Exhibit 10.16
EMPLOYMENT AGREEMENT dated as of August 27, 2001 (this "Agreement")
between Rheometric Scientific, Inc., a Delaware corporation (the "Corporation"),
and Xxxx Xxxxxxx (the "Executive").
The Corporation desires to employ the Executive as President and Chief
Operating Officer and to be assured of his unique experience, ability and
services on an exclusive basis on the terms and conditions and for the term
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the Corporation
and the Executive hereby agree as follows:
1. Employment. (a) The Corporation hereby employs the Executive as the
President and Chief Operating Officer of the Corporation. In such capacity the
Executive shall have such responsibilities and duties consistent with his
executive position and of such a nature as are usually associated with his
office and as may be designated from time to time by the Board of Directors of
the Corporation.
(b) The Executive shall competently, faithfully and diligently
discharge his duties hereunder and use his best efforts to implement the
policies established by the Board of Directors of the Corporation. The Executive
shall devote his full business time to the business and affairs of the
Corporation and its Affiliates (as hereinafter defined). Such duties shall be
performed on behalf of the Corporation and its subsidiaries primarily at the
facilities of the Corporation in Piscataway, New Jersey, or at another location
within 60 miles of Piscataway, New Jersey, subject to relocation of such
facilities in the discretion of the Corporation and to such travel as may be
appropriate in the performance of his duties.
(c) The Executive hereby represents and warrants that there is no
employment agreement or restriction presently existing or in effect between the
Executive and any other person that would in any way restrict his ability to
enter into and perform his obligations under this Agreement.
2. Term of Employment. The Executive hereby accepts such employment,
for a term (the "Employment Term") commencing with the date of this Agreement
and ending on the second annual anniversary of the date of this Agreement.
3. Compensation, Etc. (a) Subject to the terms of this Agreement, as
compensation for his services hereunder, there shall be paid to the Executive so
long as he shall be employed hereunder a salary at the annual rate of $208,000
("Base Salary"), payable in substantially equal monthly amounts. Such Base
Salary shall be reviewed by the Corporation on approximately an annual basis and
subject to annual adjustment in the Corporation's discretion, but in no event
shall the Base Salary be less than the Base Salary in effect for the immediate
prior calendar year.
(b) The Executive shall be entitled to receive during the Employment
Term benefits comparable in all material respects to benefits to which other
comparably situated
employees of the Corporation are entitled, including three weeks vacation per
year. In lieu of participation in the Corporation's bonus plan generally
available to senior executives, the Executive shall be entitled to participate
in an individual bonus program, the terms of which are to be mutually agreed to
in good faith by the Executive and the Chairman of the Corporation, which would
provide the Executive with the opportunity to receive (i) a bonus for 2001 of up
to 25% of his annual salary (prorated for the portion of the year that he was
employed by the Corporation) if the bonus targets for 2001 are met and (ii) a
bonus for 2002 of up to 35% of his annual salary if the bonus targets for 2002
are met. In addition, the Executive shall be entitled to a car allowance in the
amount of $12,500 per year payable monthly and, in full payment for
reimbursement of all relocation and similar expenses incurred by the Executive,
the aggregate amount of $40,000, payable at the rate of $10,000 per month on the
first days of September, October, November and December, 2001; the Executive
shall provide to the Corporation copies of receipts with respect to such
expenses. Amounts paid by the Corporation to the Executive in respect of such
$40,000 reimbursement shall be promptly refunded by the Executive to the
Corporation if the Executive voluntarily terminates his employment with the
Corporation without Good Cause (as hereinafter defined) within six months of the
date hereof.
(c) The Executive will receive stock options, that will vest over four
years, pursuant to the Corporation's 2000 Incentive Stock Option Plan to
purchase 160,000 shares of Corporation Common Stock at a per share exercise
price equal to 85% of the closing price per share on the date of grant.
(d) The Executive shall be entitled to reimbursement for all reasonable
expenses incurred by him in the discharge of his duties; provided however, that
the Executive shall maintain adequate records, in such form and detail as the
Corporation may reasonably request, of all such expenses to be reimbursed and
shall make such records available to the Corporation for copy, inspection, and
approval as and when requested.
(e) All amounts payable under this Agreement shall be subject to
applicable withholding of taxes, other than the reimbursement for relocation and
similar expenses provided for in Section 3(b) hereof.
(f) The Executive and this Agreement shall be subject to compliance by
the Executive with the Corporation's drug screening policies.
4. Earlier Termination. (a) Notwithstanding the provisions of Section 2
hereof, the obligations of the Corporation hereunder (except as provided by
Section 4(d) hereof) and the employment of the Executive hereunder shall be (in
the case of subparagraph (1) below) and may be (in the case of subparagraphs (2)
and (3) below) terminated by the Corporation on the earliest of the following
events:
(1) The date of the death of the Executive.
