EXHIBIT 10.7
XXXXXXX HOLDINGS CORPORATION
MANAGEMENT AGREEMENT
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THIS MANAGEMENT AGREEMENT (the "Agreement") is made as of June 14,
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1996 (the "Effective Date"), by and between 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 Xxxxxx Xxxxxxxxx ("Executive").
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WHEREAS, Executive desires to be employed as a Vice President of
Engineering of Technologies, and Technologies desires to employ Executive as a
Vice President of Engineering 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, the Company and Executive desire to enter into an agreement
pursuant to which Executive shall purchase, and the Company shall sell, 195.71
shares of the Company's Class B Common Stock, par value $.01 per share (the
"Common Stock"), and 160 shares of the Company's Series A Preferred Stock, par
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value $.01 per share (the "Preferred Stock") for an aggregate purchase price of
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$20,000. All shares of Common Stock and Preferred Stock purchased by Executive
hereunder are referred to herein as "Executive Stock," and except as set forth
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in Section 1 hereof, Executive Stock shall not include any other shares of
capital stock of the Company (including, without limitation, shares of Common
Stock issued to Executive upon the exercise of certain stock options granted to
Executive); and
WHEREAS, the execution and delivery of this Agreement by the Company,
Technologies and Executive is a condition to the consummation of transactions
contemplated by the Stock and Warrant Purchase Agreement dated as of the date
hereof by and among the Company and those Persons named therein (the "Purchase
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Agreement"). Certain provisions of this Agreement are intended for the benefit
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of, and shall be enforceable by, Liberty Partners Holdings 11, L.L.C. ("LPH")
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and Riverside Xxxxxxx, L.L.C. ("RRL" and together with LPH, the "Investors").
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Certain definitions are set forth in Section 1 of this Agreement.
NOW, THEREFORE, the Company, Technologies 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 and 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 by the
Company or its Subsidiaries.
"Executive Stock" shall continue to be Executive Stock in the hands of
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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 Common Stock or Preferred Stock, 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 Common Stock or
the Preferred Stock is not listed on any securities exchange or quoted in the
NASDAQ System or the over-the-counter market, the Fair Market Value of the
Common Stock shall be the fair value as determined in good faith by the Board,
and the Fair Market Value of the Preferred Stock shall be the aggregate
liquidation value of such shares plus all accrued but unpaid dividends thereon.
"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 Technologies 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 Technologies stating Executive's intent to resign as a consequence
of such diminution or breach; provided that Executive's resignation actually
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occurs 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's Common Stock on a fully-diluted basis, who
is not controlling, controlled by or under common control with any such 5% owner
of the Company's Common Stock and who is not the spouse or descendent (by birth
or adoption) of any such 5% owner of the Company's Common 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 obligation
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under this Agreement, for a period of 90 consecutive days or a total period of
120 days in any 365 day period.
"Person" means an individual, a partnership, a corporation, a limited
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liability company, an 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 the Company's Common Stock
having an aggregate offering value of at least $30 million.
"Sale of the Company" means the sale of the Company 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 the Company possessing the
voting power to elect a majority of the Company's 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.
"Subsidiary" means with respect to any Person, any corporation,
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limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of the shares
of stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interests thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.
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. Executive shall serve as a Vice President of
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Engineering of Technologies and shall have such duties which are consistent with
such position as may be assigned by the President, the Chief Executive Officer
of Technologies and the board of directors of Technologies from time to time.
Executive shall devote his best efforts and his full business time
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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.
