EXHIBIT 10.2
XXXXXX TECHNOLOGIES, INC.
INDEPENDENT CONSULTANT AGREEMENT
-------------------------------------------------------------------------------
CONSULTANT NAME AND ADDRESS: CONSULTANT PHONE:
Xxxxx Xxxxxx CONSULTANT FAX:
DTI CONTACT PERSON:
-------------------------------------------------------------------------------
THIS INDEPENDENT CONSULTANT AGREEMENT (the "Agreement") is made effective upon
the termination of the Employment Agreement dated September 20, 2002 between
Xxxxx Xxxxxx and Xxxxxx Technologies, Inc. (the "Effective Date") by and between
Xxxxxx Technologies, Inc., a Delaware corporation located at 000 Xxxxx Xxxxx
Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 ("DTI"), and the "Consultant"
identified above. For purposes hereof, DTI and Consultant may collectively be
referred to as the "Parties".
BACKGROUND INFORMATION
A. WHEREAS, DTI desires to contract for certain services as described on
the attached Schedule A from Consultant pursuant to the terms and
conditions of this Agreement; and
B. WHEREAS, Consultant desires to provide consulting services to DTI, upon
the terms and subject to the conditions of this Agreement.
PROVISIONS
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein
contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. SERVICES, COMPENSATION, WARRANTY, REPRESENTATION.
1.1 Consultant agrees to provide those consulting services to DTI as set
forth on the attached Schedule A (the "Services") and in accordance
with the provisions of this Agreement.
1.2 DTI will pay Consultant $13,500 per month on the 1st day of each
consecutive month during the term of this Agreement as set forth in
Section 8.1.
1.3 DTI will pay those expenses of Consultant set forth on Schedule A which
are incurred in connection with Consultant's delivery of Services
hereunder, provided such expenses are approved in advance by DTI.
Consultant shall submit monthly expense reports and deliver to DTI
copies of all expense receipts. In addition, Consultant agrees to
provide DTI with applicable tax forms upon DTI's request.
1.4 Consultant shall be eligible for the long term incentive compensation
plan ("LTIP") as described in Schedule C to this Agreement.
Consultant's interest in the LTIP shall be vested 25% at grant and the
remaining 75% shall vest ratably on a monthly basis over a 3 year
period and for six months after the greater of, the length of this
Agreement or any similar agreement reached to extend the duration of
the consulting period ("Extension"). Upon termination or expiration of
this Agreement or any Extension, any LTIP interest vested in accordance
with this Agreement shall, at the option of the Company, either be (i)
cashed out by DTI based upon the value of DTI as of the date of
termination as determined by independent appraisal or (ii) retained by
the Consultant and paid out pursuant to the terms of the LTIP on the
same basis as it would have been paid had the Consultant's Agreement or
Extension not terminated. In the event (i) a Payout Event (as defined
in the LTIP) occurs and (ii) this Agreement or an Extension is
terminated or not extended in anticipation of or as a result of a
Change of Control (as defined in the LTIP), then the Consultant's
remaining unvested portion of the plan, if any, shall immediately vest
in full. The Consultant's Participation Percentage (as defined in the
LTIP) shall be 15%. Upon termination or expiration of
this Agreement or any Extension, Consultant's stock options shall
remain exercisable for one year from the termination or expiration
date.
1.5 Consultant warrants that the Services to be provided under this
Agreement shall be performed by consultant in a professional manner
conforming to generally accepted industry standards and practices.
Consultant represents and warrants to DTI that Consultant is fully
empowered to enter and perform Consultant's obligations under this
Agreement. Consultant further warrants that Consultant is under no
restrictive covenants to any person or entity that will be violated by
entering into and performing this Agreement. Consultant agrees that
this Agreement constitutes the valid and legally binding obligation of
Consultant enforceable in accordance with its terms.
