LMI AEROSPACE, INC.
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, is made as of the 27th day of April 1998, between LMI
AEROSPACE, INC., a Missouri corporation (the "Corporation"), and XXXXXXXX X.
LEGRAND1 ("XxXxxxx").
RECITALS
A. The Corporation has elected to award XxXxxxx 10,000 shares of common
stock ($0.02 par value) of the Corporation the ("Bonus Stock") as an inducement
to become employed as an officer of the Corporation and to work for the success
of the Corporation and its subsidiaries.
X. XxXxxxx has also purchased from Xxxxxx X. Xxxx ("Saks") 30,000
shares of common stock ($0.02 par value) of the Corporation pursuant to the
terms of a certain Stock Purchase Agreement of even date herewith (the "Saks'
Stock"), and XxXxxxx'x XXX has subscribed to purchase 30,000 shares of common
stock ($0.02 par value) of the Corporation (the "Corp. Stock"). All of the
common stock purchased by XxXxxxx and his XXX (i.e. the Saks' Stock and the
Corp. Stock) is sometimes referred to herein as the "Purchased Stock".
C. All of the common stock acquired by XxXxxxx and his XXX is referred
to collectively herein as the Restricted Stock.
X. XxXxxxx is willing to accept the Restricted Stock subject to the
terms of this Agreement.
E. In consideration of the premises and the mutual agreements and
covenants contained herein, the parties hereto agree as follows:
TERMS OF AGREEMENT
1. Bonus Stock Award. The Corporation hereby grants and awards to
XxXxxxx, subject to the conditions and restrictions set forth in this Agreement,
the Bonus Stock as a bonus for LeGrand's agreement to become a full time
employee of the Corporation and to serve as its Chief Operating Officer. Based
on an independent appraisal of the Corporation, the Corporation and XxXxxxx
agree that the fair market value of the Bonus Stock is $20.00 per share. In
addition, as further consideration, the Corporation will pay on behalf of
XxXxxxx all taxes, federal, state and local, payable by XxXxxxx as a result of
the award to him of the Bonus Stock, including all taxes payable by XxXxxxx as a
result of payment of taxes by the Corporation on behalf of XxXxxxx pursuant to
this sentence. Such obligation on the part of the Corporation to
1 Xxxxxxxx X. XxXxxxx is a party to this Agreement in his individual
capacity and as the beneficial owner of the Xxxxxxxx X. XxXxxxx XXX
Rollover account, CIBC Xxxxxxxxxxx Corp. as Custodian (the "XXX").
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pay taxes on behalf of XxXxxxx will not apply to any taxes subsequently payable
by XxXxxxx with respect to the Bonus Stock.
2. Restrictions on Transfer. Subject to the exceptions and limitations
set forth elsewhere herein, none of the shares of Restricted Stock or the rights
relating thereto may be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of by XxXxxxx, and XxXxxxx agrees not to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of such Restricted Stock or
rights, during a period of restriction extending from the date hereof and ending
on April 30, 2000 ("Period of Restriction"); provided, however, that the
restrictions on pledging the Restricted Stock shall not apply to the 30,000
shares of Purchased Stock pledged by XxXxxxx to Saks to secure payment for such
stock. At the time of the earlier of (i) the expiration of the Period of
Restriction or (ii) a "Change of Control" as defined in Section 9 (the
"Termination Date"), such restriction on transfer shall lapse and the Restricted
Stock, if not previously forfeited pursuant to Section 3 of this Agreement, will
become subject to (i) a right of first refusal pursuant to Section 4 of this
Agreement, and (ii) such limitations on transfer, if any, as may exist under
applicable law, the Shareholder Agreement between XxXxxxx and the Corporation,
the Voting Trust Agreement dated November 11, 1996 or any other agreement
binding upon XxXxxxx.
3. Possible Forfeiture of Restricted Stock Prior to Termination Date.
If XxXxxxx ceases to be employed by the Corporation or any of its Subsidiaries
for any reason (whether voluntarily or involuntarily) other than his death or
disability prior to the Termination Date, the following provisions shall apply:
(a) Bonus Stock - XxXxxxx shall immediately forfeit all of the
Bonus Stock, and the full ownership of such Bonus Stock shall
thereupon revert to the Corporation.
