<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 1997
REGISTRATION NO. 333-28133
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
DATAMAX INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3577 59-309-4679
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
----------------
4501 PARKWAY COMMERCE BOULEVARD, ORLANDO, FLORIDA 32808
(407) 578-8007
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
PETER D. ORR
4501 PARKWAY COMMERCE BOULEVARD, ORLANDO, FLORIDA 32808
(407) 578-8007
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
WITH COPIES TO:
MARK B. TRESNOWSKI MARK J. MACENKA
KIRKLAND & ELLIS TESTA, HURWITZ & THIBEAULT, LLP
200 EAST RANDOLPH DRIVE HIGH STREET TOWER, 125 HIGH STREET
CHICAGO, ILLINOIS 60601 BOSTON, MASSACHUSETTS 02110
(312) 861-2000 (617) 248-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery to the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a statement of estimated expenses of the issuance and
distribution of the securities being registered other than underwriting
compensation:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $22,727
NASD Filing Fee.................................................. *
Nasdaq Original Listing Fee...................................... *
Blue Sky Fees and Expenses
(including attorneys' fees and expenses)........................ *
Printing and Engraving Expenses.................................. *
Transfer Agent's Fees and Expenses............................... *
Accounting Fees and Expenses..................................... *
Legal Fees and Expenses.......................................... *
Miscellaneous Expenses........................................... *
-------
Total........................................................ $ *
=======
</TABLE>
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*To be filed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated under the laws of the State of Delaware. Section
145 of the General Corporation Law of the State of Delaware ("Section 145")
provides that a Delaware corporation may indemnify any persons who are, or are
threatened to be made, parties to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any persons who are, or are
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director has actually and reasonably incurred.
The Company's Certificate of Incorporation provides for the indemnification
of directors and officers of the Company to the fullest extent permitted by
Section 145.
In that regard, the Certificate of Incorporation provides that the Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, administrative or investigative (other than action by or in the
right of the corporation)
II-1
<PAGE>
by reason of the fact that he is or was a director or officer of the Company,
or is or was serving at the request of the Company as a director, officer or
member of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of such corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Indemnification in connection with an action or suit by or in the right of
such corporation to procure a judgment in its favor is limited to payment of
expenses (including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such an action or suit except
that no such indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the indemnifying
corporation unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
that, despite the adjudication of liability but in consideration of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
The Company has in effect insurance policies covering all of the Company's
directors and officers in certain instances where by law they may not be
indemnified by the Company.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Company has issued options to purchase an aggregate of
shares of Common Stock pursuant to its 1991 Stock Option Plan and 1996 Stock
Plan, of which have been exercised.
The Company has not sold any unregistered securities, other than those
described above, in the last three years. All of the sales described above
were deemed to be exempt from registration under the Securities Act by virtue
of Section 4(2) thereof, as transactions not involving a public offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of the Compa-
ny.
3.2 Bylaws of the Company.
*4.1 Form of certificate representing shares of Common Stock of the
Company.
*5.1 Opinion of Kirkland & Ellis with respect to legality.
*10.1 DMX International Corporation 1991 Stock Option Plan.+
10.2 Datamax International Corporation 1996 Long-Term Performance In-
centive Plan.+
10.3 Datamax International Corporation Employee Stock Purchase Plan.+
10.4 Employment Agreement dated February 23, 1997, between Datamax
and Marvin A. Davis.+
10.5 Nonqualified Stock Option Agreement, dated September 12, 1996,
between the Company and Marvin A. Davis.+
*10.6 Employment Agreement between Datamax Corporation and Thomas E.
Turner.+
10.7 Incentive Stock Option Agreement, dated May 10, 1993, between
the Company and Thomas E. Turner.+
10.8 Second Amended and Restated Stock Option Agreement, dated July
16, 1993, between the Company and Robert L. Wohlers.+
10.9 Confidentiality, Consulting and Noncompete Agreement, dated
April 25, 1996, between the Company and Robert C. Strandberg.+
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.10 Stockholders Agreement, dated February 26, 1993, among the Com-
pany and certain of its stockholders.
*10.11 Form of Termination Agreement among the Company and certain of
its stockholders.
*10.12 Registration Agreement, dated February 26, 1993, among the Com-
pany and certain of its stockholder, together with certain join-
der agreements thereto.
*10.13 Form of Agreement Regarding Director Nominations, dated
, 1995, among the Company and Liberty Holdings.
*10.14 Stock Purchase Agreement, dated February 7, 1996, by and among
the Company, Pioneer Labels, Inc. and the stockholders of Pio-
neer Labels, Inc.
*10.15 Agreement of Purchase and Sale of Assets, dated November 3,
1995, between the Company and Unimark, Inc.
10.16 Transition Services Agreement, dated November 3, 1995, between
the Company and Unimark, Inc.
10.17 Noncompetition Agreement, dated November 3, 1995, among the Com-
pany, Robert L. Wohlers, G. William Hartman, Jr., Robert C.
Strandberg and Unimark, Inc.
10.18 Lease, dated January 27, 1989, between John Hancock Mutual Life
Insurance Company and Datamax, together with certain amendments
thereto.
*21.1 Subsidiaries of the Company.
*23.1 Consent of Kirkland & Ellis (included in opinion filed as Ex-
hibit 5.1).
**23.2 Consent of Coopers & Lybrand L.L.P.
**24.1 Power of attorney (included on signature page).
</TABLE>
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*To be filed by amendment
**Previously filed
+Management contract or compensation plan or arrangement
(b) FINANCIAL STATEMENT SCHEDULES.
No schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are required under the
related instructions, as they are inapplicable or not material, or the
information called for thereby is otherwise included in the financial
statements and therefore has been omitted.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to every purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ORLANDO, STATE OF
FLORIDA, ON JUNE 12, 1997.
Datamax International Corporation
*
By: _________________________________
Marvin A. Davis, Chief Executive
Officer
* * * *
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED ON JUNE 12, 1997, BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
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<S> <C>
* Director, Chairman of the Board and Chief
___________________________________________ Executive Officer (principal executive
Marvin A. Davis officer)
* Chief Financial Officer (principal
___________________________________________ accounting and financial officer)
T. Michael Janney
* Director
___________________________________________
Peter E. Bennett
* Director
___________________________________________
Donald H. Gately
* Director
___________________________________________
Carl E. Ring, Jr.
* Director
___________________________________________
Thomas E. Turner
* Director
___________________________________________
Robert A. Spann
* Director
___________________________________________
Jeffrey A. Weber
* Director
___________________________________________
Robert L. Wohlers
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 pursuant to the Power of Attorney executed by the above-
named officers and directors of the Registrant and previously filed with
the Securities and Exchange Commission on behalf of such officers and
directors.
<TABLE>
<S> <C>
/s/ Peter D. Orr Attorney-in-Fact
___________________________________________
Peter D. Orr
</TABLE>
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<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
DMX INTERNATIONAL CORPORATION
ARTICLE I - Name
----------------
The name of the corporation is Datamax International Corporation.
ARTICLE II - Registered Office
------------------------------
The address of the registered office of the corporation in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware 19801. The name of the registered agent of the corporation at
that address is The Corporation Trust Company.
ARTICLE III - Purpose
---------------------
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law").
ARTICLE IV - Capital Stock
--------------------------
Section A. General. The maximum number of shares of stock that the
corporation is authorized to have outstanding at any one time is 40,000,000
shares consisting of 37,149,325 shares of Common Stock, par value of $.01 per
share (the "Common Stock"), 1,000,000 shares of Preferred Stock, par value of
$.01 per share (the "Preferred Stock"), 1,085,799 shares of Series A Preferred
Stock, par value of $.01 per share (the "Series A Preferred Stock"), and 764,876
shares of Series B Preferred Stock, par value of $.01 per share (the "Series B
Preferred Stock"). The consideration to be paid for each share shall be fixed
by the Board of Directors and may be paid in whole or in part in any combination
cf cash, real or personal property, or labor or services actually performed for
the corporation, with a value, in the judgment of the directors, equivalent to
or greater than the par value of the shares.
Section B. Recapitalization. Immediately upon the effectiveness of
this Amended and Restated Certificate of
<PAGE>
Incorporation, each previously outstanding share of the corporation or the
holder thereof, changed and converted into a number of shares of Common Stock
equal to that number determined by multiplying each share outstanding on such
date by two, it being understood that the Conversion Price of the Series A
Preferred and Series B Preferred shall, in accordance with the provisions
hereof, be appropriately adjusted to reflect such change and conversion.
Section C. Common Stock. Subject to the rights of the Series A
Preferred Stock, the Series B Preferred Stock and the Preferred Stock and except
as otherwise provided by the laws of the State of Delaware, the holders of
record of Common Stock shall share ratably in all dividends payable in cash,
stock or otherwise and other distributions, whether in respect of liquidation or
dissolution (voluntary or involuntary) or otherwise and, is subject to all the
powers, rights, privileges, preferences and priorities of the Series A Preferred
Stock, the Series B Preferred Stock and the Preferred Stock as provided herein
or in any resolution or resolutions adopted by the board of directors pursuant
to authority expressly vested in it by the provisions of Section E of this
ARTICLE IV.
(a) The Common Stock shall not be convertible into, or exchangeable
for, shares of any other class or classes or of any other series of the same of
the corporation's capital stock.
(b) No holder of Common Stock shall have any preemptive,
subscription, redemption, conversion or sinking fund rights with respect to the
Common Stock, or to any obligations convertible (directly or indirectly) into
stock of the corporation whether now or hereafter authorized.
(c) The Common Stock shall have voting rights for the election of
directors and for all other purposes, each holder of Common Stock being entitled
to one vote for each share thereof held by such holder, except as otherwise
required by law.
Section D. Series A and Series B Preferred Stock.
1. Series A Preferred Stock. The rights, preferences, restrictions
and other matters relating to the Series A Preferred Stock are as follows:
(a) Dividends. No dividend or other distribution shall be paid,
or declared and set apart for payment (other than dividends of Common Stock on
the Common Stock of the Corporation) on the shares of any class or series of
capital stock of the corporation unless and until a dividend of equal or greater
amount
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(calculated as if the shares of Series A Preferred Stock had been converted to
Common Stock on the date the dividend is declared) is first or concurrently
declared and paid with respect to the Series A Preferred Stock.
(b) Liquidation Preference.
(i) Series A Preferred Stock. In the event of any
liquidation, dissolution or winding up of the corporation, either voluntary or
involuntary (a "Liquidation"), the holders of the Series A Preferred Stock shall
be entitled to receive, prior and in preference to any distribution of any of
the assets or surplus funds of the corporation to the holders of the Common
Stock or any other class or series of capital stock of the Corporation by reason
of their ownership thereof (other than the Series B Preferred Stock which shall
share in the liquidation proceeds on a pari passu basis with the Series A
Preferred Stock), an amount equal to $1.70 per share of Series A Preferred Stock
(as adjusted for any combinations, consolidations, stock distributions or stock
dividends with respect to such shares), increased at the rate of 9% per annum
from the date of issuance thereof to the date of payment plus an amount equal to
all declared but unpaid dividends, if any (as to such series, the "Series A
Preferential Amount"). If upon the occurrence of such event, the assets and
funds distributed among the holders of the Series A Preferred Stock and the
holders of the Series B Preferred Stock in accordance with Section 2(b) of Part
D of this Article shall be insufficient to permit the payment to such holders of
the full Series A Preferential Amount and the full Series B Preferential Amount,
then the entire assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of Series A
Preferred Stock and the Series B Preferred Stock in proportion to the full
Series A Preferential Amount and Series B Preferential Amount each such holder
is otherwise entitled to receive.
(ii) Distribution of Remaining Amounts. In the event of
any Liquidation which results in distributable funds to the corporation or the
stockholders in excess of the sum of the full Series A Preferential Amount and
the full Series B Preferential Amount, then such excess shall be distributed (i)
rat ably among the holders of Common Stock up to, in the aggregate, an amount
equal to the sum of the full Series A Preferential Amount and the full Series B
Preferential Amount and thereafter (ii) ratably among the holders of Common
Stock and Preferred Stock based on the number of shares held by each such holder
assuming, for this purpose, the conversion of such Preferred Stock into Common
Stock.
(iii) Consolidation, Merger, etc. A consolidation, merger
of the Corporation with or into any other
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<PAGE>
entity or entities or reorganization in which the corporation is not the
surviving entity (unless the stockholders of the corporation continue to hold
more than 50% of the voting power of the surviving corporation), or a sale of
all or substantially all of the assets of the corporation (unless the
stockholders of the corporation hold more than 50% of the voting power of the
purchasing entity), shall, upon the election of the holders of a majority of the
outstanding shares of Series A Preferred Stock, be deemed to be a Liquidation
hereunder and shall entitle each holder of Series A Preferred Stock to a
distribution in cancellation of such holder's shares of Series A Preferred Stock
equal to the Series A Preferential Amount thereof.
(iv) Valuation of Securities. Any securities to be
delivered pursuant this Section 1(b) shall be valued as follows:
(A) Securities not subject to investment letter
or other similar restrictions on free marketability covered by subsection
l(iv)(B) hereof:
(1) If traded on a securities exchange, the
value shall be deemed to be the average of the closing prices of the securities
on such exchange over the thirty day period ending three days prior to the date
of determination;
(2) If traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices (whichever
are applicable) over the thirty day period ending three days prior to the date
of determination; and
(3) If there is no public market, the value
shall be the fair market value thereof, as determined in good faith by the Board
of Directors.
(B) The method of valuation of securities subject
to investment letter or other restrictions on free market ability other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate shall be to make an appropriate discount from the market
value determined as provided in clauses (1), (2) or (3) of subsection l(iv) (A)
hereof, to reflect the approximate fair market value thereof, as determined by
the Board of Directors.
(c) Voting Rights and Number of Directors.
(i) Generally. Except as otherwise expressly
provided herein or as required by law, the holder of each share of Series A
Preferred Stock shall be entitled to the number of votes
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<PAGE>
equal to the number of shares of Common Stock into which such share of Series A
Preferred Stock could then be converted and shall have voting rights and powers
equal to the voting rights and powers of the Common Stock (except as otherwise
expressly provided herein or as required by law, voting together with the Common
Stock as a single class) and shall be entitled to notice of any stockholders'
meeting in accordance with the bylaws of the corporation. Fractional votes shall
not, however, be permitted and any fractional voting rights resulting from the
above formula (after aggregating all shares of Common Stock into which shares of
Series A Preferred Stock held by each holder could be converted) shall be
rounded to the nearest whole number (with one-half being rounded upward).
(ii) Number of Directors. The authorized number of members of
the Board of Directors of the corporation shall be as set forth in the bylaws of
the corporation.
(d) Conversion. The holders of Series A Preferred Stock shall have
conversion rights as follows (the "Series A Conversion Rights"):
(i) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any time after the
date of issuance of such share, at the office of the corporation or any transfer
agent for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $1.70, plus all declared but unpaid
dividends on each such share, by the then applicable Conversion Price of the
Series A Preferred Stock, determined as hereinafter provided, in effect on the
date the certificate is surrendered for conversion. The initial Conversion Price
per share for Series A Preferred Stock shall be $1.70. Such initial Conversion
Price shall be adjusted as hereinafter provided.
(ii) Automatic Conversion. Each share of Series A Preferred
Stock shall automatically be converted into shares of Common Stock at the then
effective Conversion Price upon the consummation of an underwritten public
offering of the Common Stock registered under the Securities Act of 1933 at a
price per share of at least $10 (as such amount is equitably adjusted for stock
splits, stock combination, stock dividends and recapitalization) and resulting
in gross proceeds to the Corporation of at least $18 million. The automatic
conversion pursuant to this subsection (d)(ii) shall apply equally and at the
same time to all the then outstanding shares of Series A and Series E Preferred
Stock.
(iii) Mechanics of Voluntary Conversion.
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<PAGE>
Before any holder of Series A Preferred Stock shall be entitled to convert the
same into shares of Common Stock, such holder shall surrender the certificate or
certificates thereof, duly endorsed, at the office of the corporation or of any
transfer agent for such stock, and shall give written notice to the corporation
at such office that it elects to convert the same and shall state therein the
name or names in which it wishes the certificate or certificates for shares of
Common Stock to be issued. The corporation shall, as soon as practicable
thereafter and at its expense, issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to which it
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of surrender of the
shares of Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.
(iv) Adjustment for Subdivisions, Combinations or Consolidations
of Common Stock and Stock Dividends. In the event the outstanding shares of
Common Stock shall be subdivided (by stock split or otherwise) into a greater
number of shares of Common Stock, or a dividend or distribution of Common Stock
payable to all holders of Common Stock shall be made (or a record date for such
dividend declared), the Conversion Price then in effect for Series A Preferred
Stock shall, concurrently with the effectiveness (or record date) of such
subdivision or dividend, be proportionately decreased. In the event the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification cr otherwise, into a lesser number of shares of Common, the
Conversion Price then in effect for Series A Preferred Stock shall, concurrently
with the effectiveness of such combination or consolidation, be proportionately
increased.
(v) Adjustments for Other Distributions. In the event the
corporation at any time or from time to time makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive any
distribution payable in securities of the corporation other than Common Stock,
then in each such event provision shall be made so that the holders of Series A
Preferred Stock shall receive upon conversion thereof, in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
corporation which they would have received had their Series A Preferred Stock
been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
date of conversion, retained such securities receivable by them as aforesaid
during such period, subject to all other adjustments
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<PAGE>
called for during such period under this Section 1(d) with respect to the rights
of the holders of the Series A Preferred Stock.
(vi) Adjustments for Reorganization, Reclassification, Exchange
and Substitution. In case of any reorganization or any reclassification of the
capital stock of the corporation, any consolidation or merger of the corporation
with or into another entity or entities or the conveyance of all or
substantially all of the assets of the corporation to another corporation (other
than a merger, sale of assets or other reor ganization referred to in subsection
l(b) (iii) hereof or a subdivision or combination of shares referred to in
subsection l(d)(iv) above), the Conversion Price for Series A Preferred Stock
then in effect shall, concurrently with the effectiveness of such reorganization
or reclassification, be proportionately adjusted such that the Series A
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock or other securities or
property equivalent to the number of shares of Common Stock that have been
subject to receipt by the holders upon conversion of the Series A Preferred
Stock immediately before such event; and, in any such case, appropriate
adjustment (as determined by the Board) shall be made in the application of the
provisions herein set forth with respect to the rights and interest thereafter
of the folders of the Series A Preferred Stock, to the end that the provisions
set forth herein (including provisions with respect to orange in and other
adjustments of the Conversion Price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of the Series A Preferred Stock.
(vii) Issues of Stock. If and whenever the corporation shall
issue any shares of its Common Stock other than Excluded Stock (as hereinafter
defined) for a consideration per share which is less than the Conversion Price
in effect immediately prior to such issue, the Conversion Price shall be reduced
to the lowest price per share for which any such share was issued. For purposes
of this subsection l(d)(vii), the following provisions shall also be applicable:
(A) Convertible Securities, Options and Rights. If the
corporation shall issue any stock, warrant, security, obligation, option or
other right which directly or indirectly may be converted, exchanged or
satisfied in shares of other than Excluded Stock, the maximum total number of
shares of Common Stock issuable upon such conversion, exchange or other exercise
of such securities or rights thereupon shall be deemed to have been issued and
to be outstanding, and the consideration received by the corporation therefor
shall be deemed to include the
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sum of the consideration received for the issue of such securities or rights and
the minimum additional consideration payable upon such conversion, exchange or
other exercise of such securities or rights. No further adjustment shall be made
for the actual issuance of Common Stock upon such conversion, exchange or other
exercise of any such securities or rights. If the provisions of any such
securities or rights with respect to purchase price or shares purchasable shall
change or expire any adjustment previously made hereunder therefor shall be
readjusted to such as would have obtained on the basis of the securities or
rights as modified by such change or expiration.
(B) Consideration. In case the corporation shall issue shares
of its Common Stock for a consideration wholly or partly other than cash, the
amount of the consideration other than cash received by the corporation shall be
deemed to be the fair market value of such consideration as determined in
accordance with subsection l(b)(iv) as to securities or, as to consideration
other than securities, in good faith by the Board of Directors.
(C) Treasury Stock. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the corporation, and the disposition of any such shares so owned
or held shall be considered an issue of Common Stock.
(D) Excluded Stock. The term "Excluded Stock" shall mean (in
each case as such number of shares is equitably adjusted for stock splits, stock
combinations, stock dividends and recapitalizations):
(1) As to the Series A Preferred Stock and Preferred Stock,
the shares of Common Stock issued by the corporation upon conversion of Series A
Preferred Stock and Series B Preferred Stock;
(2) Options to purchase and the issuance pursuant thereto
of up to 500,000 shares of Common Stock issued by the Corporation for $.011 per
share upon the exercise of such options issued to Robert C. Strandberg, G.
William Hartman and Robert L. Wohlers (the "Managers") in connection with the
acquisition of all of the outstanding stock of Datamax Corporation (each share
issued pursuant to any such option shall be counted for purposes of calculating
such 500,000 shares);
(3) Up to 20,000 shares of Common Stock or securities or
rights convertible into or giving the right to purchase up to 20,000 shares of
Common Stock, so long as such
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shares are issued for not less than the fair value of such shares as determined
in good faith by the Board of Directors;
(4) Warrants to purchase and the issuance pursuant thereto of up to
500,000 shares of Series A Preferred Stock issued by the Corporation upon the
exercise of such warrants issued in connection with the acquisition of all of
the outstanding stock of Datamax Corporation;
(5) Warrants to purchase and the issuance pursuant thereto of up to
264,876 shares of Series B Preferred Stock issued by the corporation upon the
exercise of such warrants issued in connection with the acquisition of certain
assets by Fargo Acquisition Corporation pursuant to an Agreement of Purchase and
Sale of Assets dated February 6, 1993 (the "Fargo Acquisition");
(6) Warrants to purchase and the pursuant thereto of up to 1,827,645
shares of Common Stock issued by the corporation upon the exercise of such
warrants issued connection with the financing of the Fargo Acquisition; and
(7) Warrants to purchase and the issuance pursuant thereto of up to
264,876 shares of Common Stock issued by the corporation upon the exercise of
such warrants issued in connection with the refinancing of the senior debt
incurred in connection with the Fargo Acquisition.
(E) No Adjustment for Initial Issuance of Common Stock to the Managers.
There shall be no adjustment to the Conversion Price for the initial issuance of
Common Stock to the Managers in the amount of up to 414,201 shares of Common
Stock for $.01 per share.
(1) No Impairment. The corporation will not, by amendment of this
Amended and Restated Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 1 and in the taking of all such action as may
be necessary or appropriate in order to protect the Series A Conversion Rights
of the holders of Series A Preferred Stock against impairment.
(2) Certificates as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the conversion Price pursuant to this Section
1(d), the corporation at its expense shall promptly compute such adjustment or
readjustments
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accordance with the terms hereof and furnish to each holder of Series A
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The corporation shall, upon the written request at any time of any holder of
Series A Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
applicable Series A Preferred Stock Conversion Price at the time in effect, and
(iii) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of the Series A
Preferred Stock.
(3) Notices of Record Date. In the event of any taking by the
corporation of a record of the holders any class of securities for the purpose
of determining the holders thereof who are entitled to receive any dividend or
other distribution, any security or right convertible into or entitling the
holder thereof to receive Common Stock, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Corporation shall mail to each
holder of Series A Preferred Stock at least twenty days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution, security or right, and
the amount and character of such dividend, distribution, security or right.
(4) Issue Taxes. The corporation shall pay any and all issue and
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of shares of Series A Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be obligated to pay
any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.
(5) Reservation of Stock Issuable Upon Conversion. The corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Preferred Stock, the
corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall
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be sufficient for such purpose, including, without limitations engaging in best
efforts to obtain the requisite stockholder approval of any necessary amendment
to this Amended and Restated Certificate of Incorporation.
(6) Fraction Shares. No fractional share shall be issued upon the
conversion of any share or shares of Series A Preferred Stock. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more than
one share of Series A Preferred Stock by a holder thereof shall be aggregated
for purposes of determining whether the conversion would result in the issuance
of any fractional share. If, after the aforementioned aggregation, the
conversion would result in the issuance of a fraction of a share of Common
Stock, the corporation shall, in lieu of issuing any fractional share, pay the
holder otherwise entitled to such fraction a sum in cash equal to the fair
market value of such fraction on the date of conversion (as determined in good
faith by the Board of Directors).
(7) Other Dilutive Events. In case any event shall occur as to which
the other provisions of this Section 1(d) are not strictly applicable but the
failure to make any adjustment would not fairly protect the conversion rights
represented by each share of Series A Preferred Stock in accordance with the
essential intent and, principles hereof, then, in each such case, the
corporation shall effect such adjustment, on a basis consistent with the
essential intent and principles established in this Section 1(d), as may be
necessary to preserve, without dilution, the conversion rights represented by
each share of Series A Preferred Stock.
(8) Additional Dilutive Adjustment. In addition to any other
adjustment to the Conversion Price of the Series A Preferred Stock made under
this Section 1(d), if there is an adjustment in the Conversion Price of the
Series B Preferred Stock (a "Series B Adjustment") as a result of an issuance or
deemed issuance of Common Stock at a price per share of less than $4.00 but more
than $1.70 (as such amounts are equitably adjusted for stock splits, stock
combinations, stock dividends and recapitalizations), there shall also be an
adjustment in the Conversion Price of the Series A Preferred Stock (the "Series
A Adjustment") such that the quotient of the number of shares of Common Stock
into which the Series A Preferred Stock is convertible after such Series A
Adjustment divided by the number of shares of Common Stock into which the Series
A Preferred Stock was convertible immediately prior to such Series A Adjustment
is equal to the quotient of the number of shares of Common Stock into which the
Series B Preferred Stock is convertible after such Series B divided by the
number of shares of Common Stock into which the
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Series B Preferred Stock was convertible immediately before such Series B
Adjustment.
(e) No Reissuance of Series A Preferred Stock. No share or shares of
Series A Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall he reissued as shares of Series A
Preferred Stock.
(f) Notices. Any notice required by the provisions of this Section 1
to be given to the holders of shares of Series A Preferred Stock shall be deemed
given also confirmed transmission by facsimile or telecopy or upon deposit in
the United States mail, postage prepaid, and addressed to each holder of record
at its address appearing on the books of the corporation. Notwithstanding the
foregoing, if a stockholder to whom notice is to be given has an address of
record which is outside of the United States, then any notice to such
stockholder under this subsection 1(f) shall be deemed given upon confirmed
transmission by facsimile or telecopy or ten days after deposit in the United
States mail, postage prepaid, and addressed to such holder at its address
appearing on the books of the corporation.
2. Series B Preferred Stock. The rights, preferences, privileges,
restrictions and other matters relating to the Series B Preferred Stock are as
follows:
(a) Dividends. No dividend or other distribution shall be paid, or
declared and set apart for payment (other than dividends of Common Stock on the
Common Stock of the corporation) on the shares of any class or series of capital
stock of the corporation unless and until a dividend of equal or greater amount
(calculated as if the shares of Series B Preferred Stock had been converted to
Common Stock on the date the dividend is declared) is first or concurrently
declared and paid with respect to the Series B Preferred Stock.
(b) Liquidation Preference.
(i) Series B Preferred Stock. In the event of any Liquidation, the holders of
the Series B Preferred Stock shall he entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
corporation to the holders of the Common Stock or any other class or series of
capital stock of the corporation by reason of their ownership thereof than the
Series A Preferred Stock which shall share in the liquidation proceeds on a pari
passu basis with the Series B Preferred Stock, an amount equal to $4.00 per
share of Series B Preferred Stock (as adjusted for any combinations,
consolidations, stock distributions or stock dividends with respect to such
shares), increased at the rate of 9%
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per annum from the date of issuance thereof to the date of payment, plus an
amount equal to all declared but unpaid dividends, if any (as to such series,
the "Series B Preferential Amount"). If upon the occurrence of such event, the
assets and funds distributed among the holders of the Series B Preferred Stock
and the holders of the Series A Preferred Stock in accordance with Section 1(b)
of Part D of this Article IV shall be insufficient to permit the payment to such
holders of the full Series B
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EXHIBIT 3.2
BYLAWS
OF
DATAMAX INTERNATIONAL CORPORATION
ARTICLE I - Stockholders
------------------------
Section 1. Annual Meeting.
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months of the last annual meeting of the
stockholders or, if no such meeting has been held, the date of incorporation.
Section 2. Special Meetings.
Special meetings of the stockholders, for any purpose or purposes
prescribed in the notice of the meeting, may be called holders of one-fourth of
the outstanding shares of common stock of the Corporation originally issued
pursuant to the Stock and Warrant Purchase Agreement by and among the
Corporation and certain investors, dated February 26, 1993, or the holders of
one-third of the shares of any class of voting capital stock of the Corporation
then outstanding and shall be paid at such place, on such date, and at such time
as they or he or she shall fix.
Section 3. Notice of Meetings.
Written notice of the place, date and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law, these Bylaws or the Certificate of
Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
<PAGE>
Section 4. Quorum.
At any meeting of the stockholders, the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy shall constitute a quorum for all purposes, unless or except to the extent
that the presence of a larger number may be required by law. Where a separate
vote by a class or classes is required, a majority of the shares of such class
or classes present in person or represented by proxy shall constitute a quorum
entitled to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date
or time.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in the
absence of such a person, the chief executive officer of the Corporation or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. Conduct of Business.
The chairman of any meeting of stockholders shall determine the order of
business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
The date and time of the opening and closing of the polls for each matter upon
which the stockholders will vote at the meeting shall be announced at the
meeting.
Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure established
for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this paragraph
may be substituted or used in lieu of the original writing or transmission for
any and all purposes for which the original writing or transmission could be
used, provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or transmission.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or by his or her proxy, a
stock vote shall be taken. Every stock vote shall be taken by ballots,
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each of which shall state the name of the stockholder or proxy voting and such
other information as may be required under the procedure established for the
meeting. The Corporation may, and to the extent required by law shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting and make a written report thereof. The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspectors or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting may, and to the extent
required by law shall, appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability. Every vote taken by
ballots shall be counted by an inspector or inspectors appointed by the chairman
of the meeting.
All elections shall be determined by a plurality of the votes cast and,
except as otherwise required by law, all other matters shall be determined by a
majority of the votes cast affirmatively or negatively.
Section 8. Stock List.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the which place shall be specified to be held, specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.
The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is Present. This list presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
Any action recurred to be taken at any annual or meeting of stockholders of
the Corporation, or any action which may be taken at any annual or special
meeting of the stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the Corporation by delivery to
its registered office in Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
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Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the date
of the earliest dated consent delivered to the Corporation, a written consent or
consents signed by a sufficient number of holders to take action are delivered
to the Corporation in the manner prescribed in the first paragraph of this
section.
ARTICLE II - Board of Directors
-------------------------------
Section 1. Number and Term of Office.
The number of directors who shall constitute the whole Board shall be such
number as the Board of Directors or the holders of a majority of the outstanding
voting shares of stock in the Corporation, deemed to be outstanding for voting
purposes, shall from time to time have designated, except that in the absence of
any such designation, such number shall be five (5). Each director shall be
elected for a term of one year and until his or her successor is elected and
qualified, except as otherwise provided herein or required by law.
Whenever the authorized number of directors is increased between annual
meetings of the stockholders, a majority of the directors then in office, or the
holders of a majority of the outstanding voting shares of stock in the
Corporation, deemed to be outstanding for voting purposes, shall have the power
to elect such new directors for the balance of a term and until their successors
are elected and qualified. Any decrease in the authorized number of directors
shall not become effective until the expiration of the term of the directors
then in office unless, at the time of such decrease, there shall be vacancies on
the Board which are being eliminated by the decrease.
Section 2. Vacancies.
If the office of any director becomes vacant by reason of death,
resignation, disqualification, removal or other cause, a majority of the
directors remaining in office, although less than a quorum, may elect a
successor for the unexpired term and until his or her successor is elected and
qualified.
Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors;
provided, meetings shall be held at least once during each of the Corporation's
fiscal quarters. A notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by any director or
by the chief executive officer and shall be held at such place, on such date,
and at such time as they or he or she shall fix. Notice of the place, date and
time of it is not waived by mailing written notice not less than five (5) days
before the meeting or by telegraphing or telexing or by facsimile transmission
of the
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same not less than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the total number of
the whole Board shall constitute a quorum for all purposes. If a quorum shall
fail to attend any meeting, a majority of those present may adjourn the meeting
to another place, date or time, without further notice or waiver thereof.
Section 6. Participation in Meetings by Conference Telephone.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all person
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or privileges on
such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such forms as it
may determine, of written obligations of every kind, negotiable or non-
negotiable, secured or unsecured, and to do all things necessary in connection
therewith;
(4) To remove any officer of the Corporation with or without cause, and
from time to time to develop the powers and duties of any officer upon any other
person for the time being;
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(5) To confer upon any officer of the Corporation the power to appoint,
remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase, bonus
or other compensation plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement and other
benefit plans for directors, officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not inconsistent with these
Bylaws, for the management of the Corporation's business and affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committee of the
Board of Directors.
ARTICLE III - Committees
------------------------
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the whole Board, may
from time to time designate committees of the Board, with such lawfully
delegable powers and duties as ti thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
its desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation law if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may be unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to m embers of all meeting; one-third (1/3) of the
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members shall constitute a quorum, in which event one member shall constitute a
quorum; and all matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting if all members
thereof consent thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of such committee.
ARTICLE IV - Officers
---------------------
Section 1. Generally.
The officers of the Corporation shall consist of a President, one or more
Vice Presidents, a Secretary, a Treasurer and such other officers as may from
time to time be appointed by the Board of Directors. Officers shall be elected
by the Board of Directors, which shall consider that subject at its first
meeting after every annual meeting of stockholders. Each officer shall hold
office until his or her successor is elected and qualified or until his or her
earlier resignation or removal. Any number of offices may be held by the same
person.
Section 2. President.
The President shall be the chief executive officer of the Corporation.
Subject to the provisions of these Bylaws and the Certificate of Incorporation
of the Corporation and to the direction of the Board of Directors, he or she
shall have the responsibility for the general management and control of the
business and affairs of the Corporation and shall perform all duties and have
all powers which are commonly incident to the office of chief executive or which
are delegated to him or her all stock certificates, contracts and other
instruments of the Corporation which are authorized and shall have general
supervision and direction of all of the other officers, employees and agents of
the Corporation.
Section 3. Vice President.
Each Vice President shall have such powers and duties as may be delegated
to him or her by the Board of Directors. One Vice President shall be designated
by the Board to perform the duties and exercise the powers of the President in
the event of the President's absence or disability.
Section 4. Treasurer.
The Treasurer shall have the responsibility for maintaining the financial
records of the Corporation. He or she shall make such disbursements of the
funds of the Corporation as are authorized and shall render from time to time an
account of all such transactions and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties as the Board of
Directors may from time to time prescribe.
Section 5. Secretary.
The Secretary shall issue all authorized notices for, and shall keep
minutes of, all meetings
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of the stockholders and the Board of Directors. He or she shall have charge of
the corporate books and shall perform such other duties as the Board of
Directors may from time to time prescribe.
Section 6. Delegation of Authority.
The Board of Directors may from time to time delegate the powers or duties
of any officer to any other officers or agents, notwithstanding any provision
hereof.
Section 7. Removal.
Any officer of the Corporation may be removed at any time, with or without
cause, by the Board of Directors.
Section 8. Actions with Respect to Securities of Other Corporations.
Unless otherwise as provided by law or as directed by the Board of
Directors, the President or any officer of the Corporation authorized by the
President shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of stockholders of or with
respect to any action of stockholders of any other corporation in which this
Corporation may hold securities and otherwise to exercise any and all rights and
powers which this Corporation may possess by reason of its ownership of
securities in such other Corporation.
ARTICLE V - Stock
-----------------
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the President or a Vice President any by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these Bylaws,
an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of
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stock or for the purpose of any other lawful action, the Board of Directors may
fix a record date, which record date shall not precede the date on which the
resolution fixing the record date is adopted and which record date shall not be
more than sixty (60) nor less than ten (10) days before the date of any meeting
of stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that no record date for
determining stockholders shall be at the close of business on the day next
preceding the day the close of business on the day next preceding the day on
which the meeting is held, and, for determining stockholders entitled to receive
payment of any dividend or other distribution or allotment of rights or to
exercise any rights of change, conversion or exchange of stock or for any other
purpose, the record date shall be at the close of business on the date on which
the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall be not more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by the Board of Directors and no prior action by the Board of Directors is
required by the Delaware General Corporation law, written consent setting forth
the action taken or proposed to be taken is delivered to the Corporation in the
manner prescribed by Article I, Section 9 hereof. If no record date has been
fixed by the Board of Directors and prior action by the Board of Directors is
required by the Delaware General Corporation Law with respect to the proposed
action by written consent of the stockholders entitled to consent to corporate
action in writing shall be at the close of business on the day on which the
Board of Directors adopts the resolution taking such prior action.
Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI - Notices
--------------------
Section 1. Notices.
Except as otherwise specifically provided herein or required by law, all
notices required to
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be given to any stockholder, director, officer, employee or agent shall be in
writing and may in every instance be effectively given by hand delivery to the
recipient thereof, by depositing such notice in the mails, postage paid, or by
sending such notice by prepaid telegram or mailgram. Any such notice shall be
addressed to such stockholder, director, office, employee or agent at his or her
last known address as the same appears on the books of the Corporation. The time
when such notice is received, if hand delivered, or dispatched, if delivered
through the mails or by telegram, mailgram of facsimile transmission, shall be
the time of the giving of the notice.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII - Miscellaneous
---------------------------
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws, facsimile signature of any officer of
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and when
so directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance Upon Books, Reports and Records.
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other reports of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees or committees of the Board of Directors so designated, or by any other
person as to matters such director or committee member reasonably believes are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
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Section 5. Time Periods.
In applying any provision of these Bylaws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
ARTICLE VIII - Indemnification of Directors and Officers
--------------------------------------------------------
Section 1. Right to Indemnification.
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that
except as provided in Section 3 of this Article VIII with respect to proceedings
to enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation.
Section 2. Right to Advancement of Expenses.
The right to indemnification conferred in Section 1 of this Article VIII
shall include the right to be paid by the Corporation the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses"); provided, however,
that if the Delaware General Corporation Law requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication') that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise. The rights to indemnification and to
the
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<PAGE>
advancement of expenses conferred rights and such rights shall continue as to an
indemnitee who has ceased to be a director, officer, employee or agent, and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators.
Section 3. Right of Indemnitee to Bring Suit.
If a claim under Sections 1 or 2 of this Article VIII is not paid in full
by the Corporation within sixty (60) days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case of a claim or an advancement of expenses, in which case
the applicable period shall be twenty (20) days, the indemnitee may at any time
thereafter bring suit against the Corporation or recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a sit
brought by the indemnitee to enforce a right to an advancement of expenses), it
shall be a defense that, and (ii) in any suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Corporation shall be entitled to recover such expenses upon a final adjudication
that, the indemnification set forth in the Delaware General Corporation Law.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any sit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee of expenses, under this Article VIII or otherwise
shall be on the Corporation.
Section 4. Non-Exclusivity of Rights.
The right to indemnification and to the advancement of expenses conferred
in this Article VIII shall not be exclusive of any other right which any person
may have or hereafter acquire under any stature, the Corporation's Certificate
of Incorporation, Bylaws, agreement, vote of stockholder or disinterested
directors or otherwise.
Section 5. Insurance.
The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware
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<PAGE>
Corporation Law.
Section 6. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
ARTICLE IX - Amendments
-----------------------
Except as required by law, these Bylaws may be amended or repealed by the
Board of Directors at any meeting or by the stockholders at any meeting.
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EXHIBIT 10.2
DATAMAX INTERNATIONAL CORPORATION
Amended and Restated
1996 Long-Term Performance Incentive Plan
1. Purpose. The purpose of the Amended and Restated 1996 Long-Term
Performance Incentive Plan of Datamax International Corporation (the "Plan") is
to advance the interests of Datamax International Corporation, a Delaware
corporation (together with its subsidiaries, the "Company"), and its
stockholders by providing incentives to certain employees and directors of the
Company and to certain other key individuals who perform services for the
Company, including those who contribute significantly to the strategic and long-
term performance objectives and growth of the Company.
