Exhibit 10.49
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "AGREEMENT"), dated as of _______________,
200__ (the "EFFECTIVE DATE"), is made by and between Marketing Specialists
Corporation, a Delaware corporation (the "COMPANY"), formerly known as Xxxxxxx
American Corporation, which was formerly known as Monroe, Inc., and Xxxxxx X.
Xxxxxxx, an individual ("XXXXXXX") (together, the "PARTIES").
RECITALS
A. In conjunction with that certain Employment and Noncompetition Agreement
dated as of December 18, 1998 by and between the Company and Xxxxxxx (the
"EMPLOYMENT AGREEMENT"), Xxxxxxx executed a Promissory Note in favor of the
Company for $1,500,000.00, at 6% interest per annum, with the entire principal
amount and accrued interest due and payable on April 8, 2003 (the "NOTE").
Pursuant to the terms of the Note, Xxxxxxx purchased 300 shares of common stock
of the Company, which stock was pledged to the Company as security, pursuant to
the terms of that certain Stock Pledge Agreement (the "PLEDGE AGREEMENT")
between the Company and Xxxxxxx dated as of April 8, 1998. The Note is a
recourse note with regard to $750,000.00 of the principal amount and a
non-recourse note with regard to $750,000.00 of the principal amount.
B. On July 7, 1998 and January 11, 1999, the Company released 60 and
121,817 (after giving effect to the share recapitalization in connection with
the Company's IPO) shares of common stock, respectively, from the pledge.
C. On April 27, 1999, the Employment Agreement was amended to provide,
among other things, that the Note would be due and payable on April 8, 2004 and
that shares of the common stock of the Company were released from the pledge
such that shares having a fair market value of $1,500,000.00 as of January 11,
1999 would remain subject to the pledge.
D. After giving effect to the releases and share recapitalization, 98,361
shares of common stock of the Company are currently pledged pursuant to the
Pledge Agreement (the "PLEDGED SHARES").
E. It is no longer the practice of the Company to issue its employees
promissory notes requiring a pledge of the Company's stock as security. Rather,
the Company now achieves the same economic benefits for its employees through
the issuance of employee stock options to purchase shares of Company common
stock at a stated exercise price.
F. In order to make the Note, Pledge Agreement, Pledged Shares and related
provisions of the Employment Agreement consistent with current Company practice,
Xxxxxxx wishes to surrender any and all rights and obligations he has or may
have under the Note, Pledge Agreement, and Pledged Shares in exchange for the
issuance of employee stock options pursuant to which Xxxxxxx will have an option
to purchase 98,361 shares of the Company's common stock at an aggregate exercise
price of $1,500,000.00, or $15.25 per share (the "OPTION").
G. Each of the Parties acknowledges that this Agreement is not intended to
increase or decrease the economic benefit originally provided to Xxxxxxx, but is
intended to more accurately achieve such benefit.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, representations and warranties set forth in this Agreement and for
other good, valid and binding consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows:
ARTICLE I.
TERMS OF THE EXCHANGE
Section 1.1 Pursuant to the terms and conditions set forth in this
Agreement, on the Closing Date (as defined below), Xxxxxxx shall surrender any
and all rights, and terminate any and all obligations, he has or may have under
the Note, Pledge Agreement and Pledged Shares, and shall accept the Option in
lieu thereof.
Section 1.2 Pursuant to the terms and conditions set forth in this
Agreement, on the Closing Date, and subject to the Company's ability to obtain
all necessary and appropriate approvals under the Company's credit facilities
and other material agreements, the Company shall surrender any and all rights,
and terminate any and all obligations, it has or may have under the Note, Pledge
Agreement, and Pledged Shares, and shall grant the Option in lieu thereof.
ARTICLE II.
THE CLOSING
Section 2.1 THE CLOSING. The consummation of the transactions contemplated
by this Agreement (the "CLOSING") will take place at the offices of the Company
on the first business day following the date on which all of the conditions
hereto, to the extent not waived, are satisfied, or such other time and place as
is mutually agreed upon by the Parties. The date on which the Closing actually
occurs is hereinafter referred to as the "CLOSING DATE."
Section 2.2 DELIVERIES BY XXXXXXX. At the Closing, Xxxxxxx shall deliver
the following to the Company:
(a) an original executed Pledge Agreement, if in Xxxxxxx'x possession; and
(b) the certificates representing the Pledged Shares, together with an
executed stock power in favor of the Company.
