Exhibit 10.26
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of
the 28th day of August, 1996 (the "Commencement Date"), between RC Acquisition
Sub, Inc., a Delaware corporation to be renamed Recoton Audio Corporation (the
"Corporation"), Xxxxxx Xxxx (the "Employee"), International Xxxxxx Incorporated,
a Delaware corporation ("Xxxxxx") and Recoton Corporation, a New York
corporation ("Recoton").
W I T N E S S E T H:
WHEREAS, the Employee is currently employed by Xxxxxx as its President
and Chief Executive Officer;
WHEREAS, the Corporation, Recoton and Xxxxxx have entered into a
Fourth Amended and Restated Agreement and Plan of Merger dated as of January 3,
1996 (the "Merger Agreement"), pursuant to which Xxxxxx will merge with and into
the Corporation;
WHEREAS, the Corporation and the Employee desire to enter into an
agreement pursuant to which the Employee is employed by the Corporation
effective as of the filing date of the Merger Agreement with the Delaware
Secretary of State's office (the "Effective Time");
WHEREAS, in consideration for this Agreement, the Employee has agreed
to release Xxxxxx and the Corporation from any and all compensation, benefits
and fees, payable or owing under the Employment Agreement dated December 19,
1991, but effective as of January 1, 1992, by and between Xxxxxx and the
Employee (the "1991 Employment Agreement") as of the Effective Time;
WHEREAS, Xxxxxx, the Corporation and Recoton have agreed to release
Employee from any duties or obligations and any claims arising under the 1991
Employment Agreement as of the Effective Time;
WHEREAS, the Employee also may serve as President, or in another
executive capacity, of IJI Acquisition Corporation, an Illinois Corporation
("IJI Acquisition"); and
WHEREAS, the Corporation and the Employee desire to assure the service
of the Employee to the Corporation as of the Effective Time.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and conditions herein contained, the
parties hereto agree as follows:
1. EFFECT OF THIS AGREEMENT ON THE 1991 EMPLOYMENT AGREEMENT. As of
the Effective Time, the 1991 Employment Agreement shall automatically terminate.
By executing this Agreement, the Employee, on behalf of himself, his heirs,
executors, administrators and assigns, or anyone else acting on his behalf,
hereby unconditionally and irrevocably releases Xxxxxx, the Corporation, and its
successors and assigns, subsidiaries, affiliates, directors, officers, agents
and employees, in both their individual and representative capacities, from any
obligations under the 1991 Employment Agreement, and unconditionally and
irrevocably waives any compensation, benefits, termination payments, or other
payments provided for in the 1991 Employment Agreement, as of the Effective
Time. By executing this Agreement, Xxxxxx, Recoton and the Corporation, jointly
and severally, and on behalf of their respective successors and assigns,
subsidiaries affiliates, directors, officers, agents and employees, in their
representative capacities, hereby unconditionally and irrevocably release
Employee from any obligations or duties arising under the 1991 Employment
Agreement and any claims arising thereunder, as of the Effective Time. This
Agreement shall terminate AB INITIO if the Merger Agreement is terminated and
the 1991 Employment Agreement shall remain in full force and effect.
2. EMPLOYMENT AND DUTIES.
(a) The Corporation shall employ the Employee, and the Employee shall
accept employment, effective as of the Effective Time for the period of time set
forth in Section 3(a), upon such terms and conditions as set forth in this
Agreement. The Employee shall serve the Corporation as President and as Chief
Executive Officer subject to the conditions set forth in this Agreement, under
the direction of the Board of Directors of the Corporation, and shall exercise
such responsibilities and perform such duties for the Corporation as the Board
of Directors shall from time to time reasonably designate and which are
commensurate with the typical duties of a President or Chief Executive Officer
of a wholly-owned subsidiary of a public company in the business in which the
Corporation is engaged. The Employee also shall be elected to the Board of
Directors of Recoton and the Board of Directors of the Corporation as of the
Effective Date and shall serve as an executive officer of Recoton (in which
capacity he shall exercise such responsibilities and perform such duties for
Recoton as the President/Co-Chief Executive Officer and the Chief Operating
Officer shall from time to time designate commensurate with the Employee's
position as the President and Chief Executive Officer of a significant
subsidiary. As set forth following this Agreement, Xxxxxx X. Xxxxxxxxx
("Xxxxxxxxx"), the President and Co- Chief Executive Officer of Recoton, has
agreed to vote the common shares of Recoton, which he beneficially owns or as to
which he has discretionary voting authority in favor of the election and
reelection of the Employee to serve as a director of Recoton for so long as the
Employee is employed by Recoton or the Corporation or any affiliate thereof
whether during or after the termination of this Agreement. Recoton shall vote
the common shares of the Corporation in favor of the election and reelection of
the Employee to serve as a director of the Corporation, for so long as the
Employee is employed by the Corporation whether during or after the termination
of this Agreement. For purposes of the foregoing, Xxxxxxxxx shall be deemed to
own beneficially any common shares of Recoton which are owned by himself, his
spouse, any descendant of his, any trust, partnership, corporation, joint
venture, and limited liability company which has been created primarily for his
benefit or the benefit of his spouse or any descendant of Xxxxxxxxx, or over
which he has discretionary voting authority. At such time as the Employee ceases
to be employed by the Corporation, the Employee shall resign as a director of
the Corporation and Recoton.
(b) The Employee shall report to the President/Co-Chief Executive
Officer, or to the President/Co-Chief Executive Officer and the Chief Operating
Officer of Recoton, together, as an officer of Recoton and to the Board of
Directors of the Corporation as the President or as an executive officer of the
Corporation. With the exception of that business time which will be devoted to
the performance of the Employee's responsibilities to IJI Acquisition pursuant
to an agreement to be entered into between Recoton, Xxxxxx and IJI Acquisition
captioned Management Services Agreement (the "MS Agreement"), the form of which
is attached to the Third Amended and Restated Agreement for Purchase and Sale of
the Assets of International Xxxxxx Incorporated by and between Xxxxxx and IJI
Acquisition dated as of January 3, 1996 (the "Purchase Agreement") and such
other business time as is devoted to other responsibilities as set forth herein,
the Employee shall devote all of his business time and attention to the
performance of his duties under this Agreement and to promoting the best
interests of the Corporation and Recoton and the Employee shall not, either
during or outside of such normal business hours, directly or indirectly engage
in any activity inimical to such best interests. The Employee shall not perform
services for compensation and/or bonuses for himself or for any entity or person
other than the Corporation, or Recoton, without the prior express written
permission of Recoton's Board of Directors. Notwithstanding anything to the
contrary contained herein, it shall not be a violation of this Agreement for the
Employee to (i) serve on civic or charitable boards; (ii) participate in
professional activities and organizations; (iii) manage his personal investments
and his real estate development concerns at a level of activity currently so
engaged so long as those activities do not interfere with the Employee's
performance of his responsibilities under this Agreement; and (iv) be an officer
of or serve on the Board of Directors and be an employee of IJI Acquisition and
receive compensation in connection therewith, so long as those activities do not
interfere with the Employee's performance of his responsibilities under this
Agreement. The Employee shall exert his best efforts in the performance of his
duties under this Agreement.
