EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 19th day of
January, 2000 by and between PSC INC., a New York corporation (the "Company"),
and XXXX X. XXXXXXXX ("Executive").
R E C I T A L S :
WHEREAS, Executive is employed by PERCON INCORPORATED, a Washington
corporation ("Percon");
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of November 9, 1999, among the Company, Percon and West
Acquisition Corp., a Washington corporation ("Sub"), Sub is merging with and
into Percon (hereinafter referred to as the "Merger"), and Percon is becoming a
wholly-owned subsidiary of the Company;
WHEREAS, the Company is desirous of assuring the continued employment of
Executive, and Executive is desirous of continued employment with the Company,
on the terms set forth herein.
WHEREAS, because of, among other things, Executive's intimate knowledge of
the business of Percon as it is currently conducted and the business of the
Company as it will be conducted during the term of this Agreement, the Company
and Executive recognize the detrimental effect on such businesses that will
result if Executive were to enter into competition with the Company during
Executive's employment with the Company and for a reasonable period of time
thereafter.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as a Senior Vice
President. Executive hereby accepts such employment and agrees to remain in the
employ of the Company or any of its affiliates (as hereinafter defined) for the
Term (as hereinafter defined). In the capacity of Senior Vice President,
Executive shall have such duties and responsibilities as are established by the
President and Chief Executive Officer of the Company, subject to the oversight
of the Board of Directors of the Company. Executive agrees, in performing his
obligations hereunder, to use his best efforts and to dedicate his business
time, skill, labor and attention to the performance of such obligations on a
full-time basis. As used herein, "affiliate" shall mean, with respect to any
entity, any other person or entity controlling, controlled by or under common
control with such entity.
2. Term. Subject to the terms and conditions of this Agreement, including
but not limited to the provisions for termination set forth in Section 11, the
employment of Executive under this Agreement shall commence on the date hereof
and continue through and including the close of business on December 31, 2001,
unless extended by the written mutual agreement of the parties hereto (the
"Term").
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3. Compensation.
(a) Base Salary. As consideration for all services that the Executive will
render to the Company and its affiliates in any capacity, the Company shall pay
to Executive an annual base salary at the annual rate of $200,000 ("Base
Salary"), payable in accordance with the customary payroll practices of the
Company applicable to executive employees, subject to such deductions and
withholdings as may be required under applicable federal, state or local laws or
as agreed to by Executive.
(b) Annual Bonus. In lieu of management incentive plan compensation,
Executive will be entitled to an annual bonus ("Annual Bonus") for each calendar
year during the Term in an amount equal to (i) the product obtained by
multiplying the Incremental Gross Margin (as hereinafter defined) for the
applicable calendar year by (ii) five percent (5%).
For purposes hereof, "Incremental Gross Margin" is an amount equal to the
product obtained by multiplying (A) the amount by which total sales revenue for
the portables products more fully described on Exhibit A hereto ("Portables
Products") for the applicable calendar year exceeds the sales revenue targets
for Portables Products for the applicable calendar year, also as set forth on
Exhibit A by (B) the Gross Margin Percentage (as hereinafter defined) over such
year with respect to Portables Products. For purposes of this Agreement, "Gross
Margin Percentage" is an amount equal to the quotient obtained by dividing (x)
the amount, if any, by which total sales revenue for the Portables Products for
the applicable year exceeds the cost of goods sold with respect to the Portables
Products for the applicable year by (y) total sales revenue for the Portables
Products for the applicable year. For purposes of this Agreement, sales revenue
and cost of goods sold shall be determined in accordance with generally accepted
accounting principles applied on a basis consistent with the Company's financial
statements on the date hereof, and cost of goods sold with respect to the
Portables Products shall be determined on a cost allocation basis consistent
with that used by the Company on the date hereof, which the Company represents
to be a fair and reasonable basis of allocation.
Payment of the Annual Bonus, if any, shall be made no later than forty-five
(45) days after completion of the calendar year in which the Annual Bonus was
earned.
