EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(1998)
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of July 1, 1998,
amends and restates in its entirety that employment agreement entered into
January 2, 1981, by and between Dotronix, Inc., a Minnesota corporation
(hereinafter "Dotronix") and Xxxxxxx X. Xxxxxx, a resident of the State of
Minnesota (hereinafter "Xxxxxx"), as such agreement was previously amended,
extended and restated.
WITNESSETH THAT:
WHEREAS, Dotronix desires to employ the services of Xxxxxx by reason of his
ability and experience in the business of Dotronix; and
WHEREAS, Xxxxxx desires to continue to be employed by Dotronix and is
willing to accept employment in accordance with the provisions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Duties. Dotronix hereby employs Xxxxxx as President of Dotronix to
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supervise and direct the operation of the business conducted and to be conducted
by Dotronix, subject always to the direction and control of the Board of
Directors of Dotronix, and Xxxxxx does hereby accept such employment.
2. Term. This Agreement and Xxxxxx'x employment shall commence on the
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date hereof and expire on June 30, 2001, unless sooner terminated as provided
for herein.
3. Base Compensation. Dotronix shall pay, and Xxxxxx shall accept, as
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base compensation for the services to be performed by Xxxxxx hereunder, a
monthly salary of fifteen thousand dollars ($15,000) adjusted annually at the
same rate as the average annual salary adjustment of all Dotronix employees;
provided, however, that such salary shall at no time be less than fifteen
thousand dollars ($15,000) per month.
4. Incentive Compensation.
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(a) In addition to the base compensation described in Section 3, Xxxxxx
shall be paid a one-time cash incentive payment of $125,000 on July 31, 2001, if
the conditions set forth in both (i) and (ii) below have been satisfied:
(i) A designated successor to Xxxxxx as chief executive officer,
acceptable to the Board of Directors, shall have been employed by Dotronix
on or before June 30, 1999, and shall remain employed by Dotronix at June
30, 2001. The designated successor to Xxxxxx need not have actually
succeeded Xxxxxx at June 30, 1999 or June 30, 2001, in order for this
condition to be satisfied.
(ii) Dotronix' corporate pre-tax earnings for the fiscal years ending
June 30, 1999, 2000 and 2001 shall have aggregated at least $2 million. Any
pre-tax loss during such fiscal years shall be included in the calculation
of aggregate earnings for the three fiscal years as a negative number. The
calculation of pre-tax earnings or loss for such fiscal years shall take
into account the accrual or payment of any bonuses payable under Section 5
below and any amount payable under this Section 4.
(b) If a Change of Control, as defined in Section 12 below, shall occur,
Xxxxxx shall immediately be paid a one-time cash payment of $125,000 pursuant to
this Section 4, regardless of whether the conditions set forth in (a) above have
been satisfied.
5. Bonus Compensation.
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(a) In addition to the base compensation described in Section 3, Xxxxxx
shall be paid a bonus of $150,000 in each of fiscal years 1999, 2000 and 2001;
provided, however, that the bonus in any one year cannot exceed twenty percent
(20%) of corporate pre-tax earnings before the payment of such bonus. In the
event the bonus is restricted by the 20% limitation in one year, it will be made
up in a subsequent year, provided that the sum of the bonus payments does not
exceed twenty percent (20%) of corporate pre-tax earnings before the payment of
such bonuses.
(b) Xxxxxx shall participate in Dotronix' incentive plan for salaried
employees as the same may be structured from time to time on the same basis as
other salaried employees. Payments received by Xxxxxx under the salaried
employee incentive plan for a given fiscal year shall be credited against the
amount payable to Xxxxxx under (a) above for such fiscal year. If the amount
payable to Xxxxxx under the salaried employee incentive plan for a fiscal year
exceeds the amount payable to him under (a) above for such fiscal year, Xxxxxx
shall be entitled to receive the greater amount.
6. Severence Benefit.
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(a) In the event Xxxxxx'x employment terminates due to his death or
disability pursuant to Section 10(b) below, he (or, in the case of his death,
his estate) shall be paid a severence benefit equal to one hundred percent
(100%) of the base
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compensation which would be due under Section 3 (as adjusted, if applicable,
pursuant to Section 3) for the twelve full calendar months immediately following
such termination. This severance benefit shall be due and payable 30 days
subsequent to such termination of employment.
(b) In the event Xxxxxx'x employment terminates following a Change of
Control as defined in Section 11 below, he shall be paid a severence benefit
equal to one hundred percent (100%) of the base compensation which would be due
under Section 3 (as adjusted, if applicable, pursuant to Section 3) through the
expiration date set forth in Section 2. This severance benefit shall be due and
payable immediately upon such termination of employment.