2. Administration.
(1) The Plan shall be administered solely by the Board of Directors
(the "Board") of the Company or, if the Board shall so designate, by a
committee of the Board that shall be comprised of not fewer than two
directors (the "Committee"); provided that if at any time Rule 16b-3 or any
successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Section 162(m) of the Internal Revenue
Code of 1986, as amended, or any successor statutory provision thereto (the
"Code"), and any implementing regulations (and any successor provisions
thereof), so permit without adversely affecting the ability of the Plan to
comply with the conditions for exemption from Section 16 of the Exchange
Act (or any successor provision) provided by Rule 16b-3 and the exemption
from the limitations on the deductibility of certain executive compensation
provided by Section 162(m), the Committee may delegate the administration
of the Plan in whole or in part, on such terms and conditions, to such
other person or persons as it may determine in its discretion. References
to the Committee hereunder shall include the Board where appropriate. The
membership of the Committee or such successor committee shall be
constituted so as to comply at all times with the applicable requirements
of Rule 16b-3 and Section 162(m). No member of the Committee shall have
within one year prior to his appointment received awards under the Plan
("Awards") or under any other plan, program or arrangement of the Company
or any of its affiliates if such receipt would cause such member to cease
to be a "disinterested person" under Rule 16b-3; provided that if at any
time Rule 16b-3 so permits without adversely affecting the ability of the
Plan to comply with the conditions for exemption from Section 16 of the
Exchange Act (or any successor provision) provided by Rule 16b-3, one or
more members of the Committee may cease to be a "disinterested person."
(2) The Committee has all the powers vested in it by the terms
of the Plan set forth herein, such powers to include exclusive authority
(except as may be delegated as permitted herein) (i) to select the
employees, directors and other key individuals to be granted Awards under
the Plan, (ii) to determine the type, size and terms of the Award to be
made to each individual selected, subject to the limitations set forth in
Paragraph 4(b), (iii) to modify the terms of any Award that has been
granted, (iv) to determine the time when Awards will be granted, (v) to
establish performance objectives, (vi) to make any adjustments necessary or
desirable as a result of the granting of Awards to eligible individuals
located outside the United States and (vii) to prescribe the form of the
instruments embodying Awards made under the Plan. The Committee is
authorized (A) to interpret the Plan and the Awards granted under the Plan,
(B) to establish, amend and rescind any rules and regulations relating to
the Plan, and (C) to make any other determinations which it deems necessary
or desirable for the administration of the Plan. The Committee (or its
delegate as permitted herein)
<PAGE>
may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent
the Committee deems necessary or desirable to carry it into effect. Any
decision of the Committee (or its delegate as permitted herein) in the
interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive
and binding on all parties concerned. The Committee may act only by a
majority of its members in office, except that the members thereof may
authorize any one or more of their members or any officer of the Company to
execute and deliver documents or to take any other ministerial action on
behalf of the Committee with respect to Awards made or to be made to Plan
participants. No member of the Committee and no officer of the Company
shall be liable for anything done or omitted to be done by him, by any
other member of the Committee or by any officer of the Company in
connection with the performance of duties under the Plan, except for his
own willful misconduct or as expressly provided by statute. Determinations
to be made by the Committee under the Plan may be made by its delegates.
3. Eligibility. Consistent with the purposes of the Plan, the
Committee shall have exclusive power (except as may be delegated as permitted
herein) to select the employees, directors and other key individuals performing
services for the Company and any of its subsidiaries who may participate in the
Plan and be granted Awards under the Plan. Eligible individuals may be selected
individually or by groups or categories, as determined by the Committee in its
discretion.
4. Awards under the Plan.
(1) Types of Awards. Awards under the Plan may include, but need
not be limited to, one or more of the following types, either alone or in
any combination thereof: (i) "Stock Options," (ii) "Stock Appreciation
Rights," (iii) "Restricted Stock," (iv) "Performance Grants" and (v) any
other type of Award deemed by the Committee in its discretion to be
consistent with the purposes of the Plan (including, but not limited to,
Awards of or options or similar rights granted with respect to unbundled
stock units or components thereof, and Awards to be made to participants
who are foreign nationals or are employed or performing services outside
the United States). Stock Options, which include "Nonqualified Stock
Options" (which may be awarded to participants or sold at a price
determined by the Committee ("Purchased Options")) and "Incentive Stock
Options" or combinations thereof, are rights to purchase common shares of
the Company having a par value of $.01 per share and stock of any other
class into which such shares may thereafter be changed (the "Common
Shares"). Nonqualified Stock Options and Incentive Stock Options are
subject to the terms, conditions and restrictions specified in Paragraph 5.
Stock Appreciation Rights are rights to receive (without payment to the
Company) cash, Common Shares, other Company securities (which may include,
but need not be limited to, unbundled stock units or components thereof,
debentures, preferred stock, warrants, securities convertible into Common
Shares or other property ("Other Company Securities")) or property, or
other forms of payment, or any combination thereof, as determined by the
Committee, based on the increase in the value of the number of Common
Shares specified in the Stock Appreciation Right. Stock Appreciation Rights
are subject to the terms, conditions and restrictions specified in
Paragraph 6. Shares of Restricted Stock are Common Shares which are issued
subject to certain restrictions pursuant to Paragraph 7. Performance Grants
are contingent awards subject to the terms, conditions and restrictions
described in
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Paragraph 8, pursuant to which the participant may become entitled to
receive cash, Common Shares, Other Company Securities or property, or other
forms of payment, or any combination thereof, as determined by the
Committee.
(2) Maximum Number of Shares that May be Issued. There may be
issued under the Plan (as Restricted Stock, in payment of Performance
Grants, pursuant to the exercise of Stock Options or Stock Appreciation
Rights, or in payment of or pursuant to the exercise of such other Awards
as the Committee, in its discretion, may determine) an aggregate of not
more than 1,000,000 Common Shares, subject to adjustment as provided in
Paragraph 14. The maximum number of Common Shares which may be granted to a
participant pursuant to Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Grants or any other Award in any one taxable
year of the Company shall not exceed 150,000 Common Shares. Common Shares
issued pursuant to the Plan may be either authorized but unissued shares,
treasury shares, reacquired shares, or any combination thereof. If any
Common Shares issued as Restricted Stock or otherwise subject to repurchase
or forfeiture rights are reacquired by the Company pursuant to such rights,
or if any Award is cancelled, terminates or expires unexercised, any Common
Shares that would otherwise have been issuable pursuant thereto will be
available for issuance under new Awards.
(3) Rights with respect to Common Shares and Other Securities.
(1) Unless otherwise determined by the Committee in its
discretion, a participant to whom an Award of Restricted Stock has been
made (and any person succeeding to such a participant's rights pursuant to
the Plan) shall have, after issuance of a certificate for the number of
Common Shares awarded and prior to the expiration of the Restricted Period
(as hereinafter defined), ownership of such Common Shares, including the
right to vote the same and to receive dividends or other distributions made
or paid with respect to such Common Shares (provided that such Common
Shares, and any new, additional or different shares, or Other Company
Securities or property, or other forms of consideration which the
participant may be entitled to receive with respect to such Common Shares
as a result of a stock split, stock dividend or any other change in the
corporation or capital structure of the Company, shall be subject to the
restrictions hereinafter described as determined by the Committee in its
discretion), subject, however, to the options, restrictions and limitations
imposed thereon pursuant to the Plan. Notwithstanding the foregoing, a
participant with whom an Award is made to issue Common Shares in the
future, shall have no rights as a stockholder with respect to Common Shares
related to such agreement until issuance of a certificate to him.
(2) Unless otherwise determined by the Committee in its
discretion, a participant to whom a grant of Stock Options, Stock
Appreciation Rights, Performance Grants or any other Award is made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have no rights as a stockholder with respect to any Common Shares or
as a holder with respect to other securities, if any, issuable pursuant to
any such Award until the date of the issuance of a stock certificate to him
for such Common Shares or other instrument of ownership, if any. Except as
provided in Paragraph 14, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities, other property or other forms of
consideration, or any combination thereof) for which the record date is
prior to the date such stock certificate or other instrument of ownership,
if any, is issued.
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5. Stock Options. The Committee may grant or sell Stock Options either
alone, or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter; provided
that an Incentive Stock Option may be granted only to an eligible employee of
the Company or any parent or subsidiary corporation. Each Stock Option (referred
to herein as an "Option") granted or sold under the Plan shall be evidenced by
an instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Option or the Common Shares issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:
(1) The option price may be less than, equal to, or greater than, the
fair market value of the Common Shares subject to such Option at the time
the Option is granted, as determined by the Committee, but in no event will
such option price be less than 50% of the fair market value of the
underlying Common Shares at the time the Option is granted; provided,
however, that in the case of an Incentive Stock Option granted to such an
employee, the option price shall not be less than the fair market value of
the Common Shares subject to such Option at the time the Option is granted,
or if granted to such an employee who owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or any
parent or subsidiary (a "Ten Percent Employee"), such option price shall
not be less than 110% of such fair market value at the time the Option is
granted; but in no event will such option price be less than the par value
of such Common Shares.
(2) Subject to the per participant limitation set forth in Paragraph
4(b), the Committee shall determine the number of Common Shares to be
subject to each Option. The number of Common Shares subject to an
outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares
under such Option are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of a Stock Appreciation
Right attached to such Option, or to the extent that any other Award
granted in conjunction with such Option is paid.
(3) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution, and shall be exercisable during the grantee's
lifetime only by him. Unless the Committee determines otherwise, the
Option shall not be exercisable for at least six months after the date of
grant, unless the grantee ceases employment or performance of services
before the expiration of such six-month period by reason of his disability
as defined in Paragraph 12 or his death.
(4) The Option shall not be exercisable:
(1) in the case of any Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the date it is
granted, and, in the case of any other Option, after the expiration of ten
years from the date it is granted. Any Option may be exercised during such
period only at such time or times and in such installments as the Committee
may establish;
(2) unless payment in full is made for the shares being acquired
thereunder at the time of exercise; such payment shall be made in such form
(including, but not limited to, cash, Common Shares, or the surrender of
another outstanding Award under the Plan, or any combination thereof) as
the Committee may determine in its discretion; and
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(3) unless the person exercising the Option has been, at all times
during the period beginning with the date of the grant of the Option and ending
on the date of such exercise, employed by or otherwise performing services for
the Company, or a corporation, or a parent or subsidiary of a corporation,
substituting or assuming the Option in a transaction to which Section 424(a) of
the Code is applicable, except that:
(1) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or early,
normal or deferred retirement under an approved retirement program of the
Company (or such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding an Option
that has not expired and has not been fully exercised, such person, at any
time within three years (or such period determined by the Committee) after
the date he ceased such employment or performance of services (but in no
event after the Option has expired), may exercise the Option with respect
to any shares as to which he could have exercised the Option on the date he
ceased such employment or performance of services, or with respect to such
greater number of shares as determined by the Committee;
(2) if any person to whom an Option has been granted shall die
holding an Option that has not expired and has not been fully exercised,
his executors, administrators, heirs or distributees, as the case may be,
may, at any time within one year (or such other period determined by the
Committee) after the date of death (but in no event after the Option has
expired), exercise the Option with respect to any shares as to which the
decedent could have exercised the Option at the time of his death, or with
respect to such greater number of shares as determined by the Committee; or
(3) if such person shall cease such employment or performance of
services by reason of his being terminated by the Company without cause (as
the Committee may determine, unless otherwise set forth in the instrument
evidencing the Option) while holding an Option that has not expired and has
not been fully exercised, such person, at any time within 90 days (or such
period determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the Option has
expired), exercise the Option with respect to any shares as to which he
could have exercised the Option on the date he ceased such employment or
performance of services, or with respect to such greater number of shares
as determined by the Committee.
(5) In the case of an Incentive Stock Option, the amount of the
aggregate fair market value of Common Shares (determined at the time of grant of
the Option pursuant to subparagraph 5(a) of the Plan) with respect to which
incentive stock options are exercisable for the first time by an employee during
any calendar year (under all such plans of his employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000.
(6) It is the intent of the Company that Nonqualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that the
Incentive Stock Options granted
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<PAGE>
under the Plan be consistent with and contain or be deemed to contain all
provisions required under Section 422 and the other appropriate provisions
of the Code and any implementing regulations (and any successor provisions
thereof), and that any ambiguities in construction shall be interpreted in
order to effectuate such intent.
(7) A Purchased Option may contain such additional terms not
inconsistent with this Plan, including but not limited to the circumstances
under which the purchase price of such Purchased Option may be returned to
the optionee, as the Committee may determine in its sole discretion.
6. Stock Appreciation Rights. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Award of Stock Appreciation Rights or the Common
Shares issuable upon exercise thereof, as the Committee, in its discretion,
shall establish:
(1) Subject to the per participant limitation set forth in Paragraph
4(b), the Committee shall determine the number of Common Shares to be
subject to each Award of Stock Appreciation Rights. The number of Common
Shares subject to an outstanding Award of Stock Appreciation Rights may be
reduced on a share-for-share or other appropriate basis, as determined by
the Committee, to the extent that Common Shares under such Award of Stock
Appreciation Rights are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of an Option attached to
such Award of Stock Appreciation Rights, or to the extent that any other
Award granted in conjunction with such Award of Stock Appreciation Rights
is paid.
(2) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will
or the laws of descent and distribution, and shall be exercisable during
the grantee's lifetime only by him. Unless the Committee determines
otherwise, the Award of Stock Appreciation Rights shall not be exercisable
for at least six months after the date of grant, unless the grantee ceases
employment or performance of services before the expiration of such six-
month period by reason of his disability as defined in Paragraph 12 or his
death.
(3) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights that
is attached to an Incentive Stock Option granted to a Ten Percent Employee,
after the expiration of five years from the date it is granted, and, in the
case of any other Award of Stock Appreciation Rights, after the expiration
of ten years from the date it is granted. Any Award of Stock Appreciation
Rights may be exercised during such period only at such time or times and
in such installments as the Committee may establish;
(ii) unless the Option or other Award to which the Award of
Stock Appreciation Rights is attached is at the time exercisable; and
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(3) unless the person exercising the Award of Stock Appreciation
Rights has been, at all time during the period beginning with the date of the
grant thereof and ending on the date of such exercise, employed by or otherwise
performing services for the Company, except that:
(1) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or early,
normal or deferred retirement under an approved retirement program of the
Company (or such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding an Award of
Stock Appreciation Rights that has not expired and has not been fully
exercised, such person may, at any time within three years (or such other
period determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the Award of
Stock Appreciation Rights has expired), exercise the Award of Stock
Appreciation Rights with respect to any shares as to which he could have
exercised the Award of Stock Appreciation Rights on the date he ceased such
employment or performance of services, or with respect to such greater
number of shares as determined by the Committee; or
(2) if any person to whom an Award of Stock Appreciation Rights has
been granted shall die holding an Award of Stock Appreciation Rights which
has not expired and has not been fully exercised, his executors,
administrators, heirs or distributees, as the case may be, may at any time
within one year (or such other period determined by the Committee) after
the date of death (but in no event after the Award of Stock Appreciation
Rights has expired), exercise the Award of Stock Appreciation Rights with
respect to any shares as to which the decedent could have exercised the
Award of Stock Appreciation Rights at the time of his death, or with
respect to such greater number of shares as determined by the Committee; or
(3) if such person shall cease such employment or performance of
services by reason of his being terminated by the Company without cause (as
the Committee may determine, unless otherwise set forth in the instrument
evidencing the Award of Stock Appreciation Rights) while holding an Award
of Stock Appreciation Rights that has not expired and has not been fully
exercised, such person, may at any time within 90 days (or such other
period determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the Award of
Stock Appreciation Rights has expired), exercise the Award of Stock
Appreciation Rights with respect to any shares as to which he could have
exercised the Award of Stock Appreciation Rights on the date he ceased such
employment or performance of services, or with respect to such greater
number of shares as determined by the Committee.
(4) An Award of Stock Appreciation Rights shall entitle the holder
(or any person entitled to act under the provisions of subparagraph 6(c)(iii)(B)
hereof) to exercise such Award or to surrender unexercised the Option (or other
Award) to which the Stock Appreciation Right is attached (or any portion of such
Option or other Award) to the Company and to receive from the
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<PAGE>
Company in exchange thereof, without payment to the Company, that number of
Common Shares having an aggregate value equal to (or, in the discretion of
the Committee, less than) the excess of the fair market value of one share,
at the time of such exercise, over the exercise price (or Option Price, as
the case may be), times the number of shares subject to the Award or the
Option (or other Award), or portion thereof, which is so exercised or
surrendered, as the case may be. The Committee shall be entitled in its
discretion to elect to settle the obligation arising out of the exercise of
a Stock Appreciation Right by the payment of cash or Other Company
Securities or property, or other forms of payment, or any combination
thereof, as determined by the Committee, equal to the aggregate value of
the Common Shares it would otherwise be obligated to deliver. Any such
election by the Committee shall be made as soon as practicable after the
receipt by the Committee of written notice of the exercise of the Stock
Appreciation Right. The value of a Common Share, Other Company Securities
or property, or other forms of payment determined by the Committee for this
purpose shall be the fair market value thereof on the last business day
next preceding the date of the election to exercise the Stock Appreciation
Right, unless the Committee, in its discretion, determines otherwise.
(5) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding
the expiration date of the Stock Appreciation Right or of the related
Option (or other Award), or such other date as specified by the Committee,
if at such time such Stock Appreciation Right has a positive value. Such
deemed exercise shall be settled or paid in the same manner as a regular
exercise thereof as provided in subparagraph 6(d) hereof.
(6) No fractional shares may be delivered under this Paragraph 6, but
in lieu thereof a cash or other adjustment shall be made as determined by
the Committee in its discretion.
7. Restricted Stock. Each Award of Restricted Stock under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the Committee,
in its discretion, shall establish:
(1) Subject to the per participant limitation set forth in Paragraph
4(b), the Committee shall determine the number of Common Shares to be
issued to a participant pursuant to the Award, and the extent, if any, to
which they shall be issued in exchange for cash, other consideration, or
both.
(2) Restricted Stock awarded to a participant in accordance with the
Award shall be subject to the following restrictions until the expiration
of such period as the Committee shall determine, from the date on which the
Award is granted (the "Restricted Period"): (i) a participant to whom an
award of Restricted Stock is made shall be issued, but shall not be
entitled to, the delivery of a stock certificate, (ii) the Restricted Stock
shall not be transferable prior to the end of the Restricted Period, (iii)
the Restricted Stock shall be forfeited and the stock certificate shall be
returned to the Company and all rights of the holder of such Restricted
Stock to such shares and as a shareholder shall terminate without further
obligation on the part of the Company if the participant's continuous
employment or performance of services for the Company shall terminate for
any reason prior to the end of the Restricted Period, except as otherwise
provided in subparagraph 7(c), and (iv) such other restrictions as
determined by the Committee in its discretion.
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(3) If a participant who has been in continuous employment or
performance of services for the Company since the date on which a
Restricted Stock Award was granted to him shall, while in such employment
or performance of services, die, or terminate such employment or
performance of services by reason of disability as defined in Paragraph 12
or by reason of early, normal or deferred retirement under an approved
retirement program of the Company (or such other plan or arrangement as may
be approved by the Committee in its discretion, for this purpose) or have
such employment or performance of services terminated by the Company
without cause (as the Committee may determine, unless otherwise set forth
in the instrument evidencing the Award of Restricted Stock) and any of such
events shall occur after the date on which the Award was granted to him and
prior to the end of the Restricted Period of such Award, the Committee may
determine to cancel any and all restrictions on any or all of the Common
Shares subject to such Award.
8. Performance Grants. The Award of the Performance Grant ("Performance
Grant") to a participant will entitle him to receive a specified amount
determined by the Committee (the "Actual Value"), if the terms and conditions
specified herein and in the Award are satisfied. Each Award of a Performance
Grant shall be subject to the following terms and conditions, and to such other
terms and conditions, including but not limited to, restrictions upon any cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof, issued in respect of the Performance Grant, as the
Committee, in its discretion, shall establish, and shall be embodied in an
instrument in such form and substance as is determined by the Committee:
(1) Subject to the per participant limitation set forth in Paragraph
4(b), the Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an Award
and whether or not such a Performance Grant is granted in conjunction with
an Award of Options, Stock Appreciation Rights, Restricted Stock or other
Award, or any combination thereof, under the Plan (which may include, but
need not be limited to, deferred Awards) concurrently or subsequently
granted to the participant (the "Associated Award"). As determined by the
Committee, the maximum value of each Performance Grant (the "Maximum
Value") shall be: (i) an amount fixed by the Committee at the time the
Award is made or amended thereafter, (ii) an amount which varies from time
to time based in whole or in part on the then current value of the Common
Shares, Other Company Securities or property, or other securities or
property, or any combination thereof or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants
may be issued in difference classes or series having different names, terms
and conditions. In the case of a Performance Grant awarded in conjunction
with an Associated Award, the Performance Grant may be reduced on an
appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the participant, as determined
by the Committee.
(2) The award period ("Award Period") related to any Performance
Grant shall be a period determined by the Committee. At the time each Award
is made, the Committee shall establish performance objectives to be
attained within the Award Period as the means of determining the Actual
Value of such a Performance Grant. The performance objectives shall be
based on such measure or measures of performance, which may include, but
need not be limited to, the performance of the participant, the Company,
one or more of its subsidiaries or one or more of their divisions or units,
or any combination of the foregoing, as the Committee shall determine, and
may be applied on an absolute basis or be relative to industry or other
indices, or any combination thereof. The Actual Value of a Performance
Grant shall be equal to its Maximum Value only if the performance
objectives
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<PAGE>
are attained in full, but the Committee shall specify the manner in which
the Actual Value of Performance Grants shall be determined if the
performance objectives are met in part. Such performance measures, the
Actual Value or the Maximum Value, or any combination thereof, may be
adjusted in any manner by the Committee in its discretion at any time and
from time to time during or as soon as practicable after the Award Period,
if it determines that such performance measures, the Actual Value or the
Maximum Value, or any combination thereof, are not appropriate under the
circumstances.
(3) The rights of a participant in Performance Grants awarded to him
shall be provisional and may be cancelled or paid in whole or in part, all
as determined by the Committee, if the participant's continuous employment
or performance of services for the Company shall terminate for any reason
prior to the end of the Award Period.
(4) The Committee shall determine whether the conditions of
subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain
the Actual Value of the Performance Grants. If the Performance Grants have
no Actual Value, the Award and such Performance Grants shall be deemed to
have been cancelled and the Associated Award, if any, may be cancelled or
permitted to continue in effect in accordance with its terms. If the
Performance Grants have any Actual Value and:
(1) were not awarded in conjunction with an Associated Award,
the Committee shall cause an amount equal to the Actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(2) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount in
respect thereof shall be paid to the participant or his beneficiary, and
the Associated Award may be permitted to continue in effect in accordance
with its terms, (B) to pay the Actual Value of the Performance Grants to
the participant or his beneficiary as provided below, in which event the
Associated Award may be cancelled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a portion of the
Performance Grants, in which event all or a portion of the Associated Award
may be permitted to continue in effect in accordance with its terms or be
cancelled, as determined by the Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
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<PAGE>
9. Deferral of Compensation. The Committee shall determine whether or not
an Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not such
deferred amounts may be
(1) forfeited to the Company or to other participants or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or
performance of services for the Company),
(2) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures and/or
(3) credited with income equivalents (which may include, but need not
be limited to, interest, dividends or other rates of return) until the date
or dates of payment of the Award, if any.
10. Deferred Payment of Awards. The Committee may specify that the
payment of all or any portion of cash, Common Shares, Other Company Securities
or property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
11. Amendment or Substitution of Awards under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his written
consent, unless the Committee determines in its discretion that there have
occurred or are about to occur significant changes in the participant's
position, duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit conditions which are
determined by the Committee in its discretion to have or to be expected to have
a substantial effect on the performance of the Company, or any subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under the
Plan. The Committee may, in its discretion, permit holders of Awards under the
Plan to surrender outstanding Awards in order to exercise or realize rights
under other Awards, or in exchange for the grant of new Awards, or require
holders of Awards to surrender outstanding Awards as a condition precedent to
the grant of new Awards under the Plan.
12. Disability. For the purposes of this Plan, a participant shall be
deemed to have terminated his employment or performance of services for the
Company and any of its subsidiaries by reason of disability, if the Committee
shall determine that the physical or mental condition of the participant by
reason of which such employment or performance of services terminated was such
at that time as would entitle him to payment of monthly disability benefits
under any Company disability plan. If the participant is not eligible for
benefits under any disability plan of the Company, he shall be deemed to have
terminated such employment
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<PAGE>
or performance of services by reason of disability if the Committee shall
determine that his physical or mental condition would entitle him to benefits
under any Company disability plan if he were eligible therefor.
13. Termination of a Participant. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment with,
or the performance of services for, the Company.
14. Dilution and Other Adjustments. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, dividend,
split-up, split-off, spin-off, recapitalization, merger, consolidation, rights
offering, reorganization, combination or exchange of shares, a sale by the
Company of all of its assets, any distribution to stockholders other than a
normal cash dividend, or other extraordinary or unusual event, if the Committee
shall determine, in its discretion, that such change equitably requires an
adjustment in the terms of any Award or the number of Common Shares available
for Awards, such adjustment may be made by the Committee and shall be final,
conclusive and binding for all purposes of the Plan.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding Awards shall terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, all restrictions on any
outstanding Awards shall lapse and participants shall be entitled to the full
benefit of all such Awards immediately prior to the closing date of such sale or
merger, unless otherwise provided by the Committee.
15. Designation of Beneficiary by Participant. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives the participant and is living
on the date on which any amount becomes payable to such a participant's
beneficiary, such payment will be made to the legal representatives of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there are any questions as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof, will have no
further liability to anyone with respect to such amount.
16. Financial Assistance. If the Committee determines that such action is
advisable, the Company may assist any person to whom an Award has been granted
in obtaining financing from the Company (or under any program of the Company
approved pursuant to applicable law), or from a bank or other third party, on
such terms as are determined by the Committee, and in such amount as is required
to accomplish the purposes of the Plan, including, but not limited to, to permit
the exercise of an Award, the participation therein, and/or the payment of any
taxes in respect thereof. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan from the
Company, a guarantee of the obligation by the Company, or the maintenance by the
Company of deposits with such bank or third party.
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<PAGE>
17. Miscellaneous Provisions.
(1) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall
be construed as giving any employee or other person any right to continue
to be employed by or perform services for the Company, and the right to
terminate the employment of or performance of services by any participants
at any time and for any reason is specifically reserved.
(2) No participant or other person shall have any right with respect
to the Plan, the Common Shares reserved for issuance under the Plan or in
any Award, contingent or otherwise, until written evidence of the Award
shall have been delivered to the recipient and all the terms, conditions
and provisions of the Plan and the Award applicable to such recipient (and
each person claiming under or through him) have been met.
(3) Except as may be approved by the Committee where such approval
shall not adversely affect compliance of the Plan with Rule 16b-3 under the
Exchange Act, a participant's rights and interest under the Plan may not be
assigned or transferred, hypothecated or encumbered in whole or in part
either directly or by operation of law or otherwise (except in the event of
a participant's death) including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however, that any Option or similar right (including, but not
limited to, a Stock Appreciation Right) offered pursuant to the Plan shall
not be transferable other than by will or the laws of descent and
distribution and shall be exercisable during the participant's lifetime
only by him.
(4) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder
with respect to any Award unless counsel for the Company shall be satisfied
that such issuance will be in compliance with applicable federal, state,
local and foreign legal, securities exchange and other applicable
requirements.
(5) It is the intent of the Company that the Plan comply in all
respects with Rule 16b-3 under the Exchange Act and Section 162(m) of the
Code, that any ambiguities or inconsistencies in construction of the Plan
be interpreted to give effect to such intention and that if any provision
of the Plan is found not to be in compliance with Rule 16b-3 or Section
162(m), such provision shall be deemed null and void to the extent required
to permit the Plan to comply with Rule 16b-3 or Section 162(m), as the case
may be.
(6) The Company shall deduct from any payment made under the Plan any
federal, state, local or foreign income or other taxes required by law to
be withheld with respect to such payment. It shall be a condition to the
obligation of the Company to issue Common Shares, Other Company Securities
or property, other securities or property, or other forms of payment, or
any combination thereof, upon exercise, settlement or payment of any Award
under the Plan, that the participant (or any beneficiary or person entitled
to act) pay to the Company, upon its demand, such amount as may be required
by the Company for the purpose of satisfying any liability to withhold
federal, state, local or foreign income or other taxes. If the amount
requested is not paid, the Company
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<PAGE>
may refuse to issue Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or any combination
thereof. Notwithstanding anything in the Plan to the contrary, the
Committee may, in its discretion, permit an eligible participant (or any
beneficiary or person entitled to act) to elect to pay a portion or all of
the amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee shall deem to be
appropriate (including, but not limited to, by authorizing the Company to
withhold, or agreeing to surrender to the Company on or about the date such
tax liability is determinable, Common Shares, Other Company Securities or
property, other securities or property, or other forms of payment, or any
combination thereof, owned by such person or a portion of such forms of
payment that would otherwise be distributed, or have been distributed, as
the case may be, pursuant to such Award to such person, having a fair
market value equal to the amount of such taxes).
(7) The expenses of the Plan shall be borne by the Company.
(8) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's
general creditors.
(9) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board
or the Committee or its delegates.
(10) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of
payment of Awards under the Plan, or any combination thereof, as of any
specific time shall mean such value as determined by the Committee in
accordance with applicable law.
(11) The masculine pronoun includes the feminine and the singular
includes the plural wherever appropriate.
(12) The appropriate officers of the Company shall cause to be filed
any reports, returns or other information regarding Awards hereunder of any
Common Shares issued pursuant hereto as may be required by Section 13 or
15(d) of the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
(13) The validity, construction, interpretation, administration and
effect of the Plan, and of its rules and regulations, and rights relating
to the Plan and to Awards granted under the Plan, shall be governed by the
substantive laws, but not the choice of law rules, of the State of
Delaware.
18. Plan Amendment or Suspension. The Plan may be amended or suspended in
whole or in part at any time from time to time by the Board, but no amendment
shall be effective unless and until the same is approved by stockholders of the
Company where the failure to obtain such approval would adversely affect the
compliance of the Plan with Rule 16b-3 under the Exchange Act and with other
applicable law. No amendment of the Plan shall adversely affect in a material
manner any right of any participant with respect to
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any Award theretofore granted without such participant's written consent, except
as permitted under Paragraph 11.
19. Plan Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(1) upon the adoption of a resolution of the Board terminating the
Plan; or
(2) ten years from the date the Plan is initially approved and
adopted by the stockholders of the Company in accordance with Paragraph 20
hereof; provided, however, that the Board may, prior to the expiration of
such ten-year period, extend the term of the Plan for an additional period
of up to five years for the grant of Awards other than Incentive Stock
Options. No termination of the Plan shall materially alter or impair any of
the rights or obligations of any person, without his consent, under any
Award theretofore granted under the Plan, except that subsequent to
termination of the Plan, the Committee may make amendments permitted under
Paragraph 11.
20. Stockholder Adoption. The Plan shall be submitted to the stockholders
of the Company for their approval and adoption in accordance with applicable law
and Rule 16b-3 under the Exchange Act and Section 162(m) under the Code. The
Plan shall not be effective and no Award shall be made hereunder unless and
until the Plan has been so approved and adopted.
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EXHIBIT 10.3
DATAMAX INTERNATIONAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
ARTICLE I - PURPOSE
I.1. Purpose.
The Datamax International Corporation Employee Stock Purchase Plan
(the "Plan") is intended to provide a method whereby employees of
Datamax International Corporation and its subsidiary corporations
(hereinafter collectively referred to, unless the context otherwise
requires, as the "Company") will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of
the Common Stock of the Company. It is the intention of the Company to
have the Plan qualify as an "employee stock purchase plan" under
(S)423 of the Internal Revenue Code of 1986, as amended (the "Code").
The provisions of the Plan shall be construed so as to extend and
limit participation in a manner consistent with the requirements of
that section of the Code.
ARTICLE II - DEFINITIONS
II.1. Base Pay.
"Base Pay" shall mean regular straight-time earnings excluding
payments for overtime, shift premium, bonuses and other special
payments.
II.2. Committee.
"Committee" shall mean the individuals described in Article XI.
II.3. Employee.
"Employee" means any person who is employed on a full-time or part-
time basis by the Company and is regularly scheduled to work more than
20 hours per week and more than five months in any calendar year.
II.4. Subsidiary Corporation.
"Subsidiary Corporation" shall mean any present or future corporation
which (i) would be a "subsidiary corporation" of Datamax International
Corporation as that term is defined in (S)424 of the Code and (ii) is
designated as a participant in the Plan by the Committee.
<PAGE>
ARTICLE III - ELIGIBILITY AND PARTICIPATION
III.1. Initial Eligibility.
Any employee, who shall have completed ninety (90) days employment and
shall be employed by the Company on the date the employee's
participation in the Plan is to become effective, shall be eligible to
participate in offerings under the Plan which commence on or after
such ninety (90) day period has concluded.
III.2. Leave of Absence.
For purposes of determining initial eligibility for participation in
the Plan, an employee on leave of absence shall be deemed to continue
to be an employee under the Plan for the first (lst) ninety (90) days
of such leave of absence. Such person's initial eligibility to
participate in the Plan shall terminate at the close of business on
the ninetieth (90th) day of such leave of absence unless such person
shall have returned to regular full-time or part-time employment (as
the case may be) prior to the close of business on such ninetieth
(90th) day. Termination by the Company of any employee's leave of
absence, other than termination of such leave of absence on return to
full-time or part-time employment, shall terminate an employee's
eligibility to participate in the plan for all purposes of the Plan
and shall terminate such employee's participation in the Plan, and/or
night to exercise any option under the Plan. Any such employee may
reestablish eligibility only by meeting the requirements of (S)3.01
and/or 3.02.
III.3. Restrictions on Participation.
Notwithstanding any provisions of the Plan to the contrary, no
employee shall be granted an option to participate in the Plan or any
Offering under the Plan.
(a) if, immediately after the grant, such employee would own stock,
and/or hold outstanding options to purchase stock, possessing five
percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company. (For purposes of this
paragraph, the rules of (S)424(d) of the Code shall apply in
determining stock ownership of any employee.); or
(b) which permits such employee's rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate
which exceeds $25,000 in fair market value of the stock
(determined at the time such option is granted) for each calendar
year in which such option is outstanding.
III.4. Commencement of Participation.
An eligible employee may become a participant by completing an
authorization of a payroll deduction on the form provided by the
Company and filing it with the Human Resources
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office of the Company on or before the date set therefor by the
Committee, which date shall be prior to the Offering Commencement Date
for the Offering (as such terms are defined below). Payroll deductions
for a participant shall commence on the applicable Offering
Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of
the Offering to witch such authorization is applicable unless sooner
terminated by the participant as provided in Article VIII.
ARTICLE IV - OFFERINGS
IV.1. Annual Offerings.
The Plan will be implemented by four (4) annual offerings of the
Company's Common Stock (the "Offerings"). The first Offering shall
been an the date an which the Company's Common Stock is first offered
for sale to the public pursuant to a Registration Statement filed with
the Securities and Exchange Commission (the "IPO Date") and shall
terminate on December 31, 1997 Subsequent Offerings shall begin on the
first (1st) day of January in each of the years 1998, 1999 and 2000,
and shall terminate on December 31 of such year. In the discretion of
the Committee, exercised prior to the commencement thereof, each
annual Offering may be divided into two (2) six-month Offerings
commencing on January 1 and July 1 of such year and terminating on
June 30 and December 31 of such year. The maximum number of shares
issued in the respective years shall be:
. From the IPO Date to December 31, 1997: 125,000 shares.
. From January 1, 1997 to December 31, 1998:125,000 shares plus
unissued shares from the prior Offerings, whether offered or not.
. From January 1, 1998 to December 31, 1999: 125,000 shares plus
unissued shares from the prior Offerings, whether offered or not.
. From January 1, 1999 to December 31, 2000: 125,000 shares plus
unissued shares from the prior Offerings, whether offered or not.
In a six-month Offering is made, the maximum number of shares which may be
issued shall be one-half (1/2) of the number of shares set forth for the annual
period in which the six-month offering falls, plus, if the Offering is a July 1
to December 31 offering, unissued shares, whether or not, from the immediately
preceding six-month Offering. As used in the Plan, "Offering Commencement Date
means the IPO Date, January 1 or July 1, as the case may be, on which the
particular Offering begins, and "Offering Termination Date" means the June 30 or
December 31, as the case may be, an which the particular Offering terminates.
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ARTICLE V - PAYROLL DEDUCTIONS
V.1. Amount of Deduction.
At the time a participant files us authorization for payroll
deduction, he shall elect to have deductions made from his pay on each
payday during the time he is a participant in an Offering at the rate
of one, two, three, four, five, six, seven, eight, nine or ten percent
(1, 2, 3, 4, 5, 6, 7, 8, 9, or 10%) of his base pay in effect at the
Offering Commencement Date of such Offering. In the case of a part-
time hourly employee, such employee's base pay during an Offering
shall be determined by multiplying such employee's hourly rate of pay
in effect on the Offering Commencement Date by the number of regularly
scheduled hours of work for such employee during such Offering.
V.2. Participant's Account.
All payroll deductions made for a participant shall be credited to the
participant's account under the Plan. A participant may not make any
separate cash payment into such account except when on leave of
absence and then only as provided in (S)5.04.
V.3. Changes in Payroll Deductions.
A participant may discontinue his participation in the Plan as
provided in article VIII, but no other change can be made during an
Offering, and, specifically, a participant may not alter the amount of
the participant's payroll deductions for that Offering.
V.4. Leave of Absence.
If a participant goes on a leave of absence, such participant shall
elect:
(a) to withdraw the balance in the participant's account pursuant to
(S)7.02;
(b) to delay commencement of, or, if applicable, to discontinue,
contributions to the Plan but remain a participant in the Plan; or
(c) if payments will be made to the participant by the Company during
such leave of absence, remain a participant in the Plan during
such leave of absence, authorizing deductions to be made from such
payments by the Company and undertaking to make cash payment to
the Plan at the end of each payroll period to the extent that
amounts payable by the Company to such participant are
insufficient to meet participant's authorized Plan deductions.
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ARTICLE VI - GRANTING OF OPTION
VI.1. Number of Option Shares.
On the Commencement Date of each Offering, a participating employee
shall be deemed to have been granted an option to purchase a maximum
number of shares of the stock of the Company equal to an amount
determined as follows:
an amount equal to that percentage of the employee's base pay which
the employee has elected to have withheld (but not in any case in
excess of ten percent (10%) ) multiplied by
(i) the employee's base pay during the period of the Offering
(ii) divided by eighty-five percent (85%) of the market value of the
stock of the Company on the applicable Offering Commencement
Date.
The market value of the Company's stock shall be determined as
provided in paragraphs (a) and (b) of (S)6.02 below. An employee's
base pay during the period of an Offering shall be determined by
multiplying such employee's hourly rate (as in effect on the last day
prior to the Commencement Date of the particular Offering) by two
thousand eighty (2,080) or, in the case of a six-month Offering, by
one thousand forty (1,040), as the case may be, plus any commission
paid by the Company to such employee during the period of the
Offering, provided that any commission paid may be applied to only one
Offering, and provided further that, in the case of a part-time,
hourly employee, the employee's base pay during the period of an
offering shall be determined by multiplying such employee's hourly
rate by the number of regularly scheduled hours of work for such
employee during such Offering.
VI.2. Option Price.
The option price of stock purchased with payroll deductions made
during such annual offering for a participant therein shall be the
lower of:
(a) eighty-five percent (85%) of the opening price of the stock on
the Offering Commencement Date or the nearest prior business day
on which trading occurred on the NASDAQ National Market or other
national trading market for the stock of the Company; or
(b) eighty-five percent (85%) of the closing price of the stock on
the Offering Termination Date or the nearest prior business day
on which trading occurred on the NASDAQ National Market or other
national trading market. If the Common Stock of the Company is
not admitted to trading on any of the aforesaid dates for which
closing prices of the stock are to be determined, then reference
shall be made to the fair market value of the stock on that date,
as determined on such basis as shall be established or specified
for the purpose by the Committee.
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ARTICLE VII - EXERCISE OF OPTION
VII.1. Automatic Exercise.
