EXHIBIT 10.22
EXECUTIVE STOCK AGREEMENT
THIS AGREEMENT is made as of July 22, 1993 between The Triumph Group
Holdings, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ ("Executive").
The Company and Executive desire to enter into an agreement pursuant
to which Executive will purchase, and the Company will sell, 3,500 shares of
the Company's Class A Common Stock, par value $.001 per share (the "Common
Stock"), and 1,970 shares of the Company's Preferred Stock, par value $.01
per share (the "Preferred Stock"). All of such shares of Common Stock and
all shares of Common Stock hereafter acquired by Executive are referred to
herein as "Executive Common Stock." All of such shares of Preferred Stock
and all shares of Preferred Stock hereafter acquired by Executive are
referred to herein as "Executive Preferred Stock." Executive Common Stock
and Executive Preferred Stock are referred to herein as "Executive
Securities." Certain definitions are set forth in paragraph 10 of this
Agreement.
The execution and delivery of this Agreement by the Company and
Executive is a condition to the purchase of shares of Common Stock, shares of
the Company's Preferred Stock and the Company's Promissory Notes by Citicorp
Venture Capital, Ltd. ("CVC") pursuant to a Purchase Agreement dated as of
the date hereof (the "Purchase Agreement"). Certain provisions of this
Agreement are intended for the benefit of, and will be enforceable by, CVC.
The parties hereto agree as follows:
1. PURCHASE AND SALE OF EXECUTIVE SECURITIES.
(a) Upon execution of this Agreement, Executive will purchase,
and the Company will sell, 3,500 shares of Common Stock at a price of $10.00
per share, and 1,970 shares of Preferred Stock at a price of $34.57 per
share. The Company will deliver to Executive the certificates representing
the Common Stock and the Preferred Stock, and Executive will deliver to the
Company a cashier's or certified check or wire transfer of funds in the
aggregate amount of $103,102.90.
(b) Within 30 days after Executive purchases any Executive
Securities from the Company, Executive will make an effective election with
the Internal Revenue Service under Section 83(b) of the Internal Revenue Code
and the regulations promulgated thereunder in the form of Annex A attached
hereto.
(c) In connection with the purchase and sale of the Executive
Securities hereunder, Executive represents and warrants to the Company that:
(i) The Executive Securities to be acquired
by Executive pursuant to this Agreement will be acquired for
Executive's own account and not with a view to, or intention
of, distribution thereof in violation of the 1933 Act, or
any applicable state securities laws, and the Executive
Securities will not be disposed of in contravention of the
1933 Act or any applicable state securities laws.
(ii) Executive is an executive officer of the
Company or a Subsidiary or a Division, is sophisticated in
financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Securities.
(iii) Executive is able to bear the economic
risk of his investment in the Executive Securities for an
indefinite period of time because the Executive Securities
have not been registered under the 1933 Act and, therefore,
cannot be sold unless subsequently registered under the 1933
Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask
questions and receive answers concerning the terms and
conditions of the offering of Executive Securities and has
had full access to such other information concerning the
Company as he has requested. Executive has reviewed, or has
had an opportunity to review, a copy of the Stock and Asset
Purchase Agreement, dated April 21, 1993 (the "Purchase
Agreement"), between the Company and Alco Standard
Corporation, MDR Corporation, Paper Corporation of America,
and PCA Brands Inc. (collectively the "Sellers"), pursuant
to which the Company acquired all of the assets and stock of
the divisions and subsidiaries of the Sellers which, upon
closing of the Purchase Agreement, comprise the Company's
Subsidiaries, and Executive is familiar with the
transactions contemplated thereby. Executive has reviewed,
or has had an opportunity to review, the Private Placement
Memorandum, dated as of July 13, 1993, prepared by the
Company, which includes the Company's pro forma balance
sheet dated as of March 31, 1993. Executive has also had an
opportunity to review the following documents: (A) the
Company's Certificate of Incorporation and Bylaws; and (B)
the loan agreements, notes and related documents with the
Company's senior and subordinated lenders.
