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EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of May 26, 1998,
and is entered into by and between Xxxxxx X. Xxxxxx, Xx. ("Executive") and
Xxxxxx Instrument Corporation, an Indiana corporation, including its divisions
Xxxxxx Technologies and White Microelectronics ("Xxxxxx").
WHEREAS, Xxxxxx desires to employ Executive as the Vice President
Finance, Chief Financial Officer, Secretary and Treasurer (hereinafter
collectively referred to as "Chief Financial Officer") and the Executive desires
to be employed in that capacity;
WHEREAS, Xxxxxx desires to provide severance benefits which will best
serve its interest in retaining key employees; and
WHEREAS, Executive will report to the Chief Executive Officer of
Xxxxxx.
NOW THEREFORE, Executive and Xxxxxx hereby agree that Executive will
render services to Xxxxxx on the following terms and conditions:
1. Employment. Upon the terms and subject to the conditions contained
herein, during the term of this Agreement, Executive hereby agrees to provide
full-time services to Xxxxxx as the Chief Financial Officer of Xxxxxx. During
the term hereof, Executive agrees to devote his best efforts to the business of
Xxxxxx, and shall perform his duties in a diligent, trustworthy, business-like
manner, all for the purpose of advancing the business of Xxxxxx. Executive shall
not work for or receive compensation from any other entity for services
performed or to be performed by him during the term of this Agreement, except
with the prior written consent of Xxxxxx'x Board of Directors.
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2. Duties. Executive shall perform the duties of Chief Financial
Officer in accordance with the policies and practices of Xxxxxx, as they may be
amended from time to time. Those duties may be changed or modified in the
discretion of Executive's management.
3. Term of Agreement. This Agreement shall be effective beginning on
May 1, 1998 and shall continue until September 30, 1999, except as provided
herein. It shall thereafter renew automatically for a one (1) year term, unless
thirty (30) or more days prior to such renewal date, either of the parties
notifies the other in writing of its intention not to renew.
4. Base Salary and Benefits. Xxxxxx shall pay Executive a base salary
of One Hundred Forty Thousand Dollars ($140,000.00) per annum, payable in
semi-monthly installments, less applicable tax withholding and salary deductions
("Base Salary"). The Base Salary will be subject to increase on October 1, 1998
in accordance with company policy. Executive shall be entitled to participate in
the fringe benefit programs generally available to senior executives of Xxxxxx,
as they may be modified from time to time.
5. Incentive Compensation. Executive shall be eligible to receive
incentive compensation in accordance with the terms of White
Microelectronics'/Xxxxxx'x incentive compensation plan, as it may be amended
("Incentive Compensation").
6. Stock Options. During the term of this Agreement, Executive shall
participate in Xxxxxx'x Employee Stock Option Plan in accordance with the terms
and conditions of the Plan, as it may be amended.
7. Termination and Termination Benefits. The Executive's employment
hereunder shall terminate under the following circumstances:
(a) Termination by Xxxxxx For Cause. Xxxxxx may terminate the
employment of Executive for cause at any time upon written notice to Executive
specifying the
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cause for termination. For purposes of this Section, "for cause" shall mean
discharge resulting from a determination by Xxxxxx that the Executive has: (i)
been convicted of a criminal offense involving dishonesty, fraud, theft,
embezzlement, breach of trust or moral turpitude; (ii) performed an act or
failed to act, which, if he were prosecuted and convicted, would constitute a
crime or offense involving money or property of Xxxxxx; or (iii) violated the
provisions of Section 8 pertaining to confidential information; or (iv)
willfully refused to perform the duties reasonably assigned to Executive and
consistent with his status as Chief Financial Officer of Xxxxxx.
In the event of Executive's termination by Xxxxxx under this
Section 7(a), Xxxxxx shall have no further obligation to Executive except for
any amounts earned by, or accrued for, Executive under any employee benefit
plans in which the Executive is then a participant, earned and unpaid salary,
accrued and unused vacation pay, and any rights of Executive under any bonus or
stock option agreement, which right has been earned by Executive at the time of
such termination pursuant to the terms of such plan or agreement. Executive
shall not be entitled to any further Base Salary, Incentive Compensation,
Severance Pay, fringe benefits, additional stock options, or any other
compensation or benefits, except as otherwise provided herein. A termination by
Xxxxxx under this Section 7(a) shall not prejudice any remedy to which Xxxxxx
may be entitled, either at law or in equity or under this Agreement.
