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EXHIBIT 10.17
JAYCOR, INC.
RETIREMENT AGREEMENT
This Retirement Agreement (the "Agreement) is made and entered into by
and between Xxxxxx X. Xxxxxxxx ("Xxxxxxxx") and Jaycor, Inc. (the "Company") as
of January 31, 1997.
RECITALS
A. Other than any agreement(s) related to the protection of the
Company's confidential information or the assignment of inventions to the
Company, Xxxxxxxx has never entered into a written employment agreement with
the Company, but instead has operated under an oral agreement with the Company
for at-will employment.
B. Effective as of January 31, 1997, Xxxxxxxx desires to retire and
terminate his full-time employment with the Company, but is willing to
thereafter provide part-time assistance to the Company pursuant to the terms
of this Agreement.
C. The parties have been negotiating the principal terms of this
Agreement since December 20, 1996.
D. It is the intent of the parties in entering this Agreement to
set forth all oral and written understandings and agreements between the
parties as of the Effective Date, to resolve all pending matters between the
parties and, except as specifically provided herein, to have this Agreement
supersede all prior understandings and agreements between the parties.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter set forth, it is hereby agreed by and among the parties as follows:
1. Employment.
1.1 Full-Time Employment Terms. Xxxxxxxx'x status as a full
time employee of the Company shall terminate effective midnight on January 31,
1997 (the "Retirement Date").
1.1.1 Duties. Until the Retirement Date, Xxxxxxxx
agrees to use his best efforts to devote substantially all of his time,
attention, skill and efforts to render services related to his current
position as Executive Vice President of the Company.
1.1.2 Salary. Until the Retirement Date, Xxxxxxxx'x
salary for his full time efforts on behalf of the Company shall remain
$12,993.15 per bi-weekly period paid in accordance with the Company's standard
payroll procedures.
1.1.3 Benefits. Until the Retirement Date, Xxxxxxxx
shall continue to receive his current executive medical, dental and life
insurance benefits and to accrue vacation and sick leave benefits.
1.2 Part-Time Employment Terms. Beginning on February 1,
1997, Xxxxxxxx shall be rehired as a temporary employee and shall remain a
temporary employee of the
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Company until the earlier to occur of (i) one year after the Company's initial
public offering, and (ii) June 30, 1998 (the "Termination Date").
1.2.1 Duties. Until the Termination Date, Xxxxxxxx
shall be available on an as-needed basis for consulting services as and when
directed by the President or board of directors of the Company.
1.2.2 Compensation. Xxxxxxxx'x exclusive
compensation for his services as a temporary employee shall be One Hundred
Dollars ($100.00) for each full hour he provides consulting services pursuant
to Section 1.2.1 hereof and shall be payable bi-weekly in arrears in accordance
with the Company's standard payroll procedures based on Company timesheets
delivered to the Company detailing hours spent on a daily basis for the prior
pay period.
1.2.3 Medical Benefits. Until July 16, 1998,
Xxxxxxxx shall continue to receive the executive medical and dental benefits he
currently receives with all such premiums paid for by the Company. Thereafter,
Xxxxxxxx can obtain extended medical coverage under COBRA for a period of
eighteen (18) months beyond the Termination Date (as defined below) by making
premium payments directly to the Company as prescribed under COBRA.
1.2.4 No Vacation/Sick Leave/Paid Holidays. Except
as otherwise expressly provided in this Agreement, after the Retirement Date,
Xxxxxxxx will not accrue any employee benefits which are not generally provided
to other temporary employees of the Company; including, but not limited to,
vacation benefits, sick leave and paid holidays.
1.2.5 Stock Options. Xxxxxxxx will retain his rights
to exercise any or all of his current stock options set forth on Schedule 1
attached hereto (the "Stock Options") pursuant to the terms set forth in the
written stock option agreements related thereto. It is the intent of the
parties hereto that, until the Termination Date, Xxxxxxxx shall remain an
employee of the Company for the purposes of the stock option agreements
related to the Stock Options. However, Xxxxxxxx shall bear the risk that any of
the Stock Options which are currently incentive stock options may become
non-qualified stock options and taxable upon exercise.
