Document:

exv10w16

 

EXHIBIT 10.16

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 1, 2003,
between Compex Technologies Inc. (the “Company”), a Minnesota corporation, and
Gary (Mike) Goodpaster (the “Employee”), a resident of Florida.

     WHEREAS, the Company wishes to employ the Employee to render services for
the Company on the terms and conditions set forth in this Agreement, and the
Employee wishes to be retained and employed by the Company on such terms and
conditions.

     NOW,
THEREFORE, in consideration of the premises, the mutual agreements
set forth below and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

     1.          Employment. The Company hereby employs the Employee, and the Employee
accepts such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.

     2.          Term. Unless terminated at an earlier date in accordance with Section
9 of this Agreement, the term of the Employee’s employment hereunder shall be
for a period of one year years, commencing on September 1, 2003. Thereafter,
the term of this Agreement shall be automatically extended for successive
one-year periods unless either party objects to such extension by written
notice to the other party at least 60 days prior to the expiration of the
initial term or any extension term.

     3.          Position and Duties.

     (a)  Service with Company. During the term of the Employee’s employment,
the Employee agrees to perform such reasonable employment duties as the Vice
President of Sales Operations of the Company shall assign to him from time to
time. The Employee’s title shall be “Vice President of Sales Operations.”

     (b)  Performance of Duties. The Employee agrees to serve the Company
faithfully and to the best of his ability and to devote his full time,
attention and efforts to the business and affairs of the Company during his
employment by the Company. The Employee hereby confirms that he is under no
contractual commitments inconsistent with his obligations set forth in this
Agreement and that during the term of this Agreement, he will not render or
perform services for any other corporation, firm, entity or person which are
inconsistent with the provisions of this Agreement. While he remains employed
by the Company, the Employee may participate in reasonable charitable
activities and personal investment activities so long as such activities do not
interfere with the performance of his obligations under this Agreement.

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     4.          Compensation.

     (a)  Base Salary. As compensation in full for all services to be rendered
by the Employee under this Agreement, the Company shall pay to the Employee a
base salary of $175,000.00, less deductions and withholdings, which salary
shall be paid on a monthly basis in arrears in accordance with the Company’s
normal payroll procedures and policies. The compensation payable to the
Employee during each year after the first year of the Employee’s employment
shall be established by the Company’s Board of Directors following an annual
performance review.

     (b)  Incentive Compensation. In addition to the base salary, the Employee
shall be eligible to participate in any bonus or incentive compensation plans
that may be established by the Board of Directors of the Company from time to
time applicable to the Employee. For the first twelve months of Employee’s
employment, the Company will establish a bonus program for the fiscal year
ending June 30, 2004, that will provide the Employee the opportunity to achieve
an annual bonus of up to 30% of his annual base salary (subject to satisfaction
of performance measures to be established by the Company’s Chief Executive
Officer, in his absolute discussion), such bonus to be pro rated for the actual
number of months served.

     (c)  Participation in Benefit Plans. While he is employed by the Company,
the Employee shall also be eligible to participate in all employee benefit
plans or programs (including vacation time) of the Company to the extent that
the Employee meets the requirements for each individual plan. The Company
provides no assurance as to the adoption or continuance of any particular
employee benefit plan or program, and the Employee’s participation in any such
plan or program shall be subject to the provisions, rules and regulations
applicable thereto.

     (d)  Expenses. The Company will pay or reimburse the Employee for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the Company’s normal
policies for expense verification.

     (e)  Confidential Information. Except as permitted or directed by the
Company’s Chief Executive Officer, during the term of his employment or at any
time thereafter, the Employee shall not divulge, furnish or make accessible to
anyone or use in any way (other than in the ordinary course of the business of
the Company) any confidential or secret knowledge or information of the Company
that the Employee has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his employment
by the Company (including employment by the Company or any affiliated companies
prior to the date of this Agreement), whether developed by himself or by
others, concerning any trade secrets, confidential or secret designs,
processes, formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the business of the
Company, any customer or supplier lists of the Company, any confidential or
secret development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company.

