EXHIBIT 10.3
EXECUTION COPY
EMPLOYMENT AGREEMENT
This Agreement (the "Agreement"), dated as of August 29, 2006, is by
and between Viisage Technology, Inc., a Delaware corporation (the "Company") and
Xxxxx X. XxXxxxx (hereinafter referred to as the "Executive").
INTRODUCTION
The Company desires that the Executive perform services for the
Company pursuant to the terms and conditions set forth herein. The Executive
will have significant access to information concerning the Company and its
business. The disclosure of such information or the engaging in competitive
activities would cause substantial harm to the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. TERM. The initial term of this Agreement (the "Initial Term")
shall commence at the Effective Time (as defined in the Agreement and Plan of
Merger, dated as of January 11, 2006, by and between the Company, VIDS
Acquisition Corp. and Identix Incorporated), and continue for three years
thereafter (unless this Agreement is terminated earlier in accordance with
Section 10 below). Upon the expiration of the Initial Term, this Agreement shall
be automatically renewed for consecutive one-year terms, unless a party hereto
gives the other party written notice of non-renewal, which notice must be
received no later than 120 days prior to the expiration of the Term. The Initial
Term, together with any extension thereof, is sometimes referred to herein as
the "Term."
2. DUTIES. The Executive will serve as the Executive Vice President,
Chief Financial Officer and Treasurer of the Company and shall have duties of an
executive nature that are attendant to his position as described in the by-laws
of the Company and as may be reasonably assigned to him by the Board of
Directors of the Company (the "Board"). The Executive will report to the Chief
Executive Officer, but nothing herein shall interfere with or limit the
oversight responsibilities of the Board, including, without limitation, the
audit committee's review of the performance of the Chief Financial Officer and
the Company's finance function. Unless otherwise agreed to by the Executive and
the Board, the Executive's principal base of operation will be the Company's
office in Stamford, Connecticut.
3. FULL TIME; BEST EFFORTS. The Executive shall use his best efforts
to promote the interests of the Company and shall devote his full business time
and efforts to its business and affairs. The Company acknowledges and
nevertheless agrees that the Executive may continue to oversee the investment
fund of Aston Capital Partners L.P. and his investment in Core Technology
Corporation; provided that the Executive shall not provide management services
to any other fund portfolio company or otherwise engage in business activities
that would reasonably be expected to materially interfere with the performance
of the Executive's duties, services and responsibilities hereunder. The
Executive represents and warrants that L-1 Investment Partners LLC, its partners
and affiliates, including the Executive, will not receive any
management fee or similar payment (other than a carried interest) from Aston
Capital Partners L.P., its partners or portfolio companies during the Term.
4. COMPENSATION AND BENEFITS. During the Term, the Executive will
receive the following compensation and benefits:
(a) BASE SALARY. The Executive will receive salary at the rate
of $325,000 annually (the "Base Salary"), payable in equal increments not less
often than monthly in arrears and in any event consistent with the Company's
payroll policy and practices. In addition, the Base Salary of the Executive may
from time to time be increased, but not decreased, by the Board, in its absolute
discretion.
(b) BONUS. The Executive will be eligible for annual bonuses
with a target amount of 50% of his Base Salary (the "Bonus"). The actual amount
of any Bonus may be more or less than such target and shall be determined by the
Board based on the achievement of corporate and individual objectives determined
by the Board on an annual basis, in its absolute discretion. The Bonus may be
paid, in the Company's discretion, in unregistered common stock, par value
$0.001 per share, of the Company ("Common Stock"), at a price per share equal to
the weighted average closing price per share of the Common Stock over the twenty
most recent trading days on the principal exchange or market on which the Common
Stock is listed (as reported in the Wall Street Journal) at the same time as
bonuses are paid to the other members of management of the Company. In the event
the Company elects to pay all or any portion of such bonus in shares of Common
Stock, the payment of such shares shall be deferred at the Executive's election
by crediting such shares to a notional account with the Company and shall be
distributed from such account upon the later of (i) the date designated (to the
extent consistent with Section 409A of the Internal Revenue Code of 1986, as
amended (the "Code")) by the Executive with respect to such bonus or (ii) the
earliest to occur of the 30th day after the first anniversary of the date that
annual bonuses are paid in cash or would have been paid to the other members of
management of the Company, or the Executive's death, disability or termination
of employment.
