EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), made as of February 28,
1997, by and between Everest & Xxxxxxxx Canadian Limited (the "Company"), a
corporation incorporated under the laws of Ontario, having its principal place
of business at 000 Xxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxx X0X0X0, and Xxxxx Xxxxxxx,
an individual residing at _______________ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company, an indirect wholly-owned subsidiary of
Xxxxxx-Field Health Products, Inc. ("GFHP"), GFHP, Motion 2000 Inc. ("Motion
2000"), a corporation organized under the laws of Ontario, and Motion 2000
Quebec Inc. ("Motion Quebec"), a corporation organized under the laws of Canada,
have entered into an Asset Purchase Agreement dated as of February 10, 1997 (the
"Purchase Agreement"), pursuant to which the Company has purchased substantially
all of the assets of Motion 2000 and Motion Quebec;
WHEREAS, the Executive will derive substantial economic benefits
from the performance of the Purchase Agreement;
WHEREAS, the Purchase Agreement provides that, as a condition of
closing, the parties hereto enter into this Agreement;
WHEREAS, the Company desires to retain the Executive as the
President of Xxxxxx-Field (Canada), a division of the Company
to advance the business and interests of the Company on the terms and conditions
set forth herein;
WHEREAS, the Executive desires to provide his services to the
Company in such capacities, on and subject to the terms and conditions hereof;
and
WHEREAS, in order that the Executive may participate in the growth
and performance of GFHP, the ultimate parent company of the Company, GFHP
desires to provide the Executive with the opportunity to acquire certain stock
options of GFHP as set forth herein;
NOW, THEREFORE, in satisfaction of a condition to the Purchase
Agreement, and in consideration of the promises and mutual covenants set forth
herein and other good and valuable consideration, the parties hereto hereby
agree as follows:
1. Employment. Subject to all of the terms and conditions hereof,
the Company does hereby employ the Executive, effective as of February 28, 1997
(the "Effective Date"), for a term commencing on the date hereof and ending on
the date which is three (3) years after the date hereof (subject to early
termination as provided herein) (the "Employment Term"), as the President of
Xxxxxx-Field (Canada), a division of the Company on a full time basis, and the
Executive does hereby accept such employment.
2. Duties of Executive. The Executive shall, during the term of
employment hereunder, perform such executive and administrative duties and
functions as may from time to time be
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appropriate, subject at all times to the control and direction of the Board of
Directors and the Chairman of the Board of Directors and Chief Executive Officer
of the Company. The Executive agrees to devote all of his business time and
attention as is reasonably required to carry out the business and affairs of the
Company and its "Affiliates"* The Executive agrees to perform his duties
hereunder faithfully, diligently and to the best of his abilities and to refrain
from engaging in any other business activity that does, will or could be deemed
to interfere with the performance of his duties hereunder or does, will or could
reasonably be deemed to conflict with the best interests of the Company or any
of its Affiliates. The Executive agrees that he will, in the performance of his
duties, promote the interest, business and reputation of the Company and its
Affiliates and shall perform all such duties as are essential or conducive to
the efficient management thereof in accordance with the rules and policies of
the Company. The Executive agrees to accept the payments to be made to him under
this Agreement, and the stock options of GFHP to be issued to him under this
Agreement, as full and complete compensation for the services required to be
performed by and the covenants of the Executive under this Agreement.
3. Compensation.
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* As used herein, the term "Affiliates" shall have the meaning ascribed to such
term in Rule 405 of the Securities Act of 1933, as amended, and shall include,
but not be limited to, GFHP and each of its direct and indirect subsidiaries.
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3.1 Base Salary. As remuneration for his services hereunder,
the Company agrees to pay the Executive an annual base salary at the rate of One
Hundred Twenty Thousand Canadian Dollars ($120,000) per annum, subject to
necessary statutory reductions (the "Base Salary"), payable in arrears in
substantially equal installments every week or in such other manner as the
Company may generally pay its employees. The Base Salary may be increased, but
not decreased, from time to time; provided, however, that this Agreement shall
not be deemed abrogated or terminated if the Company shall determine to increase
the Base Salary (or any other compensation of the Executive) for any period of
time, or if the Executive shall accept such increase. The Company agrees to
review the Base Salary of the Executive on an annual basis; but nothing
contained herein shall be deemed to obligate the Company to increase the Base
Salary at such time, or at any other time. Notwithstanding anything contained
herein, the Base Salary may not be decreased by the Company without the consent
of the Executive.
