AMENDMENT AGREEMENT
This Amendment Agreement (the "Amendment Agreement") is dated this 7th
day of March, 2000, and is between Apex Inc., a Washington corporation (the
"Company"), and Xxxxx X. Xxxxx ("Employee"), and among other things, amends (i)
that certain Employment Agreement by and between the Company and Employee dated
December 29, 1995, as amended on December __, 1996 (collectively, the
"Employment Agreement"), and (ii) those certain Nonqualified Stock Option Letter
Agreements between the Company an Employee dated December 29, 1995 (two grants),
June 10, 1996, June 19, 1997 (two grants), October 27, 1997, August 1, 1998 (two
grants), March 12, 1999, and October 1, 1999 (collectively, the "Option
Agreements").
RECITALS
WHEREAS, on the date of this Amendment Agreement, the Company, Cybex
Computer Products Corporation, an Alabama corporation, and Aegean Sea Inc., a
Delaware corporation ("Holdco"), are entering into an Agreement and Plan of
Reorganization (the "Reorganization Agreement").
WHEREAS, pursuant to the Reorganization Agreement, (i) Apex Sub, Inc.,
a Washington corporation and a wholly-owned subsidiary of Holdco, will merge
with and into the Company (the "Apex Merger"), and upon the Apex Merger, the
Company will become a wholly-owned subsidiary of Holdco, and (ii) Cybex Sub,
Inc., an Alabama corporation and a wholly-owned subsidiary of Holdco will merge
with and into Cybex (the "Cybex Merger"), and upon the Cybex Merger, Cybex will
also become a wholly-owned subsidiary of Holdco.
WHEREAS, effective immediately prior to the closing of the Apex Merger
as defined in the Reorganization Agreement, the Company and Employee wish to
amend the Employment Agreement and the Option Agreements on the terms and
conditions set forth in this Amendment Agreement.
WHEREAS, the Company and Employee also wish to enter into certain other
agreements regarding releases, indemnification, and other matters.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Amendment, the Company and Employee agree as follows:
1. DEFINED TERMS. All capitalized terms in this Amendment, to the
extent not otherwise defined herein, shall have the meanings assigned to such
terms in the Employment Agreement.
2. AMENDMENT OF OPTION AGREEMENTS.
(a) TERMINATION OF OPTIONS. Effective immediately prior to the
closing of the Apex Merger described in the Reorganization Agreement, Section 4
of each Option Agreement is hereby amended by deleting the existing language in
Section 4 of each such Letter Agreement and substituting therefor in each such
Option Agreement the following new language:
4. TERMINATION. Except as set forth in your Employment
Agreement with the Company dated December 29, 1995, as amended December
__, 1996 (collectively, the "Employment Agreement"), vested portions of
outstanding options (including any options that become vested as a
result of any acceleration provisions in your Employment Agreement,
this Agreement, or the Plan) may be exercised for up to three years
following the closing of the Apex Merger described in that certain
Agreement and Plan of Reorganization dated March 7, 2000, by and among
the Company, Cybex, and Holdco.
(b) ACCELERATED VESTING. Effective immediately prior to the
closing of the Apex Merger described in the Reorganization Agreement, Section 6
of each Option Agreement is hereby amended by deleting the existing language and
substituting therefor the following new language:
6. VESTING. To the extent not yet vested, your option shall
vest and become exercisable in full immediately prior to the closing of
the Apex Merger described in that certain Agreement and Plan of
Reorganization dated March 7, 2000, by and among the Company, Cybex,
and Holdco. Specifically, immediately prior to the closing of the Apex
Merger (as defined in such Agreement and Plan of Reorganization), your
entire option grants under this Agreement will, to the extent not yet
vested, become fully vested and immediately available for exercise. You
may exercise your option on vested option shares; however, you may only
exercise your option for whole shares.
(c) REMAINING TERMS UNCHANGED. Except as specifically set
forth in this Section 1, the remaining terms and conditions of each Option
Agreement shall remain unchanged and in full force and effect.