The Employee acknowledges that the above-described knowledge or
information constitutes a unique and valuable asset of the Company and
represents a substantial investment of time and expense by the Company, and
that any disclosure or other use of such knowledge or information other than
for the sole benefit of the Company would be wrongful and would cause
irreparable harm to the Company. Both during and after the term of his
employment, the Employee will

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refrain from any acts or omissions that would reduce the value of such
knowledge or information to the Company. The foregoing obligations of
confidentiality shall not apply to any knowledge or information that is now
published or which subsequently becomes generally publicly known in the form in
which it was obtained from the Company, other than as a direct or indirect
result of the breach of this Agreement by the Employee.

     6.     Ventures. If, during the term of his employment the Employee is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in such project, program or venture shall belong to the Company. Except
as approved by the Company’s Chief Executive Officer, the Employee shall not be
entitled to any interest in such project, program or venture or to any
commission, finder’s fee or other compensation in connection therewith other
than the compensation to be paid to the Employee as provided in this Agreement.
The Employee shall have no interest, direct or indirect, in any vendor or
customer of the Company.

     7.          Noncompetition Covenant.

     (a)  Agreement Not to Compete. During the term of his employment with the
Company and for a period of one year after the termination of such employment
(whether such termination is with or without cause, or whether such termination
is occasioned by the Employee or the Company), he shall not, directly or
indirectly, engage in competition with the Company in any manner or capacity
(e.g., as an advisor, principal, agent, partner, officer, director,
stockholder, employee, member of any association or otherwise) in any phase of
the business which the Company is conducting during the term of this Agreement,
including the design, development, manufacture, distribution, marketing,

leasing or selling of accessories, devices or systems related to the products
or services being sold by the Company or hire any current or former employee of
the Company.

     (b)  Geographic Extent of Covenant. The obligations of the Employee under
Section 7(a) shall apply to any geographic area in which the Company (i) has
engaged in business during the term of this Agreement through production,
promotional, sales or marketing activity, or otherwise, or (ii) has otherwise
established its goodwill, business reputation or any customer or supplier
relations.

     (c)  Limitation of Covenant. Ownership by the Employee, as a passive
investment, of less than two percent of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
on Nasdaq shall not constitute a breach of this Section 7.

     (d)  Indirect Competition. The Employee will not, directly or indirectly,
assist or encourage any other person in carrying out, directly or indirectly,
any activity that would be prohibited by the above provisions of this Section 7
if such activity were carried out by the Employee, either directly or
indirectly. In particular the Employee agrees that he will not, directly or
indirectly, induce any employee of the Company to carry out, directly or
indirectly, any such activity.

     (e)  Acknowledgment. The Employee agrees that the restrictions and
agreements contained in this Section 7 are reasonable and necessary to protect
the legitimate interests of the Company and that any violation of this Section
7 will cause substantial and irreparable harm to

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the Company that would not be quantifiable and for which no adequate remedy
would exist at law and accordingly injunctive relief shall be available for any
violation of this Section 7.

     (f)  Blue Pencil Doctrine. If the duration or geographical extent of, or
business activities covered by, this Section 7 are in excess of what is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, geographical extent or activities that are valid and
enforceable. The Employee acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

     8.          Patent and Related Matters.

     (a)  Disclosure and Assignment. The Employee will promptly disclose in
writing to the Company complete information concerning each and every
invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by the Employee,
either solely or in collaboration with others, during the term of this
Agreement, or within six months thereafter, whether or not during regular
working hours, relating either directly or indirectly to the business,
products, practices or techniques of the Company (“Developments”). The
Employee, to the extent that he has the legal right to do so, hereby
acknowledges that any and all of the Developments are the property of the
Company and hereby assigns and agrees to assign to the Company any and all of
the Employee’s right, title and interest in and to any and all of the
Developments. At the request of the Company, the Employee will confer with the
Company and its representatives for the purpose of disclosing all Developments
to the Company as the Company shall reasonably request during the period ending
one year after termination of the Employee’s employment with the Company.