3.2 Regular Benefits. The Executive shall be entitled to
participate in any health insurance, accident insurance, hospitalization
insurance, life insurance, pension, or any other similar plan or benefit
afforded by GFHP to its executives generally, if and to the extent that the
Executive is eligible to participate in accordance with the provisions of any
such insurance, plan or benefit generally (such benefits, collectively, the
"Regular Benefits"). Nothing contained herein is
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intended, or shall be construed, to require the Company or any of its Affiliates
to institute or retain any Regular Benefit, or any particular plan, insurance or
benefits.
3.3 Bonus Program. In order to provide performance-based
incentive compensation to the Executive, the Executive shall be eligible to
participate in GFHP's Bonus Plan, which is administered by the Stock Option and
Compensation Committee of GFHP.
3.4 Automobile Allowance. The Company recognizes that the
Executive will require the use of an automobile for business purposes.
Therefore, the Company will provide the Executive with an automobile
reimbursement per kilometer up to $700.00 Canadian Dollars per month. In
addition, the Company will reimburse the Executive for his reasonable expenses
associated with routine and necessary maintenance and repairs relating to the
upkeep of the automobile and gas expenses for the operation of the automobile
for business purposes. As a condition to the reimbursement of such expenses, the
Executive shall furnish to the Company receipts for expenses incurred. The
Executive agrees that he shall operate the automobile in accordance with the
terms of any applicable lease and applicable insurance policy in force from time
to time.
4. Termination.
4.1 The Executive's employment hereunder may be terminated
under the following circumstances:
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(i) The Executive may terminate his employment hereunder
at any time on not less than ninety (90) days' prior written notice to the
Company.
(ii) In the event of the death of or adjudicated
incompetency or adjudicated insanity of the Executive during the Employment
Term, this Agreement and all benefits payable hereunder shall terminate on the
date of death or adjudication of incompetency or adjudicated insanity of the
Executive.
(iii) If the Executive, because of illness, injury or
other incapacitating condition, is unable to perform the services required to be
performed by him under this Agreement for a period or periods aggregating more
than sixty (60) days in any twelve (12) consecutive months or a period of
forty-five (45) consecutive days during any twelve (12) month period, then the
Company, in its sole discretion, may terminate this Agreement by giving notice
thereof to the Executive, and this Agreement and all benefits payable hereunder
shall terminate upon the date of such notice.
(iv) The Company may terminate the Executive's
employment at any time for "Cause" as determined by the common law in Ontario.
4.2 Release of Claims. Upon notice being given pursuant to
Section 4.1(i) or 4.1(iv); upon the death of the Executive as referred to in
Section 4.1(ii); or upon the expiration of the period referred to in Sections
4.1(iii), as the case may be, the employment of the Executive shall be wholly
terminated and this
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Agreement shall cease to have any further effect except in respect of Sections 6
and 7 which shall continue in full force and effect. Upon any such termination,
the Executive shall have no claim against the Company or any of its Affiliates
for damages, termination pay, severance pay, pay in lieu of notice of
termination, statutory or otherwise, except, the Executive shall be entitled to
receive solely all amounts and benefits paid or provided by the Company under
Section 3.1, 3.2 and 3.4 of this Agreement to the effective date of such
termination.
4.3 Reasonableness. The parties hereto acknowledge and agree
that there are no implied rights whatsoever with respect to the termination of
this Agreement and employment contemplated hereunder; provided, however, in the
event the Employment Term is not renewed upon terms mutually agreed upon for any
reason other than pursuant to Section 4.1, the Executive shall be entitled to
receive as his sole and exclusive remedy, severance pay at the rate of his Base
Salary then in effect for a period of six (6) additional months following the
last day of the Employment Term (the "Severance Period"), plus all amounts and
benefits paid or provided by the Company under Section 3.1, 3.2 and 3.4 during
the Severance Period.
