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Exhibit (d)(5)
COMPAQ COMPUTER CORPORATION
April 26, 2001
Xxxx Xxxxxxxxx
c/o Proxicom, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xxxx,
As an inducement for our execution of the Agreement and Plan of Merger among
Proxicom, Inc., Compaq Computer Corporation and a subsidiary of Compaq (as may
be amended, the "MERGER AGREEMENT", and the transactions contemplated
thereunder, the "ACQUISITION"), you agree to contribute $ 14,475,000 toward the
following lock-up arrangement:
Stock. Immediately after the completion of the Acquisition, you will purchase
shares of Compaq common stock with $7,237,500 (such purchased shares, the
"PURCHASED SHARES") on the open market during the 10-day trading period
beginning on the day after the completion of the Acquisition. If you receive
physical certificates representing the Purchased Shares, then you will execute a
stock power relating to these Purchased Shares and will permit Compaq to hold
these Purchased Shares, together with the executed stock power, on your behalf.
Any certificates representing these Purchased Shares, or any substitutions
therefor, will bear a legend substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE OFFERED,
PLEDGED, SOLD, LENT OR OTHERWISE TRANSFERRED OR DISPOSED OF IN
ACCORDANCE WITH THE TERMS OF A LETTER DATED APRIL ___, 2001 BETWEEN
XXXX XXXXXXXXX AND COMPAQ COMPUTER CORPORATION, A COPY OF WHICH LETTER
IS ON FILE AT THE PRINCIPAL OFFICERS OF COMPAQ COMPUTER CORPORATION."
In addition to any restrictions that may be applicable to you under federal or
state laws or Compaq's xxxxxxx xxxxxxx policy, for 12 months after the
completion of the Acquisition (the "STOCK LOCK-UP PERIOD"), you will not:
(x) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any Purchased Shares; or
(y) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of your Purchased
Shares,
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whether any such transaction described in clause (x) or (y) above is to be
settled by delivery of your Purchased Shares or such other securities, in cash
or otherwise. At the end of the Stock Lock-Up Period, the Purchased Shares,
together with any executed stock power, will be released to you, and any legend
as required above will be removed.
Notwithstanding this lock-up, you will have all of the rights of a stockholder,
including the right to vote the Purchased Shares and the right to receive
dividends on the Purchased Shares. Any dividends paid on the Purchased Shares
will be automatically reinvested in additional shares of Compaq common stock,
which will be subject to the same terms as applied to the Purchased Shares.
Cash. At the completion of the Acquisition, you will deposit $7,237,500 in
escrow pursuant to an escrow agreement, the form of which is attached as Exhibit
A to this letter.
If you remain employed by Compaq (or Proxicom) for 18 months after the
completion of the Acquisition (the "CASH LOCK-UP PERIOD"), then the escrowed
cash (including any interests and profits earned on the escrowed cash not
previously distributed to you) will be released to you. If you voluntarily quit
your employment with Compaq (or Proxicom) (other than for "good reason", as
defined below in the next paragraph) or your employment with Compaq (or
Proxicom) is terminated for "cause", as defined below in the next paragraph, in
either case during the Cash Lock-Up Period, then you will forfeit the escrowed
cash (including any interests and profits earned on the escrowed cash not
previously distributed to you) without any consideration. If, at any time during
the Cash Lock-Up Period, you die or become disabled (i.e., you become entitled
to long-term disability benefits in accordance with Compaq's long-term
disability plan, as it may be in effect from time to time), or your employment
with Compaq (or Proxicom) is terminated without "cause" or you terminate your
employment for "good reason", then the escrowed cash (including any interests
and profits earned on the escrowed cash not previously distributed to you) will
be released to you.
For purposes of this letter, "cause" will mean (1) conviction of a felony, (2)
conviction of a misdemeanor involving moral turpitude, (3) engagement in conduct
that is injurious (monetarily or otherwise) to Compaq (or Proxicom) or any of
its affiliates (including, without limitation, misuse of Compaq's (or
Proxicom's) or an affiliate's funds or other property), (4) engagement in
business activities that are in conflict with the business interests of Compaq
(or Proxicom), (5) engagement in conduct that is in violation of Compaq's (or
Proxicom's) safety rules or standards or which otherwise may cause or causes
injury to another employee or any other person, (6) breach of an agreement with
Compaq (or Proxicom), (7) engagement in conduct that is in violation of Compaq's
Code of Conduct or other corporate policies or (8) engagement in conduct that
violates any other material policy, rule or standard of Compaq (or Proxicom),
and "good reason" will mean: (1) a relocation of your position to a job site
over 50 miles
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from your current employment position or (2) a lowering of your job position
with Compaq (or Proxicom) such that your new job position does not include the
title of "Vice President".
You will be responsible for paying any taxes for which you become liable as a
result of any dividends paid on the Purchased Shares or any interests and
profits earned on the escrowed cash.
If the Acquisition is not completed, then this letter will automatically
terminate and will have no further force or effect.
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Sincerely,
COMPAQ COMPUTER CORPORATION
/s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: Vice President and General
Manager, Professional Services
ACCEPTED: /s/ Xxxx Xxxxxxxxx
---------------------------------
Xxxx Xxxxxxxxx
