SEVERANCE AND NON-COMPETITION AGREEMENT
This SEVERANCE AND NON-COMPETITION AGREEMENT (“Agreement”) is made
and entered into by and between Argyle Security, Inc., a Delaware corporation
(the “Company”), and Xx.
Xxxxxxx X. Xxxxx, an individual (the “Employee”), effective as of February 1,
2009 (the “Effective
Date”). Capitalized terms not otherwise defined shall have the
meaning ascribed to such terms in Schedule I.
A. Whereas, the
Company is a corporation organized under the laws of the State of Delaware and
is conducting business in San Antonio, Bexar County, Texas and New York City,
New York County, New York.
B. Whereas, the
Company and the Employee desire to establish certain terms and conditions
related to their employment relationship on the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of (i) the mutual covenants herein contained
(ii) Employee’s current and ongoing exposure to Confidential
Information (as defined in Section 2.1 of this Agreement) of the
Company, (iii) employment of Employee upon the terms, conditions and covenants
set forth between Company and Employee and each act performed pursuant hereto,
and (iv) other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and Employee agree as
follows:
I.
Term
of Employment
1.1 Term. The Employee’s employment shall be “at
will,” meaning that either the Employee or the Company shall be entitled to
terminate the employment at any time and for any reason, with or without Cause
(hereinafter defined). Any contrary representations that may have
been made to the Employee shall be superseded by this Agreement. This
Agreement shall constitute the full and complete agreement between the Employee
and the Company on the “at-will” nature of the Employee’s employment, which may
only be changed in an express written agreement signed by the Employee and a
duly authorized officer of the Company.
1.2 Rights Upon
Termination. Except as expressly
provided in this Section 1.2, upon the termination of the Employee’s
employment, the Employee shall only be entitled to the compensation and benefits
earned up through the date of termination. Employee’s right to
compensation for periods after the Employee’s employment with the Company
terminates shall be determined in accordance with the following:
(a) Change of Control/Termination Without
Cause or for Good Reason. In the event the Employee’s
employment with the Company is terminated within the two (2) year period
immediately following the occurrence of a Change of Control, either (i) by the
Company without Cause, or (ii) by the Employee for Good Reason, then the
Employee shall, subject to Employee’s execution of a separation and release
agreement provided by the Company (the “Separation
Agreement”), and subject further to the applicable requirements of
Section 1.2(i):
(i) receive
a lump sum payment in the amount of (a) 2 times (Employee’s base salary in
effect on the date of termination (“Salary”) plus
Employee’s target bonus (“Bonus”)) plus (b)
Employee’s current year bonus earned up through the date of termination
(calculated by taking Employee’s annual target bonus times a fraction, the
numerator of which is the number of days Employee was employed during the year
of termination and the denominator of which is 365), with such target bonus and
current year bonus determined in accordance with the Company’s bonus
plan then in effect which is applicable to Employee. The lump
sum payment to be paid under this clause (i) shall be paid within thirty (30)
days following the date of Employee’s termination; and
(ii) receive
a lump sum payment equal to 24 times the monthly premium cost (determined as of
the date of termination) for Employee’s medical insurance under the Company’s
benefit plans then in effect, with such amount to be paid within thirty (30)
days following the date of Employee’s termination;
(b) Termination Without Cause or for Good
Reason. In the event
Employee’s employment with the Company is terminated before the occurrence of a
Change of Control or more than two (2) years after the occurrence of a Change of
Control, either (i) by the Company without Cause , or (ii) by the Employee for
Good Reason , then the Employee shall, subject to Employee’s execution of a
Separation Agreement:
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(i) receive
an amount of (a) 1 times (Employee’s Salary plus Employee’s target bonus) plus
(b) Employee’s current year bonus earned up through the date of termination
(calculated by taking Employee’s annual target bonus times a fraction, the
numerator of which is the number of days Employee was employed during the year
of termination and the denominator of which is 365), with such target bonus and
current year bonus determined in accordance with the Company’s bonus plan then in
effect which is applicable to Employee. All such amounts to be paid hereunder
shall be paid in equal monthly installments beginning on the thirtieth (30th) day
following the date of Employee’s termination and continuing on the same day in
each subsequent month for a period of 11 months thereafter; and
(ii) receive
monthly payments in the amount necessary to continue Employee’s medical benefits
coverage in effect at the time of termination with such
amounts to be paid out in monthly installments at the same times as the payments
in (b) (i) above for a period of 12 months following the date of such
termination;
(c) Death. If Employee
dies during the term of employment, Employee’s employment and this Agreement
shall automatically terminate as of the date of Employee’s death. Upon such
termination, the Company shall have no further obligation to Employee or his
estate, except to pay to the estate any accrued, but unpaid, Salary up through
the date of such termination, plus Bonus, plus those benefits payable in
accordance with (b) (i) above.