2. STATUS OF CONSULTANT. In performing the Services, nothing in this
Agreement shall be construed to create the relationship of
employer-employee, principal-agent or master-servant, either expressed
or implied. Further, the relationship between the Parties is that of
contract, Consultant being an independent contractor, free from
interference or control by DTI in the performance of Services, subject
only to the terms of this Agreement. Neither DTI nor Consultant has the
authority to bind or incur any obligation for the other, and each
agrees that Consultant will not hold itself out to any third party as
having, or act toward any third party in any manner which would suggest
that they have, any such authority.
3. TAX AND INSURANCE. Consultant acknowledges that, as an independent
contractor, Consultant is not covered by DTI's workers' or unemployment
compensation insurance. Additionally, Consultant agrees that no
withholding will be made by DTI for any Federal, state, local, Social
Security, Medicare or other taxes (for any governmental or other
agency) from any amounts paid to Consultant by DTI under this
Agreement. Consultant further agrees to be solely and personally
responsible for the payment of all such taxes from the compensation or
other remuneration paid Consultant under this Agreement.
4. DEFINITION OF CONFIDENTIAL INFORMATION.
4.1 For purposes of this Agreement, the term "Confidential Information"
means all of the following materials and information (whether or not
reduced to writing and whether or not patentable or protectible by
copyright) which Consultant receives or receives access to in
connection with its providing Services to DTI:
(a) Any information related to the business, marketing, marketing
programs, customer lists, leads, sales and financial
information and strategies of DTI;
(b) Computer software, copyrights, and related documentation,
Developments (defined in Section 5), technical data,
specifications, designs, concepts, discoveries, improvements,
product plans, research and development, and all existing and
future products and technology developed or derived therefrom;
(c) Any information or materials received by DTI from a third
party which DTI is under a covenant to maintain its
confidentiality, provided DTI notifies Consultant of its
obligation; and
(d) Any other materials or information related to the business or
activities of DTI which are not generally known to others
engaged in similar businesses or activities.
4.2 Failure to xxxx any of the Confidential Information as proprietary or
secret shall not affect its status as part of the Confidential
Information under the terms of this Agreement.
5. TREATMENT OF INFORMATION.
5.1 Consultant acknowledges that, as a result of its providing Services to
DTI, Consultant will have access to and may be making use of, DTI's
Confidential Information. Consultant also agrees that all software and
related documentation of DTI is deemed a valuable trade secret of DTI.
Consultant agrees that all of such Confidential Information:
(a) Shall not be distributed, disclosed or disseminated in any way
or form by Consultant to any third party except with the prior
written permission of DTI;
-2-
(b) Shall be treated by Consultant with the same degree of care to
avoid disclosure to any third party as is used with respect to
Consultant's own information of like importance which is to be
kept secret, but no less than a reasonable amount of care
under the circumstances; and
(c) Shall not be used by Consultant for Consultant's own purposes
except as otherwise expressly stated herein, without the
express prior written permission of DTI.
5.2 Consultant agrees that all right, title and interest in any
Confidential Information and any changes, modification, enhancements or
derivative works therefrom shall be and remain the exclusive property
of DTI. All notes, data, tapes, disks, reference items, memoranda,
records, apparatus and other materials in any way relating to any of
the Confidential Information or to DTI's business shall belong
exclusively to DTI.
5.3 The Parties agree that all Services (and all resulting work products)
performed hereunder shall be work-for-hire for the benefit of DTI.
Consultant hereby grants, transfers and assigns to DTI all of
Consultant's rights, title and interest, if any, in any and all
Developments, including rights to translation and reproductions in all
forms or formats and the copyrights and patent rights thereto, if any,
and Consultant agrees that DTI may copyright said materials in DTI's
name and secure renewal, reissues and extensions of such copyrights for
such periods of time as the law may permit. "Developments" is defined
as any idea, invention, process, design, concept, or useful article
(whether the design is ornamental or otherwise), computer program,
documentation, literary work, audiovisual work and any other work of
authorship, hereafter expressed, made or conceived in the scope of
Consultant's employment or engagement and solely or jointly by
Consultant during Consultant's engagement whether or not subject to
patent, copyright or other forms of protection and including trade
secrets, know-how and software techniques. During and after the term of
this Agreement, Consultant will do whatever is requested by DTI, at its
expense, to transfer all Developments to DTI and to sign documents or
otherwise assist in obtaining, confirming, and enforcing DTI's rights
in the Developments.
