EXHIBIT 10.20
Name:
Address: c/o DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180 E1
El Segundo, CA 90245
DeCRANE AIRCRAFT HOLDINGS, INC.
STOCK PURCHASE PLAN
DeCrane Holdings Co. (the "Company") has adopted a management stock
purchase plan ("Stock Purchase Plan") providing for the purchase of shares of
common stock of the Company as incentive compensation to designated executive
personnel and other key employees of the Company and its subsidiaries, with a
portion of the purchase price to be loaned to the participants by the
Company's subsidiary DeCrane Aircraft Holdings, Inc., available to persons
and in amounts determined by the compensation committee of the Board from
time to time, employing the attached forms of Subscription Agreement and
Promissory Note and Pledge to be entered into by individual participants.
The compensation committee of the Board has approved a one-time offer of
loans under that plan, for the purchase of up to 173,913 shares in the
aggregate (calculated on the basis of $4,000,000 divided by $23.00 per share)
at the price of $23.00 per share.
FORM OF SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "AGREEMENT") dated as of __________, 19__, by
and among DeCrane Holdings Co., a Delaware corporation (the "COMPANY" and
___________ (the "INVESTOR").
WHEREAS, the Investor desires to subscribe for, and the Company desires to
issue to the Investor, the number of shares of common stock, par value $0.01 per
share (the "COMMON STOCK"), of the Company set forth on Exhibit A hereto (such
shares of Common Stock to be subscribed for by the Investor and issued to the
Investor by the Company, the "SHARES").
NOW, THEREFORE, IT IS AGREED:
ARTICLE I ISSUANCE OF SHARES; CONSIDERATION
Section 1.01. ISSUANCE OF SHARES. Upon the terms set forth in this
Agreement, the Company hereby agrees to issue to the Investor, and the Investor
hereby subscribes for, the Shares.
Section 1.02. SUBSCRIPTION. In consideration for the issuance by the
Company of the Shares, the Investor shall:
(a) pay to the Company, by wire transfer of immediately available
funds to an account specified by the Company, an amount equal to 50% of the
aggregate subscription price set forth on Exhibit A hereto; and
(b) execute and deliver to the Company a Promissory Note and Pledge
Agreement (the "PROMISSORY NOTE AND PLEDGE") in the form of Exhibit C
hereto in a principal amount equal to 50% of the aggregate subscription
price set forth on Exhibit A hereto.
Section 1.03. INVESTORS' AGREEMENT. As a condition to the issuance of the
Shares, the Investor shall execute and deliver to the Company an agreement in
the form of Exhibit B hereto, pursuant to which the Investor agrees to be bound
by the terms of the Amended and Restated Investors' Agreement, dated as of
October
2, 1998, by and among the Company and the stockholders of the Company named
therein (the "DLJ ENTITIES").
ARTICLE II
REPRESENTATIONS OF THE COMPANY
Section 2.01. CORPORATE EXISTENCE AND POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. The Company has all corporate power to own its properties
and to carry on its business as now conducted.
Section 2.02. AUTHORITY AND APPROVAL. The execution and delivery of this
Agreement are within the corporate powers of the Company and have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement constitutes a legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
Section 2.03. SHARES. When issued to the Investor in accordance with the
terms hereof, the Shares will be duly authorized, validly issued, fully paid and
non-assessable.
Section 2.04. CAPITALIZATION. The authorized capital stock of the Company
(prior to giving effect to the issuance of the Shares) consists of (i) 3,500,000
shares of Common Stock, of which 2,826,087 shares are issued and outstanding as
of the date hereof, and (ii) 2,500,000 shares of Preferred Stock, of which
340,000 shares are issued and outstanding as of the date hereof. Except for (i)
the Preferred Stock, and (ii) warrants to purchase an aggregate of 155,000
shares of Common Stock issued to the DLJ Entities on October 2, 1998 and
warrants to purchase an aggregate of 155,000 shares of Common Stock issued in
connection with the Company's 12% Senior Subordinated Notes due 2008 on October
5, 1998, there are no outstanding securities convertible into or exchangeable
for the capital stock of the Company and no outstanding options, rights or
warrants to purchase or subscribe for any shares of the capital stock of the
Company.
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ARTICLE III
REPRESENTATIONS OF THE INVESTOR
Section 3.01. AUTHORIZATION. The Investor has full power and authority to
enter into this Agreement and the Promissory Note and Pledge and to perform his
obligations hereunder and thereunder.
Section 3.02. ENFORCEABILITY. Each of this Agreement and the Promissory
Note and Pledge has been duly executed and delivered by the Investor and
constitutes a legal, valid and binding obligation of the Investor, enforceable
against the Investor in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles.
Section 3.03. PRIVATE PLACEMENT. (a) The Investor understands that the
offering and sale of the Shares to the Investor as contemplated hereby is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "1933 ACT") pursuant to Regulation D and Section 4(2) thereunder.
(b) The Shares to be acquired by the Investor pursuant to this
Agreement are being acquired for his own account for investment and without
a view to the public distribution of the Shares or any interest therein.
The Investor understands that the Shares may not be transferred or sold
unless registered under the 1933 Act or an exemption from such registration
becomes available.
(c) The Investor has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks
of his investment in the Shares and the Investor is capable of bearing the
economic risks of such investment, including a complete loss of his
investment in the Shares.
(d) The Investor has been given the opportunity to ask questions of
and receive answers from the Company concerning the Company, the Shares and
other related matters. The Investor further represents and warrants to the
Company that he has been furnished with all information he deems necessary
or desirable to evaluate the merits and risks of the acquisition of the
Shares and that the Company has made available to the Investor or his
agents all documents and information relating to an investment in the
Shares requested by or on behalf of the Investor. In evaluating the
suitability of an investment in the Shares, the Investor has
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not relied upon any other representations or other information (other than
as contemplated by the preceding sentences) whether oral or written made by
or on behalf of the Company.
(e) The Investor is an "Accredited Investor" as such term is defined
in Regulation D under the 1933 Act.
ARTICLE IV
MISCELLANEOUS
Section 4.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission to the
recipient's then current facsimile number) and shall be given,
if to the Investor, to the address set forth on the signature page, and
if to the Company, to:
DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, Ca 90245
Attn: R. Jack DeCrane
Fax: (310) 643-0746
Section 4.02. AMENDMENTS AND WAIVERS. Any provision of this Agreement may
be amended modified, supplemented or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
Section 4.03. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
Section 4.05. COUNTERPARTS; THIRD PARTY BENEFICIARIES. This 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. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision
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of this Agreement is intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
Section 4.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 4.07. CAPTIONS. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 4.08. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with laws of the State of New York.
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IN WITNESS WHEREOF, the Investor has executed this Agreement and the
Company has caused its corporate name to be hereunto subscribed by its officers
thereunto duly authorized, all as of the day and year first above written.
DECRANE HOLDINGS CO.
By:
---------------------------------
Name:
Title:
INVESTOR
By:
---------------------------------
Name:
Title:
Address:
Fax:
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EXHIBIT A
- --------------------------------------------------------------------------------
NUMBER OF AMOUNT OF
SHARES OF SUBSCRIPTION PRICE
SUBSCRIBED FOR
- --------------------------------------------------------------------------------
COMMON STOCK - $ -
- --------------------------------------------------------------------------------
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EXHIBIT B
FORM OF AGREEMENT TO BE BOUND
______________, 19__
To the Parties to the Amended and Restated Investors'
Agreement dated as of October 2, 1998
Ladies and Gentlemen:
Reference is made to the Amended and Restated Investors' Agreement dated as
of October 2, 1998 (the "INVESTORS' AGREEMENT") among DeCrane Holdings Co. and
the other Persons listed on the signature pages thereof and each other Person
who has or shall become a party to the Investors' Agreement as provided therein.
Capitalized terms used herein and not defined have the meanings ascribed to them
in the Investors' Agreement.
In consideration of the covenants and agreements contained in the
Investors' Agreement, the undersigned hereby confirms and agrees that it shall
be bound as a "Stockholder" by all of the provisions thereof.
This letter shall be construed and enforced in accordance with the internal
laws of the State of Delaware.