(b) Termination by Xxxxxx Without Cause. Executive's
employment under this Agreement may be terminated without cause at any time by
Xxxxxx upon written notice to Executive. For purposes of this Section 7(b), the
terms "terminated without cause" and "termination without cause" shall include,
without limitation: a material change in the nature or scope of Executive's
responsibilities, title, authority, reporting relationship, powers, functions or
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duties as the Chief Financial Officer of a publicly traded corporation; or a
decrease in the total annual compensation or benefits payable to Executive other
than as a result of a decrease in incentive-based compensation payable to the
Executive and to all other executive officers of Xxxxxx on the basis of Xxxxxx'x
financial performance; or a requirement imposed by Xxxxxx that Executive
relocate to an office that is more than fifty (50) miles distant from the office
at which he is employed or the home at which he presently resides. Upon
termination without cause, Executive shall be entitled to the following
benefits:
(i) Severance Payment. Xxxxxx will pay Executive
a single, lump-sum payment equal to 2.5 times the sum of Executive's total
current annual Base Salary plus Incentive Compensation paid for fiscal 1997 or
fiscal 1998, whichever is higher, less all applicable taxes and other
withholding ("Severance Payment").
(ii) Benefit Continuation. Xxxxxx will continue
benefit contributions (medical, dental, disability and life) on behalf of
Executive for twelve (12) months or until Executive becomes otherwise eligible
for such benefits, whichever occurs first. In the event that Xxxxxx is unable
to continue such contributions or secure replacement coverage, then it shall
pay to Executive the premium cost for such coverage. Executive shall not
participate in any other Xxxxxx benefit plans except for any amounts earned
by, or accrued for, Executive under any employee benefit plans in which the
Executive is then a participant, earned and unpaid salary and accrued and
unused vacation pay and any rights of Executive under any bonus or stock
option agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement.
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(iii) Outplacement Assistance. Xxxxxx will provide
executive-level outplacement services to Executive at the outplacement
provider of his choice for a period not to exceed twelve (12) months.
(iv) Attorneys' Fees. Xxxxxx will reimburse
Executive for all reasonable attorneys' fees incurred in connection with
enforcing the terms of this Agreement following termination of employment in
the maximum amount of $25,000 except as otherwise provided in Section 14.
(c) Termination by Executive Without Cause. Executive may
terminate this Agreement at any time upon thirty (30) days' prior written notice
to Xxxxxx. In the event of such termination, Xxxxxx shall have no further
obligations to Executive under this Agreement except for any amounts earned by,
or accrued for, Executive under any employee benefit plans in which the
Executive is then a participant, earned and unpaid salary and accrued and unused
vacation pay and any rights of Executive under any bonus or stock option
agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement. Executive shall not
after termination be entitled to Base Salary, Incentive Compensation, Severance
Pay, fringe benefits, additional stock options, or any other compensation or
benefits. Xxxxxx may, in its sole discretion, accept Executive's resignation and
terminate his employment prior to the expiration of the thirty (30) day notice
period and pay Executive's compensation for the notice period (or remaining term
thereof).
(d) Non-Renewal Severance Payment. In the event that Xxxxxx
gives notice of its intention not to renew this Agreement in accordance with
Section 3, it shall, upon the termination of Executive's employment, pay
Executive in a single lump sum an amount equal to the Severance Payment set
forth in Section 7(b)(i), and provide the other benefits set forth in
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Sections 7(b)(ii) to (iv). Xxxxxx shall have no further obligations to Executive
except for any amounts earned by, or accrued for, Executive under any employee
benefit plans in which the Executive is then a participant, earned and unpaid
salary and accrued and unused vacation pay and any rights of Executive under any
bonus or stock option agreement, which right has been earned by Executive at the
time of such termination pursuant to the terms of such plan or agreement.
(e) Illness, Incapacity, or Death. In the event of illness or
incapacity of Executive, Xxxxxx shall continue Executive's Base Salary for a
period of ninety (90) days or such time as the Executive is eligible to apply
for benefits under Xxxxxx'x long-term disability plan, whichever occurs last. If
Executive is unable to perform the essential elements of his job due to illness
or incapacity for a period greater than ninety (90) days, Xxxxxx may elect, in
its sole determination, to terminate this Agreement with no further obligation
to Executive, except for any amounts earned by, or accrued for, Executive under
any employee benefit plans in which the Executive is then a participant, earned
and unpaid salary and accrued and unused vacation pay and any rights of
Executive under any bonus or stock option agreement, which right has been earned
by Executive at the time of such termination pursuant to the terms of such plan
or agreement. If Executive should die during the term of this Agreement,
Executive's heir shall be paid by Xxxxxx a total amount equal to ninety (90)
days' Base Salary, be entitled to whatever rights the heir may have under
Executive's stock option plan, and be granted applicable COBRA rights; Xxxxxx'x
remaining obligations hereunder shall terminate as of the end of the month in
which Executive's death occurs.
8. Confidential Information. In view of the fact that Executive's work
for Xxxxxx will bring him into close contact with many confidential affairs and
plans of Xxxxxx not readily available to the public, Executive agrees to keep
secret and retain in the strictest confidence all
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confidential matters of Xxxxxx, including, without limitation, trade "know-how,"
secrets, customer and prospect lists, pricing policies, prices, costs,
operational and development methods, and other business affairs of Xxxxxx (but
excluding all information in the public domain) learned by him heretofore or
hereafter, and not to disclose them to anyone outside of Xxxxxx, either during
or after his employment with Xxxxxx, except in the course of performing his
duties hereunder or with Xxxxxx'x express written consent. Executive further
agrees to deliver promptly to Xxxxxx, on termination of his employment, or at
any time Xxxxxx may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints, computer records and other documents (and all copies
thereof) relating to Xxxxxx'x business and all property associated therewith,
which he may then possess or have under his control. Executive acknowledges and
understands that his obligations with respect to confidential information shall
survive the termination of this Agreement.
