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EXHIBIT 10.22
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 28th day of January 1997, by and
between TOPRO, Inc., a Colorado corporation (the "Employer"or "Company") and
Xxxx Xxxxxxx (the "Executive"). In consideration of the mutual covenants
contained in this Agreement, the Employer agrees to employ the Executive and
the Executive agrees to be employed by the Employer upon the terms and
conditions hereinafter set forth.
ARTICLE I
TERM OF EMPLOYMENT
1.1 Initial Term. The initial term of employment hereunder
commenced on January 23, 1997 ("Commencement Date") and shall be for a period
of two years thereafter. Upon the Commencement Date, this Agreement shall
supersede the Employment Agreement dated December 27, 1994 by and between the
Company and the Executive.
1.2 Renewal; Non-Renewal Benefits to Executive. At the end of
the initial term of this Agreement, and on each anniversary thereafter, the
term of Executive's employment shall be automatically extended one additional
year unless, at least 90 days prior to such anniversary, the Employer shall
have delivered to the Executive or the Executive shall have delivered to the
Employer written notice that the term of the Executive's employment hereunder
will not be extended. In the event Employer elects not to renew this Agreement
at any time prior to termination of this Agreement, the Executive shall be
entitled to receive the benefits described in Section 5.4 hereof.
ARTICLE II
DUTIES OF THE EXECUTIVE
2.1 Duties. The Executive shall be employed with the title of
President and Chief Executive Officer, with responsibilities and authority as
are customarily performed by such officers including, but not limited to those
duties as may from time to time be assigned to Executive by the Board of
Directors of Employer. Executive shall have full responsibility and authority
for formulating policies and for the management and operation of Employer,
subject to the general direction and control of the Board of Directors. In
addition, Executive shall be elected to the Company's Board of Directors
effective the Commencement Date, and the Company shall use its best efforts to
have Executive re-elected to the Board of Directors so long as Executive is
employed hereunder.
2.2 Extent of Duties. Executive shall devote all of his working
time, efforts, attention and energies to the business of the Employer.
ARTICLE III
COMPENSATION OF THE EXECUTIVE
3.1 Base Compensation. As compensation for services rendered
under this Agreement, the Executive shall receive a base salary of $175,000 per
annum for the calendar year ending
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December 31, 1997 and a base salary of not less than $175,000 per annum for the
calendar year ending December 31, 1998 and for any subsequent year of this
Agreement, to be paid in accordance with Employer's normal practices. This
salary may be increased from time to time in the discretion of the Employer's
Board of Directors. If increased, this salary shall not be decreased
thereafter during the term of this Agreement without the consent of the
Executive. The salary provided in this subsection shall in no way be deemed
exclusive and shall not prevent Executive from participating in any other
compensation or benefit plan of Employer.
3.2 Performance Bonus Program. Executive shall participate in the
calendar year 1997 performance bonus program to be established by the Company
prior to January 31, 1997 in accordance with performance parameters to be set
by the Compensation Committee of the Employer's Board of Directors. The
program will provide the opportunity for Executive to earn a maximum cash bonus
of $30,000 for performance during calendar 1997, payable by March 31, 1998.
Such bonus shall not vest or become payable if this Agreement has been
terminated by Executive other than pursuant to Section 5.1.a. (iv) (in
connection with a "change of control of the Company") or by Employer for Cause
(hereafter defined) prior to December 31, 1997. Receipt of compensation under
the performance bonus program shall not preclude Executive from receiving
additional bonus or incentive compensation granted in accordance with Company
programs or in the discretion of the Board of Directors.
3.3 Long-Term Incentive Compensation Program. Executive shall
receive incentive compensation for services to be provided hereunder through
the grant of stock purchase options (the "Options"). Executive understands
that the Options and underlying Shares are "restricted securities" under the
Securities Act of 1933 and applicable state statutes. Executive agrees to
execute an investment representation letter to acknowledge his understanding of
the terms of the grant and the characteristics of this investment in
securities. On the Commencement Date, as a matter of separate inducement,
Executive shall be granted 450,000 Options, which shall vest and become
exercisable as set forth below, subject to provisions for accelerated vesting
and exercisability set forth in Section 5.4(b). All Options shall be
exercisable for a period of 10 years from the initial exercise date specified
below. No Option shall become exercisable if the Executive's employment has
been terminated by Employer other than within one year following a change in
control of the Company, or if Notice of Termination (hereafter defined) has
been given by Executive other than pursuant to Section 5.1.a. (iv) before the
initial exercise dates specified below:
a. on the Commencement Date, 100,000 Options shall vest
and be exercisable to purchase 100,000 shares of the Company's Common Stock at
a price of $2.50 per share;
b. on December 1, 1997, 150,000 Options shall vest and
become exercisable to purchase an aggregate of 150,000 shares of Common Stock
at a price of $2.50 per share; and
c. on December 1, 1998, 200,000 Options shall vest and
become exercisable to purchase an aggregate of 200,000 shares of Common Stock
at a price of $2.50 per share.
