Exhibit 10.1
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EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT (this "Agreement") is made this 24th day of
November, 2006 by and between CompuDyne Corporation, a Nevada corporation (the
"Company") and Xxxx Xxxxxxx ("Xxxxxxx").
In consideration of the mutual covenants and promises contained herein, the
parties, intending to be legally bound hereby, agree as follows:
1. Term of Employment. The Company shall employ Xxxxxxx and Xxxxxxx hereby
accepts employment with the Company, upon such terms as are set forth in this
Agreement, for the period commencing on November 24, 2006 (the "Commencement
Date") and ending on December 31, 2007, unless sooner terminated in accordance
with the provisions of Section 4 (such period, as it may be extended as provided
herein, the "Employment Period"). This Agreement shall automatically be renewed
for additional one-year terms unless either party gives contrary prior written
notice at least 30 days prior to the end of the then-current term.
2. Title; Capacity. During the Employment Period, Xxxxxxx shall serve as
Chief Operating Officer of the Company and such additional positions as the
Board of Directors of the Company (the "Board") may determine from time to time.
During the Employment Period, Xxxxxxx' primary responsibility will be to manage
the overall operations and personnel of the Company with the exception of those
assigned to the Chief Financial Officer, all in accordance with the duties and
responsibilities delegated to Xxxxxxx by the Board or the Chief Executive
Officer of the Company (the "CEO"). In addition, until the Company hires one or
more successors or the position is eliminated, Xxxxxxx shall serve as (i)
President of the Company's Attack Protection business unit, (ii) President of
Fiber SenSys, and (iii) Chief Executive Officer of Tiburon. Xxxxxxx will report
to the CEO of the Company. Xxxxxxx hereby accepts such employment and agrees to
undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Board or the CEO shall from time to
time reasonably assign to him. Xxxxxxx agrees to devote his entire business
time, attention and energies to the business and interests of the Company during
the Employment Period. Xxxxxxx agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.
3. Compensation and Benefits.
a. Salary. The Company shall pay Xxxxxxx $260,000 per year (the "Base
Salary") to be paid in accordance with the Company's standard procedures. The
Company will review the Base Salary annually to determine if an adjustment is
appropriate.
b. Incentive Compensation. In addition to the Base Salary, after the
conclusion of each fiscal year of the Company during the Employment Period,
Xxxxxxx will receive a bonus of up to 40% of his Base Salary ("Annual Bonus"),
provided that the Company achieves certain financial targets for the applicable
year. Targets for an applicable year shall be determined in writing by agreement
of the CEO, the Compensation Committee and Xxxxxxx prior to or at the beginning
of such fiscal year and shall be based predominantly on pre-tax income.
c. Reimbursement of Expenses. The Company shall reimburse Xxxxxxx for
all reasonable travel, entertainment and other expenses incurred or paid by
Xxxxxxx in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation by Xxxxxxx
of documentation, expense statements, vouchers and/or such other supporting
information as the Company may request, provided, however, that such expenses
are incurred in compliance with the Company's travel and other policies and that
the amount available for such travel, entertainment and other expenses may be
fixed in advance by the CEO.
d. Benefits. Xxxxxxx shall be eligible to participate in the standard
benefits the Company makes available to its employees, up until his Termination
as defined in Section 4 of this Agreement, or such longer period to the extent
provided under Section 5. Xxxxxxx shall be entitled to four (4) weeks paid
vacation per year, to be taken at such times as may be approved by the CEO.
4. Termination. Xxxxxxx'x employment by the Company pursuant to this
Agreement shall terminate (a "Termination") upon the occurrence of any of the
following:
a. Expiration of the Employment Period;
b. At the election of Company, for cause, immediately upon written
notice by the Company to Xxxxxxx. For the purposes of this Section b, "cause"
shall mean (i) the persistent material failure of Xxxxxxx to perform his
assigned duties for the Company, (ii) intentional and willful misconduct
relating to Xxxxxxx' employment hereunder, (iii) a material breach of this
Agreement by Xxxxxxx or the breach of any material written policy of the Company
or any other material contract between Xxxxxxx and the Company which is not
cured within 30 days following written notice from the Company, or (iv) the
conviction of Xxxxxxx of, or the entry of a pleading of guilty or nolo
contendere by Xxxxxxx to, any crime involving moral turpitude or any felony;
c. The death or thirty (30) days after the disability of Xxxxxxx. As
used in this Agreement, the term "disability" shall mean the inability of
Xxxxxxx, due to a physical or mental disability, for a period of 90 (ninety)
days, whether or not consecutive, during any 360-day period, to perform the
services contemplated under this Agreement. A determination of disability shall
be made by a physician satisfactory to both Xxxxxxx and the Company, provided
that if Xxxxxxx and the Company do not agree on a physician, Xxxxxxx and the
Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all
parties; or
d. At the election of the Company, upon not less than 90 (ninety) days'
prior written notice of Termination.
