-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gt3QnMkHMmTyO9oS/5bDR06KKyyjZGO0lrT/REb4S45mc8TmfPlMBps6hXXh1CIt P+P6wPY4r42Yn3+svY4Tjw== 0000950172-05-001996.txt : 20050624 0000950172-05-001996.hdr.sgml : 20050624 20050624154740 ACCESSION NUMBER: 0000950172-05-001996 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20050620 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050624 DATE AS OF CHANGE: 20050624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REFAC CENTRAL INDEX KEY: 0000082788 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 131681234 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12776 FILM NUMBER: 05915130 BUSINESS ADDRESS: STREET 1: ONE BRIDGE PLAZA STREET 2: SUITE 550 CITY: FORT LEE STATE: NJ ZIP: 07024-7102 BUSINESS PHONE: 2015850600 MAIL ADDRESS: STREET 1: ONE BRIDGE PLAZA STREET 2: SUITE 550 CITY: FORT LEE STATE: NJ ZIP: 07024-7102 FORMER COMPANY: FORMER CONFORMED NAME: REFAC TECHNOLOGY DEVELOPMENT CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCES & FACILITIES CORP DATE OF NAME CHANGE: 19740509 FORMER COMPANY: FORMER CONFORMED NAME: REFAC INC DATE OF NAME CHANGE: 19720628 8-K 1 nyc514326.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): June 20, 2005 REFAC (Exact name of registrant as specified in its charter) DELAWARE 001-12776 13-1681234 - --------------------------------- ----------------- -------------------- (State or other jurisdiction of (Commission I.R.S. Employer incorporation or organization) File Number) Identification No.) ONE BRIDGE PLAZA, FORT LEE, NEW JERSEY 07024 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (201) 585-0600 ------------------------------------------------------------- (Registrant's telephone number, including area code) None ---------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement. The Registrant entered into an Employment Agreement (the "Agreement") with J. David Pierson (the "Executive") effective as of June 20, 2005, pursuant to which the Executive will be employed as President and Chief Operating Officer of the Registrant. The Agreement has an initial term of two years but will be automatically renewed unless terminated by either party. Under the Agreement, the Executive will be paid a base salary of $350,000 and will be eligible to earn a target annual bonus in an amount equal to 50% of his base salary with the opportunity for an additional payment if targets are exceeded. A portion of any annual bonus may be paid in the form of equity, as determined by the Board of Directors in its sole discretion. The Executive shall receive a signing bonus equal to $7,000 and shall be entitled to reimbursement of relocation costs up to a maximum of $75,000. The Executive shall be entitled to an automobile fringe benefit and to participate in any employee benefit plan that the Registrant generally makes available to its executive employees. In the event of a termination of employment by the Registrant without Cause (as defined in the Agreement) or by the Executive for Good Reason (as defined in the Agreement), the Executive will be entitled to receive a lump sum payment equal to the sum of his base salary through the end of the term. In addition, the Registrant will provide the Executive with continued life, health and welfare benefits until the earlier of (i) the end of the term or (ii) the time at which the Executive becomes eligible to receive health and medical benefits from a subsequent employer. Upon a termination of employment for Cause, without Good Reason or as a result of the Executive's death or Disability (as defined in the Agreement) the Executive shall be entitled to receive any accrued compensation through the date of termination of employment. Concurrently with the execution of the Agreement, the Executive received options to purchase 150,000 shares of the Registrant's common stock with a per share exercise price equal to fair market value on the date of grant. The option, which was granted under the Registrant's 2003 Stock Incentive Plan (the "Plan"), was vested with respect to 50,000 shares on the date of grant and will vest with respect to an additional 50,000 shares on the first and second anniversaries of the date of grant, provided the Executive remains employed by the Registrant. Notwithstanding the vesting schedule, in the event that the Executive's employment terminates for Good Reason, without Cause, or upon death or Disability (in each case, as defined in the Agreement), then the option shall immediately become fully vested and shall remain exercisable for the remainder of the term of the option. Upon a termination of the Executive's employment by the Registrant for Cause (as defined in the Agreement), the option will terminate immediately whether vested or unvested. Upon a termination of the Executive's employment by the Executive without Good Reason, all unvested options will terminate immediately and vested options will remain exercisable for 90 days. Pursuant to the terms of the Plan, the option will become fully vested upon a Change in Control of the Registrant (as defined in the Plan). The Agreement provides for, among other restrictive covenants, a non-compete covenant that restricts the Executive from engaging in certain defined competitive activities for one year following the Executive's termination of employment irrespective of the reason for such termination. Copies of the Agreement and Mr. Pierson's stock option agreement are filed herewith as Exhibits 10.1 and 10.2, respectively. On June 20, 2005, the Registrant also entered into a Consulting Agreement (the "Consulting Agreement") with Cole Limited, Inc. ("CL"), a consulting firm headed by Jeffrey A. Cole. The Consulting Agreement has a term of one year. The Consulting Agreement provides that CL will serve as an independent contractor and will advise the Registrant on its optical interests and the operations of its subsidiaries and divisions, including developing a strategic plan, assisting on acquisition opportunities, assisting in financing and advising on corporate and retail operations. Except for the right to continue to provide consulting services to or on behalf of HAL International N.V., Pearle Europe, B.V., GrandVision Group or any of their affiliated entities, the services under the Consulting Agreement will generally be provided on an exclusive basis to the Registrant and all such services shall be exclusively rendered by Mr. Cole. Mr. Cole will be required to devote such time as is reasonably necessary to perform the services contemplated by the Consulting Agreement, which time shall be no more than 5 days per calendar month. The Consulting Agreement provides that CL will receive annual compensation of $100,000, payable in equal monthly installments, plus reimbursement for certain reasonable expenses. Concurrently with the execution of the Consulting Agreement, CL received options to purchase 50,000 shares of the Registrant's common stock with a per share exercise price equal to fair market value on the date of grant. One third of such options vested upon the date of grant, and one-third will vest on each of October 1, 2005 and February 1, 2006. The Registrant also presently intends to include Cole as a nominee to its Board at the next annual meeting of stockholders. In addition, on June 20, 2005, the Registrant and CL entered into a stock purchase agreement (the "Stock Purchase Agreement") whereby CL will purchase 50,000 shares of the Registrant's common stock at a price of $4.92 per share in a private placement transaction. The closing of the transaction is expected to be held on or about July 18, 2005. The Stock Purchase Agreement includes representations from the Registrant regarding organization and qualification, authorization, capitalization, issuance of shares, no conflicts, SEC documents and financial statements, litigation, absence of changes and brokers or finders. The Stock Purchase Agreement also includes representations from CL regarding organization, authority, sufficient funds, investment experience, investment intent, information and risk, disclosures and brokers and finders. The Consulting Agreement, CL's stock option agreement and the Stock Purchase Agreement are filed herewith as Exhibits 10.3, 10.4 and 10.5, respectively. A copy of the Registrant's press release announcing the appointment of Mr. Pierson and the retention of CL is furnished herewith as Exhibit 99.1. Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. As discussed under Item 1.01 hereof, effective as of June 20, 2005, J. David Pierson, age 58, was appointed as the Registrant's President and Chief Operating Officer. On such date, Mr. Pierson received options to purchase 150,000 shares of the Registrant's common stock with a per share exercise price equal to fair market value on the date of grant. A summary of Mr. Pierson's employment contract is included in Item 1.01 hereof and incorporated by reference. From 1996 to 2001, Mr. Pierson served as President of Licensed Brands for Cole National Corporation, a leading optical retailer. Through more than thirty years in retailing, he has managed operations, merchandising and strategic planning and implementation in a variety of positions with Sears, Target Stores and Federated Department Stores. Most recently, from March 2001 to April 2004, he served as the Chairman, President and Chief Executive Officer of CPI Corporation (NYSE: CPY), which provides portrait photography services in the United States, Puerto Rico and Canada through Sears Portrait Studios. Since leaving CPI Corporation, he has served as a consultant to several companies including some in the retail optical business. Robert L. Tuchman, who was previously Chief Executive Officer, President and General Counsel, will continue as Chief Executive Officer and General Counsel following Mr. Pierson's appointment. A copy of the Registrant's press release announcing the appointment of Mr. Pierson and the retention of CL is furnished herewith as Exhibit 99.1. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. Effective as of June 20, 2005, the Registrant's board of directors amended and restated the Registrant's Amended and Restated By-Laws to create separate offices for the Chief Executive Officer and the President, and to make certain other conforming changes. The by-laws previously stated that the Company's President would serve as Chief Executive Officer. As further discussed under Item 1.01 hereof, J. David Pierson has been appointed as the Company's President and Chief Operating Officer. Robert L. Tuchman, who was previously Chief Executive Officer, President and General Counsel, will continue as Chief Executive Officer and General Counsel following Mr. Pierson's appointment. A copy of the amended and restated by-laws is filed herewith as Exhibit 3.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. See Exhibit Index below. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. REFAC Dated: June 24, 2005 By: /s/ Raymond A. Cardonne, Jr. ------------------------------ Name: Raymond A. Cardonne, Jr. Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 3.1 Amended and Restated By-laws of REFAC, adopted June 20, 2005 10.1 Employment Agreement between Refac and J. David Pierson, dated June 20, 2005 10.2 Stock Option Agreement between Refac and J. David Pierson, dated June 20, 2005 10.3 Consulting Agreement between Refac and Cole Limited, Inc., dated June 20, 2005 10.4 Stock Option Agreement between Refac and Cole Limited, Inc., dated June 20, 2005 10.5 Stock Purchase Agreement between Refac and Cole Limited, Inc., dated June 20, 2005 99.1 Press Release, dated June 20, 2005. EX-3 2 nyc516547.txt EXHIBIT 3.1 - AMENDED AND RESTATED BY-LAWS Exhibit 3.1 ADOPTED JUNE 20, 2005 AMENDED AND RESTATED BY-LAWS OF REFAC ARTICLE I OFFICES ------- Section 1.1. Registered Office. The registered office of the Corporation in the State of Delaware shall be located at the principal place of business in such state of the corporation or individual acting as the Corporation's registered agent in Delaware. Section 1.2. Other Offices. In addition to its registered office in the State of Delaware, the Corporation may have an office or offices in such other places as the Board of Directors may from time to time designate or the business of the Corporation may require. ARTICLE II MEETING OF STOCKHOLDERS ----------------------- Section 2.1. Time and Place. All meetings of the stockholders of the Corporation shall be held at such time and place, either within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2.2. Annual Meeting. The annual meeting of stockholders of the Corporation shall be held at such date, time and place, either within or without the State of Delaware, as shall be determined by the Board of Directors and stated in the notice of meeting. Section 2.3. Special Meetings of Stockholders. Special meetings of stockholders for any purpose or purposes if not otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Board of Directors, the Chief Executive Officer, or the Secretary and shall be called by the Chief Executive Officer or Secretary at the request of stockholders owning a majority of the shares of capital stock of the Corporation issued and outstanding and entitled to vote at a meeting of stockholders. Such request shall state the purpose or purposes of the proposed meeting. The time of any such special meeting shall be fixed by the officer calling the meeting and shall be stated in the notice of such meeting, which notice shall specify the purpose or purposes thereof. Business transacted at any special meeting shall be confined to the purposes stated in the notice of meeting and matters germane thereto. Section 2.4. Notice of Meetings. Notice of the time and place of every annual or special meeting of the stockholders shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting, in the manner prescribed by Section 6.1 of these By-Laws, except that where the matter to be acted upon is a merger or consolidation of the Corporation, or a sale, lease or exchange of all or substantially all of its assets, such notice shall be given not less than twenty nor more than sixty days prior to such meeting. Section 2.5. Quorum and Adjournment of Meetings. The holders of at least 55% of the shares of capital stock issued and outstanding and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by the Certificate of Incorporation. If the holders of the requisite number of shares shall not be present in person or represented by proxy at any meeting of the stockholders at which action is to be taken by the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting, until holders of the requisite number of shares of stock entitled to vote shall be present or represented by proxy. At such adjourned meeting at which such holders of the requisite number of shares of capital stock shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of adjourned meeting shall be given to each stockholder of record entitled to vote thereat. Section 2.6. Vote Required. At any meeting of stockholders, directors shall be elected by a plurality of votes, and all other matters shall be decided by a vote of the holders of at least 55% of the shares of capital stock issued and outstanding, cast by the stockholders present in person or represented by proxy and entitled to vote, unless the matter is one for which, by express provisions of statute, of the Certificate of Incorporation or of these By-Laws, a different vote is required, in which case such express provision shall govern and control the determination of such matter. Section 2.7. Voting. At any meeting of the stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. To determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date which shall be not more than sixty days nor less than ten days before the date of such meeting. Except as otherwise provided by the Certificate of Incorporation or by statute, each stockholder of record shall be entitled to one vote for each outstanding share of capital stock standing in his or her name on the books of the Corporation as of the record date. A complete list of the stockholders entitled to vote at any meeting of stockholders arranged in alphabetical order with the address of each and the number of shares held by each, shall be prepared by the Secretary. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting, at the locations specified by the Delaware General Corporation Law. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 2.8. Proxies. Each proxy shall be in writing executed by the stockholder giving the proxy or his or her duly authorized attorney. No proxy shall be valid after the expiration of three years from its date, unless a longer period is provided for in the proxy. Unless and until voted, every proxy shall be revocable at the pleasure of the person who executed it or his or her legal representatives or assigns, except in those cases where an irrevocable proxy permitted by statute has been given. Section 2.9. Consents. The provision of these By-Laws covering notices and meetings to the contrary notwithstanding, any action required or permitted to be taken at any meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent 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 have been necessary to authorize or take such action at a meeting at which all shares of stock entitled to vote thereon were present and voted. Where corporate action is taken in such manner by less than unanimous written consent, prompt written notice of the taking of such action shall be given to all stockholders who have not consented in writing thereto and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting. ARTICLE III DIRECTORS --------- Section 3.1. Board of Directors. The business and affairs of the Corporation shall be managed by a Board of Directors. The Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things on its behalf as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 3.2. Number; Election and Tenure. The number of directors shall be fixed initially by the incorporator of the Corporation and thereafter such number may be increased from time to time by the stockholders or by the Board of Directors or may be decreased by the stockholders. Except as provided by law or these By-Laws, directors shall be elected each year at the annual meeting of stockholders. The directors of the Corporation shall be divided into three classes, with each class to be as nearly equal in number as reasonably possible, and with the initial term of office of the first class of directors to expire at the annual meeting of stockholders next ensuing, the initial term of office of the second class of directors to expire one year thereafter and the initial term of office of the third class of directors to expire two years thereafter, in each case upon the election and qualification of their successors. Commencing with the 2003 annual meeting of stockholders, directors elected to succeed those directors whose terms have thereupon expired shall be elected to a term of office to expire at the third succeeding annual meeting of stockholders after their election, and upon the election and qualification of their successors. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain or attain the number of directors in each class as nearly equal as reasonably possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director. Section 3.3. Resignation and Removal. A director may resign at any time by giving written notice to the Board of Directors or to the Chief Executive Officer of the Corporation. Such resignation shall take effect upon receipt thereof by the Board of Directors or by the Chief Executive Officer, unless otherwise specified therein. Any one or more of the directors may be removed for cause at any time by the affirmative vote of a majority of the then existing shares outstanding at any meeting of the stockholders called for such purpose. Section 3.4. Vacancies. A vacancy occurring for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled by the vote of a majority of the directors then in office, although less than a quorum, or by the sole remaining director, or by the stockholders. Section 3.5. Compensation. Each director shall receive for services rendered as a director of the Corporation such compensation as may be fixed by the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE IV MEETINGS OF THE BOARD --------------------- Section 4.1. Time and Place. Meetings of the Board of Directors shall be held at such places, within or without the State of Delaware, and within or without the United States of America, as shall be determined in accordance with these By-Laws. Section 4.2. Annual Meeting. Immediately after and at the place of the annual meeting of the stockholders, or at such other place as the Board of Directors may designate, a meeting of the newly elected Board of Directors for the purpose of organization and the election of officers and otherwise may be held. Such meeting may be held without notice. Section 4.3. Regular Meetings. Regular meetings of the Board of Directors may be held without notice, at such time and place as shall, from time to time, be determined by the Board of Directors. Section 4.4. Special Meetings. Special meetings of the Board of Directors may be held at any time and place as shall be determined by resolution of the Board of Directors or upon the call of the Chief Executive Officer, the Secretary, or any member of the Board of Directors on two days notice to each director by mail or on one day's notice personally or by telecopy, telephone or telegraph. Meetings of the Board of Directors may be held at any time without notice if all the directors are present, or if those not present waive notice of the meeting in writing, either before or after the meeting. Section 4.5. Quorum and Voting. A majority of the entire Board of Directors shall constitute a quorum at any meeting of the Board of Directors and the act of a majority of the directors shall be the act of the Board of Directors, except as may otherwise be specifically provided by law, the Certificate of Incorporation or by these By-Laws. If at any meeting of the Board of Directors there shall be less than a quorum present, the director or directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained. Section 4.6. Consents. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent to such action in writing, and such writing or writings are filed with the minutes of the proceedings of the Board of Directors. Section 4.7. Telephonic Meetings of Directors. The Board of Directors may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at such meeting. ARTICLE V COMMITTEES OF THE BOARD ----------------------- Section 5.1. Designation and Powers. The Board of Directors may in its discretion designate one or more committees. Each committee shall consist of one or more of the directors of the Corporation. Such committee or committees shall have duties and powers not inconsistent with the laws of the State of Delaware, the Certificate of Incorporation, these By-Laws, and the respective resolution or resolutions of the Board of Directors. ARTICLE VI NOTICES ------- Section 6.1. Delivery of Notices. Notices to directors and stockholders shall be in writing and may be delivered personally or by mail. Notice by mail shall be deemed to be given at the time when deposited in the United States mail, postage prepaid, and addressed to directors or stockholders at their respective addresses appearing on the books of the Corporation, unless any such director or stockholder shall have filed with the Secretary of the Corporation a written request that notices intended for him or her be mailed or delivered to some other address, in which case the notice shall be mailed to or delivered at the address designated in such request. Notice to directors may also be given by telegram or by telecopy. Section 6.2. Waiver of Notice. Whenever notice is required to be given by statute, the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance of a person at a meeting of stockholders, directors or any committee of directors, as the case may be, shall constitute a waiver of notice of such meeting, except where the person is attending for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of stockholders, directors or committee of directors need be specified in any written waiver of notice. ARTICLE VII CHAIRMAN OF THE BOARD AND EXECUTIVE OFFICERS -------------------------------------------- Section 7.1. Chairman of the Board and Executive Officers. At the annual meeting of directors the Board of Directors shall elect a Chairman of the Board (which may be an executive or non-executive position, as determined by the Board of Directors), Chief Executive Officer, President, Secretary and Treasurer and may elect one or more Vice Presidents, Assistant Secretaries or Assistant Treasurers and such other officers as the Board of Directors may from time to time designate or the business of the Corporation may require. Except for the Chairman of the Board, no executive officer need be a member of the Board. Any number of offices may be held by the same person, except that the office of Secretary may not be held by the Chairman of the Board or the Chief Executive Officer. Section 7.2. Other Officers and Agents. The Board of Directors may also elect such other officers and agents as the Board of Directors may at any time or from time to time determine to be advisable, such officers and such agents to serve for such terms and to exercise such powers and perform such duties as shall be specified at any time or from time to time by the Board of Directors. Section 7.3. Tenure; Resignation; Removal; Vacancies. The Chairman of the Board and each officer of the Corporation shall hold office until his or her successor is elected and qualified, or until his or her earlier resignation or removal; provided, that if the term of office of any officer elected or appointed pursuant to Section 7.2 of these By-Laws shall have been fixed by the Board of Directors, he or she shall cease to hold such office no later than the date of expiration of such term regardless of whether any other person shall have been elected or appointed to succeed him or her. The Chairman of the Board or any officer elected by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors; provided, that any such removal shall be without prejudice to the rights, if any, of the officer so employed under any employment contract or other agreement with the Corporation. The Chairman of the Board or any officer may resign at any time upon written notice to the Board of Directors. If the office of the Chairman of the Board or any officer becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the Board of Directors may choose a successor or successors to hold office for such term as may be specified by the Board of Directors. Section 7.4. Compensation. Except as otherwise provided by these By-Laws, the salaries of the Chairman of the Board, if an executive, and all officers and agents of the Corporation appointed by the Board of Directors shall be fixed by the Board of Directors. Section 7.5. Authority and Duties. The Chairman of the Board and all officers as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-Laws. In addition to the powers and duties hereinafter specifically prescribed for the Chairman of the Board and the respective officers, the Board of Directors may from time to time impose or confer upon any of the officers such additional duties and powers as the Board of Directors may see fit, and the Board of Directors may from time to time impose or confer any or all of the duties and powers hereinafter specifically prescribed for any officer upon any other officer or officers. Section 7.6. Chairman of the Board. The Chairman of the Board of Directors, who shall be a director, shall preside at all meetings of the stockholders and at all meetings of the Board of Directors. He or she shall perform such other duties as may be assigned from time to time by the Board of Directors. Section 7.7. Chief Executive Officer. The Chief Executive Officer shall perform such duties as may be assigned to him or her by the Board of Directors, and in the event of disability or absence of the Chairman of the Board, perform the duties of the Chairman of the Board, including presiding at meetings of stockholders and directors. He or she shall from time to time report to the Board of Directors all matters within his or her knowledge which the interest of the Corporation may require to be brought to their notice, and shall also have such other powers and perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors. The Chief Executive Officer shall see that all resolutions and orders of the Board of Directors are carried into effect, and in connection with the foregoing, shall be authorized to delegate to the President, the Vice President and the other officers such of his or her powers and such of his or her duties as he or she may deem to be advisable. Section 7.8. The President. The President shall perform such duties as may be assigned to him or her from time to time by the Board of Directors or as may be designated by the Chief Executive Officer. In case of the absence or disability of the Chief Executive Officer the duties of the office shall, if the Board of Directors or the Chief Executive Officer has so authorized, be performed by the President. Section 7.9. The Vice President(s). The Vice President, or if there be more than one, the Vice Presidents, shall perform such duties as may be assigned to them from time to time by the Board of Directors or as may be designated by the Chief Executive Officer or President. In case of the absence or disability of the President the duties of the office shall, if the Board of Directors, the Chief Executive Officer or the President has so authorized, be performed by the Vice President, or if there be more than one Vice President, by such Vice President as the Board of Directors, the Chief Executive Officer or President shall designate. Section 7.10. The Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors or by any officer of the Corporation authorized by the Board of Directors to make such designation. The Treasurer shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and shall perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors or by the Chief Executive Officer, President or any Vice President. Section 7.11. The Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for any committee when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and, when necessary, of the Board of Directors. The Secretary shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and he or she shall perform such other duties as may be assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer, President or by any Vice President. ARTICLE VIII CERTIFICATES OF STOCK --------------------- Section 8.1. Form and Signature. The certificates of stock of the Corporation shall be in such form or forms not inconsistent with the Certificate of Incorporation as the Board of Directors shall approve. They shall be numbered, the certificates for the shares of stock of each class to be numbered consecutively, and shall be entered in the books of the Corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the Chief Executive Officer, President or a Vice President and the Treasurer (or any Assistant Treasurer) or the Secretary (or any Assistant Secretary); provided, however, that where any such certificate is signed by a transfer agent or an assistant transfer agent, or by a transfer clerk acting on behalf of the Corporation, and registered by a registrar, the signature of any such Chief Executive Officer, President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, may be a facsimile. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates, shall cease to be such officer or officers of the Corporation, whether because of death, resignation, removal or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be such officer or officers of the Corporation. Section 8.2. Lost or Destroyed Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his or her legal representatives, to advertise the same in such manner as it shall require, and to give a bond in such sum as the Board of Directors may direct, indemnifying the Corporation, any transfer agent and any registrar against any claim that may be made against them or any of them with respect to the certificate alleged to have been lost or destroyed. Section 8.3. Registration of Transfer. Upon surrender to the Corporation of a certificate for shares, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction on its books. ARTICLE IX GENERAL PROVISIONS ------------------ Section 9.1. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. Section 9.2. Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware. Section 9.3. Dividends. Dividends upon the capital stock of the Corporation shall in the discretion of the Board of Directors from time to time be declared by the Board of Directors out of funds legally available therefor after setting aside of proper reserves. Section 9.4. Checks and Notes. All checks and drafts on the bank accounts of the Corporation, all bills of exchange and promissory notes of the Corporation, and all acceptances, obligations and other instruments for the payment of money drawn, signed or accepted by the Corporation, shall be signed or accepted, as the case may be, by such officer or officers, agent or agents as shall be thereunto authorized from time to time by the Board of Directors or by officers of the Corporation designated by the Board of Directors to make such authorization. Section 9.5. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board of Directors. Section 9.6. Voting of Securities of Other Corporations. In the event that the Corporation shall at any time own and have power to vote any securities (including but not limited to shares of stock) of any other issuer, such securities shall be voted by such person or persons, to such extent and in such manner, as may be determined by the Board of Directors. Section 9.7. Transfer Agent. The Board of Directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock. It may appoint one or more transfer agents and one or more registrars and may require all stock certificates to bear the signature of either or both. Section 9.8. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Delaware". ARTICLE X INDEMNIFICATION --------------- Section 10.1. Indemnification. (a) Actions, Suits or Proceedings Other Than by or in the Right of the Corporation. The Corporation shall indemnify any current or former director or officer of the Corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Corporation 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, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) (funds paid or required to be paid to any person as a result of the provisions of this Section 10.1 shall be returned to the Corporation or reduced, as the case may be, to the extent that such person receives funds pursuant to an indemnification from any such other corporation, partnership, joint venture, trust or enterprise) to the fullest extent permissible under Delaware law, as then in effect, against 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, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. (b) Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any current or former director or officer of the Corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit, by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) (funds paid or required to be paid to any person as a result of the provisions of this Section 10.1 shall be returned to the Corporation or reduced, as the case may be, to the extent that such person receives funds pursuant to an indemnification from any such other corporation, partnership, joint venture, trust or enterprise) to the fullest extent permitted under Delaware law, as then in effect, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) Indemnification for Expenses of Successful Party. To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraph (a) or (b) of this Section 10.1, or in defense of any claim, issue or matter therein, such person shall be indemnified by the Corporation against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. (d) Determination of Right to Indemnification. Any indemnification under paragraph (a) or (b) of this Section 10.1 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in paragraphs (a) and (b) of this Section 10.1. Such determination shall be made (1) by the Board of Directors by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the holders of a majority of the shares of capital stock of the Corporation entitled to vote thereon. (e) Advancement of Expenses. Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Section 10.1. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (f) Other Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 10.1 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. (g) Insurance. By action of the Board of Directors, notwithstanding an interest of the directors in the action, the Corporation may purchase and maintain insurance, in such amounts as the Board of Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation shall have the power to indemnify such person against such liability under the provisions of this Section 10.l. (h) Continuation of Rights to Indemnification. The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 10.1 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (i) Protection of Rights Existing at Time of Repeal or Modification. Any repeal or modification of this Section 10.1 shall not adversely affect any right or protection of an indemnified person existing at the time of such repeal or modification. ARTICLE XI AMENDMENTS ---------- Section 11.1. By the Stockholders. These By-Laws may be altered, amended or repealed in whole or in part, and new By-Laws may be adopted, by the affirmative vote of the holders of a majority of the shares of capital stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, if notice thereof shall be contained in the notice of the meeting. Section 11.2. By the Board of Directors. These By-Laws may be altered, amended or repealed by the Board of Directors at any regular or special meeting of the Board of Directors if notice thereof shall be contained in the notice of the meeting. EX-10 3 ny513662.txt EXHIBIT 10.1 - EMPLOYMENT AGREEMENT Exhibit 10.1 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between J. David Pierson (the "Executive") and REFAC, a Delaware corporation (the "Company") as of June 20, 2005 (the "Commencement Date"). WHEREAS, the Company desires to provide for the service and employment of the Executive with the Company and the Executive wishes to perform services for the Company, all in accordance with the terms and conditions provided herein. NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the Executive and the Company hereby agree as follows: Section 1. EMPLOYMENT. The Company does hereby employ the Executive and the Executive does hereby accept employment as the President and Chief Operating Officer of the Company. The Executive shall have all the duties, responsibilities and authority attendant to the position of Chief Operating Officer and shall render services consistent with such position on the terms set forth herein and shall report to the Chief Executive Officer of the Company. Such duties, responsibilities and authority shall include and extend to the operations of the Company and its present or hereinafter formed or acquired subsidiary corporations or any other entity which it controls. In addition, the Executive shall have such other executive and managerial powers and duties with respect to the Company as may reasonably be assigned to him by the Board of Directors (the "Board") to the extent consistent with his position and status as set forth herein. The Executive agrees to devote all of his working time and efforts to the business and affairs of the Company, subject to periods of vacation and sick leave to which he is entitled, and shall not engage in activities that substantially interfere with such performance. Should the Company promote the Executive to Chief Executive Officer, the Executive agrees to accept such position and change in his title and duties. In such event, the Executive will also be elected to the Board and, subject to the shareholder vote, shall continue to serve on the Board during the balance of his employment hereunder. Executive shall not receive additional compensation for such Board service. Section 2. TERM OF AGREEMENT. Subject to Section 5 hereof, the term (the "Term") of this Agreement shall commence on the Commencement Date and shall continue for a period of two (2) years (the "Initial Term"); provided that, upon expiration of the Initial Term, the Term shall be automatically extended for successive one-year periods (each such one-year period, the then current Term) commencing in each case on the anniversary of the Commencement Date, unless the Executive or the Company notifies the other in writing at least ninety (90) days prior to the next following anniversary of the Commencement Date of an intention to terminate this Agreement. Section 3. LOCATION. The Executive shall be based initially at the Company's corporate offices in Fort Lee, New Jersey. However, the Company is presently engaged in discussions to acquire U.S. Vision, Inc. ("USV") which has its corporate offices in Glendora, New Jersey and OptiCare Health Systems, Inc. ("OptiCare"), which has its corporate offices in Waterbury, Connecticut. Both USV and OptiCare are affiliates of the Company. If such discussions result in the Company's acquisition of USV, the Executive has expressed a preference to work out of a location near to or at USV. The Company agrees that if such location is consistent with its strategic plan, as approved by the Board, the Executive may relocate his office to such a site provided that he shall work out of the corporate offices in Fort Lee, New Jersey as often as necessary to maintain a close working relationship with the Company's other senior executive officers and controlling stockholder. Section 4. COMPENSATION. (a) BASE SALARY. Effective as of the Commencement Date, the Company shall pay the Executive a base salary ("Base Salary") at an initial rate of $350,000 per year, payable in accordance with the Company's policies relating to salaried employees, but no less frequently than monthly. In the event that the Executive is promoted to the position of Chief Executive Officer, then the Board shall review the Base Salary and, in its sole and absolute discretion, may approve such increase (if any) as it deems appropriate. (b) ANNUAL BONUS. (i) Commencing with the Company's fiscal year ending December 31, 2006, the Executive shall be eligible to receive a performance-based annual cash bonus based on the achievement of corporate goals approved by the Board or a committee thereof and set forth in the Company's strategic plan and budget, as approved by the Board (the "Annual Bonus"). The Executive's target Annual Bonus shall be equal to fifty percent (50%) of his then current Base Salary with opportunity for an additional payment, as determined by the Board or a committee thereof, if target goals are exceeded. To the extent consistent with the Company's compensation policy at the time of pay-out of any annual bonus, a portion of the Executive's annual bonus shall be paid in the form of equity, as determined by the Board in its sole discretion. Payment of any Annual Bonus shall be made by the Company to the Executive within thirty (30) days after the date on which the Company files its Form 10-K with the Securities and Exchange Commission. (ii) In the event of a termination of the Executive's employment without Cause, for Good Reason or as a result of his death or Disability (in each case, as defined in Section 5 hereof), the Executive shall be entitled to receive a pro-rated Annual Bonus based on the number of days that the Executive was employed by the Company during the fiscal year to which such Annual Bonus relates; provided, however, that the Board may, in its sole discretion, adjust the amount payable to the Executive based on its assessment of the Executive's contribution to the achievement of target performance during such fiscal year. Subject to the discretion of the Board, payment by the Company of any Annual Bonus shall be made to the Executive within thirty (30) days after the date on which the Company files its Form 10-K with the Securities and Exchange Commission, irrespective of whether the Executive is then employed by the Company at such time. (c) SIGNING BONUS. The Company shall pay the Executive $7,000 as a signing bonus. (d) EQUITY PARTICIPATION. As of the Commencement Date, the Executive shall be granted options to purchase 150,000 shares of Company common stock (the "Options") governed by the terms and provisions of the Company's 2003 Stock Incentive Plan (the "Plan") and a stock option agreement to be entered into by and between the Company and the Executive (the "Stock Option Agreement") in accordance with the terms set forth in this Agreement. The Options shall have an exercise price equal to fair market value of the Company's common stock on the Commencement Date and shall vest and become exercisable with respect to one-third of the Options on each of the Commencement Date and the first and second anniversaries of the Commencement Date, subject to accelerated vesting and forfeiture as set forth in this Agreement, the Option Agreement and the Plan. The Options shall have a term of five (5) years unless terminated earlier as set forth in this Agreement, the Option Agreement and the Plan. The Options are intended to qualify as an incentive stock options within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"), to the maximum extent permitted under the Code. (e) FRINGE BENEFITS. (i) General. The Executive shall be entitled to participate in or receive benefits under any employee benefit plan or arrangement now or in the future made available by the Company generally to its executive employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements, including but not limited to health insurance and life insurance benefits. During the Term, the Company shall provide the Executive with an automobile with a maximum monthly lease payment of $900. (ii) Vacation. The Executive shall be entitled to take four (4) weeks of paid vacation per calendar year, prorated for any portion thereof, and to all paid holidays given by the Company in accordance with the Company's regular paid holidays policy. (iii) Temporary Housing. The Executive currently resides in St. Louis, Missouri area and until such time as the Executive has relocated, but, in no event more than six (6) months, the Company shall provide the Executive with corporate housing in New Jersey as mutually agreed upon between the parties within a reasonable commuting distance to the Company's corporate office in Fort Lee, New Jersey. (f) REIMBURSEMENTS. (i) Business Expenses. The Company shall promptly reimburse the Executive for all direct expenses incurred by the Executive in the performance of his duties under this Agreement, including all reasonable travel expenses, provided that such expenses are incurred and accounted for in accordance with the Company's policies and procedures. (ii) Relocation Costs. The Company shall reimburse the Executive for actual costs directly related to his relocation from the greater St. Louis, Missouri area to either the Fort Lee or the greater Philadelphia area, as the case may be, in an amount up to $75,000, provided that such expenses are accounted for in accordance with the Company's policies and procedures. The Company agrees to treat the moving reimbursement as a tax-free fringe benefit to the extent permitted under Section 132 of the Code. Section 5. TERMINATION. (a) NOTICE OF TERMINATION. (i) "Notice of Termination" shall mean a notice that shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provisions so indicated. (ii) Any purported termination of the Executive's employment by the Company or by the Executive shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 9 hereof. (b) DATE OF TERMINATION. Upon the Date of Termination, the Term shall expire. "Date of Termination" shall mean: (i) if the Executive's employment is terminated because of death, the date of the Executive's death, or (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination, which shall not be a date prior to the date such Notice of Termination is given or the expiration of any required notice period. (c) ACCRUED AND UNPAID BENEFITS. Following the termination of the Executive's employment with the Company for any reason, the Executive shall receive: (i) any earned, but unpaid, Base Salary, (ii) any earned, but unpaid, bonus, (iii) the cash equivalent of any accrued, but unused, vacation and (iv) any accrued and vested employee benefits, subject to the terms of the applicable employee benefit plans. The amounts payable under subparagraphs 5(c)(i), (ii) and (iii) shall be paid within thirty (30) days following the Date of Termination, except that with respect to payment of any Annual Bonus, such amount shall be paid in accordance with Section 4(b) hereof. (d) DEATH OR DISABILITY. In the event that the Executive's employment hereunder is terminated by reason of the Executive's death or Disability (as defined below), the Company shall pay the amounts described in Section 5(c) above. All outstanding stock options, whether vested or unvested, exercisable or not exercisable, shall as of the Date of Termination, vest and become exercisable and, subject to the terms of any plan or agreement governing such stock options, shall remain exercisable by the Executive or the Executive's legal representative for the remainder of the term of such stock options and shall thereafter expire. For the purposes of this Agreement, Disability means the Executive's inability, by virtue of physical or mental illness or injury, to perform his regular duties on a full-time, continuous basis for 120 consecutive days. The Executive's Disability will be established if a qualified medical doctor selected by the parties so certifies in writing. If the parties are unable to agree on the selection of such a doctor, each party will designate a qualified medical doctor who together will select a third doctor who will make the determination. The Executive will make himself available for an examination by a doctor selected in accordance with this paragraph (d). (e) TERMINATION FOR CAUSE. The Company may terminate the Executive's employment under this Agreement for Cause (as defined below) at any time, in which event any rights of the Executive to continued employment under the Agreement shall thereupon cease, and if the Executive shall then be a member of the Board, he shall immediately resign from such position. Upon a termination for Cause, the Company shall pay to the Executive the amounts described in Section 5(c) above. As of the Date of Termination, all outstanding unvested options to purchase Company common stock held by the Executive shall terminate immediately. (i) As used herein, termination for "Cause" shall mean the occurrence of any of the following: (A) the Executive shall have been convicted of, or pleads guilty or nolo contendere to, a misdemeanor involving theft or moral turpitude or any felony; (B) the Executive shall have engaged in conduct that constitutes gross neglect or willful gross misconduct (including misappropriation or embezzlement of property of, or fraud with respect to, the Company or its subsidiaries or their affiliates) with respect to Executive's employment duties; provided, however, that for purposes of determining whether conduct constitutes willful gross misconduct, no act on Executive's part shall be considered "willful" unless it is done by Executive in bad faith and without reasonable belief that his action was in the best interests of the Company; or (C) the Executive violates any material provision of the Company's Code of Conduct and Ethics and/or its Code of Ethics for Senior