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3.4 Benefits.
a. Executive shall be entitled to paid vacation and all
paid holidays as customarily extended to executive employees. Executive shall
be entitled to participate in all of Employer's employee benefit plans and
employee benefits, including any retirement, pension, profit-sharing, stock
option, insurance, hospital or other plans and benefits which now may be in
effect or which may hereafter be adopted, it being understood that Executive
shall have the same rights and privileges to participate in such plans and
benefits as any other executive employee during the term of this Agreement.
Participation in any benefit plans shall be in addition to the compensation
otherwise provided for in this Agreement.
b. Employer shall provide an automobile for Executive's
exclusive use or, at the option of Executive, shall provide an automobile
allowance to reimburse and compensate Executive for reasonable expenses of
maintaining one automobile for Executive's use.
c. Employer will undertake payment of the premiums for a
$500,000 term life insurance policy, the beneficiary of which shall be
determined by the Executive, as of the Commencement Date.
3.5 Expenses. Executive shall be entitled to prompt reimbursement
for all reasonable expenses incurred by Executive in the performance of his
duties hereunder.
3.6 Director's Fees. Executive shall receive fees, reimbursement
of expenses, and/or other compensation, if any, as are provided by the Employer
for other directors who also serve as officers of the Company.
ARTICLE IV
NON-COMPETITION; CONFIDENTIALITY
4.1 The Executive will offer to the Employer any investment or
other opportunity in the process control industry (including without
limitation software product development) or in the other areas of business in
which the Company operates of which he may become aware. If the Board of
Directors of the Employer refuses the opportunity to participate in the
investment or venture, the Executive may do so as permitted by Section 4.2
hereof and otherwise only if Executive obtains a consent to do so from a
majority of the directors (excluding the Executive).
4.2 The Executive may make passive investments in companies
involved in the process control industry or other industries in which the
Company operates, provided any such investment does not exceed a 5% equity
interest, unless Executive obtains a consent to acquire an equity interest
exceeding 5% by a vote of a majority of the directors (excluding the
Executive).
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4.3 Except as provided in Sections 4.1 and 4.2 hereof, the
Executive may not participate in the process control industry or other areas of
business in which the Company is engaged during the term of this Agreement
except through and on behalf of the Company.
4.4 For a period of one year after the termination or expiration
of this Agreement, the Executive shall not own, manage, operate, control, be
employed by, participate in, or be connected in any manner with the ownership,
management, operation or control of any business operating in the states of
Colorado, Montana, Utah, Wyoming or Idaho which is engaged in the type of
business conducted by the Employer at the time this Agreement terminates. In
the event of the Executive's actual or threatened breach of this paragraph, the
Employer shall be entitled to a preliminary restraining order and injunction
restraining the Executive from violating its provisions. Nothing in this
Agreement shall be construed to prohibit the Employer from pursuing any other
available remedies for such breach or threatened breach, including the recovery
of damages from the Executive.
4.5 a. The Executive recognizes and acknowledges that the
information, business, list of the Employer's customers and any other trade
secret or other secret or confidential information relating to Employer's
business as they may exist from time to time are valuable, special and unique
assets of Employer's business. Therefore, Executive agrees as follows:
(i) That Executive will hold in strictest
confidence and not disclose, reproduce, publish or use in any manner, whether
during or subsequent to this employment, without the express authorization of
the Board of Directors of the Employer, any information, business, customer
lists, or any other secret or confidential matter relating to any aspect of the
Employer's business, except as such disclosure or use may be required in
connection with Executive's work for the Employer.
(ii) That upon request or at the time of leaving
the employ of the Employer the Executive will deliver to the Employer, and not
keep or deliver to anyone else, any and all notes, memoranda, documents and, in
general, any and all material relating to the Employer's business.
