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Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of December 21,
1997, and is entered into by and between Xxxxxx X. Xxxxxx, Xx. ("Executive") and
Xxxxxx Instrument Corporation, an Indiana corporation, including its divisions
Xxxxxx Technologies and White Microelectronics ("Xxxxxx").
WHEREAS, Xxxxxx desires to employ Executive as the Vice President
Finance, Chief Financial Officer, Secretary and Treasurer (hereinafter
collectively referred to as "Chief Financial Officer") and the Executive desires
to be employed in that capacity;
WHEREAS, Xxxxxx anticipates that Executive will play a key role in
effectuating the sale or other disposition of its Xxxxxx Technologies division;
and
WHEREAS, Xxxxxx desires to facilitate organizational discussions
pertaining to corporate affiliations by removing personal employment security
issues from the process and providing severance benefits which will best serve
its interest in retaining key employees;
NOW THEREFORE, Executive and Xxxxxx hereby agree that Executive will
render services to Xxxxxx on the following terms and conditions:
1. Employment. Upon the terms and subject to the conditions contained
herein, during the term of this Agreement, Executive hereby agrees to provide
full-time services to Xxxxxx as the Chief Financial Officer of Xxxxxx. During
the term hereof, Executive agrees to devote his best efforts to the business of
Xxxxxx, and shall perform his duties in a diligent, trustworthy, business-like
manner, all for the purpose of advancing the business of Xxxxxx. Executive shall
not work for or receive compensation from any other entity for services
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performed or to be performed by him during the term of this Agreement, except
with the prior written consent of Xxxxxx'x Board of Directors.
2. Duties. Executive shall perform the duties of Chief Financial
Officer in accordance with the policies and practices of Xxxxxx, as they may be
amended from time to time. Those duties may be changed or modified in the
discretion of Executive's management.
3. Term of Agreement. This Agreement shall be effective beginning on
October 1, 1997 and shall continue until September 30, 1998, except as provided
herein. It shall thereafter renew automatically for a one (1) year term, unless
thirty (30) or more days prior to such renewal date, either of the parties
notifies the other in writing of its intention not to renew.
4. Base Salary and Benefits. Xxxxxx shall pay Executive a base salary
of One Hundred Forty Thousand Dollars ($140,000.00) per annum, payable in
semi-monthly installments, less applicable tax withholding and salary deductions
("Base Salary"). Executive shall be entitled to participate in the fringe
benefit programs generally available to senior executives of Xxxxxx, as they may
be modified from time to time.
5. Incentive Compensation. Executive shall be eligible to receive
incentive compensation in accordance with the terms of Xxxxxx'x incentive
compensation plan, as it may be amended ("Incentive Compensation").
Additionally, Executive shall be paid a bonus upon the closing of the sale of
the Xxxxxx Technologies division in an amount equal to ten percent (10%) of the
excess, if any, of the sale price over book value of the division, if it is sold
during the term of this Agreement.
6. Stock Options. During the term of this Agreement, Executive shall
participate in Xxxxxx'x Employee Stock Option Plan in accordance with the terms
and conditions of the Plan, as it may be amended.
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7. Termination and Termination Benefits. The Executive's employment
hereunder shall terminate under the following circumstances:
(a) Termination by Xxxxxx For Cause. Xxxxxx may terminate the
employment of Executive for cause at any time upon written notice to Executive
specifying the cause for termination. For purposes of this Section, "for cause"
shall mean discharge resulting from a determination by Xxxxxx that the Executive
has: (i) been convicted of a criminal offense involving dishonesty, fraud,
theft, embezzlement, breach of trust or moral turpitude; (ii) performed an act
or failed to act, which, if he were prosecuted and convicted, would constitute a
crime or offense involving money or property of Xxxxxx; (iii) violated the
provisions of Section 8 pertaining to confidential information; or (iv)
willfully refused to perform the duties reasonably assigned to Executive and
consistent with his status as Chief Financial Officer of Xxxxxx, provided
however that this Section 7(a)(iv) shall not apply following a Change in Control
as defined in Section 7(d).
In the event of Executive's termination by Xxxxxx under this
Section 7(a), Xxxxxx shall have no further obligation to Executive except for
any amounts earned by, or accrued for, Executive under any employee benefit
plans in which the Executive is then a participant, earned and unpaid salary,
accrued and unused vacation pay, and any rights of Executive under any bonus or
stock option agreement, which right has been earned by Executive at the time of
such termination pursuant to the terms of such plan or agreement. Executive
shall not be entitled to any further Base Salary, Incentive Compensation,
Severance Pay, fringe benefits, additional stock options, or any other
compensation or benefits, except as otherwise provided herein. A termination by
Xxxxxx under this Section 7(a) shall not prejudice any remedy to which Xxxxxx
may be entitled, either at law or in equity or under this Agreement.