(c) The Employee and the Corporation acknowledge that there may be
situations which arise, in light of the Employee being an officer, director,
stockholder and/or employee of IJI Acquisition and an officer, director and/or
employee of Recoton or the Corporation, which would constitute, or give rise to
the possibility of, a conflict of interest or the appearance of a conflict of
interest. The Employee agrees that he shall refrain from taking action which
would constitute a violation of his fiduciary duties to Recoton or the
Corporation. To the extent that he is aware of any conflicts (or potential
conflicts) of interest, he shall promptly so advise the Corporation and Recoton.
Recoton and the Corporation may take such reasonable efforts as they deem
appropriate (including without limitation the establishment of a "Chinese Wall"
between the Employee and other employees of Recoton and the Corporation working
on, or with knowledge of, the matter or matters in conflict or potential or
possible conflict (the "Conflicting Matters") and the reasonable exclusion of
the Employee from those portions of meetings which are relevant and from having
access to those portions of the files, documents, data bases and communications
regarding or relating to the Conflicting Matters) in order to reasonably
insulate the Employee from any such Conflicting Matters). The purpose of this
paragraph is to protect the Corporation and Recoton against injury due to the
Employee's conflict of interest. In no event shall the parties construe this
provision as a means to derogate the Employee's duties, as described herein, or
otherwise negate the Corporation's obligations and responsibilities under the MS
Agreement (as defined in Section 2(b)), or the Supply Agreement (as defined in
Section 5(a)). Any reasonable action taken by Recoton or the Corporation in good
faith, pursuant to this Section 2(c), shall not constitute an event giving the
Employee the right to terminate this Agreement pursuant to the third sentence of
Section 3(d). Subject to the terms and conditions set forth in Section 5, the
Employee shall not use or transmit, to IJI Acquisition or others, Recoton or
Corporation Proprietary Information relating to any Conflicting Matters.
3. TERM; PAYMENT UPON TERMINATION.
(a) The term of the Employee's employment under this Agreement shall
commence as of the Effective Time and shall terminate on the earlier of the
death of the Employee, the Employee ceasing to be employed by the Corporation
other than by reason of breach by the Corporation of this Agreement, or 5:00
p.m. on the second anniversary of the Effective Time (the "Employment Term").
Except with respect to the provisions of Sections 2, 3(d) and 3(e) which
expressly survive the termination of this Agreement, the continued employment of
the Employee following the expiration of the Employment Term shall be other than
pursuant to this Agreement.
(b) The Corporation, in the sole discretion of its Board of Directors,
may terminate the employment of the Employee, and its obligation to pay
compensation pursuant to Section 4, during the Employment Term at any time for
"cause." "Cause" as used in this Agreement shall mean (i) conviction of a felony
or any crime having larceny as an essential element, (ii) willful conduct that
is materially injurious to the Corporation or Recoton, (iii) willful and
repeated dereliction of duty or breach of the Employee's material obligations
under this Agreement, (iv) failure to perform any material covenants under the
agreement dated as of January 3, 1996 among the Employee and the Corporation
entitled Shareholders' Agreement (the "Shareholders' Agreement") and (v) serious
violation of law relating to the Corporation's or Recoton's business or
securities. For the purpose of this section, no act or failure to act on the
Employee's part will be considered "willful" unless done, or omitted to be done,
by him not in good faith and without the reasonable belief that his action or
omission was in the interest of the Corporation or not opposed to the interests
of the Corporation. For termination for cause, written notice of the termination
shall be served upon the Employee and, except as otherwise provided herein,
shall be effective as of the date of such service ("Termination Notice"). With
respect to items (iii) and (iv) of this subsection 3(b), Employee shall have ten
(10) days within receipt of the Termination Notice to cure the cause violation,
and his failure to do so shall result in his termination. Such written notice
shall specify in reasonable detail the act or acts of the Employee underlying
such termination.
(c) The Corporation may terminate the employment of the Employee for
reasons other than for cause provided that the Corporation shall continue to pay
or provide the Employee the salary and other benefits (including bonus which
would be paid if the Employee were still employed hereunder) provided for in
this Agreement until the expiration of the Employment Term.
(d) The Employee may terminate his employment hereunder at any time
upon sixty (60) days prior written notice. If the Employee has been employed by
the Corporation for a period of two (2) years or more, at the time he gives his
written notice of termination, the Corporation shall pay Employee a severance
payment in an amount equal to one (1) year of his then-current Base Salary and
Guaranteed Bonus, payable in one lump sum upon the termination of his
employment. If the Employee has been employed by the Corporation for less than
two (2) years, his compensation and benefits under this Agreement shall cease at
the time of the termination of his employment. Notwithstanding anything herein
to the contrary, the Employee's rights under the Option Plan, shall be governed
by the terms and conditions of the Option Agreement, a form of which is attached
hereto as Exhibit 4(d). If the Employee terminates his employment hereunder or
notifies the Corporation of his intent to terminate his employment hereunder,
the Corporation in its sole discretion may require the Employee to cease the
exercise of his responsibilities and the performance of his services for the
Corporation at any time prior to the effective date of the notice of termination
and to refrain from entering the Corporation's premises but the Employee's
compensation hereunder shall continue until the effective date of termination.
