AGREEMENT
EXECUTION
COPY
AGREEMENT
This
Agreement (“Agreement”),
dated
November 7, 2007 is by and between Measurement Specialties, Inc., a New Jersey
corporation (the “Company”),
and
Xxxxx Xxxxxxx (the “Executive”). The Company and the Executive are sometimes
individually referred to herein as a “Party”
or
collectively referred to herein as the “Parties.”
WITNESSETH:
WHEREAS,
the Parties intend that upon their execution of this Agreement, this Agreement
shall supersede and replace the Executive Employment Agreement, made and entered
into as of March 31, 2006 between the Company and the Executive , and shall
be
the sole agreement governing the terms of and relating to the employment of
the
Executive by the Company;
NOW,
THEREFORE, the Parties hereto, in consideration of the foregoing recitals and
the mutual covenants and promises set forth herein, do hereby agree as
follows:
| 1. |
Definitions
|
As
used
herein, the following terms have the following meanings:
“Agreement”
means
this Agreement.
“Board”
means
the Board of Directors of the Company.
“Change
of Control”
means
(i) any liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary; (ii) any merger, consolidation, conversion transaction or
reorganization of the Company with or into any other entity or entities that
results in the conversion or exchange of outstanding Common Stock (or any
securities into which such Common Stock may be converted or exchanged) of the
Company for securities issued or other consideration paid or caused to be issued
or paid by any such entity or affiliate thereof (other than a merger of the
Company with or into another entity that does not result in the holders of
Common Stock immediately prior to the consummation of such transaction ceasing
to own a majority of the voting securities of the entity surviving or resulting
from the merger); or (iii) any sale, transfer or disposition of all or
substantially all of the property or assets of the Company. For purposes of
the
immediately preceding sentence, sale, transfer or disposition of substantially
all of the property or assets of the Company shall mean the sale of property
or
assets, in a single transaction or a series of related transactions, having
a
value in excess of 50% of the value of assets reflected on the balance sheet
of
the Company immediately prior to the first such sale.
“Annual
Salary”
has
the
meaning given such term in Section 5 of this Agreement.
“Bonus
Plan”
has
the
meaning given such term in Section 6 of this Agreement.
“Cause”
has
the
meaning given such term in Section 9 of this Agreement.
“Company”
has
the
meaning given such term in the Recitals to this Agreement.
“CRP”
shall
mean Corporate Revitalization Partners, LLC .
“Disability”
has
the
meaning given such term in Section 10 of this Agreement.
“Executive”
has
the
meaning given such term in the Recitals to this Agreement.
“Four
Corners”
shall
mean Four Corners Capital Partners LP.
“Good
Reason”
has
the
meaning given such term in Section 9 of this Agreement.
“Option”
has
the
meaning given such term in Section 7 of this Agreement.
“Option
Agreement”
has
the
meaning given such term in Section 7 of this Agreement.
“Option
Plan”
has
the
meaning given such term in Section 7 of this Agreement.
“ “Subsidiary”
or “Subsidiaries”
means
any entity at least a majority of whose voting securities is at the time owned
by the Company or one of the Company’s Subsidiaries.
“Term”
has
the
meaning set forth in Section 2 of this Agreement.
|
2.
|
Term
of Employment
|
The
service of Executive pursuant to this Agreement (the “Term”) shall continue
until terminated in accordance with the provisions of this Agreement.
| 3. |
Duties
of Executive
|
Executive
shall serve as the Chief Executive Officer of the Company during the Term,
and
in connection therewith shall perform the services and duties attendant to
such
office as set forth herein or in the Bylaws of the Company, subject in all
respects to the direction and supervision of the Board, provided that such
services and duties are consistent with the normal and customary
responsibilities of a Chief Executive Officer and that Executive retains the
title of Chief Executive Officer.
| 4. |
Exclusive
Services and Best
Efforts
|
The
Parties agree that Executive will devote substantially all of his business
time,
his best efforts, energies and skill to the discharge of the duties and
responsibilities attributable to his position; provided that nothing herein
shall prevent Executive from (i) engaging in investment activities on behalf
of
himself or his family or (ii) engaging in religious, charitable or other
community or nonprofit activities.
2
|
5.
|
Compensation
|
In
consideration of the services to be provided by Executive hereunder, the Company
shall initially pay Executive a salary of $450,000 per year during the Term
(“Annual
Salary”), payable in arrears in approximately equal bi-weekly installments in
accordance with the Company’s customary payroll practices, subject to the
following two sentences. Increases in such Salary may be decided by the Board
in
its sole discretion after taking account of, among other things, performance
and
compensation for similar positions in the Company’s geographic region. The
Annual Salary shall be reviewed by the Board for increase (but not decrease)
not
less frequently than on an annual basis.
| 6. |
Bonus
|
In
addition to the Salary payable pursuant to Section 5 above, Executive shall also
be eligible to receive an annual bonus pursuant to the Company’s Bonus Plan (the
“Bonus
Plan”),
payable in accordance with the terms thereof, based upon annual performance
criteria and goals established by the Compensation Committee of the Board (the
“Compensation Committee”). The amount of such bonus, if any, will be determined
by the Compensation Committee or the Board on an annual basis, based on such
criteria as the Compensation Committee or the Board shall establish from time
to
time.
| 7. |
Stock
Option
|
Executive
shall be eligible to receive options to purchase shares of the Company’s Common
Stock (each, an “Option”
and
collectively “Options”) at an exercise price per share equal to the fair market
value of a share of the Company’s Common Stock on the date of grant. Options
shall be granted pursuant to the Company’s 2006 Stock Option Plan or any
successor thereto (the “Option
Plan”)
and
shall be subject to the terms, conditions and provisions thereof and of the
certificate or agreement evidencing the Option (the “Option
Agreement”).
Options shall be granted in such numbers as shall be determined from time to
time by the Board or the Compensation Committee.
|
8.
|
Benefits;
Expenses
|
Executive
shall be entitled to take up to five weeks of paid vacation per year. In
addition, during the Term, the Company shall provide Executive with such
benefits (at no cost to the Executive), including medical, dental, life and
disability insurance, as are provided to senior executives of the Company under
the Company’s employee benefit and welfare plans, and Executive shall be
eligible to participate in such incentive compensation plans of the Company
(including, without limitation, the Bonus Plan, as described in Section 6
hereof, and the Option Plan) as are in effect from time to time and are made
available to senior executives of the Company. The Company shall reimburse
Executive, in accordance with the policies and practices of the Company in
effect from time to time with respect to senior executives of the Company,
for
all reasonable and necessary traveling expenses and other disbursements incurred
by Executive for or on behalf of the Company or its Subsidiaries in connection
with the performance of his duties hereunder, upon presentation by Executive
to
the Company of appropriate documentation therefor.
3
| 9. |
Termination
of Employment
|
(a)
General.
Except
as
expressly set forth in this Section 9 and in Section 10 hereof (with respect
to
the death or disability of Executive), upon a termination of Executive’s
employment with the Company, the Company shall have no further obligations
to
Executive and Executive shall be entitled to no further benefits under this
Agreement. If the termination is for Cause or for Good Reason, the notice shall
set forth the specific grounds for the termination.
(b)
Termination
by the Company for Cause.
(i) The
Company may terminate the employment of Executive for Cause. Upon a termination
of employment for Cause, Executive shall be entitled to receive payment from
the
Company, within twenty (20) business days after the date of termination, of
the
amount of Executive’s Salary accrued through the date of termination and unpaid
as of that date, together with the amount of any earned but unpaid bonus, and
any outstanding business expenses incurred by Executive prior to the date of
termination but not reimbursed as of such date.
(ii)
For
purposes of this Section 9, “Cause”
shall
mean one or more of the following: (A) the conviction of Executive by a court
of
competent jurisdiction of a felony, based on Executive’s commission of a
criminal act; (B) Executive’s commission of fraud; (C) Executive’s willful
neglect or refusal to discharge his duties pursuant to this Agreement, assuming
such duties are lawful, which continues for a period of thirty (30) days
following written notice thereof by the Board to Executive, or (D) a material
breach of this Agreement by Executive, which continues for a period of thirty
(30) days following notice written thereof by the Board to Executive. No act
or
failure on Executive’s part shall be considered “willful” unless it is done, or
omitted to be done by Executive, in bad faith or without reasonable belief
that
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a specific
resolution duly adopted by the Board or based upon the advice of counsel for
the
Company shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company.
(iii)
Notwithstanding the foregoing, the Company may not terminate Executive’s
employment for Cause until: (A) Executive has been afforded the opportunity
to
appear before the Board, with or without legal representation, to address the
Board’s stated reason for termination, (B) the affirmative vote of the majority
of the Board members (excluding the Executive if he is a member of the Board,
and any other member of the Board reasonably believed by the Board to be
involved in the events leading the Board to terminate Executive’s employment for
Cause) agreeing that the actions or inactions of the Executive, as specified
in
the notice of termination occurred, that such actions or inactions constitute
Cause, and that the employment of Executive should, accordingly, be terminated
for Cause, and (C) the Board provides Executive with a written determination
setting forth the specific details that form the basis of such
termination.
4
(c)
Termination
by the Company Without Cause or by Executive for Good Reason.
(i) The
Company may terminate the employment of Executive without Cause, and Executive
may terminate his employment for Good Reason. Upon a termination of Executive’s
employment without Cause or for Good Reason, Executive shall be entitled to
receive from the Company, within twenty (20) business days after the date of
termination, a lump sum payment consisting of (A) the amount of Executive’s
Salary accrued through the date of termination and unpaid, together with the
amount of any earned but unpaid bonus, (B) an additional amount equal to 150%
of
Executive’s Annual Salary as in effect at the date of termination, and (C) the
amount of any outstanding business expenses that were incurred by Executive
prior to the date of termination but not reimbursed as of such date. In
addition, the installment of the Option otherwise vesting as of the end of
the
fiscal year in which the termination of Executive’s employment occurs shall
instead be deemed to have vested pro rata, as and to the extent provided in
the
Option Agreement. Unless otherwise determined by the Board or set forth in
the
Option Agreement, all portions of the Option that remain unvested at the date
of
termination of Executive’s employment shall be forfeited by Executive, except as
expressly set forth above.
(ii)
For
purposes of this Section 9, “Good
Reason”
shall
mean any one or more of the following: (A) any material change in Executive’s
position, scope of authority or responsibilities, or a change in Executive’s
title, to which Executive has not previously agreed, (B) failure by the Company
to fulfill its obligations specified in Paragraphs 5 and 6 of this Agreement,
or
(C) a material breach of the Agreement by the Company. The Company shall have
thirty (30) business days to cure the Good Reason following notice to the
Company by Executive of the same.
(d)
Termination
by Executive other than for Good Reason.
The
Executive may terminate his employment other than for Good Reason. In such
event, Executive shall be entitled to receive payment from the Company, within
twenty (20) business days after the date of termination, of the amount of
Executive’s Salary accrued through the date of termination and unpaid as of that
date, together with the amount of any earned but unpaid bonus, and any
outstanding business expenses incurred by Executive prior to the date of
termination but not reimbursed as of such date.
| 10. |
Death
and Disability
|
(a)
Death
of Executive. Notwithstanding
anything to the contrary contained in Section 9 hereof, this Agreement shall
terminate automatically on the date of Executive’s death. Within twenty (20)
business days after such termination, the Company shall pay to Executive’s
estate or legal representative the amount of Executive’s Annual Salary accrued
through the date of termination and unpaid at that date, together with the
amount of any earned but unpaid bonus, and any outstanding business expenses
incurred by Executive prior to the date of termination but not reimbursed as
of
such date.
(b)
Disability
of Executive. Notwithstanding
anything to the contrary contained in Section 9 hereof, the employment of
Executive shall terminate upon Executive's Disability. For purposes of this
Agreement, "Disability"
shall
mean a physical or mental disability or infirmity that prevents the material
performance by Executive of his duties hereunder lasting for a continuous period
of six months or longer. The reasoned and good faith judgment of the Board
as to
Disability shall be based on such competent medical evidence as shall be
presented to it by Executive or by any physician or group of physicians or
other
competent medical experts employed by Executive or Employer to advise the Board.
In case of such termination, Executive shall be entitled to receive, within
twenty (20) business days after the date of termination, the amount of
Executive’s Annual Salary accrued through the date of termination and unpaid at
that date, together with the amount of any earned but unpaid bonus, and any
outstanding business expenses incurred by Executive prior to the date of
termination but not reimbursed as of such date.
5
|
11.
|
Restrictive
Covenant
|
(a) During
the Term, and for a period of one year following the termination thereof for
any
reason, Executive will not, directly or indirectly, work as an employee,
consultant, agent, principal, partner, manager, stockholder, officer, director
or in any other capacity, for any person or entity inside or outside the United
States of America who or which is directly competitive with the business of
the
Company. The restriction in the preceding sentence shall not apply to (a)
ownership of less than five percent (5%) of the issued and outstanding capital
of stock of any corporation that is publicly traded and for which capital stock
selling and asking prices are published from time to time in The Wall Street
Journal, (b) work that Four Corners and/or CRP or their respective principals
(other than Executive) perform in the turnaround business, (c) Executive’s
ownership interest in Four Corners or CRP, or (d) Executive’s participation in
sales and marketing activities on behalf of both CRP and Four
Corners.
(b) During
the Term, and for a period of two years following the termination thereof for
any reason, Executive will not, directly or indirectly, either for himself,
or
on behalf of any other business enterprise, directly or indirectly, under any
circumstance (i) solicit for employment any person who is employed by the
Company or any Subsidiaries during the period of Executive’s service to the
Company, (ii) induce any person who is employed by the Company to terminate
his
or her employment with the Company or any Subsidiaries, or (iii) call on,
solicit, or take away any person or entity who or which is a customer of the
Company or any Subsidiaries.
(c)
It
is
expressly agreed by Executive that the nature and scope of each of the
provisions set forth above in this Section 11 is reasonable and necessary.
If,
for any reason, any aspect of the above provisions as it applies to Executive
is
determined by a court of competent jurisdiction to be unreasonable or
unenforceable, the provisions shall only be modified to the minimum extent
required to make the provisions reasonable and/or enforceable, as the case
may
be.
(d)
This
Section 11 and Sections 12 and 13 hereof (and Sections 14 through 22 hereof
as
they may apply to such Sections) shall survive the expiration or termination
of
this Agreement for any reason.
| 12. |
Confidentiality
|
Executive
acknowledges that during the Term, he may have access to and be entrusted with
confidential information concerning the present and contemplated financial
status and activities of the Company, the disclosure of any of which
confidential information to competitors of the Company would be highly
detrimental to the interests of the Company. The Parties further acknowledge
and
agree that the right to maintain the confidentiality of such information
constitutes a proprietary right that the Company is entitled to protect.
Accordingly, Executive covenants and agrees with the Company that he will not,
both during the Term and thereafter, disclose any of such confidential
information to any person, firm or corporation, nor shall it make use of such
information, except as required in the normal course of service hereunder or
as
required by law or judicial process. For purposes of this Section 12,
“confidential information” shall not include any information which is generally
available to the public or which hereafter becomes generally available to the
public other than as a result of breach of the obligation under this Section
12.
6
| 13. |
Company
Property
|
(a)
Any
patents, inventions, discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Executive in the course
of
Executive’s service under this Agreement and which pertain to any aspect of the
Company’s or Subsidiaries’ business shall be the sole and absolute property of
the Company, and Executive shall promptly report the same to the Company and
promptly execute any and all documents that may from time to time reasonably
be
requested by the Company to assure the Company the full and complete ownership
thereof.
(b)
All
records, files, lists, including computer generated lists, drawings, documents,
equipment and similar items relating to the Company’s business which Executive
shall prepare or receive from the Company shall remain the Company’s sole and
exclusive property. Upon termination of this Agreement, Executive shall promptly
return to the Company all property of the Company in its possession. Executive
further represents that it will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to the Company. Executive additionally represents that, upon
termination of this Agreement, Executive will not retain in its possession
any
such software, documents or other materials.
| 14. |
Equitable
Relief; Remedies
|
Executive
acknowledges that a breach of any of the terms of Sections 11, 12 and 13 hereof
may result in damages to the Company and it Subsidiaries for which there shall
be no adequate remedy at law. Accordingly, in the event of any breach of any
of
the provisions of Sections 11, 12 and 13 hereof, the Company shall be entitled
to equitable relief by way of injunction or otherwise in addition to any damages
which the Company may be entitled to recover. The rights and remedies of the
Company under this Agreement are cumulative and not alternative.