(c) BENEFITS. In addition to the Base Salary and any Bonus, the
Executive will be entitled to receive health, welfare and fringe benefits that
are generally available to the Company's management employees in accordance with
the then existing terms and conditions of the Company's policies. The Company's
current fringe benefits for management employees is set forth on Exhibit A
hereto. The Executive will be entitled to reimbursement of all reasonable
expenses incurred by him in his performance of services on behalf of the Company
hereunder, subject to the presentation of appropriate documentation and other
reimbursement policies generally applicable to the Company's management
employees.
(d) WITHHOLDING. The Company will withhold from compensation
payable hereunder all applicable federal, state and local withholding taxes.
(e) OPTIONS. As additional compensation to the Executive
hereunder, the Company will, at the Effective Time, execute and deliver options,
granting the Executive the right to purchase (i) 180,000 shares of the Common
Stock, at an exercise price per share equal to the weighted average closing
price per share of the Common Stock over the twenty most recent trading days on
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the principal exchange or market on which the Common Stock is listed (as
reported in the Wall Street Journal), which shall vest in equal annual
installments for four years from the grant date, and shall be exercisable for
ten years from the grant date (the "Time-Vested Options"). The Time-Vested
Options shall be Nonstatutory Stock Options within the meaning of the Plan. The
Time-Vested Options shall be issued pursuant to an option grant which, except as
otherwise provided for in this Agreement, shall be in the form used for other
participants in the Company's 2005 Long-Term Incentive Plan (the "Plan"). Except
as otherwise provided in Section 10 below, in no event shall the Time-Vested
Options vest unless the Executive is a full time employee of the Company on the
vesting date. The Board may also, in its sole discretion, at the time the equity
compensation of other management employees of the Company is reviewed, consider
and grant additional equity-based compensation to the Executive during the Term.
(f) REGISTRATION OF SHARES UNDERLYING OPTIONS. All of the
Time-Vested Options shall be issued under the Plan. All of the shares of the
Company's common stock authorized to be issued under the Plan have been
registered under the Securities Act of 1933, as amended.
5. CONFIDENTIALITY. The Executive agrees that during the Term and
thereafter:
(a) The Executive has not and will not at any time, directly or
indirectly, disclose or divulge any Confidential Information (as hereinafter
defined), except as reasonably necessary or advisable in connection with the
performance of the Executive's duties for the Company, or except to the extent
required by law (but only after the Executive, to the extent practicable given
the nature of the legal requirement, has provided the Company with reasonable
notice and opportunity to take action against any legally required disclosure).
As used herein, "Confidential Information" means all information concerning the
business of the Company or of any of its subsidiaries ("Related Companies"), or
any customer or vendor of any of the Related Companies, (whether or not subject
to copyright, patent or other intellectual property protection) that has an
independent economic value from not being readily known, is not ascertainable by
proper means by others and is not generally known to the public, or which would
constitute a trade secret as may be defined by the Uniform Trade Secrets Act or
under the laws governing this Agreement, and any oral, electronic or written
communications thereof, including, but not limited to, specifications, designs,
concepts, plans, programs, software, other developments relating to products and
services, proposal plans, marketing data and financial information, and all
copies and tangible embodiments thereof (in whatever form or medium); provided,
that Confidential Information shall not include any information that is publicly
available through no fault of the Executive or disclosed pursuant to applicable
securities laws.
(b) The Executive has not and shall not make use whatsoever,
directly or indirectly, of any Confidential Information at any time, except as
reasonably necessary or advisable in connection with the performance of the
Executive's duties for the Company.
