EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated November ___, 1998, by
and between Xxxxxxxxx Technologies Inc. (the "Company") and Xxxxxxx X. Xxxx (the
"Executive"), residing at 00 Xxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Executive is currently serving as the President and Chief
Operating Officer of the Company; and
WHEREAS, the Company wishes to assure that the Executive will continue
to serve in that capacity during the term of this Agreement, and the Executive
is willing to continue to serve in that capacity on the terms and conditions
herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
Section 1. Term of Employment. The Executive's employment under this
Agreement shall commence on September 1, 1998 (the "Commencement Date") and,
subject to earlier termination pursuant to Section 5 hereof, shall continue
until August 31, 2001 (the "Term"). The Executive hereby represents and warrants
that (i) he has the legal capacity to execute and perform this Agreement, (ii)
this Agreement is a valid and binding obligation of the Executive enforceable
against him in accordance with its terms, (iii) the Executive's service
hereunder will not conflict with, or result in a breach of, any agreement,
understanding, order, judgment or other obligation to which the Executive is
presently a party or by which he may be bound, and (iv) the Executive is not
subject to, or bound by, any covenant against competition, confidentiality
obligation or any other agreement, order, judgment or other obligation which
would conflict with, restrict or limit the performance of the services to be
provided by him hereunder.
Section 2. Position and Duties. During the Term, the Executive shall
serve as the President and Chief Operating Officer of the Company and shall have
such powers and duties as are commensurate with such position and as may be
conferred upon him from time to time by the Chief Executive Officer of the
Company or the Board of Directors of the Company (the "Board"). During the Term,
and except for illness or incapacity and reasonable vacation periods consistent
with Section 3 below, the Executive shall reasonably devote all of his business
time, attention, skill and efforts exclusively to the business and affairs of
the Company and its subsidiaries and affiliates; provided, however, that the
Executive may engage in charitable, educational, religious, civic and similar
types of activities (all of which shall be deemed to benefit the Company),
speaking engagements, membership on the board of directors of other
organizations (to the extent approved in advance by the Board), and similar
activities to the extent that such activities do not inhibit or prohibit the
performance of his duties hereunder or inhibit or conflict with the business of
the Company, its subsidiaries and affiliates.
Section 3. Compensation. For all services rendered by the Executive in
any capacity required hereunder during the Term, including, without limitation,
services as an executive officer, director, or member of any committee of the
Company or of any subsidiary, affiliate or division thereof, the Executive shall
be compensated as follows:
(a) The Company shall pay the Executive a fixed salary at the rate of
$172,500 per annum or such higher (but never lower) annual amount as is being
paid from time to time pursuant to the terms hereof ("Base Salary"). The Base
Salary shall be subject to such periodic review and such periodic increases as
the Board shall deem appropriate in accordance with the Company's customary
procedures and practices regarding the salaries of senior officers. Base Salary
shall be payable in accordance with the customary payroll practices of the
Company, but in no event less frequently than semi-monthly.
(b) The Executive shall be entitled to participate in the Company's
Annual Incentive Plan or any successor plan (the "Annual Incentive Plan"), which
plan provides for the payment of incentive cash compensation to key officers
based upon the performance of the Company and the officer's individual
performance. The Company shall pay the Executive such amounts, if any, as shall
become due to the Executive from time to time under the Annual Incentive Plan. A
summary description of the terms of the Annual Incentive Plan is attached hereto
as Exhibit A.
(c) The Executive also shall be entitled to participate in the
Company's Supplemental Executive Retirement Plan or any successor plan (the
"SERP Plan"), which plan provides for contributions by the Company to accounts
maintained for the benefit of certain senior executive officers of the Company
based upon the performance of the Company. The Company shall pay to the
Executive's account such amounts, if any, as shall become due from time to time
under the SERP Plan. A summary description of the terms of the SERP Plan is
attached hereto as Exhibit B.
