Exhibit 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 21st day of August, 1995
("Agreement"), by and among IMT ACQUISITION CORP., a Delaware corporation (the
"Company"), APOLLO HOLDING, INC., a Delaware corporation ("Apollo") and XXXXXX
X. XXXXXXXX, an individual (the "Executive").
WITNESSETH:
WHEREAS, Apollo and the Company have entered into the Agreement and Plan of
Merger dated as of April 6, 1995 (the "Merger Agreement") with Intermetrics,
Inc., a Delaware corporation ("Intermetrics"), pursuant to which, among other
things, the Company will merge (the "Merger") with and into Intermetrics and the
holders of the then outstanding shares of the common stock of Intermetrics will
receive a price of $6.80 per share.
WHEREAS, Apollo and the Company (references hereinafter to Company include
the Surviving Corporation as defined in the Merger Agreement) wish to retain the
services of the Executive as President of the Company and the Executive is
willing, upon the terms and conditions herein set forth, to serve as President
of the Company.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained in this Agreement, the Company and the Executive, intending
to be legally bound hereby, agree as follows:
1. Employment; Purchase of Apollo Common Stock.
(a) Subject to the terms and conditions hereinafter set forth, Apollo
and the Company hereby each employ the Executive as President of Apollo and
the Company, and the Executive hereby accepts such employment.
(b) Executive shall have the right to acquire up to 36,000 shares of
Class A Common Stock ("Common Stock") at a price of $6.25 per share or a
total of $225,000, either through cash purchases or an exchange of shares
of common stock of Intermetrics for shares of Class A Common Stock of
Apollo in connection with the capitalization of Apollo immediately prior to
the effectiveness of the Merger. The Executive agrees to execute the
Subscription and Stockholders Agreement dated as of August 21, 1995, among
Apollo and its stockholders (the "Stockholders Agreement").
2. Term. The term of employment of the Executive by the Company pursuant to
this Agreement (the "Employment Term") shall commence with the Closing Date (as
defined in the Merger Agreement) ("Commencement Date"), and shall terminate upon
the
earlier of (a) the second anniversary of the Commencement Date or (b) the date
on which the employment of the Executive hereunder is terminated pursuant to
Section 7 hereof. The Employment Term shall be automatically renewed for
successive one-year periods unless terminated by either Executive or the
Company upon at least 90 days written notice prior to the end of the initial
term or any successive one-year term.
3. Duties and Authority. During the Employment Term, the Executive shall
render his services to the Company as President of the Company. In addition to
the foregoing, the Executive shall hold, without additional compensation
therefor, a seat on Apollo's and the Company's Board of Directors, and such
other offices, directorships or memberships on committees of Apollo and/or any
direct or indirect subsidiary of Apollo to which, from time to time during the
Employment Term, the Executive may be elected or appointed. During the
Employment Term, the Executive shall devote his full business time, efforts,
energy and skill solely to the business of the Company in accordance with the
reasonable directions and policies of the Board of Directors of Apollo and the
Company in accordance with Executive's talent, skill and experience in a prudent
manner and will use his best efforts to promote the interests thereof.
4. Compensation.
(a) Base Salary. In consideration of the services to be rendered by
the Executive pursuant to this Agreement, including, without limitation,
any services which may be rendered by the Executive as an officer, director
or member of any committee of Apollo or any direct or indirect subsidiary
of Apollo, the Company shall pay or cause to be paid to the Executive
during the Employment Term, and the Executive shall accept, compensation at
the rate of two hundred and thirty hundred thousand dollars ($230,000.00)
per annum (the "Base Salary") or such greater amount as may be approved
from time to time by the Board of Directors of the Company, in its sole
discretion. The Company's obligation to pay Base Salary shall begin to
accrue on the Commencement Date and shall be payable in accordance with the
standard payroll practices of the Company which are in effect from time to
time during the Employment Term. The Executive's Base Salary shall be
subject to all applicable withholding and other taxes.
