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Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of April
23, 1996, between Xxxxx Instruments Corp., a California corporation ("Company"),
and Xxxxxx X. Xxxxxxx ("Executive"). In consideration of the mutual covenants
and agreements set forth herein, including the Company's agreement to pay
severance benefits in certain events, the parties hereto agree as follows.
ARTICLE I
EMPLOYMENT
The Company hereby employs Executive and Executive accepts
employment with the Company upon the terms and conditions herein set forth.
1.1 Employment. The Company hereby employs Executive, and
Executive agrees to serve as the Company's President and Chief Operating Officer
during the term of this Agreement, and shall perform the duties commensurate
with such position. Executive agrees to devote substantially his full business
time and attention and best efforts to the affairs of the Company during the
term of this Agreement.
1.2 Term. The employment of Executive by the Company under the
terms and conditions of this Agreement will commence as of the date hereof and
will continue for a period of one (1) year unless terminated earlier under
Article IV. The term of the Agreement shall be extended on a daily basis such
that the remaining term of this Agreement shall at all times be one (1) full
year.
ARTICLE II
COMPENSATION
2.1 Annual Salary. During the employment of Executive, the
Company shall pay to Executive a base salary at the annual rate of $225,000 (the
"Base Salary"). The Base Salary shall be payable in substantially equal
semi-monthly installments. The Base Salary shall be reviewed annually by the
Company's Board of Directors.
2.2 Reimbursement of Expenses. Executive shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred by Executive in
performing services hereunder, including all expenses of travel, entertainment
and living expenses while away from home on business at the request of, or in
the service of, the Company, provided that such expenses are submitted to the
Company within a reasonable period of time after incurrence and are accounted
for in accordance with the policies and procedures established by the Company.
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2.3 Benefits. Executive shall be entitled to participate in
and be covered by all health, insurance, pension and other employee plans and
benefits currently established for the employees of the Company (collectively
referred to as the "Company Benefit Plans") on at least the same terms as other
employees of the Company, subject to meeting applicable eligibility
requirements.
2.4 Vacations and Holidays. During Executive's employment with
the Company, Executive shall be entitled to an annual vacation leave of three
(3) weeks at full pay, or such greater vacation benefits as may be provided for
by the Company's vacation policies applicable to senior executives. Executive
shall be entitled to such holidays as are established by the Company for all
employees.
ARTICLE III
CONFIDENTIALITY AND NONDISCLOSURE
3.1 Confidentiality. Executive will not during Executive's
employment by the Company or thereafter at any time disclose, directly or
indirectly, to any person or entity or use for Executive's own benefit any trade
secrets or confidential information relating to the Company's business
operations, marketing data, business plans, strategies, employees, negotiations
and contracts with other companies, or any other subject matter pertaining to
the business of the Company or any of its clients, customers, consultants, or
licensees, known, learned, or acquired by Executive during the period of
Executive's employment by the Company (collectively "Confidential Information"),
except as may be necessary in the ordinary course of performing Executive's
particular duties as an employee of the Company.
3.2 Return of Confidential Material. Executive shall promptly
deliver to the Company on termination of Executive's employment with the
Company, whether or not for Cause and whatever the reason, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints, Confidential Information and any other documents of a
confidential nature belonging to the Company, including all copies of such
materials which Executive may then possess or have under Executive's control.
Upon termination of Executive's employment by the Company, Executive shall not
take any document, data, or other material of any nature containing or
pertaining to the proprietary information of the Company. Upon the request of
the Company, Executive shall certify, in writing to the Company, his compliance
with the provisions of this Section 3.2.
3.3 Prohibition on Solicitation of Customers. During the term
of Executive's employment with the Company and for a period of one (1) year
thereafter Executive shall not, directly or indirectly, either for Executive or
for any other person or entity, solicit any person or entity to terminate such
person's
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or entity's contractual and/or business relationship with the Company, nor shall
Executive interfere with or disrupt or attempt to interfere with or disrupt any
such relationship. None of the foregoing shall be deemed a waiver of any and all
rights and remedies the Company may have under applicable law.
3.4 Prohibition on Solicitation of Employees, Agents or
Independent Contractors After Termination. During the term of Executive's
employment with the Company and for a period of one (l) year following the
termination of Executive's employment with the Company, Executive will not
solicit any of the employees, agents, or independent contractors of the Company
to leave the employ of the Company for a competitive company or business.
However, Executive may solicit any employee, agent or independent contractor who
voluntarily terminates his or her employment with the Company after a period of
120 days has elapsed since the termination date of such employee, agent or
independent contractor. None of the foregoing shall be deemed a waiver of any
and all rights and remedies the Company may have under applicable law.
