LIGHTPATH TECHNOLOGIES, INC.
DIRECTOR COMPENSATION AGREEMENT
THIS DIRECTOR COMPENSATION AGREEMENT is entered into as of November 11,
1999, by and between LIGHTPATH TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), and XXXXXX XXXX ("Xxxx").
RECITALS:
A. Subject to obtaining all necessary approvals and compliance with other
legal requirements, Xxxx has agreed to serve as Chairman ("Chairman") of the
Board of Directors ("Board") of the Company for a period of 24 months after the
date of his initial election to the Board.
X. Xxxx and the Company wish to agree to the amount of compensation that
Xxxx shall be entitled to receive if certain events occur during the period that
he is Chairman.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing and other consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. BONUS AMOUNT. In the event of a Company Sale (as defined below) within
the 24-month period after Xxxx'x election to the Board and during the period
that Xxxx is serving as Chairman, Xxxx shall be entitled to a bonus ("Bonus") in
an amount equal to (a) 5% of the Company Sale Price (as defined below) in excess
of $200 million, up to a maximum of $2.5 million, plus (b) 10% of the Company
Sale Price in excess of $250 million.
2. BONUS PAYMENT. The Company shall pay the Bonus to Xxxx within five
Business Days (as defined below) after the Company Sale with respect to which
the Bonus is payable; PROVIDED, HOWEVER, that, in the event holders of the
Company's Class A Common Stock ("Common Stock") receive securities and/or
obligations of another corporation in lieu of or in addition to cash pursuant to
such Company Sale, the Company shall be entitled to pay some or all of the Bonus
by delivering a portion of such securities and/or obligations to Xxxx; PROVIDED
FURTHER, HOWEVER, that, in the event a portion of such consideration consists of
cash, the portion of cash paid to Xxxx in satisfaction of the Bonus shall be no
less than the portion of cash received by the shareholders of the Common Stock
pursuant to such Company Sale.
3. SHARE GRANT SUBSTITUTION. In the event that the closing price ("Closing
Price") of Common Stock (as published in The Wall Street Journal) exceeds $20
per share for 45 consecutive Business Days, Xxxx shall be entitled to elect to
receive a grant of Common Stock in accordance with the terms of this Paragraph 3
in satisfaction of any obligations of the Company pursuant to Paragraphs 1 and
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2. Xxxx shall be entitled to exercise such election by delivering written notice
thereof to the Company. Within 30 days after receipt of such notice, the Company
shall issue to Xxxx the number of shares of Common Stock equal to (a) the amount
of the Bonus that would be payable pursuant to Paragraph 1 in the event of a
Company Sale for an amount per share of Common Stock equal to the average
("Average Closing Price") of the Closing Prices for the ten Business Days prior
to the date that Xxxx delivers his election notice to the Company pursuant to
this Paragraph 3, divided by (b) the Average Closing Price. Any shares issued to
Xxxx pursuant to this Paragraph 3 shall be registered and tradable within twelve
months after the date of such issue. For example, if the Average Closing Price
of $25 per share would yield a Bonus of $2.5 million, the number of shares of
Common Stock issuable to Xxxx under this Paragraph 3 would be 100,000 (i.e.,
$2.5 million, divided by $25).
4. OTHER COMPENSATION. The compensation provided to Xxxx pursuant to this
Agreement shall be in addition to any compensation that Xxxx shall be entitled
to as a director of the Company.
5. TERMINATION. This Agreement shall terminate and be of no further force
and effect from and after the date that Xxxx is no longer serving as Chairman.
6. DEFINITIONS
"Business Day" means a day of the year on which banks are not required
or authorized to close in Albuquerque, New Mexico.
"Company Sale" shall mean the occurrence of any of the following:
(a) a reorganization, merger, consolidation or other corporate
transaction involving the Company (a "Transaction"), in each case, with
respect to which the stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own more than fifty
(50%) of the combined voting power of the Company or other corporation
resulting from such Transaction;
(b) all or substantially all of the assets of the Company are
sold, liquidated or distributed; or
(c) there is "change in control" of the Company within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"Company Sale Price" means, with respect to a Company Sale, the
aggregate amount of cash and fair market value of securities and/or obligations
that the shareholders of the Company are entitled to receive in return for their
shares pursuant to such Company Sale. This determination shall be made on a
fully-diluted basis assuming all options, warrants and other rights to acquire
shares of the Company's voting securities (excluding any such securities issued
directly in connection with any Company Sale) are exercised and the exercise
price is paid as of the date of such Company Sale.
