Execution Copy
Exhibit 2.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of this seventh day of April, 2004 by and between ISCO, INC., a Nebraska
corporation (the "Company"), and XXXXXX X. XXXXXXXXX, a resident of Nebraska
("Executive").
RECITALS
WHEREAS, the Company is a party to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of April 7, 2004, by and among Teledyne
Technologies Incorporated, a Delaware corporation ("Parent"), Meadow Merger Sub
Inc., a Nebraska corporation and a wholly-owned subsidiary of Parent, and the
Company;
WHEREAS, Executive is a principal shareholder of the Company, is an
employee of the Company, and is not a party to any employment, change of
control, consulting, severance, or similar agreement with the Company;
WHEREAS, in connection with the transaction described in the Merger
Agreement, the Company desires to employ Executive upon the terms and conditions
hereinafter set forth, which terms and conditions shall only be effective from
and after the day on which the Effective Time (as defined in the Merger
Agreement) shall occur (the "Effective Date"); and
WHEREAS, Executive is willing to enter into this Agreement with
respect to his employment and services upon the terms and conditions hereinafter
set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and for additional good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company hereby employs Executive and Executive hereby accepts such employment
upon the terms and conditions hereinafter set forth:
1. Term of Employment. The term of employment under this Agreement (the
"Term") will commence on the Effective Date and will expire on the second
anniversary of the Effective Date (the "Initial Expiration Date"). On the
Initial Expiration Date, and on each subsequent twelve-month anniversary of the
Initial Expiration Date, the Term will be automatically extended by twelve
months unless Executive or the Company gives notice to the other, in writing, at
least 60 days prior to the Initial Expiration Date or any such subsequent twelve
month anniversary thereof, of his or its desire to terminate this Agreement or
modify its terms (other than a modification that gives effect to an assignment
permitted by Section 14). If such written notice is received within such 60-day
period, the term of employment under this Agreement will expire on the last day
of the then-current Term.
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2. Duties of Executive. During the Term:
(a) Executive will hold the position of Senior Vice President and
Chief Scientific Officer for Research and New Product Development;
(b) Executive will devote his energies to formulating, developing
and improving the Company's research and new product development
initiatives (as identified by the Company's President). Executive will
have such duties and responsibilities as are customarily required of the
holders of positions similar to that held by Executive, and such related
duties and responsibilities as may be designated by the Company's
President from time to time. In addition, Executive will, upon request,
advise and assist the Company's President in any and all aspects of the
budgeting, administration, and policy formulation functions of the Company
to the extent that such functions relate to research and new product
development;
(c) Executive will report directly to the Company's President;
(d) Executive agrees that during the Term, he will devote
substantially all of his full professional and business-related time,
skills and best efforts to the businesses of the Company;
(e) Notwithstanding subsection (d) above, Executive may (i) serve on
civic or charitable boards or committees and any scientific and
professional organizations similar to those contemplated in Section 6,
(ii) serve as a director or trustee of other corporations or businesses
with the approval of the Chief Executive Officer of Parent, and (iii)
engage in personal, passive investment activities, provided that in each
case such activities do not materially interfere with the performance of
Executive's duties hereunder; and
(f) Executive will be indemnified for actions performed in the
course of his employment to the same extent as other peer executives of
the Company.
3. Compensation.
(a) Base Salary. During the Term, the Company will pay to Executive
an annual base salary (the "Base Salary") of $247,500. The Base Salary
will be subject to all appropriate federal and state withholding taxes
(and to pro-ration for partial years) and will be payable in accordance
with the normal payroll procedures of the Company.
(b) Retirement Plans. During the Term, Executive will be entitled to
participate in savings and retirement (but not bonus or incentive) plans,
practices, policies and programs applicable generally to other peer
executives of the Company.
4. Working Facilities. Executive shall be entitled to the continued use of
the office he currently occupies (or, if the Company shall relocate during the
Term, a comparable and similarly equipped office in any new facility) throughout
the Term (the "Working Facilities").
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Unless agreed to by Executive, Executive will only be required to perform his
duties in the Lincoln, Nebraska metropolitan area during the Term. In addition,
Executive shall be provided the services of an administrative assistant who will
dedicate approximately 75% of his or her time to Executive, and such
administrative assistant shall be provided with the services of an assistant who
shall dedicate approximately 90% of his or her time to projects related to
Executive.
