EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 21st day of
December, 1999, by and between PSC Inc., a New York corporation ("Company"), and
Xxxxxx X. Xxxxxx (the "Executive").
WITNESSETH:
WHEREAS, Executive is being employed by Company as a Senior Vice President;
WHEREAS, Company anticipates that Executive's contribution as a key
employee of Company will be substantial and desires to assure itself of
Executive's employment with Company for the period stated in this Agreement;
WHEREAS, because Executive will acquire intimate knowledge of the business
of Company and will develop relationships with customers, suppliers,
distributors, vendors and others in connection with the business of Company,
Company recognizes the detrimental effect on Company and the decreased value of
Company which would result if Executive were to enter into competition with
Company during the term of this Agreement and for a reasonable period after
termination of Executive's employment with Company;
WHEREAS, because Executive will be exposed to confidential and proprietary
information of Company and, Company recognizes the detrimental effect on Company
and the decreased value of Company that will result if Executive were to
disclose or use in an unauthorized fashion any such information; and
WHEREAS, Executive is desirous of committing himself to serve Company on
the terms herein provided.
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained and the mutual benefits to be derived from this
Agreement, the parties hereto agree as follows:
1. Employment and Xxxxxx.Xxxxxxx agrees to employ Executive, and Executive
hereby agrees to serve Company, as a Senior Vice President of Company. As such,
he shall be responsible for such operations of Company as shall be specified by
Company, shall perform his duties in a conscientious, reasonable and competent
manner and shall devote his best efforts and entire business time and attention
to the performance of his duties to Company. At all times Executive shall be
subject to the direction of and shall report to Company's President and Chief
Executive Officer or his designee.
2. Term. The term ("Term") of Executive's employment hereunder shall
commence on the date hereof, and shall continue uninterrupted for the period
ending three (3) years following the date hereof except to the extent that the
Term shall be earlier terminated under Section 8. Subject to agreement by and
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among Executive and Company, the Term may be extended for a period of two (2)
years. If either party desires to extend the Term, that party will notify the
other not less than sixty (60) days prior to the end of the initial three-year
Term. Following the initial three-year Term and the two (2) year extension (if
any) and for so long as he is employed by Company thereafter, Executive shall be
an at-will employee of Company. The provisions of Sections 4, 5, 6, 7, 9 and 10
shall survive the expiration of the Term.
3. Compensation. Executive shall receive the following compensation for all
services rendered to Company in any capacity:
a. Executive shall receive base salary at a minimum annual rate of Two
Hundred Thousand Dollars ($200,000) with all such annual base salary
payable in accordance with Company's then applicable payroll practices and
subject to such deductions and withholdings as may be required by law or
agreed to by Executive.
b. In the event that 100% of the respective Annual Target is attained
in any calendar year described on Exhibit A, then, in addition to his base
salary, Executive shall be eligible to participate in the PSC Management
Incentive Plan and qualify for a target bonus of up to 35% of base salary
in the event that Company and Executive achieve their pre-established
performance goals in such Management Incentive Plan for such calendar year.
c. Executive shall qualify for a performance-based bonus in the amount
of $500,000 in the event that Company receives from Telxon within twelve
(12) months following the date of this Agreement a purchase order having
standard prices, terms and conditions and otherwise being acceptable to
Company for a minimum of 1,000 GAP Scan Engines or Ultra Pens. This
performance-based bonus will be payable upon payment in full by Telxon for
the products purchased under such purchase order and shall be paid to
Executive even if at the time Company receives such an order or orders from
Telxon, and/or at the time Company receives such payment from Telxon,
Executive is no longer employed by Company (except if Executive has
terminated his employment without Good Reason or Company has terminated
Executive's employment for Good Cause.).