Section 2.3 DELIVERIES BY COMPANY. At the Closing, the Company shall
deliver the following to Xxxxxxx:
(a) the Option, in substantially the form attached hereto as EXHIBIT A;
(b) the original executed Note, to be marked cancelled; and
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(c) an original executed Pledge Agreement, if in the Company's possession.
Section 2.4 EFFECT OF CLOSING. Upon consummation of the Closing, the Option
shall for all purposes replace the Note, Pledge Agreement, Pledged Shares and
the provisions of the Employment Agreement relating thereto, which shall be
terminated and of no further force or effect.
ARTICLE III.
MISCELLANEOUS
Section 3.1 AMENDMENT. No amendment of this Agreement will be effective
unless in a writing signed by the Parties.
Section 3.2 COUNTERPARTS; FAX SIGNATURES. This Agreement may be executed in
any number of counterparts, each of which will be deemed to be an original
agreement, but all of which will constitute one and the same agreement. Either
Party may execute and deliver this Agreement by an executed signature page
transmitted by a facsimile machine. If a Party transmits its signature page by a
facsimile machine, such Party will promptly thereafter deliver an originally
executed signature page to the other Party, provided that any failure to deliver
such an originally executed signature page will not affect the validity,
legality, or enforceability of this Agreement.
Section 3.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the Parties and supersedes all prior
agreements and understandings, both written and oral, and all contemporaneous
oral agreements and understandings with respect to the subject matter of this
Agreement.
Section 3.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF
THE STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER THE
CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.
Section 3.5 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the Parties and no other person will have any right, interest, or
claim under this Agreement.
Section 3.6 NOTICES. Unless otherwise provided elsewhere in this Agreement,
all notices, waivers, and other communications in connection with this Agreement
shall be in writing. Such notices, waivers, and other communications shall be
transmitted by hand delivery, by facsimile with written confirmation of such
transmittal, by a nationally recognized overnight courier, or by certified or
registered United States mail, postage prepaid, return receipt requested to a
Party at its address or location set forth below (or to such other address to
which such Party has notified the other Party in accordance with this Section to
send such notices, waivers, and other communications).
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Company: Marketing Specialists Corporation
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx: Xxxxxx X. Xxxxxxx
000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone:
Facsimile:
Section 3.7 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction will not invalidate the
remaining provisions of this Agreement or affect the validity or enforceability
of such provision in any other jurisdiction. In addition, any such prohibited or
unenforceable provision will be given effect to the extent possible in the
jurisdiction where such provision is prohibited or unenforceable.
Section 3.8 SUCCESSORS. This Agreement will be binding upon and will inure
to the benefit of each Party and its heirs, legal representatives and
successors.
Section 3.9 TAXATION. It is the intent and belief of the Parties that the
transactions contemplated hereby shall be accomplished as a tax free
restructuring of the obligations of the Parties, and the Parties shall report
the transactions in a manner consistent therewith on their respective Federal,
State and local income tax returns.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Party executed, or caused a duly authorized
officer to execute, this Agreement as of the Effective Date.
MARKETING SPECIALISTS CORPORATION
By:______________________________
Name:____________________________
Title:___________________________
_________________________________
Xxxxxx X. Xxxxxxx
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EXHIBIT A
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Exhibit A
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE MARKETING SPECIALISTS CORPORATION
(F/K/A XXXXXXX AMERICAN CORPORATION)
1998 STOCK OPTION AND INCENTIVE PLAN
Name of Optionee: Xxxxxx X. Xxxxxxx
No. of Option Shares: 98,361
Option Exercise Price per Share: $15.25
Grant Date: [_________________], 2000
Expiration Date: [_________________], 2010
Pursuant to the Marketing Specialists Corporation (f/k/a Xxxxxxx American
Corporation) 1998 Stock Option and Incentive Plan (the "PLAN") as amended
through the date hereof and pursuant to the exchange agreement by and between
Marketing Specialists Corporation (the "COMPANY") and Optionee dated as of [ ],
2000 (the "EXCHANGE AGREEMENT"), the Company hereby grants to the Optionee named
above an option (the "STOCK OPTION") to purchase on or prior to the Expiration
Date specified above all or part of the number of shares of Common Stock, par
value $.01 per share (the "STOCK") of the Company specified above at the Option
Exercise Price per Share specified above subject to the terms and conditions set
forth herein and in the Plan and the Exchange Agreement.
1. MANNER OF EXERCISE.
(a) The Optionee may exercise this Option only in the following manner:
from time to time on or prior to the Expiration Date of this Option, the
Optionee may give written notice to the Committee (as defined in Section 2 of
the Plan) of his or her election to purchase some or all of the Option Shares
purchasable at the time of such notice. This notice shall specify the number of
Option Shares to be purchased.