(c) Upon the Company's request at any time and for any reason,
the Executive shall immediately deliver to the Company all materials (whether in
electronic or hard copy form) in the Executive's possession which contain or
relate to Confidential Information.
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6. INTELLECTUAL PROPERTY.
(a) All inventions, modifications, discoveries, designs,
developments, improvements, processes, software programs, works of authorship,
documentation, formulae, data, techniques, know-how, secrets or intellectual
property rights or any interest therein (collectively, the "Developments") made
by the Executive, either alone or in conjunction with others, at any time or at
any place during his service with the Company, whether or not reduced to writing
or practice during such period, which relate to the business in which any
Related Company is then engaged or in which any Related Company then intends to
engage, shall be and hereby are the exclusive property of the Company without
any further compensation to the Executive. Any Developments employed and made by
the Executive, either solely or jointly with others, within six months following
the termination of the Executive's services hereunder that relate to the
Company's actual day-to-day operations or core competencies in which the
Executive was actively involved, shall be irrefutably presumed to have been made
in the course of such employment with the use of the Company's time, materials
or facilities. In addition, without limiting the generality of the prior
sentence, all Developments which are copyrightable work by the Executive are
intended to be "work made for hire" as defined in Section 101 of the Copyright
Act of 1976, as amended, and shall be and hereby are the property of the Company
without any further compensation to the Executive.
(b) If, and to the extent, any of the Developments is not
considered a "work for hire," the Executive shall, without further compensation,
assign to the Company and does hereby assign to the Company, the Executive's
entire right, title and interest in and to all Developments. At the Company's
expense and at the Company's request, the Executive shall provide reasonable
assistance and cooperation, including, without limitation, the execution of
documents in order to obtain, enforce, defend and/or maintain the Company's
proprietary rights in the Developments throughout the world. The Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as the Executive's agent and attorney-in-fact (which
designation and appointment shall be deemed coupled with an interest and shall
survive the Executive's death or incapacity), to act for and in the Executive's
behalf to execute and file any such applications, extensions or renewals and to
do all other lawfully permitted acts to further the prosecution and issuance of
such letters patent, other intellectual property registrations or filings, or
such other similar documents, with the same legal force and effect as if
executed by the Executive.
7. NONCOMPETITION. The Executive acknowledges and agrees that in the
performance of this Agreement, he will be brought into frequent contact, either
in person, by telephone, through electronic means or through the mails, with
existing and potential customers of the Company. The Executive also acknowledges
that any Confidential Information gained by him during the Term has been
developed by the Company through substantial expenditures of time and money and
constitutes valuable and unique property of the Company. The Executive further
understands and agrees that the foregoing makes it necessary for the protection
of the Company's business that the Executive not compete with the Company during
the Term and not compete with the Company for a reasonable period after the
Term, as further provided in the following provisions. Accordingly, the
Executive agrees that so long as he is an employee of the Company and for 12
months thereafter:
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(a) The Executive will not, directly or indirectly, individually
or as a consultant to, or employee, officer, director, manager, stockholder,
partner, member or other owner or participant in any business entity, other than
the Company or a Related Company, engage in or assist any other person or entity
to engage in any business which directly or indirectly competes with any
business in which the Company or any Related Company is engaging or in which the
Company or any Related Company plans to engage or is actively evaluating
engaging, during or at the time of the termination of the Executive's engagement
hereunder, anywhere in the United States or anywhere else in the world where the
Company or any Related Company does business, or plans to do business or is
actively evaluating doing business; provided that nothing contained herein shall
prohibit the Executive from being a passive owner of less than one percent (1%)
of the outstanding stock or any class of securities of any corporation or other
entity which is publicly traded or privately held; and
(b) The Executive will not, directly or indirectly, individually
or as a consultant to, or employee, officer, director, manager, stockholder,
partner, member or other owner or participant in any business entity solicit or
endeavor to entice away from the Company or any Related Company, or offer
employment or any consulting arrangement to, or otherwise materially interfere
with the business relationship of the Company or any Related Company with, any
person or entity who is, or was within the one year period immediately prior to
the termination of the Executive's engagement hereunder, (i) employed by or a
consultant to the Company or any Related Company or (ii) a customer or client
of, supplier to or other party having material business relations with the
Company or any Related Company.
