EXHIBIT 99.C4
[3/26/98 DRAFT]
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of the ____ day
of ____________, 1998, is entered into by Intelligent Controls, Inc., a
Maine corporation with its principal place of business at 00 Xxxxxxxxxx Xxxx
Xxxx, Xxxx, Xxxxx 00000 (the "Company"), and Xxxx Xxxxx, an individual
residing at 00 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxx 00000 (the "Executive").
Recitals:
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A. The Executive is the founder of the Company and has served as
President and Chief Executive Officer of the Company since 1978.
B. The Executive and other members of the Company's Board of
Directors have voted to appoint Xxxxx X. Xxxxxx as President and Chief
Executive Officer of the Company as of May 1, 1998 or thereabouts.
C. The Company and the Executive desire to define the Executive's
future roles and responsibilities and to set forth the terms of the
Company's continued employment of the Executive in these capacities.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the
parties agree as follows:
1. Term of Employment/Retention. (a) The Company hereby agrees to
employ the Executive, and the Executive hereby accepts employment (his
"Employment") with the Company, commencing on _____________, 1998 (the
"Commencement Date") and ending on June 30, 2000; provided, however, that
the term of his Employment hereunder shall be automatically extended for
periods of one (1) year after such date, unless and until the Company or the
Executive shall have delivered to the other written notice of its or his
election to terminate this Agreement as of such date or the end of any one-
year extension period, such notice to be delivered at least ninety (90) days
prior to the date of termination. The period of time during which the
Executive is employed hereunder is hereafter referred to as the "Employment
Period".
(b) In addition, the Company hereby agrees to retain the Executive as
Chairman of the Board of Directors and/or a consultant through June 30, 2003
or the date of the Annual Meeting of Shareholders in such year, whichever
occurs first, and the Executive hereby accepts this retention (his
"Retention"). If the Employment Period (as defined above) ends before such
date, then the period of time between such date and the end of the
Employment Period shall be referred to herein as the "Supplemental Retention
Period". The Supplemental Retention Period may only be extended by written
agreement of the Company and the Executive.
2. Titles; Duties. (a) During the Employment Period, the Executive
shall serve as a Vice President of the Company, subject to the general
direction and control of the Chief Executive Officer of the Company.
Initially the Executive's title shall be Vice President for Product
Development, such title to be subject to appropriate adjustment if and when
the Executive's duties as a Vice President are revised by the Chief
Executive Officer or the Board of Directors (the "Board"). The Executive
hereby accepts such employment and agrees to undertake the duties and
responsibilities inherent in such position and such other executive duties
and responsibilities as the Chief Executive Officer shall from time to time
assign to him. The Executive agrees to devote his entire business time,
attention and energies to the business and interests of the Company during
the Employment Period; provided, however, that the Executive shall have the
right to serve as a director of up to one other company. The Executive
agrees to abide by the rules, regulations, instructions, personnel practices
and policies of the Company and any changes therein which may be adopted
from time to time by the Company.
(b) For at least two years from the date of this Agreement, the
Company shall use its best efforts to cause the Board to designate the
Executive as Chairman of the Board.
(c) During the Supplemental Retention Period, the Executive shall (i)
serve as Chairman of the Board if so designated by the Board and (ii) serve
as a consultant to the Company. The Executive shall be required during the
Supplemental Retention Period to make himself available for up to 400 hours
of services per year. Either the Board or the Company's chief executive
officer shall define the nature and timing of the Executive's services
during such period, subject however to the Executive's prior approval (which
shall not be unreasonably withheld).
3. Compensation and Benefits.
(a) Salary. During the Employment Period, the Company shall pay the
Executive, in equal bi-weekly installments, a base salary at the rate of
$120,000 per year, subject to annual increases in the discretion of the
Board based on the Executive's performance.
(b) Bonuses. During the Employment Period, the Executive shall be
eligible to receive an annual bonus of up to 25% of the Executive's annual
base salary, the first of such bonuses to accrue beginning on the date as of
which the Investment Agreement is executed. The Executive's eligibility to
receive such bonus shall be dependent on the achievement of financial and
operating objectives determined by the Board.
