Exhibit 10.(c)(c)
EMPLOYMENT AGREEMENT
AGREEMENT dated March 7, 1997, between XXXXX X. XXXXX (the "Executive")
and XXXXX XXXXXX, INC., a Delaware corporation (the "Company").
The Executive is presently the President and Chief Executive Officer of
Micro Bio-Medics, Inc. ("MBM").
The Company and MBM are parties to an Agreement and Plan of Merger dated
the date hereof (the "Merger Agreement"), pursuant to which it is contemplated
that HSI Acquisition Corp., a wholly-owned subsidiary of the Company, will be
merged with and into MBM.
The Company desires to employ the Executive, and the Executive desires to
be employed by the Company, at the Effective Time, as that term is defined in
the Merger Agreement. Accordingly, the parties hereto are entering into this
Agreement to set forth and confirm their respective rights and obligations with
respect to the Executive's employment by the Company commencing as of the
Effective Time.
The parties agree as follows:
i. Employment. The Company shall employ the Executive, as of the
Effective Time, as Executive Vice President of the Company and
President of the Company's medical products group and the Executive
shall accept such employment and serve as such, subject to and upon
the terms and conditions set forth in this Agreement; provided,
however, that this Agreement shall terminate and be of no further
force or effect if the Executive shall have died or, in the
reasonable judgment of the Company, become disabled (as that term is
used in Section 7(a)(i)(A) hereof), or his employment by MBM shall
have been terminated for cause (as that term is defined in Section
7(a)(i)(B) hereof), in any such case, prior to the Effective Time.
At the Effective Time, the Executive's Employment Agreement with MBM
dated February 11, 1992 (the "MBM Agreement"), as amended, shall
terminate and be of no further force or effect.
ii. Duties and Authority.
(i) At all times during his employment with the Company, the
Executive shall, subject to the direction and control of
the Boards of Directors of the Company and MBM and the
Chief Executive Officer of the Company, perform such
executive duties and functions as he may be called upon
by
such Boards or such Chief Executive Officer to perform,
consistent with his employment hereunder as Executive
Vice President of the Company and President of the
Company's medical products group. As President of the
Company's medical products group, the Executive shall
have the authority customarily vested in the chief
executive officer of an operating division, including
with respect to such division, day to day authority with
respect to, among other matters, purchasing, pricing,
sales and the hiring, compensating and discharging of
employees, all subject to the overall authority of the
Boards of Directors of the Company and MBM and the Chief
Executive Officer of the Company.
(ii) The Executive shall devote his full business time and
effort to the performance of his duties hereunder; and,
to the extent requested by the Board of Directors of the
Company or MBM or the Chief Executive Officer of the
Company, render such executive services for any other
subsidiary or affiliated business of the Company,
provided such other subsidiaries or affiliated
businesses are engaged principally in sales of medical
supplies and equipment; and provided, further, that
nothing herein contained shall prevent the Executive
from managing his personal investments and participating
in charitable and civic endeavors so long as such
activities do not materially interfere with the
Employee's performance of his duties hereunder.
iii. Compensation.
(i) The Company shall pay to the Executive for all services
to be rendered by him pursuant to this Agreement a base
salary at the annual rate of Four Hundred Thousand
Dollars ($400,000), payable in accordance with the
Company's practices (which, for purposes of this
Agreement, means the practices of the Company with
respect to its most senior executives as in effect from
time to time). Such
salary shall be increased each year by an amount
determined in good faith by the Board of Directors of
the Company, which amount shall be no less than the
percentage increase in the cost of living over the
preceding year, as determined in accordance with the
Company's practices.
(ii) The Executive shall be entitled to a bonus in respect of
each fiscal year of the Company during which he is
employed hereunder, payable no later than 90 days after
the end of each year for which such bonus is payable, in
an amount determined in accordance with Exhibit A;
provided however, that if the Effective Time occurs
after November 30, 1997, in lieu of a bonus calculated
pursuant to Exhibit A, the bonus payable hereunder with
respect to HSI's fiscal 1997 shall be the amount that
would have been payable to the Executive pursuant to
Section III(B) of the MBM Agreement with respect to the
twelve months ended November 30, 1997.
(iii) At the Effective Time, the Executive shall be granted
(i) options to purchase shares of common stock, par
value $.01 per share ("Common Stock"), of the Company in
accordance with the stock option agreement attached
hereto as Exhibit B (the "Option Agreement"); and (ii)
restricted Common Stock pursuant to the terms of a
Restricted Stock Agreement to be executed and delivered
by the Company and the Executive in the form attached
hereto as Exhibit D.