Unless a participant gives written notice to the Company as
hereinafter provided, the participant's option for the purchase of
stock with payroll deductions made during any Offering will be deemed
to have been exercised automatically on the Offering Termination
Date applicable to such Offering, for the purchase of the number of
full shares of stock which the accumulated payroll deductions 'in the
participant's account at that time will purchase at the applicable
option price (but not in excess of the number of shares for which
options have been granted to the employee pursuant to (S)6.01.), and
any excess in the participant's account at that time will be returned
to the participant.
VII.2. Withdrawal of Account.
By written notice to the Treasurer of the Company, at any time prior
to the Offering Termination Date applicable to any Offering, a
participant may elect to withdraw all of the accumulated payroll
deductions in his or her account at such time. In such event, the
employee will not be entitled to participate in such Offering.
VII.3. Fractional Shares.
Fractional shares will not be issued under the Plan, and any
accumulated payroll deductions which would have been -used to purchase
fractional shares will be returned to any employee promptly following
the termination of an Offering, without interest.
VII.4. Transferability of Option.
During a participant's lifetime, options held by such participant
shall be exercisable only by that participant.
VII.5. Delivery of Stock.
As promptly as practical, after the Offering Termination Date of each
Offering, the Company will deliver to each participant, as
appropriate, the stock purchased upon exercise of the participant's
option.
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ARTICLE VIII - WITHDRAWAL
VIII.1. In General.
As indicated in (S)7.02., a participant may withdraw payroll
deductions credited to the participant's account under the Plan at any
time prior to the Offering Termination Date by giving written notice
to the Treasurer of the Company. All of the participant's payroll
deductions credited to his/her account will be paid to the participant
promptly after receipt of participant's notice of withdrawal, and no
further payroll deductions will be made from the participant's pay
during such Offering.
VIII.2. Effect on Subsequent Participation.
A participant's withdrawal from any Offering will not have any effect
upon the participant's eligibility to participate in any succeeding
Offering or 'in any similar plan which may hereafter be adopted by the
Company.
VIII.3. Termination of Employment.
Upon termination of the participant"s employment for any reason,
including retirement (but excluding death while in the employ of the
Company or continuation of a leave of absence for a period beyond
ninety (90) days), the payroll deductions credited to the
participant's account will be returned to the participant, or, in the
case of the participant's death subsequent to the termination of the
participant's employment, to the person or persons entitled thereto
under (S)12.01.
VIII.4. Termination of Employment Due to Death.
Upon termination of the participant's employment because of the
participant's death, the participant's beneficiary (as defined in
(S)12.01.) shall have the right to elect, by written notice given to
the Treasurer of the Company prior to the earlier of the Offering
Termination Date or the expiration of a period of sixty (60) days
commencing with the date of the death of the participant, either:
(a) to withdraw all of the payroll deductions credited to the
participant's account under the Plan, or
(b) to exercise the participant's option for the purchase of stock on
the Offering Termination Date next following the date of the
participant's death for the purchase of the number of full shares
of stock which the accumulated payroll deductions in the
participant's account at the date of the participant's death will
purchase at the applicable option price, and any excess in such
account will be returned to said beneficiary, without interest.
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In the event that no such written notice of elections shall be duly received by
the office of the Treasurer of the Company, the beneficiary shall automatically
be deemed to have elected, pursuant to paragraph 8.04.(b), to exercise the
participant's option.
VIII.5. Leave of absence.
A participant on leave of absence shall, subject to the election made
by such participant pursuant to (S)5.04., continue to be a participant
in the Plan so long as such participant is on continuous leave of
absence, provided, however, that a participant who has been on leave
of absence for more than ninety (90) days shall not be entitled to
participate in any Offering commencing after the ninetieth (90th) day
of such leave of absence. Notwithstanding the above or any other
provisions of the Plan, unless a participant on leave of absence
returns to regular full-time or part-time employment with the Company
at the earlier of (a) the termination of such leave of absence or (b)
three (3) months from the ninetieth (90) day of such leave of absence,
such participant's participation in the Plan shall terminate on
whichever of such dates first occurs.
ARTICLE IX - INTEREST
IX.1. Payment of Interest.
No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any participant employee; provided,
however, that interest shall be paid on any and all money which is
distributed to an employee or the employee's beneficiary, pursuant to
the provisions of (S)(S)7.02., 8.01., 8.03., 8.04(a) and 10.01. Such
distributions shall bear simple interest during the period from the
date of withholding to the date of return at the regular
passbooksavings account rates per annum in effect at Sun Bank, N.A.,
Orlando, Florida during the applicable Offering period or, if such
rates are not published or otherwise available for such purpose, at
the regular passbook savings account rates per annum in effect during
such period at another major commercial bank in Orlando, Florida
selected by the Committee. Where the amount returned represents an
excess amount in an employee's account after such account has been
applied to the purchase of stock, the employee's withholding account
shall be deemed to have been applied first toward the purchase of
stock under the Plan, so that interest shall be paid on the last
withholdings during the period which results in the excess amount.
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ARTICLE X - STOCK
X.1. Maximum Shares.
The maximum number of shares which shall be issued under the Plan,
subject to adjustment upon changes in capitalization of the Company as
provided in (S)12.04, shall be One Hundred Twenty-five thousand
(125,000) shares in each annual Offering (62,500 shares in each six-
month Offering), plus, in each Offering all unissued shares from prior
Offerings whether offered or not to exceed Five Hundred Thousand
(500,000) shares for all Offerings. If the total number of shares for
which options are exercised on any Offering Termination Date in
accordance with Article VI exceeds the maximum number of shares for the
applicable offering, the Company shall make a pro rata allocation of the
shares available for delivery and distribution in as nearly a uniform
manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the account
of each participant under the Plan shall be returned to the participant
as promptly as possible.
X.2. Participant's Interest in Option Stock.
The participant will have no interest in stock covered by the
participant's option until such option has been exercised.
X.3. Registration of Stock.
Stock to be delivered to a participant under the Plan will be registered
in the name of the participant, or, if the participant so directs by
written notice to the Treasurer of the Company prior to the Offering
Termination Date applicable thereto, in the names of the participant and
one (1) such other person as may be designated by the participant, as
joint tenants with rights of survivorship or as tenants by the
entireties, to the extent permitted by applicable law.
X.4. Restrictions on Exercise.
The Board of Directors my, in its discretion, require as conditions to
the exercise of any option that the shares of Common Stock reserved for
issuance upon the exercise of the option shall have been duly listed,
upon official notice of issuance, upon a stock exchange, and that
either:
(a) a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of purchase, in
form and substance satisfactory to the Company, that it is the
participant's intention to purchase the shares for investment and
not for resale or distribution.
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ARTICLE XI - ADMINISTRATION
XI.1. Appointment of Committee.
The Board of Directors may appoint a committee (the "Committee") to
administer the Plan, which shall consist of no fewer than two (2)
members of the Board of Directors. No member of the Committee shall be
eligible to purchase stock under the Plan.
XI.2. Authority of Committee.
Subject to the express provisions of the Plan, the Committee shall
have plenary authority in its discretion to interpret and construe any
and all provisions of the Plan, to adopt rules and regulations for
administering the Plan, to solicit and retain third party services to
assist in administration of the Plan, and to make all other
determinations deemed necessary or advisable for administering the
Plan. The Committee's determination on the foregoing matters shall be
conclusive.
XI.3. Rules Governing the Administration of the Committee.
Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously
appointed and may fill vacancies, however caused, in the Committee.
The Committee may select one (1) of its members as its Chairman and
shall hold its meetings at such times and places as it shall deem
advisable and may hold telephonic meetings. A majority of its members
shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members. The Committee may correct any
defect or omission or reconcile any inconsistency in the Plan, in the
manner and to the extent it shall deem desirable. Any decision or
determination reduced to writing and signed by a majority of the
members of the Committee shall be as fully effective as if it had been
made by a majority vote at a meeting dully called and held. The
Committee may appoint a Secretary and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
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ARTICLE XII - MISCELLANEOUS
XII.1. Designation of Beneficiary.
A participant may file a written designation of a beneficiary who is
to receive any stock and/or cash. Such designation of beneficiary may
be changed by the participant at any time by written notice to the
Treasurer of the Company. Upon the death of a participant and upon
receipt by the Company of proof of identity and existence at the
participant's death of a beneficiary validly designated by the
participant under the Plan, the Company shall deliver such stock
and/or cash to such beneficiary. In the event of the death of a
participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death,
the Company shall deliver such stock and/or cash to the executor or
administrator of the estate of the participant, or if no such executor
or administrator has been appointed (to the knowledge of the Company),
the Company, in it discretion, may deliver such stock and/or cash to
the spouse or to any one or more dependents of the participant as the
Company may designate. No beneficiary shall, prior to the death of the
participant by whom the beneficiary has been designated, acquire any
interest in the stock or cash credited to the participant under the
Plan.
XII.2. Transferability.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive stock
under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment
transfer pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to, withdraw funds
in accordance with (S)7.02.
XII.3. Use of Funds.
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.
XII.4. Adjustment Upon Changes in Capitalization.
(a) If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed
into or been exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock
split or similar transaction, appropriate and proportionate
adjustments may be made by the Committee in the number and/or kind
of shares which are subject to purchase under outstanding options
and in the option exercise price or prices applicable to such
outstanding options. In addition, in any such event, the number
and/or kind or shares
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which may be offered in the Offerings described in Article IV
hereof shall also be proportionately adjusted. No adjustments
shall be made for stock dividends. For the purposes of this
Paragraph, any distribution of shares to shareholders in an amount
aggregating twenty percent (20%) or more of the outstanding shares
shall be deemed a stock split, and any distributions of shares
aggregating less than twenty percent (20%) of the outstanding
shares shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one
(1) or more corporations as a result of which the Company is not
the surviving corporation, or upon a sale of substantially all of
the property or stock of the Company to another corporation, the
holder of each option then outstanding under the Plan will
thereafter be entitled to receive at the next Offering Termination
Date upon the exercise of such option for each share as to which
such option shall be exercised, as nearly as reasonably may be
determined, the cash, securities and/or property which a holder of
one (1) share of the Common Stock was entitled to receive upon and
at the time of such transaction. The Board of Directors shall take
such steps in connection with such transactions as the Board shall
deem necessary to assure that the provisions of this (S)12.04.
shall thereafter be applicable, as nearly as reasonably may be
determined, in relation to the said cash, securities and/or
property as to which such holder of such option might thereafter
be entitled to receive.
XII.5. Amendment and Termination.
The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of
Directors shall not, without the approval of the stockholders of the
Company
(i) increase the maximum number of shares which may be issued
under any Offering (except pursuant to (S)12.04.); or
(ii) amend the requirements as to the class of employees eligible
to purchase stock under the Plan or permit the members of the
Committee to purchase stock -under the Plan.
No termination, modification or amendment of the Plan may, without the
consent of an employee then having an option trader the Plan to
purchase stock, adversely affect the rights of such employee trader
such option.
XII.6. No Employment Rights.
The Plan does not, directly or indirectly, create any night for the
benefit of any employee or class of employees to purchase any shares
under the Plan, or create in any employee or class of employees any
night with respect to continuation of employment by the Company, and
it
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shall not be deemed to interfere in any way with the Company's right
to terminate, or otherwise modify, an employee's employment at any
time.
XII.7. Effect of Plan.
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each
employee participating in the Plan, including, without limitation,
such employee's estate and the executors, administrators or trustees
thereof, heirs and legatees, and any receiver, trustee in bankruptcy
or. representative of creditors of the employee.
XII.8. Governing Law.
The law of the State of Florida will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the
United States.
XII.9. Effective Date.
The Plan shall take effect upon approval by the holders of a majority
of the stock of the Company entitled to vote and the outstanding
Preferred Stock of the Company either present or represented at a
special or annual meeting of the shareholders, or by written consent
or consents in writing signed by such holders setting forth the action
so taken. If the Plan is not so approved, the Plan shall not become
effective.
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EXHIBIT 10.4
DATAMAX CORPORATION
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made as of February 23, 1997, between Datamax
Corporation, a Delaware corporation (the "Company"), and Marvin A. Davis
("Executive").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment; Signing Bonus.
(a) The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning as of the date hereof and ending as provided
in paragraph 5 hereof (the "Employment Period").
(b) Upon the execution and delivery of this Agreement by the Company and
Executive, the Company shall pay Executive a bonus of $100,000 (the "Signing
Bonus").
(c) Immediately after the execution and delivery of this Agreement by the
Company, Executive shall resign his position with Galef, Grisanti & Goldress.
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of the Chief Executive Officer, subject to the
power of the Company's Board of Directors (the "Board") to expand or limit such
duties, responsibilities and authority and to override actions of officers of
the Company. Subject to the powers of the Board, during the Employment Period,
Executive shall have the authority to manage the Company's day-to-day business
and conduct its operations and shall perform, on behalf of the Company, all
duties and services as are customarily incident to the position of Chief
Executive Officer.
(b) During the Employment Period, Executive shall report to the Board and
devote his best efforts and his full business time and attention (except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company and its Subsidiaries.
Executive shall perform his duties and responsibilities to the Company and its
Subsidiaries hereunder to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner. Notwithstanding anything to the contrary
contained herein, during the Employment Period, Executive may (i) continue to
give speeches and make presentations on business topics to the same extent
Executive currently gives speeches and makes presentations, (ii) serve on the
advisory board of the Paladin Fund and perform duties incident thereto, provided
that Executive does not participate as an active manager of the Paladin Fund,
and (iii) serve on other advisory boards and other boards
<PAGE>
of directors as approved by the Board from time to time and perform duties
incident thereto, in each case so long as such activities do not conflict in any
material respect with Executive's performance hereunder.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company, directly
or through one of more Subsidiaries.
3. Compensation and Benefits.
(a) During the Employment Period, Executive's base salary shall be $500,000
per annum or such higher rate as the Board may designate from time to time (the
"Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices. The Base Salary shall
be reviewed at least annually by the Board and shall be subject to upward
adjustment at the sole discretion of the Board.
(b) During the Employment Period, Executive shall be entitled to
participate in all of the Company's employee benefit programs for which senior
executive employees of the Company and its Subsidiaries are generally eligible,
and Executive shall be entitled to four weeks of paid vacation each year, which
if not taken during any year may not be carried forward to any subsequent year.
(c) During the Employment Period, the Company shall reimburse Executive for
all reasonable expenses incurred by him in the course of performing his duties
and responsibilities under this Agreement which are consistent with the
Company's policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's requirements
with respect to reporting and documentation of such expenses.
(d) In addition to the foregoing, during the Employment Period, the Company
shall reimburse Executive for all reasonable expenses incurred by him in
connection with (i) commuting to Orlando from his permanent residence in Georgia
or his summer residence in New York up to five times during each month, (ii)
renting an apartment in Orlando, Florida for a cost not to exceed $2,000 per
month, and (iii) renting or leasing an automobile in Orlando, Florida for a cost
not to exceed $1,000 per month, in each case subject to the Company's
requirements with respect to reporting and documentation of such expenses.
(e) For each fiscal year of the Company ending during the Employment
Period, Executive shall be entitled to receive an annual performance bonus (the
"Performance Bonus") based upon the Company's achievement of the annual plan
adopted by the Board for each such fiscal year. For each such year, the Company
shall pay Executive a Performance Bonus of $150,000 if the Company achieves 100%
or more of the annual plan or a bonus in an amount determined at the discretion
of the Board on the same basis as other upper-level executives if the Company
achieves less than 100% of the annual plan. The Performance Bonus (if any)
payable for each fiscal year shall
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be paid by the Company to Executive within 30 days after the completion of the
audit of the Company's financial statements for such fiscal year.
(f) All amounts payable to Executive hereunder shall be subject to
customary withholding by the Company.
4. Board Membership. With respect to all regular elections of directors
during the Employment Period, the Company shall nominate, and use its reasonable
efforts to cause the election of, Executive to serve as a member of the Board.
Upon the termination of the Employment Period, Executive shall resign as a
director of the Company and its Subsidiaries, as the case may be.
5. Term.
(a) The Employment Period shall terminate on December 31, 1999 (the
"Expiration Date"). Notwithstanding the foregoing, (i) the Employment Period
shall terminate prior to the Expiration Date immediately upon Executive's
resignation, death or permanent mental or physical disability or incapacity (as
determined by the Board in its good faith judgment), and (ii) the Employment
Period may be terminated by the Company at any time prior to the Expiration Date
for Cause (as defined below) or without Cause. Notwithstanding any provision in
this Agreement to the contrary, if requested by the Company, Executive shall not
resign and shall remain Chief Executive Officer of the Company under the terms
of this Agreement for the one year period following a Sale of the Company and,
if necessary, the Employment Period shall be extended accordingly. "Sale of the
Company" means a merger or consolidation effecting a change in control of
Datamax International Corporation, a Delaware corporation (the "Parent") or the
Company, a sale of all or substantially all of the Parent's or the Company's
assets or a sale of a majority of the Parent's of the Company's outstanding
voting securities except in connection with a public offering under the
Securities Act of 1933, as amended.
(b) If the Employment Period is terminated by the Company without Cause,
Executive shall be entitled to receive his Base Salary through the end of the
Employment Period then in effect (the "Severance Period"), if and only if
Executive has not breached the provisions of paragraphs 6, 7 and 8 hereof. The
Base Salary payable to Executive pursuant to this paragraph 5(b) shall be
payable in the same periodic installments as it would have if the Employment
Period had not been terminated and shall be reduced by 50% the amount of any
compensation Executive receives or earns with respect to any other employment
during the Severance Period. Upon request from time to time, Executive shall
furnish the Company with a true and complete certificate specifying any such
compensation received or earned by him during the Severance Period.
(c) If the Employment Period is terminated by the Company for Cause or by
reason of Executive's resignation, death or disability or incapacity, or if the
Employment Period expires and is not renewed or extended, Executive shall be
entitled to receive his Base Salary only through the date of termination or
expiration.
(d) Except as otherwise provided under paragraph 5(b) during the Severance
Period, all of Executive's rights to salary, bonuses, fringe benefits and other
compensation hereunder
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which accrue or become payable after the termination or expiration of the
Employment Period shall cease upon such termination or expiration. The Company
may offset any amounts Executive owes it, the Parent or their Subsidiaries
against any amounts the Company owes Executive hereunder.
(e) For purposes of this Agreement, "Cause" shall mean (i) the commission
of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud with respect to the
Company, the Parent or any of their Subsidiaries or any of their customers or
suppliers, (ii) chronic drug or alcohol abuse causing the Company, the Parent or
any of their Subsidiaries substantial harm, (iii) gross negligence or willful
misconduct with respect to the Company, the Parent or any of their Subsidiaries
or (iv) failure to perform duties as reasonably directed by the Board or any
other material breach of this Agreement which is not cured to the Board's
reasonable satisfaction within 15 days after written notice thereof to
Executive.
6. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by, or retained as a
consultant to, the Company and its Subsidiaries concerning the business or
affairs of the Company, the Parent or any of their Subsidiaries ("Confidential
Information") are the property of the Company, the Parent and their
Subsidiaries. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the Confidential Information becomes generally known to and available for use by
the public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may reasonably request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company, the Parent or their Subsidiaries which he may then possess or have
under his control.
7. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of 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 the
Company and its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary. Executive shall promptly disclose such Work Product to the Board
and, at the Company's expense, perform all actions reasonably requested by the
Board (whether during or after the Employment Period) to establish and confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
8. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the
Company and its Subsidiaries he shall become familiar with the Company's trade
secrets and with other Confidential Information concerning the Company, the
Parent and their Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
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<PAGE>
Therefore, Executive agrees that, during the Employment Period and for two years
thereafter (the "Noncompete Period"), he shall not directly or indirectly own
any interest in, manage, control, participate in, consult with, render services
for, or in any manner engage in any business competing with the businesses of
the Company or its Subsidiaries, as such businesses exist or are in process on
the date of the termination or expiration of the Employment Period, within any
geographical area in which the Company or its Subsidiaries engage or have a
demonstrable plan in effect prior to such termination to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative or disparaging statements or communications
regarding the Company or its Subsidiaries).
(c) Executive acknowledges that the restrictions contained in this
paragraph 8 are reasonable.
9. Enforcement. If, at the time of enforcement of paragraph 6, 7 or 8 of
this Agreement, a court of competent jurisdiction holds that the restrictions
stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope or
area. Because Executive's services are unique and because Executive has access
to Confidential Information and Work Product, the parties hereto agree that
money damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns, in addition to other rights and remedies
existing in their favor, shall be entitled to specific performance and/or
injunctive or other equitable relief from a court of competent jurisdiction in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security). In addition, in the event of an alleged
breach or violation by Executive of paragraph 8, the Noncompete Period shall be
tolled until such breach or violation has been duly cured.
10. Executive's Representations. Executive hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
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<PAGE>
confidentiality agreement with any other person or entity, and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
11. Survival. Paragraphs 6 through 20, inclusive, shall survive and
continue in full force in accordance with their terms notwithstanding any
termination or expiration of the Employment Period.
12. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:
Notices to Executive:
Marvin A. Davis
80 Seville Chase
Atlanta, GA 30328
with a copy to:
McDermott, Will & Emery
50 Rockefeller Plaza
New York, New York 10020
Attention: Joel E. Cohen
Notices to the Company:
Datamax Corporation
4501 Parkway Commerce Boulevard
Orlando, Florida 32808
Attention: General Counsel
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Edward T. Swan
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<PAGE>
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
13. Severability. Whenever possible, each provision of this Agreement
shall 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 shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
14. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt 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.
15. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
16. 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.
17. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.
18. Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Florida, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Florida or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
19. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company (as approved by the
Board) and Executive, and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
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<PAGE>
20. Arbitration. Except with respect to disputes or claims under
paragraphs 6, 7, 8 and 9 hereof (for which each party shall bear the cost of its
own attorney's fees and expenses), each party hereto agrees that the arbitration
procedure set forth in Exhibit A hereto shall be the sole and exclusive method
for resolving any claim or dispute ("Claim") arising out of or relating to the
rights and obligations acknowledged and agreed to in this Agreement, whether
such Claim arose or the facts on which such Claim is based occurred prior to or
after the effective date of adoption of this Agreement. The parties agree that
the result of any arbitration hereunder shall be final, conclusive and binding
on all of the parties. Nothing in this paragraph 20 shall prohibit a party
hereto from instituting litigation to enforce any Final Determination (as
defined in Exhibit A hereto). Each party hereto hereby irrevocably submits to
the jurisdiction of any United States District Court or Florida state court of
competent jurisdiction sitting in Orange County, Florida. Each party hereto
irrevocably consents to service of process by registered mail or personal
service and waives any objection on the grounds of personal jurisdiction, venue
or inconvenience of the forum. Each party hereto further agrees that each other
party hereto may initiate litigation in any court of competent jurisdiction to
execute any judicial judgment enforcing a Final Determination.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
DATAMAX CORPORATION
By /s/ Carl E. Ring, Jr.
---------------------------------------
Its Chairman
--------------------------------------
/s/ Marvin A. Davis
-------------------------------------
MARVIN A. DAVIS
<PAGE>
EXHIBIT A
ARBITRATION PROCEDURE
---------------------
1. Notice of Claim. A party asserting a Claim (the "Claimant") shall
deliver written notice to each party against whom the Claim is asserted
(collectively, the "Opposing Party"), with a copy to the persons required to
receive copies of notices under the Agreement (the "Additional Notice Parties"),
specifying the nature of the Claim and requesting a meeting to resolve same.
The Additional Notice Parties shall be given reasonable notice of and invited
and permitted to attend any such meeting. If final resolution of all matters
with respect to the Claim is not reached within ten business days after delivery
of such notice, the Claimant or the Opposing Party may, within 45 days after
delivery of such notice, invoke the arbitration procedure provided herein by
delivering to each Opposing Party and the Additional Notice Parties a Notice of
Arbitration, which shall specify the Claim as to which arbitration is sought,
the nature of the Claim, the basis for the Claim, and the nature and amount of
any damages or other compensation or relief sought. Each party agrees that no
punitive damages may be sought or recovered in any arbitration, judicial
proceeding or otherwise. Failure to deliver a Notice of Arbitration within such
45 day period shall constitute a waiver of any right to relief for the matters
asserted in the notice of claim. Any Claim shall be forever barred, and no
relief may be sought therefor, if written notice of such Claim is not made as
provided above within one year after the date such Claim accrues.
2. Selection of Arbitrator. Within 20 business days after delivery of the
Notice of Arbitration, the Executive and the Board shall meet and attempt to
agree on an arbitrator to hear and decide the Claim. If the Executive and the
Board cannot agree on an arbitrator within such 20-day period, they shall
request the American Arbitration Association (the "AAA") to appoint an
arbitrator experienced in the area of dispute who does not have an ongoing
business relationship with any of the parties to the dispute. If the arbitrator
selected informs the parties he cannot hear and resolve the Claim within the
time periods specified below, the Executive and the Board shall request the
appointment of another arbitrator by the AAA subject to the same requirements.
3. Arbitration Procedure. The following procedures shall govern the
conduct of any arbitration under this Agreement. All procedural matters
relating to the conduct of the arbitration other than those specified below
shall be discussed among counsel for the parties and the arbitrator. Subject to
any agreement of the parties, the arbitrator shall determine all procedural
matters not specified herein.
(a) Within 30 days after the delivery of a Notice of Arbitration, each
party shall provide the other, or its counsel, with reasonable access to
documents relating directly to the issues raised in the Notice of Arbitration.
All documents produced and all copies thereof shall be maintained as strictly
confidential, shall be used for no purpose other than the arbitration hereunder
and shall be returned to the producing party upon completion of the arbitration.
There shall be no other discovery, except that if a reasonable need is shown,
limited depositions may be allowed in the discretion of the arbitrator, it being
the expressed intention and agreement of each party to have the
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arbitration proceedings conducted and resolved as expeditiously, economically
and fairly as reasonably practicable and with the maximum degree of
confidentiality.
(b) All written communications regarding the proceeding sent to the
arbitrator shall be delivered simultaneously to each party or its counsel, with
a copy to the Additional Notice Parties. Oral communications between any of the
parties or their counsel and the arbitrator shall be conducted only when all
parties or their counsel are present and participating in the conversation.
(c) Within 20 days after selection of the arbitrator, the Claimant shall
submit to the arbitrator a copy of the Notice of Arbitration, along with a
supporting memorandum and any exhibits or other documents supporting the Claim.
(d) Within 20 days after delivery of the Claimant's submission, the
Opposing Party shall submit to the arbitrator a memorandum supporting its
position and any exhibits or other supporting documents. If the Opposing Party
fails to respond to any of the issues raised by the Claimant within 20 days
after delivery of the Claimant's submission, then the arbitrator may find for
the Claimant on any such issue and bar any subsequent consideration of the
matter.
(e) Within 20 days after delivery of the Opposing Party's response, the
Claimant may submit to the arbitrator a reply to the Opposing Party's response,
or notification that no reply is forthcoming.
(f) Within 10 days after the latest submission as provided above, the
arbitrator shall notify the parties and the Additional Notice Parties of the
date of the hearing on the issues raised by the Claim. Scheduling of the
hearing shall be within the sole discretion of the arbitrator, but in no event
more than 30 days after the last submission by the parties and shall take place
within 75 miles of the corporate headquarters of the Company at a place selected
by the arbitrator or such other place as is mutually agreed by the parties.
Both parties shall be granted substantially equal time to present evidence at
the hearing. The hearing shall not exceed one business day, except for good
cause shown.
(g) Within 30 days after the conclusion of the hearing, the arbitrator
shall issue a written decision to be delivered to both parties and the
Additional Notice Parties (the "Final Determination"). The Final Determination
shall address each issue disputed by the parties, state the arbitrator's
findings and reasons therefor and state the nature and amount of any damages,
compensa tion or other relief awarded.
(h) The award rendered by the arbitrator shall be final and non-appealable
and judgment may be entered upon it in accordance with applicable law in such
court as has jurisdiction thereof.
4. Costs of Arbitration. As part of the Final Determination, the
arbitrator shall determine the allocation of the costs and expenses of the
arbitration, including the arbitrator's fee and both parties' attorneys' fees
and expenses, based upon the extent to which each party prevailed in the
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arbitration. In the event that any relief which is awarded is non-monetary,
then such costs and expenses shall be allocated in any manner as may be
determined by the arbitrator.
5. Satisfaction of Award. If any party fails to pay the amount of the
award, if any, assessed against it within 30 days after the delivery to such
party of the Final Determination, the unpaid amount shall bear interest from the
date of such delivery at the lesser of (i) prime lending rate announced by
Citibank N.A. plus three hundred basis points and (ii) the maximum rate
permitted by applicable usury laws. In addition, such party shall promptly
reimburse the other party for any and all costs or expenses of any nature or
kind whatsoever (including attorneys' fees) reasonably incurred in seeking to
collect such award or to enforce any Final Determination.
6. Confidentiality of Proceedings. The parties hereto agree that all of
the arbitra tion proceedings provided for herein (including any notice of claim,
the Notice of Arbitration, the submissions of the parties, and the Final
Determination issued by the arbitrator) shall be confidential and shall not be
disclosed at any time to any person other than the parties, their
representatives, the arbitrator and the Additional Notice Parties; provided that
this provision shall not prevent the party prevailing in the arbitration from
submitting the Final Determination to a court for the purpose of enforcing the
award, subject to comparable confidentiality protections if the court agrees;
and further provided that the foregoing shall not prohibit disclosure to the
minimum extent reasonably necessary to comply with (i) applicable law (or
requirement having the force of law), court order, judgment or decree,
including, without limitation, disclosures which may be required pursuant to
applicable securities laws, and (ii) the terms of contractual arrangements (such
as financing arrangements) to which the Company or any Additional Notice Party
may be subject so long as such contractual arrangements were not entered into
for the primary purpose of permitting disclosure which would otherwise be
prohibited hereunder.
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EXHIBIT 10.5
DATAMAX CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
-----------------------------------
THIS STOCK OPTION AGREEMENT is effective as of the 12th day of September, 1996,
between DATAMAX INTERNATIONAL CORPORATION, a Delaware corporation (hereinafter
referred to as the "Company"), and MARVIN A DAVIS (hereinafter referred to as
"Optionee").
RECITALS:
--------
A. Optionee is currently an employee of the Company's subsidiary Datamax
Corporation, a Delaware corporation ("Datamax").
B. The Company considers it desirable and in the Company's best interest that
Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the
Company and its Subsidiaries in the form of an option to purchase Common
Stock of the Company.
C. The Company has approved and implemented a 1996 Long-Term Performance
Incentive Plan (as amended, the "Plan"), all of the terms of which are
incorporated herein by reference. The Plan is available for inspection by
Optionee at the principal offices of the Company.
AGREEMENT:
---------
In consideration of Optionee's serving as the Chief Executive Officer of
Datamax, the mutual covenants and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
option (the "Option") to purchase up to an aggregate of 135,000 shares of
the Company's Common Stock (the "Stock") at an exercise price equal to the
Stock's fair value as of the date of this Stock Option Agreement of $12.06
per share (the "Exercise Price"), on the terms and conditions herein set
forth. The date of grant of the Option is the date of this Agreement.
2. Period of Option and When Exercisable. The term of the Option shall be for
a period of five years from the date hereof, subject to earlier termination
as provided herein (the "Exercise Period"). During the Exercise Period,
Optionee may exercise the Option for portions of the total shares granted
above (the "Option Shares") only to the extent the Option has become
vested. The Option shall become vested based on the following vesting
schedule:
a. after one year from the date of this Agreement, provided that
Optionee is still employed by Datamax, Optionee may exercise this
Option with respect to one-third of the Option Shares;
<PAGE>
b. after two years from the date of this Agreement, provided that
Optionee is still employed by Datamax, Optionee may exercise this
Option with respect
to two-thirds of the Option Shares (including the one-third of
the Option Shares previously vested under paragraph 2(a)); and
c. after three years from the date of this Agreement, provided that
Optionee is still employed by Datamax, Optionee may exercise this
Option with respect to 100% of the Option Shares.
The unvested portion of the Option will be forfeited and canceled upon the
termination of the Optionee's employment with Datamax.
3. Acceleration of Vesting on Sale of the Company. If the Optionee has been
continuously employed by Datamax from the date of this Stock Option
Agreement until a Sale of the Company for an aggregate consideration of
greater than $200,000,000 for the Common Stock of the Company and the
portion of the Option which has not become vested at the date of such Sale
of the Company shall immediately vest and become exercisable with respect
to 100% of the Option Shares simultaneously with the consummation of such
Sale of the Company. In any event, any portion of the Option which has not
been exercised prior to or in connection with any Sale of the Company shall
be forfeited and canceled, unless otherwise determined by the Committee (as
defined in the Plan) or the Company's Board of Directors (the "Board").
"Sale of the Company" means a merger or consolidation effecting a change in
control of the Company, a sale of all or substantially all of the Company's
assets or a sale of a majority of the Company's outstanding voting
securities except in connection with a public offering under the Securities
Act of 1933, as amended.
4. Exercise of Option. The Option shall be exercisable during the Exercise
Period the extent it has vested as long as Optionee is in Continuous
Employment with Datamax. Notwithstanding the preceding sentence and subject
to paragraph 9, the Option may be exercised for the number of shares vested
in Optionee as of the date of termination of Continuous Employment:
a. for a period ending 30 days after the Continuous Employment of the
Optionee with Datamax has terminated, unless the Optionee resigns or
is Terminated for Cause (as defined in the Optionee's Employment
Agreement) by Datamax, in which case the Option will terminate on
termination of employment; or
b. by the estate of the Optionee, within one year after the date of the
Optionee's death, if the Optionee dies while in the Continuous
Employment of Datamax; or
c. within one year after the Optionee's employment with Datamax
terminates, if the Optionee becomes disabled during the Continuous
Employment with Datamax and such disability is the reason for
termination.
2
<PAGE>
In no event, however, shall the Exercise Period of this Option extend
beyond five years from the execution of this Agreement. The term
"Continuous Employment" used in this section shall have the meaning set
forth in paragraph 9(b) of the Plan.
5. Nonassignability of Option Rights. The Option is exercisable only by
Optionee, except in the case of Optionee's death, in which case the Option
is exercisable by the Optionee's estate's personal representative pursuant
to paragraph 4(b), and except in the case of Optionee's disability, in
which case the Option is exercisable, if necessary, by Optionee's legal
representative pursuant to paragraph 4(c). The Option may not be sold,
exchanged, assigned, pledged, discounted, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution or to
the Company pursuant to this Stock Option Agreement. The Option shall not
be subject to execution, attachment, or similar process. Upon any attempt
to sell, exchange, assign, pledge, discount, hypothecate, or otherwise
transfer the Option or any right thereunder, contrary to the provisions
hereof and of the Plan, the Option and all rights thereunder shall
immediately become null and void.
6. Investment Representation and Agreement.
1. Optionee represents that this Option and any shares purchased pursuant
to this Option are purchased for investment purposes only and for
Optionee's own account. Optionee acknowledges that this Option and the
shares pertaining to this Option are not registered under the
Securities Act of 1993, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
2. Optionee agrees not to sell or otherwise transfer any shares of stock
purchased pursuant to this Option without registration under the
Securities Act of 1933, as amended, and under any applicable state
securities law, unless such sale or transfer is exempt from
registration and the Optionee first delivers to the Company an opinion
of counsel reasonably acceptable in form and substance to the Company
that registration under the Securities Act or any applicable state
securities law is not required in connection with such transfer.
Optionee acknowledges that the Company's books with respect to the
transfer of any shares of stock purchased pursuance to this Option
will reflect this transfer restriction.
7. Method of Exercise. Shares purchased pursuant to this Agreement shall, at
the time of purchase, be paid for in full at the Exercise Price of the
Option as provided in paragraph 1 above. To the extent that the right to
purchase shares has vested hereunder, the Option may be exercised from time
to time during the term of the Option as set forth in paragraph 2 above by
delivering written notice to the Company stating the number of shares with
respect to which the Option is being exercised and the time of the delivery
thereof, which time shall be at least 15 days after the giving of such
notice, unless an earlier date shall have been mutually agreed upon by the
parties. upon receipt of said written notice, the Company shall provide
Optionee with that information required by the applicable state and federal
securities
3
<PAGE>
laws. If, after receipt of said information, Optionee desires to withdraw
said notice of exercise, Optionee may withdraw said notice of exercise by
notifying the Company, in writing, prior to the time set forth for delivery
of the shares. Provided that Optionee does not withdraw his notice of
exercise as provided herein, at the time specified in such notice, the
Company shall deliver, without transfer or issue fee or tax, to Optionee,
at the main office of the Company or at such other place as shall be
mutually acceptable, a certificate or certificates for such shares out of
theretofore authorized but unissued or reacquired common shares as the
Company may elect, against payment of the Exercise Price, in form
acceptable to the Company and consistent with the Plan. If Optionee fails
to accept delivery of and pay for the number of shares specified in such
notice upon tender of delivery thereof, his right to exercise the Option
with respect to such undelivered shares may be terminated by the Company.
8. Changes in Capital Structure of Company. In the event of a change in
capital structure of the Company, the number of shares covered by the
Option and the price per share shall proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting from
the splitting or consolidation of shares, or the payment of a stock
dividend, or effected in any other manner without receipt of additional or
further consideration by the Company. The Company shall give notice of any
adjustment to Optionee.
9. Right to Purchase Upon Termination of Employment.
1. Repurchase of Option Shares. If the Optionee's employment with
Datamax terminates, including by the Optionee's death, disability,
resignation or termination with or without Cause (the date on which
such termination occurs being referred to as the "Termination Date"),
then the Company shall have the option (i) to repurchase all or any
vested and unexercised portion of the Option (the "Unexercised
Option") at the price equal to the Fair Market Value of such vested
and unexercised portion of the Option minus the Exercise Price of such
vested and unexercised portion of the Option and (ii) to repurchase
all or any part of the Option Shares issued or issuable upon exercise
of this Option, whether held by the Optionee or by one or more of the
Optionee's transferees, at the price equal to the Fair Market Value of
such Option Shares as of the Termination Date ((i) and (ii)
collectively, the "Repurchase Option").
2. Repurchase by Company. The Company may elect to purchase all or any
portion of the Unexercised Option and/or the Option Shares by delivery
of written notice (the "Repurchase Notice") to the Optionee or any
other holders of the Option Shares within 120 days after the
Termination Date. The Repurchase Notice shall set forth the number of
Unexercised Options and/or Option Shares to be acquired from the
Optionee and such other holder(s), the aggregate consideration to be
paid for such Unexercised Options and/or Option Shares and the time
and place for the closing of the transaction. The number of Option
Shares to be repurchased by the Company shall first be satisfied to
the extent possible from the Option Shares held by the
Optionee at the time of delivery of the Repurchase Notice. If the
number of Option
4
<PAGE>
Shares then held by the Optionee is less than the total number of
Option Shares the Company has elected to purchase, then the Company
shall purchase the remaining shares elected to be purchased from the
other holders thereof, pro rata according to the number of shares held
by each such holder at the time of delivery of such Repurchase Notice
(determined as close as practical to the nearest whole shares).
3. Closing of Repurchase. The purchase of the Unexercised Option and/or
the Option Shares pursuant to this paragraph 9 shall be closed at the
Company's executive offices within 20 days after the expiration of the
120-day period referred to in paragraph 9(b). At the closing, the
Company shall pay the purchase price in the manner specified in
paragraph 9(d) and the Optionee and any other holders of Option Shares
being purchased shall deliver the certificate or certificates
representing such shares to the Company, accompanied by duly executed
stock powers. The Company shall be entitled to receive customary
representations and warranties from the Optionee and any other selling
holders of Option Shares regarding the sale of such 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 to be guaranteed by a national bank or reputable
securities broker.
4. Manner of Payment. If the Company elects to purchase all or any part
of the Option Shares, including Option Shares held by one or more
transferees, the Company shall pay for such shares: (i) first, by
certified check or wire transfer of funds to the extent such payment
would not cause the Company to violate the Corporation Law of the
State of Delaware and would not cause the Company to breach any
agreement to which it is a party relating to the indebtedness for
borrowed money or other material agreement; and (ii) thereafter, with
a subordinated promissory note of the Company. Such subordinated
promissory note shall bear interest at the rate of 7% per annum (which
shall be payable annually in cash unless otherwise prohibited), shall
have all principal payment due on the fifth anniversary of the date of
issuance and shall be subordinated on terms and conditions
satisfactory to the holders of the Company's indebtedness for borrowed
money. In addition, the Company may pay the purchase price for such
shares by offsetting amounts outstanding under any indebtedness or
obligations owed by the Optionee to the Company.
