Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of the 2nd day of
December, 1996, by and between Tridex Corporation, a Connecticut corporation
with a mailing address of 00 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the
"Company"), and Xxxx X. Xxxxxx, an individual with a residence address of 000
Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Executive").
INTRODUCTION
1. The Company is in the business of designing, developing, manufacturing and
marketing Point of Sale printers and related products (the "Business").
Executive possesses special and unique knowledge, experience and skill
respecting the management, operating, financial affairs and business of
Tridex that the Board of Directors of Tridex believes are important for the
future growth and success of Tridex.
2. The Company desires to employ Executive and Executive desires to accept
such employment on the terms and conditions set forth herein.
AGREEMENT
In consideration of the premises and mutual promises herein below set forth, the
parties hereby agree as follows:
1. 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 two (2) years beginning on the first day of each month after the
date hereof.
2. Employment Duties. Subject to the terms and conditions set forth herein,
the Company hereby employs Executive to act as Chairman and Chief Executive
Officer of the Company 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.
3. Salary and Bonus.
(a) Base Salary. The Company agrees to pay Executive $270,000 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, 1996, the Board of
Directors of the Company (or any appropriate committee thereof) shall
review and may increase, but not decrease, the Executive's annual base
salary in its discretion, based upon the Company's performance and the
Executive's particular contributions.
(b) Bonus. Executive shall have an opportunity to earn an annual cash bonus
commensurate with his position as Chairman and Chief Executive Officer
under the Company's Executive Incentive Compensation Plan at a target
bonus level of at least 50% of the Executive's base salary, subject to
the discretion of the Company's Board of Directors (or any appropriate
committee thereof).
4. 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 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 to other senior executives.
The Company shall contribute to the Executive's account the maximum
amount permitted under the Company's 401(k) Plan and any other Company
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 and in
no event less than five (5) weeks, without interruption of salary.
(c) Automobile Allowance. The Company shall provide the Executive with the
automobile allowance provided for the office of Chairman and Chief
Executive Officer under the Company's automobile allowance policy.
(d) 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.
(e) Service Fees. The Company shall reimburse the Executive, in an
aggregate amount not to exceed $2,500 per year, for professional and
other fees incurred by Executive in connection with (i) an annual
medical examination of Executive and (ii) the annual planning for and
preparation of Executive's personal income tax returns. The Company
shall also reimburse the Executive, in an aggregate amount not to
exceed $5,000 every twenty-four (24) months during the Employment
Period, for estate planning services performed during the Employment
Period. Additionally, the Company shall reimburse the Executive, in an
amount not to exceed $7,500, for fees and expenses of counsel for the
Executive incurred in connection with the negotiation and execution of
this Agreement.
(f) Consulting Agreement. If any amounts due or paid to Executive would
constitute an Excess Parachute Payment under Section 280G of the
Internal Revenue Code of 1986, such excess, including any excise tax
thereon, shall be paid to Executive for consulting services rendered by
Executive after termination of this Agreement.
5. 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 Board of Directors of the Company 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 5 upon
written notice to the Executive, except for termination due to the death of
the Executive, which shall require no notice.
6. Termination and Severance.
6.1 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 5 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 the Company 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
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 an equity holder of the Employer or as a beneficiary
of its employee stock ownership plan or profit sharing plan), 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 with, or an acquisition of
the Company 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 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)
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
representing more than fifty percent (50%) of the total number of
votes that may be cast for the election of directors of the
Company.
(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) the relocation of the
Company's executive offices (or, if the Executive is primarily
located at the Company's manufacturing facilities, such
facilities) by more than 50 miles from their current location in
Westport, Connecticut (unless such new location is closer than
Westport, Connecticut to the Executive's then residence)
provided, however, that a Terminating Event shall not be deemed
to have occurred solely as a result of the Executive being an
employee of any direct or indirect successor to the business or
assets of the Company, rather than continuing as an employee of
the Company, following a Change in Control; or (D) elimination or
reduction of the Executive's participation in the Company's
Executive Incentive Compensation Plan.
6.2 Executive's Right-to-Terminate. Executive may terminate Executive's
employment for Good Reason at any time during the term of this
Agreement. For purposes of this Agreement, "Good Reason" shall mean
any of the following (without Executive's express written consent):
(a) the assignment to Executive by the Company of any duties
materially inconsistent with Executive's status with the Company
or a substantial and material alteration in the nature or status
of Executive's responsibilities from those in effect on the date
hereof, or a material reduction in Executive's titles or offices
as in effect on the date hereof, or any removal of Executive
from, or any failure to reelect Executive to, any of such
positions, except in connection with the termination of his
employment for Disability or Cause or as a result of Executive's
death or by Executive other than for Good Reason;
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(b) a reduction by the Company in Executive's Salary as in effect on
the date hereof or as the same may be increased from time to time
during the term of this Agreement;
(c) except if such action applies to all senior executive officers of
the Company generally, any failure by the Company to continue in
effect any Fringe Benefits, the taking of any action by the
Company which would, directly or indirectly, materially reduce
Executive's Fringe Benefits or deprive Executive of any Fringe
Benefits enjoyed by Executive at the date hereof, or the failure
by the Company to provide Executive with the number of paid
vacation days to which Executive is entitled at the date hereof;
(d) a relocation of the Company's principal executive offices to a
location more than 50 miles from their current location in , or
the Company's requiring Executive to be based anywhere other than
the Company's principal executive offices; or
(e) any material breach, uncured after reasonable notice, by the
Company of any provisions of this Agreement.
6.3 Severance.
(a) Without Cause. If the Company terminates this Agreement without
Cause, other than as a result of a Terminating Event, or if
Executive has the right to terminate this Agreement pursuant to
Section 6.2 hereof, 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 two (2) years 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 3(a) hereof and (B) continuation of all
benefits under Section 4; 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
Executive Incentive Compensation Plan for the year of
termination.
(b) With a Terminating Event. If the Company terminates this
Agreement as a result of a Terminating Event, then commencing on
the date of such termination and for a period equal to three (3)
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 3(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; and (iii) continuation of
all benefits under Section 4. 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 6.3(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 6.3(b)(i) and (ii) provided that the
obligation of the Company to continue to provide the benefits
under Section 6.3(b)(iii) or to make monthly payments under
6.3(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 general 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.
(d) Withholding. Subject to Section 4(f), 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.
7. 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
6.3(a), for two (2) years 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 6.3(b), for three
(3) years following the termination
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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 7, 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 7 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.
8. 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 8 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
9. 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.
10. 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.
11. 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.
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(a) to the Company at:
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Chairman of the Tridex Compensation Committee
(b) to the Executive at:
000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 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.
12. 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.
13. 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. 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.
14. 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/ Xxxxxx X. Xxxxxxx
-----------------------------------
Chairman, Tridex Compensation
Committee
EXECUTIVE:
/s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
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