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EXHIBIT 10.5
INTEC
Industrial Technologies, Inc.
October 31, 1996
Xx. Xxxx X. Xxxxxxxx
0 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxxx XX 00000
Dear Xxxx:
This Letter (the "Agreement") is to confirm the agreement between you and
Industrial Technologies Inc. (the Company) regarding the terms of your
employment with the Company.
1. POSITION
Your engagement shall be to serve the Company as President and Chief Operating
Officer. Your duties will be specified by the By-Laws of the Company and as
otherwise specified from time to time by the Chief Executive Officer of the
Company. You shall report to the Chief Executive Officer of the Company. Your
employment shall be on a full-time basis. You agree to carry out your duties and
responsibilities to the best of your ability.
2. COMPENSATION AND OTHER BENEFITS
You shall be entitled to compensation for your services as follows:
a) During the term of your employment with the Company, you shall be entitled
to a base salary at the annual rate of $125,000, payable in substantially
equal installments in accordance with the Company's usual practice, but no
less frequently than bi-weekly.
It is our mutual expectation that this base salary will be reviewed at
least annually and increased to reflect changes in living costs and the
performance of the Company to the extent such factors are not taken into
account through bonuses.
b) You will be entitled to receive family medical coverage through the
medical insurance plan provided by the Company, enroll in group life
insurance programs and to participate in all other benefit programs that
the Company establishes and makes available to management employees
generally, on the same basis as other management employees.
During the term of your employment, you will be entitled to payment or
reimbursement by the Company for reasonable ordinary and necessary
business
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expenses incurred by you in connection with the performance of your
duties hereunder.
d) You will be entitled to paid vacation up to four (4) weeks per year and
otherwise in accordance with the Company's existing vacation policy.
e) In addition to the foregoing, the Company will pay you a cash bonus award
if earned, the payment and amount of which will depend upon the
achievement of certain target goals of Industrial Technologies, Inc.
and its subsidiary(s). (see Addendum A).
f) You will be granted options on 100,000 shares of Intec stock, under the
terms and conditions of the Employee Stock Option Plan. Price per share
will be at the close of business November 1, 1996. Terms and conditions of
the stock plan are enclosed for your renew.
g) You will be allowed a car allowance (see Addendum B) or a company
provided car, of a level commensurate with the position.
3. PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION
You agree to abide by the employee proprietary rights and confidentiality
policies of the Company and to execute upon request an agreement which specifies
these policies and your duties and obligations under them.
4. NON-COMPETITION
a) During the term of your employment by the Company you will not be an
employee or director or officer of, or be a stockholder, partner or
otherwise have an interest in or be associated with any entity involved
in planning, engineering, producing, marketing or financing activities
with respect to any product or business that is or may be competitive
with any product or business planned, engineered, produced or marketed
by the Company, except through ownership of not more than 5% of the
stock of a publicly traded corporation engaged in such activities.
b) For two years following termination of your employment with the
Company, you will refrain, directly or indirectly, whether on your own
behalf or on behalf of another person or entity, (i) from hiring any
person or who was an employee of the Company at any time during the
last twelve months of your employment with the Company or during the
180 days following termination of your employment, and (2) from
enticing or in any other manner persuading or attempting to persuade
any employee, independent contractor, dealer, supplier, client or
customer (as customer is defined below) of the Company to discontinue
his, her or its relationship with the Company or violate any agreements
he, she or it may
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have with the Company, whether as an employee, independent contractor,
dealer, supplier, client or customer, as the case may be. Notwithstanding
the foregoing to the contrary, if the Company terminates your employment
for other than good cause, or if you terminate your employment with the
Company for Good Reason (as that term is defined in subsection "e" of
Section 5), the two-year period herein above shall be inapplicable, and a
one-year period shall apply instead. As used above, "customer" shall mean
any customer of the Company existing at the time of such termination and
any potential customer being actively solicited by the Company at the time
of such termination.
5. TERMINATION
a) Unless sooner terminated in accordance with the provisions of
subsections (b), (c), (d) or (e) below, this Agreement and your
employment hereunder shall be for an initial period of one (1) year
from the date of this document. Such Agreement shall be automatically
renewed for an addition one (1) year period thereafter unless written
notice of intent to terminate is provided to the other party by
registered or certified mail, return receipt requested, at least thirty
(30) days prior to the termination of such initial period.
b) You may terminate your employment without cause by delivering 30 days
written notice to the Company. After the effective date of such
termination, you shall not be entitled to receive any further compensation
from the Company.
c) Your employment may be terminated by the Company for good cause only.