10. Restrictions on Transfer.
5
<PAGE>
1. Transfer of Option Shares. The Optionee shall not sell, pledge or
otherwise transfer any interest in any Option Shares except pursuant
to the public pursuant to an offering registered under the Securities
Act of 1933, as amended, or to the public through a broker, dealer or
market maker pursuant to the provisions of Rule 144 adopted under the
Securities Act (collectively, a "Public Sale") or the provisions of
paragraph 9 hereof ("Exempt Transfers") and except pursuant to the
provisions of this paragraph 10. At least 30 days prior to making any
transfer other than a Public Sale or an Exempt Transfer, the Optionee
shall deliver a written notice (the "Sale Notice") to the Company. The
Sale Notice shall disclose in reasonable detail the identity of the
prospective transferee(s) and the terms and conditions of the proposed
transfer. The Optionee agrees not to consummate any such transfer
until 30 days after the Sale Notice has been delivered to the Company,
unless the parties to the transfer have been finally determined
pursuant to this paragraph 10 prior to the expiration of such 30-day
period. (The date of the first to occur of such events is referred to
herein as the "Authorization Date").
2. First Refusal Rights. The Company may elect to purchase all (but not
less than all) of the Option Shares to be transferred by the Optionee
upon the same terms and conditions as those set forth in the Sale
Notice by delivering a written notice of such election to the Optionee
within 20 days after the receipt of the Sale Notice by the Company.
The Company shall be given up to 30 days after delivery of its notice
to consummate the purchase and sale of Option Shares. If the Company
elects not to purchase all of the Option Shares specified in the Sale
Notice, the Optionee may transfer the Option Shares specified in the
Sale Notice at a price and on terms no more favorable to the
transferee(s) thereof than specified in the Sale Notice during the 60-
day period immediately following the Authorization Date. Any Option
Shares not transferred within such 60-day period shall be subject to
the provisions of this paragraph 10(b) upon subsequent transfer.
3. Certain Permitted Transfers. The restrictions contained in this
paragraph 10 shall not apply with respect to transfers of Option
Shares (i) pursuant to applicable laws of descent and distribution or
(ii) among the Optionee's family group; provided that the restrictions
contained in this paragraph shall continue to be applicable to the
Option Shares after any such transfer and the transferees of such
Option Shares have agreed in writing to be bound by the provisions of
this Agreement. The Optionee's "family group" means the Optionee's
spouse and descendants.
4. Termination of Restrictions. The restrictions on the transfer of
Option Shares set forth in this paragraph 10 shall continue with
respect to each Option Share until the date on which such Option Share
has been transferred in a transaction permitted by this paragraph
(except in a transaction contemplated by paragraph 10(c)); provided in
any event the restrictions on transfers set forth in this paragraph 10
shall terminate when the Company has sold shares of its Common Stock
pursuant to a public offering registered under the Securities Act.
6
<PAGE>
11. Limitation on Transfer during Registration Period. During the 180 day
period following the effective date of an initial registration statement
filed by the Company under the Securities Act of 1933, as amended, Optionee
shall not, to the extent requested by the Company and any underwriter,
sell, pledge, transfer, make any short sale of, loan, grant any option for
the purchase of, or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound) any Stock held by him at any time during
such period except Stock included in such registration statement. Optionee
shall execute any agreement with any underwriter involved with such initial
registration statement deemed necessary by such underwriter to implement
the restrictions in this paragraph 11.
12. Restrictive Legend. Optionee hereby agrees that certificates evidencing
the shares of stock purchased by Optionee pursuant to this Agreement shall
be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
The sales of Common Stock evidenced by this certificate have been
issued under the Datamax International Corporation 1996 Long-Term
Performance Incentive Plan (the "Plan") and pursuant to a Nonqualified
Stock Option Agreement, and are subject to the terms and provisions of
such Plan and Nonqualified Stock Option Agreement.
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act
or any other state securities laws, and, therefore, cannot be sold
unless they are subsequently registered under the Act and any
applicable state securities laws, or unless an exemption from
registration is available.
13. Withholding of Taxes. The Company shall be entitled, if necessary or
desirable, to withhold from the Optionee any amounts due and payable by the
Company to the Optionee (or secure payment from the Optionee in lieu of
withholding) the amount of any withholding or other tax due from the
Company with respect to any shares subject to this Option issuable under
the Plan, and the Company may defer such issuance unless indemnified by the
Optionee to its satisfaction.
14. Incorporation of Terms and Conditions in the Plan. This Option is subject
to the terms and conditions contained in the Plan, and all amendments
thereto made from time to time, a copy of which is on file with the Company
at its principal business office and which Plan is by this reference
thereto incorporated herein.
15. Governing Law. This Agreement shall be governed by, interpreted under, and
construed in accordance with the laws of the State of Florida.
16. Binding Effect. This Agreement will inure to the benefit of and be binding
on the Company, its successors and assigns, including, but not limited to,
any company or entity that may acquire all or substantial all of the
Company's assets and business or into which the Company
7
<PAGE>
may be consolidated or merged, and on Optionee and except as set forth in
paragraph 5 above, their heirs, legal representatives, and successors, as
the case may be.
17. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether
written or oral, with respect to such subject matter.
18. Waiver or Modification. No waiver or modification of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between
the parties arising out of or affecting this Agreement or the rights or
obligations of any party hereunder, unless such waiver or modification is
in writing and duly executed as aforesaid. The provisions of this
paragraph may not be waived except as herein set forth.
19. Number and Gender. Whenever used herein, singular numbers shall include
the plural, the singular, and the use of any gender shall, include all
genders.
20. Invalid Provision. The invalidity of unenforceability of any term of
provision of this Agreement or the nonapplication of any such term or
provision to any person or circumstance shall not impair or affect the
remainder of this Agreement, and the remaining terms and provisions hereof
shall not be invalidated but shall remain in full force and effect and
shall be construed as if such invalid, unenforceable, or nonapplicable
provision were omitted.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
February 25, 1997.
"COMPANY"
DATAMAX INTERNATIONAL CORPORATION
By: /s/ Carl E. Ring, Jr.
----------------------------
Carl Ring, Chairman
"OPTIONEE"
/s/ Marvin A. Davis
----------------------------
Marvin A. Davis
<PAGE>
EXHIBIT 10.7
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
THIS STOCK OPTION AGREEMENT is made as of the ____ day of ____________
1993, between DMX ACQUISITION CORP., a Delaware corporation (hereinafter
referred to as the "Company"), and THOMAS E. TURNER (hereinafter referred to as
"Optionee").
R E C I T A L S:
---------------
A. Optionee is currently an employee of the Company's subsidiary, Datamax
Corporation, a Delaware corporation ("Datamax").
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase Common Stock of the Company.
C. The Company has approved and implemented a Stock Option Plan, dated
September 4, 1991 (the "Plan"), and amended the Plan as of _____________, 1993,
all of the terms of which are incorporated herein by reference. The Plan is
available for inspection by Optionee at the principal offices of the Company.
A G R E E M E N T:
-----------------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 125,000 shares of the Company's Common Stock (the "Stock") at an exercise
price of $4.00 per share (the "Exercise Price"), on the terms and conditions
herein set forth. The date of grant of the Option is the date of this
Agreement.
2. Period of Option, When Exercisable, and Vesting. The term of this
Option shall be for a period of ten (10) years from the date hereof, subject to
earlier termination as provided herein (the "Exercise Period"). During the
Exercise Period, Optionee may exercise this Option for portions of the total
shares granted above only in accordance with the following vesting schedule:
(a) In the event that earnings before interest and taxes but after
selling, general and administrative expenses for the Company's subsidiary, Fargo
Acquisition Corporation (Datamax Bar Code Products Corp. after the name change)
("EBITAF"), for the fiscal year ending at the end of February, 1994 equals
more than $16,500,000 but less than $20,500,000, this option may be exercised as
to 20,000 shares if the EBITAF is $16,500,000 or 25,000 shares if the EBITAF is
<PAGE>
$20,500,000 or greater, or an amount between these amounts on a linear basis if
the EBITAF is between $16,500,000 and $20,500,000."
(b) In the event that the EBITAF for the fiscal year ending at the end of
February, 1995 ("EBITAF 95") is greater than $18,975,000 but less than
$23,575,000, this option may be exercised as to 20,000 shares if the EBITAF is
$18,975,000, or 25,000 shares if the EBITAF is $23,575,000 or greater, or an
amount between these amounts on a linear basis if the EBITAF is between
$18,975,000 and $23,575,000.
(c) In the event that the EBITAF for the fiscal year ending at the end of
February, 1996 ("EBITAF 96") is greater than $21,821,250 but less than
$27,111,250, this option may be exercised as to 20,000 shares if the EBITAF is
$21,821,250, or 45,000 shares if the EBITAF is $27,111,250 or greater, or an
amount between these amounts on a linear basis if the EBITAF is between
$21,821,250 and $27,111,250.
(d) Provided that vesting has occurred for each of the fiscal years ending
in 1994, 1995 and 1996 as set forth above, and provided Optionee is employed by
the Company on March 1, 1997, this option may be exercised as to 25,000 shares
(in addition to other vested shares).
(e) Provided that vesting has occurred for each of the fiscal years ending
in 1994, 1995 and 1996 as set forth above, and provided Optionee is employed by
the Company on March 1, 1998, this option may be exercised as to 25,000 shares
(in addition to other vested shares).
(f) Datamax and the Optionee may mutually agree as to other financial
objectives or time vesting in lieu of the vesting objectives set forth in
paragraph 2(b), (c), (d) and (e) in order for vesting to occur, but in no event
shall vesting occur for an applicable fiscal year for more than 25,000 shares or
less than 20,000 shares. Any such agreement shall be reached prior to the
beginning of an applicable fiscal year and shall be evidenced by written
amendment to this Stock Option Agreement.
(g) Notwithstanding anything to the contrary set forth above, in the event
the Optionee voluntarily terminates his employment with the Company (i) prior to
the second anniversary date of this Stock Option Agreement (the "Anniversary
Date"), no shares may be purchased pursuant to this Stock Option Agreement, or
(ii) after the second Anniversary Date but on or before the third Anniversary
Date, forty percent (40%) of the shares that may otherwise be purchased pursuant
to paragraphs 2(a), (b) or (c) above may be purchased pursuant to this Stock
Option Agreement.
EBITAF shall be calculated by the Company's Chief Financial Officer upon
receipt of the audited financial statements for the Company for each applicable
fiscal year. The Optionee shall be notified by the Company within thirty (30)
days after receipt by the Company of its audited financial statements for the
applicable fiscal year of the EBITAF as calculated by the Chief Financial
Officer. For purposes of exercising this Option, in the event that Optionee's
employment by Datamax has terminated following the end of an applicable fiscal
year but before optionee has been notified of the EBITAF for such fiscal year,
the date of termination of employment shall be deemed to be the date
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<PAGE>
on which Optionee receives such notification. In the event that Optionee's
employment terminates prior to the end of an applicable fiscal year and it is
later determined that the EBITAF vesting target was achieved for such fiscal
fear, Optionee shall be entitled to exercise that vested portion triggered by
achieving such target equal to the ratio of the vested shares for the fiscal
year times the number of days during such fiscal year Optionee was employed by
Datamax divided by 365 days. Optionee understands that if Optionee is permitted
by this provision to exercise a portion of this Option beyond ninety (90) days
following termination of Optionee's employment, such portion may not be
qualified as an incentive stock option under Section 422 of the Internal Revenue
Code.
3. Exercise Of Option. The Option shall be exercisable only after the
second anniversary date of this Stock Option Agreement (unless earlier exercise
is permitted by the Company in writing) during the Exercise Period of the Option
and only in accordance with the above vesting schedule as long as Optionee is in
Continuous Employment with Datamax. Notwithstanding the preceding sentence, the
Option may be exercised for the number of shares vested in Optionee as of the
date of termination of Continuous Employment:
(a) for a period ending thirty (30) days after the Optionee has
terminated his Continuous Employment with Datamax, unless the optionee was
terminated for cause by Datamax, in which case the Option terminates on notice
of termination of employment; or
(b) by the estate of the Optionee, within one (1) year after the date
of the Optionee's death, if the Optionee should die while in the Continuous
Employment of Datamax; or
(c) within one (1) year after the Optionee's employment with Datamax
terminates, if the Optionee becomes disabled during Continuous Employment with
Datamax and such disability is the cause of termination.
In no event, however, shall the Exercise Period of this option extend
beyond ten (10) years from the execution of this Agreement. The term
"Continuous Employment" used in this section shall have the meaning set forth in
paragraph 11(b) of the Plan.
4. Investment Representation and Agreement.
---------------------------------------
(a) Optionee represents that this Option and any shares purchased
pursuant to this option are purchased for investment purposes only and for
Optionee's own account. Optionee acknowledges that this Option and the shares
pertaining to this Option are not registered under the Securities Act of 1933,
as amended, the Florida Securities and Investor Protection Act, or the
securities laws of any other state.
(b) Optionee agrees not to sell or otherwise transfer any shares of
stock purchased pursuant to this Option without registration under the
Securities Act of 1933, as amended, and under any applicable state securities
law, unless such sale or transfer is exempt from registration. Optionee
acknowledges that the Company's books with respect to the transfer of any shares
of stock purchased pursuant to this Option will reflect this transfer
restriction.
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<PAGE>
5. Restrictive Legend. Optionee hereby agrees that certificates
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
The shares of Common Stock evidenced by this certificate have been
issued under the DMX Acquisition Corp. Stock Option Plan (the "Plan")
and pursuant to an Incentive Stock Option Agreement, and are subject
to the terms and provisions of such Plan and Incentive Stock Option
Agreement.
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act
or any other state securities laws, and, therefore, cannot be sold
unless they are subsequently registered under the Act and any
applicable state securities laws, or unless an exemption from
registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
Optionee, except in the case of death while in Continuous Employment of Datamax,
in which case the Option is exercisable by Optionee's estate's personal
representative pursuant to paragraph 3(b), and except in the case of Optionee's
termination due to disability occurring during Continuous Employment with
Datamax, in which case the Option is exercisable, if necessary, by Optionee's
legal representative pursuant to paragraph 3(c). The Option may not be sold,
exchanged, assigned, pledged, discounted, hypothecated, or otherwise transferred
except by will or by the laws of descent and distribution. The Option shall not
be subject to execution, attachment, or similar process. Upon any attempt to
sell, exchange, assign, pledge, discount, hypothecate, or otherwise transfer the
Option or any right thereunder, contrary to the provisions hereof and of the
Plan, the Option and all to the provisions hereof and of the Plan, the Option
and all rights thereunder shall immediately become null and void.
7. Method of Exercise. Shares purchased pursuant to this Agreement
shall, at the time of purchase, be paid for in full at the Exercise Price of the
Option as provided in paragraph 1 above. To the extent that the right to
purchase shares has vested hereunder, the Option may be exercised from time to
time during the Exercise Period as set forth in paragraph 2 above by delivering
written notice to the Company stating the number of shares with respect to which
the Option is being exercised and the time of the delivery thereof, which time
shall be at least fifteen (15) days after the giving of such notice, unless an
earlier date shall have been mutually agreed upon by the parties. Upon receipt
of said written notice, the Company shall provide Optionee with that information
required by the applicable state and federal securities laws. If, after receipt
of said information, Optionee desires to withdraw said notice of exercise,
Optionee may withdraw said notice of exercise by notifying the Company, in
writing, prior to the time set forth for delivery of the shares. Provided that
Optionee does not withdraw his notice of exercise as provided herein, at the
time specified in such notice, the Company shall deliver, without transfer or
issue fee or tax, to Optionee, at the main office of the Company or at such
other place as shall be mutually acceptable, a certificate or
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<PAGE>
certificates for such shares out of theretofore authorized but unissued or
reacquired common shares as the Company may elect, against payment of the
Exercise Price, in form acceptable to the Company and consistent with the Plan.
If Optionee fails to accept delivery of and pay for the number of shares
specified in such notice upon tender of delivery thereof, his right to exercise
the Option, with respect to such undelivered shares may be Terminated by the
Company.
8. Limitation on Transfer During Registration Period. During the one
hundred twenty (120) day period following the effective date of an initial
registration statement filed by the Company under the Securities Act of 1933, as
amended, Optionee shall not, to the extent requested by the Company and any
underwriter, sell, pledge, transfer, make any short sale of, loan, grant any
option for the purchase of, or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any Stock held by him at any time during
such period except Stock included in such registration statement.
9. Extension of Exercise Period in the Event the Company is Not Publicly
Held. In the event that Optionee's employment with the Company terminates prior
to optionee exercising that portion of this Option that has vested prior to such
termination and on the date of such termination the Company is not a publicly
held company (by being subject to the reporting requirements under Section 13 of
the Securities Exchange Act of 1934), notwithstanding the provisions of
paragraph 3 of this Agreement, the Optionee (or his estate) shall have the right
to exercise that portion of this Option which has vested prior to such
termination for a period equal to thirteen (13) months following the date on
which the Company becomes publicly held or the expiration of this Option at the
end of ten (10) years from the date of this Agreement, whichever occurs first.
The Optionee understands that an extension of the exercise period pursuant to
this provision beyond the Exercise Period set forth in paragraph 3 may cause
that portion of the vested Option not exercised within the applicable period
under paragraph 3 to no longer be qualified as an incentive stock option under
Section 422 of the Internal Revenue Code.
10. Loan to Optionee. Upon exercise of part or all of the vested portion
of this Option by Optionee (or his estate) and upon request by the Optionee (or
his estate), the Company agrees to lend to the Optionee (or his estate) that
amount of money equal to the Exercise Price upon the terms and conditions set
forth in this paragraph. Such loan shall be evidenced by a promissory note in
customary form creating personal liability for such amount for the Optionee (or
his estate). Such promissory note shall be secured by the Stock purchased
pursuant to the exercise of this Option pursuant to a customary pledge
agreement. The promissory note shall carry interest at the applicable federal
rate determined as of the date the promissory note is issued by the Optionee (or
his estate). The promissory note shall be due and payable in full thirteen (13)
months from the date of issuance of the promissory note. Payment of part or all
of the promissory note may be made by the delivery to the Company of that number
of shares of Stock having a fair market value, as determined in good faith by
the Company's Board of Directors, equal to the principal and interest due on
such promissory note. The Optionee understands that payment of the promissory
note in this manner may cause the shares purchased pursuant to this Option,
which are used to repay the promissory note, not to receive the capital gains
tax treatment pursuant to Section 422 of the Internal Revenue Code.
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<PAGE>
11. Option to Repurchase.
(a) Company's Option. Any Stock purchased pursuant to this Option
shall be subject to an option to repurchase such Stock by the Company until the
Company becomes publicly held. Such option may be exercised by the Company
during said period in the event of the termination of employment of the
Optionee. The Company must elect to exercise the option to repurchase within
sixty (60) days following the termination of the Optionee, otherwise such option
shall expire. In order to exercise the option, the Company must notify the
Optionee of its intent to exercise its option by mailing a notice to the
Optionee or the representative of the Optionee's estate at the last address
contained in the Company's files for such Optionee. Such notice shall state that
the Company intends to exercise its option and shall state the purchase price
per share which will be paid by the Company and the date on which such option
will be exercised, which date will not be earlier than ten (10) days following
the date of mailing said notice nor later than sixty (60) days following the
date (the "Termination Date") of termination of employment. Such purchase price
shall be the fair market value of the Stock as determined by the Board of
Directors as of the date of the Optionee's termination of employment or death.
If the Optionee's employment is terminated for "cause" by the Company, the
purchase price shall be the price per share paid by the Optionee. As used
herein, the term "cause" shall have the meaning as used in any employment
agreement between the Company and the Optionee, or in the event there is no
employment agreement, as determined by the Board of Directors. The purchase
price shall be evidenced by a promissory note, bearing interest at the
applicable federal rate under Section 1274(d) of the Code. Payments on said note
shall be made in three (3) equal annual installments commencing six (6) months
after the Termination Date.
(b) Delivery of Stock Certificates. Upon receipt of any notice,
pursuant to this paragraph 11(a) hereof from the Company, the Optionee shall
deliver the certificates) representing such shares of Stock to the Company
within ten (10) days from the date of such notice, along with a properly
executed stock power authorizing the Company to transfer said shares to the
Company, its successor or assignee.
12. Changes in Capital Structure of Company. In the event of a change in
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. the Company shall give notice of any adjustment to Optionee.
13. Incorporation of Terms and Conditions in the Plan. This Option is
subject to the terms and conditions contained in the Plan, and all amendments
thereto made from time to time, a copy of which is on file with the Company at
its principal business office and which Plan is by this reference thereto
incorporated herein.
14. Retention of Optionee's Shares. Until September 1, 1994 and until the
Senior Debt has been paid in full and the Company and its Subsidiaries may no
longer borrow Senior Debt from SBA under the Senior Loan Agreement, the Optionee
shall not sell, transfer, assign, pledge or
-6-
<PAGE>
otherwise dispose of any Stockholder Shares held by Optionee or his Permitted
Transferees, except pursuant to a Sale of the Company or a Public Sale; provided
that nothing contained in this paragraph 14 shall prohibit the Optionee from
transferring Stockholder Shares as permitted by paragraph 15(d) hereof.
15. Restrictions on Transfer of Stockholder Shares.
----------------------------------------------
(a) Transfer of Stockholder Shares. The Optionee shall not sell,
transfer, assign, pledge or otherwise dispose of (a "Transfer") any interest in
any Stockholder Shares except pursuant to the provisions of this paragraph 15,
pursuant to the provisions of paragraph 15(d) hereof (an "Exempt Transfer") or
pursuant to a Public Sale. The Optionee agrees not to consummate any Transfer
(other than an Exempt Transfer or a Public Sale) until 30 days after the later
of the delivery to the Company and the Stockholders of Optionee's Offer Notice
or Sale Notice (if any), unless the parties to the Transfer have been finally
determined pursuant to this paragraph 15 prior to the expiration of such 30-day
period (the "Election Period").
(b) First Offer Right. At least 30 days prior to making any Transfer
of any Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
Optionee shall deliver a written notice (an "Offer Notice") to the Company and
the Stockholders (the "Other Stockholders"). The Offer Notice shall disclose in
reasonable detail the proposed number of Stockholder Shares to be transferred
and the proposed terms and conditions of the Transfer, and if the Optionee has
identified or had any discussions with any prospective transferee, the Offer
Notice shall also disclose the identity of the prospective transferees) (the
purchase price specified in any Offer Notice shall be payable Solely in cash at
the closing of the transaction or installments over time, and no Stockholder
Shares may be pledged). First, the Company may elect to purchase all (but not
less than all) of the Stockholder Shares specified in the Offer Notice at the
price and on the terms specified therein by delivering written notice of such
election to the Optionee and the Other Stockholders as soon as practical, but in
any event within 10 days after the delivery of the Offer Notice. If the Company
has not elected to purchase all of the Stockholder Shares within such 10-day
period, the other Stockholders may elect to purchase all (but not less than all)
of such Stockholder Shares at the price and on the terms specified in the Offer
Notice by delivering written notice of such election to the Optionee as soon as
practical, but in any event within 20 days after delivery of the Offer Notice.
If the Other Stockholders have in the aggregate elected to purchase more than
the number of Stockholder Shares being offered by the Optionee, the Stockholder
Shares shall be allocated among the Other Stockholders electing to purchase
shares according to each such Stockholder's Pro Rata Share. If the Company or
any Other Stockholders have elected to purchase Stockholder Shares from the
Optionee, the transfer of such shares shall be consummated as soon as practical
after the delivery of the election notice(s) to the Optionee, but in any event
within 15 days after the expiration of the Election Period. To the extent that
the Company and the other Stockholders have not elected to purchase all of the
Stockholder Shares being offered, the Optionee may, within 90 days after the
expiration of the Election period and subject to the provisions of subparagraph
(c) below, transfer all such Stockholder Shares to one or more third parties at
a price no less than 95% of the price per share specified in the offer Notice
and on other terms no more favorable to the transferees thereof than offered to
the Company and the Other Stockholders in the Offer Notice. Any Stockholder
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Shares not transferred within such 90-day period shall be reoffered to the
Company, and the Other Stockholders prior to any subsequent Transfer. Each
Stockholder's "Pro Rata Share" shall be based upon such Stockholder's
proportionate ownership of all shares of capital stock outstanding in the
Company on a fully-diluted basis.
(c) Participation Rights. At least 30 days prior to any Transfer of
Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
Optionee shall deliver a written notice (the "Sale Notice") to the Company and
the other Stockholders (the "Other Stockholders"), specifying in reasonable
detail the identity of the prospective transferee(s), the number of shares to be
transferred and the terms and conditions of the Transfer. The Other
Stockholders may elect to participate in the contemplated Transfer by delivering
written notice to the Transferring Stockholder within 15 days after delivery of
the Sale Notice. If any Other Stockholders have elected to participate in such
Transfer, the Optionee and such Other Stockholders shall be entitled to sell in
the contemplated Transfer, at the same price and on the same terms, a number of
Stockholder Shares equal to the product of (1) the quotient determined by
dividing the percentage of capital stock owned by such person by the aggregate
percentage of Stockholder Shares owned by the optionee and the Other
Stockholders participating in such sale, and (ii) the number of Stockholder
Shares to be sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100 Stockholder
Shares by the Optionee and if the Optionee at such time owns 1% of all
Stockholder Shares and if one Other Stockholder elects to participate and
owns 5% of all Stockholder Shares, the Optionee would be entitled to sell
16.6 shares (1% divided by 5% times 100 shares) and the Other Stockholder
would be entitled to sell 83.4 shares (5% divided by 6% times 100 shares).
The Optionee shall use his best efforts to obtain the agreement of the
prospective transferees) to the participation of the Other Stockholders in any
contemplated Transfer and to the inclusion of the Preferred Stock and the
Warrants in the contemplated Transfer, and the Optionee shall not transfer any
of his Stockholder Shares to any prospective transferee if such prospective
transferee declines to allow the participation of the Other Stockholders or the
inclusion of the Preferred Stock or the Warrants. If any portion of the
warrants is included in any Transfer of Stockholder Shares under this
subparagraph 15(c), the purchase price for the Warrants shall be equal to the
full purchase price determined hereunder for the Stockholder Shares covered by
the portion of the Warrants to be transferred, reduced by the aggregate exercise
price for such shares.
(d) Permitted Transfers. The restrictions set forth in this paragraph 15
shall not apply with respect to any Transfer of Stockholder Shares by the
Optionee (i) to the Company, (ii) to any Other Stockholder (or to a person that
is a Permitted Transferee of such Stockholder), (iii) pursuant to applicable
laws of descent and distribution or among the Optionee's Family Group
(collectively referred to herein as "Permitted Transferees"); provided that the
restrictions contained in this paragraph 15 shall continue to be applicable to
the Stockholder Shares after any such Transfer and provided further that the
transferees of such Stockholder Shares shall have agreed in writing to be bound
by the provisions of this Agreement affecting the Stockholder Shares so
transferred.
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<PAGE>
(e) Termination of Restrictions. The restrictions on the Transfer of
Stockholder Shares set forth in this paragraph 15 shall continue with respect to
each Stockholder Share until the first to occur of (i) the date on which such
Stockholder Share has been transferred in a Public Sale, Or (ii) upon the
Company becoming publicly held.
(f) Definitions. The definitions of those defined terms used in
paragraphs 14 and 15 hereof, unless defined elsewhere in this Agreement, are as
follows:
(i) "Preferred Shares" - Issued and outstanding shares, of
any series, of preferred stock in the Company.
(ii) "Public Sale" - Sale of Stockholder Shares pursuant to an
effective registration statement or in a broker's transaction under Rule 144 or
to the public under an exemption from registration.
(iii) "Sale of the Company" - The sale of substantially all of
the assets of the Company or the merger of the Company into another corporation,
the majority of whose voting shares are not held, immediately after such merger,
by stockholders of the Company immediately prior to such merger.
(iv) "SBA" - The Florida State Board, of Administration.
(v) "Senior Debt" Borrowings from the Florida State Board of
Administration.
(vi) "Stockholders" Stockholders of record in the Company
other than the Optionee.
(vii) "Stockholder Shares" - Shares of capital stock of the
Company held by the Optionee or shares of capital stock of the Company (or
rights to purchase shares) held by Stockholders in the Company.
(viii) "Warrants" - Stock purchase warrants issued and
outstanding in the Company, but not including stock options issued to officers,
directors or employees of the Company in connection with their services in such
capacity.
16. Governing Law. This Agreement shall be governed by, interpreted
under, and construed in accordance with the laws of the State of Florida.
17. Binding Effect. This Agreement will inure to the benefit of and be
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
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18. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
19. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
20. Number and Gender. Whenever used herein, singular numbers shall
include the plural, the singular, and the use of any gender shall include all
genders.
21. Invalid Provision. The invalidity or unenforceability of any term or
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
"COMPANY"
DMX ACQUISITION CORP.
By: ___________________________
Robert C. Strandberg
President
"OPTIONEE"
________________________________
Thomas E. Turner
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EXHIBIT 10.8
SECOND AMENDED AND RESTATED
INCENTIVE STOCK OPTION AGREEMENT
This Second Amended and Restated Incentive Stock Option Agreement is made
as of the 16th day of July, 1993, by and between DMX ACQUISITION CORP., a
Delaware corporation (the "Company"), and ROBERT L. WOHLERS (the "Optionee").
BACKGROUND
Optionee is currently an employee of Datamax Corporation, a subsidiary of
the Company.
Optionee and the Company are parties to an Incentive Stock Option Agreement
dated September 4, 1991, as amended by an Amendment to Incentive Stock Option
Agreement dated November 12, 1991 (the "Agreement"). That Agreement was made
pursuant to the Investment Agreement by and between the Company, certain
investors and other persons, including the Optionee, also dated September 4,
1991 (the "Investment Agreement"), in which the Company agreed to grant to
Optionee certain options to purchase shares pursuant to Section 1.3 of the
Investment Agreement. In addition, the Company has adopted, and subsequently
amended, the DMX Acquisition Corp. Stock Option Plan (the "Plan"), and the
options granted in the Agreement were granted pursuant to the Plan.
The Agreement provided optionee with options to purchase 166,667 shares of
the Company's common stock in accordance with a vesting schedule. Optionee
exercised a portion of his options on October 9, 1992, and purchased 55,556
shares of common stock.
The Company and Optionee now wish to amend the Agreement to provide for
accelerated vesting of the unexercised portion of Optionee's stock option.
Optionee's will then be entitled to purchase 111,111 shares of the Company's
common stock pursuant to the terms of this Second Amended and Restated Incentive
Stock Option Agreement.
Paragraph 11 of the Agreement specifies the manner by which the Agreement
may be modified, and this Second Amended and Restated Incentive Stock Option
Agreement is executed pursuant to the requirements of paragraph 11. This Second
Amended and Restated Incentive Stock Option Agreement also restates the terms of
the Agreement that are currently effective.
AGREEMENT
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
1. Grant of Option. The Company hereby grants to optionee the right and
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 166,667 shares of the Company's Common Stock (the "Stock") at an exercise
price of $.011 per share (the "Exercise Price"), on the terms and conditions
herein set forth. The date of grant of the Option is the date of the
Agreement. The Optionee has previously purchased 55,556 of the shares of Stock
subject to the Option, leaving 111,111 shares of Stock subject to this Option.
2. Period of Option and When Exercisable. The term of the Option shall
be as set forth below, subject to earlier termination as provided herein. Prior
to the expiration of the applicable portion of this Option, Optionee may
exercise the applicable portion of the option only in accordance with the
following schedule:
(a) As of July 16, 1993, 55,555 shares of Stock (of the remaining
111,111 shares of Stock subject to this Option) are immediately purchasable.
(b) As of December 31, 1993, all remaining shares of Stock subject to
this Option are immediately purchasable.
(c) This Option shall expire on May 15, 1995.
3. Exercise of Option. This Option shall be exercisable only during the
exercise period of the Option, only in accordance with the above schedule, and
only as long as Optionee is in Continuous Employment with the Company.
Notwithstanding the preceding sentence, as long as the exercise period has not
expired, the portion of this Option which is otherwise exercisable may be
exercised:
(a) upon termination of Optionee's employment with the Company, for a
period ending ninety (90) days after Continuous Employment of the Optionee has
ended other than as a result of a Termination (as such term is defined in the
Investment Agreement) and other than as covered in clauses (b), (c) or (d)
below; or
(b) by the estate of Optionee, within ninety (90) days after the date
of the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or any Subsidiary, or any successor thereof; or
(c) within ninety (90) days after Optionee's employment with the
Company terminates, if Optionee becomes permanently disabled during Continuous
Employment with the Company and such disability is the cause of termination; or
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(d) if Optionee's employment by the Company is terminated by the
Company without "Cause" (as defined in Section 7.5 of the Investment Agreement),
by the Optionee, or his estate, within the applicable option period for each
portion of the Option which is exercisable.
The term "Continuous Employment" used in this section shall have the
meaning set forth in paragraph 9(b) of the Plan.
4. The Shares Purchased Under this Option are Designated Shares. The
Optionee agrees that any shares of Stock purchased pursuant to the exercise of
this Option shall be deemed to be "Designated Shares" under Section 7.1 of the
Investment Agreement. The shares purchased by Optionee pursuant to this option
shall be subject to all other provisions pertaining to Common Stock held by the
Optionee under the Investment Agreement.
5. Investment Representation and Agreement.
(a) Optionee represents that this Option and any shares purchased
pursuant to this Option are purchased for investment purposes only and for
Optionee's own account. Optionee acknowledges that this Option and the shares
pertaining to this Option are not registered under the Securities Act of 1933,
as amended, the Florida Securities and Investor Protection Act, or the
securities laws of any other state.
(b) Optionee agrees not to sell or otherwise transfer any shares of
Stock purchased pursuant to this Option without registration under the
Securities Act of 1933, as amended, and under any applicable state securities
law, unless such sale or transfer is exempt from registration. Optionee
acknowledges that the Company's books with respect to the transfer of any shares
of Stock purchased pursuant to this Option will reflect this transfer
restriction.
6. Restrictive Legend. Optionee hereby agrees that certificates
evidencing the shares of Stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in the form
provided in Section 3 of the Shareholders' Agreement.
7. Incorporation of Terms and Conditions in the Plan. This Option is
subject to the terms and conditions contained in the Plan, and all amendments
thereto made from time to time, a copy of which is on file with the Company at
its principal business office and which Plan is by this reference thereto
incorporated herein.
8. Governing Law. This Agreement shall be governed by, interpreted under,
and construed in accordance with the laws of the State of Delaware.
9. Binding Effect; Assignability. This Agreement will inure to the
benefit of and be binding on the Company, its successors and assigns, including,
but not limited to, any Company or
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<PAGE>
entity that may acquire all or substantially all of the Company's assets and
business or into which the Company may be consolidated or merged, and on
Optionee, his heirs and legal representatives, as the case may be. The Optionee
may not sell, assign, pledge or otherwise transfer any of such optionee's rights
hereunder, except by the laws of dissent and distribution, and any such sale,
assignment, pledge or other transfer in violation of this Section 9 shall be
void and of no force or effect.
10. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
11. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
12. Number and Gender. Whenever used herein, singular numbers shall
include the plural, the singular, and the use of any gender shall include all
genders.
13. Invalid Provision. The invalidity or unenforceability of any term or
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
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<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have executed this Second
Amended and Restated Incentive Stock Option Agreement as of the day and year
first above written.
"COMPANY"
DMX ACQUISITION CORP.
By: ________________________________
William A. Grimm, Secretary
"OPTIONEE"
_____________________________________
Robert L. Wohlers
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<PAGE>
Exhibit 10.9
CONFIDENTIALITY, CONSULTING AND NONCOMPETE AGREEMENT
----------------------------------------------------
THIS AGREEMENT is made as of April 25, 1996, between Datamax International
Corporation, a Delaware corporation ("Datamax" and together with Datamax
Corporation, and all of their respective affiliates, divisions and subsidiaries,
the "Company"), and Robert C. Strandberg ("Executive").
Executive's employment with the Company has been terminated effective April
24, 1996 and Datamax and Executive desire to enter into this agreement to, among
other things (i) provide obligations of Executive with respect to Confidential
Information (as defined below), (ii) provide obligations of Executive to refrain
from competing with the Company and (iii) provide for Executive's agreement to
serve as a consultant to the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Datamax and Executive hereby agree as follows:
1. Resignations. Executive has resigned from his employment with the
Company effective April 25, 1996 and as of such date has resigned from the Board
of Directors of Datamax (the "Board and from any and all other positions he
holds with respect to the Company, including without limitation his position as
Chairman of the Board, Chief Executive Officer, President, and member of the
Compensation Committee, Banking Resolution Committee, Executive Committee and
IPO Pricing Committee of Datamax, his position as Chairman of the Board, Chief
Executive Officer, President and Trustee of 401(k) Plan of Datamax Corporation,
his position as Chairman of the Board and Chief Executive Officer of Datamax Bar
Code Products Corporation, his position as Director, President and Treasurer of
DMX Integration, Inc., his position as Director of Datamax London Ltd., his
position as Managing Director of Datamax B.V., his position as Director and
President of Pioneer Labels, Inc., his position as Director and President of
U.K. Bar Coding Corporation and his position as Director and President of
Datamax Foreign Sales Corporation. Executive hereby relinquishes any rights (but
not obligations) he has under Section 2 (entitled 'Board of Directors") of that
certain Stockholders Agreement dated as of February 26, 1993 among Datamax and
certain of its stockholders (the "Stockholders Agreement") on behalf of himself
and any of his Permitted Transferees (as defined in the Stockholders Agreement).
2. Nondisclosure and Nonuse of Confidential Information. Executive
acknowledges that his work as an employee of the Company has exposed him to
Confidential Information of the Company and that his work as a consultant to the
Company may expose him to additional Confidential Information. "Confidential
Information" includes but is not limited to customer lists, employee lists,
methods of pricing, special customer requirements for service, information on
methods of servicing customer, operational information, confidential research
projects, plans for future development, matters of a technical nature and other
information of a similar nature. Executive shall not, directly or indirectly, at
any time during or after the termination of his employment with the Company,
except to the extent required by law, (1) reveal, divulge, make
<PAGE>
known, sell, exchange, give away or otherwise dispose of, to any person, firm,
or corporation, any Confidential Information of the Company or its business,
whether the same shall or may have been designed, developed or originated by the
Executive or otherwise, or (2) reveal, divulge or make known to any person,
firm, or corporation, the name of any of Company's customers. This obligation
shall not apply to information which (a) is acquired from a third party who, to
the best of Executive's knowledge, is not in default of any obligation to the
Company in disclosing such information or (b) is already in the public domain or
known to the Company's competitors or the public generally or that becomes
available to the public generally or the Company's competitors other than as a
result of Executive's breach of this Agreement. All records and books relating
in any manner whatsoever to the Company, shall be the exclusive property of the
Company regardless of who actually prepared the original record or book.
Executive shall not copy or cause to have copied any such records and books
except in the ordinary course of business. All such records and books shall be
immediately returned to the Company by Executive on the date hereof. If the
Company shall breach its obligations to pay Executive monies due him under this
Agreement or otherwise fail to comply with its material obligations hereunder,
then if Executive shall have given the Company written notice of its breach of
this Agreement and if the Company shall not have remedied such breach within
sixty days of the date of receipt by it of such notice, Executive shall be
discharged of all obligations under this Section 2; provided, however, that if
the Company's breach occurs at a time when Executive is in breach of any of his
obligations under this Agreement, then Executive shall remain bound by this
Section 2 and all other provisions of this Agreement notwithstanding the
Company's breach.