(c) Additional Retainer. During the Employment Period and the
Supplemental Retention Period, the Company shall also pay the Executive a
retainer at the rate of $30,000, to be paid in equal bi-weekly installments.
This retainer shall be for services to the Company as a Director and/or
consultant, and shall be in lieu of any other compensation to which the
Executive would otherwise be entitled as a Director of the Company or any of
its subsidiaries.
(d) Executive Benefit Plans. During the Employment Period, the
Executive shall be eligible to participate in any life insurance, medical,
retirement, pension or profit-sharing or other benefit plans or arrangements
now or hereafter generally made available by the Company to him or executive
officers of the Company to the extent the Executive qualifies under the
provisions of any such plans (collectively, the "Benefits"). The Benefits
include, without limitation, participation in the Company's corporate
membership at the Woodlands Country Club or a comparable facility, on terms
equivalent to those in effect at the date of this Agreement. During the
Supplemental Retention Period, the Executive and his family shall be
entitled to participate in the Company's health insurance program, on the
same terms as were in effect for him at the end of the Employment Period;
provided that if the Executive and his family are ineligible to participate
in such program, then the Company may instead reimburse him for the
reasonable cost of obtaining comparable health insurance coverage.
(e) Vacation. During the Employment Period, the Executive shall be
entitled to vacations (taken consecutively or in segments), not to exceed an
aggregate of four (4) weeks per year.
(f) Expense Reimbursement. The Company shall reimburse the Executive
for all reasonable expenses properly incurred by him on behalf of the
Company in the performance of his duties hereunder and in accordance with
policies set by the Board; provided that proper vouchers are submitted to
the Company by the Executive evidencing such expenses and the purposes for
which the same were incurred.
(g) Future Stock Options. If and to the extent that the Company
grants its executive officers stock options or other stock-related
incentives, the Board shall in good faith consider whether the Executive
should be permitted to participate in such incentives. Provided, however,
that the Executive shall in no event be entitled to additional stock-related
incentives in respect of (i) the purchase of 486,923 shares of common stock
by Xx. Xxxxxx pursuant to his restricted stock arrangement with the Company
or (ii) grants of options under the 1998 Stock Option Plan (or successor
plans) if the common stock underlying such options does not exceed 300,000
shares in the aggregate.
4. Termination of Employment and/or Retention. The Executive's
Employment and/or Retention shall terminate upon the occurrence of any of
the following:
(a) At the election of the Company, for cause, immediately upon
written notice by the Company to the Executive. For purposes of this
Agreement, "cause" shall be deemed to exist upon a good faith finding by the
Board that the Executive has (i) committed an act constituting fraud,
embezzlement or other felony, (ii) breached his fiduciary duties to the
Company or (iii) wilfully failed to perform his duties and responsibilities
hereunder. Provided, however, that during the Employment Period, the
Company may not terminate his Retention for cause unless it has terminated
his Employment for cause.
(b) At the election of the Company, without cause, immediately upon
written notice by the Company to the Executive, subject to the provisions of
Section 5(b).
(c) The death or disability of the Executive. For purposes of this
Agreement, "disability" shall mean the degree of incapacitation as a result
of illness or accident and whether physical or mental which, in the opinion
of an independent medical expert selected by the Company and approved by the
Executive (which approval shall not be unreasonably withheld), makes it
reasonably unlikely that the Executive will be able to perform his normal
duties for a period of one hundred twenty (120) days, whether or not
consecutive, during any 360-day period.
(d) At the election of the Executive, for any reason, upon at least
ninety (90) days prior written notice to the Company. Provided, however,
that during the Employment Period the Executive may not terminate his
Retention unless he has also offered to terminate his Employment.
5. Effect of Termination.
(a) Termination by the Company for Cause. In the event the
Executive's Employment (and/or Retention, as the case may be) is terminated
for cause pursuant to Section 4(a), the Company shall pay or provide to the
Executive the compensation and Benefits otherwise payable to him under
Section 3 through the last day of his actual Employment (and/or Retention,
as the case may be) by the Company, but shall have no responsibility for any
compensation or benefits to the Executive for any time period subsequent to
such termination.