(iv) If the performance targets set forth in Exhibit A hereto
are met in respect of a fiscal year of the Company
during which he is employed hereunder, the Executive
shall be entitled to additional grants of options to
purchase Common Stock as set forth and in accordance
with the form of Option Agreement, such options to be
issuable no later than 90 days after the end of each
year from which such options are issuable.
iv. Working Conditions and Benefits. While employed by the Company
hereunder:
(i) The Executive shall be entitled to four (4) weeks of
paid vacation per year, sick leave, and personal time,
all in accordance with the Company's practices.
(ii) The Executive shall be authorized to incur reasonable
and necessary expenses for promoting the business of the
Company, including expenses for entertainment, travel
and similar items, all in accordance with the Company's
practices. The Company shall reimburse the Executive for
all such expenses, promptly upon presentation by the
Executive of an itemized account of such authorized
expenditures in accordance with the Company's practices
with respect to expense reimbursement.
(iii) The Executive shall be employed by the Company at such
executive offices of the Company in New York City, Long
Island and Westchester County, as may be determined by
the Company from time to time and at no other location
without the consent of the Executive, such consent not
to be unreasonably withheld. The Executive shall travel
on the Company's behalf within and outside such area to
the extent necessary to perform his duties hereunder.
(iv) The Company shall provide to the Executive a car
allowance sufficient to provide the Executive with a
Mercedes 400S model automobile, or comparable
automobile, for business use, and shall pay for all
other expenses incurred in connection with such use in
accordance with the Company's practices with respect to
car expense reimbursement.
(v) The Company shall provide the Executive with term life
insurance in an amount equal to twice his annual rate of
salary from time to time, payable to the Executive's
designee as beneficiary. The Executive hereby represents
and warrants to the Company that he is not aware of any
reason he
would be denied life insurance coverage at prevailing
rates for healthy non-smokers of the Executive's age.
The Executive shall submit to such medical examinations
and take such other actions as shall be reasonably
necessary for the Company to provide such life insurance
coverage.
(vi) The Company shall provide to the Executive to the full
extent provided for under the laws of the Company's
state of incorporation and the Company's Certificate of
Incorporation and Bylaws, indemnification for any claim
or lawsuit which may be asserted against the Executive
when acting in such capacity for the Company and/or any
subsidiary or affiliated business of a type referred to
in Section 2 hereof, provided that said indemnification
is not in violation of any Federal or state law, rule or
regulation. The Company shall use reasonable best
efforts to include the executive as an insured under all
applicable directors' and officers liability insurance
policies maintained by the Company, and any other
subsidiary or affiliated business of a type referred to
in Section 2 hereof and shall include him to the same
extent as other senior executives of the Company are
included.
v. Other Benefits. While employed by the Company hereunder:
(i) The Executive shall be entitled to participate in all
benefit, welfare and perquisite plans, policies and
programs, in accordance with the terms thereof, as are
generally provided from time to time by the Company for
its senior executive officers and for which the
Executive is eligible pursuant to the terms of such
plans, policies and programs, including, without
limitation, the plans and programs listed on Exhibit C.
(ii) The Company shall use its reasonable best efforts to
cause the Executive to be nominated for election to the
Company's and MBM's Board of Directors.
vi. Term. The Executive's employment hereunder shall commence at the
Effective Time and shall continue until the earlier of (a) the fifth
anniversary of the Effective Time, (b) his death, or (c) termination
of employment pursuant to Section 7 hereof.
vii. Termination; Non-Renewal.
(i) Notwithstanding anything to the contrary herein
contained, the Executive's employment shall terminate
prior to the fifth anniversary of the Effective Time
upon the occurrence of any of the following events:
(i) by notice given by the Company to the Executive, to terminate
the Executive's employment as of a date (not earlier than 10 days from such
notice) to be specified in such notice if (A) the Executive shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge his
duties hereunder for a period of 180 days, whether or not continuous, in any
period of 12 months, or (B) the Executive shall have given the Company cause
therefor. For purposes of this Agreement, "cause" shall be limited to (x) action
by the Executive involving willful malfeasance having a material adverse effect
on the Company, (y) the Executive being convicted of a felony involving theft,
fraud or moral turpitude (other than resulting from a traffic violation or like
event), or (z) any other action by the Executive constituting a material breach
of this Agreement which is not cured within 30 days after notice from the
Company thereof;
(ii) by notice given by the Executive to the Company to terminate
the Executive's employment as of a date (not earlier than 10 days from such
notice) to be specified in such notice if the Company shall have given the
Executive good reason therefor. For purposes of this Agreement, "good reason"
shall be limited to a material breach by the Company of this Agreement, which
breach is not cured within 30 days after notice from the Executive thereof.