(v) This Agreement constitutes the legal,
valid and binding obligation of Executive, enforceable in
accordance with its terms, and the execution, delivery and
performance of this Agreement by Executive does not and will
not conflict with, violate or cause a breach of any
agreement, contract or instrument to which Executive is a
party or any judgment, order or decree to which Executive is
subject.
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(d) As an inducement to the Company to issue the Executive
Securities to Executive, as a condition thereto, Executive acknowledges and
agrees that:
(i) neither the issuance of the Executive
Securities to Executive nor any provision contained herein
shall entitle Executive to remain in the employment of the
Company or its Subsidiaries or Divisions or affect the right
of the Company or its Subsidiaries or Divisions to terminate
Executive's employment at any time for any reason; and
(ii) the Company shall have no duty or
obligation to disclose to Executive, and Executive shall
have no right to be advised of, any material information
regarding the Company and its Subsidiaries and Divisions at
any time prior to, upon or in connection with the repurchase
of Executive Securities upon the termination of Executive's
employment with the Company and its Subsidiaries or
Divisions or as otherwise provided hereunder.
2. REGULAR AND TIME VALUED EXECUTIVE COMMON STOCK.
(a) Except as otherwise provided in paragraph 2(b) below, the
shares of Executive Common Stock will become "Time Valued Shares" in
accordance with the following schedule, if as of each such date Executive is
still employed by the Company or any of its Subsidiaries or Divisions:
Cumulative
Percentage of Executive
Common Stock to become
Date Time Valued Shares
---- ------------------------
On the date hereof: 0.0%
On the first anniversary
of the date hereof: 20.0%
On the second anniversary
of the date hereof: 40.0%
On the third anniversary
of the date hereof: 60.0%
On the fourth anniversary
of the date hereof: 80.0%
On the fifth anniversary
of the date hereof: 100.0%
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(b) If Executive ceases to be employed by the Company or its
Subsidiaries or Divisions for any reason, including the death or permanent
disability of Executive, on any date other than any anniversary date prior to
the fifth anniversary date, the cumulative percentage of Executive Common
Stock to become Time Valued Shares will be determined on a pro rata basis
according to the number of days elapsed since the prior anniversary date.
Upon the occurrence of a Sale of the Company or a Qualified Public Offering,
all shares of Executive Common Stock which have not yet become Time Valued
Shares shall become Time Valued Shares at the time of such event. For
purposes of this paragraph 2(b), the determination of permanent disability
shall be made in good faith by the Company's board of directors (the
"Board"). All shares of Executive Common Stock which have not become Time
Valued Shares are referred to herein as "Regular Shares."
3. REPURCHASE OPTION.
(a) In the event Executive ceases to be employed by the
Company and its Subsidiaries and Divisions for any reason (the
"Termination"), the Executive Securities (whether held by Executive or one or
more of Executive's transferees) will be subject to repurchase by the
Company, Management and CVC pursuant to the terms and conditions set forth in
this paragraph 3 (the "Repurchase Option").
(b) Except as provided in subsection 3(c) below, the purchase
price for each Regular Share of Executive Common Stock will be the lesser of
Book Value or Executive's Original Cost for such share, and the purchase
price for each Time Valued Share of Executive Common Stock will be the Book
Value for such share. The purchase price for each share of Executive
Preferred Stock will be the Liquidation Value thereof plus all accrued and
unpaid dividends thereon until the date of payment.
(c) If the Executive resigns or his employment is terminated
for Cause, the purchase price for each Time Valued and Regular Share will be
the lesser of Book Value or Executive's Original Cost for such share.
(d) The Board may elect to purchase all or any portion of the
Executive Securities by delivering written notice (the "Repurchase Notice")
to the holder or holders of the Executive Securities within 90 days after the
Termination. The Repurchase Notice will set forth the number of Regular
Shares and Time Valued Shares and the number of shares of Executive Preferred
Stock to be acquired from each holder, the aggregate consideration to be paid
for such shares and the time and place for the closing of the transaction.