5.4 Consultant acknowledges that the copyrights in Developments created by
Consultant belong to DTI by operation of law, or may belong to a party
engaged by DTI by operation of law pursuant to a works for hire
contract between DTI and such contracted party. To the extent the
copyrights in such works may not be owned by DTI or such contracted
party by operation of law, Consultant hereby assigns to DTI or such
contracted party, as the case may be, all copyrights (if any)
Consultant may have in Developments.
5.5 Items not assigned by this Agreement must be listed and described on
the attached Schedule of Separate Works attached hereto as Schedule B.
Consultant agrees not to include any party of such items in the
materials Consultant prepares for DTI unless and until such items are
licensed or assigned to DTI under separate written agreement.
5.6 At all times hereafter, Consultant agrees promptly to disclose to DTI
all Developments, to execute separate written assignments to DTI at
DTI's request, and to assist DTI in obtaining patents or copyrights in
the U.S. and in other countries, on any Developments assigned to DTI
that DTI, in its sole discretion, seeks to patent or copyright.
Consultant also agrees to sign all documents, and do all things
necessary to obtain such patents or copyrights, to further assign them
to DTI, and to reasonably protect them and DTI against infringement by
other parties at DTI expense with DTI prior approval.
5.7 Consultant irrevocably appoints any DTI-selected designee to act, at
all time hereafter, as his agent and attorney-in-fact to perform all
reasonable acts to obtain patents and/or copyrights related to
Developments as defined and required by this Agreement if Consultant
(i) refuses to perform those acts or (ii) is unavailable, within the
meaning of the United States Patent and Copyright laws. Consultant
expressly intends it that the foregoing power of attorney be coupled
with an interest.
5.8 Consultant shall keep complete, accurate, and authentic information and
records on all Developments in the manner and form reasonably requested
by DTI. Such information and records, and all copies thereof, shall be
the property of DTI as to any Developments assigned to DTI. Consultant
agrees to promptly surrender such information and records at the
request of DTI as to any Developments.
-3-
5.9 Consultant shall not disclose to DTI, use in DTI's business, or cause
DTI to use any information or material that is confidential to any
third party unless DTI has a written agreement with the third party
allowing DTI to receive and use the confidential information or
materials. Consultant will not incorporate into Consultant's work any
material that is subject to the copyrights of any third party unless
DTI has the right to copy and incorporate such copyrighted material.
6. NON-SOLICATION, PROTECTION OF TRADE SECRETS, CONFLICT OF INTEREST.
6.1 During the term of this Agreement, Consultant may learn Confidential
Information essential to the business and competitive position of DTI,
including, without limitation, customer information, business
strategies, financial information, employee information, source and
object codes, and other trade secrets that would unfairly disadvantage
DTI were Consultant to use or disclose such information in business
activities competitive with DTI. To protect DTI's Confidential
Information and its relationships with its employees, Consultant will
not, during the term of this Agreement and for one (1) year immediately
following its termination (or expiration, if applicable), either as an
individual on Consultant's own account or as a partner, employee,
agent, Consultant, officer, director, stockholder, or otherwise:
(a) Hire, solicit for hire, refer, or retain the services of any
DTI employee for any matter whatsoever, directly or
indirectly, during the period of time which said employee is
employed by DTI and for six (6) months thereafter; or
(b) Engage in, consult with, or accept employment from any
business in current or prospective competition with DTI where
such engagement, consultation, or employment is likely to
require Consultant to use or disclose Confidential
Information.
