EMPLOYMENT AGREEMENT
This AGREEMENT is made and entered into as of the 15th day of September,
1997, by and between PARAVANT COMPUTER SYSTEMS, INC., a Florida corporation (the
"Company") and XXXXX X. XXXXXXXX, (the "Employee").
WHEREAS, the Company desires to obtain the benefit of the services of the
Employee, and the Employee desires to render such services on the terms and
conditions hereinafter set forth; and,
WHEREAS, the Company and the Employee desire to provide limited protection
of the Employee's employment in the event of a change in ownership of the
Company by virtue of a sale, merger by the Company into, or the combination
with, another corporation or other form of takeover wherein the new ownership
may terminate the employee without cause.
NOW, THEREFORE, the Parties hereto, in consideration of the premises and
the mutual covenants herein contained, hereby agree as follows:
1. Termination of Prior Agreement. Upon the execution of this Agreement,
all prior employment agreements between the Employee, and the Company or any
of its affiliates, subsidiaries, and predecessor constituent corporations
are terminated and of no further force and effect.
2. Term of Employment. Subject to the terms and conditions hereinafter set
forth, the Company hereby enters into the employment of the Employee, or any of
subsidiary or affiliate of the Company, as the Company shall, from time to time,
select, for an employment term commencing on the date of execution of this
Agreement and terminating on 31 December 1999. The period during which the
Employee is employed pursuant to this Agreement is hereinafter called the "Term
of Employment." The Term of Employment will normally be submitted to the Board
of Directors, at the first board meeting each fiscal year, for the succeeding
calendar year, for review and updates of terms and conditions.
3. Scope of Employment. During the Term of Employment, the Employee shall
be employed as an officer of the Company with duties and responsibilities
commensurate with the execution of the Paravant Computer Systems' core business.
In addition, the Employee shall well and faithfully render and perform such
other executive and managerial services, as may be assigned to him, from time to
time, by or under the authority of the Board of Directors of the Company or of
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any subsidiary or affiliate of the Company. The Employee will devote his full
time and efforts to the business and affairs of the Company, or such subsidiary,
or affiliate as now or hereafter conducted, and shall be at all times subject to
the direction and control of the Board of Directors of the Company or such
subsidiary or affiliate. The Employee shall render such services which are in
accordance with his utmost abilities and shall use his best efforts to promote
the interests of the Company and subsidiaries and affiliates. The Employee will
not engage in any capacity or activity which is, or may be, contrary to the
welfare, interest or benefit of the business now or hereafter conducted by the
Company and its subsidiaries and affiliates.
4. Compensation. As full compensation for all services provided for herein,
including without limiting the generality of the foregoing, all services to be
rendered by the Employee as an officer or director of the Company or of any
subsidiary or affiliate of the Company, the Company will pay, cause to be paid,
to the Employee, and the Employee will accept, a salary, during the Term of
Employment, at an annual rate of One Hundred Thousand Dollars ($100,000) to be
paid in regular installments in accordance with the Company's usual paying
practices. Such payments will be subjected to such deductions by the Company as
the Company is from time to time required to make pursuant to law, government
regulations or order or by agreement with, or consent of, the Employee. The
Board of Directors shall have the authority to increase such compensation, at
its discretion from time to time, with the award and payment of bonuses and
other forms of compensation to the Employee.
5. Expenses. The Employee shall be entitled to reimbursement by the Company
for reasonable expenses actually incurred by him on its behalf in the course of
his employment by the Company, upon the presentation by the Employee, from time
to time, of an itemized account of such expenditures, together with such
vouchers and other receipts as the Company may request.
6. Vacation. The Employee shall be entitled to vacations in accordance
with the Company's prevailing policy for its operating executives.
7. Benefits. The Employee shall be entitled to participate in all group
life insurance, medical and hospitalization plans, and pension, stock option and
profit sharing plans as are presently being offered by the Company or which may
hereafter during the Term of Employment be offered by the Company generally to
its operating executives.
