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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
AGREEMENT, made this 27th day of September, 1989, effective October 2,
1989, by and between Americable, Inc., a Minnesota corporation, having its
principal place of business in Eden Prairie, Minnesota, hereinafter referred to
as "Employer" or "AMC", and Xxxx X. Xxxxxxx, residing at 0000 Xxxx Xxxx Xxxx,
Xxxx Xxxxxx, Xxxxxxxx 00000, hereinafter referred to as "Employee" or
"Xxxxxxx".
WITNESSETH:
WHEREAS, Employer desires to assure itself of the services of Employee,
and to that end desires to enter into an agreement of employment with him, upon
the terms and conditions hereinafter set forth;
WHEREAS, Employee wishes to enter into an Employment Agreement with
Employer upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement only, the following
terms shall have the meanings hereinafter set forth:
(a) The term "NSU" shall refer to North Star Universal, Inc., a Minnesota
corporation, the corporate parent of AMC.
(b) The term "Reference Rate" shall mean the rate of interest publicly
announced by the First Bank National Association, St. Xxxx,
Minnesota, as its Reference Rate, as the same may change from time to time.
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2. Employment. Employer agrees to employ Employee, and Employee agrees
to accept such employment from Employer, upon the terms and conditions
hereinafter set forth.
3. Duties. Employee shall serve in an executive capacity in the
Minneapolis, Minnesota metropolitan area and shall be President and Chief
Operating Officer of AMC, performing such services as the Chief Executive
Officer and the Board of Directors of Employer may from time to time determine,
consistent with the ordinary duties associated with the position of President
and Chief Operating Officer. Employee shall devote his full time and best
efforts to the business of Employer.
4. Term. This Agreement shall be for a term commencing with the
effective date of this Agreement, and terminating on December 31, 1994,
subject, however, to termination during each year as provided herein.
5. Base Salary. As base compensation to Employee for all services
rendered by Employee to Employer commencing on the effective date of this
Agreement, Employer agrees to pay Employee an annual Base Salary ("Base
Salary") of $140,000.00. Such salary shall be subject to any withholding
required by law and shall be payable in equal semi-monthly installments on the
15th and last day of each month, or at such shorter intervals as Employer may
adopt. Said salary shall be pro-rated for any partial years covered by this
Agreement. At the discretion of Employer, the Base Salary may be increased
from time to time.
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6. Annual Bonuses. As additional compensation to Employee during the
term of this Agreement, Employer agrees to pay Employee annual bonuses as
follows:
(a) For calendar year 1989, Employee shall receive an annual bonus equal
to 30% of his Base Salary, pro-rated for the number of days he is employed in
1989.
(b) For calendar years 1990 through 1994, Employee shall receive an
annual bonus as follows:
(i) Prior to December 31, 1989, and each subsequent December 31,
through 1993, Employer and Employee shall mutually agree upon a numerical
"Target" with respect to the financial performance of Employer for the
subsequent calendar year, which Target shall be the basis upon which
Employee's annual bonus for the calendar year shall be based.
(ii) Employer shall pay Employee an annual bonus with respect to
the performance of the Employer toward the Targeted amount, as follows:
(A) If Employer's performance reaches the Targeted
amount, Employee's annual bonus shall be thirty (30%) percent of his Base
Salary.
(B) If Employer's performance reaches one hundred twenty
(120%) percent or more of the Targeted amount, Employee's annual bonus
shall be forty (40%) percent of his Base Salary.
(C) If Employer's performance is less than eighty (80%)
percent of the Targeted amount, Employee shall receive no annual bonus.
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(D) If Employer's performance is between eighty (80%)
percent and one hundred (100%) percent of the Targeted amount, Employee
shall be paid an annual bonus on a pro rata basis with a bonus of twenty
(20%) percent of Employee's Base Salary being paid for Employer
performance of eighty (80%) percent of Targeted amount, and thirty (30%)
percent of Employee's Base Salary being paid as a bonus for performance of
one hundred (100%) percent of the Targeted amount.
(E) If Employer's performance is between one hundred
(100%) percent and one hundred twenty (120%) percent of the Targeted
amount, then Employee shall be paid an annual bonus on a pro rata basis
with an annual bonus of thirty (30%) percent of Employee's Base Salary
being paid for Employer's performance at one hundred (100%) percent of the
Targeted amount, and forty (40%) percent of Employee's Base Salary being
paid as an annual bonus for Employer's performance of one hundred twenty
(120%) percent of the Targeted amount.