(c) Xxxxxx shall not be entitled to a severance benefit pursuant to this
Section 6 in the event of his termination for "cause" as defined in Section 10
below or in the event of his resignation (other than a resignation following a
Change of Control, as contemplated by the last sentence of Section 11).
7. Activities During Employment. Xxxxxx does hereby warrant and represent
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to Dotronix that he is not subject to any agreement or arrangement which would
preclude him from carrying out the terms of this Agreement. Xxxxxx and Dotronix
acknowledge and agree that Xxxxxx shall be permitted, during the term of this
Agreement, to devote such time as is necessary to the fulfillment of his
obligations as President of Dynetic Systems, Inc., a Minnesota corporation.
Xxxxxx agrees that he shall at all times devote his full time, energy and skill
during reasonable business hours to the performance of his duties as President
of Dotronix and as President of Dynetic Systems, but that the majority of his
time and efforts shall be devoted to the business affairs of Dotronix.
8. Benefits. Xxxxxx shall be entitled to participate in any insurance,
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pension and other benefits which may be afforded by Dotronix to its employees
engaged in a supervisory or management position.
9. Convenant Not to Compete. Xxxxxx agrees that, during the term of this
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Agreement and for a period ending three (3) years after the termination of his
employment with Dotronix for any reason, he will not, directly or indirectly, on
his own behalf or as a partner, officer, employee, consultant, stockholder,
director, or trustee of any person, firm or corporation solicit, accept or
service any customers of Dotronix, nor engage in any business which would
compete with, or be of a similar nature to, the business being carried on by
Dotronix. The parties hereto hereby recognize that money damages would not be an
adequate remedy for the breach of this convenant and Xxxxxx hereby agrees to the
grant of specific performance of this convenant or other appropriate equitable
relief by a court of competent jurisdiction in the event of its breach.
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10. Termination. Notwithstanding any other provision contained herein,
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this Agreement may be terminated by (a) the mutual agreement of the parties
hereto; (b) the death of Xxxxxx, or the disability of Xxxxxx which prevents him
from performing his normal duties for a period of six consecutive months or
more; or (c) Dotronix for cause. For purposes of this Agreement, the term
"cause" shall mean deliberate misconduct on the part of Xxxxxx which is
seriously injurious to the interests of Dotronix, which misconduct shall be
specified in a written notice of termination delivered to Xxxxxx by the Board of
Directors of Dotronix.
11. Change of Control. A "Change of Control" shall have occurred if
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(a) any person other than Xxxxxx, or any group of persons acting in
concert other than a group of which Xxxxxx is a part, shall acquire
beneficial ownership of 35% or more of the outstanding voting stock of
Dotronix, or
(b) Dotronix shall be party to a merger, consolidation, share
exchange or other business combination transaction as a result of which any
person other than Xxxxxx, or any group of persons acting in concert other
than a group of which Xxxxxx is a part, shall acquire or hold beneficial
ownership of 35% or more of the outstanding voting stock of the surviving
entity, or
(c) a majority of the Board of Directors shall cease to be composed
of the persons who are presently members of the Board (i.e., Xxxxxx, Xxx X.
Xxxxxxxx, Xxxxxx X. Xxxx, Xxxxxx X. Xxxxx, and L. Xxxxxx Xxxxxxxxxxxxxx) or
who were appointed or nominated with the affirmative vote of at least three
of such persons,
and, in the case of (a), (b) or (c) above, either
(i) Xxxxxx'x employment with Dotronix thereafter is terminated (other
than (A) for "cause" as defined in Section 10 above, or (B) by virtue of
the death or disability of Xxxxxx, or (C) by means of the resignation of
Xxxxxx), or
(ii) Xxxxxx'x reponsibilities with Dotronix thereafter are materially
reduced without his agreement, or Xxxxxx is required to relocate without
his agreement.
A resignation by Xxxxxx following the occurrence of an event specified in (ii)
above shall not be deemed a resignation by Xxxxxx for purposes of (i)(C) above
or for purposes of Section 6(c).
12. Entire Agreement and Governing Law. This Agreement contains the entire
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agreement between the parties hereto and it shall be amended or modified only by
written instruments signed by both parties hereto. This Agreement shall in
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all respects be governed, enforced and interpreted in accordance with the laws
of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
DOTRONIX, INC.
By /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Chief Financial Officer and Secretary
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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