Document:

EXHIBIT 10.1

 

EXHIBIT 10.1

DREYER’S GRAND ICE CREAM, INC.

SECOND AMENDMENT

Dated as of September 26, 2001

To

Note Purchase Agreements

Dated June 6, 1996

	 	 	 
	Re:	 	
$15,000,000 7.68% Series A Senior Notes Due 2002

$15,000,000 8.06% Series B Senior Notes Due 2006

$20,000,000 8.34% Series C Senior Notes Due 2008

 

 

Second Amendment To Note Purchase Agreements

     This Second
Amendment dated as of September 26, 2001 (the or this “Second
Amendment”) to the Note Purchase Agreements dated June 6, 1996 is between
Dreyer’s Grand Ice Cream, Inc., a Delaware corporation (the “Company”), and
each of the institutions which is a signatory to this Second Amendment
(collectively, the “Noteholders”).

Recitals:

	       	A.	  	The Company and each of the Noteholders have heretofore entered
into separate and several Note Purchase Agreements each dated June 6,
1996 and the First Amendment dated as of November 17, 1998
(collectively, the “Note Agreements;” capitalized terms used herein
shall have the respective meanings ascribed thereto in the Note
Agreements unless herein defined or the context shall otherwise
require). The Company has heretofore issued $50,000,000 aggregate
principal amount of Senior Notes consisting of its $15,000,000 7.68%
Series A Senior Notes due 2002, $15,000,000 8.06% Series B Senior
Notes due 2006 and $20,000,000 8.34% Series C Senior Notes due 2008
(collectively the “Notes”) pursuant to the Note Agreements. The
Noteholders are, collectively, the holders of at least 51 % of the
outstanding principal amount of the Notes.
	 
	       	B.	  	The Company and the Noteholders now desire to amend the Note Agreements
in the respects, but only in the respects, hereinafter set forth.
	 
	       	C.	  	All requirements of law have been fully complied with and all
other acts and things necessary to make this Second Amendment a
valid, legal and binding instrument according to its terms for the
purposes herein expressed have been done or performed.

     NOW, THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in Section
3.1 hereof, and for good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the Company and the Noteholders do hereby
agree as follows:

Section 1. Amendments

	1.1	  	Section 8.3 of the Note Agreements shall be and is hereby amended by the
addition of the following sentence:
	 
	 	  	Notwithstanding the foregoing provisions of this Section 8.3 the Company
shall be permitted to make payments to the Noteholders on (but not before
or after) September 26, 2001 in the amounts set forth in Section 3.1 (b)
of this Second Amendment which payments shall satisfy in full the
Company’s obligations for interest, principal and Make Whole Amounts in
respect of the Payment of the Series A Notes due on June 1, 2002 and the
Required Prepayment of the Series B Notes due on June 1, 2002.

 

 

Section 2. Representations and Warranties of the Company

	2.1.	  	To induce the Noteholders to execute and deliver this Second Amendment,
the Company represents and warrants to the Noteholders that (which
representations and warranties shall survive the execution and delivery of
this Second Amendment):

	       	(a)	  	this Second Amendment has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation, contract and agreement of the Company enforceable against
it in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors’ rights
generally;
	 
	       	(b)	  	the Note Agreements, as amended by this Second Amendment,
constitute the legal, valid and binding obligations, contracts and
agreements of the Company enforceable against it in accordance with
their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors’ rights
generally;
	 
	       	(c)	  	the execution, delivery and performance by the Company of this
Second Amendment (i) has been duly authorized by all requisite action
on the part of the Company, (ii) does not require the consent or
approval of any governmental or regulatory body or agency, and (iii)
will not (A) violate (1) any provision of law, statute, rule or
regulation or its articles of incorporation or bylaws, (2) any order
of any court or any rule, regulation or order of any other agency or
government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to Which it is a party or by
which its properties or assets are or may be bound, or (B) result in
a breach or constitute (alone or with due notice or lapse or both) a
default under any indenture, agreement or other instrument referred
to in clause (iii)(A)(3) of this Section 2. 1 (c);
	 
	       	(d)	  	as of the date hereof and after giving effect to this Second
Amendment, no Default or Event of Default has occurred which is
continuing; and
	 
	       	(e)	  	all the representations and warranties contained in Section 5
of the Note Agreements are true and correct in all material respects
with the same force and effect as if made by the Company on and as of
the date hereof.