(d) Subject to compliance with the terms of Section 4 hereof, the
Company shall reimburse the Executive for the Executive's actual out-of-pocket
expenses of leasing a car of the Executive's choice and all related maintenance,
repairs, insurance and other expenses, subject to a monthly cap of $600.
(e) The Company shall provide the Executive with coverage under an
individual or group disability insurance policy (together with any replacement
disability insurance policy, the "Disability Policy") providing the Executive
with payments equal to 60% of his Base Salary as in effect from time to time in
the event that the Executive becomes permanently disabled, subject to a monthly
cap of $10,000 and containing such terms and conditions as the Board or the
Executive Compensation Committee of the Board may approve.
(f) The Company shall maintain a term insurance policy (the "Term
Policy") insuring the life of the Executive with a mutually acceptable insurance
company in an amount not less than four times the Executive's Base Salary at no
cost to the Executive (except any associated tax liability) with the beneficiary
to be designated by the Executive. In the event that the Executive's employment
is terminated pursuant to the terms hereof, the Company shall assign its rights
under the Term Policy to the Executive for no additional consideration and,
subject to the terms of the Term Policy, the Executive shall have the right to
assume the Company's obligations thereunder. Upon such assignment, the Company
shall have no further obligation with respect to the Term Policy.
(g) The Executive shall be entitled to four weeks of vacation and
carry-over rights all in accordance with the then-current policy of the Company.
(h) The Company also will furnish the Executive, without cost to him
except any associated tax liability, with perquisites consistent with those
afforded other senior executives holding positions with the Company comparable
to the position held by the Executive.
(i) Except as expressly modified by the terms hereof, the Executive
shall be entitled to participate in all compensation and employee benefit plans
or programs, and to receive all benefits, perquisites and emoluments, for which
any salaried employees of the Company are eligible under any plan or program now
or hereafter established and maintained by the Company, to the fullest extent
permissible under the general terms and provisions of such plans or programs and
in accordance with the provisions thereof. Notwithstanding the foregoing,
nothing in this Agreement shall preclude the amendment or termination of any
such plan or program, including, without limitation, the Annual Incentive Plan
and the SERP Plan; provided, that, such amendment or termination is applicable
generally to the senior officers of the Company or any subsidiary or affiliate.
Section 4. Business Expenses. Subject to any applicable limitations
set forth in Section 3, the Company shall pay or reimburse the Executive for all
reasonable travel or other expenses incurred by the Executive in connection with
the performance of his duties and obligations under this Agreement, subject to
the Executive's presentation of appropriate vouchers in accordance with such
procedures as the Company may from time to time establish for senior officers
and to preserve any deductions for Federal income taxation purposes to which the
Company may be entitled.
Section 5. Termination of Employment; Effects Thereof.
(a) The Company shall have the right, upon delivery of written notice
to the Executive, to terminate the Executive's employment hereunder prior to the
expiration of the Term (i) pursuant to a Termination for Cause, (ii) upon the
Executive's becoming subject to a Permanent Disability, or (iii) pursuant to a
Without Cause Termination; provided, however, that, without the Executive's
written consent, no Without Cause Termination shall be effective until 30 days
after receipt by the Executive of written notice of termination from the
Company. The Executive's employment hereunder shall terminate automatically
without action by any party hereto upon the Executive's death.
(b) Except as provided in paragraph (c) below, in the event that the
Company terminates the Executive's employment pursuant to a Without Cause
Termination, the Company shall pay the Executive any earned but unpaid Base
Salary as of the effective date of such termination and shall continue, subject
to the provisions of Section 6 below, to pay the Executive's Base Salary as in
effect at the time of such termination for a period of twelve months from the
effective date of such termination.
