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Exhibit 99.04
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and effective as of July 3, 1996
by and between TYLAN GENERAL, Inc., a Delaware corporation (the "Company"), and
XXXXXX X. XXXXXXX (the "Employee"), with respect to the following facts.
A. The Board of Directors (the "Board") of the Company has determined
that the best interests of the Company would be served by Employee's employment
by the Company in the capacity of Vice Chairman and Chief Administrative Officer
and such mutually acceptable additional capacities as the Chief Executive
Officer may delegate to him from time-to-time during the term of this Agreement.
B. The Company wishes to assure itself of the continued benefit of
Employee's services provided in this Agreement, and Employee is willing to serve
in the employ of the Company solely within the terms hereof for said period.
C. The Company and Employee desire to define their respective rights
and obligations as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Employee to serve in
the capacity of Vice Chairman and Chief Administrative Officer of the Company,
and Employee hereby accepts such employment by the Company upon the terms and
conditions set forth herein.
2. POSITION AND RESPONSIBILITIES
(a) DUTIES. The Company shall employ Employee in the capacity
of Vice Chairman and Chief Administrative Officer and such other mutually
acceptable executive positions as the Chief Executive Officer may determine to
be in the best interests of the Company, and Employee shall serve as such for
the term and under other conditions hereinafter set forth. Employee shall
devote his full business time and attention to the performance of such
services and to such other services as may be
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necessarily requested by the Chief Executive Officer that are consistent with
those required of a Vice Chairman and Chief Administrative Officer of a company.
In this capacity as Vice Chairman and Chief Administrative Officer, Employee
shall perform such duties and have such powers and authority as are customary
for the Vice Chairman and Chief Administrative Officer of a company. The
Employee shall report directly to and shall be responsible to the Chief
Executive Officer regarding his services. In the event that, without his
consent, Employee is assigned to a position involving a different title or
materially lesser authority and responsibility, then Employee shall have the
option, exercisable for 30 days following notice to Employee of such assignment
or new title, to consider that this Agreement has been terminated without cause
in which case Employee shall be entitled to the benefits set forth in Section
8(c) herein.
(b) COMPETITIVE ACTIVITY. Except upon the prior written
consent of the Chief Executive Officer, Employee, during the term of his
employment hereunder, will not accept any other employment of any nature and
will not engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that is or may be competitive
with, or that might place him in a competing position to that of the Company
or any other corporation or entity that directly or indirectly controls, is
controlled by or is under common control with the Company.
3. TERM OF EMPLOYMENT
The effective date of this Agreement shall be July 3, 1996
(the "Effective Date") and shall remain in effect until terminated pursuant to
Section 7.
4. WORKING FACILITIES
Employee shall be furnished with a private office,
secretarial and other necessary clerical and stenographic assistance, and such
other facilities, amenities and services as may at the time be generally
furnished to executive officers of the Company and as are appropriate for
Employee's position and adequate for the performance of his duties hereunder.
5. PLACE OF PERFORMANCE
In connection with this Agreement, Employee shall maintain an
office at the principal executive offices of Span Instruments, Inc. ("Span") in
Plano, Texas.
6. SALARY, BONUS, EXPENSES AND BENEFITS
(a) SALARY. The Company shall pay Employee an initial salary
of $250,000 per year. Employee's salary shall be reviewed and revised (if
appropriate) at least annually by the Chief Executive Officer and shall be
adjusted based upon
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Employee's job performance, the Company's financial condition and performance
and the salary and compensation levels of executives in similar companies with
similar responsibilities. Furthermore, any salary payable to Employee after the
second anniversary of the Effective Date shall be determined in accordance with
the Company's compensation policy for senior management. Any increases in
Employee's salary pursuant to this Section 6(a) shall require approval by the
Compensation Committee of the Board of Directors of the Company (the
"Committee") (without the vote of the Employee if Employee is a member of such
committee).
(b) BONUS. The Company shall pay Employee an annual bonus of
up to twenty-five percent (25%) of Employee's annual salary for the immediately
preceding year. The Committee (without the vote of the Employee if Employee is a
member of such committee) shall determine in good faith the amount of such bonus
giving consideration to the Company's overall achievement of the goals set forth
in the Company's annual plan for the applicable fiscal year and Employee's
performance during the year. The Company shall pay such bonus no later than 45
days after the end of each fiscal year of the Company.
(c) PARTICIPATION IN WELFARE AND BENEFIT PLANS. Employee shall
be entitled to participate in, personally and/or for the benefit of his family
or other beneficiaries, any welfare, insurance, pension, or other employee
benefit plans as are at the time made generally available to other executives of
the Company. Employee shall be eligible to receive during the term hereof all
benefits for which executives are eligible under every such plan or program to
the extent permissible under the general terms and provisions of such plans or
programs and in accordance with the provisions thereof.