4. Benefits. Executive shall be entitled throughout the Term and any
extension of the Term, if any (but not beyond termination of Executive's
employment except as provided in Section 11), to (a) receive all health, dental,
disability and life insurance benefits to which full time executive officers of
the Company are entitled as to which he meets the eligibility requirements
universally applicable to all such executive officers; (b) participate in the
Company's "401(k)" plan; and (c) receive an automobile allowance of $800 per
month. After he has completed one year of employment with the Company, Executive
will be eligible to receive grants of options under the Company's stock option
plan, except that the making of any grants of options to Executive and the size
of grants shall be subject to the discretion of the Board of Directors of the
Company.
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5. Expenses. Executive shall be reimbursed by the Company for travel and
other business expenses incurred in the performance of his duties hereunder,
subject to the Company's reimbursement policies.
6. Confidential Information. Executive agrees that during the Term and
thereafter he will (i) hold Confidential Information (as defined below) in
strictest confidence and not use such Confidential Information, disclose such
Confidential Information to any person or entity or authorize any person to use
or disclose such Confidential Information without the written authorization of
the Company, except in connection with services Executive is rendering in the
normal course of his employment or consultancy (if any) with the Company or any
affiliate, (ii) comply with all policies and procedures as the Company may from
time to time establish to protect and preserve Confidential Information of which
Executive has received notice and (iii) exercise due care in safeguarding
Confidential Information against disclosure of any kind or nature, whether
intentional or unintentional, and use his best efforts to ensure the maintenance
of its confidentiality. As used herein, "Confidential Information" means any
confidential information or knowledge or data of the Company or any of its
affiliates (including Percon), whether or not patentable or copyrightable, in
any way acquired by Executive from the inception of his employment with Percon
through the termination of his employment with the Company or any of its
affiliates including without limitation information or knowledge (A) of a
technical nature, such as, but not limited to, Trade Rights (as defined in the
Merger Agreement), methods, know-how, formulae, compositions, drawings,
blueprints, compounds, processes, discoveries, machines, manufacturing
procedures, techniques, computer databases, source codes, computer codes,
designs, programs, prototypes, inventions and computer programs; (B) of a
business nature, such as, but not limited to, information about sales or lists
of customers (including mailing lists), prices, costs, purchasing, profits,
markets, sales and marketing methods, documents, records, contract forms,
computer disks containing data and other materials and information relating to
the products, services or business of the Company and its affiliates, strengths
and weaknesses of products, business processes, business and marketing plans and
activities and employee personnel records; (C) pertaining to future
developments, such as, but not limited to, research and development and future
marketing or merchandising plans or ideas; or (D) of or pertaining to the
customers and vendors that Executive learns or has learned as a consequence of
his employment with the Company or Percon and as to which the Company and/or any
of its affiliates has an obligation of secrecy; provided, however, that
Confidential Information shall not include information that is or becomes
publicly available other than through breach by Executive of his obligations
hereunder.
Executive acknowledges and agrees that the Confidential Information is a
valuable asset of the Company, and its protection as confidential is vital to
the success of the Business (as defined below). Executive acknowledges and
agrees that all Confidential Information is and shall at all times remain the
sole and exclusive property of the Company, even if prepared or created, in
whole or in part, by Executive, and whether or not directly disclosed or
entrusted to Executive by the Company or any other person.
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Immediately upon termination of Executive's employment by the Company,
Executive shall deliver to the Company all originals and copies of everything in
his possession or under his control that embodies or contains any Confidential
Information, including, without limitation, all documents, correspondence,
specifications, blueprints, notebooks, reports, sketches, formulae, computer
programs, computer discs, prototypes, price lists, customer lists or
information, samples and all other materials.
The foregoing shall be in addition to any obligation Executive may have
under applicable law in respect of trade secrets and other legally protected
information.
7. Noncompetition.
(a) To preserve the goodwill associated with the Business and for other
good and valuable consideration, receipt of which is hereby acknowledged,
Executive hereby covenants and agrees that he will not, directly or indirectly,
during the Covenant Period:
i. engage in, continue in or carry on any business that competes with
the Business;
ii. own or control any financial interest in any Conflicting
Organization (as defined below) (other than as a holder of not more than
five percent (5%) of the combined voting power of the outstanding stock of
a publicly-traded company);
iii. consult with, advise or assist in any way, whether or not for
consideration, any Conflicting Organization in any respect, including, but
not limited to, advertising or otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving as an intermediary
for any such competitor; or engaging in any form of business transaction on
other than an arm's-length basis with any such entity; or
iv. engage in any practice the purpose of which is to evade the
provisions of this covenant not to compete.