|
15.
|
Severability
|
Each
paragraph of this Agreement shall be and remain separate from and independent
of
and severable from all and any other paragraphs herein except where otherwise
indicated by the context of the Agreement. The decision or declaration that
one
or more of the paragraphs are null and void shall have no effect on the
remaining paragraphs of this Agreement. If any of the covenants set forth in
Sections 11, 12, and 13 of this Agreement are held to be unreasonable,
arbitrary, or against public policy, such covenants will be considered divisible
with respect to scope, time, and geographic area, and in such lesser scope,
time
and geographic area, will be effective, binding and enforceable against the
Parties.
7
|
16.
|
Successors
and Assigns, Assignment and Intended
Beneficiaries
|
Neither
this Agreement, nor any of Executive’s or the Company’s respective rights,
powers, duties or obligations hereunder, may be assigned or delegated by
Executive or the Company. This Agreement shall be binding upon and inure to
the
benefit of Executive and his successors and the Company and its successors.
Successors of the Company shall include, without limitation, parents or
Subsidiaries, any corporation or corporations acquiring, directly or indirectly,
all or substantially all of the assets or stock of the Company, whether by
merger, consolidation, purchase, lease or otherwise, and such successor shall
thereafter be deemed the “Company”
for
the
purpose hereof.
| 17. |
Notices
|
Except
as
otherwise expressly provided, any notice, request, demand or other communication
permitted or required to be given under this Agreement shall be in writing,
shall be sent by one of the following means to Executive and the Company at
the
addresses set forth below (or to such other address as shall be designated
hereunder by notice to the other Parties and persons receiving copies, effective
upon actual receipt), and shall be deemed conclusively to have been given:
(a)
on the first business day following the day timely deposited with Federal
Express (or other equivalent national overnight courier) or United States
Express Mail, with the cost of delivery prepaid or for the account of the
sender; (b) on the fifth business day following the day duly sent by certified
or registered United States mail, postage prepaid and return receipt requested;
or (c) when otherwise actually received by the addressee on a business day
(or
on the next business day if received after the close of normal business hours
or
on any non-business day).
If
to the
Company:
Measurement
Specialties, Inc.
0000
Xxxxx Xxx
Xxxxxxx,
Xxxxxxxx 00000
Attn:
Chief Financial Officer
with
a
copy to:
Hunton
& Xxxxxxxx LLP
Bank
of
America Plaza
000
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxxxxx, Xx.
Fax:
(000) 000-0000
8
If
to
Executive:
Xxxxx
Xxxxxxx, at the address listed for the Executive in the Company’s payroll
records.
| 18. |
Governing
Law/Venue
|
The
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New Jersey without giving effect to conflicts of
laws principles thereof. Any disputes or controversies arising under this
Agreement shall be resolved exclusively by the state or federal courts located
in the State of New Jersey and each of the Parties hereto consents to the
exclusive jurisdiction of such courts in connection with the subject matter
hereof.
|
19.
|
Interpretation/Headings
|
The
Parties acknowledge and agree that the terms and provisions of this Agreement
have been negotiated, shall be construed fairly as to each of the Parties
hereto, and shall not be construed in favor of or against any Party. The section
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
| 20. |
Miscellaneous
|
The
provisions of this Agreement shall not be extended, varied, changed, modified
or
supplemented other than by agreement in writing signed by the Parties hereto.
There are no other terms or conditions, representations or understandings except
as herein set forth. The failure of either Party to enforce at any time or
for
any period of time any one or more of the provisions hereof shall not be
construed to be a waiver of such provisions or of the right of such Party
thereafter to enforce each such provision.
| 21. |
Counterparts
|
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute a single
instrument.
| 23. |
Entire
Agreement
|
This
Agreement contains the entire understanding between the Parties hereto and
supersedes any prior or contemporaneous written or oral agreements,
representations and warranties between them respecting the subject matter
hereof, including, but not limited to, the Engagement Agreement and the
Noncompetition Agreement.
9
IN
WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed
as
of the date first written above.
|
MEASUREMENT
SPECIALTIES, INC.
|
||
| |
|
|
| By: | ||
|
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
|
||
| Xxxxx Xxxxxxx | ||
10
