Exhibit 2.1.1
Management Voting and Exchange Agreement
THIS MANAGEMENT VOTING AND EXCHANGE AGREEMENT (this "Agreement"), dated as
of April 20, 1999, is made by and between Real Acquisition Sub #1, Inc., a
Colorado corporation ("Merger Sub"), and _________________________
("Executive").
W I T N E S S E T H:
WHEREAS, Real Software NV, a Belgium corporation ("Real"), Real Software
Holdings North America, Inc., a Delaware corporation ("Real Holdings"), Merger
Sub and TAVA Technologies, Inc., a Colorado corporation ("TAVA"), are entering
into an Agreement and Plan of Reorganization dated as of the date hereof (as
amended from time to time pursuant thereto, the "Reorganization Agreement"),
pursuant to which Merger Sub will merge with and into TAVA (the "Merger") and
all of the outstanding shares (other than certain shares designated in the Plan
of Merger) and, except as provided herein, vested options to acquire shares of
TAVA stock will be effectively converted into the right to receive $_____ (the
"Merger Consideration") per share, less the exercise price per share of any such
options;
WHEREAS, Executive is currently the ____________________ of TAVA and is the
holder of options to purchase _____ shares of TAVA Common Stock and the direct
or indirect record holder of ________ shares of Common Stock, par value $0.0001
per share, of TAVA (the "TAVA Common Stock) (such shares of TAVA Common Stock,
together with any shares of capital stock of TAVA acquired by Executive after
the date hereof and during the term of this Agreement, being collectively
referred to herein as the "Stockholder Shares");
WHEREAS, Merger Sub and Executive will execute an Employment Agreement
whereby Executive will become an employee of the corporation surviving the
Merger (the "Surviving Corporation"); and
WHEREAS, Real and Merger Sub are unwilling to proceed with the Merger
unless provision is made for continuity of management of TAVA and the Surviving
Corporation and Real and Merger Sub have required, as an indication of
Executive's willingness to continue as an employee of the Surviving Corporation,
that Executive maintain a substantial percentage of his interest in TAVA and the
Surviving Corporation, and as a condition to the willingness of Real and Merger
Sub to enter into the Reorganization Agreement, and as an inducement to them to
do so, Executive has agreed to the provisions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises set forth above, the
mutual promises set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows (terms defined in the Reorganization Agreement and used but not
defined herein having the meanings assigned to such terms in the Reorganization
Agreement):
Article I.
Exchange
1.1 Exchange of Securities. [Executive understands and agrees that,
pursuant to the terms of the Merger, 338,691 Stockholder Shares shall not be
converted into the right to receive Merger Consideration and shall continue as
shares of Common Stock, par value $___ per share, of the Surviving Corporation
("Surviving Corporation Common Stock") from and after the Merger. Executive
shall not sell, transfer or encumber, and shall remain the direct or indirect
record holder of such 338,691 Stockholder Shares prior to or at the Effective
Time. For federal income tax purposes, Executive shall be deemed a continuing
stockholder in the Surviving Corporation. Executive agrees, on or soon after the
Effective Time, to exchange the certificates representing such shares of
Surviving Corporation Common Stock for new certificates bearing the legends
described below.] [for Xxxxx Xxxxxx] Immediately prior to the Effective Time,
Executive shall surrender to TAVA the options to purchase shares of TAVA Common
Stock listed on Exhibit A and Merger Sub shall irrevocably grant and issue to
Executive an equal number of options to purchase Surviving Corporation Common
Stock (the "New Options"), with equivalent terms, vesting schedules and exercise
prices, under a Stock Option Plan of Merger Sub. The New Options shall not be
treated as incentive stock options within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"). [Executive understands
and agrees that, pursuant to the Merger and the terms of such options, the
options to purchase TAVA Common Stock set forth on Exhibit B shall not be
converted into the right to receive the Merger Consideration and shall continue
to remain outstanding, unaffected by the Merger, with the same terms (including
vesting terms) as existed for such options immediately prior to the Merger.
