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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 4th day of August, 1997, among METRAPLEX
CORPORATION, a Delaware corporation ("Metraplex"), XXXXXX INDUSTRIES, INC., a
Delaware corporation ("Xxxxxx"), and XXXXX XXXXXXXXX, residing at 0000 Xxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Executive").
WITNESSETH:
WHEREAS, pursuant to the terms of a certain Agreement and Plan of
Reorganization dated July 8, 1997 (the "Agreement and Plan of Reorganization")
among the Metraplex, Xxxxxx and Metraplex Acquisition Corp. ("Merger Sub"),
Merger Sub will merge with and into Metraplex, with Metraplex as the surviving
corporation and Metraplex will become a wholly-owned subsidiary of Xxxxxx (such
surviving corporation being hereinafter referred to as the "Employer"); and
WHEREAS, Executive has been a key executive officer and employee of
Employer and Xxxxxx wishes to retain the services of Executive as an employee
and officer of Employer, and Executive desires to render such services; and
WHEREAS, a condition of the closing of the transactions contemplated in
the Agreement and Plan of Reorganization is that Executive enter into with and
deliver this Employment Agreement to, the Employer;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. PRIOR AGREEMENTS SUPERSEDED; EFFECTIVENESS.
(a) This Agreement supersedes any employment agreements, oral or
written, entered into between Executive and Employer prior to the date of this
Agreement.
(b) This Agreement shall have no validity or force and effect
unless and until the Closing of the Agreement and Plan of Reorganization.
2. RETENTION OF SERVICES.
The Employer hereby agrees to employ the Executive and the Executive
agrees to accept employment on, and subject to, the terms and conditions
hereinafter set forth.
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3. TERM OF EMPLOYMENT.
Subject to earlier termination in accordance with Section 6 hereof, the
term of this Agreement shall commence on the effective date of Closing of the
Agreement and Plan of Reorganization and end three (3) years from that date,
unless extended by mutual agreement of the parties ("Term of Employment").
4. DUTIES.
(a) During the Term of Employment, the Executive shall be employed
by the Employer as the President of Metraplex and a Vice President of Xxxxxx
industries, Inc. The Executive agrees that he will devote his full business time
and best efforts exclusively to the faithful and diligent performance of all of
the duties and responsibilities incident to that position as well as all such
other executive duties and responsibilities for or on behalf of the Employer
and/or its subsidiaries or Xxxxxx and/or its subsidiaries as in that or any
other executive capacity he may be assigned or required to perform from time to
time by the Board of Directors or President of Xxxxxx.
(b) Notwithstanding the foregoing, neither the Employer nor Xxxxxx
will require the Executive to be employed in a location outside the Frederick,
Maryland area unless the Executive consents in writing to such other employment
location.
5. COMPENSATION.
For so long as the Executive is employed on a full time basis by the
Employer, in consideration of the services to be rendered by the Executive
hereunder, the Employer agrees to pay to the Executive during the Term of
Employment, and the Executive agrees to accept as compensation,
(a) a salary at the annual rate of not less than One Hundred
Thirty Thousand and 00/100 ($130,000.00) Dollars per annum (the "Salary"),
payable in bi-weekly installments or more frequently in accordance with the
Employer's normal payroll policies.
(b) not later than one hundred twenty (120) days after the end of
each fiscal year of the Employer, which shall be the same date as Xxxxxx
Industries, Inc. fiscal year end, the Employer shall pay to the Executive, as
incentive compensation, an amount equal to three percent (3%) of the Employer's
Pre-Tax income for such immediately preceding fiscal year. For purposes hereof,
the term "Pre-Tax Income" of the Employer shall mean, with respect to any fiscal
year, the income, if any, of the Employer, for such fiscal year as set forth in
the financial statements of the Employer, before deduction of taxes based on
income or of the incentive compensation to be paid to Executive for such fiscal
year under this Agreement. For the purpose of calculating Pre-Tax Income for
this subsection (b), a portion of the general expenses of Xxxxxx shall be
allocated to the Employer in accordance with the Generally Accepted Accounting
Principles which shall include interest from either bank loans or loans from
Xxxxxx, accounting and corporate legal charges
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consistent with Employer's previous costs, insurance and such other charges as
would usually be incurred by a separately managed subsidiary.
