Exhibit 10.34
THIS EMPLOYMENT AGREEMENT (as the same may be modified, amended,
supplemented and/or restated from time to time, this "Agreement"), dated as of
June 30, 1997, is made and entered into by and between ELXSI, a California
corporation (the "Company"), and Xxxxxxxxx X. Xxxxxx (the "Executive").
Background
The Executive has been an officer of the Company and an employee thereof
(or an Affiliated Company, as hereinafter defined) continuously since September
1989, and during such time the Executive has skillfully and diligently performed
his duties and responsibilities with respect to the Company and Affiliated
Companies. The Company now wishes to be assured (by this Agreement) of the
continued, long-term employment of the Executive by the Company, and the
Executive is willing to assure the same (by this Agreement), on the terms and
conditions set forth below in this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived and
the covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Employment and Duties. (A) Subject to the terms hereof, the Company
hereby employs the Executive: (i) with the titles of (in addition to such other
titles as the Company and Executive may from time to time mutually agree):
Chairman of the Board, President and Chief Executive Officer of the Company;
Chairman of the Board, President and Chief Executive Officer of the Company's
parent corporation, ELXSI Corporation, a Delaware corporation ("Parent"); and
President and Chief Executive Officer of the Company's Cues Division ("Cues");
(ii) to perform such duties and responsibilities with respect to the Company and
with respect to Parent, Cues and/or other subsidiaries or divisions of the
Company and/or Parent ("Affiliated Companies") as are set forth in Annex 1
attached hereto and made part hereof (and/or such other duties and
responsibilities, consistent with the duties set forth on Annex 1, as the
Company or its Board of Directors and the Executive shall mutually agree) (the
"Assigned Duties"); and (iii) in such other capacities with, and to perform such
other duties and responsibilities for, the Company and Affiliated Companies as
the Company or its Board of Directors and the Executive shall mutually agree.
(B) The Executive hereby: (i) accepts such employment; (ii) undertakes
the responsibilities of such offices; (iii) agrees to perform the Assigned
Duties; and (iv) agrees to devote substantially his entire professional time,
attention and energies (reasonable vacation, periods of illness and the like
excepted) to the performance of the Assigned Duties to the best of his ability.
Nothing set forth herein shall be deemed to prohibit the Executive from
attending to his investments, personal affairs and other business ventures,
provided that the devotion of attention to such matters will not unreasonably
interfere with the Executive's obligations hereunder nor constitute a violation
of Section 8 or 9 hereof.
(C) In performing his duties hereunder, the Executive shall work at the
offices of the Company, Parent or Cues located in the Orlando, Florida
metropolitan area, or such other location(s) as the Company or its Board of
Directors and the Executive shall mutually agree. However, the Executive shall
also render services at such other place
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or places within or without the United States as the Board of Directors may
direct from time to time; provided that the Executive shall not be required to
render services away from the Orlando, Florida metropolitan area for more than
twenty business days in any given twelve-month period.
2. Term. The term of this Agreement shall commence as of the date hereof
and shall continue in effect until June 30, 2005 (the "Initial Term"); provided
that this Agreement may be renewed and/or such term of this Agreement may be
extended, with the approval of the Board of Directors of Parent and with the
consent of the Executive, on such terms and conditions as the Company and the
Executive shall mutually agree. In this Agreement, the "Term" means the Initial
Term and, if this Agreement is so renewed and/or the term of this Agreement so
extended, the renewed or extended term.
3. Compensation. (A) During the Initial Term of this Agreement, the
Executive's compensation shall be as follows:
(1) Base Salary. The Company shall pay (or shall cause one of more
of its Affiliated Companies to pay) the Executive a base salary ("Base Salary")
at a rate of: (i) $150,000 per annum, which amount shall be increased
(cumulatively) by five percent (5%) (the "Escalator") on June 30, 1998 and each
anniversary date thereof. The Base Salary shall be paid in installments in
accordance with the Company's (or the paying Affiliated Company's) normal
payment schedule for senior executives, but no less frequently than monthly. All
payments shall be subject to the deduction of payroll taxes and similar
assessments as required by law.
(2) Options, etc. The Executive shall be entitled to participate in
such stock option, profit sharing and bonus plans as are made available to other
senior executives of the Company.
(3) Executive Plans. The Executive (together with his spouse and
minor children) shall be covered, at the Company's or an Affiliated Company's
expense, by any and all of the Company's (or appropriate Affiliated Company's)
group health, dental, life insurance and disability plans ("Insurance Plans")
made available to senior executives of the Company in the United States
generally.
(B) Other or Additional Compensation. Nothing in this Agreement shall
limit or restrict the right or ability of the Company (acting with the
authorization of the Board of Directors of Parent or the Compensation Committee
thereof) to grant or award other or additional compensation to the Executive in
whatever form (including, without limitation, increased Base Salary, an
increased Escalator, or other cash compensation (bonus, severance or otherwise)
and fringe benefits) at any time or to limit or restrict the right or ability of
the Company to prospectively or conditionally grant or award any such other or
additional compensation.