Executive shall not exercise, amend or otherwise change the status of such
options prior to or at the Effective Time.] [for Xxxx Xxxxxxx only, to preserve
ISO status] The Surviving Corporation Common Stock issuable upon exercise of the
New Options [and the Surviving Corporation Common Stock which Executive shall
retain] is referred to as the "Exchange Stock."
1.2 Status of Stock. Executive understands that at the time of the
execution of this Agreement the Exchange Stock has not been registered under the
Securities Act of 1933 (the "Securities Act") or any state securities law, and
that the Surviving Corporation does not currently intend to effect any such
registration. Executive agrees that the shares of Exchange Stock are and shall
be acquired for investment without a view to distribution, within the meaning of
the Securities Act, and shall not be sold, transferred, assigned, pledged or
hypothecated in the absence of an effective registration statement for the
shares under the Securities Act and applicable state securities laws or an
applicable exemption from the registration requirements of the Securities Act
and any applicable state securities laws. Executive also agrees that the shares
of Exchange Stock will not be sold or otherwise disposed of in any manner which
would constitute a violation of any applicable securities laws, whether federal
or state.
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1.3 Certain Restrictions. Executive agrees (i) that the certificates
representing the shares of Exchange Stock may bear such legend or legends as the
Surviving Corporation deems appropriate in order to assure compliance with
applicable securities laws, (ii) that Executive may not transfer shares of
Exchanged Stock, and the Surviving Corporation may refuse to register any such
transfer on its stock transfer records, unless Executive provides the Surviving
Corporation with a written opinion of legal counsel, satisfactory to the
Surviving Corporation, addressed to the Surviving Corporation and satisfactory
in form and substance to the Surviving Corporation, to the effect that the
proposed transfer may be made without registration under the Securities Act, and
(iii) that the Surviving Corporation may give related instructions to its
transfer agent, if any, to stop registration of any such transfer of the shares
of Exchange Stock.
1.4 Cashless Exercise. For a period of sixty (60) days beginning on the
date that is twenty two (22) months from the Effective Time, Executive shall
have the option to exercise any or all of the New Options which are vested at
such time, and pay the exercise price of such exercised New Options in the form
of a recourse note to the Surviving Corporation, secured by the shares of
Surviving Corporation Common Stock issuable upon exercise of such New Options.
In addition, to the extent that the exercise of such New Options result in
ordinary income to the Executive for which the Surviving Corporation must
satisfy withholding obligations under applicable tax laws or regulations, the
Surviving Corporation shall loan to Executive the cash in the amount of such
withholding obligations resulting from such exercise. The original principal
amount of the note issued by Executive to the Surviving Corporation shall equal
the exercise price of the exercised New Options, plus the amount loaned by the
Surviving Corporation to the Executive pursuant to the immediately preceding
sentence. Such note shall bear interest at the rate the Surviving Corporation
pays interest to its general unsecured creditors and shall mature, and the full
principal amount, plus all accrued but unpaid interest, shall become due and
payable, on the date which is five (5) years after the issuance of such note;
provided, that Executive may prepay such note at any time or from time to time
without penalty and Executive shall apply (i) with respect to shares of
Surviving Corporation Common Stock subject to pledge under this Section 1.4, the
portion of proceeds of any sale, transfer or further encumbrance of such shares
representing the portion of the loan attributable to such shares, which shall be
the exercise price and the withholding tax payable in respect of such shares,
and (ii) a pro rata portion of any proceeds from any sale, transfer or
encumbrance of any other shares of Surviving Corporation Common Stock, in each
case to repay the principal and interest on the note.
1.5 Valuation on Exercise of Options.
(a) Upon exercise of New Options, the principles to be applied in
determining the value of the Surviving Corporation Common Stock issued to
Executive upon such exercise to be used for tax reporting purposes shall
include that the value shall be subject to a discount of 45% in the first
year following the Merger, 35% in the second year and 25% in the third year
arising out of the facts that (1) the Surviving Corporation is not a
reporting company under the Securities Exchange Act of 1934 or other
applicable laws, and (2) the price Real Holdings is willing to pay
Executive for such shares in the first three years following the Merger
reflects a percentage of the full value; provided, that if the Surviving
Corporation Common Stock issued to Executive is able to be sold, without
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any remaining conditions to such sale, to Real Holdings pursuant to
Sections 1.3.1, 1.3.2 or 1.3.3 of the Shareholders Agreement for the
Surviving Corporation, then the value of such shares shall equal the price
that would be payable by Real Holdings. The valuation from which any
discount required by the preceding sentence is taken shall be the Fair
Market Value per share provided in Section 1.7 of the Shareholders
Agreement.
