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EXHIBIT 10
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 31st day of March, 1998 by and between Xxxxxx
Scientific International Inc., a Delaware corporation having its primary place
of business at Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 (the "Company") and
Xxxxx X. Xxxxx Xxxxx, residing at 0000 Xxxx Xxxxxx, Xxxxxxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as its President and
the Executive is willing to serve in that capacity;
WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of such employment;
NOW THEREFORE, in consideration of the provisions of mutual covenants and
agreements herein contained, the Company and the Executive agree as follows:
1. EMPLOYMENT PERIOD. Subject to the terms and conditions of this
Agreement, the Company hereby agrees to employ the Executive, and the Executive
hereby agrees to be employed by the Company for the period commencing on
April 20, 1998 (the "Effective Date") and ending on the third anniversary
of such date, together with any extension thereof (the "Employment
Period"). On each anniversary of the date hereof, unless either party
hereto shall have given the other party thirty (30) days' advance notice to
the contrary, the Employment Period shall be extended by an additional
year, so that on each anniversary of the date hereof the Employment Period
shall always consist of three years.
2. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. During the Employment
Period, Executive shall serve as President and Chief Operating Officer of the
Company. During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
his full business time, attention, skill and efforts to the business and affairs
of the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive's reasonable best
efforts to perform faithfully and efficiently such responsibilities.
Notwithstanding the foregoing, it shall not
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be a violation of this Agreement for the Executive to (i) serve with the prior
approval of the Board of Directors of the Company (the "Board") on corporate,
civic, charitable, governmental or religious boards or committees; provided,
however, it is understood and agreed that the Executive may continue to serve as
a member of the Board of Directors of World of Science, Inc., Yellow Springs
Instruments, Inc. and Sear Xxxxx and Associates and (ii) manage personal
investments, so long as such activities do not interfere in more than a DI
MINIMUS manner with the performance of Executive's responsibilities under this
Agreement.
(b) COMPENSATION. As full compensation for Executive's services
hereunder, and subject to all the provisions hereof,
(i) BASE SALARY. During the Employment Period, the Company shall pay
Executive an annual base salary at such rate per annum as may be fixed by
the Compensation Committee of the Board from time to time but in no event
at a rate less than Four Hundred Fifty Thousand Dollars ($450,000) per
annum ("Base Salary"). Base Salary shall be paid to Executive semi-monthly
or otherwise in accordance with the Company's normal payroll practices and
subject to required withholding.
(ii) ANNUAL BONUS. In addition to Annual Base Salary, the Executive
shall be eligible to receive an annual bonus (the "Annual Bonus") for each
fiscal year ending during the Employment Period targeted at 100% of
Executive's Base Salary. The actual amount of Executive's Annual Bonus
shall be dependent on the Company's and Executive's performance as may be
determined by the Compensation Committee, in its discretion, in accordance
with its policies generally.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Employment
Period, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company.
(iv) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible to participate in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company
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(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company; provided however that
notwithstanding the foregoing, the Company shall provide the Executive with
a Split-Dollar Life Insurance policy in the face amount of Two Million Five
Hundred Thousand Dollars ($2,500,000), 75% of the annual cost of which
shall be borne by the Company and 25% of the annual cost of which shall be
borne by the Executive.
(v) EXPENSES. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business
expenses incurred by the Executive in accordance with the policies,
practices, and procedures of the Company generally. In addition, the
Company shall pay for or provide, as the case may be, a membership in
Wentworth By The Sea Country Club and reimburse the Executive for club dues
and/or personal tax planning services in an amount not to exceed Ten
Thousand Dollars ($10,000) per year.
(vi) SIGN-ON BONUS. As a bonus in connection with execution of this
Agreement, the Executive shall be paid, subject to withholding, Three
Hundred Thousand Dollars ($300,000) and shall have the right and option,
but not the obligation, exercisable within thirty (30) days of the date of
this Agreement, to purchase up to 50,000 shares of Common Stock, $.01 par
value ("Common Stock") of the Company, at a price of $9.65 per share.
Common Stock purchased by the Executive shall be subject to the terms and
conditions of the Investors Agreement dated as of January 21, 1998 (the
"Investors Agreement"), a copy of which is attached as Exhibit A.
(vii) STOCK OPTIONS. (A) Subject to execution of this Agreement by
Executive, Executive was granted Executive shall be granted options to
purchase 250,000 shares of Common Stock having an exercise price of $9.65
per share and vesting in cumulative installments of 20% per annum (the
"Vesting Options") and such other terms and conditions set forth in the
Xxxxxx Scientific International Inc. 1998 Equity and Incentive Plan (the
"1998 Option Plan") and the applicable Award Agreement evidencing the grant
of such options attached hereto as Exhibits B-1 and B-2, respectively,
subject in any event to approval of the
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1998 Option Plan at the Company's Annual Meeting of Stockholders to be held
May 12, 1998 (the "Annual Meeting"). For each share of Common Stock
purchased pursuant to paragraph (vi) above, Executive will be granted an
additional 1.5 Vesting Options having the same exercise price and vesting
period as the 250,000 Vesting Options granted pursuant to this paragraph.