Payment of the purchase price for the Option Shares may be made (i) in cash, by
certified or bank check or other instrument acceptable to the Committee or (ii)
by the Optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay the option
purchase price, provided that in the event the Optionee chooses to pay the
option purchase price as so provided, the Optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other
agreements as the
Committee shall prescribe as a condition of such payment procedure. Payment
instruments will be received subject to collection.
The delivery of certificates representing the Option Shares will be contingent
upon the Company's receipt from the Optionee of full payment for the Option
Shares, as set forth above and any agreement, statement or other evidence that
the Company may require to satisfy itself that the issuance of Stock to be
purchased pursuant to the exercise of Options under the Plan and any subsequent
resale of the shares of Stock will be in compliance with applicable laws and
regulations.
(b) Certificates for the shares of Stock purchased upon exercise of this
Stock Option shall be issued and delivered to the Optionee upon compliance to
the satisfaction of the Committee with all requirements under applicable laws or
regulations in connection with such issuance and with the requirements hereof
and of the Plan. The determination of the Committee as to such compliance shall
be final and binding on the Optionee. The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Stock subject to this Stock Option unless and until this Stock Option shall
have been exercised pursuant to the terms hereof, the Company shall have issued
and delivered the shares to the Optionee, and the Optionee's name shall have
been entered as the stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such shares of Stock.
(c) The minimum number of shares with respect to which this Stock Option
may be exercised at any one time shall be 100 shares, unless the number of
shares with respect to which this Stock Option is being exercised is the total
number of shares subject to exercise under this Stock Option at the time.
(d) Notwithstanding any other provision hereof or of the Plan, no portion
of this Stock Option shall be exercisable after the Expiration Date hereof.
2. TERMINATION OF EMPLOYMENT. If the Optionee's employment by the Company or a
Subsidiary (as defined in the Plan) is terminated, the period within which to
exercise the Option may be subject to earlier termination as set forth below.
(a) TERMINATION DUE TO DEATH. If the Optionee's employment terminates by
reason of death, any Option held by the Optionee shall become fully exercisable
and may thereafter be exercised by the Optionee's legal representative or
legatee for a period of 12 months from the date of death or until the Expiration
Date, if earlier.
(b) TERMINATION DUE TO DISABILITY. If the Optionee's employment terminates
by reason of Disability (as defined in the Plan), any Option held by the
Optionee shall become fully exercisable and may thereafter be exercised by the
Optionee for a period of 12 months from the date of termination or until the
Expiration Date, if earlier. The death of the Optionee during the 12-month
period provided in this Section 3(b) shall extend such period for another 12
months from the date of death or until the Expiration Date, if earlier.
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(c) TERMINATION FOR CAUSE. If the Optionee's employment terminates for
Cause (as defined in the Plan), any Option held by the Optionee shall terminate
immediately and be of no further force and effect.
(d) OTHER TERMINATION. If the Optionee's employment terminates for any
reason other than death, Disability, or Cause, and unless otherwise determined
by the Committee, any Option held by the Optionee may be exercised, to the
extent exercisable on the date of termination, for a period of three months from
the date of termination or until the Expiration Date, if earlier. Any Option
that is not exercisable at such time shall terminate immediately and be of no
further force or effect.
The Committee's determination of the reason for termination of the Optionee's
employment shall be conclusive and binding on the Optionee and his or her
representatives or legatees.
3. INCORPORATION OF PLAN. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
4. TRANSFERABILITY. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.
5. MISCELLANEOUS.
(a) Notice hereunder shall be given to the Company at its principal place
of business, and shall be given to the Optionee at the address set forth below,
or in either case at such other address as one party may subsequently furnish to
the other party in writing.
(b) This Stock Option does not confer upon the Optionee any rights with
respect to continuance of employment by the Company or any Subsidiary.
(c) Pursuant to Section 15 of the Plan, the Committee may at any time amend
or cancel any outstanding portion of this Stock Option, but no such action may
be taken which adversely affects the Optionee's rights under this Agreement
without the Optionee's consent.
[Signature Page to Follow]
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MARKETING SPECIALISTS CORPORATION
By: ___________________________________
Name: _________________________________
Title: ________________________________
The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.
Dated: ________________________ _______________________________________
Optionee's Signature
Social Security No. [___ __ ___]
Xxxxxx X. Xxxxxxx
000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
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