Section 3. Conditions to Effectiveness of This Second Amendment.

	3.1.	  	This Second Amendment shall become effective as of September 26, 2001
upon the satisfaction in full of each of the following conditions:

	       	(a)	  	executed counterparts of this Second Amendment, duly executed
by the Company and each Noteholder, shall have been delivered to the
Noteholders;

 

 

	       	(b)	  	each Noteholder shall have received from the Company a wire
transfer in the amount set forth opposite its name below:

	 	 	 	 	 
	The Prudential Insurance Company of America:
	 	$	4,699,643.46	 
	Pruco Life Insurance Company:
	 	$	580,854.81	 
	Transamerica Life Insurance and Annuity Company
	 	$	2,271,443.86	 

	       	(c)	  	(i) the representations and warranties of the Company set forth in
Section 2 hereof shall be true, correct and complete on and with respect to the
date hereof and (ii) no Default or Event of Default shall have occurred
and be continuing on the date hereof or would result from this Second
Amendment becoming effective in accordance with the terms hereof, and the
Noteholders shall have received an Officer’s Certificate certifying to the
effects set forth in clauses (i) and (ii) above; and

     Upon receipt of all of the foregoing, this Second Amendment shall become
effective.

Section 4. Miscellaneous

	4.1.	  	This Second Amendment shall be construed in connection with and as part
of each of the Note Agreements, and except as modified and expressly
amended by this Second Amendment, all terms, conditions, and covenants
contained in the Note Agreements and the Notes are hereby ratified and
shall be and remain in full force and effect.
	 
	4.2.	  	Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second
Amendment may refer to the Note Agreements without making specific
reference to this Second Amendment but nevertheless all such references
shall include this Second Amendment unless the context otherwise requires.
	 
	4.3.	  	The descriptive headings of the various Sections or parts of this Second
Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
	 
	4.4.	  	This Second Amendment shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State
of California excluding choice-of-law principles of the law of such State
which would require the application of the laws of a jurisdiction other
than such State.
	 
	4.5	  	The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Second Amendment may
be executed in any number of counterparts, each executed counterpart
constituting an original, but all together only one agreement.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.

	 	 	 
	 
	 	
DREYER’S GRAND ICE CREAM, INC.

	 	 	 
	 
	 	
By: /s/ William C. Collett

	 
	 	

	 
	 	
Name: William C. Collett

	 
	 	

	 
	 	
Title: Treasurer

	 
	 	

	 	 	 
	Percentage of Principal of Notes Held	 	Noteholders:
	
	 	

	            66.7%
	 	
THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

	 	 	 
	 
	 	
By: /s/ Joseph Y. Alouf

	 
	 	

	 
	 	
Name: Joseph Y. Alouf

	 
	 	

	 
	 	
Title: Senior Vice President

	 
	 	

	 	 	 
	              3.3%
	 	
PRUCO LIFE INSURANCE COMPANY

	 	 	 
	 
	 	
By: /s/ Joseph Y. Alouf

	 
	 	

	 
	 	
Name: Joseph Y. Alouf

	 
	 	

	 
	 	
Title: Senior Vice President

	 
	 	

	 	 	 
	             30%
	 	
TRANSAMERICA LIFE INSURANCE AND

ANNUITY COMPANY

	 	 	 
	 
	 	
By: /s/ Bill Henricksen

	 
	 	

	 
	 	
Name: William Henricksen

	 
	 	

	 
	 	
Title: Vice Presidentex10-1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is effective as of August 8,
2001 (the “Effective Date”) between Ocular Sciences, Inc., a Delaware
corporation with its principal offices located at 1855 Gateway Boulevard, Suite
700, Concord, CA 94520 (the “Company”), and Stephen Fanning (“Employee”).