(ii) Upon the Executive's death or termination of the
Executive's employment pursuant to Section 7(a)(i)(A),
the Executive (or his estate, as the case may be) shall
be entitled to receive only (i) his unpaid salary at the
rate provided in Section 3(a) to the date of
termination, (ii) any unpaid bonus pursuant to Section
3(b) in respect of the fiscal year of the Company ended
prior to the year in which such termination occurs, and
(iii) an amount equal to such bonus in respect of such
prior fiscal year multiplied by a fraction the numerator
of which shall be the number of days that shall have
elapsed from the first day of the fiscal year in which
such termination occurs to the date of such termination
and the denominator of which shall be 365 (the aggregate
amounts referred to in (i), (ii) and (iii)
being hereinafter referred to as the "Accrued
Obligations"). The Accrued Obligations shall be paid
within 30 days of the termination of the Executive's
employment.
(iii) Upon termination of the Executive's employment hereunder
pursuant to Section 7(a)(ii) hereof or by the Company
other than pursuant to Section 7(a)(i) hereof, the
Executive shall be entitled to receive only (i) the
Accrued Obligations, (ii) continuation of the
Executive's base salary for a period after the date of
such termination equal to the unexpired term of this
Agreement but in no event less than eighteen months at
the rate in effect at such date of termination, and
(iii) during the one- year period following such
termination, continuation of the participation of the
Executive and his spouse and dependent children, if any,
in all health and medical benefit plans, policies and
programs in effect from time to time with respect to the
most senior executive officers of the Company and their
families generally (at the same levels and at the same
cost, if any, as provided to such officers generally).
Notwithstanding anything to the contrary contained in
the preceding clause (iii), if the continued
participation of the Executive and such family members
thereunder is not possible under the general terms and
provisions thereof, the Company shall provide such
benefits at such levels to the Executive and such family
members either by obtaining other insurance or by
self-insuring such amounts, net of any reimbursement any
of them shall receive with respect to health and medical
costs from insurance other than pursuant to such clause
(iii); provided, however, that prior to receiving
benefits hereunder from the Company, the Executive and
such family members shall first endeavor to obtain
reimbursement with respect to health and medical costs
from other insurance the Executive and such family
members may own, if any, provided that such
reimbursement can be obtained without unreasonable
effort or expense on the part of the Executive and such
family members. The Executive is hereby expressly not
required to mitigate damages or seek any other
employment;
provided, however, that any amounts that the Executive
may receive from any other employment or consulting
engagement during the one-year period following such
termination shall reduce in equal amounts the amounts
that the Company otherwise is obligated to pay to the
Executive pursuant to clause (ii) of this Section 7(c).
(iv) Upon termination of the Executive's employment hereunder
pursuant to Section 7(a)(i)(B) hereof or by the
Executive other than pursuant to Section 7(a)(ii)
hereof, the Executive shall be entitled to receive only
(i) his salary at the rate provided in Section 3(a) to
the date of such termination, and (ii) any unpaid bonus
pursuant to Section 3(b) in respect of the fiscal year
of the Company ended prior to the year in which such
termination occurs.
(v) If the Company does not offer to extend the term of this
Agreement from and after the fifth anniversary of the
Effective Time, and the Executive is employed by the
Company at such date, the Executive shall be entitled to
receive continuation of the Executive's base salary for
a period of one year after such fifth anniversary at the
rate in effect at such anniversary.
