Exhibit 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of the 21st day
of February, 1997, by and between Ultimate Technology Corporation, a New York
corporation with a mailing address of 000 Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000
(the "Company"), and Xxxx Xxxx, an individual with a residence address of 00
Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 ("Executive").
INTRODUCTION
1. On January 20, 1993, Executive and Company entered into an Employment
Agreement (the "January, 1993 Employment Agreement") in connection with the
acquisition of all the issued and outstanding stock of the Company by
Tridex Corporation, a Connecticut corporation ("Tridex"). Executive and
Company wish to terminate the 1993 Employment Agreement and enter into a
new employment agreement.
AGREEMENT
In consideration of the premises and mutual promises herein below set forth, the
parties hereby agree as follows:
1. Termination of 1993 Employment Agreement. Effective on the Effective Date
of that certain Stock Incentive Compensation Agreement between Tridex and
the Employee, among others, dated of even date herewith the 1993 Employment
Agreement is terminated and neither party shall have any further obligation
thereunder.
2. Employment Period. The term of this Agreement (the "Employment Period")
shall commence on the date hereof and, subject to termination by the
Executive or the Company as hereinafter provided, shall continue for a
period of three (3) years, subject, nevertheless, to termination as
hereinafter provided.
3. Employment Duties. Subject to the terms and conditions set forth herein,
the Company hereby employs Executive to act as Vice President - Engineering
of Ultimate Technology Corporation during the Employment Period, and
Executive hereby accepts such employment. Executive shall have supervision
and control over and responsibility for the management and day-to-day
operations of the Company subject to the direction and control of the Board
of Directors. Executive's duties may not be altered in any material fashion
without the approval of Executive.
Executive agrees to perform his duties for the Company diligently,
competently, and in a good faith manner.
4. Salary and Bonus.
a. Base Salary. The Company agrees to pay Executive $120,510 per year,
payable monthly in advance. Executive's base salary shall not be
decreased. In addition, no later than December 31 of each year during
the Employment Period, commencing December 31, 1997, the Compensation
Committee of the Tridex Board of Directors shall review and increase,
but not decrease the Executive's annual base salary by the percentage
increase in the Consumer Price Index - CPI-U (1987-100) for the
preceding twelve month period and in its discretion may grant such
further increases, based upon the Company's performance and the
Executive's particular contributions.
b. Bonus. Executive shall have an opportunity to participate in all
annual and/or long term incentive programs, including the Tridex's
Executive Incentive Compensation Plan under which Executive may earn
up to 35% of his base salary as a bonus upon meeting annual targets
and objectives established by the Tridex Board of Directors.
c. Options. In order to induce Executive to enter into this Agreement
effective on the day after the Spin-Off, as that term is defined in
that certain Stock Incentive Compensation Agreement, between Executive
and others and Tridex, dated of even date herewith, Tridex will grant
to Executive under the proposed Tridex 1997 Long Term Incentive
Compensation Plan (or in the event such Plan is not approved by the
Tridex shareholders at their next annual meeting, then under the
Tridex 1989 Long Term Incentive Plan, as amended), 45,000 options to
purchase shares of Tridex Common Stock, no par value, pursuant to an
option agreement between Tridex and Executive in the usual and
customary form, such option to have a
ten (10) year term and to vest over a three (3) year period.
Additionally, on or before the record date for the Spin-Off, Tridex
will loan to Executive fifty percent (50%) of the option exercise
price with respect to all options to purchase Tridex shares currently
held by Executive. Such loan shall be secured by a pledge of the
Tridex shares to be received upon exercise together with any shares
received in the Spin-Off, will have a term of three (3) years, will
bear a market rate of interest and also contain such other terms and
conditions which are customary for similar types of instruments issued
in connection with the exercise of options by senior company
executives.
5. Other Benefits.
a. Insurance and Other Benefits. The Executive shall be entitled to
participate in, and shall receive the maximum benefits available
under, the Company's or Tridex's insurance programs (including health,
disability and life insurance) and any ERISA benefit plans, as the
same may be adopted and/or amended from time to time, and shall
receive all other fringe benefits that are provided by the Company or
Tridex to other senior executives. The Company shall contribute to the
Executive's account the maximum amount permitted under the Company's
or Tridex's 401(k) Plan and any other Company or Tridex pension or
retirement plan during the Employment Period.
b. Vacation. Executive shall be entitled to an annual vacation of such
duration as may be determined by the Board of Directors, but not less
than that generally established for other executives of Company or
Tridex and in no event less than three (3) weeks, without interruption
of salary.
c. Reimbursement of Expenses. The Company shall reimburse Executive for
all reasonable travel, entertainment and other expenses incurred or
paid by the Executive in connection with, or related to, the
performance of his duties or responsibilities under this Agreement,
provided that Executive submits to the Company substantiation of such
expenses sufficient to satisfy the record keeping guidelines
promulgated from time to time by the Internal Revenue Service.