(c) upon execution of this Agreement, the Executive shall receive
$25,000.
(d) upon execution of this Agreement and the surrender of options
owned by the Executive to purchase 10,000 shares of Metraplex common stock, the
Executive shall receive non-qualified options to purchase Twenty-Five Thousand
(25,000) shares of Xxxxxx Common Stock, exercisable over a ten-year period,
subject to vesting over a five-year period in twenty percent (20%) increments
beginning July 31, 1998 at an exercise price per share equal to the closing
price of Xxxxxx Common Stock on the day prior to the execution of the Agreement
and Plan of Reorganization.
(e) upon execution of this Agreement and upon his request, the
Executive shall receive a loan from Xxxxxx in the principal amount of $25,000
with interest accruable at the rate or rates per annum equal to the rate
announced from time to time by Dauphin Bank as its "prime rate", payable at
maturity. Such loan shall be memorialized in a promissory note payable to
Xxxxxx, which shall mature on the second anniversary of the date of the
Agreement and Plan of Reorganization.
(f) During the Term of Employment, Executive shall be entitled to
the following benefits and perquisites:
(i) Participation, subject to qualification requirements,
in all fringe benefits, including disability,
medical, dental and hospitalization plans, presently
in effect by Employer or hereinafter instituted by
Employer and applicable to its executive employees
generally.
(ii) Term life insurance on the Executive's life
consistent with the insurance plan presently in
effect or hereafter instituted by Employer.
(iii) Reimbursement of reasonable and necessary expenses
incurred by the Executive in performing his
employment hereunder, provided such expenses are
adequately documented in accordance with Employer's
policy.
(iv) The use of an automobile comparable to those
automobiles provided to other Vice-Presidents of
Xxxxxx with reimbursement for repairs, fuel and
insurance.
(v) Vacation in accordance with Employer's policies in
effect from time to time for executives of the
Employer; provided, however, that the Executive shall
not be entitled to additional cash compensation for
any unused vacation time.
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(vi) Participation in Xxxxxx'x stock option plans to the
extent determined and approved by the Board of
Directors of Xxxxxx.
(vii) Participation in the existing or any successor
401(K) and pension and profit sharing plans of the
Employer ("Employer's Plans");
6. TERMINATION OF EMPLOYMENT.
This Agreement and, accordingly, the Term of Employment, may be
terminated earlier than as specified in Section 3 hereof, upon the happening of
any of the following events:
(a) Whenever Employer and the Executive shall mutually agree in
writing to terminate this Agreement.
(b) Upon the death of the Executive.
(c) At the option of the Employer, if the Executive shall:
(i) be in breach of or default under any material
provision of this Agreement for a period of thirty
(30) days after notice of such breach is given by
Employer to the Executive; or
(ii) be convicted or have acknowledged the commission of
fraud, misappropriation or embezzlement; or
(d) if during the Term of Employment the Executive becomes unable
for four and one-half(4-1/2) consecutive months or six (6) months during a
continuous twelve (12) month period, due to ill health or other incapacitation,
to perform his duties hereunder, then Xxxxxx has the right to terminate this
employment agreement.
(e) At the Executive's option, if Xxxxxx or the Employer shall be
in breach of or default under any material provision of this Agreement for a
period of thirty (30) days after notice of such breach is given by the Executive
to the Employer.
(f) At the Executive's option, if Employer or Executive is
relocated as set forth in paragraph 7(d) hereof
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7. EFFECTS OF TERMINATION
(a) In the event that the Executive's Term of Employment is
terminated for reasons other than set forth in Section 6(c) of this Agreement,
Executive shall receive any accrued but unpaid compensation which Executive is
entitled to pursuant to Section 5(a) and Section 5(f) of this Agreement in
regularly scheduled payments as if he were a continuing employee. Executive
shall have a duty to mitigate the Employer's damages hereunder, and there shall
be deducted from the amounts payable by the Employer hereunder an amount equal
to any compensation earned by Executive from other employment subsequent to such
termination of his employment hereunder.
