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EXHIBIT 8
FUSION SYSTEMS CORPORATION
EMPLOYMENT AGREEMENT
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TABLE OF CONTENTS
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Basic Employment Statement
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Paragraph
1. Employment.....................................................1
Transactions that Activate Severance Protection
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2. Change in Control..............................................1
3. SBU Change in Control..........................................2
Terms and Benefits of Employment
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4. Term of Employment.............................................2
5. Compensation...................................................2
6. Employee Benefits..............................................2
7. Reimbursement of Expenses......................................2
Severance Benefits
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8. Termination Compensation and Benefits..........................3
9 Other Employment
Events and Conditions that Can Trigger Severance Benefits
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10. Termination by Company Without Cause Following a
Change in Control ............................................4
11 Termination by You.............................................4
12. Termination by Company for Cause Following a Change in Control.5
13. Termination of Employees Affected By a Change in Control.......6
14. Notice of Termination..........................................6
Obligations of Employee
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15. Duty to Perform Services.......................................7
16. Patents and Inventions.........................................7
17. Non-Disclosure and Return of Confidential Information..........8
18. Non-Competition................................................9
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Remedies
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19. Injunctive Relief and Damages..................................9
20. Arbitration of Disputes........................................10
21. Legal Fees.....................................................10
Other Items
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22. Successor; Binding Agreement; Asset Sale Escrow................11
23. Disability and Death...........................................11
24. Notice of Termination..........................................12
25. Notices........................................................12
26. Withholding....................................................12
27. Assignment.....................................................12
28. Enforceability.................................................13
29. Waiver.........................................................13
30 Amendment......................................................13
31 Governing Law..................................................13
32. Entire Agreement...............................................13
Exhibits and Addenda
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Incentive Plan....................................................Exhibit 1
Description of Duties.............................................Addendum A
Definitions.......................................................Addendum B
Employee Benefits.................................................Addendum C
Prior inventions of Employees.....................................Addendum D
List of Products Subject to Non-Competition Agreement.............Addendum B
Confidential Information..........................................Addendum F
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EMPLOYMENT AGREEMENT
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WHEREAS, You, XXXXXX X. XXXXXX, and Fusion Systems Corporation ("Fusion"
or "the Company") desire to enter into a new employment agreement ("Agreement")
under the terms set forth below; and
WHEREAS, in order to promote your continued undivided attention to your
duties, Fusion wants to assure you of financial protection (severance) if there
should occur a Change in Control ("Change in Control"), as defined below and
your employment is terminated under certain circumstances;
NOW, THEREFORE you and Fusion agree this 8th day of March, 1993
("Agreement Effective Date"), as follows:
1. EMPLOYMENT. You are employed by Fusion, full-time, in the position of
President, described in Addendum A. You will carry out such duties and
responsibilities consistent with that position as may be assigned by
Company executives.
2. CHANGE IN CONTROL. A Change in Control for the purpose of this Agreement
is defined as:
a. a transaction or series of transactions in which any one person
(other than an existing stockholder) , or more than one person
acting as a group (excluding for this purpose existing
stockholders, to the extent they participate in such a group),
acquires during any 12-month period more than fifty percent of
the total voting power of Fusion's stock;
b. a change in ownership of all or substantially all of the assets
of Fusion;
c. a merger, consolidation or other reorganization where Fusion is
not the surviving entity.
d. a change of membership of a majority of the Board of Directors
(currently Atwater, Coulter, Hughes, Levine, Morgan, Mottu,
Xxxxxxx).
For the purpose of this Agreement, the effective date of a Change in
Control ("Change in Control Date") is thirty days prior to the effective
date of the transaction on which the Change in Control is based.
3. SBU CHANGE IN CONTROL. An "SBU Change in Control" is defined as any
Change in control as it would apply to the sale or transfer of an
individual Fusion "strategic business unit" ("SBU"), as defined in
Addendum B. For the purpose of this Agreement, the effective date of an
SBU Change in Control ("SBU Change in Control Date") is thirty
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days prior to the effective date of the transaction on which the SBU
Change in Control is based.