(d) VACATION. Employee shall be entitled to six weeks' paid
vacation time each year, during which such time his compensation hereunder shall
be paid in full. Unless otherwise directed by the Chief Executive Officer,
Employee shall have the discretion to take vacation time on the dates as he
determines to be appropriate and not detrimental to the Company.
(e) HOLIDAYS, LEAVE DAYS, ETC. Employee shall be entitled to
such holidays, sick leave, leaves of absence and other absences as are at the
time made generally available to other executives of the Company of comparable
tenure and position.
(f) AUTOMOBILE. During the term of this Agreement, the Company
shall make an automobile available to Employee under such terms and conditions
as are presently applied or as may be later applied to other executives of the
Company of comparable tenure and position. In connection therewith, the Company
shall bear all expenses relating to such automobile, including insurance,
maintenance and repair, gas
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and oil. Upon termination of this Agreement, the Company shall offer Employee
the right to purchase the automobile then being operated by Employee at the
depreciated value of such automobile or to assume the Company's lease of such
automobile and shall execute and deliver to Employee all documentation necessary
to establish Employee's ownership or leasing of such automobile.
(g) LIFE INSURANCE. The Company shall pay for and provide life
insurance for each year of this Agreement for the benefit of Employee under the
Company's group life insurance plan.
(h) HEALTH INSURANCE. The Company shall provide health
insurance for Employee under the Company's health insurance plan.
(i) DISABILITY INSURANCE. The Company shall provide disability
insurance for Employee pursuant to the Company's directors' and officers'
disability policy according to the Company's policy established by the
Committee.
(j) REIMBURSEMENT OF EXPENSES. The Company shall pay or
reimburse Employee, on a monthly basis, for reasonable travel, entertainment,
promotional and other expenses incurred by Employee in the performance of his
obligations under this Agreement. Employee must submit timely detailed expense
reports for appropriate review prior to reimbursement.
(k) TAX, LEGAL AND FINANCIAL ADVICE. The Company shall pay for
the fees and expenses of legal, tax and financial advisory, and income tax
preparation services for Employee in an aggregate amount not to exceed $1,500
for each year of this Agreement; provided that no payment of any fees shall be
made by the Company for legal services obtained by Employee in connection with
any dispute with the Company regarding this Agreement.
(l) OTHER FRINGE BENEFITS. Employee shall be entitled to any
and all other fringe benefits according to the Company's policy as set by the
Committee.
7. TERMINATION
Employee's employment under this Agreement may be terminated
by the Company or Employee as herein provided, without further obligation or
liability except as expressly provided herein.
(a) RESIGNATION, DEATH OR DISABILITY. Employee's employment
hereunder may be terminated at any time by Employee's resignation (other than a
resignation for good reason as provided in Section 7(d)), or by Employee's death
or disability. In the event Employee wishes to resign, he shall give the Company
not less
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than 30 days prior notice of such resignation, which notice shall indicate the
proposed resignation date. Following receipt of such notice, the Company shall
have the right to accelerate the date of Employee's resignation and to cause his
resignation to become effective at any time prior to the resignation date set
forth in Employee's original notice; provided, however, that such acceleration
or changed effective date of resignation shall not affect in any manner the
delivery of any benefits or payments to which Employee may be entitled under
Section 8 of this Agreement. For purposes of this Agreement, disability shall be
deemed to have occurred only after the following procedure has been satisfied.
If within 45 days after notice of proposed termination for disability is given
to Employee by the Company, Employee has not returned to the performance of
substantially all his duties, the Company may terminate Employee's employment by
giving notice of termination for disability. The notice of proposed termination
may only be given by the Company following Employee's substantial and material
absence from Employee's duties by reason of physical or mental disability for a
period of 120 calendar days.