6.2 Consultant agrees to devote his primary efforts to the service of DTI
and the promotion of DTI's interests to the extent of the time
expectations in Schedule A. Consultant further agrees never to enter
into any relationship, and to immediately sever any existing
relationship, whether such relationship is one for monetary gain, or
not, that compromises Consultant's ability to act in the best interests
of DTI, or detracts from Consultant's ability to perform Consultant's
responsibilities and obligations.
7. REASONABLENESS OF RESTRICTIVE COVENANTS AND SEVERABILITY.
7.1 Consultant has carefully read and considered the provisions of Sections
5 and 6 of this Agreement, and having done so, agrees that the
restrictions in such sections are fair and reasonable and are
reasonably required for the protection of the interests of DTI.
7.2 The provisions of this Agreement are severable, and if any one or more
provisions is prohibited or otherwise unenforceable, in whole or in
part, in any jurisdiction, the remaining provisions of this Agreement,
including the remaining portion of any partially unenforceable
provision, shall be binding and enforceable to the extent enforceable
in such jurisdiction, and any such prohibition or unenforceability in
any such jurisdiction shall not invalidate or render unenforceable such
provisions) in any other jurisdiction.
8. TERM AND TERMINATION OF THE AGREEMENT.
8.1 The term of this Agreement shall commence as of the Effective Date and
shall remain in effect for a period of six (6) months. In the event of
a breach of this Agreement by either Party which is not cured within
fifteen (15) days of its receipt of written notice thereof, this
Agreement may be immediately terminated.
8.2 In the event of the termination or expiration of this Agreement, the
following provisions shall apply:
(a) Unless otherwise agreed upon in writing by the Parties,
Consultant shall cease performing Services and shall submit an
invoice for any expenses which may be due Consultant under
this Agreement as of the date of termination;
-4-
(b) Consultant shall deliver to DTI all Confidential Information
and materials and all records pertaining to DTI's business
operations and related to any work performed for DTI, all DTI
property, and any and all third party property, including
those materials referred to in Sections 4 and 5 of this
Agreement and any documents or media containing the names,
addresses, and other information with regard to customers or
potential customers of DTI, together with all copies thereof
and all notebooks, notes, reports and any other materials on
electronic or printed media, in Consultant's possession or
under Consultant's control and to certify in writing to DTI
that all of such materials have so been returned; and
(c) The Parties agree to cooperate fully and to provide promptly
all information necessary or useful relating hereto.
8.3 The duties and obligation of Sections 3, 4, 5, 6, 7, 8 and 9 of this
Agreement shall survive the termination of this Agreement. Consultant
will indemnify DTI for damages, liabilities and costs associated with
Consultant's breach of any of the provisions of this Agreement or the
intentional acts of Consultant.
9. MISCELLANEOUS.
9.1 All communications between the Parties with respect to any of the
provisions of this Agreement shall be in writing, and shall be sent by
personal delivery or by airmail, facsimile transmission or other
commercial means of rapid delivery, postage or costs of transmission
and delivery prepaid, to Consultant as set forth in the preamble of
this Agreement, or to DTI (attention DTI Contact Person with a copy to
Legal Department), until such time as either Party provides the other
not less than ten (10) days' prior written notice of a change of
address in accordance with these provisions.
9.2 This Agreement is based on the services of Consultant. No Services or
rights or obligations associated therewith may be assigned or
transferred by Consultant without the prior written consent of DTI. Any
attempt by Consultant to assign or transfer any of the rights, duties,
or obligations of this Agreement without DTI's written consent is void.
9.3 Consultant understands and agrees that DTI may suffer irreparable harm
in the event that Consultant breaches any of Consultant's obligations
under this Agreement. Accordingly, Consultant agrees that, in the event
of said breach, DTI, in addition to any other rights, remedies or
damages available to it at law or in equity, DTI may be entitled to a
temporary restraining order, preliminary injunction and permanent
injunction in order to prevent or to restrain any such breach by
Consultant.