(b) Purchased Stock - The Corporation (as to the Corp. Stock) and
Saks (as to the Saks' Stock) shall have an option to
repurchase the Corp. Stock and the Saks' Stock, respectively,
for a purchase price (the "Purchase Price") equal to the
lesser of:
(i) the purchase price per share originally paid by
XxXxxxx, or
(ii) the per share value of the Corporation's common
stock determined by an independent appraiser in
conformity with the Business Valuation Standard of the
American Society of Appraisers and the Uniform Standards
of Professional Appraisal Practice, multiplied by the
number of shares being sold, which shall be based on the
appraisal most recently completed prior to the date of
the LeGrand's termination of employment.
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(c) Exercise of Option - If the Corporation and Saks (sometimes
referred to in this Section 3(c) as an "Option Holder") have
an option to purchase the Corp. Stock and the Saks' Stock (as
the case may be) pursuant to the provisions of Section 3(b) of
this Agreement, the option may be exercised by delivery of a
written notice of the Option Holder's exercise of the option
to the XxXxxxx within sixty (60) days of the termination of
LeGrand's employment (the "Notice of Exercise of Option"), and
XxXxxxx shall be obligated to sell to the Option Holder, all
of the Corp. Stock and the Saks' Stock(as the case may be)
then owned by XxXxxxx for the Purchase Price provided in
Section 3(b). The purchase and sale shall be closed on such
date and at such time and place (during normal business hours)
specified in the Notice of Exercise of Option from the Option
Holder to XxXxxxx, which closing shall be not less than thirty
(30) days after delivery of such Notice of Exercise of Option
nor more than ninety (90) days after the termination of
LeGrand's employment. At the closing the Option Holder shall
pay to XxXxxxx the full Purchase Price then due either (i) by
cashier's check or (ii) at the Option Holder's option, by
paying twenty percent (20%) of the Purchase Price by cashier's
check and by delivering to XxXxxxx a promissory note in
substantially the form attached hereto as Exhibit A (the
"Note") in the principal amount of the remainder of the
Purchase Price. The Note shall be dated as of the date of the
consummation of the aforesaid purchase, shall become payable
in five (5) equal, consecutive annual installments beginning
on the first anniversary of the closing date, and shall bear
interest (payable annually ) on the unpaid balance at the
lowest annual rate allowable under applicable provisions of
the Internal Revenue Code of 1986, as amended, to prevent any
portion of the principal payments from being treated as
imputed interest.
(d) LeGrand's Rights After Forfeiture or Sale - XxXxxxx shall have
no further rights under this Agreement with respect to the
Restricted Stock, after forfeiture of the Bonus Stock or the
sale of the Purchased Stock.
4. Right of First Refusal. In consideration of the agreement of the
Corporation to sell 30,000 shares of common stock of the Corporation to XxXxxxx,
contemporaneously herewith XxXxxxx gives the Corporation a right of first
refusal with respect to the Bonus Stock. After the Termination Date, if XxXxxxx
shall receive a bona fide written offer from a third party to purchase some or
all of the Bonus Stock at a specified purchase price and upon specified terms
and conditions (the "Third Party Offer"), XxXxxxx shall promptly give written
notice and a copy of such offer to the Corporation (the "Third Party Notice").