3. TERMINATION AND SEVERANCE. The parties agree that the closing of the
Apex Merger will constitute a termination of the Employment Agreement without
Cause within the meaning of Section 1.6 of the Employment Agreement, and that,
provided Employee satisfies (and continues to satisfy) all of his obligations
relating to the termination of his employment under the Employment Agreement
(including his obligations under Sections 2, 3, and 4.1 of the Employment
Agreement), then so long as Employee does not breach Sections 2, 3, or 4.1 of
the Employment Agreement, Employee shall be entitled to continue through the
first anniversary of the closing of the Apex Merger described in the
Reorganization Agreement:
(a) to receive a biweekly base salary of $11,538.46 (less
required withholding and deductions);
(b) to be eligible for employee and dependent coverage under
the Company's (or Holdco's) medical and dental plans, and to have
access to Apex email, Apex voicemail, a portable computer, and a pager,
to the same extent as available to other Company employees;
(c) to be insured under the Company's (or Holdco's) insurance
policies (including its directors and officers policies) to the same
extent other officers and employees are insured;
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(d) to be entitled to indemnification under the Company's
Articles of Incorporation to the same extent other officers and
employees are indemnified for acts during employment with the Company;
and
(e) to be reimbursed by the Company for all ordinary and
necessary documented business expenses incurred by Employee in
connection with the performance of duties requested by the Chief
Executive Officer of Holdco.
In addition, the Company will pay to Employee on or before the next payroll date
following the closing of the Apex Merger an amount representing his accrued but
unused vacation and personal time (less required withholding and deductions)
through such closing date. Employee further acknowledges that he will not accrue
any additional vacation or personal time after such closing date or be eligible
for any other incentive or other bonus payments or stock option grants from the
Company or from Holdco for 2000 or thereafter other than bonuses accrued by the
Company prior to the closing of the Apex Merger the payment of which is approved
by the Apex Compensation Committee. Employee and the Company further agree that,
to the extent the provisions of this Section 3 are inconsistent with Sections
1.2 and/or 1.3 of the Employment Agreement, the provisions of this Section 3
shall be deemed to amend Sections 1.2 and 1.3 of the Employment Agreement, and
the remaining terms and conditions of the Employment Agreement shall remain
unchanged and in full force and effect. Employee acknowledges and agrees that
his confidentiality, non-solicitation, and noncompete obligations described in
Section 2 and 3 of the Employment Agreement shall continue until the third
anniversary of the closing of the Apex Merger, and Employee further acknowledges
that he will be entitled to receive the benefits specified in this Section 3
only if he is not in material breach of this Amendment Agreement or his
Employment Agreement (including his confidentiality and noncompete obligation
described in Sections 2 and 3 of the Employment Agreement). Employee understands
and agrees that, as an additional condition to receiving or retaining the
benefits described in this Agreement (including Section 2 and this Section 3),
Employee must execute and deliver to the Company immediately prior to the
closing of the Apex Merger described in the Reorganization Agreement the
Confirmation of Resignation and General Release Agreement attached as ATTACHMENT
A. Employee also understands and agrees that, as a further condition to
receiving or retaining the benefits described in this Section 3, Employee must
execute and deliver to the Company the Confirmation of Resignation and General
Release Agreement attached as ATTACHMENT B, which may not be signed any earlier
than one day after the termination of Employee's employment with the Company.
4. RESIGNATIONS; LIFE INSURANCE. Effective on the closing of the Apex
Merger, (i) Employee hereby resigns as an officer and a director of the Company
and all of its affiliates, and (ii) the Company will, at Employee's election,
cancel or transfer as Employee designates in writing all life insurance policies
owned by Company insuring the life of Employee.
5. MUTUAL NONDISPARAGEMENT. Employee agrees that he will not make any
disparaging or derogatory remarks about the Company, Cybex, or Holdco or their
affiliates or any of their officers, directors, or employees. The Company,
Cybex, and Holdco and each of their affiliates and their officers, directors,
and employees agree not to make any disparaging or derogatory remarks about
Employee or his performance at the Company.