2. Existing Obligations. All of the Company's payment obligations
to Xxxxxxxx are set forth on Schedule 2 attached hereto (the "Existing
Obligations"). Xxxxxxxx hereby acknowledges and agrees that the Existing
Obligations represent all payment obligations to Xxxxxxxx through the
Retirement Date; including, but not limited to, any bonus, severance, deferred
salary, accrued vacation, or any other oral or written obligations of the
Company to Xxxxxxxx which exist as of the Effective Date. Xxxxxxxx hereby
acknowledges that, in accordance with the Company's policy, no payment will be
made to Xxxxxxxx for accrued and unused sick days. The Company agrees to pay
to Xxxxxxxx all of the Existing Obligations amounts listed on Schedule 2
attached hereto in three separate payments on the Retirement Date. Other than
as set forth in this Agreement or in a writing signed by the President of the
Company, the Company will not incur any new obligations to Xxxxxxxx after the
Effective Date of this Agreement.
3. Stock Repurchase Obligations. Subject to any statutory
prohibitions, the Company and Xxxxxxxx hereby agree to the following
repurchases by the Company of the Company's common stock currently held by
Xxxxxxxx:
3.1 On the Retirement Date, the Company will repurchase from
Xxxxxxxx and Xxxxxxxx will sell to the Company thirty-eight thousand nine
hundred eighty-seven (38,987)
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shares of the Company's common stock currently held by Xxxxxxxx at a purchase
price of three dollars and eighty-nine cents ($3.89) per share for an aggregate
payment in cash to Xxxxxxxx of $151,659.43.
3.2 If an initial public offering by the Company or its
affiliate ("IPO") occurs:
3.2.1 during calendar year 1997, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining two hundred thousand (200,000) shares of common stock then held by
Xxxxxxxx at a price equal to five dollars ($5.00) per share;
3.2.2 during calendar year 1998, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining one hundred thirty-three thousand three hundred thirty-three
(133,333) shares of common stock then held by Xxxxxxxx at a per share price
equal to one hundred twenty-eight and one-half percent (128.5%) of the ESOP
valuation price in effect at the time of the IPO; or
3.2.3 during calendar year 1999, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining sixty-six thousand six hundred sixty-six (66,666) shares of common
stock held by Xxxxxxxx at a per share price equal to one hundred twenty-eight
and one-half percent (128.5%) of the ESOP valuation price in effect at the time
of the IPO.
For the purposes of this Section 3.2, any Company payment
obligation shall be payable in cash to Xxxxxxxx within thirty (30) days after
the Company's receipt of the net proceeds of the IPO.
3.3 If an initial public offering by the Company or its
affiliate ("IPO") does not occur:
3.3.1 during calendar year 1997, then the Company
shall have the right to exercise a call option to repurchase from Xxxxxxxx and
Xxxxxxxx shall have the right to exercise a put option to sell to the Company
sixty-six thousand six hundred sixty-seven (66,667) shares of common stock
held by Xxxxxxxx at a per share price equal to eighty-five percent (85%) of the
ESOP valuation price in effect at the time of either the call or put option is
exercised; and
3.3.2 during calendar year 1998 and has not occurred
by December 31, 1998, then the Company shall have the right to exercise a call
option to repurchase from Xxxxxxxx and Xxxxxxxx shall have the right to
exercise a put option to sell to the Company sixty-six thousand six hundred
sixty-seven (66,667) shares of common stock held by Xxxxxxxx at a per share
price equal to eighty-five percent (85%) of the ESOP valuation price in effect
at the time of either the call or put option is exercised; and
3.3.3 during calendar year 1999 and has not occurred
by December 31, 1999, then the Company shall have the right to exercise a call
option to repurchase from Xxxxxxxx and Xxxxxxxx shall have the right to
exercise a put option to sell to the Company sixty-six thousand six hundred
sixty-six (66,666) shares of common stock held by Xxxxxxxx at a per share price
equal to eighty-five percent (85%) of the ESOP valuation price in effect at the
time of either the call or put option is exercised.
For the purposes of this Section 3.3, the time for either party
to exercise a put or call option shall be by written notice to the other party
pursuant to the terms of Section 6.3
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hereof within fifteen (15) days of the date the put or call option first
accrued and any Company payment obligation shall be payable in cash to Xxxxxxxx
within thirty (30) days of the Company's receipt of a put notice or the
Company's delivery of a call notice.