viii. Confidentiality and Non-Competition. In view of the unique and
valuable services it is expected the Executive will render to the
Company, the Executive's knowledge of the customers, trade secrets,
and other proprietary information relating to the business of the
Company and its customers and suppliers, and in consideration of the
compensation to be received hereunder, the Executive agrees that he
will not, during his employment with the Company and (x) for three
years thereafter in the case of a termination pursuant to Section
7(a)(i) of this Agreement, (y) for one-half of the unexpired term of
this Agreement but not less than one year in case of a termination
pursuant to Section 7(a)(ii) of this Agreement or a termination by
the Company other than pursuant to Section 7(a)(i) of this
Agreement, and (z) for two years in case of a non-renewal pursuant
to Section 7(e) of this Agreement: (a) directly or indirectly engage
or be interested (whether as owner, partner, lender, consultant,
employee, agent, supplier, distributor or otherwise) in any
business, activity or enterprise which competes with any aspect of
the business conducted by the Company or any of the Company's
affiliates (including MBM) at any time
prior to termination of his employment with the Company; (b) except
on behalf of the Company, directly or indirectly employ or otherwise
engage, or offer to employ or otherwise engage, any person who is
then (or was at any time within one year prior to the time of such
employment, en gagement or offer thereof) an employee or sales
representative of the Company or any of the Company's affiliates
(including MBM); or (c) except on behalf of the Company, solicit any
business from any person or entity that has been a customer of the
Company or any of the Company's affiliates (including MBM) or
directly or indirectly induce or influence any customer, supplier or
other person that has a business relationship with the Company or
any of the Company's affiliates (including MBM) to discontinue or
reduce the extent of such relationship with the Company or any of
the Company's affiliates (including MBM); and provided further, that
nothing herein contained shall preclude the Executive (i) from
holding not more than two (2%) percent of the total outstanding
stock of a publicly held company, and (ii) at any time after
termination of his employment hereunder, soliciting any business
from any person or entity that has been a customer of the Company or
any of the Company's affiliates (including MBM), provided such
solicitation does not involve the offer of products or services
comparable to, or that could be reasonably deemed in substitution
for, products or services theretofore offered by the Company or any
of the Company's affiliates (including MBM) and (iii) investing in
(provided he owns no more than 5% of the outstanding equity) and
serving on the board of directors of an entity currently developing
software to enable manufacturers of medical products to track
rebates. In addition, the Executive shall never use or divulge any
trade secrets, customer or supplier lists, pricing information,
marketing arrangements or strategies, business plans, internal
performance statistics, training manuals or other information
concerning the Company or its affiliates that is competitively
sensitive or confidential, except on behalf of the Company, and
shall not conduct himself in a manner that would reasonably be
expected to adversely affect the Company in any material respect,
including but not limited to making knowingly false, misleading or
negative statements, either orally or in writing, about the Company
or its affiliates, or their respective directors, officers or
employees; provided, however, that this sentence shall not apply to
the following: (i) information which is already in the public domain
at the time of its disclosure to the Executive; (ii) information
which, after its disclosure to the Executive, becomes part of the
public domain by publication or otherwise other than through the
Executive's act; (iii) information which was in the Executive's
possession before it was disclosed to him by the Company as shall be
evidenced by written documents dated prior to the time of
disclosure; (iv) information which the Executive received from a
third party having the right to make such disclosure without
restriction on disclosure or use thereof; or (v) information which
the Executive is legally compelled to disclose. Because
the breach or attempted or threatened breach of this restrictive
covenant will result in immediate and irreparable injury to the
Company for which the Company will not have an adequate remedy at
law, the Company shall be entitled, in addition to all other
remedies, to a decree of specific performance of this covenant and
to a temporary and permanent injunction enjoining such breach,
without posting bond or furnishing similar security. The provisions
of this Section 8 are in addition to and independent of any
agreements or covenants contained in any consulting or other
agreement between the Company and the Executive. If any restriction
contained in this Section 8 shall be deemed to be invalid, illegal,
or unenforceable by reason of the extent, duration, or geographical
scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced
form such restriction shall then be enforceable in the manner
contemplated hereby.
ix. Representations and Warranties.
(a) The Company represents and warrants to the Executive that the Company
has the full legal corporate power to execute and deliver this Agreement and the
agreements referred to herein. The execution, delivery and performance of this
Agreement and such other agreements have been duly authorized by the Company's
board of directors and do not conflict with or result in a breach of any
provision of (i) the Certificate of Incorporation or Bylaws of the Company, (ii)
any material agreement, commitment or other instrument to which the Company is a
party or by which it is bound or (iii) any order, judgment or decree of any
court or arbitrator.