5. Executive Benefits. During the Term, Executive and his eligible
dependents will be eligible to participate in the welfare benefit plans,
practices, policies and programs provided by the Company from time to time
(including, as of the date of this Agreement, without limitation, medical,
disability, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of the Company;
provided, however, that Executive and his eligible dependents must meet any and
all eligibility provisions required under such welfare benefit plans.
Notwithstanding the immediately preceding sentence, Executive shall be entitled,
during the Term, to continue to enjoy medical insurance coverage that is similar
or identical in all material respects to that which is currently provided to him
by the Company; provided, however, that nothing shall prevent the Company from
changing co-payment amounts to the extent such changes apply to other employees
of the Company.
6. Perquisites. During the Term, the Company will pay Executive's annual
membership dues for those scientific and professional organizations listed on
Exhibit A and such other perquisites as listed on Exhibit A.
7. Vacations. Executive will be entitled to four weeks paid vacation for
each calendar year during the Term (subject to pro-ration for partial years),
and may carry over four weeks of unused vacation to the next succeeding calendar
year; provided, however, that at no time may Executive have accumulated more
than eight weeks of vacation, unless the vacation accrual policies of the
Company are more favorable, in which case such policies will control.
8. Termination.
(a) Termination for Good Reason. The Company may terminate the
employment relationship between Executive and the Company created
hereunder before the expiration of the Term for Good Reason. The
occurrence of any of following events, actions, or inactions will
constitute "Good Reason" for purposes of this Agreement:
(i) Executive's failure to rectify any material breach of (or
a material failure to perform any obligation of Executive under)
this Agreement within 30 days after written notice of such breach or
failure to perform having been given by the President of the Company
or his designee or by the Chief Executive Officer of Parent or his
designee;
(ii) Executive being convicted of a felony involving moral
turpitude, theft, embezzlement, or fraud;
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(iii) any gross misconduct or gross negligence on the part of
Executive in the performance of his duties (including, but not
limited to, theft or embezzlement of the Company's property or
money, or an act of fraud against the Company);
(iv) a failure to enter into any invention assignment, trade
secrets, intellectual property and confidentiality, non-disclosure
or similar agreement that the Company may reasonably require of its
employees from time to time within 30 days of a written request from
the Company to enter into such an agreement, or a material breach of
any such agreement; and
(v) a material breach of the Company's code of conduct or
employment policies from time to time (unless such policies conflict
with the terms of this Agreement, in which case such material breach
shall not constitute "Good Reason" if the actions underlying such
material breach are required by the terms of this Agreement) after
30 days written notice of such breach having been given by the
President of the Company or his designee or by the Chief Executive
Officer of Parent or his designee and a failure by Executive to
remedy such breach.
(b) Constructive Termination. Executive may terminate the employment
relationship between Executive and the Company created hereunder before
the expiration of the Term upon a Constructive Termination. "Constructive
Termination" means the occurrence of any of the following:
(i) a material change, diminution, or reduction in Executive's
position, duties or authority;
(ii) a downward change in Executive's title;
(iii) a requirement to which Executive does not consent that
his Working Facilities be located outside of the Lincoln, Nebraska
metropolitan area;
(iv) a material reduction in (or a failure to pay or provide)
Executive's Base Salary, benefits, vacation time, or Working
Facilities other than as permitted by this Agreement; or
(v) any other material breach by the Company of this
Agreement.
(c) Death or Permanent Disability. The employment relationship
between Executive and the Company created hereunder will terminate before
the expiration of the Term upon the occurrence of the death or permanent
disability of Executive. For the purpose of this Agreement, "permanent
disability" of Executive will mean Executive's failure to perform
substantially all of the material duties of his position, with any
reasonable accommodation required by the Americans with Disabilities Act
or any
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similar state law as in effect as of the date hereof (or any amendments or
changes to such laws during the Term to the extent such changes are more
favorable to Executive) or such accommodations as are provided to
Executive as of the date hereof, for a period of at least one hundred
eighty consecutive calendar days due to physical or mental illness or
injury. For the sake of clarity, the parties hereto acknowledge and agree
that Executive will be deemed not to be permanently disabled as of the
date of this Agreement.