"Good cause" shall be limited to material breach of this Agreement,
death, willful neglect of duties, fraud, embezzlement, conviction of a
felony, or physical or mental disability as determined by a physician
of the Company's selection acceptable to you (you agree that your
acceptance of such a physician will not be unreasonably withheld). If
your employment is terminated for good cause, the Company shall be
obligated to pay your then base salary only through the end of the
month during which such termination occurs, plus such other sums as are
payable to you under this Agreement and which have accrued as of the
end of such month.
d) Notwithstanding the above, if the Company terminates your employment
for other than good cause, or if you terminate your employment with the
Company for Good Reason (as that term is defined in subsection "e"
below), you shall be entitled to receive from the Company the sum of
one years then current base salary payable in ten consecutive equal
monthly installments. It is anticipated that any payment made in
accordance with the foregoing shall be paid to and received by you as
liquidated damages and not as penalties, and you shall be entitled to
receive no further sums under this Agreement except such as have
accrued as of the date of such termination. Notwithstanding the above
to the contrary, if (i)
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the Company terminates your employment alleging that such termination is
for "good cause" or if you terminate your employment, alleging "good
reason," and (ii) a final judgment of a court of competent jurisdiction
shall have found the Company's allegations to be wrong thereby entitling
you to receive payments under this subsection (d), then you shall be
entitled to receive a lump sum payment of two (2) years salary, instead of
the one (1) year hereinafter recited.
e) "Good reason" as used in this Section, shall mean a material breach of
this Agreement by the Company. Material terms and conditions of this
Agreement shall be deemed to include, without limitation, the provisions
of Section 1 of this Agreement.
6. NO CONFLICT
You represent and warrant to the Company that you are not now under any
obligations of a contractual or quasi-contractual nature to any person, firm,
corporation or other organization which is inconsistent or in conflict with this
Agreement or which would prevent, or substantially limit or impair your
performance of your obligation hereunder.
7. AMENDMENT AND WAIVER
No provision of this Agreement may be amended, waived or discharged unless such
amendment or discharge is agreed to in writing and signed by you and an officer
or director of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
8. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties with respect to
your employment by and compensation from the Company. This Agreement supersedes
all prior agreements and understandings between the parties with respect to its
subject matter.
9. GOVERNING LAW
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Connecticut.
10. SEVERABILITY
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity and enforceability of any other
provisions of this Agreement, which other provisions shall remain in full force
and effect.
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11. SUCCESSORS: BINDING AGREEMENT: ASSIGNMENT
This agreement shall be binding upon and shall inure to the benefit of the
Company and any successor or successors in interest of the Company through
consolidation, merger or sale of its business. This Agreement is a personal
employment contract and may not be assigned, pledged or otherwise transferred by
you or the Company except by the Company through consolidation, merger or sale
of its business.
Please indicate your agreement with the foregoing by signing the enclosed copy
of this letter and returning it to the Company, whereupon this letter shall
constitute a binding Agreement between us as of the date first written above.
Very truly yours,
INDUSTRIAL TECHNOLOGIES, INC.
by: /s/ X. X. Xxxxxxx
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President/CEO
Agreed to and Accepted:
/s/ Xxxx X. Xxxxxxxx
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Date: 11/20/96
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ADDENDUM A: BONUS STRUCTURE
In addition to your base salary, you shall be entitled to a bonus on the
following basis:
a) 3% (three percent) of the annual (fiscal year basis) net profits (after
corporate allocations and before tax) of the Intec Inspection Division
(U.S.) (not including Intec Europe Limited), plus
b) 2% (two percent) of the annual (fiscal year basis) before tax net
profits of Industrial Technologies, Inc.,
The bonus will be based upon the profits of each fiscal year (ending September
30) and will be paid on the following basis:
- 60% upon the conclusion of each of the first three fiscal quarters
- the remainder will accrue and will be offset and adjusted for quarterly
losses, if any, upon the conclusion of the 4th quarter (the fiscal year)
- payments will be made within 31 days after the end of each fiscal quarter
The bonus structure will be reviewed annually and changes made to reflect the
performance of the Company. All bonus statements will be at the sole discretion
of the Board of Directors.
ADDENDUM B: CAR ALLOWANCE
A monthly car allowance of $500.00.
