Exhibit 10(ll)
EXHIBIT B
BASE TEN SYSTEMS, INC.
PERFORMANCE-BASED
STOCK OPTION AGREEMENT
This Option Agreement (the "Agreement"), made as of October 17, 1997, is
between Base Ten Systems, Inc. (the "Company"), a New Jersey corporation located
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, (the "Optionee").
WHEREAS, in consideration of the Optionee's agreement to serve as President
and Chief Executive Officer of the Company and Co-Chairman of the Board of
Directors under an Employment Agreement dated as of October 17, 1997 between
Optionee and the Company (the "Employment Agreement"), the Company has agreed to
grant to Optionee certain options to purchase shares of the Company's Class A
Common Stock ("Common Stock" pursuant to the Employment Agreement and the
Company'' Amended Discretionary Deferred Compensation Plan on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth below, the parties agree as follows:
1. OPTIONS
(a) Subject to the terms and conditions set forth herein and in the
Employment Agreement, the Company grants to Optionee two hundred
thousand (200,000) rights (each an "Option") to subscribe for and
purchase one share of Common Stock at the price of eleven and one-
eighth dollars ($11 1/8) per share ("Purchase Price"), the NASDAQ
closing price as of the date of this Agreement. The Options granted
pursuant to this Agreement shall be considered Performance-Based
Stock Options. Performance-Based Stock Options shall vest and become
exercisable at a rate of one Option for each one hundred dollars
($100) of consolidated earnings (excluding extraordinary items)
before interest, taxes, depreciation and amortization ("EBITDA"), as
reported in the Company's audited financial statements for each of
the Company's first three fiscal years ending after November 1, 1997,
at the time that such audited financial statements first become
available, provided that the Optionee is an active employee of the
Company as of the end of such fiscal year, except that, in the event
that Optionee's employment with the Company is terminated by the
Company "without cause" or if Optionee terminates his employment with
the Company for "good reason", all as set forth in the Employment
Agreement dated October 17, 1997 between Optionee and the Company
("Employment Agreement"), then Optionee will be considered to be an
active employee, solely for purposes of vesting, through the date that
is twelve (12) months following the termination of his employment. In
the event that the Optionee is not an active employee of the Company
as of the end of any of such three fiscal years, then no Options will
be earned or become vested with respect to any EBITDA of the Company
for such fiscal year. At the end of such three fiscal year period,
any Options granted hereunder which have not vested in accordance
with the foregoing performance standards shall terminate.
(b) The Options shall not be transferable other than by will or the laws
of descent and distribution or, after the Optionee's death, to a
beneficiary (or beneficiaries) designated by Optionee in writing in a
form satisfactory to the Company, and the Options may be exercised,
during the lifetime of the Optionee, only by the Optionee. Without
limiting the generality of the foregoing, the Options may not be
assigned, transferred (except as provided above), pledged or
hypothecated in any way, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of any of the Options
contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon any Option, shall be null and void
and without effect.
2. EXERCISE.
(a) Subject to the terms and conditions of this Agreement, Optionee shall
have the right to exercise at the Purchase Price all vested Options at
any time after the date hereof. Notwithstanding anything else herein
to the contrary, all Options granted under this Agreement shall expire
on the tenth anniversary of the date of this Agreement.
(b) Vested Options may be exercised by the Optionee in whole or in part,
but not as to a fractional share, by surrender of such Options,
properly endorsed at the principal office of the Company, and by
delivering to the Company (i) a written exercise notice substantially
in the form annexed hereto as Schedule A, and (ii) payment of the
aggregate Purchase Price, plus required tax withholding amounts (as
determined by the Company) for the number of shares purchased by
certified check or bank check(or in such other form as the Company may
elect to accept). The shares purchased shall be deemed to be issued
to the Optionee as the record owner as of the close of business on the
date of which the Options are surrendered and payment is made for the
shares. Certificates representing the shares purchased shall be
delivered to the Optionee within thirty (30) days after the rights
represented by the Options have been properly exercised.
3. SHARES.
(a) The Company covenants and agrees that all shares of Common Stock
shall, on issuance and payment of the consideration therefor
hereunder, be fully paid and nonassessable and free from all taxes,
liens and charges related to the issuance of such shares. The Company
further covenants and agrees that during the period within which the
rights represented by the Options may be exercised, the Company shall,
at all times, have authorized and reserved for the purpose of issuance
or transfer on exercise of the Options a sufficient number of the
shares subject to the Options to provide for their exercise.