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6. STANDSTILL AGREEMENT. Employee agrees that, for the period beginning
on the closing of the Apex Merger and ending at the close of business on the
earlier of (a) the third anniversary of the closing of the Apex Merger or (b)
six months after Employee exercises all of his stock options for Apex common
stock (whether or not the vesting of such stock options was accelerated by
virtue of the amendment of Employee's Option Agreements as described in Section
1 of this Amendment Agreement), neither Employee nor any of his affiliates (as
such term is defined under the Securities Exchange Act of 1934, as amended (the
"1934 Act")) will in any manner, directly or indirectly, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect or cause or
participate in or in any way assist any other person to affect to seek, offer or
propose (whether publicly or otherwise) to effect or cause or participate in (i)
any acquisition of any securities (or beneficial ownership thereof) or assets
(other than non-material assets) of the Company or Holdco; (ii) any tender or
exchange offer, merger, consolidation or other business combination involving
the Company or Holdco; (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
Holdco or any material portion of the Company's or Holdco's business; or (iv)
any "solicitation" of "proxies" (as such terms are used in the proxy rules of
the Securities and Exchange Commission) or consents to vote any voting
securities of Holdco or the Company; (b) form, join or in any way participate in
a "group" (as defined under the 0000 Xxx) with respect to the securities of
Holdco or the Company; (c) otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or policies of
the Company or Holdco or propose any matter for submission to a vote of
stockholders of the Company or Holdco; (d) take any action to which, to the
knowledge of Employee requires the Company or Holdco to make a public
announcement regarding any of the types of matters set forth in (a) above; or
(e) enter into any discussions or arrangements with any third party with respect
to any of the foregoing or advise, assist, encourage, finance or seek to
persuade others to take any action with respect to the foregoing.
Notwithstanding anything to the contrary contained in this Amendment Agreement,
nothing in this Amendment Agreement shall prohibit Employee or his affiliates
from purchasing any debt, or up to an aggregate of not more than 1.5% of any
class of publicly traded equity securities of the Company or of Holdco.
7. COVENANT NOT TO XXX. Employee represents that he has not filed any
complaints, charges, or lawsuits against the Company, and Employee agrees that
he will not do so at any time hereafter other than to enforce the terms of this
Amendment Agreement, the Employment Agreement, or the Option Agreements. The
Company represents that it has not filed any complaints, charges, or lawsuits
against Employee and that, on the date of this Amendment Agreement, its
executive officers have no actual knowledge of any basis for doing so.
8. COMPLETE RELEASE OF THE COMPANY. In consideration for the
acceleration of options described in Section 2 and the continued benefits to be
paid to Employee as described in Section 3 and other benefits set forth in this
Amendment Agreement, which Employee is not otherwise entitled to receive and
which are given to him specifically in exchange for this release as a result of
negotiations between himself and the Company, Employee, on behalf of himself,
his marital community, and his and their heirs, successors, and assigns,
releases and discharges the Company, its affiliated and predecessor
organizations, its affiliates, their employee benefit plans, their current and
former directors, officers, agents, employees, and attorneys, and each of their
respective successors and assigns (the "Released Parties"), from any and all
claims, charges, causes of action,
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and damages (including attorneys' fees and costs actually incurred of any type),
known and unknown, arising prior to the date of this Amendment Agreement
("Claims"), including such Claims related in any way to Employee's employment
with the Company, service as an officer or director of the Company or any of its
affiliates, or the termination of his employment relationship with the Company
on the first anniversary of the closing of the Apex Merger.
For the purposes of implementing a full and complete release and
discharge of the Company and the other Released Parties, and each of them,
Employee expressly acknowledges that this Amendment Agreement is intended to
include in its effect, without limitation, all Claims which he does not know or
suspect to exist in his favor at the time he signs this Amendment Agreement, and
that this Amendment Agreement is intended to fully and finally resolve any such
Claim or Claims.