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(b) Termination by Xxxxxx Without Cause. Executive's employment under
this Agreement may be terminated without cause at any time by Xxxxxx upon
written notice to Executive and, upon such termination, Executive shall be
entitled to the following benefits:
(i) Severance Payment. Xxxxxx will pay Executive a single,
lump-sum payment equal to Executive's total Base Salary and Incentive
Compensation paid for the calendar year immediately preceding the termination,
less all applicable taxes and other withholding ("Severance Payment").
(ii) Benefit Continuation. Xxxxxx will continue benefit
contributions (medical, dental, disability and life) on behalf of Executive for
twelve (12) months or until Executive becomes otherwise eligible for such
benefits, whichever occurs first. In the event that Xxxxxx is unable to continue
such contributions or secure replacement coverage, then it shall pay to
Executive the premium cost for such coverage. Executive shall not participate in
any other Xxxxxx benefit plans except for any amounts earned by, or accrued for,
Executive under any employee benefit plans in which the Executive is then a
participant, earned and unpaid salary and accrued and unused vacation pay and
any rights of Executive under any bonus or stock option agreement, which right
has been earned by Executive at the time of such termination pursuant to the
terms of such plan or agreement.
(iii) Outplacement Assistance. Xxxxxx will provide
executive-level outplacement services to Executive at the outplacement provider
of his choice for a period not to exceed twelve (12) months.
(iv) Attorneys' Fees. Xxxxxx will reimburse Executive for all
reasonable attorneys' fees incurred in connection with enforcing the terms of
this Agreement
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following termination of employment in the maximum amount of $25,000 except as
otherwise provided in Section 14.
(v) Stock Options. All Xxxxxx stock options previously granted
to Executive will vest immediately upon termination and Executive shall have a
period of twelve (12) months thereafter to exercise said options.
(c) Termination by Executive Without Cause.
(i) During Fiscal Year 1998. Executive may terminate this
Agreement upon six (6) weeks' prior written notice given to Xxxxxx at any time
prior to October 3, 1998. In the event of such termination, Executive shall be
paid the Severance Payment set forth in Section 7(b)(i), which shall not exceed
the sum of One Hundred Seventy Thousand Dollars ($170,000.00), as well as the
additional benefits set forth in Section 7(b), less all applicable taxes and
other withholding.
(ii) After Fiscal Year 1998. After October 3, 1998, Executive
may terminate this Agreement at any time upon thirty (30) days' prior written
notice, but will not be paid the Severance Payment or other benefits set forth
in Section 7(b)(i), except as otherwise provided in this Agreement.
(iii) No Further Benefits. In the event of termination by
Executive under either Section 7(c)(i) or (ii), Xxxxxx shall have no further
obligations to Executive under this Agreement except for any amounts earned by,
or accrued for, Executive under any employee benefit plans in which the
Executive is then a participant, earned and unpaid salary and accrued and unused
vacation pay and any rights of Executive under any bonus or stock option
agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement. Executive shall not
after termination be entitled to Base Salary,
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Incentive Compensation, Severance Pay, fringe benefits, additional stock
options, or any other compensation or benefits. Xxxxxx may, in its sole
discretion, accept Executive's resignation and terminate his employment prior to
the expiration of the thirty (30) day notice period and pay Executive's
compensation for the notice period (or remaining term thereof).
(d) Termination of Executive Following a Change in Control. In the
event of a Change in Control, this Agreement shall be automatically renewed for
a period of twelve (12) months following the effective date of the Change in
Control. For purposes of this Agreement, a "Change in Control" shall mean: any
sale of all or substantially all of the assets of Xxxxxx; or merger or
consolidation involving Xxxxxx, unless the stockholders of Xxxxxx receive in the
transaction, with respect to their stock in Xxxxxx, stock or other securities
representing a majority in voting interest of the acquiring entity's equity
securities; or any sale of a majority voting interest of the outstanding stock
of Xxxxxx by the holders thereof in a single transaction or series of related
transactions. For a period of twelve (12) months following the effective date of
a Change in Control, the Executive may terminate the Agreement by written notice
to Xxxxxx'x Board of Directors (or its successor) subsequent to the occurrence
of any of the following events:
(i) Notice of termination or a material change in the nature
or scope of Executive's responsibilities, title, authority, reporting
relationship, powers, functions or duties from the responsibilities, title,
authority, reporting relationship, powers, functions or duties exercised by the
Executive immediately prior to the Change in Control; or
(ii) A decrease in the total annual compensation or benefits
payable to Executive other than as a result of a decrease in incentive-based
compensation payable to the
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Executive and to all other executive officers of Xxxxxx on the basis of Xxxxxx'x
financial performance;
(iii) A requirement imposed by Xxxxxx that Executive relocate
to an office that is more than fifty (50) miles distant from the office at which
he is employed or the home at which he resides immediately prior to the Change
in Control or an increase in Executive's business travel; or
(iv) Failure of Xxxxxx'x successor to assume its obligations
hereunder following a Change in Control.
