EXHIBIT 10.45
MRS TECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
AGREEMENT dated as of February 13, 1998 between MRS Technology, Inc., a
Massachusetts corporation with its principal place of business at 00 Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 (the "Company"), and Xxxx X.
Xxxxxxxx, an individual residing at 0000 Xxxxxxxxx Xxxxx, Xxxxx, Xxxxxxxx
00000 (the "Executive").
1. FREEDOM TO CONTRACT. The Executive represents that he is free to enter
into this Agreement, that he has not made and will not make any agreements in
conflict with this Agreement, and that he will not disclose to the Company, or
use for the Company's benefit, any trade secrets or confidential information
which is the property of any other party.
2. EMPLOYMENT. The Company agrees to employ the Executive as Chief Executive
Officer of the Company and Chairman of the Company's Board of Directors. The
Executive agrees, while employed hereunder, to perform his duties faithfully
and to the best of his ability. The Executive shall have all of the authority
and responsibility customarily accorded to his titles. The Executive shall
work out of the Company's offices in Colorado.
3. TERM. The employment of the Executive hereunder shall begin on the date
hereof and shall continue through the occurrence of a Termination Date, as
defined in Section 6 (the "Term").
4. COMPENSATION
4.1 Base Salary. As compensation for the Executive's services during the
Term, the Company shall pay the Executive an annual Base Salary at the rate of
$190,000 per year, payable with the same frequency as salaries paid to other
senior executive officers. Prior to each December 31 during the Term,
beginning December 31, 1998, the Compensation Committee of the Board of
Directors (the "Committee") shall undertake an evaluation of the services of
the Executive during the year then ended. The Committee shall consider the
performance of the Executive, his contribution to the success of the Company,
and other factors and shall fix an annual Base Salary to be paid to the
Executive during the ensuing year.
4.2 Incentive Compensation. For each year, the Committee will establish an
incentive compensation program.
For the year ending December 31, 1998, incentive compensation will be based on
the raising of not less that $4,000,000 in cash for the Company (including
without limitation equity, debt, sales revenue derived from the sales of
existing inventory and licensing revenue other than that associated with the
sales and service of Panel Printers). The Executive shall be entitled to
incentive compensation equal to 40% of his Base Salary if and only if the
target is reached or exceeded.
For the year 1999 and each subsequent year, incentive compensation will be
based on the achievement of performance criteria determined by the Committee
after discussion with the Executive. Within a reasonable period after
operating results have been determined for each year, payment of the incentive
compensation for the immediately preceding year shall be made in cash, subject
to applicable employment and withholding taxes, promptly after calculation.
However, no bonus shall be paid to the Executive where the Executive has been
terminated as a result of a Discharge for Cause prior to the date of payment.
If the Executive's termination is other than as a result of a Discharge for
Cause, the Executive shall be paid a prorata portion of his bonus.
4.3. Disability. If the Executive is prevented by disability, for a period
of six consecutive months, from continuing fully to perform his obligations
hereunder, the Executive shall perform his obligations hereunder to the extent
he is able and the Company may reduce his annual base salary to reflect the
extent of the disability; provided that in no event may such rate, when added
to payments received by him under any disability or qualified retirement or
pension plan to which the Company contributes or has contributed, be less than
one-half of the annual base salary in effect at the Executive's disability,
disability shall be determined by the Board of Directors of the Company based
upon a report from a physician who shall have examined the Executive. If the
Executive claims disability, the Executive agrees to submit to a physical
examination at any reasonable time or times by a qualified physician
designated by the Company and reasonably acceptable to the Executive.
5. EQUITY. As of the date of this Agreement, the Company will grant to the
Executive, as an incentive for joining the Company as an employee and his
entering into this Agreement, options to purchase 400,000 shares of the
Company's common stock. These stock options will be issued with an exercise
price equal to the fair market value of the Company's common stock on February
13, 1998, and will vest 50,000 shares on August 13, 1998, with 10,000 shares
vesting per month for the 35 consecutive months thereafter; provided, however,
that in the event the Executive's employment with the Company is terminated at
any time after the first anniversary of the date of grant or award, on the
date of termination of the Executive's employment he shall immediately be
vested in that number of stock options as equal to the unvested portion of
such stock options that would otherwise vest on the next scheduled monthly
vesting date [plus the unvested portion of such stock options that would have
vested during the term of any severance or similar payment arrangements if the
Executive were still employed by the Company during the period of time while
severance payments, if any, are being made to the Executive.] Stock options
granted under this Section 5 shall be subject to the same risks as those
facing other shareholders of the Company, including without limitation, the
possibility of dilution in the event that the Company issues additional shares
of common stock. The terms of the Executive's stock options shall provide
that they will vest immediately in the event of either a change in control of
the Company or the attainment of a $10.00 per share or higher closing price
for the Company's common stock for a period of 60 consecutive trading days.
