CAMBEX CORPORATION
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
November 12, 1999
Xx. Xxxxxx X. Xxxx
00 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Xxx:
This letter is to confirm the arrangements agreed
to between you and Cambex Corporation (the "Company")
relating to your continued employment by the Company.
1. Term of Employment. The Company agrees that
it will employ you, and you agree to serve, under the
terms of this agreement from the date hereof until
December 31, 2002 unless earlier terminated pursuant
hereto.
2. Full Time Employment. You are presently
Chairman of the Board of Directors and the President
and Chief Executive Officer of the Company. You agree
to continue to diligently perform the duties, and
assume the responsibilities, of those officers and such
additional executive and managerial duties and
responsibilities (as are consistent with the functions
normally performed by a chief executive officer) as
shall from time to time be assigned to you by the Board
of Directors. Except for illness and reasonable
vacations, during the term of this Agreement Period you
shall devote all of your working time and attention and
your best efforts to the performance of your duties and
responsibilities hereunder, provided that nothing
herein contained shall be deemed to prevent or limit
your right (i) to invest in the securities of any
corporation whose securities are publicly owned if your
ownership of such securities shall be less than 1% of
the issued and outstanding securities of any such
corporation, (ii) to make any other passive investments
where you are not obligated to or required to, and
shall not in fact, devote any managerial efforts, (iii)
to participate in charitable, community or educational
activities, (iv) to participate in trade or
professional organizations or (v) subject to the
approval of the Board of Directors (which approval
shall not be unreasonably withheld or withdrawn), to
hold directorships in public companies, except only
that the Board of Directors shall have the right to
limit such activities whenever it reasonably believes
that the time spent on such activities infringes upon
the time required by you for performance of your duties
hereunder. You agree to enter into the Employee
Agreement relating to inventions and noncompetition to
which all other executive and professional employees of
the Company are parties.
3. Compensation.
(a) Fixed Compensation. As fixed
compensation for services rendered hereunder, the
Company agrees to pay your minimum base
compensation at the rate of $200,000.00 per year,
payable according to the Company's regular pay
practices, which amount may be increased from time
to time by the Board of Directors in its sole
discretion.
(b) Incentive Bonus. In addition to the
fixed compensation provided in subparagraph (a),
the Company agrees that pursuant to the Company's
Incentive Bonus Plan, as it may be amended from
time to time (the "Plan"), you will receive an
incentive bonus in an amount equal to four percent
of the Company's pretax profit as defined in that
Plan for each fiscal year during the term of this
Agreement.
4. Termination of Employment. If your
employment should terminate prior to December 31, 2002,
the following provisions shall govern and you shall not
be entitled to any compensation for any reason except
as follows:
(a) Voluntary Termination or Termination for
Cause. If you voluntarily terminate your
employment or the Company terminates your
employment for cause, you shall be entitled to
receive only your fixed compensation provided in
paragraph 4(a) to and until the date of
termination of your employment plus such portion
of your incentive bonus to which you are entitled
on such date under the Plan.
(b) Termination by the Company other than
for Cause. If your employment is terminated by a
majority of the Board of Directors of the Company
other than for cause, you will be entitled to
receive fixed compensation at the then current
rate pursuant to paragraph 4(a) until and
including December 31, 2002. In addition, you
shall be entitled to receive any incentive bonus
earned under the Plan during the fiscal year in
which your employment is terminated in the full
amount which you had been awarded under Par. 3(b)
and to be awarded the right to earn incentive
bonuses of one-half such amount under the Plan
(but not less than two percent of the Company's
pretax profits as defined in the Plan) during each
fiscal year thereafter through December 31, 2002.
(c) Termination by the Company of your
Status as Chief Executive Officer. If a majority
of the Board of Directors of the Company, without
your consent, should designate an person other
than you as the Chief Executive Officer of the
Company (either directly by conferring that title
on another person or indirectly by conferring the
powers of the Chief Executive Officer to another
person), you will be entitled to resign and to
treat that action by the Company as a termination
of your employment other than for cause.
(d) Mitigation of Damages: Noncompetition.
If you should accept employment elsewhere than at
the Company during the period following
termination of your employment and prior to
December 31, 2002, the Company shall be entitled
to a credit against amounts otherwise payable to
you hereunder for the period after January 1, 2001
in the amount of compensation paid to you from
such other employment after January 1, 2001.
If you should accept employment from any
entity which is directly and significantly in
competition with the Company during such period of
time, the Company's obligation to make payments to
you, other than payments described in subparagraph
4(a), shall cease.
(e) Limitation on Right to Damages.