In the event the Executive terminates this Agreement under the terms of
this Section 7(d), he shall be paid in a lump sum an amount equal to the
Severance Payment set forth in Section 7(b)(i), which shall not exceed the total
sum of One Hundred Seventy Thousand Dollars ($170,000.00), as well as the
additional benefits set forth in Section 7(b), less all applicable taxes and
other withholding. In the event of such termination, Xxxxxx shall have no
further obligations to Executive under this Agreement except for any amounts
earned by, or accrued for, Executive under any employee benefit plans in which
the Executive is then a participant, earned and unpaid salary and accrued and
unused vacation pay and any rights of Executive under any bonus or stock option
agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement.
(e) Non-Renewal Severance Payment. In the event that Xxxxxx gives
notice of its intention not to renew this Agreement in accordance with Section
3, it shall, upon the termination of Executive's employment, pay Executive in a
single lump sum an amount equal to the Severance Payment set forth in Section
7(b)(i), provide outplacement assistance set forth in Section 7(b)(iii), and
will continue benefit contributions (medical, dental, disability and life) on
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behalf of Executive for twelve (12) months or until Executive becomes otherwise
eligible for such benefits, whichever occurs first. In the event that Xxxxxx is
unable to continue such contributions or secure replacement coverage, then it
shall pay the Executive the premium cost for such coverage. Xxxxxx shall have no
further obligations to Executive except for any amounts earned by, or accrued
for, Executive under any employee benefit plans in which the Executive is then a
participant, earned and unpaid salary and accrued and unused vacation pay and
any rights of Executive under any bonus or stock option agreement, which right
has been earned by Executive at the time of such termination pursuant to the
terms of such plan or agreement.
(f) Illness, Incapacity, or Death. In the event of illness or
incapacity of Executive, Xxxxxx shall continue Executive's Base Salary for a
period of ninety (90) days or such time as the Executive is eligible to apply
for benefits under Xxxxxx'x long-term disability plan, whichever occurs last. If
Executive is unable to perform the essential elements of his job due to illness
or incapacity for a period greater than ninety (90) days, Xxxxxx may elect, in
its sole determination, to terminate this Agreement with no further obligation
to Executive, except for any amounts earned by, or accrued for, Executive under
any employee benefit plans in which the Executive is then a participant, earned
and unpaid salary and accrued and unused vacation pay and any rights of
Executive under any bonus or stock option agreement, which right has been earned
by Executive at the time of such termination pursuant to the terms of such plan
or agreement. If Executive should die during the term of this Agreement,
Executive's heir shall be paid by Xxxxxx a total amount equal to ninety (90)
days' Base Salary, be entitled to whatever rights the heir may have under
Executive's stock option plan, and be granted applicable COBRA
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rights; Xxxxxx'x remaining obligations hereunder shall terminate as of the end
of the month in which Executive's death occurs.
8. Confidential Information. In view of the fact that Executive's work
for Xxxxxx will bring him into close contact with many confidential affairs and
plans of Xxxxxx not readily available to the public, Executive agrees to keep
secret and retain in the strictest confidence all confidential matters of
Xxxxxx, including, without limitation, trade "know-how," secrets, customer and
prospect lists, pricing policies, prices, costs, operational and development
methods, and other business affairs of Xxxxxx (but excluding all information in
the public domain) learned by him heretofore or hereafter, and not to disclose
them to anyone outside of Xxxxxx, either during or after his employment with
Xxxxxx, except in the course of performing his duties hereunder or with Xxxxxx'x
express written consent. Executive further agrees to deliver promptly to Xxxxxx,
on termination of his employment, or at any time Xxxxxx may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints, computer
records and other documents (and all copies thereof) relating to Xxxxxx'x
business and all property associated therewith, which he may then possess or
have under his control. Executive acknowledges and understands that his
obligations with respect to confidential information shall survive the
termination of this Agreement.
9. Violation of Covenants. If Executive violates any of his covenants
under Section 8, Executive agrees and acknowledges that such violation or
threatened violation will cause irreparable injury to Xxxxxx and that Xxxxxx
will be entitled to injunctive relief without the necessity of proving actual
damages.
