EXHIBIT 4.4
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT ("AGREEMENT") is made between MAXXIM MEDICAL,
INC. a Texas corporation (the "COMPANY") and Xxxxxxx X. Xxxxxxxx, an individual
(the "EXECUTIVE"). As of the 31st day of January, 1997 with respect to the
following facts:
RECITALS:
A. The Executive is a principal officer of the Company and an integral
part of its management.
B. The Company wishes to assure both itself and the Executive of
continuity of management in the event of any actual or threatened
change in control of the Company.
C. This Agreement is not intended to alter materially the compensation
and benefits that the Executive could reasonably expect in the
absence of a change in control of the Company and, accordingly, this
Agreement, though taking effect upon execution thereof, will be
operative only upon a change of control of the Company, as that term
is defined herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements of the parties contained herein, the parties do hereby agree as
follows:
1. OPERATION OF AGREEMENT
This Agreement shall be effective immediately upon its execution by the
parties hereto. Anything in this Agreement to the contrary notwithstanding,
neither this Agreement nor any provision thereof shall be operative unless and
until there has been a "Change in Control" of the Company as defined in SECTION
5 below. Upon such a Change in Control of the Company, this Agreement and all
provisions hereof shall become operative immediately.
2. PURPOSE AND INTENT
The Board of Directors of the Company (the "BOARD") recognizes that the
possibility of a Change in Control of the Company exists and that such
possibility, and the uncertainty and questions which it necessarily raises among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company and its shareholders in this period
when their undivided attention and commitment to the best interests of the
Company and its
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shareholders are particularly important. Accordingly, the Board has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management, including the
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change in
Control of the Company.
3. TERM OF AGREEMENT
This Agreement shall be effective upon the execution thereof by the
parties, and shall remain in effect until December 31, 2002, at which time it
shall terminate; provided, however, that the term of this Agreement shall be
extended by one day for each day after December 31, 2000 that notice of
termination by either party has not been given to the other, so that at all
times after December 31, 2000, if neither party has given notice of termination
then this Agreement shall have a two (2) year remaining term. Either party may
give notice of termination of this Agreement at any time, with or without cause.
If any notice of termination is given on or before December 31, 2000, then this
Agreement shall terminate December 31, 2002. If any notice of termination is
given after December 31, 2000, then this Agreement shall terminate on that date
two years after such notice is given.
4. TERMINATION FOLLOWING CHANGE IN CONTROL.
For purposes hereof only, a termination of the Executive's employment
following a Change in Control (" TERMINATION FOLLOWING CHANGE IN CONTROL") shall
be deemed to occur if at any time during the two-year period immediately
following a Change in Control:
(a) there has been an actual termination by the Company of the
Executive's employment, other than "for cause" as defined herein;
(b) the Company reduces the Executive's base salary, bonus computation
or title;
(c) the Company substantially reduces the Executive's responsibilities
as in effect immediately prior to the Change in Control or as the
same may be increased from time to time, or there is a change in
employment conditions deemed by the Executive to be materially
adverse as compared to those in effect immediately prior to the
Change in Control, any of which is not remedied within 30 days after
receipt by the Company of notice by the Executive, of such reduction
in responsibilities or change in employment conditions;
(d) without the Executive's express written consent, the Company
requires the Executive to be based anywhere other than Pinellas
County, Florida, except for required travel on the Company's
business to an extent substantially consistent with that prior to
the Change in Control;
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(e) the Company fails to obtain the assumption of the performance of
this Agreement by any successor of the Company; or
(f) the Company takes any action which would deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of
the Change in Control, or the Company fails to provide the Executive
with the number of paid vacation days to which the Executive is then
entitled in accordance with the Company's normal vacation policy in
effect on the date of the Change in Control.
The voluntary termination by the Executive of his employment by the Company
shall in no event constitute a "Termination Following Change in Control."
5. DEFINITION OF CHANGE IN CONTROL.
A Change in Control will be deemed to have occurred if:
(a) any "person," as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), is or
becomes a beneficial owner, directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of
the Company's then outstanding equity securities;
(b) during any period of twenty-four (24) consecutive months, commencing
before or after the date of this Agreement, individuals who at the
beginning of such twenty-four (24) month period were directors of
the Company for whom the Executive shall have voted cease for any
reason to constitute at least a majority of the Board of Directors
of the Company;
(c) an event occurs which constitutes a change in control of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Company is then subject to such reporting
requirements;
(d) there is a merger or consolidation of the Company in which the
Company does not survive as an independent public company; or
(e) the business or businesses of the Company for which the Executive's
services are principally performed are disposed of by the Company
pursuant to a partial or complete liquidation of the Company, a sale
of assets (including stock of a subsidiary) of the Company, or
otherwise.