4. Company Car. The Executive shall have the use of a suitable executive
company car.
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5. Vacation. The Executive shall be entitled to take four weeks of paid
vacation during each year of this Agreement. Accrued but unused vacation shall
be carried over only in accordance with the Company's standard policies.
6. Expense Reimbursement. In addition to the compensation and benefits
provided in Sections 3, 4 and 5 hereof, the Company or an Affiliated Company
shall, upon receipt of appropriate documentation, reimburse the Executive for
his reasonable travel, lodging, entertainment, professional promotion and other
appropriate business expenses incurred in the course of his duties on behalf of
the Company or any Affiliated Company. The Executive shall be eligible for a
company credit card and advancements of business expenses to the same extent as
other senior executives of the Company.
7. Termination of Employment. (A) Lump-Sum Payment. If the Executive's
employment hereunder is terminated at any time for any reason (including by
reason of a failure to renew or extend this Agreement prior to the expiration of
the Initial Term), then prior to (and as a condition to) such termination, the
Company shall pay (or cause to be paid) to the Executive a lump-sum cash payment
equal to: (i) the amount of Base Salary (as the same may previously have been
increased or may then be scheduled to increase as required or permitted under
Section 3(A)(1) or 3(B), or in connection with any prior renewal or extension of
this Agreement) that would have been (but for such termination) paid over the
one-year period commencing with the effective date of such termination, plus
(ii) if such termination is to take effect prior to the expiration of the
Initial Term, the amount of Base Salary (as the same may previously have been
increased or may then be scheduled to increase as required or permitted under
Section 3(A)(1) or 3(B)) that would have been (but for such termination) paid
over the remaining Initial Term, less (iii) a present value discount calculated
at an annual rate of six percent (6%) and taking into account the timing of the
Base Salary payments that would have been made to the Executive during the
remaining Initial Term (and, in the case of the foregoing clause (i), during the
one-year period commencing with the effective date of the termination) assuming
(for this purpose) that the Executive's employment hereunder had not been
terminated. Any such payment shall be subject to the deduction of payroll taxes
and similar assessments as required by law.
(B) Executive Plans. If the Executive's employment hereunder is
terminated at any time for any reason (including by reason of a failure to renew
or extend this Agreement prior to the expiration of the Initial Term), then the
Executive (if he be alive) and his spouse and minor children shall continue, for
the period of time from and after the effective date of such termination until
the date specified hereinbelow, to be covered, at the Company's or an Affiliated
Company's expense, by any and all of the Company's (or appropriate Affiliated
Company's) Insurance Plans made available to senior executives of the Company in
the United States generally. Such period of time shall end: (i) in the case of a
termination on or after the expiration of the Initial Term, on the earlier to
occur of (x) the first anniversary of such termination and (y) the date that the
Executive shall have obtained other employment with Insurance Plan benefits
equivalent to (or in excess of) those provided for under this Agreement; and
(ii) in the case of a termination prior to the expiration of the Initial Term,
on the earlier to occur of (x) the June 30, 2006 and (y) the date that the
Executive shall have obtained other employment with Insurance Plan benefits
equivalent to (or in excess of) those provided for under this Agreement.
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8. Covenant Not to Compete. (A) The Executive agrees that, during the Term
and for a period of one year thereafter, he will not, directly or indirectly
engage in, or be employed or retained by, give advice to, be a proprietor,
principal, agent, representative, officer, director, partner or greater-than-10%
shareholder of, or otherwise be associated with or render assistance to, any
business or enterprise that competes with any business or enterprise being
pursued by the Company or any Affiliated Company at the time of determination
(or, in the case of any such action by, or circumstance prevailing with respect
to, the Executive after the Term, at the time of the termination of his
employment hereunder); provided that the foregoing shall not have any force or
effect after the Term if the Executive's employment hereunder is terminated by
the Executive with good legal reason, by the Company without good legal cause or
due to the expiration of this Agreement (as the same may have previously been
extended or renewed).
(B) Although the Executive acknowledges that the restrictions contained
in Section 8(A) are fair and reasonable under the circumstances, it is
recognized that restrictions of the nature contained in such Section may fail
for technical reasons, and, accordingly, if any of such restrictions shall be
adjudged to be void or unenforceable for whatever reason, but would be valid if
part of the wording thereof were deleted, or the period thereof reduced or the
area dealt with thereby reduced in scope, the restrictions contained in Section
8(A) shall apply, at the election of the Company, with such modifications as may
be necessary to make them valid, effective and enforceable in the particular
jurisdiction in which such restrictions are adjudged to be void or
unenforceable.