9.4 Consultant represents that Consultant's performance of all the terms of
this Agreement and any Services to be rendered as an independent
contractor of DTI do not and shall not breach any fiduciary or other
duty or any covenant, agreement or understanding (including, without
limitation, any agreement relating to any proprietary information,
knowledge or data acquired by Consultant in confidence, trust or
otherwise prior to its performing consulting services for DTI) to which
Consultant is a party or by the terms of which Consultant may be bound.
Consultant covenants and agrees that Consultant shall not disclose to
DTI, or induce DTI to use, any such proprietary information, knowledge
or data belonging to any previous employer, contractor or others.
Consultant further covenants and agrees not to enter into any agreement
or understanding, either written or oral, in conflict with the
provisions of this Agreement.
9.5 This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Florida. Each of the parties submits to the
jurisdiction of any state or federal court sitting in Palm Beach
County, Florida, in any action or proceeding arising out of or relating
to this Agreement and agrees that all claims in respect of the action
or proceeding may be heard and determined by any such court. Each party
also agrees not to bring any action or proceeding arising out of or
relating to this Agreement in any other court. Each of the parties
waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other party with respect
thereto. Consultant agrees and consents to venue in Palm Beach County,
Florida and to the in personam jurisdiction of the aforementioned
courts.
-5-
9.6 This Agreement and the agreements referenced herein represent the sole
and entire agreement between the parties and supersedes any and all
prior agreements, negotiations, and discussions between the parties or
their respective counsel with respect to the subject matters covered in
this Agreement. The Parties acknowledge that each Party may have
additional rights and obligations as set forth in the Amended and
Restated Employment Agreement dated September 27, 2002. This Agreement
may be modified only by a writing signed by both parties.
9.7 If either party initiates proceedings for the other's breach of this
Agreement, the prevailing party shall recover attorneys' fees and
costs, including such fees and costs on any enforcement or appeal
proceedings.
9.8 This Agreement may be executed in two counterparts, each of which shall
constitute an original, but all of which together shall constitute one
and the same document.
9.9 The term "DTI" refers to Xxxxxx Technologies, Inc., a Delaware
corporation, any or all current or former affiliated corporations,
parent corporations, partnerships, divisions, related companies and
subsidiaries.
9.10 The term "Consultant" refers to the Consultant named above, the
Consultant's heirs, executors, guardians, administrators, successors,
and assigns, and each of them, jointly and severally.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date set forth below.
CONSULTANT: XXXXXX TECHNOLOGIES, INC.:
Sign /s/ Xxxxx Xxxxxx BY: /s/ Xxxxxx Xxxxxxxx
-------------------------------- -------------------------
Print: Xxxxx Xxxxxx NAME: Xxxxxx Xxxxxxxx
-------------------------------- ------------------------
Date: October 11, 2002 TITLE: Chief Financial Officer
------------------------------- -----------------------
DATE: October 11, 2002
------------------------
-6-
INDEPENDENT CONSULTANT AGREEMENT
SCHEDULE A
-----------------------------------------------------------------------------------------------------------------
- Post closing transition support as needed
DESCRIPTION OF SERVICES: - Support of aggregation strategy as needed
- Promote the companies attributes to institutional money
managers and industry analysts as needed
- Other responsibilities as defined by the BOD or agreed to
between the CEO and Consultant
-----------------------------------------------------------------------------------------------------------------
- 2 weeks per month (10 business days) for the term of the
ESTIMATED TIME COMMITMENT: Agreement (6 months)
-----------------------------------------------------------------------------------------------------------------
- $13,500 per month
RATES/FEES:
-----------------------------------------------------------------------------------------------------------------
- All reasonable business and travel expenses in the support
EXPENSES: of the Agreement, including travel to the Company's office in
Boca Raton when needed
-----------------------------------------------------------------------------------------------------------------
Consultant Signature: Xxxxxx Technologies, Inc.
