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Exhibit 10.11
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is dated as of January 7, 1997
between Primark Corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the
"Employee").
WHEREAS, the Board of Directors of the Company has approved and authorized
the entry into this Agreement with the Employee to take effect on the Effective
Date, as defined in Paragraph 6 herein;
WHEREAS, the parties desire to enter into this Agreement setting forth all
of the terms and conditions of the employment relationship of the Employee with
the Company.
NOW, THEREFORE, it is agreed as follows:
1. EMPLOYMENT. The Employee shall be employed as Chairman, President and
Chief Executive Officer of the Company from the Effective Date through the term
of this Agreement. As Chief Executive Officer of the Company, the Employee shall
render executive, policy, and other management services to the Company of the
type customarily performed by persons serving in a similar executive officer
capacity and shall report only to the Board of Directors of the Company. The
Employee shall also perform such duties as the Board of Directors of the Company
may from time to time reasonably direct. During the term of this Agreement,
there shall be no material increase or decrease in the duties and
responsibilities of the Employee otherwise than as provided herein, unless the
parties otherwise agree in writing.
2. SALARY. The Company agrees to pay the Employee during the term of this
Agreement an annual salary of $602,000, with the salary to be increased from
time to time as determined by the Board of Directors of the Company. The salary
of the Employee shall not be decreased at any time during the term of this
Agreement from the amount then in effect, unless the Employee otherwise agrees
in writing. The salary under this Paragraph 2 shall be payable by the Company to
the Employee in equal installments during each month pursuant to its standard
pay practices.
3. BONUSES.
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In addition to his salary under Paragraph 2 hereof, the Employee
shall be paid an annual bonus in an amount determined based on the extent to
which Company performance goals, as established by the Compensation Committee
of the Board of Directors (the "Committee") each year, have been achieved by
the Company during the year for which the bonus is paid. If such goals have
been achieved but not exceeded in any year, Employee shall be paid a bonus
equal to 60% of his annual salary. It is expressly understood and agreed that
the amount of bonus shall increase or decrease depending upon the amount by
which the actual financial results for the Company vary from the goals. In no
event, however, shall the Employee's annual bonus be greater than $1 million or
be less than $120,000 (this minimum bonus amount is hereinafter referred to as
the "Annual Guaranteed Bonus"). Employee agrees that an amount equal to at
least 50% of his Annual Guaranteed Bonus (after applicable taxes) shall be paid
by Employee to the Company in partial satisfaction of his payment obligations
under promissory notes that he has with the Company. The Committee shall
certify in writing before an annual bonus in excess of $120,000 is paid
that the performance goals were attained."
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4. STOCK OPTIONS.
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(a) Subject to the terms and conditions set forth in the
Primark Corporation Non-Qualified Stock Option Agreement ("Stock Option
Agreement") which is attached hereto as Exhibit A, the Company hereby grants to
Employee a non-qualified stock option ("Option") to purchase the number of
shares of the Company's common stock set forth in Exhibit A.
(b) Simultaneously with the execution of this Agreement, the
Company shall execute the Stock Option Agreement and the Registration Rights
Agreement in the form attached hereto as Exhibit B.
5. PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFITS PLANS; INSURANCE;
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OTHER FRINGE BENEFITS.
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(a) The Employee shall be entitled to participate in any plan
of the Company relating to pension, profit-sharing, group life insurance,
medical coverage, education, or other retirement or employee benefits that the
Company has adopted or may adopt for the benefit of its executive officers.
(b) The Company shall provide the Employee with annual
retirement compensation for life in an amount which, after including all amounts
paid to the Employee under the Company's defined benefit plan, if any, shall
equal 55% of the salary (not including bonus) payable to the Employee during the
final year prior to the date of the Employee's retirement from the Company at
age 62 or later. In the event that the Employee predeceases his spouse at the
time of his retirement or thereafter, such spouse shall be entitled to receive
annual payments for life in an amount equal to 60% of that which otherwise would
have been payable to the Employee. In the event that the Employee dies prior to
his retirement from the Company, his spouse shall be entitled to receive until
such date on which the Employee would have become 65 years of age annual
payments equal to 50% of the Employee's final salary until such time as the
Employee would have reached age 65 and annual payments of 33% of such salary for
life. The obligations created by this paragraph shall continue beyond the term
of this Agreement, provided, however, that in the event that, prior to reaching
age 62, the Employee is terminated with cause during the term of this Agreement,
or the Employee voluntarily terminates his employment relationship with the
Company during such term, the obligations created in this paragraph shall also
terminate. If the Employee is terminated without cause prior to reaching age 62,
he will be entitled to reduced retirement compensation calculated in the same
manner as set forth in Paragraph 11 of this Agreement. The payments provided for
in this Paragraph 5(b) shall be in lieu of any payments pursuant to the
Supplemental Death Benefit and Retirement Income Plan Agreement.
