Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement, dated as of the 1st day
of September, 2001, between Xxxxxx X. Xxxxxxx (the "Executive") and Memry
Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H,
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WHEREAS, the Company and the Executive entered into an Employment
Agreement on January 1, 2000, which superseded and replaced the Letter Agreement
between the Company and the Executive, dated July 19, 1999 (the "Letter
Agreement");
WHEREAS, the Company and the Executive desire to amend and restate the
employment agreement on the terms and conditions set forth below (this
"Agreement");
WHEREAS, in consideration of the commencement of the performance
described in this Agreement, and effective as of the date hereof, the Company
shall issue to the Executive an option to acquire 100,000 shares of the common
stock of the Company pursuant to the terms of the Company's Amended and Restated
1993 Long-Term Incentive Plan, which options shall (1) be incentive stock
options to the extent permitted under the Internal Revenue Code of 1986, as
amended, (2) have an exercise price equal to the fair market value of the common
stock on the date hereof, and (3) vest equally in annual installments over four
years beginning on the first anniversary of the date hereof.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements set forth herein, the parties agree as follows:
1. Employment and Duties.
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(a) The Company hereby agrees to employ the Executive, and the
Executive hereby accepts employment, upon the terms and conditions set
forth herein. During the period during which he is employed hereunder
(the "Period of Employment"), the Executive shall diligently and
faithfully serve the Company in the capacity of Senior Vice President,
Finance and Administration, Chief Financial Officer and Corporate
Secretary or in such other and/or lesser executive capacity or
capacities as the Board of Directors and the Executive may, from time
to time, agree.
(b) During the term hereof, the Executive shall, at the
request of the Company, serve as an officer and/or director of direct
and indirect subsidiaries, and other affiliates, of the Company as the
Company, acting through its Board of Directors, shall request from time
to time.
(c) The Executive shall devote his best efforts and
substantially all of his business time, services and attention to the
advancement of the Company's business and interests. The restrictions
in this Section 1 shall in no way prevent the Executive from (except as
set forth in the immediately succeeding sentence) pursuing other
activities, so long as all of such other activities do not, in the
aggregate, materially interfere with the Executive's duties hereunder
(including his obligation to devote substantially all of his business
time, services and attention to the Company).
Notwithstanding the foregoing, however, the Executive shall not accept
any outside directorships without the prior consent of the Company's
Board of Directors.
(d) The Executive shall, at all times during the Period of
Employment, diligently and faithfully carry out the policies, programs
and directions of the Board of Directors of the Company. The Executive
shall comply with the directions and instructions made or given by or
under the authority of the Company's Chief Executive Officer and/or its
Board of Directors and whenever requested to do so shall give an
account of all transactions, matters and things related to the Company
and its affiliates and their affairs with which the Executive is
entrusted.
2. Term. The initial term of this Agreement shall commence on the date
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hereof, and shall terminate on the day before the first anniversary of such date
(the "Initial Term"). Thereafter, the term of this Agreement shall be
automatically renewed for successive one-year periods, each commencing on the
month and day of this Agreement in the appropriate year and terminating on the
day before such date in the subsequent year, unless either party notifies the
other in writing of such party's intention not to renew at least ninety (90)
days prior to the date on which the term of this Agreement would otherwise
terminate. The Initial Term and such other periods for which the term hereof has
been extended as aforesaid is collectively referred to herein as the "Term." In
the event the Company elects not to renew this Agreement at the end of any Term,
then the Company shall pay to the Executive (i) the Executive's base salary for
a period of fifteen (15) months following termination of this Agreement, as and
when the same would otherwise be due, and (ii) an amount equal to 125% of the
Executive's target bonus described in Section 3(b), as then in effect, in one
lump sum; provided, however, that such payment shall not be paid by the Company
if such non-renewal is "for cause" (as defined below).
3. Compensation. In consideration of the services rendered and
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to be rendered by the Executive, the Company agrees to compensate the Executive
as follows:
(a) From the date hereof the Company shall pay to the
Executive an annual base salary of $185,000, payable in equal
installments every two weeks. The Executive's base salary may be
increased from time to time by the Board in accordance with normal
business practices of the Company.
(b) The Executive shall also be entitled to receive additional
compensation in the form of an annual target bonus in an amount equal
to 45% of the Executive's annual base salary and/or stock option grants
determined by and in the sole discretion of the Board of Directors of
the Company. Such target amount is based upon the Executive meeting all
personal and Company performance goals and objectives. Such grants may
be made pursuant to any bonus and/or incentive compensation programs
that may be established by the Company, including without limitation
the Company's current incentive plans; provided, however, that nothing
set forth in this sentence will in any way limit the Board of Directors
discretion to approve or reject any bonus that the Executive would
otherwise be due under any such plans.