5. Stock Options.
5.1 Incentive Stock Options. In order to provide the Executive
with the opportunity to participate in the growth of GFHP, GFHP hereby agrees to
grant to the Executive, effective as of the date hereof (the "Grant Date"), an
incentive stock option (such
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option, the "ISO") within the meaning of Section 422A of the Internal Revenue
Code of 1986, as amended, under the terms and provisions of GFHP's Incentive
Program, as amended (the "Incentive Program"), to purchase Ten Thousand (10,000)
shares of the common stock, par value $.025 per share (the "Common Stock"), of
GFHP at an exercise price equal to the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape on the Grant Date. The
ISO shall be exercisable, subject to the terms set forth in the Incentive Stock
Option Agreement (a copy of which is attached hereto as Exhibit I), which are
incorporated herein by reference. In the event of a conflict between the terms
contained in this Agreement and the Incentive Stock Option Agreement, the terms
contained in the Incentive Stock Option Agreement shall govern.
6. Executive Covenants.
6.1 Non-Competition Covenant. In consideration of the payments
to be made to the Executive under this Agreement and the Purchase Agreement, the
Executive expressly covenants and agrees that:
(a) During the period commencing on the Effective Date
and ending on the second (2nd) year anniversary of the Termination Date (as
hereinafter defined), the Executive will not directly or indirectly, own,
manage, operate, join, control or participate in or be connected with as an
officer, employee, consultant, partner, stockholder, lender, or otherwise, any
Competitor, as defined below, or any subsidiary or affiliate
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thereof. For purposes hereof, a "Competitor" shall be deemed to mean any
business, individual, partnership, firm, corporation or organization (other than
the Company or any of its Affiliates) anywhere in Canada which is (i) in
competition with the business of the Company or any Affiliate in Canada, (ii)
involved in a business activity of a type not yet engaged in by the Company or
any Affiliate in Canada but with respect to which the Company or any Affiliate
has made a material commitment at the time of the Termination Date or for the
twelve (12) month period prior thereto and the Executive is aware of such
commitment, or (iii) involved in the business of the Company or any Affiliate in
Canada as then conducted by any person, firm or corporation which shall succeed
to all or a substantial part of the business of the Company or any Affiliate.
(b) Nothing in this Agreement is intended, or shall be
construed, to prevent Executive during the term hereof or thereafter from
investing in the stock or other securities listed on a securities exchange or
traded in the over-the-counter market of any corporation which is at the time a
Competitor provided that Executive and members of his immediate family shall
not, directly or indirectly, hold, beneficially or otherwise, in the aggregate,
more than one percent (1%) of any issue of such stock or other securities of any
one (1) such corporation.
(c) During the period commencing on the date hereof and
ending on the second (2nd) year anniversary of the Termination Date, the
Executive agrees that he will not, directly or
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indirectly, interfere with, solicit or attempt to solicit (i) any of the
business or accounts of the Company or any of its Affiliates which existed in
Canada as of the Termination Date or for its twelve (12) month period prior
thereto, (ii) any customer in Canada of the Company or any of its Affiliates, or
(iii) any prospective customer in Canada of the Company or any of its Affiliates
whose business the Company or any of its Affiliates is in the process of
soliciting at the time of, or had solicited in the twelve (12) months prior to
the Termination Date.
(d) During the period commencing on the date hereof and
ending on the second (2nd) year anniversary of the Termination Date, the
Executive agrees that he will not, directly or indirectly, hire, induce or
attempt to induce, solicit or attempt to solicit, any employee or representative
of the Company or any of its Affiliates who was so employed, or otherwise had a
commercial relationship with the Company or any of its Affiliates, on the
Termination Date or at any time during the twelve (12) month period prior
thereto (the "Employees") to leave their employment or cease their commercial
relationship.