(b) Performance Options. Apollo hereby issues Executive options
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("Performance Options") to purchase up to an aggregate maximum of 25,440
shares of Class D Common Stock (the "Maximum Option Shares"), which is
equal to 3% of the Common Stock outstanding at the time of the Merger, at
the Option price of $6.25 per share ("Option Price") which are exercisable
if the terms and conditions set forth below in this subsection (b) are
satisfied. The Performance Options shall be granted for a
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ten-year period commencing on the Commencement Date, and shall become
exercisable if, subject to Section 4(d), the Executive is employed by the
Company on the date of the Performance Options become exercisable, after the
Company's receipt of its audited financial statements for a relevant fiscal year
date and if:
(1) (A) For each fiscal period from the Closing commencing with
the period from Closing to the end of Apollo's 1997 fiscal year
(2/28/97), and ending at the end of Apollo's 2001 fiscal year
(2/28/01), (although Executive shall have a period of 90 days thereafter
to exercise the Performance Options) Executive shall be entitled to
exercise Performance Options to purchase 5,088 shares, which is equal
to .6% of the Common Stock outstanding at the time of the Merger, of
Common Stock at the Option Price per share if Apollo achieves the annual
earnings ("Annual Earnings") and cumulative earnings ("Cumulative
Earnings") targets set forth on Schedule 1 of this Agreement; or
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(B) For each fiscal year from the Closing commencing with
the end of Apollo's 1997 fiscal year (2/28/97), and ending 90 days after
the end of Apollo's 2001 fiscal year (2/28/01), in which Performance
Options do not become exercisable by the Executive pursuant to the
preceding subparagraph (A), the Board of Directors of Apollo shall have
the full and complete discretion to permit exercises by the Executive of
Performance Options to purchase 1,272 shares, which is equal to .15% of
the Common Stock outstanding at the time of the Merger, of the Common
Stock at the Option Price per share.
(ii) Subject to Section 4(d) (which is applicable if Executive's
employment is terminated, other than due to the expiration of the term
of this Agreement, prior to an Exit Event), upon the occurrence of an
Exit Event (as defined below), irrespective of when such event occurs,
if (x) the Cumulative Earnings targets set forth on Schedule 1 to this
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Agreement up to the date when the Exit Event occurs have been achieved,
or (y) the Exit Event conditions set forth in Section 4(b) (vi) (x) and
(y) are met, the Executive shall be entitled to exercise Performance
Options to purchase the Maximum Option Shares (after deducting the
number of Performance Options previously exercised pursuant to
subsection 4(b), such adjusted number being referred to herein as the
"Adjusted Maximum Option Shares") at the Option Price per share.
(iii) Within 90 days after termination of Apollo's 2001 fiscal
year, if the Cumulative Earnings target set forth on Schedule 1 to this
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Agreement has been achieved, the Executive shall be entitled to exercise
Performance Options to purchase the Adjusted Maximum Option Shares at
the Option Price per share, provided, however, that the foregoing shall
not apply if the Executive's employment has been terminated for Cause or
if Executive voluntarily terminates employment prior to the fifth
anniversary of the Commencement Date. This provision shall apply if the
Executive's employment is terminated pursuant to Sections 7(a), 7(b) or
7(c).
(iv) For purposes of this Agreement, "Exit Event" shall mean (A)
(I) the sale, in a single transaction or series of related transactions,
of 50.01% or more of the consolidated assets of the Company generating
50.01% of the consolidated revenues (including Intermetrics, as
successor by merger) or (II) after September 30, 1995, a change of
50.01% or more in the beneficial ownership of the outstanding Common
Stock of Apollo or in the Company on September 30, 1995 (other than
changes in beneficial ownership because of transfers of Common Stock of
Apollo to Permitted Transferees as defined in the Stockholders
Agreement or pursuant to Section 5.11 of the Stockholders Agreement),
(B) the merger or consolidation of Apollo or the Company with another
company where Apollo or the Company is not the surviving entity or where
the shareholders of Apollo or the Company prior to the merger or
consolidation do not own such number of shares of the surviving entity
as is sufficient to control the surviving entity, or (C) a public
offering is completed which results in aggregate gross proceeds of sale
of at least $18,750,000, and the Company's or Apollo's outstanding
Common Stock having an aggregate market valuation of at least
$75,000,000 or the Company or Apollo has a class of common stock
registered under the Securities Exchange Act of 1934 and the conditions
set forth in Section 4(b) (vi) (x) and (y) have been met ("Public
Offering").
(v) For purposes of this Section 4(b), Annual Earnings and
Cumulative Earnings shall be computed based upon the guidelines set
forth in Schedule 1 to this Agreement.
