EXHIBIT 10.14
XXXXXXX TECHNOLOGIES
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MANAGEMENT AGREEMENT
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THIS MANAGEMENT AGREEMENT (the "Agreement") is made as of July 24, 2000,
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(the "Effective Date"), by and among Xxxxxxx Technologies ("Technologies") , a
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Delaware corporation (the "Company"), and Xxxxxx X. Xxxx ("Executive").
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WHEREAS, Executive desires to be employed as an Officer of Technologies,
and Technologies desires to employ Executive Officer and to be assured of its
right to his services on the terms and conditions hereinafter set forth, and
Executive is willing to agree to such employment on such terms and conditions:
NOW, THEREFORE, the Company and Executive agree as follows:
1. Definitions. As used herein, the following terms shall have the
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following meanings:
"Board" means the Company's board of directors.
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"Cause" means the determination by the Board, in the exercise of its
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good faith judgement, that: (a) Executive has committed a fraud,
felony or other serious act of moral turpitude; or (b) Executive has
breached his duty of loyalty to the Company or its Subsidiaries; or
(c) Executive has committed a material breach of this Agreement, and
if such breach is capable of cure, such breach is not cured or
remedied and continues after fifteen (15) business days from the date
of which written notice of the breach was first provided to Executive;
in each case after (i) written notice to Executive and (ii) there has
been a reasonable procedure for Executive to state his case to the
Board.
"Good Reason" means the resignation by Executive of employment with
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Technologies as a direct result of either (i) a material diminution of
duties and responsibilities of Executive as an employee of
Technologies, (ii) the relocation of Executive outside of the
Flanders, New Jersey area, (iii) any requirement by the Company that
Executive make a material mistatement or omission in any financial
report or governmental filing, or (iv) a material breach of this
Agreement by the Company or its Subsidiaries in the absence of a
material breach of this Agreement by Executive, which diminution or
breach, as the case may be, has continued 15 days after delivery of
written notice by Executive to the Board stating Executive's intent to
resign as a consequence of such diminution or breach; provided that
Executive's resignation actually occurs within 30 days following the
occurrence of the diminution or breach.
"Independent Third Party" means any Person or group of Persons who,
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immediately prior to the contemplated transaction, does not own in
excess of 5% of the common equity of the Company or its Subsidiaries
on a fully-diluted basis, who is not controlling, controlled by or
under common control with any such 5% owner of capital stock and who
is not the spouse or descendent (by birth or adoption) of any such 5%
owner of capital stock.
"Permanent Disability" means that Executive, as determined by the
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Board in its good faith judgement, is unable to perform, by reason of
physical or mental incapacity, his duties or obligation under this
Agreement, for a period of ninety (90) consecutive days or a total
period of one hundred twenty (120) days in any three hundred sixty-
five (365) day period.
"Sale of the Company" means the sale of Technologies to an Independent
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Third Party or affiliated group of Independent Third Parties pursuant
to which such party or parties acquire (i) capital stock of
Technologies possessing the voting power to elect a majority of
Technologies board of directors (whether by merger, consolidation or
sale or transfer of the Company's capital stock) or (ii) all or
substantially all of the Company's assets determined on a consolidated
basis.
"Change of Control" shall be deemed to occur upon the earliest to
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occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined
below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined
voting power of the Company's then outstanding securities;
(ii) Change in Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning
of such period constitute the Board, and any new director
(other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction
described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv) of the
Corporate Bylaws whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote
of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a
majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such
merger of consolidation continuing to represent
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(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 51% of the
combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity;
(iv) Liquidation. The approval by the shareholders of the Company
of a complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially
all of the Company's assets; and
(v) Other Events. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar
item on any similar schedule or form) promulgated under the
Exchange Act (as defined below), whether or not the Company is
then subject to such reporting requirement.
(vi) Certain Definitions. For purposes of this Section 2(a), the
following terms shall have the following meanings:
(A) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(B) "Person" means an individual, a partnership, a corporation,
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an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental
entity or any department, agency or political subdivision
thereof. Person shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act; provided,
however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(C) "Beneficial Owner" shall have the meaning given to such term
in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming
a Beneficial Owner by reason of the stockholders of the
Company approving a merger of the Company with another
entity.