(c) The Employee shall be entitled to receive up to $10,000
annually as reimbursement for expenses incurred in obtaining tax and estate
planning assistance.
(d) The Employee shall be entitled to participate in any other
fringe benefits which are now or may be or become applicable to the Company's
executive officers, including participation in stock-based plans, the payment of
reasonable expenses for attending annual and
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periodic meetings of trade associations, the provision of an automobile for
business use, and any other benefits which are commensurate with the duties and
responsibilities to be performed by the Employee under this Agreement.
(e) Participation in these retirement and employee benefit
plans, insurance and other fringe benefits shall not reduce the salary or
bonuses payable to the Employee under Paragraphs 2 and 3 hereof, respectively.
6. TERM. The term of this Agreement shall be for a period commencing on
the date hereof ("Effective Date"), and ending on December 31, 2001.
7. STANDARDS. The Employee shall perform the Employee's duties and
responsibilities under this Agreement in accordance with such reason-able
standards as may be established from time to time by the Board of Directors of
the Company. Employee shall report only to the Board of Directors of the
Company. The reasonableness of such standards shall be measured against
standards for executive performance generally prevailing in the industries in
which the Company conducts business.
8. VOLUNTARY ABSENCES; VACATIONS. The Employee shall be entitled,
without loss of pay, to be absent voluntarily for reasonable periods of time
from the performance of the duties and responsibilities under this Agreement.
All such voluntary absence shall count as paid vacation time, unless the Board
of Directors of the Company otherwise approves. The Employee shall be entitled
to an annual paid vacation of at least six weeks per year or such longer period
as the Board of Directors of the Company may approve. The timing of paid
vacations shall be scheduled in a reasonable manner by the Employee.
9. TERMINATION OF EMPLOYMENT.
(a) The Board of Directors of the Company may terminate the
Employee's employment during the term of this Agreement at any time with or
without cause (as defined below), but any termination by the Board of Directors
other than termination for cause shall not, unless otherwise provided herein,
prejudice the Employee's right to compensation or other benefits under this
Agreement and upon any termination without cause all options granted to the
Employee shall be exercisable in accordance with the terms of their governing
documents. The Employee's employment during the term of this Agreement may be
terminated by a two-thirds vote of all of the members of the Board of Directors
of the Company for cause by written notice to the Employee setting forth in
reasonable detail the nature of such cause. Only the following shall constitute
"cause" for such termination: the refusal to perform duties assigned in
accordance with the Employee's employment agreement with the Company; or overt
and willful disobedience of orders or directives issued to the Employee by the
Company and within the scope of the Employee's duties to the Company; or
conviction or commission of illegal acts in connection with the performance of
duties on behalf of the Company, which refusal, disobedience or commission of
illegal acts shall continue for more than thirty days after written notice is
given to the Employee pursuant to a two-thirds vote of all of the members of the
Board of Directors of the Company, such notice to set forth in reasonable detail
the nature of the Board's determination. A termination of
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employment by the Employee after a "substantial breach" (as defined below) of
this Agreement by the Company shall be considered for all purposes of this
Agreement a termination of the Employee's employment by the Company without
cause. Notwithstanding anything in this Agreement to the contrary, under no
circumstances may the Employee's employment hereunder be terminated by the
Company without cause except as set forth in the preceding sentence.