Very truly yours,
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FORM OF PROMISSORY NOTE AND PLEDGE
New York, New York
____________, 19__
For value received, _________________ (the "INVESTOR") promises to pay to
the order of DeCrane Holdings Co., a Delaware corporation (the "COMPANY", also
referred to herein as the "LENDER"). $__________ (the "LOAN") the principal
amount of which will be repayable in full on the eighth anniversary of the date
hereof (the "PAYMENT DATE") subject to prepayment as set forth below; PROVIDED
that if at any time the Investor disposes of any shares of Common Stock, par
value $0.01 per share, of the Company (the "COMMON SHARES") pledged hereunder,
the proceeds of any such sale shall be used by the Investor as follows: first to
pay any accrued but unpaid interest on the Loan, and second to repay the
principal amount of the Loan (or portion thereof), promptly upon receipt of such
proceeds. The Investor promises to pay on the Payment Date, all accrued and
unpaid interest on the Loan on such date as well as all outstanding principal on
such date. Interest will accrue on the outstanding principal amount of the Loan,
and will be compounded annually, at a rate equal to the applicable federal rate
as published by the Treasury Department of the United States of America on
October ___, 1998. All payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of the Company c/o DLJ Merchant Banking Partners IL, L.P.,
277 Park Avenue, New York, New York 10172, or as otherwise notified to the
Investor by the Company. The Investor may pay the Loan without penalty in whole
at any time, or from time to time in part, by paying the principal amount to be
paid at such time, together with all accrued interest to the date of payment.
To secure payment of the principal of and all interest on the Loan, the
Investor hereby assigns, pledges and grants to DLJ Merchant Banking II, Inc.
(the "AGENT") for the ratable benefit of the Lender a security interest in and,
to the extent not previously delivered, delivers to the Agent (i) - Common
Shares acquired by the Investor from the Company as of the date hereof and all
other shares of capital stock acquired by the Investor from the Lender
(collectively, the "PLEDGED SHARES"), (ii) all rights and privileges with
respect to the Pledged Shares, (iii) all income and profits thereon, (iv) all
dividends, payments and other distributions with respect thereto, and (v) all
proceeds thereof and substitutions therefor other than any cash income, profits,
dividends, payments, distributions or proceeds so long as the Investor is not in
default hereunder (collectively, the "COLLATERAL"). The Investor is delivering
to the Agent certificates representing the Shares in pledge hereunder.
The Company's recourse under this Promissory Note and Pledge is limited
solely to the Collateral.
Certificates evidencing the Pledged Shares shall remain in the physical
custody of the Agent at all times until the Investor has made payment in full of
all principal of and interest on the Loan, except for transfers permitted
hereunder so long as the proceeds of such sale are applied as provided herein
and, in its reasonable discretion, the Agent determines that the remaining
Collateral is sufficient.
This Promissory Note and Pledge constitutes a security agreement for
purposes of the Uniform Commercial Code in all relevant jurisdictions. Upon the
nonpayment of principal or interest when due hereunder or under any other note
issued in connection with any other Loan (a "DEFAULT"), the Agent (i) may, by
notice to the Investor, declare the Loan (together with accrued and unpaid
interest thereon) to be, and the Loan shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Investor, and (ii) shall have all the
rights and remedies of a secured party provided in the Uniform Commercial Code
in force in New York.
The Pledged Shares are granted as security only and shall not subject the
Agent or the Company to, or in any way affect or modify, any obligation or
liability of the Investor with respect to any of its Collateral or any
transaction in connection therewith.
The Investor agrees that it will, at the Company's expense and in such
manner and from as the Agent may reasonably require, execute, deliver, file and
record any financing statement, specific assignment or other paper and take any
other action that may be reasonably necessary or desirable, or that the Agent
may reasonably request, in order to create, preserve, perfect or validate any
security interest or to enable the Agent to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Investor hereby authorizes the Agent to execute and file, in
the name of the Investor or otherwise, Uniform Commercial Code financing
statements (which may be carbon, photographic, photostatic or other
reproductions of this Promissory Note and Pledge or of a financing statement
relating to this Promissory Note and Pledge) which the Agent in its sole
discretion may deem necessary or appropriate to further perfect its security
interest in the Collateral.
To the extent a Default shall have occurred and be continuing, the Agent
may cause any or all of the Pledged Shares to be transferred of record into the
name of the Agent or its nominee. The Investor will promptly give to the Agent
copies of any notices or other communications received by him with respect to
Pledged Shares registered in the name of the Investor, and the Agent will
promptly give to the Investor copies of any notices and communications received
by the Agent with respect to Pledged Shares registered in the name of the Agent
or its nominee.
If a Default shall have occurred and be continuing, the Agent shall have
the right to receive and to retain as Collateral hereunder for the benefit of
the Company all
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dividends, interest and other payments and distributions made upon or with
respect to the Collateral, and the Investor shall take all such action as the
Agent may deem necessary or appropriate to give effect to such right.
Unless a Default shall have occurred and be continuing, the Investor shall
have the right, from time to time, to receive and retain all cash dividends,
interest and other payments and distributions made upon or with respect to the
Collateral and to vote and to give consents, ratifications and waivers with
respect to the Pledged Shares, and the Agent shall deliver to the Investor such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any of the Pledged Shares which are registered in the name of the Agent or its
nominee as the Investor shall request.
