Exhibit 10.3
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (hereinafter "Agreement"), dated this 22nd day of
September, 1995, by and between TOKHEIM CORPORATION, an Indiana corporation
(hereinafter "the Company"), and Xxxxxxx X. Xxxxxx (hereinafter "the Employee"),
which Agreement shall be deemed to replace any and all previously existing
Employment Agreements between the parties.
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to be so employed, all upon the following
terms and conditions.
NOW, THEREFORE, in consideration of the premises hereinafter set forth, it
is mutually agreed as follows:
1. The Company agrees to employ the Employee, and the Employee agrees to
serve the Company, on a full-time basis in the capacity hereinafter designated
and upon the terms hereinafter specified. Said employment shall continue from
this date forward for an indefinite period and until such time as it may be
terminated by one or more of the parties, it being expressly recognized that
either party may terminate this Agreement, with cause, upon the giving of thirty
(30) days' written notice to the other, and in such event, the parties shall
each be entitled only to such continuing rights as may be provided in this
Agreement or as may otherwise be available to them in law or equity. In the
event Employee is terminated without cause, Employee shall be entitled to
severance pay equal to twelve (12) months of the Employee's base monthly salary.
2. The Employee shall serve in the capacity of President & CEO.
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The Employee shall have such duties and responsibilities and shall supply
such services in the carrying out of such duties and responsibilities as the
Company, through the Board of Directors, the duly appointed Committees of the
Board, the Chief Executive Officer of the Company or such other Executive
Officers as may be designated by the Board, shall, from time to time, direct,
and said parties shall be free to alter or amend the position, responsibilities,
duties or services to be performed by the Employee in such manner as to them
shall be deemed to be in the best interests of the Company. During the term of
employment, the Employee shall devote his best efforts and skills to the
business interests of the Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with the
Company's business, or which may in any way interfere with his employment,
without the consent of the Company.
3. The Employee hereby recognizes the Company's proprietary rights in the
tangible and intangible property of the Company and acknowledges that
notwithstanding the relationship of employment, the Employee will not obtain or
acquire through such employment any personal property rights in any of the
property of the Company, including, but not limited to, any writings,
communications, manuals, documents, instruments, contracts, agreements, files,
literature, data, technical information, know-how secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, tradenames,
trade styles, service marks, logos, copyrights, patents or other matters which
are properly the property of the Company.
4. The Employee shall, during the term of employment, use his best
efforts and exercise his utmost diligence to protect and safeguard the
confidential information of the Company, including, but not limited to, trade
secrets, know-how, product formulas, recipes,
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methods, procedures, processes, devices, apparatuses, materials or other matters
which are confidential to the Company. The Employee further agrees that he
shall not, during the term of employment or thereafter, personally use or
disclose to others information which shall be confidential to the Company,
except as such use or disclosure may be required during the course of employment
with the Company or as may be consented to by the Company.
5. The Employee agrees that during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which the Employee
may conceive or make, either alone or in conjunction with others and related or
in any way connected with the business of the Company, shall be the sole and
exclusive property of the Company. The Employee shall, without further
compensation or consideration, but at the expense of the Company, and as and
when requested to do so by the Company, promptly execute and assign any and all
applications, assignments and other instruments which the Company shall deem
necessary in order to apply for and obtain letters patent of the United States
and of foreign countries for said inventions and discoveries, and in order to
assign and convey to the Company, or to the Company's nominee the sole and
exclusive right, title and interest in and to said inventions, discoveries or
any applications or patents thereon. As promptly as known or possessed by the
Employee, the Employee shall disclose to the Company all information with
respect to said inventions and discoveries. The Employee further agrees that
during the term of employment, trademarks, tradenames, service marks, trade
styles, logos, emblems, labels, slogans and writings, whether or not
copyrighted, originated by the Employee, alone or in conjunction with others,
and related or in any way connected with the business of the Company, shall be
the sole and exclusive property of the Company.
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6. The Employee shall be entitled to compensation as follows:
A. The Employee shall be entitled to a monthly base salary of Twenty Two
Thousand Nine Hundred Seventeen Dollars ($22,917.00). The Base Pay will be
reviewed annually. Such Base Pay will be payable in such semi-monthly or
monthly installments as is consistent with the policy of the Company in such
matters. The Employee shall also be eligible for the officer's bonus program, a
copy of which has been supplied to the Employee.