8. REMEDIES. Without limiting the remedies available to the Company
and any Related Company, the Executive acknowledges that a breach of any of the
covenants contained in Sections 5, 6 and 7 herein could result in irreparable
injury to the Company and, as applicable, a Related Company, for which there
might be no adequate remedy at law, and that, in the event of such a breach or
threat thereof, the Company and any affected Related Company, as the case may
be, shall be entitled to obtain a temporary restraining order and/or a
preliminary injunction and a permanent injunction restraining the Executive from
engaging in any activities prohibited by Sections 5, 6 and 7 herein or such
other equitable relief as may be required to enforce specifically any of the
covenants of Sections 5, 6 and 7 herein. The foregoing provisions and the
provisions of Sections 5, 6 and 7 herein shall survive the term of this
Agreement and the termination of the Executive's engagement hereunder, and shall
continue thereafter in full force and effect.
9. RECORDINGS. The Executive hereby gives the Company and its
assigns permission to capture and record his image or likeness by means of
photograph, facial imaging or similar means ("Recordings"); to make reasonable
edits to these Recordings at its discretion and to incorporate these Recordings
into publications, brochures, databases, or any other media ("Publications");
and to use such Recordings and Publications for the limited purposes of
marketing, publicizing, or otherwise promoting the products and/or services of
the Company or any of its affiliates.
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10. TERMINATION.
(a) GENERAL. The engagement of the Executive under this
Agreement may be terminated prior to the end of any Term (i) by a majority vote
of the disinterested members of the Board with Cause or without Cause, or (ii)
in the event of the death or Disability of the Executive. The Executive may
terminate his engagement hereunder prior to the end of any Term for Good Reason
or for no reason. Upon the termination of the Executive's engagement hereunder,
this Agreement shall terminate and the Term shall expire on such date.
(b) CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings:
"Cause" means: (i) the Executive's willful and continued failure
to substantially perform his reasonably assigned duties as an officer
of the Company or otherwise perform his obligations under Sections 2
and 3 above (other than any such failure resulting from incapacity due
to physical or mental condition or any failure after the Executive
gives notice of termination for Good Reason) which failure is not
cured within 30 days after a written demand for substantial
performance or adherence is received by the Executive from the Board
which specifically identifies the manner in which the Board believes
the Executive has not substantially performed his duties or
obligations; (ii) the Executive's willful and continued breach of the
Company's material corporate policies that have been approved by the
Board, which breach is not cured within 30 days after a written demand
specifying such breach is received by the Executive from the Board;
(iii) the Executive's willful engagement in illegal conduct or gross
misconduct which is materially injurious to the Company; (iv) the
Executive's willful engagement in a violation of any federal or state
securities laws or the Company's Policy Regarding Special Trading
Procedures, as may be amended; or (v) the Executive's material breach
of Sections 3, 5, 6 and/or 7 of this Agreement and, in the case of any
purported breach of Section 3, 5, 6 or 7 that is capable of being
cured, such breach is not cured within 30 days after a written demand
for performance or adherence is received by the Executive from the
Board which specifically identifies the manner in which the Board
believes the Executive has breached such provision.
"Change in Control" means an event or occurrence set forth in any
one or more of subsections (i) through (iv) below, including an event
or occurrence that constitutes a Change in Control under one of such
subsections but is specifically exempted from another such subsection:
(i) the acquisition by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership of any capital
stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 50% or more of either:
(A) the then-outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or
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(B) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company
Voting Securities");
provided, however, that for purposes of this subsection (i),
the following acquisitions shall NOT constitute a Change in
Control:
(C) any acquisition of Outstanding Company Common Stock or
Outstanding Company Voting Securities directly by the
Company or any issuance of capital stock by the
Company, in each case, solely in connection with a
recapitalization or restructuring of the Company or
similar transaction that does not involve, and is not
part of series of transactions that would involve, any
entity that is not an affiliate of the Company; or
(D) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company
or any corporation controlled by the Company.