     In consideration of the promises, terms and conditions set forth in this
Agreement, the parties agree as follows:

     1. Position. Commencing August 13, 2001 and continuing during the term of
this Agreement, Company will employ Employee, and Employee will serve Company,
as the Company’s President and Chief Executive Officer. Employee will be
elected to the Company’s Board of Directors promptly after the commencement of
his employment.

     2. Duties. Employee will perform the duties of President and Chief
Executive Officer set forth in the Company’s Bylaws, and shall report to and be
subject to the direction of the Company’s Board of Directors. Without limiting
the foregoing, Employee shall also work with the Company’s Chairman of the
Board to develop a strategic plan for the Company. Employee will comply with
and be bound by the Company’s operating policies, procedures, and practices
from time to time in effect during Employee’s employment, including any insider
trading policies. Employee understands that he will be subject to the
provisions of the Securities Exchange Act of 1934, as amended, applicable to
officers of companies with securities registered under such act. Employee will
perform his duties under this Agreement at the offices of Company, provided,
that Employee may be required to travel in connection with the performance of
his duties hereunder. Employee hereby represents and warrants that he is free
to enter into and fully perform this Agreement and the agreements referred to
herein without breach of any agreement, contract or obligation to which he is a
party or by which he is bound.

     3. Exclusive Service. Employee will devote his full working time
exclusively to this employment and will use his best efforts to carry out his
duties and advance the Company’s interests. Employee will not have any other
employment, consulting or similar relationship during the term of his
employment by the Company without the prior express written consent of the
Company’s Chairman of the Board, which consent shall be in the Chairman’s
discretion. Notwithstanding the foregoing, after Employee has been employed by
the Company for 12 months he may accept and maintain a position on the Board of
Directors of one other corporation, upon advance written notice to the Company,
so long as the Company’s Board of Directors does not, in its sole discretion,
determine that such outside Board membership will or is likely to have an
adverse impact on Employee’s ability to satisfactorily discharge his
responsibilities to the Company.

     4. Term of Agreement. This Agreement will commence on the Effective Date,
and will continue until the earlier of August 13, 2004 or when terminated
pursuant to Section 9 hereof.

 

     5. Compensation and Benefits.

          5.1 Base Salary. The Company agrees to pay Employee an initial salary
(the “Base Salary”) of Four Hundred Thousand Dollars ($400,000) per year. Such
salary will be reviewed at least once each year by the Company’s Board of
Directors or Compensation Committee. Employee’s salary will be payable as
earned in accordance with the Company’s customary payroll practice and will be
subject to such deductions or withholdings as are required by law.

          5.2 Employee Benefit Plans; Vacation. Employee will be eligible to
participate in Company’s employee benefit plans of general application,
including life, health, and dental insurance, in accordance with the rules
established for individual participation in any such plan and applicable law.
Employee will be entitled to twenty (20) days of vacation per year in
accordance with the Company’s vacation policy.

          5.3 Expenses. The Company will reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the Company’s
business, provided that such expenses are in accordance with the Company’s
applicable policy and are properly documented and accounted for in accordance
with Company policy. The Company will provide Employee with a corporate credit
card for use for Company business.

          5.4 Cash Bonus. Employee will be eligible to earn a cash bonus (“Cash
Bonus”) of up to seventy-five percent (75%) of his Base Salary paid for
calendar year 2001 and each full calendar year thereafter, based on performance
criteria (the “Criteria”) to be agreed to between the Board of Directors or its
Compensation Committee and Employee. As soon as practical after December 31 of
each applicable year, the Company’s Board of Directors or Compensation
Committee will approve the payment to the Employee of a Cash Bonus based on
actual performance relative to the Criteria.

