EXHIBIT 10.16
RANGER AEROSPACE CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
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March 7, 0000
Xxxxxx X. Xxxxx
Re: Ranger Aerospace Corporation (the "Company")
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Grant of Nonqualified Stock Option
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Dear Xxxxxx:
The Company is pleased to advise you that its Board of Directors has
granted to you a stock option (an "Option"), as provided below, under the Ranger
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Aerospace Corporation 1999 Stock Option Plan (the "Plan"), a copy of which is
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attached hereto and incor-porated herein by reference.
1. Definitions. For the purposes of this Agreement, the following
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terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
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"Cause" shall mean (i) your theft or embezzlement, or attempted theft or
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embezzlement, of money or property of the Company or any of its subsidiaries,
your perpetration or attempted perpetration of fraud, or your participation in a
fraud or attempted fraud, on the Company or any of its subsidiaries or your
unauthorized appropriation of, or your attempt to misap-propriate, any
substantial tangible or intangible assets or property of the Company or any of
its subsidiaries, (ii) your conviction of any criminal felony involving the
Company or any of its subsidiaries, or (iii) your willful failure to
substantially follow any reasonable instructions of the Board and/or other
policies of the Company, which failure is not corrected within 15 business days
after you receive notice from the Board describing such failure. You shall not
be deemed to have been terminated for Cause unless the Company has delivered to
you a written notice specifying in reasonable detail the facts and circumstances
that are the basis for terminating your employment with the Company for Cause.
Should the Company and you be unable to agree on whether or not the your
conduct, acts or omissions constitute Cause within thirty (30) business days
after your employment with the Company has been terminated, the controversy as
to whether your conduct constitutes Cause shall be settled exclusively by
arbitration in accordance with the requirements of the labor arbitration rules
of the American Arbitration Association then in effect. Arbitration shall
commence upon the appointment of arbitrators mutually agreeable to the parties
and shall continue, without interruption unless required by the arbitrator(s),
with the written decision of the arbitrator(s) to be issued within one-hundred
fifty (150) business days after filing a Notice of Arbitration. All expenses
and fees of the arbitrators shall be borne by the parties equally. Each party
shall bear its own respective attorneys' and other legal fees and any decision,
award or order by arbitration shall be binding upon the parties hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Committee" shall mean the Stock Option Committee or such other committee
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of the Board which may be designated by the Board to administer the Plan, or in
the absence of any such committee, the Board. The Committee shall in no event
be comprised of less than two directors.
"Common Stock" shall mean the Company's Class B Non-Voting Common Stock,
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par value $.01 per share, or, in the event that the outstanding Common Stock is
hereafter changed into or exchanged for different stock or securities of the
Company, such other stock or securi-ties.
"Company" shall mean Ranger Aerospace Corporation, a Delaware corporation.
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"Disability" shall mean your inability, due to illness, accident, injury,
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physical or mental incapacity or other disabil-ity, to carry out effectively
your duties and obligations to the Company or its subsidiaries or to participate
effectively and actively in the manage-ment of the Company or its subsidiaries
for a period of at least 180 consecutive business days or for shorter periods
aggregating at least 360 business days (whether or not consecutive) during any
twenty-four- month period, as determined in the reasonable judgment of the
Board.
"EBITDA" for any fiscal year, shall mean the Company's consolidated
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earnings before any charge for interest, taxes, depreciation or amortization.
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"Fair Market Value" means the average of the closing prices of the sales of
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each class of common stock on all securities exchanges on which the Company
Stock may at the time be listed, or, if there have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if on any day a class of
Executive Stock is not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if
on any day a class of Executive Stock is not quoted in the NASDAQ System, the
average of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau
Incorporated, or any similar successor organization, in each such case averaged
over a period of 21 business days consisting of the day as of which the Fair
Market Value is being determined and the 20 consecutive business days prior to
such day. If at any time a class of Executive Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the Fair Market Value shall be the fair value of the shares of Executive
Stock determined reasonably in good faith by the Board.