d. Executive shall receive additional performance-based compensation
equal to the sum of (i) the applicable Earned Commission Rate applied to
Net Sales of GAP/GEO Products in the event that Net Sales of GAP/GEO
Products in each such calendar year exceed specific Achieved Percentages of
Annual Target levels all as described on Exhibit A attached to this
Agreement; plus (ii) 50% of net royalties received by Company during each
such calendar year (including the fair market value of all rights obtained
through cross-licensing) from third parties for rights to GEO patents
issued as of December 17, 1999. For purposes of the foregoing, the Net
Sales of GAP/GEO Products for a year shall consist of the aggregate Net
Selling Price for all sales to Company and third parties of GAP/GEO
Products. By way of illustration: (x) If Company sells a GAP engine to a
third party for $80, the applicable Earned Commission Rate shall be
calculated on the Net Selling Price (e.g., $80 x 4.5% = $3.60 to be paid to
Executive); (y) If Company uses a GAP engine in a Company product (e.g., a
PSC gun) the applicable Earned Commission Rate shall be calculated on the
engine Net Selling Price payable by OEM third parties (Executive will not
earn a commission on the selling price of the total PSC product, only on
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the value of the engine); and (z) for all GAP commercial products (e.g.,
the UltraPen) Executive will earn the applicable Earned Commission Rate on
the Net Selling Price (e.g., if an UltraPen is sold to a customer for $150,
a 4.5% Earned Commission Rate payable to Executive will be $6.75). Net
Selling Price shall be defined as the selling price, less (v)
transportation and packaging costs, (w) insurance, (x) duties, taxes and
other governmental charges, (y) commercial, trade and cash discounts,
returns and adjustments or allowances actually granted by Company and (z)
any royalties paid to third parties with respect to GAP/GEO Products.
Executive's entitlement to the performance based compensation pursuant to
this Section 3.d. shall continue following termination until the fifth
(5th) anniversary date of this Agreement, unless (A) the Term of the
Agreement is not extended by Executive for an additional two years as
described in Section 2 hereof (if, however, Executive wishes to extend the
Agreement for an additional two (2) years and Company does not elect to
extend the Agreement, performance-based compensation pursuant to this
Section 3.d. shall continue following termination until the fifth (5th)
anniversary date of this Agreement), (B) Executive's employment hereunder
is terminated by Company for Good Cause or (C) Executive's employment
hereunder is terminated by Executive without Good Reason. Otherwise,
Executive's entitlement to the performance-based compensation hereunder
shall terminate upon termination of Executive's employment hereunder. For
purposes of this Agreement, "GAP/GEO Products" shall be defined as those
Products listed on Exhibit B which is attached to this Agreement.
e. Executive shall be eligible to participate in the benefit plans,
including stock options, group life insurance, group medical coverage,
401(k) and other benefits generally available to senior management officers
of Company, all determined in accordance with the terms and eligibility
requirements of those plans and as in effect from time to time in the
discretion of Company's Board of Directors.
f. Pursuant to Company's 1994 Stock Option Plan, on or about January
1, 2000, Company will award Executive 20,000 stock options, upon the terms
and conditions and subject to the restrictions set forth in the PSC 1994
Stock Option Plan.
g. Executive shall receive a monthly auto allowance equal to $500 net.
h. Effective January 1, 2000, Executive's vacation period shall be six
weeks per calendar year. In addition, Executive shall be entitled to such
Company holidays as are generally available to senior management officers
of Company.
i. After consultation with Executive, Company shall provide Executive
appropriate equipment for him to work while at home. If this Agreement is
terminated for any reason, Executive shall have the option to purchase such
equipment at its fair market value at the time of Termination (as
hereinafter defined).
j. In the event that Company is not allowed to deduct for federal
income tax purposes, an amount of compensation otherwise payable to
Executive in any fiscal year (other than payments pursuant to the
Noncompetition and Confidentiality Agreement of even date), that amount of
compensation otherwise payable to Executive that exceeds or causes the
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amount payable to Executive to exceed any applicable deduction limitations
(the "Deferred Amount") shall be deferred and paid to Executive as such
amounts entitle Company to full deductibility for federal income tax
purposes; notwithstanding the foregoing, any and all Deferred Amounts shall
be paid to Executive no later than seven (7) years from the date of this
Agreement. Executive and Company agree to explore tax alternatives which
may allow for the full payment to Executive and full tax deductibility by
Company, of all compensation in the year earned.