(c) At any time after the occurrence of a Change in Control Event, the
Executive shall have the right, upon delivery of written notice to the Company,
to terminate the Executive's employment hereunder prior to the expiration of the
Term if the Company (i) requires the Executive to be based at any office or
location more than 25 miles from the office at which the Executive is based on
the Commencement Date, other than infrequent business trips of short duration
reasonably required in the performance of the Executive's responsibilities under
this Agreement; or (ii) assigns to the Executive duties materially inconsistent
with, or fails to assign to the Executive duties materially consistent with, the
Executive's position, duties, authority and responsibilities. In the event that
either (x) the Executive resigns in accordance with the preceding sentence, or
(y) the Company terminates the Executive's employment pursuant to a Without
Cause Termination on or after the occurrence of a Change in Control Event, the
Company shall pay the Executive any earned but unpaid Base Salary as of the
effective date of such termination and shall pay to the Executive in a single
lump sum within ten (10) business days of the effective date of the termination
of the Executive's employment an amount equal to the greater of (i) the
Executive's annual Base Salary or (ii) any Base Salary payable to the Executive
for the remainder of the Term.
(d) In the event of any termination of the Executive's employment
pursuant to paragraph (b) or (c) above, subject to the provisions of Section
3(i), the Company shall pay the Executive an amount determined under the Annual
Incentive Plan in respect of the year in which the termination of employment is
effective assuming (i) the Executive has met all of his personal objectives pro
rated for such year, and (ii) the total bonus pool under the Annual Incentive
Plan for such year is based upon the level of the Company's performance through
the end of the month immediately preceding the effective date of such
termination with such performance being annualized for the year in which the
termination of employment is effective. The Company also shall pay to the
Executive (or as the Executive may otherwise direct) all amounts which the
Executive is entitled to pursuant to the SERP Plan (whether vested or unvested).
Except as provided in paragraph (l) below, all stock options or other awards
previously granted to the Executive that have not vested on or before the
effective date of the termination of the Executive's employment will immediately
expire and shall be null and void as of the date of termination and all options
or awards previously granted to the Executive that have vested on or before the
effective date of the termination of the Executive's employment shall be payable
or exercisable, if at all, as specified in the stock compensation program or
other arrangement pursuant to which such options or awards were granted to the
Executive. In addition, the Company shall pay to the Executive any other
benefits to which the Executive is entitled upon termination of employment under
any employee benefit plan or policy then in effect. The Company also shall
continue to provide the Executive, his spouse and their eligible dependents with
continued group hospitalization, health and medical insurance coverage
consistent with and pursuant to the terms of the medical plan, if any, then
maintained by the Company for its employees for one year following the effective
date of the termination of the Executive's employment. Neither the Executive,
his spouse nor their eligible dependents shall be required to contribute to the
cost of such coverage (except for any deductibles and co-payments generally
applicable to participants in such medical plan). The Executive acknowledges
that the medical benefits coverage provided hereunder shall run concurrently
with any period of coverage to which the Executive, his spouse or their eligible
dependents may be entitled under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"). Any period of continuation coverage under
COBRA shall be measured from the effective date of the termination of the
Executive's employment hereunder. The Executive and his spouse will have the
statutory period after the termination of his employment to elect continued
COBRA coverage. No other payments shall be made, or benefits provided, by the
Company under this Agreement except as otherwise required by law.
(e) In the event that the Company terminates the Executive's
employment pursuant to a Permanent Disability, the Company shall pay the
Executive any earned but unpaid Base Salary as of the effective date of such
termination and, subject to the provisions of Section 3(i), shall pay the
Executive an amount determined under the Annual Incentive Plan in respect of the
year in which the termination of employment is effective assuming (i) the
Executive has met all of his personal objectives pro rated for such year, and
(ii) the total bonus pool under the Annual Incentive Plan for such year is based
upon the level of the Company's performance through the end of the month
immediately preceding the effective date of such termination with such
performance being annualized for the year in which the termination of employment
is effective. The Company also shall pay to the Executive (or as the Executive
may otherwise direct) all amounts which the Executive is entitled to pursuant to
the SERP Plan (whether vested or unvested). All stock options or other awards
previously granted to the Executive that have not vested on or before the
effective date of the termination of the Executive's employment will immediately
expire and shall be null and void as of the date of termination and all options
or awards previously granted to the Executive that have vested on or before the
effective date of the termination of the Executive's employment shall be payable
or exercisable, if at all, as specified in the stock compensation program or
other arrangement pursuant to which such options or awards were granted to the
Executive. In addition, the Company shall pay to the Executive any other
benefits to which the Executive is entitled upon termination of employment under
any employee benefit plan or policy then in effect. No other payments shall be
made, or benefits provided, by the Company under this Agreement except as
otherwise required by law.