If you disagree in any respect with the calculation of Fair Market Value
determined by the Board, you may within 30 business days after such
determination deliver a statement to the Company disagreeing with such
calculation and setting forth your calculation of such amount (the "Statement of
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Disagreement"). Any such Statement of Disagreement shall state the basis of
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such disagreement. If you do not deliver such a Statement of Disagreement
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within such 30 day period, the calculation of Fair Market Value as determined by
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the Board shall be conclusive and binding. If a Statement of Disagreement is
delivered to the Company, the Company and you shall, during the 30 business days
following such delivery, use our best efforts to reach agreement on the Fair
Market Value. Any such agreement reached shall be conclusive and binding. If,
during such 30 business day period, the Company and you are unable to reach such
agreement, each of us shall promptly, but in no case more than 10 business days
thereafter, appoint an independent nationally recognized investment banking
firm, which firms shall then, within 10 business days, jointly select a third
independent and impartial nationally recognized investment banking firm (the
"Investment Banking Firm") to resolve such disagreement and determine Fair
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Market Value. The Investment Banking Firm, acting in a neutral capacity, shall
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review this Agreement and the Statement of Disagreement, and shall make its own
calculation of Fair Market Value. The Investment Banking Firm shall deliver to
the Company and you, as promptly as practicable, but in no case more than 30
business days, after its retention, a report setting forth the calculation of
Fair Market Value. Such report shall be final and binding. The cost of the
Investment Banking Firm shall be borne by the Company and you equally.
"Good Reason" shall mean any of the following: (a) the Company reduces your
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base salary; (b) the Company assigns to you any duties inconsistent with your
duties or responsibilities as Executive Vice President of the Company or changes
your reporting responsibilities or title; (c) the Company or any of its
affiliates breaches any of the terms of this agreement or any other agreement
between the Company or any of its affiliates and you which breach is not cured
within fifteen (15) days of receipt by the Company of written notice from you of
such breach.
"Independent Third Party" means any person who does not own in excess of 5%
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of the Company's Common Stock on a fully-diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of the Company's
Common Stock and who is not the spouse, ancestor or descendant (by birth or
adoption) of any such 5% owner of the Company's Common Stock.
"Option Shares" shall mean (i) all shares of Common Stock issued or
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issuable upon the exercise of the Option and (ii) all shares of Common Stock
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issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consol-idation or recapitalization or other reorganization affecting the Common
Stock. Option Shares shall continue to be Option Shares in the hands of any
holder other than you (except for the Company or the Original Stockholders and,
to the extent that you are permitted to transfer Option Shares pursuant to
paragraph 13 or 15 hereof, purchasers pursuant to a public offering under the
Securities Act), and each such transferee thereof shall succeed to the rights
and obligations of a holder of Option Shares hereunder.
"Public Sale" means any sale of Option Shares to the public pursuant to an
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offering registered under the Securi-ties Act or to the public through a broker,
dealer or market maker pursuant to the provisions of Rule 144 adopted under the
Securities Act.
"Qualified Sale of the Company" means a Sale of the Company prior to the
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Expiration Date of your Option to an Independent Third Party in which all
securities owned by Xxxx Xxxxxxx Mutual Life Insurance Company and its
affiliates and CIBC Wood Gundy Ventures Inc. and its affiliates, including
(without limitation) any such securities issued pursuant to (i) the Securities
Purchase Agreement dated as of April 1, 1998 by and among the Company and the
Purchasers named therein and (ii) the Securities Purchase Agreement dated as of
August 12, 1999 by and among the Company and the Purchasers named therein ("the
Securities Purchase Agreements"), are sold, redeemed or receive distributions
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with respect thereto, for an amount, payable in cash or readily marketable
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securities, equal to the original issuance price thereof plus a cumulative
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annual internal rate of return (the "IRR") in excess of 15% as determined
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reasonably and in good faith by the Board (after taking into account any
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dilution suffered with respect to such securities in connection with such a
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Qualified Sale of the Company as the result of the acceleration of any vesting
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provisions applicable to any securities of the Company or any rights, options or
warrants to purchase any securities of the Company including the Home Run
Vesting Shares.)
If you disagree in any respect with the calculation of IRR as determined by
the Board, you may within 30 business days after such determination deliver a
statement to the Company disagreeing with such calculation and setting forth
your calculation of such amount (the "IRR Statement of Disagreement"). Any such
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IRR Statement of Disagreement shall state the basis of such disagreement. If
you do not deliver such a IRR Statement of Disagreement within such 30 day
period, the calculation of IRR as determined by the Board shall be conclusive
and binding. If a IRR Statement of Disagreement is delivered to the Company,
the Company and you shall, during the 30 business days following such delivery,
use our best efforts to reach agreement on the IRR. Any such agreement reached
shall be conclusive and binding. If, during such 30 business day period, the
Company and you are unable to reach such agreement, each of us shall promptly,
but in no case more than 10 business days thereafter, appoint an independent
nationally recognized investment banking firm, which firms shall then, within 10
business days, jointly select a third independent and impartial nationally
recognized investment banking firm (the "Investment Banking Firm") to resolve
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such disagreement and determine IRR. The Investment Banking Firm, acting in a
neutral capacity, shall review this Agreement and the IRR Statement of
Disagreement, and shall make its own calculation of IRR. The Investment Banking
Firm shall deliver to the Company and you, as promptly as practicable, but in no
case more than 30 business days, after its retention, a report setting forth the
calculation of IRR. Such report shall be final and binding. The cost of such
review and report shall be borne by the Company and you equally.