(c) Annual bonuses shall be payable without interest 90 days after each
calendar year end.
(d) Bonuses payable pursuant to this paragraph will be paid on a pro-rata
basis for any partial years at the termination of this Agreement. Said bonuses
shall be paid 90 days after the end of any partial year.
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(e) Bonuses shall be paid pursuant to this paragraph only so long as
Employee is employed pursuant to this Agreement. If Employee terminates his
employment without cause, then any bonuses accrued for the year in which
Employee terminates his employment will be forfeited. Any bonus payable to
Employee shall not be forfeited if Employee's employment terminates on account
of death, disability, termination by Employer without cause, or termination by
Employee for cause; bonuses payable pursuant to this sentence shall be paid on
a pro-rata basis for the year involved.
7. Stock Option Agreement. Employees shall be granted an option to
purchase 2.5% of the Employer's common stock outstanding on the effective date
of this Agreement at its then book value per share, pursuant to the terms of a
Stock Option Agreement, as attached hereto as Exhibit A, and incorporated
herein by reference.
8. Severance Pay Provisions.
(a) If Employer terminates Employee without cause, or if Employee
terminates this Agreement with cause at any time, then as severance pay,
Employee shall receive his monthly Base Salary during each of the 18 months
immediately following termination, plus a pro-rata share of his annual bonus
accrued up to the date of termination. Said pro-rata bonus will be paid to
Employee, without interest, ninety (90) days after the end of the calendar year
in which accrued.
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(b) If Employee terminates this Agreement without cause, or Employer
terminates this Agreement with cause, Employee shall receive no severance pay,
and shall forfeit any accrued annual bonus for the year of termination. Said
pro-rata bonus will be paid to Employee without interest ninety (90) days after
the end of the calendar year in which accrued.
9. Additional Benefits and Working Facilities.
(a) Employer shall furnish Employee with all equipment, office space,
secretarial help, and such other items relating to his employment as are
determined useful and necessary by Employer and which are customary for the
duties of Employee.
(b) Employee shall participate in the NSU flex benefits plans which NSU
shall offer to employees of Employer during the term of this Agreement.
Employee and his dependents may participate in such plans on the same basis as
all other employees of Employer and NSU. Generally, such plans provide
coverage for eligible health care expenses which are paid at reasonable and
customary rates, as further stipulated in the plan documents.
(c) Employee will be entitled to four (4) weeks annual vacation.
(d) Employer shall reimburse Employee for all reasonable expenses
incurred by Employee in connection with Employer's business, including, but not
limited to, expenses of travel and entertainment, upon presentation of itemized
statements therefor. In the event any such expense is disallowed to the
Employer as
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a deduction for income tax purposes by any taxing authority, Employee shall
forthwith pay to Employer an amount equal to the income tax cost to the
Employer for such disallowance.
(e) Employer shall pay Employee Forty Thousand and No/100ths ($40,000.00)
Dollars as a relocation allowance. Employee shall receive Ten Thousand and
No/100ths ($10,000.00) Dollars of this allowance upon the execution of this
Agreement. The balance of this allowance shall be paid periodically upon the
presentation to Employer of itemized receipts for relocation expenses. To the
extent that Employee has not incurred all relocation expenses within 30 days of
his commencement of Employment, the unpaid balance of the relocation allowances
shall be paid to Employee 30 days after the commencement of his employment.
10. Events of Termination. This Agreement shall terminate as follows:
(a) On December 31, 1994;
(b) By mutual written agreement of the parties;
(c) Upon the death of Employee;
(d) At the option of Employee, with respect to a cause under the control
of Employer, upon one month's written notice by Employee to Employer, with
Employer having one month to correct said cause. "Cause" shall be defined as a
breach of the terms of this Agreement by Employer; or
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(e) At the option of Employer, only upon the occurrence (or afterwards)
of any of the following events any one of which shall be considered as
termination "for cause":
(i) If Employee shall continue to materially neglect his duties or
devote a substantial portion of his time or attention to other interests
during normal working hours thirty (30) days after Employee receives
advance written notice from Employer to correct such neglected duty or
devotion of time to such other interests;
(ii) The conviction of Employee of any crime punishable as a
felony;
(iii) Upon the expiration of six (6) consecutive months of continued
disability after the certification by a Physician of physical or mental
disability of Employee to such an extent that he is unable to carry on a
substantial portion of his usual and customary duties.