          5.5 Stock Options. Employee shall be granted one or more options under
the Company’s 1997 Equity Incentive Plan (the “Options”) to purchase an
aggregate of Two Hundred Thousand (200,000) shares of the Company’s Common
Stock at the fair market value of such stock as determined by the Company’s
Board of Directors or Compensation Committee on the date that Employee’s
employment commences. The options shall be incentive stock options to the
extent permitted by law. The Options shall vest over 5 years at the rate of
20% per year, with the first 20% to vest on the first anniversary of the
commencement of Employee’s employment, and otherwise be pursuant to the terms
of the Company’s current standard stock option documents.

     6. Relocation Assistance

          6.1 Costs Associated with Sale of Old Residence. The Company shall
reimburse Employee for any brokerage commissions and other costs incurred upon
the sale of his current residence in Gwyned, Pennsylvania (the “Old
Residence”), up to a maximum of $48,000.

 

2

 

          6.2 Costs Associated with Move. The Company will reimburse Employee’s
costs associated with moving his household goods and motor vehicles from his
Old Residence to the San Francisco Bay Area, and household goods storage for up
to six months, up to a maximum of $120,000.

          6.3 Interim Expenses. The Company will reimburse Employee’s temporary
living expenses in the San Francisco Bay Area and weekly round-trip travel to
Gwyned, Pennsylvania, and up to three round-trip flights and one one-way trip
by Employee’s spouse, until the earlier of Employee’s relocation to the San
Francisco Bay Area or six months from the date hereof, up to a maximum of
$45,000.

          6.4. Costs Associated with Purchase of New Residence. The Company will
reimburse Employee for the “one time” costs associated with the purchase of a
house in the San Francisco Bay Area (the “New Residence”), excluding the
payment of loan points, up to a maximum of $50,000.

          6.5 Tax Gross-Up. The Company will “gross-up” Employee for any Federal
and California income taxes payable by Employee on account of any expenses that
are not deductible by Employee and that are reimbursed by the Company pursuant
to Sections 6.1 through 6.4 above, up to a maximum of $100,000.

          6.6 Repayment by Employee in Event of Voluntary Termination or Termination
for Cause within 36 months. In the event that Employee voluntarily terminates
his employment with the Company within 36 months of the commencement of such
employment (other than pursuant to disability or death), or Company terminates
Employee for Cause (as defined below) within such 36 month period, then
Employee shall repay to Company, within six months, any amounts paid to
Employee pursuant to this Section 6.

     7. Company Loans to Employee.

          7.1 $400,000 Loan Upon Purchase of New Residence. Upon Employee’s
purchase of the New Residence, the Company will provide Employee with an
interest free loan of Four Hundred Thousand Dollars ($400,000) (the “$400,000
Loan”), provided that the New Residence appraises at more than the amount of
all debt (including the $400,000 Loan) on the property. The $400,000 Loan
shall be secured by a deed of trust (the “$400,000 Deed of Trust”) on the New
Residence. The $400,000 Deed of Trust shall be subordinate to any deed of
trust Employee grants on the New Residence to a bank or other financial
institution for a loan to purchase the New Residence. Employee will be
prohibited from selling, transferring or otherwise disposing of any interest in
the New Residence while any obligations are outstanding under the $400,000
Loan. The $400,000 Loan shall be due and payable in full on the earlier of:
(i) August 13, 2004, (ii) 6 months after Employee’s termination of employment
with the Company, whether due to voluntary termination, termination by the
Company with or without cause, termination by the Employee for good reason, or
other reasons, (iii) Employee’s default under any loan secured by the New
Residence or (iv) the sale, transfer or other disposition of the New Residence.
Notwithstanding the foregoing, one-half of the principal amount of the
$400,000 Loan (i.e., $200,000) shall be forgiven if Employee remains
continuously employed by

 

3

 

the Company from August 13, 2001 through August 13, 2004. Employee shall
be responsible for all taxes arising from any loan forgiveness or the
interest-free aspect of this loan, and the Company will entitled to withhold
appropriate amounts for tax purposes.