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10. Automobile Allowance. Xxxxxx shall pay an automobile allowance to
Executive in the amount of $850.00 per month, as it may be changed from time to
time, during the term of this Agreement.
11. Vacation. Xxxxxx will provide Executive with annual paid vacation
consistent with the policies of Xxxxxx applicable to senior executive staff, as
they may be changed from time-to-time.
12. Company Expenses. During the term of this Agreement, Xxxxxx will
reimburse Executive for reasonable authorized business expenses incurred on
behalf of Xxxxxx in accordance with Xxxxxx policies, as they may be amended.
13. Assistance with Litigation. Executive shall make himself available,
upon the request of Xxxxxx or its counsel, to testify or otherwise assist in
litigation, arbitration or other disputes involving Xxxxxx during and following
the termination of this Agreement, so long as Executive receives reimbursement
for his reasonable out-of-pocket expenses. Executive will also make himself
available to the attorneys representing Xxxxxx for such purposes as they
reasonably deem necessary, including but not limited to, the review of
documents, discussion of the cases and preparation for trial. This Agreement is
not intended to and shall not be construed so as to in any way limit or affect
the testimony which Executive gives in any such litigation; it is understood and
agreed Executive will at all times testify fully, truthfully and accurately,
whether in deposition, trial or otherwise.
14. Arbitration. Any dispute, controversy, or claim arising out of or
relating to this Agreement or breach thereof, or arising out of or relating in
any way to the employment of Executive or the termination thereof, shall be
submitted to arbitration in Phoenix, Arizona, in accordance with the National
Rules for the Resolution of Employment Disputes of the American
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Arbitration Association. Judgment upon the award rendered by the arbitrator may
be entered in any court in the State of Arizona, or in any other court of
competent jurisdiction. In reaching his or her decision, the arbitrator shall
have no authority to ignore, change, modify, add to or delete from any provision
of this Agreement, but is instead limited to interpreting this Agreement. The
fees and expenses of the arbitrator shall initially be shared equally by the
parties and the prevailing party shall be entitled to recover its fees and
expenses incurred in connection with the arbitration.
15. Governing Law. This Agreement has been entered into and shall be
interpreted in accordance with the laws of the State of Arizona.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of Executive and there are no
representations, warranties or commitments other than those set forth herein.
This Agreement may be amended or modified only by an instrument in writing
executed by both of the parties hereto. This is an integrated agreement.
17. Effect of Agreement. This Agreement shall be binding upon the
parties and their respective heirs, executors, administrators, successors and
assigns. Executive shall not assign any rights or duties under this Agreement
without the written consent of the Xxxxxx Board of Directors. In the event of a
merger, sale, transfer, consolidation or reorganization involving Xxxxxx, this
Agreement shall continue in force and become an obligation of Xxxxxx or
successor entity.
18. Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court or arbitration
to be void, voidable or unenforceable, the same shall in no way affect any other
provision of this Agreement. In case
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this Agreement, or any one or more of the provisions hereof, shall be held to be
invalid, illegal or unenforceable within any governmental jurisdiction or
subdivision thereof, this Agreement or any such provision thereof shall not as a
consequence thereof be deemed to be invalid, illegal or unenforceable in any
other governmental jurisdiction or subdivision thereof.
19. Waiver. The waiver by either party of any term or condition of this
Agreement or any breach thereof shall not constitute a waiver of any other term
or condition or breach of this Agreement, nor shall it constitute a waiver of
the same term or condition in the future.
20. Notices. Any notice or communication required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or such other address as the
party addressed may be substituted by prior written notice pursuant to this
section:
(a) If to Executive: Xxxxxx X. Xxxxxx, Xx.
Xxxxxx Instrument Corporation
0000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
(or such other address as may appear
in the records of Xxxxxx)
(b) If to Xxxxxx: Chief Executive Officer
Xxxxxx Instrument Corporation
0000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 000000-0000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxx Xxxx
0000 Xxxxx Xxxxxxx Xxx., Xxx. 0000
Xxxxxxx, Xxxxxxx 00000-0000
21. Representations by Executive. Executive represents and warrants
that he is not a party to or bound by any agreement or covenant that would
prohibit, restrict or inhibit in any way
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the full performance of his duties for Xxxxxx under this Agreement. Executive
further acknowledges that he has been given the opportunity to consult with
legal counsel regarding this Agreement.
22. Captions. Captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
23. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day and year first written above.
XXXXXX INSTRUMENT CORPORATION
By: /S/ Xxxxxx X. Xxxxx
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Title:President and Chief Executive Officer
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XXXXXX X. XXXXXX, XX.
/S/ Xxxxxx X. Xxxxxx, Xx.
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