The number of shares to be repurchased by the Company shall first be
satisfied to the extent possible from the shares of Executive Common Stock or
shares of Executive Preferred Stock held by Executive at the time of delivery
of the Repurchase Notice. If the number of shares of
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Executive Common Stock or shares of Executive Preferred Stock then held by
Executive is less than the total number of shares of Executive Common Stock
or shares of Executive Preferred Stock the Company has elected to purchase,
the Company shall purchase the remaining shares elected to be purchased from
the transferees of such Executive's Executive Common Stock or shares of
Executive Preferred Stock under this Agreement, pro rata according to the
number of shares of Executive Common Stock or shares of Executive Preferred
Stock held by such transferees at the time of delivery of such Repurchase
Notice (determined as nearly as practicable to the nearest share or nearest
dollar, as applicable). The number of Regular Shares and Time valued Shares
to be repurchased hereunder will be allocated among Executive and such
transferees of Executive Common Stock (if any) pro rata according to the
number of shares of Executive Common Stock to be purchased from such persons.
(e) If for any reason the Company does not elect to purchase
all of the Executive Securities pursuant to the Repurchase Option, Management
shall be entitled to exercise the Repurchase Option for the shares of
Executive Common Stock and shares of Executive Preferred Stock the Company
has not elected to purchase (the "Available Securities"). As soon as
practicable after the Company has determined that there will be Available
Securities, but in any event within 30 days after the Termination, the
Company shall give written notice (the "Option Notice") to each member of
Management setting forth the Available Securities and the purchase price for
the Executive Preferred Stock and Executive Common Stock comprising the
Available Securities. Each member of Management may elect to purchase his
pro rata share (based on the number of shares of Common Stock owned by such
member and the total number of shares owned by Management) of the Available
Securities by giving written notice to the Company within 20 days after the
Option Notice has been given by the Company. As soon as practicable, and in
any event within fifteen days after the expiration of the 20-day period set
forth above, the Company shall notify each holder of Executive Common Stock
and Executive Preferred Stock as to the number of shares being purchased from
such holder by Management (the "Supplemental Repurchase Notice"). At the
time the Company delivers the Supplemental Repurchase Notice to the holder(s)
of Executive Securities, the Company shall also deliver written notice to
each member of Management who is purchasing Available Securities setting
forth the number of shares that each member of Management is entitled to
purchase, the aggregate purchase price and the time and place of the closing
of the transaction. The number of Regular Shares and Time Valued Shares to
be repurchased hereunder shall be allocated among the Company and each member
of Management pro rata according to the number of shares of Executive Common
Stock to be purchased by each of them.
(f) If for any reason the Company and Management do not elect
to purchase all of the Executive Securities pursuant to the Repurchase
Option, CVC shall be entitled to exercise the
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▇▇▇▇▇▇▇▇▇▇ Option for the shares of Executive Common Stock and shares of
Executive Preferred Stock the Company and Management have not elected to
purchase (the "CVC Available Securities"). As soon as practicable after the
Company has determined that there will be CVC Available Securities, but in
any event within 60 days after the Termination, the Company shall give
written notice (the "CVC Option Notice") to CVC setting forth the CVC
Available Securities and the purchase price for the Executive Preferred Stock
and Executive Common Stock comprising the CVC Available Securities. CVC may
elect to purchase any or all of the CVC Available Securities by giving
written notice to the Company within 20 days after the CVC Option Notice has
been given by the Company. As soon as practicable, and in any event within
ten days after the expiration of the 20-day period set forth above, the
Company shall notify each holder of Executive Common Stock and Executive
Preferred Stock as to the number of shares being purchased from such holder
by CVC (the "CVC Supplemental Repurchase Notice"). At the time the Company
delivers the CVC Supplemental Repurchase Notice to the holder(s) of Executive
Securities, the Company shall also deliver written notice to CVC setting
forth the number of shares that CVC is entitled to purchase, the aggregate
purchase price and the time and place of the closing of the transaction. The
number of Regular Shares and Time Valued Shares to be repurchased hereunder
shall be allocated among the Company, Management and CVC pro rata according
to the number of shares of Executive Common Stock to be purchased by each of
them.