4. TERM OF EMPLOYMENT. As an at-will employee, you may terminate your
employment at any time for any reason, upon two weeks' prior notice to
Fusion. Fusion may terminate your employment at any time for any reason,
subject to any obligation it has to pay you termination compensation and
benefits expressly set forth in Paragraph 8 ("Termination and
Compensation Benefits"). Nothing contained herein shall be deemed to
create an agreement for a term of employment or to alter your status as
an at will employee. Fusion's obligation to pay you or continue your
compensation benefits following your separation from employment, for any
reason, is strictly limited to the specific terms of this Agreement.
5. COMPENSATION. As of the Agreement Effective Date, Fusion will pay you
bi-weekly a salary computed at the rate of $144,000 per year or at such
other rate as may in the future be determined by the Company ("Base
Pay"). Any future changes in your Base Pay will become a term of this
Agreement. You are also entitled to incentive, bonus and/or commission
compensation ("Incentive Compensation") under the Incentive Plan
attached hereto as Exhibit 1.
6. EMPLOYEE BENEFITS. You are entitled to employee benefits, described in
Addendum C, which are subject to change at the sole discretion of
Fusion.
7. REIMBURSEMENT OF EXPENSES. You will. be reimbursed by Fusion for
authorized business expenses upon presentation and approval by Fusion of
receipts and other supporting documents.
8. TERMINATION COMPENSATION AND BENEFITS. The following Termination
Compensation and Benefits, or a portion thereof, will be provided to you
commencing on the date of the termination of your employment following a
Change in control, if you are terminated under the conditions set forth
in Paragraphs 9, 10 or 12:
a. Continuation of Base Pay for a period equal to one month for
each $5,000 of Base Pay to a maximum of twenty-four months,
which sum shall be paid bi-weekly;
b. Incentive Compensation in accordance with Exhibit 1 for the
pro-rata portion of the year employed, to be paid in a lump sum
within thirty days of termination;
c. Payment to you monthly in cash the amount of health, life, and
disability insurance premium Fusion would have paid on your
behalf had you been employed during the payment period in
Paragraph 8(a). If you are continuing health insurance under the
Fusion plan, Fusion may pay the premium directly to the plan;
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d. Payment for full executive outplacement to a maximum of fifteen
percent of Base Pay and Incentive Compensation paid during the
twelve months prior to your termination, or payment to you of
said amount.
9. Other Employment.
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a. You shall not be required to attempt to reduce the amount of any
payment provided for in Paragraph 8 by seeking other employment;
b. If you obtain, during the payment period under Paragraph 8, new
employment comparable in duties to your position with Fusion, or
from which you earn or reasonably expect to earn in a
twelve-month period eighty percent of your base Pay plus
Incentive Compensation paid during the twelve months prior to
your termination, the amounts remaining payable by Fusion under
Paragraph 8 will be reduced to:
i. your unreimbursed relocation expenses, if any, in
connection with the new employment, not to exceed the
amount remaining, to be paid under Paragraph 8; and
ii. one-half of the amount remaining to be paid under
Paragraph 8 after payment of any unreimbursed relocation
expenses under Paragraph 9.b.i.
10. TERMINATION BY COMPANY WITHOUT CAUSE FOLLOWING A CHANGE IN CONTROL. For
three years following the Change in Control Date, your employment may be
terminated by Fusion without cause, on written notice to you. In such a
case, you will receive Termination Compensation and Benefits from
Fusion.
