Exhibit 10.9
STOCK OPTION AGREEMENT (the "Agreement"), dated as of Date, 1997,
between Gulfstream Aerospace Corporation, a Delaware corporation (together with
its successors the "Corporation"), and Name (the "Optionee").
1. Grant of Option.
1.1 The Corporation hereby grants to the Optionee the right
and option (the "Option") to purchase all or any part of an aggregate of Options
whole shares of Common Stock, par value $.01 per share, of the Corporation (the
"Common Stock") (such number being subject to adjustment as provided in Section
8 hereof) on the terms and conditions set forth in this Agreement and in the
Corporation's Stock Option Plan (the "Plan"), a copy of which has previously
been provided to the Optionee.
1.2 This Option is not intended to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code.
1.3 Except as otherwise defined herein, capitalized terms used
in this Agreement shall have the same definitions as set forth in the Plan.
2. Purchase Price. The price at which the Optionee shall be entitled
to purchase shares of Common Stock upon the exercise of this Option shall be
$Price per share (such price being subject to adjustment as provided in Section
8 hereof) (the "Option Price").
3. Duration of Option. The Option shall be exercisable to the extent
and in the manner provided herein for a period of 10 years from the date hereof;
provided, however, that the Option may be earlier terminated as provided in
Section 4, Section 6, Section 7 or Section 9 hereof.
4. Exercisability of Options. Subject to the provisions of this
Agreement and the Plan, the Option shall be exercisable in accordance with the
following schedule:
(a) on or after Date, 1998 but before Date, 1999, the
Option may be exercised to acquire up to one-third of the
total number of shares of Common Stock which may be purchased
pursuant to the Option as set forth in Section 1.1
hereof, less any shares previously acquired pursuant to the
Option;
(b) on or after Date, 1999 but before Date, 2000, the
Option may be exercised to acquire up to two-thirds of the
total number of shares of Common Stock which may be purchased
pursuant to the Option as set forth in Section 1.1, less any
shares previously acquired pursuant to the Option; and
(c) on or after Date, 2000 but before the expiration of
the term of the Option, the Option may be exercised to acquire
up to 100% of the total number of shares of Common Stock which
may be purchased pursuant to the Option as set forth in
Section 1.1, less any shares previously acquired pursuant to
the Option.
The Corporation shall give the Optionee 10 days' written notice (or,
if not practicable, such shorter notice as may be practicable) prior to the
anticipated date of the consummation of a Terminating Event (as hereinafter
defined) or the anticipated date of the consummation of a Partial Sale (as
hereinafter defined), and the Optionee shall be permitted to exercise the Option
for a period of 5 days (or such shorter period as the Committee shall determine
and so notify the Optionee) after the date of such notice of the Terminating
Event or the Partial Sale. In the case of a Terminating Event, the Option may be
exercised, in whole or in part, for the full amount of the shares of Common
Stock covered thereby (less the number of shares previously issued to the
Optionee upon exercise of the Option), whether or not the Option was otherwise
so exercisable on the date such notice was given. In the case of a Partial Sale,
the Option may be exercised in whole or in part, whether or not the Option was
otherwise so exercisable on the date such notice was given, but not for more
than the excess, if any, of (a) the number of shares with respect to which the
Optionee will be entitled to, and will participate in the Partial Sale pursuant
to Section 2.3 or 2.4 of the Stockholder's Agreement, as the case may be, over
(b) the number of shares previously issued to the Optionee upon exercise of the
Option and not disposed of in a prior Partial Sale. In the event the Terminating
Event or Partial Sale is not consummated, the Option will be deemed not to have
been exercised and shall be exercisable thereafter only to
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the extent it would have been exercisable if no such notice had been given. In
lieu of permitting the Optionee to exercise the Option in the event of a
Terminating Event, the Committee, in its sole discretion, may instead cause the
Corporation to redeem the unexercised portion of the Option pursuant to Section
9 hereof.