(g) The closing of the purchase of the Executive Securities
pursuant to the Repurchase Option shall take place on the date designated by
the Company in the Repurchase Notice, Supplemental Repurchase Notice or CVC
Supplemental Repurchase Notice, which date shall not be more than 60 days nor
less than five days after the delivery of the later of any such notice to be
delivered. The Company, Management and/or CVC will pay for the Executive
Securities to be purchased pursuant to the Repurchase Option by delivery of,
in the case of Management or CVC, a check or wire transfer of funds and, in
the case of the Company, (i) a check or wire transfer of funds, (ii) a
subordinated note or notes payable in up to three equal annual installments
beginning on the first anniversary of the closing of such purchase and
bearing interest (payable quarterly) at a rate per annum equal to the prime
rate announced from time to time by Citibank, N.A. or (iii) both (i) and
(ii), in each case, in the aggregate amount of the purchase price for such
securities. Any notes issued by the Company pursuant to this paragraph 3(g)
shall be subject to any restrictive covenants to which the Company is subject
at the time of such purchase. In addition, the Company may pay the purchase
price for the Executive Securities by offsetting amounts outstanding under
any bona fide debts owed by Executive to the Company. The purchasers of
Executive Common Stock and Executive Preferred Stock hereunder will be
entitled to receive customary representations and warranties from the sellers
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regarding such sale and to require all sellers' signatures be guaranteed.
(h) The rights of the Company, Management and CVC to
repurchase Time Valued Shares pursuant to this paragraph 3 shall terminate
upon the first to occur of the Sale of the Company or a Qualified Public
Offering.
(i) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Executive Common Stock and Executive Preferred
Stock by the Company shall be subject to applicable restrictions contained in
the Delaware General Corporation Law and in the Company's and its
Subsidiaries' debt and equity financing agreements. If any such restrictions
prohibit the repurchase of Executive Common Stock and Executive Preferred
Stock hereunder which the Company is otherwise entitled or required to make,
the Company may make such repurchases (plus interest accruing at the rate of
7% per annum from the date the Company elects to make such prohibited
repurchase to the date such repurchase is actually made) as soon as it is
permitted to do so under such restrictions.
4. RESTRICTIONS ON TRANSFER.
(a) TRANSFER OF EXECUTIVE SECURITIES. Executive shall not
sell, transfer, assign, pledge or otherwise dispose of (whether with or
without consideration and whether voluntarily or involuntarily or by
operation of law) any interest in any of the Executive Securities (a
"Transfer"), except pursuant to (i) the provisions of paragraph 3 hereof, a
Public Sale or a Sale of the Company ("Exempt Transfers") or (ii) the
provisions of this paragraph 4; provided that in no event shall any Transfer
of Executive Securities pursuant to this paragraph 4 be made for any
consideration other than cash payable upon consummation of such Transfer or
in installments over time. Prior to making any Transfer other than an Exempt
Transfer, Executive will give written notice (the "Sale Notice") to the
Company and CVC. The Company shall send a copy of the Sale Notice to each
member of Management. The Sale Notice will disclose in reasonable detail the
identity of the prospective transferee(s), the number of shares to be
transferred and the terms and conditions of the proposed transfer. Executive
will not consummate any Transfer until 60 days after the Sale Notice has been
given to the Company and to CVC, unless the parties to the Transfer have been
finally determined pursuant to this paragraph 4 prior to the expiration of
such 60-day period. (The date of the first to occur of such events is
referred to herein as the "Authorization Date").