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(vi) At the time of an Exit Event, the following conditions must
be met for the purposes of Section 4(b) (ii) (y):
(x) the internal rate of return to the holders of Apollo's
Common Stock who purchased at the Closing (the "Original
Holders") exceeds 40% in the aggregate, after dilution for
exercise of warrants and vested options issued by Apollo, based
on the Common Stock issued to all Original Holders at the
Closing; and
(y) the value of the Original Holders' Common Stock is at least
$26.5 million in cash or in value of other consideration, after
dilution for exercise of warrants and vested options issued by
Apollo, net of all expenses of sale (or if some of the shares of
the Original Holders' Common Stock have been redeemed or
repurchased by Apollo prior to the Exit Event and retired and/or
canceled or held as treasury stock, such lower cash or value
number equal to five times the Original Holders' investment in
the shares issued pursuant to the Stockholders Agreement and not
previously redeemed, repurchased or held by Apollo as treasury
stock at the time of the Exit Event).
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(c) Bonuses. The Executive shall be entitled to receive annual cash
bonuses, each in the amount of $30,000, to be paid to the Executive by the
Company on April 1st of each year beginning in 1996, subject to the provisions
of Section 7. In addition, the Executive shall receive additional cash bonuses
payable at the sole discretion of the Board of Directors of the Company and/or
Apollo. Any and all cash bonuses payable hereunder shall be subject to all
applicable withholding and other taxes.
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(d) Adjustment on Termination. In the event that executive is
terminated pursuant to Section 7(b), (c) or (d) of this Agreement prior to an
Exit Event or the term of this Agreement has expired and the Agreement has not
been renewed:
The following shall apply to the Performance Options (Section 4 (b) (i)
and (ii) of this Agreement): the Executive shall be entitled to exercise a pro
rata percentage of the Performance Options under Section 4 (b) (i) and (ii) of
this Agreement (to the extent that such Options would have been earned) for the
full fiscal year in which the Termination Date occurs determined by multiplying
the Adjusted Maximum Option Shares by a fraction, the numerator of which is the
number of fiscal quarters from the Closing to the Termination Date and the
denominator of which is the number of fiscal quarters from Closing to the end of
Apollo's 2001 fiscal year.
With respect to options issued pursuant to Section 4(d), any exercise by
Executive of his put rights under section 5.04, 5.05 or 5.06 of the Stockholders
Agreement, or any exercise by Apollo of its call rights under Section 5.04, 5.05
or 5.06 of the Stockholders Agreement, shall also apply to the same percentage
of Performance Options issued under Section 4(d), except that the issuance date
of such Securities shall be deemed to be the date of exercise of such
Performance Options for purposes of calculating the Redemption Price (as defined
in the Stockholders Agreement).
All Performance Options which become exercisable shall remain vested
whether or not the Executive remains employed by the Company.
(e) Preemptive Rights. The number of Performance Options shall be
subject to the same anti-dilution protections, if any, that all Stockholders of
Apollo may have with respect to shares of common stock of Apollo, as a group, on
a pro rata basis with all Stockholders including, without limitation, pursuant
to Section 5.09 of the Stockholders Agreement. If the number of Performance
Options are adjusted pursuant to this provision, the exercise price of said
options may be adjusted if appropriate to maintain the relative rights of
Executive and the other Stockholders, as determined in good faith by the Board
of Directors of Apollo.
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5. Employment Benefits and Loans. (a) Benefits. During the Employment Term,
the Executive shall be entitled to the following employment benefits
(collectively, the "Benefits"):
(i) five weeks paid vacation in each year of the Employment Term and
sick leave in accordance with the Company's policies from time to time in
effect for executive officers of the Company;
(ii) participation, subject to qualification requirements and provided
Executive meets eligibility requirements, in medical or hospitalization
plans, life insurance policies, dental plans and long-term and short-term
disability policies which are presently in effect or hereinafter instituted
by the Company and applicable to its executive officers generally
("Company-sponsored benefits"); the Company agrees to pay in full for
Executive's coverage under such policies;
(iii) participation, subject to continued maintenance thereof by the
Company and provided Executive meets eligibility and classification
requirements, in other employee benefit plans which are from time to time
applicable to the Company's executive officers generally;
(iv) in addition to the Company's life insurance policies provided to
executive officers, the Company will pay Executive the actual cost of life
insurance premiums up to a maximum of $7,500 per annum for life insurance
obtained by the Company on the life of Executive in the amount of $500,000
payable to beneficiaries designated by Executive; and
(v) the Company shall provide Executive a car in accordance with the
Company's policies with respect to cars.