The parties agree that the geographic scope of the foregoing covenants not to
compete shall extend throughout the entire world. In the event a court of
competent jurisdiction determines that the provisions of this Section 7 are
excessively broad as to duration, geographical scope or activity, it is
expressly agreed that this covenant not to compete shall be construed so that
the remaining provisions shall not be affected, but shall remain in full force
and effect, and any such over broad provisions shall be deemed, without further
action on the part of any person, to be modified, amended and/or limited, but
only to the extent necessary to render the same valid and enforceable in such
jurisdiction. Executive hereby acknowledges that the foregoing provisions are
reasonable.
(b) As used herein,
i. The term "Conflicting Organization" means any person (including
Executive as sole proprietor), entity, corporation, partnership, joint
venture or other organization, or the part or division of any diversified
organization, engaged in or planning or attempting to become engaged in the
Business. Without limitation, Symbol Technologies, Inc.; Metrologic
Instruments Inc.; Telxon Corporation; Xxxxx Xxxxx Data Collection,
Inc./Hand Held Products Inc.; Intermec Technologies Corp. (UNOVA); Teklogix
Corp. and any subsidiary, joint venture or affiliate of any of the
foregoing shall each be deemed a Conflicting Organization.
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ii. The term "Business" means the design, engineering, development,
manufacture, marketing, distribution, sale, license and/or service of
Business Products (as defined below); provided, however, that following the
Termination Date (as defined below), the meaning of the term "Business"
will be determined based upon Business Products determined as of the
Termination Date.
iii.The term "Business Products" means: (1) radio frequency and batch
portable data collection terminals, (2) fixed station and integrated
decoders, (3) hand-held or fixed laser, CCD or image scanners, (4)
warehouse management and fixed asset management application software, (5)
products, services, applications, systems and technologies of the Company
and its affiliates relating to bar coded data, magnetic stripe encoded
data, radio frequency communications of bar coded or related data, optical
character recognition, machine vision as applied to the recognition of bar
coded data, electronic interchange of bar coded or related data and RFID
readers, including without limitation self check-out systems, verification
products and electronic shelf labeling products, and (6) products that are
being developed, manufactured, marketed, distributed, sold, licensed or
serviced by the Company or any affiliate of the Company or are within the
actual or demonstrably anticipated research or development of the Company
or any affiliate of the Company.
iv. The term "Covenant Period" means the period commencing on the date
hereof and ending on the later of (1) the date one (1) year after the date
Executive's employment with the Company terminates for any reason or (2) if
Executive receives payments under Section 11(a)(i) or pursuant to the
agreement described in Section 16, the date through which the Company makes
such payments.
8. Nonsolicitation.
(a) Customers. As an independent obligation of Executive, Executive will
not, on behalf of a Conflicting Organization, during the Covenant Period, be
connected in any way with the solicitation of any then current or potential
customers of the Company or its affiliates.
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(b) Employees. During the Covenant Period, Executive will not, other than
on behalf of the Company or any of its affiliates, employ, induce to leave the
employ of the Company or any affiliate of the Company, or associate as a
partner, member or otherwise in a direct, material business relationship with
(i) any employee, consultant or sales representative of the Company or any
affiliate of the Company, (ii) any person who shall have been an employee,
consultant or sales representative of the Company or any affiliate of the
Company within the one-year period prior to the expiration or termination of the
Term and any extension thereof or (iii) any person who shall have been an
employee, consultant or sales representative of the Company or any affiliate of
the Company at any time during the one year after the date hereof who became
known to Executive prior to the date hereof by virtue of his relationship with
the Company or any affiliate of the Company. This paragraph shall not apply to
employees whose duties are secretarial or clerical or to employees whose
employment the Company or any affiliate of the Company has terminated after the
date hereof.