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2. Employment. Technologies agrees to employ Executive, and Executive
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hereby accepts employment with Technologies, upon the terms and
conditions set forth in this Agreement.
(a) Position and Duties:
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(i) Executive shall serve as CFO of Technologies and shall have
such duties as may be consistent with such position and as
are determined by the Board from time to time.
(ii) Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation
periods and reasonable periods of illness or other
incapacity which does not constitute Permanent Disability)
to the business and affairs of Technology; provided, that
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subject to approval by the Board, Executive may serve as a
director of other companies that are not competitive with
the business of Technologies. Executive shall perform his
duties and responsibilities to the best of his abilities in
a diligent, trustworthy, businesslike and efficient manner.
(b) Term: Subject to the provisions of Section 3(a), the "Term" of
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this Agreement shall be for 1 year from the date hereof, unless
earlier terminated by either party as provided in Section 4(a)
below, subject to automatic renewals for successive 1 year Terms
unless either party has delivered written notice not less than
ninety (90) days prior to the expiration of the initial Term or
any renewal thereof.
3. Non-competition, non-solicitation:
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(a) Executive acknowledges that during the course of his employment
with Technologies he will become familiar with the trade secrets
and with other Confidential Information of the Company and its
Subsidiaries and the his services will be of a special, unique
and extraordinary value to the Company and its Subsidiaries.
Therefore, Executive agrees that, during the time he is employed
by Technologies and for 1 year thereafter (the "Non-Compete
Period"), Executive shall not directly or indirectly own,
operate, manage, control, participate in, consult with, advise,
provide services for, or in any manner engage in (including by
himself or in association with any person, firm, corporate or
other business organization or through an entity), any business
engaged in the businesses in which the Company and its
Subsidiaries is engaged or then proposes to engage within any
geographical area in which the Company or its Subsidiaries
engages in business. Nothing herein shall prohibit Executive
from being a passive owner or not more that 5% of the outstanding
stock of any class of a corporation which is publicly traded, or
any other passive minority investment in any investment fund,
limited partnership or similar entity,
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whether or not publicly traded, and so long as Executive has no
active participation in the business of such entity.
(b) During the time Executive is employed by Technologies and for 1
year thereafter (the "Non-Solicitation Period"), Executive shall
not, directly or indirectly through another entity, (i) induce or
attempt to induce any employee of Technologies to leave the
employ of Technologies, or in anyway interfere with the
relationship between Technologies and any employee thereof,
including without limitation, inducing or attempting to induce
any employee, group of employees or any other person or persons
to interfere with the business or operations of Technologies,
(ii) hire any person who was an employee of Technologies at any
time during Executive's employment period, or (iii) induce or
attempt to induce, whether directly or indirectly, any customer,
supplier, distributor, franchisee, licensee or other business
relation of Technologies to cease doing business with
Technologies, or in any way interfere with the relationship
between any such customer, supplier, distributor, franchisee,
licensee or business relation and Technologies.
(c) Executive agrees that: (i) the covenants set forth in this
Section are reasonable in geographical and temporal scope and in
all other respects, (ii) the Company would not have entered into
this Agreement but for the covenants of Executive contained
herein, and (iii) the covenants contained herein have been made
in order to induce the Company to enter into this Agreement.
(d) If, at the time of enforcement of this Section a court shall hold
that the duration, scope or area restrictions stated herein are
unreasonable under the circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under
such circumstance shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area
permitted by law.
(e) Executive recognizes and affirms that in the event of his breach
of provision of this Agreement money damages would be inadequate
and the Company and its Subsidiaries would have no adequate
remedy at law. Accordingly, Executive agrees that in the event
of a breach or threatened breach by Executive of any of the
provisions of this Agreement, the Company and its Subsidiaries,
in addition and supplementary to other rights and remedies
existing in its favor may apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce or prevent any violations of
the provisions hereof (without posting a bond or other security).
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4. Termination and Severance:
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(a) Termination. Executive and Technologies shall each have the
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right to terminate the Term and Executive's employment with
Technologies (a) "Termination", and the date of such termination
the "Termination Date" at any time and for any reason or for no
reason at all, by delivering written notice to the other party,
and upon any such Termination, Technologies shall have no further
obligations to Executive hereunder, except as set forth in
Sections 4(b) and (c) below.