This release specifically includes but is not limited to rights and
claims under the local, state or federal laws prohibiting discrimination in
employment, including the Civil Rights Acts, the Americans with Disabilities
Act, the Washington Law Against Discrimination, the Age Discrimination in
Employment Act, the Family and Medical Leave Act, the Employee Retirement Income
Security Act, as well as any other state or federal laws or common law theories
relating to discrimination in employment, the termination of employment, or
personal injury, including without limitation all claims for breach of contract,
fraud, defamation, loss of consortium, infliction of emotional distress,
additional compensation, back pay or benefits (other than as provided for in
this Amendment Agreement).
9. INDEMNIFICATION FOR SECTION 4999 EXCISE TAXES. In the event that it
shall be determined that any payment or other benefit by the Company to or for
the benefit of the Employee under the Employment Agreement, pursuant to Section
2 of this Amendment or otherwise, but determined without regard to any
additional payments required under this Section 9 (the "Payments") would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
(the "Excise Tax"), then the Company shall indemnify Employee for such Excise
Tax in accordance with the following:
(c) Employee shall be entitled to receive an additional
payment from the Company equal to (i) one hundred percent (100%) of any Excise
Tax actually paid or payable by the Employee in connection with the Payments,
plus (ii) an additional payment in such amount that after all taxes, interest
and penalties incurred in connection with all payments under this Section 3(a),
Employee retains an amount equal to one hundred percent (100%) of the Excise
Tax.
(d) All determinations required to be made under this Section
shall be made by the Company's primary independent public accounting firm, or
any other nationally recognized accounting firm reasonably acceptable to the
Company and the Employee (the "Accounting Firm"). The Company shall cause the
Accounting Firm to provide detailed supporting calculations of its
determinations to the Company and the Employee. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. For purposes of making the
calculations required by this Section, the Accounting Firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code, provided the Accounting Firm's determinations must be
made
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with substantial authority (within the meaning of Section 6662 of the Code). The
payments to which Employee is entitled pursuant to this Section shall be paid by
the Company to Employee in cash and in full not later than thirty (30) calendar
days following the date Employee becomes subject to the Excise Tax.
10. MISCELLANEOUS.
(a) WITHHOLDING. All compensation and benefits to the Employee
hereunder shall be reduced by all federal, state, local, and other withholdings
and similar taxes and payments required by applicable law.
(b) WAIVER. The waiver of the breach of any provision of this
Amendment Agreement shall not operate or be construed as a waiver of any
subsequent breach of the same or other provision hereof.
(c) ENTIRE AGREEMENT; MODIFICATION. Except as otherwise
provided herein, this Amendment Agreement represents the entire understanding
among the parties with respect to the subject matter hereof, and this Amendment
Agreement supersedes any and all prior understandings, agreements, plans and
negotiations, whether written or oral with respect to the subject matter hereof
including without limitation, any understandings, agreements or obligations
respecting any past or future compensation, bonuses, reimbursements or other
payments to the Employee from the Company. In the event of any conflict between
this Amendment Agreement and any other agreement (including, without limitation,
the Employment Agreement or the Option Agreements), this Amendment Agreement
shall control and govern. All modifications to the Agreement must be in writing
and signed by the party against whom enforcement of such modification is sought.
(d) NOTICES. All notices and other communications under this
Amendment Agreement shall be in writing and shall be given by hand delivery or
first class mail, certified or registered with return receipt requested, and
shall be deemed to have been duly given upon hand delivery to an officer of the
Company or the Employee, as the case may be, or upon three (3) days after
mailing to the respective persons named below:
If to the Company: Apex Inc.
0000 Xxxxxxx Xxxx XX
Xxxxxxx, XX 00000-0000
Attn: Chief Operating Officer
With copy to: General Counsel
Fax: ________________________________
If to the Employee: Xxxxx X. Xxxxx
_____________________________________
_____________________________________
Fax: ________________________________
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Any party may change such party's address for notices by notice duly given
pursuant to this Section
(e) HEADINGS. The Section headings herein are intended for
reference and shall not by themselves determine the construction or
interpretation of this Amendment.