     (b)  Future Developments. As to any future Developments made by the
Employee that relate to the business, products or practices of the Company and
that are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any
reason to belong to an entity or person other than the Company, the Employee
will promptly disclose the same in writing to the Company and shall not
disclose the same to others if the Company, within 20 days thereafter, shall
claim ownership of such Developments under the terms of this Agreement. If the
Company makes no such claim, the Employee hereby acknowledges that the Company
has made no promise to receive and hold in confidence any such information
disclosed by the Employee.

     (c)  Limitation on Sections 8(a) and 8(b). The provisions of Section 8(a)
and 8(b) shall not apply to any Development meeting the following conditions:

	 	 	 	 	 
	 	 	
(i)
	 	such Development was developed entirely on the Employee’s
own time;
	 	 	 	 	 
	 	 	
(ii)
	 	such Development was made without the use of any Company
equipment, supplies, facility or trade secret information;

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(iii)
	 	such Development does not relate (A) directly to the
business of the Company or (B) to the Company’s actual or
demonstrably anticipated research or development; and
	 	 	 	 	 
	 	 	
(iv)
	 	such Development does not result from any work performed
by the Employee for the Company.

     (d)  Assistance of the Employee. Upon request and without further
compensation therefore, but at no expense to the Employee, the Employee will do
all lawful acts, including but not limited to, the execution of papers and
lawful oaths and the giving of testimony, that in the opinion of the Company,
may be necessary or desirable in obtaining, sustaining, reissuing, extending
and enforcing United States and foreign copyrights and Letters Patent,
including but not limited to, design patents, on the Developments, and for
perfecting, affirming and recording the Company’s complete ownership and title
thereto, and to cooperate otherwise in all proceedings and matters relating
thereto.

     (e)  Records. The Employee will keep complete, accurate and authentic
accounts, notes, data and records of the Developments in the manner and form
requested by the Company. Such accounts, notes, data and records shall be the
property of the Company, and, upon its request, the Employee will promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, the Employee will surrender the same, and all copies thereof, to the
Company upon the conclusion of his employment.

     (f)  Obligations, Restrictions and Limitations. The Employee understands
that the Company may enter into agreements or arrangements with agencies of the
United States Government, and that the Company may be subject to laws and
regulations which impose obligations, restrictions and limitations on it with
respect to inventions and patents which may be acquired by it or which may be
conceived or developed by employees, consultants or other agents rendering
services to it. The Employee shall be bound by all such obligations,
restrictions and limitations applicable to any such invention conceived or
developed by him while he is employed by the Company and shall take any and all
further action, which may be required to discharge such obligations and to
comply with such restrictions and limitations.

     (g)  Copyrightable Material. All right, title and interest in all
copyrightable material that the Employee shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
this Agreement, will be the property of the Company and are by this Agreement
assigned to the Company along with ownership of any and all copyrights in the
copyrightable material. Upon request and without further compensation
therefore, but at no expense to the Employee, the Employee shall execute all
papers and perform all other acts necessary to assist the Company to obtain and
register copyrights on such materials in any and all countries. Where
applicable, works of authorship created by the Employee for the Company in
performing his responsibilities under this Agreement shall be considered “works
made for hire,” as defined in the U.S. Copyright Act.

     (h)  Know-How and Trade Secrets. All know-how and trade secret information
conceived or originated by the Employee that arises out of the performance of
his obligations or

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responsibilities under this Agreement or any related material or
information shall be the property of the Company, and all rights therein are by
this Agreement assigned to the Company.

     9.          Termination of Employment.

     (a)  Grounds for Termination. The Employee’s employment shall terminate
prior to the expiration of the initial term set forth in Section 2 or any
extension thereof in the event that at any time:

	 	(i)	 	The Employee dies,
	 	 	 	 
	 	(ii)	 	The Employee becomes “disabled,” so that he
cannot perform the essential functions of his position with or
without reasonable accommodation,
	 	 	 	 
	 	(iii)	 	The Board of Directors of the Company elects to
terminate this Agreement for “cause” and notifies the Employee
in writing of such election,
	 	 	 	 
	 	(iv)	 	The Board of Directors of the Company elects to
terminate this Agreement without “cause” and notifies the
Employee in writing of such election, or
	 	 	 	 
	 	(v)	 	The Employee elects to terminate this Agreement
and notifies the Company in writing of such election.