(e) During the period commending on the date hereof and
ending on the second (2nd) year anniversary of the Termination Date, the
Executive agrees that he will not, directly or indirectly, solicit or attempt to
solicit, in competition with the Company or any of its Affiliates, any supplier
of the Company or any Affiliate or induce or request any such person or business
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entity to curtail or terminate its commercial relationship with the Company or
any Affiliate.
(f) As used herein, "Termination Date" means the first
date as of which the Executive ceases to be engaged by the Company, or any of
the Affiliates, in any capacity whatsoever, whether as an employee, consultant,
independent contractor, agent or otherwise, and whether pursuant to a formal or
informal, oral or written, agreement, contract, understanding or otherwise.
6.2 Confidential Information. The Executive expressly
covenants and agrees that he will not at any time, during the period commencing
on the Effective Date and ending on the third (3rd) anniversary of the
Termination Date, directly or indirectly, use or permit the use of any trade
secrets, confidential information, or proprietary information (including,
without limitation, customer lists, costing information, technical information,
software techniques, business plans, marketing data, financial information or
similar items) of, or relating to, the Company, or any Affiliate in connection
with any activity or business, whether for his own account or otherwise (except
solely the business of the Company, if and to the extent that the Executive is
then an employee of the Company) and will not divulge such trade secrets,
confidential information or proprietary information to any person, firm,
corporation or other entity whatsoever. As between the Company and the
Executive, the identity of customers known to the Executive prior to the
Effective Date, the Executive's contacts and relations with individuals and
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entities prior to the Effective Date and the Executive's "know-how" shall not be
deemed confidential or proprietary to the Company. Any information which becomes
known to the public without breach by the Executive of any of the terms hereof
or of Executive's common law duties shall not be deemed to be trade secret or
confidential or proprietary information of the Company.
6.3 Ownership by Company. The Executive acknowledges and
agrees that all of his work product created, produced or conceived in connection
with his association with the Company shall be deemed work for hire and shall be
deemed owned exclusively by the Company. Without limiting the generality of the
foregoing, the Executive agrees that the Company shall have and possess all
proprietary rights, patent rights, copyright rights and trade secret rights as
may exist in such work product or as which are inherent therein or appurtenant
thereto. The Executive agrees to execute and deliver all documents required by
the Company to document or perfect the Company's proprietary rights in and to
the Executive's work product.
6.4 Property and Documents. The Executive acknowledges,
understands and agrees that all memoranda, notes, records, charts, formulae,
client lists, price lists, marketing plans, financial information and other
documents made, received, held or used by the Executive during the course of his
employment, shall be the property of the Company and shall be delivered by the
Executive to the Company upon request at any time during the course of
employment and upon the termination of his employment as
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provided herein. With respect to all confidential information and other
documents of the Company held by the Executive, the Executive acknowledges that
he is in a position of trust and subject to a fiduciary duty to use such
confidential information only in the best interests of the Company and its
Affiliates.
6.5 Remedies. In the event of the breach by either party of
any of the terms and conditions of this Agreement on either party's part to be
performed hereunder, or in the event of the breach or threatened breach by
Executive of any of the terms and provisions of this Section 6, then the party
pursuing legal action shall be entitled, if it so elects, to institute and
prosecute any proceedings in any court of competent jurisdiction, either in law
or equity, for such relief as it deems appropriate, including, without limiting
the generality of the foregoing, any proceedings to obtain provable damages for
any breach of this Agreement, to enforce the specific performance thereof by the
responding party or to obtain an injunction against the commission, threatened
commission or continuance of any such breach or threatened breach without the
necessity of proving actual damages or that damages would be inadequate or of
posting a bond. Subject to the provisions of Section 7.2 of this Agreement, in
any such action, if the party pursuing legal action is substantially successful,
the responding party shall further, as an element of the responding party's
damages, be liable for the reasonable attorney's fees and expenses of the party
pursuing legal action in the prosecution of such action or proceeding; provided,
however,
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that if the party pursuing legal action does not substantially prevail, in any
such action or proceeding, and the matter is not otherwise settled by mutual
agreement of the parties, the party pursuing legal action shall reimburse the
responding party for the reasonable attorneys' fees and expenses of the
responding party in defending against such action or proceeding, as well as any
damages, if any.