(b) Termination by the Company without Cause. (1) In the event the
Executive's Employment is terminated without cause pursuant to Section 4(b),
the Company shall (i) continue to pay him, on a bi-weekly basis, his base
salary specified in Section 3(a), as in effect at the time of such
termination, for the twelve-month period commencing on the date of such
termination or until June 30, 2000, whichever is later (the "Severance
Period"), and (ii) continue to provide him, through the Severance Period,
with the Benefits to which he would otherwise have been entitled hereunder
had his Employment not been terminated; provided, however, that if pursuant
to terms of any plan or arrangement under which Benefits are provided the
Company is unable to continue to provide those Benefits to the Executive for
all or a portion of the Severance Period at a cost comparable to that which
would apply if the Executive remained an employee of the Company, the
Company shall have the right to discontinue providing those Benefits to the
Executive and in lieu thereof to pay the Executive a cash amount equal to
the cost to the Company of continuing to provide those Benefits for the
remainder of such period, assuming the Executive remained an employee of the
Company; and provided further, that in the event Executive has secured full
time employment in a comparable position, the Severance Period shall be
deemed to end as of the later of the date Executive has secured such
comparable employment, or six (6) months from the date of termination of his
Employment.
(2) In the event the Executive's Retention is terminated without
cause pursuant to Section 4(b), the Company through June 30, 2003 shall
continue to (i) pay him, on a bi-weekly basis, the retainer specified in
Section 3(c), as in effect at the time of such termination, and (ii) make
health insurance benefits available to him and his family as specified in
the last sentence of Section 3(d).
(c) Termination due to Death. In the event the Executive's
Employment and Retention is terminated due to his death, the Company shall
pay or provide to the estate of the Executive the compensation and Benefits
which would otherwise be payable to the Executive under Section 3 through
the date of termination, but the Company shall have no responsibility for
any compensation or benefits to the Executive or his estate for any time
period subsequent to such termination.
(d) Termination due to Disability. In the event the Executive's
Employment and/or Retention is terminated due to his disability, the Company
shall for the twelve-month period commencing on the date of such termination
(i) continue to pay him, on a bi-weekly basis, an amount equal to the
difference between (A) his base salary under Section 3(a) plus (as the case
may be) his retainer under Section 3(c), in each case as in effect at the
time of such termination, and (B) the pre-tax equivalent amount received by
the Executive pursuant to any disability insurance provided to the Executive
by the Company and (ii) continue to provide him with the Benefits to which
he would otherwise have been entitled hereunder had his Employment and/or
Retention (as the case may be) not been terminated; provided, however, that
if pursuant to terms of any plan or arrangement under which Benefits are
provided the Company is unable to continue to provide those Benefits to the
Executive for all or a portion of such twelve-month period at a cost
comparable to that which would apply if the Executive remained an Executive
of the Company, the Company shall have the right to discontinue providing
those Benefits to the Executive and in lieu thereof to pay the Executive a
cash amount equal to the cost to the Company of continuing to provide those
Benefits for the remainder of such twelve-month period, assuming the
Executive remained an Executive of the Company.
(e) Voluntary Termination by the Executive. In the event the
Executive's Employment and/or Retention is terminated by the Executive
pursuant to Section 4(d), the Company shall pay or provide to the Executive
the compensation and Benefits otherwise payable to him under Section 3
through the last day of his actual Employment and/or Retention (as the case
may be) by the Company, but shall have no responsibility for any
compensation or benefits to the Executive for any time period subsequent to
such termination.
(f) Termination upon Nonrenewal. If the Executive's Employment
terminates on or before June 30, 2001 because the Company (but not the
Executive) has given notice of nonrenewal in accordance with Section 1(a)
above, then the Executive shall thereupon be entitled to the same severance
pay and Benefits as would be provided under Section 5(b) upon a termination
of his Employment by the Company without cause.
6. Confidential Information.
(a) Confidential Information. The Executive acknowledges and
understands that in the performance of his service as an employee under this
Agreement, he will obtain knowledge of Confidential Information. The
Executive agrees that he shall not, either during the Employment Period or
at any time thereafter, except as required in the performance of his
services for the Company, (i) use or disclose any Confidential Information
outside the Company, or (ii) remove or aid in the removal from the premises
of the Company any Confidential Information or any property or material
relating thereto.