(B) Subject to the execution of this Agreement, Executive was
granted options to purchase 250,000 shares of Common Stock having an
exercise price of $19.30 per share (the "Performance Options")and such
other terms and conditions set forth in the 1998 Option Plan and the
applicable Award Agreement evidencing the grant of such options attached as
Exhibit B-3, subject in any event to approval of such plan at the Annual
Meeting. For each share of Common Stock purchased by Executive pursuant to
paragraph (vi) above, Executive will be granted an additional 1.5
Performance Options having the same exercise price and vesting period as
the 250,000 Vesting Options granted pursuant to this paragraph.
(viii) RELOCATION. Full relocation benefits in accordance with the
standard policies and practices of the Company with other peer executives.
3. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that a Disability of
the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice of its intention to terminate the Executive's employment. In such event,
the Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within such period, the Executive shall not
have returned to full-time performance of the Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence or inability of the
Executive to perform his duties under this Agreement on a full-time basis for
180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
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(b) CAUSE. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the conviction (or plea of guilty or NOLO CONTENDERE) of the
Executive with respect to any felony, or with respect to any crime
involving fraud, dishonesty or misappropriation, or moral turpitude whether
or not the act giving rise to such conviction or plea is directly involving
the Company;
(ii) commission of an act directly involving the Company, which
involves fraud, dishonesty or misappropriation or moral turpitude;
(iii) Executive's continued willful neglect of his duties and
responsibilities under the Agreement or Executive's gross negligence;
(iv) Executive's willful misconduct with respect to the Company or
its subsidiaries;
(v) the failure of the Executive to perform substantially the
Executive's duties with the Company (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand
for performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the manner
in which the Board or Chief Executive Officer believes that the Executive
has not substantially performed the Executive's duties, or
(vi) material breach of any of the provisions of this Agreement by
the Executive.
(c) GOOD REASON. The Executive's employment may be terminated by the
Executive for Good Reason at any time within 90 days after the occurrence of
Good Reason. For purposes of this Agreement, Good Reason shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
material respect with the Executive's position, authority, duties or
responsibilities as contemplated by Section 2(a) of this Agreement, or any
other action by the Company which results in a material and permanent
diminution in such position, authority, duties or
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responsibilities, excluding action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof by the
Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 2(b) of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied by
the Company promptly after receipt of notice thereof by the Executive;
(iii) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(iv) any failure by the Company to comply with and satisfy Section
5(c) of this Agreement.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 6(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination and (iii)
if the Executive's employment is
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terminated by reason of death or Disability, the date of death of the Executive
or the Disability Effective Date, as the case may be.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) GOOD REASON; OTHER
THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause, Death
or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive the following:
(A) the Executive's Base Salary through the Date of
Termination to the extent not theretofore paid.
(B) the Executive's Base Salary, less interim earnings,
applicable to the period beginning on the Date of Termination and
ending on the date which is the second anniversary of the Date of
Termination or the end of the Employment Period whichever shall be
first to occur (the "Severance Period").
(C) any amount or benefit payable under the 1998 Equity and
Incentive Plan as specified in an Award Agreement between the Company
and the Executive.
(ii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services selected by the Company, the total
cost of which shall not exceed $50,000; and
(iii) during the Severance Period or such longer period required by
COBRA, to the extent not theretofore paid or provided, the Company shall
provide, and timely pay the premiums for, medical coverage for Executive
and his dependents in a manner consistent with that provided to other peer
executives of the Company.
(b) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligation to the Executive's legal representatives under this
Agreement, other than for payment to Executive's estate of Executive's Base
Salary through the date of death to the extent not theretofore paid, Executive's
Annual Bonus to the extent declared but unpaid
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and such payment, obligations and duties as may be required under any benefit or
incentive Plan applicable to the Executive, including the 1998 Option Plan.
(c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligation to the Executive other than the obligation
to pay to the Executive (x) Executive's Base Salary through the Date of
Termination to the extent not theretofore paid and (y) the amount of any
compensation previously deferred by the Executive. If the Executive voluntarily
terminates employment during the Employment Period, excluding a termination for
Good Reason, this Agreement shall terminate without further obligation to the
Executive, other than the obligation to pay Executive's Base Salary through the
Date of Termination to the extent not theretofore paid and the timely payment or
provision of other benefits to which the Executive is entitled as of the Date of
Termination under any employer benefit or incentive plan applicable to the
Executive.
5. SUCCESSORS. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
6. MISCELLANEOUS. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New Hampshire, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors
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and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Xxxxx X. Xxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxxxxx 0X
Xxxxxxxxx, Xxx Xxxx 00000
IF TO THE COMPANY:
Attention: General Counsel
Xxxxxx Scientific International Inc.
Xxxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
7. INTELLECTUAL PROPERTY; CONFIDENTIAL INFORMATION, CONFLICTS OF
INTEREST AND RELEASE. Contemporaneously with the execution of this Agreement
Executive has executed the Agreement Relating to Intellectual Property,
Confidential Information, Conflicts of Interest and Release (the "Noncompete")
attached
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hereto as Exhibit C. The terms of the Noncompete are incorporated by reference
in this Agreement as if fully set forth herein.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxxx X. Xxxxx Xxxxx
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Xxxxx X. Xxxxx Xxxxx
Xxxxxx Scientific International Inc
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Cuchene
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