(ii) such time as the Continuing Directors do not constitute a
majority of the Board (or, if applicable, the Board of
Directors of a successor corporation to the Company). The
term "Continuing Director" means at any date a member of the
Board:
(A) who was a member of the Board on the Effective Date;
(B) who, after the Effective Date, is nominated or elected
by (or whose nomination to the Board is recommended or
endorsed by) at least a majority of the directors who
were directors on the Effective Date or are Continuing
Directors;
provided, however, that this clause (B) excludes any
individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board.
(iii) the consummation of a merger, consolidation,
reorganization, recapitalization, or statutory share
exchange involving the Company, or a sale or other
disposition of all or substantially all of the assets of the
Company in one or a series of transactions (a "Business
Combination"),
provided, however, that the following shall NOT constitute a
Change in Control: if immediately following a Business
Combination, all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination:
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(A) beneficially own, directly or indirectly, more than 50%
of the then-outstanding shares of common stock in, and
the combined voting power of the then-outstanding
securities entitled to vote generally in the election
of directors of, the resulting or acquiring corporation
(which shall include, without limitation, a corporation
which as a result of the Business Combination owns the
Company or substantially all of the Company's assets
either directly or through one or more subsidiaries),
and
(B) such post-transaction beneficial ownership is in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively.
(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Disability" means a mental or physical condition or accident,
which results in the Executive being unable to perform his material duties
hereunder for a period of three consecutive months, as reasonably determined by
a majority of the disinterested members of the Board.
"Good Reason" means the occurrence, without the Executive's
written consent, of any of the events or circumstances set forth in clauses (i)
through (iii) below, provided that the Executive has given the Company written
notice describing in reasonable detail the event or circumstance that he
believes constitutes Good Reason and the Company has not cured it within 30 days
after its receipt of such notice.
(i) the assignment to the Executive of duties inconsistent in
any material respect with his executive position with the
Company, or any other action or omission by the Company
which results in a material diminution in such position,
authority, title or responsibilities or any change in
reporting relationship, or the relocation of the Executive's
principal base of operation to more than 25 miles from
Stamford, Connecticut without his consent;
(ii) a reduction in the Executive's Base Salary or target Bonus
as in effect on the Effective Date or as the same was or may
be increased thereafter from time to time;
(iii) the failure by the Company to:
(A) continue in effect any material compensation or benefit
plan or program (a "Benefit Plan") in which the
Executive participates, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan or program;
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(B) continue the Executive's participation therein (or in
such substitute or alternative plan) on a basis that
is, both in the amount of benefits provided and the
level of the Executive's participation relative to
other participants, materially equal to or more
favorable than the basis existing on the Effective
Date;
(C) the failure of the Company to obtain the agreement from
any successor to the Company to continue to provide the
Executive with the material compensation and benefits
described in Sections 4 and 10 of this Agreement;
(D) any failure of the Company to pay or provide to the
Executive any portion of his compensation or benefits
due under any Benefit Plan within seven days of the
date such compensation or benefits are due; or
(E) any other material breach by the Company of this
Agreement that is not cured within 30 days of notice
specifying the nature of the breach.
(c) PAYMENTS UPON TERMINATION.
(i) WITH CAUSE OR WITHOUT GOOD REASON. If the Executive's
engagement hereunder is terminated by the Company with Cause
or by the Executive without Good Reason, the Company shall
have no further obligation to make any payments or provide
any benefits to the Executive hereunder after the date of
termination except for (A) payments of Base Salary, any
awarded but unpaid Bonus for any prior completed year, and
expense reimbursement that had accrued but had not been paid
prior to the date of termination, (B) payments for any
accrued but unused vacation time, and (C) any benefits due
through the date of termination in accordance with the terms
of the Benefit Plans. Any amounts payable under this Section
10(c)(i) shall be paid within five business days of the
termination date.