For purposes hereof, (a) the term "Terminating Event" shall mean the
consummation of any of the following transactions: (i) any merger or
consolidation of the Corporation with or into another corporation (other than a
merger or consolidation in which the Corporation is the surviving corporation
and which does not result in any capital reorganization or reclassification or
other change of the then outstanding shares of Common Stock), or (ii) the
liquidation of the Corporation, or (iii) the sale to a Third Party of all or
substantially all of the assets of the Corporation pursuant to a plan of
liquidation or otherwise, or (iv) the sale to a Third Party of Class A Common
Stock (including through one or more Public Offerings); provided, that, as a
result thereof, the FL & Co. Companies (as defined below), the direct or
indirect partners of any of the FL & Co. Companies, and any Affiliates of any of
the foregoing cease to own, directly or indirectly, any shares of the voting
stock of the Corporation, and (b) the term "Partial Sale" shall mean any sale by
the FL & Co. Companies of all or a portion of their shares of Common Stock to a
Third Party, including through any Public Offering, which sale is not a
Terminating Event. The term "FL & Co. Companies" shall mean Forstmann Little &
Co. Subordinated Debt and Equity Management Buyout Partnership-IV, Gulfstream
Partners and Gulfstream Partners II, L.P., each a New York limited partnership.
Subject to the provisions of Section 9 hereof, the Option shall be
canceled simultaneously with the consummation of a Terminating Event to the
extent that the Option has not theretofore been exercised.
5. Manner of Exercise and Payment.
5.1 Notice of Exercise. Subject to the terms and conditions of
this Agreement and the Plan, the Option may be exercised by delivery of written
notice to the Committee, at the Corporation's principal office (or such other
address as the Corporation may from time to time notify the Optionee in
writing). Such notice shall state that the Optionee is electing to exercise the
Option and the number of shares of Common Stock
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in respect of which the Option is being exercised and shall be signed by the
Optionee or by any guardian, executor, administrator or other legal
representative (each, a "Legal Representative"). The Corporation may require
proof satisfactory to it as to the right of such person to exercise the Option.
5.2 Deliveries. The notice of exercise described in Section
5.1 hereof shall be accompanied by (a) the full purchase price for the shares in
respect of which the Option is being exercised, such purchase price to be paid
by certified or bank check payable to the order of the Company or cash by wire
transfer to an account designated by the Company, and (b) a fully executed
Stockholder's Agreement (a copy of which will be supplied to the Optionee upon
request) and an accompanying undated stock power. Not less than 250 shares of
Common Stock may be purchased at any one time upon the exercise of an Option,
unless the number of shares of Common Stock so purchased constitutes the total
number of shares of Common Stock then purchasable under the Option.
5.3 Issuance of Shares. Upon receipt of notice of exercise,
full payment for the shares of Common Stock in respect of which the Option is
being exercised and a fully executed Stockholder's Agreement and accompanying
stock power, and subject to Section 10 of the Plan, the Corporation shall take
such action as may be necessary under applicable law to effect the issuance to
the Optionee of the number of shares of Common Stock as to which such exercise
was effective.
5.4 Stockholder Rights. The Optionee shall not be deemed to be
the holder of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to the Option until: (a) the Option shall have
been exercised pursuant to the terms of this Agreement and the Optionee shall
have paid the full purchase price for the number of shares in respect of which
the Option was exercised and any withholding taxes due in connection with such
exercise, (b) the Optionee shall have delivered the fully executed Stockholder's
Agreement and stock power to the Corporation, (c) the Corporation shall have
issued the shares to the Optionee, and (d) the Optionee's name shall have been
entered as a stockholder of record on the books of the Corporation. Upon the
occurrence of all of the foregoing events, the Optionee shall have full voting
and other ownership rights with respect to such shares, subject to the
provisions of the Stockholder's Agreement.