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Executive agrees to submit to an annual physical examination with a doctor of
his choice, which examination shall take place in the metropolitan Boston or New
York City area (the "Area"), at the Company's expense prior to the execution of
this Agreement with respect to life and disability insurance to be maintained
on Executive by the Company. Each year during which this Agreement is in effect
the Company agrees to pay for one physical examination in the Area with a doctor
of his choice, and the Executive agrees to have such annual physical
examination. The Executive agrees to deliver to the Company pursuant to this
Agreement, copies of any physical examination reports received from the doctor
conducting the examination. The Executive's coverage under the life and
disability insurance policies referenced throughout this Agreement shall be in
force with the insurance company selected by the Company no later than forty-
five (45) days after the Commencement Date or such later date as the Company can
obtain such policies using its best efforts.
6. Expenses. During the Employment Term, the Company will reimburse the
Executive, upon presentation of proper vouchers, for all reasonable travel,
entertainment and other out-of-pocket expenses reasonably and appropriately
incurred by the Executive in the performance of his duties hereunder.
7. Termination.
(a) Cause. The Company may, at any time, and in its sole discretion,
terminate the employment of the Executive hereunder for Cause, effective as
of the date (the "Termination Date") of written notice (the "Termination
Notice") to the Executive specifying the nature of such Cause. For purposes
of this Agreement, "Cause" shall mean if the Executive (i) fails or refuses
to act in any material respect in accordance with the reasonable directions
of the Board of Directors or Chief Executive Officer of Apollo or the
Company in a manner that would constitute an act of insubordination or is
in continuing willful material breach of this Agreement; provided, however,
that in such case the Company shall give Executive a Termination Notice
specifying the directions the Executive failed to follow or the material
breach of this Agreement, and the Executive shall have a reasonable period
of time after the date of the notice to cure such action; (ii) has been
convicted of a felony; or (iii) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his
employment. During the cure period referred to in subsection (i), the Board
of Directors of Apollo may cause the Company to suspend the employment of
the Executive hereunder if the conduct of the Executive constituting Cause
is deemed to have a potential negative affect on the Company as determined
in good faith by the Board of Directors of Apollo in its sole
determination. If the Executive has not cured such action within the
specified cure period, the employment of
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the Executive shall be terminated by the Company for Cause. If the
employment of the Executive hereunder is terminated pursuant to this
Section 7(a), the Company and Apollo shall have no further obligations to
the Executive hereunder after the Termination Date other than the payment
of Base Salary accrued and unpaid under Section 4 hereof through the
Termination Date, or except as otherwise provided by law.
(b) Termination by the Company for actions other than Cause. For
actions other than Cause, the Company may, at any time, and in its sole
discretion, terminate the employment of the Executive hereunder for any or
no reason by delivery to him of a Termination Notice. Such termination
shall be effective on the date of the Termination Notice; provided,
however, that (i) in addition to the benefits set forth in subparagraph
(ii) below, if the Executive is terminated prior to the end of the first
full year of the Employment Term, the Company shall continue to pay the
Executive, through the end of such first full year of his Employment Term,
on a monthly basis, the Executive's Base Salary (not to exceed an aggregate
amount of $19,167 per month), plus prorated Bonus, in accordance with the
provisions of Section 4(a) hereof and medical benefits as in effect during
the year of such termination; (ii) in addition to the benefits, if any, set
forth in subparagraph (i) above, if the Executive is terminated for reasons
other than Cause at any time, or the Company gives written notice to
Executive to terminate this Agreement pursuant to Section 2 or if an
employment agreement is not renewed on mutually agreeable terms (provided
that Sections 4(b) and (d) shall be included in such agreement), the
Company shall pay one-half of Executive's Base Salary, on a monthly basis,
and one-half of his Bonus, on an annual basis, for a period of four years
following the later of the one-year period referred to subparagraph (i)
above or the Termination Date; plus, the Company shall continue medical
benefits and the disability benefits set forth in Section 7(c) for the
greater of the remaining Employment Term or 18 months after the Termination
Date, and (iii) the benefits in Section 4(d) of this Agreement shall apply.
