AMENDED AND RESTATED AGREEMENT
This is an Amended and Restated Agreement (the "Agreement") between
Xxxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxxxxx'x, Inc. ("Xxxxxxxx'x" or the
"Company") intended to be effective as of October 4, 1996.
WHEREAS, Xxxxxxx has served as a director of Xxxxxxxx'x since 1987;
and
WHEREAS, in November 1994, Xxxxxxx was elected to serve as Chairman
of the Board in accordance with the terms of an Agreement dated as of
November 23, 1994 (the "Original Agreement"); and
WHEREAS, in connection with the retirement of the President and
Chief Executive Officer of the Company on October 4, 1996, Xxxxxxx has
been elected to serve in the additional capacity of Chief Executive
Officer; and
WHEREAS, this Agreement is intended to supersede the Original
Agreement in all respects from and after October 4, 1996; and
WHEREAS, in recognition of the additional services to be performed
by Xxxxxxx, the Board has authorized the arrangements set forth in this
Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Effective October 5, 1996, Xxxxxxx has been elected to serve
as (a) Chief Executive Officer of Xxxxxxxx'x, (b) Chairman of the Board of
Xxxxxxxx'x, (c) Chairman of the Executive Committee of the Board of
Xxxxxxxx'x, and (d) a member of the Nominating Committee of the Board of
Xxxxxxxx'x.
2. For Xxxxxxx'x services in the positions listed in paragraph 1,
Xxxxxxxx'x will pay to Xxxxxxx (a) an annual retainer of $15,000, payable
in shares of the Company's common stock (valued at the average closing
price (the "Market Price") on the NASDAQ National Market System during the
ten trading days immediately preceding the date of issuance), (b) $2,000
per year, payable in cash, for each full or partial year that Xxxxxxx
serves as Chairman of the Executive Committee, (c) $500, payable in cash,
for attending each meeting of the Board or each meeting of any committee
of the Board of which Xxxxxxx is a member, and (d) reimbursement of all
expenses incurred by Xxxxxxx in connection with his service as an officer
and/or director of Xxxxxxxx'x (upon submission by Xxxxxxx of reasonable
substantiation thereof).
3. (a) Xxxxxxxx'x hereby grants to Xxxxxxx, subject to approval
by shareholders at the next Annual Meeting of Shareholders, a non-
transferable stock option (the "Option") covering 500,000 shares of common
stock at an exercise price of $1.375 per share, the fair market value on
October 4, 1996.
(b) Unless earlier terminated in accordance with Paragraph
3(d) below, the Option will be fully vested on October 1, 1997 (or earlier
as provided in the next succeeding sentence), and will terminate on
October 1, 2006. In addition, the Option will become fully vested in the
event that, prior to October 1, 1997, either (a) Xxxxxxx is terminated by
Xxxxxxxx'x without Cause (as defined in Paragraph 6(e) below), (b) in one
or a series of transactions, all or substantially all of the assets of
Xxxxxxxx'x are sold or otherwise disposed of, or control of more than 50%
of the outstanding shares of common stock is acquired by a "person" or
"group" (as those terms are defined in Rule 13d-3 unless the Securities
Exchange Act of 1934, as amended) (a "Sale of the Company"), or (c)
Xxxxxxx dies or becomes disabled.
(c) In the event that the stockholders fail to approve the
grant of the Option, Xxxxxxxx'x shall pay to Xxxxxxx, in cash, an amount
equal to (x) 500,000 times (y) the difference between (i) the greater of
(x) the closing price of the common stock on the NASDAQ National Market
System on date of the 1997 Annual Meeting of Stockholders or (y) the
closing price of the common stock on the NASDAQ National Market System on
December 31, 1997, and (ii) $1.375.
(d) In the event that (i) Xxxxxxx voluntarily terminates his
employment with the Company on or before December 31, 1997, or (ii)
Xxxxxxx is terminated for Cause, the Option shall forthwith terminate and
be of no further force and effect and Xxxxxxxx'x shall have no obligation
to make any payments pursuant to Paragraph 3(c) above.