(b) FIRST REFUSAL RIGHTS. The Company may elect to purchase all or
any portion of the Executive Securities to be transferred upon the same terms
and conditions as those set forth in the Sale Notice by delivering a written
notice of such election to Executive, each member of Management and CVC
within 25 days after the Sale Notice has been given to the Company. If
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the Company has not elected to purchase all of the Executive Securities to be
transferred, each member of Management may elect to purchase his pro rata
portion (based on the number of shares of Common Stock owned by such member
and the total number of shares owned by Management) of the Executive
Securities not purchased or not to be purchased by the Company upon the same
terms and conditions as those set forth in the Sale Notice by giving written
notice of such election to Executive within 40 days after the Sale Notice has
been given to the Company. If the Company and Management have not elected to
purchase all of the Executive Securities to be transferred, CVC may elect to
purchase all or any portion of the Executive Securities not purchased or not
to be purchased by the Company and Management upon the same terms and
conditions as those set forth in the Sale Notice by giving written notice of
such election to Executive within 50 days after the Sale Notice has been
given to CVC. If the Company, Management and CVC do not elect to purchase
all of the Executive Securities specified in the Sale Notice, Executive may
transfer the remaining Executive Securities specified in the Sale Notice at a
price and on terms no more favorable to the transferee(s) thereof than
specified in the Sale Notice during the 60-day period immediately following
the Authorization Date. Any Executive Securities not transferred within such
60-day period will be subject to the provisions of this paragraph 4(b) upon
subsequent transfer. The Company may pay the purchase price for such shares
by offsetting amounts outstanding under any bona fide debts owed by Executive
to the Company.
(c) CERTAIN PERMITTED TRANSFERS. The restrictions contained
in this paragraph 4 will not apply with respect to transfers of Executive
Securities (i) pursuant to applicable laws of descent and distribution or
(ii) among Executive's family group; provided that (x) such restrictions will
continue to be applicable to the Executive Securities after any such transfer
and (y) the transferees of such Executive Securities have agreed in writing
to be bound by the provisions of this Agreement. Executive's "family group"
means Executive's spouse and descendants (whether natural or adopted) and any
trust solely for the benefit of Executive and/or Executive's spouse and/or
descendants.
(d) PLEDGES. Notwithstanding the provisions of this paragraph
4, Executive may not pledge any Executive Securities.
(e) TERMINATION OF RESTRICTIONS. The restrictions on the
transfer of shares of Executive Securities set forth in this paragraph 4 will
continue with respect to all Executive Securities following any transfer
thereof; provided that in any event such restrictions will terminate on the
first to occur of a Sale of the Company or a Qualified Public Offering.
5. ADDITIONAL RESTRICTIONS ON TRANSFER.
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(a) The certificates representing the Executive Common Stock
and Executive Preferred Stock will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED AS OF JULY __, 1993 HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS
AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN EXECUTIVE STOCK
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE DATED AS OF JULY __, 1993. A COPY
OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Executive Securities may sell, transfer or
dispose of any Executive Securities (except pursuant to an effective
registration statement under the 1933 Act) without first delivering to the
Company an opinion of counsel (reasonably acceptable in form and substance to
the Company) that neither registration nor qualification under the 1933 Act
and applicable state securities laws is required in connection with such
transfer.
(c) Each holder of Executive Securities agrees not to effect
any public sale or distribution of any Executive Securities or other equity
securities of the Company, or any securities convertible into or exchangeable
or exercisable for any of the Company's equity securities, during the seven
days prior to and the 180 days after the effectiveness of any underwritten
public offering, except as part of such underwritten public offering or if
otherwise permitted by the Company.
6. SALE OF THE COMPANY.
(a) If the Board and the holders of a majority of the
Company's Common Stock approve a Sale of the Company (the "Approved Sale"),
the holders of Executive Securities will consent to and raise no objections
against the Approved Sale of the Company, and if the Approved Sale of the
Company is structured as a sale of stock, the holders of Executive Securities
will agree to sell their shares of Executive Securities on the terms and
conditions approved by the Board and the holders of a majority of the
Company's Common Stock and will raise no objections to process and will waive
dissenters or similar rights. The holders of Executive Securities will take
all necessary and desirable actions in connection with the consummation of
the Approved Sale of the Company. The Company
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shall give Management thirty days notice prior to a Sale of the Company.