Notwithstanding anything to the contrary in this Agreement, any
and all repurchases of stock pursuant to Section 3.3 hereof shall be
conditioned upon obtaining the prior approval of the Company's lender(s) if
such approval is required. The Company will, in good faith, use reasonable
efforts to secure any such approval(s).
4. Restrictions on Xxxxxxxx'x Stock. Xxxxxxxx hereby agrees not to
sell, encumber, hypothecate or transfer any of the 238,987 shares of the
Company's common stock which he currently holds (the "Restricted Shares") and
agrees to allow the Company to place a legend on the certificates representing
the Restricted Shares and to have the Company hold the certificates
representing the Restricted Shares in trust. Xxxxxxxx also agrees to execute
an irrevocable proxy in favor of the Company to allow the Company to attend
all shareholder meetings and to vote all of the Restricted Shares on any
matter submitted to the shareholders of the Company for approval or consent
until the Company has failed to cure any default on any of the terms of this
Agreement within thirty (30) days of its receipt of Xxxxxxxx'x written notice
alleging with specificity any such default(s).
5. Transfer of Ownership of Company Automobile. On the Retirement
Date, the Company will transfer ownership of the Company-owned automobile
currently driven by Xxxxxxxx (Registration Number ______________________) (the
"Automobile") at no direct cash cost to Xxxxxxxx; provided, however, that
Xxxxxxxx shall be liable for the tax consequences of the transfer of ownership
of the Automobile to Xxxxxxxx. The parties acknowledge that the current fair
market value of the Automobile is $16,000. After the Retirement Date, Xxxxxxxx
shall be the registered owner of the Automobile and shall be fully liable for
all costs incident to such ownership; including, but not limited to,
registration fees, operating expenses and insurance costs.
6. Pension Plan; No Tax Advice. The Company will notify Fidelity
Investments of Xxxxxxxx'x termination as a full-time employee as of the
Retirement Date and will instruct Fidelity to process a pension plan payout to
Xxxxxxxx in accordance with Fidelity procedures and plan documents. Xxxxxxxx
acknowledges the existence of a loan against his pension plan funds, the
balance of which will represent taxable income to him upon payout.
Notwithstanding the foregoing, Xxxxxxxx acknowledges that he is not relying on
any tax advice from the Company and that the Company has encouraged Xxxxxxxx to
seek tax advice from his accountant or tax advisor related to the terms of this
Agreement; including, but not limited to, the forthcoming pension plan payout.
7. Resignations. Xxxxxxxx hereby agrees to resign from any and all
officer and director positions held with the Company effective as of the
Retirement Date.
8. No Severance Benefit; Tax Liability. Xxxxxxxx agrees that the
new obligations incurred by the Company in this Agreement including the
obligations set forth in Sections 1.2.3, 1.2.5, 3, and 5 hereof are in lieu of
any and all severance pay and any other amounts or benefits to which Xxxxxxxx
might otherwise be entitled. Xxxxxxxx shall be liable for payment of any and
all taxes, levies or assessments on the amounts paid to him or benefits
received by him under this Agreement and Xxxxxxxx agrees to hold the Company
harmless from such tax liability.
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9. Confidential Information. Xxxxxxxx acknowledges that when he
commenced employment with the Company he signed an "Employee Proprietary
Information and Intellectual Property Agreement," a copy of which is attached
hereto. Xxxxxxxx covenants, represents and warrants that he has complied with,
and will continue to comply with, all terms and conditions of that agreement.
Furthermore, Xxxxxxxx acknowledges that as an employee of the Company, he has
acquired certain information (the "Confidential Information") concerning
business plans, existing and proposed new products, customers, suppliers and
related information which is confidential to the Company. Xxxxxxxx covenants,
represents and warrants that he has returned all tangible representations of
such information to the Company and that he will not disclose any such
Confidential Information to any third party, or make any use of such
Confidential Information without the prior written consent of the Company,
unless and until such Confidential Information has become generally known by
the public without any fault or act of Xxxxxxxx or anyone acting with him on
their behalf. Xxxxxxxx further acknowledges that Xxxxxxxx'x obligations extend
to Confidential Information of the Company's customers, suppliers and
affiliates.