"Sale of the Company" means a merger or consolida-tion effecting a change
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in control of the Company, a sale of all or substantially all of the Company's
assets or a sale of a majority of the Company's outstanding voting securities.
"Securities Act" means the Securities Act of 1933, as amended, and any
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successor statute.
"Significant Stockholders" shall mean any person or entity which owns at
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least 2% of the shares of the Company's Common Stock on a fully diluted basis.
"Termination Date" means the date on which you cease to be an employee of
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the Company or its subsidiaries for any reason.
2. Option.
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(a) Terms. Your Option is for the purchase of up to 2546 shares of
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Common Stock (the "Option Shares") at a price of $100 per share (the "Exercise
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Price"), payable upon exercise as set forth in paragraph 2(b) below. Your
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Option shall expire at the close of business on March 31, 2008 (the "Expiration
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Date"), subject to earlier expiration as provided in paragraph 3(c) below or
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upon termination of your employment as provided in paragraph 4(b) below. Your
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Option is not intended to be an "incentive stock option" within the meaning of
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Section 422A of the Code.
(b) Payment of Option Price. Subject to paragraph 3 below, your Option
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may be exercised in whole or in part upon payment of an amount (the "Option
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Price") equal to the product of the Exercise Price multiplied by the number of
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Option Shares to be acquired. Payment shall be made (i) in cash (including by
check, bank draft or money order), (ii) if permitted by the Board, by delivery
of a promissory note with such terms and conditions as may be approved by the
Board, (iii) by the surrender to the Company of Common Stock of the Company
having a Fair Market Value equal to the Option Price, or (iv) by delivering a
written notice to the Company that you are exercising the Option by authorizing
the Company to withhold from issuance a number of shares of Common Stock
issuable upon such exercise of the Option which, when multiplied by the Fair
Market Value of the Common Stock, is equal to the Option Price (and such
withheld shares shall no longer be issuable under this Option).
3. Exercisability/Vesting.
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(a) Vesting. Your Option may be exercised only to the extent it has
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become vested.
(b) Time Vesting. 423 of the Option Shares issuable upon exercise of
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your Option are subject to time vesting (the "Time Vesting Shares") as described
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below. Your Option shall become vested with respect to the Time Vesting Shares,
40% on the date hereof, and thereafter on March 31st of each year at the rate of
20% per year beginning March 31, 2000, and ending on March 31, 2002, if as of
each such date you are still employed by the Company or one of its subsidiaries.
If you cease to be employed by the Company or its subsidiaries on any date other
than March 31 of any year included above, the percentage of your Option that is
vested shall equal the percentage of your Option which was vested as of the end
of the immediately preceding fiscal quarter of the Company.
(c) Performance Vesting. 850 of the Option Shares issuable upon
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exercise of your Option are subject to accelerated performance vesting (the
"Performance Vesting Shares") as described below. Your Option shall become
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vested with respect to the Performance Vesting Shares, 40% on the date hereof,
and thereafter, based upon the achievement by the Company on a consolidated
basis of certain EBITDA targets as set forth in the following schedule (as
adjusted, the "Target EBITDA"), if as of each such date you are still employed
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by the Company or one of its subsidiaries:
Cumulative Percentage of
Performance Vesting Shares
Year Ended Target EBITDA Vested
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March 31, 2000 $18,420,000 60%
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March 31, 2001 $20,220,000 80%
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March 31, 2002 $21,880,000 100%
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All or any portion of the EBITDA that is in excess of the Target EBITDA
(the "Excess EBITDA") for any year may be carried back and included in
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calculation of EBITDA for any of the 3 immediately preceding years in the event
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that Target EBITDA was not met in any of such 3 preceding years. If the Target
EBITDA of the Company for any year is met due to the carryback of Excess EBITDA
from a succeeding year pursuant to this paragraph, your Option shall become
vested as of the end of the succeeding year in which the Excess EBITDA was
actually generated. Any carry back of Excess EBITDA from any year shall be made
first to the most recently preceding year in which the Company failed to achieve
Target EBITDA, and thereafter to prior years in which the Company failed to
achieve Target EBITDA in reverse chronological order. In no case shall Excess
EBITDA be carried back to a year that is more than 3 years prior to the year in
which the Excess EBITDA is actually generated. In order for your Options to
vest for a preceding year as a result of the carry back of Excess EBITDA
according to this paragraph, you must be employed as of the end of the year in
which the Excess EBITDA was actually generated.