The Executive shall also be eligible for future grants of options and/or
restricted stock, as a member of the Company's executive management team.
6. EMPLOYEE BENEFITS. The Executive shall participate in all "employee
pension benefit plans" and in all "employee welfare benefit plans" (each as
defined in the Employee Retirement Income Security Act of 1974) and all other
benefits plans available to any of the Company's officers maintained by the
Company, on a basis no less advantageous to the Executive than the basis on
which similarly situated executives participate (collectively, "Benefits").
Without limiting the generality of the foregoing, the Executive shall be
entitled to the following Benefits:
6.1 Medical Insurance. The Executive and the Executive's dependents shall be
covered by medical insurance comparable in scope to the coverage afforded on
the date hereof, with only such contribution by the Executive toward the cost
of such insurance as may be required from time to time from other similarly
situated executive employees.
6.2 Expenses. The Company shall reimburse the Executive from time to time
for the reasonable expenses incurred by the Executive in connection with the
performance of his obligations hereunder, subject to compliance with
reasonable documentation procedures.
6.3 Holidays and Vacations. The Executive shall be entitled to legal
holidays and to annual paid vacation of up to four weeks, all in accordance
with the Company's holiday and vacation policy.
6.4 Pension Plans. The Executive shall participate in such pension and
retirement plans as are made available by the Company to any of its
management.
6.5 Legal Fees. The Company shall reimburse the Executive for legal fees and
expenses he incurs in negotiating and documenting his employment and equity
arrangement with the Company in the amount of the first $3,000 for such fees
and expenses, plus 50% of the amount in excess of $3,000, subject to a maximum
reimbursement of $5,000.
6.6 Relocation. The Company shall not require the Executive to relocate from
the Company's offices in Niwot, Colorado. In the event that the Executive
does relocate (for example, to the Company's offices in Massachusetts), the
Company shall reimburse the Executive for reasonable relocation expenses, and,
where necessary, will gross up the Executive's compensation to account for
taxes payable by him with respect to the reasonable relocation expenses paid
by the Company.
6.7 Travel. The Company acknowledges and agrees that the Executive may
determine the class of airline and hotel which all members of management,
including the Executive, shall use while on Company business.
7. TERMINATION DATE; CONSEQUENCES FOR COMPENSATION AND BENEFITS.
7.1 Definition of Termination Date. The first to occur of the following
shall be the Termination Date:
7.1.1. The date on which the Executive becomes entitled to receive long-term
or short-term disability payments by reason of total and permanent disability;
7.1.2. The Executive's death;
7.1.3. Voluntary resignation after one of the following events shall have
occurred, which event shall be specified to the Company by the Executive at
the time of resignation: (1) any change which limits or reduces the
responsibility, authority, title, power or duty of the Executive; (2) any
reduction in Executive's Base Salary without the Executive's prior written
consent; (3) any relocation of the Executive from the Company's offices in
Niwot, Colorado mandated by the Company's Board of Directors; (4) any failure
by the Company to continue in effect any Benefit, or any action by the Company
which would adversely affect the Executive's participation in or reduce the
Executive's benefit under any Benefit, without the Executive's prior written
consent; or (5) any other material breach by the Company of any provision of
this Agreement resulting from action by the Board of Directors, which breach
continues for 10 business days following notice by the Executive to the
Company setting forth the nature of the breach ("Resignation with Reason");
7.1.4. Voluntary resignation by the Executive which does not constitute
Resignation with Reason as defined in Section 7.1.3 ("General Resignation");
7.1.5. Discharge of the Executive by the Company after one of the following
events shall have occurred, which event shall be specified to the Executive by
the Company at the time of discharge: a material act by the Executive against
the Company involving moral turpitude; material willful misconduct in the
discharge of his duties; conviction of the Executive or the entry of a plea of
guilty or nolo contendere by the Executive to any crime involving moral
turpitude; or any material breach of any term of this Agreement by the
Executive which is not cured within 30 days after written notice from the
Board of Directors of the Company to the Executive setting forth the nature of
the breach ("Discharge for Cause");
7.1.6. Discharge of the Executive by the Company not accompanied by a notice
of cause described in Section 7.1.5 ("General Discharge").
