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EXHIBIT 10.21
FORM OF
AT HOLDINGS CORPORATION
AND
ITS WHOLLY-OWNED SUBSIDIARY
ARGO-TECH CORPORATION
STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT evidences that [name of optionee]
("Optionee") who is [title] of Argo-Tech Corporation ("Argo-Tech"), has been
granted as of the 20th day of December, 1995, an option ("Option") to purchase
[number of shares] shares of Class A Common Stock, par value $0.01 per share of
AT Holdings Corporation ("Shares") at the price of Ten Dollars ($10.00) per
Share ("Purchase Price") pursuant to the 1991 Management Incentive Stock Option
Plan, as amended, of AT Holdings Corporation ("Holdings") and Argo-Tech
Corporation. This Stock Option Agreement and the terms and conditions on which
this Option has been granted, as hereinafter set forth, have been approved in
resolutions adopted by the Boards of Directors of AT Holdings Corporation and
Argo-Tech Corporation.
1. Holdings shall cause certificates for any Shares purchased
hereunder to be delivered to the Optionee upon payment to Holdings of the
Purchase Price in full.
2. This Option (until termination as hereinafter provided)
shall be exercisable, except as provided otherwise in Paragraph 3 hereof, only
to the extent of one-fourth of the number of Shares covered hereby after the
Optionee shall have been in the continuous employ of Argo-Tech for one full year
after the date set forth hereinabove and to the extent
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of an additional one-fourth of such Shares after each of the next three
successive years thereafter during which the Optionee shall have been in the
continuous employ of Argo-Tech. For the purposes of this paragraph, leaves of
absence approved by the Board of Directors of Argo-Tech for illness, military or
governmental service, or other cause, shall be considered as employment. To the
extent exercisable, this Option may be exercised in whole or in part from
time-to-time.
3. If Holdings Class A Common Stock (i) shall become registered under
the Securities Exchange Act of 1934 or (ii) shall become otherwise eligible for
trading on the New York Stock Exchange or other national exchange, or shall be
quoted in the over-the-counter market on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or through the National Quotation
Bureau, Inc. or any successor organization, then this Option shall become
immediately exercisable in full. Upon the signing of any agreement for the
merger or consolidation of Holdings with another corporation or for the sale of
all or substantially all of the assets of Holdings to another corporation or
upon adoption of any resolution of reorganization or dissolution of Holdings by
the stockholders, or upon the occurrence of any other event or series of events,
in the opinion of the Board of Directors of Holdings, will or is likely to, if
consummated, result in a change in control of Holdings or Argo-Tech, this Option
shall become immediately exercisable in full. In the event that any such merger,
consolidation, sale, reorganization, liquidation or other event or series of
events shall be abandoned, this Option shall be exercisable thereafter only as
provided otherwise in Paragraph 1, unless the Board of Directors of Holdings
shall determine and notify the Optionee to the contrary. Any exercise
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of this Option that may have occurred prior to such determination shall be valid
and effective in all respects.
In the event: (i) an Optionee ceases to be an employee of Argo-Tech by
reason of an "Event I Termination" (as such term is defined as set out in that
certain Vestar/AT Holdings Corporation Stockholders' Agreement dated December
24, 1990 (the "Original Stockholders' Agreement"); (ii) "Tag-Along Rights"
become effective pursuant to Section 9.06 of that certain AT Holdings
Stockholders' Agreement dated May 17, 1994 (the "Current Stockholders'
Agreement"); or (iii) "Drag-Along" rights are exercised pursuant to Section 9.07
of the Current Stockholders' Agreement, this Option shall become immediately
exercisable in full. In the event "Drag-Along" rights are exercised and
"Non-Yamada Stockholders" sell stock pursuant to Section 9.07 of the Current
Stockholders' Agreement, to the extent the purchase price for "Securities"
disposed of pursuant to such "Drag-Along" rights exceeds the Purchase Price,
this option shall be, without any further action on the part of the Optionee,
deemed exercised and, in such event the Purchase Price shall be paid to Holdings
and the remainder shall be paid to Optionee (less appropriate withholdings).
4. This Option shall terminate on the earliest of the
following dates:
(A) Thirty (30) days after the date on which the Optionee
ceases to be an employee of Argo-Tech by reason of an "Event II
Termination" or an "Event III Termination" (as such terms are defined
in subsection 6.02(a) of the Original Stockholders' Agreement);
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(B) Ninety (90) days after the date on which the Optionee
ceases to be an employee of Argo-Tech by reason of an "Event I
Termination" (as such term is defined in subsection 6.02(a) of the
Original Stockholders' Agreement); or
(C) November 9, 2001.
Nothing contained in this Option shall limit whatever right Argo-Tech might
otherwise have to terminate the employment of an Optionee.
5. The Optionee may exercise this Option in whole or in part to the
extent such Option is exercisable by delivering to Holdings a notice in writing
indicating such Optionee's intent to exercise the Option, together with (in all
events except for the exercise of the Option pursuant to the last sentence of
Paragraph 3 hereof) the Purchase Price to the extent required to purchase the
number of Shares being exercised plus provision for any required withholding.