Target EBITDA shall be adjusted from time to time by the Board in
connection with the acquisition by the Company of any other business or interest
therein. In connection with any such acquisition, the Board will approve and
adopt revised levels of Target EBITDA for each fiscal year remaining during
which Performance Vesting Shares are subject to vesting pursuant to this
paragraph 3(c). The revised Target EBITDA shall be determined based upon
financial projections for the Company approved by the Board in connection with
its approval of such acquisition transaction; provided, however that any
increase in Target EBITDA may not be greater than the projected incremental
EBITDA of the Company associated with such acquisition transaction.
The effective date of vesting shall be March 31 of any year included above
even though EBITDA for the related period may not be determined until a date
thereafter. If you cease to be employed by the Company or its subsidiaries on
any date other than March 31 of any year included above, the percentage of your
Option that is vested shall equal the percentage of your Option which was vested
as of the immediately preceding fiscal quarter of the Company.
Except as otherwise provided herein, if any portion of your Option has not
vested as of the date on which such portion of your Option is eligible to become
vested pursuant to this Agreement, such portion shall be automatically
transferred to the Company without any consideration to you.
(d) Home Run Vesting. 1273 of the Option Shares issuable upon exercise
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of your Option are subject to accelerated "home run" vesting (the "Home Run
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Vesting Shares") upon a Sale of the Company in which all securities outstanding
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as of the date of this Agreement and then owned by Xxxx Xxxxxxx Mutual Life
Insurance Company and its affiliates and CIBC Wood Gundy Ventures Inc. and its
affiliates, including (without limitation) any such securities issued pursuant
to (i) the Securities Purchase Agreement dated as of April 1, 1998 by and among
the Company and the Purchasers named therein and (ii) the Securities Purchase
Agreement dated as of August 12, 1999 by and among the Company and the
Purchasers named therein ("the Securities Purchase Agreements"), are sold,
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redeemed or receive distributions with respect thereto, for an amount, payable
in cash or readily marketable securities, equal in the aggregate to the original
issuance price thereof plus a cumulative annual internal rate of return in
excess of 35% as determined reasonably and in good faith by the Board (after
taking into account any dilution suffered with respect to such securities in
connection with such a Qualified Sale of the Company as the result of the
acceleration of any vesting provisions applicable to any securities of the
Company or any rights, options or warrants to purchase any securities of the
Company, including the Home Run Vesting Shares.) If Executive disagrees in any
respect with the calculation of IRR determined by the Board, such disagreement
shall be resolved by the same procedures for resolving disagreements in the
calculation of Fair Market Value set forth in the definition thereof.
(e) Termination of Employment. Notwithstanding paragraphs 3(a), (b),
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(c) and (d) above, the following special vesting rules shall apply if your
employment with the Company and its subsidiaries terminates prior to the
Expiration Date:
(i) Termination Without Cause. If your employment is terminated
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(i) by the Company or one of its subsidiaries without Cause, or, (ii) by you
with Good Reason, your Option shall be fully exercisable with respect to the
number of Option Shares that were exercisable on the date of such termination.
Any portion of your Option that was not exercisable on the date of such
termination (after giving effect to any acceleration under this clause (i))
shall expire and be for-feited.
(ii) Termination for Cause. If you are discharged by the Company
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or one of its subsidiaries for Cause, all of your Option not previously
exercised shall immediately expire and be forfeited whether vested and
exercisable or not.
(iii) Other Termination of Employment. Unless otherwise
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determined by the Committee, if your employment terminates for any reason other
than upon the termination of your employment by the company or one of its
subsidiaries (whether with or without Cause), your Option shall be fully
exercisable with respect to that portion of your Option that was vested and
exercisable on your Termination Date and any portion of your Option that was not
vested and exercisable on your Termination Date shall expire and be forfeited.