(d) Disability. If,
during the term of employment, Employee is prevented from performing his duties
for Company by reason of becoming totally disabled, then the Company, on prior
notice to Employee, may terminate Employee’s employment and this
Agreement. For purposes of this Agreement, Employee shall be deemed
to have become totally disabled when (i) he receives “total disability benefits”
under the Company’s disability plan (whether funded with insurance or
self-funded by the Company), if such a plan is maintained by the Company, or
(ii) the Company’s Board (exclusive of Employee if he sits on the
Board), upon the written report of a qualified physician (after complete
examination of Employee) designated by the Board, determines that Employee has
become physically and/or mentally incapable of performing his duties under this
Agreement on a permanent basis. In the event of termination of
Employee under this subsection (d), the Company shall pay Employee any accrued
but unpaid Salary, as of the date on which such permanent disability is
determined, but then remains unpaid, plus those benefits payable in accordance
with (b) (i) and (ii) above.. The provisions of the preceding sentence shall not
affect Employee’s rights to receive payments under the Company’s disability
insurance plan, if any, or under any individual disability insurance plan that
the Employee may have in place.
(e) Notwithstanding
anything to the contrary contained in this Section 1.2, to the extent that the
Employee is determined to be a "key employee" (as defined in Section 416(i) of
the Code but without regard to paragraph (5) thereof), the payment or payments
under this Section 1.2 which constitute "nonqualified deferred compensation"
under Section 409A of the Code shall be made to the Employee no earlier
than the earlier of the last day of the sixth complete calendar month following
the termination of the Employee's employment with the Company, or (ii) the date
of the Employee's death, consistent with the requirements of Section 409A of the
Code. Any payment or payments delayed by reason of the immediately preceding
sentence shall be paid to the Employee in a single lump sum on the first day
following the last day of the sixth complete calendar month following the date
of the termination of the Employee's employment with the Company, in order to
catch up to the original payment schedule. Notwithstanding the immediately
preceding 2 sentences, no delay shall be required to the extent that such
payments (i) are payable during the short-term deferral period set forth in
Treasury Regulation Section 1.409A-1(b)(4), and/or (ii) do not exceed an amount
equivalent to 200% of the lesser of (A) the Employee's annualized compensation
from the Company for the Employee's taxable year immediately preceding his or
her taxable year in which the Employee's termination of employment with the
Company occurs, or (B) the maximum amount of compensation that may be taken into
account under tax-qualified retirement plans pursuant to Section 401(a)(17) of
the Code, for the calendar year in which the termination of the Employee's
employment with Company occurs.
(f) Excess Parachute Payments. (i) If it is determined that any
amount, right or benefit paid or payable (or otherwise provided or to be
provided) to the Employee by the Company or any of its affiliates under this
Agreement or any other plan, program or arrangement under which Employee
participates or is a party, other than amounts payable under this Section 1.2(f)
(collectively, the “Payments”), would
constitute an “excess parachute payment” within the meaning of Section 280G of
the Code, subject to the excise tax imposed by Section 4999 of the Code, as
amended from time to time (the “Excise Tax”), and the
present value of such Payments (calculated in a manner consistent with that set
forth in the applicable regulations promulgated under Section 280G of the Code)
is equal to or less than $25,000.00 greater than the threshold at which such
amount becomes an “excess parachute payment,” then the amount of the Payments
payable to the Employee under this Agreement shall be reduced (a “Reduction”) to the
extent necessary so that no portion of such Payments payable to the Employee is
subject to the Excise Tax.