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6. COMPENSATION FOLLOWING TERMINATION.
(a) Subject to the terms and conditions of this Agreement, upon a
Termination Following Change in Control, as defined in SECTION 4,
which occurs during the term of this Agreement, the Executive shall
be entitled to (i) a lump sum payment, within fifteen (15) days
following such termination, in an amount equal to two and one-half
times the highest annual level of total cash compensation (including
any and all bonus amounts) paid to the Executive by the Company (as
reported on Form W-2) during the three calendar years ended
immediately prior to such termination, (ii) the immediate vesting of
all previously granted but unvested stock options to acquire
securities from the Company which were outstanding on the date of
the termination, and (iii) continuing health coverage for a period
of twenty-four (24) months, at a level commensurate with that which
the Executive enjoyed with the Company immediately prior to such
Change in Control.
(b) The Executive shall not be required to mitigate the amount of any
payment provided for in this SECTION 6 by seeking other employment
or otherwise, nor shall the amount of any payment or benefit
provided for in this SECTION 6 be reduced by any amounts to which
the Executive shall be entitled by law (nor shall payment hereunder
be deemed in lieu of such amounts), by any compensation earned by
the Executive as the result of employment by another employer or by
retirement benefits after the date of termination or voluntary
termination, or otherwise.
(c) Anything to the contrary notwithstanding, all payments required to
be made by the Company hereunder to the Executive or his estate or
beneficiaries shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company
may reasonably determine it should withhold pursuant to any
applicable law or registration. In lieu of withholding such amounts,
the Company may accept other provisions to the end that it has
sufficient funds to pay all taxes required by law to be withheld in
respect of any or all of such payments.
7. DEFINITION OF "FOR CAUSE."
The Termination of the Executive's employment by the Company shall be
deemed "For Cause" if it results from:
(a) the willful and continued failure by the Executive substantially to
perform his duties hereunder or regular failure to follow the
specific directives of the Board, after demand for substantial
performance that specifically identifies the manner in which the
Company believes the Executive has not substantially performed his
duties is delivered by the Company;
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(b) the willful engaging by the Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise;
(c) the Executive's death; or
(d) an accident or illness which renders the Executive unable, for a
period of at least six (6) consecutive months, to perform the
essential functions of his job, notwithstanding the provision of
reasonable accommodation by Employer.
For purposes of this section, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated For Cause under
subsection (a) or (b)without (i) reasonable notice to the Executive setting
forth the reasons for the Company's intention to terminate For Cause, (ii) an
opportunity for the Executive, together with his counsel, to be heard before the
Board, and (iii) delivery to the Executive of a notice of termination from the
Board finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth above in clause (a) or (b) of the preceding sentence
and specifying the particulars thereof in detail.
8. TAX TREATMENT.
It is the intention of the parties that no portion of the payment made
under SECTION 6 hereof (The "TERMINATION PAYMENT") or any other payment under
this Agreement, or payments to or for the Executive's benefit under any other
agreement or plan, be deemed to be an excess parachute payment as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "CODE"), or
its successors. It is agreed that the present value of the Termination Payment
and any other payment to or for the Executive's benefit in the nature of
compensation, receipt of which is contingent on the Change in Control of the
Company, and to which Section 280G of the Code or any successor provision
thereto applies (in the aggregate "Total Payments") shall not exceed an amount
equal to one dollar less than the maximum amount which the Executive may receive
without becoming subject to the tax imposed by Section 4999 of the Code or any
successor provisions or which the Company may pay without loss of deduction
under Section 280G of the Code or any successor provision. Present value for
purposes of this Agreement shall be calculated in accordance with Section
1274(b)(2) the Code or any successor provision.
Within six (6) days following delivery of written notice by the Company to
the Executive of the Company's belief that there is a payment or benefit due
which will result in an excess parachute payment as defined in Section 280G of
the Code or any successor provision, the Company and the Executive, at the
Company's expense, shall obtain the opinion of legal counsel and certified
public accountants, as the Company and Executive may mutually agree upon, which
opinions need not be unqualified, which sets forth (i) the amount of the
Executive's Base Period
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Income, as defined in Section 280G of the Code, (ii) the present value of Total
Payments, and (iii) the amount and present value of any excess parachute
payments.