4. Confidential Information.
a. Executive currently has and will continue to have intimate
knowledge of the business and confidential affairs of Company (including
GAP Technologies, Inc. and GEO Labs, Inc. prior to acquisition by Company
of the business and assets of those companies) and its subsidiaries,
including information and matters not readily available to the public
relating to Company and its present and future subsidiaries which are: (i)
of a technical nature, such as, but not limited to, methods, know-how,
formulae, compositions, drawings, blueprints, compounds, processes,
discoveries, machines, prototypes, inventions, computer programs and
similar items; (ii) of a business nature, such as, but not limited to,
information about sales or lists of customers, prices, costs, purchasing,
profits, markets, strengths and weaknesses of products, business processes,
business and marketing plans and activities and employee personnel records;
or (iii) pertaining to future developments, such as, but not limited to,
research and development, future marketing or merchandising plans or ideas
(hereinafter collectively referred to as "Confidential Information").
Confidential Information shall also include information of the customers
and vendors of Company and its subsidiaries which was learned by Executive
as a consequence of his employment with Company or with GAP Technologies,
Inc. or GEO Labs, Inc. Executive agrees to keep secret all Confidential
Information and not to disclose it to anyone outside of Company, not to
authorize the disclosure of Confidential Information to anyone outside of
Company, or otherwise use his knowledge of Confidential Information for his
own personal benefit, or the benefit of anyone other than Company or its
subsidiaries, either during the Term or at any time thereafter, except with
Company's prior written consent.
b. Executive acknowledges and agrees that the Confidential Information
is a valuable asset of Company, and its protection as confidential is vital
to the success of the business of Company. All memoranda, notes, records,
plans, drawings, reports, papers and other documents (and all copies
thereof) relating to or containing Confidential Information, some of which
may be prepared by Executive, and all objects associated therewith (such as
models and samples) in any way obtained by Executive are and at all times
shall remain Company's sole and exclusive property even if prepared or
created, in whole or in part, by Executive, and whether or not directly
disclosed or entrusted to Executive by Company or any other person. This
shall include, but is not limited to, documents and objects concerning any
process, apparatus, fixture, mold, die or product manufactured, used,
developed, investigated or considered by Company or any subsidiary and any
reports, sketches, formulae, computer programs, computer disks, prototypes,
price lists, customer lists or information, samples and all other materials
containing Confidential Information. Executive shall exercise the highest
degree of care in safeguarding Confidential Information against disclosure
of any kind or nature, whether intentional or unintentional and generally
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take all steps necessary to ensure the maintenance of its confidentiality.
Executive shall comply with all policies and procedures as Company may from
time to time establish to protect and preserve Confidential Information.
Executive shall not, except for Company's use or sole benefit, copy or
duplicate any of the aforementioned documents or objects, nor remove them
from the facilities of Company or any subsidiary, nor use any information
concerning them except for the benefit of Company or any subsidiary, either
during his employment or thereafter. Executive agrees to deliver all
originals and copies of the aforementioned documents and objects, if any,
that may be in his possession or under his control to Company on
termination of his employment with Company or at any other time on
Company's request. Nothing in this Agreement modifies or reduces
Executive's obligation to comply with applicable laws relating to trade
secrets, confidential information or unfair competition.
c. Prior to the date of this Agreement, Executive received
confidential information from the counter-parties to the Bi-Directional
Nondisclosure Agreements and Mutual Confidentiality Agreements described on
attached Exhibit C. Executive agrees and covenants that except as necessary
to fulfill obligations to Counter-Parties he shall not utilize in the
fulfillment of his duties pursuant to this Agreement any confidential
information received by him from any of the counter-parties pursuant to
such Agreements or disclose any such information to anyone including
employees, agents and representatives of Company.