(f) In the event that the Company terminates the Executive's
employment hereunder due to a Termination for Cause or the Executive terminates
his employment with the Company (including, without limitation, pursuant to any
retirement plan or policy then maintained by the Company), the Company shall pay
the Executive any earned but unpaid Base Salary as of the date of termination of
employment. The Company also shall pay to the Executive (or as the Executive may
otherwise direct) all amounts then credited to the Executive's account pursuant
to the SERP Plan that have vested on or before the effective date of the
termination of the Executive's employment and all amounts then so credited that
have not vested on or before the effective date of the termination of the
Executive's employment shall be forfeited. The Executive shall not be entitled
to participate in the Annual Incentive Plan in respect of the year in which
termination of his employment occurs or any subsequent year. All stock options
or other awards previously granted to the Executive that have not vested on or
before the effective date of the termination of the Executive's employment will
immediately expire and shall be null and void as of the date of termination and
all options or awards previously granted to the Executive that have vested on or
before the effective date of the termination of the Executive's employment shall
be payable or exercisable, if at all, as specified in the stock compensation
program or other arrangement pursuant to which such options or awards were
granted to the Executive. In addition, the Company shall pay to the Executive
any other benefits to which the Executive is entitled upon termination of
employment under any employee benefit plan or policy then in effect. No other
payments shall be made, or benefits provided, by the Company under this
Agreement except as otherwise required by law.
(g) In the event that the Executive's employment hereunder is
terminated due to the Executive's death, the Company shall pay the Executive's
executor or other legal representative (the "Representative") any earned but
unpaid Base Salary as of the date of termination of employment and, subject to
the provisions of Section 3(i), shall pay the Representative an amount
determined under the Annual Incentive Plan in respect of the year in which the
Executive's death occurs assuming (i) the Executive has met all of his personal
objectives pro rated for such year, and (ii) the total bonus pool under the
Annual Incentive Plan for such year is based upon the level of the Company's
performance through the end of the month immediately preceding the Executive's
death with such performance being annualized for the year in which the
Executive's death occurs; provided, that, the amount paid to the Representative
shall be pro rated for the number of complete months preceding the Executive's
death. In addition, the Company shall pay to the Representative (or as the
Representative may otherwise direct) all amounts which the Executive is entitled
to pursuant to the SERP Plan (whether vested or unvested). All stock options or
other awards previously granted to the Executive that have not vested on or
before the Executive's death will immediately expire and shall be null and void
as of the date of death and all options or awards previously granted to the
Executive that have vested on or before the Executive's death shall be payable
or exercisable, if at all, by the Representative as specified in the stock
compensation program or other arrangement pursuant to which such options or
awards were granted to the Executive. In addition, the Company shall pay to the
Representative any other benefits to which the Executive would have been
entitled upon termination of employment under any employee benefit plan or
policy then in effect. No other payments shall be made, or benefits provided, by
the Company under this Agreement except as otherwise required by law.
(h) In the event that the Term expires and the Company and the
Executive have not agreed to extend this Agreement or entered into a replacement
employment agreement, other than as a result of the Executive's retirement, the
Executive shall have the right to terminate his employment within 30 days of the
end of the Term by providing written notice to that effect to the Company. Such
termination shall be effective 20 days after receipt of such notice by the
Company, unless the Company and the Executive agree otherwise in writing. A
termination of employment by the Executive pursuant to this Section 5(h) shall
have the same effect as a Without Cause Termination.
