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AMENDMENT ONE TO EXECUTIVE STOCK APPRECIATION
RIGHTS AND NON QUALIFIED STOCK OPTION AGREEMENT
This Amendment One to Executive Stock Appreciation Rights and Non Qualified
Stock Option Agreement ("Amendment") is made and entered into this 28 day of
October 2000, between Medical Technology Systems, Inc., a Delaware corporation
(the "Company"), and Xxxx X. Xxxxxx (the "Executive').
Background
A. On February 6, 1995, the Company and the Executive entered into an
Executive Stock Appreciation Rights and NonQualified Stock Option Agreement, a
true, correct and authentic copy of which is attached hereto as Exhibit "A" (the
Agreement").
B. It is the parties' desire to amend the Agreement as set forth below.
THEREFORE, in consideration of the mutual covenants and promises set forth
herein, and in consideration of Executive's continued employment with and
service with the Company and its subsidiaries, the parties agree as follows:
1. The Background is true and correct, and is incorporated herein.
2. Section 1.14 of the Agreement is deleted and replaced as follows:
"Total Market Capitalization" means the total number of shares of
common stock outstanding on the Valuation Date multiplied by the
weighted average closing bid price of the common stock trade on
the NASDAQ/NMS (or other market or exchange). The "weighted
average closing bid price" shall be determined by multiplying the
closing bid price on the Valuation Date by the number of shares
of Common Stock traded on the Valuation Date and repeating the
calculation for each of the four days preceding the Valuation
Date, then dividing the sum of the five calculations by the
aggregate number of shares of Common Stock traded during the five
day period.
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3. The following definition is added to Section 1 of the Agreement:
1.18 "Floor Value" means the highest Total Market Capitalization
of the Company from March 31, 2000 through March 31, 2005 as
measured on March 31 of any year during that time period. By way
of example, for the time period from March 31, 2000 through March
31, 2001, the Floor Value is $3,336,736.00 (the Total Market
Capitalization as of March 31, 2000). If the Total Market
Capitalization as of March 31, 2001 exceeds $3,336,736.00, then
the March 31, 2001 Total Market Capitalization will be the new
Floor Value. If the Total Market Capitalization as of March 31,
2001 does not exceed $3,336,736.00 then $3,336,736.00 will remain
the Floor Value.
4. Section 1.15 of the Agreement is deleted, and replaced as
follows:
"Incremental Value" means the difference between the Total Market
Capitalization of the Company at the end of a fiscal year (i.e.,
March 31) and the Floor Value. Example: the Floor Value of the
company as of March 31, 2000 is $3,336,736.00. The Total Market
Capitalization of the Company as of March 31, 2001 is
$4,000,000.00. Incremental Value is defined as the difference
between the Total Market Capitalization on March 31, 2001 and the
Floor Value or $663,264.00. (In addition, the "Floor Value" for
the next fiscal year will be $4,000,000.00).
5. Section 2.A. is deleted, and replaced as follows:
X. Xxxxx of SAR's. Subject to the terms and conditions of this
Agreement, the Company hereby grants the Executive, as
additional compensation, which the Executive may receive,
effective as of each March 31st during the term of this
Agreement, if the Executive is then employed, Stock
Appreciation Rights equal to 3.25% of the Incremental Value
of the Company. Any stock appreciation rights granted under
this Agreement shall vest immediately.
6. Section 2.B. is deleted, and replaced as follows:
B. Payment of SAR. Except as may be provided in any other
provision here to the contrary, the Executive, or as the
case may be, his estate or legatees, heirs or assigns, shall
be paid an amount in cash equal to the value of any Stock
Appreciation Rights within 120 days after each Incremental
Valuation Date. If the Total Market Capitalization at any
fiscal year-end is less than the Floor Value, the Executive
will not be entitled to compensation pursuant to this Stock
Appreciation Right. There is no requirement that in the
determination of Incremental Value that the prior base
fiscal year be the fiscal year with the highest preceding
value. Measurements of Incremental Value will be done on a
year-to-year basis based upon the annual change in Total
Market Capitalization between Valuation Dates.
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7. Section 2.F. is deleted, and replaced as follows:
Termination of Employment. If Executive ceases to be employed by
the company and/or its subsidiaries at any time during the term
of this Agreement, for any reason other than for "cause"
termination as described in the Executive's Employment Agreement,
the Valuation Date shall be the date of such termination of
employment. The executive shall be entitled to his SARs based
upon the increase in value between the Floor Value and the Total
Market Capitalization of the company on the date of termination.
Payment shall be due to the executive, his estate, assigns, or
legal representatives within sixty (60) days of the termination
date. Payment shall be in the form of cash or the company's
common stock, at the election of the executive, as described in
subparagraph 2.C. above.
8. This Amendment is intended to act prospectively and will govern
the calculation of all Stock Appreciation Rights granted after
the date of the Amendment. This Amendment does not, in any way,
affect the grant of any Stock Appreciation Rights which occurred,
or should have occurred, prior to the date of this Amendment.
9. Other than as modified by this Amendment, the Agreement, and all
provisions of the Agreement which are not modified by this
Amendment, remain in full force and effect. This Amendment is
intended to modify only those provisions which are expressly
modified by this Amendment.
10. The parties expressly incorporate the modifications set forth in
this Amendment into the Agreement. IN WITNESS WHEREOF, the
Parties have executed this Agreement this ____ day of ________,
2000. Medical Technology Systems, Inc.
By: _________________________________
_______________________________ Print: _______________________________
Its: _________________________________
________________________________
Witnesses for MedTech Date: ________________________________
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_______________________________ Xxxx Xxxxxx __________________________
_______________________________ Date: ________________________________
Witnesses for Xxxxxx