If a Default shall have occurred and be continuing, the Agent shall have
the right to the extent permitted by law and the Investor shall take all such
action as may be necessary or appropriate to give effect to such right, to vote
and to give consents, ratifications and waivers, and take any other action with
respect to any or all of the Pledged Shares with the same force and effect as if
the Agent were the absolute and sole owner thereof.
The Investor hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Investor, the
Agent or otherwise, for the sole use and benefit of the Agent, but at the
expense of the Agent, to the extent permitted by law, to exercise, at any time
and from time to time while a Default has occurred and is continuing, all or any
of the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due to become due upon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the Agent
were the absolute owner thereof; and
(iv) to extent the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
PROVIDED that the Agent shall give the Investor not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral. The Agent and the Investor agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
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The Investor covenants and agrees that in the event that any of the
Collateral shall become subject to any lien or security interest other than
the liens and security interests in favor of the Agent created hereunder, or
the lien on and security interest in the Collateral in favor of the Agent
shall cease to be a first priority perfected security interest in and lien on
any of such Collateral except pursuant to a release herein contemplated, the
Investor will promptly take whatever reasonable action may be necessary to
release such other liens or security interests or to restore the Agent's lien
on and security interest in the Collateral as a first priority perfected
security interest or lien, as the case may be. The Investor acknowledges
that money damages would not be a sufficient remedy for the breach of the
Investor's covenant in this paragraph and that, in addition to all other
remedies that may be available, the Agent shall be entitled to specific
performance as a remedy for any such breach.
The Investor agrees that it will forthwith upon demand pay to the Agent and
the Company, as the case may be, the amount of any and all reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel and of any other experts, which the Agent or the Company may incur in
connection with (w) the enforcement of this Promissory Note and Pledge,
including such expenses as are incurred to preserve the value of the Collateral
and the validity, perfection, rank and value of any security interest, (x) the
collection, sale or other disposition of any of the Collateral, (y) the exercise
by the Agent of any of the rights conferred upon its hereunder or (z) any
Default; PROVIDED, HOWEVER, that in no event shall the total amount collected
pursuant to this paragraph exceed the value of the Collateral.
For the purpose of this Promissory Note and Pledge, notices and all other
communications provided for in this Promissory Note and Pledge shall be in
writing and shall be given to the respective addresses or telecopy numbers set
forth below:
if to the Investor, to the address set forth on the signature page hereof;
if to the Company, to: DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, CA 90245
Telefax: (310) 643-0746
if to the Agent, to: DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, NY 10172
Attention: Thompson Dean
Telefax: (212) 892-7272
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PROVIDED, that all notices to the Company shall be directed to the attention of
the Board with a copy to the Secretary of the Company, or to such other address
as either party may have furnished to the other in writing in accordance
herewith. Each such notice or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this paragraph and telephonic confirmation of receipt thereof is
obtained, (ii) if given by prepaid overnight courier, one business day after
deposit with such courier or (iii) if given by United States certified or
registered mail, postage prepaid, three business days after deposit with the
United States postal service; PROVIDED that notice of change of address shall be
effective only upon receipt.
No failure or delay by the Agent in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Any provision of this Promissory Note and Pledge may be amended or waived
if, and only if, such amendment or waiver is in writing and is signed by the
Investor, the Company and the Agent. The provisions of this Promissory Note and
Pledge shall be binding upon the Investor and its successors, assigns, personal
representatives, estate and heirs and shall inure to the benefit of the Company
and its successors and assigns.
This Promissory Note and Pledge shall be governed by and construed in
accordance with the laws of the State of New York.
Upon the repayment in full of the principal of and interest on the Loan,
the security interest shall terminate and all rights to the Collateral shall
revert to the Investor, and the Agent shall take all actions which may
reasonably be requested by the Investor to reflect the termination of such
security interest. In addition, in the case of a transfer of the Collateral
permitted hereunder in which the proceeds are applied as provided herein, the
security interest in the Collateral so transferred shall terminate and the Agent
shall take all actions which may reasonably be requested by the Investor to
reflect the termination of such security interest.
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This Promissory Note and Pledge constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.
By:
------------------------------
Name:
Address:
Fax:
Agreed and Acknowledged:
DECRANE HOLDINGS CO.
By:
------------------------------
Name:
Title:
DLJ MERCHANT BANKING II, INC.
By:
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Name:
Title:
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