The Purchase Price shall be payable (a) in cash or by certified check, (b) at
the discretion of the Compensation Committee (the "Committee") of the Holdings
Board of Directors, by the transfer to Holdings by the Optionee of shares of
Class A Common Stock having a value at the time of exercise equal to the total
Purchase Price, or (c) at the discretion of the Committee, by a combination of
such methods of payment. The Committee, in its discretion, may permit an
Optionee to satisfy any minimum federal, state or local withholding tax
assessments in connection with the exercise of the Option by electing (a) to
have a portion of the Shares to be issued under the Option withheld by Holdings,
(b) to deliver to Holdings a portion of the Shares issued pursuant to the
exercise of the Option and/or (c) to deliver to Holdings shares of Class A
Common Stock owned by the Optionee.
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6. This Option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution, and is exercisable, during the
lifetime of the Optionee, only by the Optionee or the legal representative of
the Optionee.
7. This Option shall not be exercisable if such exercise would involve
a violation of any applicable federal or state securities law. If the Ohio
Securities Act shall be applicable to this Option, it shall not be exercisable
unless at the time of exercise the Shares or other securities purchasable
hereunder are exempt, are the subject matter of an exempt transaction, are
registered by description or by qualification or at such time are the subject
matter of a transaction which has been registered by description.
8. The Holdings Board of Directors shall make such adjustments in the
option price and in the number or kind of shares of Class A Common Stock or
other securities covered by this Option as the Holdings Board of Directors, in
its sole discretion, exercised in good faith, may determine is equitably
required to prevent dilution or enlargement of the rights of the Optionee that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of Holdings
or Argo-Tech, (b) any merger, consolidation, separation, reorganization,
partial or complete liquidation or issuance of rights or warrants to purchase
stock, or (c) any other corporate transaction or event having an effect similar
to any of the foregoing. In the event of any merger, consolidation,
separation, reorganization, partial or complete liquidation or any similar
event and in connection therewith Holdings Class A Common Stock or other
securities theretofore substituted shall be changed, converted, reclassified or
extinguished, this Option shall become ipso facto without any action or consent
by the Optionee an option
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to acquire upon exercise, in accordance with its terms, whatever the Optionee
would have been entitled to receive if this Option had been exercised at the
last permissible date prior to such merger, consolidation, separation,
reorganization, partial or complete liquidation or similar event, and the
Purchase Price shall be changed to the extent necessary to correspond
appropriately to the change, conversion or reorganization in Holdings Class A
Common Stock or other securities therefore substituted.
9. The term "Subsidiary" as used in the Stock Option Agreement means
any corporation (other than AT Holdings Corporation) in an unbroken chain of
corporations beginning with AT Holdings Corporation if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. For purposes of this Stock
Option Agreement, the continuous employ of the Optionee with Argo-Tech shall not
be deemed interrupted, and the Optionee shall not be deemed to have ceased to be
an employee of Argo-Tech, by reason of the transfer of his employment among
Argo-Tech and its Subsidiaries.
10. This Stock Option Agreement shall become effective only upon the
Optionee's execution of the Acknowledgement which follows the execution of AT
Holdings Corporation and Argo-Tech Corporation hereof.
11. This Stock Option Agreement may be amended by a writing executed
on behalf of each of Holdings, Argo-Tech and the Optionee.
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EXECUTED at Cleveland, Ohio this 22nd day of December, 1995.
AT HOLDINGS CORPORATION
By:__________________________________
Title: President
ARGO-TECH CORPORATION
By:__________________________________
Title: Vice President, General
Counsel and Secretary
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Stock Option Agreement and accepts the option granted
thereunder.
The undersigned Optionee further acknowledges that the shares of Class
A Common Stock covered by said Agreement shall be issued or transferred to
Optionee only if the Optionee has executed an appropriate amendment or joinder
to the Current Stockholders' Agreement pursuant to which Optionee shall be bound
by and entitled to the benefits of the Current Stockholders' Agreement as if he
were an original party thereto. In addition, the Optionee further acknowledges
that he has been advised that the shares of Class A Common Stock covered by said
Agreement have not been registered under the Securities Act of 1933 and agrees
that he will not make any disposition of such shares unless either (a) such
shares have been registered under said Act, or (b) an exemption from the
registration provisions of said Act is applicable to the Optionee's proposed
disposition of
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such shares. The Optionee understands that the certificates for such shares may
bear a legend substantially as follows:
"THIS CERTIFICATE IS HELD SUBJECT TO AN AGREEMENT AMONG AT HOLDINGS
CORPORATION ("THE CORPORATION") AND CERTAIN OF ITS STOCKHOLDERS DATED AS OF MAY
17, 1994, AS AMENDED, AND THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THE TERMS, CONDITIONS AND
RESTRICTIONS OF THAT AGREEMENT, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
SECRETARY OF AT HOLDINGS CORPORATION. ANY ATTEMPTED DISPOSITION OF THIS
CERTIFICATE OR THE SHARES OF STOCK REPRESENTED HEREBY IN VIOLATION OF SUCH
AGREEMENT SHALL BE NULL AND VOID."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SHARES HAVE BEEN ACQUIRED BY INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
1933, UNLESS IN THE OPINION (WHICH OPINION SHALL BE IN THE FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION) OF COUNSEL
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SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED."
Date:____________________ Optionee:______________________
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