(b) Term. Subject to the provisions of Section 3(a), the "Term" of
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this Agreement shall be for one (1) year from the date hereof, unless earlier
terminated by either party as provided in Section 3(a) below, subject to
automatic renewals for successive one (1) year Terms unless either party has
delivered written notice not less than 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 $135,000. Such Base Salary shall be paid in
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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. Executive's Base Salary shall be
reviewed by the Board annually, 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
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United States 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;
provided, however that the Board shall not reduce the Base Salary. Executive
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will also be eligible to receive an annual bonus in an amount as determined by
the Board equal to up to twenty-five percent (25%) of Executive's then current
Base Salary. The determination of the amount of such bonus by the Board shall
be based (i) seventy-five percent (75%) upon the Company's achievement of
Company performance goals established by the Company's Chief Executive Officer
and the Board, and (ii) twenty-five percent (25%) upon Executive's achievement
of personal performance goals established by the Company's Chief Executive
Officer and 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 as may be appropriate for
Executive's position with Technologies and as approved by the Board.
(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,
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and Executive shall cooperate with Technologies in obtaining such insurance and
shall submit to medical examinations as required.
(g) Closing Bonus. Upon consummation of the transactions completed by
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the Purchase Agreement, the Company shall pay to Executive a one-time bonus of
$125,000 (the "Closing Bonus") within five (5) business days following the date
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hereof. The Closing Bonus shall be paid in accordance with the Company's normal
payroll procedures and shall be subject to withholding of applicable taxes and
governmental changes in accordance with federal and state law.
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 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 (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 and
affiliates, Technologies shall continue to pay Executive (or his estate) his
annual Base Salary (as in effect on the Termination Date) over a period of one
year following the Termination Date, payable in accordance with the Company's
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 the Company is terminated
for any other reason, the Company 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, the Company 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.
4. Executive Stock Options. The Company shall grant to Executive an
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option to purchase shares of the Company's Common Stock pursuant to the terms of
the Company's 1996 Stock Option Plan and a definitive option agreement between
the Company and Executive.
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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 (including employment with
Technologies prior to the date of this Agreement), and as a result of his
ownership of capital stock of the Company are the property of the Company and
its Subsidiaries. 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 Company and its Subsidiaries on Executive's Termination Date, or
at any other time the Company or Technologies 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 currently planned, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company and its Subsidiaries (including
employment with Technologies prior to the date of this Agreement) ("Work
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Product") are the property of and belong to the Company and its Subsidiaries.
Executive understands and acknowledges that, at the request of the Company or
Technologies, he must assign to the Company and its Subsidiaries any
development, invention or information that (i) relates to the actual or
anticipated business research or development of the Company or its Subsidiaries,
or (ii) results from any work performed by Executive for the Company and its
Subsidiaries. Executive shall promptly disclose such Work Product to
Technologies and the Company and perform all actions requested by the Board
(whether during or after Executive's employment) to establish and confirm the
Company's and 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-Competition, Non-Solicitation.
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(a) Executive acknowledges that during the course of his employment
with Technologies (including employment with Technologies prior to the date of
this Agreement) he will become familiar with the Company's and its Subsidiaries'
trade secrets and with other Confidential Information 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-Competition Period"),
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Executive shall not directly or 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
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Subsidiaries is engaged or then proposes to engage as of Executive's Termination
Date 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 by 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 the Company or its Subsidiaries to leave their employ, or in anyway
interfere with the relationship between the Company or its Subsidiaries 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 the Company and its Subsidiaries, (ii) hire
any person who was an employee of the Company or its Subsidiaries at any time
during Executive's employment period, or (iii) induce or attempt to induce,
whether directly or indirectly, any customer, supplier, distributor, franchisee,
licensee or other business relation of the Company and its Subsidiaries to cease
doing business with the Company or its Subsidiaries, or in any way interfere
with the relationship between any such customer, supplier, distributor,
franchisee, licensee or business relation and the Company and its Subsidiaries.
(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 and Technologies 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 and Technologies
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) 195.71 shares of Common Stock at a price of $20.44
per share, and (ii) 160
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shares of Preferred Stock at a price of $100 per share for an aggregate purchase
price of $20,000. The Company shall deliver to Executive the certificates
representing such shares of Common Stock and Preferred Stock, and Executive
shall deliver to the Company a cashier's or certified check or wire transfer of
funds in the aggregate amount of $20,000. The closing of the purchase and sale
of the Executive Stock shall take place simultaneously with the closing of the
transactions contemplated by the 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.