7.2. Consequences for Compensation and Benefits. If the Termination Date
occurs by reason of disability, death, General Resignation or Discharge for
Cause, the Company shall pay compensation to the Executive through the
Termination Date (including accrued vacation and a prorated portion of the
Executive's accrued bonus and incentive compensation) and shall pay to the
Executive all Benefits accrued through the Termination Date, payable in
accordance with the respective terms of the plans, practices and arrangements
under which the Benefits were accrued.
If the Termination Date occurs by reason of General Discharge or Resignation
with Reason, the Company shall pay to the Executive, in addition to the
amounts described in the preceding paragraph, an amount equal to one times the
Executive's annual Base Salary and Benefits; such amount shall not be reduced
by the receipt of Earned Income through subsequent employment and shall be
paid in two equal installments. The first installment shall be paid
immediately and the second installment shall be paid six months thereafter.
Receipt of Earned Income means receipt of wages or self-employment income,
whether from consulting or otherwise, from any source.
8. INDEMNIFICATION. The Company shall indemnify the Executive against all
loss, cost, liability and expense arising from the Executive's service to the
Company, whether as officer, director, employee, fiduciary of any employee
benefit plan or otherwise, upon terms at least as favorable to the Executive
as those provided by the Articles of Organization and By-laws of the Company
on the date hereof.
9. AGREEMENT NOT TO COMPETE. The Executive agrees that, while serving as an
Executive of the Company, he will not serve as an employee or director of any
business entity other than the Company, but may serve as a director of a
reasonable number of not-for-profit corporations and may devote a reasonable
amount of time to charitable and community service. For the period beginning
on the Termination Date and continuing for six months, the Executive shall not
directly or indirectly, engage in, or enter into or participate in, at any
place within the rest of the United States any Competitive Business (as
defined below), either as an individual for his own account, or as a partner
or a joint venture, or as an officer, director, independent contractor or
holder of more than a 1% equity interest in any other person, firm,
partnership or corporation, or as an employee, agent or salesperson for any
person.
For purposes of this Section 9: the term "Competitive Business" shall mean any
business or commercial activity that directly competes with or is reasonably
likely to directly compete with or adversely affect any part or area of the
Company's current business or any proposed business relating to
microlithography which has been actively considered, and not rejected by, the
Company's Board of Directors at any time throughout the entire period of the
Executive's employment by the Company.
10. AGREEMENT NOT TO SOLICIT OR INTERFERE.
(a) During the Executive's employment by the Company, the Executive will
comply with all policies and rules that may from time to time be established
by the Company, and will not engage directly or indirectly in any business or
enterprise which in any way is competitive or conflicting with the interests
or business of the Company.
(b) During the six-month period after termination of employment by the
Company, regardless of the reason or absence of reason for termination of
employment (such period not to include any period(s) of violation of this
Section 10(b) or period(s) of time required for litigation to enforce it
provisions), the Executive shall not, directly or indirectly: (i) solicit,
service, accept orders from, or otherwise have business contact with any
person or entity who has, within the three-year period immediately prior to
such termination of Executive's employment, been a customer (including,
without limitation, a reseller and/or end user of products) of the Company, if
such contact could directly or indirectly divert business from or adversely
affect the business of the Company; (ii) interfere with the contractual
relations between the Company and any of its employees; or (iii) employ or
cause to be employed in any capacity, or retain or cause to be retained as a
consultant, any person who was employed by the Company at any time during the
six-month period ended on the date of termination of the Executive's
employment.
