Exhibit 10.9
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), dated as hereinafter indicated to
be effective on November 12, 2000 (the "Effective Date"), by and between
x-xxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxxx, Xx. ("Employee").
WHEREAS, the parties hereto had entered into that certain Employment
Agreement, dated November 13, 1998 among the Company and Employee (the "Prior
Agreement"); and,
WHEREAS, the Company and Employee wish to continue the employment of
Employee on the terms and conditions described herein with this Agreement
superceding and wholly replacing the Prior Agreement in its entirety;
NOW THEREFORE, in consideration of the mutual premises and conditions
contained herein, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby agrees to employ Employee, and
Employee hereby accepts employment by the Company, upon the terms and subject to
the conditions hereinafter set forth.
SECTION 2. DUTIES. Employee shall serve as the President, Chief Executive
Officer and Chairman of the Board of the Company (the "Position"). Employee's
duties and powers shall be those consistent with the office of President and the
Company's Bylaws, as established and amended from time to time by the Board of
Directors (the "Board"). Employee agrees to devote his full time and best
efforts to the performance of his duties to the Company. All of the Employee's
powers and authorities shall be subject to the reasonable direction and control
of the Company's Board of Directors. Employee acknowledges that the executive
offices of the Company will be located in Phoenix, Arizona and he shall perform
his duties under this Agreement from such executive offices.
SECTION 3. TERM. Except as otherwise provided in Section 6 hereof, the term
of this Agreement shall be for two (2) years ("Term"), commencing on the date
hereof (the "Commencement Date"). Unless earlier terminated as provided for
herein, this Agreement shall automatically extend on each annual anniversary of
the Effective Date by adding one (1) year to the Term from year to year until
terminated.
SECTION 4. COMPENSATION AND BENEFITS. In consideration for the services of
the Employee hereunder, the Company will compensate Employee as follows:
(a) BASE SALARY. Commencing on January 1, 2001, Employee shall be
entitled to receive a base salary of $225,000 per annum or as increased
from time to time by the Board of Directors of the Company or the
Compensation Committee of the Board of Directors ("Compensation
Committee").
(b) BONUS. Commencing with the fiscal year beginning April 1, 2000 and
continuing from year to year until this Agreement is terminated, Employee
shall be eligible to receive a bonus each year during the term of this
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Agreement in accordance with the Management Incentive Compensation Plan as
amended from time to time, a copy of which is attached as Exhibit "A". Such
bonus shall be payable by the Company to Employee as provided for in the
Management Incentive Compensation Plan.
(c) BENEFITS. The Company shall grant Employee options to purchase
shares of the Company's Common Stock in such amounts, with such vesting and
at such prices as determined by the Compensation Committee of the Board or
the Board itself.
In addition, during the term of this Agreement, Employee shall be
entitled to participate in and receive benefits under any and all employee
benefit plans and programs which are from time to time generally made
available to the executive employees of the Company, subject to approval
and grant by the appropriate committee of the Board of Directors of the
Company with respect to programs calling for such approvals or grants.
Additionally, Employee shall be entitled to medical insurance, dental
insurance, life insurance and other benefits as are generally made
available to the executive employees of the Company. Company has the right
to purchase life insurance with a face value up to $5 Million and with
Company as owner and beneficiary. Employee shall be entitled to
reimbursement of any out of pocket costs associated with an annual physical
exam administered by a physician mutually agreed upon by Employee and
Company. Employee will provide to Company a comfort letter from a physician
indicating that Employee is physically fit to perform the task and duties
required herein. Employee shall be entitled to three (3) weeks vacation and
such other days for personal use as reasonably determined by the Company.
SECTION 5. EXPENSES; AUTOMOBILE. It is acknowledged by the parties that
Employee, in connection with the services to be performed by him pursuant to the
terms of this Agreement, will be required to make payments for travel,
entertainment of business associates, mobile telephone and similar expenses. The
Company will reimburse Employee for all reasonable expenses of types authorized
by the Company and incurred by Employee in the performance of his duties
hereunder. Employee will comply with such budget limitations, approval and
reporting requirements with respect to such expenses as the Company may
establish from time to time.
