EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the 7th day of November, 1995,
between XXXXXXX X. XXXXXX, XX. (the "Executive") and MEMRY CORPORATION, a
Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, the Company and the Executive desire to enter into an employment
agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements set forth herein, the parties agree as follows:
1. Employment and Duties. The Company hereby agrees to employ the
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Executive, and the Executive hereby accepts employment, upon the terms and
conditions set forth herein. During the term of his employment, the Executive
shall diligently and faithfully serve the Company in the capacity of Senior Vice
President and Chief Operating Officer, or in such other executive capacity or
capacities as the Board of Directors may, from time to time, direct. As Senior
Vice President and Chief Operating Officer, the Executive shall have
responsibility for all operating activities of the Company and shall report to
the President and Chief Executive Officer of the Company. The Executive shall
devote his best efforts and entire business time, services and attention to the
advancement of the Company's business and interests. The Executive
shall diligently and faithfully carry out the policies, programs and directions
of the Board of Directors of the Company.
2. Term. The term of this Agreement shall commence on the date hereof,
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and shall terminate on the day before the second anniversary of such date.
Thereafter, this Agreement shall be automatically renewed for successive one-
year periods, unless either party notifies the other in writing of the intention
not to renew at least six (6) months prior to the date on which the term of this
Agreement would otherwise terminate.
3. Compensation. In consideration of the services rendered by the
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Executive, the Company agrees to compensate the Executive as follows:
(a) In consideration of the services rendered by the Executive and/or The
Xxxxx Corporation prior to the date hereof, and as an inducement to enter into
this Agreement, the Company shall promptly (i) issue to the Executive 50,000
shares of its Common Stock, valued at $1.00 per share, and (ii) pay to the Xxxxx
Corporation $50,000. The Executive shall be entitled to the registration rights
with respect to such shares identical to the rights granted to domestic
investors who purchased Common Stock during 1995, but the Executive agrees not
to sell any such shares before January 1, 1997 without first obtaining the
consent of the Company's Board of Directors.
(b) The Company shall pay to the Executive an annual base salary of
$150,000, payable in equal installments every two weeks. The Executive's base
salary may be increased from time to
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time by the Board in accordance with normal business practices of the Company.
The Executive shall also be entitled to receive additional compensation in the
form of any annual bonus that may be determined by and in the sole discretion of
the Board of Directors of the Company and shall be eligible to participate in
any incentive bonus program that may be established by the Company; provided,
however, that the amount of any such bonus or incentive compensation paid to the
Executive shall not be less than 80% of any similar bonus or incentive
compensation paid to the Company's Chief Executive Officer with respect to any
periods during which the Executive is employed by the Company.
(c) The Company shall grant to the Executive 125,000 Incentive Stock
Options (the "Options") pursuant to the Memry Corporation Stock Option Plan (the
"Plan"). The exercise price for the Options shall be the Fair Market Value (as
defined in the Plan) as of the date of grant. The Options shall become
exercisable with respect to one fifth of the shares covered thereby on the first
anniversary of the date of grant and an additional one fifth shall become
exercisable on each of the second, third, fourth and fifth anniversaries of the
date of grant. The Options shall terminate ten years from the date of grant.
All options shall be cancelled if the Executive is terminated "for cause" (as
hereinafter defined) hereunder. If the Executive resigns from all his positions
with the Company, all Options not exercisable as of the date of such resignation
shall be cancelled. In the event of a Change of
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Control of the Company (as defined below), all such Options shall become
immediately exercisable.
For the purposes of this Agreement, a "Change of Control" shall mean: (i)
a merger, consolidation or other corporate reorganization of the Company in
which the Company does not survive, or (ii) the beneficial ownership by one
person or entity or a related group of persons or entities (other than Harbour
Holdings Limited Partnership and its affiliates) of as much as 25% of the
outstanding voting stock of the Company, unless the transaction resulting in
such ownership by such person or related group had been approved by the Board of
Directors of the Company.
(d) The Executive shall be entitled to fringe benefits comparable to the
benefits afforded to other executive employees of the Company, including but not
limited to reasonable sick leave and coverage under any health, accident,
hospitalization, disability, retirement, life insurance, 401-K and annuity
plans, programs or policies maintained by the Company. In addition, and without
limiting the foregoing, the Company shall provide the Executive with the
following:
(i) twenty working days of vacation per calendar year, no more
than one half of which shall accrue from one year to the
next; and
(ii) a car allowance of $300.00 per month.
(e) The Executive shall be entitled to reimbursement, in accordance with
Company policy, of all reasonable, ordinary and necessary out-of-pocket expenses
which he incurs on behalf of the
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Company in the course of performing his duties hereunder, subject to furnishing
appropriate documentation of such expenses in form and substance satisfactory to
the Company.
4. Employee's Covenants.
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(a) Except as otherwise provided herein, during the term of
employment, as set forth in Section 2 hereof, and for a period of two years
thereafter, the Executive shall not, directly or indirectly in any manner or
under any circumstances or conditions whatsoever, on his own behalf or on behalf
of others, without the express written consent of the Company: (i) be or become
interested, as an individual, partner, principal, agent, clerk, employee,
stockbroker, officer, director, trustee, or in any other capacity whatsoever,
except as a nominal owner of stock of a public corporation, in any business
which is in any way in competition with the business of the Company or any
direct or indirect subsidiaries of any of the above (including the Company, the
"Affiliated Companies") within the United States; (ii) solicit any business from
any person or firm which is or was a customer of the Affiliated Companies at the
time of termination of the Executive's employment or within the preceding
twelve-month period; (iii) solicit any person employed by the Affiliated
Companies or to render services to any business which competes with the business
of any of the Affiliated Companies.