(b) The obligations of the holders of Executive Securities
with respect to the Approved Sale of the Company are subject to the
satisfaction of the following conditions: (i) upon the consummation of the
Approved Sale, all of the holders of Common Stock will receive the same form
and amount of consideration per share of Common Stock, or if any holders of
Common Stock are given an option as to the form and amount of consideration
to be received, all holders will be given the same option; and (ii) all
holders of rights to acquire shares of Common Stock will be given an
opportunity to either (A) exercise such rights prior to the consummation of
the Approved Sale and participate in such sale as holders of Common Stock or
(B) upon the consummation of the Approved Sale, receive in exchange for such
rights consideration equal to the amount determined by multiplying (1) the
same amount of consideration per share of Common Stock received by the
holders of Common Stock in connection with the Approved Sale less the
exercise price per share of Common Stock of such rights to acquire Common
Stock by (2) the number of shares of Common Stock represented by such rights.
(c) If the Company or the holders of the Company's securities
enter into any negotiation or transaction for which Rule 506 (or any similar
rule then in effect) promulgated by the Securities Exchange Commission may be
available with respect to such negotiation or transaction (including a
merger, consolidation or other reorganization), the holders of Executive
Common Stock will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501) reasonably acceptable to
the Company. If any holder of Executive Common Stock appoints a purchaser
representative designated by the Company, the Company will pay the fees of
such purchaser representative, but if any holder of Executive Common Stock
declines to appoint the purchaser representative designated by the Company
such holder will appoint another purchaser representative (reasonably
acceptable to the Company), and such holder will be responsible for the fees
of the purchaser representative so appointed.
(d) Executive and the other holders of Executive Common Stock
(if any) will bear their pro rata share (based upon the number of shares
sold) of the costs of any sale of Executive Common Stock pursuant to an
Approved Sale to the extent such costs are incurred for the benefit of all
holders of Common Stock and are not otherwise paid by the Company or the
acquiring party. Costs incurred by Executive and the other holders of
Executive Common Stock on their own behalf will not be considered costs of
the transaction hereunder.
(e) The provisions of this paragraph 6 will terminate upon the
completion of a Qualified Public Offering.
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7. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
information, observations and data obtained by him while employed by
Executive's Business concerning the business or affairs of the Company,
Executive's Business or any other Subsidiary or Division ("Confidential
Information") are the property of the Company or such Subsidiary or Division.
Therefore, Executive agrees that he shall not disclose to any unauthorized
person or use for his own account any Confidential Information without the
prior written consent of the Board, unless and to the extent that the
aforementioned matters become generally known to and available for use by the
public other than as a result of Executive's acts or omissions to act.
Executive shall deliver to the Company at the termination of the Executive's
employment, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined in Section 8 below) or the business of
the Company or any Subsidiary or Division which he may then possess or have
under his control.
8. INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses,
drawings, reports, and all similar or related information which relates to
the Company's or any of its Subsidiaries' or Divisions' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by
Executive's Business ("Work Product") belong to the Company or such
Subsidiary or Division. Executive will promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board
(whether during or after Executive's employment period) to establish and
confirm such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
9. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his
employment with Executive's Business he has become familiar, and he will
become familiar, with the Company's and its Subsidiaries' and Divisions'
trade secrets and with other confidential information concerning the Company
and its Subsidiaries and Divisions and that his services have been and will
be of special, unique and extraordinary value to the Company. Therefore,
Executive agrees that, prior to the termination of Executive's employment and
for two years thereafter (the "Noncompete Period"), he shall not directly or
indirectly own, manage, control, participate in, consult with, render
services for, or in any manner engage in any business competing with the
businesses of the Executive's Business as such businesses exist or are in
process on the date of the termination of Executive's employment, within any
geographical area in which Executive's Business engages or plans to engage in
such
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businesses. Nothing herein shall prohibit Executive from being a passive
owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to induce any
employee of the Company or any Subsidiary or Division to leave the employ of
the Company or such Subsidiary or Division, or in any way interfere with the
relationship between the Company or any Subsidiary or Division and any
employee thereof, (ii) hire any person who was an employee of the Company or
any Subsidiary or Division at any time during the Executive's employment
period, or (iii) induce or attempt to induce any customer, supplier, licensee
or other business relation of the Company or any Subsidiary or Division to
cease doing business with the Company or such Subsidiary or Division, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any Subsidiary or Division.