The number of Option Shares with respect to which your Option may be
exer-cised shall not increase once you cease to be employed by the Company or
its subsidiaries.
(f) Acceleration of Vesting on Sale of the Company. Notwithstanding
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any other provision hereof to the contrary, if you have been continuously
employed by the Company or one of its subsidiaries from the date of this
Agreement until a Sale of the Company, provided that such Sale of the Company is
a Qualified Sale of the Company, the portion of your outstanding Option, other
than the Home Run Vesting Shares which shall vest only in accordance with
paragraph 3(d) hereof, which has not become vested at the date of such event
shall immedi-ately vest and become exercisable with respect to 100% of the
Option Shares immediately prior and subject to the consummation of such Sale of
the Company. Any portion of your Option which has not been exercised prior to
or in connection with a Sale of the Company (whether or not a Qualified Sale of
the Company) shall be forfeited immediately prior to the consummation of such
Sale of the Company, unless otherwise determined by the Committee or the Board.
(g) Automatic Vesting. If as of January 28, 2007, all or any portion
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of your Option Shares have not become vested pursuant to this paragraph 3, such
unvested Option Shares shall automatically become vested, if as of such date you
are still employed by the Company or one of its subsidiaries.
4. Expiration of Option. In no event shall any part of your Option be
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exercisable after the Expiration Date set forth in paragraph 2(a) above.
5. Procedure for Exercise. You may exercise all or any portion of your
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Option, to the extent it has vested and is outstanding, at any time and from
time to time prior to its expiration, by delivering written notice to the
Company (to the attention of the Company's Secretary) and your written
acknowledgment that you have read and have been afforded an opportunity to ask
questions of management of the Company regarding all financial and other
information provided to you regarding the Company, together with payment of the
Option Price in accordance with the provisions of paragraph 2(b) above. As a
condition to any exercise of your Option, you shall make all customary
investment representations which the Company reasonably requires.
6. Securities Laws Restrictions and Other Restric-tions on Transfer of
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Option Shares. You represent that when you exercise your Option you shall be
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purchasing Option Shares for your own account and not on behalf of others. You
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understand and acknowledge that federal and state securities laws govern and
restrict your right to offer, sell or otherwise dispose of any Option Shares
unless your offer, sale or other disposition thereof is registered under the
Securities Act and state securi-ties laws, or in the opinion of the Company's
counsel, such offer, sale or other disposition is exempt from registration or
qualification thereunder. You agree that you shall not offer, sell or otherwise
dispose of any Option Shares in any manner which would: (i) require the Company
to file any registration statement with the Securities and Exchange Commission
(or any similar filing under state law) or to amend or supplement any such
filing or (ii) violate or cause the Company to violate the Securities Act, the
rules and regulations promulgated thereunder or any other state or federal law.
You further understand that the certificates for any Option Shares you purchase
shall bear such legends as the Company deems necessary or desirable in
connection with the Securities Act or other rules, regulations or laws.
7. Non-Transferability of Option. Your Option is personal to you and
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is not transferable by you except upon your death pursuant to your will or the
laws of descent and distribution. During your lifetime only you (or your
guardian or legal representative) may exercise your Option. In the event of
your death, your Option may be exercised only (i) by the executor or
administrator of your estate or the person or persons to whom your rights under
the Option shall pass by will or the laws of descent and distribution (and such
executor, or administrator or other person or persons shall continue to be bound
by all the provisions of this Option, including, without limitation, the
provisions of paragraph 12) and (ii) to the extent that you were entitled
hereunder at the date of your death.
8. Conformity with Plan. Your Option is intended to conform in all
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respects with, and is subject to all applicable provisions of, the Plan (which
is incorporated herein by refer-ence). Inconsistencies between this Agreement
and the Plan shall be resolved in accordance with the terms of the Plan. By
execut-ing and returning the enclosed copy of this Agreement, you acknowledge
your receipt of this Agreement and the Plan and agree to be bound by all of the
terms of this Agreement and the Plan.
9. Rights of Participants. Nothing in this Agreement shall interfere
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with or limit in any way the right of the Company to terminate your employment
at any time (with or without Cause), nor confer upon you any right to continue
in the employ of the Company or its subsidiaries for any period of time or to
continue your present (or any other) rate of compensation. Nothing in this
Agreement shall confer upon you any right to be selected again as a Plan
participant, and nothing in the Plan or this Agreement shall provide for any
adjustment to the number of Option Shares subject to your Option upon the
occurrence of subsequent events except as provided in paragraph 11 below.
