EXHIBIT 10.38
LOCKUP AGREEMENT
THIS LOCKUP AGREEMENT (the "Agreement"), dated as of June 13, 2002, is
entered into by and among Matria Healthcare, Inc., a Delaware corporation
("Matria"), and Xxxxxx X. Xxxxxx, Xx., an individual resident of the state of
Georgia ("Shareholder").
WHEREAS, Shareholder is an employee, officer, director and significant
shareholder of XxxxxxXxxx.xxx, Inc., a Georgia corporation ("MarketRing");
WHEREAS, Matria, MRDC Acquisition Corp., a Georgia corporation ("Merger
Sub") and MarketRing have entered into that Agreement and Plan of Merger dated
as of May 30, 2002 (the "Merger Agreement"), pursuant to which, on the terms set
forth therein, Merger Sub shall merge with and into MarketRing (the "Merger"),
and MarketRing shall become a wholly-owned subsidiary of Matria;
WHEREAS, Shareholder will benefit from the Merger and receive shares of
the Common Stock of Matria pursuant to the Merger; and shall accept employment
with Matria following the consummation of the Merger;
WHEREAS, as a condition to consummation of the Merger, the parties
desire to enter into this Agreement to further Matria's reasonable business
interest in Shareholder's commitment to continued employment following the
consummation of the Merger; and
WHEREAS, the Merger Agreement contemplates that Shareholder will enter
into this Agreement with Matria, and Shareholder acknowledges that Shareholder's
execution and delivery of this Agreement is a material inducement for Matria to
consummate the Merger;
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises, covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1. Definitions. Capitalized terms used but not defined herein
will have the respective meanings assigned to such terms in the Merger
Agreement. For all purposes of this Agreement, the following terms shall have
the respective meanings specified below:
"Affiliate" shall have the meaning prescribed to such term in Rule
12b-2 of the Exchange Act.
"Associate" shall have the meaning prescribed to such term in Rule
12b-2 of the Exchange Act.
"Cause" means any of the following: (i) any material or willful failure
on the part of Shareholder to adequately perform his duties as an employee of
Matria, as determined by the Chief Executive Officer of Matria serving on the
date of this Agreement or the Board of Directors of Matria (unless Shareholder
has cured such failure within fifteen (15) days following written notice thereof
by Matria and has not at any time thereafter repeated such failure or failed to
sustain such cure); (ii) any breach by Shareholder of this Agreement, the
Non-Competition Agreement, or any written employment agreement between Matria
and Shareholder (unless, if such breach is curable, Shareholder has cured such
breach within ten (10) days after written notice thereof by Matria and has not
at any time thereafter repeated such breach or failed to sustain such cure);
(iii) any conviction of or guilty plea by Shareholder with respect to any felony
or crime of moral turpitude; (iv) the commission by Shareholder of any act
constituting fraud, deceit, material misrepresentation or embezzlement with
respect to MarketRing, Matria or any of their customers or suppliers; (v) any
failure by Shareholder to obey the lawful direction of the Board of Directors of
MarketRing or the Chief Executive Officer of Matria; or (vi) any willful act of
Shareholder having a direct, substantial and adverse effect on the reputation of
MarketRing or Matria.
"Common Stock" means the common stock of Matria, par value $.01 per
share, as described in the Certificate of Incorporation of Matria.
"Permitted Transfer" means (i) any transfer of Shares to a member of
Shareholder's immediate family (spouse or children), provided that such
transferee expressly agrees in writing to Matria (in form and substance
reasonably satisfactory to Matria) that such transferee (and any Shares held
thereby) shall be bound by and subject to the same restrictions and obligations
as are applicable to Shareholder (and the Shares held by Shareholder) under this
Agreement; or (ii) any pledge or encumbrance by Shareholder of all or any
portion of the Shares to a bank or other lending institution for the purpose of
obtaining financing, on a full recourse basis to Shareholder, the proceeds of
which are used to purchase or improve a family residence of Shareholder,
provided that (A) no foreclosure or other subsequent Transfer of the Shares
subject to any such pledge or encumbrance shall be made except as and to the
extent permitted under Section 3.1 of this Agreement, and (B) such bank or
lending institution expressly agrees in writing to Matria (in form and substance
reasonably satisfactory to Matria) to act in accordance with the foregoing.
