EXHIBIT 10.6
XXXXXXX HOLDINGS CORPORATION
MANAGEMENT AGREEMENT
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THIS MANAGEMENT AGREEMENT (the "Agreement") is made as of June 14, 1996
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(the "Effective Date"), by and among Xxxxxxx Holdings Corporation, a
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Delaware corporation (the "Company"), Xxxxxxx Technologies, Inc., a New Jersey
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corporation ("Technologies"), and Xxxx X. XxXxxxxxxx ("Executive").
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WHEREAS, Executive desires to be employed as the President and Chief
Executive Officer of Technologies, and Technologies desires to employ Executive
as its President and Chief Executive Officer and to be assured of its right to
his services on the terms and conditions hereinafter set forth, and Executive is
willing to agree to such employment on such terms and conditions;
WHEREAS, Executive desires purchase from the Company and the Company
desires to sell to Executive, 684.98 shares of the Company's Class B Common
Stock, par value $.01 per share (the "Class B Common") and 560 shares of the
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Company's Series A Preferred Stock, par value $.01 per share (the "Series A
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Preferred"). All of the shares of Class B Common and Series A Preferred
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purchased by Executive hereunder are referred to herein as "Executive Stock,"
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and Executive Stock shall not include any other shares of capital stock of the
Company, Technologies or any affiliate thereof including, without limitation,
stock issued upon the exercise of options granted to Executive; and
WHEREAS, the execution and delivery of this Agreement by the Company
and Executive is a condition to the consummation of transactions contemplated by
the Stock Purchase Agreement dated as of the date hereof (the "Stock Purchase
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Agreement") by and among Xxxxxxx Acquisition Corporation, a Delaware corporation
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("Acquisition"), and the other persons named therein. Liberty Partners Holdings
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11, L.L.C. ("LPH"), Riverside Xxxxxxx, L.L.C., ("Riverside"), are collectively
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referred to herein as the "Investors." Certain provisions of this Agreement are
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intended for the benefit of, and shall be enforceable by, the Investors.
Certain definitions are set forth in Section 1 of this Agreement.
NOW, THEREFORE, the Company and Executive agree as follows:
1. Definitions. As used herein, the following terms shall have the
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following meanings.
"Board" means the Company's board of directors.
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"Cause" means the determination by the Board, in the exercise of its
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good faith judgment, that: (a) Executive has committed a fraud, felony or other
serious act of moral turpitude; or (b) Executive has breached his duty of
loyalty to the Company or its Subsidiaries; or (c) Executive has committed a
material breach of this Agreement, and if such breach is capable of cure, such
breach is not cured or remedied and continues after fifteen (15) business days
from the date on which written notice of the breach was first provided to
Executive; in each case after
(i) written notice to Executive and (ii) there has been a reasonable procedure
for Executive to state his case to the Board.
"Executive Stock" Executive Stock shall continue to be Executive Stock
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in the hands of any holder other than Executive (except for the Company and the
Investors and except for transferees in a Public Sale or Sale of the Company),
and except as otherwise provided herein, each such other holder of Executive
Stock shall succeed to all rights and obligations attributable to Executive as a
holder of Executive Stock hereunder. Executive Stock shall also include shares
of the Company's capital stock issued with respect to Executive Stock by way of
a stock split, stock dividend or other recapitalization.
"Fair Market Value" of each share of Executive Stock, means with
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respect to Class B Common or Series A Preferred, respectively, the average of
the closing prices of the sales of such shares on all securities exchanges on
which such shares may at the time be listed, or, if there have been no sales on
any such exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if on any day such
shares are not so listed, the average of the representative bid and asked prices
quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if on any day
such shares are not quoted in the NASDAQ System, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau Incorporated, or any similar successor
organization, in each such case averaged over a period of 21 days consisting of
the day as of which the Fair Market Value is being determined and the 20
consecutive business days prior to such day. If at any time the Class B Common
or the Series A Preferred is not listed on any securities exchange or quoted in
the NASDAQ System or the over-the-counter market, the Fair Market Value of such
shares shall be the fair value as determined in good faith by the Board.