(ii)
In the event it shall be determined that the amount of the Payments payable to
the Employee is more than $25,000.00 greater than the threshold at which such
amount becomes an “excess parachute payment,” then the Employee shall be
entitled to receive an additional payment from the Company (a “Gross-Up Payment”) in
an amount such that, after payment by the Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income and employment taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment
(and any interest and penalties imposed with respect thereto), the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax (including any
interest and penalties imposed with respect thereto) imposed upon the
Payments.
(iii)
All determinations required to be made under Section 1.2(f), including whether
and when a Gross-Up Payment or a Reduction is required, the amount of such
Gross-Up Payment or Reduction and the assumptions to be utilized in arriving at
such determination, shall be made by an independent, nationally recognized
accounting firm mutually acceptable to the Company and the Employee (the “Auditor”); provided
that in the event a Reduction is determined to be required, the Employee may
determine which Payments shall be reduced in order to comply with the provisions
of Section 1.2 (f). The Auditor shall promptly provide detailed supporting
calculations to both the Company and Employee following any determination that a
Reduction or Gross-Up Payment is necessary. All fees and expenses of the Auditor
shall be paid by the Company. Any Gross-Up Payment, as determined pursuant to
Section 1.2(f), shall be paid by the Company to the Employee within five (5)
days of the receipt of the Auditor’s determination. All determinations made by
the Auditor shall be binding upon the Company and the Employee; provided that
if, notwithstanding the Auditor’s initial determination, the Internal Revenue
Service (or other applicable taxing authority) determines that an additional
Excise Tax is due with respect to the Payments, then the Auditor shall
recalculate the amount of the Gross-Up Payment or Reduction Amount, if
applicable, based upon the determinations made by the Internal Revenue Service
(or other applicable taxing authority) after taking into account any additional
interest and penalties (the “Recalculated Amount”)
and the Company shall pay to the Employee the excess of the Recalculated Amount
over the Gross-Up Payment initially paid to the Employee or the amount of the
Payments after the Reduction, as applicable, within five (5) days of the receipt
of the Auditor’s recalculation the Gross-Up Payment.
II.
Restrictive
Covenants
2.1 Trade Secrets and
Proprietary and Confidential Information. Employee recognizes and
acknowledges that Employee has acquired in the past, is presently acquiring, and
will continue to acquire in the future during his employment with the Company,
access to certain trade secrets and confidential and proprietary information of
the Company, including, but not limited to: (i) technical
information, know-how, trade secrets, financial data, marketing and
sales plans, customer and supplier lists, Developments (as defined in Section
2.6 of this Agreement) and other commercial information relating to the
Company’s business and (ii) certain information that the Company has acquired or
received from third parties in confidence (collectively, the “Confidential
Information”). Employee acknowledges that the Confidential
Information he obtains through his employment hereunder constitutes valuable,
special and unique property of the Company and that the Company would suffer
great loss and damage if he should violate the covenants set forth in this
Agreement. Employee acknowledges that such covenants and conditions
are reasonable and necessary for the protection of the Company’s
business.
2.2 Nondisclosure of
Trade Secrets, Proprietary and Confidential Information. Employee agrees
that, without the prior written approval of the Company, Employee shall not
during the Term of Employment or thereafter for any reason disclose any of the
Confidential Information of the Company to any
person, firm, company or other entity (except for authorized
personnel of the Company) for any reason or purpose whatsoever; provided,
however, that this Section shall not apply to the extent that Employee shall be
required to provide information pursuant to a valid, lawful subpoena or court
order so long as Employee shall have made his best efforts in good faith to
cause the court of relevant jurisdiction, to the greatest extent possible, to
limit the scope of such subpoena or order and protect the confidentiality of the
information so disclosed.
2.3 Solicitation of
Employees. Employee
agrees that during the term of employment and for a period of two (2) years
following termination of Employee’s employment hereunder, he will not, directly
or indirectly, by himself or by acting in concert with others, employ or attempt
to employ or solicit for employment with any business that is competitive with
the Company, any of the Company’s employees, contractors, or other personnel, or
seek to influence any employees, contractors, or other personnel of the Company
to leave their employment or other engagement with the Company.