(b) The Company shall use its best reasonable efforts to assure that all
shares of Common Stock received by Optionee on any exercise of any
Option shall be, and shall remain, (i) fully registered (at the
Company's expense) under the Securities Act of 1933, as amended (the
"1933 Act"), both for issuance and for resale, (ii) fully
registered or qualified (at the Company's expense) under such state
securities laws as Optionee may reasonable request, both for issuance
and for resale, and (iii) either qualified for trading on NASDAQ or
listed on a national securities exchange unless, in each case,
Optionee consents to alternative arrangements that adequately protect
the salability of such shares, which consent shall not be unreasonable
withheld.
4. ADJUSTMENTS. In the event that there is any change in the Common Stock
arising through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split or combination, the Board of Directors shall
make such adjustments in the aggregate number of Options subject to this
Agreement and/or the price per share of such Options in order to prevent
dilution or enlargement of the Optionee's rights and value represented by
the Options. In the event of a dissolution or liquidation of the Company
or a merger, consolidation, sale of all or substantially all of the
Company's assets, or other corporate reorganization in which the Company is
not the surviving corporation, or any merger in which the Company is the
surviving corporation but the holders of its Common Stock receive
securities of another corporation (each of the foregoing, a "Trigger
Event"), outstanding Options shall terminate, provided that the holder of
each Option shall, in such event, if no provision has been made for the
substitution of a new option for such outstanding option, have the right
immediately prior to such Trigger Event, to exercise the holder's Options
in whole or in part without regard to the date on which the Options
otherwise would be first exercisable. Upon any adjustment in the number or
exercise price of shares subject to an Option, a new Option may be granted
in place of such Option which has been so adjusted.
5. ABSENCE OF RIGHTS. No Option shall entitle the Optionee to any rights as a
shareholder of the Company prior to the exercise of such Option.
6. INVALIDITY; SEVERABILITY. If any clause or provision of this Agreement
shall be adjudged invalid, the same shall not affect the validity of any
other clause or provision of this Agreement, or of any other document
pertaining to the subject matter thereof, or constitute by reason thereof,
any claim or cause of action in favor of Optionee as against the Company.
In addition, the provisions of this Agreement shall be read and construed
and shall have effect as separate, severable and independent provisions or
restrictions, and shall be enforceable accordingly.
7. ENTIRE AGREEMENT; NO WAIVER; REMEDIES. This Agreement and the Employment
Agreement contains the entire agreement of the parties and incorporates and
supersedes any and all prior or contemporaneous oral or written agreements
with respect to the matters referred to in them. No waiver of any breach
or default hereunder shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
No failure on the part of any party to exercise, and no delay in exercising
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; no waiver whatever shall be valid unless in writing signed by the
party or parties to be charged and then only to the extent specifically set
forth in such writing. All remedies, rights, powers and privileges, either
under this Agreement or by law or otherwise afforded the parties to this
Agreement, shall be cumulative and shall not be exclusive of any remedies,
rights, powers and privileges provided by law.
8. NOTICES. Any notice required or permitted to be given under this Agreement
shall be give in accordance with Section 12 of the Employment Agreement.
9. SUCCESSORS AND ASSIGNS. The rights and obligations of the Company under
this Agreement or the Options shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company.
10. HEADINGS; COUNTERPARTS; GOVERNING LAW. The headings in this Agreement are
for convenience of reference only and are not intended to define or limit
the contents of any section or paragraph. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. This
Agreement shall in all respects be governed by the internal laws (without
reference to conflicts of laws principles) of the State of New Jersey
applicable to contracts made and performed within the State of New Jersey.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BASE TEN SYSTEMS, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman & Chief Executive
Officer
Schedule A
EXERCISE NOTICE
Base Ten Systems, Inc.
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Gentlemen:
The undersigned hereby exercises the option to purchase ________ shares of Class
A Common Stock of Base Ten Systems, Inc. pursuant to the Base Ten Systems, Inc.
Performance-Based Stock Option Agreement (the "Option Agreement") dated as of
___________________________ between Base Ten Systems, Inc. and the undersigned.
Accompanying this Exercise Notice is payment pursuant to the Option Agreement in
the amount of $ _____________.
Dated: _________________________ By: ____________________________
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