If the Corporation shall: (i) materially breach any term of this Agreement,
which breach shall not have been cured within ten (10) days after written notice
thereof has been given to the Corporation by the Employee, (ii) assign duties or
a title to the Employee or delegate powers to the Employee inconsistent, in any
material respect with the Employee's position as President or as an executive
officer of the Corporation; (iii) (A) relocate the Employee to an office or
location outside of a radius of ten (10) miles from the Lincolnshire office and
which is further than two (2) miles from an expressway (excluding the Employee's
relocation to the Corporation's Schiller Park Facility), or (B) require the
Employee to travel out-of-town in excess of an average of three (3) days per
week over any period of twelve (12) consecutive weeks, other than with the prior
written consent of the Employee, (iv) fail to require a successor of Recoton to
perform under the Employment Agreement; and/or (v) materially change the
Employee's reporting requirements; then the Employee may terminate his
employment under this Agreement and the Corporation shall continue to be
obligated to pay or provide to the Employee the salary and bonus provided for in
this Agreement until the expiration of the Employment Term and the Corporation
shall be obligated to provide to the Employee the payments and benefits
specified in Section 3(e).
(e) If the employment of the Employee is terminated by the Corporation
at any time, whether during the Employment Term or thereafter (including, but
not limited to, termination due to the death or disability of the Employee and
the "constructive termination" specified in the last sentence of Section 3(d)
above), unless terminated by the Corporation for cause, (i) the Employee will
receive a severance payment equal to twice the sum of the Base Salary (as
defined below) in effect at the time of termination and the Guaranteed Bonus (as
defined below), of which one-half shall be paid upon the effective date of such
termination and one-half of which shall be paid in equal monthly installments
over a 24-month period commencing upon the effective date of such termination,
(ii) all options to purchase the common shares of the Corporation in the
Employee's name shall immediately vest, (iii) the Corporation shall pay (or, if
desired by the Employee, reimburse the Employee for) all premiums for COBRA
insurance coverage for 18 months and shall reimburse the Employee for any
comparable coverage obtained thereafter (but not for an amount in the aggregate
in excess of the premiums paid or reimbursed for COBRA coverage) until the
second anniversary of such termination and (iv) the Corporation shall pay the
premiums for the life insurance policy noted in Section 4(c) for two years.
Recoton agrees to guaranty the obligations of the Corporation under Sections 3
and 4.
4. COMPENSATION; BENEFITS; AND EXPENSES.
For all services to be rendered to the Corporation or any affiliate
thereof in any capacity, including services as an officer, director, member of
any committee or otherwise, so long as the Employee is employed by the
Corporation or Recoton during the Employment Term pursuant to Section 3(a) or as
otherwise set forth in the last sentence of Section 3(d);
(a) The Corporation or the Surviving Corporation shall pay the
Employee a salary at the rate of $300,000 per year (the "Base Salary").
Such Base Salary shall be payable in equal installments, less any usual
payroll deductions, in accordance with prevailing payroll practices of
the Corporation from time to time. The Board of Directors may in its
sole discretion increase the Employee's Base Salary and benefits over
those provided for hereunder. Other than as provided in this Agreement,
in no event may Employee's compensation or benefits be decreased by the
Board of Directors except to the extent that such benefits (other than
Base Salary and Guaranteed Bonus, as defined below) are provided to
other employees and such employee benefits are similarly generally
reduced.
(b) The Employee shall receive an annual bonus in respect of
services for each twelve (12) month period during the Employment Term
in the amount of at least $150,000 (the "Guaranteed Bonus"). The
Guaranteed Bonus shall be paid in one (1) installment, payable on the
fifteenth day following the end of each twelve month period. The
Employee also shall be eligible for an additional annual
performance-based bonus which may be granted by the Board of Directors
of the Corporation in its sole discretion (the "Performance Bonus").
(c) The Employee shall be eligible to participate in all
executive medical, dental, life, long-term disability, and qualified or
non-qualified retirement benefit plans and all key executive and other
employee benefit plans or arrangements of the Corporation, including,
without limitation, any Section 401(k) savings and profit sharing plan,
and any standard life, disability, accidental death and dismemberment
and retirement plans or programs consistent with the terms and
coverages of such plans or arrangements and such other individual plans
and arrangements applicable to key executives or employees generally,
each as may from time to time be established, amended or terminated;
PROVIDED, HOWEVER, that the value of all such benefits shall not be
less than the aggregate value of those benefits provided to the
Employee under Section 4(e) of the 1991 Employment Agreement except
that the key man life insurance policies with aggregate benefits
totalling $16.5 million can be terminated or assigned to IJI
Acquisition but the Corporation shall pay the premiums on the
Transamerica Life insurance policy owned by the Xxxxxx X. Xxxx Trust in
the principal amount of $2.5 million during the Employment Term, and
for a period of two (2) years following the termination of the
Employment Term, to the extent required pursuant to Section 3(e).
(d) On the Effective Date, the Employee shall be granted an
option pursuant to the terms of the Recoton Corporation 1991 Stock
Option Plan (the "Option Plan") to purchase 50,000 Recoton Common
Shares, par value $.20 (the "Common Shares") at the closing price for
the Common Shares on the day prior to the Effective Time which option
shall vest in five equal annual installments, commencing on the first
anniversary of the grant, and shall have a term of ten years from the
date hereof. The options granted under this paragraph (d) shall be
issued under the form of option agreement attached hereto as Exhibit
4(d).
(e) The Corporation shall reimburse the Employee for all
reasonable and necessary expenses incurred by the Employee requested or
authorized by the Corporation in connection with the Corporation's
business where such expenses are properly documented and accounted for
in accordance with the current policy of the Corporation.
5. RESTRICTIONS ON THE DISCLOSURE OF PROPRIETARY INFORMATION;
INVENTIONS.