11. Termination by You.
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a. For three years following the Change in Control Date, you may
terminate your employment with Fusion by written notice to the
President of Fusion if there is a Significant Change, as
specifically defined below, in the nature or scope of your
responsibilities, powers, duties or the terms and conditions of
your employment; provided that you first give written notice to
the President of the Significant Change and Fusion fails to take
reasonable steps within fifteen working days to effect a prompt
remedy. In such case, you will receive Termination Compensation
and Benefits from Fusion. A Significant Change is:
i. during a twelve-month period a twenty-five percent
increase in your overnight travel over the year period
prior to the Change in Control, except that any employee
may be required to travel a minimum of two overnights
per month;
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ii. an assignment of duties inconsistent with your status
and/or position prior to the Change in Control;
iii. assigning you to work at a facility beyond a 30-mile
radius of the present location of Fusion, regardless of
the reason therefor;
iv. reduction in your Base Pay or any change in sales
territory or Incentive Compensation structure that
results in a reduction in your total income by twenty
percent or more; except that a reduction in Incentive
Compensation caused by adverse business conditions shall
not be considered a Significant Change;
v. the failure by Fusion to obtain a satisfactory agreement
from any successor to assume and agree to perform this
Agreement, as contemplated in Paragraph 22;
vi. in the event of an asset sale, the failure of Fusion to
escrow an amount of funds sufficient to cover potential
Termination Compensation and Benefits due under
Paragraph 8, unless the successor to the assets agrees
to assume and perform this Agreement, as contemplated in
Paragraph 22; and
vii. failure to reelect you to a position as a corporate
officer in which your authority and duties are
substantially the same as in the position that you held
prior to the Change of Control.
b. You must provide written notice of your claim of Significant
Change within 45 days of the date you know or reasonably should
have known of the Significant Change in order to reserve your
rights to Termination Compensation and Benefits pursuant to
Paragraph 8.
c. Your waiver of your rights with respect to any one Significant
Change shall not constitute a waiver as to any subsequent
Significant Change.
12. Termination by Company for Cause Following a Change In Control.
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a. For three years following the Change in Control Date, your
employment may be terminated by Fusion for Cause, as defined
below, and you will not be entitled to Termination Compensation
or Benefits or any other severance allowance:
b. "Cause" is limited to:
i. deliberate dishonesty with respect to Fusion;
ii. conviction of a felony or crime of moral turpitude;
iii. gross and willful failure to perform a substantial
portion of your duties or responsibilities after written
notice thereof and failure to remedy within thirty days;
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iv. possession, use, or being under the influence of illegal
drugs or alcohol on Company property;
v. possession of weapons on Company property, unless
authorized in writing by the Company;
vi. sexual harassment or other employment discrimination
prohibited by law;
vii. breach of Paragraphs 17 or 18 of this Agreement.
13. TERMINATION OF EMPLOYEES AFFECTED BY AN SBU CHANGE IN CONTROL. In the
event of an SBU Change in Control, your rights to Termination
Compensation and Benefits are as follows:
a. If during the eighteen months after the SBU Change in Control
Date:
i. your employment with the remaining Fusion entity is
terminated due primarily to lack of work resulting
primarily from the SBU Change in Control; or
ii. there is a Significant Change in your employment under
Paragraph 11, you will be entitled to Termination
Compensation and Benefits.
b. If you are offered employment by the entity that purchases or
controls the assets of the SBU and such entity agrees to adopt
and perform this Agreement in place of Fusion, Fusion will have
no further obligations to you under this Agreement
14. Notice of Termination.
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a. Prior to a Change in Control Date or SBU Change in Control Date,
Fusion may terminate your employment at any time for any reason;
b. At all times, you must give two weeks written notice of your
resignation in order to be paid your accrued leave.
15. DUTY TO PERFORM SERVICES. You will devote your full business and
productive time, ability, and attention to rendering services to Fusion,
and exert your best efforts in doing so. This provision does not
prohibit you from:
a. making passive investments;
b. engaging in religious, charitable or other community or
non-profit activities which do not impair your ability to
fulfill your duties and responsibilities under this Agreement;
and
c. serving with Fusion's approval, on the board of directors of any
company, subject to the prohibitions set forth in Paragraphs 17
- 18 and provided that you shall not
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render any material services with respect to the operations or
affairs of any such company.
You will comply with all policies and procedures established by Fusion
from time to time, except to the extent that they materially diminish
your rights hereunder.