"Substantial breach" shall mean (i) the assignment of the Employee to any
position or duties materially inconsistent with the provisions of Paragraph 1
hereof; (ii) a reduction by the Company in the Employee's salary as specified in
Paragraph 2 hereof; (iii) the failure by the Company to pay to the Employee the
bonus provided for in Paragraph 3 hereof; or (iv) the failure by the Company to
allow the Employee to participate in other benefit programs as provided in
Paragraph 5 hereof, provided, however, that the term "substantial breach" shall
not include an immaterial breach by the Company of any provisions of this
Agreement, including clauses (i) and (iv) above, which does not result in
substantial detriment to the Employee. The Employee shall have no right to
receive compensation or other benefits for any period after termination for
cause.
(b) The parties acknowledge and agree that damages which will
result to Employee for termination by the Company without cause shall be
extremely difficult or impossible to establish or prove, and agree that, unless
the termination is for cause, the Company shall be obligated, concurrently with
such termination, to make a lump sum cash payment to the Employee as severance
pay of an amount equal to the sum of the following:
(i) Two times the amount of the Employee's then
annual salary as provided in Paragraph 2 hereof;
(ii) An amount equal to the bonus paid to the
Employee in the year prior to termination pro-rated for the time Employee has
worked in the year of termination;
(iii) The Company shall at its sole cost and
expense provide Employee with health insurance, life insurance and disability
insurance for a period of two years following termination in the same amounts
provided prior to termination;
The Employee agrees that, except for such other payments and benefits to which
the Employee may be entitled as expressly provided by the terms of this
Agreement, such severance pay shall be in lieu of all other claims which the
Employee may make by reason of such termination. Such payment to the Employee
shall be made on or before the Employee's last day of employment with the
Company. The severance pay amount shall not be reduced by any compensation which
the Employee may receive for other employment with another employer after
termination of his employment with the Company.
10. NONPERFORMANCE BY COMPANY. If the Company fails to make timely
payment of the amounts then owed to the Employee under this Agreement, the
Employee shall be entitled to reimbursement for all reasonable costs, including
attorneys' fees, incurred by the Employee in taking action to collect such
amounts or otherwise to enforce this Agreement, plus interest on such amounts at
the rate of one percent above the prime rate (defined as the base rate on
corporate loans
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at large U.S. money center commercial banks as published by the Wall Street
Journal), compounded monthly, for the period from the date the payment is due
to be paid to the Employee until payment is made.
11. DISABILITY. If the Employee shall become disabled or
incapacitated to the extent that the Employee is unable to perform the
Employee's duties and responsibilities hereunder, the Employee shall be entitled
to receive (in addition to the insurance benefits provided for in Paragraph 5
hereof) disability benefits of the type provided for other executive officers of
the Company. In such event, the Employee shall be entitled to receive the
retirement compensation as specified in Paragraph 5(b), reduced by 2% for each
full year not worked by the Employee prior to age 62.
12. NO ASSIGNMENTS. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto. Except
for the obligations of the Company under Paragraph 5(b) hereof, this Agreement
shall terminate immediately upon the death of the Employee.
13. OTHER CONTRACTS. The Employee shall not, during the term of this
Agreement, have any other paid employment other than with a subsidiary of the
Company or provide services to any other Company other than services to a
subsidiary of the Company, except that the Employee may be a member of the Board
of Directors of companies not affiliated with the Company, with the prior
approval of the Board of Directors of the Company. This provision shall not
apply with respect to Lifeline Corporation and The Hitachi Foundation where
Employee currently serves as Director and Trustee respectively. This Agreement
supersedes and cancels the agreement dated as of February 21, 1992 between the
parties hereto.
14. RESTRICTIVE COVENANTS. As consideration for the execution of
this Agreement by the Company and the grant of the Option, the Executive
covenants and agrees as follows:
(a) For the twelve month period following termination of his
employment, the Employee shall not solicit business from any person, firm or
entity which was a customer of the Company or any of its subsidiaries at any
time within one year preceding the termination date of the Employee's employment
with the Company, induce or attempt to induce any such customer to reduce its
business with the Company or any of its subsidiaries, or solicit or attempt to
solicit any employees of the Company or any of its subsidiaries to leave the
employ of the Company or any of its subsidiaries.
(b) For a period of one year following termination of his
employment with the Company, the Employee shall keep confidential and not
disclose to any person, firm or corporation the trade secrets or confidential
information or knowledge relating to the business of the Company or any of its
subsidiaries.