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2.4 Solicitation of
Business of Company. Employee covenants and agrees that
during the term of employment and for a period of two (2) years following
termination of Employee’s employment hereunder, Employee will not attempt,
directly or indirectly, by himself or acting in concert with others, to
influence any of the Company’s clients, suppliers or other business associates
not to do business with or not to continue to do business with the Company or
any of its affiliates.
2.5 Non-Competition. Because
Employee's services to the Company are special and because the Company agrees to
provide Confidential Information of the Company to Employee from the moment of
execution of this Agreement and on an ongoing basis throughout the term of
employment, Employee covenants and agrees that during his term of
employment and for a period of two (2) years thereafter, Employee will not,
without the prior written consent of the Company, directly or indirectly, either
on his own behalf or on behalf of or in connection with any person, partnership,
limited liability company, corporation, professional company or otherwise,
engage in any business that would be directly or indirectly competitive with the
Company (including any subsidiaries and affiliates) as of the date of Employee's
termination in any market served by the Company.
2.6 Survival of
Covenants. The
provisions of this Article II shall survive any expiration or termination of
this Agreement and shall continue to bind the parties hereto in accordance with
the terms hereof. The covenants contained in this Article II shall be
construed as covenants or agreements independent of any other provision of this
Agreement, and the allegation or existence of any claim or cause of action of
Employee against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
covenants contained herein.
2.7 Reformation. If any provision of this Article
II should be found by any court of competent jurisdiction to be unenforceable by
reason of being too broad as to the period of time, territory or scope set forth
therein, then that provision shall be modified to reflect the maximum period of
time, the largest territory or the broadest scope, as the case may be, that
would be found enforceable by such court.
2.8 Remedies. In
the event of breach or threatened breach by Employee of any provision of this
Article II, the Company shall be entitled to relief by temporary restraining
order, temporary injunction, permanent injunction or otherwise in addition to
other legal and equitable relief to which the Company may be entitled, including
any and all monetary damages that the Company may incur as a result of said
breach, violation or threatened breach or violation. The Company may
pursue any remedy available to it concurrently or consecutively in any order as
to any breach, violation or threatened breach or violation, and the pursuit of
one of such remedies at any time shall not be deemed an election of remedies or
waiver of the right to pursue any other of such remedies as to such breach,
violation or threatened breach or violation, or as to any other breach,
violation or threatened breach or violation.
III.
Miscellaneous
Provisions
3.1 Binding
Arbitration. Any controversy between the Company and Employee
involving the construction or application of any of the terms, covenants or
conditions of this Agreement shall, on the written request of one party served
on the other, be submitted to arbitration. Such arbitration shall comply with
and be governed by the provisions of the Texas General Arbitration Act, Sections
171.001 through 171.098 of the Texas Civil Practice and Remedies Code. The
Company and Employee shall each appoint one person as an arbitrator to hear and
determine the dispute, and if they shall be unable to agree, then the two
arbitrators so chosen shall select a third impartial arbitrator whose decision
shall be final and conclusive upon the Company and Employee. The expense of
arbitration proceedings conducted under this Section 3.1 shall be borne by the
parties in such proportions as the arbitrators decide. This provision
shall not prohibit the Company from seeking any injunctive relief from a court
at any time.
3.2 Notices.
Whenever, in connection with this Agreement, any notice is required to be
given or any other act or event is to be done or occur on or by a particular
number of days, and the date thus particularized should be a Saturday, Sunday,
or holiday in the City of San Antonio, Texas, that date shall be postponed to
the next day that is not a Saturday, Sunday, or holiday in the City of San
Antonio, Texas. If a notice or other document is required to be given
hereunder to the Company or Employee, that notice or other document shall be
personally delivered, sent by a nationally recognized overnight courier or be
mailed to the party entitled to receive the same by registered or certified
mail, return receipt requested, at the appropriate address set forth below or at
such other address as such party shall designate in a written notice given in
accordance with this Section:
|
Company:
|
Employee:
|
|
Xx.