(ii) WITHOUT CAUSE OR FOR GOOD REASON. If the Executive's
engagement hereunder is terminated by the Company without
Cause or by the Executive for Good Reason, the Executive
shall receive the following: (A) the payments and benefits
described in Section 10(c)(i) above, (B) all of the
Executive's Time-Vested Options shall immediately vest and
become exercisable in full (and shall remain exercisable for
three years after such termination), (C) a Bonus for the
current year through the date of termination that shall
equal, pro rata, the Bonus awarded to the Executive for the
most recent completed year, and (D) until the earliest to
occur of (x) 12 months following the date of termination, or
(y) the end of the Term then in effect immediately prior to
the termination (the "Severance Period"), (1) Base Salary
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payable during the Severance Period at the rate in effect at
the date of termination, (2) a Bonus for such severance
period that shall equal, subject to pro rata adjustment if
the Severance Period is less than 12 months, the Bonus
awarded to the Executive for the most recent completed year,
and (3) continuance at the Company's expense of the
Executive's medical and dental insurance coverage in
accordance with the terms of the then existing Company
benefit plans (but only to the extent the Executive is
allowed by such benefit plans and by law to continue
participation in such benefit plans, and if such
continuation is not allowed, the Company shall provide the
Executive with commensurate insurance coverage at its
expense). Subject to Section 10(f), any amounts payable
under subsections (C) and (D) above shall be paid as
follows: 50% within five business days of the termination
date and 50% within six months of the termination date.
(iii) DEATH OR DISABILITY. If the Executive's engagement
hereunder is terminated because of death or Disability, he
(or his representatives) shall be entitled to all of the
payments and benefits described in Section 10(c)(ii) as if
the Executive's engagement hereunder were terminated without
Cause, except that no payments shall be made under Section
10(c)(ii)(D).
(iv) CHANGE IN CONTROL. If (A) a Change in Control occurs
prior to the expiration of the Term, (B) the Executive's
engagement with the Company or its successor is terminated
prior to the expiration of the Term and (C) it is reasonably
demonstrated by the Executive that such termination of
engagement (1) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in
Control or (2) otherwise arose in anticipation of or as a
result of a Change in Control, the Executive shall be
entitled to the compensation and benefits he would receive
under Section 10(c)(ii) above (except that the pre and post
termination Bonus shall be based on the target amount in
effect on the date of termination) as if he were terminated
without Cause.
(d) EXCISE TAX PROVISIONS.
(i) In the event that any payment or benefit received or to
be received by the Executive with respect to any stock
option, restricted stock or stock unit, stock appreciation
right, bonus or other incentive compensation plan or
agreement (collectively "Incentive Payments"), or any
payments or benefits under any severance or other plan,
arrangement or agreement of the Company or any of its
affiliates ("Other Payments" and, together with the
Incentive Payments, the "Payments") would be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), the Company shall pay to Executive an additional
amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of all Excise
Taxes on the Payments, and all Excise Taxes, federal, state
and local income taxes, and federal employment taxes on the
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Gross-Up Payment, and any interest, penalties or additions
to tax payable by Executive with respect thereto, shall be
equal to the total present value (using the applicable
federal rate (as defined in Section 1274(d) of the Code in
such calculation) of the Payments at the time such Payments
are to be made.
(ii) For purposes of determining whether any of the Payments
will be subject to the Excise Tax, such determination shall
be initially made by tax counsel selected by the Company.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income
taxes at the highest marginal rates of federal income
taxation applicable to individuals in the calendar year in
which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rates of taxation
applicable to individuals as are in effect in the state and
locality of the Executive's residence in the calendar year
in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes that can be
obtained from deduction of such state and local taxes,
taking into account any limitations applicable to
individuals subject to federal income tax at the highest
marginal rates.