11. Confidential Information. Employee shall not at any time, either
during Employee's employment or after the termination of such employment,
divulge to others or use for Employee's own benefit any proprietary or
confidential information or trade secrets of Employer obtained during the
course of employment with Employer relating to sales, technology, formulas,
processes, methods, machines, manufacturers, compositions, ideas, improvements,
or inventions belonging to or relating to the Employer, its clients,
subsidiaries, affiliates, successors or associated companies.
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12. Property of the Employer. All memoranda, notes, records, papers,
inventions, and other documents, items and all copies thereof relating to the
Employer and its operation of business and all objects related thereto are and
remain the property of the Employer including, but not limited to, those
developed, investigated or considered by the Employer; provided however, that
Employee shall remain the owner of any invention for which no equipment,
supplies, or trade secret information of the Employer was used and which was
developed entirely on Employee's own time, and;
(a) Which does not relate (1) directly to the business of the
Employer or (2) to the Employer's actual or demonstrably anticipated
research or development; or
(b) Which does not result from any work performed by Employee for
the Employer.
13. Covenant Not to Compete. As additional consideration for this
Agreement, Employee hereby covenants and agrees that during his full or part
time employment by Employer and for three years thereafter, whether Employee's
termination of employment is the result of discharge or otherwise, provided
that Employer is not in default to Employee under the terms hereof, Employee
shall not within the continental United States directly or indirectly:
(a) Enter into or engage (i) in the business of manufacturing,
selling, or distributing computer cables, connectors or related computer
accessories, or
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(ii) in the business of providing services, including contract computer
maintenance, depot computer repair, and computer refurbishment and
reconfiguration, either as an individual for his own account, or as a
partner or joint venturer, or as an employee, agent, or salesman for any
person, or as an officer or director of a corporation or otherwise,
provided, however, that nothing prohibited by this covenant shall apply to
me health care industry as it relates to the distribution of products not
related to computer cables, connectors or related computer accessories.
Nothing herein shall prevent Employee from buying and owning shares of
stock of any corporation that may be deemed to compete with Employer,
except that if such stock is not listed on any national or local exchange
at the date of this Agreement, Employee shall be limited to owning not
more than 10% of the outstanding shares of any such company. Solicitation
or acceptance of business shall constitute "engaging in business" in
violation of this Agreement. Except as qualified herein, this covenant on
the part of Employee shall be construed as an agreement independent of any
other provision in this Agreement.
(b) Induce or attempt to induce any employee of Employer or its
subsidiaries to leave the employ of Employer or its subsidiaries or in any
way interfere with the relationship between Employer and its subsidiaries
and any employee of Employer or its subsidiaries.
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(c) Induce or attempt to induce any customer, supplier, licensees
or business relation of Employer or its subsidiaries to cease doing
business with Employer or its subsidiaries or in any way interfere with
the relationship between any customer or business relation of Employer or
its subsidiaries.
In the event of a breach or threatened breach by Employee of the provisions
hereof, Employer shall be entitled to seek an injunction restraining Employee
from competing with Employer. Nothing herein shall be construed as prohibiting
Employer from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages. Employee acknowledges and agrees
that a breach of any of the foregoing covenants shall entitle Employer to
withhold and retain any and all amounts owed or to be owed by the Employer to
the Employee pursuant to Paragraphs 5, 6, and 9, in addition to obtaining such
damages and/or injunctive relief, as may be available at law or equity.
14. Reasonableness of Provisions. The parties to this Agreement consider
the terms, covenants and conditions of this Agreement, including without
limitation, the restrictions imposed by Paragraph 13, to be reasonable and
appropriate as to the scope of business activities, time
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and geographic area specified. If, however, such terms, covenants or
conditions are found by any court of competent jurisdiction to be unreasonable
because they are, or any one of them is, too broad, then such terms, covenants
or conditions shall nevertheless remain effective, but shall be considered
amended as to the scope of business activities, time and geographic area
specified in whatever manner is considered reasonable by that court, and as so
amended shall be enforced.