15. AMENDMENTS OR ADDITIONS; ACTION BY BOARD OF DIRECTORS. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by all parties hereto. Except as otherwise provided in this Agreement,
the prior approval of the Board of Directors of the
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Company shall be required in order for the Company to authorize any amendments
or additions to this Agreement, to give any consents or waivers of provisions of
this Agreement, or to take any other action under this Agreement including any
termination of employment under Paragraph 9(a) hereof.
16. PARAGRAPH HEADINGS. The paragraph headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
17. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
18. GOVERNING LAW. This Agreement shall be governed by the laws of
the United States to the extent applicable and otherwise by the laws of the
Commonwealth of Massachusetts.
19. ARBITRATION OF DISPUTES. Any controversy or claim arising out of
or relating to this Employment Agreement or the breach thereof shall be settled
by arbitration in accordance with the laws of the Commonwealth of Massachusetts
by three arbitrators, one of whom shall be appointed by the Company, one by the
Employee and the third by the first two arbitrators. If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association.
Such arbitration shall be conducted in accordance with the rules of the American
Arbitration Association, except with respect to the selection of arbitrators
which shall be as provided in this Paragraph 18. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. In the event that it shall be necessary or desirable for the Employee
to retain legal counsel and/or incur other costs and expenses in connection with
the enforcement of any or all of the Employee's rights under this Agreement, the
Company shall pay or the Employee shall be entitled to recover from the Company,
as the case may be, the Employee's reasonable attorneys' fees and other
reasonable costs and expenses in connection with the enforcement of said rights
(including the enforcement of any arbitration award in court) regardless of the
final outcome, unless and to the extent the arbitrators shall determine that
under the circumstances recovery by the Employee of all or a part of any such
fees and costs and expenses would be unjust.
20. SHAREHOLDER APPROVAL. This Agreement shall be subject to the
approval of the shareholders of the Company at the next Annual Meeting of
Shareholders and shall be of no further force or effect unless such approval is
obtained in a separate vote by the affirmative vote of a majority of the voting
shares present or represented and entitled to vote at such meeting. In the event
that such shareholder approval is not forthcoming, the Option granted under
Paragraph 4 of this Agreement shall not become exercisable and shall otherwise
become cancelled.
ATTEST: PRIMARK CORPORATION
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/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Assistant Secretary Senior Vice President, General
Counsel and Secretary
WITNESS: EMPLOYEE
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Exhibit 10.11
PRIMARK CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
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This Non-Qualified Stock Option Agreement (the "Option Agreement") is made
this 7th day of January, 1997, by and between Primark Corporation, a Michigan
corporation (the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Optionee").
WHEREAS, the Company has determined that it is desirable and in its best
interests to grant to the Optionee an option to purchase a certain number of
shares of the Company's Common Stock (the "Stock");
WHEREAS, this Option Agreement and the grant of the option to the Optionee
have been authorized and approved by the Compensation Committee of the Board of
Directors of the Company (the "Committee");
NOW, THEREFORE, in consideration of the mutual promises and covenants, and
subject to the conditions, contained herein, the parties hereto do hereby agree
as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
the Company hereby grants to the Optionee the right and option (the "Option") to
purchase from the Company, on the terms and subject to the conditions
hereinafter set forth, 1,000,000 shares of Stock.
2. PRICE. The purchase price (the "Option Price") for the shares of Stock
subject to the Option granted by this Option Agreement shall be as follows:
(a) For 500,000 shares of Stock subject to the Option, the Option
Price is $24.25 per share, which price is not less than the closing price
of a share of Stock on the New York Stock Exchange on the date of grant;
(b) For 250,000 shares of Stock subject to the Option, the Option
Price is $30.313 per share, which price is not less than 125% of the closing
price of a share of Stock on the New York Stock Exchange on the date of grant;
and
(c) For the remaining 250,000 shares of Stock subject to the
Option, the Option Price is $36.375 per share, which price is not less than
150% of the closing price of a share of Stock on the New York Stock Exchange on
the date of grant.