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8. Payments on Death or Disability. In the event that the Employee shall
die or become disabled during the Term of Employment or any renewal thereof, the
Company shall pay to his heirs in the case of his death, or to him or his
guardian, in case of his disability, a lump sum payment equal to 6 months of
compensation due to him at that time hereunder or equal monthly installments
covering such 6 months compensation at the discretion of the Employee, his or
her guardian, whatever the case may be. For purposes of this Agreement,
disability of the Employee shall have occurred if (a) the Employee shall
become physically or mentally incapable of properly performing his services to
the Company as provided hereunder excluding infrequent and temporary absences
due to ordinary illnesses, (b) such incapacity shall exist or be reasonably
expected to exist for more than 90 days in the aggregate during any 12
consecutive months covered hereunder or in any renewals hereof, and (c) either
the Employee or the Company shall have given the other 30 days written notice of
his or its intention to terminate the Employee's active employment by the
Company due to such disability. For purposes of this Agreement, the Employee
shall on or immediately after executing this Agreement provide the Company with
a written list of his heirs in order of preference regarding death payment
benefits hereunder. This list may be altered and changed from time to time by
the Employee by giving written notice of such changes or new list thereof to
the Company as provided herein.
9. Severance. In the event that the Employee's employment with the Company
is terminated thereby "without cause" during the Term thereof, the Employee
shall be entitled to, as severance hereunder, one year's full compensation and
6 months benefits as provided for and paid out in the manner specified for
herein. Termination for cause shall include Employee's failure to perform his
duties hereunder, his conviction of felony, alcoholism, illegal drug abuse,
violations of corporate or securities laws or similar infractions.
10. Vesting of Benefits, etc. Upon the effective termination date of the
Executive's employment; (a) by the Company without Cause (Paragraph 9),
(b) due to Disability (Paragraph 8), or (c) in the case of Change of Control
(Paragraph 15):
(1) The Executive shall become vested immediately in any unvested stock
options (other than incentive stock options under a "qualified" plan)
that the Executive may have at the time of his termination; and must
exercise all stock options within 90 days of termination or forfeit either
all unexercised options;
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(2) To the extent, and only to the extent, that the same is permitted
by law without thereby disqualifying any plan of the Company or an
affiliate that is a "qualified" plan under the Internal Revenue Code or
that otherwise enjoys or provides tax benefits to employees under the
Internal Revenue Code, the Executive shall become vested immediately in
any and all other benefits under each and every benefit plan of the Company
or any affiliate and in which the Executive, at the time of his
termination, had unvested benefits.
(3) The company will indemnify and defend the Executive in the same
manner and to the same degree as if he was an employee, executive, officer
and director of the Company, for all litigation or other actions brought
against the Executive originating as a result of association of the
Executive with the Company, including but not limited to all claims,
liability, damage, loss, expense, attorneys' fees, court costs, judgements,
settlements, fines, etc.
11. Covenant not to Compete. During the Term of Employment and for a period
of one (1) year after the Term of Employment, the Employee shall not engage,
directly or indirectly, within the United States in any business engaged in the
design, development, manufacture and sale of rugged computers. For the purpose
of this paragraph, the Employee will be deemed, directly or indirectly, engaged
in a business if he participates in such business as proprietor, partner, joint
venturer, stockholder, director, officer, lender, manager, employee, consultant,
advisor or agent or if he otherwise controls such business. The Employee shall
not, for purposes of this paragraph, be deemed stockholder if he holds less than
one (1%) percent of the outstanding shares of any publicly owned corporation
engaged in the same or similar business to that of the Company or any of its
divisions, subsidiaries or affiliates; provided, however, that the Employee
shall not be in a control position with regard to such corporation. In addition,
the Employee shall not be in a control position with regard to such corporation.