10. Exit Interview. On the Retirement Date, Xxxxxxxx agrees to
participate in an exit interview. The purpose of this interview is anticipated
to be (but is not limited to): (i) accounting for and receiving copies of all
notes, writings, files, reports, correspondence, tapes, cards, maps, machines,
technical data, or any other tangible product or document which Xxxxxxxx
produced or received in connection with his employment with the Company which
incorporate any Confidential Information and which he has in his possession;
(ii) accounting for any classified documents provided to Xxxxxxxx under this
Agreement; (iii) debriefing Xxxxxxxx on any appropriate security matters;
(iv) discussions of any appropriate trade secret or confidential information
restrictions and appropriate technical debriefings; and (v) other equipment,
software or other property of the Company, including but not limited to, all
security cards and keys.
11. General Provisions.
11.1 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
11.2 Successors and Assigns. Xxxxxxxx may not subcontract or
otherwise delegate its obligations under this Agreement without the Company's
prior written consent. Subject to the foregoing, this Agreement will be for the
benefit of the Company's successors and assigns, and will be binding on
Xxxxxxxx'x assignees.
11.3 Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be delivered as follows with notice
deemed given as indicated: (i) by personal delivery when delivered personally;
(ii) by overnight courier upon written verification of receipt; (iii) by
telecopy or facsimile transmission upon acknowledgement of receipt of
electronic transmission; or (iv) by certified or registered mail, return
receipt requested, upon verification of receipt. Notice shall be sent to the
addresses set forth below or such other address as either party may specify in
writing pursuant to the terms of this Section.
11.4 Acknowledgement. This Agreement has been reviewed by
the parties hereto and their respective attorneys, and the parties have had a
full opportunity to negotiate the contents hereof. The parties hereto
expressly waive any common law or statutory rule of construction that ambiguity
shall be construed against the drafter of this Agreement, and acknowledge that
both parties contributed equally to the drafting of this Agreement.
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11.5 Expenses. All parties to this Agreement agree that they
will bear their own attorneys' fees, costs and all other expenses related to
the negotiation and execution of this Agreement.
11.6 Waiver. No waiver by any party hereto of any breach of
this Agreement by any other party shall operate or be construed as a waiver of
any other or subsequent breach. No waiver by any party hereto of any breach of
this Agreement by any other party hereto shall be effective unless it is in
writing and signed by the party claimed to have waived such breach.
11.7 Binding Nature. The agreements and releases contained
in this Agreement bind and inure to the benefit of the principals, agents,
representatives, heirs, successors and assigns of Xxxxxxxx and the Company.
11.8 Further Assurances. All parties agree to cooperate
fully and to execute any and all supplementary documents and to take all
additional actions that may be necessary or appropriate to give full force to
the basic terms and intent of this Agreement and which are not inconsistent
with its terms.
11.9 Governing Law. This Agreement shall be governed in all
respects by the laws of the United States of America and by the laws of the
State of California, as such laws are applied to agreements entered into and to
be performed entirely within California between California residents
irrespective of its conflict of laws provisions.
11.10 Severability. Should any provisions of this Agreement
be held by a court of law to be illegal, invalid or unenforceable, the
legality, validity and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired thereby. It is the express intent
of the parties that any such illegal, invalid or unenforceable provision be
modified to the minimum possible extent so that the modified provision continues
to reflect the intent of the parties and is a legal, valid and enforceable
provision. However, if such a modification is not possible, then such illegal,
invalid or unenforceable provision shall be severed and the remainder of the
terms of this Agreement shall remain in full force and effect.
11.11 Injunctive Relief for Breach. Xxxxxxxx'x obligations
under Section 9 of this Agreement are of a unique character that gives them
particular value and breach of any of such obligations will result in
irreparable and continuing damage to the Company for which there will be no
adequate remedy at law. In the event of such breach, the Company will be
entitled to injunctive relief and/or a decree for specific performance, and
such other and further relief as may be proper (including monetary damages if
appropriate).
11.12 Choice of Forum. Each of the parties to this Agreement
irrevocably agrees that any litigation, arbitration or other proceeding arising
under or related to this Agreement shall be resolved in, and waives any venue
objections against, the United States District Court for the Southern District
of California or the Superior and Municipal Courts of the State of California,
San Diego County.