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7. MISCELLANEOUS
(a) ASSIGNMENT; SUCCESSORS. This Agreement is personal to each of the
parties hereto. No party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party hereto,
except that this Agreement shall be binding upon and inure to the benefit of any
successor corporation to the Company. This Agreement shall inure to the benefit
of and be enforceable by Xxxx and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devises and
legatees.
(b) NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
addresses as either party may have furnished to the other in writing in
accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:
To the Company: LightPath Technologies, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx XX,
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
To Xxxx: 00 Xxx Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
(c) AMENDMENTS OR ADDITIONS. No amendments or additions to this
Agreement shall be binding unless in writing and signed by each of the parties
hereto.
(d) PARAGRAPH HEADINGS. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
(e) SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
(f) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(g) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in Albuquerque, New Mexico in
accordance with the rules of the American Arbitration Association then in
effect. The decision of the arbitrators shall be final and binding on the
parties, and judgment may be entered on the arbitrators' award in any court
having jurisdiction. The costs and expenses of such arbitration shall be borne
in accordance with the determination of the arbitrators. Notwithstanding any
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other provision of this Agreement, if any termination of this Agreement becomes
subject to arbitration, the Company shall not be required to pay any amounts to
Xxxx until the completion of the arbitration and the rendering of the
arbitrators' decision. The amounts, if any, determined by the arbitrators to be
owed by the Company to Xxxx shall be paid within five (5) days after the
decision by the arbitrators is rendered.
(h) GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware without regard to its conflicts of law principles.
(i) TAXES. Any payments provided for hereunder shall be paid net of
any applicable withholding or other employment taxes required under federal,
state or local law.
IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth above.
LIGHTPATH TECHNOLOGIES, INC.,
a Delaware corporation
/s/ Xxxxxx Xxxxxx
----------------------------------------
By: Xxxxxx X. Xxxxxx
Its: President
XXXXXX XXXX
/s/ Xxxxxx Xxxx
----------------------------------------
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AMENDMENT TO DIRECTOR COMPENSATION AGREEMENT
This Amendment to Director Compensation Agreement is made as of the 11 day
of April, 2000 between LightPath Technologies, Inc., a Delaware corporation (the
"Company") and Xxxxxx Xxxx ("Xxxx").
RECITALS
X. Xxxx and the Company entered into a Director Compensation Agreement on
November 11, 1999.
X. Xxxx and the Company wish to modify the sections in the aforementioned
agreement relating to Bonus Amount and Share Grant Substitution in
accordance with the terms set forth herein.
AGREEMENT
Now, therefore, the parties agree as follows:
1. The parties acknowledge the truth of the Recitals.
2. Paragraph 1 Bonus Amount (b) is modified to read "(b) 3.25% of the Company
Sale Price in excess of $250 million." The existing language,"(b) 10% of
the Company Sale Price in excess of $250 million." is deleted. The
definition of Company Sale Price as described in paragraph 6 is modified to
include the following sentences. "For the purposes of this contract the
Company Sale Price will be calculated using the current market price
multiplied by the number of fully diluted shares assuming all dilutive
options, warrants and other rights to acquire shares of the Company's
voting securities ( although such number shall not exceed 24 million
shares). The restriction of 24 million shares shall be increased pro rata
in the event of a stock dividend or stock split."
3. Paragraph 3 of the Director Compensation Agreement is eliminated.
4. The other terms of the Director Compensation Agreement shall remain in
effect, except as modified by this Amendment to Director Compensation
Agreement.
In Witness Whereof, this Amendment to Director Compensation Agreement is
executed as of the date first set forth above.
LightPath Technologies, Inc.
a Delaware corporation
/s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx
President
/s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
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LIGHTPATH TECHNOLOGIES, INC.
STOCK OPTION GRANT
APRIL 11, 2000
Xxxxxx Xxxx (optionee) will receive two nonqualified stock options. The first
option is for one million shares with an exercise price of $6, vesting on
December 1, 2001. The second option is for 500,000 shares with an exercise price
equal to the market price on the grant date vesting on December 1, 2001. Both
options will have immediate vesting upon death, full disability or termination
of optionee. The options will be issued under the terms of a nonqualified stock
option which would be registered via Form S3 on the next such filing by the
Company or 120 days. The stock option shares shall be increased pro rata in the
event of a stock dividend or stock split.
The Board of Directors approved these options on April 11, 2000 with a xxxxx
xxxxx equal to the closing price on April 12, 2000.
/s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx
President
/s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
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