5. Inventions.
a. Executive shall promptly disclose to Company, in writing, all
ideas, discoveries, designs, improvements, innovations and inventions
(collectively referred to herein as "Inventions"),whether patentable or
not, either relating to the existing or planned business, products,
processes, or procedures of Company, or any parent or subsidiary of
Company, or suggested by or resulting from Executive's work at Company, or
resulting wholly or in part from the use of Company's time, material,
facilities or ideas, which Executive has made or conceived or may make or
conceive, whether during or outside of working hours, whether or not using
resources of Company or its subsidiaries, whether alone or with others, at
any time during Executive's employment or within one year after termination
thereof. Executive agrees that all such Inventions shall be the exclusive
property of Company.
b. Executive hereby assigns to Company all his rights and interests in
and to all such Inventions and all patents and copyrights which may be
obtained on them, in this and all foreign countries. At Company's expense,
but without charge to it, Executive will execute, acknowledge and deliver
to Company any specific assignments to any such Inventions or other
relevant documents and take any such further action as may be considered
necessary by Company at any time during or subsequent to the period of
Executive's employment to obtain or defend letters patent in any and all
countries or to obtain documents relating to registration, ownership or
transfer of copyrights, or to vest title in such Inventions in Company or
its successors or assigns or to obtain for Company any other legal
protection for such Inventions, and Executive will continue to cooperate in
this manner even after Executive's employment by Company terminates.
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c. Executive represents that he has listed and briefly described on
Exhibit D attached hereto all inventions, if any, patented or unpatented,
which he conceived or made prior to his employment by Company, and which
were not previously, validly assigned to GEO Labs, Inc., or to GAP
Technologies, Inc., and which he wishes to exclude from this Agreement.
d. Executive acknowledges that all Creative Works (as defined below)
that are covered by the definition of a "work made for hire" under 17
U.S.C.ss.101 of the U.S. Copyright Act of 1976 (the "Copyright Act") will
be considered a "work made for hire", and Company will be regarded as the
author and owner of all copyrights in any such works. As to any Creative
Works that are not "work made for hire" under the Copyright Act, such that
Executive is regarded as the copyright author and owner, Executive hereby
assigns and agrees to assign to Company all of his right, title and
interest in any such Creative Works Executive authors, either solely or
jointly with others, at any time during Executive's employment or within
one year after termination thereof, either relating to the existing or
planned business, products, processes, or procedures of Company, or any
parent or subsidiary of Company, or suggested by or resulting from
Executive's work at Company, or resulting wholly or in part from the use of
Company's time, material, facilities or ideas, that Executive has made or
conceived or may make or conceive, whether or not during working hours or
with Company's resources. Executive agrees that all such Creative Works
shall be the exclusive property of Company. As used herein, "Creative
Works" shall mean any and all original works of authorship fixed in any
tangible medium of expression, including but not limited to writings,
compilations of data, charts, forms, drawings, software, videos,
photographs, music, designs and mask works, and further including but not
limited to any other subject matter for which copyright or mask work
protection would apply, specifically including original or revised designs,
computer software, advertising and marketing materials, instructional and
procedural manuals, and related documents and copies thereof.
6. Noncompete.
a. In light of the special and unique services that have been and will
be furnished to Company by Executive and the Confidential Information that
has been and will be disclosed to him during his employment, Executive
agrees that during the Noncompetition Period (as defined), he will not,
without the written consent of Company, directly or indirectly, whether as
principal, agent, officer, director, consultant, employee, partner,
stockholder or owner of or in any capacity with any corporation,
partnership, business, firm, individual company or any entity located
anywhere in the world engage in, or assist another to engage in, any work
or activity in any way competitive with the Business of Company (as
hereinafter defined). However, nothing herein shall prevent Executive from
owning not more than five percent (5%) of the outstanding publicly traded
shares of common stock of a corporation, as to which corporation Executive
has no relationship other than as a shareholder. In addition, during the
Noncompetition Period, Executive will not, directly or indirectly, (i)
induce or attempt to induce any officer or employee of Company or its
subsidiaries (other than Xxx Xxxxxx) to leave the employ of Company or its
subsidiaries, or in any way interfere with the relationship between Company
or its subsidiaries and any officer, employee, director or shareholder
thereof; (ii) hire directly or through another entity any person who is an
employee of Company or its subsidiaries on the date of termination of
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employment of Executive; or (iii) induce or attempt to induce any customer,
dealer, supplier or licensee to cease doing business with Company or its
subsidiaries, or in any way interfere with, or induce or attempt to induce
any change in, the relationship between any such customer, dealer, supplier
or licensee and Company or its subsidiaries.