3. EXERCISE OF OPTION.
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(a) Except as otherwise provided herein and provided the Optionee
is an employee of the Company at each vesting date, the Option granted pursuant
to this Option Agreement shall become exercisable in the following installments:
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(i) That portion of the Option covering the 500,000 shares of
Stock referred to in Section 2(a) above shall be exercisable on or after the
second anniversary of the date of grant of the Option;
(ii) That portion of the Option covering the 250,000 shares of
Stock referred to in Section 2(b) above shall be exercisable on or after the
third anniversary of the date of grant of the Option; and
(iii) That portion of the Option covering the 250,000 shares of
Stock referred to in Section 2(c) above shall be exercisable on or after the
fourth anniversary of the date of grant of the Option.
Notwithstanding the foregoing, the vesting of such Option shall be accelerated,
in the sole discretion of the Committee, in the event that the Optionee develops
a successor as Chief Executive Officer of the Company.
(b) In the event of a "Change of Control" (as defined in Section 2 of
the Change of Control Compensation Agreement dated April 30, 1987 between the
Company and Optionee):
(i) all of the shares of common stock with respect to which
the Option was not previously exercisable and vested shall become
fully exercisable and vested; and
(ii) if the Optionee so elects, the value of the Option shall,
to the extent exercisable and vested (after application of the
preceding clause (i)), be cashed out on the basis of the "Change of
Control Price" as of the date the Change of Control occurs or such
other date as the Board of Directors of the Company may determine
prior to the Change of Control.
(c) For purposes of this Paragraph 3, "Change of Control Price"
means the higher of (i) the highest price per share paid or offered in any
transaction related to a Change of Control of the Company or (ii) the highest
price per share paid in any transaction reported on the exchange on which the
common stock is traded, at any time during the preceding sixty day period, as
determined by the Board of Directors of the Company.
(d) During the lifetime of the Optionee, only the Optionee (or, in
the event of the Optionee's legal incapacity or incompetency, the Optionee's
guardian or legal representative) may exercise the Option.
(e) The Optionee may exercise the Option only while the Optionee is
employed by the Company or any corporation in which the Company owns,
directly or indirectly, stock possessing 50 percent or more of the total
combined voting power of all classes of stock (a "Subsidiary"), and immediately
upon the Optionee's termination of employment the Option shall terminate and
the Optionee shall have no further right to purchase shares of Stock under this
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Option, except as provided in Subsections (f), (g) and (h) of this Section.
However, if the Optionee's employment with the Company is terminated without
cause, all options granted to Executive hereunder shall become fully vested and
all such options shall be exercisable until the 90th day following the date of
such termination. Any options remaining unexercised shall thereafter
immediately terminate.
(f) In the event of the Optionee's death while employed by the
Company or within three years following the Optionee's retirement from the
Company at age 62 or older, the Optionee's designated beneficiary or, in the
absence of a beneficiary designation, the personal representative or legatees
or distributees of the Optionee's estate, as the case may be, shall have the
right to exercise all or any part of the Option to the extent the Option was
exercisable on the date of the Optionee's death, only until the later of one
year after the date of the Optionee's death and three years after the
Optionee's retirement from the Company at age 62 or older but in any event not
later than the original expiration date of the Option. The Optionee may
designate to the Company on a form provided by the Company for that purpose, a
beneficiary who may exercise the Option after the Optionee's death under this
Subsection (f). Such designation may be cancelled or changed by the Optionee in
his discretion, but no cancellation or change will be recognized by the Company
unless effected in writing on a form provided by the Company for that purpose
and filed with the Company.
(g) If the Optionee's termination of employment is by reason of
"permanent and total disability" (within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code")), the Optionee or the
Optionee's guardian or legal representative shall have the right to exercise all
or any part of the Option to the extent the Option was exercisable at the time
of such termination of employment, at any time within one year after such
termination of employment but not later than the original expiration date of the
Option.
(h) Upon termination of employment from the Company by reason of
retirement at age 62 or older, the Option may be exercised, to the extent that
the Option was exercisable on the date of such termination of employment, only
until the earlier of three years after the date of such termination of
employment or the original expiration date of the Option.
(i) The Option shall terminate upon the earlier of (i) the
expiration of a period of ten years from the date of grant of the Option, as set
forth in Section 13 below; or (ii) the Optionee's termination of employment with
the Company or a subsidiary, unless such termination falls within the scope of
the penultimate sentence of Subsection (e) or within Subsection (f), (g) or (h)
of this Section and in such event upon the expiration of the period after the
Optionee's termination of employment within which the Option is exercisable as
specified in such subsections.