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5.5 Partial Exercise. In the event the initial exercise of the
Option is an exercise in part only, then, in the event of any further exercise
of the Option, the Optionee, in lieu of executing a new Stockholder's Agreement,
may, at the Corporation's option, re-execute the original Stockholder's
Agreement, thereby re-affirming the representations and warranties contained in
the Stockholder's Agreement as of the date of re-execution, but with an amended
Schedule I completed to set forth the number of shares of Common Stock in
respect of which the Option is then being exercised and the cumulative number of
shares of Common Stock which would then be subject to the Stockholder's
Agreement. If a further exercise of the Option is by a person who has not
previously exercised the Option (as for example if the initial exercise was by
the Optionee and the subsequent exercise was by a Legal Representative), then
such person shall execute a counterpart of the original Stockholder's Agreement
thereby agreeing to be bound by such agreement as though such person were an
original signatory thereto and affirming the truth of the representations and
warranties contained therein with respect to such person as of the date of his
execution of such counterpart.
6. Certain Restrictions.
6.1 No Sale or Transfer. The Optionee shall not sell,
transfer, assign, exchange, pledge, encumber or otherwise dispose of the Option,
in whole or in part, except in accordance with the provisions of this Agreement.
6.2 Employment Termination. Except (i) as provided in this
Section 6.2 or (ii) as may be agreed between the Committee and the Optionee, if
the Optionee shall no longer be employed on a full-time basis by either the
Corporation or any of its subsidiaries, or ceases to serve as a director of the
Corporation or any of its subsidiaries, for any reason whatsoever (including by
reason of death, permanent disability or adjudicated incompetency) ("Terminated"
or a "Termination"), irrespective of whether the Optionee receives, in
connection with the Termination, any severance or other payment from the
Corporation or any of its subsidiaries under any employment agreement or
otherwise (such Optionee being referred to herein as a "Terminated Optionee"),
the portion of the Option that was not exercisable immediately prior to the
Optionee's Termination shall terminate and shall be of no further force and
effect from and
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after the date of such Termination. Following a Termination, the Optionee may
exercise the portion of the Option which was exercisable immediately prior to
the date of the Optionee's Termination (the "Exercisable Portion of the Option")
or any portion thereof on one occasion during the 90-day period following the
date of Termination, but in no event after the expiration of the term of the
Option; provided, however, that the shares acquired upon any such exercise shall
be subject to the provisions of the Stockholder's Agreement including, without
limitation, the employment and director termination provisions of Section 2.2
thereof. To the extent the Terminated Optionee does not so exercise the
Exercisable Portion of the Option, the Exercisable Portion of the Option shall
terminate and shall be of no force and effect.
7. Prohibited Activities.
7.1 Prohibition Against Certain Activities. The Optionee
agrees that (a) he will not at any time during his employment (other than in the
course of his employment) with the Corporation or any Affiliate thereof, or
after any Termination, directly or indirectly disclose or furnish to any other
person or use for his own or any other person's account any confidential or
proprietary knowledge or any other information which is not a matter of public
knowledge obtained during the course of his employment with, or other
performance of services for (including service as a director of), the
Corporation or any Affiliate thereof or any predecessor of any of the foregoing,
no matter from where or in what manner the Optionee may have acquired such
knowledge or information, and he shall retain all such knowledge and information
in trust for the benefit of the Corporation, its Affiliates and the successors
and assigns of any of them, (b) if he is Terminated, he will not for three years
following the Termination directly or indirectly solicit for employment,
including, without limitation, recommending to any subsequent employer the
solicitation for employment of, any person who at the time of the solicitation
is employed by the Corporation or any Affiliate thereof, (c) he will not at any
time during his employment with, or performance of services for (including
service as a director of), the Corporation or any Affiliate thereof or any
predecessor of any of the foregoing, or after any Termination, publish any
statement or make any statement (under circumstances reasonably likely to become
public or that he might reasonably expect to become public) critical of the
Corporation or any Affiliate of the Corporation, or in any way adversely
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affecting or otherwise maligning the business or reputation of any of the
foregoing, and (d) he will not breach the provisions of Section 6.1 hereof (any
activity described in clause (a), (b), (c) or (d) of this Section 7.1 being
herein referred to as a "Prohibited Activity").