(b) Delivery of Material. The Executive shall deliver promptly to
the Company on the termination of his Employment and/or Retention (as the
case may be), or at any other time the Company may so request, all
memoranda, notes, records, reports, manuals, computer disks, videotapes,
drawings, blueprints and other documents (and all copies thereof) which, and
to the extent they, embody Confidential Information which he may then
possess or have under his control.
(c) Customer Lists. The Executive acknowledges that (i) all existing
lists of customers, vendors and advertisers of the Company developed during
the course of the Executive's Employment and/or Retention (as the case may
be) by the Company are and shall be the sole and exclusive property of the
Company and that the Executive neither has nor shall have any right, title
or interest therein, (ii) such lists are and must continue to be
confidential, and (iii) such lists are not readily accessible to competitors
of the Company.
(d) Definitions. For the purposes of this Section 6, "Confidential
Information" shall mean any information, including, without limitation,
trade "know-how", trade secrets, subscriber, advertiser and customer lists,
pricing policies, operational methods, methods of doing business, technical
processes, formulae, designs and design projects, inventions, software
programs, business plans, projects, research projects, and other business
affairs of the Company which (i) is or is designed to be used in the
business of the Company or results from its research or development
activities, and (ii) is conceived, developed, discovered or received by, or
made available to, the Executive during the period that the Executive is
employed or retained by the Company, in the course of his employment with or
retention by the Company. Confidential Information does not include, and no
restriction of the Executive contained in this Agreement shall apply to, any
of the following information: (i) that at or prior to the time of its
availability, disclosure to or development, conception or discovery by the
Executive, was generally known by the public; (ii) was available to the
public on a non-confidential basis prior to its availability, disclosure to
or development, conception or discovery by the Executive; or (iii) is now or
subsequently becomes rightfully known in the industry of which the Company
is a part. The phrase "business of the Company" in Sections 6 and 7 shall
mean the business in which the Company is now engaged or which may hereafter
become engaged during the course of the Executive's Employment and/or
Retention (as the case may be) by the Company. The term "Company" in
Sections 6, 7 and 8 shall mean the Company and any subsidiary of the
Company.
7. Non-Competition Covenants.
(a) Non-Competition Covenants. The Executive agrees that he will
not, during the Non-Competition Period, compete directly or indirectly with
the business of the Company. The phrase "compete directly or indirectly
with the business of the Company" shall mean (1) engaging or having a
material interest, directly or indirectly, as owner, employee, officer,
director, partner, sales representative, stockholder, capital investor,
lessor, renderer of consultation services or advice, either alone or in
association with others, in the operation of any aspect of a business or
enterprise which is competitive with the business in which the Company is
engaged during the Employment Period; (2) soliciting any employee of the
Company to leave the employ of the Company; (3) soliciting any of the
employees of the Company to become employees of any other person or entity;
or (4) soliciting any customer of the Company with respect to the business
of the Company.
(b) Non-Competition Period. For the purposes of this Section 7,
"Non-Competition Period" shall mean the period during which the Executive is
employed by the Company and the one-year period commencing on the last day
of the Executive's Employment and/or Retention (as the case may be) by the
Company.
8. Injunctive and Other Equitable Relief.
(a) The Executive acknowledges that the services to be rendered by
him under the terms of this Agreement are of a special, unique and
extraordinary character, which gives them a peculiar value, the loss of
which cannot be reasonably or adequately compensated in damages in any
action at law. By reason of this, the Executive consents and agrees that if
he violates any of the provisions of Section 6 and 7 hereof, the Company
shall be entitled, in addition to any other remedies it may have at law, to
the remedies of injunction, specific performance and other equitable relief
for a breach by the Executive of Sections 6 and 7 of this Agreement. This
Section 8 shall not, however, be construed as a waiver of any of the rights
which the Company may have for damages or otherwise.
(b) Any waiver by the Company of a breach of any provision of Section
6 and 7 hereof shall not operate or be construed as a waiver of any
subsequent breach of such provision or any other provision hereof.