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxx
-------------------------------- -----------------------------
By: Xxxxxx Xxxxxxxx
-------------------------
Date: October 11, 2002 Its: Chief Financial Officer
-------------------------- ------------------------
Date: October 11, 2002
-----------------------
-7-
SCHEDULE B
SCHEDULE OF SEPARATE WORKS
The following are works that are not assigned by the INDEPENDENT
CONSULTANT AGREEMENT, in which Consultant has any right, title or interest, and
which were conceived or written either wholly or in part by Consultant, prior to
or outside the scope of Consultant's engagement by DTI.
DESCRIPTION: (If none, enter the word "None")
None.
Indicate any item listed above that has been published, registered as a
copyright, or is or has been the subject of a patent application:
Indicate the name of such organization or third party that also has rights in
any of the listed items (such as former employers, partners, etc.):
The foregoing is complete and accurate to the best of Consultant's knowledge.
Consultant's Signature: /s/ Xxxxx Xxxxxx Date: October 11, 2002
-------------------------- ----------------
Consultant's Printed Name: Xxxxx Xxxxxx
-8-
SCHEDULE C
XXXXXX TECHNOLOGIES, INC.
LONG-TERM INCENTIVE COMPENSATION PLAN
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.01 Purpose. The purpose of the Xxxxxx Technologies, Inc.
Long-Term Incentive Compensation Plan is to attract and retain Employees and
provide appropriate incentive to other eligible Participants by providing
Participants with a long-term opportunity to share in the appreciation of the
Company's value.
1.02 Effective Date. This Plan shall become effective as of the
Closing Date as defined in the Asset Purchase Agreement among the Company,
Xxxxxx Solutions, Inc. and Abiliti Solutions, Inc., dated October 7, 2002.
ARTICLE II
DEFINITIONS
2.01 Definitions. For purposes of this Plan, the following terms
shall have the following meanings:
(a) "Board" shall mean the board of directors of the
Company. The Compensation Committee of the Board may exercise any
authority reserved to the Board under this Plan.
(b) "Common Stock" shall mean the Common Stock of the
Company.
(c) "Company" shall mean Xxxxxx Technologies, Inc., a
Delaware corporation.
(d) "Employee" shall mean an employee of the Company.
(e) "Enterprise Value" shall mean for purposes of the
calculation of the Payout Equity Pool, (i) in the case of a sale of
100% of the common stock, preferred stock and other equity securities
of the Company, the then fair market value of the securities or other
consideration paid for such equity securities and (ii) in the case of
any other transaction, the implied pre-tax value of the equity of the
Company in such transaction. In each case, the fair market value of
securities or other consideration or assets or implied value of the
equity of the Company shall be determined in good faith by the Board
without applying any discounts or premiums and without regard to the
amounts payable under this Plan.
(f) "Options" shall mean (i) the vested portion of any
stock options to acquire Common Stock or other capital securities of
the Company granted to each Participant as of or prior to the Effective
Date and held by such Participant at the time of a Payout Event, (ii)
the vested portion of any stock options to acquire Common Stock or
other capital securities of the Company granted to each Participant
after the Effective Date and held by such Participant at the time of a
Payout Event and which the Board has designated at grant to be
"Options" for purposes of the Plan, and (iii) all such stock options
described in (i) and (ii) above that would have been so held but for a
prior exercise of such stock option by or on behalf of the Participant.
(g) "Option Shares" shall mean the shares of Common Stock
or other capital securities of the Company underlying a Participant's
Options.
(h) "Option Value" shall mean, for any Participant, the
excess of (i) the aggregate value of all of that Participant's Option
Shares at the time of a Payout Event based upon the value attributable
to the Common Stock in connection with such Payout Event over (ii) the
aggregate exercise price of such Participant's Options.
-9-
(i) "Participant" shall mean, with respect to the Payout
Equity Pool, any Employee of the Company, individual, or specified
entity who is eligible to participate in such Payout Equity Pool, as
provided in Section 3.01.