B. The Employee shall be granted participation in all employee benefit
plans applicable to executive officers of the Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans and such other plans as may from time to time be made
available and applicable to the Employee, consistent with the policies of the
Company and the terms and conditions of such plans. Nothing herein shall be
deemed to alter the terms and conditions of such plans or the policy of the
Company with respect thereto, and nothing herein shall be deemed to entitle the
Employee to any rights therein which would not otherwise be made available to
the Employee pursuant to the implementations of such plans in accordance with
the terms, conditions and provisions set forth therein. It shall be further
understood that nothing herein shall prevent the Company, through its Board of
Directors, the duly appointed Committees of the Board or such other Executive
Officers of the Company as the Board may designate, from altering or amending
any of the aforesaid plans or eliminating or adding to them as they shall from
time to time deem appropriate and in the interests of the Company.
C. Except as may otherwise be expressly provided herein, the Employee
shall be granted, upon his termination from the Company, such rights as may be
available to him
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pursuant to any plan or plans hereinabove referred to, and, in addition thereto,
any termination benefits accorded terminated executives, consistent with any
existing policy or practice of the Company with respect to such termination. In
the event there shall be no such policy or practice with respect to termination,
then such termination benefits, if any, as may be deemed appropriate to the
Board of Directors, its duly appointed Committees or such other Executive
Officers as may be directed by the Board to act in such matters.
7. In the event there shall occur (i) a merger, consolidation or other
combination of the Company with or into any other corporation, (ii) the
acquisition, subsequent to the date of this Agreement, directly or indirectly,
by any person, entity or group of persons of ownership of the power to vote in
excess of twenty percent (20%) of the voting securities of the Company followed
by the election by said party of one or more representatives to the Board of
Directors, (iii) the acquisition, subsequent to the date of this Agreement,
directly or indirectly, by any person, entity or group of persons of ownership
of the power to vote in excess of fifty percent (50%) of the voting securities
of the Company, whether or not followed by the election by said party or parties
of one or more representatives to the Board of Directors or (iv) any other
event, including, but not limited to, the matters set forth in (i) through (iii)
above which shall have the effect of vesting effective control of the business
and affairs of the Company in a person, entity or group of persons other or
different than the present stockholders of the Company, or which shall have the
effect of causing a change in management of the Company, then and in that event,
the right of the Company and the Employee to unilaterally terminate this
employment upon thirty (30) days' written notice as provided in Paragraph 1
above shall continue, but shall be subject to the following express provision:
If such termination shall occur as a result of notice
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given by either party within thirty-six (36) months of any of the events
described in (i), (ii), (iii) or (iv) of this Paragraph above, then upon the
effective date of termination, the Employee shall be entitled to the termination
benefits set forth in this Paragraph 7 in addition to any other termination
rights which may have accrued to him during his employment; provided, however,
that the following provisions with respect to direct severance pay (i.e., salary
and bonus payments) shall be exclusive and shall replace any other rights of the
Employee to direct severance payments:
A. The Employee shall be entitled to receive the greater of 299.99% of the
base salary or twice the Employee's total compensation at the same rate at which
it existed at the date of the event referenced in (i) through (iv) of this
Paragraph 7 above. The Employee shall further be entitled to receive as direct
severance pay, bonuses during the subsequent twenty-four (24) months on the same
dates that he would otherwise have been entitled to them had his employment
continued; provided, however, that the amount of such bonuses shall not be
contingent upon any matters arising after the date of termination, but shall on
an annual basis be equal to the average annual sum paid in bonuses to the
Employee during the last three (3) bonus periods preceding his termination, or
the average annual bonuses of such lesser bonus periods if his employment was
for less than three (3) bonus periods prior to termination. In the event that
during any part of such twenty-four (24) month period, the executive officer's
activities involved returning the corporation to profitability which limited
bonus potential, the bonus shall be paid for such twenty-four month period as if
the company had been profitable. To the extent the twenty-four (24) months
shall expire in the middle of a bonus period, then for such partial year the
Employee shall be entitled to that percentage of the average annual bonus that
the partial year bears to a total year, and he
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shall be paid any remaining and unpaid bonus amounts due him at the expiration
of said twenty-four (24) month period. In the event the Employee is terminated
within said 36 month period, severance shall be payable. In the event the
Employee shall die during any period in which payments shall be due hereunder,
the balance of any salary and bonus payments shall be paid to the Employee's
estate within six (6) months of the date of his death.
