Exhibit 10.26
Top Source Technologies, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Effective as of June 1, 1997
Xx. Xxxxxx Xxxxxx
Top Source Technologies, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Re: Employment Agreement
Dear Xx. Xxxxxx:
We refer to the Employment Agreement dated as of August 18,
1993, as amended by the letter agreement dated November 30, 1993 (as so amended,
the "Employment Agreement") between you and Top Source Technologies, Inc. (the
"Company").
Section 3 of the Employment Agreement provides that the
initial five year term of the Employment Agreement shall continue in effect
until August 18, 1998, unless earlier terminated pursuant to the Employment
Agreement, "provided, however, that the term of [the Employment Agreement] shall
automatically be extended without further action of either party for additional
one year periods unless written notice of either party's intention not to extend
shall have been provided to the other party ...
no later than one year prior to the end of the then effective term".
Section 6 of the Employment Agreement provides, inter alia,
that upon your resignation from employment with the Company for "Good Reason"
you shall be entitled to certain benefits. "Good Reason" is defined to include
"any action by the Company which results in a material diminution in [your]
position, authority, duties or responsibilities as set forth in [the Employment]
Agreement".
As you know, the Company's Board of Directors has determined
that it would best serve stockholder interests to augment top management by
retaining the services of an additional executive, as chief executive officer
(the "New Executive"), to work with you in executing the Company's business
plan. Indeed, as you know, in recent days the Company and Mr. Xxxxxxx Xxxxxx,
Jr. have agreed on the principal terms under which Xx. Xxxxxx has assumed the
position of chief executive officer of the Company. The Company acknowledges
that the retention of Xx. Xxxxxx as the New Executive has triggered your right
to resign from employment with the Company for Good Reason.
The Company believes that it would be in the best interests of
the Company and its stockholders for you to continue your employment with the
Company for some period of time after the Company retains the New Executive,
without requiring you to waive any rights that you may have under the Employment
Agreement. This would enable you and the Company to evaluate your relationship
with the New Executive and the Company and determine whether you will continue
your employment with the Company on a longer-term basis, and if so on what
terms.
Accordingly, it has been agreed that Section 3 of the
Employment Agreement will be amended by extending the initial term so that it
expires on June 1, 1999 (rather than August 18, 1998), unless earlier terminated
pursuant to the Employment Agreement, and we have agreed that (i) during the
period from the date of this letter through June 1, 1998, you and the Company
shall negotiate in good faith in an effort to reach agreement on the terms and
conditions of a new employment agreement taking into account your duties and
responsibilities (although it is understood and acknowledged that neither you
nor the Company shall be under any legal obligation to enter into such an
agreement), and (ii) you will be able to exercise your right to terminate the
Employment Agreement for "Good Reason" based on the Company retaining the New
Executive (and any such termination shall not be treated as a breach of your
obligation under clause (i) of this sentence) only during the period commencing
on July 1, 1997 and ending on July 1, 1998; provided, however, that no matter
what date during such period you elect to exercise such right to terminate the
Employment Agreement for "Good Reason" based on the Company retaining the New
Executive, the payments that you will be entitled to receive under the
Employment Agreement will be calculated as if such termination had taken place
on July 1, 1997, except that your previously granted options on Company stock
will continue to be exercisable for one year from your actual date of
termination in accordance with the terms of the grant agreements covering such
options.
The foregoing is without prejudice to any other rights of
either party to the Employment Agreement, including either party's rights to
take any actions to which they may be entitled upon a breach of the Employment
Agreement by the other party.
To indicate your agreement with and acceptance of this
amendment to the Employment Agreement, please evidence such agreement by
executing the acknowledgment below and returning it to Weil, Gotshal & Xxxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Fax: (000) 000-0000, Attention:
Xxxxxx X. Block.
Except as specifically amended above, the Employment Agreement
shall remain in full force and effect.
This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. The execution of this Amendment may
be by actual or facsimile signature.
TOP SOURCE TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxxx, Xx.
By:__________________________
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President and CEO
Acknowledged and Agreed:
/s/XXXXXX XXXXXX
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Xxxxxx Xxxxxx