3.5 Agreement Not to Compete. During the term of Executive's
employment with the Company and for so long as Executive receives any severance
benefits provided under Section 4.5(b), the Executive agrees not to engage,
directly or indirectly, in any business which is in competition with that of the
Company or any of its affiliates in any jurisdiction in which the Company or any
of its affiliates are doing business. For purposes of this Section 3.5, the
Executive will be deemed to engage in any business by being a shareholder (other
than holding less than one percent (1%) of the shares of any publicly-held
corporation), director, officer, partner, member, governor, manager, employee,
consultant, independent contractor or serving in any capacity similar to the
foregoing on behalf of said business. A business in competition with the Company
is a business which distributes products which are competitive with those
products distributed or sold by the Company or its affiliates.
3.6 Right to Injunctive and Equitable Relief. Executive's
obligations not to disclose or use Confidential Information and to refrain from
the solicitations described in this Article III are of a special and unique
character which gives them a peculiar value. The Company cannot be reasonably or
adequately compensated for damages in an action at law in the event Executive
breaches such obligations. Therefore, Executive expressly agrees that the
Company shall be entitled to injunctive and other equitable relief without bond
or other security in the event of such breach in addition to any other rights or
remedies which the Company may possess or be entitled to pursue. Furthermore,
the obligations of Executive and the rights and remedies of the Company under
this Article III are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies created by applicable law.
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3.7 Survival of Obligations. Executive agrees that the terms
of this Article III shall survive the term of this Agreement and the termination
of Executive's employment by the Company.
ARTICLE IV
TERMINATION
4.1 For purposes of this Article IV, the following definitions
shall apply to the terms set forth below:
(a) Board Change. "Board Change" shall mean the
designation of the members of a majority of the Company's Board of
Directors by Xxxxxxxxx ESOP Capital Partners , A Minnesota Limited
Partnership ("CECP"), pursuant to Section 1(b)(ii) of that certain
Shareholder Agreement dated as of the date hereof, by and among the
Company, CECP, Xxxxxx X. Xxxxxx, Xx., Xxx Xxxx, Xxxx Xxxxxx,
individually and also acting as the trustee of the Xxxxxx Living Trust,
and Xxxxxx Xxxxxxx, individually and also acting as trustee of the
Xxxxxxx 1986 Trust.
(b) Cause. "Cause" shall include the following:
(i) the Executive's personal dishonesty or
willful misconduct;
(ii) the Executive's breach of his fiduciary
duties to the Company;
(iii) the Executive's willful violation and
conviction of any law, rule or regulation (other than traffic
violations or similar offenses) or of any final cease and
desist order issued by any financial institution regulatory
authority against the Company; or
(iv) the Executive's material breach of this
Agreement;
(v) the Executive's willful and continuous
failure to devote substantially his full business time and
attention and best efforts to the affairs of the Company; or
(vi) the Executive's refusal after seven (7)
business days from a written request by the Board of Directors
to take any action consistent with his position reasonably
requested by the Board of Directors.
(c) Good Reason. "Good Reason" shall mean voluntary
termination as a result of:
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(i) the assignment to Executive of duties
substantially inconsistent with the position and status of
Executive as set forth in this Agreement without Executive's
prior written consent;
(ii) a substantial alteration in the nature,
status or prestige of Executive's responsibilities or a change
in Executive's title or reporting level from that set forth in
this Agreement;
(iii) the relocation of the Company's executive
offices or principal business location to a point more than
fifty (50) miles from the location of such offices or
businesses as of the date of this Agreement; or
(iv) a reduction by the Company of Executive's
Base Salary.
(d) Disability. "Disability" shall mean a physical or
mental incapacity as a result of which Executive becomes unable to
continue the proper performance of his duties hereunder (reasonable
absences because of sickness for up to three (3) consecutive months
excepted); provided, however, that any new period of incapacity or
absence shall be deemed to be part of a prior period of incapacity or
absence if the prior period terminated within ninety (90) days of the
beginning of the new period of incapacity or absence and the incapacity
or absence is determined by the Company's Board of Directors, in good
faith, to be related to the prior incapacity or absence. A
determination of Disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and Executive or in
the event of Executive's incapacity to designate a doctor, Executive's
legal representative. In the absence of agreement between the Company
and Executive, each party shall nominate a qualified medical doctor and
the two (2) doctors so nominated shall select a third doctor, who shall
make the determination as to Disability. The effective date ("Effective
Date") of Disability shall be the first date of Executive's incapacity
or absence.
4.2 Termination by Company. The Company may terminate
Executive's employment hereunder immediately for Cause, and the effective date
("Effective Date") of such termination shall be the date Executive receives
written notice of termination for Cause. Subject to the other provisions
contained in this Agreement, the Company may terminate this Agreement for any
reason other than Cause upon thirty (30) days' written notice to Executive. The
effective date of termination other than for Cause ("Effective Date") shall be
considered to be thirty (30) days subsequent to written notice of termination;
however, the Company may elect to have Executive leave the Company immediately.