b. Executive specifically agrees that because of his special expertise
and the special and unique services that he will be furnishing Company, and
because of the Confidential Information that has been acquired by him or
that will be disclosed to him during his employment with Company, the
above-stated geographic areas and the Noncompetition Period, in and during
which he will not compete with Company, are reasonable in scope and
duration and are necessary to afford Company just and adequate protection
against the irreparable damage which would result to Company from any
activities prohibited by this Section.
c. For purposes of this Agreement, the "Business of Company" is the
development, manufacturing and marketing of technologies, products
(including such products as radio frequency and batch portable data
collection terminals, handheld or fixed or miniature bar code laser, CCD or
image scanners or engines, RFID readers, other laser scanners,
self-checkout systems, verification products, electronic shelf labeling
products) and services for the automatic identification and keyless data
entry industry, and includes, but is not limited to, products, services,
applications, systems and technologies relating to bar coded data, magnetic
stripe encoded data, radio frequency communications of bar coded or related
data, optical character recognition, machine vision as applied to the
recognition of bar coded data, electronic interchange of bar coded or
related data. The Business of Company shall also include any business in
which Company or any of its subsidiaries is actually engaged or as to which
it is doing research and development during Executive's employment with
Company.
d. For purposes of this Agreement, the "Noncompetition Period" shall
begin on the date of this Agreement and continue so long as Executive
receives any compensation of any kind pursuant to this Agreement and for a
period of 24 months thereafter provided, that any compensation received
under the Stock Option Plan described at Section 3.f. and any deferral of
compensation pursuant to Section 3.j. shall not extend the Noncompetition
Period otherwise applicable.
7. Remedies.
a. If Executive commits a breach, or threatens to commit a breach, of
any of the provisions of Sections 4, 5 or 6 Company shall have the
following rights and remedies: (i) the right and remedy to have the
provisions of Sections 4, 5 or 6 specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed that any such breach
or threatened breach will cause irreparable injury to Company or its
subsidiaries and that money damages will not provide an adequate remedy to
Company or its subsidiaries; (ii) the right and remedy to require Executive
to account for and pay over to Company all compensation, profits, monies,
accruals, increments or other benefits (hereinafter collectively referred
to as the "Benefits") derived or received thereby as the result of any
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transactions constituting a breach of any of the provisions of Sections 4,
5 or 6, Executive hereby agreeing to account for and pay over the Benefits
to Company; and (iii) the right and remedy to withhold payment of
compensation or other benefits otherwise payable to Executive hereunder or
otherwise, and such withheld amount may be a portion or all of the payable
compensation or benefits, at the discretion of the Board. Each of the
foregoing rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to Company under law or in equity.
b. If any covenant contained in Sections 4, 5 or 6 or any part
thereof, is hereafter construed to be invalid or unenforceable, except as
provided in Section 7.c., the same shall be given full effect, without
regard to the invalid portions.
c. If any covenant contained in Sections 4, 5 or 6 or any part
thereof, is held to be unenforceable because of the duration of such
covenant or the area covered thereby, the parties agree and intend that the
court making such determination should reduce the duration and/or area of
such covenant to the extent reasonably necessary for the protection of
Company and, in its reduced form, the covenant shall then be strictly
enforceable.
d. The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 4, 5 or 6 upon the courts of
any state or foreign jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such states or jurisdictions
shall hold such covenants wholly unenforceable by reason of the breadth of
such scope or otherwise, it is the intention of the parties hereto that
such determination not bar or in any way affect Company's right to the
relief provided above in the courts of any other states or jurisdictions
within the geographical scope of such covenants, as to breaches of such
covenants as they relate to each state being, for this purpose, severable
into diverse and independent covenants.
e. If any action, suit or other proceedings in law or in equity is
brought to enforce the covenants contained in Sections 4, 5 or 6 or to
obtain money damages for the breach thereof, and such action results in the
award of a judgment for money damages or in the granting of any injunction
in favor, all expenses (including attorneys' fees) in such action, suit or
other proceeding shall (on demand) be paid by the prevailing party in such
suit, action or other proceeding.