(c) If, at the time of enforcement of this paragraph 9, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that
the maximum duration, scope or area reasonable under such circumstances shall
be substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law.
(d) In the event of the breach or a threatened breach by
Executive of any of the provisions of this paragraph 9, the Company, in
addition and supplementary to other rights and remedies existing in its
favor, may apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof (without posting a bond or
other security).
10. DEFINITIONS.
"BOOK VALUE" of each share of Executive Common Stock will be equal
to the quotient determined by dividing (A) the excess of Company's assets
over its liabilities as of the end of the fiscal quarter immediately
preceding the date of Executive's Termination (provided however that if
Executive's Termination occurs in connection with a Sale of Executive's
Business, the excess of the Company's assets over its liabilities shall be
determined on a pro forma basis assuming the Sale of Executive's Business
occurred on the last day of such fiscal quarter), determined on a
consolidated basis in accordance with generally accepted accounting
principles, consistently applied, less the liquidation value of all
outstanding preferred stock, by (B) the
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total number of shares of Common Stock outstanding on a fully diluted basis
(including in such calculation the aggregate conversion price and exercise
price of all outstanding convertible securities, options and warrants).
"CAUSE" shall mean (i) a material breach of this Agreement by
Executive, (ii) a breach of Executive's duty of loyalty to the Company, (iii)
the commission by Executive of a felony, a crime involving moral turpitude or
other act causing material harm to the Company's standing and reputation,
(iv) Executive's continued failure to perform his duties to the Company or
(v) Executive's substandard performance. For the purposes of this agreement,
"substandard performance" shall be determined in good faith by a majority of
the Board (excluding Executive). In assessing Executive's performance, the
Board shall give due consideration to the overall industry experience in
assessing Executive's performance. After due consideration of these factors,
if a majority of the Board (excluding Executive) determines in good faith
that the Company would have performed substantially better with other
management and that the future performance of the Company would be best
served by new management, the Board may terminate Executive for "substandard
performance."
"CREDIT AGREEMENT" means the Financing and Security Agreement, dated
as of July 22, 1993, among the Company, certain of the Company's Subsidiaries
and The CIT Group/Business Credit, Inc., as Lender and as Agent.
"DIVISION" means an operating division of the Company or any
Subsidiary.
"EXECUTIVE COMMON STOCK" will continue to be Executive Common Stock
in the hands of any holder other than Executive (except for the Company and
CVC and except for transferees in a Public Sale), and except as otherwise
provided herein, each such other holder of Executive Common Stock will
succeed to all rights and obligations attributable to Executive as a holder
of Executive Common Stock hereunder. Executive Common Stock will also
include shares of the Company's capital stock issued with respect to
Executive Common Stock by way of a stock split, stock dividend or other
recapitalization.
"EXECUTIVE PREFERRED STOCK" will continue to be Executive Preferred
Stock in the hands of any holder other than Executive (except for the Company
and CVC and except for transferees in a Public Sale), and except as otherwise
provided herein, each such other holder of Executive Preferred Stock will
succeed to all rights and obligations attributable to Executive as a holder
of Executive Preferred Stock hereunder. Executive Preferred Stock will also
include shares of the Company's capital stock issued with respect to
Executive Preferred Stock by way of a stock split, stock dividend or other
recapitalization.
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"INDEPENDENT THIRD PARTY" means any person who, immedi-ately prior
to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a fully diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of the Company's
Common Stock and who is not the spouse or descendent (by birth or adoption)
of any such 5% owner of the Company's Common Stock.
"MANAGEMENT" means all of the other executive officers of the
Company and its Subsidiaries and Divisions who are purchasing JSDs or
Preferred Stock and shares of Common Stock on the date hereof pursuant to
Executive Stock Agreements between such executive officers and the Company,
substantially in the form hereof.
"1933 ACT" means the Securities Act of 1933, as amended from time to
time.