(iii) The Gross-Up Payments provided for in this Section
10(d) shall be made upon the earlier of (i) the payment to
the Executive of any Payment or (ii) the imposition upon the
Executive or payment by the Executive of any Excise Tax upon
any Payment. If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding or the opinion of tax counsel that the Excise Tax
is less than the amount taken into account under this
Section 10(d), the Executive shall repay to the Company
within thirty (30) days of the Executive's receipt of notice
of such final determination or opinion the portion, of the
Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income tax imposed on the
Gross-Up Payment being repaid by the Executive, if such
repayment results in a reduction in Excise Tax or a federal,
state and local income tax deduction) plus any interest
received by the Executive on the amount of such repayment.
If it is established pursuant to a final determination of a
court, an Internal Revenue Service proceeding, or the
opinion of tax counsel that the Excise Tax exceeds the
amount taken into account hereunder (including by reason of
any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such
excess within thirty (30) days of the Company's receipt of
notice of such final determination or opinion.
(e) CONDITIONS TO PAYMENT. The obligation to make payments or
provide benefits under Section 10(c)(ii) or (iv) of this Agreement shall be
contingent upon the Executive executing a customary general release in form and
substance reasonably acceptable to the Company and the Executive, it being
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understood that the Executive shall not be required to relinquish any benefits
to which the Executive is entitled hereunder or pursuant to any director or
officer indemnification provided by the Company. The Company's obligations
hereunder to pay any premiums for medical or dental insurance benefits shall
cease if the Executive is eligible to receive similar benefits from another
employer. The Executive shall notify the Company promptly in writing of any such
benefits earned or to be earned from another employer.
(f) CESSATION OF PAYMENTS. If the Executive breaches his
obligations under Sections 6 or 7 of this Agreement in any material respect, the
Company may, following 30 days prior written notice to the Executive specifying
such breach and a reasonable opportunity to cure such breach and/or to be heard
by the Board, cease all payments payable to, or on behalf of, the Executive
under Sections 10(c)(ii)(C) and (D) of this Agreement and the Company shall be
entitled to recover all prior payments made to the Executive under Sections
10(c)(ii)(C) and (D) of this Agreement. The cessation of these payments shall be
in addition to, and not as an alternative to, any other remedies at law or in
equity available to the Company, including without limitation the right to seek
specific performance or an injunction.
(g) SURVIVAL. The provisions of Sections 5 through 24 of this
Agreement shall survive the term of this Agreement and the termination of the
Executive's engagement hereunder with the Company, and shall continue thereafter
in full force and effect in accordance with their respective terms.
11. ENFORCEABILITY, ETC. This Agreement shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any provision
hereof shall be prohibited or invalid under any such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provisions shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent permitted by applicable law.
12. NOTICES. Any notice, demand or other communication given pursuant
to this Agreement shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested as
follows:
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(a) If to the Executive:
Xxxxx X. XxXxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to:
--------------
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
(b) If to the Company:
Viisage Technology, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chairman, Compensation Committee of
Board of Directors
With a copy to:
--------------
Xxxxxx, Xxxx & Xxxxxxx, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
or at such other address as may have been furnished by such person in writing to
the other party.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of The State of Connecticut without regard
to its choice of law provisions.
14. AMENDMENTS AND WAIVERS. This Agreement may be amended or modified
only by a written instrument signed by the Company and the Executive. No waiver
of this Agreement or any provision hereof shall be binding upon the party
against whom enforcement of such waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver of a breach of any
provision of this Agreement shall not be construed as a waiver or a continuing
waiver of the same or any subsequent breach of any provision of this Agreement.
No delay or omission in exercising any right under this Agreement shall operate
as a waiver of that or any other right.
15. BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors and
administrators, successors and assigns, except that the rights and obligations
of the Executive are personal and may not be assigned without the Company's
prior written consent. Any assignment of this Agreement by the Company shall not
constitute a termination of the Executive's engagement hereunder.
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16. ENTIRE AGREEMENT. This Agreement constitutes the final and entire
agreement of the parties with respect to the matters covered hereby and replaces
and supersedes all other agreements and understandings relating to the subject
matter contained herein.
17. DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION.
(a) The Company shall provide the Executive with (i) the
coverage applicable to the officers of the Company under the Company's policies
of directors' and officers' insurance as may be in effect from time to time, and
(ii) the most favorable indemnification that the Company from time to time
extends to any of its officers or directors, whether under the Company's
by-laws, Certificate of Incorporation, by contract or otherwise.
(b) The Company shall amend its directors' and officers'
liability insurance policy to add the Executive as a named insured under such
policy.
(c) For so long as the Executive serves as an officer or
director of the Company, the Company shall maintain directors' and officers'
liability insurance with an insurer which maintains a rating of not less than A-
by Fitch or A.M. Best with at least the current level of coverage.
18. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE. The Executive
represents and warrants to the Company that, as of the date hereof, neither his
execution and delivery of this Agreement nor the performance of his obligations
hereunder will conflict with, violate or result in a breach of any agreement or
obligation to which he is a party or by which he is bound.
19. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Executive that, as of the date hereof:
(a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is formed and has all requisite
organizational authority to own its property and assets and to conduct its
business as presently conducted or proposed to be conducted under this
Agreement;
(b) it has the organizational power and authority to execute,
deliver and perform its obligations under this Agreement;
(c) all necessary action has been taken to authorize its
execution, delivery and performance of this Agreement and this Agreement
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its respective terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, moratorium and other similar laws
affecting the rights of creditors generally and by general principles of equity;
(d) neither its execution and delivery of this Agreement nor the
performance of its obligations hereunder will:
(i) conflict with or violate any provision of its certificate of
incorporation or by-laws or equivalent organizational documents;
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(ii) conflict with, violate or result in a breach of any
constitution, law, judgment, regulation or order of any
governmental authority applicable to it; or
(iii) conflict with, violate or result in a breach of or
constitute a default under or result in the imposition or
creation of any mortgage, pledge, lien, security interest or
other encumbrance under any term or condition of any mortgage,
indenture, loan agreement or other agreement to which it is a
party or by which its properties or assets are bound;
(e) no approval, authorization, order or consent of, or
declaration, registration or filing with any governmental authority or third
party is required for its valid execution, delivery and performance of this
Agreement, except such as have been duly obtained or made; and
(f) there is no action, suit or proceeding, at law or in equity,
by or before any court, tribunal or governmental authority or third party
pending, or, to its knowledge, threatened, which, if adversely determined, would
materially and adversely affect its ability to perform its obligations hereunder
or the validity or enforceability of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, including counterpart signature pages or counterpart facsimile
signature pages, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. REVIEW OF AGREEMENT. Each party hereto acknowledges that he or it
(a) has carefully read and understands all of the provisions of this Agreement
and has had the opportunity for this Agreement to be reviewed by counsel, (b) is
voluntarily entering into this Agreement and (c) has not relied upon any
representation or statement made by the other party (or its affiliates, equity
holders, agents, representatives, employees and attorneys) with regard to the
subject matter or effect of this Agreement. The Executive also acknowledges that
his compliance with certain of the provisions of this Agreement is necessary to
protect the goodwill, customer relationships and Confidential Information of the
Company and each Related Company.
22. CAPTIONS. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
23. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises under any provision of
this Agreement, this Agreement shall be construed as if drafted jointly by the
parties thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authoring any of the provisions of this
Agreement.
24. NOTIFICATION OF NEW EMPLOYER. In the event that the Executive is
no longer providing services to the Company under this Agreement, the Executive
15
consents to notification by the Company to the Executive's new employer or its
agents regarding the Executive's rights and obligations under this Agreement.
[Signature Page Follows]
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[Signature Page to Employment Agreement]
This Agreement has been executed and delivered as a sealed instrument
as of the date first above written.
VIISAGE TECHNOLOGY, INC.
------------------------------------
By:
Title:
------------------------------------
Xxxxx X. XxXxxxx
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