(c) The Executive shall be entitled to an automobile allowance
of $500 per month, to be paid in accordance with the Company's policy
for paying automobile allowances as in effect from time to time.
(d) The Executive shall be entitled to other fringe benefits
comparable to the benefits afforded to other executive employees of the
Company, including but not limited to reasonable sick
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leave and coverage under any health, dental, accident, hospitalization,
disability, retirement, life insurance, 401(k), and annuity plans,
programs or policies maintained by the Company. In addition, and
without limiting the foregoing, the Company shall provide the Executive
with twenty working days of vacation per calendar year, no more than
thirty of which (in the aggregate) may be carried over from one year to
the next.
(e) The Executive shall be entitled to reimbursement, in
accordance with Company policy, of all reasonable out-of-pocket
expenses which he incurs on behalf of the Company in the course of
performing his duties hereunder, subject to furnishing appropriate
documentation of such expenses to the Company's Chief Executive
Officer.
4. Covenant Not to Compete; Nonsolicitation.
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(a) Except as specifically set forth in this Section 4, during
the Period of Employment, the Executive will not engage, directly or
indirectly, anywhere in the United States (including its territories,
possessions and commonwealths) or Canada in any business which competes
or could reasonably be expected to compete with the Company and/or its
affiliates and, for such time after the Period of Employment as the
Company is making severance payments to the Executive, any business
which competes or could reasonably be expected to compete with the
Company and/or its affiliates as of the date of termination of the
Period of Employment; provided, however, that (i) the ownership by the
Executive of less than 2% of the outstanding stock of any publicly
traded corporation shall not be deemed solely by reason thereof to
cause the Executive to be engaged in any businesses being conducted by
such publicly traded corporation; and (ii) the Executive, at his sole
discretion, may, by written notice to the Company, terminate the
Company's obligation to make severance payments to the Executive, and
upon the termination of such payments, the Executive's non-competition
obligations pursuant to this Section 4 shall terminate. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this Section 4(a) is invalid or unenforceable, the parties
agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or
area of the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
(b) During the Period of Employment and for a period of two
years thereafter, the Executive will not, directly or indirectly,
either for himself or for any other person or entity (i) solicit (A)
any employee of the Company or any affiliate of the Company to
terminate his or her employment with the Company or such affiliate
during his or her employment with the Company or such affiliate or (B)
any former employee of the Company or an affiliate of the Company for a
period of one year after such individual terminates his or his
employment with the Company or such affiliate, (ii) solicit any
customer or client of the Company or any such affiliate (or any
prospective customer or client of the Company or such affiliate) as of
the termination of the Period of Employment to terminate its
relationship with the Company or such affiliate, or do business with
any third parties, or (iii) take any action that is reasonably likely
to cause injury to the relationships between the Company or any such
affiliate or any of their respective employees and any lessor, lessee,
vendor, supplier, customer, distributor, employee, consultant or other
business associate of the Company or any such affiliate as such
relationship relates to the Company's or such affiliate's conduct of
its business.
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5. Covenant Not to Disclose Information. The Executive agrees
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that during the Period of Employment and thereafter, he will not use or
disclose, other than to another employee of the Company, qualified by the
Company to receive that information in the normal course of business, any
confidential information or trade secrets of the Company or any affiliate of the
Company which were made known to him by the Company, its officers or employees
or affiliates, or learned by him while in the Company's employ, without the
prior written consent of the Company, and that upon termination of his
employment for any reason, he will promptly return to the Company any and all
properties, records, figures, calculations, letters, papers, drawings,
schematics or copies thereof or other confidential information of the Company
and its affiliates of any type or description. It is understood that the term
"trade secrets" as used in this Agreement is deemed to include, without
limitation, lists of the Company's and its affiliates' respective customers,
information relating to their practices, know-how, processes and inventions, and
any other information of whatever nature which gives the Company or any
affiliate an opportunity to obtain an advantage over its competitors who do not
have access to such information.
6. Remedy at Law Inadequate. The Executive acknowledges that any
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remedy at law for breach of any of the restrictive covenants (Sections 4 and 5)
contained in this Agreement would be inadequate and the Company shall be
entitled to injunctive relief in the event of any such breach.