The severance payments referred to in subparagraphs (i) and (ii) above
shall be in lieu of, and shall otherwise replace, any and all payments
which the Company may owe to Executive upon termination of employment under
the Non-Competition Agreement dated August 21, 1995 between Intermetrics,
Inc. and the Executive ("Non-Competition Agreement"). The Executive shall
also be entitled to exercise the applicable "put" provision under the
Stockholders Agreement with respect to shares of Apollo Common Stock owned
by the Executive set forth in the Stockholders Agreement. If the employment
of the Executive hereunder is terminated pursuant to this Section 7(b), the
Company and Apollo shall have no further obligations hereunder except as
expressly provided herein, or as otherwise provided by law.
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(c) Disability.
(i) Temporary Disability. In the event that any time during the
Employment Term, the Executive, due to physical or mental injury, illness,
disability or incapacity, shall fail to render satisfactorily the services
to be performed by the Executive under this Agreement either for a
consecutive period of three (3) months or for a non-consecutive period of
six (6) months within any twelve month period, the Board of Directors of
the Company may, at its option, determine that such disability is long term
or place the Executive on temporary disability leave during the subsequent
pendency of such injury, illness, disability or incapacity for a period of
up to three (3) months or until subparagraph (c) (ii) becomes applicable if
Executive is disabled for more than three months, during which period the
Company shall continue to pay (to the extent not paid pursuant to
disability insurance provided by the Company) to the Executive the Base
Salary as provided in Section 4(a) and the Company-Sponsored Benefits, but
only to the extent permitted by such policies or plans.
(ii) Long-Term Disability. If such injury, illness, disability or
incapacity persists and is long--term (any such disability shall be deemed
to be long-term in nature if the Executive's physician advises the Board of
Directors of Apollo that such disability can be expected to last for a
period of at least six consecutive months or for a period of 6 months in
any 12 month period), Executive meets the definition of disability under
the Company's disability policies and the Executive cannot fulfill his
duties as determined in good faith by the Board of Directors, the Company
shall have the option at any time after the Executive is on disability
leave to terminate the employment of the Executive hereunder upon not less
than thirty (30) days' written notice to the Executive. In addition to the
Company's rights set forth in the preceding sentence, if at any time the
Company receives the written opinion of two doctors (one doctor to be
selected by each of the Company and the Executive, and if such doctors
disagree as to whether the Executive is suffering from a long-term
disability, a third doctor will be selected mutually by the Executive and
the Company, whose determination will be final) that the Executive cannot
render satisfactorily the services to be performed by him under this
Agreement because of a long-term disability, the Board of Directors of the
Company may terminate the Executive's employment hereunder within thirty
(30) days of receipt of such doctors' reports. The Company can require
Executive to have the physical examinations described in the preceding
sentence at any time for the purpose of determining whether or not
Executive has a long-term disability, and Executive agrees to submit to
such examinations upon request of the Company. If the employment of the
Executive hereunder is terminated pursuant to this Section 7(c) because of
a long-term disability, the Executive shall receive the following from the
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Company (i) benefits under the Company's long-term disability policy and
medical benefits for a period commencing on the Termination Date and ending
on Executive's sixty-fifth birthday, (ii) for the first 12 months following
disability, his Base Salary plus Bonus (less amounts received under
subparagraph (i) above), and thereafter $9,000 per month (less amounts
received under subparagraph (i) above) or such greater amount as the
Company's regular disability insurance policy permits, (iii) the rights set
forth in section 4(d) of this Agreement, and (iv) at no greater
out-of-pocket cost to the Executive than incurred prior to termination, the
Company-sponsored Benefits, but only to the extent permitted by such
policies or plans. The Executive shall also be entitled to exercise the
applicable "put" provision contained in the Stockholders Agreement with
respect to shares of Apollo Common Stock owned by the Executive subject to
the limitations set forth in the Stockholders Agreement. If the employment
of the Executive hereunder is terminated pursuant to this Section 7(c), the
Company and Apollo shall have no further obligations hereunder except as
expressly provided under this Section 7(c), or as otherwise provided by
law.
(iii) Executive's Health. Executive hereby represents to Apollo and
the Company that as of the date of execution of this Agreement, and that to
the best of his knowledge, he is in good health and is not aware of any
health condition that could lead to a temporary or long-term disability.