(i) Any lump-sum severance payments received by the Executive pursuant
to this Section 5 upon termination of his employment shall be treated as salary
for purposes of the Company's 401(k) Savings Plan to the maximum extent
permitted by applicable law.
(j) For purposes of this Agreement, the following terms have the
following meanings:
(i) The term "Termination for Cause" means, to the maximum extent
permitted by applicable law, a termination of the Executive's employment by
the Company because the Executive has (a) materially breached or materially
failed to perform his duties under applicable law and such breach or
failure to perform causes material damage to the Company or constitutes
self-dealing or willful misconduct, (b) intentionally committed an act of
dishonesty in the performance of his duties hereunder that either
constitutes self-dealing, willful misconduct, a breach of duty to the
Company or a violation of applicable law, (c) engaged in conduct
detrimental to the business of the Company which causes material damage to
the Company, (d) been convicted of a felony, (e) been convicted of a
misdemeanor involving moral turpitude, (f) materially breached or
materially failed to perform his obligations and duties hereunder, which
breach or failure the Executive shall fail to remedy within 30 days after
written demand from the Company, (g) repeatedly refused to follow lawful
and reasonable directions from the Board or the Chief Executive Officer
commensurate with the Executive's office and the terms of this Agreement,
which refusal is material to the performance of the Executive's duties or
(h) violated in any material respect the representations made in Section 1
above or the provisions of Section 6 below.
(ii) The term "Without Cause Termination" means a termination of
the Executive's employment by the Company other than due to (i) a
Termination for Cause, (ii) Permanent Disability or (iii) the Executive's
death.
(iii) The term "Permanent Disability" means permanently disabled
so as to qualify for full benefits under the Disability Policy; provided,
however, that if no Disability Policy is in effect on the date of
determination, "Permanent Disability" shall mean the inability of the
Executive to perform his duties hereunder on a full-time basis for a period
of six full calendar months during any eight consecutive calendar months
due to illness or injury of a physical or mental nature, supported by the
completion by the Executive's attending physician (or a physician selected
by the Company and reasonably satisfactory to the Executive or his legal
representative if the Executive's physician is unable or unwilling to
provide the necessary certification) of a medical certification form
outlining the disability and treatment.
(iv) The term "Change in Control Event" means any of the
following events:
(A) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended), is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended,
except that a person shall be deemed to have "beneficial ownership" of
all securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 50% or more of the total voting power of
the Company's outstanding capital stock;
(B) The individuals who (i) as of the date of this Agreement
constitute the Board of Directors (the "Original Directors"), (ii)
thereafter are elected to the Board of Directors and whose election or
nomination for election to the Board of Directors was approved by a
vote of at least 2/3 of the Original Directors then still in office
(such Directors being called "Additional Original Directors"), or
(iii) are elected to the Board of Directors and whose election or
nomination for election to the Board of Directors was approved by a
vote of at least 2/3 of the Original Directors and Additional Original
Directors then still in office, cease for any reason to constitute a
majority of the members of the Board of Directors;
(C) The Company shall consummate a merger, consolidation,
recapitalization, or reorganization of the Company, other than any
such transaction which results in holders of outstanding voting
securities of the Company immediately prior to the transaction having
beneficial ownership of at least 50% of the total voting power
represented by the voting securities of the surviving entity
outstanding immediately after such transaction, with the voting power
of each such continuing holder relative to such other continuing
holders being not altered substantially in the transaction; or
(D) The Company shall consummate a plan of complete
liquidation of the Company or an agreement for the sale, assignment,
conveyance, transfer, lease or other disposition by the Company of all
or substantially all of its assets to any person, or group of related
persons, in one or a series of related transactions.