          7.2 $725,000 Loan. Upon commencement of Employee’s employment with the
Company, the Company will provide Employee with an interest-free loan of Seven
Hundred Twenty-Five Thousand Dollars ($725,000) (the “$725,000 Loan”). The
$725,000 Loan will not be secured (but will be full recourse). The $725,000
Loan shall be due and payable on the earlier of (i) August 13, 2004 or (ii) six
(6) months after Employee’s termination of employment with the Company, whether
due to voluntary termination, termination by the Company with or without cause,
termination by the Employee for good reason, or other reasons. Notwithstanding
the foregoing, one-third of the principal amount of the Loan (i.e., $241,667)
shall be forgiven on each of the first, second and third anniversaries of the
commencement of Employee’s employment, so long as Employee has remained
continuously employed by the Company until such date. Employee shall be
responsible for all taxes arising from any loan forgiveness or the
interest-free aspect of this loan, and the Company will be entitled to withhold
appropriate amounts for tax purposes.

          7.3 Other Loan Terms. In connection with the loans set forth in Sections
7.1 and 7.2 above (the “Loans”) Employee and Employee’s spouse shall execute
any documents reasonably requested by Company, including loan and security
agreements, promissory notes and deeds of trust. Such documents shall have
such other terms and provisions as are typical for residential/personal loans,
including standard default provisions and a provision regarding the payment of
fees and expenses, including reasonable attorneys’ fees, incurred enforcing or
collecting the Loans. Additionally, the Loans shall provide that they are to
be forgiven if Employee dies or becomes permanently disabled while he is an
employee of the Company. Employee acknowledges that nothing herein will limit
the Company’s right to terminate Employee’s employment at any time, in its
discretion, pursuant to Section 9.1(b) hereof.

     8. Proprietary Rights. Employee hereby agrees to execute an Employee
Invention Assignment and Confidentiality Agreement with the Company in
substantially the form attached hereto as Exhibit A.

     9. Termination.

          9.1 Events of Termination. Employee’s employment with the Company shall
terminate upon any one of the following:

	     	
	 	     (a) the Company’s termination of Employee for “cause” as
defined under Section 9.2 below (“Termination for Cause”); or

	     	
	 	     (b) the effective date of a written notice sent to Employee
stating that the Company is terminating his employment, without
cause, which notice can be given by the Company at any time after
the Effective Date at the Company’s sole discretion, for any reason
or for no reason (“Termination Without Cause”); or

 

4

 

	     	
	 	     (c) the effective date of Employee’s voluntary termination of
his employment with the Company (“Voluntary Termination”); or

	     	
	 	     (d) the Employee’s termination of his employment for “good
reason”, as defined under Section 9.3 below (“Termination by
Employee for Good Reason”).

     9.2 “Cause” Defined. For purposes of this Agreement, “cause” for
Employee’s termination will exist at any time after the happening of one or
more of the following events:

	     	
	 	     (a) a material failure or refusal by Employee to diligently
perform his duties to the Company, including his obligations under
this Agreement; provided that the Company will provide Employee
with 30 days advance notice to remedy the situation, if such is not
unreasonable under the circumstances, and provided further that the
Company will not be required to provide notice of similar types of
failures or refusals more than once during the term of this
Agreement;

	     	
	 	     (b) misconduct by Employee that is materially detrimental to,
or materially discredits, the reputation, character or standing of
the Company, including the commission of a felony crime;

	     	
	 	     (c) conduct by Employee that is intended to do injury to the
Company; or

	     	
	 	     (d) disability that prevents Employee from performing his
duties more than 90 days in any 360 day period; or Employee’s
death.