(j) "Participation Percentage" shall mean, with respect
to a Participant's participation in the Payout Equity Pool, the
percentage assigned by the Board. The Participation Percentage assigned
to a Participant shall be communicated to the Participant in writing.
(k) "Payout Equity Pool" shall mean, with respect to a
Payout Event, the sum of (i) 15% of the excess of (A) the amount of the
Enterprise Value not exceeding $100,000,000 over (B) $20,000,000, and
(ii) 10% of the amount by which the Enterprise Value exceeds
$100,000,000. The Payout Equity Pool is notional only; no segregation
of securities or other assets is intended or required.
(l) "Payout Event" shall mean any (i) liquidation,
dissolution or winding up of the Company; (ii) a sale of all or
substantially all of the assets of the Company to a third party; (iii)
a merger or consolidation of the Company with or into another entity
pursuant to which (a) the capital stock of the Company outstanding
immediately prior to the merger or consolidation is converted into or
exchanged for securities of another entity or cash or property and (b)
the stockholders of the Company immediately prior to the merger or
consolidation own less than 50% of the combined voting stock of the
surviving company (or the parent of the surviving company) in the
merger or consolidation.; or (iv) a sale or other disposition in one
transaction or series of transactions, regardless of the form of the
transaction or of the form of consideration received, of 60% or more
(based on voting control) of the capital stock of the Company to a
single person or group (within the meaning of Rule 13d-5(b)(1)
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).
(m) "Plan" shall mean the Xxxxxx Technologies, Inc.
Long-Term Incentive Compensation Plan, as the same may be amended from
time to time.
(n) "Unallocated Equity Pool" shall mean that percentage
of the Payout Equity Pool that is not allocated to a specific
Participant at the time of a Payout Event.
ARTICLE III
OPERATION OF THE PROGRAM
3.01 Eligibility. The initial Participants shall be those
Employees, individuals or others as set forth in Exhibit A attached to this
Plan. Prior to a Payout Event, additional Participants may be designated by the
Board. The Unallocated Equity Pool, including any portion of the Payout Equity
Pool forfeited or otherwise terminated in accordance with Section 3.04 hereof,
will be distributed as determined by the Board; provided, however, that the
Board shall not be required to distribute any of the Unallocated Equity Pool.
The Board may, at the time of grant of a Plan interest to a Participant,
establish vesting, forfeiture and other terms and conditions applicable to such
grant.
3.02 Distribution of the Payout Equity Pool
(a) As soon as practicable after the occurrence of a
Payout Event, the Board shall determine and approve the Payout Equity
Pool as of the date of the Payout Event.
(b) As soon as practicable after the Board approves the
calculation of the Payout Equity Pool, the Company shall pay to each
Participant an amount equal to (i) the Payout Equity Pool multiplied by
(ii) that Participant's Participation Percentage, reduced by (iii) that
Participant's Option Value.
(c) Payment of the amounts described in (b) above may be
made in cash or in the same consideration as is paid to the Company's
stockholders in connection with the Payout Event. Such determination
shall be made by the Board. If some or all of such payment is paid in
property other than cash, the value of the portion of such distribution
or consideration not paid in cash shall be the
-10-
fair market value of such property as determined in good faith by the
Board of Directors of the Company. In the event that all or any portion
of payments made to Participants consists of consideration other than
cash or immediately tradable securities, the Company shall use
reasonable best efforts to make appropriate arrangements to ensure that
Participants have sufficient cash as part of the payout under the Plan
to pay taxes incurred with respect to such payments, or, if sufficient
cash is not available for distribution as part of the payout, the
Company shall use reasonable best efforts to distribute as part of the
payout publicly traded stock that has been registered under the
Securities Act of 1933, as amended, sufficient to pay such taxes.