(d) Death. If the Executive dies during the Employment Term, the
employment of the Executive hereunder shall terminate immediately upon the
death of the Executive. If the employment of the Executive hereunder is
terminated pursuant to this Section 7(d), the Company and Apollo shall have
no further obligations hereunder after the Termination Date other than the
payment to the Executive's estate, legal representatives, heirs,
successors, assigns or other beneficiaries of (i) accrued Base Salary (as
in effect during the year of such death) up to the date of the Executive's
death, (ii) the rights set forth in Section 4(d) of this Agreement, and
(iii) at no greater out-of-pocket cost to the Executive than incurred prior
to termination, the Company-sponsored Benefits, but only to the extent
permitted by such policies or plans. The Executive's estate, legal
representatives, heirs, successors, assigns or other beneficiaries shall be
entitled to the benefit of the exercise of the applicable "put" provision
under the Stockholders Agreement with respect to Apollo's Common Stock
owned by the Executive at his death subject to the limitations set forth in
the Stockholders Agreement. If the employment of the Executive hereunder is
terminated pursuant to this Section 7(d), the Company shall have no further
obligations hereunder except as expressly provided under this Section 7(d),
or as otherwise provided by law.
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(e) Change of Control. In the event that there is a change of control
of the Company, including an Exit Event (as defined in Section 4(b)(iv)
hereof) other than a Public Offering (a "Change of Control"), which Change
of Control event is being negotiated or takes place at any time during
which Executive's full time employment is continuing hereunder, and this
Agreement is expressly assumed by the party effecting such Change of
Control, the Executive shall subject to the terms hereof continue to render
his services to the Company pursuant to Section 3 above, for a period of 18
months from the date of the consummation or closing of the event
constituting the Change of Control, even if it is beyond the term of this
Agreement, after which period the Executive may elect to discontinue his
services to the Company. Notwithstanding any such discontinuance by the
Executive, the Company shall continue to pay the Executive his Base Salary,
in accordance with Section 4 hereof, and shall continue to provide the
Benefits (as defined in Section 5 hereof) to the Executive for the
remainder of the Employment Term, and the provisions of Section 7 to the
extent they survive the termination of Employment by Executive shall
continue to be applicable.
(f) Notice of Termination. Any termination of the Executive's
employment by the Company pursuant to Section 7 (a), (b), (c) or (d) shall
be communicated by a written Termination Notice to the Executive in
accordance with Section 11 hereof. For purposes of this Agreement, a
"Termination Notice" shall mean only a notice which is based upon, and
shall indicate, the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated.
(g) Voluntary Termination. If the Executive voluntarily terminates his
employment hereunder, the Company and Apollo shall have no further
obligations to the Executive hereunder after the date of voluntary
termination other than the payment of Base Salary and bonus accrued and
unpaid under Section 4 hereof through the date of voluntary termination, or
except as otherwise provided by the Stockholders Agreement or by law.
8. Disclosure of Information. The Executive shall not, during or after the
Employment Term, disclose any confidential or proprietary information of the
Company to any person, firm, corporation, association, limited liability
company, or other entity (other than the Company, its affiliates or subsidiaries
or officers thereof or other than as necessary in the performance of his duties
as Executive) for any reason or purpose whatsoever, nor shall the Executive make
use of any such confidential or proprietary information for his own purpose or
for the benefit of any person, firm, limited liability company, corporation or
other entity, except the Company. As used in this Section 8, the term
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"confidential or proprietary information" means all information which is known
to the Company or the Executive or to employees, former employees, consultants
or others in a confidential relationship with the Company, is specific to the
Company or is developed by the Company regarding the industry and relates to
matters such as trade secrets, research and development activities, computer or
multimedia related software or software concepts in development, books and
records, customer lists, vendor lists, suppliers, distribution channels, pricing
information and private processes as they may exist from time to time which the
Executive acquired or obtained by virtue of work heretofore performed for the
Company; provided, that the term "confidential or proprietary information" shall
not include (i) information that is or becomes generally available to the public
(other than as a result of an unauthorized disclosure by the Executive), (ii)
information which must be disclosed by law but only to the extent necessary to
comply with such law, and (iii) information which must be disclosed in order for
him to carry out his duties under this Agreement but only to the extent
necessary to carry out said duties.
9. Non-Competition. The parties mutually agree to the importance of the
provisions of the Non-Competition Agreement to this Employment Agreement and the
provisions of the Non-Competition Agreement are incorporated herein by
reference.