10. Withholding of Taxes. The Company shall be entitled, if necessary
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or desirable, to withhold from you from any amounts due and payable by the
Company to you (or secure payment from you in lieu of withholding) the amount of
any income tax withholding due from the Company with respect to any Option
Shares issuable under this Plan, and the Company may defer such issuance unless
indemnified by you to its satisfaction.
11. Adjustments. In the event of a reorganization, recapitalization,
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stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board or the Committee shall, in order to prevent the dilution
of rights under your Option and may, in order to prevent the enlargement of
rights under your Option, make such adjustments in the number and type of shares
authorized by the Plan, the number and type of shares covered by your Option and
the Exercise Price specified herein as may be reasonably determined to be
appropriate and equitable and to preserve all of your rights, under your Option.
The issuance by the Company of shares of stock of any class, or options or
securities exercisable or convertible into shares of stock of any class, for
cash or property, or for labor or services, either upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon exercise or
conversion of other securities, shall not affect, and no adjust-ment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock then subject to any Options.
12. Right to Purchase Option Shares Upon Your Termina-tion of
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Employment for Cause.
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(a) Repurchase of Option Shares. If your employment with the Company
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and its subsidiaries shall be terminated by the Company or one of its
subsidiaries for Cause, then the Company shall have the option to repurchase all
or any part of the Option Shares issued or issu-able upon exercise of your
Option, whether held by you or by one or more of your transferees, at a price
per share equal to the Exercise Price of such share (the "Repurchase Option").
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(b) Repurchase by Company. The Company may elect to purchase all or
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any portion of the Option Shares by delivery of written notice (the "Repurchase
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Notice") to you or any other holders of the Option Shares within 45 business
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days after your Termina-tion Date (the "Company Election Period"). The
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Repurchase Notice shall set forth the number of Option Shares to be acquired
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from you (or upon your death, from other holder(s)), the aggregate consideration
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to be paid for such shares and the time and place for the closing of the
transaction. If, following your death, Option Shares are held by more than one
person, the Company shall purchase the shares elected to be purchased from the
holders thereof, pro rata according to the number of shares held by each such
holder at the time of delivery of such Repurchase Notice (determined as close as
practical to the nearest whole shares).
(c) Repurchase by Significant Stockholders. If for any reason the
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Company does not elect to purchase all of the Option Shares pursuant to the
Repurchase Option, then the Significant Stockholders shall be entitled to
exercise the Company's Repur-chase Option in the manner set forth in paragraph
12(a) for all or any portion of the number of Option Shares the Company has not
elected to purchase (the "Available Shares"). As soon as practi-cable after the
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Company has determined that there shall be Available Shares, but in any event
within 5 business days after the expiration of the Company Election Period, the
Company shall deliver written notice (the "Option Notice") to the Significant
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Stockholders setting forth the number of Available Shares and the price for each
Available Share. Each Significant Stockholder may elect to purchase any number
of Available Shares by delivering written notice to the Company within 30
business days after receipt of the Option Notice from the Company. If more than
one Significant Stockholder elects to purchase the Available Shares and such
elections exceed the number of Available Shares, the number of Available Shares
to be purchased by the electing Significant Stockholders shall be allocat-ed
among them pro rata based upon their relative percentage ownership of Common
Stock of the Company on a fully diluted basis. As soon as practicable, and in
any event within five business days after the expiration of such 30-day period,
the Company shall notify you or any other holder(s) of Option Shares as to the
number of Option Shares being purchased from you by the Significant
Stockhold-ers (the "Supplemental Repurchase Notice"). At the time the Company
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delivers the Supplemental Repurchase Notice to you or such other holder(s) of
Option Shares, each Significant Stockholder shall also receive written notice
from the Company setting forth the number of shares it is entitled to purchase,
the aggregate purchase price and the time and place of the closing of the
transaction.
(d) Closing of Repurchase of Option Shares. The purchase of Option
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Shares pursuant to this paragraph 12 shall be closed at the Company's executive
offices on a date determined by the Company, which date shall be within 45
business days after the expiration of the Company Election Period. At the
closing, the purchaser or purchasers shall pay the purchase price in the manner
specified in paragraph 12(a) and you or any other holders of Option Shares being
purchased shall deliver the certificate or certificates representing such shares
to the purchaser or purchasers or their nominees, accompanied by duly executed
stock powers. Any purchaser of Option Shares under this paragraph 12 shall be
entitled to receive customary repre-sentations and warranties from you or any
other selling holders of Option Shares regarding good title to such shares, free
and clear of any liens or encumbrances and to require all sellers' signatures to
be guaranteed by a national bank or reputable securities broker.
