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EXHIBIT 10.B
FORM OF PERFORMANCE SHARE AGREEMENT
UNDER THE WYMAN-GORDON LONG-TERM INCENTIVE PLAN
This Agreement is made as of the 16th day of July 1996
between WYMAN-GORDON COMPANY, a Massachusetts corporation (the
"Company") and (the "Grantee"), relating to 9,100 shares (the
"Shares") of the Company's common stock, par value $1.00 per
share (the "Common Stock") to be issued by the Company to the
Grantee 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") in consideration of services heretofore rendered and
to be rendered by Grantee to the Company during the term of this
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. On the date hereof the Company shall issue the Shares to
the Grantee which shall be subject to risk of loss and forfeiture
during a period beginning on the date hereof and ending on July
16, 2001 (the "Term of this Agreement"). During the Term of this
Agreement, the Committee shall determine the average closing
price of the Common Stock on the NASDAQ National Market System,
or on any successor market or exchange in which the Common Stock
is publicly traded, as quoted in the WALL STREET JOURNAL during
each period of 30 consecutive business days during the Term of
this Agreement, each such period being referred to herein as a
"Measurement Period" and the average prices being referred to
herein as the "Target Price." Restrictions on all or a portion
of the Shares will lapse only if the Target Price during a
Measurement Period has reached the amounts set forth below:
CUMULATIVE NUMBER OF
SHARES ON WHICH
TARGET PRICE RESTRICTIONS WILL LAPSE
Below $21.00 0
21.00 455
22.00 910
23.00 1,820
24.00 3,185
25.00 4,550
26.00 5,915
27.00 7,280
28.00 8,190
29.00 8,645
30.00 and above 9,100
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Upon achieving a Target Price for a Measurement Period as set
forth above, the restrictions set forth above and in Section 3
below shall lapse with respect to the number of Shares indicated
in the table as to which restrictions have not previously lapsed.
At the end of the Term of this Agreement, Grantee shall forfeit
all right, title and interest in the Shares to the extent that
the Target Price with respect to such Shares has not been
attained.
2. 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 1 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.
3. The Grantee acknowledges that the Shares may not be
sold, assigned, transferred, conveyed, pledged or otherwise
encumbered during the Term of this Agreement except in accordance
with the provisions of this Agreement. If the Grantee ceases to
be employed by the Company prior to the end of the Term of this
Agreement, his rights to the Shares to the extent restrictions
have not previously lapsed as provided above in Section 1 will
thereupon be forfeited and revert to the Company.
4. Upon the attainment of the Target Price as provided in
Section 1 and the satisfaction of all other conditions contained
in this Agreement, the restrictions applicable to the designated
number of 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 any that may be imposed by law. Any Shares
as to which the restrictions shall not have lapsed at the end of
the Term of this Agreement shall be transferred to the Company
without any further action of the Grantee.
5. If an event of a Change of Control, as defined below,
shall occur, the Committee in its sole discretion may, but need
not, determine that the restrictions not previously lapsed and
terminated 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 upon such terms and conditions as the Committee may
determine. "Change in Control" means any one of the following
events: (1) stockholder approval of a merger or consolidation
involving the Company or a sale of all or substantially all of
the assets of the Company, in each case except for a transaction
in which the Company's shareholders receive at least 50% of the
stock of the surviving, resulting or acquiring corporation; (2)
any "person" (other than the Company or an employee benefit plan
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of the Company or a corporation controlled by the Company's
employee benefit plan of the Company or a corporation controlled
by the Company's stockholders) becomes the "beneficial owner" of
shares of capital stock of the Company representing a majority of
the votes entitled to be cast on matters submitted to the
shareholders of the Company; or (3) persons who, as of July 16,
1996, constituted the Company's Board (the "Incumbent Board")
cease for any reason, including without limitation as a result of
a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any
person becoming a director of the Company subsequent to July 16,
1996 whose election was approved by at least a majority of the
directors then comprising the Incumbent Board shall for purposes
of this Agreement, be considered a member of the Incumbent Board.
For purposes of this paragraph, the term "person" shall have the
meaning used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 as amended (the "1934 Act"), and "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 of the
1934 Act.
6. The Grantee shall have all voting and dividend rights
with respect to the Shares, provided that non-cash dividends
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.
7. If the 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 1 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.
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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.
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 1 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
of 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 or any conditions not acceptable to the Company in
its reasonable and good faith judgment.
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.
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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 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 12 of the Plan.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
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16. 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.
17. 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
distribution, or beneficiary designation hereunder.
18. 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 the date first written above.
WYMAN-GORDON COMPANY
By: /S/DAVID P. GRUBER
David P. Gruber
President and Chief
Executive Officer
GRANTEE
Grantee's Signature
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