(b) If the Surviving Corporation shall determine that the valuation of
the Surviving Corporation Common Stock as determined under Section 1.5(a)
is manifestly unreasonable as a result of any circumstance, the Surviving
Corporation may report on the basis of the closest valuation that the
Surviving Corporation determines to not be manifestly unreasonable.
(c) If (i) either (a) the Internal Revenue Service on audit of
Executive or Surviving Corporation determines that the amount of income to
Executive and/or compensation expense to Surviving Corporation should be
higher than the amount determined under Section 1.5(a) or (b) the Surviving
Corporation, pursuant to Section 1.5(b), reports a valuation higher than
the valuation determined pursuant to Section 1.5(a), and (ii) as a result,
Executive is required to pay additional tax on income with respect to the
exercise and Surviving Corporation is required to pay less tax as a result
of higher compensation expense with respect to the exercise, then (iii)
Surviving Corporation shall pay the amount of the lessening of Surviving
Corporation's tax to Executive, up to 80% of the amount of additional tax
so payable by Executive.
Article II.
Covenants of Executive
2.1 Agreement to Vote. At any meeting of the stockholders of TAVA held
prior to the Termination Date, however called, and at every adjournment or
postponement thereof prior to the Termination Date, or in connection with any
written consent of the stockholders of TAVA given prior to the Termination Date,
Executive shall, and shall cause each individual, firm, corporation,
partnership, trust, limited liability company or other entity (each, a "Person")
controlled by Executive, other than TAVA and its Subsidiaries (collectively, the
"Executive Group") to, vote or cause to be voted all Stockholder Shares and
other TAVA Common Stock entitled to vote and beneficially owned by such Persons
in accordance with the recommendation of the Board of Directors of TAVA. From
the date of this Agreement through the Termination Date, Executive hereby grants
Merger Sub an irrevocable proxy coupled with an interest to vote the Stockholder
Shares in accordance with the recommendation of the Board of Directors of TAVA.
2.2 Proxies and Voting Agreements. Except as described in Section 2.1,
Executive hereby revokes any and all previous proxies granted with respect to
matters set forth in Section 2.1. Prior to the Termination Date, Executive shall
not, and shall cause each member of the Executive Group not to, enter into any
agreement or understanding with any person other than Merger Sub prior to the
Termination Date, directly or indirectly, to vote, grant any proxy or give
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instructions with respect to the voting of any Stockholder Shares in any manner
inconsistent with this Agreement.
2.3 No Solicitation.
(a) From and after the date hereof until the Termination Date, neither
Executive nor any other member of the Executive Group will directly or
indirectly, solicit or encourage (including by way of providing
information) any prospective acquiror or the invitation or submission of
any inquiries, proposals or offers or any other efforts or attempts that
constitute, or may reasonably be expected to lead to, a TAVA Transaction
Proposal.
(b) Executive shall immediately cease and cause to be terminated any
existing solicitation, initiation, encouragement, activity, discussion or
negotiation with any parties conducted heretofore by Executive or any
representatives of Executive with respect to any TAVA Transaction Proposal
existing on the date hereof.
(c) Prior to the Termination Date, Executive will promptly notify
Merger Sub of any requests for information made to Executive or any
representative of Executive or the receipt of any TAVA Transaction Proposal
made to Executive or any representative of Executive, including the
identity of the person or group engaging in such discussions or
negotiations, requesting such information or making such TAVA Transaction
Proposal, and the material terms and conditions of any TAVA Transaction
Proposal.
(d) Prior to the Termination Date, Executive shall not, and each
member of the Executive Group shall not, enter into any agreement with any
person that provides for, or in any way facilitates, a TAVA Transaction
Proposal.
(e) The provisions of this Section 2.3 do not prohibit Executive, or
other member of the Executive Group, from taking actions expressly
permitted by Section 4.2.14.1 of the Reorganization Agreement.