(a) During the period from the Effective Time until the expiration of
the Employment Term and thereafter, and except as may be necessary in the
ordinary course of the Corporation's business, the Employee shall not, without
the prior written consent of the Corporation, directly or indirectly (i) record,
photograph, photocopy or by any other means copy or cause to be copied any
document, list, drawing, writing, photograph, sketch, sound recording or other
material that embodies Proprietary Information as defined herein or (ii) use, or
disclose or divulge to any person, firm or corporation, any Proprietary
Information. Notwithstanding the above, the parties acknowledge that the MS
Agreement will be entered into pursuant to the Purchase Agreement and that a
certain Supply and Services Agreement will be entered into between Xxxxxx and
IJI Acquisition (the "Supply Agreement"), the form of which is attached to the
Purchase Agreement, and recognize that the non-disclosure limitation as set
forth herein does not apply to information properly transmitted to any of the
parties in the performance of the MS Agreement and/or the Supply Agreement and
maintained in confidence by the recipient. As used in this Agreement,
"Proprietary Information" means information disclosed to or obtained by the
Employee, whether or not acquired during business hours, concerning Xxxxxx'x,
the Corporation's, Recoton's and/or their subsidiaries' business, operations,
products, manufacturing or other processes, services, customers, vendors, costs
and pricing policies, research, development, formulae, specifications, methods,
expertise, techniques, inventions, equipment, purchasing, merchandising and
selling including, but not limited to, customer lists, financial and/or
marketing reports and plans, product configurations and compositions, pricing
guidelines or information, financial reports, financial projections and other
financial information, business plans and any other information not readily
known or obtainable by the general public, and any proprietary software. Notwith
standing the foregoing sentence, Proprietary Information does not include (i)
information acquired by the Employee before the Employee became an employee of
Xxxxxx, (ii) information acquired by the Employee pursuant to his employment by
or ownership of IJI Acquisition, (iii) information which is or becomes public
knowledge (except as may be disclosed by the Employee in violation of this
Agreement), (iv) information acquired by the Employee from a source other than
Xxxxxx, the Corporation, Recoton or an affiliate thereof or a party providing
such information to Xxxxxx, the Corporation, Recoton or such affiliate that
legally acquired such information and was free to disclose the same or, (iv)
information independently developed by the Employee without the use of
Proprietary Information or the Corporation's, Recoton's, Xxxxxx'x or an
affiliates' facilities. Upon termination of employment hereunder for any reason,
Employee shall, to the extent feasible, promptly return to the Corporation that
portion of all books, records, lists, tapes and other written, typed, computer
or printed materials or data and all copies thereof which contain any
Proprietary Information, and the Employee shall not make or retain any copies
thereof.
(b) If at any time during the term of employment by the Corporation
the Employee conceives, develops, participates in the development of or causes
to be developed any products, methods, techniques, inventions, improvements,
works, techniques, processes, programs, software, works of art, products, ideas
or formulae which are not related to any of the businesses conducted by IJI
Acquisition or any of its affiliates (collectively, the "Corporation
Intellectual Property"), whether or not patentable or copyrightable and whether
or not done within or after normal business hours or alone or in conjunction
with others, relating exclusively to the business of the Corporation or any of
its affiliates, or their affiliates or any part thereof, such Corporation
Intellectual Property shall be and remain the sole and exclusive property of the
Corporation. The Employee shall promptly communicate and disclose all such
Corporation Intellectual Property or Employee Intellectual Property as defined
below to the Corporation, and to further effectuate the purposes of this
provision, each of the Corporation and the Employee shall execute and deliver to
the other at the requesting party's expense any instruments deemed necessary by
the requesting party to effect the disclosure thereof to, and ownership thereof
by, the requesting party, including without limitation any assignments of rights
to patents, copyrights and all other proprietary interests which the Employee or
the Corporation, as applicable might have in any Corporation Intellectual
Property or Employee Intellectual Property, defined below, and shall further
assist the requesting party, as the requesting party may reasonably request, to
obtain patent, trademark or copyright registration, or other protections for the
Corporation Intellectual Property or Employee Intellectual Property, as defined
below, including testifying in any hearings, depositions or trials related
thereto.
If at any time during the term of employment the Employee conceives,
develops, participates in the development of or causes to be developed any
products, methods, techniques, inventions, improvements, works, techniques,
processes, programs, software, works of art, products, ideas or formulae which
are not related to any of the business conducted by the Corporation or any of
its affiliates (collectively the "Employee Intellectual Property"), whether or
not patentable or copyrightable and whether or not done within or after normal
business hours or alone or in conjunction with others, relating exclusively to
the business of IJI Acquisition, or its affiliates or any part thereof, such
Employee Intellectual Property shall be and remain the sole and exclusive
property of the Employee. To the extent the Employee conceives, develops,
participates in the development of or causes to be developed any products,
methods, techniques, inventions, improvements, works, techniques, processes,
programs, software, works of art, products, ideas or formulae which are related
to the business conducted by both the Corporation or any of its affiliates and
IJI Acquisition or any of its affiliates (collectively the "Shared Intellectual
Property"), whether or not patentable or copyrightable and whether or not done
within or after normal business hours or alone or in conjunction with others,
which does not relate exclusively to the business of IJI Acquisition, the
Corporation or any of their affiliates, shall be and remain the shared property
of the Employee, IJI Acquisition and the Corporation, as the case may be. The
parties shall, in good faith, endeavor to agree on an appropriate bifurcation or
other allocation of such Shared Intellectual Property, to the extent the parties
cannot agree on such bifurcation or allocation, or other appropriate arrangement
the parties shall each hold a perpetual worldwide royalty free license to use
such Shared Intellectual Property on a non- exclusive basis.
6. RESTRICTIONS ON COMPETITION. During the period of time during which
the Employee is employed by the Corporation (for the purpose of this section,
the term "Corporation" shall include the Corporation's subsidiaries and Recoton)
(the "Employment Period") and for that period of time after the Employment
Period in which the Employee is deemed to receive benefits pursuant to Section
3(d) (i.e. one (1) year after termination of the Employment Agreement if the
severance payment referenced in the second sentence of Section 3(d) is made), or
Section 3(e), as applicable, the Employee shall not:
(a) directly or indirectly, either individually or as a
principal, partner, agent, employer, consultant, stockholder, joint
venturer, or investor, or in any other manner or capacity whatsoever,
engage in, assist or have any active interest in a business that
engages in the Branded Business or any business of Recoton or its
affiliates as that term is defined in that certain Non-Competition
Agreement to be entered into by and among Xxxxxx, IJI Acquisition, the
Corporation, Recoton, and Fuji Cone, Inc., a Delaware corporation (the
"Non-Competition Agreement") the form of which is attached to the
Purchase Agreement, as it exists on the Commencement Date, located
anywhere in the United States of America or any foreign country in
which the Corporation has conducted business in the last three (3)
years. Notwithstanding anything to the contrary contained herein: (A)
this Section shall not preclude the Employee from owning not more than
5% of the outstanding securities of a corporation which is publicly
traded, either on a securities exchange or over-the-counter; and which
engages in a business or lines of business similar to the Branded
Business, as that term is defined in the Non-Competition Agreement; and
(B) it shall not be a violation of this Agreement for Employee (whether
during employment or after termination of employment of the Employee
hereunder) to: (i) provide services pursuant to the MS Agreement, (ii)
act as an executive officer or director of IJI Acquisition, so long as
those activities do not interfere with the Employee's performance of
his responsibilities under this Agreement, (iii) own stock in IJI
Acquisition, or (iv) be employed by IJI Acquisition so long as those
activities do not interfere with the Employee's performance of his
responsibilities under this Agreement.