(b) The Executive represents and warrants to the Company that the
execution and delivery of this Agreement and the performance of his obligations
pursuant hereto do not conflict with or result in a breach of any provisions of
any (i) material agreement, commitment, or other instrument to which the
Executive is a party or by which the Executive is bound or (ii) order, judgment
or decree of any court or arbitrator.
x. Amendment and Modification; Waiver. This Agreement may be amended,
modified or supplemented only by written agreement (referring
specifically to this Agreement) of the parties. The waiver by either
party of any breach or violation of any provision of this agreement
shall not operate or be construed as a waiver of any subsequent
breach.
xi. Notice. All notices required to be given under the terms
of this agreement shall be in writing and shall be
deemed to have been duly given if delivered to the
addressee in person or mailed by certified mail, return
receipt requested, as follows:
If to the Company, addressed to:
Xxxxx Xxxxxx, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
With a copy to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Executive, addressed to:
Xxxxx X. Xxxxx
000 Xxxxxx Xxxx
Xxxxxxx Xxxxxx, XX 00000
With a copy to:
Otterbourg, Steindler, Houston & Xxxxx P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.
xii. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
xiii. Entire Agreement; Benefit. This Agreement constitutes the entire
agreement and supersede all other prior agreements and
understandings, both written and oral, between the parties, with
respect to the subject matter hereof. This agreement shall inure to
and shall be binding upon the parties hereto, the successors and
assigns of the Company and the heirs and personal representatives of
the Executive.
xiv. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving
effect to the provisions thereof relating to conflicts of law.
xv. Attorney's Fees. If the Executive shall engage counsel to bring suit
against HSI and/or MBM to enforce his rights hereunder, the
Executive shall be entitled to be reimbursed by HSI for the
reasonable fees and expenses of such counsel incurred in connection
with such suit if the Executive is the prevailing party in such
suit.
xvi. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
/s/ Xxxxx X. Xxxxx
--------------------------
XXXXX X. XXXXX
XXXXX XXXXXX, INC.
By: /s/ Xxxx Xxxxxx
----------------------
Authorized Officer
EXHIBIT A
Fiscal 1997
If Adjusted Pre-Tax Earnings (as defined below) is greater than $6 million an
amount equal to $65,000, plus, if Adjusted Pre-Tax Earnings is $7,000,000 or
more an additional amount equal to $135,000 multiplied by a fraction, the
numerator of which is the excess of such Adjusted Pre-Tax Earnings over $7
million (such excess not to exceed $1 million) and the denominator of which is
1,000,000. In determining whether any adjustment with respect to the foregoing
is necessary or desirable, the Compensation Committee of the Board of Directors
shall take into account synergies achieved with, and contribution to, the
Company's medical products division.
For purposes of the preceding paragraph, "Adjusted Pre-Tax Earnings" shall
mean, net income of MBM for the twelve-month period ending in December, 1997,
less the base salary and cost of benefits payable or provided pursuant to this
agreement with respect to such period, before income taxes, as determined in
accordance with generally accepted accounting principles consistently applied
(but with charges for corporate overhead and for inter-corporate borrowing costs
in a manner consistent with charges to other divisions of the Company and in no
event in a proportion greater than the percentage which the division sales bear
to total Company sales) adjusted as follows: pre-tax earnings will be after all
bonuses paid to MBM employees, will include financing costs for all payments and
expenses related to the Merger and associated transactions.
Fiscal 1998-2001
An amount, not less than $200,000, determined by the Compensation Committee of
the Company's Board of Directors upon achievement by the executive of
performance targets to be set by such Committee in consultation with the
Executive. Among the matters to be taken into account by the Compensation
Committee in connection with its determination shall be synergies achieved with,
and contribution to, the Company's medical products division.
EXHIBIT B
XXXXX XXXXXX, INC.
CLASS B OPTION AGREEMENT
PURSUANT TO THE
1994 STOCK OPTION PLAN
AGREEMENT dated _____________, 1997, between Xxxxx Xxxxxx, Inc. (the
"Corporation") and Xxxxx X. Xxxxx (the "Participant").
Preliminary Statement
The Stock Option Committee of the Board of Directors of the Corporation
(the "Committee"), pursuant to the Corporation's 1994 Stock Option Plan, as
amended (the "Plan"), has authorized the granting to the Participant, as a Key
Employee, of a nonqualified stock option (the "Option") to purchase the number
of shares of the Corporation's Common Stock, par value $.01 per share, set forth
below. The parties hereto desire to enter into this Agreement in order to set
forth the terms of the Option. Capitalized terms used but not defined herein
shall have the same meanings as set forth in the Plan.