9. Confidentiality. Without the specific prior written consent of the
Company, the Executive shall not, directly or indirectly, at any time after the
date hereof (including after the termination of this Agreement and/or his
employment by the Company and any Affiliated Company), divulge to any person or
entity, or use for his own direct or indirect benefit, any non-public
information confidential and/or proprietary to the Company or any Affiliated
Company concerning their respective business, affairs, products, services,
assets, services, liabilities, revenues, condition (financial or otherwise),
prospects, customers or suppliers, including, without limitation, any data or
statistical information of or with respect to the Company or any Affiliated
Company, whether created or developed by the Company or any Affiliated Company
or on its or the Executive's behalf, or with respect to which the Executive may
have knowledge or access, it being the intent of the parties hereto to restrict
the Executive from disseminating or using any such information of or with
respect to the Company or any Affiliated Company which is at the time of such
use or dissemination unpublished and not readily available or generally known to
the public or in the Company's or any Affiliated Company's trade; provided that
nothing in this Section 9 shall prohibit such disclosure within the scope of the
Executive's employment or in the best interests of the Company or an Affiliated
Company.
10. Amendment and Waivers. This Agreement may be amended, and compliance
with any of the terms and provisions hereof may be waived, only by a written
instrument signed by both parties hereto. No waiver of any term or provision
hereof shall constitute a waiver of any other term or provision hereof, or
constitute a waiver of the right to subsequently demand strict compliance with
all of the terms and provisions hereof.
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11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida (other than the choice of law
principles thereof).
12. Attorneys' Fees. In the event that either party hereto finds it
necessary to bring an action at law or other proceedings against the other party
to enforce any of the terms or provisions hereof, the party prevailing in any
such action or other proceeding shall be paid by the other party its reasonable
attorneys' fees as well as court costs.
13. Severability. Should any term or provision hereof be deemed, for any
reason whatsoever, to be invalid or inoperative, that provision shall be deemed
severable and shall not affect the force and validity of all other terms and
provisions of this Agreement.
14. Survival. All provisions which may reasonably be interpreted or
construed to survive the expiration or termination of this Agreement shall
survive the expiration or termination of this Agreement. Without limiting the
generality of the foregoing, Sections 7, 8 and 9 of this Agreement shall survive
the termination of this Agreement and the Executive's employment by the Company
and any Affiliated Company, in accordance with their respective terms.
15. Notices. All notices, offers, acceptances, requests and other
communications under or in connection with this Agreement shall be in writing
and shall be deemed to have been given when personally delivered or sent by
facsimile transmission, one day after being sent by recognized overnight courier
or three days after being sent by United States mail, certified or registered
mail, with postage prepaid, to the other party at such party's address as (in
the case of the Executive) is set forth the Company's employment records and (in
the case of the Company) is the Executive's then place of employment; provided,
however, that either party may at any time specify a different address by
written notification to the other party.
16. Successors. This Agreement shall inure to the benefit of and be binding
upon and enforceable against the respective heirs, legal representatives,
successors, and permitted assigns of the parties hereto.
17. Assignment and Delegation. Neither the Company nor the Executive shall
have the right to assign this Agreement or its rights hereunder or to delegate
its duties hereunder without the prior written consent of the other party
hereto; provided that the foregoing shall not prohibit or restrict the Company
from collaterally assigning this Agreement and its rights hereunder to any bank
or other financial institutions providing credit to the Company or any
Affiliated Company.
18. Remedies. (A) The remedies of each of the parties hereunder shall be
cumulative and not exclusive. However, neither party shall be obligated to the
other for punitive or other forms of speculative or expectancy damages. In
addition to any and all such other remedies, the provisions of this Agreement
requiring the performance of an affirmative act by a party or requiring a party
to refrain from the performance of specific act shall be enforceable by
injunctive proceeding or by a suit for specific performance.
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(B) Without limiting the generality of the foregoing Section 18(A), the
Executive acknowledges that any violation or threatened violation of Section 8
or 9 hereof will cause irreparable injury to the Company and that the remedy at
law for any such violation or threatened violation will be inadequate. The
Executive therefore agrees that the Company shall be entitled to temporary and
permanent injunctive relief for any such violation or threatened violation
without the necessity of proving (i) that the Company will be irreparably
injured thereby, (ii) that the remedy at law for such violation or threatened
violation is inadequate, or (iii) actual damages.
19. Descriptive Headings; References. The descriptive headings of this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction of any term or provision hereof. Section and
subsection references in this Agreement are to the referenced Sections and
subsections of this Agreement, unless the context otherwise requires.
20. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements, arrangements and understandings with respect thereto between
the parties hereto, which arrangements or understandings are merged herein.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
The Company: The Executive:
ELXSI
By:________________________ ________________________
Name: Xxxxxxxxx X. Xxxxxx
Title:
Annex 1
(to Employment Agreement)
Assigned Duties
o Serve as the Chairman of the Board, President and Chief Executive
Officer of the Company; as Chairman of the Board, President and Chief
Executive Officer of Parent; and as President and Chief Executive
Officer of Cues, reporting directly to the Board of Directors of Parent,
and serve all duties, responsibilities and functions incident to such
offices.
o Primary executive responsibility for Parent, the Company and Cues.
o Serve as the leading member of the Company's senior executive/management
team, including formulation of corporate strategy, development of
business plans, and creation of marketing, sales and distribution
strategies.
o Help identify and evaluate potential acquisition targets, and
participate as the leading member the Company's acquisition team.