7.2 Right to Terminate Option. The Optionee understands that
the Corporation is granting to the Optionee an option to purchase shares of
Common Stock hereunder to reward the Optionee for the Optionee's future efforts
and loyalty to the Corporation and its Affiliates by giving the Optionee the
opportunity to participate in the potential future appreciation of the
Corporation. Accordingly, (a) if the Optionee engages in any Prohibited
Activity, or (b) if, at any time during the Optionee's employment with the
Corporation or any Affiliate or during the three years following the Optionee's
Termination, the Optionee engages in any Competitive Activity (as hereinafter
defined), or (c) if, at any time (whether during the Optionee's employment or
after any Termination), the Optionee is convicted of a crime against the
Corporation or any of its Affiliates, then, in addition to any other rights and
remedies available to the Corporation, the Corporation shall be entitled, at its
option, to terminate the Option, which shall then be of no further force and
effect. The term "Competitive Activity" shall mean engaging in any of the
following activities: (i) serving as a director of any person (other than the
Corporation or any of its subsidiaries) that competes either directly or
indirectly through one or more Affiliates with any of the businesses conducted
by the Corporation or any of its Affiliates (a "Competitor"), (ii) directly or
indirectly through one or more intermediaries (X) controlling any Competitor or
(Y) owning any equity or debt interests in any Competitor (other than equity or
debt interests which are publicly traded and do not exceed 2% of the particular
class of interests outstanding) (it being understood that, if interests in any
Competitor are owned by an investment vehicle or other entity in which the
Optionee owns an equity interest, a portion of the interests in such Competitor
owned by such entity shall be attributed to the Optionee, such portion
determined by applying the percentage of the equity interest in such entity
owned by the Optionee to the interests in such Competitor owned by such entity),
(iii) directly or indirectly soliciting, diverting, taking away, appropriating
or otherwise interfering with any of the customers or suppliers of the
Corporation or any Affiliate of the Corporation of which the Optionee owns
shares of capital stock or any other equity
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interest or (iv) employment by (including serving as an officer or director of)
or providing consulting services to any Competitor. For purposes of this Section
7.2, the term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of any
Competitor, whether through the ownership of equity interests, by contract or
otherwise.
8. Adjustments. In the event that the outstanding shares of Common
Stock are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Corporation, whether through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split-up
or other substitution of securities of the Corporation, the Committee shall make
appropriate adjustments to the number and class of shares of stock subject to
this Option and the Option Price for such shares. In the event that any shares
of Common Stock are issued after the date of the Plan to any of the FL & Co.
Companies for less than fair consideration, as determined finally by the
Committee, the Committee shall make appropriate adjustments to the number of
shares of stock subject to this Option and the Option Price for such shares. The
Committee's adjustment shall be final and binding for all purposes of the Plan
and this Agreement. No adjustment provided for in this Section 8 shall require
the Corporation to issue a fractional share, and the total adjustment with
respect to this Agreement shall be limited accordingly.
9. Terminating Events.
(a) Upon the effective date of any Terminating Event, any
unexercised portion of this Option shall terminate unless provision shall be
made in writing in connection with such Terminating Event for the continuance
of the Plan and such unexercised portion of the Option and for the assumption
of such unexercised portion of this Option by a Successor Corporation or for
the substitution for such unexercised portion of this Option of new options
covering shares of such Successor Corporation with appropriate adjustments as
to number and kind of shares and prices of shares subject to such new
options; provided, however, that in connection with a Terminating Event
involving the merger, consolidation or liquidation of the Corporation or the
sale of capital stock of the Corporation covered by Section 2.5 of the
Stockholder's Agreement, the Committee may, in its sole discretion, authorize
the redemption of the unexercised portion
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of the Option for a consideration per share of Common Stock issuable upon
exercise of the unexercised portion of the Option equal to the excess of (i)
the consideration payable per share of Common Stock in connection with such
Terminating Event, adjusted as if all outstanding options and warrants had
been exercised prior to the consummation of such Terminating Event, over (ii)
the Option Price. In the event that provision for continuance of the Plan is
made in writing in connection with a Terminating Event, the unexercised
portion of this Option or the new options substituted therefor shall continue
in the manner and under the terms provided in the Plan and this Agreement and
in such writing.