(ii) Executive is an executive officer of the Company's
significant operating subsidiary, 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 as he has requested. Executive has reviewed or
has had an opportunity to review, a copy of the Purchase Agreement,
dated as of the date hereof, between the Company and those other
persons named therein, 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; and (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:
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(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 the Company or affect the right
of Technologies to terminate Executive's employment at any time; and
(ii) the Company 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.
9. Vesting of Executive Stock. The Executive Stock shall be fully vested
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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 Company 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 shares as determined by the Board.
(d) The Board may elect to purchase all of the Executive Stock by
delivering written notice (the "Call Notice") to the holder or holders of the
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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 Company does not elect to purchase all of
the Executive Stock pursuant to the Call Option, the Investors shall be entitled
to exercise the Call Option for the
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shares of Executive Stock the Company has not elected to purchase (the
"Available Shares"). As soon as practicable after the Company has determined
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that there will be Available Shares, but in any event within 30 days after the
Termination Date, the Company shall give written notice (the "Option Notice") to
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the Investors setting forth 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 Company within 15 days
after the Option Notice has been given by the Company. 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 number of shares of Common Stock (which for purposes of this Section 10
shall include shares of the Company's Class A Common Stock any other class or
series of common equity which may hereafter be issued by the Company) then owned
by each Investor on a fully-diluted basis. If the Investors have 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 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 elected to purchase Remaining Available Shares). As soon as
practicable, and in any event within ten days after the expiration of the 15 day
period set forth above, the Company 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 Company delivers the
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Supplemental Call Notice to the holder(s) of Executive Stock, the Company 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 Company in the
Call Notice or Supplemental Call Notice, which date shall not be more than 60
days nor less than 15 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 Company in a
written notice delivered to Executive, which date shall not be more than 60 days
nor less than five 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 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) a combination of
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 loan agreements and
by applicable law. Notwithstanding anything to the contrary contained herein,
any notes issued by the Company pursuant to this Section 10(f) shall be subject
to any restrictive covenants to which the Company or
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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 shall be subject to
applicable restrictions contained in the Delaware General 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.
11. Restrictions on Transfer.
------------------------
(a) Stockholders Agreement. Shares of Executive Stock are subject to
----------------------
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 COMPANY 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 COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
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(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 Company) that neither registration nor qualification
under the 1933 Act and applicable state securities laws is required in
connection with such transfer.
12. Holdback Agreement. Executive agrees not to effect any public sale
------------------
or distribution of Common Stock during the seven days prior to, and the 180-day
period beginning on, the effective date of any underwritten registration of
equity securities of the Company or its Subsidiaries, unless otherwise agreed to
by the Board and the underwriters managing such registration. The restrictions
on transfer set forth in this Section 12 shall continue with respect to each
share of Executive Stock until the date on which such share has been transferred
in a Public Sale.
13. 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 at its headquarters or executive
offices or to Executive at his address as set forth from time to time in the
records of the Company.
14. 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 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,
and Executive agrees to forever release and discharge any claims, damages, or
other causes of action relating to Executive's employment with Technologies
prior to the date hereof, including, without limitation, relating to payments
(if any) owed to Executive pursuant to the terms of Technologies By-Laws
(including the By-Laws of Xxxxxxx Research Corporation as predecessor
corporation to Technologies).
(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
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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 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/ Xxxx X. XxXxxxxxxx
-------------------------------
Name: Xxxx X. XxXxxxxxxx
-----------------------------
Title: President
----------------------------
XXXXXXX HOLDINGS CORPORATION
By: /s/ Xxxx X. XxXxxxxxxx
-------------------------------
Name: Xxxx X. XxXxxxxxxx
-----------------------------
Title: President
----------------------------
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxxx
