Exhibit 10(jj)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (together with the three Exhibits hereto, the
"Agreement") is entered into as of the 17th day of October, 1997, by and
between BASE TEN SYSTEMS, INC., a New Jersey corporation (the "Company") and
Xxxxxx X. Xxxxxxx, an individual ("Xxxxxxx").
WHEREAS, the Company believes that given Xxxxxxx'x experience and knowledge of
the pharmaceutical industry and his business and management skills, it would be
to the benefit of the Company for Xxxxxxx to serve the Company as Co-Chairman,
President, and Chief Executive Officer; and
WHEREAS, Xxxxxxx is willing to serve the Company in such capacities and enter
into the obligations hereunder set forth,
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. RETENTION OF XXXXXXX. Effective as of November 1, 1997 the Company
for the duration of the Employment Term hereby retains Xxxxxxx and Xxxxxxx
agrees to serve the Company as its President and Chief Executive Officer and, as
of the completion of the Special Shareholders meeting intended to be held on or
about November 15, 1997 or any adjournments or postponements thereto, the
Company hereby retains Xxxxxxx and Xxxxxxx agrees to serve the Company as Co-
Chairman of the Board of Directors, upon and subject to the terms and conditions
hereinafter set forth.
2. EMPLOYMENT TERM. The term of Xxxxxxx'x employment pursuant to this
Agreement shall be from November 1, 1997 to and including October 31, 1998
unless sooner terminated as provided in this Agreement (the "Initial Employment
Term"). Thereafter, the term shall continue from year to year for additional
one year terms (the "Additional Terms"; the Initial Employment Term and any
Additional Terms are hereinafter referred to as the "Employment Term") unless
sooner terminated as provided herein.
3. DUTIES. During the Employment Term, Xxxxxxx shall faithfully perform
the duties of President and Chief Executive Officer and, when appointed, as
Co-Chairman, to the best of his ability and shall devote substantially all of
his working time and efforts to the affairs of the Company; PROVIDED, HOWEVER,
that he may also (a) serve on such boards of a reasonable number of other
business entities, trade associations and/or charitable organizations as the
Board of Directors of the Company ("Board") may reasonably approve, (b) engage
in charitable activities and community affairs and (c) manage his personal
investments and affairs, provided that such activities do not interfere with the
proper performance of his duties and responsibilities under this Agreement.
Xxxxxxx shall report solely to the Board of Directors of the Company; shall have
the authority and responsibilities customarily associated with the positions of
Co-Chairman, President and Chief Executive Officer of a publicly held
corporation; shall perform such duties relating to the management and operations
of the Company, consistent with the foregoing, as may from time to time be
assigned to him by the Board; and shall not be assigned
duties or responsibilities, following written, detailed notice by Xxxxxxx to the
Board, that are materially inconsistent with the foregoing duties and
responsibilities.
4. COMPENSATION. As compensation for the services to be rendered by
Xxxxxxx, the Company shall pay to Xxxxxxx:
(a) During the Employment Term, a salary at a rate of no less than
$300,000 annually, payable in accordance with the customary payroll practices
applicable to senior executives of the Company. Xxxxxxx'x salary shall be
reviewed no less frequently than annually for increase by the Board, in its
discretion, and shall not be decreased at any time, or for any purpose
(including for the purpose of determining severance benefits under Section 5),
during the Employment Term.
(b) On the date hereof, as an inducement to Xxxxxxx'x agreement and
willingness to accept this position, the Company shall award to Xxxxxxx a
ten-year non-qualified stock option (the "Service-Based Stock Option"), pursuant
to the Company's Amended Discretionary Deferred Compensation Plan, to purchase
250,000 shares of the Company's Class A Common Stock at a price per share equal
to the closing price of the Company's Class A Common Stock as reported by the
NASDAQ National Market System on the date of this Agreement. The Service-Based
Stock Option shall be in substantially the form attached as EXHIBIT A and shall
vest and become exercisable with respect to 70,000 shares on November 1, 1997
and an additional 60,000 shares on each of the first three anniversaries of that
date. The Service-Based Stock Option shall remain exercisable after any
termination of Xxxxxxx'x employment with the Company only to the extent provided
in Section 5 and in the Service-Based Option.
(c) On the date hereof, as a further inducement to Xxxxxxx'x
agreement and willingness to accept this position, the Company shall award to
Xxxxxxx a ten-year non-qualified stock option (the "Performance-Based Stock
Option") pursuant to the Company's Amended Discretionary Deferred Compensation
Plan, to purchase a maximum of 200,000 shares of the Company's Class A Common
Stock at a price per share equal to the closing price of the Company's Class A
Common Stock as reported by the NASDAQ National Market System on the date of
this Agreement.
The Performance-Based Stock Option shall be substantially in the form
attached hereto as EXHIBIT B and shall vest and become exercisable with respect
to one share for each one hundred dollars ($100.00) of consolidated earnings
(excluding extraordinary items) before interest, taxes, depreciation and
amortization (EBITDA) reported on the Company's audited financial statements for
any of the Company's first three fiscal years ending after November 1, 1997, at
the time such audited financial statements first become available, provided
Xxxxxxx is employed hereunder as of the end of such year. The Performance-Based
Stock Option shall remain exercisable with respect to any shares for which it
has vested and become exercisable until the earlier of (i) the date it is
exercised for such shares and (ii) the tenth anniversary of the date of grant.
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(d) Beginning no later than November 1, 2000, Xxxxxxx shall be
eligible for additional grants of stock options, in the sole discretion of the
Board, under the Company's Amended Discretionary Deferred Compensation Plan or
any successor plan.
(e) The Company shall use its best reasonable efforts to assure that
all shares received by Xxxxxxx on any exercise of any stock option awarded to
him by the Company shall be, and shall remain, (i) fully registered (at the
Company's expense) under the Securities Act of 1933, as amended (the "1933
Act"), both for issuance and for resale, (ii) fully registered or qualified (at
the Company's expense) under such state securities laws as Xxxxxxx may
reasonably request, both for issuance and for resale, and (iii) either qualified
for trading on NASDAQ or listed on a national securities exchange UNLESS, in
each case, Xxxxxxx consents to alternative arrangements that adequately protect
the salability of such shares, which consent shall not be unreasonably withheld.
(f) In the event there is any change in the Class A Common Stock
subject to the above options, through merger consolidation, reorganization,
recapitalization, stock dividend, stock split or combination, an appropriate
adjustment shall be made to such stock options so as to avoid dilution or
enlargement of Xxxxxxx'x rights and the value represented by the options.
(g) During the Employment Term Xxxxxxx shall have the right, by
furnishing written notice to the Company at least six months prior to any
exercise of any stock option, to elect to defer any gains realized upon such
exercise. Any such deferral, including the manner of exercise of the stock
option in connection with such deferral, shall be made in such manner as may
reasonably be required by the Company, including such requirements as may apply
in order to defer such gains for Federal income tax purposes or as the
independent public accountants for the Company advises are necessary in order
that the stock option gains not be a charge against the earnings of the Company.
At the time Xxxxxxx elects to defer such gains, such gains shall be deferred
into any non-qualified deferral plan of the Company that accepts such deferrals
on terms that satisfy the requirements of the preceding sentence. If such a
plan is not available, Xxxxxxx may during the Employment Term make an
irrevocable election to defer such gains into Share Units (with a "Share Unit"
representing a share of Class A Common Stock of the Company including any
dividends that may be declared thereon during the period of the deferral).
Amounts deferred under this Section 4(g) shall be paid out as required under the
terms of Xxxxxxx'x election to defer.
(h) On the date hereof, the Company shall enter into a
"change-in-control" agreement with Xxxxxxx, substantially in the form attached
as EXHIBIT C. The Company's obligation to provide benefits and compensation
under Sections 5(d)(iii), 5(e)(iv) and 5(e)(v) of this Agreement shall be offset
by corresponding benefits and compensation (if any) provided under such
change-in-control agreement.
(i) During the Employment Term, the Company shall pay to Xxxxxxx an
annual bonus with respect to each fiscal year of the Company equal to one half
percent (0.5%) of the first $10 million of the Company's consolidated gross
revenues earned during that portion of the fiscal year during which Xxxxxxx is
employed by the Company hereunder, as set forth in the
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Company's audited financial statements for the fiscal year (if relating to a
full fiscal year, and otherwise as determined by the regular independent
accountants of the Company), and one percent of all such revenues, earned during
that portion of the fiscal year during which Xxxxxxx is employed by the Company
hereunder, in excess of $10 million. Any such annual bonus shall be paid to
Xxxxxxx on the date which is 120 days after the end of the fiscal year or the
date which is thirty (30) days after such audited financial statements (or, if
applicable, such independent accountants' determination) first become available
for the fiscal year in question, whichever is later, but in no event later than
210 days after the end of such fiscal year.
(j) During the Employment Term, the Company shall provide Xxxxxxx
with disability insurance in accordance with the Company's existing plan from
time to time applicable to senior executives of the Company, on the same cost
basis as for such other senior executives. Any such plan shall be supplemented
by the Company, as necessary, so that if Xxxxxxx suffers a "permanent
disability" (as defined in Section 5(f)) during the Employment Term, he shall
receive, for one year after his employment with the Company terminates, monthly
disability payments equaling no less than his then current monthly salary.
(k) During the Employment Term, Xxxxxxx shall be entitled to three
weeks paid vacation each calendar year in accordance with the Company's standard
vacation policy. Xxxxxxx shall also be entitled to all regular Company holidays
and personal days.
(l) During the Employment Term, Xxxxxxx shall be entitled to
participate in any medical, dental, hospitalization, disability, life insurance,
vision, prescription, accidental death and dismemberment, travel accident, and
other employee welfare benefit plan, program or arrangement that is made
available generally to senior executives of the Company on terms and conditions
that are commensurate with such other senior executives. During the Employment
Term, no such benefit, coverage, term or condition shall be changed in a manner
that is materially adverse to Xxxxxxx without his consent unless such change is
part of an across-the-board change applying generally to senior executives of
the Company. During the Employment Term, the Company shall maintain in effect
for Xxxxxxx, at its cost, a life insurance policy, or policies, providing
aggregate death benefits equaling no less than $1,000,000 provided Xxxxxxx
submits to and satisfactorily passes any insurance related medical examination
and other applicable medical or health requirements.
(m) During the Employment Term, Xxxxxxx shall be entitled to such
other benefits as are made available generally to senior executives of the
Company, including (without limitation) any pension, profit sharing, savings,
employee stock purchase, 401(k) or retirement plan, program or arrangement,
whether funded or unfunded and whether qualified or unqualified.
(n) During the Employment Term, Xxxxxxx shall be entitled to
participate in all fringe benefits and perquisites that are available generally
to senior executives of the Company, at an appropriate level commensurate with
such other senior executives.
(o) During the Employment Term, Xxxxxxx is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this
Agreement, and the Company
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shall promptly reimburse him for all such expenses, subject to reasonable
documentation in accordance with the Company's policies.
(p) Upon the signing of this Agreement the Company will reimburse
Xxxxxxx all of his legal expenses he reasonably incurred in connection with
entering into this Agreement.
(q) In consideration of the need for Xxxxxxx to relocate to the area
of the Company's principal office, the Company agrees to reimburse Xxxxxxx for
his reasonable relocation expenses up to a maximum relocation reimbursement of
$10,000 upon presentation of appropriate expense vouchers. In addition the
Company agrees to provide a temporary living allowance to Xxxxxxx for the
reimbursement of temporary living expenses incurred by Xxxxxxx at the Company's
location up to a maximum of $1500 per month for not more than three months, or a
maximum sum not to exceed $4500, upon presentation of appropriate expense
vouchers.
5. TERMINATION OF EMPLOYMENT
(a) The Employment Term
(1) shall terminate in the event of Xxxxxxx'x death or
"permanent disability" (as hereinafter defined);
(2) may be terminated by the Company for "cause" (as hereinafter
defined) or "without cause" (as hereinafter defined); or
(3) may be terminated by Xxxxxxx for "good reason" (as
hereinafter defined) or "voluntarily" (as hereinafter defined).
On any termination by the Company "without cause" or any termination
by Gardener for "good reason" or "voluntarily", such party will give the other
at least three (3) months prior notice of such termination.
(b) Xxxxxxx'x obligation to perform and observe the obligations,
terms and conditions of Sections 7 and 8 of this Agreement shall survive any
termination of the Employment Term.
(c) Upon any termination of the Employment Term, Xxxxxxx shall be
entitled to (i) salary through the date of termination; (ii) any annual bonus or
other incentive compensation award earned but not yet paid; (iii) the continued
right to exercise the Performance-Based Stock Option, to the extent that such
option is, or becomes, vested and exercisable under the terms of this Agreement,
until the tenth anniversary of its date of grant; (iv) the continued right to
exercise any other outstanding stock option (including, without limitation, the
Service-Based Stock Option), to the extent that such option had vested and was
exercisable on the date of termination, until the end of the 90th day following
such date; (v) any amounts earned or accrued, but not yet paid, under Sections
4(l) through 4(q); (vi) a lump sum payment in respect of accrued but unused
vacation days at his salary rate on the date of termination; (vii) prompt payout
when due of all amounts due and payable under the terms of
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this Agreement as a result of his termination; and (viii) other or additional
benefits, if any, in accordance with the terms and conditions of applicable
plans, programs and arrangements of the Company.
(d) Upon termination of the Employment Term by reason of the death or
"permanent disability" of Xxxxxxx, Xxxxxxx shall be entitled to (i) all rights
and benefits provided under Section 5(c); (ii) the right to exercise any
outstanding stock option (including, without limitation, the Service-Based Stock
Option), to the extent that such option had vested and is exercisable on the
date of his termination, at any time through the second anniversary of such
date; and (iii) continued coverage and benefits as provided under any welfare
benefit plan or arrangement of the Company in which Xxxxxxx was participating on
the date of termination for two years after such date, with no reduction in
coverage or benefits and no increase in cost to Xxxxxxx other than any such
reduction or increase commensurate with any similar reduction or increase for
other senior executives of the Company.
(e) Upon termination of the Employment Term at any time during the
Employment Term by the Company "without cause" or by Xxxxxxx for "good reason,"
Xxxxxxx shall be entitled to (i) all rights and benefits provided under
Section 5(c); (ii) the right to exercise the Performance-Based Stock Option, to
the extent that such option had vested and is exercisable on the date of
termination (or becomes vested and exercisable within one (1) year following
that date), at any time between the time it becomes exercisable and the tenth
anniversary of its date of grant; (iii) the right to exercise any other
outstanding stock option (including, without limitation, the Service-Based Stock
Option), to the extent that such option had vested and is exercisable on the
date of termination (or, as to the Service Based Option, becomes vested and
exercisable within one (1) year following that date), at any time prior to the
second anniversary of the date of termination; (iv) continued coverage and
benefits as provided under any medical, health or dental plan or arrangement of
the Company in which Xxxxxxx was participating on the date of termination for
two years after such date, with no reduction in coverage or benefits and no
increase in cost to Xxxxxxx, other than any such reduction or increase
commensurate with a similar reduction or increase for other senior executives of
the Company, provided that the Company's obligation to provide such coverage and
benefits shall be reduced to the extent that Xxxxxxx receives coverage and
benefits under the plans of a subsequent employer, determined on a
coverage-by-coverage and benefit-by-benefit basis; and (v) payment in a lump sum
within 60 days of such termination or in installments over time if so specified
by Xxxxxxx, of an amount equal to the sum of (a) one year's salary (at the then
current rate of salary) plus (b) the greater of (i) the annual bonus payable to
him under Section 4(i) for the most recently completed fiscal year of the
Company and (ii) the annual bonus that would be due to him in connection with
the then current fiscal year of the Company based solely on the consolidated
gross revenue of the Company through the date of termination. This Section 5(e)
shall be the maximum liability and obligation of the Company (including the
officers and directors of the Company) in the event of any such termination of
Xxxxxxx "without cause" or by Xxxxxxx for "good reason" at any time.
(f) As used herein, "permanent disability" shall mean a disability
which renders Xxxxxxx mentally or physically unable to perform his usual and
regular duties and responsibilities for a continuous period of 120 days or for a
non-continuous period of 180 days in
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any 365 day period, as determined by a medical doctor selected by the Company
and reasonably acceptable to Xxxxxxx.
(g) As used herein, "cause" shall mean (i) the continuing willful
failure by Xxxxxxx to devote substantially all his business time and effort to
performing his duties hereunder as provided in Section 3 (other than any such
failure resulting from Xxxxxxx'x death or incapacity due to physical or mental
illness) and the continuance of such failure for a period of thirty (30) days
after a written demand for substantial performance is delivered to Xxxxxxx by
the Board which specifically identifies the manner in which the Board believes
that Xxxxxxx has not substantially performed such duties; (ii) the engaging by
Xxxxxxx in willful gross misconduct or willful gross neglect in carrying out his
duties under this Agreement, resulting, in either case, in material economic
harm to the Company; (iii) Xxxxxxx engages in any activity that constitutes a
felony involving moral turpitude; or (iv) Xxxxxxx engages in any activity that
constitutes embezzlement, theft, fraud or similar criminal conduct. No
termination of Xxxxxxx'x employment for "cause" shall be effective unless the
provisions set forth in the following three sentences shall have been complied
with. The Board shall give Xxxxxxx written notice of its intention to terminate
him for "cause," such notice (x) to state in detail the particular circumstances
that constitute the grounds on which the proposed termination for "cause" is
based and (y) to be given no later than 90 days after the Board is first advised
of such circumstances. Xxxxxxx shall then be entitled to a hearing before the
Board to be held within 20 days of his receiving such notice. If, within, seven
days following such hearing, the Board gives written notice to Xxxxxxx
confirming that, in the reasonable, good faith judgment of at least
three-quarters of the members of the Board, "cause" for terminating him on the
basis set forth in the original notice exists, his employment with the Company
shall thereupon be terminated for "cause," subject to DE NOVO review in
accordance with Section 14.
(h) As used herein, "good reason" shall mean the occurrence, without
Xxxxxxx'x prior written consent, of one or more of the following events UNLESS
cured on 60 days written notice from Xxxxxxx requesting cure: (i) any reduction
in Xxxxxxx'x then current salary; (ii) any material reduction in any benefit or
perquisite available to Xxxxxxx under Sections 4(j) through 4(n) unless a
substantially equivalent benefit or perquisite is substituted or unless a
substantially equivalent reduction is applied generally to other senior
executives of the Company; (iii) any material diminution in Xxxxxxx'x duties or
responsibilities, or the assignment to him of duties or responsibilities that
are materially inconsistent with his duties and responsibilities as set forth in
Section 3, or the failure to grant, or the loss of, any of his titles or
positions as set forth in Section 1 (including any failure to employ him as
Co-Chairman of the Board by December 31, 1997); (iv) any failure by the Company
to make any salary, bonus or other compensation payment or award promptly when
due under the terms of this Agreement, or to honor any stock option award, or
other long-term compensation or incentive award, in accordance with its terms;
(v) any relocation of the Company's principal office, or of Xxxxxxx'x own office
as assigned to him by the Company, to a location more than 35 miles from the
Company's current chief executive offices in Trenton, New Jersey; or (vi) any
failure by the Company to obtain the assumption in writing of its obligation to
perform all aspects of this Agreement by any successor or assign within 15 days
after a merger, consolidation, sale of assets or similar transaction.