The Company shall provide Employee with a suitable automobile for business
use, or at the Company's option, Company shall provide Employee with an
automobile allowance and Company shall pay all costs and expenses reasonably
incurred by Employee in connection with the business use thereof; provided that
the cost to Company for such automobile costs and expenses shall not exceed $750
per month.
SECTION 6. TERMINATION. Employee's employment hereunder will commence on
the Commencement Date and continue until the end of the Term, except that the
employment of Employee hereunder will terminate upon the occurrence of the
following events:
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(a) DEATH OR DISABILITY. Employee's employment will terminate
immediately upon the death of Employee during the term of his employment
hereunder or, at the option of the Company, in the event of Employee's
disability, upon 30 days notice to Employee. Employee will be deemed
disabled if, as a result of Employee's incapacity due to physical or mental
illness, Employee shall have been absent from his duties with the company
on a full-time basis for 120 consecutive business days and Employee shall
not reasonably be expected to be able to resume his duties within 60 days
of the end of such 120 day period. In the event of the termination of this
Agreement pursuant to this subsection, Employee will not be entitled to any
severance pay or other compensation except for any portion of his base
salary accrued but unpaid from the last monthly payment date to the date of
termination and expense reimbursements under Section 5 hereof or for
expenses incurred in the performance of his duties hereunder prior to
termination.
(b) FOR CAUSE. The Company may terminate the Employee's employment for
"Cause" immediately upon written notice by the Company to Employee. For
purposes of this Agreement, a termination will be for Cause if: (i)
Employee willfully and continuously fails to perform his duties with the
Company (other than any such failure resulting from incapacity due to
physical or mental illness); (ii) Employee willfully engages in gross
misconduct materially and demonstrably injurious to the Company; or (iii)
Employee has been convicted of a felony. In the event of the termination of
this Agreement pursuant to this Section, Employee will not be entitled to
any severance or further consideration, except for any portion of the base
salary accrued but unpaid from the last monthly payment date to the date of
Termination and expense reimbursements under Section 5 hereof for expenses
incurred in the performance of his duties hereunder prior to termination.
(c) BY COMPANY WITHOUT CAUSE. The Company may terminate this Agreement
during the Term at any time for any reason without cause. It shall be
deemed a termination without cause if Company changes the Position of
Employee without Employee's prior written consent. In the event of the
termination of this Agreement pursuant to this subsection, the Company will
pay Employee, as Employee's sole remedy in connection with such
termination, severance pay in the amount determined by multiplying
Employee's monthly base salary at the rate in effect immediately preceding
the termination of Employee's employment by twelve (12) months (the
"Severance Amount"). The Company will also pay Employee the portion of his
base salary accrued but unpaid from the last monthly payment date to the
date of termination and expense reimbursements under Section 5 hereof for
expenses incurred in the performance of his duties hereunder prior to
termination. The Company will pay the Severance Amount provided for in this
subsection (other than in the foregoing sentence) in a lump sum amount
concurrent with Employee's termination of employment. The Company will not
be entitled to offset or mitigate the amount due under this subsection by
any other amounts payable to Employee, including amounts payable or paid to
Employee by third parties for Employee's services after the date of
termination, except as provided for otherwise in Section 10(b) hereinafter.