3. Noncompetition. Executive acknowledges and agrees with the Company
that Executive's services to the Company are unique in nature and that the
Company would be irreparably damaged if Executive were to provide similar
services to competitors of the Company. Executive accordingly covenants and
agrees with the Company that during the period from the date hereof through and
including April 24, 1998 (the "Noncompetition Period"), Executive shall not,
directly or indirectly, either for himself or for any other individual,
corporation, partnership, joint venture or other entity, participate in any
business (including, without limitation, any division, group or franchise of a
larger organization) engaged in the manufacturing, design, engineering,
distributing, marketing, selling or reselling of (i) thermal or thermal transfer
bar code printers, (ii) bar code verifiers or (iii) labeling media and ribbons
used in connection with thermal bar code printers (the "Prohibited Business")
anywhere in the World. For purposes of this Agreement, the term "participate in"
shall include, without limitation, having any direct or indirect interest in any
corporation, partnership, joint venture or other entity, whether as a sole
proprietor, owner, stockholders partner, joint venturer, creditor or otherwise,
or rendering any direct or indirect service or assistance to any individuals
corporation, partnership, joint venture and other business entity (whether as a
director, officer, manager, supervisor, employee, agent, consultant or
otherwise), provided, however, that Executive shall not be deemed to be
participating' in the Prohibited Business if and to the extent that he merely
owns as a Passive investor less than 1% of the outstanding stock of any company
whose securities are publicly traded and has no other material relationship with
such company. If the Company shall breach its obligations to pay Executive
monies due him under this Agreement or otherwise fail to comply with its
material obligations hereunder, then if Executive shall have given the Company
written notice of its breach of this Agreement and if the Company shall not have
remedied such breach within sixty days of the date of receipt by it of such
notice,
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Executive shall be discharged of all obligations under this Section 3; provided,
however, that if the Company's breach occurs at a time when Executive is in
breach of any of his obligations under this Agreement, then Executive shall
remain bound by this Section 3 and all other provisions of this Agreement
notwithstanding the Company's breach.
4. Employee, Customer, Dealer, Supplier, Licensee Nonsolicitation. During
the Consulting Period, Executive shall not, directly or indirectly (i) induce or
attempt to induce any officer or employee of the Company to leave the employ of
the Company, or in any way interfere with the relationship between the Company
and any officer, employee, director or stockholder thereof, (ii) hire directly
or through another entity any person who was an employee of the Company at any
time during the Consulting Period, (iii) induce or attempt to induce any,
customer, dealer, supplier or licensee to cease doing business with the Company,
or in any way interfere with the relationship between any such customer, dealer,
supplier or licensee and the Company, (iv) make any negative statements or
communications, oral or written, regarding the Company or its directors,
officers, employees, consultants or stockholders (or their directors, officers,
employees or affiliates) or otherwise take actions which have the effect of
diminishing their respective reputations in any way (it being understood,
however, the Executive shall be free when seeking employment to defend his
performance as an executive of the Company and to state that he did not agree
with the decision of the board of directors of the Company to effect a change in
the Company's management so long as he does so in a manner which is not intended
to, and which does not in fact, have the effect of diminishing the reputation of
any member of the Company's board of directors or any affiliate of any of them)
or (v) compete with the Company or participate in any entity competing with the
Company in acquiring or attempting to acquire (whether by purchase of stock,
purchase of assets, merger or otherwise) any Acquisition Target. The term
"Acquisition Target" shall mean Graftek, Datametrics, Eltron, Matthews
International, Printronix, Inc. and PSC, Inc. (and any affiliate of any of the
foregoing). If the Company shall breach its obligations to pay Executive monies
due him under this Agreement or otherwise fall to comply with its material
obligations hereunder, then if Executive shall have given the Company written
notice of its breach of this Agreement and if the Company shall not have
remedied such breach within sixty days of the date of receipt by it of such
notice, Executive shall be discharged of all obligations under this Section 4;
provided, however, that if the Company's breach occurs at a time when Executive
is in breach of any of his obligations under this Agreement, then Executive
shall remain bound by this Section 4 and all other provisions of this Agreement
notwithstanding the Company's breach.
5. Consulting Services. From the date of termination of Executive's
employment with the Company through the end of the Noncompetition Period (the
"Consulting Period"), the Company shall engage Executive as an independent
contractor, and not as an employee, to render consulting services to the Company
as hereinafter provided, and Executive shall accept such engagement Executive
shall not have any authority to bind or act on behalf of the Company during the
Consulting Period. During the Consulting Period, Executive shall render such
consulting services to the Company in connection with the Company's business as
may be directed from time to time by the President of Datamax or any successor
entity. As part of such consulting services, Executive shall be obligated to
refer to the Company in writing each and every Business Opportunity that
Executive becomes aware of during the Consulting Period. The term "Business
Opportunity" means any
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<PAGE>
acquisition, joint venture or customer opportunity in the business of the same
or similar nature as that furnished by the Company to its customers as of the
date hereof that is communicated to Executive by the prospective acquisition
target, joint venture partner or customer (or by a representative of any of the
foregoing) other than any such opportunity that is known generally within the
autoidentification or printer industries or that has, to Executive's knowledge,
already been communicated to a senior executive of the Company. Executive's
commitment to provide consulting services shall extend, to the extent requested
by the Company, to 20 hours per month from the date hereof through and including
April 24, 1997 and 10 hours per month from April 25, 1997 through and including
the termination of the Consulting Period; provided, however, that the foregoing
limitations on the number of hours Executive can be obligated to work hereunder
shall not apply (i) to any request by the Company that Executive consult with
respect to and assist (including by means of testifying as a witness in
litigation or similar proceeding) in addressing any dispute relating to any
transaction that occurred during Executive's employment with the Company or any
dispute with any party with which the Company has entered into a contract during
Executive's employment with the Company or (ii) to Executive's obligation under
Section 1(e)(i) of the Transition Services Agreement dated November 3, 1995
between Datamax Corporation and Unimark, Inc. Notwithstanding the foregoing, it
is expressly understood that (i) Executive shall be free to move his residence
to any place in the United States and his travel expenses to and from such
residence in performance of his duties hereunder shall be reimbursed by the
Company in accordance with Section 6 below and (ii) the Company shall attempt in
good faith to accommodate Executive's prior commitments when requesting him to
provide services hereunder, it being understood that the Company's commitment to
attempt to do so shall not serve to in anyway limit Executive's obligations
hereunder.
6. Compensation. In consideration of Executive's agreements set forth
herein, (i) during the Consulting Period, the Company shall pay Executive
$18,435.98 per month ($221,231,76 per year), (ii) for a period of eighteen
months after the date hereof, the Company shall provide at its cost and expense
Executive with health and dental insurance In the same manner as it is provided
generally to employees of the Company during the Consulting Period (but
Executive shall be solely responsible for any taxes incurred by him as a result
thereof, (iii) if, when and to the extent that the Company pays all executives
of the Company or all but one executive of the Company (other than Executive)
cash bonuses for the fiscal year ended February 20, 1996, the Company shall pay
Executive the bonus he would have received had he remained an employee of the
Company (which bonus shall not in any event exceed $25,538), (iv) upon execution
of this Agreement, the Company shall pay Executive $13,923.07 in full settlement
of his accrued and unused vacation, and (v) during the Consulting Period, the
Company shall indemnify Executive to the maximum extent permitted under its
bylaws and certificate of incorporation in effect on the date hereof. The
amounts payable to Executive hereunder shall remain payable notwithstanding the
death or incapacity of Executive. Except as expressly provided in this Section
6, Executive shall not be entitled to any other benefits, bonuses or perquisites
from the Company. The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties as a consultant
to the Company under this Agreement which are consistent with the Company's
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company's requirements with respect to
reporting and documentation of such expenses. Executive shall file all tax
returns and reports required to be filed by him on the basis that he is an
independent contractor,
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rather than an employee, as defined in Treasury Regulation (S)31.3121(d)-l
(c)(2), and Executive shall indemnify the Company for the amount of any
employment taxes paid by the Company as the result of Executive not withholding
employment taxes from any amount paid to him hereunder.
7. Agreements Regarding Stock. Datamax and Executive acknowledge that
except as otherwise provided in Section 1 hereof, Executive remains a party to
the Stockholders Agreement, the Registration Agreement dated as of February 26,
1993 between Datamax and certain of its stockholders (the "Registration
Agreement"), the Second Amended and Restated Incentive Stock Option Agreement
dated as of July 16, 1993 between Datamax and Executive relating to options to
purchase 66,666 shares of Datamax common stock with respect to which he is now
fully vested (the "66,667 Share Option Agreement" and the Stock Option Agreement
dated as of July 16, 1993 between Datamax and Executive relating to options to
purchase 66,667 shares of Datamax common stock with respect to which he is now
fully vested (the "66,667 Share Option Agreement" and, together with the
Stockholders Agreement, the Registration Agreement and the 166,660 Share Option
Agreement, the "Equity Agreements"), and will continue to have the lights and be
subject to the obligations set forth in the Equity Agreements, provided,
however, that effective as of April 24, 1996, (a) the 66,667 Stock Option
Agreement and the 166,666 Share Option Agreement are each hereby amended to
restate paragraph 3 of each to read as follows:
"3. Exercise of Option. The Option shall be exercisable only
during the exercise period of the Option, only in accordance with the
above vesting schedule and only on or prior to the earlier of a Sale
of the Company (as defined below) or the date which is 270 days after
the Company consummates a public offering of common Stock pursuant to
a registration statement declared effective by the Securities and
Exchange Commission. The term "Sale of the Company" shall mean the
sale of the Company pursuant to which another party or parties
acquires (i) capital stock of the Company possessing the voting power
under normal circumstances 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."
and (b) the 66,667 Stock Option Agreement is hereby amended to delete paragraph
4 thereof (entitled "Company's Repurchase Option"). The Company acknowledges
that in light of the foregoing amendments, it no longer has a right to
repurchase any shares owned by Executive. The foregoing amendments, however,
will be effective unless and until Executive breaches this Agreement or the
provisions of Sections 2, 3 or 4 of this Agreement are determined by a court of
competent jurisdiction to be invalid or unenforceable as written (it being
understood that in either such event the 66,667 Stock Option Agreement and the
166,666 Share Option Agreement shall continue in full force and effect as
written without giving effect to such amendments). Executive understands and
acknowledges that the effect of the foregoing amendments will likely be to cause
any option that would otherwise qualify as an incentive stock option under
Section 422A of the Internal Revenue Code to cease to so qualify. Executive
shall sign any lock-up or similar agreement in connection with any underwritten
public offering of Datamax's (or its successors) capital stock so long as
Liberty Partners Holdings 1, L.L.C. (or its successor) ("LPH") and non-
management
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<PAGE>
stockholders of the Company holding at least 10% of the Company's outstanding
common stock sign the substantially same agreement and so long as the duration
thereof does not exceed 180 days after the consummation of such offering. LPH
shall use it reasonable efforts to cause Executive to have the right to sell his
shares of Datamax stock in any such offering to the same extent as other non-
management stockholders (taking into account relative ownership of such stock).
8. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:
To the Company:
Datamax International Corporation
% Liberty Capital Partners
Americas Tower, 34th Floor
1177 Avenue of the Americas
New York, New York 10036
Attention: Peter Bennett
To Executive:
Robert C. Strandberg
5430 Brookline Drive
Orlando, Florida 32819
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed five days after deposit in the U.S. mail.
9. Waiver and Release. Effective on the date hereof Executive hereby
waives any and all claims it or he has or may have (in any capacity) against the
Company or against any stockholder, director, officer, agent or employees of the
Company or its affiliates (in each case in their capacities as such) (the
"Released Persons") for obligations or liabilities (whether known or unknown,
accrued, absolute, contingent, unliquidated or otherwise, whether due or to be
come due and regardless of when asserted) arising out of the termination of
Executive's employment with the Company or any transaction entered into at or
prior to such date, or out of any action or inaction or any state of facts
existing or event occurring at or prior to such date, of any nature whatsoever
(including any such obligations or liabilities arising under Title VII of the
Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, the
Employee Retirement Income Security Act of 1974, as amended, the Age
Discrimination in Employment Act of 1974, as amended by various congressional
enactments, including the Older Workers Benefit Protection Act of 1990, and any
state or local laws
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<PAGE>
or regulations similar to any of the foregoing), other than any claims for a
breach of this Agreement or the Equity Agreements (the "Reserved Claims").
Executive further agrees to release and hold harmless each of the Released
Persons from the claims described in the preceding sentence (other than the
Reserved Claims).
10. General Provisions.
(a) Not an Employment Agreement. Executive and the Company
acknowledge and agree that this Agreement is not intended and should not be
construed to grant Executive any right to continued employment with the
Company or to otherwise define the terms of Executive's employment with the
Company.
(b) Absence of Conflicting Agreements. Executive hereby warrants and
covenants that (i) his employment by the Company and his execution,
delivery and performance of this Agreement do not and shall not result in a
breach of the terms, conditions or provisions of any agreement, instrument,
order, judgment or decree to which Executive is subject, (ii) Executive is
not a party to or bound by any employment agreement, severance agreement,
plan or arrangement, noncompete agreement or confidentiality agreement with
any other person or entity that will survive the execution and delivery of
this Agreement and (iii) upon the execution and delivery of this Agreement
by the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.
(c) Severability. Whenever possible, each provision of this
Agreement shall 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 shall not affect any other provision or any other
jurisdiction, and this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein. The parties agree that a court of
competent jurisdiction making a determination of the invalidity or
unenforceability of any term or provision of Sections 3 or 4 of this
Agreement shall have the power to reduce the scope, duration or area of any
such term of provision, to delete specific words or phrases or to replace
any invalid or unenforceable term or provision in Sections 3 or 4 with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified.
(d) 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.
(e) 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.
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<PAGE>
(f) 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
may not be assigned or delegated without the prior written consent of the
Company.
(g) Choice of Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits
hereto shall be governed by the internal law, and not the law of conflicts,
of the State of Delaware.
(h) Remedies. Each of the parties to this Agreement shall 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
Executive's breach of any term or provision of this Agreement shall
materially and irreparably harm the Company, that money damages shall
accordingly not be an adequate remedy for any breach of the provisions of
this Agreement by Executive and that the Company in its sole discretion and
in addition to any other remedies it may have at law or in equity may 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. The Company shall have the right to set off against any and
all amounts due hereunder (including any benefits to be provided pursuant
hereto) the amount of any damages suffered as a result of Executive's
breach of this Agreement and all provisions hereof shall continue in full
force and effect regardless of any such set off.
(i) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of Datamax and
Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
DATAMAX INTERNATIONAL CORPORATION
By
-------------------------------
Its
-------------------------------
Robert C. Strandberg
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<PAGE>
EXHIBIT 10.10
DMX ACQUISITION CORP.
STOCKHOLDERS AGREEMENT
----------------------
THIS AGREEMENT is made as of February 26, 1993, between DMX Acquisition
Corp., a Delaware corporation (the "Company"), the State Board of Administration
of Florida ("SBA"), Liberty Investment Partnership I, a Florida general
partnership ("LIP-I"), Liberty Capital Partners, Inc., a Delaware corporation
("Liberty"), Robinson-Humphrey, Inc, ("Robinson-Humphrey"), William T. Sherman
("Sherman"), Nicholas A. Merrick ("Merrick"), Garrison M. Kitchen ("Kitchen")
and Thomas G. Johnson III ("Johnson" and collectively with Robinson-Humphrey,
Sherman, Merrick and Kitchen, the "RH Investors"), each of the investors listed
on the Stockholders Schedule attached hereto (the "Investors") and each of the
executives listed on the Stockholders Schedule attached hereto (the
"Executives"), SBA and LIP-I are collectively referred to as the "Purchasers,"
and the Purchasers, the RH Investors, the Investors and the Executives are
collectively referred to as the "Stockholders" and individually as a
"Stockholder," Capitalized terms used herein are defined in paragraph 12 hereof.
The Company, the Stockholders and Liberty desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's Board of Directors (the "Board"), (ii) assuring continuity in the
management and ownership of the Company and (iii) limiting the manner and terms
by which the Stockholders may transfer securities of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Prior Agreements, The Company, the Investors and the Executives are
parties to the Investment Agreement, dated as of September 4, 1991 (the
"Investment Agreement"), and the Shareholders' Agreement, dated as of September
4, 1991 (the "Shareholders' Agreement"), and desire that this Agreement
supersede certain provisions of the Investment Agreement and the Shareholders'
Agreement in its entirety. Upon the execution and delivery of this Agreement by
the Company, the provisions of Sections 7.1, 7.2, 7.3F 7.4p 7.5, 8.1, 8.2, 8.3,
9.9 and 9.10 of the Investment Agreement and all of the provisions of the
Shareholders' Agreement shall be superseded by this Agreement, and each Investor
and each Executive shall exercise all rights such Person may have under the
Investment Agreement and the Shareholders' Agreement so that the provisions of
this Agreement shall be fully performed and effectuated and that the operation
of the Investment Agreement and the Shareholders' Agreement shall not conflict
with or be inconsistent with the provisions of this Agreement, The Company
agrees to use its best efforts to cause each party to the Investment Agreement
and/or Shareholders' Agreement that has not become a party to this Agreement to
duly execute this Agreement as soon as possible and upon the due execution of
this Agreement by such parties the Shareholders' Agreement and the Sections of
the Investment Agreement returned to above shall terminate and shall be of no
further force or effect.
<PAGE>
2. Board of Directors.
(a) From and after the date of this Agreement and until the
provisions of this paragraph 2 cease to be effective, each Stockholder shall
vote all of his Stockholder Shares that can be voted at the time of a particular
vote, notwithstanding the definition of Stockholder Shares, and any other voting
securities of the Company over which such Stockholder has voting control and
shall take all other reasonably necessary or desirable actions within his
control (whether in his capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Company shall take all reasonably necessary and desirable actions within its
control (including, without limitation, calling special board and stockholder
meetings), so that:
(i) the authorized number of directors on the Board shall be
established at nine directors;
(ii) except as otherwise provided herein, the following
individuals shall be elected to the Board
(A) five representatives designated by Liberty (the
"Liberty Directors"), two of which shall be officers or employees of
Liberty and three of which shall be Qualified Representatives, shall
serve for one year terms and shall at the time of each election be
independent directors as reasonably determined in good faith by the
Executives holding a majority of the Stockholder Shares held by all
Executives at such time and by the Investor Director, provided, that
Jay Sugarman shall serve as one of such three Qualified
Representatives for a one-year term commencing on the date hereof (and
shall not during such term be subject to removal pursuant to (iii)
below)
(B) one representative designated by the Investors,
determined by a vote of the Investors owning a majority of the
Stockholder Shares held by all Investors and who shall be reasonably
acceptable to Liberty at the time of each election (the "Investor
Director"), provided, that until the first annual meeting of the
Company's stockholders occurring on or after January 31, 1994, Jeffrey
A. Weber shall serve as the Investor Director; and
(C) three of the Company" s officers designated by the
Executives, determined by a vote of the Executives owning a majority
of the Stockholder Shares held by all Executives (the "Executive
Directors") . provided that until the first annual meeting of the
Company's stockholders, Robert C. Strandberg, G. William Hartman and
Robert L. Wohlers shall serve as the Executive Directors;
<PAGE>
(iii) the removal from the Board (with or without cause) of any
representative designated hereunder by Liberty, the Investors or the
Executives shall be at Liberty's, the Investors' or the Executives' written
request, respectively, (solely with respect to the representatives
designated by them) but only upon such written request and under no other
circumstances (in the case of the Investors and the Execu tives, determined
on the basis of a vote of the holders of a majority of the Stockholder
Shares held by such Persons), provided that if any director elected
pursuant to subparagraph (ii)(C) above ceases to be an officer of the
Company, he shall be removed as a director promptly thereafter;
(iv) in the event that any representative designated hereunder
by Liberty, the Investors or the Executives ceases to serve as a director
during his term of office, the resulting vacancy on the Board shall be
filled by a representative designated by Liberty, the Investors or the
Executives, respectively, as provided hereunder; and
(v) the Board shall have at all times an audit committee, a
compensation committee and a nominating committee as standing committees,
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof. In addition, the Company may pay to each Liberty
Director who is not an officer or director of Liberty an annual fee of up to
$20,000. So long as any Liberty Director serves on the Board and for four years
thereafter, the Company shall maintain directors indemnity insurance coverage
reasonably satisfactory to Liberty in an amount of up to $5,000,000 prior to the
initial public offering of the Company's Common Stock registered under the
Securities Act and thereafter in an amount reasonable for a public company of
its size.
(c) The number of directors Liberty may designate under subparagraph
(a)(ii) above shall be reduced as set forth in the table below according to the
aggregate number of the Stockholder Shares the Purchasers and their Permitted
Transferees hold as a percentage of the aggregate number held by such Persons on
the date hereof:
Percentage of Original
Number of Directors Stockholder Shares Held
------------------- -----------------------
5 80% or more
4 60% or more but less than 80%
3 40% or more but less than 60%
2 20% or more but less than 40%
1 10% or more but less than 20%
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<PAGE>
Any reduction of directors shall first be applied to the Liberty Directors who
are not officers or employees of Liberty.
(d) The rights of the Investors under this paragraph 2 shall
terminate at such time as the Investors and their Permitted Transferees hold in
the aggregate less than 50% of the shares of the Stockholder Shares held by such
Persons on the date hereof,
(e) The rights of the Executives under this paragraph 2 shall
terminate at such time as the Executives and their Permitted Transferees hold in
the aggregate less than 50% of the shares of the Stockholder Shares held by such
Persons on the date hereof, provided that at such time, all directors which were
previously designated by the Executives shall be designated by Liberty and
approved by the Investor Director.
(f) The provisions of this paragraph 2 shall terminate automatically
and be of no further force and effect upon the tenth anniversary of the date of
this Agreement unless extended by the parties hereto in accordance with Section
218 of the Delaware General Corporation Law.
(g) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this paragraph 2. the election of an
individual to such directorship shall be accomplished in accordance with the
Company's bylaws and applicable law,
3. Irrevocable Proxy. In order to secure the obligations to vote
Stockholder Shares and other voting securities of the Company in accordance with
the provisions of paragraph 2 hereof, each Stockholder hereby appoints Liberty
as his or its true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote all of his Stockholder Shares and other voting securities
of the Company for the election and/or removal of directors and all such other
matters as expressly provided for in paragraph 2, Liberty may exercise the
irrevocable proxy granted to it hereunder at any time any Stockholder fails to
comply with the provisions of paragraph 2 of this Agreement. In order to secure
the obligations to vote Liberty's Stockholder Shares and other voting securities
of the Company in accordance with the provisions of paragraph 2 hereof, Liberty
hereby appoints each Person who is serving as the Investor Director (for so long
as any such Person is serving in such capacity) as its true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote all of its
Stockholder Shares and other voting securities of the Company for the election
and/or removal of directors and all such other matters as expressly provided for
in paragraph 2. Such Person may exercise the irrevocable proxy granted to it
hereunder at any time Liberty fails to comply with the provisions of paragraph 2
of this Agreement. The proxies and powers granted by each Stockholder pursuant
to this paragraph 3 are coupled with an interest and are given to secure the
performance of each such Stockholder's obligations under this Agreement. Such
proxies and powers shall be irrevocable for the term set forth in paragraph 2(f)
of this Agreement and shall survive the death, incompetency, disability,
bankruptcy or dissolution of such Stockholder and the subsequent holders of its
Stockholder Shares, except for transferees in connection with a Public Sale.
4. Representations and warranties. Each Stockholder represents and
warrants
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<PAGE>
that (i) such Stockholder is the record owner of the number and type of
Stockholder Shares set forth opposite its name on the Stockholders Schedule
attached hereto, (ii) this Agreement has been duly authorized, executed and
delivered by such Stockholder and is a valid and binding obligation of such
Stockholder, enforceable in accordance with its terms, and (iii) such
Stockholder has not granted and is not a party to any proxy, voting trust or
other agreement which is inconsistent with, conflicts with or violates any
provision of this Agreement. No holder of Stockholder Shares shall grant any
proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.
5. Retention of Stockholder Shares. Until September 1, 1994, no Investor
or its Permitted Transferees, and until the Senior Debt has been repaid in full
and the Company and its Subsidiaries may no longer borrow Senior Debt from SBA
under the Senior Loan Agreement, no Executive or its Permitted Transferees,
shall sell, transfer, assign, pledge or otherwise dispose of any Stockholder
Shares held by such Investor or its Permitted Transferees or Executive or its
Permitted Transferees on the date hereof or hereafter acquired, except pursuant
to a Sale of the Company or a Public Sale; provided that nothing contained in
this paragraph 5 shall prohibit any Investor or Executive from transferring
Stockholder Shares as permitted by paragraph 6(d) hereof.
6. Restrictions on Transfer of Stockholder Shares.
(a) Transfer of Stockholder Shares. No Stockholder shall sell,
transfer, assign, pledge or otherwise dispose of (a "Transfer") any interest in
any Stockholder Shares except pursuant to the provisions of this paragraph 6.
pursuant to the provisions of paragraph 7 or 10 hereof (an "Exempt Transfer") or
pursuant to a Public Sale. Each Stockholder agrees not to consulate any Transfer
(other than an Exempt Transfer or a Public Sale) until 30 days after the later
of the delivery to the Company and the other Stockholders of such Stockholder's
Offer Notice or Sale Notice (if any), unless the parties to the Transfer have
been finally determined pursuant to this paragraph 6 prior to the expiration of
such 30-day period (the "Election Period").
(b) First Offer Right. At least 30 days prior to making any Transfer
of any Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
transferring Stockholder (the "Transferring Stockholder") shall deliver a
written notice (an "Offer Notice") to the Company and the other Stockholders
(the "Other Stockholders"). The Offer Notice shall disclose in reasonable detail
the proposed number of Stockholder Shares to be transferred and the proposed
terms and conditions of the Transfer, and if the Transferring Shareholder has
identified or had any discussions with any prospective transferee the Offer
Notice shall also disclose the identity of the prospective transferees) (the
purchase price specified in any Offer Notice shall be payable solely in cash at
the closing of the transaction or installments over time, and no Stockholder
Shares may be pledged), First, the Company may elect to purchase all (but not
less than all) of the Stockholder Shares specified in the Offer Notice at the
price and on the terms specified therein by delivering written notice of such
election to the Transferring Stockholders and the Other Stockholders as soon as
practical but in any event within ten days after the delivery of the Offer
Notice. If the Company has not elected to purchase all of the Stockholder Shares
within such ten-day period, the Other Stockholders may elect to purchase all
(but not less than all) of such Stockholder Shares at the price
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<PAGE>
and on the terms specified in the Offer Notice by delivering written notice of
such election to the Transferring Stockholder as soon as practical, but in any
event within 20 days after delivery of the Offer Notice. If the Other
Stockholders have in the aggregate elected to purchase more than the number of
Stockholder Shares being offered by the Transferring Stockholder, the
Stockholder Shares shall be allocated among the Other Stockholders electing to
purchase shares according to each such Stockholder's Pro Rata Share, If the
Company or any Other Stockholders have elected to purchase Stockholder Shares
from the Transferring Stockholder, the transfer of such shares shall be
consummated as soon as practical after the delivery of the election notice(s) to
the Transferring Stockholder, but in any event within 15 days after the
expiration of the Election Period. To the extent that the Company and the Other
Stockholders have not elected to purchase all of the Stockholder Shares being
offered, the Transferring Stockholder may, within 90 days after the expiration
of the Election Period and subject to the provisions of subparagraph (c) below,
transfer all such Stockholder Shares to one or more third parties at a price no
less than 95% of the price per share specified in the offer Notice and on other
terms no more favorable to the transferees thereof than offered to the Company
and the Other Stockholders in the Offer Notice. Any Stockholder Shares not
transferred within such 90-day period shall be reoffered to the Company and the
Other Stockholders prior to any subsequent Transfer. Each Stockholder's "Pro
Rata Share" shall be based upon such Stockholder's proportionate ownership of
all Stockholder Shares on a fully-diluted basis.
(c) Participation Rights. At least 30 days prior to any Transfer of
Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
Stockholder making such Transfer (the "Transferring Stockholder") shall deliver
a written notice (the "Sale Notice") to the Company and the other Stockholders
(the "Other Stockholders"), specifying in reasonable detail the identity of the
prospective transferees), the number of shares to be transferred and the terms
and conditions of the Transfer. The Other Stockholders may elect to participate
in the contemplated Transfer by delivering written notice to the Transferring
Stockholder within 15 days after delivery of the Sale Notice. If any Other
Stockholders have elected to participate in such Transfer, the Transferring
Stockholder and such Other Stockholders shall be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number of
Stockholder Shares equal to the product of (i) the quotient determined by
dividing the percentage of Stockholder Shares owned by such Person by the
aggregate percentage of Stockholder Shares owned by the Transferring Stock
holder and the Other Stockholders participating in such sale and (ii) the number
of Stockholder Shares to be sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100 Stockholder
Shares by the Transferring Stockholder, and if the Trans ferring
Stockholder at such time owns 30% of all Stockholder Shares and if one
Other Stockholder elects to participate and owns 20% of all
Stockholder Shares, the Transferring Stockholder would be entitled to
sell 60 shares (30% / 50% x 100 shares) and the Other Stockholder
would be entitled to sell 40 shares (20% / 50% x 100 shares).
Each Stockholder shall use best efforts to obtain the agreement of the
prospective transferees) to the
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<PAGE>
participation of the Other Stockholders in any contemplated Transfer and to the
inclusion of the Preferred Stock and the Warrants in the contemplated Transfer,
and each Stockholder shall not transfer any of its Stockholder Shares to any
prospective transferee if such prospective transferee declines to allow the
participation of the Other Stockholders or the inclusion of the Preferred Stock
or the Warrants. If any portion of the Warrants is included in any Transfer of
Stockholder Shares under this subparagraph 6(c), the purchase price for the
Warrants shall be equal to the full purchase price determined hereunder for the
Stockholder Shares covered by the portion of the Warrants to be transferred,
reduced by the aggregate exercise price for such shares.
(d) Permitted Transfers. The restrictions set forth in this paragraph
6 shall not apply with respect to any Transfer of Stockholder Shares by any
Stockholder (i) to the Company, (ii) to any other Stockholder (or to a Person
that is a Permitted Transferee of such Stockholder) (iii) in the case of an
individual, pursuant to applicable laws of descent and distribution or among
such individuals Family Group or (iv) in the case of Liberty or the Investors,
to any of the Affiliates of Liberty or the Investors or any of the employees,
partners, officers or directors of Liberty or the Investors, respectively
(collectively referred to herein as "Permitted Transferees"); provided that the
restrictions contained in this paragraph 6 shall continue to be applicable to
the Stockholder Shares after any such Transfer and provided further that the
transferees of such Stockholder Shares shall have agreed in writing to be bound
by the provisions of this Agreement affecting the Stockholder Shares so
transferred and by the provisions of the Registration Agreement of even date
herewith by and among the Company and the parties hereto (the "Registration
Agreement").
In addition, the restrictions on transfer set forth in this paragraph 6
shall not apply with respect to any Transfer of Stockholder Shares by SBA in
connection with the assignment or disposition of all or any portion of the
Senior Debt or the Subordinated Debt; provided that any transferee thereof has
agreed in writing to be bound by the provisions of this Agreement affecting the
Stockholder Shares so transferred (a "Permitted Transferee").
(e) Termination of Restrictions. The restrictions on the Transfer of
Stockholder Shares set forth in this paragraph 6 shall continue with respect to
each Stockholder Share until the first to occur of (i) the date on which such
Stockholder Share has been transferred in a Public Sale or (ii) a Qualified
Public offering.
7. Sale of Company.
(a) Third Party Transaction. At any time after the date of this
Agreement, any holder or holders of more than 75% of the Stockholder Shares, and
at any time after February 28, 1995, any holder or holders of more than 51% of
the Stockholder Shares, shall have the right to seek a Sale of the Company and
produce an Independent Third Party or Independent Third Parties to acquire (i)
all of the issued and outstanding capital stock of the Company (whether by
merger, consolidation or sale or transfer of stock) or (ii) all or substantially
all of the Company's assets on a consolidated basis. The holder or holders
proposing a Sale of the Company (the "Proposing Stockholders") shall notify the
Company and the other Stockholders (the "Other Stockholders") prior to
commencing any actions in connection with such transaction.
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<PAGE>
(b) Election. The Proposing Stockholders shall deliver written notice
to the Company and the Other Stockholders setting forth in reasonable detail the
terms of the proposed Sale of the Company (the "Sale Notice"). Within 15 days
following delivery of the Sale Notice (the "Election Period"), each Other
Stockholder shall deliver to the Company and the Proposing Stockholders written
notice setting forth such holder's election (i) to consent to and raise no
objections against the transaction described in the Sale Notice, and if the Sale
of the Company is structured as a sale of stock, to sell their Stockholder
Shares on the terms and conditions set forth in the Sale Notice, or (ii) if such
Other Stockholder or Stockholders hold more than 20% of the Stockholder Shares,
to deliver a written offer (a "Stockholder Offer"), upon substantially the same
terms as described in the Sale Notice, to acquire the Company (a "Stockholder
Transaction"). If the Other Stockholders have not delivered a Stockholder Offer
within the Election Period, the Proposing Stockholders shall have 180 days after
the expiration of the Election Period to consulate the Sale of the Company on
the terms specified in the Sale Notice. If the Sale of the Company is not
consummated within such 180-day period, the Proposing Stockholders shall comply
with the provisions of this paragraph 7 for any subsequent Sale of the Company,
If the Other Stockholders have delivered a Stockholder Offer within the Election
Period, the Other Stockholders must (A) obtain an executed definitive and
binding agreement to consummate the Stockholder Transaction and obtain binding
commitments from reputable sources for the financing thereof both within 30 days
after delivery to the Proposing Stockholder of the Stockholder Offer and (B)
consummate the Stockholder Transaction within 120 days after delivery to the
Proposing Stockholder of the Stockholder Offer. If any condition set forth in
(A) or (B) of the preceding sentence is not fulfilled, the Other Stockholders
shall comply with the provisions of this paragraph 7 for any subsequent Sale of
the Company.
(c) Conditions to Obligation. The obligations of the Other
Stockholders to participate in or make an alternative offer to any Sale of the
Company hereunder are subject to the satisfaction of the following conditions:
(i) upon consummation of the Sale of the Company hereunder, all holders of
Common Stock or Preferred Stock shall receive the same form and amount of
consideration per share of Common Stock or Preferred Stock, respectively
(including for this purpose amounts allocated to noncompetition, consulting and
other arrangements), or if the holders of Common Stock or Preferred Stock are
given an option as to the form and consideration to be received, all such
holders shall be given the same option; (ii) the consideration per share of
Common Stock (assuming the conversion of all convertible securities and the
exercise of all rights to acquire Common Stock including Executive Options) to
be paid upon consummation of the Sale of the Company shall equal or exceed a
cash amount of $10.00 (as such price is equitably adjusted for subsequent stock
splits, stock combinations, stock dividends and recapitalizations) and (iii)
none of the Other Stockholders shall be required to agree to indemnify or hold
harmless the acquiring party with respect to an amount in excess of the not cash
proceeds paid to such Other Stockholder in the Sale of the Company.
8. Legend. Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stock holder Shares after such transfer) shall be
stamped or otherwise imprinted with a legend in
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substantially the following form:
"The securities represented by this certificate are subject to a
Stockholders Agreement dated as of February 26, 1993, among the
issuer of such securities (the "Company") and certain of the
Company's stockholders, as amended and modified from time to time.
A copy of such Stockholders Agreement shall be furnished without
charge by the Company to the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding as of the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with paragraph 11 hereof.
9. Transfer. Prior to transferring any Stockholder Shares (other than
in an Exempt Transfer or a Public Sale) to any Person, the transferring
Stockholder shall cause the prospective transferee to be bound by this Agreement
and to execute and deliver to the Company and the other Stockholders a
counterpart of this Agreement and the Registration Agreement.
10. Repurchase Option.
(a) In the event any Executive ceases to be employed by the Company
and its Subsidiaries prior to February 25, 1995, other than as a result of such
Executive's death or disability as determined by the Board in its good faith
judgment (a "Termination"), the Shareholder Shares owned by such Executive
(whether held by Executive or one or more of Executive's transferees) (each, an
"Executive Share") shall be subject to repurchase by the Company and the
Stockholders pursuant to the terms and conditions set forth in this paragraph 10
(the "Repurchase Option").
(b) In the event the Termination is as a result of the dismissal of
Executive without Cause or the resignation of Executive with Good Reason, only
the Executive Shares acquired upon exercise of the Executive's Executive Options
shall be subject to repurchase hereunder, and the purchase price for each
Executive Share shall be the greater of Original Cost or Book Value for such
share; provided, however, that if such Termination is without Cause, such
Executive Shares shall be subject to repurchase hereunder only if such
repurchase is approved by a majority of the Board (with the affirmative vote of
at least one Executive Director). In addition, in the event of such a
Termination, the Executive's unexercised Executive Options shall expire within
90 days.
(c) In the event the Termination is as a result of the dismissal of
Executive for Cause or the resignation of Executive without Good Reason, all of
the Executive's Executive Shares shall be subject to repurchase hereunder, and
the purchase price for each Executive Share will be Executive's Original Cost
for such share (with shares having the lowest cost subject to repurchase prior
to shares with a higher cost), In addition, in the event of such a Termination,
the Executive's unexercised Executive Options shall expire immediately upon such
Termination.
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(d) The Board may elect to purchase all or any portion of the
Executive Shares that become subject to the Repurchase option by delivering
written notice (the "Repurchase Notice") to the holder or holders of such
Executive Shares within 180 days after the Termination, or such longer period as
is required to determine the reason for the Termination (the "Option Period").
The Repurchase Notice shall set forth the number of such Executive Shares to be
acquired from each holder, the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction. The number of
shares to be repurchased by the Company shall first be satisfied to the extent
possible from the Executive Shares held by Executive at the time of delivery of
the Repurchase Notice. If the number of Executive Shares then held by Executive
is less than the total number of Executive Shares the Company has elected to
purchase, the Company shall purchase the remaining shares elected to be
purchased from the other holder(s) of Executive Shares under this Agreement, pro
rata according to the number of Executive Shares held by such other holder(s) at
the time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share). The number of Executive Shares to be
repurchased hereunder will be allocated among Executive and the other holders of
such shares (if any) pro rata according to the number of shares to be purchased
from such persons.
(e) If for any reason the Company does not elect to purchase all of
the Executive Shares that become subject to the Repurchase Option pursuant to
the Repurchase Option, the Stockholders shall be entitled to exercise the
Repurchase option for the shares the Company has not elected to purchase (the
"Available Shares"). As soon as practicable after the Company has determined
that there shall be Available Shares, but in any event within 45 days after the
expiration of the Option Period, the Company shall give written notice (the
"Option Notice") to the Stockholders setting forth the number of Available
Shares and the purchase price for the Available Shares. The Stockholders may
elect to purchase any or all of the Available Shares by giving written notice to
the Company within 30 days after the Option Notice has been given by the
Company. If the Stockholders elect to purchase an aggregate number of shares
greater than the number of Available Shares, the Available Shares shall be
allocated among the Stockholders based upon the number of shares requested to be
purchased by each Stockholder, As soon as practicable, and in any event within
ten days after the expiration of the 30-day period set forth above, the Company
shall notify each holder of Executive Shares subject to the Repurchase Option as
to the number of shares being purchased from such holder by the Investors (the
"Supplemental Repurchase Notice"). At the time the Company delivers the
Supplemental Repurchase Notice to the holder(s) of such shares, the Company
shall also deliver written notice to each Stockholder setting forth the number
of shares such Stockholder 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 Executive Shares pursuant to the
Repurchase Option shall take place on the date designated by the Company in the
Repurchase Notice or Supplemental Repurchase 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 Company and/or the Stockholders will
pay for the Executive Shares to be purchased pursuant to the Repurchase Option
by delivery of, in the case of each Stockholder, a check or wire transfer of
funds and, in the case of
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the Company, (i) a check or wire transfer of funds, (ii) a subordinate note or
notes payable in up to, three equal annual installments beginning on the first
anniversary of the closing of such purchase and bearing interest (payable
quarterly) at a rate per annum equal to the prime rate announced from time to
time by Citibank, N.A. 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, Any notes issued by the Company pursuant to this paragraph 10(e) shall be
subject to any restrictive covenants to which the Company is subject at the time
of such purchase.
(g) The right of the Company and the Stockholder to repurchase
Executive Shares pursuant to this paragraph 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 Shares 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 Shares hereunder
which the Company is otherwise entitled or required to make, the Company may
make such repurchases as soon as it is permitted to do so under such
restrictions.
10A. Executive Options.
(a) The Company, the Investors and the Executives hereby agree that
promptly after the date hereof, the Executive Options shall be amended to
conform to the provisions of this paragraph 10A.