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(i) As used herein, "without cause" is any termination by the Company
that is not with "cause."
(j) As used herein, "voluntary" termination by Xxxxxxx shall mean any
termination by him that is not by death, by "disability" or for "good reason".
A "voluntary" termination by Xxxxxxx shall not be deemed a breach of this
Agreement or of the change-in-control agreement attached as Exhibit C.
(k) Notwithstanding anything to the contrary elsewhere in this
Agreement, in no event may any stock option be exercised after the expiration of
its maximum stated term.
(l) In the event of any termination of his employment with the
Company, Xxxxxxx shall be under no obligation to seek other employment and there
shall be no offset against amounts due him under this Agreement on account of
any remuneration or other benefit attributable to any subsequent employment that
he may obtain except as specifically provided in Section 4(e)(iv) with respect
to medical, health and dental benefits.
(m) Xxxxxxx and the Company agree that amounts due under this Section
5 are in the nature of severance payments considered to be reasonable by the
Company and are not in the nature of a penalty.
(n) At no time during the Employment Term or thereafter shall either
party make any public statement that intentionally disparages or defames the
goodwill or reputation of the other party; PROVIDED THAT it shall not be a
violation of this Section 5(n) for either party to make truthful statements when
required to do so by law or by a court, governmental agency, administrative
body, or legislative body with apparent jurisdiction to require such statements.
6. WITHHOLDING. The Company shall withhold all amounts required by law
to be withheld from any payments made pursuant to this Agreement, including any
and all amounts required to be withheld by any applicable Federal, state, or
foreign country's income tax act, and any applicable city, county, or
municipality's earnings or income tax act.
7. CONFIDENTIAL INFORMATION AND DUTY OF NONDISCLOSURE. Xxxxxxx
acknowledges and agrees that his employment with the Company pursuant to this
Agreement necessarily involves his access to secrets and confidential
information pertaining to the business of the Company and its subsidiaries.
Accordingly, Xxxxxxx agrees that at all times during his Employment Term and
thereafter, he will not, directly or indirectly, without the express written
authority of the Company, except as reasonably appropriate in connection with
the performance of his services under this Agreement or unless directed by
applicable legal authority having jurisdiction over Xxxxxxx, knowingly disclose
or use for the benefit of any person, firm, corporation, or other business
entity or himself, any trade secrets, confidential information concerning the
Company or any subsidiary of the Company, including, without limitation, any
information concerning the past, present, or prospective clients, creditors,
customers, operations, systems, software or methods (collectively, the
"Confidential Information"). Notwithstanding the foregoing, the term
Confidential Information shall not
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include any information which is or becomes in the public domain without breach
by Xxxxxxx of this Section 7.
Further, Xxxxxxx agrees that he will return to the Company upon termination
of the Employment Term all Confidential Information then in Xxxxxxx'x
possession, except such as relates to him personally.
8. COVENANT NOT TO COMPETE
(a) During the Employment Term and for one year thereafter, if the
Employment Term is terminated by the Company for "cause" or by Xxxxxxx
"voluntarily", Xxxxxxx shall not, directly or indirectly, acting as employee,
investor, officer, partner, principal or otherwise, of any corporation or other
entity, engage, within the United States of America, in any activity involving
products or services which compete materially with products and services of the
Company or any of its subsidiaries, as such products and services exist as of
the date hereof and during the Employment Term.
(b) The parties hereto agree that in the event that either the length
of time or the geographical areas set forth in Section 8(a) above is deemed too
restrictive in any court proceeding, the court may reduce such restrictions to
those which it deems reasonable under the circumstances.
