1
EXHIBIT 99.11
PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON COMPANY LONG-TERM INCENTIVE PLAN
WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company"), in consideration of services heretofore rendered and to
be rendered during the term of this Agreement, hereby issues and
transfers to David P. Gruber of 16 Carding Mill Road, Sudbury,
Massachusetts (the "Grantee"), President and Chief Executive
Officer of the Company, 150,000 shares (the "Shares") of the
Company's common stock, par value $1.00 per share, (the "Company
Common Stock") having a restricted period beginning on May 24, 1994
and ending on May 24, 1999 (the "Restricted Period") pursuant to
the terms and conditions set forth in the Wyman-Gordon Company
Long-Term Incentive Plan, as it may be amended from time to time in
accordance with its terms (the "Plan") and this Performance Share
Agreement, as it may be amended from time to time in accordance
with its terms (the "Agreement"). By execution of this Agreement,
the Grantee acknowledges receipt of a copy of the Plan and further
agrees to be bound thereby and by the actions, pursuant to the
Plan, of the Committee referred to in the Plan (the "Committee")
and of the Company's Board of Directors.
(1) The Grantee acknowledges receipt of a stock
certificate registered in his name for the Shares and bearing a
legend setting forth the restrictions set forth in Section (2) of
this Agreement. The Grantee agrees, concurrently with the
execution of this Agreement, to deposit such stock certificate with
the Company together with a stock power relating thereto endorsed
in blank.
(2) The Grantee acknowledges that the Shares may not be
sold, assigned, transferred, pledged or otherwise encumbered during
the Restricted Period except in accordance with the terms of this
Agreement. If the Grantee ceases to be employed by the Company
prior to the end of the Restricted Period, his rights to the Shares
shall thereupon be forfeited and revert to the Company.
Notwithstanding the foregoing if the Grantee's employment is so
terminated by Grantee's death or permanent disability, the
Restricted Period shall be deemed to have ended on the date of
Executive's death or permanent disability for the purposes of
determining the number of Shares, if any, as to which restrictions
would lapse in accordance with Section (3) below. The number of
shares as to which restrictions shall lapse under this Section (2)
in the event of such death or permanent disability shall be the
number of Shares determined in accordance with the previous
sentence multiplied by a fraction the numerator of which shall be
the full number of months the Executive has served as Chief
Executive Officer of the Company during the Restricted Period and
the denominator of which shall be 60. The restrictions contained
herein on the number of Shares as so determined shall be deemed
lapsed and terminated and such Shares shall not be forfeited and
shall vest in Grantee or Grantee's Beneficiary referred to in
-21-
2
Section (15) hereof. For example, if the price of the Shares
reaches $10.00 for the period specified in clause (ii) of the first
sentence of Section (3) and the Executive shall have served as
Chief Executive Officer of the Company for 28 months during the
Restricted Period, then the number of shares as to which
restrictions shall lapse shall be 100,000 shares multiplied by 28
and divided by 60 or 46,666 2/3 shares.
If an event of a Change of Control, as hereinafter
defined, shall occur, the Committee in its sole discretion may, but
need not, determine that the restrictions shall be deemed lapsed
and terminated with respect to some or all of the Shares and such
Shares, if any as determined by the Committee, shall not be
forfeited and shall vest in the Grantee.
(3) At the end of the Restricted Period, the Committee
shall determine the average closing price of the Company Common
Stock on the NASDAQ National Market System, or on any successor
market or exchange in which the Company Common Stock is publicly
traded, as quoted in the Wall Street Journal for each of the
following periods (i) the last 30 business days of the Restricted
Period and (ii) the period of 90 consecutive business days during
which the Company Common Stock had the highest average closing
price at any time during the Restricted Period. The higher of the
prices determined pursuant to the previous sentence shall be the
"Target Price." Restrictions on all or a portion of the Shares
will lapse at the conclusion of the Restricted Period only if the
Target Price has reached the amounts set forth below:
Portion of Shares on which
Target Price Restrictions will Lapse
Less than $10.00 None
$10.00 66 2/3%
More than $10.00 but Pro rata portion between
Less than $12.00 66 2/3% and 100%
$12.00 or More 100%
(4) Upon the expiration or termination of the
Restricted Period and the satisfaction of all other conditions
contained in this Agreement, including those set forth in Section 3
above, the restrictions applicable to the Shares shall lapse and a
stock certificate for the number of Shares with respect to which
the restrictions have lapsed shall be delivered to the Grantee,
free of all such restrictions except (i) any that may be imposed by
law and (ii) the further restriction that the Grantee shall retain
33 1/3% of such Shares for as long as he continues to serve as
Chief Executive Officer of the Company. Any Shares as to which the
restrictions shall not have lapsed hereunder shall be transferred
to the Company without any further action of the Grantee. The
Company shall not be required to deliver any fractional share of
Stock but will pay, in lieu thereof, the fair market value
(determined as of the date the restrictions lapse) of such
fractional share to the Grantee.
