EXHIBIT 10.19
DeCRANE HOLDINGS CO.
and DeCRANE AIRCRAFT HOLDINGS, INC.
STOCK OPTION INCENTIVE PLAN
SECTION 1. PURPOSE. The purposes of the DeCrane Holdings Co. Stock
Incentive Plan are to promote the interests of DeCrane Holdings Co. (the
"COMPANY") and its stockholders by (i) attracting and retaining exceptional
executive personnel and other key employees of the Company and its Subsidiaries,
as defined below; (ii) motivating such employees by means of performance-related
incentives to achieve longer-range performance goals; and (iii) enabling such
employees to participate in the long-term growth and financial success of the
Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, the terms "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), when used with respect to any Person, means the possession, directly or
indirectly of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"AWARD" means any Option.
"AWARD AGREEMENT" means an agreement in substantially the Form attached
hereto as Exhibit A, or any other written agreement, contract, or other
instrument or document, designated by the Committee, evidencing any Award which
may, but need not, be executed or acknowledged by a Participant.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means (i) dishonesty by a Participant that results in substantial
personal enrichment at the expense of the Company; (ii) willful violations of a
Participant's obligations to the Company (including under any employment
agreement between the Participant and the Company) which result in material
injury to the Company; (iii) a Participant's conviction of any felony involving
the personal dishonesty of the Participant; or (iv) a Participant's chronic
alcoholism or abuse of controlled substances.
"CHANGE OF CONTROL" means:
(a) any "person" (as such term is used in Section 3(a)(9) and 13(d)(3)
of the Exchange Act) other than (A) the DLJ Entities and/or their
respective Permitted Transferees (as defined in the Investors'
Agreement) or (B) any "group" (within the meaning of such
Section 13(d)(3)) of which the DLJ Entities constitute a majority
(on the basis of ownership interest), acquires, directly or indirectly,
by virtue of the consummation of any purchase, merger or other
combination, securities of the Company representing more than 51% of the
combined voting power of the Company's then outstanding voting securities
with respect to matters submitted to a vote of the stockholders generally;
or
(b) a sale or transfer by the Company or any of its Subsidiaries of
substantially all of the consolidated assets of the Company and its
Subsidiaries to an entity which is not an Affiliate of the Company prior to
such sale or transfer.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan. Until otherwise determined by the Board, the full Board
shall be the Committee under the Plan.
"DISABILITY" shall mean a Participant's inability to perform the duties of
his or her employment due to mental or physical incapacity for a period of six
consecutive months.
"EMPLOYEE" means an employee of the Company or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means with respect to the Shares, as of any given date
or dates, the average reported closing price of a share of such class of common
stock on such exchange or market as is the principal trading market for such
class of common stock for the three trading days immediately preceding such date
or dates. If such class of common stock is not traded on an exchange or
principal trading market on such date, the fair market value of a Share shall be
determined by the Committee in good faith taking into account as appropriate
recent sales of the Shares, recent valuations of the Shares and such other
factors as the Committee shall in its discretion deem relevant or appropriate.
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"INVESTORS' AGREEMENT" means the Amended and Restated Investors' Agreement
dated as of October 2, 1998 among (i) the Company, (ii) DLJ Merchant Banking
Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore
Partners II, C.V., DLJ Diversified Partners, L.P., DLJ Diversified Partners-A,
L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMB
Funding II, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, DLJ First
ESC, L.P. and DLJ ESC II, L.P. (collectively, the "DLJ ENTITIES") and (iii)
certain other Persons listed on the signature pages thereof.
"OPTION" means a right to purchase Shares from the Company granted under
Section 6 of the Plan.
"PARTICIPANT" means any Employee selected by the Committee to receive an
Award under the Plan (and to the extent applicable, any heirs or legal
representatives thereof).
"PERMITTED TRANSFEREE" shall have the meaning assigned to it in the
Investors' Agreement.