Financial Officers. (ii) Notwithstanding the foregoing, the Company may not terminate Executive's employment for Cause unless (x) a determination that Cause exists is made and approved by a majority of the Board (excluding the Executive in the event that the Executive is then a member of the Board) and (y) Executive is given at least fifteen (15) days written notice of the Board meeting called to make such determination and, if curable, an opportunity to cure during such notice period. (f) TERMINATION OTHER THAN FOR CAUSE. The Company may terminate the Executive's employment under this Agreement without Cause at any time, in which event any rights of the Executive to continued employment under the Agreement shall thereupon cease. In the event of such a termination without Cause, the Executive shall be entitled to receive a lump sum payment on the Date of Termination equal to the amount of Base Salary then in effect that the Executive would have received had he remained employed for the remainder of the Term. The Executive shall also be entitled to receive continued health and medical benefits until the earlier of (i) the expiration of the Term or (ii) the time at which the Executive becomes eligible to receive health and medical benefits from a subsequent employer. In addition, the Company shall pay to the Executive the amounts set forth in Section 5(c) hereof. All outstanding stock options, whether vested or unvested, exercisable or not exercisable, shall as of the Date of Termination, vest and become exercisable and, subject to the terms of any plan or agreement governing such stock options, shall remain exercisable by the Executive for the remainder of the term of the stock option and shall thereafter expire. (g) TERMINATION BY THE EXECUTIVE. (i) In the event that the Executive terminates his employment hereunder without Good Reason, (A) any outstanding unvested stock options shall expire and terminate on the Date of Termination, (B) any vested stock options shall remain exercisable for a period of ninety (90) days following the date of Termination, subject to the terms of any plan or agreement governing such stock options and (C) the Executive shall be entitled to receive only the amounts set forth in Section 5(c) above ; provided, however, that such stock options shall not expire or terminate if Executive is then a member of the Board and continues to serve as a member of the Board. (ii) The Executive shall have the right to terminate his employment for Good Reason (as defined below). In the event that the Executive terminates his employment for Good Reason, he shall be entitled to receive a lump sum payment on the Date of Termination equal to the amount of Base Salary then in effect that the Executive would have received had he remained employed for the remainder of the Initial Term. The Executive shall also be entitled to receive continued health and medical benefits until the earlier of (i) the expiration of the Term or (ii) the time at which the Executive becomes eligible to receive health and medical benefits from a subsequent employer. In addition, the Company shall pay to the Executive the amounts set forth in Section 5(c) hereof. All outstanding stock options, whether vested or unvested, exercisable or not exercisable, shall as of the Date of Termination, vest and become exercisable and, subject to the terms of any plan or agreement governing such stock options, shall remain exercisable by the Executive for the remainder of the term of the stock option and shall thereafter expire. (iii) "Good Reason" shall mean any of the following actions or failures to act, but in each case only if it occurs while the Executive is employed by the Company and then only if it is not consented to by the Executive in writing: (A) a material adverse change in the Executive's title, duties or responsibilities including the assignment to the Executive of any duties that are materially inconsistent with his status in his then current position as Chief Operating Officer or, if applicable, Chief Executive Officer of the Company; (B) a reduction by the Company in the Executive's Base Salary; (C) a Change of Control (as defined in the Plan), provided that this Section 5(g)(iii) shall not apply to any Change of Control in which the Executive continues to be employed by the Company in accordance with the terms of this Agreement after the Change of Control; or (D) a material breach of this Agreement by the Company. For purposes of this definition, none of the actions described in clauses (A) through (D) above shall constitute "Good Reason" with respect to the Executive if it was an isolated and inadvertent action not taken in bad faith by the Company and if it is remedied by the Company within 30 days after receipt of written notice thereof given by the Executive (or, if the matter is not capable of remedy within 30 days, then within a reasonable period of time following such 30 day period, provided that the Company has commenced such remedy within said 30 day period); provided that "Good Reason" shall cease to exist for any action described in clauses (A) through (D) above on the 60th day following the later of the occurrence of such action or the Executive's knowledge thereof, unless the Executive has given the Company written notice thereof prior to such date. (h) RELEASE OF EMPLOYMENT CLAIMS. The Executive agrees, as a condition to receipt of the payments and benefits provided for in sections 5(f) and (g) hereof, that he will execute a release agreement, releasing any and all claims arising out of the Executive's employment or termination thereof (other than enforcement of this Agreement and the Executive's rights under any of the Company's incentive compensation and employee benefit plans and programs to which he is entitled under this Agreement). Such release agreement shall be negotiated in good faith by the parties. Section 6. CONFIDENTIALITY; NON-COMPETITION; NON-SOLICITATION; INTELLECTUAL PROPERTY. (a) CONFIDENTIALITY. As a senior executive officer and, if applicable, director of the Company, the Executive will be privy to non-public information generally regarded as confidential and often proprietary with respect to the Company and its subsidiaries and affiliates, including, without limitation, their business relationships, negotiations and past, present and prospective activities, methods of doing business, know-how, trade secrets, data, formulae, customer lists and all papers, resumes and records (including computer records) of the documents containing such information (hereinafter collectively referred to as the "Confidential Information"). Notwithstanding the foregoing, it is agreed that Confidential Information does not include information regarding the Executive's own compensation and benefits nor information that became generally available to the public other than as a result of a disclosure by the Executive. (i) The Executive acknowledges that in his employment with the Company, he will occupy a position of trust and confidence. The Executive shall not, except as may be required to perform his duties hereunder or as required by applicable law, without limitation in time or until such information shall have become public other than by the Executive's unauthorized disclosure, disclose to others or use, whether directly or indirectly, any Confidential Information. (ii) The Executive acknowledges that all Confidential Information is specialized, unique in nature and of great value to the Company and its subsidiaries, and that such Confidential Information gives the Company and its subsidiaries a competitive advantage. The Executive agrees to deliver or return to the Company, at the Company's request at any time or upon termination or expiration of his employment or as soon thereafter as possible, all documents, computer tapes and disks, records, lists, data, drawings, prints, notes and written information (and all copies thereof) furnished by or on behalf of or for the benefit of the Company and its subsidiaries or their affiliates or prepared by the Executive during the term of his employment by the Company, but excluding documents relating to the Executive's own compensation and benefits. (b) NON-COMPETITION. During the Executive's employment with the Company and during the one (1) year period commencing on the Date of Termination, if any, or the expiration of the Term, the Executive shall not, directly or indirectly, whether as owner, consultant, employee, partner, venturer, agent, through stock ownership, investment of capital, lending of money or property, rendering of services, or otherwise, compete with the Company or any of its affiliates or subsidiaries in any business in which any of them is engaged or developing while the Executive is employed with Company (such businesses are hereinafter referred to as the "Business"), or assist, become interested in or be connected with any corporation, firm, partnership, joint venture, sole proprietorship or other entity which so competes with the Business. This non-competition restriction shall only apply to a geographic area in which the Company or its affiliates and subsidiaries were engaged, or had specific plans to engage, at the time of termination. (c) NON-SOLICITATION OF HOST STORES AND CUSTOMERS. During the Executive's employment with the Company and during the two (2) year period commencing on the Date of Termination, if any, or the expiration of the Term, the Executive shall not, directly or indirectly, influence or attempt to influence the host stores in which the Company or any of its subsidiaries operate or any customer, consultant or supplier of the Company or any of its subsidiaries or their affiliates to divert their business to any business, individual, partner, firm, corporation or other entity that is then a direct competitor of the Company or its subsidiaries or their affiliates or has plans to so compete (each such competitor or prospective competitor, a "Competitor of the Company"); provided, however, that if the Executive is employed by customers or suppliers of the Company following his termination of employment and such employment does not violate Section 6(b) hereof, the normal execution of his duties in connection with such employment shall not constitute a violation of this Section 6(c). (d) NON-SOLICITATION OF EMPLOYEES, CONSULTANTS AND ADVISERS. (i) The Executive recognizes that he will possess confidential information about other employees of the Company and its subsidiaries or their affiliates relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with customers of the Company and its subsidiaries or their affiliates. (ii) The Executive recognizes that he will also possess confidential information about consultants and advisers to the Company and its subsidiaries or their affiliates relating to their experience, skills, abilities and their professional relationships with the Company and its subsidiaries or the affiliates. (iii) The Executive agrees that, during the Executive's employment with the Company and during the two (2) year period commencing on the Date of Termination he will not, directly or indirectly, solicit or recruit any employee, consultant or adviser of the Company or its subsidiaries or their affiliates for the purpose of being employed, or retained as the case may be, by him or by any Competitor of the Company on whose behalf he is acting as an agent, representative or employee and that he will not convey any such confidential information or trade secrets about other employees, consultants or advisers of the Company and its subsidiaries or their affiliates to any other person. (e) The provisions of subparagraphs 6(b), (c) and (d) hereof shall not apply if the Executive is terminated without Cause or for Good Reason. (f) INTELLECTUAL PROPERTY. The Executive shall disclose promptly and in writing to the Company all inventions, creative works and any other intellectual property, whether or not patentable or copyrightable, conceived or created solely or jointly by the Executive during the period of his employment which relate to the business of the Company, and the Executive shall assign all of his interest in them to the Company. The Executive shall execute all papers at the Company's expense, which the Company shall deem necessary to apply for and obtain domestic and foreign patents and copyright registrations, and to protect and enforce the Company's interest in them. These obligations shall continue beyond the period of the Executive's employment with respect to inventions or creations conceived or made by the Executive alone or in conjunction with other employees or consultants of the Company or its subsidiaries or their affiliates during the period of his employment. (g) REMEDIES. In the event of a breach or threatened breach of this Section 6, the Executive agrees that the Company shall be entitled to apply for injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, the Executive acknowledging that damages would be inadequate and insufficient. (h) SURVIVAL OF PROVISIONS. The obligations contained in this Section 6 shall, to the extent provided in this Section 6, survive the termination or expiration of the Executive's employment with the Company and, as applicable, shall be fully enforceable thereafter in accordance with the terms of this Agreement. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 6 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. Section 7. NO VIOLATION OF THIRD-PARTY RIGHTS. (a) The Executive hereby represents, warrants and covenants to the Company that the Executive: (i) shall not, in the course of his employment with the Company, infringe upon or violate any proprietary rights of any third party (including, without limitation, any third party confidential relationships, patents, copyrights, trade secrets or other proprietary rights); (ii) is not a party to any agreements with third parties that prevent him from fulfilling the terms of employment and the obligations of this Agreement or which would be breached as a result of his execution of this Agreement; and (iii) agrees to respect any and all valid obligations which he may now have to prior employers or to others relating to confidential information, inventions or discoveries which are the property of those prior employers or others, as the case may be. (b) If the Executive is in breach of any of the foregoing representations, warranties and covenants and a court of competent jurisdiction issues a final order (not including a temporary restraining order or other order subject to interlocutory appeal) precluding the Executive from performing his duties hereunder, the Company shall be entitled to terminate this Agreement and treat the Executive as if he were terminated for Cause. Section 8. WITHHOLDING. The Company shall make such deductions and withhold such amounts from each payment made to the Executive hereunder as may be required from time to time by law, governmental regulation or order. Section 9. NOTICES. All notices and other communications under this Agreement shall be in writing and shall be given by hand, facsimile or first-class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given upon delivery or three (3) days after mailing or twenty-four (24) hours after transmission of a facsimile to the respective persons named below: (a) If to the Company: REFAC One Bridge Plaza - Suite 550 Fort Lee, NJ 07024 Attn: Chairman If to the Executive, at the address for the Executive then on file with the Company: With a copy to: Mr. Gregory M. Nolfi Hahn, Loeser & Parks, LLP 3300 BP Tower 200 Public Square Cleveland, OH 44114 Either party may change such party's address for notices by notice duly given pursuant hereto. Section 10. DISPUTE RESOLUTION; ATTORNEYS' FEES. The Company and the Executive agree that any dispute arising as to the parties' rights and obligations hereunder, other than with respect to Section 6 hereof, shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association for resolution of employment disputes then in effect and/or commercial disputes. Each party shall have the right, in addition to any other relief granted by such arbitrator (or by any court with respect to relief granted with respect to Section 6 hereof), to reasonable attorneys' fees based on a determination by the arbitrator (or, with respect to Section 6 hereof, the court) of the extent to which each party has prevailed as to the material issues raised the dispute. Section 11. GOVERNING LAW. This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance with the laws of the State of Delaware, without regard to its conflicts of law principles. Section 12. ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENTS. This Agreement, collectively with the Stock Option Agreement, the Plan and the Side Letter by and between the Company and the Executive relating to the Executive's former employment, contain the entire understanding of the parties relating to the employment of the Executive. This Agreement terminates and supersedes any and all prior agreements and understandings between the parties with respect to the Executive's employment and compensation by the Company. Section 13. WAIVER; MODIFICATION. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. This Agreement shall not be modified in any respect except by a writing executed by each party hereto. Section 14. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature and the Executive shall not assign or transfer this Agreement or any rights or obligations hereunder. In the event of the merger, consolidation, transfer or sale of all or substantially all of the assets of the Company with or to any other individual or entity or any similar event, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties and obligations of the Company hereunder. Section 15. SEVERABILITY. Except as provided in Section 6(g) hereof, in the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, only the portions of this Agreement that violate such statute or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Furthermore, any court order striking any portion of this Agreement shall modify the stricken terms as little as possible to give as much effect as possible to the intentions of the parties under this Agreement. Section 16. HEADINGS; INCONSISTENCY. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. In the event of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the Company, the terms of this Agreement shall control. Section 17. COUNTERPARTS AND FACSIMILE SIGNATURE. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. In the event that any signature is delivered via facsimile or e-mail transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or digital signature page were an original signature. Section 18. REPRESENTATION BY COUNSEL; INTERPRETATION. Each party acknowledges that it has had the opportunity to be represented by counsel in connection with this Agreement. Any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has hereunto signed this Agreement on the date first above written. REFAC /s/ Robert L. Tuchman ------------------------ By: Robert L. Tuchman Title: Chief Exectutive Officer EXECUTIVE /s/ J. David Pierson ------------------------ J. David Pierson EX-10 4 nyc514112.txt EXHIBIT 10.2 - STOCK OPTION AGREEMENT Exhibit 10.2 STOCK OPTION AGREEMENT UNDER REFAC'S 2003 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT (this "Agreement") entered into as of June 20, 2005, pursuant to the REFAC 2003 Stock Incentive Plan (the "Plan"), by and between REFAC, a Delaware corporation, and J. David Pierson (the "Optionee"). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. WHEREAS, simultaneously with the execution of this Agreement, the Optionee is entering into an employment agreement with REFAC (the "Employment Agreement"); and WHEREAS, REFAC desires, by affording the Optionee an opportunity to purchase shares of its Stock as hereinafter provided and subject to the terms and conditions hereof, to carry out the purpose of the Plan; NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: 1. Number of Shares. REFAC hereby grants to the Optionee an Incentive Stock Option (the "Option") to purchase an aggregate of 150,000 shares of Stock, subject to adjustment as provided in Section 2 hereof, on the terms and conditions herein set forth. To the extent the Option does not qualify as an Incentive Stock Option under the Code, it shall be treated as a Nonqualified Stock Option. 2. Adjustments. In the event that the Board shall determine that any dividend or other distribution (whether in the form of cash, Stock or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of the Optionee hereunder, then the Board shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of stock issued or issuable in respect of the Option, and (ii) the Exercise Price (as defined below) of the Option. 3. Option Price. The purchase price of the Stock subject to the Option shall be $4.92 per share (the "Exercise Price"), subject to adjustment as provided in Section 2 hereof. 4. Term and Exercisability of Option. (a) Unless the Option is previously cancelled pursuant to this Agreement, the Option Term shall commence on the date hereof (the "Date of Grant") and terminate on the fifth anniversary of the Date of Grant. Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (b) Exercisability of Option. The Option shall be exercisable as to 33 1/3% of the aggregate number of shares covered hereby upon the Date of Grant. Subject to Section 6 hereof, the Option will become exercisable in cumulative fashion as to 33 1/3% of the aggregate number of shares of Stock covered hereby on the first and second anniversaries of the Date of Grant. Subject to Section 6 hereof, the right of the Optionee to purchase shares with respect to which this Option has become exercisable as herein provided may be exercised in whole or in part at any time or from time to time, prior to the fifth anniversary of the Date of Grant. 5. Payment. Upon the exercise of all or any portion of the Option, the Exercise Price of the shares being purchased shall be paid in full either (a) in cash or by check, (b) by tendering previously acquired shares of Stock, that if acquired from REFAC has been held by the Optionee for at least six months, having an aggregate fair market value at the time of exercise equal to the total Exercise Price, (c) by a combination of (a) and (b), or (d) with approval by the Board, through a broker cashless exercise procedure, if such procedure has been established by REFAC at the time of exercise. 6. Termination. (a) In the event that the Optionee's employment with REFAC is terminated (i) by the Optionee for Good Reason (as defined in the Employment Agreement), (ii) by the Company without Cause (as defined in the Employment Agreement) or (iii) due to the Optionee's death or Disability (as defined in the Employment Agreement), then the Option shall immediately become exercisable as to all shares subject thereto and shall remain exercisable by the Optionee (or his heirs, distributees, or legal representatives, as applicable) for the remainder of the term of the Option and shall thereafter expire. (b) In the event that the Optionee's employment with REFAC shall be terminated by REFAC for Cause (as defined in the Employment Agreement) prior to the expiration of the term of the Employment Agreement, then the Option shall immediately terminate as to any shares subject thereto. (c) In the event that the Optionee's employment with REFAC is terminated on or after the expiration of the Term of the Employment Agreement (as defined in the Employment Agreement), then the Option which by its terms shall be fully vested may be exercised by the Optionee for ninety days following the termination of his employment. Upon expiration of such ninety-day period, any unexercised portion of the Option shall terminate in full. (d) In the event that the Optionee's employment with REFAC is terminated for any reason other than those described in (a), (b) and (c), then the Option shall immediately terminate as to any shares that have not previously become exercisable as of the date of the Optionee's termination of employment. Any portion of the Option that is exercisable as of the date of the Optionee's termination of employment may be exercised by the Optionee for ninety days following the termination of his employment. Upon expiration of such ninety-day period, any unexercised portion of the Option shall terminate in full. (e) Notwithstanding anything to the contrary in this Section 6, the Option shall not be exercisable later than the date of its termination as set forth in Section 4(a) hereof. 7. Rights of Optionee. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee upon exercise of the Option. (b) The Option shall not interfere with or limit in any way the right the Board may have to terminate the employment of the Optionee with REFAC nor confer upon the Optionee any right to continue to be employed by REFAC. 8. Nontransferability of Option. The Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and shall be exercisable during the Optionee's lifetime only by the Optionee. 9. Notification. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit A hereto and delivered to the Secretary of REFAC in accordance with subsection (c) of this Section 9. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) The Optionee shall notify the Company promptly following any sale of shares of Stock purchased pursuant to the exercise of the Option that is a "disqualifying disposition" within the meaning of section 421(b) of the Code. (c) Any notification required or permitted hereunder shall be addressed to REFAC, to the attention of the Secretary, One Bridge Plaza, Suite 550, Fort Lee, New Jersey 07024 or to the Optionee at the address set forth below, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 9 shall be effective only upon receipt by the Secretary of REFAC of such notification and all necessary documentation, including full payment for the shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. 10. Tax Withholding. REFAC shall have the power and the right to require the Optionee to remit to it an amount sufficient to satisfy any Federal, state, local, employment and other taxes required by law to be withheld as a result of any taxable event arising in connection with the Option in accordance with the terms of the Plan. 11. Conditions to Issuance. The Option and exercise of the Option, and the other obligations of REFAC under the Plan and the Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. REFAC, in its discretion, may postpone the issuance or delivery of Stock under the Option as REFAC may consider appropriate and may require the Optionee to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations. 12. Incorporation of Plan; Governing Law; Interpretation. (a) The Plan is hereby incorporated by reference and made a part hereof, and the Option and this Agreement are subject to all terms and conditions of the Plan. To the extent that any provision in this Agreement is inconsistent with the Plan, the provisions of the Plan shall control. (b) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of laws. (c) The Board shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its determination and decisions shall be final, conclusive and binding upon the Optionee and his legal representative in respect of any questions arising under the Plan or this Agreement. 13. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of REFAC, its successors and assigns, and the Optionee and his personal representatives and assigns. (b) The failure of REFAC to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. (c) This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. In the event that any signature is delivered via facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original signature. 14. Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, REFAC has caused this Agreement to be duly executed by its officer thereunder duly authorized and the Optionee has hereunto set his hand, all as of the day and year set forth above. REFAC By: /s/ Robert L. Tuchman ------------------------ Name: Robert L. Tuchman Title: Chief Executive Officer ACCEPTED: /s/ J. David Pierson - ---------------------------- J. David Pierson Exhibit A Page 1 INSERT DATE NAME OF OPTIONEE ADDRESS OF OPTIONEE ________________ _______ NOTICE OF EXERCISE OF STOCK OPTION PURSUANT TO 2003 STOCK INCENTIVE PLAN DATE REFAC One Bridge Plaza Fort Lee, New Jersey 07024 Attn: Secretary Gentlemen: Reference is made to the stock option that REFAC (the "Company") granted to me by Agreement dated __________. Let this letter serve as my Notice of Exercise of such option with respect to __________ shares of the Company's Common Stock at the exercise price of $__________ per share. I wish to make payment of the exercise price for the shares as indicated below (check one or more boxes): ____ Cash; my check in the amount of $_________ is enclosed herewith. ____ Previously acquired shares of Stock; __________ such shares with a total fair market value of $__________ are enclosed herewith. ____ ["Broker cashless exercise"; I understand that of the __________ shares I am purchasing by this method, the net number that I will receive is __________. Note: This method of exercise may not be permitted by the Board.] In exercising this stock option, if the option shares are not registered under the Securities Act of 1933, as amended, I hereby agree, warrant and represent to the Company that: Exhibit A Page 2 INSERT DATE 1. The certificate evidencing said shares will bear the following legend in conspicuous type: "The shares represented by this certificate have not been registered under the Securities Act of 1933 and may not be sold, transferred, pledged, hypothecated or offered for sale in the absence of an effective registration statement relating to such shares under such Act or a written opinion of counsel to REFAC that such registration is not required." 2. I am acquiring said shares for my investment account and do not have the present intention of reselling or distributing any of said shares. 3. I have no contract, understanding, agreement, or arrangement with any person to sell or transfer to such person or to any third person any of said shares, and I have no present plan to enter into any such contract, understanding, agreement or arrangement. 4. I do not presently have in mind any future sale or other disposition of any of said shares, upon the occurrence or nonoccurrence of any predetermined event or circumstance. 5. I have had access to the Company's reports as filed with the Securities and Exchange Commission and to its press releases. 6. I have sufficient knowledge and experience in financial and business matters to be able to evaluate the merits and risks of this investment and to bear the economic risks of this investment. 7. I acknowledge that the Company has no obligation to issue a certificate evidencing any shares owned by me until the purchase price of said shares is fully paid as set forth herein. 8 I am enclosing cash and/or a certified or bank check payable to the Company in an amount equal to the sum of any local, state and federal withholding taxes due. Sincerely, NAME OF OPTIONEE Exhibit A Page 3 INSERT DATE REQUIRED INFORMATION -------------------- Name and Address ____________________ ____________________ ____________________ Telephone Number ____________________ Social Security Number ____________________ EX-10 5 refcons.txt EXHIBIT 10.3 - CONSULTING AGREEMENT Exhibit 10.3 CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (the "Agreement"), dated this 20th day of June 2005 (the "Effective Date"), by and between REFAC, a Delaware corporation (the "Corporation") having its principal offices at One Bridge Plaza, Fort Lee, New Jersey 07024, and COLE LIMITED, INC. a Florida corporation (the "Consultant") having its principal address at 211 Esplanade Way, Palm Beach, Florida 33480. WHEREAS, the Corporation is engaged in acquisition discussions with two affiliated companies, U.S. Vision, Inc., which operates 518 retail optical locations in 47 states and Canada, consisting of 506 licensed departments and 12 freestanding stores, and OptiCare Health Systems, Inc., which operates 18 retail optical centers in the State of Connecticut and is a managed vision care provider in the United States (hereinafter such businesses are collectively referred to as the "Business"); and WHEREAS, the Consultant has extensive experience in the operation of retail optical departments in host stores, freestanding retail optical stores and managed vision care plans; and WHEREAS, the Corporation wishes to retain the Consultant on the terms and conditions set forth herein and the Consultant is willing to undertake and perform the obligations herein set forth, subject to such terms and conditions: NOW, THEREFORE, in consideration of the promises, covenants and agreements set forth herein, the parties agree as follows: 1. Engagement of Consultant; Duties and Representations. (a) The Corporation hereby engages the Consultant, and the Consultant agrees to be engaged, as a consultant on the terms and conditions set forth below. (b) The Consultant agrees that it will assist in the development of the Corporation's strategic plan; identify and assist on acquisition opportunities; recommend corporate and division organizational structures; assist in equity/debt financing activities; advise on retail operations, host store relationships and purchasing; assess and recruit management; and consult, as requested, on all other aspects of the Business in which the Consultant has experience or expertise. All such services shall be exclusively rendered by Jeffrey A. Cole ("Cole"), the Consultant's Chief Executive Officer and sole stockholder, subject to the direction and control of the Corporation's Chief Executive Officer and Board of Directors. (c) The Consultant represents and warrants that (i) it has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, (ii) upon execution and delivery, this Agreement, shall constitute the valid and binding obligation of the Consultant enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights, (iii) the execution, delivery and performance by the Consultant and its agents of this Agreement and the performance of obligations hereunder will not conflict with, constitute a default under or give to others any rights of termination, cancellation or amendment or acceleration of, any material agreement, indenture or instrument to which the Consultant or its agents is a party and (iv) the Consultant and its agents are not subject to any agreement, covenant or legal restraint which precludes or otherwise restricts the Consultant's ability to enter into this Agreement and perform the services contemplated hereby. 2. Time. The Consultant will devote such time as is reasonably necessary to perform the services contemplated hereby in a professional and effective manner, provided however, that in no event shall it be required to devote more than an average of five (5) days per calendar month during the term of this Agreement. The Corporation and Consultant agree that they will work together and use their best efforts to schedule full business days for Consultant's services hereunder. The Consultant may perform services hereunder in such manner (whether in person, by conference, telephone, letter, e-mail or otherwise) and at such times and places as Consultant and the Corporation may jointly determine. 3. Term. (a) Except as otherwise provided in subparagraphs (b) and (c) below, the term of this Agreement and Consultant's engagement hereunder shall commence as of June 1, 2005 and shall terminate on May 31, 2006. (b) The Corporation shall have the right to terminate this Agreement at any time upon fifteen (15) days prior written notice should any person, firm, corporation or other entity allege that this Agreement and/or the performance of the services provided for herein by Consultant and/or Cole violates a contract to which such person, firm, corporation or other entity is a party. (c) This Agreement shall automatically terminate if, in the reasonable judgment of the Corporation, Cole fails to substantially perform all of the services required of Consultant hereunder or the Consultant otherwise breaches this Agreement in any material respect. 4. Compensation. (a) Cash Compensation. As compensation for the Consultant's services hereunder, the Consultant shall receive a fee of $8333.33 for each month of service hereunder payable on the first day of each calendar month during the term hereof. (b) Stock Option. Simultaneously with the signing of this Agreement, the Corporation shall grant Consultant an option (the "Option") to purchase an aggregate of 50,000 shares of the Corporation's Common Stock. The Option shall become exercisable as follows:
- --------------------------------------------------------------------------------------------- Number of Exercise Date Exercisable Shares Price Period of Exercisability - --------------------------------------------------------------------------------------------- Effective Date 16,667 $4.92 From the date such option becomes exercisable through June 30, 2010 - --------------------------------------------------------------------------------------------- October 1, 2005 16,666 $4.92 From the date such option becomes exercisable through June 30, 2010 - --------------------------------------------------------------------------------------------- February 1, 2006 16,666 $4.92 From the date such option becomes exercisable through June 30, 2010 - ---------------------------------------------------------------------------------------------
The Option shall be evidenced by a written option agreement in the form annexed hereto as Exhibit "A". 5. Expense Reimbursement. Consultant shall be responsible for all of its normal operating expenses. Except for such expenses, the Corporation will promptly reimburse the Consultant for any and all reasonable out-of-pocket expenses incurred by it in rendering the services provided for herein including, but not limited to, all reasonable travel expenses, provided that such expenses are incurred and accounted upon presentation of expense vouchers or other documentation in such detail as the Corporation may from time to time reasonably require. Notwithstanding the foregoing, no documentation shall be required for expenses less than $50. 6. Effect of Termination. (a) Termination pursuant to Sections 3 (b) or (c) hereof. In the event that this Agreement is terminated pursuant to Sections 3 (b) or (c) hereof, the Corporation shall pay Consultant (i) any accrued cash compensation due to Consultant pursuant to Section 4 (a) through the date of termination and (ii) any and all expenses then due and owing the Consultant. Thereafter, no further payments shall be due and owing to Consultant. (b) Other Termination by the Corporation. In the event that the Corporation terminates this Agreement for any reason (other than as provided for in Section 3 (b) or (c) hereof), it will pay Consultant (i) a lump sum equal to the sum of (i) its monthly retainer payments that would have been payable for the remainder of the term and (ii) any and all expenses then payable to the Consultant pursuant to Section 5 hereof. 7. Non-Competition. (a) The Consultant recognizes that the services to be performed by it hereunder are special, unique and extraordinary and that, by reason of its engagement hereunder, the Consultant will acquire confidential information and trade secrets concerning the operation of the Corporation and the Business. For all purposes hereunder or in respect hereof, the Consultant agrees that during any period in which the Consultant is receiving or has received any compensation provided for herein, the Consultant and its agents will not, directly or indirectly, as an officer, director, stockholder, partner, associate, employee, consultant, owner, agent, creditor, co-venturer or otherwise, become or be interested in or be associated with any other corporation, firm or business engaged in a Competitive Business in any geographical area in North America in which the Corporation or its affiliates or subsidiaries are engaged at the termination of this Agreement. A "Competitive Business" shall mean any business (i) which sells, at retail, optical products or services (other than vision aid products or services for visually impaired persons) , (ii) which manages an optical laboratory or (iii) which is a provider of managed vision care. The ownership by the Consultant and its agents, directly or indirectly, of not more than three percent (3%) of the issued and outstanding stock of any corporation, the shares of which are regularly traded on a national securities exchange or in the over-the-counter market shall not in any event be deemed to be a violation of the provisions of this Section 7 nor shall any services rendered by the Consultant or Cole to or on behalf of HAL International N.V., Pearle Europe, B.V., GrandVision Group or any of their affiliated entities (hereinafter collectively referred to as "HAL"). However, Consultant shall advise the Corporation as soon as possible if any such services conflicts, or is likely to conflict, with the Corporation's business or any opportunities that it is pursuing, or is likely to pursue, in the foreseeable future. (b) The Consultant agrees, during the term of this agreement and for a period of two (2) years thereafter, that it shall not, on behalf of itself or any business it is interested in or associated with, employ or otherwise engage, or seek to employ or engage, any individual employed by the Corporation or its affiliates or subsidiaries at any time during the preceding twelve (12) months, or solicit any optical related business from any person or entity with whom the Corporation or its affiliates or subsidiaries were doing business at any time during the engagement hereunder, including without limitation any lessor from which the Corporation or its affiliates or subsidiaries leased a department or departments. Notwithstanding the foregoing, the restriction of this subparagraph (b) shall not apply to any suppliers with which the Consultant or Cole had a relationship prior to the date of this Agreement. (c) The Corporation shall be entitled, in addition to any other right and remedy it may have, at law or in equity, to an injunction, without the posting of any bond or other security, enjoining or restraining the Consultant from any violation or threatened violation of this Section 7, and the Consultant hereby consents to the issuance of such injunction. If any of the restrictions contained herein shall be deemed to be unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope, or other provisions hereof, and in its reduced form this Section 7 shall be enforceable in the manner contemplated hereby. 8. Confidentiality. (a) The Consultant shall not divulge to anyone, either during or at any time after the termination of its engagement, any information (whether oral or written) furnished by the Corporation or its directors, officers, employees, affiliates, representatives or agents (the "Representatives") to the Consultant or its Representatives (the "Confidential Information"), except in the performance of its duties hereunder, without the prior written consent of the Corporation. The term Confidential Information will not, however, include information which (i) is or becomes publicly available other than as a result of a disclosure by the Consultant or its Representatives, (ii) is or becomes available to the Consultant on a non-confidential basis from a source (other than the Corporation or its Representatives) which, to the best of Consultant's knowledge after due inquiry, is not prohibited from disclosing such information to Consultant by a legal, contractual or fiduciary obligation to the Corporation or (iii) was known by the Consultant or Cole prior to the Effective Date. (b) In the event that the Consultant or any of its Representatives is required pursuant to applicable law, regulation or legal process to disclose any of the Confidential Information, such person shall notify the Corporation promptly so that the Corporation may seek a protective order or other appropriate remedy or, in its sole discretion, waive compliance with the terms of this Agreement. (c) The Consultant acknowledges that such information is of great value to the Corporation, and upon the termination of its engagement, the Consultant shall forthwith deliver up to the Corporation all copies of any materials in its possession or control (or in the possession or control of Cole) containing any Confidential Information. The Corporation shall be entitled, in addition to any other right and remedy it may have, at law or in equity, to an injunction, without the posting of any bond or other security, enjoining or restraining the Consultant from any violation or threatened violation of this Section 8, and the Consultant hereby consents to the issuance of such injunction. 9. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be construed as if such provision had been drawn so as not to be invalid or unenforceable. 10. Entire Agreement, Etc. This Agreement sets forth the parties' final and entire agreement, and supersedes any and all prior understandings with respect to its subject matter. This Agreement shall bind and benefit the parties hereto and their respective heirs, successors and assigns, except as otherwise set forth herein. This Agreement is personal in nature and none of the Consultant's obligations under this Agreement may be assigned or delegated by the Consultant. Notwithstanding the foregoing, Consultant may freely assign this Agreement to Cole provided that he expressly agrees to personally undertake and perform all of Consultant's obligations hereunder. This Agreement shall be assignable by the Corporation to any other person in connection with the sale, transfer or other disposition of all or substantially all of its business and assets; and this Agreement shall inure to and be binding upon any successor to all or substantially all of the business, or to all or substantially all of the assets, of the Corporation, whether by merger, consolidation, purchase of stock or assets or otherwise. This Agreement cannot be changed, waived or terminated except by a writing signed by both the Consultant and the Corporation and shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state without giving effect to any choice of law provisions thereof. 11. Independent Contractor. The parties agree that the Corporation shall not have the right to control or direct the details, manner or means by which the Consultant accomplishes the results of the services performed hereunder, it being acknowledged that the Consultant shall for all purposes be an independent contractor of the Corporation. 12. Counterparts. This Agreement may be executed in two (2) counterparts, each of which shall constitute an original, and both of which together shall constitute one and the same instrument. In the event that any signature is delivered via e-mail or facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such digital or facsimile signature page were an original hereof. 13. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed by first-class registered or certified airmail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and shall be addressed as follows: If to the Consultant, to: Cole Limited, Inc. 5055 Bristol Court Lyndhurst, OH 44124 Attention: Jeffrey A. Cole, President Facsimile: (216) 691-4667 - with a copy to - Jeffrey A. Cole 211 Esplanade Way Palm Beach, FL 33480 Facsimile: (561) 841-2671 If to the Corporation, to: REFAC One Bridge Plaza Fort Lee, NJ 07024 Attention: President Facsimile: (201) 585-2020 - with a copy to - Stephen M. Banker, Esq. Skadden, Arps, Meagher, Slate & Flom LLP Four Times Square New York, NY 10036 Facsimile: (917) 777-2760 Such notices or other communications shall be deemed delivered upon receipt, in the case of overnight delivery, personal delivery, facsimile transmission (as evidenced by the confirmation thereof), or mail. 14. Captions. The descriptive headings of the several sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. [END OF PAGE] IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first written above. REFAC By: /s/ Robert L. Tuchman ------------------------------- Name: Robert L. Tuchman Title: Chief Executive Officer COLE LIMITED, INC. By: /s/ Jeffrey A. Cole ------------------------------- Name: Jeffrey A. Cole Title: Chief Executive Officer As a material inducement for Refac to enter into the within agreement, the undersigned does hereby agree to be personally bound by Section 7 (Non-Competition) and Section 8 (Confidentiality) thereof to the same extent, and with the same force and effect, as Consultant. /s/ Jeffrey A. Cole --------------------------------- Jeffrey A. Cole EX-10 6 stockoption.txt EXHIBIT 10.4 - STOCK OPTION AGREEMENT - COLE LTD. Exhibit 10.4 STOCK OPTION AGREEMENT ---------------------- STOCK OPTION AGREEMENT (this "Agreement") entered into as of June 20, 2005 by and between REFAC, a Delaware corporation, and COLE LIMITED, INC., a Florida corporation (the "Optionee"). WHEREAS, the Optionee is a consultant to the Corporation pursuant to a Consulting Agreement of even date herewith (the "Consulting Agreement"); and WHEREAS, under the terms of the Consulting Agreement, REFAC has agreed to grant the Optionee the opportunity to purchase shares of its common stock, par value $.001 per share (the "Stock") as hereinafter provided and subject to the terms and conditions hereof: NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: 1. Number of Shares. REFAC hereby grants to the Optionee a nonqualified stock option (the "Option") to purchase an aggregate of 50,000 shares of Stock, subject to adjustment as provided in Section 2 hereof, on the terms and conditions herein set forth. 2. Adjustments. In the event that the Board of Directors of REFAC (the "Board") shall determine that any dividend or other distribution (whether in the form of cash, Stock or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of the Optionee hereunder, then the Board shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of stock issued or issuable in respect of the Option, and (ii) the Exercise Price (as defined below) of the Option. 3. Option Price. The purchase price of the Stock subject to the Option share (the "Exercise Price") shall be $4.92 and shall be subject to adjustment as provided in Section 2 hereof. 4. Term and Exercisability of Option. (a) The Option shall become exercisable as set forth in Exhibit "1" hereto. The Option Term shall commence on the date hereof (the "Date of Grant") and terminate as set forth on Exhibit "1" hereto. Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (b) Exercisability of Option. Except as otherwise provided for in Section 6 hereof, the Option shall be exercisable as set forth in Exhibit "1" hereto and the right of the Optionee to purchase shares with respect to which this Option has become exercisable as herein provided may be exercised in whole or in part at any time or from time to time, prior to the expiration of the exercise period. 5. Payment. Upon the exercise of all or any portion of the Option, the Exercise Price of the shares being purchased shall be paid in full in cash or by certified or bank check payable to the Corporation. 