EXHIBIT 10.21
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, 900 shares of the Company's Class A Common
Stock, par value $.001 per share (the "Common Stock"), and the
Company's Promissory Notes substantially in the form of EXHIBIT A
attached hereto (the "JSDs") in an aggregate principal amount of
$50,625. 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." Executive Common Stock and
all JSDs, including JSDs acquired hereafter 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, par value
$.01 per share (the "Preferred Stock"), and JSDs 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, 900 shares of Common
Stock at a price of $10.00 per share and JSDs in an aggregate
principal amount of $50,625 at a price equal to the face amount
thereof. The Company will deliver to Executive the JSDs and the
certificates representing the Common Stock, and Executive will
deliver to the Company a cashier's or certified check or wire
transfer of funds in the aggregate amount of $59,625.
(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.
- 2 -
(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%
- 3 -
(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 the JSDs will be the outstanding
principal amount so purchased plus all accrued and unpaid
interest 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 principal amount of JSDs to be
acquired from each holder, the aggregate consideration to be paid
for such shares or JSDs and the time and place for the closing of
the transaction. The number of shares and principal amount of
JSDs to be repurchased by the Company shall first be satisfied to
the extent possible from the shares of Executive Common Stock or
principal amount of JSDs held by Executive at the time of
- 4 -
delivery of the Repurchase Notice. If the number of shares of
Executive Common Stock or principal amount of JSDs then held by
Executive is less than the total number of shares of Executive
Common Stock or principal amount of JSDs 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 JSDs under this Agreement, pro rata
according to the number of shares of Executive Common Stock or
principal amount of JSDs 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
principal amount of JSDs 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 JSDs 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 JSDs as to
the number of shares and principal amount of JSDs 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 and principal amount of JSDs 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
- 5 -
to the Repurchase Option, CVC shall be entitled to exercise the
Repurchase Option for the shares of Executive Common Stock and
principal amount of JSDs 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 JSDs 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 JSDs as to the number of
shares and principal amount of JSDs 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
and principal amount of JSDs 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 and principal amount of JSDs 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 and principal amount of JSDs 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(f) 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
- 6 -
Stock hereunder will be entitled to receive customary
representations and warranties from the sellers 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 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 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 para-
graph 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
- 7 -
25 days after the Sale Notice has been given to the Company. If
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.
- 8 -
5. Additional Restrictions on Transfer.
(a) The JSDs and the certificates representing
the Executive Common 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
- 9 -
consummation of the Approved Sale of the Company. The Company
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.
- 10 -
(e) The provisions of this paragraph 6 will
terminate upon the completion of a Qualified Public Offering.
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, in the event Executive
resigns or is terminated for cause for a period of two years
thereafter (the "Noncompete Period"), he shall not directly or
indirectly own, manage, control, participate in, consult with,
- 11 -
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
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
- 12 -
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
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 __, 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.
"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
- 13 -
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.
"TIME VALUED SHARES" means those shares of Executive
Common Stock designated as such pursuant to Section 2.
- 14 -
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
violation of any provision of this Agreement shall be void, and
the Company shall not record such Transfer on its books or treat
- 15 -
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
sole discretion apply to any court of law or equity of competent
- 16 -
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.
* * * * *
- 17 -
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 & CEO
------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
[Executive]
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/ M.A. ▇▇▇▇▇▇▇
----------------------------
Witness
- 18 -