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Exhibit 10.13
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into
by and between Ferrofluidics Corporation (the "Company"), a
Massachusetts corporation with its principal place of business at
00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx, and Xxxxxxxxx X.
Xxxxxxxxxxx ("Xxxxxxxxxxx"), of 0 Xxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, and is to be effective as of January 1,
1995.
WHEREAS, the operations of the Company are a complex matter
requiring direction and leadership in a variety of areas;
WHEREAS, Xxxxxxxxxxx possesses the experience and expertise
to provide the direction and leadership required by the Company;
and
WHEREAS, subject to the terms and conditions hereinafter set
forth, the Company, therefore, wishes to establish the terms of
employment of Xxxxxxxxxxx as its President and Chief Operating
Officer, and Xxxxxxxxxxx agrees to so establish such terms of
this employment;
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual promises, terms, provisions and conditions set
forth in this Agreement, the parties hereby agree:
1. EMPLOYMENT. Subject to the terms and conditions set
forth in this Agreement, the Company hereby offers and
Xxxxxxxxxxx hereby accepts employment on the terms and conditions
set forth in this Agreement.
2. CAPACITY AND PERFORMANCE.
(a) Xxxxxxxxxxx shall be employed by the Company as
its President and Chief Operating Officer, and shall have all
powers and duties consistent with those positions, subject to the
direction of the Company's Chief Executive Officer.
(b) Xxxxxxxxxxx shall devote his best efforts,
business judgment, skill and knowledge to the advancement of the
business and interests of the Company and its affiliates, and to
the discharge of his duties and responsibilities hereunder. In
accordance with the foregoing, Xxxxxxxxxxx shall not engage in
any other business activity, except as may be approved by the
Board of Directors; PROVIDED, HOWEVER, that nothing herein shall
be construed as preventing Xxxxxxxxxxx from:
(1) investing his assets in a manner not otherwise prohibited
by this Agreement, and in such form or manner as shall not
require any
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material services on his part in the operations
or affairs of the companies or other entities in which such
investments are made;
(2) serving on the board of directors of any
company, provided that he shall not be required to
render any material services with respect to the
operations or affairs of any such company; or
(3) engaging in religious, charitable or other
community or non-profit activities which do not impair
his ability to fulfill his duties and responsibilities
under this Agreement.
(c) Except for required travel on the Company's
business Xxxxxxxxxxx shall not be required to work on a regular
basis at any location outside of Hillsborough County in the State
of New Hampshire.
3) COMPENSATION AND BENEFITS.
(a) BASE SALARY. The Company shall pay Xxxxxxxxxxx a
base salary at an annual rate equal to $185,000 per year, payable
in accordance with the payroll practices of the Company for its
executives. After six (6) months of satisfactory performance, as
determined by the CEO, said base salary will be increased to an
annual rate equal to $200,000 per year.
(b) STOCK BONUS PLAN. On the effective date of this
Agreement, Xxxxxxxxxxx will be awarded 75,000 shares of Common
Stock of the Company as a restricted stock award under the
Company's 1994 Restricted Stock Plan (the "Plan") to be vested as
follows:
Cumulative
Percentage of Shares Percentage
Vesting Date Becoming Vested Vested
------------ -------------------- ----------
January 1, 1996 33 1/3% 33 1/3%
January 1, 1997 33 1/3% 66 2/3%
January 1, 1998 33 1/3% 100%
As provided in Section 10 of the Plan, the shares subject to the
Restricted Stock Award above shall vest upon the occurrence of a
"Change of Control" as such term is defined in the Plan.
(c) VACATIONS. Xxxxxxxxxxx shall be entitled to the
number of paid vacation days to which he would entitled in
accordance with the Company's normal vacation policy, to be taken
at such times and intervals as shall be determined by
Xxxxxxxxxxx, subject to the reasonable business needs of the
Company.
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(d) RETIREMENT PLANS. Xxxxxxxxxxx shall be entitled
to participate in and enjoy the benefit of the Company's
retirement, supplementary retirement, deferred compensation or
similar plans, programs or arrangements as available to the
Company's management from time to time.
(e) HEALTH, WELFARE AND FRINGE BENEFIT PLANS, ETC.