(b) An aggregate of 333,333 shares of Common Stock remain subject to
unexercised Executive Options, Notwithstanding anything to the contrary
contained in plans and agreements related to the Executive options, the
Executive Options shall become exercisable in accordance with the following
schedule:
For the fiscal year ending in February 1994
- -------------------------------------------
Option Shares
TARGET Become Exercisable
------ -----------------
EBITA of at least $20 million 166,667
EBITA of at least $18.5 million 83,334
(pro rate number of shares for EBITA between $18.5 million and $20 million)
For the fiscal year ending in February 1995
- -------------------------------------------
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TARGET Option Shares
------ Become Exercisable
------------------
EBITA of at least $22 million 166,666
EBITA of at least $20 million 83,334
(pro rate number of shares for EBITA between $20 million and $22 million)
(c) If any Executive Options have not become exercisable pursuant to
subparagraph (b) above, the Executive Options shall become exercisable on a
cumulative basis in accordance with the following schedule:
For the two consecutive fiscal years ending in February 1995
- ------------------------------------------------------------
Cumulative Option
Shares Become
TARGET Exercisable
------ -----------------
Cumulative EBITA of at least $42 million 333,333
Cumulative EBITA of at least $38.5 million 166,667
(pro rate number of shares of EBITA between $38.5 million and $42 million)
(d) All exercisable option shares shall be allocated among the
holders of Executive Options on a pro rata basis. For purposes of this
Agreement, "EBITA" shall mean the net after-tax income of the Company and its
Subsidiaries for the fiscal year in question plus all interest expense,
provision for income taxes and amortization of intangibles for such year,
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied.
(e) Notwithstanding the provisions of subparagraph (b) above, all of
the Executive Options shall become exercisable immediately upon the occurrence
of any one of the following events prior to February 26, 1998:
(i) a Sale of the Company which results in a price per share of
Common Stock on a fully-diluted basis (assuming conversion of all
convertible securities and exercise of all then exercisable rights to
acquire Common Stock, including all of the Executive Options) of at least
$15 (as such amount is equitably adjusted for subsequent stock splits,
stock combinations, dividends and recapitalizations);
(ii) a Sale of the Company pursuant to the provisions of
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paragraph 7 hereof (provided that none of the Executives are Proposing
Stockholders) which results in a price per share of Common Stock on a
fully-diluted basis (assuming conversion of all convertible securities and
exercise of all then exercisable rights to acquire Common Stock, including
all of the Executive Options) of at least $10 (as such amount is equitably
adjusted for subsequent stock splits, stock combinations, stock dividends
and recapitalizations) and if the Company's EBITA for the twelve-month
period immediately preceding the delivery of the Sale Notice under
paragraph 7 is at least $20 million.
(iii) the consummation of an underwritten public offering of the
Common Stock registered under the Securities Act and following such
offering the closing price of the Common Stock (or if there is no closing
price, the average of the closing bid and ask prices) is at least $15 per
share (as such amount is equitably adjusted for subsequent stock splits,
stock combinations, stock dividends and recapitalizations) for 60
consecutive trading days; or
(iv) the payment in full of all of the obligations owed under
the Senior Loan Agreement (and any refinancings or replacements thereof)
and the Subordinated Loan Agreement (and any refinancings or replacements
thereof) and the termination of all obligations to advance funds
thereunder.
11. First Refusal Rights.
(a) Except for issuances of (i) Common Stock issued to the Company's
employees upon exercise of stock options (provided that this exception shall
apply only with respect to stock options for no more than 250,000 shares of
Common Stock in the aggregate, as equitably adjusted for stock dividends, stock
splits, combinations of shares or recapitalizations occurring after the date
hereof), (ii) Common Stock issued upon the conversion of the Preferred Stock or
the exercise of the Warrants, (iii) Common Stock issued to the seller in
connection with the acquisition of another company or business, (iv) Common
Stock issued pursuant to a public offering registered under the Securities Act,
(v) warrants and the Common Stock issuable thereunder (and securities issuable
pursuant thereto) granted or sold in connection with the refinancing of the
Senior Debt and/or Subordinated Debt to the lender or lenders providing the new
debt, if the Company authorizes the issuance or sale of any equity securities or
any securities containing options or rights to acquire any equity securities
(other than as a dividend on the outstanding Common Stock) or (vi) Preferred
Stock issued upon exercise of the Series A Warrants or the Warrants, the Company
shall first offer to sell to each holder of Stockholder Shares a portion of such
equity securities of the Company equal to the quotient determined by dividing
(1) the number of shares of Stockholder Shares held by such holder by (2) the
total number of shares of Stockholder Shares. Each holder of Stockholder Shares
shall be entitled to purchase such stock or securities at the most favorable
price and on the most favorable terms as such stock or securities are to be
offered to any other Persons; provided that if all Persons entitled to purchase
or receive such stock or securities are required to also purchase other
securities of the Company, the holders of Stockholder Shares exercising their
rights pursuant to this paragraph shall also be required to purchase the same
strip of securities (on the same terms and
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<PAGE>
conditions) that such other Persons are required to purchase. The purchase price
for all stock and securities offered to the holders of the Stockholder Shares
shall be payable in cash or, to the extent otherwise required hereunder, notes
issued by such holders.
(b) In order to exercise its purchase rights hereunder, a holder of
Stockholder Shares must within 15 days after receipt of written notice from the
Company describing in reasonable detail the stock or securities being offered,
the purchase price thereof, the payment terms and such holder's percentage
allotment deliver a written notice to the Company describing its election
hereunder. If all of the stock and securities offered to the holders of
Stockholder Shares is not fully subscribed by such holders, the remaining stock
and securities shall be reoffered by the Company to the holders purchasing their
full allotment upon the terms set forth in this paragraph, except that such
holders must exercise their purchase rights within five days after receipt of
such reoffer.
(c) Upon the expiration of the offering periods described above, the
Company shall be entitled to sell such stock or securities which the holders of
Stockholder Shares have not elected to purchase during the 90 days following
such expiration on terms and conditions no more favorable to the purchasers
thereof than those offered to such holders. Any stock or securities offered or
sold by the Company after such 90-day period must first be reoffered to the
holders of Stockholder Shares pursuant to the terms of this paragraph.
(d) The rights of the holders of Stockholder Shares under this
paragraph shall terminate upon a Qualified Public Offering.
(e) The rights of the holders of Stockholder Shares under this
paragraph 11 may be amended and waived with respect to all such Persons by the
holders of a majority of the Stockholder Shares.
12. Definitions.
"Affiliate" of any Person means any other Person controlling, controlled by
or under common control with such Person and any partner of a Stockholder which
is a partnership.
"Board" has the meaning set forth in the preamble.
"Book Value" of each Executive Share shall be equal to the quotient
determined by dividing (A) the excess of Company's assets over its liabilities
as of the end of the fiscal year immediately preceding the date of Executive's
Termination, determined on a consolidated basis in accordance with generally
accepted accounting principles, consistently applied, less the liquidation value
of all outstanding preferred stock, by (B) the total number of shares of Common
Stock outstanding on a fully-diluted basis (including in such calculation the
aggregate conversion price and exercise price of all outstanding convertible
securities, options and warrants). Notwithstanding the foregoing, the
calculation of Book Value will be made without taking into account (i) the
allocation of the cost of the "acquired enterprise" to the assets acquired and
the liabilities assumed required or
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permitted by Accounting Principles Board Opinions No. 16 and No, 17 as a result
of the Acquisition (as defined in the Senior Loan Agreement) or (ii) the
amortization of goodwill, debt discount or financing costs related to such
acquisition, and the excess of the cost of the "acquired enterprise" over the
historical book value of the acquired assets immediately prior to the
acquisition shall be allocated to and classified as goodwill solely for such
purposes hereunder.
"Cause" means with respect to any Executive (a) the Executive committing
any act of fraud or embezzlement in the performance of his duties or is
convicted of a felony, (b) the Executive's dishonesty or serious misconduct in
relation to any aspect of the business of the Company or its subsidiaries, or
other conduct by the Executive calculated or likely to bring himself, the
Company or its Subsidiaries into disrepute or to materially damage or materially
affect prejudicially the interests of the Company or its Subsidiaries, which
other conduct, if remediable, is not remedied by such Executive within 90 days
after his receipt of notice from the Company advising him of such conduct and
instructing him on what he must do to remedy such conduct, or (c) the
Executive's insubordination or failure to follow the reasonable directions of
the Board which causes material damage to the Company or its Subsidiaries and
such damage, if curable, remains uncured 90 days after receipt by such Executive
of notice thereof from the Company and instructions on what the Executive must
do to cure such conduct. Should the Executive dispute whether his dismissal is
for Cause, then after a period of 30 days, during which the Company and the
Executive shall negotiate in good faith to settle the dispute, the parties shall
enter immediately into binding arbitration pursuant to the rules of the American
Arbitration Association, the costs of which shall be borne by the non-prevailing
party.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Company" has the meaning set forth in the preamble.
"Executive Directors" has the meaning set forth in paragraph 2(a).
"Executive Options" means the stock options granted to the Executives on
September 4, 1991 which have not been exercised as of the date hereof (which
stock options are exercisable into an aggregate of 333,333 shares of Common
Stock).
"Executives" has the meaning set forth in the preamble.
"Family Group" means an individual's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of the individual
and/or the individual's spouse and/or descendants or any of them.
"Good Reason" means with respect to any Executive circumstances whereby
such Executive, without Cause, is removed from or not reelected as an officer of
the Company or Datamax and does not remain employed by the Company or Datamax
(i) in an executive capacity, reporting directly to the chief executive officer
of the Company or Datamax and in charge of a principal business function such
as, but not limited to, engineering or product development or
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<PAGE>
manufacturing, and (ii) at a salary at least equal to his then current salary.
Should any Executive dispute for any purpose under this Agreement whether or not
he resigned with Good Reason, then after a period of 30 days, during which the
Company and the Executive shall negotiate in good faith to settle the dispute,
the Company and the Executive shall enter immediately into binding arbitration
pursuant to the rules of the American Arbitration Association, the costs of
which shall be borne by the non-prevailing party.
"Independent Third Party" means any Person who, immediately prior to the
contemplated transaction, does not own in excess of 5% of the Company's Common
Stock on a fully-diluted basis (a "5% owner)", who is not controlling,
controlled by or under common control with any such 5% owner and who is not the
spouse or descendent (by birth or adoption) of any such 5% Owner or a trust for
the benefit of such 5% Owner and/or such other Persons or any Affiliate of such
Person.
"Investor Director" has the meaning set forth in paragraph 2(a).
"Investors" has the meaning set forth in the preamble.
"Liberty" has the meaning set forth in the preamble.
"Liberty Directors" has the meaning set forth in paragraph 2(a).
"Permitted Transferee" has the meaning set forth in paragraph 6(d) hereof.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"Preferred Stock" means the Series A Preferred and the Series B Preferred.
"Public Sale" means any sale of Stockholder Shares to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act.
"Qualified Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of shares of the Company's Common
Stock having an aggregate offering value of at least $18 million and a price per
share of Common Stock of at least $10 (as adjusted for stock dividends, stock
splits, combinations of shares or recapitalizations occurring after the date
hereof).
"Qualified Representative" shall mean any person who (A) is not a Related
Person; and (B) does not have, nor any member of such person's family whether by
marriage or otherwise have, any beneficial interest in, directly or indirectly,
any Related Entity.
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<PAGE>
"Related Entity" shall mean (i) Liberty Investment Partnership II (ii)
Liberty Capital Partners, Inc., (iii) the State Board of Administration of
Florida, (iv) any entity (other than an Investor) which owns, directly or
indirectly, any equity or debt securities of the Company or any of its
subsidiaries and (v) any entity which is an affiliate of any of the entities
referred to in clauses (i), (ii), (iii) or (iv) above.
"Related Person" shall mean any person who is a director, officer,
employee, partner, shareholder of, or holder of any debt or equity interest in a
Related Entity.
"RH Investors" has the meaning set forth in the preamble.
"Sale of the Company" means the sale of the Company to an Independent
Third Party or group of Independent Third Parties pursuant to which such party
or parties acquire (i) all of the issued and outstanding capital stock of the
Company (whether by merger, consolidation or sale or transfer of stock) or (ii)
all or substantially all of the Company's assets determined on a consolidated
basis.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Senior Debt" means all of the indebtedness owed by the Company and its
Subsidiaries to SBA under the Senior Loan Agreement, dated as of February 26,
1993 (the "Senior Loan Agreement"), and the related agreements and instruments
entered into in connection therewith, each as amended, modified and supplemented
from time to time.
"Series A Preferred" means the Company's Series A Preferred Stock, par
value $.01 per share.
"Series A Warrants" means the stock purchase warrants issued on September
4, 1991, exercisable into shares of Series A Preferred.
"Series B Preferred" means the Company's Series B Preferred Stock, par
value $.01 per share.
"Series B Warrants" means the stock purchase warrants issued on February
26, 1993, exercisable into shares of Series B Preferred.
"Stockholder Shares" means (i) any Common Stock purchased or otherwise
acquired by any Stockholder, (ii) any Common Stock issued or issuable directly
or indirectly upon exercise of the Warrants and the Series A Warrants, (iii) any
Common Stock issued or issuable directly or indirectly upon conversion of the
Preferred Stock, (iv) any Common Stock issued or issuable upon exercise of the
Executive Options and (v) any Common Stock issued or issuable with respect to
the securities referred to in clauses (i), (ii)f (iii) or (iv) above by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes
of this Agreement, any Person who holds Warrants, Series A Warrants,
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Preferred Stock or Executive Options shall be deemed to be the holder of the
Stockholder Shares issuable directly or indirectly upon exercise or conversion
thereof, regardless of any restriction or limitation on the exercise or
conversion thereof, and such securities shall be subject to the provisions of
this Agreement as Stockholder Shares. As to any particular Stockholder Shares,
such shares shall cease to be Stockholder Shares when they have been (a)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them or (b) distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar provision then in force).
"Stockholders" has the meaning set forth in the preamble.
"Subordinated Debt" means all of the indebtedness owed by the Company
and its Subsidiaries to SBA under the Subordinated Loan Agreement, dated as of
February 26, 1993, and the related agreements and instruments entered into in
connection therewith, each as amended, modified and supplemented from time to
time.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of 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 partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more 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 partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
"Transfer" has the meaning set forth in paragraph 5(a).
"Warrants" means the Series B Warrant and the stock purchase warrants
exercisable into shares of Common Stock issued to the Purchasers in connection
with the incurrence of the Senior Debt and the Subordinated Debt and the
issuance to the Purchasers of the Series B Preferred and the Common Stock.
13 Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Stockholder Shares as the owner
of such shares for any purpose.
14 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
made or be effective against the Company, Liberty or any Stockholder unless such
modification, amendment or waiver
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is approved in writing (i) in the case of the Company, by the Company, (ii) in
the case of Liberty, by Liberty, (iii) in the case of the Purchasers and their
Permitted Transferees, by the Purchasers and their Permitted Transferees holding
a majority of the Stockholder Shares held by such Persons, (iv) in the case of
the Investors and their Permitted Transferees, by the Investors and their
Permitted Transferees holding a majority of the Stockholder Shares held by such
Persons, (v) in the case of the Executives and their Permitted Transferees, by
the Executives and their Permitted Transferees holding a majority of the
Stockholder Shares held by such Persons, and (vi) in the case of the RH
Investors and all other Persons, by the holders of a majority of the Stockholder
Shares, The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
15 Severability. Whenever possible, each provision of this
Agreement shall 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 shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
16 Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof 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.
17 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 successors and assigns, Liberty and its successors and assigns
and the Stockholders and any subsequent holders of Stockholder Shares and the
respective successors and assigns of each of them, so long as they hold
Stockholder Shares.
18 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
19 Remedies. The Company, Liberty and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that the Company, Liberty or any
Stockholder may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
-19-
<PAGE>
20 Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company or Liberty at their respective address set forth below
and to any other recipient at the address indicated on the Stockholder Schedule
hereto and to any subsequent holder of Stockholder Shares subject to this
Agreement at such address as indicated by the Company's records, or at such
address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices shall be deemed
to have been given hereunder when delivered personally, three days after deposit
in the U.S. mail and one day after deposit with a reputable overnight courier
service. The Company's address and Liberty's address are as follows:
The Company Liberty
(prior to June 1, 1993)
DMX Acquisition Corp.
4501 Parkway Commerce Blvd. Liberty Capital Partners, Inc.
Orlando, Florida 32808 237 Park Avenue
Attention: President 21st Floor
New York, New York 10017
Attention: President
(on and after June 1, 1993)
Liberty Capital Partners, Inc.
1177 Avenue of the Americas
New York, New York
Attention: President
21 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 Florida, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
22 Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
23 Affiliate Transactions. The Company hereby agrees not to and the
Company hereby agrees not to permit any of its subsidiaries to, enter into any
transaction with any Person who is a Stockholder of the Company or holder of any
security of the Company or any Affiliate of such Stockholder or holder or any
Person who is an officer, director, partner or employee of such Stockholder or
holder unless such transaction is approved by the Board.
-20-
<PAGE>
24 Issuances of Preferred Stock. The Company shall not, without the
prior written consent of the holders of Series B Warrants representing a
majority of the shares of Series B Preferred issuable upon exercise of the
Series B Warrants, issue any shares of Series A Preferred at a price per share
lower than the exercise price in effect immediately prior to such issuance under
the Series A Warrants and the Company shall not, without the prior written
consent of the holders of Series A Warrants representing a majority of the
Series A Preferred issuable upon exercise of the Series A Warrants, issue any
shares of Series B Preferred at a price per share lower than the exercise price
in effect immediately prior to such issuance under the Series B Warrants.
* * * * * *
-21-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
DMX ACQUISITION CORP.
By______________________________________
Its ____________________________________
STATE BOARD OF ADMINISTRATION OF FLORIDA
By______________________________________
Its Attorney-in-Fact
LIBERTY INVESTMENT PARTNERSHIP I
By______________________________________
Its ____________________________________
LIBERTY CAPITAL PARTNERS, INC.
By______________________________________
Its ____________________________________
WILLIAM A.M. BURDEN & CO.
By______________________________________
Its ____________________________________
________________________________________
G. William Hartmah, Jr.
________________________________________
Robert C. Standberg
-22-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
DMX ACQUISITION CORP
By______________________________________
Its ____________________________________
STATE BOARD OF ADMINISTRATION
OF FLORIDA
By______________________________________
Its Attorney-in-Fact
LIBERTY INVESTMENT
PARTNERSHIP I
By______________________________________
Its General Partner
LIBERTY CAPITAL PARTNERS, INC.
By______________________________________
Its ____________________________________
WILLIAM A.M. BURDEN & CO.
By______________________________________
Its ____________________________________
________________________________________
G. William Hartman, Jr.
________________________________________
-23-
<PAGE>
Robert C. Standberg
________________________________________
Robert L. Wohlers
EDMUND & MARY SHEA
REAL PROPERTY TRUST
By______________________________________
Its ____________________________________
BALBOA PARTNERS
By______________________________________
Its ____________________________________
SHEA INVESTMENTS
By______________________________________
Its ____________________________________
TAHOE PARTNERS
By______________________________________
Its ____________________________________
ZIFF INVESTORS PARTNERSHIP, L.P.
By______________________________________
Its ____________________________________
________________________________________
Peter M. Joost
-24-
<PAGE>
________________________________________
Robert C. Standberg
________________________________________
Robert L. Wohlers
EDMUND & MARY SHEA
REAL PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Richard E. Rainwater
BALBOA PARTNERS
By______________________________________
Its ____________________________________
SHEA INVESTMENTS
By______________________________________
Its ____________________________________
TAHOE PARTNERS
By______________________________________
Its ____________________________________
ZIFF INVESTORS PARTNERSHIP, L.P.
By______________________________________
Its ____________________________________
-25-
<PAGE>
________________________________________
Peter M. Joost
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
JEFFREY A. HARTMAN TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
________________________________________
Peter M. Joost -- SEP
Pensco Pension Services, Inc.
by:_____________________________________
JFI, L.P.
By______________________________________
Its ____________________________________
________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
MARLENE N. MEYERSON
-26-
<PAGE>
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Christopher J. O'Brien
________________________________________
Gerald W. Haddock
________________________________________
Thomas L. Kelly, II
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
JEFFREY A. HARTMAN TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
________________________________________
Peter M. Joost -- SEP
________________________________________
John C. Goff
JFI, L.P.
By______________________________________
Its ____________________________________
-27-
<PAGE>
________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
MARLENE N. MEYERSON
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Christopher J. O'Brien
________________________________________
Gerald W. Haddock
________________________________________
Thomas L. Kelly, II
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
JEFFREY A. HARTMAN TRUST dated
December 11, 1992
-28-
<PAGE>
By_______________________________________
Its _____________________________________
_________________________________________
Peter M. Joost -- SEP
_________________________________________
John C. Goff
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
MARLENE N. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Christopher J. O'Brien
_________________________________________
Gerald W. Haddock
-29-
<PAGE>
_________________________________________
Thomas L. Kelly, II
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
JEFFREY A. HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
Peter M. Joost -- SEP
_________________________________________
John C. Goff
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
-30-
<PAGE>
MARLENE N. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Christopher J. O'Brien
_________________________________________
Gerald W. Haddock
_________________________________________
Thomas L. Kelly, II
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
JEFFREY A, HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
Peter M. Joost -- SEP
_________________________________________
John C. Goff
JFI, L.P.
-31-
<PAGE>
By_______________________________________
Its _____________________________________
_________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Christopher J. O'Brien
_________________________________________
Gerald W. Haddock
_________________________________________
Thomas L. Kelly, II
GREGORY C. HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
JEFFREY A. HARTMAN TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
-32-
<PAGE>
Peter M. Joost -- SEP
_________________________________________
John C. Goff
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Harlan Korenvaes
MORTON H. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
MARLENE N. MEYERSON
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Christopher J. O'Brien
_________________________________________
Gerald W. Haddock
_________________________________________
Thomas L. Kelly, II
-33-
<PAGE>
_________________________________________
Joseph W. Autem
_________________________________________
James D. Cregan
_________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By_______________________________________
Its _____________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
_________________________________________
Thomas G. Johnson III
-34-
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
__________________________________________
Joseph W. Autem
__________________________________________
James D. Cregan
__________________________________________
Randall Chappel
THE ROBINSON HUMPHREY COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
William T. Sherman
_________________________________________
Nicholas A. Merrick
_________________________________________
Garrison M. Kitchen
__________________________________________
Thomas G. Johnson III
<PAGE>
STOCKHOLDER SCHEDULE
--------------------
<TABLE>
<CAPTION>
Number of Stockholder Shares
-------------------------------------
<S> <C> <C> <C> <C>
Name and Address Common Preferred Options Warrants
- ---------------- ------ --------- ------- --------
State Board of Administration 425,000 500,000 2,017,031
of Florida
Liberty Capital Partners, Inc.
237 Park Avenue, 21st Floor
21st Floor
New York, NY 10017
Liberty Investment 75,000 75,490
Partnership I, L.P.
Liberty Capital Partners, Inc.
237 Park Avenue, 21st Floor
New York, NY 10017
(in each case, on or
after August 1, 1993)
Liberty Capital Partners, Inc.
Americas Towers, 34th Floor
1177 Avenue of the Americas
New York, New York 10036
RH Investors:
- ------------
The Robinson-Humphrey Company, Inc. 37,500
3333 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attention William T. Sherman
William T. Sherman 10,000
The Robinson-Humphrey Company, Inc.
3333 Peachtree Road, N.E.
Atlanta, Georgia 30326
Nicholas A. Merrick 7,500
2652 Birchwood Drive
Atlanta, Georgia 30325
</TABLE>
-42-
<PAGE>
<TABLE>
Name and Address Common Preferred Options Warrants
- ---------------- ------ --------- ------- --------
<S> <C> <C> <C> <C>
Garrison M. Kitchen 3,750
The Robinson-Humphrey Company, Inc.
3333 Peachtree Road, N.E.
Atlanta, Georgia 30326
Thomas G. Johnson III 3,750
Thomas G. Johnson, Jr.
1800 NationsBank center
One Commercial Place
Norfolk, Virginia 23510
Investors:
- ---------
William A.M. Burden & Co. 62,500 100,001 100,001
630 Fifth Avenue, Suite 2900
New York, NY 10111
Edmund & Mary Shea 124,373 124,998
Real Property Trust
J. F. Shea Co., Inc.
655 Brea Canyon Road
Walnut, CA 91789
Richard E. Rainwater 44,000 44,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Balboa Partners 41,667 41,667
J. F. Shea Co., Inc.
655 Brea Canyon Road
Walnut, CA 91789
Shea Investments 41,667 41,667
J. F. Shea Cool Inc.
655 Brea Canyon Road
Walnut, CA 91789
Tahoe Partners 41,666 41,666
J. F. Shea Co., Inc.
655 Brea Canyon Road
</TABLE>
-43-
<PAGE>
<TABLE>
Name and Address Common Preferred Options Warrants
- ---------------- ------ --------- ------- --------
<S> <C> <C> <C> <C>
Walnut, CA 91789
Ziff Investors Partnership, L.P. 25,000 25,000
130 Mason Street
Greenwich, CT 06830
Peter M. Joost 19,000 19,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Gregory C. Hartman Trust 17,000
Datamax Corporation
4501 Parkway Commerce Blvd.
Orlando, FL 32808
Jeffrey A. Hartman Trust 17,000
Datamax Corporation
4501 Parkway Commerce Blvd.
Orlando, FL 32808
Peter M. Joost -- SEP 16,001 16,0001
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
John C. Goff 12,000 12,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
JFI, L.P. 9,000 9,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Harlan Korenvaes 5,000 5,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Morton B. Meyerson 4,500 4,500
</TABLE>
-44-
<PAGE>
<TABLE>
Name and Address Common Preferred Options Warrants
- ---------------- ------ --------- ------- --------
<S> <C> <C> <C> <C>
Separate Property Trust
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Marlene W. Meyerson 4,500 4,500
Separate Property Trust
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Christopher J. O'Brien 3,500 3,500
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Gerald W. Haddock 2,500 2,500
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Thomas L. Kelly, II 2,500 2,500
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
Joseph W. Autem 2,000 2,000
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
James D. Cregan 625
Douglas C. Leonard, Esq.
2250 Hospital Trust Tower
Providence, RI 02903
Randall Chapel 500 500
Rainwater, Inc.
777 Main Street, Suite 2700
Fort Worth, TX 76102
</TABLE>
-45-
<PAGE>
<TABLE>
Name and Address Common Preferred Options Warrants
- ---------------- ------ --------- ------- --------
<S> <C> <C> <C> <C>
Robert P. Cummins 300
Mark D. Strobel 300
Executives:
- ----------
Robert C. Strandberg 193,622 28,600 111,111
Datamax Corporation
4501 Parkway Commerce Blvd.
Orlando, FL 32808
G. William Hartman 159,623 28,600 111,111
Datamax Corporation
4501 Parkway commerce Blvd.
Orlando, FL 32808
Robert L. Wohlers 193,623 28,599 111,111
Datamax Corporation
4501 Parkway Commerce Blvd.
Orlando, FL 32808
</TABLE>
-46-
<PAGE>
EXHIBIT 10.16
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this "Agreement") is made and
entered into as of __________, 1995 by and between Datamax Corporation, a
Delaware corporation ("Datamax"), and Unimark, Inc. a Kansas corporation
("Unimark").
WHEREAS, contemporaneously with the execution and delivery hereof,
Unimark is acquiring certain assets related to the operation of Datamax's
automated ticketing and boarding pass ("ATB") business for the airline and
travel industry (the "Business") pursuant to that certain 1995 between Datamax
and Unimark (the "Purchase Agreement"); and
WHEREAS, Datamax and Unimark desire to make certain arrangements for
the provision of certain services (as more fully described below) by Datamax to
Unimark following the closing (the "Closing") of the transactions contemplated
by the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and upon the terms and subject to the conditions
hereinafter set forth, the parties hereby agree as follows:
1. Services. The parties agree that, subject to the terms and
conditions of this Agreement, Datamax shall provide to Unimark the following
services (the 'Transition Services").
(a) Employment Matters.
(i) Datamax and Unimark shall mutually agree on those
current employees of Datamax to whom Unimark shall offer
permanent employment and those who may be utilized by Datamax
to provide Transition Services under this Agreement Purchase
agrees not to make an offer of employment or enter into
discussions concerning employment with any of Seller's
employees other than the mutually agreed employees without
Seller's prior consent. Seller shall use reasonable efforts
to cause such mutually agreed employees who are offered
permanent employment by Purchaser to make available their
employment services to Purchaser Unimark shall be responsible
for all payroll and benefit obligations for such employees
who accept Unimark's offer of employment (the "Hired
Employees") as of the later of the Closing Date or the date
of Unimark's receipt of acceptance. Any Hired Employee may
work out of Datamax's facility during the Transition Period
and Unimark shall pay or reimburse Datamax for all direct
costs for telephone usage, supplies and the like associated
therewith, excluding base rental.
(ii) During the Transition Period (as hereinafter defined),
Datamax shall cause its employees assigned to the Business as
of the Closing Date
<PAGE>
(other than the Hired Employees) (collectively, the "Service Personnel") to
provide Unimark with the Transition Services. Unimark shall reimburse
Datamax for the payroll cost and associated benefits of such employees and
any direct costs such as travel expenses, telephone charges, supplies and
the like, until the earliest to occur of the date on which such employee
becomes a Hired Employee, the termination of the Transition Period or the
date on which the service of such Employee is no longer required to perform
Transition Services.
(b) ATB Product Transition.
(i) During the Transition Period, Datamax shall manufacture the ATB
products identified on Exhibit A for Unimark upon the terms and conditions
described in subsection (c) below and at the respective price(s) set forth
in Exhibit A. Datamax warrants to Unimark that with respect to any specific
ATB product manufactured by Datamax hereunder the cost of such product to
Unimark, which includes the price therefor set forth in Exhibit A plus the
cost of materials and supplies therefor pursuant to Section 1(c)(ii) below,
shall in no event exceed the price, if any, at which Datamax has previously
committed to sell such specific product to the customer.
(ii) At Unimark's sole discretion, Unimark shall be permitted to send its
employees to Datamax during the Transition Period for training by Datamax's
Service Personnel, which training shall include ATB product assembly and
testing. Each party shall be responsible for its own labor costs
associated with such training. At Unimark's request Datamax shall send to
Unimark, for initial pilot builds, selected Datamax Service Personnel as
mutually agreed upon by both parties and Unimark shall pay all reasonable
travel expenses related thereto.
(iii) Datamax shall provide Unimark with documentation in current format
for the ATB products, parts and assemblies, which documentation shall
include assembly drawings, assembly procedures, test procedures, test
programs, source code for all firmware, software test and debug routines,
engineering drawings, schematics for all printed circuit boards,
specifications and user and maintenance documentation.
(iv) Datamax shall, at its own cost and expense, use its best efforts to
(A) assist Unimark in the transfer of all of Datamax's domestic and
international agency transferable approvals/certifications to Unimark for
its use, and (B) transfer Datamax's existing vendor relationships (except
as to the products described in Exhibit B and the products discussed in
Section VII.E. of the Purchase Agreement) and purchase order obligations
-2-
<PAGE>
to Unimark as requested by Unimark (including, without limitation,
assistance in the transfer of tools and fixtures located at vendors and
purchased by Unimark at the Closing pursuant to the Purchase Agreement).
(v) Datamax shall, at its own cost and expense, be responsible for
adequately packaging the Assets (as defined in the Purchase Agreement) and
Unimark shall ship such Assets to Unimark's designated facility at the
conclusion of the Transition Period. The parties shall cooperate with each
other to make this relocation of Assets as smooth as possible.
(vi) Datamax shall repair any ATB product(s) manufactured by it which
experience an out-of-box failure due to defects in material or workmanship
and which are returned to Datamax's factory within the Transition Period
for the applicable product(s). Datamax may use consignment inventory to
perform any such repair(s). Return of all repaired products to the customer
shall be the responsibility of Unimark. Except as specifically set forth
above, ALL PRODUCTS ARE AND SHALL BE SOLD BY DATAMAX "AS IS." ALL EXPRESS
WARRANTIES AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE, ARE HEREBY EXPRESSLY
DISCLAIMED.
(vii) Notwithstanding Section 1(b)(vi) above, during the Transition Period
Datamax shall honor any warranty on ATB Products manufactured or repaired
by it as is necessary to meet a customer commitment made by Seller prior to
the Closing Date.
(c) Manufacturing Services.
(i) Datamax shall provide manufacturing services for the ATB products
listed Exhibit A hereto, including, without limitation, configurations and
options thereof, until completion of the transfer of the manufacturing of
ATB products to Unimark's facility. The Transition Period may be extended,
at Unimark's sole discretion, for two months beyond the Transition Period
provided that Unimark pays Datamax an additional 10% more than the amounts
specified on Exhibit A hereto for all ATB products manufactured beyond the
end of the originally scheduled termination date of the Transition Period.
(ii) Datamax shall be responsible for all of its expenses incurred in
providing such manufacturing services (which expenses shall include all
costs associated with the planning, procurement, storage, material
handling, production, cost accounting and assembly of such ATB
-3-
<PAGE>
products, as well as labor and overhead costs, and which expenses shall be
reflected in the prices set forth on Exhibit A hereto); provided, however,
that Unimark shall pay for all materials and parts for such ATB products,
however, that Unimark shall pay for all materials and parts for such ATB
products, and shall, at Unimark's option, either provide to Datamax the
required parts and materials (other than the parts and materials referenced
in Exhibit B and Section VII.E of the Purchase Agreement) or reimburse
Datamax for the cost thereof if supplied by Datamax.
(iii) All inventory related to such ATB products purchased by Unimark will
be maintained by Datamax in its facility as consignment inventory of
Unimark during the Transition Period. At the conclusion of the Transition
Period Datamax shall pack and Unimark shall ship such inventory to
Unimark's facility, each at its own cost and expense. At Datamax's own cost
and expense, Datamax shall be responsible for insuring such ATB product
inventory and reimbursing Unimark for insurable losses as well as losses
due to theft or shrinkage. Datamax and Unimark shall reconcile perpetual
inventory records of consignment inventory on a monthly basis. At Unimark's
sole discretion, any of the Hired Employees or any other employees of
Unimark shall be permitted to conduct inventory cycle counts at Datamax at
any time during the Transition Period.
(iv) Unimark shall be responsible for sales order administration and
Datamax shall build and stock finished ATB products based upon and subject
to the terms and conditions of purchase orders delivered by Unimark to
Datamax. If Unimark requests Datamax to ship finished products, Datamax
shall do so at Unimark's risk, cost and expense. Datamax's standard sixty
(60) day manufacturing and shipping lead times shall apply.
(v) Datamax shall review any manufacturing quality improvements
suggested by Unimark during the Transition Period and shall advise Unimark
of the related recurring and/or non-recurring cost(s), if any, of
implementing such improvements. If, after such review, implementation of
such improvement(s) is determined by Datamax to be feasible, and if Unimark
so requests, Datamax shall implement such improvements and may invoice
Unimark and/or adjust the prices in Exhibit A to cover such cost(s).
(d) DMX Service.
(i) Datamax shall rent to Unimark the present DMX Serve facilities in
Orlando, Florida at the current base rent from the Closing until March 15,
1996, and, provided that the current space or alternate suitable space in
the
-4-
<PAGE>
Orlando area can be obtained by Seller beyond March 15, 1996, thereafter
through May 1, 1996. In connection therewith, Unimark will be permitted
to use the related furniture, fixtures and equipment, including phones,
computers and software free of charge, except for charges for phone use and
supplies. All costs associated with DMX Serve for the ATB Business shall
be paid or reimbursed by Unimark.
(ii) During the Transition Period, Unimark shall be permitted to send its
employees to Datamax's DMX Service facility for training. Such training
will include phone support, trouble shooting and repair of printers.
Unimark shall pay all associated travel costs.
(iii) Unimark shall share the leased space in Maidenhead, UK, currently
housing DMX Serve, with Datamax through the Transition Period. Unimark
shall reimburse Datamax for Unimark's pro rata share of the current base
rent and utilities and other costs based upon the current space allocation
between ATB repair and Datamax Bar Code sales and repair. Unimark shall
assume the current lease of the DMX Serve facility in Dallas, Texas during
the Transition Period.
(e) Other Technical Assistance and Transition Support.
(i) During the Transition Period, Datamax shall cause Rob Strandberg,
Bob Wohlers, or Bill Hartman (or any combination thereof) to provide
Unimark with a maximum aggregate of 120 hours of consulting services in
connection with the transfer of technical, manufacturing and marketing
information to Unimark, Unimark shall pay for all reasonable travel-related
costs associated with such consulting services.
(ii) During the Transition Period, Datamax shall make available in
current format the following files associated with the ATB products listed
on Exhibit A hereto (and related configurations and options): inventory
master file information, bills of material, assembly routers with time
standards, perpetual inventory records, vendor file information, including
quality and delivery performance, payroll information, including quality
and delivery performance, payroll information for employees being hired by
Unimark, customer file information including sales and credit history,
historical sales/usage information for each item, open sales order
information, open purchase order information, historical product serial
number and manufacturing data for service use, outstanding service
contracts, any additional computer files necessary for the successful
transition of the inventory, planning, sales order processing, purchasing
and MRP functions to Unimark. Unimark may copy any or all of the foregoing
files for Unimark's own use.
-5-
<PAGE>
(iii) Datamax and Unimark shall mutually agree on the
announcement of the acquisition to customers and jointly contact
all key customers. Datamax shall assist in the transfer of all
outstanding sales orders and contracts to Unimark.
2. Cost of Services. In exchange for the Transition Services provided by
Datamax under this Agreement, Unimark shall pay Datamax the amounts specified in
Section 1 hereof. Invoices for all amounts shall be rendered monthly by Datamax
and shall be due and payable net fifteen (15) days following Unimark's receipt
of invoice from Datamax.
3. Term and Termination; Default.
(a) The term of this Agreement shall commence on the date hereof and
shall continue for seven (7) months from the date hereof, (the
"Transition Period"); provided, however, that (i) the Transition
Period for the DMX 4000 Products shall be three (3) months, or such
shorter period as Unimark may determine, and (ii) at the end of such
seven (7) month period Unimark shall begin to relocate ATB products
and related Assets to Unimark's facility and shall complete such
relocation for all ATB products and related Assets during the ensuing
two months.
(b) Notwithstanding the foregoing, the termination of this Agreement
pursuant to any of the provisions of this Agreement shall be without
prejudice to any rights, or diminution of any obligation or liability
of either party, that may have accrued prior to the effective date of
such termination. In addition, the provisions of Section 5 shall
survive the termination of this Agreement.
4. Force Majeure. Performance by Datamax and/or Unimark under this
Agreement may be suspended without liability to the other party to the extent,
and for so long as, any event which is beyond the reasonable control of the
party claiming suspension, ("Force Majeure Events"), prevents or makes
commercially impracticable the performance of any obligation hereunder of such
party.
5. Dispute Resolution.
(a) Any and all disputes or differences which may arise between
Datamax and Unimark with respect to this Agreement, including
performance hereunder or the interpretation, breach or termination
hereof (collectively, "Disputes") shall be resolved pursuant to this
Section 5, which the parties hereby agree is the sole method for
resolving Disputes under this Agreement.
(b) Any and all Disputes shall first be discussed by Unimark and
Datamax in a good faith attempt to resolve the Disputes.
-6-
<PAGE>
(c) If, in spite of such discussions, no mutually agreeable solution
is reached within 30 calendar days of the delivery of one party's
written request to the other party to discuss such Dispute pursuant to
Section 5(b) hereof, then the parties shall attempt to settle the
Dispute by non-binding mediation under the Center for Public Resources
Model Procedure for Mediation of Business Disputes. The neutral in any
such proceeding will be selected by and agreed to by both parties and
shall be available to serve on short notice throughout the term of
this Agreement. The mediation process shall continue until the first
to occur of (i) resolution of the Dispute, (ii) the 45th day after
such Dispute is referred for mediation, or (iii) the neutral
determines that resolution is not reasonably possible in a mediation
proceeding. Each party shall bear its own costs of attending and
participating in such mediation proceeding.
(d) In the event that pursuant to Sections 5(b) and 5(c) hereof, the
parties fail to resolve any Dispute arising under this Agreement, the
parties agree that thereafter either party shall be free to exercise
whatever rights or remedies it may then have at law or in equity, but
in connection with any judicial proceeding with respect to such
matter, both parties agree to waive their rights, if any, to a jury
trial and further agree that any applicable statute of limitations or
repose or claim of laches will be tolled from the date either party
commences the dispute resolution procedures provided in this Section 5
until conclusion of any non-binding mediation conducted pursuant to
Section 5(c) hereof.
6. Successor and Assigns. Except as otherwise expressly provided in this
Agreement, this Agreement may not be assigned by any party hereto without the
prior written consent of the other party.
7. Governing Law. The validity, interpretation and performance of this
Agreement and nay dispute connected herewith shall be governed and construed in
accordance with the laws of the State of Florida.
