January 19, 2000
Xx. Xxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
This Agreement sets forth the terms of your employment with Xxxxxxx
Technology Company, Inc., a Delaware corporation (the "Company"), and is
effective as of January 31, 2000, and if not extended or unless sooner
terminated, shall expire on January 31, 2003.
1. DUTIES. During the term of
your employment hereunder, you shall be employed as the Chief Financial Officer
of the Company, and you shall direct and manage the financial business, affairs
and property of the Company subject to the direction of the Chief Executive
Officer of the Company (the "Chief Executive Officer"). You shall also be a
member of the Xxxxxxx Management Committee ("BMC").
2. COMPENSATION. As compensation for your services during the term of your
employment hereunder:
A. Salary. You shall be paid a salary at the annual rate of two hundred
thousand dollars ($200,000) (hereinafter referred to as your "base salary"),
payable in appropriate installments to conform with regular payroll dates for
salaried personnel of the Company.
B. Reviews and Adjustments. On or about January 31, 2001 and each
succeeding January 31 during the term of your employment hereunder, your
performance shall be reviewed by the Chief Executive Officer and your
attainment of mutually agreed-upon objectives evaluated; your base salary for
the ensuing twelve (12) months commencing on such January 31 may be adjusted,
subject to approval by the Compensation Committee of the Board of Directors of
the Company, in accordance with your level of performance. In no case, however,
will any such adjustment to your salary ever be a negative amount unless you
expressly agree to such a reduction.
C. Incentive Compensation. During the term of your employment hereunder,
and at such other times subsequent thereto as are otherwise set forth herein,
you shall be paid annually, within three (3) months of the end of each fiscal
year, beginning with the fiscal year ending June 30, 2000, incentive
compensation in an amount determined for such fiscal year under the Company's
Executive and Key Person Cash Incentive Program (the "Incentive Program") as in
effect at that time.
D. Supplemental Retirement Benefit. On the first day of each month that
you are still performing services under the terms of this Agreement, the Company
shall accrue for your benefit a supplemental retirement benefit (the
"Supplemental Retirement Benefit") in the amount of four thousand two hundred
($4,200.00).The sum of all such monthly accruals of Supplemental Retirement
Benefit shall constitute the "Aggregate Supplemental Retirement Benefit". The
Aggregate Supplemental Retirement Benefit, to the extent
vested, is to be paid to you in equal monthly installments, over a ten (10) year
period beginning at such times as are set forth in this Agreement. Wherever so
used in this Agreement, the term "Monthly Supplemental Retirement Benefit"
shall mean the Aggregate Supplemental Retirement Benefit divided by
one-hundred-twenty (120) months. The Aggregate Supplemental Retirement
Benefit will vest, in each case assuming you are then employed by the Company,
as follows: as of January 31, 2001 it shall be vested to the extent of 20%,
as of January 31, 2002 it shall be vested to the extent of 40%, as of January
31, 2003 it shall be vested to the extent of 60%, as of January 31, 2004 it
shall be vested to the extent of 80%, as of January 31, 2005 it shall be
vested to the extent of 100% so that as of the latter date the full amount of
the Aggregate Supplemental Retirement Benefit shall be due and payable in the
instances set forth elsewhere in this Agreement.
3. Stock and Loans. In order to permit you (but only if you, in your sole
discretion so elect) to purchase shares of the Company's Class B Common Stock,
par value $.01 per share (the "Class B Stock"), that may become available from
time to time, you shall be eligible, to the extent allowable under the Company's
various loan covenants or any other legal restrictions under which the Company
may operate, to obtain loans from the Company in the aggregate principal amount
of up to twice your then-current base salary which shall be used by you to
purchase such shares of Class B Stock. Any loans made under this section shall
(i) not exceed one million dollars ($1,000,000.00) in the aggregate, (ii) bear
interest, payable annually, at a rate equal to the Company's borrowing rate (as
adjusted on the first day of each calendar quarter) on its U.S. short-term
banking facilities, (iii) require pledging by you to the Company of all shares
of Class B Stock purchased using the proceeds of any such loans (until sold in
part or in full as described herein), and (iv) require repayment by you within
six (6) months of the last day of your employment by the Company, except in
case of your death, in which instance repayment shall be within twelve (12)
months of the date of your death. Notwithstanding anything to the contrary
contained in this Paragraph 3, if at any time you sell any of such shares of
Class B Stock while any amount of any said loan remains unpaid, you shall,
within five (5) days of receipt of the funds from such sale, pay to the
Company, in repayment of part or all, as the case may be, of any said loan,
an amount equal to (a) that amount (the "Principal Repayment") equal to the
product of (i) the aggregate unpaid amount of all such loans, multiplied by
(ii) a fraction, the numerator of which is the number of shares of the Class B
Stock sold and the denominator of which is the number of shares of Class B Stock
purchased using the proceeds of all such loans (provided, however that the
Principal Repayment shall not exceed the unpaid balance of all such loans), plus
(b) any accrued but unpaid interest on the amount of the Principal Repayment to
the date of such repayment.
