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EXHIBIT 10.M
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 J. Stewart
Smith, 11611 Knobcrest Drive, Houston, Texas 77070 (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 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:
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CUMULATIVE NUMBER OF
SHARES ON WHICH
TARGET PRICE RESTRICTIONS WILL LAPSE
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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
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
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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 above 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 of 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 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 shareholders) 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
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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 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
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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.
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 of 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
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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 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.
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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.
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 extend that such laws may be superseded by
any Federal law. It may not be modified orally.
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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
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David P. Gruber, President
and Chief Executive Officer
/s/ J. Stewart Smith
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J. Stewart Smith
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