"Permitted Transferee" means any recipient of any Shares (or any pledge
or encumbrance thereof) pursuant to a Permitted transfer.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
"Representative" means a director, officer, employee, agent or other
representative (including, without limitation, a consultant, accountant,
attorney, banker or financial advisor).
"Securities Act" means the Securities Act of 1933, as amended.
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"Shares" means all shares of the Common Stock which are issued by
Matria to Shareholder pursuant to the Merger Agreement (including, without
limitation, any such shares issued upon exercise of any Company Options assumed
by Matria), and any shares of Common Stock received, by way of stock split,
reverse stock split, stock dividend, recapitalization or similar transaction, on
or in respect of such shares.
"Securities Laws" means the Securities Act and all other applicable
federal and state securities laws, rules and regulations.
"Transfer" means (i) to sell, assign, transfer, convey, pledge,
hypothecate, offer, grant an option, contract, right or warrant with respect to
or otherwise dispose of or encumber any interest in, directly or indirectly
through an Affiliate, Associate, Representative or otherwise (or enter into an
agreement, arrangement or understanding with respect to any of the foregoing),
or (ii) to enter into or agree to enter into any swap or other arrangement that
transfers, in whole or in part, any of the economic consequences of the
ownership of the Shares.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Shareholder. Shareholder
hereby represents and warrants to Matria as follows:
(a) Shareholder has full legal right, power and authority
to enter into and perform this Agreement. The execution and delivery of this
Agreement by Shareholder and the consummation by Shareholder of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other action on behalf of Shareholder. This Agreement is a valid and binding
obligation of Shareholder enforceable against Shareholder in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, moratorium and other similar laws affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether asserted
at law or in equity).
(b) Neither the execution and delivery of this Agreement
by Shareholder nor the consummation by Shareholder of the transactions
contemplated hereby conflicts with or constitutes a violation of or default
under (i) any statute, law, regulation, order or decree applicable to
Shareholder, or (ii) any contract, commitment, agreement, arrangement or
restriction of any kind to which Shareholder is a party or by which Shareholder
is bound.
2.2 Representations and Warranties of Matria. Matria hereby
represents and warrants to Shareholder as follows:
(a) Matria has full legal right, power and authority to
enter into and perform this Agreement. The execution and delivery of this
Agreement by Matria and the consummation by Matria of the transactions
contemplated hereby have been duly authorized by all necessary
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corporate action on behalf of Matria. This Agreement is a valid and binding
obligation of Matria enforceable against Matria in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether asserted at law or in
equity).
(b) Neither the execution and delivery of this Agreement
by Matria nor the consummation by Matria of the transactions contemplated hereby
conflicts with or constitutes a violation of or default under (i) the
certificate of incorporation or bylaws of Matria, (ii) any statute, law,
regulation, order or decree applicable to Matria, or (iii) any contract,
commitment, agreement, arrangement or restriction of any kind to which Matria is
a party or by which Matria is bound.
ARTICLE 3
RESTRICTIONS ON TRANSFER
3.1 Prohibitions on Transfer.
(a) Shareholder agrees that he shall in no event Transfer
any of the Shares on or prior to the date that is one (1) year following the
Closing Date without the prior written consent of Matria, except pursuant to
Permitted Transfers.
(b) In the event that the employment of Shareholder is
terminated by Matria or MarketRing for Cause or is terminated by Shareholder for
any reason within one (1) year following the Closing Date, Shareholder agrees
that he will not Transfer any of the Shares on or prior to the date that is
three (3) years following the Closing Date without the prior written consent of
Matria, except pursuant to Permitted Transfers.
(c) In the event that the employment of Shareholder is
terminated by MarketRing or Matria without Cause within one (1) year following
the Closing Date, Shareholder may, after the expiration of one (1) year
following the Closing Date, freely Transfer any of the Shares, subject to
compliance with all Securities Laws.
(d) In the event that Shareholder remains employed with
MarketRing or Matria on the date that is one (1) year following the Closing
Date, (i) Shareholder may thereafter freely transfer up to 50% of the Shares,
subject to compliance with all Securities Laws, and (ii) subject to subsections
(e) and (f) below, Shareholder shall not, without the prior written consent of
Matria, Transfer any Shares in excess of such amount during the two (2) year
period ending on the date that is three (3) years following the Closing Date,
except pursuant to Permitted Transfers.