     9.3 “Good Reason” Defined. For purposes of this Agreement, “good reason”
for Employee’s termination of his employment will exist at any time after the
happening of one or more of the following events:

	     	
	 	     (a) any material diminution of Employee’s duties or authority
with the Company as specified in this Agreement, or the assignment
of duties and responsibilities inconsistent with Employee’s status
as President and CEO of the Company, any of which are made without
Employee’s express written consent;

	     	
	 	     (b) a reduction in salary or material reduction in benefits
without the express prior written consent of the Employee;

	     	
	 	     (c) any breach of the Company of any material obligation of
the Company under this Agreement or any stock option agreement; or

	     	
	 	     (d) a reassignment which requires Employee to move his
principal work location more than fifty (50) miles from the
principal office of the Company maintained at the time of execution
of this Agreement.

 

5

 

The Employee shall be required to give the Company thirty (30) days prior
written notice to terminate his employment for good reason. The Company shall
then have the opportunity, during said thirty-day period, to remedy or cure the
circumstances which are the basis for Employee’s ability to terminate his
employment for good reason, and Employee shall not be able to terminate his
employment for good reason if the Company does so remedy or cure the
circumstances within such thirty-day period.

     10. Effect of Termination.

          10.1 Termination for Cause or Voluntary Termination. In the event of any
termination of this Agreement pursuant to Sections 9.1(a) or 9.1(c), the
Company shall pay Employee the compensation and benefits otherwise payable to
Employee under Section 5 through the date of termination. Employee’s rights
under the Company’s benefit plans of general application shall be determined
under the provisions of those plans.

          10.2 Termination Without Cause or Termination by Employee for Good Reason.
In the event of any termination of this Agreement pursuant to Sections 9.1(b)
or 9.1(d),

	     	
	 	     (a) the Company shall pay Employee the compensation and
benefits otherwise payable to Employee under Section 5 through the
date of termination,

	     	
	 	     (b) for thirteen (13) months after the date of termination the
Company shall continue to pay Employee his Base Salary under
Section 5.1 above at Employee’s then-current salary, less
applicable deductions and withholding taxes, payable on the
Company’s normal payroll dates during that period,

	     	
	 	     (c) for thirteen (13) months after the date of termination the
Company shall continue Employee’s coverage under the Company’s
benefit plans of general application, or similar plans, at the
Company’s expense, provided, however, that if Employee secures
other employment during such period that provides similar coverage,
then the Company’s obligation shall terminate.

     11. Termination in Connection with a Change in Control.

          11.1 Compensation. If, during the term of this Agreement, the Company
undergoes a Change in Control (as defined below), and Employee is Terminated
(as defined below), then, in place of the Company’s obligations under Section
10, the Company shall:

	     	
	 	     (a) pay Employee the compensation and benefits otherwise
payable to Employee under Section 5, through the date of
termination;

	     	
	 	     (b) pay Employee, for thirteen (13) months after the date of
termination, his Base Salary under Section 5.1 above, at Employee’s
then-current salary, plus a 75% bonus, less applicable deductions
and withholding taxes, payable on the Company’s normal
payroll/bonus payment dates during that period;

 

6

 

	     	
	 	     (c) continue Employee’s coverage under the Company’s benefit
plans of general application, or similar plans, at the Company’s
expense, for thirteen (13) months after the date of termination,
provided, however, that if Employee secures other employment during
such period that provides similar coverage, the Company’s
obligation under this subsection (c) shall terminate;

	     	
	 	     (d) accelerate the vesting of the Options;

	     	
	 	     (e) forgive the 50% of the $400,000 Loan that is potentially
to be forgiven pursuant to Section 7.1 hereof, if it has not
already been forgiven; and

	     	
	 	     (f) forgive the $725,000 Loan, to the extent it has not
already been forgiven.