(k) Any payments to be made or benefits to be provided by the Company
pursuant to this Section 5 (other than pursuant to Sections 5(e) or (g)) are
subject to the receipt by the Company of an effective general release and
agreement not to xxx in a form reasonably satisfactory to the Company (the
"Release") pursuant to which the Executive agrees (i) to release all claims
against the Company and certain related parties (excluding claims for any
severance benefits payable hereunder), (ii) not to maintain any action, suit,
claim or proceeding against the Company and certain related parties, and (iii)
to be bound by certain confidentiality and mutual non-disparagement covenants
specified therein. Notwithstanding the due date of any post-employment payment,
the Company shall not be obligated to make any payments under this Section 5
until after the expiration of any revocation period applicable to the Release.
(l) Upon the occurrence of a Change in Control Event and provided that
the Executive continues to be employed by the Company at such time, the Board
shall, or shall cause the Executive Compensation Committee of the Board to,
cause all stock options previously granted to the Executive to become
immediately exercisable by the Executive to the extent that such acceleration is
not prohibited by the terms of any plan, program, agreement or arrangement
pursuant to which such options were granted.
Section 6. Other Duties of Executive During and After Term. (a) The
Executive recognizes and acknowledges that all information pertaining to the
affairs, business, clients, or customers of the Company or any of its
subsidiaries or affiliates (any or all of such entities being hereinafter
referred to as the "Business"), as such information may exist from time to time,
other than information that the Company has previously made publicly available,
is confidential information and is a unique and valuable asset of the Business,
access to and knowledge of which are essential to the performance of the
Executive's duties under this Agreement. In consideration of the payments made
to him hereunder, the Executive shall not, except to the extent reasonably
necessary in the performance of his duties under this Agreement, divulge to any
person, firm, association, corporation, or governmental agency, any information
concerning the affairs, businesses, clients, or customers of the Business
(except such information as is required by law to be divulged to a government
agency or pursuant to lawful process), or make use of any such information for
his own purposes or for the benefit of any person, firm, association or
corporation (except the Business) and shall use his reasonable best efforts to
prevent the disclosure of any such information by others. All records,
memoranda, letters, books, papers, reports, accountings, experience or other
data, and other records and documents relating to the Business, whether made by
the Executive or otherwise coming into his possession, are confidential
information and are, shall be, and shall remain the property of the Business. No
copies thereof shall be made which are not retained by the Business, and the
Executive agrees, on termination of his employment or on demand of the Company,
to deliver the same to the Company.
(b) The Executive recognizes and acknowledges that the Company shall
own all Work Product created by the Executive during the Term. As used herein,
"Work Product" includes, but is not limited to, all intellectual property
rights, U.S. and international copyrights, patentable inventions, creations,
discoveries and improvements, works of authorship and ideas, whether or not
patentable or copyrightable and regardless of their form or state of
development. All Work Product shall be considered work made for hire by the
Executive and shall be owned by the Company.
If any of the Work Product may not, by operation of law, be considered
a work made for hire by the Executive for the Company, or if ownership of all
right, title and interest of the intellectual property rights therein shall not
otherwise vest exclusively in the Company, the Executive shall assign, and upon
creation thereof shall be deemed to have automatically assigned, without further
consideration, the ownership of all such Work Product to the Company and its
successors and assigns. The Company, its successors and assigns shall have the
right to obtain and hold in its or their own name copyrights, patents,
registrations and other protections available to the Work Product. The Executive
shall, at the Company's expense, assist the Company in obtaining and maintaining
patent, copyright, trademark and other appropriate protection for all Work
Product in all countries. The Executive hereby irrevocably relinquishes for the
benefit of the Company, its successors and assigns any moral rights in the Work
Product recognized under applicable law.
The Executive shall disclose all Work Product promptly to the Company
and shall not disclose the Work Product to anyone other than authorized Company
personnel without the Company's prior written consent. The Executive shall not
disclose to the Company or induce the Company to use any secret or confidential
information or material belonging to others.