Xxxxxxx X. Xxxxx
|
|
|
Attn: Xxxxxx
X. Xxxxxxx, CFO
|
00
Xxxxxxxxx Xxxxx
|
|
00000
Xxxxxxxx Xxxxx
|
Xxxx
Xxxxxxxxxx, XX 00000
|
|
Xxx
Xxxxxxx, Xxxxx 00000
|
Notice
shall be deemed given on the date of actual delivery if delivered in person or
by nationally recognized overnight courier, or, if mailed, then on the date
noted on the return receipt.
3.3 Binding
Effect. The rights and obligations of the parties shall inure
to the benefit of and shall be binding upon their respective heirs,
representatives, successors and assigns, as the case may be.
3.4 Severability. If
any provision contained in this Agreement is determined to be void, illegal or
unenforceable, in whole or in part, then the other provisions contained herein
shall remain in full force and effect as if the provision that was
determined to be void, illegal or unenforceable had not been contained
herein.
3.5 Waiver,
Modification and Integration. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by any party. This instrument
contains the entire agreement of the parties concerning the subject matter
hereof and supersedes all prior or contemporaneous representations,
understandings and agreements, either oral or in writing, between the parties
hereto with respect to the subject matter hereof and all such prior or
contemporaneous representations, understandings and agreements, both oral and
written, are hereby terminated. This Agreement may be modified, altered or
amended by the Company at any time.
3.6 GOVERNING
LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND ACTIONS HEREON SHALL BE
BROUGHT EXCLUSIVELY IN BEXAR COUNTY, TEXAS.
3.7 Counterpart
Execution. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.
3.8 Captions. The
captions herein are inserted for convenience only and shall not affect the
construction of this Agreement.
3.9 Assignment.
In the event of any merger or consolidation of the Company with any other
corporation, partnership, limited liability company or other entity or company,
sale by the Company of a major portion of its assets or of its business and good
will, or any other corporate reorganization involving the Company, this
Agreement may be assigned and transferred to such successor in interest as an
asset of the Company upon such assignee assuming the Company’s obligations under
this Agreement. Upon any such assignment, Employee shall continue to perform his
duties and obligations according to the terms of this Agreement. Employee shall
not have any right to delegate or transfer any duty or obligation to be
performed by her under this Agreement to any third party.
3.10. Attorneys’ Fees
and Costs. If any
dispute arising under this Agreement is finally adjudicated by a court of
competent jurisdiction, the party that prevails shall be entitled to recover its
legal fees and costs, including reasonable attorneys’ fees, from the other
party.
3.11. Gender. References
in this Agreement to the male gender shall be deemed to include the female and
neuter genders and vice-a-versa, unless otherwise stated or unless the
circumstances eliminate such inclusion.
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3.12. Drafting. No provision of
this Agreement will be interpreted in favor of, or against, any of the parties
hereto by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or
thereof.
3.13 Construction and
Interpretation of the Word “or”. For the purposes of this
Agreement, the word “or” shall be deemed to include both the disjunctive and
conjunctive (i.e. “and/or”) where appropriate and to reflect the manifest intent
of the parties.
3.14 Section
409A. All payments of
"nonqualified deferred compensation" (within the meaning of Section 409A of the
Code) by the Company to the Employee are intended to comply with the
requirements of Section 409A of the Code, and this Agreement shall be
interpreted consistent therewith. Neither the Company or the Employee,
individually or in combination, may accelerate any such deferred payment, except
in compliance with Section 409A of the Code, and no amount shall be paid prior
to the earliest date on which it is permitted to be paid under Section 409A of
the Code. Notwithstanding anything to the contrary contained in Section
3.5, no amendment may be made to this Agreement if it would cause the Agreement
or any payment hereunder to not be in compliance with the requirements of
Section 409A of the Code. Unless otherwise expressly provided, any
payment of compensation by the Company to the Employee, whether pursuant to this
Agreement or otherwise, shall be made on or before the fifteenth day of the
third calendar month next following the later of the end of the calendar year or
the end of the Company's fiscal year, in either case in which the Employee's
right to such payment vests (ie, is not subject to a "substantial risk of
forfeiture" for purposes of Section 409A of the Code).