16. Patents and Inventions. You agree:
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a. to promptly and fully disclose to Fusion in writing, every idea,
invention, product, process, apparatus, design, development,
discovery, improvement or trademark related to Fusion's business
operations, whether patentable or not, which you conceive, make
or develop, individually or jointly, during business hours or
otherwise, during the term of this Agreement or during the
one-year period thereafter;
b. on request, to assign to Fusion or its nominee title to such
ideas, inventions and discoveries and all United States and
foreign patents, trademarks or similar rights concerning those
ideas, inventions and discoveries;
c. without expense to yourself, to cooperate fully with Fusion in
applying for and securing in the name of Fusion, or its nominee
patent, trademark or similar rights in such ideas, inventions
and discoveries in each country in the world in which Fusion may
desire to secure such rights, including renewals, amendments and
reissues;
d. to execute promptly all appropriate documents presented to you
for signature by Fusion to enable Fusion, or its nominee, to
secure or transfer legal title to such ideas, inventions or
discoveries or any patents, trademarks or similar rights;
e. without expense to yourself, to give true information and
testimony (under oath if requested) as may be required to
protect the interest of Fusion relative to the ideas, inventions
and discoveries conceived, made or development by you or by any
other person concerning which you had knowledge by reason of
your employment with Fusion;
f. that the list attached as Addendum D identifies every invention,
product, process, apparatus, design or improvement, and all
patents, trademarks or other similar rights if any, in which you
personally held an interest prior to your employment by Fusion
and which are not subject to this Agreement; and
g. that the obligations of this Paragraph 16, shall be binding upon
you, your heirs, legal representatives, and assigns.
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17. Non-disclosure and Return of Confidential Information.
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a. Without Fusion's written consent, you will not disclose or use
at any time during or after your employment Confidential
Information, as defined in Addendum B, of which you become
informed during employment by Fusion whether or not developed by
you; Provided, however, that this paragraph shall not restrict
such disclosures or use as is required in the performance of
your duties to Fusion.
b. Upon termination of this Agreement, you will promptly deliver to
Fusion all drawings, blueprints, software, process
documentation, manuals, customer lists, employee lists, agent
lists, letters, notes, notebooks, reports, models and
prototypes, and any other materials containing Confidential
Information and which are in your possession or control.
18. Noncompetition.
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a. During the term of your employment and for two years following
your separation from employment with Fusion, regardless of the
reason therefor, you will not without Fusion's prior written
consent, participate in or be connected with, as an officer,
employee, partner, agent, sole proprietor, owner, consultant,
licensor, or otherwise, any business in which you and/or the
business are actively involved in research, development,
manufacturing or sale of any product or category of product as
listed in Addendum E, or any service which involves maintenance,
repair, redesign, or other activity associated with any product
or category of product listed in Addendum E. Fusion reserves the
right upon written notice to you to supplement the definition of
Products with additional items as the nature of its businesses
shall reasonably dictate.
b. You will be permitted to engage in such competitive employment
or activity described in Paragraph 18 (a) if you furnish to
Fusion evidence, including assurances from you and your new
employer, that the fulfillment of your duties in such proposed
employment or activity would not likely cause you to disclose or
use any Confidential Information of Fusion and such evidence is
found satisfactory by Fusion in its sole judgment and
discretion.
19. INJUNCTIVE RELIEF AND DAMAGES. You recognize that if you breach
Paragraphs 17 or 18 of this Agreement, it will not be possible to
calculate resulting damages and Fusion will suffer immediate,
substantial and irreparable harm. Therefore, in such a case, Fusion will
be entitled to obtain an injunction in any competent court restraining
your further breach of Paragraph 17 or 18, and will be entitled to
collect from you its reasonable attorney's fees and costs if it is
successful in obtaining the injunction. In addition, if you breach
Paragraphs 17 or 18, you will lose any rights you have or may have had
to Termination Compensation and Benefits. If the court determines that
you have breached Paragraph 17, you will pay damages to Fusion caused by
or related to your actions. If the court determines that you have
breached Paragraph 18, you will pay Fusion $500 per calendar
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day as liquidated damages from the first day of the breach to the date
of the injunction. You further agree to jurisdiction and venue in the
Federal District Court of Maryland or the Circuit Court of Xxxxxxxxxx
County, Maryland.