15. Physical Examination. At any time that Employer deems appropriate,
but not more than once every year, Employee agrees to undergo an examination by
a physician of Employer's choice, such examination to be at no cost to
Employee.
16. Additional Documents. The parties shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purposes and intent of this Agreement and to fulfill
the obligations of the respective parties hereunder.
17. Waiver. Any waiver of any term of condition of this Agreement shall
not operate as a waiver of any other breach of such term or condition, or of
any other term or condition, nor shall any failure to enforce a provision
hereof operate as a waiver of such provision or of any other provision hereof.
18. Notices. All communications with respect to this Agreement shall be
considered given if delivered or sent as follows:
(a) To Employee, by first class certified mail, postage prepaid, return
receipt requested, addressed as follows:
Xxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
with copy to:
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(b) To Employer, by first class certified mail, postage prepaid, return
receipt requested, addressed as follows:
Americable, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
with copy to:
Xxxxxx Xxxxxxx
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
(c) To North Star Universal, Inc., by first class certified mail, postage
prepaid, return receipt requested, addressed as follows:
North Star Universal, Inc.
Attn: Corporate Secretary
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
with copy to:
Xxxxxx Xxxxxxx
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
or mailed to such other addresses as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) days after mailing
or upon personal delivery.
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19. Entire Agreement. This Agreement, together with all exhibits and
writings required or contemplated hereby, constitutes the entire agreement
between the parties hereto with respect to the transactions contemplated hereby
and no party shall be liable or bound to another in any manner by any
warranties, representations, or guarantees, except as specifically set forth
herein.
20. Modifications, Amendments and Waivers. The parties hereto at any
time may, by written agreement, (i) extend the time for the performance of any
of the obligations or other acts of the parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any exhibit, schedule, letter, certificate or other instrument delivered
pursuant hereto; (iii) waive compliance with any of the covenants or agreements
contained in this Agreement; or (iv) make any other modifications of this
Agreement. This Agreement shall not be altered or otherwise amended except
pursuant to an instrument in writing executed by the parties hereto.
21. Arbitration. Except for any matter in which injunctive relief is
requested, any matter of disagreement in connection with this Agreement shall
be promptly settled by arbitration in Minneapolis, Minnesota, pursuant to the
rules of the American Arbitration Association. The arbitrator's decision may
be filed with the District Court, and shall become the final judgment.
The Minnesota Rules of Civil Procedure which provide for discovery by
either party shall apply and be in full effect for said arbitration procedure.
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The "non-prevailing" party in any arbitration proceeding shall reimburse
the "prevailing" party for all reasonable costs of the arbitration proceeding,
including, but not necessarily limited to, reasonable attorney's fees,
arbitrator's fees, deposition expense, photocopy expense, and the like, and in
addition, the prevailing party shall be reimbursed for funds advanced under
protest with respect to the disputed matter under any provision of this
Agreement, as well as interest at the Reference Rate on any such funds
advanced.
22. Severability. No finding or adjudication that any provision of this
Agreement is invalid or unenforceable shall affect the validity or
enforceability of the remaining provisions herein, and this Agreement shall be
construed as though such invalid or unenforceable provisions were omitted.
23. Audit. Until Employee is satisfied that all payments under this
Agreement are appropriate, Employee or his agents shall have the right to audit
the books and records of Employer, and to examine any other records reasonably
necessary to determine the accuracy of the calculations provided with this
Agreement, provided the same shall not unreasonably interfere with Employer's
normal business operations. The audit will be at Employee's expense, unless
cumulative errors in Employee's favor are found exceeding $2,000, in which case
Employer will bear the cost of said audit. Any errors disclosed by said audit
shall be rectified and paid within 10 days of the conclusion of the audit,
unless the party required to pay the same shall object, in which case the
matter shall be submitted to
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arbitration pursuant to paragraph 21. In the case of any errors disclosed by
said audit, any monies due to be transferred will bear interest at the
Reference Rate from the date the error was made.
24. Miscellaneous.
(a) The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective legal representatives, successors and
assigns of the parties thereto.
(b) This Agreement is made pursuant to and shall be construed under the
laws of the State of Minnesota.
(c) This Agreement may be executed in one or more counterparts and each
of such counterparts shall for all purposes be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
above written.
EMPLOYER:
Americable, Inc.