7. Inventions and Improvements. With respect to any and all
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inventions (as defined in Section 7(e) below) made or conceived by the
Executive, whether or not during his hours of employment, either solely or
jointly with others, during the Period of Employment, without additional
consideration:
(a) The Executive shall promptly inform the Company of any
such invention.
(b) Any such invention, whether patentable or not, shall be
the property of the Company, and the Executive hereby assigns and
agrees to assign to the Company all his rights to any such invention,
and to any United States and/or foreign letters patent granted upon any
such invention or any application therefor.
(c) The Executive shall apply, at the Company's request and
expense, for United States and/or foreign letters patent either in the
Executive's name or otherwise as the Company may desire.
(d) The Executive shall acknowledge and deliver promptly to
the Company, without charge to the Company but at its expense, all
sketches, drawings, models and figures and other information and shall
perform such other acts, such as giving testimony in support of his
inventorship, as may be necessary in the opinion of the Company to
obtain and maintain United States and/or foreign letters patent and to
vest the entire right and title thereto in the Company.
(e) For purposes of this Section, the term "invention" shall
be deemed to mean any discovery, concept or idea (whether patentable or
not), including but not limited to processes, methods, formulas,
techniques, hardware developments and software developments, as well as
improvements thereof or know-how related thereto, (i) concerning any
present or prospective activities of the Company and its affiliates and
(ii) (A) which the Executive becomes acquainted with as a result of his
employment by the Company, (B) which results from any work he may do
for, or at the request of, the Company or any of its affiliates, (C)
which relate to the Company's or any affiliates' business or actual or
demonstrably anticipated research and development, or (D) which are
developed in any part by use of the Company's or any such affiliates'
equipment, supplies, facilities or trade secrets.
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The parties hereto agree that the covenants and agreements contained in this
Section 7 are, taken as a whole, reasonable in their scope and duration, and no
party shall raise any issue of the reasonableness of the scope or duration of
any such covenants in any proceeding to enforce any such covenants.
8. Termination of Employment.
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(a) The Executive's Period of Employment may not be terminated
prior to the expiration of the Term except in accordance with the
provisions of this Section 8.
(b) The Executive's Period of Employment may be terminated by
the Company for cause. For purposes of this Agreement, "for cause"
means that termination occurs in connection with a determination, made
at a meeting of the Board of Directors at which the Executive (and, at
the Executive's option, his counsel) shall have had a right to
participate, that the Executive has (i) committed an act of gross
negligence or willful misconduct, or a gross dereliction of duty, that
has materially and adversely affected the overall performance of his
duties hereunder; (ii) committed fraud upon the Company in his capacity
as an employee hereunder; (iii) been convicted of, or pled guilty (or
nolo contendere) to, a felony that the Board of Directors, acting in
good faith, determines is or would reasonably be expected to have a
material adverse effect upon the business, operations, reputation,
integrity, financial condition or prospects of the Company; (iv) any
material breach by the Executive of the terms hereof; (v) failure to
follow instructions from a person authorized to give them pursuant to
Section 1(d) above that is lawful and not inconsistent with the terms
hereof; (vi) the Executive's habitual drunkenness or habitual substance
abuse; or (vii) civil or criminal violation of any state or federal
government statute or regulation, or of any state or federal law
relating to the workplace environment (including without limitation
laws relating to sexual harassment or age, sex or other prohibited
discrimination), or any violation of any Company policy adopted in
respect of any of the foregoing. "For cause" termination must be
accompanied by a written notice to that effect. If the Executive is
terminated for cause, the Executive shall be paid through the date of
his termination.
(c) If the Executive dies, the Period of Employment shall
terminate effective at the time of his death; provided, however, that
such termination shall not result in the loss of any benefit or rights
which the Executive may have accrued through the date of his death. If
the Period of Employment is terminated prior to the expiration of the
Term due to the Executive's death, the Company shall make a severance
payment to the Executive or his legal representatives equal to the
Executive's regular salary payments through the end of the month in
which such death occurs. In addition, the Company shall make a
severance payment to the Executive or his legal representative equal to
the Executive's target bonus described in Section 3(b), pro rated for
the portion of such fiscal year completed prior to the Executive's
death; provided, however, that such pro rated portion of the
Executive's target bonus shall be paid to the Executive following the
completion of such fiscal year at the time similar bonuses are paid to
other employees of the Company.
