EXHIBIT 99.(e)(20)
RETENTION BONUS AGREEMENT
This RETENTION BONUS AGREEMENT (this "Agreement") is made and entered into
as of this 23/rd/ day of May, 2000, by and between Protocol Systems, Inc., an
Oregon corporation (the "Company"), and Xxxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), with Xxxxx Xxxxx, Inc., a
New York corporation ("Parent"), and a wholly-owned Oregon subsidiary of Parent
("Merger Sub"), pursuant to which it is proposed that Parent acquire, through a
tender offer by Merger Sub and a subsequent merger of Merger Sub with the
Company, all the outstanding capital stock of the Company;
WHEREAS, the Executive is an executive employee of the Company whose
services and expertise Parent and Merger Sub consider essential to the success
of the Company after it becomes a wholly-owned subsidiary of Parent as a result
of the transactions contemplated by the Merger Agreement;
WHEREAS, in order to provide an incentive for the Executive to continue his
employment with the Company after its acquisition by Parent, the Company desires
to grant the Executive certain retention bonus upon the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Effectiveness. This Agreement shall become effective as of,
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and only upon, the consummation of the Offer (as such term is defined in the
Merger Agreement) in accordance with the Merger Agreement (the "Effective
Date"). In the event the Merger Agreement is terminated or if for any reason
the Offer is not made pursuant to the Merger Agreement or, if made, is not
consummated, this Agreement shall immediately become null and void in all
respects and the Company shall have no obligations hereunder.
Section 2. Payment of Retention Bonus.
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(a) Executive's Election. Within 14 days following the Effective
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Date, Executive shall notify the Company in writing of his or her election of
the payment methodology (i) or (ii), below. Executive shall not be permitted to
change his or her election, once made.
(i) First Payment Methodology.
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(A) First Installment. In the event that the Executive
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shall have been employed continuously by the Company during the period from
the date of this Agreement through the first annual anniversary of the
Effective Date, then the Company shall pay the Executive on the first
annual anniversary of the Effective Date, but in no event prior to January
1, 2001, an amount equal to 35% of the Executive's weighted average base
salary during the 12 month period ending on such first annual anniversary.
(B) Second Installment. In the event that the Executive
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shall have been employed continuously by the Company during the period from
the date of this Agreement through the second annual anniversary of the
Effective Date, then the Company shall pay the Executive on the second
annual anniversary of the Effective Date an amount equal to 35% of the
Executive's weighted average base salary during the 12 month period ending
on such second annual anniversary.
(ii) Second Payment Methodology
(A) First Installment. In the event that the Executive
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shall have been employed continuously by the Company during the period from
the date of this Agreement through the first sixth month anniversary of the
Effective Date, then the Company shall pay the Executive on the first sixth
month anniversary of the Effective Date, but in no event prior to January
1, 2001, an amount equal to 23% of the Executive's weighted average base
salary during the 6 month period ending on such first sixth month
anniversary.
(B) Second Installment. In the event that the Executive
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shall have been employed continuously by the Company during the period from
the date of this Agreement through the second annual anniversary of the
Effective Date, then the Company shall pay the Executive on the second
annual anniversary of the Effective Date an amount equal to 47% of the
Executive's weighted average base salary during the 18 month period ending
on such second annual anniversary.
Section 3. Miscellaneous.
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(a) Amendment; Waiver. This Agreement may only be amended by a
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written agreement signed by each of the parties hereto. No waiver of any Section
of provision of this Agreement will be valid unless in a writing signed by the
party to be charged and only to the extent set forth in that writing.
(b) Notices. All notices, demands and other communications called
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for, required by or under this Agreement shall be in writing and shall be
addressed to the Company at Corporate Offices, Attention: President, and to the
Executive at his principal residence as shown in the records of the Company or
to such other address as a party may subsequently designate by written notice to
the other parties.
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(c) Governing Law. This Agreement will be governed by, and construed
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and enforced in accordance with, the laws of the State of Oregon, except that if
any provision of this Agreement or any part of any such provision would be
illegal, invalid or enforceable under such laws in connection with a suit or
proceeding validity instituted in another jurisdiction, then the laws of such
other jurisdiction will govern insofar as is necessary to sustain the legality,
validity or enforceability of such provision or any part of such provision.
(d) Captions. Captions to the various Sections in this Agreement are
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for the convenience of the parties only and will not affect the meaning or
interpretation of this Agreement.
(e) Enforceability and Interpretation. It is the desire and intent of
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the parties to this Agreement that the terms and provisions contained in this
Agreement will be enforceable to the fullest extent permitted by law. If any
term or provision or the application thereof to any person or circumstances
will, to any extent, be construed to be illegal, invalid, or unenforceable, in
whole or in part, then such term or provision will be construed in a manner so
as to permit its enforceability under the applicable law to the fullest extent
permitted by such law. In any case, the remaining terms and provisions or the
application thereof to any person or circumstance, except those which have been
held illegal, invalid, or unenforceable, will remain in full force and effect.
(f) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which will be deemed an original, but together they will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with full force and effect as of the day and year first written above.
PROTOCOL SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
___________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxx
______________________________________
Name: Xxxxxx X. Xxxxx
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