(2) The date on which the Corporation shall have given the Executive
notice of termination of his employment hereunder by reason of his physical
or mental incapacity on a permanent basis. The Executive shall be deemed to
be physically or
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mentally incapacitated on a permanent basis if the Executive is unable, by
reason of any physical or mental incapacity, for a period of 90 days
(whether or not consecutive) during any 12-month period, to perform his
duties and responsibilities hereunder in a manner reasonably satisfactory to
the Board of Directors of the Corporation in its good faith judgment.
(3) Upon notice in writing to the Executive, for "cause", which shall
mean (A) action or omission by the Executive which causes or is intended to
cause significant harm to the Corporation or any of its Affiliates, (B) the
commission or perpetration by the Executive of any fraud upon the
Corporation or any of its Affiliates, or any criminal or dishonest act or
any act of moral turpitude, (C) habitual absenteeism or chronic alcoholism
or other form of addiction which substantially interferes with the
performance by the Executive of his duties, (D) any failure to meet such
performance standards as shall be established by the Board of Directors in
consultation with the Executive or refusal by the Executive to perform the
duties of his employment hereunder or to follow the lawful and proper
directives of the Board of Directors or of any other officer having
supervisory authority over the Executive, it being understood that the
failure by the Corporation to achieve its business plan or projections shall
not in and of itself be considered a failure or refusal to perform duties,
or (E) any other material violation by the Executive of his obligations
under this Agreement, including without limitation any violation by the
Executive of his obligations under Section 5 hereof.
(b) Notwithstanding the provisions of Section 2 hereof, the obligations
of the Corporation hereunder (except as provided by Section 4(d) hereof) and the
employment of the Executive hereunder may be terminated by the Executive upon
the occurrence of any of the following events (each of which constitutes "Good
Reason"):
(1) A material reduction in the nature or scope of the authorities,
powers, functions or duties, or a reduction in Base Salary, of the
Executive;
(2) A material breach by the Corporation of its obligations under this
Agreement;
(3) The liquidation or dissolution of the Corporation; or
(4) The relocation by the Corporation of the Executive's regular place
of employment more than 60 miles from Piscataway, New Jersey.
(c) In the event that the employment of the Executive is terminated
pursuant to Section 4(a) or 4(b) hereof, the Executive shall thereupon be
released from any further obligations under Section 1 hereof, and the
Corporation shall thereupon be released from any further obligations hereunder
(except as provided by Section 4(d) hereof); provided, however, that termination
pursuant to this Section 4 shall in no way abrogate or relieve the Executive of
his obligations under Section 5 hereof.
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(d) The Corporation may at any time terminate the employment of the
Executive hereunder without cause. In such event or if the Executive terminates
his employment by the Corporation in accordance with Section 4(b) hereof, if
such termination occurs during the Employment Term, the Executive shall be
entitled to receive, as liquidated damages and in lieu of any and all other
claims against the Corporation and its Affiliates, the salary specified in
Section 3(a) hereof, plus continuation of the Executive's medical benefits, in
each case for a period of eight months from the date of such termination.
Payment of such salary and bonus shall be made at the same times such payments
would be made if the Executive continued to be employed and shall be conditioned
upon receipt of a general release from the Executive in form and substance
reasonably satisfactory to the Corporation.
5. Non-Competition; Confidentiality; Disclosure of Information, Etc.
(a) Without the prior written consent of the Corporation, the Executive shall
not, directly or indirectly, (i) during the Employment Term, (ii) during the
period of his employment by the Corporation or any Affiliate of the Corporation
and (iii) until the expiration of eighteen months after termination of his
employment with the Corporation or any Affiliate,
(1) compete with, or be retained by, render consulting or advisory
services to, or be a proprietor, director, partner or shareholder
(other than a shareholder of a corporation listed on a national
securities exchange or whose stock is regularly traded in the
over-the-counter market, provided that the Executive at no time
owns, directly or indirectly, in excess of one percent (1%) of the
outstanding stock of any class of any such corporation) of, any
enterprise, person, firm, corporation or other entity that
competes directly with the Corporation or any Affiliate or
successor of the Corporation in the business of the manufacture,
design or sale of such products of the general type and in such
geographical areas as the Corporation and its Affiliates have
manufactured, assembled, designed and sold products as of the date
hereof or at any time while the Executive is employed hereunder
or, at the time of the termination of the employment of the
Executive, any other business of which the Corporation or an
Affiliate is actively investigating the possible entry; or
(2) interfere with, disrupt or attempt to disrupt any then existing
relationship, contractual or otherwise, between the Corporation or
any successor or Affiliate of the Corporation and any of their
customers, clients, executives, employees or other persons with
whom they deal.