Xxxxxxxxxxx shall be entitled to participate in and enjoy the
benefit of all the health, medical, dental, cafeteria,
reimbursement, death (including life insurance), accident, travel
insurance, long-term disability, short-term disability, sick leave,
other leaves of absence, holidays and other similar welfare,
fringe-benefit or employment-related plans, programs, arrangements,
policies or perquisites available to the Company's management
from time to time. participation shall be subject to the terms
of the applicable plan documents and the discretion of the Board
or any administrative or other committee provided for in or
contemplated by such plan. The Company may alter, modify, add to
or delete its employee benefit plans as they apply to the
Company's management at such times and in such manner as the
company determines to be appropriate, without recourse by
Xxxxxxxxxxx.
(f) BUSINESS EXPENSES. The Company shall pay or
reimburse Xxxxxxxxxxx for all reasonable business expenses
incurred or paid by him in the performance of his duties and
responsibilities hereunder, subject to any restrictions on such
expenses set by the Board and to such reasonable substantiation
and documentation as may be specified by the Company from time to
time.
4) TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS. If
employed for 6 months or less, Xxxxxxxxxxx shall be entitled to
receive as a severance payment if terminated for reasons other
than "cause" an amount equal to 6 months' salary, or 12 months'
salary if employed for a period of more than 6 months. If the
Company undergoes a Change of Control (as defined in the Plan)
and a Terminating Event (as defined below) occurs within a 24
month period of the date on which the Change of Control occurs
then Xxxxxxxxxxx will be paid an amount equal to 18 month's base
salary at the rate then in effect under this Agreement. If
Xxxxxxxxxxx desires to terminate his employment, then 8 weeks'
notice must be given to the Company. Xxxxxxxxxxx'x employment
shall terminate under the following circumstances:
For purpose of this Agreement, a "Terminating
Event" shall mean (A) termination by the
Company or its successor entity of the
employment of Xxxxxxxxxxx for any reason
other than death, disability or cause
pursuant to Section 5(a) or (b) of this
Agreement, or (B) resignation of Xxxxxxxxxxx
upon the occurrence of any of the following
events: (1) there is a significant change in
the nature or scope of Xxxxxxxxxxx'x
responsibilities, authorities, powers,
functions or duties from the
responsibilities, authorities, powers,
functions or duties exercised by Xxxxxxxxxxx
immediately prior to the Change in Control or
(2) Xxxxxxxxxxx is required to relocate outside
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Hillborough County, New Hampshire in
order to maintain his employment hereunder
after the Change in Control or (3) there is a
decrease in the total annual compensation
payable by the surviving or successor entity,
as applicable, to Xxxxxxxxxxx from the total
annual compensation paid to Xxxxxxxxxxx by
the Company prior to the Change in Control.
(a) DEATH OR DISABILITY. In the event Xxxxxxxxxxx
dies or becomes disabled during the term of this Agreement, his
employment hereunder shall automatically terminate. In such
case, the Company shall pay to Xxxxxxxxxxx or his beneficiary, as
the case may be, in addition to such amounts as may be payable to
Xxxxxxxxxxx pursuant to Section 3(b) of this Agreement, any earned
but unpaid salary as of the date of his death or disability. For
the purpose of this Agreement, "disability" shall refer to a
situation in which Xxxxxxxxxxx is totally disabled from
performing his duties for the Company during a period of 13
consecutive weeks, in which case the Company's Chief Executive
Officer may terminate his employment, on account thereof.
(b) BY THE COMPANY FOR CAUSE. The Company may
terminate Xxxxxxxxxxx'x employment hereunder for cause at any
time upon notice to Xxxxxxxxxxx setting forth in reasonable
detail the nature of such case. The following, as determined by
the Board in its reasonable judgment, shall constitute cause for
terminate:
(i) Xxxxxxxxxxx'x falsification of the accounts
of the Company, embezzlement of funds of the Company or
other material dishonesty with respect to the Company or any
of its affiliates; or
(ii) Conviction of, or plea of nolo contendere to,
a felony or other crime involving moral turpitude (it being
understood that violation of a motor vehicle code does not
constitute such a crime); or
(iii) Conduct engaged in or action taken or omitted
to be taken by Xxxxxxxxxxx which is in material breach of
this Agreement; or
(iv) Material failure to perform a substantial
portion of Xxxxxxxxxxx'x duties and responsibilities
hereunder, which failure continues for more than thirty days
after written notice given to Xxxxxxxxxxx pursuant to a vote
of the Board of Directors, such vote to set forth in
reasonable detail the nature of such failure; or
(v) Gross or willful misconduct of Xxxxxxxxxxx
with respect to the Company or any subsidiary or affiliate
thereof.