4. INSURANCE. During the term of your employment hereunder, the Company,
subject to your insurability, shall (i) pay the premiums on a contract or
contracts of life insurance on your life providing for an aggregate death
benefit of five hundred thousand dollars ($500,000), which contract or contracts
will be owned by you, your spouse or such other party as may be designated by
you; (ii) purchase key person term life insurance on your life in the aggregate
amount of one million dollars ($1,000,000), which contract or contracts will be
owned by the Company; provided, however, that upon your death if there are any
loans outstanding between you and the Company pursuant to Section 3 of this
Agreement, the Company agrees to pay to your survivors or estate an amount equal
to theunpaid balance of such loans, up to but not exceeding five hundred
thousand dollars ($500,000), of the death benefits received by the Company
from such key person term life insurance policy.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation provided for
herein, the Company shall reimburse to you, or pay directly, in accordance with
the policies of the Company as in effect at the time, all reasonable expenses
incurred by you in connection with the business of the Company, and its
subsidiaries and affiliates, including but not limited to business-class
travel if overseas, reasonable accommodations, and entertainment, subject to
documentation in accordance with the Company's policy.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment hereunder, you shall
devote your best and full-time efforts to the business and affairs of the
Company.
B. Limitation on Other Services. During the term of your employment
hereunder, you shall not undertake employment with, or participate in the
conduct of the business affairs of, any other person, corporation, or entity,
except at the direction or with written approval of the Board of Directors of
the Company.
C. Personal Investments. Nothing herein shall preclude you from having,
making, or managing personal investments which do not involve your active
participation in the affairs of the entities in which you so invest, but, unless
approved in writing by the Board of Directors of the Company, during the term of
your employment hereunder, you shall not have more than a one percent (1%)
ownership interest in any entity which is directly competitive with any business
conducted by the Company at that time. The phrase "conducted by the Company" as
used in this Xxxxxxxxx 0X and in Paragraph 13 hereof shall mean the business
conducted by the Company or by any corporation or other entity in which the
Company owns fifty percent (50%) or more of the stock or equity interests
(either voting or non-voting) in such other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the Company
worldwide, with substantial time in the Company's current offices in Norwalk,
Connecticut. This location may change in the future.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment hereunder, you shall be
entitled to a vacation or vacations, with pay, in accordance with the Company's
vacation policy as in effect at the time. Your yearly vacation accrual will be
three (3) weeks of annual vacation per year in year one and all subsequent years
until your time with the Company eventually triggers a larger annual accrual
beyond three (3) weeks per year. You may accumulate up to twelve (12) weeks
vacation, but not more than three (3) weeks from any single prior year. Any
such accumulated vacation may be used in any subsequent year or years (but no
more than two (2) weeks of such accumulated vacation in any one year) in
addition to the vacation to which you are entitled for each such year.
B. The Company's Benefit Plans. During the term of your employment
hereunder, you shall be eligible for inclusion, to the extent permitted by
law, as a full-time employee of the Company, in any and all (i) pension, profit
sharing, savings, and other retirement plans and programs as in effect at the
time, (ii) life and health (medical, dental, hospitalization, short-term and
long-term disability) insurance plans and programs as in effect at the time,
(iii) stock option and stock purchase plans and programs as in effect at
the time, (iv) accidental death and dismemberment protection plans and programs
as in effect at the time, (v) travel accident insurance plans and programs as in
effect at the time, and (vi) other plans and programs sponsored by the Company
or any Subsidiary for employees or executives generally as in effect at the
time, including any and all plans and programs that supplement any or all of the
foregoing types of plans or programs.