Accordingly, the parties hereto agree as follows:
A. Tax Matters. No part of the Option granted hereby is intended to
qualify as an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986, as amended.
X. Xxxxx of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein, the Participant is hereby granted the Option to
purchase from the
Corporation up to (a) shares (the "Shares"), at a price per Share of $ (b) (the
"Option Price"). Subject to Sections D and E hereof, the Option may be exercised
by the Participant, in whole or in part, at any time or from time to time prior
to the expiration of the Option as provided herein.
C. Restriction on Transfer. The Option granted hereby is not transferable
otherwise than by will or under the applicable laws of descent and distribution
and during the lifetime of the Participant may be exercised only by the
Participant or his guardian or legal representative, provided, however, that,
from and after the date that the Plan is amended to provide for such transfers,
the Options may be transferred by the Participant to his wife or daughter or to
trusts the sole beneficiaries of which are the Participant's wife or daughter.
Except as provided in the preceding sentence, the Option shall not be assigned,
negotiated, pledged or hypothecated in any
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(a) At the Effective Time, pursuant to Section 3(c) of the Participant's
employment agreement with the Corporation, the Participant will be issued
options ("Closing Options") to purchase shares of the Corporation's Common
Stock having a value of $1,000,000 determined by application of the
Block-Shares formula in the same manner in which it is applied in granting
options to the Corporation's other most senior executives. In addition,
and subject to the satisfaction of the performance targets set forth in
Exhibit A thereto, pursuant to Section 3(d) of the Participant's
employment agreement with the Corporation, the Participant will be issued
options ("Annual Option") to purchase shares of the Corporation's Common
Stock in respect of each fiscal year of the Corporation during which he is
employed under the employment agreement, issuable no later than 90 days
after the end of each year for which such options are issuable, such
number of Annual Options to have a value of $170,000 determined by
application of the Block- Shares formula in the same manner in which it is
applied in granting options to the Corporation's other most senior
executives:
The value of options to be granted after the Effective Time shall be
increased or decreased, as the case may be, to reflect the cumulative
change in the [CPI] between the date of the Effective Time and the date of
grant.
(b) In all cases, the fair market value on the date of grant.
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way (whether by operation of law or otherwise), and the Option shall not be
subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, negotiate, pledge or hypothecate the Option not expressly
permitted hereby, or in the event of any levy upon the Option by reason of any
execution, attachment or similar process contrary to the provisions hereof, the
Option shall immediately become null and void.
D. Term of Option. Unless terminated as provided below or otherwise
pursuant to the Plan, the Option shall expire on the tenth anniversary of the
date of grant.
E. Exercise of Option.
1. No Options may be exercised unless and until such Options shall
have become vested. (c) of the Options granted hereunder shall automatically and
immediately vest on each of the (d) anniversaries of the date hereof, provided
that the Participant is employed by the Corporation on such anniversary dates.
The Chief Executive Officer of the Corporation shall have the right to
accelerate the vesting of any such Options in his sole discretion.
2. The Option may be exercised by the Participant by delivering
notice to the Committee of the election to exercise the Option and of the number
of Shares with respect to which the Option is being exercised, which notice
shall be accompanied by payment in full for the Shares. Payment for such Shares
may be made as follows:
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(c) "One-fifth (1/5)" in the case of Closing Options; and "One-third (1/3)" in
the case of Annual Options.
(d) "first, second, third, fourth and fifth" in the case of Closing Options;
and "first, second and third" in the case of Annual Options.
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(a) In cash or by certified check, bank draft or money order
payable to the order of the Corporation;
(b) Through the delivery of unencumbered Shares (including
Shares to be acquired under the Options then being exercised) provided such
Shares (or such Option) have been owned by the Participant for at least six
months, or such longer period as required by applicable accounting standards to
avoid a charge to earnings;
(c) If so permitted by the Committee (i) through a combination
of Shares and cash as provided above, (ii) by delivery of a promissory note of
the Participant to the Corporation, or (iii) by a combination of cash (or cash
and Shares) and the Participant's promissory note; provided, that, if the Shares
delivered upon exercise of the Option is an original issue of authorized Shares,
at least so much of the exercise price as represents the par value of such
Shares shall be paid in cash or by a combination of cash and Shares; or
(d) On such terms and conditions as may be acceptable to the
Committee and in accordance with applicable law.
3. Upon receipt of payment and satisfaction of the requirements, if
any, as to withholding of taxes set forth in the Plan, the Corporation shall
deliver to the Participant as soon as practicable a certificate or certificates
for the Shares then purchased.