(c) If at any time any of the provisions of this Section 10 shall be deemed
invalid or unenforceable or are prohibited by the laws of the state or place
where they are to be performed or enforced, by reason of being vague or
unreasonable as to duration or geographic scope or scope of activities
restricted, or for any other reason, such provisions shall be considered
divisible and shall become and be immediately amended to include only such
restrictions and to such extent as shall be deemed to be reasonable and
enforceable by the court or other body having jurisdiction over this
Agreement; and the Company and the Executive agree that the provisions of this
Section 10, as so amended, shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
11. CONFIDENTIAL INFORMATION.
(a) The Executive recognizes and acknowledges that during the course of his
employment, he may have exposure to and develop special knowledge and skills
concerning certain of the Company's Confidential Information (as defined
below) vital to the Company's ability to compete successfully in its business.
The Executive further acknowledges that it is vital to the Company's
legitimate business interests that the confidentiality of such Confidential
Information be preserved, and that use or reliance on such Confidential
Information by or on behalf of any other business or commercial activity in
competition with the Company could result in irreparable harm to the Company.
The Executive further acknowledges that the Confidential Information is a
valuable, special and unique asset of the Company's business, and that the
Confidential Information is and shall remain the exclusive property of the
Company and nothing in this Agreement shall be construed as a grant to the
Executive of any rights, title or interest in the Confidential Information.
(b) Without the prior written consent of the Company, the Executive shall
not, at any time either during or subsequent to his employment by the Company,
use any Confidential Information (as defined below) for the benefit of anyone
other than the Company, or disclose any Confidential Information to any person
or party; the Executive may, however, use or disclose Confidential Information
as required by his obligations to the Company or as necessary or desirable
(and for the benefit of the Company) in connection with the Company's business
(but all such permitted uses and disclosures shall be made under circumstances
and conditions reasonably appropriate to preserve the Confidential Information
as the Company's confidential property). In particular, without limiting the
generality of the foregoing, the Executive shall not remove any Confidential
Information, however embodied, from the Company's premises, facilities or
place of business, except as required in the course of employment by the
Company.
(c) After the term of the Executive's employment with the Company, the
foregoing restrictions shall not apply to Confidential Information which the
Executive can establish by competent written proof:
(i) was known, other than under binder of secrecy, to the Executive prior to
his employment by the Company; or
(ii) was subsequently obtained by the Executive, other than under binder of
secrecy, from a third party not acquiring the information under an obligation
of confidentiality from the disclosing party.
(d) The term "Confidential Information" includes all confidential or trade
secret proprietary information which is acquired by the Executive from the
Company, its other employees, its suppliers or customers, its agents or
consultants, or others, during his employment by the Company, and which
relates to the present or potential businesses and products of the Company, as
well as any other information as may be designated by the Company as
confidential. The term Confidential Information may relate, for example, to
Inventions (as defined below), trade secrets, computer software, research,
development, design, engineering, manufacturing, purchasing, supplier lists,
customer lists, price lists, accounting, profit margins, marketing or sales
volume information or strategic plans; may include information contained, for
example, in drawings, models, data, specifications, reports, compilations or
computer programs; and may be in the nature of unwritten knowledge or
technical or manufacturing know-how; but shall not in any event include any
information which becomes generally known or available to persons in the
business or industry of the Company other than as a result of acts or
omissions attributable to the Executive.
12. ARBITRATION. In the event that any party hereto has any claim under this
Agreement or other issues relating to the Executive's employment by the
Company, the party shall promptly notify each other party of such claim. If
within 30 days of the receipt of such notice of claim, the parties cannot
agree on a resolution of such claim, the parties agree to submit such dispute
to binding arbitration to be held in Boston, Massachusetts if initiated by the
Company and in Boulder, Colorado if initiated by the Executive under the rules
of the American Arbitration Association. Any such arbitration shall be
conducted by three arbitrators, one of whom shall be selected by the
Executive, one of whom shall be selected by the Company and one of whom shall
be selected by the arbitrators so selected. The expenses of any such
arbitration, including legal fees of the prevailing party, shall be paid by
the non-prevailing party, as determined by the final order of the arbitrators.
13. SPECIFIC ENFORCEMENT. Notwithstanding the provisions of Section 12, the
parties acknowledge that the Executive's breach of the provisions of Section
9, 10 or 11 of this Agreement will cause irreparable harm to the Company; it
is agreed and acknowledged that the remedy of damages will not be adequate for
the enforcement of such provisions and that such provisions may be enforced by
equitable relief, including injunctive relief or specific performance, which
relief shall be cumulative and in addition to any other relief to which the
Company may be entitled.