5. Effect of Termination.
a. Termination for Cause. In the event of Termination for cause pursuant
to Section 4.b, the Company shall pay to Xxxxxxx the Base Salary and benefits
otherwise payable to him under Section 3 through the last day of his actual
employment.
b. Termination at Election of Company. In the event Termination is at
the election of the Company pursuant to Section 4.d, (i) the Company shall pay
to Xxxxxxx the Base Salary , a pro-rata portion of the Annual Bonus for the
applicable year, and the accrued vacation to which he is entitled under Section
3 through the date of his Termination, (ii) the Company shall pay to Xxxxxxx the
greater of (x) one year of Base Salary or (y) Base Salary through the end of the
Employment Period, in either case payable ratably over the year according to
standard payroll procedures, and (iii) the Company shall pay standard life
insurance benefits and the COBRA payments for health and dental benefits for
Xxxxxxx for a period of one year after the date of his Termination.
c. Termination for Death or Disability. If Termination is as a result of
the death or disability of Xxxxxxx pursuant to Section 4.c, the Company shall
pay to the estate of Xxxxxxx or to Xxxxxxx, as the case may be, the Base Salary,
a pro-rata portion of the Annual Bonus for the applicable year, and the accrued
vacation to which he is entitled under Section 3 up to the end of the month in
which Termination because of death or disability occurs.
d. Survival. The provisions of Sections 6 and 7 shall survive the
termination of this Agreement.
6. Confidential Information and Developments.
a. Confidential Information.
(i) Xxxxxxx agrees that all information and know-how, whether or not
in writing, of a private, secret or confidential nature concerning the business
or financial affairs of the Company or the business or financial affairs of any
entity affiliated with the Company (collectively, "Confidential Information") is
and shall be the exclusive property of the Company. By way of illustration, but
not limitation, Confidential Information may include inventions, products,
processes, methods, techniques, formulas, compositions, compounds, projects,
developments, plans, research data, clinical data, financial data, personnel
data, computer programs, and customer and supplier lists. Xxxxxxx will not
disclose any Confidential Information to others outside the Company or use the
same for any unauthorized purposes without written approval, either during or
after his employment or retention as a consultant by the Company, unless and
until such Confidential Information has become public knowledge without fault by
Xxxxxxx.
(ii) Xxxxxxx agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings, or
other written, photographic, or other tangible material containing Confidential
Information, whether created by Xxxxxxx or others, which shall come into his
custody or possession, shall be and are the exclusive property of the Company to
be used by Xxxxxxx only in the performance of his duties for the Company and
shall be returned by Xxxxxxx upon Termination.
(iii) Xxxxxxx agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (i) and
(ii) above, also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to Xxxxxxx in the course of the Company's business.
b. Developments.
(i) Xxxxxxx will make full and prompt disclosure to the Company of all
inventions, improvements, discoveries, methods, developments, software, and
works of authorship, whether patentable or not, which are created, made,
conceived or reduced to practice by Xxxxxxx or under his direction or jointly
with others during his employment or retention as a consultant by the Company,
whether or not during normal working hours or on the premises of the Company
(all of which are collectively referred to in this Agreement as "Developments").
(ii) Xxxxxxx agrees to assign and does hereby assign to the Company
(or any person or entity designated by the Company) all his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this Section 7.b
shall not apply to Developments which do not relate to the present or planned
business or research and development of the Company and which are made and
conceived by Xxxxxxx not during normal working hours, not on the Company's
premises and not using the Company's tools, devices, equipment or Confidential
Information.