6.6 Covenants Non-Exclusive. Each of the Executive and the
Company acknowledges and agrees that the covenants contained in this Section 6
shall not be deemed exclusive of any common law and equitable rights of the
Company and the Executive in connection with the relationships contemplated
hereby; and that each of the Company and the Executive shall have any and all
rights as may be provided by law in connection with the relationships
contemplated hereby.
6.7 Reasonableness and Severability. The parties to this
Agreement acknowledge and agree that the scope of the covenants contained in
Section 6 are, in all respects, and particularly in respect of area, time and
subject matter no more than what is reasonably required to protect the Company's
interest. If any term or provision of the covenants contained in Section 6 shall
be deemed by a court or any authority to be overly broad in scope, such court or
authority shall have the power and is hereby authorized and directed to modify
such term or provision to limit such scope so that such term or provision is no
longer overly broad and to enforce the same as so limited.
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7. General.
7.1 Applicable Law. All questions concerning the validity,
interpretation, or performance of any of its terms or provisions, or of any
rights or obligations of the parties hereto, shall be governed by and resolved
in accordance with the laws of the Province of Ontario, and the laws of Canada
applicable therein, without giving effect to the principles of conflict of laws.
Venue of any action shall be proper only in the appropriate state and/or federal
court located in Toronto, Ontario.
7.2 Arbitration. The parties to this Agreement agree that any
dispute relating to this Agreement shall be submitted to arbitration pursuant to
this Section 7.2 which shall be finally and conclusively settled by the decision
of a board of arbitration consisting of three (3) members (hereinafter sometimes
called the "Board of Arbitration") selected as hereinafter provided. Each of the
Executive and the Company shall select one (1) member and the third member shall
be selected by mutual agreement of the other members, or if the other members
fail to reach agreement on a third member within twenty (20) days after their
selection, such third member shall thereafter be selected by a judge of the
appropriate court of Ontario in accordance with the Arbitrations Act (Ontario),
upon application made to it by the parties for a third member possessing
expertise or experience appropriate to the dispute, after giving two (2) days
written notice to the other party of its intention to make such application. The
provisions of the Arbitration Act (Ontario) shall
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apply to any court application pursuant to this Section 7.2. If the parties
agree in writing, the Board of Arbitration may be composed of a single
arbitrator. The Board of Arbitration shall meet in Toronto, Ontario or such
other place as a majority of the members of the Board of Arbitration determines
more appropriate, and shall reach and render a decision in writing (concurred in
by a majority of the members of the Board of Arbitration) with respect to the
dispute. In connection with rendering its decision, the Board of Arbitration
shall adopt and follow such rules and procedures as a majority of the members of
the Board of Arbitration deems necessary or appropriate. It is the intent of the
parties hereto that, barring extraordinary circumstances, decisions of the Board
of Arbitration shall be rendered no more than thirty (30) days following
commencement of proceedings with respect thereto. The Board of Arbitration shall
cause its written decision to be delivered to each of the parties. Any decision
made by the Board of Arbitration (either prior to or after the expiration of
such thirty (30) calendar day period) shall be final, binding and conclusive on
each of the parties and entitled to be enforced to the fullest extent permitted
by law and entered in any court of competent jurisdiction. Each party to any
arbitration shall bear its own expense in relation thereto, including but not
limited to such party's attorneys' fees, if any, and the expenses and fees of
the Board of Arbitration shall be shared equally between each of the parties.
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7.3 Survival. Except as otherwise provided herein, the parties
hereto agree that Section 7 and the covenants contained in Section 6 hereof
shall survive any termination of employment by the Executive and any termination
of this Agreement. In addition, the parties hereto agree that any compensation
or right which shall have accrued to the Executive as of the date of any
termination of employment or termination hereof shall survive any such
termination and shall be paid when due to the extent accrued on the date of such
termination.