10. Conflicting Agreements. The Executive hereby represents and warrants to
the Company that (a) neither the execution of this Agreement by the Executive
nor the performance by the Executive of any of his obligations or duties
hereunder will conflict with or violate or constitute a breach of the terms of
any employment or other agreement to which the Executive is a party or by which
the Executive is bound, and (b) the Executive is not required to obtain the
consent of any person, firm, corporation, limited liability company or other
entity in order to enter into this Agreement or to perform any of his
obligations or duties hereunder.
11. Notices. Any notice, request, information or other document to be given
under this Agreement to any party by any other party shall be in writing and
delivered personally, sent by registered or certified mail, postage prepaid,
delivered by a nationally recognized overnight courier service or transmitted by
facsimile machine addressed as follows:
If to the Company or Apollo:
Apollo Holding, Inc.
c/o Xxxx X. Xxxx/Xxxxx X. Xxxxxxx, L.L.C.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
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Facsimile No.: (212) 980--2630
with a copy to:
Windels, Marx, Davies & Ives
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No. (212) 262--1215
-and-
Intermetrics, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No. (000) 000-0000
If to the Executive:
Xxxxxx Xxxxxxxx
00 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or at his then current address
included in the employment records
of the Company
with a copy to:
Xxxxxxx, Procter & Xxxx
Exchange Place
Boston, Massachusetts 02109-2881
Attention: Xxxxxx X. Xxxxxxx, III
Facsimile No. 000-000-0000
or to such other address as a party hereto may hereafter designate in writing to
the other party, provided that any notice of a change of address shall become
effective only upon receipt thereof.
12. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Company and the Executive and their respective
heirs, legal representatives, successors and permitted assigns.
13. Entire Agreement. This Agreement, the Non-Competition Agreement and the
Stockholders Agreement contain the entire understanding between the Company,
Apollo and the Executive with respect to the employment of the Executive and
supersedes all prior negotiations and understandings between the Company, Apollo
and the Executive with respect to the employment of the Executive
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by the Company. This Agreement may not be amended or modified except by a
written instrument signed by the Company, Apollo and the Executive.
14. Severability. In the event any one or more provisions of this Agreement
is held to be invalid or unenforceable, such illegality or unenforceability
shall not affect the validity or enforceability of the other provisions hereof
and such other provisions shall remain in full force and effect, unaffected by
such invalidity or unenforceability.
15. Applicable Law; Submission to Arbitration. This Agreement and the
rights, obligations and relations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without giving effect to the principles of conflicts of law thereof. If there is
a conflict between the laws of New York and any other state with respect to this
Agreement, the provisions of New York law shall govern, except that with respect
to corporate matters concerning Apollo or the Company, Delaware law shall
govern.
Any disputes hereunder which cannot be resolved by negotiation between the
parties hereto shall be submitted to, and determined by, arbitration in
accordance with the Arbitration Rules of the American Arbitration Association,
and the parties hereto agree to be bound by the final award of the arbitration
panel (which shall be comprised of three members, one to be selected by each of
Apollo and the Executive, and the third to be mutually selected by Apollo and
the Executive) in any such proceeding. The arbitration panel shall apply the law
of the State of New York. Arbitration may be held in the State of New York, the
Borough of Manhattan, or such other place as the parties hereto may mutually
agree. Judgment upon the award by the arbitration panel may be entered and
enforced in any court having jurisdiction thereof. The arbitration panel may
order injunctive relief against any party.
16. Headings. The headings of sections and subsections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
17. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which, when taken together, shall constitute one and the same instrument.
18. Indemnification.
(a) Unless otherwise prohibited by law, the Company and Apollo shall
indemnify Executive, if Executive is a party or is threatened to be made party
to any threatened, pending or completed action, suit or proceeding whether
civil, criminal,
14
administrative or investigative, or by or in the right of the Company or Apollo
to procure a judgment in its favor, by reason of the fact that Executive is or
was a director, officer, employee or agent of the Company or Apollo, or is or
was serving at the request of the Company or Apollo as a director, officer,
employee, manager or agent of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise, against expenses
(including attorneys' reasonable fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Executive in connection with such
action, suit or proceeding if Executive acted in good faith and in a manner
Executive reasonably believed to be in or not opposed to the best interests of
the Company and/or Apollo, as applicable. The determination of whether Executive
is entitled to indemnification hereunder shall be made by a court of competent
jurisdiction in a final non-appealable judgment. The Company and Apollo shall be
entitled to direct the defense of any claim for which either of them is
providing indemnification.