9. Compensation Upon Termination.
(a) General. Unless otherwise provided for herein, upon the
termination of Executive's employment under this Agreement before the
expiration of the Term for any reason, Executive will be entitled to:
(i) the Base Salary earned by him before the effective date of
termination, prorated on the basis of the number of full days of
service rendered by Executive during the applicable year to the
effective date of termination;
(ii) any accrued but unpaid amounts (calculated on a pro-rata
basis) pursuant to any savings and retirement plans, practices,
policies and programs under which Executive is eligible to
participate and, if applicable, has elected to participate;
(iii) payments in respect of perquisites, as provided herein,
incurred through the date of termination;
(iv) any accrued but unused vacation pay incurred through the
date of termination; and
(v) any benefits to which Executive is entitled under any
benefit plans, practices, programs or policies maintained by the
Company under which Executive is eligible to participate and, if
applicable, has elected to participate.
The sum of the amounts described in clauses (i) through (v) will be
hereinafter referred to as the "Accrued Obligations." The Accrued
Obligations (except for amounts due pursuant to the terms of any
applicable benefit plans, practices, programs or policies, which shall be
paid in accordance with the terms thereof or the Company's customary
practices) will be paid to Executive or his estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the date of
termination (subject, in each case, to applicable tax withholding and
regular payroll deductions).
(b) Termination Because of Death or Permanent Disability.
(i) If Executive's employment hereunder terminates because of
the death or permanent disability of Executive, Executive will only
be entitled to payment of the Accrued Obligations as set forth in
Section 9(a) above. Executive
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will continue to receive Executive's full Base Salary during the one
hundred eighty day qualification period either directly from the
Company or under any short term disability plan that the Company may
provide from time to time (or any combination thereof). After that
time, the Company will have no further obligation to Executive under
this Agreement and all supplemental benefits will be terminated,
except for benefits that have accrued in favor of Executive prior to
the termination of employment, which will be determined in
accordance with the terms and conditions of the Company's various
benefit plans and practices then in effect that apply to Executive.
(ii) If the Company and Executive disagree as to Executive's
incapacity, each may appoint a medical doctor to certify his opinion
as to Executive's incapacity, and if the doctors do not agree as to
Executive's incapacity, then the two doctors will appoint a third
medical doctor to certify his opinion as to Executive's incapacity,
and the decision of a majority of the three doctors will prevail.
Executive and the Company shall each bear the costs of their
respective medical doctor's opinion. The Company, however, will bear
the costs of any third doctor's opinions.
(c) Termination For Good Reason. If the employment relationship
hereunder is terminated by the Company for Good Reason, Executive will
only be entitled to payment of the Accrued Obligations as set forth in
Section 9(a) above.
(d) Constructive Termination or Termination by the Company without
Good Reason. If Executive's employment is terminated by Executive due to
his Constructive Termination, or by the Company other than for Good
Reason, Executive will be entitled to receive his Base Salary and to
continue to enjoy and receive all of the benefits, perquisites, fringe
benefits, and other forms of compensation to which Executive would
otherwise have been entitled to enjoy or receive under this Agreement
(except for the use of Working Facilities) for and during the remainder of
the Term.
10. Restrictive Covenant. Executive acknowledges that, because of his
senior executive and long-standing position with the Company, his technical and
scientific knowledge of the Company's products and product development
initiatives, his knowledge of the affairs of the Company and his relations with
its dealers, distributors and customers are such that he could do serious damage
to the financial welfare of the Company should he compete or assist others in
competing with the business of the Company. Accordingly, the parties hereto
agree as follows:
(a) Confidential Information.
(i) Except as the Company may permit or direct in writing,
during the Term and thereafter, Executive agrees that he will never
disclose to any individual or entity any confidential or proprietary
information, knowledge, or data of the Company that he may have
obtained while in the employ of the Company relating to any
customers, customer lists, methods of distribution, sales, prices,
profits,
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costs, contracts, inventories, suppliers, dealers, distributors,
business prospects, business methods, products, research and product
development initiatives, ideas and workpapers, manufacturing ideas,
formulas, plans or techniques, research, trade secrets, or know how
of the Company.
(ii) All records, documents, software, computer disks, and any
other form of information relating to the business of the Company
that are or were prepared or created by Executive, or that may or
did come into his possession during the Term with the Company,
including any and all copies thereof, shall be returned to the
Company, or as the case may be, shall remain in the possession of
the Company.
