EX-10 4 ex103.txt STOCK EXCHANGE AGREEMENT BETWEEN THE REGISTRANT AND JEROME I. FELDMAN Exhibit 10.3 STOCK EXCHANGE AGREEMENT This STOCK EXCHANGE AGREEMENT (this "Agreement"), dated as of January 19, 2006, by and between GP STRATEGIES CORPORATION, a Delaware corporation ("GPX"), and JEROME I. FELDMAN ("Feldman"). WHEREAS, Feldman beneficially owns 142,174 shares of GPX's Common Stock, par value $0.01 per share ("Common Stock"), and 568,750 shares of GPX's Class B Capital Stock, par value $0.01 per share ("Class B Stock"); WHEREAS, GPX believes it would be in the best interests of GPX and its stockholders if GPX were to restructure its capital structure into only one class of common stock by repurchasing and/or exchanging upon satisfactory terms and conditions and thereby retiring all of the outstanding shares of Class B Stock owned by Feldman and the other holders thereof; WHEREAS, GPX therefore approached Feldman to determine whether Feldman would exchange the Class B Stock into Common Stock, at a rate of one share of Class B Stock for one share of Common Stock; WHEREAS, Feldman expressed his willingness to exchange the Class B Stock into Common Stock, at a rate of one share of Class B Stock for one share of Common Stock; WHEREAS, in connection with the foregoing, a Special Committee of the GPX Board of Directors (the "Special Committee") was formed that excluded, among others, Feldman; WHEREAS, the Special Committee and Feldman have negotiated on an arms-length basis for the exchange of Class B Stock upon the terms and conditions herein provided, and the Special Committee has determined that such terms and conditions are in the best interests of GPX and its stockholders; WHEREAS, Feldman desires to exchange the Class B Stock, and GPX desires for Feldman to exchange the Class B Stock, upon the terms and conditions herein provided; NOW THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Exchange of Class B Stock. 1.1 Subject to the terms and conditions and in reliance upon the representations, warranties and covenants set forth herein, Feldman agrees to exchange ("Exchange") all his shares of Class B Stock ("Shares Exchanged"), pursuant to the terms of the Class B Stock, into Common Stock, at a rate of one share of Class B Stock for one share of Common Stock ("New Shares"), for a price 1 of $1.50 per Share Exchanged ("Exchange Incentive"). The aggregate price for the Shares Exchanged to be paid by GPX to Feldman shall be $853,125 ("Exchange Incentive Payment"). Following the Exchange, Feldman will beneficially own 710,924 shares of Common Stock and no shares of Class B Stock. 1.2 The closing of the Exchange (the "Closing") shall be held at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, at 10:00 A.M., local time on the date hereof. 1.3 At the Closing, Feldman shall deliver to GPX the certificate or certificates representing the Shares Exchanged, accompanied by a stock power endorsed in blank. 1.4 At the Closing, GPX shall pay an amount equal to the Exchange Incentive Payment, by wire transfer of immediately available funds or by check, to an account of Feldman previously furnished to GPX and shall deliver to Feldman a certificate or certificates evidencing the New Shares. 2. Representations, Warranties and Covenants of Feldman. Feldman hereby represents, warrants and covenants, as the case may be, to, and agrees with GPX, that: 2.1 Authority. This Agreement has been duly executed and delivered by Feldman and constitutes the valid and legally binding obligation of Feldman, enforceable against him in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2.2 Ownership of the Shares Exchanged. Except as provided for under the Agreement, dated as of December 29, 1999, between Feldman and Martin M. Pollak, Feldman is the record and beneficial owner of the Shares Exchanged, and owns the Shares Exchanged free and clear of any lien and any other limitation or restriction, and will transfer and deliver to GPX at the Closing valid title to the Shares Exchanged, free and clear of any lien and any such other limitation or restriction. 2.3 No Conflicts and Consents. The execution and delivery of this Agreement by Feldman and the consummation of each of the transactions and the performance of each of the obligations contemplated hereby do not (a) conflict with or violate (whether with or without notice or a lapse of time or both) any agreement to which he is a party or any law or order applicable to him; or (b) require any consent, approval, authorization or permit of, action by, filing with or notification to, any Governmental Entity (other than any filing required under Section 13(a) or (d), 14, 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended), in each case in a manner that could reasonably be expected to materially hinder or impair the completion of any of the transactions contemplated hereby or have a material adverse effect on the business, properties, condition (financial or otherwise) or liabilities of Feldman. In this Agreement, "Governmental Entity" shall mean any court, administrative agency, commission or other governmental authority or instrumentality, whether domestic (federal, state or local) or foreign. 2.4 Due Diligence; Access to Information and Counsel. Feldman has the knowledge, sophistication and experience in business and financial matters 2 so as to be capable of evaluating the merits and risks of the Exchange. Feldman has been afforded adequate opportunity (i) to perform due diligence and ask such questions as Feldman has deemed necessary of, and to receive answers from, representatives of the Company concerning the operations and prospects of the Company; (ii) to obtain such additional information that the Company possesses or can acquire that Feldman deems necessary or appropriate to receive to form a decision on whether to exchange the Shares Exchanged and enter into this Agreement; (iii) to investigate and appraise the fair market value of the Company and the Shares Exchanged; and (iv) to consult with counsel as Feldman has deemed necessary in connection with the transactions contemplated in this Agreement. 2.5 Independent Transaction. The decision by Feldman to enter into this Agreement and to consummate the Exchange contemplated hereby has been made independent of the transactions described under subsections (a), (b) and (c) of Section 4.1 hereof. 