(b) In the event the Executive's Term of Employment is terminated
pursuant to Section 6(c), Executive shall not be entitled to receive any amounts
from the Employer other than any salary and accrued fringe benefits as set forth
in Section 5(f) then due but unpaid; provided, that if the reason for such
termination is the commission of any fraudulent act or felony against the
Employer or Xxxxxx, Executive shall not be entitled to receive any salary or
accrued fringe benefits then due but unpaid.
(c) In the event the Executive's Term of Employment is terminated
pursuant to Sections 6(b) or 6(d) of this Agreement, Executive shall receive any
accrued but unpaid compensation which Executive is entitled to pursuant to
Section 5(a) and Section 5(f) of this Agreement in regularly scheduled payments
as if he were a continuing employee. In such event. Executive also shall be
entitled to receive any amounts subsequently due and payable under Section 5(b)
of this Agreement prorated and payable for only that part of the year during
which Executive was employed by Employer.
(d) If the Employer or Executive is relocated out of Frederick,
Maryland, and the Executive terminates the Term of Employment pursuant to
Section 6(f) ("Termination for Relocation"), Executive shall receive the
following payments only:
(i) If Termination for Relocation is during the first year
of this Agreement, the Executive shall receive an amount equal to $260,000,
payable thirty (30) days after such Termination for Relocation.
(ii) If Termination for Relocation is during the second year
of this Agreement, the Executive shall receive an amount equal to $195,000,
payable thirty (30) days after such Termination for Relocation.
(iii) If Termination for Relocation is during the third year
of this Agreement or the fourth year of the Executive's employment, assuming the
Executive's employment with the Employer or Xxxxxx continues after the
expiration of this Agreement, the Executive shall receive an amount equal to
$130,000, payable thirty (30) days after such Termination for Relocation.
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8. DISCLOSURE AND ASSIGNMENT OF DISCOVERIES.
The Executive shall (without any additional compensation) promptly
disclose in writing to the Boards of Directors of Employer and Xxxxxx all new
ideas, processes, devices, inventions and discoveries (hereinafter referred to
collectively as "discoveries"), whether or not patentable or copyrightable,
which he, while employed by the Employer or Xxxxxx or any of their affiliates
(collectively the "Group"), conceives, makes, develops, acquires or reduces to
practice, whether alone or with others and whether during or after usual working
hours, and which are related to the Group's business or interests, or are used
or usable by the Group, or arise out of or in connection with the duties
performed by him hereunder; and the Executive hereby transfers and assigns to
the Employer and Xxxxxx all right, title and interest in and to such
discoveries, including any and all domestic and foreign copyrights and patent
rights therein and any renewals thereof. On request of the Employer or Xxxxxx,
the Executive shall (without any additional compensation), from time to time
during or after the expiration or termination of his employment, execute such
further instruments (including, without limitation, applications for copyrights,
letters patent and assignments thereof) and do all such other acts and things as
may be deemed necessary or desirable by the Employer or Xxxxxx to protect and/or
enforce their rights in respect of such discoveries. All expenses of filing or
prosecuting any patent or copyright applications shall be borne by the Employer
and Xxxxxx, but the Executive shall cooperate in filing and/or prosecuting any
such applications.
9. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
The Executive represents that he has been informed that it is the
policy of the Employer and Xxxxxx to maintain as secret and confidential all
information (i) relating to the products, processes, designs and/or business
concepts used by the Group and (ii) relating to the customers, suppliers and
employees of the Group, including, without limitation, the names, addresses,
requirements of, or credit terms extended to or by, customers or suppliers (all
such information hereinafter referred to as "Confidential Information"), and the
Executive further acknowledges that such Confidential Information is of great
value to the Group. The parties recognize that the services to be performed by
the Executive are special and unique, and that by reason of his employment by
the Employer, he has and will acquire Confidential Information as aforesaid. The
parties confirm that it is reasonably necessary to protect the goodwill of the
Employer and Xxxxxx that the Executive agree, and accordingly, the Executive
does agree, that at any time during or after he ceases to be employed by the
Employer, he will not directly or indirectly (except where authorized by the
Board of Directors of the Employer or Xxxxxx for the benefit of either of those
Companies or the Group, divulge to any persons, firms or corporations, other
than the Group (hereinafter referred to collectively as "third parties"), or use
or cause to authorize any third parties to use, any such Confidential
Information, or any other information regarded as confidential and valuable by
the Employer or Xxxxxx which he knows or should know is regarded as confidential
and valuable by the Employer or Xxxxxx. The non-disclosure obligations of this
section shall not be imposed with regard to information which is or subsequently
becomes, through no fault of Executive, generally available to the public or is
disclosed as required by court order or by an order of a Regulatory Agency.
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10. NON-COMPETITION.
(a) During the term of employment and any extensions thereof, and
for a period of two (2) years after the Executive leaves Employer's employment,
the Executive will not, anywhere in the United States or Canada:
(i) engage, directly or indirectly, either individually
or as stockholder, partner, officer, director,
employee, consultant, agent or otherwise, in any
business which is in competition with Metraplex,
provided that nothing shall preclude Executive from
being a stockholder only in a publicly traded
corporation in competition with Metraplex provided
that such stock ownership is less than 2% of the
outstanding capital stock of the publicly traded
corporation.
(ii) solicit or accept, or cause or authorize directly or
indirectly to be solicited or accepted, for or on
behalf of himself or third parties, any business
which is directly competitive with the business
conducted by the Employer at the time the Executive's
employment ends, from third parties who were
customers of the Employer at any time within one year
prior to the end of the Executive's employment:
and/or
(iii) solicit for employment or employ, or cause or
authorize directly or indirectly to be solicited for
employment or employ, for or on behalf of himself or
third parties, any persons who were at the time the
Executive's employment hereunder ended, employees of
the Employer.
(b) The Executive agrees that he will not, at any time, remove
from the Employer's premises any drawings, notebooks, data and other documents
and materials relating to the business and procedures of the Employer, except as
reasonably necessary to the discharge of his duties hereunder.
(c) In the event of a breach of this covenant not to compete, the
parties acknowledge that the Employer and Xxxxxx may be irreparably damaged and
may not have an adequate remedy at law. Therefore, either Employer or Xxxxxx may
obtain injunctive relief, without the necessity of posting a bond, for any
breach or threatened breach of this covenant. The parties hereto further
acknowledge that this covenant not to compete is intended to conform to the
extent required with the laws of the State of Delaware. Any court of competent
jurisdiction is hereby authorized to expand or contract the geographical,
temporal or other restrictions of this covenant not to compete in order to
conform with the laws of the State of Delaware so that it shall bind the parties
hereto and be enforceable by that court.
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11. INJUNCTIVE RELIEF AND OTHER REMEDIES.
(a) Executive agrees that any breach or threatened breach by him
of any provision of Sections 8, 9 and 10 shall entitle either the Employer or
Xxxxxx, on a non-mutually exclusive basis, in addition to any other legal
remedies available to it, to apply to any court of competent jurisdiction to
enforce specifically the terms of this Agreement or enjoin such breach or
threatened breach. The parties understand and intend that each restriction
agreed to by the Executive above and elsewhere herein will be construed as
separable and divisible from every other restriction and that the
unenforceability, in whole or in part, of any other restriction will not affect
the enforceability of the remaining restriction and that one or more or all of
such restrictions may be enforced in whole or in part, as the circumstances
warrant.
(b) Executive acknowledges that he is fully aware of the
restrictions placed upon him under Sections 8, 9 and 10 and that he also has
agreed to such restrictions in order to induce Xxxxxx to enter into the
Agreement and Plan of Reorganization, this Agreement, and the Merger.