[SIGNATURE
PAGE TO FOLLOW]
IN
WITNESS WHEREOF, this Agreement is executed as of the date first set forth
above.
| Company: | |||
| ARGYLE SECURITY, INC. | |||
|
|
By:
|
/s/ Xxx Chaimovski | |
| Name: Xxx Chaimovski | |||
| Title: Executive Chairman | |||
| Employee: | |||
|
|
By:
|
/s/ Xxxxxxx X. Xxxxx | |
| XXXXXXX X. XXXXX | |||
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SCHEDULE
I
DEFINITIONS
SCHEDULE
Change of
Control means the earliest to occur of the
following:
(i) the public announcement
by the Company or any person (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any subsidiary of the
Company) (“Person”) that such
Person, who or which, together with all “affiliates” and “associates” (within
the meanings of such terms under Rule 12b-2 of the Exchange Act) of such Person,
shall be the beneficial owner of (fifty percent (50%) or more of the Company’s
voting stock then outstanding;
(ii) the commencement of,
or after the first public announcement of any Person to commence, a tender or
exchange offer the consummation of which would result in any Person becoming the
beneficial owner of the Company’s voting stock aggregating fifty percent (50%)
or more of the Company’s then outstanding voting stock;
(iii) the announcement of
any transaction relating to the Company required to be described pursuant to the
requirements of Item 6(e) of Schedule 14A of Regulation 14A of the Securities
and Exchange Commission under the Exchange Act;
(iv) a proposed change in
the constituency of the Company’s Board of Directors (the “Board”) such that,
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at least
a majority thereof, unless the election or nomination for election by the
shareholders of the Company of each new director was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who were members of
the Board at the beginning of the period;
(v) the Company enters into
an agreement of merger, consolidation, share exchange or similar transaction
with any other corporation other than a transaction which would result in the
Company’s voting stock outstanding immediately prior to the consummation of such
transaction continuing to represent (either by remaining outstanding or by being
converted into voting stock of the surviving entity) at least two-thirds (2/3)
of the combined voting power of the Company’s or such surviving entity’s
outstanding voting stock immediately after such transaction;
(vi) the Board approves a
plan of liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company (in one transaction or a series of transactions)
of all or substantially all of the Company’s assets to a person or entity which
is not an affiliate of the Company; or
(vii) Any other event which
shall be deemed by a majority of the members of the Board to constitute a
“Change of Control.”
Cause means termination of
Employee, upon written notice, limited to one or more of the following
reasons:
(i) fraud,
misappropriation or embezzlement by Employee in connection with the Company as
determined by the affirmative vote of at least a majority of the Board
(exclusive of Employee if he sits on the Board), or any other act of personal
dishonesty, fraud or misrepresentation taken by Employee which was intended to
result in substantial gain or personal enrichment for Employee at the expense of
the Company;
(ii)
mismanagement or neglect of Employee’s duties as determined by the affirmative
vote of at least a majority of the Board (exclusive of Employee if he sits on
the Board);
(iii) willful
and unauthorized disclosure of Confidential Information (as defined in Section
2.1 of this Agreement);
(iv) Employee’s
breach of any material term or provision of this Agreement, after written notice
to Employee of the particular details of the breach and the failure of Employee
to cure the breach within thirty (30) days thereafter;
(v) failure
or refusal of the Employee to comply with the policies, procedures, standards or
regulations of the Company, as may be in effect from time to time;
(vi) Employee’s
conviction of a felony or other crime;
(vii) Employee’s
breach or violation of any other Company policy, procedure or agreement after
written notice to Employee of the particular details of the breach and the
failure of Employee to cure such breach within thirty (30) days
thereafter
Good Reason any of the
following which occur without the Employee’s consent, but only to the extent
that (a) the termination of employment occurs within one (1) year following the
initial existence of any of the events set forth in (i), (ii) or
(iii) below, (b) Employee provides written notice to the Company of the
occurrence of any of the events set forth in (i), (ii), or (iii) below within
ninety (90) days
from the date of its initial existence, and (c) the Company fails to cure the
occurrence within thirty (30) days after receipt of written notice from
Employee:
(i) reduction of Employee’s
Salary unless such reduction is generally applicable to all senior executives as
determined by the Board;
(ii) the Employee’s duties
and or responsibilities are materially reduced;
(iii) relocation of
Employee’s regular work address to a location which requires Employee to travel
more than 50 miles from his residence.