The Corporation shall have an option, but not the obligation, to purchase the
Bonus Stock which is subject to the Third Party Offer, which option may be
exercised within ten (10) days of the receipt by the Corporation of the Third
Party Notice by giving notice of such exercise to XxXxxxx ("Notice of Exercise
of Option"). If the Corporation elects to purchase the Bonus Stock which is
subject to the Third Party Offer, the closing shall take place no later than
twenty (20) days after the Notice of Exercise of Option at the offices of the
Corporation. The purchase price per share of the Bonus Stock shall be either (i)
seventy-five percent (75%) of the traded market value on the date of the Third
Party Notice if the stock of the Corporation is publicly traded, or (ii) one
hundred twenty-five percent (125%) of the book value per share of the
Corporation's stock determined as of the end of the Corporation's fiscal year
preceding the Third Party Notice if the stock of the Corporation is privately
held, as the case may be, multiplied by the number of shares of Bonus Stock to
be purchased. The purchase price shall be paid by cashier's check. As used
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herein the term "book value" shall have its generally accepted meaning for
accounting purposes and shall be determined by the firm of independent certified
public accountants employed by the Corporation. If the Corporation does not
elect to purchase the Bonus Stock which is subject to the Third Party Offer, the
Bonus Stock may be sold pursuant to the Third Party Offer, subject to the
restrictions contained in this Agreement and such limitations on transfer, if
any, as may exist under applicable law or any other agreement binding upon
XxXxxxx.
5. Certificates. One or more certificates representing the Restricted
Stock will be held by the Corporation or by its transfer agent, together with a
stock power to be executed by XxXxxxx in favor of the Corporation, until the
Termination Date, at which time a certificate or certificates for such
Restricted Stock will be issued to XxXxxxx. The certificates shall bear a legend
indicating that the shares of Restricted Stock are subject to the terms of this
Agreement.
6. Dividends and Voting. During the Period of Restriction with respect
to the Restricted Stock and until any subsequent transfer or forfeiture thereof
by XxXxxxx, XxXxxxx shall be treated as the sole beneficial owner of the
Restricted Stock, having all rights of a common stockholder of the Corporation
with respect thereto, except as otherwise may be set forth in this Agreement.
Specifically, (i) XxXxxxx shall be entitled to receive all dividends, payable in
stock, in cash or in kind, or other distributions, declared on or with respect
to any Restricted Stock as of a record date that occurs during the Period of
Restriction and prior to any transfer or forfeiture of such Restricted Stock,
provided that any such dividends payable in equity securities of the Corporation
or its affiliates, including Common Stock, any series of Preferred Stock, or any
warrants, options or rights to purchase any of the foregoing, shall be received
and held by XxXxxxx subject to the same restrictions on transfer and the same
conditions regarding forfeiture as apply to the Restricted Stock with respect to
which such dividends are paid, and (ii) XxXxxxx shall be entitled to exercise
all voting rights with respect to the Restricted Stock, if the record date for
the exercise of such voting rights occurs during the Period of Restriction and
prior to any transfer or forfeiture of the Restricted Stock. In the event of
forfeiture of the Restricted Stock by XxXxxxx, he shall not be required to
return to the Corporation any dividends or distributions previously paid to
XxXxxxx with respect to the Restricted Stock.
7. Designation of Beneficiary. XxXxxxx may designate a person or
persons to receive the Restricted Stock, in the event of the death of XxXxxxx.
Such designation must be made upon forms supplied by and delivered to the
Corporation and may be revoked in writing. If XxXxxxx fails effectively to
designate a beneficiary, LeGrand's estate will be deemed to be the beneficiary
of XxXxxxx with respect to the Restricted Stock.
8. Adjustments. In the event of any change in the outstanding shares of
common stock by reason of any stock dividend or stock split, recapitalization,
merger, sale, consolidation, spinoff, reorganization, combination, issuance of
stock rights or warrants, exchange of shares, or other similar corporate change,
an appropriate adjustment will be made by the Corporation to the number of
shares of Restricted Stock, the rights to which were previously awarded hereby,
consistent with equitable considerations; provided, however, that if the
Corporation shall deliver additional shares of common stock or other securities
for consideration, no such adjustment shall be made. No such adjustment may
materially change the value of benefits available to XxXxxxx as a result of the
prior award of the Restricted Stock.
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9. Change in Control. Notwithstanding anything to the contrary set
forth elsewhere in this Agreement, in the event of a "Change in Control" of the
Corporation, as defined below, all restrictions on transfer of the Restricted
Stock (other than the right of first refusal provided for in Section 4 hereof)
then in effect pursuant to Section 2 or any other provision of this Agreement
shall lapse and cease to be effective, as of the date of such Change in Control.