(b) directly or indirectly, either individually or as a
principal, partner, agent, employer, consultant, stockholder, joint
venturer, or investor, or in any other manner or capacity whatsoever:
(i) divert or attempt to divert from
the Corporation or an affiliate any Branded Business, as that
term is defined in the Non-Competition Agreement, with respect
to any customer or account, with which the Corporation or any
of its affiliates had any contact or association, or which was
under the supervision of the Corporation within three (3)
years prior thereto;
(ii) induce any employee, salesperson,
distributor, supplier, vender, manufacturer, representative,
agent, jobber, or other person transacting business relating
to the Branded Business, as that term is defined in the
Non-Competition Agreement, with the Corporation, or any of the
affiliates, to terminate their relationship or association
with the Corporation or any of its affiliates, or to represent
or sell services or products in competition with services or
products relating to the Branded Business, as that term is
defined in the Non-Competition Agreement, of the Corporation
or any of its affiliates, excluding, however, any employee
first hired after the Employee's employment with the
Corporation terminated (a "PROHIBITED EMPLOYEE") for
employment by any person, business, firm or corporation, or
any other entity;
(iii) employ or retain, directly
or indirectly, a Prohibited Employee; or
(iv) be an officer, director, partner,
sole proprietor, the holder of outstanding securities (except
the holder of not more than 5% of the securities of any
corporation which is publicly traded, either on a securities
exchange or over-the-counter, or principal of any person,
business, firm, corporation or other entity that employs or
retains a Prohibited Employee; PROVIDED, HOWEVER, that nothing
in this Section 6 shall be construed to in any way prohibit
IJI Acquisition's right to hire any of the persons named as
Management Service Providers in the MS Agreement as an
officer, director, employee or agent of IJI Acquisition during
the course of the Employee's employment with the Corporation
and for six months after termination of such employment
pursuant to the Non-Competition Agreement.
Nothing contained in this Agreement shall prevent Employee during the
Employment Period or thereafter, from performing his duties as an employee of
IJI Acquisition while IJI Acquisition engages in activities consistent with the
Non-Competition Agreement, so long as such performance conforms with Section
2(c). The Employee acknowledges that the time, scope, geographic area and other
provisions of this Section 6 have been specifically negotiated by sophisticated
commercial parties and that all such provisions are reasonable under the
circumstances of the transactions contemplated by this Agreement. It is
understood that the Employee is agreeing to the terms of this Section 6 in order
to induce the Corporation and Recoton to enter into this Agreement. The parties
acknowledge that the business which the Corporation plans to conduct will be
conducted throughout the United States and worldwide and that, given the current
sophistication of the information and telecommunication "highway," a narrow
geographic limitation would deny the Corporation protection to which it is
entitled in this Agreement.
7. PRIOR AGREEMENTS. The Employee represents and warrants to the
Corporation that, except for his current employment by Xxxxxx and the Purchase
Agreement and all ancillary documents thereto, he is not currently subject to
any agreements, obligations or restrictions regarding prior employment,
competition, solicitation of employees or customers or disclosure of proprietary
information.
8. CERTAIN BUSINESS PRACTICES. The Employee shall not during the term
of his employment by the Corporation take or cause or knowingly permit others to
take any action which would cause the Corporation or Recoton to be in violation
of the United States Foreign Corrupt Practices Act or any other similar
legislation of the United States or any other country or any subdivision
thereof.
9. GOVERNING LAW; ARBITRATION; ATTORNEYS FEES.
(a) This Agreement and its validity, construction and performance
shall be governed in all respects by the law of the State of Illinois, without
giving effect to principles of conflict of law.
(b) The parties shall promptly cooperate in good faith to carry out
the provisions of this Agreement and the activities contemplated hereby and
shall also cooperate in good faith to resolve any disputes or differences which
may arise in connection with the provisions hereof and the activities
contemplated hereby. Except as otherwise noted in this Agreement, any dispute,
question, difference, controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be finally settled by arbitration in the
jurisdiction where the Corporation's main offices are located at the time of
institution of such action (the "Main Office") in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, as then in effect at
the time of filing of the notice of demand. The parties consent to the
jurisdiction of the trial court for the county where the Main Office is located
and of the United States Federal District Court for the District where the Main
Office is located for all purposes in connection with arbitration. The parties
consent that any process or notice of motion or other application to either of
said courts, and any paper in connection with arbitration, may be served by
certified mail, return receipt requested or by personal service or in such other
manner as may be permissible under the rules of the applicable court or
arbitration tribunal, provided a reasonable time for appearance is allowed. The
arbitrators shall not alter or disregard any express provisions of this
Agreement. Any arbitration award in accordance with this Section 9(b) shall be
final and binding upon the parties and judgment thereon may be entered in any
court having jurisdiction over such party. The arbitrators are hereby authorized
to award to the prevailing party the costs (including reasonable attorneys' fees
and expenses) of any such arbitration.
(c) In the event of litigation or arbitration hereunder, the court or
arbitration panel shall be authorized to award the prevailing party in such
action or proceeding any or all reasonable attorney fees and disbursements paid
by it in pursuing or defending such action.
10. ENFORCEABILITY. Any provision of this Agreement which is
prohibited by, or unlawful or unenforceable under, any applicable law of any
jurisdiction shall be ineffective as to such jurisdiction without affecting any
other provision of this Agreement in such jurisdiction or all of the provisions
of this Agreement in other jurisdictions. To the full extent, however, that the
provisions of such applicable law may be waived, or the provisions of this
Agreement "blue-penciled" or reformed by any competent court or arbitration
panel, so that they become enforceable, such provisions of law shall be hereby
deemed waived or such provisions of this Agreement shall be so blue-penciled or
reformed to the end that this Agreement is deemed to be a valid and binding
agreement enforceable in accordance with its terms. If any term or provision of
this Agreement shall be held invalid by a competent court or arbitration panel,
the remainder of this Agreement shall not be affected thereby and the parties
hereto shall continue to be bound by the remaining terms hereof. In such event,
the relevant term or provision (or should such term(s) or provision(s) be such a
material element of this Agreement, then the entire Agreement) shall be
renegotiated by the parties in a good faith effort to achieve mutual agreement
consistent with such holding and the parties shall continue to perform under
this Agreement in a manner consistent with the intent and objectives of the
parties to this Agreement.