(d) If the Executive becomes disabled, the Period of
Employment may be terminated, at the Company's option, at the end of
the calendar month during which his disability is determined; provided,
however, that such termination shall not result in the loss of any
benefits or rights which the Executive may have accrued through the
date of his disability. If the Period of Employment is terminated prior
to the expiration of the Term due to the Executive's disability, the
Company shall make a severance payment to the Executive or his legal
representative equal to the Executive's regular salary payments for a
period of six (6) months from the date of such termination or, if
sooner,
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until payments begin under any disability insurance policy maintained
by the Company for the benefit of the Executive. For the purposes of
this section, the definition of "disability" shall be the same as the
definition of a "permanent disability" contained in any long-term
disability insurance policy maintained by the Company in effect at the
time of the purported disability, or last in effect, if no policy is
then in effect.
(e) If the Executive's Period of Employment is terminated by
the Executive for "Good Reason," as hereinafter defined, or is
terminated by the Company without cause (and the Company may terminate
the Period of Employment without cause at any time) other than at the
end of the Term, then, in addition to the other rights to which the
Executive is entitled upon a termination as provided for herein, the
Executive shall also be entitled to a lump-sum payment equal to the sum
of (i) 125% of the Executive's annual base salary, at the rate of
salary in effect immediately prior to the effective date of such
termination (without regard to any purported or attempted reduction of
such rate by the Company), plus (ii) 125% of the Executive's target
bonus for the fiscal year during which termination occurs. For purposes
of this Agreement, the term "Good Reason" shall mean: (i) the failure
by the Company to observe or comply with any of the provisions of this
Agreement if such failure has not been cured within ten (10) days after
written notice thereof has been given by the Executive to the Company;
or (ii) at the election of the Executive, upon a Change in Control of
the Company, as defined in Section 10(f) (which election can be made at
any time upon thirty (30) days' prior written notice given within two
(2) years following the date on which the Change in Control of the
Company occurred) if, subsequent to such Change in Control, there is a
material diminution in the position, duties and/or responsibilities of
the Executive; or (iii) the relocation of the Executive's principal
place of business to a location more than sixty (60) miles from both
(A) Bethel, Connecticut and (B) Easton, Connecticut, without the
Executive's prior consent. Further, in the event of a termination
pursuant to this Section 8(e), or pursuant to Section 8(c) or Section
8(d) above, to the extent allowable under the provisions of the
Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, and the plans pursuant to which the
same were granted, all incentive and non- qualified stock options then
held by the Executive still subject to any vesting requirements shall
have such vesting requirements terminated (such that all such options
are then immediately exercisable).
9. Effect of Termination. Upon termination of the Executive's
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employment for any reason whatsoever, all rights and obligations of the parties
under this Agreement shall cease, except that the Executive shall continue to be
bound by the covenants set forth in Sections 4, 5, 6 and 7 hereof, and the
Company shall be bound to pay to the Executive accrued compensation, including
salary and other benefits, to the date of termination and any severance payments
which may be owed under the provisions of Section 8 hereof.
10. Miscellaneous.
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(a) This Agreement may not be assigned by the Executive. The
Company may assign this Agreement in connection with a Sale of the
Company.
(b) In the event that any provision of this Agreement is found
by a court of competent jurisdiction to be invalid or unenforceable,
such provision shall be, and shall be deemed to be, modified so as to
become valid and enforceable, and the remaining provisions of this
Agreement shall not be affected.
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(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
(d) No modification of this Agreement shall be effective
unless in a writing executed by both parties.
(e) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof, and supercedes all
prior agreements, representations and promises by either party or
between the parties, including without limitation, the Letter
Agreement, notwithstanding any provisions therein which state that
certain provisions shall survive the termination of the Letter
Agreement.
(f) For purposes of this Agreement, "Change in Control of the
Company" shall mean: (i) any merger or consolidation or other corporate
reorganization of the Company in which the Company is not the surviving
entity; or (ii) any sale of all or substantially all of the Company's
assets, in either a single transaction or a series of transactions; or
(iii) a liquidation of all or substantially all of the Company's
assets; or (iv) a change within one twelve-month period of a majority
of the directors constituting the Company's Board of Directors at the
beginning of such twelve-month period; or (v) if a single person or
entity, or a related group of persons or entities, at any time acquires
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under teh Securities Exchange Act of 1934, as amended) of 25% or more
of the Company's outstanding voting securities; unless, (x) with
respect to any event described in clauses (i) through (v), the
Executive agrees in writing, prior to the consummation of the event
giving rise to the Change in Control of the Company, that such event or
events does not for purposes of this Agreement constitute a Change in
Control of the Company or, as a director, votes in favor of the matter
that would otherwise cause the Change in Control of the Company or, (y)
with respect to clause (iv), the change of directors is approved by the
Board of Directors as constituted prior to such change.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
MEMRY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chairman and CEO
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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