8. Termination.
a. In the event of the termination of employment of Executive by
Company prior to the expiration of the Term for any reason other than Good
Cause (as hereinafter defined), death, disability, or a Change in Control
(as hereinafter defined), Company will continue to pay Executive for the
applicable Severance Period as specified in this Section an amount equal to
Executive's base salary at the annual rate then in effect. Such amount
shall be payable biweekly. In addition, Company will continue to provide
Executive with Executive's then current health, dental, life and accidental
death and dismemberment insurance benefits for the applicable Severance
Period. In the event of termination pursuant to this Section prior to the
expiration of the initial three-year Term, the Severance Period shall be
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equal to the then remaining portion of the three-year Term. In the event of
termination of employment pursuant to this Section after the expiration of
the initial three-year Term, the Severance Period shall be a period of one
(1) year. All payments made to Executive hereunder will be subject to all
applicable employment and withholding taxes.
b. In the event of the termination of employment of Executive within
the two (2) year period following a Change in Control (as hereinafter
defined) of Company, and such termination is: (i) by Company for any reason
other than Good Cause (as hereinafter defined), death or disability, or
(ii) by Executive for "Good Reason" (as hereinafter defined), Company will
pay Executive over a period of three (3) years following such termination
an amount equal to the product of (x) Executive's base salary at the annual
rate then in effect and (y) the highest annual bonus paid to Executive
under Company's current Management Incentive Plan or any successor plan in
the three full fiscal years preceding termination multiplied by 2.9.
Payments of such amount shall be made biweekly. In addition, Executive will
be immediately vested in any retirement, incentive or option plans then in
effect and Company will continue to provide Executive with Executive's then
current health, dental, life and accidental death and dismemberment
insurance benefits for a period of three years. All payments made to
Executive hereunder will be subject to all applicable employment and
withholding taxes.
c. Notwithstanding anything in this Section to the contrary, the
maximum amount of cash and other benefits payable (whether on a current or
deferred basis and whether or not includible in income for income tax
purposes) under this Section (the "Severance Benefits") shall be limited to
the extent necessary to avoid causing any portion of such Severance
Benefits, or any other payment in the nature of compensation to Executive,
to be treated as a "parachute payment" within the meaning of Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended. Any adjustment
required to satisfy the limitation described in the preceding sentence
shall be accomplished first by reducing any cash payments that would
otherwise be made to Executive and then, if further reductions are
necessary, by adjusting other benefits as determined by Company.
d. A "Change in Control" shall be deemed to have occurred:
(i) On the date that any person or group deemed a person under
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
other than Company, in a transaction or series of transactions, has
become the beneficial owner, directly or indirectly (with beneficial
ownership as determined as provided in Rule 13d-3, or any successor
rule under such Act), of 30% or more of the outstanding voting
securities of Company; or
(ii) On the date on which one third or more of the members of the
Board of Directors shall consist of persons other than Current
Directors (for these purposes, a "Current Director" shall mean any
member of the Board of Directors elected at or continuing in office
after, the 1999 Annual Meeting of Shareholders, any successor of a
Current Director who has been appointed or nominated by a majority of
the Current Directors then on the Board, and any other person who has
been appointed or nominated by a majority of the Current Directors
then on the Board); or
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(iii) On the date of approval of (x) the merger or consolidation
of Company with another corporation where the shareholders of Company,
immediately prior to the merger or consolidation, would not
beneficially own, immediately after the merger or consolidation,
shares entitling such shareholders to 50% or more of all votes
(without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all shareholders of the
corporation would be entitled in the election of directors or where
the members of the Board of Directors of Company, immediately prior to
the merger or consolidation, would not immediately after the merger or
consolidation, constitute a majority of the Board of Directors of the
corporation issuing cash or securities in the merger or consolidation
or (y) the sale or other disposition of all or substantially all of
the assets of Company.