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(d) CHANGE OF CONTROL. Notwithstanding anything to the contrary
contained in this Section 6, in the event Employee's employment with the
Company terminates for any reason (other than death or disability) within
the twelve (12) month period following a Change of Control (as defined
hereafter), then the Company will pay Employee a lump sum payment (the
"Termination Payment") in cash equal to the amount of the Severance Amount;
plus, the amount of Employee's base salary accrued but unpaid and any
expense reimbursement for expenses incurred in the performance of the
duties described herein prior to the termination date. A "Change of
Control" shall be deemed to have occurred: (i) when in a single transaction
or a series of transactions a change of stock ownership of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any successor item of a similar nature
has occurred; or (ii) upon the acquisition of beneficial ownership,
directly or indirectly, by any person (as such term is used in Section
13(d) and 14(d)(2) of the Exchange Act of securities of the Company) in a
single transaction or a series of transactions representing 33% or more of
the combined voting power of the Company's then outstanding securities; or
(iii) sale of substantially all of the assets of the Company in a single
transaction or a series of transactions; or (iv) removal by the Board of
Employee from the Position or title identified herein without Employee's
prior written consent; provided that a Change in Control will not be deemed
to have occurred for purposes of clauses (i) and (ii) hereof with respect
to any person meeting the requirements of Rule 13d-1(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended. The Company shall
pay the Termination Payment to Employee upon written notice by Employee.
The Termination Payment due under this Section will not be affected by the
manner in which Employee's employment is terminated and accordingly will be
whether the Change of Control occur after termination of this Agreement and
whether Employee's termination of employment is voluntary, involuntary, for
cause, or without cause.
SECTION 7. EFFECT OF TERMINATION ON OPTIONS. The Employee has been granted
options to purchase shares of the Company's Common Stock pursuant to the terms
of a Stock Option Agreement the form of which is attached as Exhibit "B", and
may continue to be granted such options from time to time. If Employee is
terminated "for cause" under Section 6(b) above, then the effect of the
termination of the Employee's employment on such options shall be determined by
the terms of the option plan under which the options are issued and the option
agreement related to such options. Notwithstanding anything to the contrary
herein or in any option agreement, in the event of: (a) a Change of Control, or
(b) termination of this Agreement for any reason (except if "for cause" under
Section 6(b)), then the Options issued and outstanding to Employee shall
immediately vest (100%), and the Employee may exercise his options at any time
during the original term of the option agreement (as defined therein), and such
termination of this Agreement shall not cause termination or expiration of the
options.
SECTION 8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges
that certain assets of the Company and its affiliates, including without
limitation information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales, products, profits, costs,
markets, key personnel, formulae, product applications, technical processes, and
trade secrets (herein called "Confidential Information") are valuable, special
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and unique assets of the Company and its affiliates. Employee will not, during
or after the term of his employment, disclose any of the Confidential
Information to any person, firm, corporation, association, or any other entity
for any reason or purpose whatsoever, directly or indirectly, except as may be
required pursuant to his employment hereunder, unless and until such
Confidential Information becomes publicly available other than as a consequence
of the breach by Employee of his confidentiality obligations hereunder. In the
Event of the termination of his employment, whether voluntary or involuntary,
and whether by the Company or Employee, Employee will deliver to the Company all
documents and data pertaining to the Confidential Information and will not take
with him any documents or data of any kind or any reproductions (in whole or in
part) of any items relating to the Confidential Information.
SECTION 9. NONCOMPETITION. Until one year after termination of Employee's
employment with the Company for any reason, whether voluntary or involuntary,
Employee will not: (i) engage directly or indirectly, alone or as a shareholder,
partner, officer, director, employee or consultant of any other business
organization, in any business activities which are directly competitive with the
Company and which were either conducted by the Company at the time of Employee's
termination or "Proposed to be Conducted" (as defined herein) by the Company at
the time of such termination (the "Designated Industry"); (ii) divert to any
competitor of the Company in the Designated Industry any customer of Employee
or, (iii) solicit or encourage any officer, employee, or consultant of the
Company to leave its employ for employment by or with any competitor of the
Company in the Designated Industry. The parties hereto acknowledge that
Employee's non-competition obligations hereunder will not preclude Employee from
(i) owning less than 5% of the common stock of any publicly traded corporation
conducting business activities in the Designated Industry or (ii) serving as an
officer, director, stockholder or employee of an entity engaged in the
healthcare industry whose business operations are not competitive with those of
the Company. "Proposed to be Conducted," as used herein, shall mean those
business activities which are the subject of a formal, written business plan
approved by the Board of Directors prior to termination of Employee's employment
and which the Company takes material action to implement within 12 months of the
termination of Employee's employment. Employee will continue to be bound by the
provisions of this Section 9 until their expiration and will not be entitled to
any compensation from the Company with respect thereto. If at any time the
provisions of this Section 9 are determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or scope of activity,
this Section 9 will be considered divisible and will become and be immediately
amended to only such area, duration, scope of activity as will be determined to
be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so amended will be
valid and binding as though any invalid or unenforceable provision had not been
included herein.