     If this Agreement is terminated pursuant to clause (i), (ii) or (iii) of
this Section 9(a), such termination shall be effective immediately. If this
Agreement is terminated pursuant to clause (iv) or (v) of this Section 9(a),
such termination shall be effective 30 days after delivery of the notice of
termination.

     (b)  “Cause” Defined. “Cause” means:

	 	(i)	 	The Employee has breached the provisions of Section 5, 7
or 8 of this Agreement in any material respect,
	 	 	 	 
	 	(ii)	 	The Employee has engaged in willful and material
misconduct, including willful and material failure to perform the
Employee’s duties as an officer or employee of the Company and has
failed to cure such default within 30 days after receipt of
written notice of default from the Company,
	 	 	 	 
	 	(iii)	 	The Employee has committed fraud, misappropriation or
embezzlement in connection with the Company’s business, or
	 	 	 	 
	 	(iv)	 	The Employee has been convicted or has pleaded nolo
contendere to criminal misconduct (except for parking violations
and occasional minor traffic violations).

     In the event that the Company terminates the Employee’s employment for
“cause” pursuant to clause (ii) of this Section 9(b) and the Employee objects
in writing to the Board’s determination that there was proper “cause” for such
termination within 20 days after the

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Employee is notified of such termination, the matter shall be resolved by
arbitration in accordance with the provisions of Section 10(a). If the
Employee fails to object to any such determination of “cause” in writing within
such 20-day period, he shall be deemed to have waived his right to object to
that determination. If such arbitration determines that there was not proper
“cause” for termination, such termination shall be deemed to be a termination
pursuant to clause (iv) of Section 9(a) and the Employee’s sole remedy shall be
to receive the wage continuation benefits contemplated by Section 9(f).

     (c)  Effect of Termination. Notwithstanding any termination of this
Agreement, the Employee, in consideration of his employment hereunder to the
date of such termination, shall remain bound by the provisions of this
Agreement which specifically relate to periods, activities or obligations upon
or subsequent to the termination of the Employee’s employment.

     (d)  “Disabled” Defined. “Disabled” means any mental or physical condition
that renders the Employee unable to perform the essential functions of his
position, with or without reasonable accommodation, for a period in excess of
three months.

     (e)  Surrender of Records and Property. Upon termination of his employment
with the Company, the Employee shall deliver promptly to the Company all
records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof that relate in
any way to the business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain
any trade secrets or confidential information of the Company, which in any of
these cases are in his possession or under his control.

     (f)  Salary Continuation. If the Employee’s employment by the Company is
terminated by the Company pursuant to clause (ii) or (iv) of Section 9(a), the
Company shall continue to pay to the Employee his base salary (less any
payments received by the Employee from any disability income insurance policy
provided to him by the Company) through the earlier of (a) the date that the
Employee has obtained other full-time employment, or (b) one year from the date
of termination of employment. If this Agreement is terminated pursuant to
clauses (i), (iii) or (v) of Section 9(a), the Employee’s right to base salary
and benefits shall immediately terminate, except as may otherwise be required
by applicable law.

     10.     Settlement of Disputes.

     (a)  Arbitration. Except as provided in Section 10(b), any claims or
disputes of any nature between the Company and the Employee arising from or
related to the performance, breach, termination, expiration, application or
meaning of this Agreement or any matter relating to the Employee’s employment
and the termination of that employment by the Company shall be resolved
exclusively by arbitration in Hennepin County, Minnesota, in accordance with
the applicable rules of the American Arbitration Association. In the event of
submission of any dispute to arbitration, each party shall, not later than 30
days prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at
the hearing and a list of all persons each party intends to call at the
hearing.