(e) Following the earlier of December 31, 1997 or the date of
termination of Xxxxxxx'x employment with the Company, other than a
termination for Cause or a voluntary termination by Xxxxxxx prior to
December 31, 1997, the Option shall be exercisable for a period of 3 years
from the date of such termination.
(f) The remaining terms and conditions of the Option will be
as set forth in a mutually acceptable Option Agreement between Xxxxxxxx'x
and Xxxxxxx.
4. In further consideration of Xxxxxxx'x agreement to accept the
responsibilities set forth herein, the Company will immediately issue to
Xxxxxxx 100,000 shares of common stock (the "Shares"). The certificates
evidencing the Shares will bear a legend thereon restricting transfer in
the absence of registration under the Securities Act of 1933, as amended
(the "Act") or an exemption therefrom. The parties agree that the fair
market value of the Shares is $1.375 per Share.
5. The Company will, at its expense, file a registration
statement on Form S-3 (or such other form as may be appropriate) covering
(a) the Shares and (b) the Shares of common stock issuable upon exercise
of the Option, if approved by the Company's stockholders, as soon as
reasonably practicable after the date hereof and the date of the 1997
Annual Meeting of Stockholders, respectively.
6. Xxxxxxx has also agreed that, as Chief Executive Officer and
Chairman of the Board, he will be available to devote his time to
Xxxxxxxx'x affairs for up to a maximum of 150 days per calendar year (in
addition to days spent in Board or committee meetings), unless Xxxxxxx and
the Board mutually agree to a greater number of days. For these services,
Xxxxxxxx'x will pay Xxxxxxx (a) $1,000 per day payable in cash within 30
days after the end of each calendar quarter upon submission of his invoice
therefor, (b) $1,000 per day payable in shares of common stock pursuant to
the 1995 Directors' Stock and Option Plan (valued at the Market Price)
payable within 30 days after the end of each calendar quarter upon
submission of his invoice therefor, and (c) reimbursement of all expenses
incurred by him (including travel expenses for his wife at his discretion
and reasonable costs incurred for improving his Phoenix/Paradise Valley
office) in connection with his service as Chief Executive Officer and
Chairman of the Board of Xxxxxxxx'x (upon submission by him of reasonable
substantiation thereof). Subject to Paragraph 13 below, Xxxxxxx shall
otherwise be free to perform services for other persons or entities.
7. Xxxxxxx shall be entitled to receive such bonuses as may be
determined from time to time by the Compensation Committee of the Board of
Directors; provided, however, that (A) for the period from October 5, 1996
through December 31, 1996, Xxxxxxx shall be entitled to a minimum bonus,
payable in shares of common stock (valued at the Market Price) on or
before February 10, 1997, equal to (a) 100,000 times (b) the difference
between (i) the closing price of Xxxxxxxx'x common stock on the NASDAQ
National Market System on December 31, 1996 and (ii) $1.375; and (B) for
the period from January 1, 1997 through December 31, 1997, Xxxxxxx shall
be entitled to a minimum bonus, payable in shares of common stock (valued
at the Market Price) on or before February 10, 1998, equal to (x) 100,000
times (y) the difference between (I) the closing price of Xxxxxxxx'x
common stock on the NASDAQ National Market System on December 31, 1997,
and (II) the closing price of the common stock on the NASDAQ National
Market System on December 31, 1996.
8. (a) Either Xxxxxxx xx Xxxxxxxx'x may terminate this Agreement
and Xxxxxxx'x services as Chief Executive Officer and/or Chairman of the
Board hereunder upon the giving of not less than 30 days' prior written
notice. Unless earlier terminated, this Agreement shall terminate on
December 31, 1997.
(b) In the event of a termination by Xxxxxxxx'x for any
reason prior to December 31, 1997 other than Cause or in connection with
or as a result of the Sale of the Company, Xxxxxxxx'x will immediately pay
Xxxxxxx $300,000 in cash, plus a pro rata portion of the bonus minimum
bonus to which he would have been entitled under Paragraph 7 above for the
period in which such termination occurs.