7.4 Independent Representation. The Executive acknowledges
that he has had the opportunity to seek independent counsel and tax advice in
connection with the execution of this Agreement, and the Executive represents
and warrants to the Company (a) that he has sought such counsel and advice as he
has deemed appropriate in connection with the execution hereof and the
transactions contemplated hereby; and (b) that he has not relied on any
representation of the Company as to tax matters or as to the consequences of the
execution hereof.
7.5 Notices. Any and all notices required or desired to be
given hereunder by any party shall be in writing and shall be validly given or
made to another party if delivered either personally, by facsimile transmission,
same day delivery service, overnight expedited delivery service, or if deposited
in the mail, certified or registered, postage prepaid, return receipt requested.
If notice is served personally, notice shall be deemed effective upon receipt.
If notice is served by facsimile transmission,
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notice shall be deemed effective upon transmission provided such transmission
occurs on a business day (if such transmission does not occur on a business day,
it shall be deemed effective on the next business day) and, provided further
that such notice is confirmed in writing by the sender within one day after
transmission. If notice is served by same day delivery service, overnight
expedited delivery service or by certified or registered mail, notice shall be
deemed effective the day it is received if received on a business day (if it is
received on a day that is not a business day, it will be deemed effective on the
next following business day). In all instances, notice shall be sent to the
parties at the following addresses:
If to the Company:
Everest & Xxxxxxxx Canadian Limited
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
Telecopier No.: (000) 000-0000
If to the Executive:
Xx. Xxxxx Xxxxxxx
c/o Motion 2000 Inc.
00 Xxxx Xxxxxx Xxxxxx, Xxxx 00
Xxxxxxxx Xxxx, Xxxxxxx X0X 0X0
Xxxxxx
Telecopier No.: (000) 000-0000
Any party may change its address for the purpose of receiving
notices by a written notice given to the other party.
7.6 Modifications or Amendments. No amendment, change or
modification of this document shall be valid unless in writing and signed by all
of the parties hereto.
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7.7 Waiver. No reliance upon or waiver of one or more
provisions of this Agreement shall constitute a waiver of any other provisions
hereof.
7.8 Successors and Assigns. All of the terms and provisions
contained herein shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns. However, no party shall voluntarily assign any rights hereunder, or
delegate any duties hereunder, except upon the prior written consent of the
other.
7.9 Separate Counterparts. This document may be executed in
one or more separate counterparts, each of which, when so executed, shall be
deemed to be an original. Such counterparts shall, together, constitute and
shall be one and the same instrument.
7.10 Headings. The captions appearing at the commencement of
the sections hereof are descriptive only and are for convenience of reference.
Should there be any conflict between any such caption and the section at the
head of which it appears, the substantive provisions of such section and not
such caption shall control and govern in the construction of this document.
7.11 Further Assurances. Each of the parties hereto shall
execute and deliver any and all additional papers, documents and other
assurances, and shall do any and all acts and things reasonably necessary in
connection with the performance of their
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obligations hereunder and to carry out the intent of the parties hereto.
7.12 Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the subject matter of
this Agreement, and any and all prior agreements, understandings or
representations are hereby terminated and cancelled in their entirety.
7.13 Severability. If any provision of this Agreement is
determined to be illegal or unenforceable, in whole or in part, such illegal or
unenforceable provision or part thereof, shall be severable from this Agreement
and shall not effect the remaining provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
EVEREST & XXXXXXXX CANADIAN LTD. XXXXX XXXXXXX
By:_____________________________ _______________________________
Name: Xxxxx Xxxxxxx
Title:
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EXHIBIT I
INCENTIVE STOCK OPTION AGREEMENT
XXXXXX-FIELD HEALTH PRODUCTS, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of February 28, 1997, between
Xxxxxx-Field Health Products, Inc., a Delaware corporation (the "Company"), and
Xxxxx Xxxxxxx ("Optionee").