2.4 Transfer of Shares by Executive. Prior to the Termination Date,
Executive shall not (a) subject any of the Purchase Option Shares to, or suffer
to exist on any of the Purchase Option Shares, any lien, pledge, security
interest, charge or other encumbrance or restriction, other than pursuant to
this Agreement, or (b) sell, transfer, assign, convey or otherwise dispose of
any of the Purchase Option Shares (including any such action by operation of
law), other than a disposition by operation of law pursuant to the Merger. Prior
to the record date for the TAVA stockholder meeting to vote on the
Reorganization Agreement, neither Executive nor any member of the Executive
Group will sell, transfer, assign, convey or otherwise dispose of any of the
Stockholder Shares (including any such action by operation of law).
2.5 Other Actions. Prior to the Termination Date, neither Executive nor any
member of the Executive Group shall take any action that would in any way
restrict, limit, impede or interfere with the performance of its obligations
hereunder or the transactions contemplated hereby or by the Reorganization
Agreement.
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Article III.
Representations, Warranties and Additional Covenants
of Executive
Executive represents, warrants and covenants to Merger Sub that:
3.1 Ownership. Executive is as of the date hereof the beneficial and record
owner of the Stockholder Shares and has the sole right to vote the Stockholder
Shares. None of the Stockholder Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of the
Stockholder Shares, and no proxy, power of attorney or other authorization has
been granted with respect to any of the Stockholder Shares other than as set
forth herein. Upon delivery of any Purchase Option Shares upon exercise of the
Purchase Option, Merger Sub will acquire good title to such shares, free and
clear of all liens, pledges, security interests, charges or other encumbrances
or restrictions.
3.2 Authority and Non-Contravention. Executive has the right, power and
authority, and Executive has been duly authorized by all necessary action
(including consultation, approval or other action by or with any other person),
to execute, deliver and perform this Agreement and consummate the transactions
contemplated hereby. Such actions by Executive (a) require no action by or in
respect of, or filing with, any governmental entity with respect to Executive,
other than any required filings under the Exchange Act or under the HSR Act, and
(b) do not and will not contravene or constitute a default under any provisions
of applicable law or regulation or any agreement, judgment, injunction, order,
decree or other instrument binding on Executive or result in the imposition of
any lien, pledge, security interest, charge or other encumbrance or restriction
on any of the Stockholder Shares (other than as provided in this Agreement with
respect to Stockholder Shares).
3.3 Binding Effect. This Agreement has been duly executed and delivered by
Executive and is the valid and binding agreement of Executive, enforceable
Executive in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are subject.
3.4 Reasonable Efforts. Prior to the Termination Date, Executive shall use
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with Merger Sub in doing, all
things necessary, proper or advisable to consummate and make effective the
Merger and the other transactions contemplated by the Reorganization Agreement
and this Agreement.
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Article IV.
Miscellaneous
4.1 Capitalization; Common Stock Issuances. At the Effective Time, the
authorized capital stock of the Company shall consist of 100,000,000 shares of
Surviving Corporation Common Stock, of which ______ shares shall be issued and
outstanding and ______ shares shall be reserved for issuance in connection with
various employee benefit plans and _____ shares shall be reserved for issuance
pursuant to certain warrants. The Company shall not issue any shares of
Surviving Corporation Common Stock while Executive owns any Stockholder Shares,
other than issuances for fair value as determined in good faith by the Board of
Directors of the Company; provided, that the Company may issue shares of
Surviving Corporation Common Stock for any amount of cash consideration, if the
Company offers to Executive the preemptive right to purchase its proportionate
share of any such issuance. Executive's "proportionate share" shall mean the
number of shares of Surviving Corporation Common Stock proposed to be issued and
sold multiplied by a fraction, the numerator of which is the number of shares of
Surviving Corporation Common Stock held by the Shareholder, and the denominator
of which is the number of shares of Surviving Corporation Common Stock
outstanding (in each case, determined on a fully diluted basis assuming full
exercise and conversion of all outstanding options, warrants, rights and other
securities which are convertible or exchangeable for shares of Surviving
Corporation Common Stock, without regard to vesting schedules or exercise
periods, but excluding options for which the exercise price is greater than the
Fair Market Value (as defined in the Shareholders Agreement, dated as of the
date hereof, among Merger Sub, Real Holdings and the other shareholders party
thereto) and assuming that all options are exercised by paying the exercise
price in shares of stock).