9. Inventions; Creative Works.
(a) Executive will promptly disclose to the Company, in writing, all ideas,
discoveries, designs, improvements, innovations and inventions (collectively
referred to herein as "Inventions"), whether patentable or not, either relating
to the existing or planned business, products, processes, or procedures of the
Company, or any parent or subsidiary of the Company, or suggested by or
resulting from Executive's work at the Company, or resulting wholly or in part
from the use of the Company's time, material, facilities or ideas, that
Executive has made or conceived or may make or conceive, whether or not during
working hours or with the Company's resources, alone or with others, at any time
during Executive's employment or within one year after termination thereof.
Executive agrees that all such Inventions shall be the exclusive property of the
Company.
(b) Executive hereby assigns to the Company all Executive's rights and
interests in and to all such Inventions and all patents and copyrights that may
be obtained on them in this and all foreign countries. At the Company's expense,
but without charge to it, Executive will execute, acknowledge and deliver to the
Company any specific assignments to any such Inventions or other relevant
documents and take any such further action as may reasonably be considered
necessary by the Company at any time during or subsequent to the period of
Executive's employment to obtain or defend letters patent in any and all
countries or to obtain documents relating to registration, ownership or transfer
of copyrights, or to vest title in such Inventions in the Company or its
successors or assigns or to obtain for the Company any other legal protection
for such Inventions, and Executive will continue to provide reasonable
cooperation in this manner even after Executive's employment by the Company
terminates.
(c) Executive represents that there are no Inventions, if any, patented or
unpatented, that Executive conceived or made prior to his employment by the
Company or Percon that Executive wishes to exclude from this Agreement.
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(d) Executive acknowledges that all Creative Works (as defined below) that
are covered by the definition of a "work made for hire" under 17 U.S.C. ss.101
of the U.S. Copyright Act of 1976 (the "Copyright Act"), either relating to the
existing or planned business, products, processes, or procedures of the Company,
or any parent or subsidiary of the Company, or suggested by or resulting from
Executive's work at the Company, or resulting wholly or in part from the use of
the Company's time, material, facilities or ideas, that Executive has made or
conceived or may make or conceive, whether or not during working hours or with
the Company's resources, alone or with others, at any time during Executive's
employment or within one year after termination thereof, will be considered a
"work made for hire", and the Company will be regarded as the author and owner
of all copyrights in any such works. As to any such Creative Works that are not
"work made for hire" under the Copyright Act, such that Executive is regarded as
the copyright author and owner, Executive hereby assigns and agrees to assign to
the Company all of his right, title and interest in any such Creative Works
Executive authors, either solely or jointly with others, at any time during
Executive's employment or within one year after termination thereof, either
relating to the existing or planned business, products, processes, or procedures
of the Company, or any parent or subsidiary of the Company, or suggested by or
resulting from Executive's work at the Company, or resulting wholly or in part
from the use of the Company's time, material, facilities or ideas, that
Executive has made or conceived or may make or conceive, whether or not during
working hours or with the Company's resources. Executive agrees that all such
Creative Works shall be the exclusive property of the Company. As used herein,
"Creative Works" shall mean any and all original works of authorship fixed in
any tangible medium of expression, including but not limited to writings,
compilations of data, charts, forms, drawings, software, videos, photographs,
music, designs and mask works, and further including but not limited to any
other subject matter for which copyright or mask work protection would apply,
specifically including original or revised designs, computer software,
advertising and marketing materials, instructional and procedural manuals, and
related documents and copies thereof.
10. Injunctive Relief. Executive agrees that the provisions and
restrictions of Sections 6, 7, 8 and 9 are necessary to protect the legitimate
continuing interests of the Company, that any violation or breach of these
provisions will result in irreparable injury to the Company for which a remedy
at law would be inadequate and that, in addition to any relief at law that may
be available to the Company for such violation or breach and regardless of any
other provision contained in this Agreement, the Company shall be entitled to
injunctive and other equitable relief without posting any bond or other
security. Nothing herein, however, shall be construed as prohibiting the Company
from pursuing, in conjunction with an injunction or otherwise, any other
remedies available to the Company for such breach or threatened breach,
including the recovery of damages from Executive.