The provisions of this Section 6(b) cover Work Product of any kind
that is conceived or made by the Executive that (i) results from tasks assigned
to the Executive by the Company, its subsidiaries and affiliates, or (ii) are
conceived or made with the use of facilities or materials provided by the
Company, its subsidiaries and affiliates.
(c) In consideration of the payments made to him hereunder, during the
one-year period commencing on the effective date of the termination of his
employment for any reason, the Executive shall not, without express prior
written approval of the Board, directly or indirectly, own or hold any
proprietary interest in, or be employed by or receive remuneration from, any
corporation, limited liability company, business trust, partnership, sole
proprietorship or other entity engaged in competition with the Company or any of
its affiliates (a "Competitor"), other than severance-type or retirement-type
benefits from entities constituting prior employers of the Executive. The
Executive also shall not, during such one-year period, solicit for the account
of any Competitor, any customer or client of the Company or its affiliates, or
any entity or individual that was such a customer or client during the one-year
period immediately preceding the termination of the Executive's employment. The
Executive also shall not, during such one-year period, act on behalf of any
Competitor to interfere with the relationship between the Company or its
subsidiaries and affiliates and their respective employees.
For purposes of the preceding paragraph, (i) the term "proprietary
interest" means legal or equitable ownership, whether through stockholding or
otherwise, of an equity interest in a business, firm or entity other than
ownership of less than two percent of any class of equity interest in a publicly
held business, firm or entity and (ii) an entity shall be considered to be
"engaged in competition" if such entity is, or is a holding company for, a
company engaged in the business of designing, manufacturing, assembling, selling
or servicing trace chemical detection equipment or related software or supplies
anywhere in the world.
(d) The Executive acknowledges that the restrictions contained in this
Section 6 are reasonable and necessary to protect the legitimate interests of
the Company and that any breach by the Executive of any provision contained in
this Section 6 will result in irreparable injury to the Company for which a
remedy at law would be inadequate. Accordingly, the Executive acknowledges that
the Company shall be entitled to temporary, preliminary and permanent injunctive
relief against the Executive in the event of any breach or threatened breach by
the Executive of the provisions of this Section 6, in addition to any other
remedy that may be available to the Company whether at law or in equity.
(e) The Company's obligation to make payments, or provide for any
benefits under this Agreement (except to the extent vested or exercisable) shall
cease upon a violation by the Executive of the provisions of this Section 6. The
provisions of this Section 6 shall survive any termination of the Executive's
employment with the Company.
Section 7. Withholdings. The Company may directly or indirectly
withhold from any payments made under this Agreement all Federal, state, city or
other taxes and all other deductions as shall be required pursuant to any law or
governmental regulation or ruling or pursuant to any contributory benefit plan
maintained by or on behalf of the Company.
Section 8. Consolidation, Merger, or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into or with,
or transferring all or substantially all of its assets to, or engaging in any
other business combination with, any other person or entity which assumes this
Agreement and all obligations and undertakings of the Company hereunder. Upon
such a consolidation, merger, transfer of assets or other business combination
and assumption, the term "Company" as used herein shall mean such other person
or entity and this Agreement shall continue in full force and effect.
Section 9. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage prepaid,
by same day or overnight mail (i) if to the Executive, at the address set forth
above, or (ii) if to the Company, as follows:
Xxxxxxxxx Technologies Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
or to such other address as either party shall have previously specified in
writing to the other.
Section 10. No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; provided, however,
that nothing in this Section 10 shall preclude the assumption of such rights by
executors, administrators or other legal representatives of the Executive or his
estate and their assigning any rights hereunder to the person or persons
entitled thereto.
Section 11. Expenses. Except as set forth herein, each party hereto
shall pay its own expenses incident to the preparation, negotiation,
administration and enforcement of this Agreement and the transactions
contemplated herein.