"PERSON" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"PLAN" means this DeCrane Holdings Co. Management Incentive Plan.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SHARES" means shares of common stock, $0.01 par value, of the Company or
such other securities as may be designated by the Committee from time to time.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"SUBSTITUTE AWARDS" means Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
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SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Company, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to a Participant; (iii) determine the number of
Shares to be covered by, or with respect to which payments, rights, or other
matters are to be calculated in connection with, Awards; (iv) determine the
terms and conditions of any Award and Award Agreement; (v) determine whether, to
what extent, and under what circumstances Awards may be settled or exercised in
case, Shares, other securities, other Awards or other property, or canceled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan; (viii) establish,
amend, suspend, or waive such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan; and (ix)
make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
(b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any Subsidiary,
any Participant, any holder or beneficiary of any Award, any shareholder and any
Employee.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section 4(b)
and 4(c), the number of Shares with respect to which Awards may be granted
under the Plan shall be approved by resolution of the Board upon the adoption
of this Plan. If, after the effective date of the Plan, any Shares covered by
an Award granted under the Plan or to which such an Award relates are
forfeited, or if such an Award is settled for cash or otherwise terminates or
is canceled without the delivery of Shares, then the Shares covered by such
Award, or to which such Award relates, or the number of Shares otherwise
counted against the aggregate number of Shares with respect to which Awards
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may be granted, to the extent of any such settlement, forfeiture, termination
or cancellation, shall, in the calendar year in which such settlement,
forfeiture, termination or cancellation occurs, again become Shares with
respect to which Awards may be granted unless any dividends have been paid
thereon prior to such settlement, forfeiture, termination or cancellation.
In addition, Shares tendered in satisfaction or partial satisfaction of the
exercise price of any Award or any tax withholding obligations will again
become Shares with respect to which Awards may be granted. Notwithstanding
the foregoing and subject to adjustment as provided in Section 4(b), no
Employee of the Company may receive Options in any calendar year that relate
to more than a number of Shares, if any, fixed by resolution of the Board
from time to time.
(b) ADJUSTMENTS. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number of Shares of the Company (or number and kind of other securities
or property) with respect to which Awards may thereafter be granted, (ii) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award, or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award.
(c) SUBSTITUTE AWARDS. Any Shares underlying Substitute Awards shall not
be counted against the Shares available for Awards under the Plan.
(d) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, shall be eligible to be
designated a Participant.
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SECTION 6. STOCK OPTIONS.
(a) GRANT. Subject to the provisions of the Plan and contractual
restrictions affecting the Company, the Committee shall have sole and complete
authority to determine the Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the exercise price therefor
and the conditions and limitations applicable to the exercise of the Option.
(b) EXERCISE PRICE. The Committee in its sole discretion shall establish
the exercise price at the time each Option is granted; PROVIDED, that in no
event shall the exercise price per Share be less than the Fair Market Value of a
Share on the date of grant.
(c) EXERCISE. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Committee may, in its sole discretion,
specify in the applicable Award Agreement or thereafter. The Committee may
impose such conditions with respect to the exercise of Options, including
without limitation, any relating to the application of Federal or state
securities laws, as it may deem necessary or advisable.
(d) PAYMENT. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company. Such payment may be made: (i) in cash;
(ii) in Shares owned by the Participant for at least six months (the value of
such Shares shall be their Fair Market Value on the date of exercise); (iii) by
a combination of cash and Shares; or (iv) in such other manner as permitted by
the Committee at the time of grant or thereafter.
SECTION 7. VESTING; TERMINATION OF EMPLOYMENT. Each Award Agreement shall
contain such terms as the Committee may in its sole discretion determine
concerning vesting, forfeiture, the Company's rights of repurchase of Shares
acquired upon exercise of an Option, and/or the effects of termination or
suspension of a Participant's employment upon the exercisability of any Option
granted thereunder.
SECTION 8. CHANGE OF CONTROL. The Committee, in its sole discretion, may
provide in an Award Agreement for the accelerated vesting of an Award in the
event of a Change of Control.
SECTION 9. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that
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no such amendment, alteration, suspension, discontinuation or termination shall
be made without shareholder approval if such approval is necessary to comply
with any tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief from Section
16(b) of the Exchange Act, for which or with which the Board deems it necessary
or desirable to qualify or comply. Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.