11.13 Dispute Resolution. Any dispute or difference arising
out of this Agreement or involving a question of fact which is not settled by
mutual agreement and the settlement of which is not otherwise provided for
herein within thirty (30) days of the date either party provides written notice
of a dispute to the other party, the dispute shall be settled and finally
determined by arbitration in the City of San Diego, in the following manner:
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11.13.1 Each party to this Agreement shall
appoint an arbitrator. The two arbitrators so appointed shall then select a
third arbitrator. The arbitrators shall meet and give each party an opportunity
to present its case and witnesses (if any) in the presence of the other party,
and shall then make their determination. The written decision of the three
arbitrators, or any two of them, shall be final and binding upon the parties
thereto, and judgment may be entered therein in any court having jurisdiction.
Such decision shall include the fixing of the expenses of the arbitration and
the assessment of the same against either or both parties. If either party
shall fail to appoint its arbitrator within thirty (30) days after receipt of
notice in writing requiring it to do so, the arbitrator appointed by the other
party shall act for both, and his decision in writing shall be final and binding
on both parties, as if he had been appointed by the consent of each party.
Pending final decision of a dispute hereunder and, if performance has not been
completed, Consultant shall proceed diligently with the performance of the
Services in accordance with the Company's instructions.
11.13.2 If, in an appropriate case, the
arbitrators appointed by the parties shall fail to select a third arbitrator
within two weeks of their appointment, a third arbitrator shall be selected in
accordance with the then current rules and regulations of the American
Arbitration Association.
11.14 Survival. The rights and obligations which are intended by the parties
to survive the termination or expiration of this Agreement shall survive any
such termination or expiration; including, but not limited to, Sections 2, 3, 4,
5, 7, 8, 9, 10 and 11 hereof.
11.15 Counterparts. This Agreement may be executed in two or
more counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed to be original signatures.
11.16 Entire Agreement. This Agreement together with [the
Invention Assignment and Confidentiality Agreement(s)] contain and represent the
entire agreement and understanding between the parties concerning the subject
matter herein and supersedes and replaces any prior negotiations or agreements
between the parties hereto, whether written or oral, except as expressly
provided herein; including, but not limited to, the terms of retirement letter.
Each of the parties acknowledges that neither party nor any agent or attorney of
either party has made any promise, representation or warranty, express or
implied, not contained in this Agreement to induce the other party to execute
this Agreement in reliance upon any such promise, representation or warranty not
contained herein. This Agreement may only be amended by a written instrument
executed by the parties hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Interim Retirement
Agreement effective as of the date first set forth above.
XXXXXXXX: COMPANY:
JAYCOR, INC.,
a California corporation
/s/ XXXXXX X. XXXXXXXX By: /s/ XXXX X. XXXXXX
----------------------------- ----------------------
Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxxx
----------------------
Title: President/CEO
----------------------
Address: 0000 Xxxxx Xxxx Xx Address: _________________
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Xxxxxxxxxx, XX 00000 _________________________
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SCHEDULE 1
LIST OF XXXXXXXX'X EXISTING STOCK OPTIONS
As of January 31, 1997
OPTION DATE OF NUMBER OF EXERCISE OPTION
CATEGORY GRANT SHARES PRICE % VESTED EXPIRATION
-------- ----- ------ ----- -------- ----------
ISO 2/20/91 105,000 $2.417 100% 90 days from
(35,000 pre-split) ($7.25 pre-split) termination
Non-qualified 6/14/91 198,000 $2.843 100% 1 year from
(66,000 pre-split) ($8.53 pre-split) termination
Non-qualified 3/05/96 18,000 $3.34 Vests fully on immediately
3/05/97 upon
termination
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Schedule 2
JAYCOR
Payments to X. X. Xxxxxxxx
To be made on January 31, 1997
DEFERRED COMPENSATION
-------- ------------
Gross Amount $ 155,225.21
less:
FICA 0.00%
Federal Inc Tax 18.00% 27,941.00
State Inc Tax 2.50% 3,881.00
---------
31,822.00 (31,822.00)
-------------
Net Payment $ 123,403.21
=============
ACCRUED VACATION
----------------
Gross Amount $ 38,321.71
less:
FICA 2,193.73
Federal Inc Tax 18.00% 6,898.00
State Inc Tax 2.50% 958.00
---------
10,049.73 (10,049.73)
-------------
Net Payment $ 28,271.98
=============
REGULAR PAYCHECK (80 HRS. THRU 1/31/97)
---------------------------------------
Gross Amount $ 12,993.16
less:
FICA 7.65% 1,007.21
Federal Inc Tax 16.28% 2,115.91
State Inc Tax 2.31% 300.00
Other Deductions 600.71
----------
4,023.83 (4,023.83)
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Net Payment $ 8,969.33
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Stock Repurchase
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Shares @ price 38,987 $ 3.89 $ 151,659.43
=============
GRAND TOTAL $ 312,303.95
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FIRST AMENDMENT TO
THE RETIREMENT AGREEMENT BETWEEN
JAYCOR, INC. AND XXXXXX X. XXXXXXXX
This First Amendment (the "First Amendment") to the Retirement
Agreement between JAYCOR, Inc. and Xxxxxx X. Xxxxxxxx (the "Agreement") is made
and entered into effective as of the 31st day of January, 1997 (the
"Effective Date") by and between JAYCOR, Inc. (the "Company") and
Xxxxxx X. Xxxxxxxx ("Xxxxxxxx").