WHEREAS, pursuant to the Company's Incentive Program, as
amended (the "Program"), the Company desires to make available shares of its
common stock, par value $.025 per share (the "Common Stock"), for purchase by
the Optionee on the terms set forth herein;
WHEREAS, this Agreement consists of this document and the
terms and provisions contained in the Program are hereby incorporated by
reference herein and made a part hereof; and
WHEREAS, the Administrator of the Program, being the Board of
Directors, in conjunction with and through a committee (the "Committee"), acting
in accordance with the provisions of the Program, as of February 28, 1997,
granted to the Optionee stock options to purchase the number of shares of Common
Stock of the Company as set forth below.
NOW, THEREFORE, the Company and the Optionee hereby agree as
follows:
W I T N E S S E T H:
1. Definitions. In this Agreement, except where the context
otherwise indicates, the following definitions apply:
1.1 Terms defined in the Program shall have the same meanings
when used herein as defined therein.
1.2 The term "Optionee" when used herein shall include the
Optionee's legal representative when the context requires.
1.3 "Vesting Date" means the anniversary of the Date of Grant
on which the Option becomes exercisable in whole or in part.
2. Confirmation of Grant of Option. Pursuant to a
determination by the Committee made as of February 28, 1997, (hereinafter called
the "Date of Grant"), the Company, subject to the terms of the Program and this
Agreement, hereby confirms that the Optionee has been irrevocably granted, on
the Date of Grant, as a matter of separate inducement and agreement and not in
lieu of salary or other compensation for services, an Incentive Stock Option to
purchase 10,000 shares of the Common Stock (the "Shares").
3. Exercise Price. The exercise price of the Shares is
$_________ per Share, subject to adjustment as provided in Section 15 hereof.
4. Tax Treatment. Optionee understands that the Incentive
Stock Option granted under this Agreement is entitled to special tax treatment
under Section 422A of the Internal Revenue Code of 1986, as amended to date and
as may be amended from time to time (the "Code").
5. Options Non-Transferable. The Option shall not be
transferable by the Optionee otherwise than by will, or by the laws of descent
and distribution, and shall be exercised during the lifetime of the Optionee
only by him. Neither the Option nor any interest therein may be transferred,
assigned, pledged or hypothecated by the Optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
6. Vesting Dates of Options. The Incentive Stock Option shall
become exercisable as follows:
(a) 5,000 Shares subject to the Incentive Stock Option
shall be exercisable at any time between February 28, 1998 and February 28,
2002; and
(b) 5,000 Shares subject to the Incentive Stock Option
shall be exercisable at any time between February 28, 1999 and February 28,
2002.
Notwithstanding the foregoing, the Option shall be exercisable in full
immediately upon the occurrence of a change in control of the Company, as such
term is defined in Rule 405 under the Securities Act of 1933, as amended.
7. Exercise of Option. If the Optionee has not died or been
terminated, the Option shall become exercisable at the time specified by the
grant, as provided in Section 6 above. The Option may be exercised only by
written notice to the Company as provided in Section 11 below, by payment, in
cash, shares or other consideration in accordance with the terms of the Program
and of any applicable regulations of the granting authority. The Option may be
exercised before or after the exercise of any other option granted under the
Program.
8. Termination of Options. All rights of the Optionee in the
Option, to the extent that they have not been exercised, shall terminate: (a)
five (5) years after the Date of Grant (subject to prior termination as herein
provided); and (b) when the Optionee terminates if the Optionee terminates but
does not terminate normally. Notwithstanding the foregoing, in the event of the
death of the Optionee or in the event he terminates normally prior to exercise
of the Option, his Option outstanding hereunder shall terminate upon failure of
the Optionee or his
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personal representative to exercise the Option in accordance with the time
period provided in Section 9 below. "Terminates normally" shall mean that the
employment of the Optionee with the Company or any subsidiary of the Company
terminates (i) at the normal retirement time for the Optionee, (ii) as a result
of the Optionee's becoming incapacitated, (iii) with the written approval of the
Committee that any outstanding award to the Optionee will not expire or be
annulled because of such termination, or (iv) other than (x) for "Cause" as
defined in Section 4(iv) of that certain Employment Agreement dated as of
February 28, 1997 (the "Employment Agreement"), by and between the Optionee and
Everest & Xxxxxxxx Canadian Limited, or (y) pursuant to a voluntary resignation
of employment pursuant to Section 4(i) of the Employment Agreement.