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The fees of the arbitrator(s) and other costs incurred by the Employee and the
Company in connection with such arbitration shall be paid by the party that is
unsuccessful in such arbitration.

     The decision of the arbitrator(s) shall be final and binding upon both
parties. Judgment of the award rendered by the arbitrator(s) may be entered in
any court of competent jurisdiction.

     (b)  Resolution of Certain Claims—Injunctive Relief. Section 10(a) shall
have no application to claims by the Company asserting a violation of Section
5, 7, 8 or 9(e) or seeking to enforce, by injunction or otherwise, the terms of
Section 5, 7, 8 or 9(e). Such claims may be maintained by the Company in a
lawsuit subject to the terms of Section 10(c).

     The Employee acknowledges that it would be difficult to fully compensate
the Company for damages resulting from any breach by him of the provisions of
this Agreement. Accordingly, the Employee agrees that, in addition to, but not
to the exclusion of any other available remedy, the Company shall have the
right to enforce the provisions of Sections 5, 7, 8 and 9(e) by applying for
and obtaining temporary and permanent restraining orders or injunctions from a
court of competent jurisdiction without the necessity of filing a bond
therefore, and without the necessity of proving actual damages, and the Company
shall be entitled to recover from the Employee its reasonable attorneys’ fees
and costs in enforcing the provisions of Sections 5, 7, 8 and 9(e).

     (c)  Venue. Any action at law, suit in equity or judicial proceeding
arising directly, indirectly, or otherwise in connection with, out of, related
to or from this Agreement, or any provision hereof, shall be litigated only in
the courts of the State of Minnesota, County of Hennepin. The Employee and the
Company consent to the jurisdiction of such courts over the subject matter set
forth in Section 10(b). The Employee waives any right the Employee may have to
transfer or change the venue of any litigation brought against the Employee by
the Company.

     11.     Miscellaneous.

     (a)  Entire Agreement. This Agreement (including the exhibits, schedules
and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.

     (b)  Counterparts. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.

     (c)  Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a 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 under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not
be affected or impaired thereby. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business
activities covered by, any provision of this Agreement be in excess of that
which is valid and enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent or activities which may
validly

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and enforceably be covered. The Employee acknowledges the uncertainty
of the law in this respect and expressly
stipulates that this Agreement be given the construction which renders its
provision valid and enforceable to the maximum extent (not exceeding its
express terms) possible under applicable law.

     (d)  Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns.

     (e)  Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by either party without the prior
written consent of the other party to this Agreement, except that the Company
may, without the consent of the Employee, assign its rights and obligations
under this Agreement to any corporation, firm or other business entity with or
into which the Company may merge or consolidate, or to which the Company may
sell or transfer all or substantially all of its assets, or of which 50% or
more of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company provided such
assignee corporation firm or business expressly assumes all of the obligations
of the Company under this Agreement. After any such assignment by the Company,
the Company shall be discharged from all further liability hereunder and such
assignee shall thereafter be deemed to be the Company for the purposes of all
provisions of this Agreement including this Section 11.

     (f)  Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an
instrument in writing signed by the parties to this Agreement. No course of
dealing between the parties will modify, amend, waive or terminate any
provision of this Agreement or any rights or obligations of any party under or
by reason of this Agreement. No delay on the part of the Company in exercising
any right hereunder shall operate as a waiver of such right. No waiver,
express or implied, by the Company of any right or any breach by the Employee
shall constitute a waiver of any other right or breach by the Employee.

     (g)  Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.

	 	 	 
	 	 	
Gary (Mike) Goodpaster
	 	 	
6210 Ashbury Palms Drive
	 	 	
Tampa, Florida 33647
	 	 	 
	 	 	
Compex Technologies Inc.
	 	 	
1811 Old Highway 8
	 	 	
New Brighton, Minnesota 55112
	 	 	
Attn. Chief Executive Officer

Any party may change the address set forth above by notice to each other party
given as provided herein.