(b) AMENDMENTS TO AWARDS. Subject to the terms of the Plan and applicable
law, the Committee may waive any conditions or rights under, amend any terms of,
or alter, suspend, discontinue, cancel or terminate, any Award theretofore
granted, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination
that would adversely affect the rights Participant or any holder or beneficiary
of any Award theretofore granted shall not to that extent be effective without
the consent of the affected Participant, holder or beneficiary.
(c) CANCELLATION. Any provision of this Plan or any Award Agreement to
the contrary notwithstanding, in the event of a Change of Control or an offer to
Participants generally relating to the acquisition of Shares, including through
purchase, merger or otherwise, the Committee may cause any Award granted
hereunder to be canceled in consideration of a cash payment or alternative Award
made to the holder of such canceled Award equal in value to the Fair Market
Value of such canceled Award.
SECTION 10. GENERAL PROVISIONS.
(a) DIVIDEND EQUIVALENTS. In the sole and complete discretion of the
Committee, an Award may provide the Participant with dividends or dividend
equivalents, payable in cash, Shares, other securities or other property on a
current or deferred basis.
(b) NONTRANSFERABILITY. Except to the extent otherwise provided in an
Award Agreement, no Award shall be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant, except by will or the
laws of descent and distribution.
(c) NO RIGHTS TO AWARDS. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of
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Awards. The terms and conditions of Awards need not be the same with respect to
each recipient.
(d) SHARE CERTIFICATES. Certificates issued in respect of Shares shall,
unless the Committee otherwise determines, be registered in the name of the
Participant or its Permitted Transferees and shall be deposited by such
Participant or Permitted Transferee, together with a stock power endorsed in
blank, with the Company. When the Participant ceases to be bound by any
transfer restrictions set forth herein or in the Investors' Agreement, the
Company shall deliver such certificates to the Participant upon request. Such
stock certificate shall carry such appropriate legends, and such written
instructions shall be given to the Company's transfer agent, as any be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933, any state securities laws or any
other applicable laws and the Investor's Agreement. Subject to the provisions
of the Investors' Agreement, all certificates for Shares or other securities of
the Company or any Subsidiary delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the Securities and Exchange Commission or
any stock exchange upon which such Shares or other securities are then listed
and any applicable laws or rules or regulations, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(e) WITHHOLDING. A Participant may be required to pay to the Company or
any Subsidiary, and the Company or any Subsidiary shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from any such grant, lapse, vesting, or exercise of any Award.
(f) AWARD AGREEMENTS. Each Award hereunder shall be evidenced by an Award
Agreement which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto.
(g) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other compensation arrangements, which may, but need not,
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provide for the grant of options, restricted stock, Shares and other types of
Awards provided for hereunder (subject to shareholder approval if such approval
is required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(h) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ or service of the
Company or any Subsidiary. Further, the Company or an Subsidiary may at any
time dismiss a Participant from employment or service, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement.
(i) RIGHTS AS A STOCKHOLDER. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a stockholder with respect to any Shares to be issued under the Plan
until he or she has become the holder of such Shares.
(j) GOVERNING LAW. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware.
(k) SEVERABILITY. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) OTHER LAWS. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant in connection therewith shall
be promptly refunded to the relevant Participant, holder or beneficiary.
Without limiting the generality of the foregoing, no Award granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Committee in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the U.S. federal securities laws and any
other laws to which such offer, if made, would be subject.
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(m) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary.
(n) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash or other securities or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(o) TRANSFER RESTRICTIONS. Shares acquired hereunder may not be sold,
assigned, transferred, pledged or otherwise disposed of, except as provided in
the Plan, the applicable Award Agreement and the Investors' Agreement.
(p) HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
SECTION 11. TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of April 22, 1999,
subject to approval by the shareholders of the Company. Awards may be granted
hereunder prior to such shareholder approval subject in all cases, however, to
such approval.
(b) EXPIRATION DATE. The Board and the Committee's authority to grant
Awards under the Plan shall terminate on the tenth anniversary of the Plan's
effective date. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, continue after the authority for grant of new Awards hereunder has
been exhausted.