(f) GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of Washington. The
Employee and the Company each hereby expressly consents to the exclusive venue
of the state and federal courts located in Seattle, King County, Washington, for
any lawsuit arising from or relating to this Amendment Agreement.
(g) ARBITRATION. Any controversy or claim arising out of or
relating to this Amendment Agreement, or breach thereof, shall be settled by
arbitration in Seattle, Washington, in accordance with the Rules of the American
Arbitration Association, and judgment upon any proper award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. There shall
be three (3) arbitrators, one (1) to be chosen directly by each party at will,
and the third arbitrator to be selected by the two (2) arbitrators so chosen. To
the extent permitted by the Rules of the American Arbitration Association, the
selected arbitrators may grant equitable relief. Each party shall pay the fees
of the arbitrator selected by him and of his own attorneys, and the expenses of
his witnesses and all other expenses connected with the presentation of his
case. The cost of the arbitration including the cost of the third arbitrator,
the cost of the record or transcripts thereof, if any, administrative fees, and
all other fees and costs shall be borne equally by the parties.
(h) SEVERABILITY. If a court or other body of competent
jurisdiction determines that any provision of this Amendment Agreement is
excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, and all other provisions of this
Agreement shall be deemed valid and enforceable to the extent possible.
(i) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one and the same
Amendment Agreement
[Signature pages follow.]
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IN WITNESS WHEREOF, each of the parties has executed this Amendment
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year set forth below.
DATE: APEX INC.
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By: /s/ XXXXX X. XXXXXX
--------------------------------------
Title: COO, CFO & Treasurer
------------------------------------
XXXXX X. XXXXX:
/s/ XXXXX X. XXXXX
-----------------------------------------
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ATTACHMENT A
CONFIRMATION OF RESIGNATION AND GENERAL RELEASE
By signing below, I hereby acknowledge and confirm my agreement to all
the terms of the Amendment Agreement ("Agreement"). I also agree that, as of the
date I sign this document, I release and waive any and all additional employment
claims (E.G., statutory employment claims, wrongful discharge types of claims or
related claims, breach of employment contract types of claims, but not claims
for breach of the Agreement itself) I may have relating to my employment with
Apex Inc. and/or the termination of my role as an officer or director of
Apex Inc. which I would not have but for my being an officer, director, or
employee of Apex Inc. since the time I signed the Agreement, as well as
releasing and waiving any and all other claims referenced in Paragraph 8 of
the Agreement to the extent permitted by law.
-----------------------------
Xxxxx X. Xxxxx
*TO BE DELIVERED IMMEDIATELY PRIOR
TO THE CLOSING OF THE APEX MERGER AS DESCRIBED IN THE
REORGANIZATION AGREEMENT
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ATTACHMENT B
CONFIRMATION OF RESIGNATION AND GENERAL RELEASE
By signing below, I hereby acknowledge and confirm my agreement to all
the terms of the Amendment Agreement ("Agreement"). I also agree that, as of the
date I sign this document, I release and waive any and all additional employment
claims (E.G., statutory employment claims, wrongful discharge types of claims or
related claims, breach of employment contract types of claims, but not claims
for breach of the Agreement itself) I may have relating to my employment with
Apex Inc. and/or the termination of that relationship which I would not have but
for my being an employee of Apex Inc. since the time I signed the Agreement, as
well as releasing and waiving any and all other claims referenced in Paragraph 8
of the Agreement to the extent permitted by law.
----------------------------
Xxxxx X. Xxxxx
*DO NOT SIGN, DATE, OR RETURN THIS DOCUMENT BEFORE THE
FIRST ANNIVERSARY OF THE APEX MERGER AS DESCRIBED IN THE
REORGANIZATION AGREEMENT
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