Exhibit 10 (g)
Form of Outside Director Stock Purchase Agreement
WOODWARD GOVERNOR COMPANY
OUTSIDE DIRECTOR STOCK PURCHASE AGREEMENT
Dated as of
_______________________
WOODWARD GOVERNOR COMPANY
Attention: Mr. John Halbrook, President
5001 North Second Street
Rockford, IL 61111
Dear Mr. Halbrook:
The undersigned, _______________, understands that you, Woodward Governor
Company, a Delaware corporation (the "Company") is authorized to issue
60,000,000 shares, designated Common Stock of the par value of $0.00875 per
share (the "Company Stock"), of which as of _______________, (i) __________
shares were issued and outstanding, and (ii) _______ shares were issued but are
not outstanding and are owned and held by the Company as treasury shares.
In accordance with the Company's Director Share Ownership Guideline, the Company
is authorized to sell treasury shares of the Company Stock to each of its
directors who are not officers, members or employees of the Company (the
"Outside Directors"). The aggregate purchase price to me for the shares of
Company Stock I purchase will be One Hundred Eleven Dollars ($111,000.00) (the
"Purchase Price"). The price per shall be equal to the Fair Market Value of such
stock as quoted on the Nasdaq National Market at the close of business on the
date of this agreement. The shares of the company Stock to be purchased by me
hereunder shall be the number of whole shares of Company Stock which may be
acquired for the Purchase Price based upon the Fair Market Value per share as of
the Purchase Date (the "Shares").
I confirm my agreement with the Company as follows in connection with my
purchase of the Shares. Accordingly, the company confirms its agreement with me.
(1) PURCHASE OF SHARES. Subject to the terms and conditions herein set
forth, I agree to purchase from the Company, and the Company agrees to sell
to me, the number of Shares which may be purchased for the Purchase Price
at a price per share equal to the Fair Market Value per share as of the
Purchase Date.
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(2) PAYMENT OF PURCHASE PRICE. In payment of the Purchase Price, I agree to
deliver to the Company within 10 days following the Purchase Date a
Non-Interest Bearing Installment Note from me in the amount of the Purchase
Price dated the Purchase Date and payable to your order, expressed to
mature in 60 monthly installments as follows: $1,850.00 on the 20th day of
_______, and $1,850.00 on the same day of each and every succeeding month
thereafter to and including a final installment on the 20th day of
____________, such note to be in the form of the Non-Interest Installment
Note from me which is attached hereto as Exhibit A and hereby made a part
hereof (the "Installment Note"). The remaining balance on the Installment
Note will be accelerated in the event I cease to be an Outside Director of
the Company for any reason and shall be payable 90 days thereafter.
(3) PURCHASE DATE. The purchase and sale provided for herein shall be
consummated and closed at the office of the Company, 5001 North Second
Street, Rockford, Illinois 61111, commencing at 11:00 a.m., Rockford local
time, on ______________.
(4) ASSIGNMENT OF RETAINER FEES. I agree that commencing as of the Purchase
Date, and on each of the next 60 payment dates thereafter, the Company may
withhold and retain the monthly retainer fees due me from the company for
my service as a member of the Board of Directors of the Company (the
"Retainer Fees") in satisfaction of the payment of the Purchase Price for
the Shares under the Installment Note. I hereby sell, assign, convey and
transfer to the Company all my right, title and interest to any and all
payments due me as Retainer Fees, including any and all increases thereof.
The assignment of Retainer Fees shall be effective as of the Purchase Date
until the Installment Note is paid and satisfied in full.
(5) PREPAYMENT. The unpaid monthly installments of the Purchase Price for
Shares to be purchased by me hereunder may be prepaid by me in whole or in
part at any time. In case of any prepayment of the Purchase Price in part,
such prepayment shall be applied to the installments hereof in the inverse
order of their respective maturities. Any monthly Retainer Fees in excess
of $1,850.00 shall be applied by the Company as a prepayment hereunder.