(c) In the event of a termination by Xxxxxxxx'x in connection
with or as a result of the Sale of the Company, or in the event of
Xxxxxxx'x death or disability, Xxxxxxx (or his executors or
representatives) will be entitled to receive a cash payment equal to the
greater of (i) $150,000, or (ii) the product of (A) 6,000 times (B) the
average number of days spent by Xxxxxxx on Xxxxxxxx'x affairs during each
of the immediately preceding six months (or such shorter period as this
Agreement has been in effect), together in each case with a pro rata
portion of the minimum bonus to which he would have been entitled under
Paragraph 7 above for the period in which such termination occurs.
(d) In the event of a voluntary termination by Xxxxxxx or a
termination by Xxxxxxxx'x for Cause at any time, Xxxxxxxx'x shall have no
obligation to make any payments pursuant to this Paragraph 8.
(e) For purpose of this Agreement, "Cause" means a good faith
finding by the Board of a material willful breach of this Agreement by
Xxxxxxx or of willful malfeasance or gross negligence in the performance
by Xxxxxxx of his duties, resulting in material harm to the Company. The
Company may terminate Xxxxxxx for Cause only after (i) giving him written
notice of intention to terminate and the cause or reason through and of
his right to a hearing , (ii) conducting a hearing before the full Board
at which he may be represented by counsel on a date specified in the
notice but no less than 10 days after the date of the notice, and (iii)
giving him 10 days' written notice of the results of the hearing. The
provisions of this Paragraph 8(e) shall not restrict or limit Xxxxxxx'x
rights in law or at equity or otherwise.
9. All notices and other communications shall be in writing
mailed by first class registered mail, postage prepaid, if to Xxxxxxx at
the address set forth below under Xxxxxxx'x signature, or, if to
Xxxxxxxx'x, at 00 Xxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of the
Secretary, or at such other address as either party shall designate by
written notice to the other. No notice shall be deemed to have been given
until actually received by the party to whom it is addressed; provided
that a certified or registered mail return receipt shall be conclusive
evidence of such receipt.
10. This Agreement may not be changed, waived, discharged or
terminated orally, but only by an instrument in writing, signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought.
11. Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the written consent of the other,
except that this Agreement will be binding upon and inure to the benefit
of any successor or successors of Xxxxxxxx'x whether by merger,
consolidation, sale of assets or otherwise and reference herein to
Xxxxxxxx'x is intended to include any such successor or successors.
12. Xxxxxxxx'x agrees to pay the reasonable fees and expenses of
Xxxxxxx'x counsel in connection with the negotiation, interpretation,
enforcement, preparation and defense of this Agreement or any dispute
arising under this Agreement.
13. While this Agreement is in effect and for a period of one year
after its termination Xxxxxxx may not, without the consent of the Company,
in any manner compete, nor may he own or acquire any equity interest in
any corporation, partnership or other entity that competes, with the
Company or any of its subsidiaries in any part of the United States in the
retain sole of building materials or supplies or in any other business
conducted by the Company presently or while this Agreement is in effect;
provided, that Xxxxxxx may own an equity interest in any publicly-owned
corporation that does not exceed 1% of that corporation's total equity.
14. Xxxxxxx will be entitled to indemnification by the Company and
limitation of liability for acts and omissions in his capacity as an
officer and/or director of the Company or any subsidiary to the fullest
extent provided by the Restated Certificate of Incorporation and By-laws
of the Company as in affect or the effective date of this Agreement or to
any greater extent provided by any amendment to those documents.
15. This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts.
This Agreement embodies the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, including the Original Agreement. If any one or more of
the provisions of this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such provision shall be
in effective to the extent, but only to the extent, of such invalidity,
illegibility or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any
other provision hereof.
16. All payments to be made to Xxxxxxx pursuant to this Agreement
shall be subject to all applicable withholding and similar taxes.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
XXXXXXXX'X INC.
By:________________________________
Name:
Title:
________________________________
Xxxxxx X. Xxxxxxx
c/o RKS,Inc.
0000 Xxxxx Xxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