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     (h)  Headings. The headings and any table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

     (i)  Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW PROVISIONS THEREOF.

     (j)  Third-Party Benefit. Nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights, remedies, obligations
or liabilities of any nature whatsoever.

     (k)  Withholding Taxes. The Company may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the first paragraph.

	 	 	 	 	 
	 	 	 	 	 
	 	 	/s/ MIKE GOODPASTER
	 	 	

	 	 	Gary (Mike) Goodpaster Signature (Signature)
	 	 	 	 	 
	 	 	 	 	 
	 	 	Compex
Technologies, Inc
	 	 	 	 	 
	 	 	
By:	 	/s/ DAN W. GLADNEY

	 	 	 	 	

	 	 	 	 	 
	 	 	
Name:	 	Dan W. Gladney
	 	 	 	 	

	 	 	 	 	 
	 	 	Title:	 	Chief Executive
Officer
	 	 	 	 	

	 	 	 	 	 

10exv10w17

 

EXHIBIT 10.17

COMPEX TECHNOLOGIES, INC.

INCENTIVE STOCK OPTION AGREEMENT

     THIS AGREEMENT, made this                 day of
                               ,
by and between Compex Technologies, Inc., a Minnesota corporation
(“the Company”), and                                (“Employee”).

     WITNESSETH, THAT:

     WHEREAS, the Company pursuant to its 1998 Stock Incentive Plan wishes to
grant this stock option to Employee.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:

     1. Grant of Option

     The Company hereby grants to Employee, on the date set forth above, the
right and option (hereinafter called “the option”) to purchase all or any part
of an aggregate of                shares of Common Stock, $.10 par value,
at the price of $         per share on the terms and conditions set forth
herein. This option is intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

     2. Duration and Exercisability

     (a) Except as provided in paragraphs (c) below, this option may not be
exercised by Employee until the expiration of one (1) year from the date of
this Agreement and shall become exercisable on the first anniversary of the
date hereof with respect to 25% of the shares subject to this option (as set
forth in paragraph 1 above) and with respect to an additional cumulative 25% of
the shares subject to this option on the anniversary of the date hereof in of
each year thereafter until the fourth anniversary of the date hereof when this
option shall be exercisable in full. This option shall terminate in all events
seven (7) years after the date of this Agreement.

     (b) During the lifetime of Employee, the option shall be exercisable only
by Employee and shall not be assignable or transferable by Employee, other than
by will or the laws of descent and distribution.

     (c) Notwithstanding the installment exercise provision set forth in
paragraph (a) above and subject to the other terms and conditions set forth
herein, this option may be exercised as to 100% of the shares of Common Stock
of the Company for which this option was granted on the date of a “Change of Control” as
hereinafter defined. For purposes hereof, a “Change in Control” shall mean:

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          (i) the public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) that such person has become the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 51% or
more of the combined voting power of the Company’s then outstanding securities.

          (ii) the commencement of or public announcement of an intention to
make a tender or exchange offer for 51% or more of the then outstanding
shares of Common Stock of the Company.

          (iii) the majority of the Board of Directors determine in their
sole and absolute discretion that there has been a change in control of
the Company.

     (d) Notwithstanding any other provision set forth herein, this option
shall not be exercisable for the first time by Employee except in accordance
with the requirements of subsection (b)(7) of Section 422 of the Code.

     3. Effect of Termination of Employment

     (a) In the event that Employee shall cease to be employed by the Company
for any reason other than Employee’s gross and willful misconduct or Employee’s
death, Employee shall have the right to exercise the option at any time within
thirty days after such termination of employment to the extent of the full
number of shares Employee was entitled to purchase under the option on the date
of termination, subject to the condition that no option shall be exercisable
after the expiration of the term of the option.

     (b) In the event that Employee shall cease to be employed by the Company
by reason of Employee’s gross and willful misconduct during the course of
employment, including but not limited to wrongful appropriation of the Company
funds or the commission of a gross misdemeanor or felony, the option shall be
terminated as of the date of the misconduct.