          11.2 Definitions. For purposes of this Section 11:

	     	
	 	     (a) a “Change in Control” shall mean a transaction or series
of related transactions (such as a merger, consolidation, sale of
assets or tender offer) whereby the Company’s stockholders
immediately prior to the transaction or series of related
transactions own less than a majority of the Company’s voting
stock, or the voting stock of the surviving entity of any such
transaction or series of related transactions, after such
transaction, on account of shares held by such stockholders in the
Company immediately prior to such transaction or series of related
transactions; and

	     	
	 	     (b) “Terminated” shall mean that Employee is not offered a
position in the surviving entity in the Change in Control, or an
affiliate of such company, including the Company, that is similar
in responsibility and compensation to the position Employee held in
the Company prior to the Change in Control, within 50 miles of the
Company’s executive office prior to the Change in Control, and
maintained in that position for at least twelve (12) months after
the Change in Control, except for Cause. For the avoidance of
doubt, if Employee is offered and maintained in a position where he
continues to be the chief executive of the primary portion of the
business that was operated by the Company prior to the Change in
Control, at similar compensation and within 50 miles of the
previous executive office, then he will not be deemed to have been
“Terminated”, even if he is not the President or Chief Executive
Officer of the surviving company.

          11.3 Taxes. Employee shall be responsible for all taxes arising from any
loan forgiveness or other payment or compensation made pursuant to this Section
11, and the Company will be entitled to withhold appropriate amounts for tax
purposes. If any amounts payable to Employee under this Section 11 are
characterized as “excess parachute payments” pursuant to Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), and Employee thereby
would be subject to any United States federal excise tax due to that

 

7

 

characterization, then Employee may elect, in Employee’s discretion, to reduce
the amounts payable under this Agreement or to not have any applicable portion of the Option not vest,
to avoid any “excess parachute payments” under Section 280G(b)(1) of the Code.

     12. Release. As a condition to the Company’s obligations under Sections
10.2(b) and (c) and 11, the Company may require Employee to enter into a mutual
release in form and substance satisfactory to the Company and Employee in their
reasonable discretion.

     13. Non- Solicitation. So long as Employee is an employee of the Company
or any affiliate and for one (1) year thereafter, Employee shall not, directly
or indirectly, either for himself or for any other person or entity, directly
or indirectly, solicit, induce or assist another to solicit or induce any
employee, consultant, customer or supplier of the Company or any affiliate to
terminate his, her or its relationship with the Company or such affiliate.

     14. Post-Employment Consultancy. Upon the termination of Employee’s
employment with the Company for any reason, the Company may, at its option,
retain Employee as a consultant to the Company for an additional one year
period. The Company may exercise such right by providing written notice to
such effect to the Employee within 30 days after his last day of employment.
If the Company elects to retain Employee as a consultant, Employee’s
responsibilities in such position shall be to assist in the transition to a new
Chief Executive Officer, provide strategic advice to the Company and to
otherwise provide such counsel and advice as the Company shall reasonably
request of a senior consultant. In such capacity Employee shall report
directly to the Chairman of the Board of the Company, shall not be required to
provide services to the Company for more than 10 hours per month, and shall not
be required to travel. Employee shall continue to be bound by his Employee
Invention Assignment and Confidentiality Agreement during this period of
consultancy, to the extent applicable to his consulting work, and shall not
provide services (as an employee, consultant, Board member or otherwise) to, or
otherwise assist, directly or indirectly, any other company involved in the
development, manufacture or distribution of contact lenses during the
consultancy period. The Company shall pay Employee Eight Thousand Three
Hundred Thirty-Three Dollars and Thirty-Three Cents ($8,333.33) per month for
his consulting services. The Company shall not be obligated to make any other
payments or provide any other benefits to Employee on account of his consulting
services, including, without limitation, the provision of employee benefits or
continued option vesting. Notwithstanding the foregoing, the election of the
Company to retain Employee as a consultant shall not limit in any way the
Company’s obligations to make payments to Employee that are due upon
termination of his employment, as otherwise set forth herein.