(iii) That the Board of Directors of Employer may
from time to time reasonably designate other subject matters requiring
confidentiality and secrecy which shall be deemed to be covered by the terms of
this Agreement.
b. In the event of a breach or threatened breach by the
Executive of the provisions of this paragraph 4.5, the Employer shall be
entitled to an injunction (i) restraining the Executive from disclosing, in
whole or in part, any information as described above or from rendering any
services to any person, firm, corporation, association or other entity to whom
such information, in whole or in part, has been disclosed or is threatened to
be disclosed; and/or (ii) requiring that Executive deliver to Employer all
information, documents, notes, memoranda and any and all other material as
described above upon Executive's leave of the employ of the Employer. Nothing
herein shall be construed as prohibiting the Employer from pursuing other
remedies available to the
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Employer for such breach or threatened breach, including the recovery of
damages from the Executive.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.1 Termination. The Executive's employment hereunder may be
terminated without any breach of this Agreement only under the following
circumstances:
a. By Executive. Upon the occurrence of any of the
following events, this Agreement may be terminated by the Executive by written
notice to Employer:
(i) if Employer makes a general assignment for
the benefit of creditors, files a voluntary bankruptcy petition, files a
petition or answer seeking a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any law, or
there shall have been filed any petition or application for the involuntary
bankruptcy of Employer, or other similar proceeding, in which an order for
relief is entered or which remains undismissed for a period of thirty days or
more, or Employer seeks, consents to, or acquiesces in the appointment of a
trustee, receiver, or liquidator of Employer or any material part of its
assets;
(ii) the sale by Employer of substantially all of
its assets;
(iii) a decision by Employer to terminate its
business and liquidate its assets; or
(iv) within 90 days following a "change in control
of the Company," which shall mean a change in control of a nature that would be
required to be reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities and Exchange Act of 0000 (xxx "Xxxxxxxx
Xxx"); provided that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as that term is used in Section
13(d) and 14(d) of the Exchange Act), other than the Company or any "person"
who on the date hereof is a director or officer of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding securities, or
(ii) during any period of two consecutive years during the term of this
Agreement, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period.
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b. Death. This Agreement shall terminate upon the
death of Executive.
c. Disability. The Employer may terminate this
Agreement upon the permanent disability of the Executive only in accordance
with Employer's policy applicable to other employees.
d. Cause. The Employer may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Employer
shall have "Cause" to terminate the Executive's employment hereunder upon the
following: (1) the continued failure by the Executive substantially to perform
his duties hereunder (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness), after demand for
substantial performance is delivered by the Employer; or (2) misconduct by the
Executive which is materially injurious to the Employer, monetarily or
otherwise; or (3) the willful violation by the Executive of the provisions of
this Agreement. For purposes of this Section, no act, or failure to act, on
the part of the Executive shall be considered "willful" unless done, or omitted
to be done, not in good faith and without reasonable belief by him that his
action or omission was in the best interest of the Employer.
e. By Employer Other than for Cause. The Company shall
have the right to terminate Executive's employment hereunder other than for
cause, only after the initial term of this Agreement, upon written
notification to Executive given at any time. In the event such termination
occurs within one year following a change in control of the Company the
Executive shall be paid the compensation specified in Section 5.4(b). In all
other circumstances, Executive shall be entitled to receive additional notice
or salary continuation benefits as described in Section 5.4(d) hereof.
5.2 Notice of Termination. Any termination of the Executive's
employment by the Employer or by the Executive (other than termination pursuant
to subsection 5.1 (b) above) shall be communicated by written Notice of
Termination to the other party.
5.3 Date of Termination. "Date of Termination" shall mean (i) if
the Executive's employment is terminated by his death, the date of his death;
(ii) if the Executive's employment is terminated for cause, the date on which a
Notice of Termination is received by the Executive; and (iii) if the
Executive's employment is terminated for any other reason, the date specified
in a Notice of Termination by Employer or Executive, which date shall be no
less than 90 days following the date on which Notice of Termination is given.
5.4 Compensation Upon Termination.
a. Following the termination of this Agreement pursuant
to Sections 5.1 (a) (i)-(iii) or 5.1 (d), the Executive shall be entitled to
compensation only through the Date of Termination.
b. In the event of termination of this Agreement by
Executive pursuant to Section 5.1(a) (iv) or by Employer pursuant to Section
5.1(e) within one year following a change in control of the Company, the
Executive will receive (i) continuation of base salary payments for 24 months
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following the Date of Termination; (ii) full and immediate vesting
exercisability of all stock options and stock appreciation rights or other
benefits consisting of or related to securities granted under this Agreement;
and (iii) payment of any accrued bonus.
c. Following the termination of this Agreement pursuant
to Section 5.1(b), Employer shall pay to Executive's estate the compensation
which would otherwise be payable to Executive to the end of the month in which
his death occurs. This payment shall be in addition to life insurance
benefits, if any, paid to Executive's estate under policies for which the
Employer pays all premiums and Executive's estate is the beneficiary.