(e) Manner of Payment. If the Company elects to purchase all or any
-------------------
part of the Option Shares, including Option Shares held by one or more
transferees, the Company shall pay for such shares: (i) first, by offsetting
amounts outstanding under any indebtedness or other obligations owed by you to
the Company or any of its subsidiaries; (ii) by certified check or wire transfer
of funds to the extent such payment would not cause the Company or any of its
subsidiaries to violate the General Corporation Law of the State of Delaware
(the "DGCL") and would not cause the Company or any of its subsidiaries to
breach any debt or equity financing agreement; and (iii) thereafter, with a
subordinat-ed promissory note of the Company. Such subordinated promissory note
shall bear interest at the applicable federal rate (which interest shall accrue
and be payable annually in cash unless otherwise prohibited), shall have all
principal due on the fifth anniversary of the date of issuance and shall be
subordinated on terms and conditions satisfactory to the holders of the
Company's and its subsidiaries' existing indebtedness for borrowed money. If any
Significant Stockholders elect to purchase all or any portion of the Available
Shares, such Significant -Stockholders shall pay for that portion of such Option
Shares by certified check or wire transfer of funds.
(f) Repurchase Restriction. Notwithstanding anything to the contrary
-----------------------
contained in this Agreement, all purchases of Option Shares by the Company shall
be subject to applicable restrictions contained in the DGCL and in the Company's
and its subsidiaries' debt and equity financing agreements. If any such
restrictions prohibit the purchase of Option Shares hereunder which the Company
is otherwise entitled or required to make, all time periods set forth in
paragraph 12 shall be deemed to be extended so that the Company may make such
repurchase as soon as it is permitted to do so under such restrictions, and upon
purchase the Company shall pay to Executive interest on the purchase price of
Option Shares to be purchased accruing during the period of such extension at
the lesser of 9.5% per annum or the highest rate permitted by applicable law.
13. Restrictions on Transfer of Option Shares. You shall not sell,
---------------------------------------------
pledge or otherwise transfer any interest in any Option Shares except pursuant
to the provisions of paragraphs 12 or 15 hereof, pursuant to paragraph 3 or 4 of
the Security Holders Agreement dated April 1, 1998, as amended, or upon your
death pursuant to your will or the laws of descent and distribution.
14. Additional Restrictions on Transfer.
--------------------------------------
(a) Restrictive Legend. The certificates representing the Option
-------------------
Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON MARCH
7, 2000, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIF-ICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN
OTHER AGREEMENTS SET FORTH IN AN OPTION AGREEMENT BETWEEN THE COMPANY AND XXXXXX
X. XXXXX DATED AS OF MARCH 7, 2000, A COPY OF WHICH MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) Holdback. In connection with any Public Sale, you agree to comply
--------
with the terms of any underwriting agreement (or other related agreement) that
is approved by the Board and entered into by the holders of a majority of shares
in the Company.
15. Sale of the Company.
----------------------
(a) Consent to Sale of the Company. If the Board and the holders of a
-------------------------------
majority of the Company's Common Stock then out-standing approve a Sale of the
Company (including any Qualified Sale of the Company) (the "Approved Sale"), you
-------------
shall consent to and raise no objections against the Approved Sale of the
Company. If the Approved Sale is structured as a sale of stock, you shall agree
to sell all of your Option Shares and vested rights to acquire Option Shares on
the terms and conditions approved by the Board and the holders of a majority of
the Common Stock then outstanding. If the Approved Sale is structured as a
merger, you shall approve the merger and you hereby agree to waive all
dissenters, approval or similar rights you may have in connection therewith.
You shall take all necessary and desirable actions in connection with the
consummation of any Approved Sale as reasonably requested by the Board or
holders of a majority of the Company's Common Stock then outstanding.
(b) Your obligations with respect to the Approved Sale are subject to
the satisfaction of the following conditions: (i) upon the consummation of the
Approved Sale, you shall receive the same form of consideration and the same
portion of the aggregate consideration that you would have received if such
aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences set forth in the Company's
Certificate of Incorporation as in effect immediately prior to the consummation
of the Approved Sale; (ii) if any other holder of capital stock of the Company
is given an option as to the form and amount of consideration to be received,
you shall be given the same option; and (iii) you shall be given an opportunity
to exercise all Options vested or vesting in connection with the Approved Sale
prior to the consummation thereof and participate in such sale as a holder of
the Common Stock receivable upon exercise of such Options.
