EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
January 1, 2001 ("Effective Date"), by and between GTSI Corp., a Delaware
corporation ("Employer"), and X. Xxxxx Xxxxx ('Employee");
WHEREAS, Employer desires to employ Employee as Employer's president and
chief executive officer and to have Employee as a member of Employer's board of
directors (the "Board");
WHEREAS, Employer desires to ensure that, if a Change of Control (as
defined below) appears possible, Employee will be in a secure position from
which he can objectively engage in any potential deliberations or negotiations
respecting such Change of Control without fear of any direct or implied threat
to his employment, status and responsibilities; and
WHEREAS, Employee desires to be employed by Employer and to have the
foregoing assurances;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, Employer and Employee, each intending to be legally bound, agree
as follows:
1. Term. The term of Employee's employment hereunder shall commence on
January 1, 2001 and shall continue until December 31, 2001 (the "Term"), except
as otherwise provided in Section 6. This Agreement shall be automatically
renewed for successive one-year terms unless either party gives notice to the
other party not less than 180 days prior to expiration of the initial term or
any renewal term that it does not intend to renew this Agreement, or unless this
Agreement is otherwise terminated in accordance with Section 6.
2. Duties
(a) Offices. During the Term, and as provided herein, Employee shall serve
as a member of Employer's Board, and as Employer's president and chief executive
officer, and the Board shall re-nominate Employee as a director of Employer and
reappoint Employee as Employer's president and chief executive officer, and
Employee shall perform the duties of those positions, as assigned to him by the
Board. Employer agrees, however, that Employee will be assigned only duties of
the type, nature and dignity normally assigned to the president and chief
executive officer of a corporation of the size, stature and nature of Employer.
During the Term, Employee shall report directly to the Board.
(b) Full-Time Basis. During the Term, Employee shall devote, on a
full-time basis, his services, skills and abilities to his employment hereunder,
excepting periods of vacation, illness or Disability (as defined below).
3. Compensation
(a) Salary. During the Term, as compensation for services rendered
by Employee hereunder, Employer shall pay to Employee $300,000 per year,
reviewed annually by the Board of Directors, payable biweekly in accordance with
Employer's standard payroll schedule, plus a targeted
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annual bonus of $300,000, payable periodically in accordance with the Company's
then current Bonus Plan for Senior Officers.
(b) Tax Withholdings. Employer shall withhold from Employee's
compensation hereunder and pay to the appropriate governmental agencies payroll
taxes, including income, social security, and unemployment compensation taxes,
required by the federal, state and local governments with jurisdiction over
Employer.
(c) Options and Restricted Stock. Annually upon renewal of this
Agreement, the Board shall consider the granting of options or restricted stock
to Employee; such grants or denial of grants shall be at the Board's sole
discretion.
4. Benefits. During the Term, Employee shall be entitled to such
comparable fringe benefits and perquisites as may be provided to any or all of
Employer's senior officers pursuant to policies established at any time, and
from time to time, by the Board. These fringe benefits and perquisites shall
include Employee's participation in compensatory, benefit and incentive plans
and arrangements, including stock option and stock purchase plans, deferred
compensation and profit participation plans, as well as holidays, group health
insurance, short term and long term disability insurance and life insurance, and
supplemental executive health care benefits. Also, during the Term, Employee
shall be entitled to 20 Business Days paid leave per annum and to accrue unused
leave from year to year and to be reimbursed for the costs of physical
examinations up to $500 per annum.
5. Expenses and Other Perquisites. Employer shall reimburse Employee for
all reasonable and proper business expenses incurred by him in the performance
during the Term of his duties hereunder, in accordance with Employer's customary
practices for senior officers, and provided such business expenses are
reasonably documented. Further, Employer shall reimburse Employee for the
monthly dues to the Tower Club. In addition, during the Term, Employer shall
continue to provide Employee with an office and suitable office fixtures,
telephone services, and secretarial assistance of a nature appropriate to
Employee's position and status.
6. Termination
(a) By Employer
(i) Termination for Cause. Employer may, for Cause (as defined below),
terminate the Term at any time upon 10 Business Days prior notice to Employee.