A. The Company and Xxxxxxxx desire to amend the Agreement
pursuant to this First Amendment to reflect a condition to the Company's
obligation to purchase certain of Xxxxxxxx'x shares of the Company's common
stock which he currently holds upon an initial public offering of the Company
as set forth in Section 3.2 of the Agreement.
B. All defined terms set forth in this First Amendment which are
not otherwise defined herein shall have the meaning set forth in the Agreement.
AGREEMENT
In consideration of the terms and conditions set forth herein, the
Company and Xxxxxxxx each hereby agree that the Agreement is hereby amended as
of the Effective Date as follows:
1. Amendment. Section 3.2 of the Agreement is hereby replaced in
its entirety with the following:
3.2 If an initial public offering by the Company or its
affiliate (an "IPO") which allows the common stock of the Company or its
affiliate to be listed on the NASDAQ National Market System ("NMS") and the
Company's payment of its obligations under this Section 3.2 can be made without
causing the common stock of the Company or its affiliate to fail to meet the
criteria to remain listed on the NMS occurs:
3.2.1 during calendar year 1997, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining two hundred thousand (200,000) shares of common stock then held by
Xxxxxxxx at a price equal to five dollars ($5.00) per share;
3.2.2 during calendar year 1998, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining one hundred thirty-three thousand three hundred thirty-three
(133,333) shares of common stock then held by Xxxxxxxx at a per share price
equal to one hundred twenty-eight and one-half percent (128.5%) of the ESOP
valuation price in effect at the time of the IPO; or
3.2.3 during calendar year 1999, then the Company
shall repurchase from Xxxxxxxx and Xxxxxxxx shall sell to the Company the
remaining sixty-six thousand six hundred sixty-six (66,666) shares of common
stock held by Xxxxxxxx at a per share price equal to one hundred twenty-eight
and one-half percent (128.5%) of the ESOP valuation price in effect at the time
of the IPO.
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For the purposes of this Section 3.2, any Company payment
obligation shall be payable in cash to Xxxxxxxx within thirty (30) days after
the Company's receipt of the net proceeds of the IPO.
If an IPO has occurred during the term of this agreement and
the Company has not repurchased Xxxxxxxx'x shares pursuant to this Section 3.2
in order to meet listing criteria for the NMS, then the Company will, within 60
days of the end of each fiscal quarter, review its operating results and
financial statements with regard to the maintenance standards for remaining on
NMS and will repurchase from Xxxxxxxx at $5.00 per share (pre-split price) the
maximum number of shares of Class B common stock then held by Xxxxxxxx which
can be repurchased to allow the Company to remain listed on the NMS. The
Company will continue to make such repurchases, to the extent possible as
described herein, on a quarterly basis until 100% of Xxxxxxxx'x outstanding
Class B shares have been repurchased by the Company or otherwise converted to
shares of Class A common stock."
2. Effect on Agreement. Except as amended by this First
Amendment, all provisions of the Agreement shall remain in full force and
effect.
3. Counterparts. This First Amendment may be executed in one or
more counterparts all of which shall constitute one original agreement.
4. Entire Agreement. This First Amendment together with the
Agreement, the Acknowledgment and the Irrevocable Proxy constitute the entire
agreement between the parties with respect to the subject matter hereof and
neither party shall be bound by any representation, promise, warranty or
statement whether oral or written which is not contained herein or therein.
In Witness Whereof, the undersigned hereby execute this First
Amendment as of the date first set forth above.