3.03 Payments to Former Employees. If, at the time a payment is to
be made pursuant to Section 3.02 above, a Participant is no longer employed by
the Company, the Board shall determine, in its sole discretion, whether and
under what conditions payment shall be made to such former Employee; provided,
however, that the Board shall be entitled to make such determination at any time
prior to such payment; and provided, further, that if the Participant is a party
to an employment agreement with the Company, payment to such Participant shall
be made in accordance with the terms of such agreement.
3.04 Certain Adjustments. In the event of any acquisition, stock
issuance, reorganization, merger, consolidation or similar transaction involving
the Company, other than a Payout Event, that would have the effect of diluting
the percentage equity ownership (in the Company or its successor) of the
Company's then existing stockholders, or enlarging the rights of Participants
hereunder, the Board may make equitable and reasonable adjustments to the
Participation Percentages of Participants and/or the method of calculating the
Payout Equity Pool (including changes in the percentages set forth in Section
2.01(k)(i) and (ii)) in order to adjust the Payout Equity Pool to reflect
approximately the same level of dilution to the Payout Equity Pool as the
dilution of the Company's capital stock resulting from said transaction.
ARTICLE IV
AMENDMENT, TERMINATION AND CONVERSION
4.01 Amendment and Termination. The Board may, in its sole and
complete discretion, amend or terminate this Plan at any time and for any reason
that the Board deems necessary or appropriate. The termination or amendment of
the Plan shall not adversely affect any Participant's rights previously granted
under the Plan unless approved by Participants holding in the aggregate more
than one-half of the total Participation Percentages then outstanding. This Plan
shall terminate upon the payment of all amounts payable following Payout Event.
4.02 Plan Conversion. At any time after the adoption of this Plan,
the Board may elect to replace this Plan in its entirety by a new equity-based
compensation plan; provided, however, that any such new plan shall be
substantially equivalent to or more favorable than this Plan for Participants
from a financial and tax standpoint.
ARTICLE V
MISCELLANEOUS
5.01 Governing Law and Venue. All rights under this Plan shall be
governed and construed in accordance with the laws of the State of Florida. The
parties acknowledge that a substantial portion of negotiations, anticipated
performance and execution of this Agreement occurred or shall occur in Boca
Raton, Florida, therefore, each of the parties irrevocably and unconditionally
(a) agrees that any suit, action or legal proceeding arising out of or relating
to this Agreement must be brought in Boca Raton, Florida; (b) consents to the
jurisdiction of such court in any suit, action or proceeding; (c) waives any
objection which it may have to the laying of venue of any such suit, action or
proceeding in any of such courts; and (d) agrees that service of any court paper
may be effected on such party by mail, as provided in this Agreement, or in such
manner as may be provided under applicable laws or court rules in the State of
Florida.
-11-
5.02 Funding. All cash payments under the Plan will be made from
the general assets of the Company. Any shares issued in payment of the Company's
obligations under this Plan may be newly-issued shares or treasury shares. No
portion of the assets of the Company will be segregated or separately
identifiable as a source of payment under the Plan.
5.03 Withholding Taxes. The Company shall withhold from any
payment to be made to a Participant under the terms of the Plan an amount
sufficient to satisfy the Company's withholding obligation under any federal,
state or local withholding tax requirement applicable to such payment and shall
promptly remit the withheld amount to the appropriate taxing bodies.
5.04 Employment Rights. Nothing in this Plan shall confer upon any
Employee the right to continue in the employment of the Company or any affiliate
of the Company or affect any right which the Company or any affiliate of the
Company may have to terminate the employment of such Participant.
5.05 Successors. This Plan shall bind any corporation or
unincorporated entity or group of corporations or unincorporated entities which
acquires ownership, directly or indirectly, of all or substantially all of the
assets of the Company. In the case of any transaction in which a such a
successor would not by the foregoing provision or by operation of law be bound
by the Plan, the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Plan, in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
5.06 Captions. The captions of Articles and Sections of this Plan
are for the convenience of reference only and shall not control or affect the
meaning or construction of any of its provisions.
-12-