"Good Reason" means the resignation by Executive of employment with
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Technologies as a direct result of either (i) a substantial diminution of duties
and responsibilities of Executive as an employee of Technologies, (ii) the
relocation of Executive outside of the Flanders, New Jersey area, (iii) any
requirement by the Company that Executive make a material misstatement or
omission in any financial report or governmental filing, or (iv) a material
breach of this Agreement by the Company or its Subsidiaries in the absence of a
material breach of this Agreement by Executive, which diminution or breach, as
the case may be, has continued 15 days after delivery of written notice by
Executive to the Board stating Executive's intent to resign as a consequence of
such diminution or breach; provided that Executive's resignation actually occurs
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within 30 days following the occurrence of the diminution or breach.
"Independent Third Party" means any Person or group of Persons who,
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immediately prior to the contemplated transaction, does not own in excess of 5%
of the common equity of the Company or its Subsidiaries on a fully-diluted
basis, who is not controlling, controlled by or under common control with any
such 5% owner of capital stock and who is not the spouse or descendent (by birth
or adoption) of any such 5% owner of capital stock.
"Permanent Disability" means that Executive, as determined by the
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Board in its good faith judgement, is unable to perform, by reason of physical
or mental incapacity, his duties or
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obligation under this Agreement, for a period of ninety (90) consecutive days or
a total period of one hundred twenty (120) days in any three hundred sixty-five
(365) day period.
"Person" means an individual, a partnership, a corporation, an
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association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"Public Sale" means any sale pursuant to a registered public offering
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under the 1933 Act or any sale to the public pursuant to Rule 144 promulgated
under the 1933 Act effected through a broker, dealer or market maker.
"Qualified Public Offering" means the sale, in an underwritten public
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offering registered under the 1933 Act, of shares of common equity of the
Company or its Subsidiaries having an aggregate offering value of at least $30
million.
"Sale of the Company" means the sale of Technologies to an Independent
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Third Party or affiliated group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of Technologies possessing the
voting power to elect a majority of Technologies board of directors (whether by
merger, consolidation or sale or transfer of the Company's capital stock) or
(ii) all or substantially all of the Company's assets determined on a
consolidated basis.
"1933 Act" means the Securities Act of 1933, as amended from time to
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time.
2. Employment. Technologies agrees to employ Executive, and
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Executive hereby accepts employment with Technologies, upon the terms and
conditions set forth in this Agreement.
(a) Position and Duties.
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(i) Executive shall serve as President and Chief Executive
Officer of Technologies and shall have such duties as may be
consistent with such position and as are determined by the Board from
time to time.
(ii) Executive shall serve as a director on the Board, subject
to the provisions of the Stockholders Agreement dated as of the date
hereof (the "Stockholders Agreement") by and among the Company,
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Executive and the other Persons named therein.
(iii) Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity which does not
constitute Permanent Disability) to the business and affairs of
Technologies; provided, that subject to the prior approval by the
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Board, Executive may serve as a director of other companies that are
not competitive with the business of Technologies. Executive shall
perform his duties and responsibilities to the best of his abilities
in a diligent, trustworthy, businesslike and efficient manner.
(b) Term. Subject to the provisions of Section 3(a), the "Term" of
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this Agreement shall be for two (2) years from the date hereof, unless earlier
terminated by either party
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as provided in Section 3(a) below, subject to automatic renewals for successive
two year Terms unless either party has delivered written notice not less than
ninety (90) days prior to the expiration of the initial Term or any renewal
thereof.