C. Automobile. During the term of your employment hereunder, the Company
shall provide an automobile for your use pursuant to the Company's written
policy on company autos as in effect at that time.
9. TERMINATION OF EMPLOYMENT.
In the event your employment is terminated for any of the reasons set forth
under this Paragraph 9, the Company shall pay to you or your legal
representative, estate or heirs, as the case may be, the following amounts,
which are in addition to the amounts stipulated under any subparagraph of this
Paragraph 9:
(i) A single lump sum payment, not later than the last day of your
employment, of:
(a) Any accrued but unpaid salary set forth in Xxxxxxxxx 0X (xx
xxxxxxxx xx Xxxxxxxxx 0X) hereof, including salary in respect of any accrued and
accumulated vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid, pursuant to Paragraph 5
hereof.
(ii) Any accrued but unpaid incentive compensation as set forth in Paragraph
2C hereof due to you at the date of such termination for the fiscal year ending
on or immediately prior to the date of such termination which shall be paid
within three (3) months of the end of such fiscal year.
A. Termination by the Company Without Cause. The Company may, without
cause, terminate your employment hereunder at any time upon ten (10) or more
days' written notice to you. In the event your employment is terminated under
this Paragraph 9A, the Company shall pay to you the following:
(i) A single lump sum payment, not later than the last day of your
employment, of severance pay in an amount equal to your then current annual
base salary as defined in Xxxxxxxxx 0X (xx xxxxxxxx xx Xxxxxxxxx 0X) hereof;
(ii) A single lump sum payment of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30;
(iii) To the extent vested, the Monthly Supplemental Retirement
Benefit with the first payment beginning on the first day of the month
immediately succeeding the last day of employment;
(iv) Continuation of medical benefits for a period of six (6) months;
and
(v) Executive outplacement services for a period of six (6) months.
The Company shall have no further obligation to you under this Agreement and you
shallhave no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
B. Termination by the Company With Cause. The Company may, for cause,
terminate your employment hereunder at any time by written notice to you. In
the event your employment is terminated under this Paragraph 9B, you shall
forfeit the incentive compensation set forth in Xxxxxxxxx 0X hereof for the
fiscal year in which such termination or resignation occurs. In the event your
employment is terminated under this paragraph 9B, the Company shall pay to you,
to the extent vested, the Monthly Supplemental Retirement Benefit as set forth
in Paragraph 2D with the first payment beginning on the first day of the month
immediately succeeding the month in which you attain the age of 55. The Company
shall have no further obligation to you under this Agreement and you shall
have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof. For purposes of this
Agreement, the term "cause" shall mean (1) a failure by you to remedy, within
ten (10) days of the Company's written notice to you, either (a) a continuing
neglect in the performance of your duties under this Agreement, or (b) any
action taken by you that seriously prejudices the interests of the Company, or
(2) your conviction of a felony.
C. TERMINATION BY MUTUAL CONSENT. You may terminate your
employment hereunder at any time with the written consent of the Company. In the
event your employment is terminated pursuant to this paragraph 9C, the Company
shall pay to you the following:
(i) A single lump sum payment, of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30; and
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
D. DISABILITY. If you should suffer a Permanent Disability at any time,
the Company may terminate your employment hereunder upon ten (10) or more days'
prior written notice to you. For purposes of this Agreement, a "Permanent
Disability" shall be deemed to have occurred only when you are qualified for
benefits under the Company's Long Term Disability Insurance Policy. In the
event of the termination of your employment hereunder by reason of Permanent
Disability, the Company shall pay to you or your legal representative:
(i) In conformity with regular payroll dates for salaried personnel of
the Company, an amount equal to fifty percent (50%) of the base salary you were
receiving at the date of such termination under Paragraph 2A hereof (as adjusted
by Paragraph 2B hereof), payable until you attain the age of 65 or die,
whichever occurs first; provided, however, that the amount payable under this
Paragraph 9D(i) shall be reduced to the extent of any payments made to you
through any Company-sponsored group long term disability plan and also to the
extent of any payments made to you under any other long term disability
insurance policy (the "Supplemental LTD Policy") where the premiums for said
Supplemental LTD Policy have either been paid by the Company or reimbursed to
you by the Company.