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EXHIBIT A
Form of Award Agreement under the
DeCrane Holdings Co. Management Incentive Plan
Date of Grant: _________________, 1998
Name of Optionee: _______________________
Number of Shares: ______________
Exercise Price: $__________/share
Expiration Date: ________________, 2008
Operating Unit: _______________________
DeCrane Holdings Co., a Delaware corporation (the "COMPANY"), hereby grants
to the above named optionee (the "OPTIONEE") a performance-based vesting option
(the "OPTION") to purchase from the Company, for the price per share set forth
above, the number of shares of Common Stock, $0.01 par value (the "SHARES"), of
the Company set forth above pursuant to the DeCrane Holdings Co. Management
Incentive Plan (the "PLAN"). The Options are not intended to be treated as
incentive stock options under the Code.
Capitalized terms not otherwise defined herein shall have the same meanings
as in the Plan. The terms and conditions of the Option granted hereby, to the
extent not controlled by the terms and conditions contained in the Plan, are as
follows:
1. EXERCISE PRICE. The price at which each Share subject to this Option
may be purchased shall be the price set forth above.
2. NUMBER OF SHARES: EXERCISE. The number of Shares for which the Option
may be exercised are set forth above. To the extent this Option has become
vested in accordance with Section 3 below, the Option may be exercised at any
time until the Expiration Date, subject to the terms of the Plan and of Section
7 below.
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3. VESTING.
(a) To the extent not previously vested in accordance with paragraph (b)
below or Section 8, the Option shall become fully vested and exercisable on the
eighth anniversary of the Date of Grant, provided the Optionee is then in the
employ of the Company or a Subsidiary.
(b) (i) The Option shall become vested and exercisable with respect to
up to 25% of the Shares subject thereto on the thirtieth day following the
availability of audited financial statements for each of the four fiscal
years of the Company commencing with the fiscal year ending December 31, 1999
(each such day a "VESTING DATE"), provided the EBITDA of the operating unit
of the Company to which the Optionee is assigned on the first page hereof as
of the end of such fiscal year, calculated in accordance with Schedule A
hereto, is at least equal to the EBITDA target values for such fiscal year
set forth in such Schedule A, and provided further that the Optionee is in
the employ of the Company or a Subsidiary on such Vesting Date. (ii) If any
EBITDA target value set forth in Schedule A for any of the first three fiscal
years referred to above is not attained, the portion of the Option that would
otherwise have vested for such fiscal year shall be treated as vested and
exercisable as of the Vesting Date for any subsequent fiscal year ending on
or before December 31, 2002 for which the maximum EBITDA target value for
such subsequent year is attained, provided, the Optionee is in the employ of
the Company or a Subsidiary on such Vesting Date.
4. MANNER OF EXERCISE. The Optionee (or his representative, devisee or
heir, as applicable) may exercise any portion of this Option which has become
exercisable in accordance with the terms hereof as to all or any of the Shares
then available for purchase by delivering to the Company written notice
specifying:
(i) the number of whole Shares to be purchased together with
payment in full of the aggregate Exercise Price of such shares;
(ii) the address to which dividends, notices, reports, etc. are to
be sent; and
(iii) the Optionee's social security number.
Payment shall be in cash, by certified or bank cashier's check payable to the
order of the Company, free from all collection charges, or in unencumbered
Shares) provided such shares shall have been held by the Optionee for at least
six months unless the Committee determines in its sole discretion that such
six-month holding period is not necessary to comply with any accounting,
legal or regulatory requirement) having a Fair Market Value equal to the full
amount of the Exercise Price therefor, or such other form as may permitted by
the Committee. Only one
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stock certificate will be issued unless the Optionee otherwise requests in
writing. Shares purchased upon exercise of the Option will be issued in the
name of the Optionee or the Optionee's Permitted Transferee. No Shares shall
be issued hereunder unless and until the Optionee (or his representative,
devisee or heir, as applicable) executes and agrees to be bound by the
Investors' Agreement. The Optionee shall not be entitled to any rights as a
stockholder of the Company in respect of any Shares covered by this Option
until such Shares shall have been paid for in full and issued to the Optionee.