11. Termination of Employment.
(a) Termination of Employment Without Cause. In the event of the
termination of employment of Executive by the Company prior to the expiration of
the Term without Cause (as hereinafter defined) or the voluntary termination of
employment by Executive for Good Reason (as hereinafter defined), Executive
shall be entitled to receive only (i) from the effective date of such
termination (the "Termination Date") until the expiration of the Term or the
first anniversary of the Termination Date, whichever is later, an amount equal
to Executive's Base Salary at the annual rate in effect at the Termination Date,
(ii) reimbursement for any and all monies advanced in connection with
Executive's employment for expenses incurred by Executive through the
Termination Date, subject to the Company's reimbursement policies, (iii) the pro
rata portion of any Annual Bonus payable for the calendar year in which the
termination occurred, determined on the basis of the number of days Executive
was employed by the Company during the year in which such termination occurred,
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(iv) Executive's then current health, dental, life and accidental death and
dismemberment insurance benefits for a period until the expiration of the Term
or the first anniversary of the Termination Date, whichever is later, and (v)
all other payments and benefits to which Executive may be entitled pursuant to
this Agreement or under the terms of any Company benefit plan in which Executive
was participating through the Termination Date. Payment of amounts set forth in
clause (i) above shall be made in accordance with the Company's prevailing
practice; with respect to clauses (iv) and (v) above, pursuant to the terms of
the benefit plan establishing such benefit; with respect to clause (ii), within
ten (10) business days after the later of the Termination Date or the submission
of satisfactory documentation; and with respect to clause (iii), no later than
forty-five (45) days after completion of the calendar year in which the Annual
Bonus was earned. In the event of Executive's death while receiving severance
payments hereunder, all remaining severance installment payments otherwise
payable to Executive hereunder will be paid in the same amounts and in the same
manner to Executive's heirs and legal representatives. All payments made to
Executive hereunder will be subject to all applicable employment and withholding
taxes.
For purposes of this Agreement, "Cause" shall mean (A) Executive's failure
(it being understood that a failure to achieve performance goals in and of
itself or an inability to act because the Company fails to provide adequate
supporting resources shall not constitute "failure" for purposes of this
definition) or refusal to perform such services as may reasonably be delegated
or assigned to Executive, consistent with Executive's position (except to the
extent such failure or refusal to perform is a direct result of a relocation of
the location of Executive's principal office to a location more than twenty-five
(25) miles from Eugene, Oregon) or Executive's violation of express Company
policies, (B) Executive's gross negligence in connection with the performance of
Executive's duties, (C) Executive's commission of acts involving dishonesty,
willful misconduct, breach of fiduciary duty, fraud, or any similar offense
that, in any such case, materially affects Executive's ability to perform
Executive's duties for the Company or any of its affiliates or may materially
adversely affect the Company or any of its affiliates, (D) Executive's
conviction of a felony, or (E) the violation of a material law by the Company or
any affiliate where Executive willfully caused the Company or such affiliate to
commit such violation. Termination of the services of Executive for Cause shall
not be effective unless and until acted upon by the Board of Directors of the
Company and unless and until written notice shall have been given to Executive
which notice shall include identification with specificity of each and every
factual basis or incident upon which the termination is based. Notwithstanding
the preceding sentence, in connection with the termination of the services of
Executive for Cause under clause (A) above, the Board of Directors of the
Company shall take no action until Executive has been provided written notice of
the services Executive has failed or refused to perform, or the policies
Executive has violated, and such failure or refusal, or such violation, remains
unremedied for thirty (30) days after Executive has received such notice.
For purposes of this Agreement, "Good Reason" shall mean the occurrence of
any of the following: (A) a material reduction of Executive's duties, title,
authority or responsibilities with the Company relative to Executive's duties,
title, authority or responsibilities with the Company as in effect immediately
prior to such reduction, or the assignment to Executive of such reduced duties,
title, authority or responsibilities, other than such changes in duties, title,
authority and responsibilities as may be a natural consequence of Percon
becoming a wholly owned subsidiary of the Company; (B) a material violation of
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the Company's obligations under this Agreement; (C) a material reduction by the
Company in the kind or level of employee benefits (other than the Base Salary
and Annual Bonus provided for by Section 3(a) and 3(b) of this Agreement) to
which Executive was entitled immediately prior to such reduction, with the
result that Executive's overall benefits package is materially reduced, unless
the overall benefits package of executive officers of the Company generally is
similarly reduced; (D) the relocation of Executive to a facility or a location
more than 25 miles from the city, village, town or other municipality in which
Executive is then located; or (E) the failure of the Company to obtain the
assumption of this Agreement by any successors to the Company's business.