(b) Base Salary through Termination: COBRA. Executive shall be
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entitled to receive his Base Salary earned through his
Termination Date, prorated on a daily basis together with all
accrued but unpaid vacation time earned through his Termination
Date. In addition, Executive shall be entitled to COBRA benefits
after the Termination Date. Except as set forth in Section 4(c),
Executive shall not be entitled to receive his Base Salary or any
bonuses or other benefits from Technologies for any period after
the Termination Date.
(c) Severance Obligation. In the event Executive's employment is
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terminated by Technologies without Cause or Executive resigns
from employment with Technologies with Good Reason, following
such Termination and upon execution by Executive of a general
release in favor of the Company and its Subsidiaries (i)
satisfying all applicable requirements of the Older Workers
Benefit-Protection Act, including expiration of the applicable
revocation period, and (ii) releasing any and all claims against
the Company and its Subsidiaries, Technologies shall continue to
pay Executive (or his estate) his Base Salary (as in effect on
the Termination Date) his bonus (as was paid for the most recent
completed bonus period) for a period of 1 year following the
Termination Date, payable in accordance with Technologies' normal
payroll procedures and cycles and shall be subject to withholding
of applicable taxes and governmental charges in accordance with
federal and state law and all unvested stock options previously
granted to the Executive shall immediately become vested and
exercisable. In the event the Executive's employment with
Technologies is terminated for any other reason, Technologies
shall have no obligation to make any severance or other payment
to or on behalf of Executive. Notwithstanding the foregoing, in
the event that Executive shall breach any of his obligations
under this Agreement, Technologies shall be relieved from and
shall have no further obligation to pay Executive any amounts to
which Executive would otherwise be entitled pursuant to this
Section 4.
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5. Sale or Change of Control:
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(a) In the event of sale or change of control of Technologies which
results in the Executive being offered a Management Agreement
with the new owners or the New Company (NewCo) that is comparable
to this Agreement, then the obligations of Technologies under
this Agreement shall terminate effective on the execution of the
comparable Management Agreement between the Executive and the new
owners or NewCo. The new Management Agreement will specifically
include comparable exchange of stock options, compensation,
management duties and responsibilities, and geographical location
among other things.
(b) If in the event of sale or change of control of Technologies
which results in the Executive not being offered a Management
Agreement with the new owners or NewCo that is comparable to this
Agreement, then the Executive is considered terminated for Good
Reason and receives compensation benefits pursuant to Section 4
above.
6. Notices. All notices or communications provided for herein shall be
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deemed to be validly given as of the date of delivery, if delivered
personally, and three days after mailing, if sent by registered or
certified mail, return receipt requested, addressed to Technologies at
its respective headquarters or executive offices or to Executive at his
address as set forth from time to time in the records of the Company.
7. Miscellaneous:
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(a) Severability. Whenever possible, each provision of this
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Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceabillity will not affect
any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never
been contained herein.
(b) Complete Agreement. This Agreement embodies the complete
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agreement and understanding among the parties and supersedes and
preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
(c) Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all
of which taken together constitute one and the same agreement.
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(d) Governing Law. The corporate law of the State of Delaware shall
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govern all issues and questions concerning the relative rights of
the Company and its stockholders. All other issues and questions
concerning the construction, validity, interpretation and
enforceability of this Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to any
choice of law or conflicts of law rules or provisions (whether of
the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the
State of New York.
(e) Successors and Assigns. Except as otherwise provided herein,
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this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its subsidiaries and Executive and
their respective successors and assigns; provided that the rights
and obligations of Executive under this Agreement shall not be
assignable without the prior written approval of the Board.
(f) Remedies. Each of the parties to this Agreement will be entitled
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to enforce its rights under this Agreement specifically, to
recover damages and costs (including reasonable attorneys' fees)
caused by any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to
any court of law or equity of competent jurisdiction (without
posting any bond or deposit) for specific performance and/or
other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may be
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amended and waived only with the prior written consent of the
Company and Executive.
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IN WITNESS WHEREOF, the parties hereto have executed this MANAGEMENT AGREEMENT
as of the date first written above.
EXECUTIVE
By: /s/ Xxxxxx X. Xxxx
______________________________
Name: Xxxxxx X. Xxxx
Title: CFO
XXXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxx X. XxXxxxxxxx
______________________________
Name: Xxxx X. XxXxxxxxxx
Title: Chairman & CEO
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