If any question shall arise as to whether during any period
Xxxxxxxxxxx has suffered disability, Xxxxxxxxxxx may, and at the
request of the Company will, submit to the Company a
certification in reasonable detail by a physician selected by
Xxxxxxxxxxx or his guardian to whom the Company has no reasonable
objection as to whether Xxxxxxxxxxx was so disabled
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and such certification shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and Xxxxxxxxxxx shall
fail to submit such certification, the Company's determination of such issue
shall be binding on Xxxxxxxxxxx.
Upon the giving of notice of termination of Xxxxxxxxxxx'x
employment hereunder for cause, the Company shall have no further
obligation or liability to Xxxxxxxxxxx, other than the payment of
salary earned and unpaid at the date of termination and the
contribution by the Company to the cost of Xxxxxxxxxxx'x
participation (subject to any required employee contribution by
Xxxxxxxxxxx under the terms of the applicable plans) in the
Company's group medical and dental insurance plans as the same
are in effect from time to time for so long as Xxxxxxxxxxx is
entitled to continue such participation under applicable law and
plan terms.
(c) BY THE COMPANY OTHER THAN FOR CAUSE. The Company
may terminate Xxxxxxxxxxx'x employment hereunder other than for
cause at any time upon notice to Xxxxxxxxxxx. In the event of
such termination, the Company shall continue to pay Xxxxxxxxxxx
the salary and other benefits specified by Section 3 and 4 of this
Agreement, to the end of its term.
(d) BY XXXXXXXXXXX. Xxxxxxxxxxx may terminate his
employment hereunder at any time upon sixty (60) days' notice to
the Company.
5) WITHHOLDING. All payments made by the Company under
this Agreement shall be reduced by any tax or other amounts
required to be withheld by the Company under applicable law.
6) ASSIGNMENT. Neither the Company nor Xxxxxxxxxxx may
make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent
of the other; provided, however, that the Company may assign its
rights and obligations under this Agreement without the consent
of Xxxxxxxxxxx in the event that the Company shall hereafter
affect a reorganization, consolidate with, or merge into, any
other person or entity or transfer all of its properties or
assets to any other person or entity. This Agreement shall
insure to the benefit of and be binding upon the Company and
Xxxxxxxxxxx, their respective successors, executors,
administrators, heirs and permitted assigns.
7) SEVERABILITY. If any portion or provision of this
Agreement shall to any extent be declared illegal or
unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion
or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
8) WAIVER. No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party.
The failure of either party to require the performance of any
term or obligation of this Agreement, or the waiver by either
party of
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any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
9) NOTICES. Any and all notices, requests, demands and
other communications provided for by this Agreement shall be in
writing and shall be deemed given when delivered by hand, telex
or facsimile, or if mailed, five days after mailing (two business
days in the case of courier service), to the parties as follows:
to Xxxxxxxxxxx at his last known address on the books of the
Company and, in the case of the Company, to its principal place
of business, attention of Chairman of the Board or to such other
address as either party may specify by notice to the other.
10) ENTIRE AGREEMENT. This Agreement and the Non-
Disclosure/Non-Compete agreement to be signed by Xxxxxxxxxxx and
the Company constitute the entire agreement between the parties
and supersede all prior communications, agreements and
understandings, written or oral, with respect to the terms and
conditions of Xxxxxxxxxxx'x employment.
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11) AMENDMENT. This Agreement may be amended or modified
only by a written instrument signed by Xxxxxxxxxxx and by an
expressly authorized representative of the Company.
12) HEADINGS. The headings and captions in this Agreement
are for convenience only and in no way define or describe the
scope of or content of any provision of this Agreement.
13) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be an original and all of
which together shall constitute one and the same instrument.
14) GOVERNING LAW. This is a New Hampshire contract and
shall be construed and enforced under and be governed in all
respects by the laws of The State of New Hampshire, without
regard to the conflict of laws principles thereof.
IN WITNESS WHEREOF, this Agreement has been executed as a
sealed instrument by the Company, by its duly authorized
representative, and by Xxxxxxxxxxx, as of the date first above
written.
FERROFLUIDICS CORPORATION
/s/ Xxxxxxxxx X. Xxxxxxxxxxx By: /s/ Xxxx X. Xxxxx, Xx.
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Xxxxxxxxx X. Xxxxxxxxxxx Xxxx X. Xxxxx, Xx.
Chief Executive Officer