SECTION 10. GENERAL.
(a) NOTICES. All notices and other communications hereunder will be in
writing or by written telecommunication, and will be deemed to have been
duly given if delivered personally or if mailed by certified mail, return
receipt requested or by written telecommunication, to the relevant address
set forth below, or to such other address as the recipient of such notice
or communication will have specified to the other party hereto in
accordance with this Section 10(a):
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If to the Company, to: With a copy to:
x-xxxxxxx.xxx, Inc. Xxxxxxx Xxxxxx, L.L.P.
0000 X. 00xx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxx 00000
Attn: CHIEF EXECUTIVE OFFICER Attn: Xxxxx X. Xxxx, III
Fax No.: (000) 000-0000 Fax No. (000) 000-0000
If to Employee, to:
Xxxxx X. Xxxxxx, Xx.
0000 X. Xxxxx Xxxxx
Xxxxxxxx Xxxxxx, XX 00000
(b) WITHHOLDING AND OFFSET. All payments required to be made by the
Company under this Agreement to Employee will be subject to the withholding
of such amounts, if any, relating to federal, state and local taxes as may
be required by law. No payment under this Agreement will be subject to
offset or reduction attributable to any amount Employee may owe to the
Company or any other person.
(c) EQUITABLE REMEDIES. Each of the parties hereto acknowledges and
agrees that upon any breach by Employee of his obligations under any of the
Sections 8 and 9 hereof, the Company will have no adequate remedy at law,
and accordingly will be entitled to specific performance and other
appropriate injunctive and equitable relief.
(d) SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be fully severable
and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part hereof; and the
remaining provisions hereof will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable. Any and all covenants and obligations of either party hereto
which by their terms or by reasonable implication are to be performed, in
whole or in part, after the termination of this Agreement, shall survive
such termination, including specifically the obligations arising under
Sections: 6, 7, 8 and 9.
(e) WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder will impair such right, power or
privilege, nor will any single or partial exercise of any such right, power
or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.
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(f) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
(g) CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
(h) REFERENCE TO AGREEMENT. Use of the words "herein," "hereof,"
"hereto" and the like in this Agreement refer to this Agreement only as a
whole and not to any particular subsection or provision of this Agreement,
unless otherwise noted.
(i) BINDING AGREEMENT. This Agreement will be binding upon and inure
to the benefit of the parties and will be enforceable by the personal
representatives and heirs of Employee and the successors of the Company. If
Employee dies while any amounts would still be payable to him hereunder,
such amounts will be paid to Employee's estate. This Agreement is not
otherwise assignable by Employee.
(j) ENTIRE AGREEMENT. Except as provided in the benefit plans and
programs referenced herein, this Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not be amended
except by a written instrument hereafter signed by each of the parties
hereto.
(k) GOVERNING LAW. This Agreement and the performance hereof will be
construed and governed in accordance with the laws of the State of Arizona,
without regard to its choice of law principles. Any modification of this
Agreement shall be effective only if it is in writing and signed by the
parties hereto.
SECTION 11. BINDING ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, shall be settled exclusively by
arbitration in Phoenix, Arizona, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect. Judgment upon the
award rendered by the arbitrator(s) may be entered in, and enforced by, any
court having jurisdiction thereof.
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EXECUTED as of the date and year first written above.
X-XXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Its: Sr. VP, COO & CFO
-------------------------------
EMPLOYEE:
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx, Xx.