14. GOVERNING LAW. This Agreement shall be deemed a contract made and
performed in The Commonwealth of Massachusetts and shall be governed by the
laws of The Commonwealth of Massachusetts.
15. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement of the parties and may be altered or amended or any provision hereof
waived only by an agreement in writing signed by the party against whom
enforcement of any alteration, amendment, or waiver is sought. No waiver by
any party of any breach of this Agreement shall be considered as a waiver of
any subsequent breach.
16. BINDING OBLIGATIONS. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors and assigns and the Executive
and his personal representatives.
17. ASSIGNABILITY. Neither this Agreement nor any benefits payable to the
Executive hereunder shall be assigned, pledged, anticipated, or otherwise
alienated by the Executive, or subject to attachment or other legal process by
any creditor of the Executive, and notwithstanding any attempted assignment,
pledge, anticipation, alienation, attachment, or other legal process, any
benefit payable to the Executive hereunder shall be paid only to the Executive
or his estate.
IN WITNESS WHEREOF, the Company, by its officer hereunto duly authorized, and
the Executive have signed and sealed this Agreement as of the date first
written above.
MRS TECHNOLOGY, INC.
By: Xxxxxx X. Xxxxxxxxx
XXXX X. XXXXXXXX
MRS TECHNOLOGY, INC.
NON-PLAN STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") dated as of February 13, 1998
(the "Grant Date"), is by and between MRS Technology, Inc. (the "Company"), a
Massachusetts corporation and Xxxx X. Xxxxxxxx (the "Optionee"), an individual
presently residing at 0000 Xxxxxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000.
1. Optioned Shares. Subject to the terms and conditions set forth herein, the
Company hereby grants to the Optionee an option (the "Option") to purchase
from the Company all or any part of a total of 400,000 shares (the "Optioned
Shares") of the Company's Common Stock, $0.01 par value per share ("Common
Stock"). For purposes of the restrictions on transfer and repurchase rights
set forth herein, the term "Optioned Shares" shall include any securities
issued in respect of, in lieu of, or in exchange for the securities originally
covered by the Option.
2. Price. The per share purchase price payable for the Optioned Shares upon
exercise of the Option is $0.96875, which is, in accordance with the Company's
policy, the price of the Company's Common Stock at the close of the market on
the date prior to the grant.
3. Termination of Option. The Option shall terminate on the earlier of (a)
the 10th anniversary of the Grant Date and (b) if the Optionee's employment
ends for any reason, or the Optionee's employer is no longer the Company or a
subsidiary (as defined in Section 424 of the Internal Revenue Code of 1986
(the "Code")), the applicable date determined from the following table:
Event Causing Termination Date
(i) death of employee one year thereafter
(ii) total and permanent disability of employee within the meaning ofone year
thereafter Section 22(e)(3) of the Code
(iii) termination of employment other 10th anniversary of the than by reason
of (i) or (ii) above Grant Date
Military or sick leave shall not be deemed a termination of employment
provided that it does not exceed the longer of 90 days or the period during
which the absent employee's reemployment rights are guaranteed by statute or
by contract.
4. Exercise of Option
4.1 Subject to Section 4.2 hereof, 50,000 shares of the Optioned Shares will
vest on August 13, 1998, with 10,000 shares of the remaining Optioned Shares
vesting per month for the 35 consecutive months thereafter.
4.2 In the event the Optionee's employment with the Company is terminated at
any time after the first anniversary of the Grant Date, on the date of
termination of the Optionee's employment he shall immediately be vested in
that number of Optioned Shares as equal to the unvested portion of such
Optioned Shares that would vest on the next scheduled monthly vesting date
[plus the unvested portion of such stock options that would have vested during
the term of any severance or similar payment arrangements if the Executive
were still employed by the Company during the period of time while severance
payments, if any, are being made to the Executive.] Further, the Optionee
shall be immediately vested in the event of either a change in control of the
Company or the attainment of a $10.00 per share or higher closing price for
the Company's common stock for a period of 60 consecutive trading days.