(j) In no event shall the Optionee be entitled to exercise the
Option unless and until this Agreement shall have been approved in a separate
vote by the affirmative vote of the holders of a majority of the voting shares
of the Company present or represented and entitled to vote at the Company's
next annual meeting of shareholders.
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4. METHOD OF EXERCISE OF OPTION. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by delivering written notice
of exercise to the Company, at its principal office, addressed to the attention
of the Secretary of the Company, which notice shall specify the number of
shares for which the Option is being exercised, and shall be accompanied by
payment in full of the Option Price for the shares for which the Option is
being exercised. Payment of the Option Price for the shares of Stock purchased
pursuant to the exercise of the Option shall be made (i) in cash or in cash
equivalent, or (ii) by delivery of a promissory note to the Company, in
accordance with the provisions set forth below, or (iii) by delivery of shares
of Stock, unless otherwise prohibited by the Committee, having at the time the
Option is exercised, an aggregate fair market value equal to the portion of the
Option price not paid for in cash or by promissory note. Upon exercise of the
Option the Optionee may borrow from the Company an amount not exceeding the
lesser of 80% of the fair market value on the exercise date of the shares for
which the Option is being exercised or 100% of the Option Price. Any such loan
shall be evidenced by a promissory note, in a form previously approved by the
Company, which shall bear interest at the minimum rate required to preclude the
imputation of interest under applicable provisions of the Code. The term of the
note shall not exceed three years; PROVIDED, HOWEVER, that upon the Optionee's
termination of employment with the Company or a subsidiary, other than by
reason of the death, permanent and total disability (within the meaning of
Section 22(e)(3) of the Code) of the Optionee or retirement from the Company by
the Optionee and other than as described in the immediately following sentence,
the balance of the note together with interest accrued thereon shall become
immediately due and payable. In the event that the Executive's employment is
terminated by the Company without cause, the balance of the note together with
interest accrued thereon shall be due and payable on the 90th day following
such termination date. If the person exercising the Option is not the Optionee,
such person shall also deliver with the notice of exercise appropriate proof of
his or her right to exercise the Option. An attempt to exercise the Option
granted hereunder other than as set forth above shall be invalid and of no
force and effect.
Promptly after exercise of the Option as provided for above, the Company
shall deliver to the person exercising the Option a certificate or certificates
for the shares of Stock being purchased; PROVIDED, HOWEVER, that certificates
for any shares paid for by delivery of a promissory note shall be retained by
the Company accompanied by a separate stock power endorsed in blank by the
Optionee, in pledge as security for the payment of the promissory note. In the
event that the balance of principal and interest owing under the promissory note
on the last business day of any month exceeds 90% of the fair market value of
those shares held in pledge as security for payment of such principal and
interest, the Company shall notify the Optionee that an additional amount is due
and payable within seven days to the Company so as to reduce the balance owing
under such promissory note to within 80% of the fair market value of such
shares. In total or partial satisfaction thereof, the Optionee may pledge
additional shares of Stock provided that certificates for such shares are
delivered to the Company accompanied by a separate stock power endorsed in blank
by the Optionee. In the event additional shares of Stock are delivered to the
Company pursuant to the preceding sentence, such shares shall be valued at the
closing price of the Stock on the New York Stock Exchange on the business day
immediately prior to the day the Company receives such shares from the Optionee.
Any dividends on the shares held in pledge in connection with the loan shall be
paid to the Company on behalf of the Optionee and first shall be applied by the
Company against unpaid interest and thereafter to unpaid principal owed under
the note.
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5. LIMITATION ON TRANSFER. The Option is not transferable by the
Optionee, other than by will or the laws of descent and distribution in the
event of death of the Optionee.
6. RIGHTS AS SHAREHOLDER. Neither the Optionee nor any executor,
administrator, distributee or legatee of the Optionee's estate shall be, or
have any of the rights or privileges of, a shareholder of the Company in
respect of any shares of Stock transferable hereunder unless and until such
shares have been fully paid and certificates representing such shares have been
endorsed, transferred and delivered, and the name of the Optionee (or of such
personal representative, administrator, distributee or legatee of the Optionee's
estate) has been entered as the shareholder of record on the books of the
Company.