Date: February 8, 2001
----------------------------------
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Exhibit "A"
Current Form of Management Incentive Compensation Plan
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X-XXXXXXX.XXX, INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
The x-xxxxxxx.xxx, Inc. ("e-dentist") Management Incentive Compensation Plan
(the "Plan") is designed to offer incentive compensation to key employees
("Associates") by rewarding the achievement of corporate goals, specifically
measured individual goals that are consistent with and support the overall
corporate goals. The Management Incentive Compensation Plan will create an
environment which will focus key Associates on the achievement of objectives.
Since cooperation between departments and Associates will be required to achieve
corporate objectives which will represent a significant portion of the
Compensation Plan, the Plan should help xxxxxx improved teamwork and a more
cohesive management team. The Company reserves the right to revise or
discontinue the Plan at any time. Key Associates (as hereinafter defined) who
may be eligible to participate in the plan shall be selected at the sole
discretion of the Company.
PURPOSE OF THE PLAN
The E-dentist Management Incentive Compensation Plan (the "Plan") is designed
to:
>> Provide an incentive program to achieve overall corporate objectives
and to enhance shareholder value
>> Reward those individuals who significantly impact corporate results
>> Encourage increased teamwork among all disciplines within the Company
>> Incorporate an incentive program in E-dentist's overall compensation
program to help attract and retain key Associates
PLAN GOVERNANCE
The Plan will be governed by the Compensation Committee of the Board of
Directors. The President and CEO will be responsible for administration of the
Plan. The Compensation Committee will be responsible for approving any incentive
awards to the President and CEO.
CORPORATE AND INDIVIDUAL PERFORMANCE
Prior to the beginning of the Plan year, the President and CEO will present to
the Board a list of overall corporate objectives for the coming year, which are
subject to approval by the Board. All participants in the Plan will then develop
a list of key individual objectives which will be approved by the responsible
Vice President and by the President and CEO.
The Plan will call for incentive awards based on the achievement of annual
corporate and individual objectives that have been approved as indicated above.
The relative weight between corporate and individual performance factors will
vary based on levels within the organization. The weighing will be reviewed
annually and be adjusted as necessary or appropriate. The weighing for the year
2000 will be as follows:
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CORPORATE INDIVIDUAL
--------- ----------
President and CEO 100%
Senior Vice Presidents/Officers 75% 25%
Vice Presidents/Directors &
Corporate Controller 50% 50%
Practice Administrators/Managers/
Practice Advisors/Practice
Consultants (employed) 50% 50%
TARGET AWARDS MULTIPLIER
Incentive awards will be determined by applying an "achievement multiplier" to
the base salary of Associates in the Plan. The following target award
multipliers will be used in implementing the Plan:
POSITION TARGET AWARD MULTIPLIER
-------- -----------------------
President and CEO 35%
Senior Vice Presidents/Officers 25%
Vice Presidents/Directors &
Corporate Controller 15%
Practice Administrators/Managers/
Practice Advisors/Practice
Consultants (employed) 10%
The target award multiplier will be used to establish the target cash award at
the beginning of each year. The target award multiplier will be equal to the
actual award multiplier used at year-end in situations where corporate and
individual objectives have been met for the year.
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PERFORMANCE MEASUREMENT
The following scale will be used to determine the actual award multiplier based
upon measurement of corporate and individual performance versus objectives.
Separate payment multipliers will be established for both the individual and the
corporate components of each award. The same payment multiplier for the
corporate component of each participant's annual award shall be used for all
Plan participants in any given year.
Performance Category Award Multiplier
-------------------- ----------------
1. Performance for the year met or exceeded objectives or
was excellent in view of prevailing conditions 100%
2. Performance generally met the year's objectives or was
very acceptable in view of prevailing conditions 75%
3. Performance for the year met some but not all objectives 25%
4. Performance for the year was not acceptable in view of
prevailing conditions 0%
CALCULATION OF AWARD
Example I shows a sample cash award calculation under the Plan. First, a total
target award is calculated by multiplying the Associates base salary by the
target award multiplier. This dollar figure is then divided between its
corporate component and its individual component based on the performance factor
mix for that specific position. This calculation establishes specific dollar
target awards for the performance period for both the individual and corporate
components of the award.