8. Notice. Any notice or other communication required or permitted to be
given under this Agreement shall be in writing and shall be deemed sufficiently
given when delivered in person by one party to the other party at the address
for notice as herein provided, or by overnight delivery service, or transmitted
by telecopier (confirmed by delivery in person or by overnight delivery
service), addressed as follows:
If Datamax: Datamax Corporation
4501 Parkway Commerce Boulevard
Orlando, Florida 32808
Attention: President
Telephone: (407) 578-8007
Telecopy: (407) 292-6583
-7-
<PAGE>
If Unimark: Unimark Inc.
9400 Reeds Road
Overland Park, Kansas 66207
Attention: President
Telephone: (913) 649-2424
Telecopy: (913) 649-5795
or to such other persons and addresses as may be specified
from time to time in a notice given by such party. Both
parties agree to acknowledge in writing the receipt of any
such notice delivered in person. Any notice required or
permitted hereunder shall be deemed given upon its date of
receipt on a normal work day by the party to whom it was
directed or if received on a holiday or weekend the next
normal work date thereafter.
9. Entire Agreement. This Agreement constitutes the full understanding of
the parties, a complete allocation of risks between them and a complete and
exclusive statement of the terms and conditions of their agreement relating to
the subject matter hereof and supersedes any and all prior agreements, whether
written or oral, that may exist between the parties with respect thereto;
provided, that this provision is not intended to abrogate or superseded the
Purchase Agreement or to abrogate any other written agreement between the
parties executed on or after the date of this Agreement. No waiver by either
party with respect to any breach or default or of any right or remedy and no
course of dealing or performance, shall be deemed to constitute a continuing
waiver of any other breach or default or of any other right or remedy, unless
such waiver be expressed in writing signed by the party to be bound. Failure of
a party to exercise any right shall not be deemed a waiver of such right or
rights in the future.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which taken together shall constitute one and the same
Agreement.
11. Severability. All provisions of this Agreement are severable and
any provision which may be prohibited by law shall be ineffective to the extent
of such prohibition without invalidating the remaining provisions of this
Agreement.
12. Binding Effects; Benefits. This Agreement shall inure to the benefit
of, and be binding upon, the parties to it and their respective successors,
permitted assigns and other permitted transferees. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties to it and their respective successors, permitted assigns and other
permitted transferees, any rights or remedies under or by reason of this
Agreement.
13. Independent Contractor Status. Datamax shall be deemed to be an
independent contractor to Unimark. Nothing contained in this Agreement shall
create or be deemed to create the relationship of employer and employee between
Datamax and Unimark. The relationship created between Datamax and Unimark
pursuant to or by this Agreement is not and shall not be
-8-
<PAGE>
one of partnership or joint venture. No party to this Agreement shall, by
reason hereof, be deemed to be a partner or a joint venturer of any other party
hereto in the conduct of their respective businesses and/or the conduct of the
activities contemplated by this Agreement. Except as specifically and explicitly
provided in this Agreement, and subject to and in accordance with the provision
hereof, no party to this Agreement is now, shall become, or shall be deemed to
be a principal, agent or representative or any other party hereto. Except as
herein explicitly and specifically provided, neither party shall have any
authority or authorization, of any nature whatsoever, to speak for or bind the
other party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
DATAMAX CORPORATION
By:
----------------------------
Title:
-------------------------
UNIMARK INC.
By:
----------------------------
Title:
-------------------------
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<PAGE>
EXHIBIT A
ATB PRODUCT TRANSITION AND PRICING
<TABLE>
<CAPTION>
PRODUCT PRICE*
- --------------- -------
<S> <C>
DMX 625 $39.53
DMX 1500 $257.31
DMX 2500 D-WS $759.20
DMX 2500 D-SI $758.84
DMX 2500 MS $718.69
DMX 2500 MD $961.92
DMX 3500 BC $600.93
DMX 4000 $490.62
DMX 4000 T $555.14
DMX 4500 $678.28
DMX 4500 DL $647.75
DMX 8500 $360.90
</TABLE>
THE ABOVE PRODUCTS INCLUDE ALL FINISHED GOODS CONFIGURATIONS AND RELATED OPTIONS
AND ACCESSORIES FOR THE DESIGNATED PRODUCT.
*ALL PRICES ARE FOB DATAMAX'S FACILITY. ANY SHIPPING CHARGES PAID OR INCURRED
BY DATAMAX SHALL BE ADDED TO THE PRICE AND INVOICED TO UNIMARK.
-10-
<PAGE>
EXHIBIT B
The following components and assemblies, and the vendor relationships associated
therewith, are not being transferred to Unimark pursuant to this Agreement.
Datamax shall supply these components and assemblies to Unimark in accordance
with the provisions of Paragraph VII.D. of the Purchase Agreement.
<TABLE>
<CAPTION>
ITEM PART #
- -------------------------- ----------
<S> <C>
Print control Gate Array 58-2103-01
Printhead Control Pick 46-2287-01
Printhead-Thermo Plus 220039
</TABLE>
-11-
<PAGE>
EXHIBIT 10.17
NONCOMPETITION AGREEMENT
------------------------
THIS AGREEMENT, dated as of the 3rd day of November, 1995, is made and
entered into by and between DATAMAX CORPORATION, a Delaware corporation
("Seller"), ROBERT L. WOHLERS ("Wohlers"), G. WILLIAM HARTMAN, JR. ("Hartman"),
ROBERT C. STRANDBERG ("Strandberg") and UNIMARK, INC., a Kansas corporation
("Buyer").
RECITALS:
--------
A. Buyer and Seller have entered into a certain Agreement of Purchase and
Sale of Assets dated November 3, 1995 (the "Acquisition Agreement"), whereby
Buyer is acquiring certain assets of Seller.
B. As a condition to Buyer's obligation to consummate the transactions
contemplated by the Acquisition Agreement, Buyer requires that Wohlers, Hartman,
Strandberg and Seller (collectively, the "Datamax Group") execute this
Noncompetition Agreement.
NOW, THEREFORE, in consideration of the premises and the following mutual
promises, the parties agree as follows:
1. The Datamax Group acknowledges and recognizes the highly competitive
nature of the operations of Seller being acquired by Buyer pursuant to the
Acquisition Agreement and acknowledge the necessity of preserving for Buyer the
proprietary rights and ongoing business value of such operations, and thus
hereby jointly and severally agree that they will not, directly or indirectly,
during the period commencing on the date hereof and continuing for that period
of time set forth opposite such party's name:
Datamax 8 years
Wohlers 3 years
Hartman 3 years
Strandberg 3 years
(a) own, manage, operate, control or participate in the ownership,
management, operation or control of, or have any interest, financial or
otherwise, in any business engaged in the business of automated ticketing
and boarding pass, or luggage tag or gate reading (the "ATB Business");
(b) knowingly allow or permit any member of the Datamax Group or any
officer, director or employee of the Datamax Group (while an officer,
director or employee of Datamax Group) to act as an officer, director,
partner, principal, employee, agent, representative, consultant or
independent contractor of, or in any way assist in, or assist any
individual or entity other than Buyer in the conduct of, any ATB Business;
or
<PAGE>
(c) divert or attempt to divert clients or customers (whether or not
such persons have done business with Buyer once or more than once) or
accounts of Buyer for ATB Business.
Notwithstanding the foregoing, the Datamax Group may own in the aggregate not
more than 5% of the stock of any corporation which is listed upon a national
stock exchange or actively traded in the over-the-counter market.
2. As compensation for the covenants of the Datamax Group set forth
above, Buyer shall to pay to Datamax the total sum of $1,000,000, payable over a
period of eight (8) years in eight annual payments of ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($125,000.00). As compensation for the covenants of Wohlers,
Hartman and Strandberg set forth above, Wohlers, Hartman and Strandberg
acknowledge that the consummation of the transactions contemplated by this
Agreement will constitute an indirect, intangible benefit. The Datamax Group
also acknowledges that Buyer was not willing to close the transactions
contemplated by the Acquisition Agreement or pay any substantial amount to
Seller for such assets and covenants not to compete unless Buyer could be
assured that the Datamax Group would not engage in competition with Buyer, which
competition would deprive Buyer of the value and benefit of its purchase of
assets from Datamax. The annual payments hereunder shall be due and payable on
November 1 of each year following the year of this Agreement, with the first
payment due on November 1, 1996, and the final payment due on November 1, 2003.
Any payment which is not made when due shall bear interest from the date notice
of such non-payment is received by Buyer until the date paid at the lower of 15%
or the highest interest rate permitted by law.
3. It is expressly understood and agreed that, although the Datamax
Group considers the restrictions contained in Paragraph 1 of this Agreement to
be reasonable for the purposes set forth herein, if a final judicial
determination is made by a court of competent jurisdiction that any restriction
contained in Paragraph 1 of this Agreement is an unreasonable or otherwise
unenforceable restriction against the Datamax Group or any person in the Datamax
Group, neither this Agreement nor the provisions of such Paragraph shall be
rendered void, but shall be deemed amended to apply as to the maximum extent as
such court may judicially determine or indicate to be reasonable or, if such
court does not so determine or indicate, to the maximum extent which any
pertinent statute or judicial decision may indicate to be a reasonable
restriction under the circumstances involved. No such judicial determination or
amendment shall limit or relieve Buyer from the obligation to pay the total sum
of $1,000,000 or the annual fee(s) described above for the full eight (8) year
term of this Agreement.
4. The Datamax Group acknowledges and agrees that Buyer's remedy at law
for a breach or threatened breach of any of the provisions of Paragraph 1 of
this Agreement would be inadequate and, in recognition of that fact, in the
event of a breach or threatened breach, it is agreed that, in addition to its
remedy at law, Buyer shall be entitled to, and the Datamax Group agrees not to
oppose Buyer's request for, equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available. Nothing herein contained
shall be construed as prohibiting Buyer from pursuing any other remedies
-2-
<PAGE>
available to it for such breach or threatened breach.
5. (a) This Agreement cancels and supersedes all previous agreements
relating to the subject matter of this Agreement, written or oral, between the
parties hereto and contains the entire understanding of the parties hereto and
shall not be amended, modified or supplemented in any manner whatsoever except
as otherwise provided herein or in writing signed by each of the parties hereto.
(b) The waiver by either party, or the failure by either party, to
claim a breach, or give notice with respect thereto, of any provision of this
Agreement shall not be, or be deemed to be, a waiver of any subsequent breach,
or deemed to affect in any way the effectiveness, of such provision.
(c) Neither this Agreement, nor any of the duties or obligations of
the Datamax Group hereunder, may be assigned (either voluntarily or by operation
of law) or otherwise delegated by the Datamax Group. This Agreement shall be
binding upon, and inure to the benefit of and be enforceable by, the parties
hereto and their respective successors and permitted assigns.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one agreement which is binding upon all parties hereto,
notwithstanding that all parties are not signatories to the same counterpart.
(e) Any notice, request, consent or communication under this
Agreement shall be effective only if it is in writing and personally delivered
or sent by certified mail, postage prepaid, nationally recognized express
delivery service with delivery confirmed or telexed or telecopied with receipt
confirmed, addressed as follows:
If to THE DATAMAX GROUP:
Name: With Copy To:
---- ------------
Datamax Corporation Peter D. Orr
4501 Parkway Commerce Blvd. Datamax Corporation
Orlando, FL 32808 4501 Parkway Commerce Blvd.
Attention: Robert Strandberg Orlando, FL 32808
-3-
<PAGE>
If to BUYER:
Name: With Copy To:
---- ------------
Unimark, Inc. Mary Anne O'Connell
9400 Reeds Rd. Husch & Eppenberger
Overland Park, KS 66207 1200 Main, Suite 1700
Attn: Dean W. Lawrence Kansas City, MO 64105
or such other person and/or addresses as shall be furnished in writing by any
such party, and shall be deemed to have been given as of the date so personally
delivered or received.
(f) This Agreement and all rights and obligations of the parties
hereunder and all rights and obligations of the parties shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
Missouri applicable to agreements made and to be performed entirely within such
State, including all matters of enforcement, validity and performance.
(g) If any legal action or other proceeding is brought for the
enforcement or interpretation of any of the rights or provisions of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provision of this Agreement, the
successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and all other costs and expenses incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
(h) The parties hereto represent that in the negotiation and drafting
of this Agreement they have been represented by and relied upon the advice of
counsel of their choice. The parties affirm that their counsel have both had a
substantial role in the drafting and negotiation of this Agreement and,
therefore, this Agreement shall be deemed drafted by all of the parties hereto
and the rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any attachment hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be
duly executed this Agreement as of the day and year first above written.
_______________________________
SELLER: BUYER:
DATAMAX, INC. UNIMARK, INC.
By:________________________________ By:_____________________________
Robert C. Strandberg, President Dean W. Lawrence, President
Robert L. Wohlers
G. William Hartman, Jr.
Robert C. Strandberg
-5-
<PAGE>
ASSIGNMENT AND ASSUMPTION OF CONTRACT
-------------------------------------
Effective this ____ day of __________, 1995, pursuant to the Agreement
of Purchase and Sale of Assets dated ______________, 1995 (the "Agreement")
between DATAMAX CORPORATION, a Delaware corporation having its principal office
at 4501 Parkway Commerce Boulevard, Orlando, Florida 32808 ("Datamax"), UNIMARK,
INC., a Kansas corporation having its principal office at 9400 Reeds Road,
Overland Park, Kansas 66207 ("Purchaser"), DATAMAX, for and in consideration of
the payment by Purchaser of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
does hereby assign, sell, bargain, grant, set over and otherwise transfer to
Purchaser all of DATAMAX's right, title, and interest in and to the following
contract: OEM Purchase Agreement between DATAMAX and OKIDATA, Division of OKI
America, Inc., executed by the parties in November 1992, together with all
revisions and amendments thereof, if any, to date.
Purchaser hereby assumes and agrees to be bound by and to perform, pay
when due, discharge and be liable for all obligations and liabilities under the
Contract described above from and after the effective date hereof.
DATAMAX CORPORATION
By:____________________________
President
UNIMARK, INC.
By:____________________________
Its:___________________________
-6-
<PAGE>
Exhibit 10.18
FIRST AMENDMENT TO LEASE
------------------------
THIS FIRST AMENDMENT TO LEASE is entered into this day of February, 1989,
between JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation,
and its respective assigns, (hereinafter referred to as "Landlord"), and DATAMAX
CORPORATION, a Delaware corporation, (hereinafter referred to as "Tenant").
RECITALS:
1. On January 27, 1989, Landlord and Tenant entered into a Lease Agreement
for "demised premises" consisting of approximately 49,200 square feet, being a
portion of Building Number 606, Units A and B, on Parkway Commerce Boulevard,
Orlando, Florida 32810, situated upon real property described as follows:
Lots 8 and 9, PARKWAY CENTER, Phase I, according to the plat thereof
as recorded in Plat Book 8, Page 2, Public Records of Orange County,
Florida.
2. Landlord and Tenant desire to amend and modify the Lease as described
in this First Amendment to Lease, but otherwise ratifying and confirming the
terms of the Lease.
AGREEMENT
IN CONSIDERATION of the mutual covenants contained in this agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by both parties, it is agreed as follows:
1. Section 2.01, 2.2, and 2,3 (of Article II) are hereby deleted in their
entirety and the following sections are substituted in their place:
1.1 Tenant hereby covenants and agrees, subject to the terms and
conditions hereinafter set forth, to have the walls painted, replace damaged
ceiling tiles, and replace worn or dis colored carpeting in the Demised
Premises, and Landlord shall be responsible for the costs of such refurbishment
up to the sum of THIRTY-FIVE THOUSAND AND NO/100 DOLLARS ($35,000.00), In the
event that the total costs of such refurbishment do not amount to THIRTY-FIVE
THOUSAND AND NO/100 DOLLARS ($35,000.00), then the unspent balance shall serve
as a credit to Tenant for leasehold improvements installed by Tenant. Such
leasehold improvements shall be and consist of partitioning of office spaces in
the Demised Premises. Such THIRTY-FIVE THOUSAND AND NO/100 DOLLARS ($35,000.00)
shall be paid as follows by Landlord to Tenant in order to accomplish the
refurbishment and any Tenant improvements: Upon execution of this First
Amendment to Lease, Landlord shall pay to Tenant the sum of SEVENTEEN THOUSAND
FIVE HUNDRED AND NO/100 DOLLARS ($17, 500.00), which Tenant shall use solely
for such
-1-
<PAGE>
refurbishment. Upon the completion of all refurbishment in the Demised Premises
satisfactory to Landlord, Landlord shall pay to Tenant the additional sum of
SEVENTEEN THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($17,500.00). Notwithstanding
anything in this Lease or otherwise to the contrary, Landlord's total liability
for refurbishment and any improvements shall not exceed THIRTY-FIVE THOUSAND AND
N0/100 DOLLARS ($35,000.00).
1.2 After execution of this First Amendment to Lease by both parties
hereto, Tenant shall deliver notice to Landlord of those contractors that Tenant
has engaged to make the refurbishment and any improvements, with copies of the
contract or agreement between Tenant and the contractor. Such contracts or
agreements shall specifically provide that the contractor shall have no lien
rights as against Landlord's interest in the Demised Premises.
1.3 Upon obtaining any necessary permits, Tenant shall cause the
commencement, and thereafter the completion, of the refurbishment as
expeditiously as conditions shall reasonably permit.
2. As amended in this First Amendment to Lease, Landlord and Tenant
ratify and confirm the Lease as a valid, binding, legally enforceable, and
subsisting agreement between Landlord and Tenant.
IN WITNESS WHEREOF, the parties have executed this First Amendment to Lease
on the date first above written.
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------- ---------------------------------
Executed in the presence of the following LANDLORD:
witnesses:
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
BY:
PETER E. POTRYKUS, as its Senior
Real Estate Management Officer
- ----------------------------------------- ---------------------------------
TENANT:
DATAMAX CORPORATION
By:
</TABLE>
-2-
<PAGE>
SECOND AMENDMENT TO LEASE
-------------------------
THIS SECOND AMENDMENT TO LEASE is entered into this ______ day of
_____________, 1990 between Park Center Properties, Assignee of JOHN HANCOCK
MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation, and its respective
assigns, (hereinafter referred to as "Landlord"), and DATAMAX CORPORATION, a
Delaware corporation, (hereinafter referred to as "Tenant").
RECITALS
1. On January 27, 1989, Landlord and Tenant entered into a approximately
49,200 square feet, being a portion of Building Number 606, Units A and B, on
Parkway Commerce Boulevard, Orlando, Florida 32808, situated upon real property
described as follows:
Lots 8 and 9, PARKWAY CENTER, Phase I, according to the plat thereof
as recorded in Plat Book 8, Page 2, Public Records of Orange County,
Florida.
and amended said Lease Agreement by entering into First Amendment to Lease dated
February 1, 1989.
2. Landlord and Tenant desire to further amend and modify the Lease as
described in this second Amendment to Lease.
AGREEMENT
IN CONSIDERATION of the mutual covenants contained in this agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by both parties, it is agreed as follows:
1. Effective July 1, 1990, the Lease is modified to provide for the
addition to the "Demised Premises" of the 2,400 square feet contained in Unit F
of Building Number 606 located as described in Article I, Section 1.l of the
Lease.
2. Monthly rental payments on the additional premises, Unit F shall
commence on July 1, 1990 in the amount of $840.00 together with additional
rental pursuant to the terms of the Lease and payment of all applicable Florida
State Sales Tax on said amounts and shall continue until the termination of the
Lease on January 31, 1994.
3. Effective July 1, 1990, Tenant's share of costs and expenses as
outlined in Article IV, Section 4.2, is amended to 58% of all such costs and
expenses.
4. Landlord and Tenant agree that Unit F, Building 606, is leased by
Tenant in an "as is" condition and Landlord shall make no improvements
whatsoever to the space.
-1-
<PAGE>
5. As further amended in this Second Amendment to Lease, Landlord and
Tenant ratify and confirm and Lease as a valid, binding, legally enforceable,
and subsisting agreement between Landlord and Tenant.
6. Landlord shall not place or maintain or permit others to place or
maintain any signs on the building or the land or any part of the land upon
which the building is located other than tenant identification signs permitted
by Landlord affixed to the front door of each tenant's space or the wall of the
building adjoining the front door of such space. Notwithstanding the preceding
sentence, Tenant shall continue to have the right to maintain its existing sign
which abuts the right of way of John Young Parkway as well as its existing
directional signs on the property. In the event that space becomes available in
the multi-tenancy portion of the building and Tenant does not exercise option to
take the available space, as outlined in Article XXVII of the Lease then
Landlord may place a sign on the property advertising available space.
IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Lease on the date first above written.
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------- ------------------------------
LANDLORD:
PARK CENTER PROPERTIES
By:
Sanford B. Sheber
- ----------------------------------------- ------------------------------
TENANT:
DATAMAX CORPORATION
By:
William Daman, President
</TABLE>
-2-
<PAGE>
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE is entered into this 10 day of November, 1994
between Park Center Properties, Assignee of JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY, a Massachusetts corporation, and its respective assigns, (hereinafter
referred to as "Landlord"), and DATAMAX CORPORATION, a Delaware corporation,
(hereinafter referred to as "Tenant").
RECITALS
1. On January 27, 1989, Landlord and Tenant entered into a Lease
Agreement for "demised premises" consisting of approximately 49,200 square feet,
being a portion of Building Number 606, Units A and B, on Parkway Commerce
Boulevard, Orlando, Florida 32808, situated upon real property described as
follows:
Lots 8 and 9 PARKWAY CENTER, Phase 1, according to the plat thereof as
recorded in Plat Book 8, Page 2, Public Records of Orange County, Florida.
and amended said Lease Agreement by entering into First Amendment to Lease dated
February 1, 1989, and further amended said Lease Agreement by entering into
Second Amendment to Lease on July 1, 1990.
AGREEMENT
IN CONSIDERATION of mutual covenants contained in this agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by both parties, it is agreed as follows:
1. Effective February 1, 1994, the Lease is modified to provide for the
addition to the "Demised Premises" of 26,400 square feet contained in Units C
through J of Building Number 606 located as described in Article 1, Section 1.1
of the Lease.
2. Monthly rental payments on the 75,600 square feet (all of Building
606) shall be at a rate of $4.305 per square foot. The extension shall be for a
period of five (5) years and shall be triple net commencing February 1, 1994 and
terminating January 31, 1999.
3. Landlord agrees to upgrade the fire sprinkler systems as required by
applicable fire codes for any new construction required by the Tenant provided
that the new construction does not materially change the use of the space
involved. This upgrade is to be at no charge to Tenant. Landlord further agrees
to bear the cost of any water main expansion required to handle the upgraded
fire sprinkler systems which may be installed pursuant to this provision. Tenant
agrees that the existing fire separations shall be kept in place and any and all
openings in such fire separations shall be properly fire rated.
-1-
<PAGE>
40. Effective February 1, 1994, the Tenant shall pay the costs and
expenses of operating the building directly and discontinue monthly estimated
payments to Landlord.
50. Landlord will transmit property and intangible tax bills to Tenant
immediately upon receipt and Tenant will make payment directly and return
evidence of payment to Landlord.
60. As further amended in this Third Amendment to Lease, Landlord and
Tenant ratify and confirm the Lease is valid, binding legally enforceable, and
subsisting agreement between Landlord and Tenant. All clauses of the original
Leases not changed by this Amendment shall remain in force.
IN WITNESS WHEREOF, the parties have executed this to Lease on the date
first above written.
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------- -----------------------------
LANDLORD:
PARK CENTER PROPERTIES
By:
Sanford B. Sheber
- ----------------------------------------- ------------------------------
TENANT:
DATAMAX CORPORATION
By:
</TABLE>
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<PAGE>
MEMORANDUM OF LEASE
NAME OF LANDLORD: PARK CENTER PROPERTIES, Assignee of JOHN HANCOCK MUTUAL
LIFE INSURANCE COMPANY, a Massachusetts corporation
NAME OF TENANT: DATAMAX CORPORATION, a Delaware corporation
DATE LEASE EXECUTED: February 1, 1994
DESCRIPTION OF LEASED PREMISES IN THE FORM CONTAINED IN THE LEASE: The Landlord
leased to Tenant that certain space containing approximately 75,600 square feet
(all of Building Number 606) situated on Parkway Commerce Boulevard, Orlando,
Florida, a more particularly described in Exhibit "A" attached hereto and by
this reference made a part hereof.
COMMENCEMENT DATE AND TERM OF LEASE: The term of this Lease shall commence on
February 1, 1989, modified and continued on February 1, 1994, to terminate on
January 31, 1999.
LIENS: Landlord's/fee owner's interest in the property described in Exhibit "A"
shall not be subject to any liens for improvement by the Tenant.
TERMINATION: Landlord and Tenant agree to execute a termination and
cancellation of this Memorandum upon the termination of the Lease.
IN WITNESS WHEREOF, the parties has respectively executed this Memorandum
of Lease this 10th day of November, 1994.
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------- ------------------------------
Signed, Sealed and delivered in the LANDLORD:
presence of:
PARK CENTER PROPERTIES
By:
- ----------------------------------------- ------------------------------
TENANT:
DATAMAX CORPORATION
By:
William Daman, President
</TABLE>
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<PAGE>
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this ______ day of
_______, 1994, by _______________________ as Landlord/Agent for Park Center
Properties, a New York partnership.
_____________________________________________
Notary Public
(Print, type or stamp commissioned name of Notary Public)
Personally known ________ or produced identification _______
Type of identification produced
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this 10th day of
November, 1994, by _________________ as Tenant/Agent for Datamax Corporation, a
Delaware corporation.
_____________________________________________
Notary Public
(Print, type or stamp commissioned name of Notary Public)
Personally known ________ or produced identification _______
Type of identification produced ____________
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<PAGE>
LEASE
-----
LANDLORD: JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
TENANT: DATAMAX CORPORATION
GUARANTOR: GTECH CORPORATION
PREMISES: REAL PROPERTY AT PARKWAY CENTER, ORLANDO, FLORIDA
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<C> <S> <C>
ARTICLE I Demised Premises 2
ARTICLE II Landlord's Refurbishment of Demised Premises 2
ARTICLE III Term of Lease 3
ARTICLE IV Rent 3
ARTICLE V Taxes and Assessments 4
ARTICLE VI Utility Charges 5
ARTICLE VII Hold Harmless 5
ARTICLE VIII Insurance 5
ARTICLE IX Repairs, Maintenance, Alterations and Removal of Equipment 7
ARTICLE X Inspection of Premises by Landlord 8
ARTICLE XI Mechanic's Liens 8
ARTICLE XII Damage or Destruction of Demised Premises 9
ARTICLE XIII Condemnation 10
ARTICLE XIV Use of Premises - Assignments 11
ARTICLE XV Event of Default 11
ARTICLE XVI Surrender of Premises 14
ARTICLE XVII Strikes - War - Acts of God 15
ARTICLE XVIII Cost of Litigation 15
ARTICLE XIX Statement of Lease 15
ARTICLE XX Rights Reserved by Landlord 16
ARTICLE XXI Covenants of Quiet Enjoyment 16
ARTICLE XXII Short Form Lease 16
ARTICLE XXIII Subordination 16
ARTICLE XXIV Prepaid Rent and Security Deposit 17
ARTICLE XXV Holding over 17
ARTICLE XXVI General 17
ARTICLE XXVII Option to Lease Additional Space 18
ARTICLE XXVIII Radon Gas Notice 19
ARTICLE XXIX Hazardous Substances Prohibited 19
</TABLE>
<PAGE>
L E A S E
---------
THIS LEASE made and entered into on January 27, 1989, by and between JOHN
HANCOCK MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation (and its
respective assigns, hereinafter collectively referred to as Landlord), and
DATAMAX CORPORATION, a Delaware corporation (hereinafter referred to as Tenant),
and GTECH CORPORATION, a Delaware corporation (hereinafter referred to as
"Guarantor").
W I T N E S S E T H :
---------------------
The parties hereto mutually covenant and agree that Landlord in
consideration of the rentals payable by Tenant, and the covenants and agreements
to be kept, observed and performed by Tenant, has rented, demised and leased
unto Tenant, and Tenant does hereby take and hire from Landlord, the demised
premises (the Demised Premises), upon and subject to the covenants and
conditions, restrictions, reservations, easements, rights and rights-of-way of
record.
ARTICLE I
---------
Demised Premises
----------------
I.1 The "Demised Premises", consist of approximately 49,200 square feet as
shown on the legal description attached hereto and incorporated herein as
Exhibit "A", which Demised Premises are a portion of Building No. 606, Units A &
B, on Parkway Commerce Boulevard, Orlando, Florida 32808, located at PARKWAY
CENTER, which building is situated on real property platted as Lots 8 and 9,
Parkway Center, Phase I, being a portion of Section 4, Township 22 South, Range
29 East, Orange County, Florida, together with the appurtenances thereto and
improvements thereon. TO HAVE AND TO HOLD the Demised Premises unto Tenant for
the term of this Lease pursuant to the terms hereof.
ARTICLE II
----------
Landlord's Refurbishment of Demised Premises
--------------------------------------------
II.1 Landlord hereby covenants and agrees, subject to the terms and
conditions hereinafter set forth, to have the walls painted, replace damaged
ceiling tiles, and replace worn or discolored carpeting in the demised premises,
at Landlord's expense and cost, but not to exceed in all events a total cost of
THIRTY FIVE THOUSAND AND NO/100 DOLLARS ($35,000.00). Such refurbish ment shall
be at the reasonable direction of Tenant. In the event the total costs of such
refurbishment do not amount to THIRTY FIVE THOUSAND AND NO/100 DOLLARS
($35,000.00), then the unspent balance shall serve as a credit to Tenant for
leasehold improvements installed by Tenant. such leasehold improvements shall be
and consist of partitioning of office spaces in the Demised Premises.
Notwithstanding anything in this Lease or otherwise to the contrary, Landlord's
total liability for refurbishment and any improvements shall not exceed THIRTY
FIVE THOUSAND AND NO/100 DOLLARS ($35,000.00).
-2-
<PAGE>
II.2 Upon execution of this Lease by both parties hereto, Tenant shall
describe in writing those refurbishment requested and deliver such notice to
Landlord. Landlord shall then deliver to Tenant price quotes on all
refurbishment requested. Tenant shall then have twenty (20) days within which
to object to such price quotes, and upon failure to do so such quotes shall be
conclusive as to the total cost of refurbishment paid for by Landlord. In the
event Tenant objects to any price quotes (within such twenty (20) days) , then
if the parties cannot agree upon a price, bids shall be obtained from third
party independent contractors acceptable to Tenant, which contractors shall
perform the refurbishment.
II.3 Upon obtaining any necessary permits, Landlord shall cause the
commencement, and thereafter the completion, of said refurbishment as
expeditiously as conditions shall reasonably permit.
II.4 Subject to those items in need of refurbishment as described above,
Landlord warrants that the Demised Premises, including all roofs, interior and
exterior walls (except painting), floors, windows, glass, doors, plumbing,
pipes, electrical systems, heating and air conditioning, equipment, machinery,
and lighting systems are in good condition, proper state of repair and operating
order and radon gas levels do not exceed federal -and state guidelines at the
commencement of the term of this Lease. Tenant shall have a period of thirty
(30) days following the commencement of the term of this Lease to make written
objections to any claimed defects in the Demised Premises other than those items
in need of refurbishment, or as not being in the condition, repair or operating
order as warranted by Landlord. In the event no objections are made by Tenant
within said time period, then Tenant conclusively shall be deemed to have
approved and accepted the Demised Premises as the same existed at the
commencement of the term of this Lease, and any maintenance, upkeep, repairs,
and any compliance with federal, state, and local regulations, guidelines, or
laws shall be solely Tenant's responsibility as hereafter provided in this
Lease. Landlord shall use due diligence to correct any reasonable and valid
objections made by Tenant.
II.5 Landlord further agrees that for the first year following
commencement of the term hereof, it will enforce for the benefit of Landlord and
Tenant any and all guaranties which may be made by any contractor or
subcontractor with respect to the roof and exterior painting of the Demised
Premises; thereafter, providing Landlord does not choose to enforce such
guaranties, Landlord shall assign such guaranties to Tenant and permit Tenant to
enforce the same as Tenant may determine. The foregoing sentence shall not be
construed to require Landlord to obtain any such guaranties, but Landlord shall
not voluntarily waive any guaranties customarily obtained.
ARTICLE III
-----------
Term of Lease
-------------
The term of this Lease shall be for five (5) years. Said term, and
Tenant's obligations hereunder, shall commence on February 1, 1989, and shall
continue for five (5) years thereafter, subject, however, to the terms and
conditions hereafter set forth.
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<PAGE>
ARTICLE IV
----------
Rent
----
IV.1 Tenant agrees to pay to the Landlord at the office of Landlord, or at
such other place as may be designated by Landlord from time to time, without any
prior demand therefor and without any deduction or setoff whatsoever, the rent
for Demised Premises as follows: Commencing the first (1st) day of February, the
annual rent hereunder shall be TWO HUNDRED SIX THOUSAND SIX HUNDRED FORTY AND
NO/100 U.S. DOLLARS ($206,640.00) which shall be payable in equal monthly
installments of SEVENTEEN THOUSAND TWO HUNDRED TWENTY AND N0/100 U.S. DOLLARS
($17,220.00) each. In addition to the foregoing rent, the Tenant shall pay to
the Landlord with each monthly installment of rent the applicable Florida State
Sales Tax due on said rent or any other sums payable hereunder. The Landlord
shall assume sale responsibility for filing any sales tax returns with respect
to this Lease.
IV.2 The fixed monthly rental hereinbefore set forth is to be a "net
net net rental", as those terms are used and understood in the real property
leasing business. Accordingly, and as additional rental hereunder, Tenant shall
pay (as hereinafter provided) during the term of this Lease, and prorated to the
date of the commencement and termination of the term hereof, all taxes and
assessments levied against the Demised Premises, or any portion thereof, public
utility and related costs and expenses, insurance premiums, expenses of
occupying, operating, altering, maintaining and repairing the entire Demised
Premises (subject however, to Landlord's obligations under Article 11, Sections
12.1 and 13.3 hereof) and any other expenses or charges which, during the term
of this Lease, shall be levied, assessed or imposed by any governmental
authority upon or with respect to, or incurred in connection with, the
possession, occupation, operation, alteration, maintenance, repair and use of
the Demised Premises, it being intended that this Lease shall result in a rental
to be paid to Landlord, without additional cost of Landlord or diminution or
offset hereto, in the fixed monthly amounts hereinbefore specified. For the
first year, such additional rent is estimated to be TWO THOUSAND FOUR HUNDRED
THIRTY-SIX AND N0/100 U.S. DOLLARS ($2,436.00) per month, which shall be paid
monthly to Landlord on the first of each month without any prior demand therefor
and without any deduction or set off whatsoever. At the beginning of each
subsequent year of this Lease (after the first year) Landlord shall deliver to
Tenant Landlord's new estimation of additional rent for the following year and
Tenant shall pay monthly such new estimated additional rent in the manner
provided for in the first year. At the end of the first year (or such fiscal or
calendar year as designated by Landlord), and each year thereafter throughout
the term of this Lease, the actual additional rent for the prior months shall be
computed: any estimated additional rent paid to Landlord in excess of the actual
additional rent shall be repaid to Tenant within twenty (20) days; and Tenant
shall pay within twenty (20) days of notice any amounts by which the actual
additional rent exceeds the estimated additional rent. Such additional rent is
based upon Tenant's proportionate share of taxes, insurance, and all other costs
and expenses as provided in this Lease, which share is initially based upon the
49,200 square feet of demised premises out of a total of the 75,600 square feet
of Building 606, Parkway Center, i.e., Tenant's share of such costs and expenses
shall (subject to Article XXVII) be initially 65% of all such costs and
expenses. Subject to the provisions of Article V nothing in this paragraph
shall be construed to require Tenant to pay any franchise or
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<PAGE>
transfer taxes of Landlord growing out of or connected with this Lease or
Landlord's right in and to the Demised Premises, or any income, excess profits,,
or revenue tax of Landlord.
ARTICLE V
---------
Taxes and Assessments
---------------------
V.1 Tenant shall pay as additional rent to Landlord, in addition to
the rent otherwise payable to the Landlord hereunder, Tenant's proportionate
share of the real estate taxes paid or payable by Landlord with respect to the
land and building of which the Demised Premises is a part, Tenant's
proportionate share of said taxes shall be determined by multiplying the taxes
payable by the Landlord by a fraction of which the numerator shall be the number
of square feet in the Demised Premises and the denominator which shall be the
total amount of the square feet of the building of which the Demised Premises is
a part. As soon as Landlord has paid the real property taxes as provided
herein, the Landlord shall submit a copy of the receipted tax bill to Tenant
together with a statement for Tenant's share of such taxes as provided in
Article 4.2. The term real property taxes shall mean and include all taxes and
assessments, special or otherwise levied upon the Demised Premises if any
portion of the term of this Lease shall consist of a portion of a calendar year,
Tenant's prorated share of the taxes for such portion of such year shall be
equitably prorated based upon the number of months consisting of such portion of
such year to the entire calendar year.
ARTICLE VI
----------
Utility Charges; Common Area Maintenance; Etc.
---------------------------------------------
VI.1 Tenant shall pay or cause to be paid all charges for water, gas,
sewer, electricity, light, heat, air conditioning, power, telephone, fire
protection waste pickup, or other services used, rendered or supplied solely to
Tenant in connection with the Demised Premises and shall contract for the same
in Tenant's own name. Any charges that cannot be actually calculated separately
will be prorated in relation to footage occupied by Tenant of the entire
building.
VI.2 Tenant shall pay as additional rent its proportionate cost of all
expenses, reasonably relating to the repair and maintenance in good condition of
the Demised Premises and complex grounds, which complex grounds are described in
Exhibit "B", which is attached to and incorporated by reference into this Lease.
Tenant's proportionate share of said expenses shall be determined by multiplying
the expenses payable by the Landlord by a fraction of which the numerator shall
be the number of square feet in the Demised Premises and the denominator which
shall be the total amount of the square feet of the building of which the
Demised Premises is a part. Such costs shall be paid monthly based upon the
prior year's actual expenses, Tenant, however, shall provide at its own cost the
landscaping, mowing, hedging, and parking lot sweeping of the entire common
area; provided however, that such maintenance shall be satisfactory to Landlord.
If Landlord in its reasonable discretion, determines that Tenant's maintenance
is unsatisfactory, then upon written notice, Landlord shall cause such common
area maintenance to be performed and Tenant shall pay its prorata portion.
-5-
<PAGE>
ARTICLE VII
-----------
Hold Harmless
-------------
VII.1 Tenant covenants and agrees that, with the exception of liability
deriving from fault or neglect by Landlord, its agents and assigns, and
liability for which Landlord is a named insured, Landlord shall not at any time
or to any extent whatsoever be liable, responsible, or in any way accountable
for any loss, injury, death or damage to persons or property which at any time
may be suffered or sustained by Tenant or by any person whomsoever may at any
time be using, occupying or visiting the Demised Premises, or be in, on or about
the same, whether such loss, injury, death or damage shall be caused by or in
any way result from or arise out of any act, omission or negligence of Tenant or
of any occupant, subtenant, visitor or user of any portion of the Premises, and
Tenant shall forever indemnify, defend, hold and save Landlord free and harmless
of , from and against any and all claims, liability, loss or damage whatsoever,
including attorneys' fees, on account of any such loss, injury, death or damage.
ARTICLE VIII
------------
Insurance
---------
VIII.1 Landlord shall, throughout the term of this Lease, keep
constantly insured against loss or damage by earthquake and fire, and those
perils included from time to time in the so-called Florida form of extended
coverage insurance endorsement including vandalism and malicious mischief, all
buildings and improvements which may from time to time be upon or a part of the
Demised Premises, in an amount equal to the full replacement cost as determined
by Landlord. Tenant shall pay as additional rent to the Landlord, Tenant's
proportionate share of the cost of the insurance to be carried pursuant to this
Article 8.1, Tenant's proportionate share of the cost thereof to be determined
by multiplying the annual premium cost for said policy or policies by a
fraction, of which the numerator shall be the number of square feet in the
Demised Premises and the denominator which shall be the total amount of the
square feet in the building of which the Demised Premises is a part, and the
resulting figure therefore being the amount that Tenant shall pay to the
Landlord monthly pursuant to Article 4.2 or at such time as a statement is
rendered by Landlord to Tenant of the amount due Landlord as Tenant's
proportionate share of said insurance costs. Such insurance shall have attached
thereto such form of lender's loss payable endorsement as any institutional
lender to Landlord may require.