(6) ISSUANCE OF STOCK CERTIFICATE. On the Purchase Date, the Company shall
issue to me a stock certificate evidencing the number of Shares purchased
by me hereunder.
(7) TRANSFERABILITY AND CONTINUING OBLIGATION. The rights granted me
hereunder may not be sold, pledged, assigned, transferred or otherwise
disposed of in any manner whatsoever. Only I shall have the right to
purchase Shares hereunder. Furthermore, except as mutually agreed otherwise
by the parties hereto, I understand and agree that my obligation under the
Installment Note and this Agreement are with recourse and binding
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on me individually until satisfied in full, including without limitation,
in the event (i) of my death, or (ii) that I am no longer an Outside
Director for any reason.
(8) FINANCIAL RISKS. I acknowledge that I have received all information
which I deem necessary and appropriate to evaluate the financial risks
inherent in my purchase of Shares hereunder, and I acknowledge that I have
satisfactory and complete information concerning the business, operations,
and finances of the Company in response to all my inquiries in respect
thereof.
(9) INVESTMENT REPRESENTATION. I represent and warrant that the Shares
acquired by me pursuant to this agreement (i) will be acquired by me for my
own account, (ii) will be acquired by me for investment and not with a view
to, or for sale in connection with, any distribution thereof, (iii) will be
acquired by me with no present intention of selling or distributing such
shares. I agree that I will not dispose of the Shares purchased by me
hereunder in such a manner as will violate the Securities Act of 1933, as
amended, or any applicable rules and regulations thereunder and until and
unless the Company shall have been furnished with an opinion of counsel
satisfactory to it to the effect that any proposed disposition of such
shares may be effected without such violation. I agree that all
certificates evidencing the Shares acquired by me hereunder will be marked
with a legend as follows:
"The shares evidenced by this Certificate have not been
registered under the Securities Act of 1933, as amended. The shares
evidenced hereby may not be sold, transferred, pledged or hypothecated
in the absence of an effective registration statement for the shares
under the Securities Act of 1933, as amended, or an opinion of counsel
satisfactory to the Corporation prior to the proposed transaction that
registration is not required under said Act."
I represent that I have been informed by the Company and understand that
the Shares acquired by me hereunder will not be registered under the
Securities Act of 1933, as amended, and that the Company does not
contemplate and is not legally required to file any such registration.
Accordingly, in connection with any future resale of the Shares acquired by
me hereunder I acknowledge that my attention has been directed to Rule 144
under the Securities Act of 1933, as amended, and that I have been advised
that the Shares acquired by me hereunder must be held indefinitely unless
they are subsequently registered under the Securities Act of 1933, as
amended, or an exemption from such registration is available.
(10) NOTICES. All notices, requests, demands and other communication
hereunder shall be in writing and shall be deemed to have been duly given
when delivered personally or when deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid,
addressed as follows:
(a) if to me, to:
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(b) if to you, to:
Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61111
Attention: Stephen P. Carter, Vice President, Chief Financial
Officer and Treasurer
or to such other address or addresses as you or I may communicate in
writing to the other by notice given pursuant to the provisions of this
paragraph (10). Written notice given by any other method shall be deemed
effective only when actually received by the party to whom given.
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(11) MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
between you and me with respect to the subject matter hereof, (ii) shall
not be assigned or transferred by your or me, (iii) shall be governed in
all respects by the laws of the State of Illinois, and (iv) may be executed
in two or more counterparts which together shall constitute a single
instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to me the enclosed copy of this Outside Director Stock
Purchase Agreement whereupon it shall become a binding agreement between us.
Very truly yours,
By ________________________________
The foregoing is hereby confirmed
and agreed to as of the ____ day of
__________, ______.
WOODWARD GOVERNOR COMPANY
By __________________________________
John A. Halbrook, Chairman and CEO
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