(b) In the event of a redemption pursuant to this Section 9,
the Optionee shall be responsible for and shall be obligated to pay a
proportionate amount (determined as if the Optionee were a holder of the number
of shares of Common Stock which would have been issuable upon exercise of the
portion of the Option redeemed pursuant to this Section 9) of the expenses,
liabilities or obligations incurred or to be incurred by the stockholders of the
Corporation in connection with such Terminating Event (including, without
limitation, the fees and expenses of investment bankers, legal counsel and other
outside advisors and experts retained by or on behalf of the stockholders of the
Corporation in connection with the Terminating Event, amounts payable in respect
of indemnification claims, amounts paid into escrow and amounts payable in
respect of post-closing adjustments to the purchase price).
10. No Right to Continued Employment. This Option shall not confer
upon the Optionee any right with respect to continuance of employment by the
Corporation or any Affiliate, nor shall it interfere in any way with the right
of the Corporation or any Affiliate to terminate the Optionee's employment at
any time.
11. Optionee Bound by Plan; Entire Agreement. The Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. This Agreement and the Plan and, upon execution
thereof, the Stockholder's Agreement, constitute the entire agreement, and
supersede all prior agreements and understandings, oral and written, between the
parties hereto with respect to the subject matter hereof; provided, however,
that in the event there is any conflict between the provisions of this Agreement
or, upon
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execution thereof, the Stockholder's Agreement, on the one hand, and the Plan,
on the other hand, the provisions of this Agreement or the Stockholder's
Agreement shall be binding.
12. Modification of Agreement. This Agreement may be modified,
amended, suspended or terminated by the parties hereto; provided, that the
Corporation may modify, amend, suspend or terminate this Agreement without any
further action by the Optionee if such modification, amendment, suspension or
termination does not adversely affect the Optionee's rights hereunder. Any
terms, covenants, representations or conditions may be waived by the parties
hereto, but only in a writing signed by the party which is entitled to the
benefits of such waived term, covenant, representation or condition.
13. Severability. Should any provision of this Agreement be
held by a court to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
14. Acknowledgment. By signing this Agreement, the Optionee
acknowledges that he has reviewed the Plan and this Agreement and understands
his rights and obligations thereunder and hereunder. The Optionee also
acknowledges that he has been provided with such information concerning the
Corporation, the Plan and this Agreement as he and his advisors have requested.
15. Successors in Interest. This Agreement shall inure to the
benefit of and be binding upon each successor of the Corporation. All
obligations imposed upon the Optionee and all rights granted to the Corporation
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrators and successors.
16. Headings. The headings and captions contained herein are
for convenience only and shall not control or affect the meaning or
construction of any provision hereof.
17. Resolution of Disputes. Any dispute or disagreement which may
arise under, or as a result of, or which may in any way relate to, the
interpretation, construction or application of this Agreement shall be
determined by the Committee. Any determination made hereunder shall be final and
binding for all purposes.
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18. Governing Law. This Agreement and the rights and obligations of
the parties hereto shall be governed by, and construed in accordance with, the
laws of the State of New York without giving effect to the principles of
conflicts of laws thereof.
GULFSTREAM AEROSPACE CORPORATION
By:_____________________________
Title:
_____________________________
Optionee
The undersigned acknowledges that the undersigned has read the
foregoing Agreement between Gulfstream Aerospace Corporation and the
undersigned's spouse and the Stock Option Plan, understands that the
undersigned's spouse has been granted an option to acquire shares of Gulfstream
Aerospace Corporation Common Stock, which option is subject to certain
restrictions reflected in such Agreement and such Plan and agrees to be bound by
the foregoing Agreement and such Plan.
_____________________________
Optionee's Spouse
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