XXXXXX, INC.
FORM 10-K
FOR FISCAL YEAR ENDED NOVEMBER 30, 1995
EXHIBIT 10.9
SUPPLEMENTAL EXECUTIVE COMPENSATION AGREEMENT
BETWEEN THE COMPANY AND XXXXXXX X. XXXXXX
DATED MAY 12, 1995
SUPPLEMENTAL EXECUTIVE
COMPENSATION AGREEMENT
This Agreement, dated as of May 12, 1995 between Xxxxxx, Inc.
(the "Company"), a New Jersey corporation with offices located at
000 Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, and Xxxxxxx X. Xxxxxx
(the "Executive"), an individual residing at 00 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000.
WHEREAS, the Company has previously granted options (the
"Options") to the Executive to purchase 160,000 shares of the
Company's Common Stock under the Company's Amended and Restated
1993 Non-Qualified Stock Option Plan (the "Option Plan");
WHEREAS, each of the Options currently has an exercise price
of $.50 per share;
WHEREAS, the Company has engaged Bear, Xxxxxxx & Co. as its
financial advisor and agent in connection with seeking out parties
who would be interested in entering into certain business
transactions with the Company;
WHEREAS, the Board of Directors of the Company has recognized
that the continued services of the Executive are an essential
component in maximizing the value of the Company and completing any
proposed Transaction (as defined below);
NOW, THEREFORE, in consideration for the mutual promises
contained herein and to induce the Executive to remain in the
employ of the Company, the parties hereto do hereby agree as
follows:
1. Supplemental Compensation. In the event that either (a) a
Transaction shall be consummated prior to May 12, 1996 or (b) at
any time subsequent to May 12, 1996, the Company shall consummate
a Transaction with a party (i) from whom it received, prior to May
12, 1996, a written offer relating to a Transaction or (ii) with
whom it entered into a letter of intent or written agreement with
respect to a Transaction prior to May 12, 1996, then, the Company
shall pay to the Executive an amount in cash equal to the amount,
if any, by which $150,000 (as such amount may be proportionately
reduced if any of the Options are exercised prior to a closing of
a Transaction) exceeds the Option Value (as defined below). The
Company shall pay any amount owed under this Agreement on the
closing date of the Transaction or if the amount payable cannot be
determined on such date, promptly upon the determination of such
amount.
2. Definition. The following terms shall have the following meanings
for purposes of this Agreement:
"Option Value" shall mean (a) the amount, if any, by which the
Transaction Price per share of Common Stock exceeds $.50,
multiplied by (b) the number of shares subject to the Options which
are outstanding immediately prior to the Transaction; provided,
however, that if the Executive exercises his right to require the
Company to repurchase his Options pursuant to Section 7(b)(iii) or
7(b)(iv) of the Option Plan, then the Option Value shall mean the
amount paid to the Executive in connection with the repurchase of
such Options.
"Transaction" shall mean (A) a merger (other than a merger intended
solely to change the Company's jurisdiction of incorporation),
consolidation, reorganization, recapitalization, in which (i) the
previously outstanding Common Stock shall be changed into or,
pursuant to operation of law or the terms of the transaction to
which the Company is a party, exchanged for common stock or other
securities of another corporation or interests in a noncorporate
entity or other property (including cash) or (ii) the Company is
the surviving entity and which results in the Company's
shareholders immediately prior to such transaction not holding (by
virtue of such shares or securities issued pursuant to such
transaction) securities representing sixty-five percent (65%) or
more of the total voting power of the outstanding voting securities
of the Company having the right under ordinary circumstances to
vote in an election of the Company's Board, (B) a sale in any
transaction or series of transactions of fifty percent (50%) or
more of the Company's assets to an entity other than a subsidiary
or other affiliated entity of the Company, or (C) an event or
series of events by which any "Person," as that term is defined in
Section 2(2) of the Securities Act of 1933 or any affiliate of such
Person (when applied to any Person, an affiliate shall mean any
other Person directly or indirectly controlling, controlled by, or
under common control with, that Person) or Person and affiliates of
such Persons acting in concert shall, whether in a single
transaction or series of related transactions, acquire, directly or
indirectly, an amount of the Company's voting stock representing
thirty-five percent (35%) or more of the total voting power of the
outstanding voting securities of the Company having the right under
ordinary circumstances to vote in an election of the Company's
Board.
"Transaction Price" shall mean the per share consideration given to
holders of the Company's Common Stock in connection with a
Transaction. If all or a portion of the consideration paid in the
Transaction is other than cash, then the value of such non-cash
consideration shall be the fair market value thereof on the date
the Transaction is consummated as determined in good faith by the
Company's Board of Directors. If all or a portion of the
consideration payable in connection with the Transaction includes
contingent future payments, then the present value of the
reasonably expected amount of such contingent future payments (as
such amount is determined in good faith by the Company's Board of
Directors) using a discount rate of 10% will be included in the
Transaction Price. If the Transaction involves a sale (in any
transaction or series of transactions) of fifty percent (50%) or
more of the Company's assets followed by a dissolution and
liquidation of the Company, then the Transaction Price shall mean
the amount per share distributed to the holders of the Company's
Common Stock in connection with such dissolution and liquidation.
In the event that the Transaction involves (a) an event described
in clause (C) of the definition of "Transaction" set forth above,
(b) a merger, consolidation or recapitalization in which the
Company is the surviving entity which does not affect the
outstanding shares of the Common Stock or in which no securities or
other consideration are issued in respect of the Common Stock, or
(c) a sale (in any transaction or series of transactions) of 50% or
more of the Company's assets which is not followed by a dissolution
and liquidation of the Company, then the Transaction Price shall
mean the closing price of the Company's Common Stock on the
American Stock Exchange (or other principal securities exchange on
which the Common Stock is then traded) on the date of the closing
of the Transaction.
3. Termination. The Company's obligation to make the payment, if any,
contemplated by this Agreement shall terminate if the Executive
voluntarily resigns his employment with the Company prior to the
closing of a Transaction. For purposes of this Agreement, the
Executive will not be deemed to have voluntarily resigned if he
terminates his employment with the Company after (i) the Board
fails to reelect the Executive to the offices he holds as of the
date of this Agreement; (ii) the Board of Directors significantly
reduces the nature or scope of the authorities, powers, functions
or duties attached to the Executives office; (iii) the Company
breaches any material covenant of any employment agreement between
the Executive and the Company, and such breach is not cured within
forty-five (45) days of the issuance of written notice by the
Executive to the Company identifying the breach, (iv) the salary of
the Executive is reduced or (v) the Company consents to the
Executive's retirement.
4. No Effect on Other Rights. Nothing contained in this Agreement
shall be construed as limiting or otherwise affecting any of the
Executive's rights under any other agreement or plan in effect as
of the date hereof, including, but not limited to, the Option Plan
and the Company's Severance Policy for Senior Executives (the
benefits under which the Company acknowledges it is obliged to pay
to Executive in accordance with the terms thereof). In the event
that a Transaction shall occur, the compensation payable under this
Agreement shall be payable to the Executive regardless of whether
the employment of the Executive is terminated or continued
following the Transaction.
IN WITNESS WHEREOF, the parties have executed the Agreement as
of the date first above written.
XXXXXX, INC.
By:/S/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
/s/ Xxxxxxx x. Little
XXXXXXX X. LITTLE