7. EFFECT OF CHANGES IN CAPITALIZATION.
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(a) CHANGES IN STOCK. If the outstanding shares of Stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split-up, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of
consideration by the Company occurring after the date the Option is granted, a
proportionate and appropriate adjustment shall be made by the Company in the
number and kind of shares subject to the Option, so that the proportionate
interest of the Optionee immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such adjustment
in the Option shall not change the total Option Price with respect to shares
subject to the unexercised portion of the Option but shall include a
corresponding proportionate adjustment in the Option Price per share.
(b) REORGANIZATION IN WHICH THE COMPANY IS THE SURVIVING
CORPORATION. Subject to Subsection C of this Section, if the Company shall be
the surviving corporation in any reorganization, merger or consolidation
of the Company with one or more other corporations, the Option shall pertain to
and apply to the securities to which a holder of the number of shares of Stock
subject to the Option would have been entitled immediately following such
reorganization, merger or consolidation, with a corresponding proportionate
adjustment of the Option Price per share so that the aggregate Option Price
thereafter shall be the same as the aggregated Option Price of the shares
remaining subject to the Option immediately prior to such reorganization, merger
or consolidation.
(c) REORGANIZATION IN WHICH THE COMPANY IS NOT THE SURVIVING
CORPORATION OR SALE OF ASSETS OR STOCK. Upon the dissolution or liquidation of
the Company, or upon a merger, consolidation or reorganization of the Company
with one or more other corporations in which the Company is not the
surviving corporation, or upon a sale of substantially all of the assets of the
Company to another corporation, or upon any transaction (including, without
limitation, a merger or reorganization in which the Company is the surviving
corporation) approved by the Board which results in any person or entity owning
eighty percent (80%) or more of the combined voting power of all classes of
stock of the Company, the Option hereunder shall terminate, except to the extent
provision is made in connection with such transaction for the continuation
and/or the assumption of
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the Option, or for the substitution for the Option of new options covering
the stock of a successor employer corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of shares and
exercise prices, in which event the Option shall continue in the manner and
under the terms so provided. In the event of any such termination of the
Option, the entire Option shall become fully vested and exercisable and the
Optionee shall have the right (subject to the limitations on exercise set forth
in Section 3 above), for thirty (30) days immediately prior to the occurrence
of such termination, to exercise the Option in whole or in part, to the extent
the Option had not expired. The Company shall send written notice of an event
that will result in such a termination to the Optionee not later than the time
at which the Company gives notice thereof to its shareholders.
(d) ADJUSTMENTS. Adjustments specified in this Section relating
to stock or securities of the Company shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. No
fractional shares of Stock or units of other securities shall be issued pursuant
to any such adjustment, and any fractions resulting from any such adjustment
shall be eliminated in each case by rounding downward to the nearest whole share
or unit.
8. GENERAL RESTRICTIONS. The Company shall not be required to sell or
issue any shares of Stock under the Option if the sale or issuance of such
shares would constitute a violation by the individual exercising the Option or
by the Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or
regulations. If at any time the Company shall determine, in its discretion, that
the listing, registration or qualification of any shares subject to the Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Option. Specifically in connection with the Securities Act of 1993 (as now in
effect or as hereafter amended), unless a registration statement under such Act
is in effect with respect to the shares of Stock covered by the Option, the
Company shall not be required to sell or issue such shares unless the Company
has received evidence satisfactory to it that the holder of the Option may
acquire such shares pursuant to an exemption from registration under such Act.
Any determination in this connection by the Company shall be final, binding, and
conclusive. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act of 1933 (as not in
effect or as hereafter amended). The Company shall not be obligated to take any
affirmative action in order to cause the exercise of the Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the
requirements that the Option shall not be exercisable unless and until the
shares of Stock covered by the Option are registered or are subject to an
available exemption from registration, the exercise of the Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.