6. Termination. (a) In the event that the Consulting Agreement is terminated by the Optionee or pursuant to Paragraph 3(c) of the Consulting Agreement, then the Option shall immediately terminate as to any shares that have not previously become exercisable as of the date of such termination (the "Termination Date"). Any portion of the Option that is exercisable as of the Termination Date shall remain exercisable for a period of thirty (30) days following the Termination Date. Upon expiration of such thirty (30) day period, any unexercised portion of the Option shall terminate in full. (b) In the event that the Consulting Agreement is terminated by REFAC for cause, then the Option shall immediately terminate as to any and all shares as of the Termination Date. (c) In the event that the Consulting Agreement is terminated pursuant to Paragraph 3(b) thereof, then the Option shall immediately terminate as to any shares that have not previously become exercisable as of the Termination Date. Any portion of the Option that is exercisable as of the Termination Date shall remain exercisable by Optionee for a period of one (1) year thereafter. Upon expiration of such one (1) year period, any unexercised portion of the Option shall terminate in full. (d) In the event that the Consulting Agreement is terminated by REFAC prior to June 30, 2006 for any reason other than (i) as provided for in Section 3(b) thereof or (ii) for cause, then notwithstanding anything herein contained to the contrary all of the options shall vest and become immediately exercisable for the full term specified in Exhibit "1" without regard to the fact that the Consulting Agreement has been terminated. (e) Except as otherwise provided for in this Section 6, the Option shall be exercisable during the entire period specified in Exhibit "1". Notwithstanding anything to the contrary in this Section 6, the Option shall not be exercisable later than the date of its termination as set forth in Section 4(a) hereof. 7. Rights of Optionee. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee upon exercise of the Option. (b) The Option shall not interfere with or limit in any way the right the Board may have to terminate the Consulting Agreement. 8. Nontransferability of Option. Except as otherwise provided for in the following sentence, the Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated and shall be exercisable by the Optionee. Optionee may transfer and assign the Option to Jeffrey A. Cole provided that, as a condition of such transfer, he agrees to be bound by all of the provisions hereof. 9. Notification. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit "2" hereto and delivered to the Secretary of REFAC in accordance with subsection (b) of this Section 9. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) Any notification required or permitted hereunder shall be addressed to REFAC, to the attention of the Secretary, One Bridge Plaza, Fort Lee, New Jersey 07024 or to the Optionee at the address set forth on the signature page hereof, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 9 shall be effective only upon receipt by the Secretary of REFAC of such notification and all necessary documentation, including full payment for the shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. 10. Conditions to Issuance. The Option and exercise of the Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. REFAC, in its discretion, may postpone the issuance or delivery of Stock under the Option as REFAC may consider appropriate and may require the Optionee to make such reasonable representations and furnish such information as it may reasonably consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations. 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of laws. 12. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of REFAC and Optionee and their respective successors and assigns. (b) The failure of REFAC to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 13. Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, each of REFAC and Optionee has caused this Agreement to be duly executed by its duly authorized officer, all as of the day and year set forth above. REFAC By: /s/ Robert L. Tuchman ------------------------------ Name: Robert L. Tuchman Title: Chief Executive Officer ACCEPTED: COLE LIMITED, INC. By: /s/ Jeffrey A. Cole ------------------------------ Name: Jeffrey A. Cole Title: Chief Executive Officer Address: 5055 Bristol Court Lyndhurst, OH 44124 EXHIBIT "1" - ------------------- ---------- ---------- ------------------------------------- Number of Exercise Date Exercisable Shares Price Period of Exercisability - ------------------- ---------- ---------- ------------------------------------- Effective Date 16,667 $4.92 From the date such option becomes exercisable through June 30, 2010 - ------------------- ---------- ---------- ------------------------------------- October 1, 2005 16,666 $4.92 From the date such option becomes exercisable through June 30, 2010 - ------------------- ---------- ---------- ------------------------------------- February 1, 2006 16,666 $4.92 From the date such option becomes exercisable through June 30, 2010 - ------------------- ---------- ---------- ------------------------------------- EXHIBIT "2" NAME OF OPTIONEE ADDRESS OF OPTIONEE ________________ _______ NOTICE OF EXERCISE OF STOCK OPTION DATE Refac One Bridge Plaza Suite 550 Fort Lee, NJ 07024 Attn: Secretary Gentlemen: Reference is made to the stock option that Refac (the "Corporation") granted to the undersigned pursuant to the Stock Option Agreement dated _______________2005 (the "Stock Option Agreement"). Let this letter serve as our Notice of Exercise of such option with respect to __________ shares of the Corporation's Common Stock at the exercise price of $__________ per share and, in connection therewith, we are enclosing our check in the amount of $________ in payment of the exercise price for the shares. In exercising this stock option, if the option shares are not registered under the Securities Act of 1933, as amended, we hereby agree, warrant and represent to the Company that: 1. The certificate evidencing said shares will bear the following legend in conspicuous type: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR UNLESS SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE CORPORATION MAY REQUEST A WRITTEN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER TRANSFER." 2. We are acquiring said shares for our investment account and do not have the present intention of reselling or distributing any of said shares. 3. We do not have any contract, understanding, agreement, or arrangement with any person to sell or transfer to such person or to any third person any of said shares, and we do not have any present plan to enter into any such contract, understanding, agreement or arrangement. 4. We do not presently have in mind any future sale or other disposition of any of said shares, upon the occurrence or nonoccurrence of any predetermined event or circumstance. 5. We have sufficient knowledge and experience in financial and business matters to be able to evaluate the merits and risks of this investment and to bear the economic risks of this investment. 6. We acknowledge that the Corporation has no obligation to issue a certificate evidencing any shares owned by us until the purchase price of said shares is fully paid as set forth herein. 7. We are enclosing cash and/or a certified or bank check payable to the Corporation in an amount equal to the sum of any local, state and federal withholding taxes due. Sincerely, COLE LIMITED, INC. By: ------------------------------- Name: Jeffrey A. Cole Title: Chief Executive Officer Federal Employer Identification No. ----------------------- REQUIRED INFORMATION -------------------- Name and Address ____________________ ____________________ ____________________ Telephone Number ____________________ Social Security Number ____________________ EX-10 7 spacole.txt EXHIBIT 10.5 - STOCK PURCHASE AGREEMENT Exhibit 10.5 STOCK PURCHASE AGREEMENT ------------------------ THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of June 20, 2005 by and between Refac, a Delaware corporation (the "Company"), and Cole Limited, Inc., a corporation formed under the laws of Florida (the "Purchaser"). WHEREAS, Purchaser desires to purchase 50,000 shares (the "Shares") of the Company's common stock, par value $.001 per share (the "Common Stock") at an aggregate price of $246,000 in immediately available funds (the "Purchase Price") or $4.92 per share in accordance with the terms and provisions of this Agreement: NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Purchaser hereby agree as follows: Section 1. Purchase and Sale of Stock. Upon the terms and subject to the conditions of this Agreement, on the Closing Date (as defined in Section 2.1 hereof), Purchaser shall purchase from the Company, and the Company shall issue and sell to Purchaser, the Shares for an aggregate price equal to the Purchase Price. Section 2. The Closing. 2.1. The Closing. The issuance, sale and purchase of the Shares upon the terms and conditions hereof shall take place at a closing (the "Closing") to be held at the offices of the Company, One Bridge Plaza, Suite 550, Fort Lee, New Jersey 07024, at 10:00 a.m. New York City time, on July 18, 2005 or such later date, time and place as may be mutually agreed upon by the Company and Purchaser. The date on which the Closing actually occurs is referred to herein as the "Closing Date." 2.2. At the Closing: (a) Purchaser shall deliver to the Company immediately available funds in the full amount of the Purchase Price, in accordance with the following wire transfer instructions: Refac ABA routing number - 031201467 Account Number: 2000008780443 Wachovia Bank, NA Charlotte, North Carolina (b) The Company shall deliver to Purchaser one or more certificates representing the Shares, bearing a legend in accordance with Section 6 hereof. 2.3. Conditions to Closing. (a) The Company's obligation to complete the purchase and sale of the Shares is subject to the satisfaction, at or before the Closing of each of the following conditions, provided that these conditions are for the sole benefit of the Company and may be waived in writing by the Company at any time in its sole discretion: (i) receipt by the Company of immediately available funds in the full amount of the Purchase Price from Purchaser, in accordance with the wire transfer instructions set forth in Section 2.2(a) above; (ii) the approval for listing the Shares, upon notice of issuance, by the American Stock Exchange; and (iii) the accuracy in all material respects of the representations and warranties made by each Purchaser in Section 4 below as of the date hereof and the Closing Date and the fulfillment in all material respects of those undertakings of Purchaser to be fulfilled on or prior to the Closing Date. (b) Purchaser's obligation to complete the purchase and sale of the Shares is subject to the satisfaction, at or before the Closing of each of the following conditions, provided that such conditions are for its sole benefit and may be waived in writing by Purchaser at any time in Purchaser's sole discretion: (i) the Company's delivery to Purchaser of one or more certificates representing the Shares being purchased by Purchaser; (ii) the accuracy in all material respects of the representations and warranties made by the Company in Section 3 below as of the date hereof and the fulfillment in all material respects of those undertakings of the Company in this Agreement to be fulfilled on or prior to the Closing Date; (iii) no statute, rule, regulation, executive order, decree, ruling, injunction, action or proceeding shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which questions the validity of, challenges or prohibits the consummation of the transaction contemplated by this Agreement; and Section 3. Representations and Warranties of the Company. The Company hereby represents and warrants to Purchaser as of the Closing Date as follows: 3.1. Organization and Qualification. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware and is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect (as defined below). All of the outstanding shares of capital stock of the Company are validly issued, fully paid and non-assessable. The Company has no subsidiaries or other equity interest (other than the marketable securities disclosed in the "SEC Documents", as hereinafter defined) in any corporation, partnership, joint venture, limited liability company or other Person (as defined below). (a) For the purposes of this Agreement: (i) "Affiliate" shall mean OptiCare Health Systems, Inc., U.S. Vision, Inc, Palisade Capital Management, L.L.C. and Palisade Concentrated Equity Partnership, L.P. (ii) "Person" shall mean an individual, corporation, limited liability company, joint venture, partnership, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity that may be treated as a person under applicable law. (iii) "Material Adverse Effect" shall mean any material adverse effect, or any development that could reasonably be expected to result in a material adverse effect, on the business, properties, assets, operations, results of operations or condition (financial or otherwise) of a Person and its subsidiaries (if any), taken as a whole, or on the transaction contemplated hereby or on the authority or ability of such Person to timely perform its obligations under this Agreement. (iv) "SEC Documents" is defined in Section 3.6 hereof. 3.2. Authorization, Enforcement and Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Shares in accordance with the terms hereof. The execution and delivery by the Company of this Agreement and the consummation by it of the transaction contemplated hereby have been duly authorized by the Company's Board of Directors and no further consent or authorization is required of the Company's Board of Directors. No authorization or consent by the stockholders of the Company is required for execution and delivery by the Company of this Agreement and the consummation by it of the transaction contemplated hereby. Upon execution and delivery, this Agreement, shall constitute the valid and binding obligation of the Company enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights. 3.3. Capitalization. The authorized capital stock of the Company consists of 20,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, par value $0.001 per share. As of March 31, 2005, (i) 6,993,393 shares of Common Stock are issued and outstanding, (ii) 22,656 shares of Common Stock are held by the Company in its treasury, (iii) 406,500 shares of Common Stock are subject to outstanding stock options, (iv) 155,000 shares are reserved for additional stock options that the Company is authorized to issue under its 2003 Stock Incentive Plan and (v) no shares of preferred stock are issued or outstanding. Except as set forth above, no shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding. All outstanding shares of the Common Stock are duly authorized, validly issued, fully paid and non-assessable and, except for a put option described in the Company's SEC Documents, and are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Delaware General Corporation Law, the Company's certificate of incorporation, by-laws or any contract to which the Company is a party or otherwise bound. The issuance and sale of the Shares hereunder will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. 3.4. Issuance of Shares. The Shares are duly authorized and, upon issuance in accordance with the terms of this Agreement shall be validly issued, fully paid and non-assessable, and shall not be subject to preemptive rights or other similar rights of any other Person. 3.5. No Conflicts. The execution, delivery and performance by the Company of this Agreement and the consummation of the transaction contemplated hereby will not (i) result in a violation of the Company's certificate of incorporation or bylaws; (ii) conflict with, constitute a default under or give to others any rights of termination, cancellation or amendment or acceleration of, any material agreement, indenture or instrument to which the Company is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company, except to the extent that such violation would not have a Material Adverse Effect. 3.6. SEC Documents; Financial Statements. The Company has filed all documents required to be filed by it prior to the date hereof with the Securities and Exchange Commission (the "SEC") pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Securities Act of 1933, as amended (the "Securities Act") (the "SEC Documents"). As of the respective dates of filing, each SEC Document complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder. None of the SEC Documents, as of the date filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. None of the statements made in any of the SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings made prior to the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC applicable with respect thereto. Such financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to immaterial year-end audit adjustments). Except as set forth in the unaudited financial statements of the Company or the notes thereto included in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005 filed with the SEC on May 11, 2005, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to the date of such financial statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under GAAP to be reflected in such financial statements, which liabilities and obligations referred to in clauses (i) and (ii), individually or in the aggregate, are not material to the financial condition or operating results of the Company. 3.7. Litigation. There are no actions, suits, arbitrations or proceedings, including any governmental proceeding, pending, or to the knowledge of the Company, threatened, against, relating to or affecting the Company, except as would not have a Material Adverse Effect. 