By /s/
------------------------------------------
Its President
----------------------------------------
EMPLOYEE:
/s/
-----------------------------------------
Xxxx X. Xxxxxxx
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EXHIBIT A
STOCK OPTION AGREEMENT
Agreement made this 27th day of September, 1989, by and between
Americable, Inc., a Minnesota corporation, hereinafter referred to as "AMC" or
the "Company"; North Star Universal, Inc., a Minnesota corporation, hereinafter
referred to as "NSU" or "Optionor"; and Xxxx X. Xxxxxxx, hereinafter referred
to as "Xxxxxxx" or "Optionee".
WITNESSETH:
WHEREAS, simultaneously with the execution of this Agreement, AMC and
Xxxxxxx have entered into an Employment Agreement; and
WHEREAS, as an additional incentive to Xxxxxxx, the parties wish to enter
into an agreement whereby Xxxxxxx is awarded options to purchase up to 2.5% of
the Company's Common Stock; and
WHEREAS, as of the date hereof, the capitalization of the Company consists
only of 20,000 shares of Common Stock, all of which is issued to NSU.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Purpose. This Stock Option Agreement (the "Agreement") is intended
to advance the interests of the Company, its shareholders, and its subsidiaries
by encouraging and enabling Xxxxxxx upon whose judgment, initiative and effort
the Company is largely dependent upon for the successful conduct of its
business, to
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acquire and retain a proprietary interest in the Company by ownership of its
stock. The Option granted under this Agreement is intended to be an option
which does not meet the requirements of Section 422A of the Internal Revenue
Code of 1986 (the "Code").
2. Definitions. As used throughout this Agreement, unless the context
otherwise requires a different meaning, the terms defined below shall have the
following meaning (such definitions to be equally applicable to the singular
and plural forms thereof):
(a) "Book Value" shall mean the assets of the Company, less its
liabilities (but excluding long term liabilities owed to NSU or Affiliates),
all as determined by generally accepted accounting principles.
(b) "Book Value Per Share" shall mean the Book Value, divided by the then
outstanding number of Shares.
(c) "Common Stock" means the Company's Common Stock, no par value per
share.
(d) "Corporate Transaction" shall mean:
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Company's incorporation,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company, or
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(iii) any other corporate reorganization or business combination in
which more than fifty percent (50%) of the Company's outstanding voting stock
is transferred to different holders in a single transaction or a series of
related transactions, except as part of a public offering.
(e) "Employment Agreement" shall mean the Employment Agreement between
Xxxxxxx, as Employee and the Company, as Employer, of even date herewith.
(f) "Initial Public Offering" shall mean an offering of the Company's
Common Stock registered with the Securities and Exchange Commission or the
securities division of any state, or an offering made to the public pursuant to
an exemption from registration.
(g) "Shares" shall mean shares of Common Stock of the Company.
(h)
(i) "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations as defined in Section 425 of the Code.
(j) "Successor" means the legal representative of the estate of Xxxxxxx
or the person or persons who acquire the right to exercise an option by bequest
or inheritance or by reason of the death of Xxxxxxx.
(k) "Reference Rate" means the rate of interest announced by the First
Bank National Association, St. Xxxx, Minnesota as its "reference rate", as that
rate changes from time to time.
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(l) "Affiliate" shall include, with respect to any party, any Person
which directly or indirectly controls, is controlled by, or is under common
control with such party and in addition, in the case of NSU or the Company,
each Officer, Director or Shareholder who owns more than five (5%) percent of
any class of the equity securities of NSU or the Company, and each joint
venturer and partner of the Company or NSU. All Subsidiaries of NSU shall be
deemed to be Affiliates of NSU.
(m) "Person" shall mean any natural person, corporation, firm,
association, partnership, joint venture, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
(n) "Permanent Disability" or "Permanently Disabled" shall mean Xxxxxxx'x
physical condition at the expiration of six consecutive months of continued
disability after the certification by a physician of physical or mental
disability of Xxxxxxx to such an extent that he is unable to carry on a
substantial portion of his usual and customary duties.
3. Grant of Option. NSU hereby grants to Xxxxxxx an option to purchase
up to 500 Shares of the Company's Common Stock which it holds.