6. Termination by the Company With Cause. The Company may terminate this
Agreement if any of the following events shall occur:
a. the death or disability of the Executive (For purposes of this
Agreement, "disability" shall mean the Executive's incapacity due to
physical or mental illness which has caused the Executive to be absent
from the full-time performance of his duties with the Company for a
period of six (6) consecutive months.);
b. any action or inaction by the Executive that constitutes larceny,
fraud, gross negligence, a willful or negligent misrepresentation to
the directors or officers of the Company, its successors or assigns, a
crime involving moral turpitude; or
c. the refusal of the Executive to follow the reasonable and lawful
written instructions of the Chief Executive Officer of Tridex or the
Tridex Board of Directors with respect to the services to be rendered
and the manner of rendering such services by Executive, provided such
refusal is material and repetitive and is not justified or excused
either by the terms of this Agreement or by actions taken by the
Company in violation of this Agreement, and with respect to the first
two refusals Executive has been given reasonable written notice and
explanation thereof and reasonable opportunity to cure and no cure has
been effected within a reasonable time after such notice.
The Company may terminate this Agreement pursuant to this Section 6 upon
written notice to the Executive, except for termination due to the death of
the Executive, which shall require no notice.
7. Termination and Severance.
7.1 Notice/Events/Defined Terms.
a. Termination by the Executive. Executive may terminate this
Agreement at any time by providing written notice to the Company.
b. Termination by the Company Without Cause. The Company may
terminate this Agreement at any time, without Cause by providing
written notice to Executive. As used in this Agreement, the term
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"without Cause" shall mean termination for any reason not
specified in Section 6 hereof, except for retirement.
c. Change in Control. A "Change in Control" will be deemed to have
occurred if: (1) a Takeover Transaction occurs; or (2) any
election of directors of Tridex takes place (whether by the
directors then in office or by the stockholders at a meeting or
by written consent) and a majority of the directors in office
following such election are individuals who were not nominated by
a vote of two-thirds of the members of the Board of Directors
immediately preceding such election; or (3) the Company or Tridex
effectuates a complete liquidation of the Company or a sale or
disposition of all or substantially all of its assets. A "Change
in Control" shall not be deemed to include, however, a merger or
sale of stock, assets or business of the Company if the Executive
immediately after such event owns, or in connection with such
event immediately acquires (other than in the Executive's
capacity as (1) a current equity holder of Tridex, (2) a holder
of options or instruments convertible into an equity interest in
Tridex, or (3) as a beneficiary of any employee stock ownership
plan or profit sharing plan maintained by Tridex or the Company),
any stock of the buyer or any affiliate thereof which, at the
time of Executive's initial investment in such stock, had a
purchase price or fair market value greater than $25,000.
d. Takeover Transaction. A "Takeover Transaction" shall mean (i) a
merger or consolidation of the Company or Tridex with, or an
acquisition of the Company or Tridex or all or substantially all
of its assets by, any other corporation, other than a merger,
consolidation or acquisition in which the individuals who were
members of the Board of Directors of the Company or Tridex
immediately prior to such transaction continue to constitute a
majority of the Board of Directors of the surviving corporation
(or, in the case of an acquisition involving a holding company,
constitute a majority of the Board of Directors of the holding
company) for a period of not less than twelve (12) months
following the closing of such transaction, or (ii) when any
person or entity or group of persons or entities (other than any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or Tridex) either related or acting
in concert becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of
securities of the Company or Tridex representing more than fifty
percent (50%) of the total number of votes that may be cast for
the election of directors of the Company or Tridex.