(c) Xxxxxxx agrees and acknowledges that the Company and any of its
subsidiaries do not have adequate remedy at law for the breach or threatened
breach by Xxxxxxx of the covenants under this Section 8 and agrees that the
Company or any subsidiary of the Company shall be entitled to apply for
injunctive relief to restrain Xxxxxxx from such breach or threatened breach in
addition to any other remedies which might be available to the Company or any
subsidiary of the Company at law or equity.
For purposes of this Agreement, the term "subsidiary" includes any
limited liability company (including uPACS LLC) or other business directly
affiliated with the Company.
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9. INDEMNIFICATION
(a) The Company agrees that (i) if the Executive is made a party, or
is threatened to be made a party, to any "proceeding" by reason of the fact that
he is or was a director, officer, employee, agent, manager, consultant or
representative of the Company or is or was serving at the request of the Company
as a director, office, member, employee, agent, manager, consultant or
representative of another "person", or (ii) if any "claim" is made, or is
threatened to be made, that arises out of or relates to Xxxxxxx'x service in any
of the foregoing capacities, then Xxxxxxx shall be indemnified by the Company to
the fullest extent permitted or authorized by the Company's certificate of
incorporation, bylaws, Board resolutions or, if greater, by the laws of the
State of New Jersey against any and all costs, expenses, liabilities and losses
(including, without limitation, attorney's fees, judgments, interest, expenses
of investigation, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) incurred or suffered by Xxxxxxx in connection therewith,
and such indemnification shall continue as to Xxxxxxx even if he has ceased to
be a director, member, employee, agent, manager, consultant or representative of
the Company or other "person", and shall inure to the benefit of Xxxxxxx'x
successors and assigns. The Company shall advance to Xxxxxxx all costs and
expenses incurred by him in connection with any such proceeding or claim within
30 days of receiving written notice requesting such an advance, provided that
such notice includes, to the extent and in form and substance required by
applicable law, an undertaking by Xxxxxxx to repay the amount of such advance if
he is ultimately determined not to be entitled to indemnification against such
costs or expenses.
(b) Neither the failure of the Company (including its Board,
independent legal counsel or stockholders) to have made a determination in
connection with any request for payment or advancement under Section 9(a) that
Xxxxxxx has satisfied any applicable standard of conduct, nor a determination by
the Company (including its Board, independent legal counsel or stockholders)
that Xxxxxxx has not met any applicable standard of conduct, shall create a
presumption that Xxxxxxx has not met an applicable standard of conduct.
(c) The Company shall at all times during the Employment Term and for
six years thereafter keep in place a directors' and officers' liability
insurance policy (or policies) covering Xxxxxxx to the extent that the Company
provides such coverage for other senior executives.
(d) As used in this Agreement "person" shall mean any individual,
corporation, partnership, joint venture, trust, estate, board, committee,
agency, body, or other person or entity; "proceeding" shall mean any threatened
or actual action, suit, or other proceeding, whether civil, criminal,
administrative, investigative, appellate, or other; and "claim" shall mean any
claim, demand, request, investigation, dispute, controversy, threat, discovery
request, or request for testimony or information.
10. REPRESENTATIONS
(a) The Company represents and warrants that (i) it is fully
authorized by action of its Board (and of any other "person" whose action is
required) to enter into this
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Agreement and to perform its obligations under it; (ii) the grant of the
Service-Based Stock Option and Performance-Based Stock Option has been approved
in accordance with Rules 16b-3(d)(i) and 16b-3(e) promulgated under the
Securities Exchange Act of 1934, as amended; (iii) the execution, delivery and
performance of this Agreement by the Company does not violate any law,
regulation, order, judgment or decree or any agreement, plan or corporate
governance document of the Company; and (iv) upon the execution and delivery of
this Agreement by Xxxxxxx and the Company, this Agreement shall be a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except to the extent enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
(b) Xxxxxxx represents and warrants that (i) delivery and performance
of this Agreement by him does not violate any law, regulation, order, judgment
or decree or any agreement to which he is a party or by which he is bound, and
(ii) upon the execution and delivery of this Agreement by Xxxxxxx and the
Company, this Agreement shall be a valid and binding obligation of Xxxxxxx,
enforceable in accordance with its terms, except to the extent enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
11. NO EMPLOYMENT GUARANTEE. This Agreement shall not be deemed to
entitle Xxxxxxx to continued employment with the Company, and the rights of the
Company to terminate the employment of Xxxxxxx shall continue as fully as if
this Agreement were not in effect, subject to the provisions in Section 5 above.
12. NOTICES. Any notice, consent, demand, request, or other communication
given by Xxxxxxx or the Company in connection with this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered personally to
the party specified or (b) three days after mailing by certified or registered
mail, return receipt requested, or (c) provided that a written acknowledgment of
receipt is obtained, upon delivery by a nationally recognized overnight courier,
to the address set forth below for the party specified (or to such other address
for such party as shall be specified by ten days advance notice given pursuant
to this Section 12).
If to the Company: Base Ten Systems, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Board of Directors
If to Xxxxxxx: Xxxxxx X. Xxxxxxx
00 Xxxxxxxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
13. ASSIGNMENT/BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of Xxxxxxx, the Company, and their respective successors
and assigns. No rights or obligations of the Company under this Agreement may
be assigned or transferred by the
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Company except that such rights or obligations may be assigned or transferred
pursuant to a merger or consolidation in which the Company is not the continuing
entity, or the sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
expressly assumes all the liabilities, obligations and duties of the Company, as
contained in this Agreement. In connection with any transfer or assignment of
its rights, duties, or obligations under this Agreement, the Company shall take
whatever action it legally can to cause such assignee or transferee to expressly
assume the liabilities, obligations and duties of the Company hereunder. No
rights, obligations or duties of Xxxxxxx under this Agreement may be assigned or
transferred, other than his rights to compensation and benefits, which may be
transferred only by will or operation of law, except as otherwise expressly
provided.
14. DISPUTE RESOLUTION. Except as otherwise provided in Section 8(c), any
dispute or controversy between Xxxxxxx and the Company that arises out of or
relates to this Agreement (or any amendment thereof) shall, at the election of
either party, be resolved by confidential arbitration, to be held in Princeton,
New Jersey, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award may be entered in any court
having jurisdiction thereof.
15. INTEGRATION. This Agreement represents the entire understanding of
the parties with respect to the subject matter hereof. This Agreement
supersedes all other agreements, contracts, understandings and other
arrangements, written or oral, between the parties with respect to the subject
matter hereof, all of which are hereby terminated and shall be of no further
force or effect, including without limitation, any employment contracts,
agreements, or understandings in effect as of the date hereof.
16. MISCELLANEOUS. No provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is agreed to in
writing signed by Xxxxxxx and such officer of the Company as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of any similar or
dissimilar provision or condition at the same or any prior or subsequent time.
No representations, oral or otherwise, express or implied, with respect the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remainder of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Agreement. Except as otherwise expressly
set forth in this Agreement, the respective rights and obligations of Xxxxxxx
and the Company hereunder shall survive any termination of the Executive's
employment or the Employment Term. This Agreement itself (as distinguished from
Xxxxxxx'x employment with the Company or the Employment Term) may not be
terminated by either party without the written consent of the other party. The
headings of the Sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement. The validity,
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interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New Jersey without regard to conflict of law
principles. This Agreement may be executed in counterparts, each of which shall
be deemed a duplicate original all of which shall be deemed to be one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first set forth above.
BASE TEN SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman & Chief Executive Officer
/s/ XXXXXX X. XXXXXXX
-----------------------------------
XXXXXX X. XXXXXXX
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