Section 12. Source of Payment. Subject to the terms of the SERP Plan,
all payments provided for under this Agreement shall be paid in cash from the
general funds of the Company. Except as may be required pursuant to the SERP
Plan, the Company shall not be required to establish a special or separate fund
or other segregation of assets to assure such payments, and, if the Company
shall make any investments to aid it in meeting its obligations hereunder, the
Executive shall have no right, title or interest whatever in or to any such
investments except as may otherwise be expressly provided in a separate written
instrument relating to such investments. Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship, between the Company and
the Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right, without
prejudice to rights which employees may have, shall be no greater than the right
of an unsecured creditor of the Company.
Section 13. Binding Agreement; No Assignment. This Agreement shall be
binding upon, and shall inure to the benefit of, the Executive and the Company
and their respective permitted successors, assigns, heirs, beneficiaries and
representatives. This Agreement is personal to the Executive and may not be
assigned by him without the prior written consent of the Company. Any attempted
assignment in violation of this Section 13 shall be null and void.
Section 14. Dispute Resolution. At the option of either the Company or
the Executive, any dispute, controversy or question arising under, out of or
relating to this Agreement or the breach thereof, other than pursuant to Section
6 hereof, shall be referred for decision by arbitration in the State of New
Jersey by a neutral arbitrator mutually selected by the parties hereto. Any
arbitration proceeding shall be governed by the Rules of the American
Arbitration Association then in effect or such rules last in effect (in the
event such Association is in existence). If the parties are unable to agree upon
such a neutral arbitrator within 21 days after either party has given the other
written notice of the desire to submit the dispute, controversy or question for
decision as aforesaid, then either party may apply to the American Arbitration
Association for a final and binding appointment of a neutral arbitrator,
however, if such Association is not then in existence or does not act in the
matter within 45 days of any such application, either party may apply to the
Presiding Judge of the Superior Court of any county in New Jersey for an
appointment of a neutral arbitrator to hear the parties and such Judge is hereby
authorized to make such appointment. In the event that either party exercises
the right to submit a dispute, controversy or question arising hereunder to
arbitration, the decision of the neutral arbitrator shall be final, conclusive
and binding on all interested persons and no action at law or in equity shall be
instituted or, if instituted, further prosecuted by either party other than to
enforce the award of the neutral arbitrator. The award of the neutral arbitrator
may be entered in any court that has jurisdiction. The Executive and the Company
shall each bear all their own costs (including the fees and disbursements of
counsel) incurred in connection with any such arbitration and shall each pay
one-half of the costs of any arbitrator appointed hereunder.
Section 15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey,
without reference to the choice of law principles thereof.
Section 16. Entire Agreement. This Agreement shall constitute the
entire agreement among the parties with respect to the matters covered hereby
and shall supersede all previous written, oral or implied understandings among
them with respect to such matters, including, but not limited to, the Employment
Agreement, dated November 1, 1996, between the Company and the Executive.
Section 17. Amendments. This Agreement may only be amended or
otherwise modified, and compliance with any provision hereof may only be waived,
by a writing executed by all of the parties hereto. The provisions of this
Section 17 may only be amended or otherwise modified by such a writing.
Section 18. Severability. The invalidity of any provision hereof shall
not affect the validity, force or effect of the remaining provisions hereof. In
the event that an arbitrator designated pursuant to the provisions of Section 14
or a court of competent jurisdiction determines that any provision contained
herein is not enforceable as written because of the breadth or duration of such
provision, such arbitrator or court shall have the authority to modify the terms
of such provision so that, as so modified, such provision shall be enforceable
to the maximum extent permitted by applicable law.
Section 19. No Strict Construction. Each of the parties hereto
acknowledges that this Agreement has been prepared jointly by the parties
hereto, each of whom has been represented by counsel, and shall not be strictly
construed against either party.
Section 20. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and all of which
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by the undersigned, thereunto duly authorized, and the Executive has
signed this Agreement, all as of the date first written above.
XXXXXXXXX TECHNOLOGIES INC.
By:/s/Xxxxxxx X. Xxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
/s/Xxxxxxx X. Xxxx
_______________________________
Xxxxxxx X. Xxxx