(c) The Executive agrees that each provision of Section 6 and 7 shall
be treated as a separate and independent clause, and the unenforceability of
any one clause shall in no way impair the enforceability of the other
clauses herein. Moreover, if one or more of the provisions contained in
Section 6 and 7 shall for any reason be held to be excessively broad as to
scope, activity or subject so as to be unenforceable at law, such provision
or provisions shall be construed by the appropriate judicial body by
limiting and reducing it or them so as to be enforceable to the maximum
extent compatible with the applicable law as it shall then appear.
(d) The Executive's obligations under Section 6 and 7 shall survive
the termination of his Employment and/or Retention (as the case may be)
regardless of the manner of such termination and shall be binding upon his
heirs, executors, administrators and legal representatives.
9. Other Agreements. The Executive hereby represents and warrants
that he is not bound by the terms of any agreement with any previous
employer or other party to refrain from using or disclosing any trade secret
or confidential or proprietary information in the course of his employment
with the Company or to refrain from competing, directly or indirectly, with
the business of such previous employer or any other party. The Executive
further represents and warrants that his performance of all the terms of
this Agreement and as an Executive of the Company does not and will not
breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company.
10. Entire Agreement; Amendments. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter
hereof, and no statement, representation, warranty or covenant has been made
by any party except as expressly set forth herein. This Agreement
supersedes and cancels all prior agreements between the parties, whether
written or oral, relating to the employment of the Executive. No
alteration, amendment or modification of any of the terms and provisions
hereof shall be valid unless made pursuant to an instrument in writing
signed by all of the parties hereto.
11. Applicable Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Maine.
12. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed, first class, postage prepaid, certified
mail, return receipt requested, or sent by nationally recognized overnight
courier service, to each of the parties at its or his address as set forth
at the beginning of this Agreement or as any of the parties may designate in
conformity with the foregoing.
13. Headings. The Section headings set forth in this Agreement are
for reference purposes only and shall not be considered as part of this
Agreement in any respect nor shall they in any way affect the substance of
any provisions contained in this Agreement.
14. Successor and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. In
addition, this Agreement shall be binding upon and inure to the benefit of
the Executive and his heirs, legal representatives and assigns; provided,
however, that the obligations of the Executive hereunder may not be assigned
without the prior written approval of the Board.
15. Severability. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be
of no force and effect, but the illegality or unenforceability of such
provision shall have no effect upon and shall not impair the enforceability
of any other provision of this Agreement.
16. Dispute Resolution. In the event of any controversy or claim
arising out of or relating to the Executive's Employment and/or Retention
(as the case may be), this Agreement or any act or omission of a party
hereunder (a "dispute"), either party (by written notice to the other) may
invoke the procedures of this Section. Promptly after such notice is given,
the Executive and one or more disinterested representatives of the Company's
Board of Directors will meet to attempt to negotiate a settlement of all
pending disputes. If for any reason the Executive and the Company have not
entered into a written settlement of the dispute(s) within 30 days after the
original notice, either party may within one year of the original notice
give notice demanding arbitration. Thereafter all pending disputes shall be
settled by arbitration before a panel of three arbitrators, in accordance
with the rules of the American Arbitration Association pertaining to
employment disputes (or such other rules and procedures as the parties may
hereafter consent to in writing). The arbitration shall occur in Portland,
Maine, or such other location as is mutually acceptable to the parties.
Except as the parties may hereafter consent in writing, the arbitrator(s)
shall be required to decide each claim in accordance with applicable law and
to set forth briefly in writing the award, the rationale of the decision,
and those facts considered by the arbitrator(s) to be material to such
decision. The arbitral award shall be deemed binding upon each party, and
judgment on the award may be entered in any court having jurisdiction
thereof. This agreement to arbitrate shall be enforceable under the Uniform
Arbitration Act. In any action to compel arbitration under this Section or
to enforce an arbitral award, the prevailing party shall be entitled to an
award of its reasonable expenses, including attorneys fees.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
INTELLIGENT CONTROLS, INC.
By: __________________________________
Title:
EXECUTIVE:
______________________________________
Xxxx Xxxxx