(iii) Nothing in this Section 10(a) shall limit Executive's
right to carry Executive's accumulated career knowledge and
professional skills to any future employment, subject to the
specific limitations of the foregoing provisions of this Section 10
and the covenants set forth below.
(b) Non-Competition.
(i) The parties hereto acknowledge that the Company's
operations are global, and that it sells and distributes its
products to dealers, distributors and customers worldwide, and,
thus, the Company's need for protection against unfair competition
is global.
(ii) Executive agrees that he will not, during the Term:
(1) engage directly or indirectly, for his own
personal benefit or the benefit of any individual
or entity other than the Company, in the
manufacture, assembly, distribution, or sale of
the products then being manufactured, assembled,
distributed, or sold by the Company anywhere in
the world; or
(2) develop, promote, invest in, provide financing
for, be employed by, or operate any business on
his own behalf, or for any other individual or
entity, that is in competition with the Company,
or assist any other individual or entity in doing
so; provided, however, that Executive may purchase
or otherwise acquire up to five percent of any
class of securities of any enterprise (but without
otherwise participating in the activities of such
enterprise) if such securities are listed on any
national or regional securities exchange or have
been registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended.
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(c) Non-Solicit. Executive agrees that he will not, during the Term
and for a period ending on the later to occur of (x) the fifth anniversary
of the date of this Agreement and (y) the two year anniversary of the end
of the Term:
(i) directly or indirectly, on behalf of himself or any
individual or entity, engage in, or assist any other individual or
entity to engage in, the manufacture, assembly, distribution, or
sale to any customer, distributor, or dealer of the Company,
wherever located, of the products then being manufactured,
assembled, distributed, or sold by the Company, if such customer,
distributor, or dealer is one with whom he had personal contact or
with whose account he was personally involved during the twenty-four
months prior to the termination of his employment; or
(ii) directly or indirectly request or advise any of the
aforesaid customers, distributors, or dealers referred to in (i)
above of this subsection (c), to curtail their business with the
Company or to patronize another business that is in competition with
the Company; or
(iii) directly or indirectly, on behalf of himself or any
other individual or entity, request, advise, or solicit any employee
of the Company to leave that employment in order to engage in, or
assist any other individual or entity to engage in, competition with
the Company.
11. Confidential Information. Executive will enter into, and will abide by
the terms of, any invention assignment, trade secrets, intellectual property and
confidentiality, non-disclosure or similar agreement that the Company may
generally or reasonably require of its employees from time to time.
12. Property of the Company. Executive acknowledges that from time to time
in the course of providing services pursuant to this Agreement he will have the
opportunity to inspect and use certain property, both tangible and intangible,
of the Company, and Executive hereby agrees that such property will remain the
exclusive property of the Company, and Executive will have no right or
proprietary interest in such property, whether tangible or intangible,
including, without limitation, the Company's customer and supplier lists,
technical documentation and workpapers, contract forms, books of account,
computer programs and similar property.
13. Equitable Relief. Executive acknowledges that the services to be
rendered by him are of a special, unique, unusual, extraordinary, and
intellectual character, which gives them a peculiar value, and the loss of which
cannot reasonably or adequately be compensated in damages in an action at law,
and that a breach by him of any of the provisions contained in this Agreement
will cause the Company irreparable injury and damage. Executive further
acknowledges that he possesses unique skills, knowledge and ability and that
competition by him in violation of this Agreement or any other breach of the
provisions of this Agreement would be detrimental to the Company. By reason
thereof, Executive agrees that the Company will be
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entitled, in addition to any other remedies it may have under this Agreement or
otherwise, to injunctive and other equitable relief to prevent or curtail any
breach of this Agreement by him.
14. Assignment; Successors Bound. This Agreement is personal to Executive
and may not be assigned in any way by Executive without the prior written
consent of the Company. This Agreement may not be assigned by the Company
without the written consent of Executive, except for an assignment (i) to an
affiliate of the Company, (ii) to a purchaser of substantially all of the assets
or stock of the Company, or (iii) by operation of law. This Agreement will be
binding upon the Company and Executive, their respective permitted assigns,
heirs, executors, administrators or successors in interest.