3.8. Absence of Certain Changes. Since December 31, 2004, there has been no change or development in the business, properties, operations, financial condition or results of operations of the Company which could have a Material Adverse Effect, except as disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and the Quarterly Report on form 10-Q for the fiscal quarter ended March 31, 2005. 3.9. Brokers or Finders. No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transaction contemplated by this Agreement based upon arrangements made by or on behalf of the Company. 3.10. Solicitation; Other Issuances of Securities. Neither the Company nor the Affiliates, nor any Person acting on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares, (ii) has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security that would require registration of the Shares under the Securities Act, or (iii) has issued any shares of Common Stock or shares of any series of preferred stock or other securities or instruments convertible into, exchangeable for or otherwise entitling the holder thereof to acquire shares of Common Stock which would be integrated with the sale of the Shares to Purchaser for purposes of the Securities Act or of any applicable stockholder approval provisions, nor will the Company or the Affiliates take any action or steps that would require registration of any of the Shares under the Securities Act or cause the offering of the Shares to be integrated with other offerings. Assuming the accuracy of the representations and warranties of Purchaser in Section 4 hereof, the offer and sale of the Shares by the Company to Purchaser pursuant to this Agreement will be exempt from the registration requirements of the Securities Act. Section 4. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to the Company as of the Closing Date as follows: 4.1. Organization. Purchaser is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. 4.2. Authority, Enforcement and Validity. Purchaser has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Purchaser has taken all necessary action to authorize the execution, delivery and performance of this Agreement and same constitutes the valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies. 4.3. Sufficient Funds. Purchaser will at the Closing have sufficient immediately available funds in cash to pay the Purchase Price. 4.4. Investment Experience. Purchaser is an accredited investor within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the purchase of the Shares. 4.5. Investment Intent and Limitation On Dispositions. The Purchaser is acquiring the Shares for its own account for investment only and has no intention of selling or distributing any of the Shares or any arrangement or understanding with any other person or entity regarding the sale or distribution of the Shares except pursuant to a registration, or an exemption from registration, under the Securities Act. 4.6. Information and Risk. (a) The Purchaser has requested, received, reviewed and considered all information the Purchaser deems relevant in making an informed decision to purchase the Shares. The Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with its management and also had an opportunity to ask questions of officers of the Company that were answered to Purchaser's satisfaction, provided that such inquiries do not impair the rights of Purchaser to rely on the representations and warranties of the Company as set forth in Section 3. (b) Purchaser acknowledges that it is aware of the pending discussions between (i) the Company and OptiCare Health Systems, Inc. ("OptiCare"), a public company listed on the American Stock Exchange and (ii) the Company and U.S. Vision, Inc. ("USV"), a privately held company. The Company, OptiCare and USV are all controlled by Palisade Concentrated Equity Partnership, L.P. which beneficially owns approximately 90% of the Company's outstanding common stock, 88% of USV's outstanding common stock and 84% of OptiCare's outstanding Common stock (on a fully diluted basis). In both instances, the terms of acquisition have not been established and the Board of Directors of the Company has formed a special committee to consider, evaluate and negotiate such terms and to make a recommendation to it. Purchaser recognizes that there can be no assurance that the Company will come to acceptable terms with OptiCare and/or USV or, if it does come to terms, that these will prove to be beneficial acquisitions for the Company. (c) Purchaser recognizes that an investment in the Shares involves a high degree of risk, including a risk of total loss of Purchaser's investment. Purchaser is able to bear the economic risk of holding the Shares for an indefinite period, and has knowledge and experience in the financial and business matters such that it is capable of evaluating the risks of the investment in the Shares. (d) Purchaser has, in connection with Purchaser's decision to purchase Shares, not relied upon any representations or other information (whether oral or written) with respect to the Company other than as set forth in Section 3 hereof, and Purchaser has, with respect to all matters relating to this Agreement and the sale of the Shares, relied solely upon the advice of Purchaser's own counsel and has not relied upon or consulted counsel to the Company. 4.7. Disclosures to the Company. Purchaser understands that the Company is relying on the statements contained herein to establish an exemption from registration under federal and state securities laws. 4.8. Brokers or Finders. No broker, investment banker, financial advisor or other person or entity is entitled to any broker's, finder's, financial advisor's or other similar fee or commission from the Company in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Purchaser. Section 5. Compliance with the Securities Act. 5.1. Restrictions on Transferability. Purchaser agrees that it will not effect any disposition of the Shares that would constitute a sale within the meaning of the Securities Act or pursuant to any applicable state securities or Blue Sky laws, except pursuant to the requirements of the Securities Act, including Rule 144 ("Rule 144") promulgated thereunder (in which case Purchaser will provide the Company with reasonable evidence of its compliance therewith), or pursuant to a written opinion of legal counsel reasonably satisfactory to the Company and addressed to the Company to the effect that registration is not required in connection with the proposed transfer; whereupon the holder of such Shares shall be entitled to transfer such securities. Each certificate evidencing the Shares transferred as above provided shall bear the restrictive legend required by Section 6 hereof. Purchaser shall cause any proposed transferee of the Shares held by it to agree to take and hold such Shares subject to the provisions and upon the conditions specified in this Section 5 if and to the extent that such Shares continue to be restricted securities in the hands of the transferee. 5.2. Termination of Conditions and Obligations. The conditions precedent imposed by Section 5.1 above regarding the transferability of the Shares shall not apply as to any particular number of the Shares covered by an effective registration statement with respect to such Shares and shall cease and terminate upon the date on which Purchaser is eligible to sell such Shares then held by Purchaser without registration by reason of Rule 144 or any other rule of similar effect. Section 6. Legend. (a) Purchaser understands and agrees that each certificate or other document evidencing any of the Shares shall be endorsed with a legend in the form set forth below, and Purchaser covenants that Purchaser will not transfer the shares represented by any such certificate without complying with the restrictions on transfer described in the legend endorsed on such certificate and understands that the Company will refuse to register a transfer of any of the Shares unless the conditions specified in the following legend is satisfied: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. EXCEPT AS SPECIFIED IN THIS LEGEND, SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR UNLESS SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, SUBJECT TO DELIVERY OF A WRITTEN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER TRANSFER." (b) Such certificates shall not contain any legend (i) following any sale of any such Shares that are sold pursuant to an effective registration statement or Rule 144, or (ii) if such Shares are eligible for sale under Rule 144. At such time as a legend is no longer required for certain Shares, the Company shall promptly following the delivery by a Purchaser to the Company or the Company's transfer agent of a legended certificate representing such securities, deliver or cause to be delivered to such Purchaser a certificate representing such securities that is free from all restrictive and other legends. Section 7. Notices. 7.1. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed by first-class registered or certified airmail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and shall be addressed as follows: If to Purchaser, to: Cole Limited, Inc. 5055 Bristol Court Lyndhurst, OH 44124 Attention: Jeffrey A. Cole, President Facsimile: (216) 691-4667 - with a copy to - Jeffrey A. Cole 211 Esplanade Way Palm Beach, FL 33480 Facsimile: (561) 841-2671 If to the Company, to: REFAC One Bridge Plaza Suite 550 Fort Lee, NJ 07024 Attention: President Facsimile: (201) 585-2020 - with a copy to - Stephen M. Banker, Esq. Skadden, Arps, Meagher, Slate & Flom LLP Four Times Square New York, NY 10036 Facsimile: (917) 777-2761 or at such other address as the parties each may specify by written notice to the other. 7.2. Each such notice, request, consent and other communication shall for all purposes of this Agreement be treated as being effective or having been given when delivered if delivered personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid. Section 8. Miscellaneous. 8.1. Amendments. Any term of this Agreement may be amended only with the written consent of the Company and Purchaser. 8.2. Headings. The headings of the various sections of this Agreement are for convenience of reference only and shall not be deemed to be part of this Agreement. 8.3. Severability. In the event that any provision in this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 8.4. Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law provisions thereof, and the federal law of the United States of America. The parties hereto agree to submit to the exclusive jurisdiction of the federal and state courts of the State of New York with respect to the interpretation of this Agreement or for the purposes of any action arising out of or related to this Agreement. 8.5. Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute an original, and both of which together shall constitute one and the same instrument. In the event that any signature is delivered via e-mail or facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such digital or facsimile signature page were an original hereof. 8.6. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the matters covered herein and supersedes all prior agreements and understandings with respect to such matters. Except as specifically set forth herein or therein, neither the Company nor Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. 8.7. Expenses. Each party hereto shall pay all costs and expenses incurred by it in connection with the execution, delivery and performance of this Agreement, including, but not limited to, fees of legal counsel. 8.8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither party shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party. 8.9. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized representatives as of the day and year first above written. REFAC By: /s/ Robert L. Tuchman --------------------------------- Name: Robert L. Tuchman Title: Chief Executive Officer COLE LIMITED, INC. By: /s/ Jeffrey A. Cole --------------------------------- Name: Jeffrey A. Cole Title: Chief Executive Officer EX-99 8 nyc516551.txt EXHIBIT 99.1 - PRESS RELEASE Exhibit 99.1 N E W S CONTACT: Raymond A. Cardonne (201) 585-0600 Fax: (201) 585-2020 about Refac [GRAPHIC OMITTED] Web site: www.refac.com =============================================================================== REFAC Appoints J. David Pierson President and Chief Operating Officer Retains Consulting firm Headed by Jeffrey A. Cole --------------------------------------------------------------------- Fort Lee, New Jersey, June 20, 2005 - Refac (AMEX: REF) announced today that it has hired J. David Pierson as its President and Chief Operating Officer. He will report to Chief Executive Officer Robert L. Tuchman and be responsible for all of Refac's operations. On April 8, 2005, the Company announced that it had entered into acquisition discussions with two affiliated companies, U.S. Vision, Inc., which operates 518 retail optical locations in 47 states and Canada, consisting of 506 licensed departments and 12 freestanding stores, and OptiCare Health Systems, Inc., which operates 18 retail optical centers in the State of Connecticut and is a managed vision care provider in the United States. Refac, U.S. Vision, Inc. and OptiCare Health Systems, Inc. are all controlled by Palisade Concentrated Equity Partnership, L.P. These discussions are continuing. From 1996 to 2001, Pierson served as President of Licensed Brands for Cole National Corporation, a leading optical retailer. During his tenure with Cole National, he led the expansion of vision care products and services from 650 stores to more than 1,100 under the banners of Sears Optical, Target and BJ's Wholesale Clubs. Through more than thirty years in retailing, Pierson has managed operations, merchandising and strategic planning and implementation in a variety of positions with Sears, Target Stores and Federated Department Stores. Most recently, from March 2001 to April 2004, he served as the Chairman, President and Chief Executive Officer of CPI Corporation (NYSE: CPY), which provides portrait photography services in the United States, Puerto Rico and Canada through Sears Portrait Studios. Since leaving CPI Corporation, he has served as a consultant to several companies including some in the retail optical business. Tuchman commented, "Dave is a highly-regarded leader with a great reputation. He has the ideal background and experience for this position and this is the perfect time for him to join our leadership team. We look forward to working with him." "I am delighted about being part of the commitment that Refac is making to the optical industry and am excited to bring my experience in optical retailing to the Company," said Pierson. "I have a strong belief in the growth opportunities that the industry continues to present and am looking forward to returning to the industry and working with my many friends and colleagues." Refac also announced that it has engaged Cole Limited, Inc., a consulting firm headed by Jeffrey A. Cole. From 1984 to June 2003, Cole served as the chairman and chief executive officer of Cole National. He remained on Cole National's board until October 2004 when it was acquired by Luxottica S.p.A., the leading optical retailer in the U.S., Canada, Australia, New Zealand and Hong Kong. He is a member of the supervisory board of directors of Pearle Europe, B.V., the leading optical retailer in Europe with retail optical locations in the Netherlands, Belgium, Germany, Denmark, Austria, Italy, Norway, Poland, Portugal, Estonia, Sweden, Finland and Kuwait. Since 1990, he has also served as a director of Hartmarx Corporation. Refac presently intends to include Cole as a nominee to its Board at the next annual meeting of stockholders. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS ------------------------------ This News Release includes certain statements of the Company that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are made pursuant to the Private Securities Litigation Reform Act of 1995. These forward-looking statements and other information relating to the Company are based upon the beliefs of management and assumptions made by and information currently available to the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance, as well as underlying assumptions and statements that are other than statements of historical fact, including statements regarding the Company's acquisition plans. When used in this document, the words "expects," "anticipates," "estimates," "plans," "intends," "projects," "predicts," "believes," "may" or "should," and similar expressions, are intended to identify forward-looking statements. These statements reflect the current view of the Company's management with respect to future events. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, but not limited to, the Company's ability to come to acceptable terms with U.S. Vision and/or OptiCare or, if it does come to terms, that these will prove to be beneficial acquisitions for the Company. Investors are cautioned that all forward-looking statements involve those risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2004. Forward-looking statements speak only as of the date they are made and the Company undertakes no duty or obligation to update any forward-looking statements in light of new information or future events. # # # -----END PRIVACY-ENHANCED MESSAGE-----