20. Arbitration of Disputes.
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a. Except as provided in Paragraphs 19 and 21, all disputes under
this Agreement are subject to exclusive and binding arbitration
under The Model Employment Arbitration Procedures of the
American Arbitration Association;
b. During the arbitration process, Fusion will advance fifty
percent of the expenses, costs, and fees of arbitration. Said
expenses, costs, and fees will be shared equally by you and
Fusion; except that the losing party will pay to the prevailing
party a maximum of ten percent of the amount of Termination
Compensation and Benefits claimed to be due, to cover such fees,
expenses, costs and reasonable attorney's fees incurred by the
prevailing party;
c. Limited Arbitration Remedies -- the arbitrator's authority as to
remedies is specifically and exclusively limited to awarding or
not awarding Termination Compensation and Benefits as provided
for in Paragraph 8, plus the percentage of fees, costs, and
expenses provided in Paragraph 20(b). The arbitrator may also
set forth a specific schedule for payment and award interest at
the legal rate from the date any Termination Compensation and
Benefits should have been paid under this Agreement;
d. You may not seek any other damages or remedy to enforce your
rights under the Agreement, except as provided in Paragraph 21.
e. All arbitration decisions will be confidential and will not
serve as precedent in future arbitrations concerning the terms
of this Agreement.
21. LEGAL FEES. If either party fails to comply with the terms of an
arbitration award, the other may bring legal action to enforce the
award. In such case, the losing party will pay reasonable legal fees and
expenses incurred by the prevailing party.
22. Successor; Binding Agreement; Asset Sale Escrow.
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a. Fusion will attempt to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
the stock and/or assets of Fusion under circumstances resulting
in a Change in Control to expressly assume and agree to perform
all of Fusion's obligations under this Agreement in place of
Fusion. Failure of Fusion to obtain such agreement within thirty
days after a Change in Control Date shall be a breach of this
Agreement and shall entitle you to Termination Compensation and
Benefits from Fusion in the same amount and on the same terms as
if your employment were terminated pursuant to Paragraph
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10(a). For purposes of implementing the foregoing, thirty days
after the Change in Control Date shall be deemed the date of
termination.
b. In the event of an asset sale of Fusion or an SBU, if the
successor fails to assume and agree to perform this Agreement in
place of Fusion, Fusion will escrow an amount of funds from the
sale sufficient to pay Termination Compensation and Benefits
which may become payable in the future. Said escrow funds may
thereafter be released by Fusion to the extent that funds
sufficient to cover Termination Compensation and Benefits which
may become payable in the future remain in escrow. Fusion shall
take reasonable and prudent steps to assure the financial
security and trusteeship for such escrow funds and shall make
available to you at least annually, and at any other time as
conditions reasonably warrant, a report by the trustee as to the
adequacy of such escrow to cover potential Termination
Compensation and Benefits and the financial security of the
funds.
c. If a successor assumes and agrees to perform this Agreement in
place of Fusion, all your obligations, duties, and liabilities
to Fusion shall become obligations, duties, and liabilities to
the successor and all your rights in relation to Fusion shall
become rights in relation to the successor.
23. Disability and Death.
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a. If during your employment you become disabled and entitled to
disability benefits under the long-term disability insurance
policy maintained for you by the Company, Fusion may terminate
your employment as of the date such disability benefits first
become payable by giving you written notice. Said termination
will not entitle you to any Termination compensation or
Benefits.
b. This Agreement shall inure to the benefit of and be enforceable
by your representatives, executors, administrator, successors,
heirs, distributes, devisees and legatees. If you should die
while any compensation or health insurance benefits would still
be payable to you hereunder if you had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to your devise,
legatee or other designee or, if there is no such designee, to
your estate. Unless you specify otherwise in writing, your
designee shall be the beneficiary of your Fusion life insurance
policy.