COMPANY:
JAYCOR, INC.,
a California corporation
By:
Name: /s/ XXXX X. XXXXXX
----------------------
Title: President/CEO
----------------------
XXXXXXXX:
/s/ XXXXXX X. XXXXXXXX
---------------------------
Xxxxxx X. Xxxxxxxx
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[JAYCOR LETTERHEAD]
AGREEMENT
In accordance with the Retirement Agreement dated January 31, 1997, between
Xxxxxx X. Xxxxxxxx and JAYCOR, Xxxxxxxx agrees as a condition to the sale of
shares pursuant to paragraph 3.2 of the Agreement to execute and deliver to
JAYCOR the ACKNOWLEDGMENT attached as Exhibit 1.
/s/ XXXXXX X. XXXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxxx
JAYCOR
By: /s/ XXXX X. XXXXXX
----------------------------
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Exhibit 1
ACKNOWLEDGMENT
I, Xxxxxx X. Xxxxxxxx, acknowledge that JAYCOR's purchase of 200,000 shares of
JAYCOR Common Stock at a price of $5.00 per share pursuant to the Retirement
Agreement dated January 31, 1997, is at my request and as a senior officer and
member of the board of directors of the Company as of the effective date of the
Retirement Agreement, I have been provided with full and complete information
and access to information related to the Company and its prospects that I would
consider necessary or appropriate in deciding to sell my shares to the Company.
I further acknowledge that I understand the risk that, within thirty days, the
per share value of the shares may be several times greater than the price per
share that the Company has agreed to pay for the shares pursuant to Section 3
of the Retirement Agreement, and that, notwithstanding such increase in price
risk, I am willing to sell the shares to the Company pursuant to the terms of
the Retirement Agreement.
/s/ XXXXXX X. XXXXXXXX
----------------------
Xxxxxx X. Xxxxxxxx
28 January 1997
---------------
Date
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[JAYCOR LETTERHEAD]
IRREVOCABLE PROXY
TO VOTE STOCK OF
JAYCOR, INC.
Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), a shareholder of JAYCOR, INC., a
California corporation ("JAYCOR"), hereby irrevocably (to the full extent
permitted by Section 705 of the California General Corporation Law (the "CGCL")
appoints JAYCOR's President and Secretary to each be the sole and exclusive
attorney and proxy of Xxxxxxxx, with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to the full
extent that Xxxxxxxx is entitled to do so) with respect to all of the shares of
capital stock of JAYCOR beneficially owned by Xxxxxxxx listed below and any and
all replacement or successor shares or securities of JAYCOR or any successor
entity issued or issuable in respect thereof on or after the date hereof
whether by stock dividend, reorganization, merger or otherwise (collectively,
the "Shares") in accordance with the terms of this Proxy. Upon Xxxxxxxx'x
execution of this Proxy, any and all prior proxies given by Xxxxxxxx with
respect to any of the Shares are hereby expressly revoked and Xxxxxxxx agrees
not to grant any subsequent proxies with respect to the Shares.
This Proxy is granted pursuant to an obligation by JAYCOR to
repurchase and Xxxxxxxx to sell to the Company all of the Shares set forth in
Section 3 of that certain Retirement Agreement dated of even date hereof. This
Proxy is coupled with an interest and is irrevocable.
The attorneys and proxies named above, and each of them are hereby
authorized and empowered by Xxxxxxxx, at any time prior to the Expiration Date,
to act as Xxxxxxxx'x attorney and proxy to vote the Shares, and to exercise all
voting and other rights of Xxxxxxxx with respect to the Shares (including
without limitation, the power to execute and deliver written consents pursuant
to Section 603 of the CGCL) at every annual, special or adjourned meeting to
the shareholders of JAYCOR and in every written consent in lieu of any
shareholders' meeting.
All authority herein conferred shall survive the death or incapacity
of Xxxxxxxx and any obligation of Xxxxxxxx hereunder shall be binding upon the
heirs, personal representatives, successors and assigns of Xxxxxxxx.
Certificate Number
Number of Shares Class Shareholder
------------ --------- -------- --------------
822 200,000 Common Xxxxxx X. Xxxxxxxx
Date: 28 January 1997 /s/ XXXXXX X. XXXXXXXX
--------------- ------------------------
Xxxxxx X. Xxxxxxxx