In any event, as of the Termination Date, Employee shall be relieved of all of
his duties hereunder and Employee shall not be entitled to the accrual or
provision of any compensation or benefit after the Termination Date, but
Employee shall be entitled to the provision of all compensation and other
benefits that shall have accrued as of the Termination Date, including all
vested Options, paid leave benefits, and reimbursement of incurred business
expenses.
(ii) Termination Without Cause Employer may, in its sole discretion,
without Cause, terminate the Term at any time by providing Employee with 180
days prior notice. Upon termination of the Term under this Section 6(a)(ii),
Employer shall be obligated to pay Employee an amount equal to Employee's annual
base salary in effect as of the Termination Date plus bonus monies equal to the
previous year's bonus payments ("Severance Payment"). The Severance Payment
shall be paid during the 12 months following the Termination Date and shall be
paid in 24 biweekly payments, in accordance with Employer's standard payroll
schedule, during such 12 months. The bonus monies shall be paid at the same time
as they were paid during the previous year. Employee shall be entitled to the
provision of all compensation and other benefits that shall have accrued as of
the Termination Date, including all
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vested Options, paid leave benefits, and reimbursement of incurred business
expenses. The option exercise period would be extended for twelve months to be
coterminous with Severance Payment.
(iii) Definition of Cause. Termination by Employer of Employee's
employment for "Cause" means termination as a result of (1) deliberate and
premeditated acts against the Employer's best interests; or (2) acts or
omissions involving unacceptable performance or conduct (examples of which
include, but are not limited to: failure or refusal to perform assigned duties
or to follow Employer's policies, as determined in the sole discretion of
Employer; commission of sexual harassment or other employment practice
liabilities; excessive absenteeism; unlawful use or possession of drugs or
misuse of legal drugs or alcohol; misappropriation of an Employer asset or
opportunity; the offer, payment, solicitation or acceptance of any bribe or
kickback with respect to Employer's business; the assertion, representation or
certification of any false claim or statement to a customer of Employer; or
indictment or conviction for any felony whatsoever or for any misdemeanor
involving moral turpitude);.
(b) Death or Disability. The Term shall be terminated immediately and
automatically upon Employee's death or "Disability." The term "Disability" shall
mean Employee's inability to perform all of the essential functions of his
position hereunder for a period of 26 consecutive weeks or for an aggregate of
150 Business Days during any 12-month period by reason of illness, accident or
any other physical or mental incapacity, as may be permitted by applicable law.
Employee's capability to continue performance of Employee's duties hereunder
shall be determined by a panel composed of two independent medical doctors
appointed by the Board and one appointed by Employee or his designated
representative. Upon termination of the Term under this Section 6(b), Employee
shall not be entitled to the accrual or provision of any compensation or benefit
after the Termination Date, but Employee shall be entitled to the provision of
all compensation and other benefits that shall have accrued as of the
Termination Date, including all vested Options, paid leave benefits, and
reimbursement of incurred business expenses.
(c) By Employee
(i) Employee may, in his sole discretion, without cause, terminate the
Term at any time by providing Employer with 90 days written notice. If Employee
exercises such termination right, Employer may, at its option, at any time after
receiving such notice from Employee, relieve him of his duties and terminate the
Term at any time prior to the expiration of said notice period. If the Term is
terminated by Employee pursuant to this Section 6(c)(i), Employee shall be
entitled to the provision of all compensation and other benefits that shall have
accrued as of the Termination Date, including all vested Options, paid leave
benefits, and reimbursement of incurred business expenses, but shall not be
entitled to any further accrual or provision of any other compensation or
benefits after the Termination Date.
(ii) If, during the Term, a Change of Control (as defined below) occurs
and, without his consent, Employee is assigned duties materially inconsistent
with his position and status with Employer hereunder, Employee may, in his sole
discretion, terminate the Term upon 5 days' notice to Employer. If Employee
exercises such termination right, Employer may, at its Option, at any time after
receiving such notice from Employee, relieve him of his duties hereunder and
terminate the Term at any time prior to the expiration of said notice period. If
this Agreement is terminated by Employee or Employer pursuant to this Section
6(c)(ii), Employee shall receive, on or before the Termination Date, a lump sum
equal to one year's salary plus bonuses (paid in the prior 12 months) plus
Employee shall be entitled to the provision of all compensation and other
benefits that shall have accrued as of the Termination Date, including all
vested Options, paid leave benefits, and reimbursement of incurred business
expenses.