9. Death or Normal Termination of Optionee. The Option granted
the Optionee under the Program and this Agreement and outstanding on the date of
his death or on the date he terminates normally may be exercised by the Optionee
or the personal representative of the Optionee, as the case may be, for a period
of one hundred eighty (180) days following the date he terminates normally or
the date of the appointment of the personal representative.
10. Assignability. The rights and benefits under the Program
and this Agreement shall not be assignable or transferable by the Optionee other
than by will or by the laws of descent and distribution, and during the lifetime
of the Optionee the Option granted under the Program and this Agreement shall be
exercisable only by him.
11. Notice. In the event that the Optionee wishes to purchase
any of the Shares purchasable under the Option as provided in Section 2 hereof,
Optionee shall deliver or shall transmit by registered or certified mail to the
Secretary or the treasurer of the Company, at the Company's then principal
office, a written notice signed by Optionee specifying the form of Option, the
number of Shares that the Optionee has irrevocably elected to purchase under the
Option and the Program, together with a certified check in the aggregate amount
of the Exercise Price for such number of Shares. Upon receipt of such notice and
payment, the Company shall deliver to the Optionee a certificate or certificates
for the Shares in respect of which the Option were so exercised.
12. Limitation of Rights - No Right to Continue as a Director,
Officer or Employee. Neither the Program or this Agreement, nor the granting of
the Option nor any other action taken pursuant to the Program or this Agreement,
shall constitute or be evidence of any agreement or understanding, express or
implied that the Company will retain the Optionee as a director, officer or
employee for any period of time, or at any particular rate of compensation.
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13. No Stockholders' Rights for Options. The Optionee shall
have no rights as a stockholder with respect to the Shares until the date of the
issuance to him of a stock certificate therefor, and no adjustment will be made
for dividends or other rights for which the record date is prior to the date
such certificate is issued.
14. No Right to Future Compensation. Neither the Program, nor
this Agreement nor the grant of the Option hereunder shall be construed to
entitle the Optionee to any future compensation in respect of service as a
director, officer or employee.
15. Adjustments to Stock. In the event any change is made to
the Common Stock subject to the Program or subject to any outstanding option or
right granted under the Program (whether by reason of merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure or otherwise), then
appropriate adjustments shall be made to the maximum number of shares subject to
the Program and this Agreement and the number of shares and price per share of
the Shares.
16. Reserve. The Company shall at all times during the term of
the Option reserve such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of this Agreement.
17. Withholding Taxes. The Optionee acknowledges that it is a
condition to the obligation of the Company to deliver shares of the Company,
upon the exercise of a stock option under this Agreement, to pay the Company
such amount as may be requested by the Company for the purpose of satisfying any
liability for any federal, state or local income, or other taxes required by law
to be withheld with respect to such delivery; provided that the Optionee may
elect, in accordance with the applicable regulations of the granting authority,
to pay a portion or all of such withholding taxes in shares and the Optionee in
such case hereby authorizes the Company to withhold and agrees to surrender back
to the Company, on or about the date such withholding tax is determinable,
shares previously owned by the Optionee or a portion of the shares that were or
otherwise would be distributed to the Optionee pursuant hereto having a fair
market value equal to the amount of such withholding taxes to be paid in shares.
18. Governing Law. The Program, this Agreement and
all action taken under each shall be governed, as to construction
and administration, by the laws of the State of New York.
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IN WITNESS WHEREOF, the Company and the Optionee have duly
executed this Agreement as of the day and year first above written.
XXXXXX-FIELD HEALTH
PRODUCTS, INC.
By:_____________________________
Name:________________________
Title:_______________________
ATTEST:
_________________________
Vice President,
General Counsel
ACCEPTED AND AGREED:
________________________________
Xxxxx Xxxxxxx
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