4.3. The Option may be exercised by the Optionee (or, in the event of the
Optionee's death, and to the extent described in this Section 4 and Section 3
above, by the Optionee's executor or administrator or any person or persons to
whom the Option may have been transferred by will or by the laws of descent
and distribution) as of the date first above written by giving written notice,
in the manner provided in Section 13, specifying the number of shares as to
which the Option is being exercised, accompanied by full payment for such
shares in the form of a certified or bank check payable to the Company, in an
amount equal to the option price of the shares to be purchased. Receipt by
the Company of such notice and payment shall constitute the exercise of the
Option or a part of it. Within 20 days, the Company shall deliver or cause to
be delivered to the Optionee a certificate or certificates for the number of
shares then being purchased by him or her. Such shares shall be fully paid
and nonassessable. The minimum number of shares with respect to which an
Option may be exercised, in whole or in part, at any time shall be the lesser
of 500 shares or the maximum number of shares available for purchase under the
Option at the time of exercise. If any law or applicable regulation of the
Securities and Exchange Commission or other public regulatory authority shall
require the Company or the Optionee to register or qualify under the
Securities Act of 1933, as amended (the "Securities Act"), any similar federal
statute then in force or any state law regulating the sale of securities, any
such shares with respect to which notice of intent to exercise shall have been
delivered to the Company or to take any other action in connection with such
shares, the delivery of the certificate or certificates for such shares shall
be postponed until completion of the necessary action, which the Company shall
take in good faith, without any delay and at its own expense.
4.4. Upon each exercise of the Option prior to the registration contemplated
by Section 6 hereof, the Optionee will be required to give a representation in
form satisfactory to counsel for the Company that the shares are being
purchased for investment and not with a view to distribution and that the
Optionee will make no transfers of the shares in violation of the Securities
Laws. The Company may, at its discretion, make a notation on any certificate
delivered upon exercise of the Option to the effect that the shares are
subject to any restrictions contained in this Plan and the shares represented
by the certificate may not be transferred except in accordance with any
transfer restrictions contained in the Company's Articles of Organization and
after receipt by the Company of an opinion of counsel satisfactory to it to
the effect that such transfer will not violate the Securities Laws, and may
issue "stop transfer" instructions to its transfer agent, if any, and make a
"stop transfer" notation on its books, as appropriate. Notwithstanding the
foregoing, the Company may release the Optionee from the investment
representation if the shares of the Stock subject to the Option have been
registered with the Securities and Exchange Commission.
5. Restrictions on Issue of Shares. Notwithstanding any other provision of
this Agreement, if, at any time, in the reasonable opinion of the Company the
issuance of shares of Stock covered by the exercise of any Option may
constitute a violation of law, then the Company may delay such issuance and
the delivery of a certificate for such shares until (i) approval shall have
been obtained from such governmental agencies, other than the Securities and
Exchange Commission, as may be required under any applicable law, rule, or
regulation; and (ii) in the case where such issuance would constitute a
violation of a law administered by or a regulation of the Securities and
Exchange Commission, one of the following conditions shall have been
satisfied:
(a) the shares with respect to which such Option has been exercised are at the
time of the issue of such shares effectively registered under the Securities
Act; or
(b) a no action letter in form and substance reasonably satisfactory to the
Company with respect to the issuance of such shares shall have been obtained
by the Company from the Securities Exchange Commission.
The Company shall make all reasonable efforts to bring about the occurrence of
said events.
6. Registration. The Company shall register under the Securities Act or other
applicable statutes the Optioned Shares no later than six months from the
Grant Date. The Company shall take such action at its own expense. The
Company may require from each Option holder, or each holder of shares of Stock
acquired pursuant to the Plan, such information in writing for use in any
registration statement, prospectus, preliminary prospectus or offering
circular as is reasonably necessary for such purpose and may require
reasonable indemnity to the Company and its officers and directors from such
holder against all losses, claims, damage and liabilities arising from such
use of the information so furnished caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.
7. Restriction Against Transfer of Option. During the lifetime of the
Optionee, the Option may be exercised only by the Optionee (or, in the event
of legal incapacity or incompetency, the Optionee's guardian or legal
representative). The Option and all rights and privileges conferred hereby
may not be transferred, assigned, pledged, or hypothecated (whether by
operation of law or otherwise) except by will or by the laws of descent and
distribution, and shall not be subject to execution, attachment, or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of the Option or any right or privilege conferred hereby,
contrary to the foregoing, or upon the sale or levy or any attachment or
similar process upon the rights and privileges conferred hereby, the Option
shall thereupon terminate and become null and void.