11. EQUITABLE REMEDIES. The Employee acknowledges that because of the
nature of the business of the Corporation and the subject matter of this
Agreement, a breach of Section 5 or 6 of this Agreement will cause irreparable
injury to the Corporation for which money damages will not provide an adequate
remedy, and the Employee agrees that the Corporation shall have the right to
have the provisions of such Sections specifically enforced by a court having
equity jurisdiction, in addition to, and not in limitation of, any remedies at
law that the Corporation may have.
12. NO WAIVER. The failure by either party at any time to require
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind shall be effective or binding, unless it is in writing and is signed by
the party against which such waiver is sought to be enforced.
13. ASSIGNMENT. This Agreement and all rights hereunder are personal
to the Employee and may not be transferred or assigned by the Employee at any
time. The Corporation may assign its rights to any parent or subsidiary or, with
the Employee's consent (not to be unreasonably withheld), any successor or in
connection with any sale, transfer or other disposition of all, or substantially
all, of its business and assets, provided, however, that any such assignee
assumes the Corporation's obligations hereunder and provided, further, that such
assignment and assumption shall not relieve the Corporation of its obligations
hereunder.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire and only
agreement between the parties relating to employment of the Employee by or with
the Corporation, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto.
15. AMENDMENT. This Agreement may be amended, modified, superseded,
canceled, renewed or extended only by a written instrument executed by both of
the parties hereto.
16. NOTICES. Any notice, request, consent or communication
(collectively "Notice") sent under this Agreement shall be effective only if it
is in writing and (a) personally delivered, (b) sent by certified or registered
mail, return receipt requested, postage prepaid, (c) sent by a nationally
recognized overnight delivery service, with delivery confirmed, or (d) telexed
or telecopied with receipt confirmed, addressed as follows:
(i) To the Employee:
Xxxxxx X. Xxxx
c/o International Xxxxxx Incorporated/
Recoton Audio Corporation
00 Xxx-Xxxxx Xxxxxxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
Telephone No.: 000-000-0000
- copy to (which shall not constitute notice) -
Xxxxxxx Xxxxxxx Xxxxx & Xxxxx
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000-000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telecopier: 312-201-2555
Telephone No.: 000-000-0000
(ii) To the Corporation:
RC Acquisition Sub, Inc./Recoton Audio Corporation
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Attn: Stuart Mont
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
- copy to (which shall not constitute notice) -
Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
(iii) To Xxxxxx
International Xxxxxx Incorporated
00 Xxx-Xxxxx Xxxxxxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Telecopier: 000-000-0000
Telephone : 000-000-0000
(iv) To the Corporation:
RC Acquisition Sub, Inc./Recoton Audio Corporation
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Attn: Stuart Mont
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
- copy to (which shall not constitute notice) -
Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
or such other persons or addresses as shall be furnished in writing by any party
to the other parties. A notice shall be deemed to have been given as of the date
when (i) personally delivered, (ii) five days after the date when deposited with
the Unites States mail properly addressed, (iii) when a receipt of a Notice sent
by a overnight delivery service is confirmed by such overnight delivery service,
or (iv) when receipt of the telex or telecopy is confirmed, as the case may be,
unless the sending party has actual knowledge that a Notice was not received by
the intended recipient.
17. BINDING NATURE. This Agreement shall be binding upon and inure to
the benefit of the personal representatives and successors of the respective
parties hereto.
18. HEADINGS; LANGUAGE. The headings contained in this Agreement are
for reference purposes only and shall in no way affect the meaning or
interpretation of this Agreement. In this Agreement, the singular includes the
plural, the plural the singular and the word "or" is used in the inclusive sense
and all references to "including" shall mean "including without limitation,"
unless the context requires otherwise.
19. SURVIVAL. Unless otherwise provided herein, the provisions of
Sections 2, 3(d), 3(e), 4(b), 4(d), 5, 6, 9, 10, 11, 12, 13 and 16 of this
Agreement shall survive the termination of this Agreement as a continuing
agreement of the Corporation and the Employee.
20. CROSS-REFERENCES; EXHIBITS. References in this Agreement to
Articles, Sections, Schedules and Exhibits are references to Articles and
Sections of this Agreement and to Schedules and Exhibits attached to or
delivered pursuant to this Agreement. Any Schedules and Exhibits are hereby made
a part of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original.
22. ADVICE OF COUNSEL. The Employee acknowledges that he was given the
opportunity to receive the advice of counsel before signing this Agreement and
has consulted counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INTERNATIONAL XXXXXX RECOTON CORPORATION
INCORPORATED
By: /S/ XXXX X. XXXXXXXXX By: /S/ STUART MONT
Name: Xxxx X. Xxxxxxxxx Name: Stuart Mont
Title: Executive Vice Title: Executive Vice President-Operations
Title: Vice President
RC ACQUISITION SUB, INC.
By: /S/ STUART MONT By: /S/ XXXXXX X. XXXX
Name: Stuart Mont Xxxxxx X. Xxxx
Title: Secretary
EXHIBIT 4(D)
NO. OF SHARES SUBJECT TO OPTION: 50,000 OPTION NO.: ----------------
RECOTON CORPORATION
1991 STOCK OPTION PLAN AGREEMENT
This AGREEMENT dated as of the ________ day of
________________________, 1996 between RECOTON CORPORATION, a New York
corporation (the "Company"), and Xxxxxx X. Xxxx (the "Optionee").
W I T N E S S E T H:
1. GRANT OF OPTION. Pursuant to the provisions of the Recoton
Corporation 1991 Stock Option Plan (the "Plan"), the Company hereby grants to
the Optionee, subject to the terms and conditions set forth in the Plan and this
Agreement, the right and option (the "Option") to purchase from the Company all
or any part of an aggregate of 50,000 Common Shares, $.20 par value ("Common
Shares"), of the Company at the purchase price of $______________ per share. The
Option is intended to qualify as an incentive stock option pursuant to Section
422 of the Internal Revenue Code of 1986, as amended, to the maximum extent
allowable by law.