Termination of the services of Executive for Good Reason shall not be effective
unless and until written notice shall have been given to the Company which
notice shall include identification with specificity of each and every factual
basis or incident upon which the termination is based. Notwithstanding the
preceding sentence, in connection with the termination of the services of
Executive for Good Reason under clause (A), (B) or (C) above, no such
termination may be effective unless Executive has provided to Company written
notice identifying with specificity each and every factual basis or incident
upon which the termination is based and such basis or incident remains
unremedied for thirty (30) days after Executive has delivered such notice.
(b) Termination for Cause or by Voluntary Resignation. If, during the Term,
Executive's employment is terminated by the Company for Cause or terminated by
Executive's voluntary resignation other than for Good Reason, then Executive
shall be entitled to receive only (i) Executive's Base Salary earned through the
Termination Date and (ii) reimbursement for any and all monies advanced in
connection with Executive's employment for expenses incurred by Executive
through the Termination Date, subject to the Company's reimbursement policies.
Payment of amounts set forth in clause (i) above shall be made in
accordance with the Company's normal practice for payment of final wages to
terminating employees; and with respect to clause (ii), within ten (10) business
days after the later of the Termination Date or the submission of satisfactory
documentation.
(c) Termination by Reason of Death or Disability. If, during the Term,
Executive's employment is terminated by reason of death or disability, then
Executive (or in the event of Executive's death, his estate, heirs and
beneficiaries, as applicable) shall be entitled to receive only (i) all Base
Salary earned through the Termination Date; (ii) reimbursement for any and all
monies advanced in connection with Executive's employment for expenses incurred
by Executive through the Termination Date, subject to the Company's
reimbursement policies; (iii) the pro rata portion of any Annual Bonus payable
for the calendar year in which the termination occurred, determined on the basis
of the number of days Executive was employed by the Company during the year in
which such termination occurred, and (iv) all other payments and benefits to
which Executive may be entitled pursuant to this Agreement or under the terms of
any Company benefit plan in which Executive was participating through the
Termination Date.
Payment of amounts set forth in clause (i) above shall be made in
accordance with the Company's normal practice; with respect to clause (iv)
above, pursuant to the terms of the benefit plan establishing such benefit; with
respect to clause (ii), ten (10) business days after the later of the
Termination Date or the submission of satisfactory documentation; and with
respect to clause (iii), no later than forty-five (45) days after completion of
the calendar year in which the Annual Bonus was earned.
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(d) Notwithstanding the foregoing, the Company may condition the
entitlement of Executive or his estate, heirs and beneficiaries, as applicable,
to any payment or benefit under this Section 11 upon receipt of a fully executed
general release in favor of the Company and its affiliates in reasonable form to
be prepared by the Company, except that Executive shall not be required to
release entitlements to indemnification under applicable law or the charter or
bylaws of the Company and its affiliates, rights under this Section 11 or rights
under Section 5.10 of the Merger Agreement.
(e) Without limitation, the provisions of Sections 6, 7, 8 and 9 shall
survive the termination of Executive's employment for any reason.
12. Notice. All notices given in connection with this Agreement shall be in
writing and shall be delivered either by personal delivery, by certified or
registered mail, return receipt requested, or by a recognized express courier or
delivery service, addressed to the parties hereto at the following addresses:
If to Executive:
Xx. Xxxx X. Xxxxxxxx
000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Copy to:
Xxxxxxx Coie LLP
0000 X.X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000-0000
Attention: Xxx X. Xxxxxx
If to the Company:
PSC Inc.
000 Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxxxx
Copy to:
Xxxxxxx X. Quick
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxx.
Xxxxxxxxx, Xxxxxxxxx 00000
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or at such other address and number as either party shall have previously
designated by written notice given to the other party in the manner hereinabove
set forth. If notice is personally delivered, such communication shall be deemed
delivered upon actual receipt; if sent by express courier or delivery service
pursuant to this paragraph, such communication shall be deemed delivered upon
actual receipt or, if the addressee fails or refuses to accept delivery, as of
the date of such failure or refusal; and if sent by U.S. mail pursuant to this
paragraph, such communication shall be deemed delivered as of the date of
delivery indicated on the receipt issued by the relevant postal service, or, if
the addressee fails or refuses to accept delivery, as of the date of such
failure or refusal.