(c) Compensation. Commencing from the Effective Date, Technologies
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shall pay to Executive, during Executive's employment by Technologies, an annual
base salary ("Base Salary") of $200.000, subject to increase as provided below
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in this Section 2(c). Such Base Salary shall be paid in accordance with the
Technologies' normal payroll procedures and cycles and shall be subject to
withholding of applicable taxes and governmental charges in accordance with
federal and state law. Executives' Base Salary shall be subject to annual
review by the Board, and at a minimum shall be increased annually as of the
anniversary of the date hereof by an amount equal to the product of the Base
Salary theretofore in effect multiplied by a fraction of which (i) the numerator
is the Consumer Price Index for All Urban Consumers - New Jersey (1982/84 = 100)
(the "Index"), prepared by the Bureau of Labor Statistics of the United States
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Department of Labor (or if the Index is not then published, the most nearly
comparable index) of the month immediately preceding such date and (ii) the
denominator is the Index for the month immediately preceding the last date on
which the Base Salary has been adjusted pursuant to this sentence or, if not
previously adjusted, the month preceding the date of this Agreement. Executive
will also be eligible to receive an annual bonus in an amount equal to up to 30%
of Executive's then current Base Salary upon the achievement by Technologies of
certain annual operating targets as determined by the Board.
(d) Benefits. In addition to the Base Salary paid to Executive by
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Technologies, Executive shall be eligible to participate, during Executive's
employment by Technologies, in such benefits programs (including paid vacation
of four weeks per year) as may be appropriate for Executive's position with
Technologies and as approved by the Board. Technologies will reimburse
Executive for reasonable out-of-pocket expenses incurred by Executive in
relocating to the Flanders, New Jersey area, including arms-length real estate
broker's fees payable to an unrelated third party, incurred in connection with
the sale of Executive's home in Moorestown.
(e) Expenses. Technologies shall reimburse Executive for all
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reasonable expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with Technologies'
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to Technologies' requirements with respect to
reporting and documentation of such expenses.
(f) Key Man Life Insurance. Technologies, in its sole discretion and
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at its sole expense, may obtain a key man life insurance policy on Executive for
the benefit of Technologies, and Executive shall cooperate with Technologies in
obtaining such insurance and shall submit to medical examinations as required.
3. Termination and Severance.
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(a) Termination. Executive and Technologies shall each have the right
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to terminate the Term and Executive's employment with Technologies (a
"Termination," and the date of such termination the "Termination Date") at any
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time and for any reason or for no reason at all, by
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delivering written notice to the other party, and upon any such Termination,
Technologies shall have no further obligations to Executive hereunder, except as
set forth in Sections 3(b) and (c) below.
(b) Base Salary through Termination; COBRA. Executive shall be
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entitled to receive his Base Salary earned through his Termination Date,
prorated on a daily basis together with all accrued but unpaid vacation time
earned through his Termination Date. In addition, Executive shall be entitled
to COBRA benefits after the Termination Date. Except as set forth in Section
3(c), Executive shall not be entitled to receive his Base Salary or any bonuses
or other benefits from Technologies for any period after the Termination Date.
(c) Severance Obligations. In the event Executive's employment is
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terminated by Technologies without Cause or Executive resigns from employment
with Technologies with Good Reason, following such Termination and upon
execution by Executive of a general release in favor of the Company and its
Subsidiaries (i) satisfying all applicable requirements of the Older Workers
Benefit Protection Act, including expiration of the applicable revocation
period, and (ii) releasing any and all claims against the Company and its
Subsidiaries, Technologies shall continue to pay Executive (or his estate) his
Base Salary (as in effect on the Termination Date) for a period of one year
following the Termination Date, payable in accordance with Technologies' normal
payroll procedures and cycles and shall be subject to withholding of applicable
taxes and governmental charges in accordance with federal and state law. In the
event that Executive's employment with Technologies is terminated for any other
reason, Technologies shall have no obligation to make any severance or other
payment to or on behalf of Executive. Notwithstanding the foregoing, in the
event that Executive shall breach any of his obligations under Sections 5, 6 or
7 of this Agreement, Technologies shall be relieved from and shall have no
further obligation to pay Executive any amounts to which Executive would
otherwise be entitled pursuant to this Section 3.
(d) Sale of the Company. In the event of a Termination of Executive's
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employment with Technologies for any reason within three months from the date of
a Sale of the Company, Technologies shall pay to Executive his Base Salary as in
effect on the Termination Date, over a period of one year, in accordance with
Technologies' normal payroll procedures and cycles, and subject to withholding
of applicable taxes and governmental charges in accordance with federal and
state law.