(b) The Executive acknowledges that some of the information that he
will acquire in the course of his employment with the Company concerning the
Affiliated Companies' policies,
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business methods, products, systems, customer lists, marketing programs, ideas,
plans concerning business or product development, and other such matters is
valuable proprietary information and may constitute trade secrets of the
Affiliated Companies. Therefore, the Executive agrees that he shall take all
reasonable and necessary steps during the term of his employment and thereafter
to safeguard such information and he shall not disclose the same to any person
or firm, except as necessary in the course of performing his duties on behalf of
the Company hereunder. Further, upon termination of his employment hereunder,
the Executive agrees that he will deliver to the Company any and all records,
files, lists or other documents containing information within the scope of the
foregoing description, including, without limitation, the Executive's records of
contacts with customers and supplies and potential customers and suppliers.
(c) Injunctive Relief for Breach; Enforceability. The Executive
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agrees that the Company may not be adequately compensated by money damages for a
breach by the Executive of any of the covenants contained in this Section 4 and
that the Company shall be entitled to injunctive relief and specific performance
in connection therewith, in addition to all other remedies. Each of the
covenants contained in this Section 4 shall be construed as separate covenants,
and if any court shall finally determine that any of the restraints provided for
in any such covenants are too broad as to this area, activity or time covered,
said area, activity or time covered shall be deemed reduced to whatever extent
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the court deems reasonable and such covenants shall be enforced as to such
reduced area, activity or time.
(d) Reasonableness of Scope and Duration. The parties hereto agree
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that the covenants and agreements contained in this Section 4 are, taken as a
whole, reasonable in their scope and duration, and no party shall raise any
issue of the reasonableness of the scope of duration of any such covenants in
any proceeding to enforce any such covenants.
5. Termination of Employment.
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(a) The Executive's employment hereunder may not be terminated prior
to the expiration of the employment period specified in Section 2 hereof except
in accordance with the provisions of this Section 5.
(b) The Executive's employment may be terminated by the Company for
cause. For purposes of this Agreement, "for cause" shall mean dishonesty
materially relating to the Executive's employment, habitual drunkenness, any
substance abuse, commission of a felony, any violation of any federal
procurement statute or regulation, any violation of any state or federal law
relating to the workplace environment (including without limitation laws
relating to sexual harassment or age, sex or other prohibited discrimination) or
any violation of any Company policy adopted in respect of any of the foregoing,
gross incompetence, gross insubordination or any material violation of this
Agreement (which shall include, but not be limited to, a violation of the
confidentiality and non-competition provisions hereof). "For
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cause" termination must be accompanied by a written notice to that effect.
(c) If the Executive dies, this Agreement shall terminate effective at
the time of his death; provided, however, that such termination shall not result
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in the loss of any benefit or rights which the Executive may have accrued
through the date of his death. If the Executive's employment is terminated
prior to the expiration of the employment period due to his death, the Company
shall make a severance payment to the Executive or his legal representatives
equal to the Executive's regular salary payments through the end of the month in
which such death occurs.
(d) If the Executive becomes disabled, this Agreement may be
terminated, at the Company's option, at the end of the calendar month during
which his disability is determined; provided, however, that such termination
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shall not result in the loss of any benefit or rights which the Executive may
have accrued through the date of his disability. If the Executive's employment
is terminated prior to the expiration of the employment period due to his
disability, the Company shall make a severance payment to the Executive or his
legal representative equal to the Executive's regular salary payments for a
period of six (6) months or until payments begin under any disability insurance
policy maintained by the Company for the benefit of the Executive, whichever
period is shorter. For the purposes of this section, the definition of
"disability" shall be the same as that contained in any disability insurance
policy maintained by the Company in effect at the time of
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the purported disability, or last in effect, if no policy is then in effect.
6. Effect of Termination. Upon termination of the Executive's employment
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for any reason whatsoever, all rights and obligations of the parties under this
Agreement shall cease, except that the Executive shall continue to be bound by
the covenants set forth in Section 4 hereof, and the Company shall be bound to
pay to the Executive accrued compensation, including salary and other benefits,
to the date of termination and any severance payments which may be owed under
the provisions of Section 5 hereof.
7. Successors. In the event that the Company is merged or consolidated
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with, or sells all or substantially all of its assets to, any successor which
will continue the Company's business, the Company will use its best efforts to
cause such successor to assume the Company's obligations under this Agreement.
8. Remedies. The Executive hereby acknowledges that his services are
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unique and extraordinary, and are not readily replaceable, and hereby expressly
agrees that the Company in enforcing the covenants contained in Section 4 of
this Agreement, in addition to any other remedies provided for herein or
otherwise available at law, shall be entitled in any court of equity having
jurisdiction to an injunction restraining him in the event of such a breach,
actual or threatened, of the agreement and covenants contained in Section 4 of
this Agreement.
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9. Miscellaneous.
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(a) This Agreement may not be assigned by either party hereto.
(b) In the event that any provision of this Agreement is found by a
court of competent jurisdiction to be invalid or unenforceable, such provision
shall be, and shall be deemed to be, modified so as to become valid or
enforceable, and the remaining provisions of this Agreement shall not be
affected.
(c) This Agreement shall be governed by and construed in accordance
with the law of the State of Connecticut.
(d) No modification of this Agreement shall be effective unless in a
writing executed by both parties.
(e) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof, and supersedes all prior agreements,
representations and promises by either party or between the parties.
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IN WITNESS WHEREOF, the parties hereto have signed this instrument as of
the date first above written.
MEMRY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx.
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