8. Capital Changes
8.1 If the Company effects a subdivision or consolidation of shares or other
capital readjustment, the payment of a stock dividend, or other increase or
reduction of the number of shares of the Common Stock outstanding, without
receiving compensation therefor in money, services, or property, then the
number, class, and per-share price of shares of stock subject to the Option
shall be appropriately adjusted in such a manner as to entitle the Optionee to
receive upon exercise of the Option, for the same aggregate cash
consideration, the same total number and class of shares that the owner of an
equal number of outstanding shares of Common Stock would own as a result of
the event requiring the adjustment.
8.2. Adjustments other than under Section 8.4 of this Agreement shall be
determined by the Board or the Committee and such determinations shall be
conclusive. The Board and the Committee shall have the discretion and power
in any such event to determine and to make effective provision for
acceleration of the time or times at which the Option or any portion thereof
shall become exercisable. No fractional shares of Common Stock shall be
issued on account of any adjustment specified above.
8.3. The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, or upon the exercise of rights
or warrants to subscribe therefore, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
or other increase or decrease in such shares affected without receipt of
consideration by the Company, shall affect, and an adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock then subject to the Option.
8.4. If the Company is a party to a reorganization or merger with one or more
other corporations and the Company is the surviving or resulting corporation,
after the effective time of such transaction the Option shall remain
outstanding, and upon exercise in accordance with its terms, the Optionee
shall be entitled to receive, instead of the shares of Common Stock otherwise
deliverable upon such exercise, shares of stock or other securities equivalent
in value to those that the Optionee would have received if the Option had been
so exercised prior to such transaction and no disposition thereof had
subsequently been made. If the Company consolidates with or into one or more
other corporations, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets to another corporation
(individually or collectively, as the case may be, a "Transaction"), in any
such event while the Option is outstanding, then the Optionee shall be
immediately and 100% vested in any and all unexercised Optioned Shares and
shall have the right to exercise the Option, notwithstanding any other
provision of this Agreement to the contrary. The Optionee shall be provided
with 30 days written notice of such Transaction.
9. Reservation of Shares. The Company shall at all times during the term of
this Agreement reserve and keep available such number of shares of the Common
Stock as will be sufficient to satisfy the requirements of this Agreement and
shall pay all fees and expenses necessarily incurred by the Company in
connection therewith.
10. Limitation of Rights in Option Shares. The Optionee shall not be deemed
for any purpose to be a stockholder of the Company with respect to any of the
Option Shares, except to the extent that the Option shall have been exercised
with respect thereto and in addition thereto a stock certificate shall have
been issued therefor and delivered to the Optionee. Any stock issued pursuant
to the Option shall be subject to all restrictions upon the transfer thereof
that may now or hereafter be imposed by the Articles of Organization, and the
By-laws of the Company.
11. Power of Company. The existence of the Option shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations, or other changes in
the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of Common Stock, or any issue of
bonds debentures, or preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
12. Withholding. The Company's obligation to deliver shares upon the exercise
of any Option shall be subject to the Optionee's satisfaction of all
applicable tax withholding requirements.
13. Notices and Other Communications. Except as otherwise provided herein,
any communication or notice required or permitted to be given under this
Agreement shall be effective if in writing and if delivered or sent by
certified or registered mail, return receipt requested, (a) if to the Company,
at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 marked "Attention
Secretary" or to such other person as the Company may specify, and (b) if to
the Optionee, to the address set forth on the first page of this Agreement or
such other address, in each case, as the addressee shall last have furnished
to the communicating party.
14. Characterization of Option for Tax Purposes. The Option is intended to be
treated as a "nonqualified stock option" rather than an "incentive stock
option" under the Internal Revenue Code of 1986, as amended and is not issued
under any stock option plan of the Company.
15. Disclaimer of Rights. No provision in this Agreement shall be construed
to confer upon the Optionee the right to remain in the employ of the Company,
interfere in any way with the right and authority of the Company either to
increase or decrease the compensation of the Optionee at any time, or to
terminate the employment or any other relationship between the Optionee and
the Company.
16. Governing Law. This Agreement shall be governed by and interpreted and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts (without reference to principles of conflicts or choice of law).
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
MRS TECHNOLOGY, INC.
By: Xxxxxx X. Xxxxxxxxx
By: Xxxx X. Xxxxxxxx, Optionee