     15. Miscellaneous.

          15.1 Arbitration; Equitable Remedies. Employee and the Company agree to
submit to mandatory binding arbitration in San Francisco, California any
controversy or claim arising out of, or relating to, this Agreement or any
breach hereof, provided, however, that the Company retains its right to, and
shall not be prohibited, limited or in any other way restricted from, seeking
or obtaining equitable relief from a court having jurisdiction over the
parties. In

 

8

 

this regard, and without limiting any other rights of the Company,
the Employee acknowledges
that the Company places substantial value on his personal services and
that he will have control over and access to the Company’s confidential
information, and that the Company shall be entitled to obtain equitable relief
in the event of any breach of Employee’s confidentiality, non-solicitation or
non-competition during consultancy obligations. Any arbitration shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

          15.2 Severability. If any provision of this Agreement shall be found by
any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and agree to substitute a
replacement provision to effect the intent of the parties to the extent
permitted by law. All other provisions of this Agreement shall remain in full
force and effect.

          15.3 No Waiver. The failure by either party at any time to require
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind shall be effective or binding, unless it is in writing and is signed
by the party against whom such waiver is sought to be enforced.

          15.4 Assignment. This Agreement and all rights hereunder are personal to
Employee and may not be transferred or assigned by Employee at any time. The
Company may assign its rights, together with its obligations hereunder, to any
parent or successor, or in connection with any sale, transfer or other
disposition of all or substantially all of its business and/or assets,
provided, however, that any such assignee assumes the Company’s obligations
hereunder.

          15.5 Withholding. All sums payable to Employee hereunder shall be reduced
by all federal, state, local and other withholding and similar taxes and
payments required by applicable law.

          15.6 Entire Agreement. This Agreement constitutes the entire and only
agreement between the parties relating to the subject matter hereof, and this
Agreement supersedes and cancels any and all previous contracts, arrangements
or understandings with respect thereto.

          15.7 Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed or extended only by an agreement in writing executed by both
parties hereto.

          15.8 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and sent by (i) hand delivery, (ii)
certified mail, return receipt requested, postage pre-paid, or (iii) nationally
recognized express courier service. Such notices and other communications
shall be effective upon receipt if hand delivered or, two (2)

 

9

 

business days
after mailing, if sent by mail, or after delivery to the courier if sent by
express
courier, to the following addresses, or such other addresses as any party
shall notify the other parties:

	 	 	 
	If to the Company:

 

 

 

Attention:
 

 

If to Employee:	 	
Ocular Sciences, Inc.

1855 Gateway Boulevard

Suite 700

Concord, CA 94520

John Fruth

 

Stephen Fanning

1271 Turnbury Lane

Gwyned, PA 19436

          15.9 Headings. The headings contained in this Agreement are for reference
purposes only and shall in no way affect the meaning or interpretation of this
Agreement. In this Agreement, the singular includes the plural, the plural
includes the singular, the masculine gender includes both the male and female,
and the word “or” is used in the inclusive sense.

          15.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but both of
which, taken together, constitute one and the same agreement.

          15.11 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be construed in accordance with the laws of the State of
California, without giving effect to the principles of conflict of laws.

          15.12 Surviving Provisions. Sections 6.5 and 6.6, the last sentence of
each of Sections 7.1 and 7.2 and Sections 10-15 shall survive termination of
this Agreement.

     IN WITNESS WHEREOF, the Company and Employee have executed this Employment
Agreement as of the date first above written.

	 	 	 	 
	OCULAR SCIENCES, INC	 	EMPLOYEE
	 
	By: 	/s/ John Fruth	 	/s/ Stephen Fanning
	 	
	 	

	Its: 	President	 	Stephen Fanning

 

10

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