2. TERMS AND CONDITIONS. The Option is subject to the following terms
and conditions:
(A) EXPIRATION DATE. The Option shall expire ten years
after the date of this Agreement (the "Expiration Date"), except as
otherwise noted in subparagraph (d) of this paragraph 2.
(B) EXERCISE OF OPTION. The Option may be exercised, to the
extent otherwise exercisable by its terms, in five equal annual
cumulative installments with the first installment occurring on the
first anniversary date of the Agreement; PROVIDED, HOWEVER, that no
options granted to executive officers, directors and beneficial owners
of more than ten percent of any class of the Company's equity
securities ("Section 16 Persons") may be exercised in part or in full
prior to six months from the date of grant of the Option.
Notwithstanding the foregoing, all or any part of any remaining
unexercised Option (without regard to any installment limitations) may
be exercised in the following circumstances (but in the case of Section
16 Persons in no event during the six month period commencing on the
date of grant of the Option): (i) immediately upon Employee's
termination of employment with the Company (other than "for cause")
pursuant to the Employment Agreement (as defined in Section 2(d)(4)),
(ii) immediately upon (but prior to the expiration of the term of the
Option) the Optionee's retirement from the Company and all Subsidiaries
on or after the Optionee's 65th birthday, (iii) upon the disability or
death of the Optionee, (iv) upon the occurrence of such special
circumstances or event as in the opinion of the Stock Option Committee
constituted pursuant to the Plan (the "Committee") merits special
consideration, or (v) if, while the Optionee is employed by the Company
or a Subsidiary (as defined below), there occurs a Change in Control.
For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if (i) any "person" or group of "persons" (as
the term "person" is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder (the "Exchange Act")) ("Person"), including any
Affiliate or Associate of such Person, as defined in Rule 12b-2 of the
Exchange Act, acquires (or has acquired during the twelve-month period
ending on the date of the most recent acquisition by such Person) the
beneficial ownership, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
then outstanding securities of the Company; (ii) during any period of
twelve months, individuals who at the beginning of such period
constitute the Board of Directors of the Company ("Board"), and any new
director whose election or nomination was approved by the individuals
who either were members of the Board at the beginning of the period,
cease for any reason to constitute at least a majority of the Board;
(iii) a Person acquires ownership of Common Shares of the Company that,
together with Common Shares held immediately prior to such acquisition
by such Person, possesses more than 50% of the total fair market value
or total voting power of the Common Shares ("50% Ownership") of the
Company, unless the additional Common Shares is acquired by a Person
possessing, immediately prior to such acquisition, ownership of 40% or
more of the Common Shares; or (iv) a Person acquires (or has acquired
during the twelve- month period ending on the date of the most recent
acquisition by such Person) assets from the Company that have a total
fair market value equal to or more than one-third (_) of the total fair
market value of all of the assets of the Company immediately prior to
such acquisition. Notwithstanding the foregoing, for purposes of
subsections (i) and (ii) above, a Change in Control will not be deemed
to have occurred if the power to control (directly or indirectly) the
management and policies of the Company is not transferred from a Person
to another Person; and for purposes of subsection (iv), a Change in
Control will not be deemed to occur if the assets of the Company are
transferred: (A) to a shareholder in exchange for his stock, (B) to an
entity in which the Company has (directly or indirectly) 50% Ownership,
or (C) to a Person that has (directly or indirectly) at least 50%
ownership of the Company with respect to its stock outstanding, or to
any entity in which such Person possesses (directly or indirectly) 50%
Ownership.
To the extent otherwise permitted by this Agreement, Common
Shares with respect to which the Option becomes exercisable may be
purchased in whole or from time to time in part at any time prior to
the expiration of the Option. Any exercise shall be accompanied by a
written notice to the Company in a form substantially as attached to
this Agreement as Exhibit 1 (including the last paragraph of such
Exhibit if applicable), specifying the number of shares as to which the
Option is being exercised. Notation of any partial exercise shall be
made by the Company on Schedule 1 to this Agreement.
(C) PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of
any exercise, the purchase price of the shares as to which the Option
shall be exercised shall be paid (i) in cash or by check (subject to
clearance) made payable to the Company, (ii) in stock of the Company
valued at its fair market value on the date of exercise by the
Committee, (iii) by providing an order to a designated broker to sell
part or all of the shares being purchased pursuant to exercise of the
Option and to deliver sufficient proceeds to the Company, in cash or by
check payable to the order of the Company, to pay the full purchase
price of such shares and all applicable withholding taxes, or (iv) by
such other methods as the Committee may permit from time to time. As
soon as practicable following receipt of such cash, check, stock,
option or order, the Company shall issue to Optionee a certificate for
the number of shares as to which the Option is being exercised.
Delivery of such shares shall be at the principal office of the Company
and the obligation of the Company with respect to the purchase of such
shares shall be fulfilled by delivery of such shares registered in the
name of the Optionee.
(D) EXERCISE UPON DEATH OR TERMINATION OF EMPLOYMENT.
(i) In the event of the death of Optionee while an
employee of the Company or of a subsidiary of the Company as
defined in the Plan (a "Subsidiary") all unexercised Options
may be exercised by the person or persons to whom Optionee's
rights under the Option pass by will or applicable law, or if
no such person has such right, by Optionee's executors or
administrators, at any time, or from time to time within one
year after the date of Optionee's death, but not later than
the Expiration Date.
(ii) If Optionee's employment by the Company or a
Subsidiary shall terminate because of Optionee's permanent
disability, Optionee may exercise all unexercised Options at
any time, or from time to time within one year after such
termination, but not later than the Expiration Date.
(iii) If Optionee's employment by the Company or a
Subsidiary shall terminate for any reason other than death or
permanent disability as aforesaid, Optionee may exercise all
unexercised Options, at any time, or from time to time within
three months from the date of termination, but not later than
the Expiration Date.
(iv) Notwithstanding anything in this subparagraph
(d) to the contrary, if Optionee's employment is terminated
"for cause" as that term is defined in the Employment
Agreement between the Company and the Optionee dated
__________, 1996 ("Employment Agreement"), all unexercised
Options of Optionee shall terminate immediately upon such
termination of Optionee's employment by the Company and all
subsidiaries, the Optionee shall have no right after such
termination "for cause" to exercise any unexercised Option
which Optionee might have exercised prior to the termination
of employment.