13. Waiver. Any waiver of a breach of any of the terms of this Agreement
shall not operate as a waiver of any other breach of such terms or of any other
terms, nor shall failure to enforce any term hereof operate as a waiver of any
such term or of any other term.
14. Severability. If any term of this Agreement or the application thereof
is held invalid or unenforceable, then the validity or unenforceability shall
not affect any other term of this Agreement. This Agreement shall be enforced to
the broadest extent possible under the law.
15. Governing Law; Venue. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Oregon,
without reference to conflict of law principles of any jurisdiction (including
without limitation Oregon) which would result in the application of the domestic
substantive laws of any other jurisdiction.
16. Change in Control. Simultaneous with the execution hereof, Executive
and the Company are entering into a Change-in-Control (the "Change in Control
Agreement"). Anything in this Agreement to the contrary notwithstanding, if
there is a Change in Control (as defined in the Change in Control Agreement) of
the Company at a time that the Change in Control Agreement is in effect and if
Executive's employment is thereafter terminated at such time as this Agreement
and the Change in Control Agreement are still in effect, then the obligations of
the Company and the rights of Executive in respect of such termination shall be
as provided in the Change in Control Agreement rather than this Agreement.
17. Termination Obligations. Executive agrees that if his employment
hereunder is terminated for any reason, then he will meet at a mutually
agreeable time and location (upon which the Company and Executive will use their
best efforts to agree) with a representative of the Company to discuss, among
other matters, the provisions of this Agreement and Executive's obligations
hereunder within three (3) business days after his termination.
18. Assignment. Neither this Agreement nor any interest herein may be
assigned by Executive. The Company may freely assign this Agreement and any and
all interest herein to any person or entity that, directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company or in connection with a transfer, directly or
indirectly, of all or substantially all of the business of the Company or
Percon.
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19. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in a
writing, signed by all parties hereto. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns and Executive
and his heirs, executors, administrators and legal representatives. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.
20. Entire Agreement; Amendment. This Agreement and the Change in Control
Agreement contain the entire agreement between the parties with respect to the
employment of Executive by the Company or Percon and supersede all previous
agreements related to the employment of Executive by the Company or Percon.
Notwithstanding the foregoing, Executive acknowledges he has independent
obligations under that certain Noncompetition Agreement between Executive and
the Company dated as of the date hereof. This Agreement may not be amended or
changed except by a writing signed by both parties.
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IN WITNESS WHEREOF, Executive has executed this Agreement and the Company
has caused this Agreement to be executed as of the date first above written.
PSC INC.
By:
--------------------------------
Its:
-------------------------------
EXECUTIVE:
-----------------------------------
Xxxx X. Xxxxxxxx
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EXHIBIT A
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As used herein, "Portables Products" means (a) all products and services of
Percon and its affiliates immediately prior to the date hereof and (b) those
products and services of PSC within its Commercial/Industrial HHLS Business
immediately prior to the date hereof.
Targets
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1999 Total 2000 Total 2001 Total
(in millions) (in millions) (in millions)
Portables Product areas:
1. Existing Percon Business $32 $39 $45
1999 = $35 million
2000 = $42 million
2. Existing PSC Commercial/ $36 $40 $44
Industrial HHLS Business
1999 = $36 million
2000 = $40 million
EXAMPLE: Sales of Portables Products are $89 million in Year 2000 and gross
margin percentage is 45%.
$89 - $79 = $10 million x 45% = $4.5 million x 5% = $225,000
million million Incremental Gross Incremental Incentive Annual
Actual Base Sales Margin Gross Margin Factor Bonus Earned
Notwithstanding the foregoing, if sales of Portables Products exceed $68 million
but are less than $79 million in Year 2000, then Executive shall be entitled to
an Annual Bonus of $25,000 for such year. Notwithstanding the foregoing, if
sales of Portables Products exceed $79 million but are less than $89 million in
Year 2001, then Executive shall be entitled to an Annual Bonus of $25,000 for
such year.
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