9. Violation of Covenants. If Executive violates any of his covenants
under Section 8, Executive agrees and acknowledges that such violation or
threatened violation will cause irreparable injury to Xxxxxx and that Xxxxxx
will be entitled to injunctive relief without the necessity of proving actual
damages.
10. Automobile Allowance. Xxxxxx shall pay an automobile allowance to
Executive in the amount of $850.00 per month, as it may be changed from time to
time, during the term of this Agreement.
11. Vacation. Xxxxxx will provide Executive with annual paid vacation
consistent with the policies of Xxxxxx applicable to senior executive staff, as
they may be changed from time-to-time.
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12. Company Expenses. During the term of this Agreement, Xxxxxx will
reimburse Executive for reasonable authorized business expenses incurred on
behalf of Xxxxxx in accordance with Xxxxxx policies, as they may be amended.
13. Assistance with Litigation. Executive shall make himself available,
upon the request of Xxxxxx or its counsel, to testify or otherwise assist in
litigation, arbitration or other disputes involving Xxxxxx during and following
the termination of this Agreement, so long as Executive receives reimbursement
for his reasonable out-of-pocket expenses. Executive will also make himself
available to the attorneys representing Xxxxxx for such purposes as they
reasonably deem necessary, including but not limited to, the review of
documents, discussion of the cases and preparation for trial. This Agreement is
not intended to and shall not be construed so as to in any way limit or affect
the testimony which Executive gives in any such litigation; it is understood and
agreed Executive will at all times testify fully, truthfully and accurately,
whether in deposition, trial or otherwise.
14. Arbitration. Any dispute, controversy, or claim arising out of or
relating to this Agreement or breach thereof, or arising out of or relating in
any way to the employment of Executive or the termination thereof, shall be
submitted to arbitration in Phoenix, Arizona, in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
in any court in the State of Arizona, or in any other court of competent
jurisdiction. In reaching his or her decision, the arbitrator shall have no
authority to ignore, change, modify, add to or delete from any provision of this
Agreement, but is instead limited to interpreting this Agreement. The fees and
expenses of the arbitrator shall initially be shared equally by the parties and
the prevailing party shall be entitled to recover its fees and expenses incurred
in connection with the arbitration.
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15. Governing Law. This Agreement has been entered into and shall be
interpreted in accordance with the laws of the State of Arizona.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of Executive and there are no
representations, warranties or commitments other than those set forth herein.
This Agreement may be amended or modified only by an instrument in writing
executed by both of the parties hereto. This is an integrated agreement.
17. Effect of Agreement. This Agreement shall be binding upon the
parties and their respective heirs, executors, administrators, successors and
assigns. Executive shall not assign any rights or duties under this Agreement
without the written consent of the Xxxxxx Board of Directors. In the event of a
merger, sale, transfer, consolidation or reorganization involving Xxxxxx, this
Agreement shall continue in force and become an obligation of Xxxxxx or
successor entity.
18. Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court or arbitration
to be void, voidable or unenforceable, the same shall in no way affect any other
provision of this Agreement. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, this Agreement or any such
provision thereof shall not as a consequence thereof be deemed to be invalid,
illegal or unenforceable in any other governmental jurisdiction or subdivision
thereof.
19. Waiver. The waiver by either party of any term or condition of this
Agreement or any breach thereof shall not constitute a waiver of any other term
or condition or breach of this Agreement, nor shall it constitute a waiver of
the same term or condition in the future.
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20. Notices. Any notice or communication required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or such other address as the
party addressed may be substituted by prior written notice pursuant to this
section:
(a) If to Executive: Xxxxxx X. Xxxxxx, Xx.
Xxxxxx Instrument Corporation
0000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
(or such other address as may appear
in the records of Xxxxxx)
(b) If to Xxxxxx: Chief Executive Officer
Xxxxxx Instrument Corporation
0000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 000000-0000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxx Xxxx
0000 Xxxxx Xxxxxxx Xxx., Xxx. 0000
Xxxxxxx, Xxxxxxx 00000-0000
21. Representations by Executive. Executive represents and warrants
that he is not a party to or bound by any agreement or covenant that would
prohibit, restrict or inhibit in any way the full performance of his duties for
Xxxxxx under this Agreement. Executive further acknowledges that he has been
given the opportunity to consult with legal counsel regarding this Agreement.
22. Captions. Captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
23. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day and year first written above.
XXXXXX INSTRUMENT CORPORATION
By /s/ XXXXX XXXXXXXXXX
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Title: President and Chief
Executive Officer
XXXXXX X. XXXXXX, XX.
/s/ XXXXXX X. XXXXXX, XX.
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