24. NOTICE OF TERMINATION. Any termination by Fusion or by you shall be
communicated to the other party by a written "Notice of Termination." A
Notice of Termination shall state the specific provision in this
Agreement relied upon and set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your
employment.
25. NOTICES. Any notices and other communications provided for herein shall
be sufficient if in writing and delivered in person or sent by certified
mail to you at
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the last address you have filed in writing with Fusion or, in the case
of Fusion, at its main office, attention of the President, with a copy
to Xxxxxxx X. Xxxxxx, Esq., 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000 or such other legal counsel as the Company may designate in
writing.
26. WITHHOLDING. All payments made by Fusion under this Agreement shall be
net of any tax or other amounts required to be withheld under applicable
law.
27. ASSIGNMENT. Neither Fusion nor you may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other party, except that this
Paragraph shall not affect Fusion's right to assign this agreement to
any successor contemplated in Paragraph 22.a. and b. of this Agreement.
This Agreement shall inure to the benefit of and be binding upon Fusion,
you, your and Fusion's respective successors, executors, administrators,
heirs, and assigns.
28. ENFORCEABILITY. If any portion or provision of this Agreement is
declared illegal, invalid or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law. Paragraphs 17 -
19 remain in effect regardless of any claimed breach of this Agreement.
29. WAIVER. No waiver of any provision hereof shall be effective unless made
in writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this Agreement,
or the waiver, by either party of any breach of this Agreement, shall
not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach.
30. AMENDMENT. This Agreement may be amended or modified only by a written
instrument signed by you and by a duly authorized representative of
Fusion, except that if within three years from the Agreement Effect Date
there has not occurred a Change in Control, or an SBU Change in Control
that potentially affects you, the Company may unilaterally amend or
eliminate your rights to Termination Compensation and Benefits at any
time thereafter by providing written notice to you.
31. GOVERNING LAW. This Agreement shall be construed under and be governed
in all respects by the laws of Maryland, including but not limited to
the Arbitration and Award provisions of the Maryland Code, Courts and
Judicial Proceedings.
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32. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements and
understandings between you and Fusion, constitutes the entire agreement
between the parties, and may not be modified or terminated orally;
provided that you are subject to Fusion's written polities and
procedures which are in effect and may be modified at the discretion of
Fusion to the extent they do not materially diminish your rights
hereunder.
SO AGREED:
Employee Fusion Systems Corporation:
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxx
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Signature Signature
Xxxxxx X. Xxxxxx Xxxx Xxxxxxx
------------------------------------ -----------------------------------
Type Name Type Name
V.P. Quality
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Title
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Exhibit 1 to Employee Agreement 100
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Senior Executive Incentive Compensation
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1. SENIOR EXECUTIVES for the purpose of this Plan, include the officers of
the Company and other managers specifically added by the President.
2. INCENTIVE POOL is an amount of compensation reserved, to be paid before
March 15 after the completion of a fiscal year, to Senior Executives.
The amount is determined annually by the Board of Directors at the
recommendation of the Finance Committee of the Board and the President.
Historically, it has been about 7.3 to 7.4% of pretax profit (before
deduction of incentive pool accrual) during the past fiscal year.
3. INCENTIVE COMPENSATION is the amount drawn from the Incentive Pool, paid
to each of the Senior Executives. It is determined, in general terms, by
the Board through its Finance Committee, and in detail by the President
(for all the other Senior Executives). It is based on the performance of
the individual Executive, by the financial performance of the business
unit for which he is responsible, and by the general performance of the
company. The President recommends amounts to the Finance Committee which
may approve them; the Committee recommends Incentive Compensation for
the President.
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ADDENDA
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A. Description of President position:
- Overall responsibility for the direction management and
performance of Fusion Systems Corporation;
- Responsibility for recruitment and supervision of other officers
of the Corporation;
- Responsibility for representing the Company and its management
to the Board of Directors and Shareholders.
