THIS AMENDMENT AND
WAIVER, dated as of October 28, 2005 (this “
Amendment and Waiver ”), is made by and among
(the “ Option Holder ”), AT Holdings
Corporation, a Delaware corporation (the “ Company
”), Argo-Tech Corporation, a Delaware corporation (“
Argo-Tech ”), and V.G.A.T. Investors, LLC, a Delaware
limited liability company (“ Parent
”).
WHEREAS, pursuant
to that certain AT Holdings Corporation Nonqualified Stock Option
Agreement, dated as of
(the “ Option Agreement ”), by and among the
Company, Argo-Tech and the Option Holder, the Option Holder is the
holder of options to purchase an aggregate of
shares of common stock of the Company (the “ Options
”);
WHEREAS, as part
of the transactions contemplated by that certain Merger Agreement
(the “ Merger Agreement ”), dated
September 13, 2005, by and among the Company, Argo-Tech, The
Argo-Tech Corporation Employee Stock Ownership Plan (the “
ESOP ”), acting therein through GreatBanc Trust
Company in its capacity as trustee of the ESOP, Parent, and Vaughn
Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent, as amended, the Merger Agreement provides
that the Option Holder will (i) retain 400 Options that were
issued under the Option Agreement (the “ Rollover
Securities ”), (ii) amend the Option Agreement to
provide that such Rollover Securities will become options to
purchase Class A Units of Parent as set forth herein and
(iii) waive his right to receive any amounts that would
otherwise be payable pursuant to the Merger Agreement with respect
to such Rollover Securities, and as the result, such Rollover
Securities will not be cancelled as otherwise contemplated by the
terms of the Merger Agreement and no amounts will be paid to the
Option Holder in respect thereof pursuant to the Merger
Agreement;
WHEREAS, pursuant
to Section 11 of the Option Agreement, the board of
directors of the Company may make adjustments in the securities
covered by outstanding options to reflect the occurrence of certain
transactions with respect to the stock of the Company and, pursuant
to Section 13 of the Option Agreement, the Option
Agreement may be amended with the consent of the Option
Holder;
WHEREAS, the
parties hereto intend that this Amendment and Waiver shall not
constitute a modification of the Rollover Securities for purposes
of Section 409A of the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder (the
“ Code ”), and this Amendment and Waiver shall
be construed accordingly; and
WHEREAS, the
Option Holder is willing to amend the Option Agreement and provide
all such waivers with respect to such Rollover Securities as are
required under the Merger Agreement in connection with the
transactions contemplated thereby, upon the terms and subject to
the conditions set forth below.
NOW, THEREFORE, in
consideration of the respective covenants and promises contained
herein and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
|
1.
|
|
Waiver of Right to Receive Merger
Consideration . The Option Holder hereby consents
to the Company’s execution and delivery of the Merger
Agreement and the consummation of the transactions contemplated
thereby, including the treatment of Rollover Securities, and waives
all of his rights to receive any amounts that would otherwise be
payable pursuant thereto with respect to the Rollover Securities
held by the Option Holder.
|
|
|
|
|
|
2.
|
|
Amendment to Option
Agreement .
The Option Holder hereby consents, in accordance with
Section 11 and Section 13 of the Option
Agreement, to the following amendments of the Option
Agreement:
|
|
|
(a)
|
|
The
title and preamble of the Option Agreement are hereby deleted in
their entirety and replaced with the following:
|
Nonqualified Unit Option
Agreement
This AGREEMENT
(the “Agreement”) is made by and between V.G.A.T.
INVESTORS, LLC, a Delaware limited liability company (the
“Company”), AT HOLDINGS CORPORATION, a Delaware
corporation (“ATH”), ARGO-TECH CORPORATION, a Delaware
corporation (“Argo-Tech”), and the individual listed on
the signature page of this Agreement (the “Optionee”).
Capitalized terms have the meaning set forth in Section 7 of
this Agreement.”
|
|
(b)
|
|
Section 1
of the Option Agreement
is hereby deleted in its entirety and replaced with the
following:
|
|
|
|
|
|
|
|
|
|
“1. Grant of Option. The
Company hereby assumes, effective as of October 28, 2005, an
option (the “Option”) to purchase the number of
Class A Units listed on the signature page of this Agreement
(the “Optioned Units”). Prior to the assumption thereof
by the Company, the Option consisted of an option to acquire from
ATH a number of shares of common stock of ATH (the “Optioned
Shares”) equal to the number of Optioned Units now subject to
the Option. The price at which each of the Optioned Units may be
purchased pursuant to this Option shall be listed on the signature
page of this Agreement (the “Option Price”), subject to
adjustment as hereinafter provided, and shall be equal to the
Option Price for an Option Share prior to the assumption of the
Option by the Company. The Option is intended to be a
“nonqualified stock option” and shall not be treated as
an “incentive stock option” within the meaning of that
term under Section 422 of the Internal Revenue Code of 1986,
as amended, or any successor provision thereto.”
|
|
|
|
|
|
|
|
(c)
|
|
The
words “ten (10) years from the Date of Grant” in
Section 2 are hereby deleted and replaced with the
words “
.”
|
2
|
|
(d)
|
|
Section 3(a)
of the Option Agreement
is hereby deleted in its entirety and replaced with the
following:
|
|
|
|
|
|
|
|
|
|
“The Option is immediately
exercisable with respect to all Optioned Units. Upon exercise of
the Option with respect to one or more Optioned Units, (i) the
Company shall cause ATH to transfer to Argo-Tech a number of shares
of common stock of ATH equal to the number of Optioned Units,
(ii) the Company shall cause Argo-Tech to transfer the shares
of ATH common stock to the Optionee in exchange for payment by the
Optionee to Argo-Tech of the Option Price and (iii) the
Optionee shall contribute shares of ATH common stock to the Company
in exchange for the Optioned Units acquired upon the exercise of
the Option.
|
|
|
|
|
|
|
|
(e)
|
|
The
words “the Company” in the third sentence of
Section 5(a) of the Option Agreement are hereby deleted
and replaced with the words “an Issuer.”
|
|
|
|
|
|
|
|
(f)
|
|
Section 5(b)
of the Option Agreement
is hereby deleted in its entirety and replaced with the
following:
|
|
|
|
|
|
|
|
|
|
“(b) The Optionee may also
tender the Option Price by (i) the actual or constructive
transfer to the Company of outstanding Class A Units (or such
other Company secu
|
|