(d) Change of Control. For purposes of this Section 6, a "Change of
Control" shall be deemed to have occurred upon the happening of any of the
following events: (i) any "person," including a "group," as such terms are
defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 as
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amended, and the rules promulgated thereunder (collectively the "Exchange Act"),
other than a trustee or other fiduciary holding voting securities of Employer
("Voting Securities") under any employment benefit plan, becomes the beneficial
owner, as defined under the Exchange Act, directly or indirectly, whether by
purchase or acquisition or agreement to act in concert or otherwise, of 35% or
more of the outstanding Voting Securities; (ii) the stockholders of Employer
approve a merger or consolidation of Employer with any other corporation, other
than a merger or consolidation which would result in the Voting Securities of
Employer outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being the surviving entity) more than 50% of the
combined voting power of the Voting Securities of Employer or such surviving
entity outstanding immediately after such merger or consolidation; or (iii)
Employer's stockholders approve an agreement to merge, consolidate, liquidate,
or sell all or substantially all of Employer's assets.
7. Non-Waiver. It is understood and agreed that one party's failure at any
time to require the performance by the other party of any of the terms,
provisions, covenants or conditions hereof shall in no way affect the first
party's right thereafter to enforce the same, nor shall the waiver by either
party of the breach of any term, provision, covenant or condition hereof be
taken or held to be a waiver of any succeeding breach.
8. Severability. If any provision of this Agreement conflicts with the law
under which this Agreement is to be construed, or if any such provision is held
invalid or unenforceable by a court of competent jurisdiction or any arbitrator,
such provision shall be deleted from this Agreement and the Agreement shall be
construed to give full effect to the remaining provisions thereof.
9. Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the Commonwealth of Virginia, without regard
to the conflict of law provisions thereof.
10. Construction of this Agreement and Certain Terms and Phrases.
Unless the context of this Agreement otherwise requires, (i) words of any
gender include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement and not to any particular provision of this Agreement; and (iv)
the terms "Section" and "Attachment" refer to the specified Section and
Attachment, respectively, of this Agreement.
The words "including," "include" and "includes" are not exclusive and
shall be deemed to be followed by the words "without limitation"; if exclusion
is intended, the word "comprising" is used instead.
The word "or" shall be construed to mean "and/or" unless the context
clearly prohibits that construction.
Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified. For purposes of this
Agreement, Business Days shall mean any day other than a Sunday, Saturday or
other day on which banking institutions are authorized or obligated to close in
New York, New York.
Any reference to any federal, state, local or foreign statute or law shall
be deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise.
The parties have participated jointly in the negotiation and drafting of
this Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
Both Employee and Employer have received independent legal advice with
respect to the advisability of entering into this Agreement and neither has been
entitled to rely upon nor has in fact relied upon the advice of the other party
or such other party's counsel in entering into this Agreement. The
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paragraph headings and captions contained in this Agreement are for convenience
only and shall not be construed to define, limit or affect the scope or meaning
of the provisions hereof. All references herein to Sections shall be deemed to
refer to Sections of this Agreement.
11. Entire Agreement. This Agreement contains and represents the entire
agreement of Employer and Employee and supersedes all prior agreements,
representations or understandings, oral or written, express or implied with
respect to the subject matter hereof. Notwithstanding this provision, however,
nothing in this Agreement shall affect Employee's stock option rights granted
prior to the Effective Date of this Agreement. This Agreement may not be
modified or amended in any way unless in writing signed by each of Employer and
Employee.
12. Assignment. Neither this Agreement nor any rights or obligations of
Employer or Employee hereunder may be assigned by Employer or Employee without
the other party's prior written consent. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of Employer and
Employee and their heirs, successors and assigns.
13. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed properly given if delivered personally or sent by
certified or registered mall, postage prepaid, return receipt requested, or sent
by telegram, telex, fax or similar form of telecommunication, and shall be
deemed to have been given when received. Any such notice or communication shall
be addressed: (a) if to Employer, to Chief Financial Officer, 0000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; or (b) if to Employee, to his last known
home address on file with Employer; or to such other address as Employer or
Employee shall have furnished to the other in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the date first above-written.
GTSI Corp. X. Xxxxx Xxxxx
By: Signature:
Print Name: _________________________
Print Title: __________________________
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