e. Company shall have the right to terminate the services of Executive
at any time without further liability or obligations to Executive for any
of the following reasons, each constituting "Good Cause" hereunder: (i)
Executive has failed or refused to perform such services as may reasonably
be delegated or assigned to Executive, consistent with Executive's
position, by the Chief Executive Officer or by the Board of Directors; (ii)
Executive has been grossly negligent in connection with the performance of
Executive's duties; (iii) Executive has committed acts involving
dishonesty, willful misconduct, breach of fiduciary duty, fraud, or any
similar offense which materially affects Executive's ability to perform
Executive's duties for Company or may materially adversely affect Company;
(iv) Executive has violated a law material to the Business of Company or
has caused Company or any of its subsidiaries to violate such a law; or (v)
Executive has been convicted of a felony. Termination of the services of
Executive for Good Cause shall not be effective unless and until acted upon
by the Board of Directors and unless and until written notice shall have
been given to Executive which notice shall include identification with
specificity of each and every factual basis or incident upon which the
termination is based.
f. For purposes of this Agreement, Good Reason shall mean the
occurrence or existence of any of the following with respect to Executive:
(i) Executive's annual rate of salary is reduced from the annual rate then
currently in effect or Executive's other employee benefits are in the
aggregate materially reduced from those then currently in effect (unless
such reduction of salary or employee benefits applies to executives or
employees of Company generally); or (ii) Executive is required, in order to
fulfill his employment obligations hereunder, to relocate his residence; or
(iii) Executive is assigned duties that are demeaning or are otherwise
materially inconsistent with the duties then currently performed by
Executive. Before Executive may terminate his employment for Good Reason,
Executive must notify Company in writing of his intention to terminate and
Company shall have 20 days after receiving such written notice to remedy
the situation, if possible.
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g. The election by either party not to extend the Term pursuant to
Section 2 hereof shall not constitute a termination of Executive pursuant
to this Agreement or for any other reason.
h. Executive shall not be entitled to receive any benefits pursuant to
this Agreement following termination or nonrenewal of the Agreement unless
and until Executive executes and delivers to Company a release in form and
substance satisfactory to Company releasing Company, its subsidiaries and
its directors, officers and employees, from any and all claims arising out
of or relating to Executive's employment with Company, the termination of
such employment or the decision by Company not to extend the Term of this
Agreement.
9. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
(a) personally delivered; or (b) sent to the parties at their respective
addresses indicated herein by private mail or courier service. The respective
addresses to be used for all such notices and other communications are as
follows:
If to Executive:
Xxxxxx X. Xxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
With a copy to:
Xxxx Xxxxx Xxxx & XxXxxx LLP
2500 One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
If to Company:
PSC Inc.
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. XxXxxxxx, Esq.
With a copy to:
Xxxxx & Xxxxxxx
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
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If personally delivered, such communications shall be deemed delivered upon
receipt; if sent by courier pursuant to this section, such communication shall
be deemed delivered upon receipt. Any party to this Agreement may change its
address for purposes of this Agreement by giving notice thereof in accordance
with this section.
10. Miscellaneous.
a. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the parties hereto. No waiver by any 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.
b. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement or the Option
Agreement between Company and Executive.
c. This Agreement shall not be assigned by Executive without the
written consent of Company, and any attempted assignment without such
written consent shall be null and void and without legal effect. This
Agreement shall be binding upon and inure to the benefit of Company, its
successors and assigns and Executive and his heirs, executors,
administrators and legal representatives.
d. Executive shall be liable for all taxes levied against Executive
relating to amounts paid to Executive by Company, and amounts paid by
Company will be net of all applicable FICA and income tax withholding, if
any.
e. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York, excluding
any choice of law rules that may direct the application of the laws of
another jurisdiction. The parties hereto consent to the jurisdiction of any
federal or state court situated in Monroe County, New York, and waive any
objection based on lack of personal jurisdiction, improper venue or forum
non-conveniens, with regard to any actions, claims, disputes or proceedings
relating to this Agreement.
f. Executive acknowledges and agrees that the recitals set forth at
the beginning of this Agreement are true and correct and constitute a part
of this Agreement.