4. Executive Stock Options. The Company shall grant to Executive an
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option to purchase shares of its Class B Common pursuant to the terms of the
Company's 1996 Stock Option Plan and a definitive option agreement between the
Company and Executive.
5. Confidential Information. Executive acknowledges that the
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information, observations and data concerning the business or affairs of the
Company and its Subsidiaries ("Confidential Information") obtained by him as a
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result of his employment with Technologies, as a result of his serving as a
director on the Board or as a result of his ownership of capital stock of the
Company are the property of the Company. Therefore, Executive agrees that he
shall not disclose to any person or use for any other purpose, any Confidential
Information without the prior written consent of the Board, unless and to the
extent such Confidential Information becomes generally known to and available
for use by the public other than as a result of Executive's acts or omissions to
act. Executive shall deliver to the Board on Executive's Termination Date, or at
any other time the Board
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may request, all memoranda, notes, plans, records, reports, computer tapes and
software, and all other material, documents and data (and all copies thereof)
relating to the Confidential Information, Work Product (as defined below) and
the business of the Company and its Subsidiaries which Executive may then
possess or have under his control.
6. Inventions and Patents. Executive agrees that all inventions,
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innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information which relates to the Company's or
its Subsidiaries' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by Technologies or while serving as a director
on the Board ("Work Product") are the property of and belong to the Company and
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its Subsidiaries. Executive understands and acknowledges that, at the request
of the Board, he must assign to the Company or its Subsidiaries any development,
invention or information that (i) relates to the actual or anticipated business
research or development of the Company and its Subsidiaries, or (ii) results
from any work performed by Executive for the Company and its Subsidiaries.
Executive will promptly disclose such Work Product to the Board and perform all
actions requested by the Board (whether during or after Executive's employment)
to establish and confirm the Company's or its Subsidiaries ownership of any Work
Product (including, without limitation, the execution and delivery of
assignments, consents, powers of attorney and other instruments).
7. Non-Compete, Non-Solicitation.
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(a) Executive acknowledges that during the course of his employment
with Technologies and directorship on the Board he will become familiar with the
trade secrets and with other Confidential Information of the Company and its
Subsidiaries and that his services will be of a special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore, Executive
agrees that, during the time he is employed by Technologies and for two years
thereafter (the "Non-Compete Period"), Executive shall not directly or
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indirectly own, operate, manage, control, participate in, consult with, advise,
provide services for, or in any manner engage in (including by himself or in
association with any person, firm, corporate or other business organization or
through any entity), any business engaged in the businesses in which the Company
and its Subsidiaries is engaged or then proposes to engage within any
geographical area in which the Company or its Subsidiaries engages in business.
Nothing herein shall prohibit Executive from being a passive owner of not more
than 5% of the outstanding stock of any class of a corporation which is publicly
traded, or any other passive minority investment in any investment fund, limited
partnership or similar entity, whether or not publicly traded, and so long as
Executive has no active participation in the business of such entity.
(b) During the time Executive is employed Technologies and for two
years thereafter (the "Non-Solicitation Period"), Executive shall not, directly
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or indirectly through another entity, (i) induce or attempt to induce any
employee of Technologies to leave the employ of Technologies, or in anyway
interfere with the relationship between Technologies and any employee thereof,
including without limitation, inducing or attempting to induce any employee,
group of employees or any other person or persons to interfere with the business
or operations of Technologies, (ii) hire any person who was an employee of
Technologies at any time during Executive's employment period, or (iii) induce
or attempt to induce, whether directly or indirectly,
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any customer, supplier, distributor, franchisee, licensee or other business
relation of Technologies to cease doing business with Technologies, or in any
way interfere with the relationship between any such customer, supplier,
distributor, franchisee, licensee or business relation and Technologies.
(c) Executive agrees that: (i) the covenants set forth in this Section
7 are reasonable in geographical and temporal scope and in all other respects,
(ii) the Company would not have entered into this Agreement but for the
covenants of Executive contained herein, and (iii) the covenants contained
herein have been made in order to induce the Company to enter into this
Agreement.