VIII.2 Landlord and Tenant agree that if the building and improvements
at any time forming a part of the Demised Premises shall be damaged or destroyed
by fire, vandalism, or malicious mischief, or extended coverage endorsement
perils, or if any of Tenant's fixtures, furniture, merchandise or other
property, real or personal, be damaged or destroyed from any cause covered by a
fire insurance policy obtained by Tenant, then and to the extent allowable
without invalidating such insurance, and whether or not such damage or
destruction was caused by the negligence of the other party, neither party shall
have any liability to the other nor to any insurer of the other for or in
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<PAGE>
respect of such damage or destruction; and, if obtainable, each party shall
require all policies of fire or other insurance carried by such party during the
term of this Lease upon the Demised Premises or contents thereof or therein to
be endorsed with a provision in and by which the insurer designated therein
shall waive its right of subrogation against the other party.
VIII.3 During the entire term of this Lease, Tenant, at Tenant's sole cost
and expense, shall procure and maintain in full force and effect general
property and personal injury liability insurance in the minimum amount of Two
Million and no/100 Dollars ($2,000,000.00) insuring against all liability of
Tenant with respect to the Demised Premises or arising out of the maintenance,
use or occupancy thereof. All such insurance shall insure the performance by
Tenant of the indemnity agreement as to liability for injury to or death of
persons and injury to or damage to property in Article VII contained herein; the
limits of said policies shall not limit the liability of Tenant under this
Lease. In the event that either party hereto shall at any time deem the limits
of any such liability insurance then carried to be insufficient, the parties
shall endeavor to agree upon the proper and reasonable limits for such insurance
then to be carried. If the parties shall be unable to agree thereon, the
reasonable limits for such insurance shall be determined by an impartial third
person knowledgeable of insurance risk matters, selected by the parties, or
should they be unable to agree upon a selection of an impartial third persons
the impartial third person shall be chosen by the Presiding Judge of the Circuit
Court of orange County, Florida, upon application by either party (with notice
to the other party) of the time and place of application and the decision of
such impartial third person as to such limits then to be carried shall be
binding upon the parties. Such insurance shall be carried with the limits as
thus agreed upon or determined until such limits shall again be changed pursuant
to the provisions of this paragraph. The expenses of such determination shall be
borne equally between Landlord and Tenant.
VIII.4 All of the insurance provided for under this Article VIII and all
renewals thereof shall be issued by such good, responsible and standard
companies authorized as to do business in Florida and in such form and substance
as are reasonably approved by Landlord. The policy or policies of insurance
provided for in Article 8.1 hereof shall be payable to Landlord, or to the owner
and holder of any encumbrance of record on the Demised Premises, and Tenant
agrees to endorse any check which might be made payable jointly to Landlord and
Tenant by the insurance company in connection with such policy. Tenant agrees to
comply with any reasonable request of the insurance carrier providing insurance
described in Article 8.1, if the failure to comply therewith will cause
cancellation of such insurance. All insurance obtained in accordance with
Article 8.3 shall be carried in the name of the Tenant and the Landlord shall be
designated in the policy as an additional insured party. All policies provided
for in this Article VIII shall expressly provide that the policy shall not be
canceled or altered without thirty (30) days prior written notice to the other
party, Neither Landlord nor Tenant shall do or permit to be done anything which
will invalidate the insurance policies provided for in this Article. Upon the
issuance thereof each such policy or a duplicate thereof required hereunder
shall be delivered to the other party hereto. Tenant shall have the right to
review the premium rates from time to time respecting all insurance provided for
herein and to substitute carriers charging more competitive rates for the
coverage upon Landlord's approval, shall not be unreasonably withheld. Tenant
shall obtain such fire insurance and other insurance on Tenant's fixtures,
furniture and other property, real or personal, as Tenant deems appropriate, and
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<PAGE>
with which Landlord shall not otherwise be concerned.
ARTICLE IX
----------
Repairs, Maintenance, Alterations
---------------------------------
and Removal of Equipment
------------------------
IX.1 Tenant shall have the right, subject to prior written approval of
Landlord, to make such additions alterations, changes and improvements to the
Demised Premises as Tenant shall deem necessary or desirable; however, no
addition alteration, change or improvement shall be made which will weaken the
structural strength, lessen the value of, interfere with, or make inoperable any
portion of the building or the building service equipment, or change the
architectural appearance of any building. All additions, alterations, changes
and improvements shall be made in workmanlike manner, in full compliance with
all building laws and ordinances applicable thereto, they shall become a part of
the Demised Premises, and all such improvements including all building service
equipments, shall remain in and be surrendered as a part of the Demised Premises
upon the termination of this Lease.
IX.2 Landlord shall not be obligated to maintain nor to make any repairs,
replacements, or renewals of any kind, nature or description whatsoever to the
Demised Premises or any buildings or improvements thereon, except as provided in
Articles II, XII and XIII hereof, and Tenant hereby expressly waives all rights
to make repairs at Landlord's expense under any law now or thereafter enacted,
except that if damage to or failure of any element covered by Landlord's
warranties contained in Article 2.5 hereof (relating to exterior painting and
the roof) shall require immediate attention to prevent damage to Tenant's
fixtures or equipment, Tenant, after giving reasonable written notice to
landlord and upon Landlord's failure to demand from any contractors or
subcontractors who warranted work that they repair such damage, may proceed to
make such repair at Tenant's sole cost.
IX.3 Tenant shall take good care of the Demised Premises and shall, at the
Tenant's own cost and expense, keep, maintain, and make all repairs to the same,
including but not limited to maintenance and repair of all roofs, interior and
exterior walls, floors, carpeting, windows, glass, doors, plumbing, pipes,
electrical systems, heating and air conditioning, equipment, machinery, and
lighting systems, except for usual and ordinary wear and tear by reasonable use
and occupancy. Tenant shall comply with and abide by all federal, state, county,
municipal, and other governmental statutes, ordinances, laws, and regulations
affecting the Demised Premises, the improvements thereon, the business to be
conducted therein and thereon by Tenant, or any activity or condition on or in
the Demised Premises, and if any improvements to the Demised Premises shall be
required by applicable law, Tenant shall make such improvements. Tenant further
agrees that Tenant shall not commit or permit waste upon the Demised Premises.
ARTICLE X
---------
Inspection of Premises by Landlord
----------------------------------
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<PAGE>
X.1 Tenant agrees to permit Landlord and the authorized representatives of
Landlord to enter the Demised Premises at all reasonable times during usual
business hours for the purpose of (a) inspecting same, and (b) making such
repairs or reconstruction to the Demised Premises required by or permitted to
Landlord, and (c) performing any work therein that may be necessary by reason of
Tenant's default under the terms of this Lease. Nothing herein shall imply any
duty upon the part of Landlord to do any such work which, under the provisions
of this Lease Tenant is required to perform, and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
the same. Landlord may, during the progress of any work an the Demised premises,
keep and store upon the parking area of or within the Demised Premises all
necessary materials, tools and equipment. Landlord shall not in any event be
liable for any inconvenience, annoyance, disturbance, loss of business, or other
damage sustained by Tenant while making such repairs or the performance of any
such work on the Demised Premises, or on account of bringing materials, supplies
and equipment into or through the Demised Premises during the course thereof,
except that Tenant's rental and other payment obligations hereunder shall abate
to the extent Tenant is prevented from using all of the Demised Premises until
such work shall be completed. Provided Tenant is in default, as defined in
Section 15.1 hereof, with respect to specified repairs or maintenance, in the
event Landlord makes any such repairs or maintenance which Tenant has failed to
do or perform, the cost thereof shall constitute additional rent and shall be
paid to Landlord with the next installment of fixed monthly rental hereunder.
X.2 Upon at least twenty-four (24) hours notice, Landlord is hereby given
the right during usual business hours to enter the Demised Premises and to
exhibit the same for purpose of sale or mortgage, and during the last twelve
(12) months of the term of "his Lease to exhibit the same to any prospective
tenant. Landlord shall not unnecessarily disrupt Tenant's business when entering
the Demised Premises.
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<PAGE>
ARTICLE XI
----------
Mechanic's Liens
----------------
XI.1 Tenant covenants and agrees to keep all of the Demised Premises and
every part thereof and all buildings and other improvements thereon free and
clear of and from any and all mechanics materialmen's and other lions for work
or labor done, services performed, materials, appliances, transportation or
power contributed, used or furnished to be used in or about the Demised Premises
for or in connection with any operations of Tenant, any alterations,
improvements, repairs or additions, which Tenant may make or permit or cause to
be made, or any work or construction by, for or permitted by Tenant on or about
the Demised Premises, and at all times Tenant shall promptly and fully pay and
discharge any and all claims upon which any such lien may or could be based; and
Tenant shall save and hold Landlord and at all of the premises and all buildings
and improvements thereon free and harmless of and from any and all such liens
and claims of liens and suits or other proceedings pertaining thereto. Tenant,
or any subtenant, assignee of Tenant, or other occupant of the Demised Premises,
covenants and agrees to give landlord written notice not less than ten (10) days
in advance of the commencement of any construction, alteration, addition,
improvements or repair to the Demised Premises in order that Landlord may post
appropriate notices of Landlord's non-responsibility. A sworn affidavit will be
provided to the Landlord by the Tenant to show all bills are paid in full.
XI.2 No mechanics' or materialmen's liens or mortgages, deeds of trust, or
other liens of any character whatsoever created or suffered by Tenant shall in
any way or to any extent affect the interest or rights of Landlord in any
buildings or other improvements on the Demised Premises, or attach to or affect
Landlord's title to or rights in the Demised Premises.
XI.3 Tenant shall have the right to contest any mechanic's lien or other
lien claim filed against the Demised Premises, provided that the Tenant shall
bond said lien so that the same no longer constitutes a lien against the real
property of Landlord and shall diligently prosecute any such contest, at all
times effectually stay or prevent any official or judicial sale of the Demised
Premises under execution or otherwise, and pay or otherwise satisfy any final
judgment adjudging or enforcing such contested lien and thereafter procure and
record satisfaction or release thereof.
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<PAGE>
ARTICLE XII
-----------
Damage or Destruction of Demised Premises
-----------------------------------------
XII.1 In the event the building or other structures on the Demised
Premises are damaged or destroyed, then Landlord shall repair and restore such
improvements then owned by Landlord to their condition prior to said damage or
destruction and this Lease shall continue in full force and effect. Landlord
shall commence such repair or rebuilding with reasonable diligence and complete
the same within one hundred eight (180) days after commencement. There shall be
an abatement of rental payable under the provisions of Article IV only by reason
of such damage or destruction or the time required to repair or rebuild in the
proportion that the part of the Demised Premises rendered usable to Tenant bears
to the whole thereof. The net proceeds, if any, of any insurance maintained, in
force by Landlord at the expense of the Tenant in accordance with the terms of
Article 8.1 hereof, with the proceeds thereof payable to Landlord or any
encumbrancer shall be applied by Landlord to the cost and expense of repair or
rebuilding such damage or destruction, subject to reasonable con ditions and
payable on the usual architect's certificates; but Landlord or any encumbrancer
holding said insurance proceeds may withhold until completion and the expiration
of the period within the time that mechanics or materialmen's liens may be filed
and until receipt of satisfactory evidence that no liens exist, an amount
reasonably necessary to insure completion of such repairs or rebuilding. If
prior to Landlord's rebuilding it is determined that such rebuilding will
reasonably take more than six (6) months, Landlord or Tenant may terminate this
Lease by thirty (30) days written notice to the other party. if Landlord shall
fail to complete its rebuilding hereunder within eight (8) months of such
damage, notwithstanding the provisions of Article 17.1 hereof, Tenant may
terminate this Lease upon notice to Landlord.
ARTICLE XIII
------------
Condemnation
------------
XIII.1 If title to all or any portion of the Demised Premises be taken by
any public or quasi-public use or authority under any statute or by right of
eminent domain, or by private purchase in lieu thereof, then the rights of the
parties to share in the condemnation award or purchase price thereby resulting
shall be governed by the provisions of this Article XIII.
XIII.2 Total Taking: Should more than 50% of the Demised Premises be
taken in such a manner as to materially interfere with Tenant's use and
occupancy thereof, then this Lease shall terminate as of the date that
possession of said Demised Premises or part thereof be taken, and Landlord shall
be entitled to (a) any amount paid for the taking of Landlord's fee interest in
the Demised Premises, and (b) any severance damages included in the award, and
(c) any amount paid for the taking of the Demised Premises except that paid for
any improvements made to the Demised Premises by Tenant which remain the
property of Tenant, and (d) any amount which represents the present worth of
rental payments to be made in the future under the provisions of this Lease
which was not included in (a) above, and none of Landlord's interests in the
above shall be subject to any diminution or apportionment whatsoever, except
that notwithstanding anything contained herein to
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the contrary, Tenant shall be entitled to compensation for the unamortized value
of any improvements made to the Demised Premises by Tenant of the area taken.
XIII.3 Partial Taking: In the event of a partial taking of more than
thirty percent (30%) of the Demised Premises which in Tenant's judgment
materially interferes with Tenant's continued use and occupancy of the Demised
Premises' Tenant shall have the right to terminate this Lease upon sixty (60)
days prior written notice to Landlord. If notwithstanding such taking, Tenant
does not elect to terminate within sixty (60) days of such taking, or in the
event of the taking of less than thirty percent (30%) of the building area of
the Demised Premises, then this Lease as to the part so taken only shall
terminate as of' the date that possession of such part of the Demised Premises
be so taken, and the fixed monthly rental and additional rental herein Provided
for shall be reduced in proportion as the square footage of the Demised Premises
so taken bears to the total Demised Premises area existing before such taking if
this Lease is not terminated as provided herein, Landlord shall replace or
repair the building facility constituting a portion of the Demised Premises by
re-installing plumbing, electrical wiring, walls and paving, if necessary, so
that said building facility shall be completely operable and an integral whole,
but at a cost to Landlord not to exceed the condemnation award received by
Landlord. If Landlord shall fail to complete such rebuilding so as to result in
an integral whole within six months of such taking, notwithstanding the
provisions of Section 17.1 hereof, Tenant may terminate this Lease upon notice
to Landlord. In the event of such partial taking Landlord shall be entitled to
(a) any amounts paid for the taking of Landlord's fee interest in the demised
premises, and (b) any severance damages included in the award and (c) any amount
paid for the taking of the Demised Premises except that paid for any
improvements made to the Demised Premises by Tenant which remain the property of
Tenant, and (d) any amount which represents the present worth of rental
payments to be made in the future under the provisions of this Lease as to the
part taken which was not included in (a) above, and none of Landlord's interests
in the above shall be subject to any diminution or apportionment whatsoever
except that notwithstanding anything to the contrary contained herein, Tenant
shall be entitled to compensation for the unamortized value of any improvements
made to the demised premises by Tenant which were taken.
XIII.4 Landlord and Tenant agree to execute all documents and assignments
necessary to carry out this Article in the event of condemnation or purchase in
lieu thereof.
ARTICLE XIV
-----------
Use of Premises - Assignments
-----------------------------
XIV.1 Tenant shall have the right to use the Demised Premises for any
lawful purpose within applicable zoning laws and regulations existing from time
to time, except as otherwise prohibited or limited in this Lease.
XIV.2 Tenant may not hypothecate this Lease without the written consent of
Landlord.
XIV.3 Tenant may assign this Lease or its rights and leasehold estate
hereunder with the written consent of Landlord first had and obtained, which
consent will not be unreasonably withheld or delayed. Tenant may without
Landlord's consent assign this Lease or sublet all or a portion of the
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Demised Premises to any corporation, partnership, trust, association or other
business entity directly or indirectly controlling, controlled by or in common
control with Tenant or to any successor by merger, consolidation or acquisition
of all or substantially all of Tenant's assets. Tenant may sublet the Demised
Premises to another party with the written consent of Landlord first had and
obtained, which consent will not be unreasonably withheld or delayed. In the
event of any assignment, subletting, or other transfer permitted under this
Lease, or otherwise occurring (voluntary or involuntary, by agreement or by
operation of law), any rent, additional rent, or other consideration, payments,
compensation, or remuneration of whatever kind or nature received by Tenant in
excess of the rent as provided in this Lease shall be and become the sole
property of Landlord. No such assignment or subletting by Tenant, unless
otherwise expressly agreed to by Landlord in writing, shall relieve or release
Tenant from the obligations to pay rent and items in the nature of rent, as
herein provided, and to do and perform all covenants and agreements herein made
by Tenant, all of which Tenant shall continue to guaranty, notwithstanding any
such assignment or subletting. Landlord reserves the right to approve any
exterior signs which an assignee or sublessee intends to place in or upon the
Demised Premises. Each assignee or sublessee acquiring this Lease by acceptance
of an assignment or transfer by operation of law shall ipso facto assume, to be
bound by, be obligated to perform, be entitled to enforce and acquire all rights
and obligations of its assignor or sub-lessor under this Lease in the event of
default of Tenant, and a subtenant is in possession Landlord at Landlord's
option may succeed to the position of Tenant as to any subtenant or subtenants
of Tenant.
ARTICLE XV
----------
Event of Default
----------------
XV.1 This Lease is made on the conditions precedent and subsequent that if
any one or more of the following events (herein sometimes referred to as a
"default" or "event of default") shall happen:
A. Tenant shall default in the due and punctual payment of fixed rent
or additional rent payable hereunder, and such default shall continue for ten
(10) days after mailing of written notice to Tenant; or
B. Tenant shall neglect or fail to perform or observe any of the
covenants herein contained on Tenant's part to be Performed or observed, and
Tenant shall fail to remedy the same within thirty (30) days after Landlord
shall have given to Tenant written notice specifying such neglect or failure (or
within such additional period, if any, as may be reasonably required to cure
such default, if it is of such nature that it cannot be cured within said
thirty-day (30) period); or
C. This Lease or the Demised Premises or any part thereof shall be
taken upon execution or by other process of law directed against Tenant, or
shall be taken upon or subject to any attachment at the instance of any creditor
of or claimant against Tenant, and said attachment shall not be discharge or
disposed of within thirty (30) days after levy thereof; or
D. Tenant shall be involved in financial difficulties as evidenced by
(a) Tenant
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admitting in writing Tenant's inability to pay Tenant's debts generally as they
become due, or (b) Tenant filing a petition in bankruptcy or for reorganization
or for the adoption of an arrangement under the Bankruptcy Act (as now or in the
future amended) or an answer or other pleading be filed by or on behalf of
Tenant admitting the material allegations of such petition, or seeking,
consenting to, or acquiescing in the relief provided for under such Act, or (c)
Tenant making an assignment of all or a substantial part of Tenant's property
for the benefit of its creditors, or (d) Tenant seeking or consenting to or
acquiescing in the appointment of a receiver or trustee for all or a substantial
part of Tenant's property or of the Demised Premises or of Tenant's interest in
this Lease, or (e) Tenant being adjudicated a bankrupt or insolvent, or (f) the
entry of a court order without Tenant's consent affecting Tenant's right to use
or occupancy of the Demised Premises, which order shall not be vacated, set
aside or stayed within 120 days from the date of entry, (provided rent is paid
during such period); or (g) the appointment of a receiver or trustee for all or
a substantial part of Tenant's property, or (h) Tenant's approving a petition
filed against it for the effecting of an arrangement in bankruptcy or for a
reorganization Pursuant to said Bankruptcy act, or for an judicial modification
or alteration of the rights of creditors; then, in any such event, Landlord
shall have the right at Landlord's election then or at any time thereafter, and
while such event of default shall continue to either:
(a) Give Tenant written notice of Landlord's intention to
terminate this Lease on the date of such notice or on any later date specified
therein, and on the date specified in such notice Tenant's right to the use,
occupancy and possession of the Demised Premises shall cease and this Lease
shall there"mon be terminated; or
(b) To the extent permitted by applicable law, with three (3)
days' notice, to re-enter and take possession of the Demised Premises or any
part thereof and repossess the same as of Landlord's former estate and expel
Tenant and those claiming through or under Tenant and remove the effects of both
or either therefrom (forcibly if necessary) without being deemed guilty of any
manner of trespass and without prejudice to any remedies for arrears of rent or
preceding breach of this Lease. Should Landlord elect to re-enter as provided in
this subparagraph (b), or should Landlord take possession pursuant to legal
proceedings or pursuant to any notice provided for by law, Landlord may (i)
terminate this Lease; or (ii) from time to time, without terminating this Lease,
relet the premises or any part thereof for such term or terms and at such rental
or rentals and upon such other terms and conditions as Landlord may deem
advisable, with the right to make alterations and repairs to the premises, but
reserving to Landlord the right at any time to thereafter elect to terminate
this Lease as in subparagraph (a) provided. No such re-entry or taking
possession of the premises by Landlord shall be construed as an election on
Landlord's part to terminate this Lease unless a written notice of such
intention be given to Tenant or unless the termination thereof be decreed by a
court of competent jurisdiction.
XV.2 In the event that Landlord does not elect to terminate this Lease as
permitted in subparagraph (a) of Article 15.1, but on the contrary elects to
take possession as provided in subparagraph (b) of Article 15.1, then such
repossession shall not relieve Tenant of Tenant's liabilities and obligations
under this Lease, all of which shall survive such repossession. in the event of
such repossession, Tenant shall pay the fixed rent and all additional rent and
other sums as herein
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provided up to the time of termination of this Lease (which Landlord can declare
at any time while Tenant remains in default), and thereafter Tenant, until the
end of what would have been the term of this Lease, in the absence of such
repossession (excluding any unexercised options to extend) and whether or not
the Demised Premises shall have been relet, shall be liable to Landlord for and
shall pay to Landlord as liquidated current damages:
A. The fixed rent and additional rent as herein provided which would
be payable hereunder if such possession had not occurred;
LESS
B. The net proceeds, if any, of any reletting of the Demised
Premises, after deducting all of Landlord's reasonable expenses in connection
with such reletting, including, but without limitation, all repossession costs,
brokerage commissions, reasonable legal expenses and attorneys' fees, and
reasonable expenses of preparation for remodeling for such reletting.
Tenant shall pay such current damages to Landlord on the days on which the
fixed rent would have been payable hereunder if Landlord had not repossessed,
and Landlord shall be entitled to receive the same from Tenant on each such day.
If this Lease is terminated by Landlord by reason of any default by Tenant,
whether at the time of such default or at a later date, Landlord shall be
entitled to recover from Tenant the worth at the time of such termination of the
excess, if any, of the amount of rent reserved in this Lease for the balance of
the term hereof (excluding any unexercised options to extend) over the then
reasonable rental value of the premises for the same period. It is agreed that
the "reasonable rental value" as used herein shall not exceed the amount of
rental which Landlord can then obtain as rent for the remaining balance of the
term under a written lease in the same form as this Lease.
XV.3 In the event of any such re-entry by Landlord, Landlord may, at
Landlord's option, require Tenant to remove from the premises any of Tenant's
property located thereon. If Tenant fails to do so Landlord shall not be
responsible for the care or safekeeping thereof and to the extent permitted by
applicable law may remove any of the same from the demised premises and place
the same in storage in a public warehouse at the cost, expense and risk of
Tenant with authority to the warehouseman to sell the same in the event that
Tenant shall fail to pay the costs of transportation and storage, all in
accordance with the rules and regulations applicable to the operation of a
public warehouseman's business. Any refusal by a public warehouseman to accept
personal property located in the Demised Premises upon such conditions shall be
conclusive evidence that the same is of not substantial value, and shall be an
unconditional warrant to Landlord for disposing of the same in any manner
Landlord may see fit, and without accountability for any alleged value thereof
in any and all such cases of re-entry Landlord may make any repairs in, to or
upon the Demised Premises which may be necessary, desirable or convenient, and
excluding Landlord's fault or neglect Tenant hereby waives any and all claims
for damages which may be caused or occasioned by such re-entry of any of the
aforesaid acts of Landlord or by reason of any loss or destruction or damage to
any property in or about the demised Premises or any part thereof.
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XV.4 It is expressly agreed that neither the taking of possession of the
Demised Premises nor the institution of any proceedings by way of lawful
detainer, ejectment, quiet title, or otherwise, to secure possession of said
Demised Premises, nor the re-entry by Landlord with or without the institution
of such proceedings, nor the rerenting or subletting of the Demised Premises,
shall operate to terminate this Lease in whole or in part, nor of itself
constitute an exercise of Landlord's option so to do, but only by the giving of
the written notice clearly specifying termination shall such termination be
effected.
XV.5 Tenant further covenants and agrees that if Landlord fails or
neglects for any reason to take advantage of any of the terms hereof providing
for the termination of this Lease or for the termination or forfeiture of the
estate hereby demised, or if Landlord, having the right to declare this Lease
terminated or the estate hereby demised terminated or forfeited, shall fail so
to do, any such failure or neglect of Landlord shall not be or be deemed or be
construed to be a waiver of any provision for the termination of this Lease
continuing to exist or for the termination or forfeiture of the estate hereby
demised subsequently arising, or as a waiver of any of the covenants, terms or
conditions of this Lease or of the prompt performance thereof by Tenant. None of
the covenants, terms or conditions of this Lease can be waived except by the
written consent of the party entitled to the benefits thereof.
ARTICLE XVI
-----------
Surrender of Premises
---------------------
XVI.1 Upon any termination of this Lease, whether by lapse of time,
cancellation pursuant to an election provided for herein, forfeiture, or
otherwise, Tenant shall surrender immediately possession of the Demised Premises
and all buildings and improvements on the same to Landlord in good and
tenantable repair, reasonable wear and tear, reconstruction required by reason
of condemnation, and damage from fire or other casualty excepted. If possession
be not immediately surrendered Landlord, to the extent permitted by applicable
law, may forthwith enter the Demised Premises and repossess the same for any
part thereof and expel and remove therefrom using such force as may be
necessary, all persons and property, without being deemed guilty of any unlawful
act and without prejudice to any other legal remedy available to Landlord.
Landlord shall hold Demised Premises after any such re-entry free of any right,
privilege or estate of Tenant and without any duty or obligation to Tenant in
respect of any subsequent law, reletting or disposition of the Demised Premises.
XVI.2 Upon the termination of this Lease, Tenant, if not in default
hereunder at the time, shall have the right to remove, and if directed so to do
by Landlord shall remove from the demised Premises, all furniture, furnishings,
signs, and equipment (excluding building service equipment) then installed or in
place in, on or about the Demised Premises; provided, however, Tenant shall make
all repairs to the Demised Premises required because of such removal. If this
Lease shall terminate at any time other than the time herein fixed as the
expiration of the term, and occurring not due to a default by Tenant, then
Tenant shall have a reasonable time thereafter to effect the removal
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of the foregoing items, not to exceed thirty (30) days. If any of such property
shall remain on the Demised Premises after the end of the term hereof or time
allowed to remove the same, such property shall be deemed abandoned by Tenant
and it shall become the property of Landlord without any claim therein of Lessee
should Landlord so elect.
XVI.3 Upon termination of this Lease, Tenant shall surrender the Demised
Premises in a "Broom-clean" condition, and Tenant shall fill or repair any holes
or openings made by Tenant in the walls, roof or floor of the building remove
any protuberance, and perform any maintenance or repairs required of Tenant by
this Lease if directed so to do by Landlord, Tenant shall leave all improvements
affixed to the Demised Premises and all right, title and interest therein of the
Tenant shall immediately cease unless otherwise agreed to in writing.
ARTICLE XVII
------------
Strikes - War - Acts of God
---------------------------
XVII.1 The time within which Landlord or Tenant is obligated herein to
construct, repair or rebuild any buildings, improvement or other structure shall
be extended and the performance excused when the delay is occasioned by the
other party, strikes, threats of strikes, blackouts, war, threats of war,
bombing, insurrection, invasion, acts of God, calamities, civil commotion,
violent action of the elements, fire, action or regulations of any governmental
authority, state, law or ordinances, impossibility of obtaining materials,
weather conditions which impair or delay construction, or other matters or
things whether similar or dissimilar to the foregoing, beyond the reasonable
control of the obligated party.
ARTICLE XVIII
-------------
Cost of Litigation
------------------
XVIII.1 In the event that either party hereto brings any action or
proceeding against the other party for possession of the Demised Premises or for
the recovery of any sum due hereunder, or because of the breach of any covenant,
condition, or provision hereof, or for any other relief against the other party,
declaratory or otherwise, including appeals therefrom, and whether being an
action based upon a tort or contract, then the successful party in any such
proceeding shall recover from the other party, reasonable attorneys' fees and
all costs of such action or proceeding which shall be enforceable whether or not
such action or proceeding is prosecuted to final judgment, and including an
allowance for attorneys fees on appeals and rehearings. Should Landlord be made
a party to any suit or proceeding brought by any third party, arising by reason
of Tenant's use or occupancy of the Demised Premises and not being a dispute
essentially between Landlord and Tenant, then Tenant shall defend the same and
landlord therein, at Tenant's sole cost and expense, and shall hold Landlord
free and harmless from any liability, duty, obligation therein, including any
attorneys' fees of Landlord.
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ARTICLE XIX
-----------
Statement of Lease
------------------
XIX.1 Tenant agrees at any reasonable time and upon not less than 10 days
prior written request by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if modified in full force and effect as modified and
stating modifications), and the dates to which rental or other sums have been
paid in advance, it being intended that any such statement delivered pursuant to
this paragraph may be relied upon by any prospective purchase, mortgagee or
assignee. Tenant shall also deliver to Landlord, upon Landlord's reasonable
request therefor from time to time, Tenant*s latest financial statements which
are not of a confidential nature or for intercompany use only.
ARTICLE XX
----------
Rights Reserved by Landlord
---------------------------
XX.1 Landlord expressly reserves all rights in and with respect to the
land hereby leased not inconsistent with Tenant's use Of the Demised Premises as
in this Lease provided, including (without in anywise limiting the generality of
the foregoing) the rights of landlord to enter upon the Demised Premises for
itself or to give easements to others for the purpose of installing, using,
maintaining, renewing and replacing such overhead or underground water, oil,
gas, sewer, drainage, and other pipe lines, and telephone, electric, power,
television and other lines, cables and conduits as Landlord may deem desirable
in the neighborhood of the land hereby leased, whether owned by Landlord or not,
all of which pipe lines, lines and conduits shall be buried to a sufficient
depth or raised to a sufficient height so as not to interfere with the use or
stability of the building or any other improvement comprising the Demised
Premises.
ARTICLE XXI
-----------
Covenants of Quiet Employment
-----------------------------
XXI.1 Landlord does hereby covenant, promise and agree to and with Tenant
that Tenant, for so long as it is not in default hereof, shall and may at all
times peaceably and quietly have, hold, use, occupy and possess the Demised
Premises throughout the term of this lease without any litigation, suit,
trouble, molestation or eviction by Landlord or any persons claiming by or
through Landlord or claiming the Demised Premises.
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ARTICLE XXII
------------
Short Form of Lease
-------------------
XXII.1 Simultaneously with the execution hereof, the parties shall execute
a short from of memorandum of this lease agreement in such form as shall be
furnished by Landlord which shall evidence the interest of the parties hereto.
Said memorandum of lease shall be recorded only in the Public Records of orange
County, Florida, with the permission of Landlord.
ARTICLE XXIII
-------------
Subordination
-------------
XXIII.1 Tenant agrees that upon the request of Landlord, it will
subordinate this Lease to the lien of any present or future mortgage or
mortgages upon the Demised Premises, irrespective of the date of any such
mortgage or mortgages, provided that the holder of any such future mortgage
shall enter into an agreement with the Tenant that, in the event of foreclosure
by the holder of any future mortgage or assignee thereof, this Lease and the
rights of the Tenant hereunder shall continue in full force and effect and shall
not be terminated or disturbed except in accordance with the provisions of this
Lease. Tenant agrees that it will upon the request of Landlord execute,
acknowledge and deliver any and all instruments deemed by the Landlord Necessary
or desirable to give effect to or notice of such subordination. Tenant further
agrees that if it shall fail at any time to executer acknowledge, or deliver any
such instrument requested by Landlord, Landlord may, in addition to any other
remedies available to Landlord, execute, acknowledge and deliver such instrument
as the attorneys-in-fact of Tenant and in tenant's names; and Tenant hereby
makes, constitutes and irrevocably appoints Landlord as its attorney-in-fact for
such purpose. No such instrument shall alter any of the terms of this Lease. The
word "mortgage", as used herein includes mortgages, deeds of trust or other
similar instruments and modifications, consolidations, extensions, renewals,
replacements and substitutes thereof.
ARTICLE XXIV
------------
Prepaid Rent and Security Deposit
---------------------------------
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XXIV.1 As security for the faithful performance of the terms, covenants,
conditions and provisions of this lease, as well as to indemnify Landlord from
any damages, costs, expenses, real estate brokerage commissions or attorneys'
fees to which Landlord may be put by reason of any default by Tenant, Tenant
hereby agrees to deposit with Landlord, upon execution of this Lease, the sum of
SEVENTEEN THOUSAND TWO HUNDRED TWENTY-TWO AND NO/100 DOLLARS ($17,222.00) as
security deposit. If Tenant is not in default and has complied with all its
obligations under the Lease, the security deposit together with interest thereon
as hereinafter provided and any prepaid rent that has been subsequently paid to
Landlord will be returned at the termination of the Lease, less the reasonable
expense, if any, to restore the Demised Premises to the same condition as
existed at the time of the signing hereof, less normal wear and tear. Landlord
shall pay to Tenant quarterly interest upon the balance, if any, of the
foregoing amounts, at the bank savings passbook rate of interest prevailing
locally from time to time in orange County, Florida.
ARTICLE XXV
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Holding over
------------
XXV.1 If Tenant remains in possession of the Demised Premises after the
expiration of the term of this Lease or any extension or renewal hereof, such
holding over shall not operate to extend or renew this Lease but shall be
construed as a tenancy from month to month which may be terminated by Landlord
upon thirty (30) days prior written notice if Tenant is then in default of this
Lease, or by either party upon at least sixty (60) days prior written notice
directed to the end of a calendar month. Such month to month tenancy by Tenant
shall be subject to all the terms and provisions of this Lease, except that the
monthly rental payable during the period of holding over shall be the rental set
forth in Article IV, plus two percent (2%) of the amount of said rent per year
increase from date of lease commencement.
ARTICLE XXVI
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General
-------
XXVI.1 The specific remedies to which Landlord or Tenant may resort under
the terms of this Lease are cumulative and are not intended to be exclusive of
any other remedies or means of redress to which they may be lawfully entitled in
case of any breach or threatened breach by either of them or of any provision of
this Lease.
XXVI.2 The covenants and agreement herein contained shall bind and inure
to the benefit of Landlord, its successors and assigns, and Tenant, its
successors and assigns, subject to the provisions of this Lease.
The term "Landlord", as used in this Lease, means only the owner for the
time being of the land and building containing the Demised Premises, so that in
the event of any sale of said land and building, or in the event of a lease of
said entire building, the Landlord shall be and hereby is entirely released of
all covenants and obligations of the Landlord hereunder, and it shall be deemed
and
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construed without further agreement between the parties or between the parties
and the purchaser at any such sale of the land and the building or the lessee of
the building, that said purchaser or said lessee has assumed and agreed to carry
out any and all covenants and obligations of the Landlord hereunder.
XXVI.3 Each covenant, agreement or stipulation by a party hereto shall be
performed at such party's own cost and expense, without cost or expense to the
other party. Any monetary obligations due from Tenant to Landlord which are not
paid when due shall bear interest from the due date until paid to Landlord at
the rate of ten percent (10%) per annum, and such interest shall be paid at the
time of payment of the principal obligation as a condition of remedy of such
principal obligation.
XXVI.4 Any notice or demand required or permitted by law or by an of the
provisions of this Lease shall be in writing. All notices or demands by Landlord
to Tenant shall be deemed to have been properly given when served personally on
tenant or when sent by registered or certified mail, postage prepaid, addressed
to Tenant at the address of the Demised Promises, with a copy thereof sent
simultaneously to attention: President, DATAMAX CORPORATION, Building 606, 4500
Parkway Commerce Boulevard, Orlando, Florida 32810, with a copy to Office of
General Counsel, GTECH Corporation, 101 Dyer Street, Providence, RI 02903. All
notices or demands by Tenant to Landlord shall be deemed to have been properly
given if served personally on Landlord or when sent by registered or certified
mail, postage prepaid, addressed to Landlord at John Hancock Properties, Inc.,
Post Office Box 111, 2 Copley Place, Suite 200, Boston, MA 02117. Either party
hereto may change the place to which notices are to be given by advising the
other party in writing.
XXVI.5 The headings or captions of Articles in this Lease are for
convenience and reference only, and they in no way define, limit, or describe
the scope or intent of this Lease or the provisions of such Articles.
XXVI.6 Time is hereby expressly declared to be of the essence of this
Lease and of each and every covenant, term, condition or provisions hereof.
XXVI.7 The agreement may be executed in several counterparts, each of which
shall constitute an original.
ARTICLE XXVII
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Option to Lease Additional Space
--------------------------------
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<PAGE>
XXVII.1 Provided Tenant is not in default hereunder either on the
date it exercises the within option or on the date of commencement of leasing of
the additional premises which may be leased pursuant to this Article, Tenant
shall have the first right to lease additional space in the building of which
the Demised Premises are a part, for a term which is not less than the term
remaining on the original term of this Lease, said additional premises being in
that portion of the building known as a multi-tenancy area. The multitenancy
area consists of approximately 26,400 square feet, divided into bays of from
2400 square feet to 3600 square feet. The Tenant's right to lease said
additional premises is subject to said additional premises not being occupied
and leased by other Tenants. of Landlord. Tenant's option to lease said
additional space shall exist during the original term of this lease or the
extension thereof, if any. In the event said additional premises are available
for lease by Tenant, the rental rates shall be at the prevailing market rate
charged by Landlord and other terms for said additional space shall be as agreed
upon between Landlord and Tenant. Tenant shall be notified in writing as to the
availability of such additional space as aforesaid. Upon receipt of such
notification, Tenant shall have a period of ten (10) days in which to notify
Landlord whether Tenant will lease said additional premises pursuant to the
provisions of this paragraph and this Lease. if Tenant leases the additional
premises as provided herein, the rental shall be payable in equal monthly
installments over the period the additional premises shall be leased, together
with additional rental pursuant to the terms of this Lease and payment of all
applicable Florida State Sales Tax on said amounts.
ARTICLE XXVIII
--------------
Radon Gas Notice
----------------
XXVIII.1 RADON GAS: RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS
THAT WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES MAY PRESENT
HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT
EXCEED FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM
YOUR COUNTY PUBLIC HEALTH UNIT. SEE SECTION 404.056, FLORIDA STATUTES.
ARTICLE XXIX
------------
Hazardous Substances Prohibit"
------------------------------
Tenant shall not utilize the Demised Premises any part thereof, to
treat, deposit, store, dispose of, or place any hazardous substance, as defined
by 41 U.S.C.A. Section 9601 (A); nor shall Tenant authorize any other person or
entity to treat, deposit, store, dispose of, or place any hazardous substance,
as defined above, on the Demised Premises or any part thereof.
In the event a release or threatened release of a hazardous substance
occurs on the Demised Premises, which subjects Landlord to liability or claims
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C.A. Section 9607, under the Florida
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Resource Recovery and Management Act, Florida Statute Section 504.727 (1983), or
under any other statutory or common law, Tenant agrees to indemnify, hold
harmless and defend Landlord from and against any such liability or claims
regardless of whether Landlord is responsible for such release or threatened
release.
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<PAGE>
Tenant is expressly prohibited from engaging in any business in which
hazardous substances or hazardous waste are produced (either as a primary or
incidental product of Tenant's business), stored, held, brought upon,
warehoused, manufactured, or disposed of upon the Demised Premises.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above set forth.
- ------------------------------------- --------------------------------------
Witnesses: LANDLORD:
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
Wetness as to Landlord
By: JOHN HANCOCK PROPERTIES,
INC.
By:
Peter E. Potrykus, as its Senior
Witness as to Landlord Real Estate Management Officer
(Corporate Seal)
- ------------------------------------- --------------------------------------
TENANT:
DATAMAX CORPORATION
By:
Willem Daman, as its President
(Corporate Seal)
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<PAGE>
EXHIBIT "A"
-----------
(New)
LOTS 8 and 9, PARKWAY CENTER PHASE 1, according
to the Plat thereof, as recorded in Plat Book 8.
Page 2 p of the Public Records of Orange County,
Florida.
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