(b) Without the specific prior written consent of the Corporation, the
Executive shall not, directly or indirectly, at any time after the date hereof,
divulge to any person, firm, corporation or other entity, or use for his own
benefit, any confidential information concerning the business, affairs,
customers or clients of the Corporation or any of its Affiliates, or any data or
statistical information of the Corporation and its Affiliates, whether created
or developed by the Corporation or such Affiliate or on its behalf or, in the
case of any confidential information pertaining to the Corporation or any of its
Affiliates, with respect to which the Executive may have knowledge or access
(including without limitation any of the foregoing
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developed by the Executive), it being the intent of the Corporation and the
Executive to restrict the Executive from disseminating or using any data or
information of the Corporation which is at the time of such use or dissemination
unpublished and not readily available or generally known.
(c) The Executive will promptly disclose to the Corporation all
processes, trademarks, inventions, improvements, discoveries and other
information related to the business of the Corporation and its Affiliates
(collectively "developments") conceived, developed or acquired by him alone or
with others during the term of this Agreement and thereafter so long as he shall
be an employee of the Corporation or any of its subsidiaries or Affiliates,
whether or not conceived during regular working hours or through the use of
Corporation or Affiliate time, material or facilities or otherwise. All such
developments shall be the sole and exclusive property of the Corporation, and
upon request the Executive shall deliver to the Corporation all drawings,
sketches, models and other data and records relating to such developments. In
the event any such developments shall be deemed by the Corporation to be
patentable, the Executive shall, at the expense of the Corporation, assist the
Corporation in obtaining a patent or patents thereon and execute all documents
and do all other things necessary or proper to obtain letters patent and to vest
the Corporation with full title thereto.
(d) Although the restrictions contained in Section 5(a) hereof are
considered by the parties hereto to be fair and reasonable in the circumstances,
it is recognized that restrictions of the nature contained in Section 5(a) may
fail for technical reasons, and accordingly it is hereby agreed that if any of
such restrictions shall be adjudged to be void or unenforceable for whatever
reason, but would be valid if part of the wording thereof were deleted, or the
period thereof reduced or the area dealt with thereby reduced in scope, the
restrictions contained in Section 5(a) shall apply, at the election of the
Corporation, with such modifications as may be necessary to make them valid,
effective and enforceable in the particular jurisdiction in which such
restrictions are adjudged to be void or unenforceable.
(e) If a violation of any covenant contained in this Section 5 occurs
or is threatened, the Executive agrees and acknowledges that such violation or
threatened violation will cause irreparable injury to the Corporation, and the
remedy at law for any such violation or threatened violation shall be inadequate
and that the Corporation shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damages.
(f) The covenants contained in this Section 5 shall inure to the
benefit of the Corporation, any successor of the Corporation and each Affiliate
of the Corporation.
6. Miscellaneous. (a) This Agreement contains the entire agreement
between the Corporation and the Executive with respect to the transactions
contemplated by this Agreement and supersedes all prior arrangements or
understandings with respect thereto.
(b) This Agreement may be assigned by the Corporation to any person,
firm, corporation or other entity acquiring (by purchase, merger or otherwise),
directly or indirectly, the business and substantially all of the assets of the
Corporation and expressly assuming the obligations of the Corporation under this
Agreement. The Corporation's obligations hereunder may be performed in whole or
in part, at the election of the Corporation, by any
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Subsidiary or by any other corporation, firm, person or other business entity
controlled by, controlling or under common control (as the term "control" is
used in the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder), with the Corporation, including without limitation any
parent company or subsidiary of the Corporation (each, an "Affiliate").
(c) The performance by the Executive of his duties under this Agreement
is the personal obligation of the Executive and may not be delegated by the
Executive; however, the Executive may delegate duties and responsibilities to
other employees or agents of the Corporation incident to normal and customary
management practices.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey (other than the choice of law
principles thereof).
(e) The descriptive headings of this Agreement are for convenience only
and shall not control or affect the meaning or construction of any provision of
this Agreement.
(f) All notices pursuant to this Agreement shall be in writing and
sufficient if delivered personally or sent by registered or certified mail,
postage prepaid, addressed as follows:
(g) If to the Corporation:
Rheometric Scientific, Inc.
Xxx Xxxxxxxxxx Xxxx Xxxxxxxxxx, XX 00000-0000
Attn: Chairman
If to the Executive:
Xxxx Xxxxxxx
000 Xxx Xxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Any party may by written notice change the address to which notices to such
party are to be delivered or mailed.
(h) Any waiver of any term or condition, or any amendment or
supplementation, of this Agreement shall be effective only if in writing and
signed by the party against whom enforcement is sought.
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IN WITNESS WHEREOF, the Corporation and the Executive have executed
this Agreement as of the date first above written.
RHEOMETRIC SCIENTIFIC, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
Executive:
/s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
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