d. In the event of temporary or permanent disability of
the Executive as described in Section 5.1 (c) hereof, whether or not the
Employer elects to terminate this Agreement, Executive shall be entitled to
receive such compensation and benefits, if any, as are payable to employees
generally in accordance with the policy of Employer.
e. In the event this Agreement is not renewed by
Employer at any time prior to termination of this Agreement, or if this
Agreement is terminated at any time pursuant to Section 5.1(e) other than
within one year following a change in control of the Company, Executive shall
be entitled to receive from the date of Notice of Termination, at Employer's
option, an aggregate of 12 months of (i) prior notice of such termination or
(ii) continuation of monthly salary payments following termination or (iii) a
combination thereof. The Employer's obligation to make salary continuation
payments shall, in any event, cease on the date Executive accepts any full time
employment. For example: if Executive is given three months' notice of
termination, Employer shall continue to pay salary to Executive salary for a
period ending on the earlier of nine months following the Date of Termination
or Executive's acceptance of other full time employment; if Executive receives
two months' prior Notice of Termination and accepts full time employment two
months following the Date of Termination, the Executive will have received two
months' prior notice and two months' salary continuation, and will not be
entitled to receive eight months' of salary continuation benefits.
5.5 Remedies. Any termination of this Agreement shall not
prejudice any other remedy to which the Employer or Executive may be entitled,
either at law, equity, or under this Agreement.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification. To the fullest extent permitted by
applicable law, Employer agrees to indemnify, defend and hold Executive
harmless from any and all claims, actions, costs, expenses, damages and
liabilities, including, without limitation, reasonable attorneys' fees,
hereafter or heretofore arising out of or in connection with activities of
Employer or its employees, including Executive, or other agents in connection
with and within the scope of this Agreement or by reason of the fact that he is
or was a director or officer of Employer or any affiliate of Employer. To the
fullest extent permitted by applicable law, Employer shall advance to Executive
expenses of
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defending any such action, claim or proceeding. However, Employer shall not
indemnify Executive or defend Executive against, or hold him harmless from any
claims, damages, expenses or liabilities, including attorneys' fees, resulting
from the gross negligence or willful misconduct of Executive. The duty to
indemnify shall survive the expiration or early termination of this Agreement
as to any claims based on facts or conditions which occurred or are alleged to
have occurred prior to expiration or termination.
ARTICLE VII
GENERAL PROVISIONS
7.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.
7.2 Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by
arbitration in the City and County of Denver, Colorado in accordance with the
rules then existing of the American Arbitration Association and judgment upon
the award may be entered in any court having jurisdiction thereof.
7.3 Entire Agreement. This Agreement supersedes any and all other
Agreements, whether oral or in writing, between the parties with respect to the
employment of the Executive by the Employer. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by either party, or anyone acting on behalf
of any party, that are not embodied in this Agreement, and that no agreement,
statement, or promise not contained in this Agreement shall be valid or
binding.
7.4 Successors and Assigns. This Agreement, all terms and
conditions hereunder, and all remedies arising herefrom, shall inure to the
benefit of and be binding upon Employer, any successor in interest to all or
substantially all of the business and/or assets of Employer, and the heirs,
administrators, successors and assigns of Executive. Except as provided in the
preceding sentence, the rights and obligations of the parties hereto may not be
assigned or transferred by either party without the prior written consent of
the other party.
7.5 Notices. For purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive: Xxxx Xxxxxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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If to Employer: Topro, Inc.
Attn: Chairman of the Board of Directors
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7.6 Severability. If any provision of this Agreement is
prohibited by or is unlawful or unenforceable under any applicable law of any
jurisdiction as to such jurisdiction, such provision shall be ineffective to
the extent of such prohibition without invalidating the remaining provisions
hereof.
7.7 Section Headings. The section headings used in this Agreement
are for convenience only and shall not affect the construction of any terms of
this Agreement.
7.8 Survival of Obligations. Termination of this Agreement for
any reason shall not relieve Employer or Executive of any obligation accruing
or arising prior to such termination.
7.9 Amendments. This Agreement may be amended only by written
agreement of both Employer and Executive.
7.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute only one legal instrument. This Agreement
shall become effective when copies hereof, when taken together, shall bear the
signatures of both parties hereto. It shall not be necessary in making proof
of this Agreement to produce or account for more than one such counterpart.
7.11 Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys fees, costs and necessary
disbursements in addition to any other relief to which that party may be
entitled.
"EMPLOYER"
TOPRO, INC.
By
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R. Xxxxx Xxxxxxxx, Chairman
"EXECUTIVE"
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Xxxx Xxxxxxx
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