(iii) Xxxxxxx agrees to cooperate fully with the Company, both during
and after his employment by the Company, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the United States
and foreign countries) relating to Developments. Xxxxxxx shall sign all papers,
including, without limitation, copyright applications, patent applications,
declarations, oaths, formal assignments, assignment of priority rights, and
powers of attorney, which the Company may deem necessary or desirable in order
to protect its rights and interests in any Development.
c. Other Agreements. Xxxxxxx hereby represents that he is not bound by
the terms of any agreement with any previous employer or other party to refrain
from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment or retention as a consultant by the
Company or to refrain from competing, directly or indirectly, with the business
of such previous employer or any other party. Xxxxxxx covenants that his
performance of all the terms of this Agreement will not breach any agreement,
and that he will keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment by the
Company.
7. Non-Compete.
a. During the period Xxxxxxx is employed by the Company and for a period
of one year after the earlier of: (i) notice of Termination and (ii) the last
day of Xxxxxxx' employment, Xxxxxxx will not directly or indirectly:
(i) compete with the Company in the business of the manufacture, sale,
distribution or processing of any product or service substantially identical to
or competitive with the products or services manufactured, sold, distributed or
processed by the Company during the term of this Agreement and Xxxxxxx shall not
assist any other person to do so; or be a proprietor, equity holder, investor
(except as an investor holding not more than 1% of the capital stock, including
options and warrants to purchase such capital stock, or other securities of a
publicly held company), lender, partner, director, officer, employee, consultant
or representative of any person who does or attempts to do so; or
(ii) recruit, solicit, induce, or attempt to induce any of the
employees or independent contractors of the Company or any of its affiliates to
terminate their employment or contractual relationship with the other party or
any such affiliate; and Xxxxxxx shall not assist any other person to do so, or
be a proprietor, equity holder, investor (except as an investor holding not more
than 1% of the capital stock, including options and warrants to purchase such
capital stock, or other securities of a publicly held company), lender, partner,
director, officer, employee, consultant or representative of any person who does
or attempts to do so; or
(iii) solicit, divert, take away, or attempt to divert or take away,
from the Company any of its business or the patronage of its customers, clients,
accounts, vendors or suppliers for products or services manufactured, sold,
distributed or processed by the Company, and Xxxxxxx shall not assist any other
person to do so, or be a proprietor, equity holder, investor (except as an
investor holding not more than 1% of the capital stock, including options and
warrants to purchase such capital stock, or other securities of a publicly held
company), lender, partner, director, officer, employee, consultant or
representative of any person who does or attempts to do so.
b. If any restriction set forth in this Section 7 is found by any court
of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
c. The restrictions contained in this Section 7 are necessary for the
protection of the business and goodwill of the Company and are considered by
Xxxxxxx to be reasonable for such purpose. Xxxxxxx agrees that any breach of
this Section 7 will cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies
which may be available, the Company shall have the right to seek specific
performance and injunctive relief.
8. Notices. All notices required or permitted under this Agreement shall be
in writing and shall be deemed effective upon personal delivery or upon deposit
in the United States Post Office, by registered or certified mail, postage
prepaid, addressed to the other party as set forth below:
a. If to Company:
CompuDyne Corporation
0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Fax: 000-000-0000
b. If to Xxxxxxx:
Xxxx Xxxxxxx
0000 Xxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
Notwithstanding anything else herein, this Agreement shall not amend, modify or
terminate the Retention Agreement entered into by the Company and Xxxxxxx on
June 28, 2005, and in the event of any conflict between this Agreement or the
Retention Agreement, the Retention Agreement shall prevail.
10. Amendment. This Agreement may be amended or modified only by a written
instrument executed by the Company and Xxxxxxx.
11. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Maryland.
12. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of Xxxxxxx are personal and shall not be assigned by him.
13. Miscellaneous.
a. No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
x. Xxxxxxx acknowledges that he has had an opportunity to review this
Agreement with his attorney and that counsel to the Company is not representing
him in the negotiation of this Agreement.
c. 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.
d. In case any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
e. This Agreement may be executed in counterparts, each of which shall
be considered an original and which together shall constitute one agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
COMPUDYNE CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Title: Chairman
By: /s/ Xxxx Xxxxxxx
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Title: Chief Operating Officer