(e) In the event that the employment of Shareholder is
terminated by MarketRing or Matria without Cause after the date that is one (1)
year following the Closing Date, Shareholder may, following the effective date
of such termination, freely Transfer any of the Shares, subject to compliance
with all Securities Laws.
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(f) In the event that Shareholder remains employed with
MarketRing or Matria on the date that is two (2) years following the Closing
Date, Shareholder may thereafter freely Transfer any of the Shares, subject to
compliance with all Securities Laws.
(g) Following any Permitted Transfer, all restrictions
and other provisions of this Agreement shall remain unaffected by such Permitted
Transfer and fully applicable to all of the Shares, to the same extent as if all
Shares were still held by Shareholder. Shareholder shall be jointly and
severally liable for any and all actions of his Permitted Transferees which
result in a breach or violation of the restrictions or other provisions set
forth in this Agreement.
3.2 Legends. Shareholder hereby acknowledges and agrees that each
certificate representing the Shares shall include a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A LOCKUP AGREEMENT DATED AS
OF JUNE __, 2002 BETWEEN SHAREHOLDER AND THE
CORPORATION, A COPY OF WHICH MAY BE OBTAINED FROM
THE SECRETARY OF THE CORPORATION, AND MAY NOT BE
SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE TERMS OF SUCH AGREEMENT. ANY
ATTEMPTED TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE IN VIOLATION OF THE TERMS OF SUCH
AGREEMENT SHALL BE NULL AND VOID AND NOT RECOGNIZED
BY THE CORPORATION.
ARTICLE 4
MISCELLANEOUS
4.1 Term. The term of this Agreement shall begin as of the
Effective Time and shall continue for a period of three (3) years after the
Effective Time.
4.2 Specific Performance. The parties hereto hereby acknowledge
and agree that irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, the parties hereto will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically its provisions in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
may be entitled under this Agreement, at law, in equity or otherwise.
4.3 No Waiver. No failure or delay on the part of any party in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
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4.4 Entire Agreement; Amendment. This Agreement constitutes the
entire understanding of the parties hereto with respect to the subject matter
hereof; provided, however, that the terms of this Agreement are independent of
and in addition to, and shall not limit, alter or otherwise affect, any rights
or obligations of the parties hereto under any employment agreement between the
parties or any non-competition or confidentiality agreement or similar
agreement included therein or executed in connection therewith. This Agreement
may be amended only by an agreement in writing executed by each of the parties
hereto.
4.5 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable, the remaining provisions
shall remain in full force and effect. It is declared to be the intention of
the parties hereto that they would have executed the remaining provisions
without including any that may be declared unenforceable.
4.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute the same Agreement, and any signature page of any such
counterpart, or any electronic facsimile thereof, may be attached or appended
to any other counterpart to complete a fully executed counterpart of this
Agreement, and any telecopy or other facsimile transmission of any signature
shall be deemed an original.
4.7 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one (1) business day after the business day of
deposit with Federal Express or similar overnight courier, freight prepaid or
(d) one (1) business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first class mail, postage
prepaid, and shall be addressed to the address of such party as set forth
beneath such party's signature hereto, or at such other address as a party may
designate by ten days' advance written notice to the other parties hereto
pursuant to the provisions of this Section 4.7.
4.9 Successors and Assigns; Assignment. This Agreement shall bind
the successors and assigns of the parties hereto, and shall inure to the
benefit of any successor or assign of any of the parties hereto; provided,
however, that this Agreement may not be assigned by Shareholder without the
prior written consent of Matria.
4.10 Governing Law. The validity and effect of this Agreement and
the rights and obligations of the parties hereto shall be governed by and
construed in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the date first referred to above.
"Matria"
MATRIA HEALTHCARE, INC.
By:
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Title:
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Address: 0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Phone #: (000) 000-0000
Facsimile #: (000) 000-0000
"Shareholder"
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Xxxxxx X. Xxxxxx, Xx.
Address:
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Phone #: ( )
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Facsimile #: ( )
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