"ORIGINAL COST" of each share of Common Stock purchased hereunder
will be equal to $10.00 (as proportionately adjusted for all subsequent stock
splits, stock dividends and other recapitalizations).
"PERMITTED TRANSFEREE" means any holder of Executive Common Stock
who acquired such stock pursuant to a transfer permitted by paragraph 4(c).
"PUBLIC SALE" means any sale pursuant to a registered public
offering under the 1933 Act or any sale to the public pursuant to Rule 144
promulgated under the 1933 Act effected through a broker, dealer or market
maker.
"QUALIFIED PUBLIC OFFERING" means the sale in an underwritten public
offering registered under the 1933 Act of shares of the Company's Common
Stock having an aggregate offering value of at least $40 million.
"REGULAR SHARES" means those shares of Executive Common Stock
designated as such pursuant to Section 2.
"SALE OF THE COMPANY" means the sale of the Company to an
Independent Third Party or affiliated group of Independent Third Parties
pursuant to which such party or parties acquire (i) capital stock of the
Company possessing the voting power to elect a majority of the Company's
board of directors (whether by merger, consolidation or sale or transfer of
the Company's capital stock) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
"SUBSIDIARY" means any corporation of which the Company owns
securities having a majority of the ordinary voting power in electing the
board of directors directly or through one or more subsidiaries.
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"TIME VALUED SHARES" means those shares of Executive Common Stock
designated as such pursuant to Section 2.
11. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
To the Company:
The Triumph Group Holdings, Inc.
c/o The Triumph Group Management Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
With copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
To Executive:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To CVC:
Citicorp Venture Capital, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement will be deemed to have been given
when so delivered or sent or, if mailed, five days after deposit in the U.S.
mail.
12. GENERAL PROVISIONS.
(a) TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or
attempted Transfer of any Executive Securities in
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violation of any provision of this Agreement shall be void, and the Company
shall not record such Transfer on its books or treat any purported transferee
of such Executive Securities as the owner of such securities for any purpose.
(b) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.
(c) COMPLETE AGREEMENT. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
(d) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement.
(e) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by Executive, the Company, CVC and their respective successors
and assigns (including subsequent holders of Executive Securities); provided
that the rights and obligations of Executive under this Agreement shall not
be assignable except in connection with a permitted transfer of Executive
Securities hereunder.
(f) CHOICE OF LAW. The corporate law of the State of Delaware
will govern all questions concerning the relative rights of the Company and
its stockholders. All other questions concerning the construction, validity
and interpretation of this Agreement and the exhibits hereto will be governed
by the internal law, and not the law of conflicts, of the State of Delaware.
(g) REMEDIES. Each of the parties to this Agreement
(including CVC) will be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach
of the provisions of this Agreement and that any party may in its
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sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(h) AMENDMENT AND WAIVER. The provisions of this Agreement
may be amended and waived only with the prior written consent of the Company,
Executive and CVC.
(i) BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or
holiday in the state in which the Company's chief executive office is
located, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
The Triumph Group Holdings, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ILL
-------------------------------------
Its President
----------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Agreed and Accepted:
Citicorp Venture Capital, Ltd.
By /s/
-----------------------------------
Its V.P.
--------------------------------
CONSENT
The undersigned spouse of Executive hereby acknowledges that I have
read the foregoing Executive Stock Agreement and that I understand its
contents. I am aware that the Agreement provides for the repurchase of my
spouse's Executive Securities (as defined in the foregoing agreement) under
certain circumstances and imposes other restrictions on the transfer of such
Executive Securities. I agree that my spouse's interest in the Executive
Securities is subject to this Agreement and any interest I may have in such
Executive Securities shall be irrevocably bound by this Agreement and further
that the my community property interest in such Executive Securities, if any,
shall be similarly bound by this Agreement.
I am aware that the legal, financial and other matters contained in
this Agreement are complex and I am free to seek advice with respect thereto
from independent counsel. I have either sought such advice or determined
after carefully reviewing this Agreement that I will waive such right.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
[Spouse]
/s/ ▇▇▇▇▇▇▇ ▇. ILL
---------------------------------------
Witness
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