In the event such opinions reunder, or any other payment determined by
such counsel to be includable in Total Payments, shall be reduced or eliminated
in the following order: (i) by the amount of any options to purchase securities
of the Company which have had their vesting rights accelerated hereunder, and
(ii) by the amount of any cash received hereunder, so that under the bases of
calculation set forth in such opinions there will be no excess parachute
payment. The provisions of this Section, including the calculations, notices and
opinions provided herein, shall be based upon the conclusive presumption that
(i) the compensation and benefits provided herein and (ii) any other
compensation, including but not limited to any accrued benefits, earned by the
Executive prior to the Change in Control of the Company pursuant to the
Company's compensation programs, would have been reasonable if made in the
future in any event, even though the timing of such payment is triggered by the
Change in Control of the Company. In the event such legal counsel so requests in
connection with the Section 280G opinion required by this Section, the Company
and Executive shall obtain, at the Company's expense, the advice of a firm of
recognized executive compensation consultants concerning the reasonableness of
any item of compensation to be received by the Executive, on which advice legal
counsel may rely in providing their opinion. In the event that the provisions of
Sections 280G and 4999 of the Code or any successor provision are repealed
without succession, this Section shall be of no further force or effect.
9. MISCELLANEOUS.
(a) INTENT. This Agreement is made by the Company in order to induce the
Executive to remain in the Company's employ, with the Company's acknowledgment
and intent that it will be relied upon by the Executive, and in consideration of
the services to be performed by the Executive from time to time hereafter.
However, this Agreement is not an agreement to employ the Executive for any
period of time or at all, and the terms and conditions of the Executive's
employment, other than those expressly addressed herein, shall be subject to and
governed by a separate agreement of employment between the Company and the
Executive. This Agreement is intended only as an agreement to provide the
Executive with a specified compensation and benefits if he or she is terminated
following a Change in Control.
(b) ATTORNEY'S FEES. If any action at law or in equity is commenced to
enforce any of the provisions or rights under this Agreement, the unsuccessful
party to such litigation, as determined by the court in a final judgment or
decree, shall pay the successful party all costs, expenses and reasonable
attorneys' fees incurred by the successful party or parties (including, without
limitation, costs, expenses and fees on any appeals), and if the successful
party recovers judgment in any such action or proceeding, such costs, expenses
and attorneys' fees shall be included as part of the judgment.
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(c) GOVERNING LAW. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Texas.
(d) SUCCESSORS AND ASSIGNS.
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree in writing to perform this Agreement. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall
require the Company to pay to the Executive compensation from the Company
in the same amount and on the same terms as the Executive would be
entitled hereunder in the event of a Termination Following Change in
Control of the Company, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall
be deemed to be the date on which the Executive shall receive such
compensation from the Company. As used in this Agreement, "Company" shall
mean the Company as herein above defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation or law or otherwise.
(ii) This Agreement shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would still be
payable to the Executive hereunder if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's devisee,
legatee or other designee or, if there is no such designee, to Executive's
estate.
(e) NOTICES. Except as otherwise expressly provided herein, any notice,
demand or payment required or permitted to be given or paid shall be deemed duly
given or paid only if personally delivered or sent by United States mail and
shall be deemed to have been given when personally delivered or two (2) days
after having been deposited in the United States mail, certified mail, return
receipt requested, properly addressed with postage prepaid. All notices or
demands shall be effective only if given in writing. For the purpose hereof, the
addresses of the parties hereto (until notice of a change thereof is given as
provided in this Section 9(f)), shall be as follows:
The Company: Maxxim Medical, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Chief Operating Officer
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Executive: Xxxxxxx X. Xxxxxxxx
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(f) SEVERABILITY. In the event any provision in this Agreement shall
be invalid, illegal or unenforceable, such provision shall be severed from the
rest of this Agreement and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(g) ENTIRETY. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understandings relating to the subject matter
hereof.
(h) AMENDMENT. This Agreement may be amended only by a written
instrument signed by the parties hereto, which makes specific reference to this
Agreement.
(i) SETOFF. There shall be no right of setoff or counterclaim, in
respect of any claim, debt or obligation, against any payments to the Executive,
his dependents, beneficiaries or estate provided for in this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
THE COMPANY: MAXXIM MEDICAL, INC.
By:_______________________________________
Xxxxxxx X. Xxxxxxx, Phd., Chairman of
Compensation Committee
EXECUTIVE: __________________________________________
Xxxxxxx X. Xxxxxxxx
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