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4.3 Termination by Executive. Executive may terminate his
employment hereunder upon thirty (30) days' written notice to the Company. The
effective date of termination by the Executive ("Effective Date") shall be
considered to be thirty (30) days subsequent to written notice of termination;
however, the Company may elect to have Executive leave the Company immediately.
4.4 Death or Disability of Executive. Executive's
employment hereunder shall terminate immediately upon the death
or Disability of Executive.
4.5 Severance Benefits Received Upon Termination.
(a) If Executive's employment is terminated by the
Company for Cause, Executive terminates this Agreement pursuant to
Section 4.3 other than for Good Reason after a Board Change or the
Executive dies, then the Company shall pay Executive his Base Salary
through the Effective Date of such termination or the date of death, as
applicable, plus credit for any vacation earned but not taken, and the
Company shall thereafter have no further obligations to Executive under
this Agreement.
(b) If Executive's employment is terminated by the
Company without Cause, Executive terminates this Agreement for Good
Reason after a Board Change or Executive's employment is terminated by
the Company as a result of Disability, and provided Executive is not in
breach of the provisions of Article III, then the Company shall provide
Executive:
(i) salary continuation in an amount equal
to Executive's then Base Salary for a period equal to the
remainder of the term of this Agreement measured from the
Effective Date of termination or Disability, as applicable,
said sum to be paid semi-monthly in equal installments at the
times salary payments are usually made; and
(ii) health insurance coverage as then in
effect for Executive, his spouse and dependent children for a
period equal to the remainder of the term of this Agreement,
subject to any employee contribution provisions as defined in
the Company Benefit Plans. Subsequent health insurance
benefits will be in accordance with COBRA.
ARTICLE V
GENERAL PROVISIONS
5.1 Notice. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when
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delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, as follows:
If to the Company: Xxxxx Instruments Corp.
00000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
If to Executive: 00000 Xxxxx
Xxxxxxx Xxxxx, XX 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
5.2 No Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
5.3 Beneficial Interests. This Agreement shall inure to the
benefit of and be enforceable by Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's devisee, legatee, or
other designee or, if there be no such designee, to Executive's estate.
5.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
5.5 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect. The parties intend that the covenants and
agreements, contained herein shall be deemed to be a series of separate
covenants and agreements, one for each and every state of the United States and
political subdivision outside of the United States where the business described
is conducted. If, in any judicial proceeding, a court shall refuse to enforce
any of the separate covenants deemed included in such action, then such
unenforceable covenants shall be deemed eliminated from the provisions of this
Agreement for the purpose of such proceeding to the extent necessary to permit
the remaining covenants to be enforced in such proceeding. Further, in the event
that any provision is held to be overbroad as written, such provision
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shall be deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to applicable law and enforced as
amended.
5.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
5.7 Legal Fees and Expenses. Should any party institute any
action or proceeding to enforce this Agreement or any provision hereof, or for
damages by reason of any alleged breach of this Agreement or of any provision
hereof, or for a declaration of rights hereunder, the prevailing party in any
such action or proceeding shall be entitled to receive from the other party all
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party in connection with such action or proceeding.
5.8 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
parties with respect to the subject matter hereof. This Agreement is intended by
the parties as the final expression of their agreement with respect to such
terms as are included in this Agreement and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.
5.9 Assignment. This Agreement and the rights, duties, and
obligations hereunder may not be assigned or delegated by any party without the
prior written consent of the other party and any attempted assignment or
delegation without such prior written consent shall be void and be of no effect.
Notwithstanding the foregoing provisions of this Section 5.9, the Company may
assign or delegate its rights, duties, and obligations hereunder to any
Affiliate or to any person or entity which succeeds to all or substantially all
of the business of the Company through merger, consolidation, reorganization, or
other business combination or by acquisition of all or substantially all of the
assets of the Company.
5.10 Arbitration. Any controversy, dispute, claim or other
matter in question arising out of or relating to this Agreement shall be
settled, at the request of either party, by binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("AAA"), and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof, subject to the following terms,
conditions and exceptions:
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(a) Notice of the demand for arbitration shall be
filed in writing with the other party and with the AAA. There shall be a panel
of three (3) arbitrators whose selection shall be made in accordance with the
procedures then existing for the selection of such arbitrators by the AAA.
(b) Reasonable discovery shall be allowed in
arbitration.
(c) Except as otherwise provided in Section 5.7
hereof, the costs and fees of the arbitration shall be allocated by the
arbitrators.
(d) The arbitrator shall not be authorized to award
punitive damages with respect to any claim, dispute or controversy.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Company"
Xxxxx Instruments Corp.
a California corporation
By: /s/ XXXX XXXXXX
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Xxxx Xxxxxx, Chairman and
Chief Executive Officer
"Executive"
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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