5. CERTIFICATES. Certificates issued in respect of Shares acquired upon
exercise of the Option shall, unless the Committee otherwise determines, be
registered in the name of the Optionee or its Permitted Transferee. When the
Optionee ceases to be bound by the provisions of the Investors' Agreement, the
Company shall deliver such certificates to the Optionee or its Permitted
Transferee upon request. Such stock certificate shall carry such appropriate
legends, and such written instructions shall be given to the Company's transfer
agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Securities Act of 1933, any state
securities laws or any other applicable laws or the Investors' Agreement.
6. NONTRANSFERABILTY. This Option is personal to the Optionee and may be
exercised only by the Optionee or his or her representative in the event of the
Optionee's Disability or death. This Option shall not be transferable other
than by will or the laws of descent and distribution. Notwithstanding the
foregoing, this Option may be transferred to a trust solely for the benefit of
the Optionee or the Optionee's immediate family (which shall be deemed to
include the Optionee's spouse, parents, siblings, children, stepchildren and
grandchildren).
7. FORFEITURE OF OPTION: RIGHT OF REPURCHASE.
(a) If the Optionee's employment with the Company and its Subsidiaries
shall terminate for any reason other than by the Company or its Subsidiary for
Cause, then (i) to the extent not yet vested as of the date of termination of
employment, the Option shall immediately be forfeited; and (ii) to the extent
vested as of the date of termination of employment, the Option may be retained
and exercised, in accordance with the terms of the Plan and this Award
Agreement, [DURING THE SIX MONTH PERIOD FOLLOWING SUCH TERMINATION].
(b) If the Optionee's employment with the Company and its Subsidiaries
shall be terminated by the Company or its Subsidiary for Cause, then the entire
Option shall immediately be forfeited, ans all Shares previously acquired upon
exercise of the Option shall be subject to a right of repurchase by the Company
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from the Participant or his or her Permitted Transferee at a price equal to the
Exercise Price.
8. CHANGE OF CONTROL. Upon a Change of Control, the Option shall vest in
its entirety and become immediately exercisable.
9. SALE OF UNDERLYING SHARES. The Optionee's right to sell any Shares
acquired upon exercise of the Option (in the case of Optionees who are party
thereto) shall be subject to the terms of the Investors' Agreement.
10. EMPLOYMENT RIGHTS. This Option does not confer on the Optionee any
right to continue in the employ of the Company or any Subsidiary or interfere in
any way with the right of the Company or any Subsidiary to determine the terms
of the Optionee's employment.
11. TERMS OF PLAN; INTERPRETATIONS. This Option and the terms and
conditions herein set forth are subject in all respects to the terms and
conditions of the Plan, which shall be controlling. All interpretations or
determinations of the Committee and/or the Board shall be binding and conclusive
upon the Optionee and his legal representatives on any question arising
hereunder. The Optionee acknowledges that he has received and reviewed a copy
of the Plan.
12. DELEGATION. Optionee acknowledges that any powers, rights or
responsibilities of the Board and/or the Committee set forth herein may be
delegated to and exercised by any subcommittee thereof as permitted under the
Plan.
13. NOTICES. All notices hereunder to the party shall be delivered or
mailed to the following addresses:
If to the Company:
DeCrane Holdings Co.
c/o DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, New York 10172
Attention: Thompson Dean
Fax: (212) 892-7272
and
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DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, CA 90245
Attention: R. Jack DeCrane
Fax: (310) 643-0746
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: George R. Bason, Jr., Esq.
Fax: (212) 450-4800
If to the Optionee:
To the person and at the address specified on the signature page.
Such addresses for the service of notices may be changed at any time provided
notice of such change is furnished in advance to the other party.
14. ENTIRE AGREEMENT. This Agreement, together with the Plan and (in the
case of Optionees who are party thereto) the Investors Agreement, contains the
entire understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement, the Plan and the Investors' Agreement
supersede all prior agreements and understandings between the parties hereto
with respect to the subject matter hereof.
15. GOVERNING LAW. This Award Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without application of the
conflict of laws principles thereof.
16. COUNTERPARTS. This Award Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be
duly executed as of the date first above written.
DECRANE HOLDINGS CO.
By:
----------------------
Name:
Title:
OPTIONEE:
-------------------------
Name:
Address: c/o DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, CA 90245
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