4. The exercise of any Option after termination of employment shall
be subject to satisfaction of the conditions precedent that the Participant be
in compliance with Section 8 of his employment agreement with the Corporation
(as amended, revised or replaced from time to time, the "Employment Agreement").
If the Participant exercises his Options and the Corporation
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determines that the Participant subsequently (within a year following
termination of employment) engages in conduct which would have breached such
Section 8 had it taken place prior to exercise of the Options, then the
Participant hereby agrees to immediately return to the Corporation any financial
benefit he received from the Options upon request of the Corporation.
5. Upon a change in control (as defined in the Plan), the Options
shall immediately become vested, unless two-thirds of members of the Board of
Directors have approved the change of control, in which event, there shall be no
accelerated vesting of the Options.
F. Termination of Employment.
1. Death, Disability, Retirement. Subject to Section E hereof, upon
termination of employment by reason of death or normal retirement on or after
the Company's normal retirement age, or pursuant to Section 7(a)(i) of the
Employment Agreement, all outstanding Options then exercisable and not exercised
by the Participant prior to such termination of employment shall remain
exercisable by the Participant (to the extent exercisable by such Participant
immediately prior to such termination) for a period of one (1) year from the
date of termination of employment. All Options not yet exercisable on the date
of termination of employment because of vesting provisions or otherwise shall be
canceled.
2. Cause or Voluntary Termination. Upon termination of employment of
a Participant under the Employment Agreement for Cause (as defined therein) or
by the Participant under the Employment Agreement without Good Reason (as
defined therein) or any other
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written agreement between the Participant and the Company, all outstanding
Options shall immediately be canceled.
3. Other Termination. In the event of termination of employment for
any reason other than as provided in Sections F(1) or F(2), all outstanding
Options not exercised by the Participant prior to such termination of employment
shall, subject to Section E hereof, remain exercisable (to the extent
exercisable by such Participant immediately before such termination) for a
period of three (3) months after such termination. All Options not yet
exercisable on the date of termination of employment because of vesting
provisions or otherwise shall be canceled. Notwithstanding the foregoing, if the
Participant terminates his employment for Good Reason, as defined therein, or
the Company terminates the Participant's employment with the Company without
Cause (as defined in the Employment Agreement), all options shall thereafter
automatically vest and be exercisable in accordance with the provisions of this
Agreement for a period of three months from the date of such termination.(e)
G. Rights as a Stockholder. Participant shall have no rights as a
stockholder with respect to any Shares covered by the Option until Participant
shall have become the holder of record of the Shares, and no adjustments shall
be made for dividends in cash or other property, distributions or other rights
in respect of any such Shares except as otherwise specifically provided for in
the Plan.
H. Provisions of Plan Control. This Agreement is subject to all of the
terms, conditions and provisions of the Plan and to such rules, regulations and
interpretations relating to
----------
(e) The treatment of termination for Cause or without Good Reason shall apply
only to the Options granted at the Effective Time.
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the Plan as may be adopted by the Committee and as may be in effect from time to
time. A copy of the Plan is available to you at the offices of the Corporation,
and the terms thereof are incorporated herein by reference. If and to the extent
that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be
deemed to be modified accordingly.
I. Notices. Any notice or communication given hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person, or
by United States mail, to the appropriate party at the address set forth below
(or such other address as the party shall from time to time specify):
If to the Corporation, to:
Xxxxx Xxxxxx, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Secretary
If to the Participant, to:
the address indicated on the signature page at the end of this
Agreement.
J. Rights of Employer. This Agreement does not guarantee that the
Corporation will employ the Participant for any specific time period, nor does
it modify in any respect the Corporation's right to terminate or modify the
Participant's employment or compensation.
K. Withholding. The Corporation shall be entitled to withhold (or, in its
discretion, secure payment from the Participant in cash or other property in
lieu of withholding) the amount of any Federal, state or local taxes required by
law to be withheld by the Corporation for any
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Shares deliverable under this Agreement, and the Corporation may defer such
delivery unless such withholding requirement is satisfied.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
XXXXX XXXXXX, INC.
By:__________________________
Authorized Officer
_____________________________
XXXXX X. XXXXX
Address:
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EXHIBIT C
1. Participation in the Company's SERP and profit sharing program.
2. A "golden parachute" equal to 2.99 times "average annual base
compensation". See form of agreement attached.
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