In addition, the Employee shall not at any time, during or after the termination
of this Agreement, engage in any business which uses as its name, in whole or
in part, "Paravant Computer Systems, Inc.," "PCS" or any other name then used
by the Company or any of its affiliates or subsidiaries.
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12. Non-Disclosure: Except as may be required by law or with the express
permission of the Company's Board of Directors, the Employee will not at any
time, directly or indirectly, disclose or furnish to any other person, firm or
corporation: (a) the methods of conducting the business of the Company or its
subsidiaries or affiliates; (b) a description of any of the methods of obtaining
business, or manufacturing or advertising products, or of obtaining customers
thereof; and/or (c) any confidential information acquired by him during the
course of his employment by the Company, its predecessors, subsidiaries or
affiliates, including, without limiting the generality of the foregoing, the
names of any new customers or prospective customers of, or any person, firm or
corporation, who or which have, or shall have, traded or dealt with (whether
such customers have been obtained by the Employee or otherwise) the Company, its
predecessors, subsidiaries or affiliates.
13. Inventions. As between the Employees and the Company, all products,
designs, styles, processes, discoveries, materials, ideas, creations, inventions
and properties, whether or not furnished by the Employee, created, developed,
invented or used in connection with the Employee's employment hereunder or prior
to this Agreement, will be the sole and absolute property of the Company for any
and all purposes whatever in perpetuity, whether or not conceived, discovered
and/or developed during regular working hours. The Employee will not have, and
will not claim to have, under this Agreement or otherwise, any right, title or
interest of any kind or nature whatsoever in or to any such products, processes,
discoveries, materials ideals, creations, inventions and properties.
14. Arbitration. Any controversy arising out of or relating to this
Agreement shall be resolved by arbitration in the State of Florida pursuant to
the rules of the American Arbitration Association then in effect.
15. Change of Control. In the event of a change in the control of the
Company by virtue of a sale, merger by the Company into, or the combination
with, another corporation or other form of takeover wherein the resulting entity
controls thirty-three percent (33%) or more of the voting stock, and there is
more than a 50% change in the composition of the Board, the Employee may not be
terminated without cause for the Term of Employment.
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16. Further Instruments. The Employee will execute and deliver all such
other further instruments and documents as may be necessary, in the opinion of
the Company, to carry out the purposes of this Agreement, or to conform, assign,
or convey to the Company any products, processes, discoveries, materials, ideas,
creations, inventions or properties referred to in Paragraph 12 hereof,
including the execution of all patent applications.
17. Notice. Any written notices required hereunder shall be deemed
sufficient if delivered personally or by certified mail to the Employer at its
regular business office and to the Employee at his home address on file with the
Company.
18. Assignment. A party hereto may not assign this Agreement or any rights
or obligations hereunder, without the consent of the other party hereto.
Provided, however, that upon the sale or transfer of all or substantially all of
the assets of the Company or upon the sale, merger by the Company into, or the
combination with, another corporation or other form of takeover, this Agreement
will (subject to the provisions of Paragraph 2 hereof) inure to the benefits of
and be binding upon the person, firm or corporation purchasing such assets, or
the corporation surviving such merger or consolidation or takeover, as the case
may be. The provisions of the Agreement are binding upon the heirs of the
Employee and upon the successors and assigns of the Company hereto.
19. Waiver of Breach. Waiver by either party of a breach of any provision
of this Agreement by the other shall not operate or be constructed as a waiver
of any subsequent breach by such other party.
20. Entire Agreement. This instrument contains the entire agreement of the
parties as to the subject matter hereof. It may not be changed orally, but only
by an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
21. Applicable Law. This Agreement shall be constructed in accordance with
the laws of the State of Florida.
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22. Severability. If any provision of this Agreement is held to be invalid
or unenforceable by any court or tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgement, and such
provision shall be carried out as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the day and year first above written.
PARAVANT COMPUTER SYSTEMS, INC.
BY:
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx, Chairman
/s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx, Employee
Vice President, CFO & Treasurer
15 Sep '97
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