B. The Employee shall immediately be paid a lump sum amount equal to the
value of any outstanding stock options which by their terms cannot be exercised
the day following the Employee's termination of employment (the value of each
option shall be equal to the average of the high and low price of a share of
stock, as quoted on the composite transactions table covering transactions on
the New York Stock Exchange on the first date that the stock was traded on that
Exchange which next precedes the date the Employee's employment terminated minus
the stock option's exercise price). The Executive shall immediately be paid a
lump sum amount equal to the value of any unvested shares of restricted stock as
if all restrictions had been removed the day preceding the Change of Control;
C. In addition to the continuation of his base salary and bonus as
provided above, the Employee shall further be entitled for twenty-four (24)
months following termination to receive medical insurance, life insurance and
disability insurance benefits from the Company on terms comparable to the
benefits provided by the Company to the Employee in such matters as of the date
of the event referenced in (i) through (iv) of this Paragraph 7 above; provided,
that any severance payments provided for hereinabove shall be reduced by the
amount of any disability benefits paid pursuant to this Paragraph 7B for the
period that such disability payments shall continue; and, provided further, that
notwithstanding anything hereinabove set forth, any medical,
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life and disability benefits shall terminate automatically at any time that the
Employee shall secure and begin alternate employment. The employee may elect in
writing at the time of severance to receive the cash value of any or all of
these benefits in lieu of coverage.
D. If the Employee shall be fifty (50) years of age or older at the time
of any termination governed by the terms of this Paragraph 7, and if the twenty-
four (24) months of continued salary and bonus shall expire prior to the
Employee's sixtieth (60th) birthday, then the Employee shall additionally be
entitled to receive his base salary and bonus from the date of expiration of the
twenty-four (24) months until the date of his sixtieth (60th) birthday at one-
half (1/2) the rate of salary and bonus payable to him during the first twenty-
four (24) months following his termination.
E. If the Employee shall be sixty-three (63) years of age or older at the
time of any termination governed by the terms of this Paragraph 7, then all
benefits provided for above shall run not for a period of twenty-four (24)
months as hereinabove set forth, but rather for that number of months occurring
between the date of termination and the date of the Employee's sixty-fifth
(65th) birthday and all benefits otherwise running for twenty-four (24) months
shall run for that period of time.
F. It is expressly understood and agreed that if the receipt or the right
to receive all or any part of the payments contemplated by this Paragraph 7,
either alone or with other payments, which the Employee has received or has the
right to receive from the Company and which are "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code, as amended, would result
in some or all of the payments contemplated by this Paragraph 7 or the parachute
payments being "excess parachute payments," as defined in Section 280G of
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the Internal Revenue Code, and/or if such payments would result in the Employee
suffering an excise tax or other extraordinary tax upon the receipt thereof, the
Company shall make such additional payments to the Employee as shall be
necessary to cause the net after-tax benefit to the Employee to be the same as
would have been the case had there been no excise or extraordinary tax applied
to such payments.
G. In the event the Employee shall be required to employ counsel or bring
suit to enforce any of the terms or conditions of this Paragraph 7 and shall be
successful in securing enforcement of any of such terms and conditions, the
Employee shall be entitled to all reasonable expenses, including, but not
limited to, attorneys' fees incurred in such enforcement efforts.
8. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Company as an executive or
in any other capacity.
9. All payments provided under this Agreement shall be paid in cash from
the general funds of the Company and no special or separate fund shall be
established and no other segregation of assets shall be made to assure payment.
The Employee shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind or a fiduciary relationship, between the Company and the Employee or
any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company.
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10. The Company may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
11. Neither this Agreement nor any right or interest hereunder shall be
assignable by the Employee, his beneficiaries or legal representatives, without
the Company's prior written consent; provided however, that nothing in this
Paragraph shall preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
12. Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, communication, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
13. This Agreement shall be binding upon and inure to the benefit of the
Employee and the Company and their respective permitted successors and assigns.
In the event the Company merges or consolidates with or into any other
corporation or corporations or sells or otherwise transfers substantially all
its assets to another corporation, the provisions of this Agreement shall be
binding upon and inure to the benefit of the corporation surviving or resulting
from the merger or consolidation or to which such assets are sold or
transferred. All references herein to the Company refer with equal force and
effect to any corporate or other successor of the
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Company which acquires, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the
Company.
14. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provisions of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
15. If, for any reason, any provisions of this Agreement is held invalid,
such invalidity shall not affect any other provision of this Agreement not held
so invalid, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this Agreement
shall be held invalid in part, such invalidity shall in no way affect the rest
of such provision not held so invalid, and the rest of such provision, together
with all other provisions of this Agreement, shall to the full extent consistent
with law continue in full force and effect.
16. This Agreement has been executed and delivered in the State of
Indiana, and its validity, interpretation, performance and enforcement shall be
governed by the laws of said State.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Employee has signed this Agreement, all as of the day and year first
above written.
TOKHEIM CORPORATION
By /s/ Xxxxxx X. Xxxxxxxxx
________________________________
Xxxxxx X. Xxxxxxxxx
Chairman, Compensation Committee
ATTEST:
"the Company"
_____________________________
Its _________________________
/s/ Xxxxxxx X. Xxxxxx
________________________________
Xxxxxxx X. Xxxxxx
President & CEO
"the Employee"
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