15. Severability and Reformation. The parties hereto intend all provisions
of this Agreement to be enforced to the fullest extent permitted by law. If,
however, any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future law, such provision will be fully
severable, and this Agreement will be construed and enforced as if such illegal,
invalid, or unenforceable provision were never a part hereof, and the remaining
provisions will remain in full force and effect and will not be affected by the
illegal, invalid, or unenforceable provision or by its severance.
16. Integrated Agreement. This Agreement constitutes the entire Agreement
between the parties hereto with regard to the subject matter hereof, and there
are no agreements, understandings, specific restrictions, warranties or
representations relating to said subject matter between the parties hereto other
than those set forth herein or herein provided for.
17. Notices. All notices and other communications required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by certified mail (return receipt
requested) or sent by overnight delivery service, or facsimile transmission to
the parties hereto at the following addresses or at such other addresses as
shall be specified by such parties by like notice:
If to the Company:
Isco, Inc.
c/o Teledyne Technologies Incorporated
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
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if to Executive, to:
Xx. Xxxxxx X. Xxxxxxxxx
c/o Isco, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
with a copy to:
Baird, Holm, McEachen, Pedersen, Hamann & Xxxxxxxxx LLP
Attention: Xxxx Xxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the fourth calendar day after posting, in the case of
notice so given by overnight delivery service, on the date of actual delivery
and, in the case of notice so given by facsimile transmission or personal
delivery, on the date of actual transmission or, as the case may be, personal
delivery.
18. Further Actions. Whether or not specifically required under the terms
of this Agreement, each party hereto will execute and deliver such documents and
take such further actions as will be necessary in order for such party to
perform all of his or its obligations specified herein reasonably implied from
the terms hereof.
19. Governing Law. This agreement will be governed by and construed in
accordance with the internal law, and not the law of conflicts, of the State of
Nebraska.
20. Counterparts. This Agreement may be executed in counterparts, each of
which will take effect as an original and all of which will evidence one and the
same Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed this Agreement as of the date first set forth above.
ISCO, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Operating Officer
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------------
XXXXXX X. XXXXXXXXX
-S-1-
EXHIBIT A: LIST OF SCIENTIFIC AND PROFESSIONAL ORGANIZATIONS
AND OTHER PERQUISITES
PROFESSIONAL SUBSCRIPTIONS: ESTIMATED ANNUAL SUBSCRIPTION RATES:
--------------------------- ------------------------------------
Analytical Separations News $450.00
Analytical Chemistry 115.00
Chemical & Engineering News (included
with American Chemical Society
membership)
Instrument Business Outlook 725.00
IEEE Technology & Society Magazine
(included with IEEE life membership)
ISIS 57.00
Journal of Chromatographic Science 640.00
Lincoln Business Journal 40.00
Modern Plastics 59.00
Osiris 35.00
Review of Scientific Instruments 142.00
Science Magazine (included with
American Association for the
Advancement of Science membership)
Scientific American 35.00
Technology and Culture 40.00
PROFESSIONAL MEMBERSHIPS: ESTIMATED ANNUAL RENEWAL COST:
------------------------- ------------------------------
American Association for the
Advancement of Science $275.00
American Chemical Society 137.00
American Institute of Chemists 215.00
American Management Association 1,800.00
American Physical Society 108.00
American Society for Metals (ASM
International) 112.00
Analytical & Life Science Systems
Association (ALSSA) 4,500.00
Xxxxx Xxxxxxx 40.00
Xxxxx Xxxxxxx - Hot-Line Protection 15.00
History of Science Society 67.00
IEEE Life Member 54.00
National Society of Professional
Engineers 242.00
Nebraska Board of Engineers and
Architects 90.00
The Nebraska Club 425.00
Newcomen Society of the United States 75.00
Sigma Xi 80.00
Society for the History of Technology 40.00
Society of Industrial Archaeology 50.00
Society of Plastics Engineers 127.00
MISC. TECHNICAL REFERENCE BOOKS:
ChemSources $450.00 purchased every other year
Lincoln City Directory $400.00 purchased every year
CRC Handbook of Chemistry and Physics $100.00 purchased every few years when new edition is published
Merck Index $60.00 purchased every few years when new edition is published
Xxxxxx Register set (books and CD) $50.00 for both each year
Physician's Desk Reference $75.00 each year