4. Exercise of Option.
(a) Exercise Dates. This Option shall not be exercisable immediately,
but except as otherwise provided in paragraph 4 shall only be
exercisable under the following schedule, each successive date being
hereinafter referred to as an "Exercise Date".
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Exercise Date Number of Shares Exercisable
------------- ----------------------------
October 1, 1990 100
October 1, 1991 100
October 1, 1992 100
October 1, 1993 100
October 1, 1994 100
---
500
(b) Exercise Price. The Exercise Price shall be the Book Value per Share
as of September 30, 1989.
(c) Full-time employment necessary. Xxxxxxx must be a full-time employee
of the Company (within the terms of the Employment Agreement) (except as
provided in Paragraph 4(d)) from the effective date of this Agreement through
each of the Exercise Dates specified in subparagraph (a) above, in order to
exercise the Shares applicable on each respective Exercise Date.
(d) Duration of Options. Each portion of the Option herein granted is
exercisable on its respective Exercise Date as set forth in subparagraph 4(a),
and shall be exercisable until 11:59 p.m. on October 1, 1999, except that in
the event of Xxxxxxx'x termination of employment, regardless of the reason for
termination, death, or permanent disability, all options which were otherwise
exercisable as of the date of termination, death, or permanent disability, may
be exercised only for a
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period of ninety (90) days following termination, death or disability, or until
11:59 p.m. on October 1, 1999, whichever date first occurs.
(e) Adjustment. This Option and each separately exercisable portion
thereof shall be subject to adjustment as provided in Paragraph 5(a).
(f) Vesting of Shareholder Rights. Neither Xxxxxxx nor his Successor
shall have any of the rights of a shareholder of the Company until Xxxxxxx
exercises his option or portion thereof as provided herein and pays the
consideration for all shares purchased.
(g) Nontransferability of Option. No Option shall be transferable or
assignable to Xxxxxxx, otherwise than by will or by laws of descent and
distribution and this Option and each portion thereof shall be exercisable,
during Xxxxxxx'x lifetime, only by him. No Option shall be pledged or
hypothecated in any way and no Option shall be subject to execution,
attachment, or similar process.
5. Adjustments.
(a) In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares of other securities of the Company or of
another corporation, by reason of a recapitalization, reclassification, stock
split-up, combination of shares, or dividend or other distribution payable in
capital stock, appropriate adjustment shall be made by the Optionor in the
number and kind of Shares as to which this Option, or portions thereof then
unexercised, shall be
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exercisable, to the end that the proportionate interest of the holder of the
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustment in outstanding options shall be made without
change in the total price applicable to the unexercised portion of the Option
but with a corresponding adjustment in the option price per share.
(b) In the event of the dissolution or liquidation of the Company or a
Corporate Transaction, any Option granted under this Agreement shall terminate
as of a date to be fixed by the Company and NSU ("Option Termination Date"),
provided that not less than 30 days' written notice of the Option Termination
Date so fixed shall be given to Xxxxxxx and Xxxxxxx shall have the right prior
to the Option Termination Date to exercise the Option granted hereunder as to
any part of the shares optioned, not previously exercised, i.e. 500 shares,
less shares previously exercised, subject to adjustments.
(c) If the Company is the surviving entity in any merger or other
business combination, then this Option, if outstanding immediately after such
merger or other business combination, shall be appropriately adjusted, by the
Optionor and the Company, to apply and pertain to the number and class of
securities which would be issuable to Xxxxxxx in the consummation of such
merger or business combination if the option were exercised immediately prior
to such merger or business combination, and appropriate adjustments shall also
be made to the price payable per Share, provided the aggregate price payable
hereunder shall remain the same.
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(d) This Agreement shall not in any way affect the right of the Company
to adjust, reclassify, reorganize or otherwise make changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
6. Method of Exercising Option.
(a) In order to exercise this option or any part thereof, Xxxxxxx (or, in
the case of exercise after his death, his Successor) must take the following
actions:
(i) Execute and deliver to the Company a stock purchase agreement
in the form of Exhibit A to this Agreement (the "Stock Purchase and
Shareholder's Agreement" hereinafter "Purchase Agreement") (which Purchase
Agreement the Company and NSU also agree to execute and deliver to Xxxxxxx);
(ii) Pay the aggregate option price for the purchased shares in
cash.
(iii) Furnish to the Company appropriate documentation that the
person or persons exercising the option, if other than Xxxxxxx, have the right
to exercise this option.
