Exibit 99.2
XXXX COMPUTER CORPORATION
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this ___ day of _______, 1997 by and
between XXXX COMPUTER CORPORATION, a Delaware corporation, having an office at
0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as
"Employer") and XXXXXX X. XXXXX, an individual residing at 00000 Xxxxxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxx 00000 (hereinafter referred to as "Employee");
W I T N E S S E T H:
WHEREAS, Employer employs, and desires to continue to employ, Employee
as Chief Executive Officer, Chairman and President of Employer; and
WHEREAS, Employee is willing to continue to be employed as the Chief
Executive Officer, Chairman and President in the manner provided for herein, and
to perform the duties of the Chief Executive Officer, Chairman and President of
Employer upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows:
1. EMPLOYMENT OF EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER. Employer hereby employs Employee as Chief Executive Officer, Chairman
and President.
2. TERM.
a. Subject to Section 10 below and further subject to Section
2(b) below, the term of this Agreement shall commence on the effective date of
the Company's Registration Statement (the "Commencement Date") and expire three
years from such date. Each 12 month period from the Commencement Date forward
during the term hereof shall be referred to as an "Annual Period." During the
term hereof, Employee shall devote substantially all of his business time and
efforts to Employer and its subsidiaries and affiliates.
b. Subject to Section 10 below, unless the Board of Directors
of the Company (the "Board") of Employer shall determine to the contrary and
shall so notify Employee in writing on or before the end of any Annual Period or
unless the Employee notifies Employer in writing on or before the end of any
Annual Period of his desire not to renew this Agreement, then at the end of each
Annual Period, the term of this Agreement shall be automatically extended for
one (1) additional Annual Period to be added at the end of the then current term
of this Agreement.
3. DUTIES. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board, shall perform any and all related duties and
shall have any and all powers as may be prescribed by resolution of the Board,
and shall be available to confer and consult with and advise the officers and
directors of Employer at such times that may be required by Employer. Employee
shall report directly and solely to the Board.
4. COMPENSATION.
a. (i) Employee shall be paid a minimum of $240,000 for each
Annual Period thereafter. Employee shall be paid periodically in accordance
with the policies of the Employer during the term of this Agreement, but not
less than monthly.
(ii) Employee is eligible for an annual bonus, if any, which
will be determined and paid in accordance with policies set from time to time by
the Board. The annual bonus which the Employee is eligible for may not exceed
(a) five percent of the Employer's pre-tax income for the Company's preceding
fiscal year; or (b) $250,000.
b. Employer shall include Employee in its health insurance
program available to Employer's executive officers and shall pay 100% of the
premiums for such program.
c. Employee shall have the right to participate in any other
employee benefit plans established by Employer.
d. Employee shall be entitled to a car provided to him by the
Company and the Company will pay all insurance and maintenance and expenses in
connection therewith.
e. The Company shall be responsible for and pay all costs
associated with Employer's country club membership.
5. BOARD OF DIRECTORS. Employer agrees that so long as this
Agreement is in effect, Employee will be nominated to the Board as part of
management's slate of Directors.
6. EXPENSES. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
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7. VACATION. Employee shall be entitled to receive four (4) weeks
paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time accrued
and not used shall be paid at the salary rate of Employee in effect at the time
of employment separation.
8. SECRECY. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning (a) internal affairs or proprietary business
operations of Employer or (b) any trade secrets, new product developments,
patents, programs or programming, especially unique processes or methods.
9. COVENANT NOT TO COMPETE. Subject to, and limited by, Section
11(b), Employee will not, at any time, anywhere in the world, during the term of
this Agreement, and for one (1) year thereafter, either directly or indirectly,
engage in, with or for any enterprise, institution, whether or not for profit,
business, or company, competitive with the business (as identified herein) of
Employer as such business may be conducted on the date thereof, as a creditor,
guarantor, or financial backer, stockholder, director, officer, consultant,
advisor, employee, member, inventor, producer, director, or otherwise of or
through any corporation, partnership, association, sole proprietorship or other
entity; provided, that an investment by Employee, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or business and
further provided that said competitive enterprise or business is a publicly held
entity whose stock is listed and traded on a national stock exchange or through
the NASDAQ Stock Market. As used in this Agreement, the business of Employer
shall be deemed to include the manufacturing and marketing of computer systems.
10. TERMINATION.
a. TERMINATION BY EMPLOYER
(i) Employer may terminate this Agreement upon written
notice for Cause. For purposes hereof, "Cause" shall mean (A) engaging by the
Employee in conduct that constitutes activity in competition with Employer; (B)
the conviction of Employee for the commission of a felony; and/or (C) the
habitual abuse of alcohol or controlled substances. Notwithstanding anything to
the contrary in this Section 10(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute Cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (at least 10 days
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from the date Employee receives the notice from the Board) to correct the acts
or omissions so complained of. In no event shall alleged incompetence of
Employee in the performance of Employee's duties be deemed grounds for
termination for Cause.
(ii) This agreement automatically shall terminate upon the
death of Employee, except that Employee's estate shall be entitled to receive
any amount accrued under Section 4(a) and the pro-rata amount payable under
Section 4(e) for the period prior to Employee's death and any other amount to
which Employee was entitled of the time of his death.
b. TERMINATION BY EMPLOYEE
(i) Employee shall have the right to terminate his
employment under this Agreement upon 30 days' notice to Employer given within 90
days following the occurrence of any of the following events (A) through (F) or
within three years following the occurrence of event (G):
(A) Employee is not elected or retained as Chief
Executive Officer, Chairman and President.