(b) TERMINATION FOR CAUSE. Employee's employment hereunder may
be terminated by the Company for cause; provided, however, that Employee shall
be given notice of the Company's findings of conduct by Employee amounting to
cause for such termination. Cause for termination under this Agreement shall be
limited to (i) Employee's personal dishonesty or gross misconduct; (ii) a
material breach of any material provision of this Agreement; (iii) Employee's
refusal or failure to act in accordance with any lawful, reasonable direction or
order of the Chief Executive Officer or the Board and such refusal or failure
results or is reasonably likely to result in a materially adverse effect on the
Company's business; (iv) conviction of any felony involving moral turpitude (not
including a conviction for operating a motor vehicle under the influence of
alcohol or any other motor vehicle violation if no bodily injury to a third
party is involved); (v) any chemical dependency or substance abuse resulting in
a continuous and material impairment of Employee's ability to perform his duties
under this Agreement; or (vi) the willful and continued failure by Employee to
substantially perform Employee's duties with the Company or its subsidiaries or
affiliates (other than any failure resulting from disability) after a written
demand identifies the manner in which the Company believes that Employee has not
substantially performed his duties. Termination of Employee's employment under
this Agreement for cause as set forth in clauses (i) or (iv) of the preceding
sentence shall be deemed to be effective upon delivery of notice thereof in
accordance with the provisions of Section 9(i) of this Agreement. Employee shall
have 30 days from the date notice is given for cause as set forth in clause
(ii), (iii), (v) or (vi) of the second sentence of this Section 7(b) to cure
such conduct.
(c) TERMINATION WITHOUT CAUSE. The Company shall have the
right, exercisable at any time during the term of this Agreement upon written
notice to Employee, to terminate Employee's employment without cause upon 30
days prior
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notice. If Employee is terminated without cause, he shall be entitled to receive
the severance benefits pursuant to Section 8(c) hereof subject to his full
compliance with said Section 8(c).
(d) RESIGNATION FOR GOOD REASON. During the term hereof,
Employee may regard Employee's employment as being constructively terminated and
may, therefore, resign within 30 days of Employee's discovery of the occurrence
of one or more of the following events, any of which will constitute "good
reason" for such resignation:
(1) Without Employee's express written consent, the
assignment to Employee of any duties materially inconsistent with Employee's
position, duties, responsibilities and status with the Company;
(2) Without Employee's express written consent, the
termination and/or material reduction in Employee's facilities (including office
space and general location) and staff reporting available to Employee, unless
such reduction occurs as part of a company-wide action authorized by the Board
(including the vote of Employee) to reduce the Company's expenses;
(3) A reduction by the Company of Employee's base
salary or of any bonus compensation formula applicable to him unless in
connection with (i) an across-the-board reduction for all senior management of
the Company, (ii) a reduction after the second anniversary of the Effective Date
in order to make Employee's salary consistent with the Company's compensation
policy for senior management or (iii) a company-wide salary expense reduction
necessitated by poor financial performance of the Company, in any case as
determined by the Committee in its reasonable discretion;
(4) A failure by the Company to maintain any of the
employee benefits to which Employee is entitled at a level substantially equal
to or greater than the value of those employee benefits currently in effect
through the continuation of the same or substantially similar plans, programs
and policies; or the taking of any action by the Company or its affiliate(s)
that would materially affect Employee's participation in or reduce Employee's
benefits under any such plans, programs or policies, or deprive Employee of any
material fringe benefits enjoyed by Employee unless such failure or reduction
occurs as part of a company-wide action authorized by the Board (including the
vote of Employee if Employee is a Director of the Company) to reduce the
Company's expenses;
(5) The failure by the Company to permit Employee to
take substantially the same number of paid vacation days and leave to which
Employee is entitled;
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(6) The Company or any affiliate(s) requiring
Employee to be based anywhere other than within 20 miles of Plano, Texas, except
for required travel on the Company's or an affiliate's business to an extent
substantially consistent with Employee's present business travel obligations;
(7) Any termination of Employee's employment by the
Company which is not affected pursuant to the requirements of this Section 7
with respect to death, disability or termination for cause;
(8) The failure of the Company to obtain the
assumption of this Agreement by any successor as contemplated in Section 9(e)
hereof; and
(9) A material breach of any provision of this
Agreement by the Company.
In the event of the occurrence of any of the above listed events and in the
event Employee wishes to resign on the basis of occurrence of such event,
Employee shall give the Company notice of his proposed resignation, and the
Company shall have a period of 30 days following its receipt of such notice to
remedy the breach or occurrence giving rise to such proposed resignation. In the
event the Company fails to so remedy said breach or occurrence by expiration of
said 30-day period, Employee shall be deemed to have resigned from his
employment with the Company for good reason pursuant to this Section 7(d).
(e) TERMINATION OBLIGATIONS. Employee hereby acknowledges and
agrees that all personal property of the Company, including, without limitation,
all books, manuals, records, reports, notes, contracts, lists, and other
documents, proprietary information, copies of any of the foregoing, and
equipment furnished to or prepared by Employee in the course of or incident to
his employment, belong to the Company and shall be promptly returned to the
Company upon termination of his employment for any reason. Employee shall retain
the rights to remove all of his personal property from the premises of the
Company and any personal property of the Company as may be mutually agreed upon
between the Company and Employee.