Notwithstanding the foregoing, you shall not be
entitled to receive any amounts for any period
subsequent to termination of your employment if
(i) On the effective date of such
termination, the assets of the
Company are in the hands of a
receiver, assignee for the benefit
of creditors, trustee in
bankruptcy, debtor in possession,
or other entity for the benefit of
creditors; or
(ii) The consolidated net worth of the
Company on the effective date of
termination is less than the
consolidated net worth of the
Company shown on the Company's
December 31, 1999 balance sheet.
5. Definition of "Cause". For purposes of this
agreement, the term "cause" shall mean the following:
(a) Your continuing any arrangement or
holding any position which conflicts with the
interest of or which interferes with your duties
owed to the Company for more than thirty days
after written notice by the Company to you
thereof;
(b) Your conviction of a felony;
(c) Your deliberate misappropriation of
corporate funds;
(d) Your refusal to perform assigned duties
where such assignment is consistent with your
engagement hereunder as an executive officer of
the Company and is not a basis for your treating
the Company's action as a termination of your
employment pursuant to subparagraph 4(c).
If the Company asserts that it has cause for your
discharge under subparagraph (d) above, the Company
will give thirty days' written notice to you specifying
the action or inaction on your part which is the basis
of the asserted right to terminate and advising you
that it is the Company's intention to terminate your
employment. Your employment will terminate in
accordance with such notice unless within such period
of thirty days you shall remedy the cause in respect of
which such notice was sent. If during such thirty-day
period you notify the Company that you dispute the
grounds for discharge or dispute the assertion that
admitted action or inaction constitutes a basis for
discharge, the dispute shall be submitted to
arbitration in the following manner:
You shall give written notice to the Company
naming an arbitrator and requesting that the Company
name an arbitrator within ten days. The two
arbitrators thus selected shall select a third, and a
decision of any two of the three shall be binding upon
the parties. Should the Company fail to appoint an
arbitrator within the ten-day period mentioned above,
the arbitrator appointed by you will act as sole
arbitrator. If the two arbitrators shall be unable to
agree upon a third arbitrator within a period of ten
days after the appointment of the Company's arbitrator,
the selection of an additional arbitrator shall be made
by the American Arbitration Association in Boston,
Massachusetts. The decision of any two of the three
arbitrators shall be binding upon the parties and said
decision shall be reduced to a judgment in any court
having jurisdiction. The arbitrators will be
instructed to conduct their arbitration informally and
expeditiously, the arbitration to be completed in all
events within thirty days after the appointment of the
third arbitrator (or within thirty days after the
Company has failed to appoint its arbitrator, as the
case may be). Failure of either party to cooperate
with the arbitrators will be a basis for the
arbitrators to make a finding against the non-
cooperating party. Each party shall bear his or its
own expenses in connection with such an arbitration
except that the expenses of the arbitrators themselves
shall be borne in accordance with their award. All
matters respecting your employment shall remain in
status quo pending the outcome of any dispute which is
submitted to arbitration hereunder, and the parties
shall, during such arbitration, proceed with the
performance of their respective obligations hereunder
until final determination is made. If the award of the
arbitrators is unfavorable to you, you shall
nevertheless have a reasonable period, to be set by
them, following the rendering of their award within
which to conform to the Company's assignment of duties
to you, thereby restoring you to good standing under
this Agreement.
6. Merger, etc. This agreement shall be binding
upon any successor to the Company in the event that the
Company consolidates with any other entity or in the
event that the Company is a party to a merger where the
Company is not the surviving entity. This agreement
shall be binding upon and inure to the benefit of the
Company and its successors and assigns and you and your
heirs, executors and administrators.
7. Notices. All notices required to be given
hereunder shall be in writing and shall be considered
duly given on two days after the date of deposit in the
mail, return receipt requested, if mailed to the
address listed below or such other addresses as may be
given by either party to the other by notice hereunder:
If you: At your address shown in the inside
address at the beginning of this letter;
If to the
Company: Its address as it appears on the
letterhead appearing on the first page
of this agreement.
8. Massachusetts Law. This Agreement shall be
governed by and construed in accordance with the laws
of The Commonwealth of Massachusetts.
9. Waivers. Waiver by the Company of any breach
of any provision of this Agreement by you shall not
operate or be construed as a waiver of any subsequent
breach by you.
10. Entire Agreement. This instrument contains
the entire agreement of the parties. This Agreement
shall be modified or terminated only by a writing
signed by you and the Company.
If you accept and agree to the foregoing, please
so signify by signing and returning a counterpart of
this letter, whereupon this letter will become an
agreement between you and the Company as of the date
first above written.
Very truly yours,
CAMBEX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Accepted and agreed to:
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