(ii) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(iii) Upon your attainment of age 65 or your death, whichever
occurs first, to the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the month in which you attained
the age of 65 or died. The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the Company under
this Agreement except as provided in Paragraph 12 and Paragraph 13 hereof.
E. Termination by Death. In the event of the termination of your
employment by reason of death, at any time, the Company shall pay to your legal
representative, estate or heirs:
(i) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and
shall be paid within three (3) months of such June 30;
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
F. Termination Upon Expiration of Agreement. If not previously terminated,
this Agreement and your employment with the Company shall be automatically
extended for additional three-year periods, unless and until either party
notifies the other, in writing, one year prior to the expiration of the
then-current term of this Agreement. After the expiration of this agreement,
the Company shall pay to you the Monthly Supplemental Retirement
Benefit as set forth in Paragraph 2D hereof, with the first monthly payment
beginning on the first day of the month immediately succeeding the month in
which you shall have attained the age of 55. The Company shall have no further
obligation to you under this Agreement and you shall have no further obligation
to the Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
G. Events. If any of the following described events occurs during the
term of your employment hereunder, you may terminate your employment hereunder
by written notice to the Company either prior to, or not more than six (6)
months after the happening of such event. In such event, your employment
hereunder will be terminated effective as of the later of ten (10) days after
the notice or ten (10) days after the event, and the
Company shall make to you the same payments that the Company would have been
obligated to make to you under Paragraph 9A hereof if the Company had terminated
your employment hereunder effective on such date. The events, the occurrence of
which shall permit you to terminate your employment hereunder under this
Paragraph 9G, are as follows:
(i) Any merger or consolidation by the Company with or into any
other entity or any sale by the Company of substantially all of its assets;
provided, however, that such event shall not be deemed to have occurred under
this clause if consummation of the transaction would result in at least fifty
(50%) percent of the total voting power represented by the voting securities of
the Company outstanding immediately after such transaction being beneficially
owned by holders of outstanding voting securities of the Company immediately
prior to the transaction.
(ii) Any change of a majority of the directors of the Company
occurring within any thirteen (13) month period.
(iii) The adoption by the Company of any plan of liquidation
providing for the distribution of all or substantially all of its assets.
(iv) A material diminution in your duties, or the assignment to
you of duties that are materially inconsistent with your duties or that
materially impair your ability to function as the Chief Financial Officer of the
Company if such diminution or assignment has not been cured within thirty (30)
days after written notice thereof has been given by you to the Company.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall be paid from
the general funds of the Company. The Company may, but shall not be required
to, make any investment or investments whatsoever, including the purchase of a
life insurance contract or contracts on your life, to provide it with funds to
satisfy its obligations hereunder; provided, however, that neither you nor your
beneficiary or beneficiaries, nor any other person, shall have any right, title,
or interest whatsoever in or to any such investments or contracts. If the
Company shall elect to purchase a life insurance contract or contracts on your
life to provide the Company with funds to satisfy its obligations hereunder, the
Company shall at all times be the sole and complete owner and beneficiary
of such contract or contracts, and shall have the unrestricted right to use all
amounts and to exercise all options and privileges thereunder without the
knowledge or consent of you, your beneficiary or beneficiaries, or any other
person, it being expressly agreed that neither you, any such beneficiary or
beneficiaries, nor any other person shall have any right, title,
or interest whatsoever in or to any such contract or contracts unless expressly
provided otherwise in this Agreement.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no action taken
pursuant to its terms, shall create or be construed to create a trust or escrow
account of any kind, or a fiduciary relationship between the Company and you,
your beneficiary or beneficiaries, or any other person. You, your beneficiary
or beneficiaries, and any other person or persons claiming a right to any
payments or interests hereunder shall rely solely on the unsecured promise of
the Company, and nothing herein shall be construed to give you, your
beneficiary or beneficiaries, or any other person or persons, any right, title,
interest, or claim in or to any specific asset, fund, reserve, account, or
property of any kind whatsoever owned by the Company or in which it may have any
right, title, or interest now or in the future, but you or your beneficiary or
beneficiaries shall have the right to enforce a claim for benefits hereunder
against the Company in the same manner as any unsecured creditor.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall be
employed by the Company, you agree promptly to make known to the Company the
existence of any and all creations, inventions, discoveries, and improvements
made or conceived by you, either solely or jointly with others, during the term
of this Agreement and for three (3) years thereafter, and to assign to the
Company the full exclusive right to any and all such creations, inventions,
discoveries, and improvements relating to any subject matter with which the
Company is now or shall become concerned, or relating to any other
subject matter if made with the use of the Company's time, materials, or
facilities. To the fullest extent permitted by law, any and all of the
foregoing creations, inventions, discoveries and improvements shall be
considered as "work-made-for-hire" and the Company shall be the owner thereof.