2.6 Repayment of Indebtedness. Immediately following the Exchange, Feldman shall apply the entire amount of the Exchange Incentive Payment to repay indebtedness owed by Feldman to GPX. 3. Representations and Warranties of GPX. GPX hereby represents and warrants to, and agrees with Feldman, that: 3.1 Existence and Power. GPX has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to execute and deliver this Agreement and consummate the transactions and perform each of its obligations contemplated hereby. 3.2 Authority. The execution and delivery of this Agreement by GPX, the consummation by GPX of each of the transactions and the performance by GPX of each of its obligations contemplated hereby have been duly and properly authorized by all necessary corporate action on the part of GPX. This Agreement has been duly executed and delivered by GPX and constitutes the valid and legally binding obligation of GPX, enforceable against it in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3.3 No Conflict or Consents. The execution and delivery of this Agreement by GPX and the consummation of each of the transactions and the performance of each of the obligations contemplated hereby do not (a) conflict with or violate (whether with or without notice or a lapse of time or both) its organizational documents or any agreement to which it is a party or any law or order applicable to it; or (b) require any consent, approval, authorization or permit of, action by, filing with or notification to, any Governmental Entity (other than any filing required under Section 13(a) or (d), 14, 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended), in each case in a manner that could reasonably be expected to materially hinder or impair the completion of any of the transactions contemplated hereby or have a material adverse effect on the business, properties, condition (financial or otherwise) or liabilities of GPX. 3 4. Conditions to Closing. The respective obligations of GPX and Feldman hereunder are subject to the accuracy of the representations and warranties contained herein, and to each of the following additional terms and conditions: 4.1 Concurrent Transactions. At the Closing, (a) EGI-Fund (02-04) Investors, L.L.C. ("EGI") shall have executed and delivered a Stock Repurchase Agreement, dated the date hereof and in form and substance satisfactory to GPX, and GPX shall have received an original copy thereof, duly executed by EGI with respect to the sale by EGI to GPX of all of EGI's shares of Common Stock and Class B Stock; (b) Bedford Oak Partners, L.P. ("Bedford") shall have executed and delivered a Stock Repurchase Agreement, dated the date hereof and in form and substance satisfactory to GPX, and GPX shall have received an original copy thereof, duly executed by Bedford with respect to the sale by Bedford to GPX of all of Bedford's shares of Class B Stock and all but 1,100,000 shares of Bedford's Common Stock; and (c) Martin M. Pollak ("Pollak") shall have executed and delivered a Stock Exchange Agreement, dated the date hereof and in form and substance satisfactory to GPX, and GPX shall have received an original copy thereof, duly executed by Pollak with respect to the exchange by Pollak of all his shares of Class B Stock at a rate of one share of Class B Stock for one share of Common Stock. Taken together, this Agreement and the agreements described in (a), (b) and (c) of this subsection shall have the effect of eliminating all outstanding shares of Class B Stock. 5. Miscellaneous. 5.1 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given, If to GPX, to: GP Strategies Corporation 777 Westchester Avenue White Plains, New York 10604 Attn: Andrea Kantor, Executive Vice President and General Counsel Fax: (914) 249-9745 If to Feldman, to: Jerome I. Feldman c/o GP Strategies Corporation 777 Westchester Avenue White Plains, New York 10604 Fax: (914) 249-9745 All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof. By notice given in accordance with this Section 5.1 to the other party, any party may change its/his address for the receipt of notices under this Agreement. 5.2 Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 5.3 Agreement to Cooperate; Further Assurances. Subject to the terms and conditions of this Agreement, each of the parties shall use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including providing information and using reasonable efforts to obtain all necessary or appropriate waivers, consents and approvals, and effecting all necessary registrations and filings. In case at any time after the Closing any further action is necessary or desirable for the Exchange or otherwise to carry out the purposes of this Agreement, the parties shall execute such further documents and shall take such further action as shall be necessary or desirable to effect such purchase and to otherwise carry out the purposes of this Agreement, in each case to the extent not inconsistent with applicable law. 5.4 Expenses. Each of GPX and Feldman shall pay its/his own expenses incurred in connection with the transactions contemplated hereby. 5.5 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 5.6 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without reference to its conflict of laws principles. 5.7 Public Announcements. Each party agrees that, except as may be required by applicable law or any listing agreement with any national securities exchange, such party will not issue any press release or make any public statement with respect to this Agreement or the transactions contemplated hereby without obtaining the prior consent of the other party. 5.8 Section Headings. The captions and headings appearing at the beginning of the various sections of this Agreement are for convenience of reference only and shall not be given any effect whatsoever in the construction or interpretation of this Agreement. 5.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any party may execute this Agreement by the delivery of a facsimile signature, which signature shall have the same force and effect as an original signature. Any party that delivers a facsimile signature shall promptly thereafter deliver an originally executed signature to the other party; provided, however, that the failure to deliver an original signature page shall not affect the validity of any signature delivered by facsimile. [Signature Page Follows] 4 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of the date first written above. GP STRATEGIES CORPORATION Name: Andrea D. Kantor Title: Executive Vice President and General Counsel JEROME I. FELDMAN Jerome I. Feldman 5