8. PAYMENTS TO EMPLOYEE UPON TERMINATION.
(a) DEATH OR DISABILITY. In the event of Employee's death or
disability, all benefits generally available to the Company's executives as of
the date of such an event as determined by the Committee shall be payable to
Employee or Employee's estate, without reduction, in accordance with the terms
of any plan, contract, understanding or arrangement forming the basis for such
payment, including, but not limited to, payments under the plans identified in
Section 6(c). Employee shall be entitled to such other payments as might arise
from any plan, contract, understanding or
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arrangement between Employee and the Company at the time of any such event
pursuant to Section 6(c) or 6(i) hereof.
(b) TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON.
In the event Employee is terminated by the Company for cause as provided in
Section 7(b) or Employee resigns for other than good reasons as defined in
Section 7(d), neither the Company nor an affiliate shall have any further
obligation or liability of any nature to Employee under this Agreement or
otherwise.
(c) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.
Upon the occurrence of termination without cause, or resignation for good
reason, as defined in Section 7(d), Employee shall be entitled to receive the
following:
(1) SEVERANCE PAYMENT. The Company shall continue to
pay to the Employee his salary (i) until the date that is eighteen (18) months
from the effective date of this Agreement (the "Initial Period") and (ii) for
twelve (12) months following the later of (x) the date of Employee's actual
termination of employment and (y) termination of the Initial Period (the
"Severance Payment"). Such salary shall be determined with reference to the
salary in effect for the month in which the date of employment termination
occurs.
(2) METHOD OF PAYMENT. The Severance Payment shall be
paid to Employee in cash in one lump sum no later than thirty (30) days
following the actual date of termination.
(3) PAYMENT IN LIEU OF CONTRACT DAMAGES. The
Severance Payment shall be in lieu of any further payments to the Employee and
any further accrual of benefits with respect to periods subsequent to the date
of the employment termination and shall constitute a full satisfaction and
discharge of any claims by Employee related to the Agreement or the
circumstances surrounding the termination of employment hereunder.
Notwithstanding the preceding sentence, neither the Severance Payment nor any
other payments under this Section 8(c) shall reduce or offset any benefits the
Employee may be entitled to under the specific terms of the benefit plans of the
Company.
9. GENERAL PROVISIONS
(a) ENTIRE AGREEMENT. The terms and provisions of this
Agreement, together with the terms and provisions of the Noncompetition
Agreement dated the date hereof between Employee and the Parent, shall
constitute the entire understanding between Employee and the Company with
respect to the subject matter hereof, and shall supersede any and all prior
agreements or understandings between Employee and the Company (or any affiliate
of the Company, including Span), whether written or oral.
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(b) AMENDMENTS. This Agreement may be amended or modified only
by a written instrument executed by Employee and the Company.
(c) GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California.
(d) SEVERABILITY. In the event that any terms or provisions of
this Agreement shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining terms and provisions hereof.
(e) ASSUMPTION. The Company shall require any
successor-in-interest (whether direct or indirect or as a result of purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform the
obligations under this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.
(f) ASSIGNABILITY. The rights or obligations contained in this
Agreement shall not be assigned, transferred or divided in any manner by
Employee or the Company, without the prior written consent of the other;
provided, however, that nothing in this Section 9(f) shall preclude Employee
from designating a beneficiary to receive any benefits hereunder upon his death,
or the executors, administrators or other legal representatives of Employee or
his estate from assigning any rights hereunder to the person(s) entitled
thereto. Notwithstanding the foregoing, this Agreement shall be assignable by
the Company without Employee's consent and be binding on (i) any affiliate of
the Company and (ii) any entity which by purchase of assets, merger or
otherwise, becomes a successor to the business of the Company.
(g) WAIVER OF BREACH. Any waiver of any breach of employment
terms set forth herein shall not be construed to be a continuing waiver or
consent to any subsequent breach on the part of Employee or the Company.
(h) HEADINGS. The headings of paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation and performance of any of the provisions of this Agreement.
(i) NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or if mailed by United States certified or
registered mail, prepaid, to the parties or their permitted assignees at the
following addresses (or at such other address as shall be given in writing by
either party to the other):
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To: Tylan General, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
To: Xxxxxx X. Xxxxxxx
Span Instruments, Inc.
0000 Xxxxxx X
Xxxxx, Xxxxx 00000
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first written above.
TYLAN GENERAL, INC.
By: /s/ Xxxxx X. Xxxxxx
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Its: Chairman of the Board, President
and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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