-2-
3
(5) The Grantee shall have all voting and dividend
rights with respect to the Shares, provided that dividends paid in
stock or other property shall be deposited with the Company
together with a stock power or other appropriate instrument of
transfer endorsed in blank and shall be subject to the same
restrictions as the Shares.
(6) The Shares have not been registered for resale
under the Securities Act of 1933, as amended, and may be offered
and sold only if registered pursuant to the provisions of that Act
or if an exemption from registration is available. The Grantee
hereby acknowledges that the Shares have not been so registered and
agrees to offer or sell same only if they have been registered
pursuant to the provisions of that Act or if an exemption from
registration is available. The Grantee understands that the
Company may place stop-transfer instructions with its transfer
agents with respect to the Shares and may cause all certificates
representing the Shares to be conspicuously legended to evidence
the fact that the Shares have not been registered under the
Securities Act of 1933, as amended, and may be offered or sold only
if registered pursuant to the provisions of that Act or if an
exemption from registration is available. The Grantee hereby
represents that he accepts the Shares for his own account for
investment and not with a view to, or for sale in connection with,
the distribution of any part thereof and the Grantee acknowledges
that he or his beneficiary may be required by the Committee to
repeat this representation in writing upon the delivery of shares
which are free of restrictions under this Agreement.
(7) If Grantee properly elects, within 30 days of the
date of this Agreement, to include in gross income for federal
income tax purposes an amount equal to the aggregate value of the
Shares subject to the Award based on the closing price of the Stock
on the date of this Agreement, Grantee shall make arrangements
satisfactory to the Committee to pay to the Company any federal,
state or local taxes required to be withheld with respect to such
Shares. If the Grantee shall fail to make such tax payments as are
required, the Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to
the Grantee any federal, state or local taxes of any kind required
by law to be withheld with respect to the Shares.
If the Grantee does not make the election
described above in this Section 7, Grantee shall, no later than the
date as of which the restrictions referred to in Section 3 and such
other restrictions as may have been imposed under this Agreement,
shall lapse, pay to the Company, or make arrangements satisfactory
to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to
the Shares, and the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due
to the Grantee any federal, state or local taxes of any kind
required by law to be withheld with respect to the Shares. Any tax
withholding may be satisfied, at the discretion of the Committee,
by the Company's withholding Shares, otherwise deliverable to
Grantee hereunder with a Fair Market Value (as defined in the Plan)
equal to all or a portion of the amount to be withheld.
-3-
4
At the sole discretion of the Committee, the
Company may make a loan to Grantee in such amount as may be
required to discharge his federal income tax liability on account
of the lapsing of restrictions under Section (3) above assuming the
resulting income is taxable at the maximum applicable individual
federal income tax rate. Such loan shall have such maturity and
other terms and conditions as the Committee shall determine in its
sole discretion, and shall bear interest at the applicable federal
rate under Section 1274(d) of the Internal Revenue Code or any
successor provision thereto.
(8) The issuance of the Shares to Grantee shall be
subject to the condition that if at any time the Company shall
determine (in accordance with the provisions of the following
sentence) that it is necessary as a condition of, or in connection
with, such exercise (a) to satisfy withholding tax or other
withholding liabilities, (b) to effect the listing, registration,
or qualification on any securities exchange or under any state or
Federal law of any Shares otherwise deliverable in connection with
such exercise, or (c) to obtain the consent or approval of any
regulatory body, then in any such event such exercise shall not be
effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company in
its reasonable and good faith judgment. Any such determination
(described in the preceding sentence) by the Company must be
reasonable, must be made in good faith, and must be made without
any intent to postpone or limit such exercise, grant or distribu-
tion beyond the minimum extent necessary and without any intent
otherwise to deny or frustrate the Grantee's rights in respect
thereof. In seeking to effect or obtain any such withholding,
listing, registration, qualification, consent or approval, the
Company shall act with all reasonable diligence.
(9) This Agreement is in all respects governed by the
terms of the Plan. All of the terms and provisions of the Plan are
hereby incorporated into this Agreement by reference and are made a
part of this Agreement. Each and every provision of this Agreement
shall be administered, interpreted, and construed so that this
Agreement shall conform to the provisions of the Plan. Any
provisions of this Agreement that cannot be so administered,
interpreted, or construed shall be disregarded, and, accordingly,
in the event of any conflict between this Agreement and the Plan,
the latter will govern. Any capitalized terms used herein and not
defined herein have the respective meanings ascribed to them in the
Plan. Whenever the word "Grantee" is used herein in a context
where the provision should logically be construed to apply to the
Grantee's Beneficiary, the word "Grantee" shall be deemed to
include such Beneficiary.