4.2 [Employment Agreement. Executive and Merger Sub shall, within thirty
(30) days of the date hereof, enter into an employment agreement, to be
effective at the Effective Time and on terms mutually acceptable to Executive
and Merger Sub. Each of the terms of such new employment agreement shall (i)
incorporate the general concepts set forth on Exhibit C hereto, and (ii)
otherwise be on terms and conditions at least as favorable to Executive as the
employment agreement Executive presently has with TAVA.
4.3 Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Real Holdings to: Real Software Holdings North America, Inc.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
If to Merger Sub to: Real Acquisition Sub #1, Inc.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
If to Executive to: ____________________________________
____________________________________
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or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices or changes of address shall be
effective only upon receipt.
4.4 Specific Performance. Each of the parties hereto acknowledge and agree
that irreparable damage would occur if for any reason Executive fails to perform
any of Executive's obligations under this Agreement, and that Merger Sub would
not have an adequate remedy at law for money damages in such event. Accordingly,
Merger Sub shall be entitled to seek specific performance and injunctive and
other equitable relief to enforce the performance of this agreement by Executive
without any requirement for the securing or posting of any bond. This provision
is without prejudice to any other rights that Merger Sub may have against
Executive for any failure to perform its obligations under this Agreement.
4.5 Applicable Law. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the state of Delaware.
4.6 No Waiver. No failure by either party hereto at any time to give notice
of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
4.7 Severability. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.
4.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
4.9 Headings. The Article and Section headings herein have been inserted
for purposes of convenience only and shall not be used for interpretive
purposes.
4.10 Gender and Plurals. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
4.11 Assignment. This Agreement, and the other documents contemplated
hereby, shall be binding upon and inure to the benefit of each of the parties
hereto and any successor of Merger Sub or the Surviving Corporation, by merger
or otherwise. Except as specifically provided in this Section 4.11, this
Agreement and the rights and obligations of the parties hereunder are personal,
and neither this Agreement nor any right, benefit, or obligation of either party
hereto shall be subject to voluntary or involuntary assignment, alienation, or
transfer, whether by operation of law or otherwise, without the prior written
consent of the other party.
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4.12 Dispute Resolution. Any controversy, dispute or claim for
indemnification arising pursuant to this Agreement (a "Dispute") shall be
resolved by binding arbitration administered by the American Arbitration
Association (the "AAA") in accordance with the terms of this Section 4.12, the
Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable,
the United States Arbitration Act. Judgment on any matter rendered by
arbitrators may be entered in any court having jurisdiction. Any arbitration
shall be conducted before three arbitrators. The arbitrators shall be
individuals knowledgeable in the subject matter of the Dispute. Each of the
Surviving Corporation and the Executive shall select one arbitrator by written
notice to the Surviving Corporation and the Executive within fifteen (15) days
after a request by one party for arbitration and the two arbitrators so selected
shall select the third arbitrator. If the third arbitrator is not selected
within thirty (30) days after the request for an arbitration, then any party may
request the AAA to select the third arbitrator. The arbitrators may engage
engineers, accountants or other consultants they deem necessary to render a
conclusion in the arbitration proceeding. To the maximum extent practicable, an
arbitration proceeding hereunder shall be concluded within 90 days of the filing
of the Dispute with the AAA. Arbitration proceedings shall be conducted in
Denver, Colorado. Arbitrators shall be empowered to impose sanctions and to take
such other actions as the arbitrators deem necessary to the same extent a judge
could impose sanctions or take such other actions pursuant to the Federal Rules
of Civil Procedure and applicable law. At the conclusion of any arbitration
proceeding, the arbitrators shall make specific written findings of fact and
conclusions of law. Subject to the limitations set forth in this Agreement, the
arbitrators shall have the power to award recovery of all costs and fees,
including attorney fees and disbursements, to the prevailing party. All fees of
the arbitrators and any engineer, accountant or other consultant engaged by the
arbitrators, shall be shared equally between the parties unless otherwise
awarded by the arbitrators.