(b) This Option shall be deemed to have been exercised with respect to
the number of Shares specified in the Purchase Agreement at such time as the
executed Purchase Agreement for such Shares shall have been delivered to the
Company. Payment of the Option price shall immediately become due and shall
accompany the Purchase Agreement. As soon thereafter as practical, the Company
shall mail or deliver to Xxxxxxx or to the other person or persons exercising
this Option a
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certificate or certificates representing the Shares so purchased and paid for,
with the appropriate legends affixed thereto.
(c) In no event may this Option be exercised for any fractional shares.
7. Compliance with Laws and Regulations.
(a) The exercise of this Option and the issuance of Shares upon such
exercise shall be subject to compliance by the Company, NSU and Xxxxxxx with
all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's Common Stock
may be listed at the time of such exercise and issuance.
(b) In connection with the exercise of this option, Xxxxxxx shall execute
and deliver to the Company such representations in writing as may be requested
by the Company in order for it to comply with the applicable requirements of
federal and state securities laws.
8. Waivers, Amendments, etc. No amendment to or waiver of any provision
of this Agreement shall be binding unless in writing and executed by NSU, the
Company and Xxxxxxx. No failure or delay on the part of any party in
exercising any power or right under this Agreement or any instrument executed
pursuant hereto shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise of any such power or right.
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9. Notices. All communications and notices provided under this
Agreement or any Instrument executed pursuant hereto shall be in writing and
sent by first class certified mail, and if to NSU addressed and delivered to it
at:
North Star Universal, Inc.
610 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
with copy to:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxxxxx
000 Xxxx Xxxxxxxx Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
And if to the Company addressed or delivered to:
Americable, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
with copy to:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxxxxx
000 Xxxx Xxxxxxxx Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
And if addressed or delivered to Xxxxxxx at:
Xxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
with copy to:
Xxxxxx X. Xxxx
000 Xxxxx Xxx Xxxx, #000
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Xxxxxxxx, Xxxxxxxx 00000
or to any party at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed properly addressed, shall
be deemed given on the third business day after mailing postage prepaid.
10. Severability. Any provision of this Agreement or any Instrument
executed pursuant hereto which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability of such provision in any other
jurisdiction.
11. Cross References. References in this Agreement or in any instrument
executed pursuant hereto to any section or article are, unless otherwise
specified, to such section or article of this Agreement or such instrument, as
the case may be.
12. Headings. The various headings of this Agreement and of any
Instrument executed pursuant hereto are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement of such Instrument
or any provisions hereof or thereof.
13. Counterparts, Effectiveness, etc. This Agreement may be executed by
the parties hereto in counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
14. Governing Law. This Agreement, and each other instrument executed
pursuant hereto shall each be governed by and construed in accordance with, the
laws of the State of Minnesota, and Xxxxxxx submits to the personal
jurisdiction of
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the federal and state courts located in such state in connection with all
actions, matters and disputes in any way related thereto.
15. Arbitration. In the event that any matter of disagreement shall arise
in connection with this Agreement, except for any disagreement in which
equitable relief is sought, such disagreement shall be promptly settled by
arbitration in Minneapolis, Minnesota, pursuant to the rules of the American
Arbitration Association.
The rules of practice for the District Court for the State of Minnesota
which provide for discovery by either party shall apply and be in full effect
for said arbitration procedure. The "non-prevailing" party in any arbitration
proceeding shall reimburse the "prevailing" party for all reasonable costs of
the arbitration proceeding, including, but not necessarily limited to,
reasonable attorney's fees, arbitrator's fees, deposition expense, photocopy
expense, and the like, and in addition, the prevailing party shall be
reimbursed for funds advanced under protest with respect to the disputed matter
under any provision of this Agreement, as well as interest at the Reference
Rate on any such funds advanced. Judgment on the arbitrator's decision can be
entered in an appropriate court of jurisdiction.
16. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and assigns except that Xxxxxxx may not assign or transfer
his rights hereunder without the prior written consent of NSU and the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement the date
above first written.
NORTH STAR UNIVERSAL, INC.
By:__________________________
Its _________________________
AMERICABLE, INC.
By:__________________________
Its: ________________________
_____________________________
Xxxx X. Xxxxxxx
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