(c) Purchaser Representative. If the Company or the holders of the
-------------------------
Company's securities enter into any negotiation or transaction for which Rule
506 (or any similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or transaction
(in-cluding a merger, consolidation or other reorganization), you shall, at the
request of the Company, appoint a purchaser repre-sentative (as such term is
defined in Rule 501) reasonably acceptable to the Company. If you appoint the
purchaser repre-sentative designated by the Company, the Company shall pay the
fees of such purchaser representative, but if you decline to appoint the
purchaser representative designated by the Company you shall appoint another
purchaser representative (reasonably acceptable to the Company), and you shall
be responsible for the fees of the purchaser representative so appointed.
(d) Termination of Restrictions. The provisions of this paragraph 15
-----------------------------
shall terminate with respect to any Option Shares when such Option Shares have
been sold in a Public Sale.
16. Rule 701 under the Securities Act. The Company and you acknowledge
---------------------------------
and agree that this Option is a written contract relating to your compensation
by the Company. The securities issued or issuable to you hereunder are being
issued in reliance on the exemption from registration provided in Rule 701
promulgated by the Securities and Exchange Commission under the Securities Act
and are "restricted securities" within the meaning of Rule 144 under the
Securities Act. You hereby covenant and agree that you will sell the securities
issued or issuable hereunder only pursuant to registration under the Securities
Act, or pursuant to an exemption from registration available thereunder.
17. Remedies. The parties hereto (and the Significant Stockholders as
--------
third-party beneficiaries) shall be entitled to enforce their rights under this
Agreement specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights existing in their
favor. The parties hereto acknowledge and agree that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party hereto (and any Significant Stockholder as a third-party beneficiary)
may, in its sole discretion, apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
18. Amendment. Except as otherwise provided herein, any provision of
---------
this Agreement may be amended or waived only with the prior written consent of
you and the Company; provided that no provision of paragraph 12, 13, 14, 15, or
17 or of this paragraph 18 may be amended or waived without the prior written
consent of the Significant Stockholders owning a majority of the shares of
Common Stock held by all Significant Stockholders on a fully diluted basis.
19. Successors and Assigns. Except as otherwise expressly provided
------------------------
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not.
20. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
21. Counterparts. This Agreement may be executed simultaneously in two
------------
or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same Agreement.
22. Descriptive Headings. The descriptive headings of this Agreement
---------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
23. Governing Law. The corporate law of Delaware shall govern all
--------------
questions concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation of
this Agreement shall be governed by the internal law, and not the law of
conflicts, of Delaware.
24. Notices. All notices, demands or other communica-tions to be given
-------
or delivered under or by reason of the provi-sions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally, mailed
by certi-fied or registered mail (return receipt requested and postage prepaid),
or sent by facsimile (with facsimile transmission information and hard copy to
follow by regular mail) to the recipient. Such notices, demands and other
communications shall be sent to you and to the Company and the Significant
Stockholders at the addresses indicated below:
(a) If to the Optionee:
---------------------
To the address set forth in the books and records of the Company
(b) If to the Company:
--------------------
Ranger Aerospace Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx International Airport
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President
(c) If to the Significant Stockholders:
--------------------------------------
To the addresses set forth in the books and records of the Company
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
25. Third-Party Beneficiary. The Company and you acknowledge that the
------------------------
Significant Stockholders are third-party beneficiaries under this Agreement.
26. Entire Agreement. This Agreement constitutes the entire
-----------------
understanding between you and the Company, and supersedes all other agreements,
whether written or oral, with respect to the acquisition by you of Common Stock
of the Company.
* * * *
Please execute the extra copy of this Agreement in the space below and
return it to the Company's Secretary at its executive offices to confirm your
understanding and acceptance of the agreements contained in this Agreement.
Very truly yours,
Ranger Aerospace Corporation
By: ___________________________
Its: ___________________________
The undersigned hereby acknowledges having read this Agreement and the Plan
and hereby agrees to be bound by all provisions set forth herein and in the
Plan.
Dated as of OPTIONEE
March 7, 2000
___________________________________
Xxxxxx X. Xxxxx