4.13 Entire Agreement. This Agreement, together with the other agreements
contemplated hereby, constitutes the entire agreement of the parties with regard
to the subject matter hereof. Without limiting the scope of the preceding
sentence, all prior understandings and agreements among the parties hereto
relating to the subject matter hereof are hereby null and void and of no further
force and effect. Any modification of this Agreement will be effective only if
it is in writing and signed by each of the parties to be bound by such
modification.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
20th day of April, 1999, to be effective as of the effective date of the Merger.
REAL ACQUISITION SUB #1, INC.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
EXECUTIVE
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EXHIBIT A
For Xxxx Xxxxxxx
--------------------------------------------------------------------------------
Grant Date Expiration Plan Type Options Option Price Vesting
Date Outstanding
--------------------------------------------------------------------------------
1/28/1997 1/28/2008 NQ 200,000 $2.50 Current
1/28/1997 1/28/2007 NQ 150,000 $2.50 Current
1/28/1997 1/28/2007 NQ 86,260 $2.50 Current
--------------------------------------------------------------------------------
For Xxxx Xxxxxxx
--------------------------------------------------------------------------------
Grant Date Expiration Plan Type Options Option Price Vesting
Date Outstanding
--------------------------------------------------------------------------------
2/17/1999 2/17/2007 NQ 23,367 $5.81 Current at
Effective Time
5/5/1997 5/4/2007 NQ 100,000 $2.49 Current at
Effective Time
5/5/1997 5/4/2007 NQ 27,721 $2.13 Current
--------------------------------------------------------------------------------
For Xxxxx Xxxxxxxx
--------------------------------------------------------------------------------
Grant Date Expiration Plan Type Options Option Price Vesting
Date Outstanding
--------------------------------------------------------------------------------
7/15/1997 7/15/2007 NQ 75,000 $3.66 Current at
Effective Time
7/15/1997 7/15/2007 NQ 16,173 $3.14 Current
--------------------------------------------------------------------------------
For Xxxxx Xxxxxx
--------------------------------------------------------------------------------
Grant Date Expiration Plan Type Options Option Price Vesting
Date Outstanding
--------------------------------------------------------------------------------
2/8/1997 11/30/2006 NQ 66,666 $2.25 Current
2/8/1997 11/30/2006 NQ 66,667 $2.25 Current
2/8/1997 11/30/2006 NQ 36,897 $2.25 Current
--------------------------------------------------------------------------------
EXHIBIT B
[For Xxxx Xxxxxxx only]
For Xxxx Xxxxxxx
--------------------------------------------------------------------------------
Grant Date Expiration Plan Type Options Option Price Vesting
Date Outstanding
--------------------------------------------------------------------------------
2/17/1999 2/17/2007 Incentive 51,633 $5.81 Current at
Effective Time
--------------------------------------------------------------------------------
EXHIBIT C
Terms to be included in Executive Employment Agreement
o Term of Agreement: 3 years.
o In the event of termination prior to expiration of agreement that is either
(a) by Merger Sub not for Cause, or (b) by Executive for Good Reason,
Executive shall receive:
(1) Severance payments for at least 12 months base salary; and
(2) Accelerated vesting of options granted through the date of termination
(unless such option grants specifically exclude acceleration or such options are
for shares of stock of Real Holdings).
"Cause" shall be defined according to custom in the industry, but in no
event shall include simple negligence or disagreement over management
strategy or philosophy. "Good Reason" shall be defined according to custom
in the industry.
o Compensation:
(1) Base salary equal to no less than base salary at the date hereof, with
annual review for increase as customary in the industry;
(2) Bonus program in accordance with the bonus program in place at TAVA ninety
(90) days prior to the date hereof;
(3) Merger Sub will consider the issuance of new options to purchase shares of
Surviving Corporation Common Stock or shares of Common Stock of Real Holdings;
and
(4) Fringe benefits no less valuable than those provided by TAVA to Executive
prior to the date hereof (including, but not limited to, medical, dental,
disability, life, directors and officers liability insurance, and a 401(k)
plan).