At the end of the performance period, corporate and individual award multipliers
will be established using the criteria described above. The corporate award
multiplier, which is based on overall corporate performance, is used to
calculate actual corporate performance awards for all Plan participants. This is
done by multiplying the target corporate award established for each individual
at the beginning of the performance period by the actual award multiplier. The
individual award multiplier, which is based on an individual's performance
against objectives, is used in the same way to calculate the actual individual
performance award.
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EXAMPLE 1: CASH AWARD CALCULATION
Position Vice President
Base salary $100,000
Year 2000 target award multiplier 15%
Year 2000 target award $15,000
Target award components (based on performance factor mix)
Target award based on Corporate performance (50%) 7,500
Target award based on Individual performance (50%) 7,500
ACTUAL YEAR 2000 CASH AWARD CALCULATION:
Assumed payment multipliers based on assessment of Corporate and Individual
performance:
Corporate multiplier 75% - performance generally met year's objectives
Individual multiplier 100% - performance generally exceeded objectives
Year 2000 Cash Award:
Corporate component $5,625 ($7,500 X 75%)
Individual component $7,500 ($7,500 X 100%)
Total 2000 Cash Award $13,125
PAYMENT OF THE AWARD
Annual performance reviews will be completed by May 15th and payment of Awards
will be made after receipt of the Company's audited financial statements and
after review and approval by the President and CEO and the Compensation
Committee of the Board of Directors.
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Exhibit "B"
Form of Stock Option Agreement
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X-XXXXXXX.XXX, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is entered into
between x-xxxxxxx.xxx, Inc. ("e-dentist"), a Delaware corporation (the
"Company"), and __________________________(the "Optionee") as of
______________________ (the "Effective Date"). In consideration of the mutual
promises and covenants made herein, the parties hereby agree as follows:
1. GRANT OF OPTION. Under the terms and conditions of the Company's 1997
Stock Compensation Plan, as amended (the "Plan"), the terms of which are
incorporated herein by reference, the Company grants to the Optionee an option
(the "Option") to purchase from the Company all or any part of a total of
____________ (________) shares of the Company's Common Stock, par value $.001
per share, at an exercise price of _______________ ($________) per share (the
"Purchase Price"). The Option is granted as of _________________________ (the
"Date of Grant").
2. CHARACTER OF OPTION. [The Option is an "incentive stock option" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").] [Delete Prior and Insert Language for Non-Qualified Option: This
Option is a non-qualified stock option and is therefore not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").]
3. TERM. The Option will expire on the day prior to the tenth anniversary
of the Date of Grant, or such earlier date as may be provided in (i) Section
1.16 of the Plan regarding Employee (as defined in the Plan) termination or (ii)
Section 11 below.
4. VESTING. Subject to the provisions of Section 1.12 and Section 1.16 of
the Plan, the Option may be exercised according to the following schedule:
[Example Only: Beginning on _____________, _____ percent (_____%) shall
vest on the first day of each month, from month to month, until fully
vested.]
The unexercised portion of the Option from one period may be carried over
to a subsequent period or periods, and the right of the Optionee to exercise the
Option as to such unexercised portion shall continue for the entire term. Upon
exercise the actual number of shares purchased shall be rounded to the nearest
whole share.
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5. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion thereof
shall be effected by the giving of written notice to the Company by the Optionee
in accordance with Section 1.13 of the Plan and payment of the Purchase Price
for the shares to be acquired pursuant to the exercise.
6. PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price for any shares
purchased pursuant to the Option shall be in accordance with the provisions of
Section 1.11(b) of the Plan.
7. TRANSFER OF OPTIONS. This option is not assignable or transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
during the lifetime of the Optionee may only by exercised by the Optionee or his
legally authorized representative.