You further agree, without charge to the Company but at its expense, if
requested to do so by the Company, to execute, acknowledge, and
deliver all papers, including applications or assignments for patents,
trademarks, and copyrights relating thereto, as may be considered by the Company
to be necessary or desirable to obtain or assign to the Company any and all
patents, trademarks, or copyrights for any and all such creations, inventions,
discoveries, and improvements in any and all countries, and to vest title
thereto in the Company in all such creations, inventions, discoveries, and
improvements as indicated above conceived during your employment by
the Company, and for three (3) years thereafter. You further agree that you
will not disclose to any third person any trade secrets or proprietary
information of the Company, or use any trade secrets or proprietary information
of the Company in any manner, except in the pursuit of your duties as an
employee of the Company, and that you will return to the Company all materials
(whether originals or copies) containing any such trade secrets or
proprietary information (in whatever medium) on termination of your employment
by the Company. The obligations set forth in this Paragraph 12 shall survive
the termination of your employment hereunder.
13. RESTRICTIVE COVENANT. For a period of three (3) years after the termination
of your employment by the Company, you shall not, in any geographical location
at which there is at that time business conducted by the Company which was
conducted by the Company at the date of such termination, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with, the ownership, management, operation, or
control of, any business similar to or competitive with such business conducted
by the Company without the written consent of the Company;
provided, however, that you may have an ownership interest of up to one percent
(1%) in any entity, notwithstanding that such entity is directly competitive
with any business conducted by the Company at the date of such termination.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach or asserted breach thereof, shall be settled by
arbitration to be held in New York, New York in accordance with the rules then
obtaining of the American Arbitration Association, and the judgment upon the
award rendered may be entered in any court having jurisdiction thereof. The
arbitrator shall determine which party shall bear the costs of such arbitration,
including attorneys' fees.
15. NON-ASSIGNABILITY. Your rights and benefits hereunder are personal to you,
and shall not be alienated, voluntarily or involuntarily, assigned or
transferred.
16. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
and their respective assigns, successors, executors, administrators, and heirs.
In the event the Company becomes a party to any merger, consolidation, or
reorganization, this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of the payments
provided for by this Agreement shall be subject to seizure for payment of any
debts or judgments against you or your beneficiary or beneficiaries, nor
shall you or any such beneficiary or beneficiaries have any right to transfer or
encumber any right or benefit hereunder; provided, however, that the
undistributed portion of the Aggregate Supplemental Retirement Benefit shall
at all times be subject to set-off by the Company for debts owed by you to the
Company.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement relating to
your employment by the Company. It may only be changed by written agreement
signed by the party against whom enforcement of any waiver, change,
modification, extension, deletion or revocation is sought.
18. NOTICES. All notices and communications hereunder shall be in writing, sent
by certified or registered mail, return receipt requested, postage prepaid; by
facsimile transmission, time and date of receipt noted thereon; or by
hand-delivery properly receipted. The actual date of receipt as shown by the
receipt therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you shall be sent postage prepaid,
or, at your election, shall be transferred to you electronically to such bank as
you designate in writing to the Company, including designation of the
applicable electronic address. The foregoing items (other than any electronic
transfer to you) shall be addressed as follows (or to such other address as the
Company or you may designate in writing from time to time):
To you: To the Company:
Xxxxx X. Xxxxxxxx Xxxxxxx Technology Company, Inc.
00 Xxxxxxxx Xxxxx Xxxx Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000 00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
19. LAW TO GOVERN. This Agreement shall be governed by, and construed and
enforced according to, the laws of the State of Connecticut without giving
effect to the principles of conflict of laws.
Very truly yours,
XXXXXXX TECHNOLOGY COMPANY, INC.
By:__________________________________
Xxxxxx X. Xxxxx
Its President
Duly Authorized
AGREED TO AND ACCEPTED:
_________________________________
Xxxxx X. Xxxxxxxx