g. If any provision of this Agreement shall be deemed illegal or
unenforceable, such illegality or unenforceability shall not affect the
validity and enforceability of any legal and enforceable provisions hereof,
unless such illegality or unenforceability shall destroy the underlying
business purpose of this Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of such
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
PSC INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Vice President--Chief Financial Officer
-----------------------------------------
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EXHIBIT A
ANNUAL TARGETS, ACHIEVED PERCENTAGE, EARNED COMMISSION RATE
Annual Achieved Percentage 100% or more of 85% of Target 70% of Target 55% of Target Below 55% of
Target Target
-------------------------------------------------------------------------------------------------------------------------------
Target Earned Commission Rate 4.50% 3.75% 3.00% 2.25% 0%
===============================================================================================================================
2000 @ $ 5M= $ 225K $ 159K $ 105K $ 62K $0
2001 @ $10M= $ 450K $ 319K $ 210K $124K $0
2002 @ $15M= $ 675K $ 478K $ 315K $186K $0
2003 @ $20M= $ 900K $ 638K $ 420K $248K $0
2004 @ $25M= $1.125M $ 797K $ 525K $309K $0
Total $3.375M $2.391M $1.575M $929K $0
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EXHIBIT B
GAP/GEO PRODUCTS
All versions of products that are being sold by GAP, as of the effective date of
this Employment Agreement, and any similar or repackaged versions of such
current GAP products, as follows:
a) Laser scanning pens and wands
b) Nanoscanners
c) Fixed beam scanners such as those shipped to ISI or prototyped
for ATL
d) SQ engines
e) Fixed-mount FM series scanners
f) Tetherless laser scanning pens or wands (excluding the value of
any radio components)
Products covered by claims contained in GEO's issued patent portfolio as of
December 17, 1999, all as described in the GEO Asset Purchase Agreement
(collectively, the "GEO Patents"), provided that no commission shall be owed or
paid on any PSC products existing on the Closing Date, any PSC product design
existing on the Closing Date, and/or any new, enhanced, or repackaged versions
of such products having similar design.
New scan engine products which incorporate an articulated scan element
("flipper") of the type generally shown in figures 1-8, 10-12, and 16-19 of U.S.
Patent Application, Serial No. 09/286,577.
The following new GAP products specifically described by Xxxxxx Xxxxxx prior to
the date hereof:
a) Ultrapen with USB interface
b) Any card scanner or module incorporating SQ or flipper technology
c) 3 volt ultra pen
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EXHIBIT C
BI-DIRECTIONAL NON-DISCLOSURE AGREEMENTS
1. Bi-Directional Non-Disclosure Agreement dated June 23, 1997 by and between
GAP Technologies, Inc. and ITS
2. Bi-Directional Non-Disclosure Agreement dated March 20, 1997 by and between
GAP Technologies, Inc. and Datavision, Inc.
3. Bi-Directional Non-Disclosure Agreement dated February 5, 1997 by and
between GAP Technologies, Inc. and Telxon Corporation
4. Bi-Directional Non-Disclosure Agreement dated January 4, 1999 by and
between GAP Technologies, Inc. and Casio Manufacturing Corporation
5. Mutual Confidentiality Agreement dated January 6, 1999 by and between GAP
Technologies, Inc. and Symbol Technologies, Inc.
6. Confidentiality and Non-Disclosure Agreement dated February 16, 1999 by and
between GAP Technologies, Inc. and Internet Cargo Services, Inc.
7. Bi-Directional Non-Disclosure Agreement dated June 11, 1998 by and between
GAP Technologies, Inc. and Microvision, Inc.
8. Bi-Directional Non-Disclosure Agreement dated March 9, 1999 by and between
GAP Technologies, Inc. and JTEL CO. LTD.
9. Bi-Directional Non-Disclosure Agreement dated June 29, 1999 by and between
GAP Technologies, Inc. and Metrologic Instruments, Inc.
10. Bi-Directional Non-Disclosure Agreement dated July 14, 1999 by and between
GAP Technologies, Inc. and Intermec Technologies Corporation
11. Agreement dated March 24, 1997 by and between GAP Technologies, Inc. and
Xxxxxxx Xxxxxx
12. Associates Agreement on Inventions and Confidential Information dated March
24, 1997 by and between GAP Technologies, Inc. and Xxxxxx Xxxxxxx
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EXHIBIT D
RETAINED TRADE RIGHTS
None
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