(d) If, at the time of enforcement of this Section 7 a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under the circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstance shall be
substituted for the stated duration, scope or area and that the courts shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
(e) Executive recognizes and affirms that in the event of his breach
of any provision of this Section 7 or Sections 5 or 6, money damages would be
inadequate and the Company and its Subsidiaries would have no adequate remedy at
law. Accordingly, Executive agrees that in the event of a breach or threatened
breach by Executive of any of the provisions of this Section 7 or Sections 5 or
6, the Company and its Subsidiaries, in addition and supplementary to other
rights and remedies existing in its favor, may apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the provisions
hereof (without posting a bond or other security).
8. Purchase and Sale of Executive Stock.
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(a) Upon execution of this Agreement, Executive shall purchase, and
the Company shall sell: (i) 684.98 shares of Class B Common at a price of $20.44
per share, and (ii) 560 shares of Series A Preferred at a price of $100.00 per
share, for an aggregate purchase price of $70,000. The Company shall deliver to
Executive the certificates representing such shares of Class B Common and Series
A Preferred, and Executive shall deliver to the Company a cashier's or certified
check or wire transfer of funds in the aggregate amount of $70,000. The closing
of the purchase and sale of the Executive Stock shall take place simultaneously
with the closing of the transactions contemplated by the Stock Purchase
Agreement.
(b) In connection with the purchase and sale of the Executive Stock
hereunder, Executive represents and warrants to the Company that:
(i) The Executive Stock to be acquired by Executive pursuant to
this Agreement shall be acquired for Executive's own account and not
with a view to, or intention of, distribution thereof in violation of
the 1933 Act, or any applicable state securities laws, and the
Executive Stock shall not be disposed of in contravention of the 1933
Act or any applicable state securities laws.
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(ii) Executive is an executive officer of Technologies and a
director on the Board, is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the
Executive Stock.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Stock for an indefinite period of time
because the Executive Stock has not been registered under the 1933 Act
and, therefore, cannot be sold unless subsequently registered under
the 1933 Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
the Executive Stock and has had full access to such other information
concerning the Company and its Subsidiaries as he has requested.
Executive has reviewed, or has had an opportunity to review, a copy of
the Stock Purchase Agreement, and Executive is familiar with the
transactions contemplated thereby. Executive has also reviewed, or
has had an opportunity to review, the following documents: (A) the
Company's Certificate of Incorporation and Bylaws; (B) the loan
agreements, notes and related documents with Technologies senior and
subordinated lenders; (C) Technologies audited financial statements
dated as of December 31, 1995;
(v) This Agreement constitutes the legal, valid and binding
obligation of Executive, enforceable in accordance with its terms, and
the execution, delivery and performance of this Agreement by Executive
do not and shall not conflict with, violate or cause a breach of any
agreement, contract or instrument to which Executive is a party or any
judgment, order or decree to which Executive is subject.
(c) As an inducement to the Company to issue the Executive Stock to
Executive, and as a condition thereto, Executive acknowledges and agrees that:
(i) neither the issuance of the Executive Stock to Executive
nor any provision contained herein shall entitle Executive to remain
in the employment of Technologies or any affiliate or subsidiary
thereof or affect the right of Technologies to terminate Executive's
employment at any time; and
(ii) the Company and its Subsidiaries shall have no duty or
obligation to disclose to Executive, and Executive shall have no right
to be advised of, any material information regarding the Company and
its Subsidiaries at any time prior to, upon or in connection with the
repurchase of Executive Stock upon Executive's Termination or as
otherwise provided hereunder, except for reports or information used
by the Board to determine the Fair Market Value of the Executive Stock
purchased from Executive.
(d) The Company and Executive acknowledge and agree that this
Agreement has been executed and delivered, and the Executive Stock has been
issued hereunder, in connection with and as part of the compensation and
incentive arrangements between the Company and Executive.
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9. Vesting of Executive Stock. The Executive Stock shall be fully
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vested immediately as of the consummation of the purchase and sale of the
Executive Stock.