e. Terminating Event. A "Terminating Event" shall mean: (i)
termination by the Company of the employment of the Executive
without Cause occurring within twelve (12) months of a Change of
Control; or (ii) resignation of the Executive from the employ of
the Company, while the Executive is not receiving payments or
benefits from the Company by reason of the Executive's
disability, subsequent to any of the following events occurring
within twelve (12) months of a Change of Control: (A) a
significant reduction in the nature or scope of the Executive's
responsibilities, authorities, powers, functions or duties from
the responsibilities, authorities, powers, functions or duties
exercised by the Executive immediately prior to the Change in
Control; (B) a decrease in the salary payable by the Company to
the Executive from the salary payable to the Executive
immediately prior to the Change in Control except for
across-the-board salary reductions similarly affecting all
management personnel of the Company; or (C) elimination or
reduction of the Executive's participation in the Company's
Executive Incentive Compensation Plan; (D) the relocation of the
Company's executive offices by more than fifty (50) miles from
their current location in Victor, New York; provided, however,
that a Terminating Event shall not be deemed to have occurred
solely as a result of Executive being an employee of any direct
or indirect successor to the business or assets of the Company,
following a Change in Control..
7.2 Severance.
a. Without Cause. If the Company terminates this Agreement without
Cause, other than as a result of a Terminating Event, or then
commencing on the date of termination of this Agreement, the
Company shall provide Executive with a severance package which
shall consist of the following: (i) for a period equal to one (1)
year after the date of termination (A) payment on the first
business day of each month of an amount equal to one-twelfth of
the Executive's then current annual base salary under Section
4(a) hereof and (B) continuation of all benefits under Section 5;
and (ii) payment on the first business day of each month of an
amount equal to one-twelfth of the Executive's annual target
bonus amount under the Company's or Tridex's Executive Incentive
Compensation Plan for the year of termination.
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b. Event, then commencing on the date of such termination and for a
period equal to two (2) years thereafter, the Company shall
provide Executive with a severance package which shall consist of
the following: (i) payment on the first business day of each
month an amount equal to one-twelfth of the Executive's then
current annual base salary under Section 4(a) hereof; (ii)
payment on the first business day of each month of an amount
equal to one-twelfth of the Executive's annual target bonus
amount under the Company's Executive Incentive Compensation Plan
for the year in which such termination occurs; and (iii)
continuation of all benefits under Section 5. In addition, if the
Company terminates this Agreement as a result of a Termination
Event, then the Company shall cause the immediate vesting of all
options and other rights granted to the Executive under the
Company's stock plans. At any time when the Company is obligated
to make monthly payments under Section 7.2(b), the Company shall,
ten (10) days after receipt of a written request from the
Executive, pay the executive an amount equal to the balance of
the amounts payable under Section 7.2(b)(i) and (ii) provided
that the obligation of the Company to continue to provide the
benefits under Section 7.2(b)(iii) or to make monthly payments
under 7.2(b)(i)-(ii) shall cease upon the payment of such amount.
c. General Release. As a condition precedent to receiving any
severance payment, the Executive shall execute a release of any
and all claims which Executive or his heirs, executors, agents or
assigns might have against the Company, its subsidiaries,
affiliates, successors, assigns and its past, present and future
employees, officers, directors, agents and attorneys arising out
of the termination of employment.
d. Withholding. All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be
withheld by the Employer under applicable law.
8. Non-Competition. During the term of this Agreement and (a) in the case of
termination other than as a result of a Terminating Event and provided that
the executive is receiving the severance payments provided for in Section
7.2(a), for one (1) year following the termination of this Agreement or (b)
in the case of termination as a result of a Terminating Event and provided
that the executive is receiving, or after the Executive has received, the
severance payments provided for in Section 7.2(b), for two (2) years
following the termination of this Agreement, Executive will not directly or
indirectly whether as a partner, consultant, agent, employee, co-venturer,
greater than two percent owner or otherwise or through any other person (as
hereafter defined): (a) be engaged in any business or activity which is
competitive with the business of the Company in any part of the world in
which the Company is at the time of the Executive's termination engaged in
selling its products directly or indirectly; or (b) attempt to recruit any
employee of the Company, assist in their hiring by any other person, or
encourage any employee to terminate his or her employment with the Company;
or (c) encourage any customer of the Company to conduct with any other
person any business or activity which such customer conducts or could
conduct with the Company.
For purposes of this Section 8, the term "Person" shall mean an individual
or corporation, association or partnership in estate or trust or any other
entity or organization.