(b) Expenses incurred in defending any threatened or pending civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by Apollo and the Company in advance of the final disposition of such
action, suit or proceeding, to the extent permitted by law, upon receipt of an
undertaking by or on behalf of the Executive to repay such amount if it is
ultimately determined, in a final non-appealable judgment, that Executive is not
entitled to be indemnified against such expenses. This undertaking by Executive
shall be an unqualified general undertaking, but no security for such
undertaking will required.
(c) Executive's right hereunder will be in addition to any indemnification
provided to Executive by any law, agreement, Board resolution, provision of the
Articles of Incorporation (or Certificate of Incorporation) or By-laws of the
Company or Apollo, or otherwise. All of Executive's rights hereunder will
continue even after Executive has ceased to be a director, officer, employee or
agent of the Company and/or Apollo for any reason, will inure to the benefit of
the heirs, executors and administrators of Executive, and will survive
termination of this Agreement. Apollo and the Company shall be jointly and
severally liable to Executive with respect to any amounts which become due to be
paid to or for the benefit of Executive hereunder.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
IMT ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
APOLLO HOLDING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXX
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SCHEDULE 1
EBITDA DEFINITION
This definition of EBITDA is intended to clearly define earnings derived
solely from the normal operations of the Company on a consolidated basis (for
the President and the Chief Executive Officer, excluding the earnings which
result from the acquisition of any business after the closing ("Closing") of the
Merger Agreement).
EBITDA, with respect to any fiscal period, shall be obtained from the
Company's consolidated annual audited income statement and shall be defined as
follows:
(i) Operating income plus interest income and less interest expense;
(ii) plus depreciation, amortization and other similar non-cash charges,
software development and design and research and development
expenses in the aggregate in excess of $100,000 not reimbursed by a
third party at the time of the expense;
(iii) plus consulting fees described in Sections 3(a)(i) and (ii) of the
Consulting Agreement between the Company and Xxxx X. Xxxx/Xxxxx X.
Xxxxxxx, L.L.C. and the Consulting Agreement between the Company and
the Westgate Capital Co.;
(iv) plus any charges to income related to the grant, issuance or
exercise of stock options to management of, or lenders to, Apollo,
the Company or their subsidiaries;
(v) less extraordinary and nonoperating gains and plus extraordinary and
nonoperating losses, including, without limitation, any prepayment
penalties resulting from the retirement of debt before its scheduled
repayment date;
(vi) plus any expenses incurred or minus reimbursement received, both net
of reserves, in settlement of any claims or other items related to
the assets and liabilities of Apollo or the Company for events
occurring prior to the closing of the Merger Agreement;
(vii) plus the special bonuses to be paid to Xxxxxxx X. Xxxxxxxxx by the
Company on September 15, 1996 and September 15, 1997;
(viii) plus travel, lodging and entertainment expense for Directors of
Apollo and the Company;
(ix) minus gains or plus losses from the sale of assets other than
write-offs in the ordinary course of business;
(x) plus charges amortized or expensed relating to future acquisitions
of Apollo or the Company;
(xi) plus extraordinary litigation expenses and extraordinary legal and
accounting expenses;
(xii) plus amortization or expenses relating to asset write-ups in
connection with the acquisition of the Company; and
(xiii) plus in the first twelve months only, expenses for special
consultants, not in the ordinary course, but this adjustment shall
be limited to a maximum of $100,000.
In the event of a loss from a catastrophe or other casualty loss, an act of
God (including, but not limited to, fire, flood, wind damage, lightning or other
event), industrial sabotage, labor strikes, disputes or work stoppages or any
other unforeseen event (whether at the Company or at any of its vendors), which
such event or events shall cause a disruption or cessation of all or a portion
of the normal business operations of the Company for a period of forty-eight
hours or longer, then for purposes of the determination of operating earnings,
to the extent that the Company is not reimbursed by its business interruption
insurance policy, the final amount will be credited with an amount equal to the
product of the daily average operating earnings for the period of the Company's
normal business operation for the two most recent fiscal years (as adjusted by
an aggregate annual amount [including depreciation and amortization as set forth
in Intermetric's financial statements) of plus $1,915,000 for 1994 and by plus
$3,257,000 for 1995, respectively), whichever is larger, and the number of days
that the normal business operations were disrupted or ceased.