10. Call and Put Options.
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(a) In the event of Executive's Termination, the Executive Stock
(whether held by Executive or one or more of Executive's transferees) shall be
subject to repurchase by the Company and/or the Investors at their option
pursuant to the terms and conditions set forth in this Section 10 (the "Call
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Option").
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(b) In the event of a Termination either without Cause or with Good
Reason or as a result of the death or Permanent Disability of Executive,
Executive (or Executive's Estate) shall have the option to cause the Company to
repurchase all of the Executive Stock held by Executive as of the date of the
Termination pursuant to the terms and conditions set forth in this Section 10
(the "Put Option") by delivering a written election notice (the "Put Notice") to
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the Board within 60 days of Executive's Termination Date.
(c) The purchase price for each share of Executive Stock purchased
from the Executive pursuant to the Call Option or the Put Option shall be the
Fair Market Value for such share.
(d) The Board may elect to cause the Company to purchase all of the
Executive Stock by delivering written notice (the "Call Notice") to the holder
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or holders of the Executive Stock within 90 days after the Termination Date.
The Call Notice shall set forth the number of shares of Executive Stock to be
acquired from each holder of Executive Stock, the aggregate consideration to be
paid for such shares and the time and place for the closing of the transaction.
(e) If for any reason the Board does not elect to cause the Company to
purchase all of the Executive Stock pursuant to the Call Option, the Investors
shall be entitled to exercise the Call Option for the shares of Executive Stock
the Company has not elected to purchase (the "Available Shares"). As soon as
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practicable after the Board has determined that there will be Available Shares,
but in any event within thirty (30) days after the Termination Date, the Board
shall give written notice (the "Option Notice") to the Investors setting forth
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the number of Available Shares and the purchase price for the Available Shares.
The Investors may elect to purchase any or all of the Available Shares by giving
written notice to the Board within fifteen (15) days after the Option Notice has
been given by the Board. If the Investors elect to purchase an aggregate number
of shares greater than the number of Available Shares, the Available Shares
shall be allocated among the Investors based upon the aggregate number of shares
of Class B Common and Class A Common Stock of the Company, par value $.01 per
share (the "Class A Common," and together with the Class B Common, the "Common
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Stock") owned by each Investor on a fully-diluted basis. If the Investors have
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in the aggregate elected to purchase less than all of the Available Shares, the
Available Shares which the Investors have not elect to purchase (the "Remaining
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Available Shares") shall be reoffered to the Investors who have elected to
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purchase Available Shares for an additional five (5) day period, and each
Investor may elect to purchase all (but not less than all) of such Investor's
pro rata share of all Remaining Available Shares (based on such holder's
proportionate ownership of all shares of Common Stock on a fully-diluted basis
owned by the Investors who have
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elected to purchase Remaining Available Shares). As soon as practicable, and in
any event within ten (10) days after the expiration of the fifteen (15) day
period set forth above, the Board shall notify each holder of Executive Stock as
to the number of shares being purchased from such holder by the Investors (the
"Supplemental Call Notice"). At the time the Board delivers the Supplemental
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Call Notice to the holder(s) of Executive Stock, the Board shall also deliver
written notice to each Investor setting forth the number of shares such Investor
is entitled to purchase, the aggregate purchase price and the time and place of
the closing of the transaction.