A Change in Control shall be deemed to have occurred as of the first
date that (a) any individual, corporation (other than the Corporation),
partnership, trust, association, pool, syndicate, or any other entity or any
group of persons acting in concert (other than any of the foregoing that is
controlled by or under common control with the Corporation) becomes the
beneficial owner, as that concept is defined in Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, as the result of any one or more securities transactions (including
gifts and stock repurchases but excluding transactions described in subdivision
(C), below), of securities of the Corporation then possessing thirty-five
percent (35%) or more of the voting power for the election of directors of the
Corporation, or (b) "approved directors" shall constitute less than a majority
of the entire Board of Directors of the Corporation, with "approved directors"
defined to mean the members of such Board as of the Date of Grant and any
subsequently elected members of such Board who shall be nominated or approved by
a majority of the approved directors on the Board prior to such election, or,
(c) the Corporation shall have entered into a binding agreement for a Sale of
the Corporation, as defined below, and shall have received all required
corporate, regulatory and other approvals for consummating such transaction. For
purposes of subdivision (c) of the preceding sentence, "Sale of the Corporation"
shall mean (i) any consolidation, merger or stock- for-stock-exchange involving
the Corporation or the securities of the Corporation in which the holders of
voting securities of the Corporation immediately prior to the consummation of
such transaction will own, as a group, immediately after such consummation,
voting securities of the Corporation (or, if the Corporation is not to survive
such transaction, voting securities of the corporation that issues securities to
such holders in such transaction) having less than fifty percent (50%) of the
total voting power in an election of directors of the Corporation (or such other
corporation), excluding any securities of any such other corporation owned by
any members of such group prior to such transaction and any securities to be
received in such transaction by any members of such group which represent
disproportionate percentage increases in their shareholdings vis-a-vis the other
members of such group, or (ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions), of all, or substantially
all, of the assets of the Corporation to a party which is not controlled by or
under common control with the Corporation.
10. Effect on Employment. The grant of the Restricted Stock and rights
thereto provided for herein shall not confer upon XxXxxxx any right to continue
in the employment of the Corporation or its Subsidiaries or to continue to
perform services for the Corporation or its Subsidiaries and shall not in any
way interfere with the right of the Corporation or its Subsidiaries to terminate
the services of XxXxxxx as an employee or officer at any time.
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11. Withholding. To the extent that the grant of the Restricted Stock
granted hereunder may obligate the Corporation to pay withholding taxes on
behalf of XxXxxxx, the Corporation will pay the minimum amount of such
withholding taxes then due and will (i) withhold such amount from LeGrand's
wages or other payments due to XxXxxxx, or (ii) apply to such payment funds then
delivered by XxXxxxx to the Corporation for such purpose, or (iii) withhold from
the Restricted Stock then distributed to XxXxxxx (and the certificate or
certificates representing such distributed shares of Restricted Stock) a number
of shares of Restricted Stock otherwise then distributable to XxXxxxx having a
fair market value on the date such shares of Restricted Stock are granted equal
to the amount of such payment, in which event XxXxxxx shall have no further
rights to such withheld shares of Restricted Stock.
12. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Missouri.
13. Execution of Agreement. In order to obtain all rights under this
Agreement, XxXxxxx must sign and return this Agreement to the Corporation prior
to, or simultaneously with, the delivery of the Restricted Stock by the
Corporation to XxXxxxx. If XxXxxxx fails to sign and return this Agreement to
the Corporation, the award of Restricted Stock provided for herein shall be
deemed void and never to have been granted.
The parties hereto have executed this Agreement as of the date first
above written.
LMI AEROSPACE, INC.
By:_________________________________
(Authorized Officer)
------------------------------------
Xxxxxxxx X. XxXxxxx
Xxxxxx X. Xxxx has executed this Agreement as of the date first above
written solely for the purpose of accepting the right of first refusal given to
him by XxXxxxx pursuant to Section 4 of this Agreement.
__________________________________
Xxxxxx X. Xxxx
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