The Executive recognizes and agrees that because a violation by him of this
Section 8 will cause irreparable harm to the Company that would be
difficult to quantify and for which money damages would be inadequate, the
Company shall have the right to injunctive relief to prevent or restrain
any such violation, without the necessity of posting a bond.
Executive expressly agrees that the character, duration and scope of this
covenant not to compete are reasonable in light of the circumstances as
they exist at the date upon which this Agreement has been executed.
However, should a determination nonetheless be made by a court of competent
jurisdiction at a later date that the character, duration or geographical
scope of this covenant not to compete is unreasonable in light of the
circumstances as they then exist, then it is the intention of both
Executive and the Company that this covenant not to compete shall be
construed by the court in such a manner as to impose only those
restrictions on the conduct of Executive which are reasonable in light of
the circumstances as they then exist and necessary to provide the Company
the intended benefit of this covenant to compete.
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9. Confidentiality Covenants. Executive understands that Company may impart to
him confidential business information including, without limitation,
designs, financial information, personnel information, strategic plans,
product development information the like (collectively "Confidential
Information"). Executive hereby acknowledges Company's exclusive ownership
of such Confidential Information.
Executive agrees as follows: (1) only to use the Confidential Information
to provide services to the Company; (2) only to communicate the
Confidential Information to fellow employees, agents and representatives of
the Company on a need-to-know basis; and (3) not to otherwise disclose or
use any Confidential Information. Upon demand by the Company or upon
termination of Executive's employment, Executive will deliver to the
Company all manuals, photographs, recordings, and any other instrument or
device by which, through which, or on which confidential Information has
been recorded and/or preserved, which are in my Executive's possession,
custody or control. Executive acknowledges that for purposes of this
Section 9 the term "Company" means any person or entity now or hereafter
during the term of this Agreement, which controls, is under common control
with, or is controlled by, the Company
10. Governing Law/Jurisdiction This Agreement shall be governed by and
interpreted and governed in accordance with the laws of the State of
Connecticut. The parties agree that this Agreement was made and entered
into in Connecticut and each party hereby consents to the jurisdiction of a
competent court in Connecticut to hear any dispute arising out of this
Agreement.
11. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and thereof
and supersedes any and all previous agreements, written ad oral, regarding
the subject matter hereof between the parties hereto. This Agreement shall
not be changed, altered, modified or amended, except by a written agreement
signed by both parties hereto.
12. Notices. All notices, requests, demands and other communications required
or permitted to be given or made under this Agreement shall be in writing
and shall be deemed to have been given if delivered by hand, sent by
generally recognized overnight courier service, telex or telecopy, or
certified mail, return receipt requested.
(a) to the Company at:
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Chairman and CEO
(b) to the Executive at:
00 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Any such notice or other communication will be considered to have been
given (i) on the date of the delivery in person, (ii) on the third day
after mailing by certified mail, provided that receipt of delivery is
confirmed in writing, (iii) on the first business day following delivery to
a commercial overnight courier or (iv) on the date of facsimile
transmission (telecopy) provided that the giver of the notice obtains
telephone confirmation of receipt.
Either party may, by notice given to the other party in accordance with
this section, designate another address or person for receipt of notices
hereunder.
13. Severability. If any term or provision of this Agreement, or the
application thereof to any person or under any circumstance, shall to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms to the persons or under circumstances other than
those as to which it is invalid or unenforceable, shall be considered
severable and shall not be affected thereby, and each term of this
Agreement shall be valid and enforceable to the fullest extent permitted by
law. The invalid or unenforceable provisions shall, to the extent permitted
by law, be deemed amended and given such interpretation as to achieve the
economic intent of this Agreement.
14. Waiver. The failure of any party to insist in any one instance or more upon
strict performance of any of the terms and conditions hereof, or to
exercise any right or privilege herein conferred, shall not be construed as
a waiver of such terms, conditions, rights or privileges, but same shall
continue to remain in full force and effect.
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Any waiver by any party of any violation of, breach of or default under any
provision of this Agreement by the other party shall not be construed as,
or constitute, a continuing waiver of such provision, or waiver of any
other violation of, breach of or default under any other provision of this
Agreement.
15. Successors and Assigns. This Agreement shall be binding upon the Company
and any successors and assigns of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TRIDEX CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Chairman and Chief Executive Officer
ULTIMATE TECHNOLOGY CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Vice President
EXECUTIVE:
By: /s/ Xxxx Xxxx
-------------------------------------
Xxxx Xxxx
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