(B) Employer acts to materially reduce Employee's
duties and responsibilities hereunder. Employee's duties and responsibilities
shall not be deemed materially reduced for purposes hereof solely by virtue of
the fact that Employer is (or substantially all of its assets are) sold to, or
is combined with, another entity, provided that Employee shall continue to have
the same duties and responsibilities with respect to Employer's business, and
Employee shall report directly to the chief executive officer and/or board of
directors of the entity (or individual) that acquires Employer or its assets.
(C) Employer acts to change the geographic location of
the performance of Employee's duties from the Washington, D.C. Metropolitan
area. For purposes of this Agreement, the Washington D.C. Metropolitan area
shall be deemed to be the area within 60 miles of Washington, D.C.
(D) A Material Reduction (as hereinafter defined) in
Employee's rate of base compensation, or Employee's other benefits. "Material
Reduction" shall mean a ten percent (10%) differential;
(E) A failure by Employer to obtain the assumption of
this Agreement by any successor;
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(F) A material breach of this Agreement by Employer,
which is not cured within thirty (30) days of written notice of such breach by
Employer;
(G) A Change of Control.
(ii) Anything herein to the contrary notwithstanding,
Employee may terminate this Agreement upon thirty (30) days written notice.
c. If Employer shall terminate Employee's employment other than
due to his death or disability or for Cause (as defined in Section 10(a)(i) of
this Agreement), or if Employee shall terminate this Agreement under Section
10(b)(i), Employer's obligations under Section 4 shall be absolute and
unconditional and not subject to any offset or counterclaim and Employee shall
continue to be entitled to receive all amounts provided for by Section 4 and all
additional employee benefits under Section 4 regardless of the amount of
compensation he may earn with respect to any other employment he may obtain.
11. CONSEQUENCES OF BREACH BY EMPLOYER;
EMPLOYMENT TERMINATION
a. If this Agreement is terminated pursuant to Section 10(b)(i)
hereof, or if Employer shall terminate Employee's employment under this
Agreement in any way that is a breach of this Agreement by Employer, the
following shall apply:
(i) Employee shall be entitled to payment of any previously
declared bonus and additional compensation as provided in Section 4(a) and (b)
above.
b. In the event of termination of Employee's employment
pursuant to Section 10(b)(i) of this Agreement, the provisions of Section 9
shall not apply to Employee.
12. REMEDIES
Employer recognizes that because of Employee's special talents,
stature and opportunities in the computer industry, and because of the special
creative nature of and compensation practices of said industry and the material
impact that individual projects can have on company's results of operations, in
the event of termination by Employer hereunder (except under Section 10(a)(i) or
(iii), or in the event of termination by Employee under Section 10(b)(i) before
the end of the agreed term, the Employer acknowledges and agrees that the
provisions of this Agreement regarding further payments of base salary, bonuses
and the exercisability of Rights constitute fair
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and reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.
13. EXCISE TAX. In the event that any payment or benefit received
or to be received by Employee in connection with a termination of his employment
with Employer would constitute a "parachute payment" within the meaning of Code
Section 280G or any similar or successor provision to 280G and/or would be
subject to any excise tax imposed by Code Section 4999 or any similar or
successor provision then Employer shall assume all liability for the payment of
any such tax and Employer shall immediately reimburse Employee on a "grossed-up"
basis for any income taxes attributable to Employee by reason of such Employer
payment and reimbursements.
14. ARBITRATION. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 8 and 9 hereof, shall on the written request of either party served on
the other be submitted to arbitration. Such arbitration shall comply with and
be governed by the rules of the American Arbitration Association. An
arbitration demand must be made within one (1) year of the date on which the
party demanding arbitration first had notice of the existence of the claim to be
arbitrated, or the right to arbitration along with such claim shall be
considered to have been waived. An arbitrator shall be selected according to
the procedures of the American Arbitration Association. The cost of arbitration
shall be born by the losing party or in such proportions as the arbitrator shall
decide. The arbitrator shall have no authority to add to, subtract from or
otherwise modify the provisions of this Agreement, or to award punitive damages
to either party.
15. ATTORNEYS' FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
16. ENTIRE AGREEMENT; SURVIVAL. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other provision. This
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Agreement may not be amended except by an agreement in writing signed by the
Employee and the Employer, or any waiver, change, discharge or modification as
sought. Waiver of or failure to exercise any rights provided by this Agreement
and in any respect shall not be deemed a waiver of any further or future rights.
b. The provisions of Sections 4, 8, 9, 10(a)(ii), 10(c), 11,
12, 13, 14, 15, 18, 19 and 20 shall survive the termination of this Agreement.
17. ASSIGNMENT. This Agreement shall not be assigned to other
parties.
18. GOVERNING LAW. This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the State of Virginia, without regard to the conflicts of laws principles
thereof.
19. NOTICES. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed), provided
that a copy is mailed by registered or certified mail, return receipt requested;
or
c. received by the addressee as sent be express delivery service
(receipt requested) in each case to the appropriate addresses, telex numbers and
telefax numbers as the party may designate to itself by notice to the other
parties:
(i) if to the Employer:
Xxxx Computer Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx, Savage, Kaplowitz, Xxxxxxxxxx &
Xxxxxx
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxx X. Xxxxxxxxx, Esq.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
20. SEVERABILITY OF AGREEMENT. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which remaining
provisions shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties that they would have executed the remaining
portions of this Agreement without including any such part, parts or portions
which may, for any reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have executed this
agreement as of the day and year first above written.
XXXX COMPUTER CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Executive Vice President
/s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
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