(10) In the event that there is any change in the
Company Common Stock through merger, consolidation, reorganization,
recapitalization, or otherwise; or if there shall be any dividend
on the Shares, payable in Shares, or an extraordinary cash dividend
or other extraordinary distribution; or if there shall be a stock
split, reverse stock split, combination of Shares, exercisability
of stock purchase rights received under the Company's Stockholder
-4-
5
Rights Plan, or other similar corporate transaction or event that
affects the Shares, such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the rights of the Grantee or of the potential
benefits intended to be made available under this Agreement, the
number and kind of Shares and the other relevant provisions of this
Agreement shall be appropriately adjusted as provided in Section 13
of the Plan.
(11) For purposes of this Agreement, a Change in
Control shall be deemed to have occurred when and only when the
first of the following events occurs: (a) the acquisition
(including by purchase, exchange, merger or other business
combination, or any combination of the foregoing) by any
individuals, firms, corporations or other entities, other than a
Major Stockholder on the date of this Agreement, acting in concert
("Person"), together with all Affiliates and Associates of such
Person, of beneficial ownership of securities of the Company
representing 20 percent or more of the combined voting power of the
Company's then outstanding voting securities; or (b) members of the
Incumbent Board cease to constitute a majority of the Board of
Directors.
Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur pursuant to clause (a), above,
(i) solely because 20 percent or more of the combined voting power
of the Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company, or (ii) if the
Grantee is included among the individuals, firms, corporations or
other entities that, acting in concert, acquire the Company's
securities. For purposes of this Paragraph 11, the terms
"Affiliates" and "Associates" shall have the meanings set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under
the 1934 Act; the terms "beneficial ownership" and "beneficially
owned" shall have the meaning set forth in section 13(d) of the
1934 Act, as amended, and in Rule 13d-3 promulgated thereunder; the
term "Major Stockholder" shall mean all Shares beneficially owned
by the Fuller Foundation, the Stoddard Charitable Trust, and
descendants of Harry G. Stoddard and their spouses; and the term
"Incumbent Board" shall mean (i) the members of the Board of
Directors on the date hereof, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual
who becomes a member of the Board of Directors after the date
hereof, if his election or nomination for election as a director
was approved by a vote of at least three quarters of the then
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the 1934
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board of
Directors.
(12) Notices hereunder shall be mailed or delivered to
the Treasurer of the Company at its principal place of business at
Grafton, Massachusetts, and shall be mailed or delivered to Grantee
at his address set forth above or at such other address as he may
subsequently furnish the Treasurer of the Company in writing.
-5-
6
(13) The Committee may not, without the written
consent of the Grantee, cause this Agreement to be revoked, and may
not without such written consent make or change any determination
or change any term, condition or provision hereunder if the
determination or change would reduce or adversely affect the
Grantee's rights hereunder.
(14) Notwithstanding anything herein to the contrary,
on or after the occurrence of a Change in Control, as defined
above, the Committee may not under any circumstances make or change
any determination or change any term, condition, or provision
affecting this Agreement if the determination or change would
reduce or adversely affect the Grantee's rights hereunder.
(15) The Grantee shall designate a Beneficiary in
writing and in such manner as is acceptable to the Company. If the
Grantee fails so to designate a Beneficiary, or if no such
designated Beneficiary survives the Grantee, the Grantee's
beneficiary shall be the Grantee's estate.
(16) Nothing in this Agreement shall confer upon the
Grantee the right to continue in the employment or service of the
Company or affect any right that the Company may have to terminate
the employment or service of (or to demote or to exclude from
future Awards under the Plan) the Grantee at any time for any
reason.
(17) So long as this Agreement shall remain in effect,
the Company shall furnish to the Grantee, as and when available, a
copy of any Prospectus issued with respect to the Shares covered
hereby, and also a copy of all material hereinafter distributed by
the Company to its stockholders generally.
(19) This Agreement is nontransferable by Grantee
other than by will or by the laws of descent and distribution.
This Agreement and the provisions thereof shall be binding upon,
and inure to the benefit of, any successor or successors of the
Company and the person or entity to whom his rights hereunder may
have been transferred by will, the laws of descent and distribu-
tion, or beneficiary designation hereunder.
(22) This Agreement shall be governed and its
provisions construed, enforced and administered in accordance with
the laws of the Commonwealth of Massachusetts except to the extent
that such laws may be superseded by any Federal law. It may not be
modified orally.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of May 24, 1994.
WYMAN-GORDON COMPANY
By: /s/ John M. Nelson
John M. Nelson, Chairman
/s/ David P. Gruber
David P. Gruber
-6-