(f) The closing of the purchase of the Executive Stock pursuant to the
Call Option shall take place on the date designated by the Board in the Call
Notice or Supplemental Call Notice, which date shall not be more than 60 days
nor less than five days after the delivery of the later of either such notice to
be delivered. The closing of the purchase of the Executive Stock pursuant to
the Put Option shall take place on any date designated by the Board in a written
notice delivered to Executive, which date shall not be more than 60 days nor
less than 5 days after the delivery by Executive of the Put Notice. The Company
and/or the Investors shall pay for the Executive Stock to be purchased pursuant
to the Call Option or Put Option, as applicable, by delivery of, in the case of
each Investor, a check or wire transfer of funds and, in the case of the Company
at its option (i) a check or wire transfer of funds, or (ii) a subordinated note
or notes payable as soon as reasonably practicable and bearing interest (payable
quarterly) at a rate per annum equal to the prime rate announced from time to
time by State Street Bank & Trust Co. (or any successor entity thereto) plus 2%,
or (iii) both (i) and (ii), in the aggregate amount of the purchase price for
such shares; provided that the Company shall use reasonable efforts to make all
such repurchases with a check or wire transfer of funds; and provided further,
in the event Executive exercises the Put Option and the Company pays for such
repurchase by delivery of a subordinated note, the Company shall repay such
indebtedness as soon as it is permitted under the Company's or its Subsidiaries'
loan agreements and by applicable law. Notwithstanding anything contained in
this Agreement to the contrary, any notes issued by the Company or its
Subsidiaries pursuant to this Section 10(f) shall be subject to any restrictive
covenants to which the Company or its Subsidiaries is subject at the time of
such purchase. The purchasers of Executive Stock hereunder shall be entitled to
receive customary representations and warranties from the sellers regarding such
sale of shares (including representations and warranties regarding good title to
such shares, free and clear of any liens or encumbrances) and to require all
sellers' signatures be guaranteed by a national bank or reputable securities
broker.
(g) The right and obligation of the Company and the right of the
Investors to repurchase the Executive Stock pursuant to this Section 10 shall
terminate upon the first to occur of the Sale of the Company or a Qualified
Public Offering.
(h) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Executive Stock by the Company or its Subsidiaries
shall be subject to applicable restrictions contained in the New Jersey and
Delaware Corporation Law and in the Company's and its Subsidiaries debt and
equity financing agreements. If any such restrictions prohibit the repurchase
of Executive Stock hereunder which the Company is otherwise entitled or required
to make or the payment of dividends or loans to the Company to make such
repurchases, the time periods provided in this Section 10 shall be suspended,
and the Company may, or shall (as applicable), make such repurchases as soon as
it is permitted to do so under such restrictions.
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11. Restrictions on Transfer.
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(a) Stockholders Agreement. Shares of Executive Stock are subject to
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the restrictions on transfer set forth in the Stockholders Agreement, dated as
of the date hereof, by and among Executive and each of the other persons named
therein.
(b) The certificates representing Executive Stock shall bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON JUNE 14, 1996, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET
FORTH IN A MANAGEMENT AGREEMENT BETWEEN THE ISSUER AND _______________
DATED AS OF JUNE 14, 1996, AS AMENDED AND MODIFIED FROM TIME TO TIME.
A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
ISSUERS' PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(c) Except in connection with a Sale of the Company, no holder of
Executive Stock may sell, transfer or dispose of any Executive Stock (except
pursuant to an effective registration statement under the 1933 Act) without
first delivering to the Company an opinion of counsel (reasonably acceptable in
form and substance to the Board) that neither registration nor qualification
under the 1933 Act and applicable state securities laws is required in
connection with such transfer.
12. Notices. All notices or communications provided for herein shall be
-------
deemed to be validly given as of the date of delivery, if delivered personally,
and three days after mailing, if sent by registered or certified mail, return
receipt requested, addressed to the Company or Technologies at its respective
headquarters or executive offices or to Executive at his address as set forth
from time to time in the records of the Company.
13. Miscellaneous.
-------------
(a) Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in
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such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(b) Complete Agreement. This Agreement embodies the complete
------------------
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(c) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Governing Law. The corporate law of the State of Delaware shall
-------------
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other issues and questions concerning the
construction, validity, interpretation and enforceability of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflicts of law rules or provisions (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.
(e) Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its Subsidiaries and Executive and their respective successors and
assigns; provided that the rights and obligations of Executive under this
Agreement shall not be assignable without the prior written approval of the
Board.
(f) Remedies. Each of the parties to this Agreement will be entitled
--------
to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended and waived only with the prior written consent of the Company and
Executive.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this MANAGEMENT
AGREEMENT as of the date first written above.
XXXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
--------------------------------
XXXXXXX HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
--------------------------------
/s/ Xxxx X. XxXxxxxxxx
---------------------------------------
Xxxx X. XxXxxxxxxx