8. ACCEPTANCE OF THE PLAN. The Option is granted subject to all of the
applicable terms and provisions of the Plan, and such terms and provisions are
incorporated by reference herein. The Optionee hereby accepts and agrees to be
bound by all the terms and conditions of the Plan.
9. AMENDMENT. This Agreement may be amended by an instrument in writing
signed by both the Company and the Optionee.
10. MISCELLANEOUS. This Agreement will be construed and enforced in
accordance with the laws of the State of Arizona and will be binding upon and
inure to the benefit of any successor or assign of the Company and any executor,
administrator, trustee, guarantor or other legal representative of the Optionee.
11. RIGHTS OF OPTIONEE UPON TERMINATION OF EMPLOYMENT. In the event an
Optionee ceases to serve as an Employee by reason of death, retirement,
permanent disability, termination for cause, or resignation by the Optionee (as
hereinafter defined), then the Options may be exercised as follows:
(a) DEATH. If the Optionee dies while serving as an Employee or within
three (3) months after ceasing to become an Employee, the Option shall
become fully vested and exercisable during the period beginning with the
date of the Employee's death and ending twelve (12) months thereafter,
unless by its terms it expires sooner. During such period, the Option may
be fully exercised, to the extent that it remains unexercised on the date
of death, by the Optionee's personal representative or by the distributees
to whom the Optionee's rights under the Option shall pass by will or by the
laws of descent and distribution.
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(b) RETIREMENT. If the Optionee ceases to serve as an Employee as a
result of retirement, then (i) the Company's Compensation Committee shall
have the ability to accelerate the vesting of the Option, in its sole
discretion, or (ii) the Option shall be exercisable (to the extent
exercisable and vested on the effective date of such Retirement or, if the
vesting of such Option has been accelerated, to the extent exercisable
following such acceleration) at any time during the period beginning with
the effective date of the retirement and ending three (3) months
thereafter, unless by its terms it expires sooner.
(c) DISABILITY. If the Optionee ceases to serve as an Employee as a
result of permanent disability (as defined in the Plan or the Employee's
employment agreement), the Option shall become fully vested and exercisable
during the period beginning with the date Employee is determined to be
permanently disabled and ending twelve (12) months thereafter, unless by
its terms it expires sooner.
(d) CAUSE. If the Optionee ceases to be employed by the Company
because the Optionee's relationship with the Company is terminated by the
Company for cause (as defined in the employment agreement), the Option
shall be exercisable (to the extent exercisable and vested on the effective
date of such termination) during the period beginning with the date of such
termination and ending three (3) months thereafter, unless by its term the
Option expires earlier. If any facts that would constitute Cause for
termination of an Optionee are discovered after the Optionee's relationship
with the Company has ended, the Options may be immediately terminated by
the Company's Compensation Committee. Notwithstanding the foregoing, if an
Optionee is employed pursuant to a written employment agreement with the
Company, the Optionee's relationship with the Company shall be deemed
terminated for Cause for the purposes of this Agreement only if the
Optionee is considered under the circumstances to have been terminated "for
cause" for purposes of such written agreement or the Optionee voluntarily
ceases to be an employee in breach of such Optionee's employment agreement
with the Company.
(e) VOLUNTARY BREACH. If the Optionee ceases to be an Employee
voluntarily by resignation or in breach of the Optionee's employment
agreement, the Options shall automatically expire on the date of such
termination of the employment relationship.
(f) WITHOUT CAUSE. If the Optionee is terminated as an Employee
Without Cause, the Option shall be exercisable (to the extent exercisable
and vested on the effective date of such termination) at any time within
three (3) months after the effective date of such termination, unless by
its term the Option expires earlier. Without Cause shall be defined as
termination for any reason other than for Cause.
[Signatures on following page.]
Page 17 of 18
Executed as of the 28th day of September, 2000.
X-XXXXXXX.XXX, INC.
By:
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Xxxxx X. Xxxxxx,
President
ACKNOWLEDGED AND AGREED:
THE OPTIONEE:
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Optionee's Social Security Number
Page 18 of 18