     (c) If Employee shall die while in the employ of the Company or within
thirty days after termination of employment for any reason other than gross and
willful misconduct or become disabled (within the meaning of Code Section
105(d)(4)) while in the employ of the Company and Employee shall not have fully
exercised the option, such option may be exercised at any time within twelve
months after Employee’s death or disability by the personal representatives or
administrators, or if applicable guardian, of Employee or by any person or
persons to whom the option is transferred by will or the applicable laws of
descent and distribution, to the extent of the full number of shares Employee
was entitled to purchase under the option on the date of death, disability or
termination of employment, if earlier, and subject to the condition that no
option shall be exercisable after the expiration of the term of the option.

2

 

     4. Manner of Exercise

     (a) The option can be exercised only by Employee or other proper party by
delivering within the option period written notice to the Company at its
principal office. The notice shall state the number of shares as to which the
option is being exercised and be accompanied by payment in full of the option
price for all shares designated in the notice.

     (b) Employee may pay the option price by check (bank check, certified
check or personal check) or with the approval of the Company by delivering to
the Company for cancellation Common Stock of the Company with a fair market
value equal to the option price; provided, however, that Employee shall not be
entitled to tender shares of the Company’s Common Stock pursuant to successive,
substantially simultaneous exercises of this option or any other stock option
of the Company. For these purposes, the fair market value of the Company’s
Common Stock shall be as reasonably determined by the Company but shall not be
less than, if applicable, (i) the closing price of the stock as reported for
composite transactions, if the Common Stock is then traded on a national
securities exchange, (ii) the last sale price if the Common Stock is then
quoted on the NASDAQ National Market System or (iii) the average of the closing
representative bid and asked prices of the Common Stock as reported on NASDAQ
on the date as of which fair market value is being determined.

     5. Miscellaneous

     (a) This option is issued pursuant to the Company’s 1998 Stock Incentive
Plan and is subject to its terms. The terms of the Plan are available for
inspection during business hours at the principal offices of the Company.

     (b) This Agreement shall not confer on Employee any right with respect to
continuance of employment by the Company or any of its subsidiaries, nor will
it interfere in any way with the right of the Company to terminate such
employment at any time. Employee shall have none of the rights of a
shareholder with respect to shares subject to this option until such shares
shall have been issued to Employee upon exercise of this option.

     (c) The exercise of all or any parts of this option shall only be
effective at such time that the sale of Common Stock pursuant to such exercise
will not violate any state or federal securities or other laws.

     (d) If Employee exercises all or any portion of the option subsequent to
any change in the number or character of the Common Stock of the Company
(through merger, consolidation, reorganization, recapitalization, stock
dividend or otherwise), Employee shall then receive for the aggregate price
paid by Employee on such exercise
of the option, the number and type of securities or other consideration which
Employee would have received if such option had been exercised prior to the
event changing the number or character of outstanding shares.

3

 

     (e) The Company shall at all times during the term of the option reserve
and keep available such number of shares as will be sufficient to satisfy the
requirements of this Agreement.

     (f) If Employee shall dispose of any of the Common Stock of the Company
acquired by Employee pursuant to the exercise of the option within two (2)
years from the date this option was granted or within one (1) year after the
transfer of any such shares to Employee upon exercise of this option, then, in
order to provide the Company with the opportunity to claim the benefit of any
income tax deduction which may be available to it under the circumstances,
Employee shall promptly notify the Company of the dates of acquisition and
disposition of such shares, the number of shares so disposed of, and the
consideration, if any, received for such shares. In order to comply with all
applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure (i) notice to the Company of
any disposition of the Common Stock of the Company within the time periods
described above and (ii) that, if necessary, all applicable federal or state
payroll, withholding, income or other taxes are withheld or collected from
Employee.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

	 	 	 	 	 
	 	 	 	 	COMPEX TECHNOLOGIES, INC.
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	

	 	 	 	 	 
	 	 	 	
Its	 
	 	 	 	 	

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	

	 	 	 	 	Employee

4

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