(c) If any of the covenants contained in Sections 8, 9 and 10 or
any aspects thereof are construed to be invalid or unenforceable, the same shall
not affect the remainder of the covenant or covenants, which shall be given full
effect, without regard to the invalid parts.
12. XXXXXX'X GUARANTY OF PERFORMANCE.
Xxxxxx hereby covenants and agrees with the Executive that Xxxxxx shall
cause Employer to perform and comply with all of its covenants and agreements
contained in this Agreement. In the event that the Employer is unable to perform
its obligations hereunder, Xxxxxx shall perform all of the Employer's duties and
obligations hereunder, including, without limitation, payment obligations to the
Executive. In the event of a breach of this Agreement by Employer, the Executive
shall be entitled to seek enforcement of the terms of this Agreement against
Xxxxxx without exhausting his remedies against the Employer.
13. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and the Employer's successors or assigns (whether resulting
from any reorganization, consolidation or merger of the Employer) and the
Executive's heirs, executors and legal representatives.
14. ENTIRE AGREEMENT.
This Agreement contains the entire agreement and understanding of the
parties with respect to the subject matter hereof, supersedes all prior
agreements and understandings with respect thereto and cannot be modified,
amended, waived or terminated, in whole or in part, except in accordance with
the terms hereof or by a writing signed by all of the parties. No course of
dealings
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between the parties during the term of this Agreement shall be deemed to amend
or expand the obligations of any of the parties hereto unless incorporated in a
written instrument as aforesaid.
15. NOTICE.
Any notice to a party hereto pursuant to this Agreement shall be in
writing, shall be deemed given when received, and be delivered personally or
sent by certified mail return receipt requested, or by nationally recognized
overnight courier service, or by telecopier addressed as follows (or to such
other address as any party shall designate by written notice to the other
parties):
If to Xxxxxx or the Employer to:
Metraplex Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxx
Fax: (000)000-0000
and
Xxxxxx Industries, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxx Xxxxx
Fax: (000)000-0000
with a copy to:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Employee to:
Xxxxx X. Xxxxxxxxx
Metraplex Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
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with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Offit & Xxxxxx, P.A.
0 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxx 00000
Fax:(000) 000-0000
16. GOVERNING LAW.
This Agreement and all issues regarding the validity, construction,
interpretation. performance and enforceability thereof, shall be governed and
construed exclusively in accordance with the laws of the State of Delaware
regardless of the laws that might otherwise govern this Agreement under
applicable conflicts of laws principle.
17. JURISDICTION AND VENUE.
The Employer, Xxxxxx and the Executive each irrevocably consent that
any legal action or proceeding against any of them under, arising out of or in
any manner relating to, this Agreement, may be brought in any court of the State
of Delaware or in the United States District Court for the District of Delaware.
Employer, Xxxxxx and the Executive by the execution and delivery of this
Agreement, expressly and irrevocably consent and submit to the personal
jurisdiction of any of such courts in any such action or proceeding. The said
parties further irrevocably consent to the service of any complaint, summons,
notice or other process relating to any such action or proceeding by delivery
thereof to him or it by hand, by certified mail, return receipt requested, or by
any other manner provided for in the Delaware Rules of Civil Procedure. The
Employer, Xxxxxx and the Executive hereby expressly and irrevocably waive any
claim or defense in any such action or proceeding based on any alleged lack of
personal jurisdiction, improper venue or forum non conveniens or any similar
basis.
18. MISCELLANEOUS.
This Agreement:
(a) may not (except as specifically provided in Section 13 hereof)
be assigned by any party hereto without the prior written consent of the other
parties (any purported assignment hereof in violation of this provision being
null and void); and
(b) may be executed in various counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
employment agreement this 22nd day of July, 1997.
METRAPLEX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
XXXXXX INDUSTRIES, INC
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: President
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx Xxxxxxxxx, Executive
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