(E) NONTRANSFERABILITY. The Option and any rights hereunder
shall not be transferable or assignable other than by will or by the
laws of descent and distribution. During the lifetime of Optionee, the
Option shall be exercisable only by Optionee.
(F) ADJUSTMENTS. In the event of any change in the Common
Shares of the Company by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of shares, or any rights offering to purchase
Common Shares at a price substantially below fair market value, or of
any similar change affecting the Common Shares, then the number and
kind of shares subject to the Option and their purchase price per share
shall be appropriately adjusted consistent with such change in such
manner as the Committee may deem equitable to prevent substantial
dilution or enlargement of the rights granted to Optionee hereunder.
Any adjustment so made shall be final and binding upon Optionee.
(G) NO RIGHTS AS STOCKHOLDER. Optionee shall have
no rights as a stockholder with respect to any shares of
Common Shares subject to the Option prior to the date of
issuance of a certificate or certificates for such shares.
(H) NO RIGHT TO CONTINUED EMPLOYMENT. The Option shall not
confer upon Optionee any right with respect to continuance of
employment by the Company or any Subsidiary, nor shall it interfere in
any way with the right of the Company to terminate Optionee's
employment pursuant to and in accordance with the terms of the
Employment Agreement.
(I) COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The
Option and the obligation of the Company to sell shares
and deliver certificates for shares of Common Shares
pursuant to the Option shall be subject to all applicable
federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may
be required. No Option may be granted pursuant to the
Plan or exercised at any time when such Option, or the
granting, exercise or payment thereof, may result in the
violation of any law or governmental order or regulation.
The Plan is intended to comply with the Rule 16b-3 under
the Exchange Act. Any provision inconsistent with such
Rule shall be inoperative and shall not affect the
validity of the Plan. If at any time the Committee shall
determine in its discretion that the listing, registration
or qualification of the shares covered by the Plan upon
any national securities exchange or under any state or
federal law, or the consent or approval of any
governmental regulatory body, is necessary as a condition
of, or in connection with, the sale or purchase of shares
under the Plan, no Common Shares will be delivered unless
and until such listing, registration, qualification,
consent or approval shall have been effected or obtained,
or otherwise provided for, free of any conditions not
acceptable to the Committee. If Common Shares are not
required to be registered, but are exempt from
registration, upon exercising all or any portion of the
Option the Company may require Optionee (or any person
acting under subparagraph (d) of paragraph 2), to
represent that the Common Shares is being acquired for
investment only and not with a view to their sale or
distribution, and to make such other representations and
furnish such information deemed appropriate by counsel to
the Company. Stock certificates evidencing unregistered
Common Shares acquired upon exercise of an Option may be
subject to stop orders and shall bear any legend required
by applicable state securities laws and a restrictive
legend substantially as follows:
"The securities represented hereby have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be transferred in the absence of such
registration or an opinion of counsel acceptable to the
Company that such transfer will not require registration under
such Act."
3. OPTIONEE BOUND BY PLAN. Optionee acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions of the Plan.
4. NOTICES. All notices, requests, demands and other communications
provided for in this Agreement shall be in writing and addressed to the address
(or telecopier number) of the parties stated below or to such changed address as
such party may have fixed by notice:
(a) To the Employee:
Xxxxxx X. Xxxx
c/o International Xxxxxx Incorporated/
Recoton Audio Corporation
00 Xxx-Xxxxx Xxxxxxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
Telephone No.: 000-000-0000
- copy to (which shall not constitute notice) -
Xxxxxxx Xxxxxxx Xxxxx & Xxxxx
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telecopier: 312-201-2555
Telephone No.: 000-000-0000
(b) To the Corporation:
Recoton Corporation
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Attn: Stuart Mont
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
- copy to (which shall not constitute notice) -
Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
(or to such other address or telecopier number as any party may specify by
notice to all other parties as aforesaid). Unless otherwise specifically
provided in this Agreement, such communications shall be deemed to have been
given (a) three days after mailing, when mailed by registered or certified
postage-paid mail, (b) on the next business day, when delivered to a same- day
or overnight national courier service or the U.S. Post Office Express Mail or
(c) upon the date of receipt by the addressee when delivered personally or by
telecopier; PROVIDED, HOWEVER, that any notice of change of address shall be
effective only upon receipt. Notice may be given on behalf of a party by his or
its counsel.
5. COUNTERPARTS. This Agreement has been executed in two counterparts,
each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Recoton Corporation has caused this Agreement to
be executed by its President or a Vice President and Optionee has executed this
Agreement, both as of the day and year first above written.
RECOTON CORPORATION
By:
Name:
Title:
(L.S.)
Optionee
EXHIBIT 1
STOCK OPTION EXERCISE FORM
[DATE]
Recoton Corporation
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Secretary
Dear Sirs:
The undersigned elects to exercise the option to purchase ______
shares, $.20 par value, of the Common Shares ("Common Shares") of Recoton
Corporation (the "Company") under and pursuant to 1991 Stock Option Plan
Agreement No. ___ between the Company and the under signed dated
___________________.
Delivered herewith is a [check in the amount of $______] [certificate
for ____ shares of Common Shares of the Company] [order to a broker to sell part
or all of the shares being purchased and to deliver sufficient proceeds to the
Company, in cash or by check payable to the order of the Company, to pay the
full purchase price of the shares and all applicable withholding taxes]
[unexercised options sufficient to pay the full purchase price of the shares of
Common Shares and all applicable withholding taxes] in payment of the option
price.
[The undersigned hereby represents and agrees that all of the Common
Shares being purchased hereunder is being acquired for investment and not with a
view to the sale or distribution thereof and that the undersigned understands
that such Common Shares has not been registered under the Securities Act of 1933
(the "Act"), as amended, and such Common Shares may not be sold, pledged,
hypothecated, alienated, or otherwise assigned or transferred in the absence of
registration under the Act, or an opinion of counsel which opinion is
satisfactory to the Company to the effect that such registration is not
required.]
Very truly yours,
[Optionee]
SCHEDULE 1 -- NOTATIONS AS TO PARTIAL EXERCISE
-------------------------------------------------------------------------------
Date of Number of Balance of Signature Notation
Exercise Option Authorized Date
Shares Shares
Purchased
-------------------------------------------------------------------------------