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9. WITHHOLDING OF TAXES. The parties hereto recognize that the Company
may be obligated to withhold federal and local income taxes and Social
Security taxes to the extent that the Optionee realizes ordinary income in
connection with the exercise of the Option. The Optionee agrees that the
Company may withhold amounts needed to cover such taxes from payments otherwise
due and owing to the Optionee, and also agrees that upon demand the Optionee
will promptly pay to the Company having such obligation any additional amounts
as may be necessary to satisfy such withholding tax obligation. Unless
otherwise prohibited by the Committee, the Optionee may satisfy any such
withholding tax obligation by any of the following means or by a combination of
such means: (a) tendering a cash payment, (2) authorizing the Company to
withhold from the shares of Stock otherwise issuable to the Optionee as a
result of the exercise of the Option that number of shares having a fair market
value, as of the date the withholding tax obligation arises, less than or equal
to the amount of the withholding tax obligation; or (3) delivering to the
Company owned and unencumbered shares of Stock having a fair market value as of
the date the withholding tax obligation arises, less than or equal to the
amount of the withholding tax obligation. A participant's election to pay the
withholding tax obligation by either of the latter two means of payment is
irrevocable and may be disapproved by the Committee.
10. DISCLAIMER OF RIGHTS. No provision in this Option Agreement shall be
construed to confer upon the Optionee the right to be employed by the Company
or any subsidiary, or to interfere in any way with the right and authority of
the Company or any subsidiary to terminate any employment or other relationship
between the Optionee and the Company or any subsidiary, or to obligate the
Company to appoint the Optionee as the President of the Company.
11. INTERPRETATION OF THIS OPTION AGREEMENT. All decisions and
interpretations made by the Committee or the Board of Directors of the Company
with regard to any question arising under this Option Agreement shall be binding
and conclusive on the Company and the Optionee and any other person entitled to
exercise the Option as provided for herein.
12. GOVERNING LAW. This Option Agreement is executed pursuant to and
shall be governed by the laws of the State of Massachusetts (but not including
the choice of law rules thereof).
13. DATE OF GRANT. The date of grant of this Option is January 7, 1997,
subject to approval of this Agreement by the shareholders of the Company as
provided in Section 3(i) above.
14. BINDING EFFECT. Subject to all restrictions provided for in this
Option Agreement and by applicable law relating to assignment and transfer of
this Option Agreement and the option provided for herein, this Option Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors, and assigns.
15. NOTICE. Any notice hereunder by the Optionee to the Company shall
be in writing and shall be deemed duly given if mailed or delivered to the
Company at its principal office, addressed to the attention of the Committee,
or if so mailed or delivered to such other address as the Company may hereafter
designate by notice to the Optionee. Any notice hereunder by the Company to the
Optionee shall be in writing and shall be deemed duly given if mailed or
delivered
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to the Optionee at the address specified below by the Optionee for such purpose,
or if so mailed or delivered to such other address as the Optionee may hereafter
designate by written notice given to the Company.
16. ENTIRE AGREEMENT. This Option Agreement, the Change of Control
Compensation Agreement, Registration Rights Agreement and the Employment
Agreement entered into between the Company and the Optionee constitutes the
entire agreement and supersedes all prior understandings and agreements,
written or oral, of the parties hereto with respect to the subject matter
hereof. Neither this Option Agreement nor any term hereof may be amended,
waived, discharged or terminated except by a written instrument signed by the
Company and the Optionee; PROVIDED, HOWEVER, that the Company unilaterally may
waive any provision hereof in writing to the extent that such waiver does not
adversely affect the interests of the Optionee hereunder, but no such waiver
shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Option
Agreement, or caused this Option Agreement to be duly executed on their behalf,
as of the day and year first above written.
ATTEST: PRIMARK CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- ---------------------------------------
Title: SR. Vice President & General
Counsel & Secretary
-------------------------------------
OPTIONEE:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ADDRESS FOR NOTICE TO OPTIONEE:
------------------------------------------
------------------------------------------
------------------------------------------
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NOTICE OF BENEFICIARY DESIGNATION
---------------------------------
Pursuant to Section 3f of that certain Primark Corporation Non-Qualified
Stock Option Agreement dated January 7, 1997 (the "Agreement"), I hereby revoke
all prior designations and designate ________________ as my beneficiary under
the Agreement in the event of my death. I understand that this designation may
be cancelled or changed by me at any time by filing a new written Notice of
Beneficiary Designation with Primark Corporation at its principal offices,
directed to the attention of the Secretary.
OPTIONEE:
Date: /s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
WITNESS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
9
