EXHIBIT 10.4
Employment Agreement
This Employment Agreement ("Agreement") is made as of this First day of March,
1999, by and between NDC Automation, Inc., a Delaware corporation with its
principal offices located at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
("Company") and Xxxxxx Xxxxxxx, an individual residing at 0000 Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx, 00000. ("Employee")
1. Statement of Background, Purpose and Intent.
Employee was appointed Chief Financial Officer (CFO) by the Company's Board of
Directors ("BOD"). The purpose of this Agreement is to outline all terms,
conditions and duties of this position.
2. Employment.
Company hereby employs Employee and Employee accepts such employment pursuant to
the terms and conditions of this Agreement.
3. Duties.
Employee shall serve as the Chief Financial Officer (CFO) of the Company and
shall perform diligently and conscientiously and to the best of his ability
those executive duties as are customarily rendered by and required of a Chief
Financial Officer, and as the Company's President may reasonably require.
Employee shall at an times discharge his duties in consultation with and under
the supervision of the Company President. Employee shall serve the Company
faithfully and shall comply with all applicable laws, the Company's policies and
procedures and prevailing commercial and industrial practices, in that order.
Employee shall also discharge specific duties as directed by the Company
President or the Board of Directors (BOD).
4. Full - time services.
Employee shall devote his full time, attention and best efforts to the Company's
business. During the term of this Agreement, Employee shall not engage in any
other business activity which would interfere with his ability to devote all
time reasonably necessary to satisfactorily discharge his duties to the Company.
5. Compensation.
5.1 Base salary
Company shall pay Employee for all services rendered with a current salary of
one hundred thousand dollars ($100,000) per year, payable in equal bi-monthly
installments. Salary payments shall be subject to withholding and applicable
taxes. Company may adjust Employee's salary each year after review by the
Compensation Committee. In no event shall Employee's salary be made less than
the current salary without the written consent of the Employee.
5.2 Bonus and Stock options.
The Compensation Committee will establish a yearly bonus and/or stock option
plan for Employee. The Compensation Committee will set the performance goal
requirements necessary to qualify for the bonus or stock options. The minimum
bonus opportunity will be equal to 20% of the current annual salary.
6. Benefits.
6.1 Insurance and general benefits.
Company shall purchase and maintain in effect during the term hereof, major
medical, health and dental insurance for Employee and his immediate family,
immediate family being defined as spouse and dependent children under the age of
19 or until age 26 if a full time student. Life and long term disability
insurance shall be maintained in conformance with Company policy for all
employees and executive officers. The death benefit for any life insurance shall
not be less than one (1) year's salary plus $20,000.00. Employee shall be
eligible to participate in any other employee benefit which the BOD may, from
time to time, make available to executives or other employees of Company.
7. Vacation and Holidays.
Employee shall be entitled to a minimum of four (4) weeks annual paid vacation
during the term of this Agreement. Additional vacation time may be granted as
recommended by the President and approved by the BOD. Employee's vacation shall
be planned and coordinated with the other executives of the Company. In
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addition, Employee shall be entitled to the same paid holidays, sick and
personal time as are available to all other employees of the Company pursuant to
its then current policies and procedures.
8. Automobile.
Company shall provide Employee with an automobile for his use. The Company
furnished automobile shall be not more than the cost equivalent of a standard
full-size automobile. The Company shall pay for appropriate insurance, all
maintenance and operating costs. In the event this Agreement expires or
terminates for any reason, except Employee's discharge for cause, the Company
shall continue to provide Employee with the use and maintenance of the
automobile for a period of up to one (1) year.
9. Working facilities.
Employee shall have an adequate private office in the Company's headquarters
building and other facilities and services appropriate for his position and for
the execution of his duties.
10. Expenses.
The Company shall reimburse Employee for all actual and reasonable business
related expenses incurred in the performance of his duties hereunder.
Reimbursement shall be pursuant to the Company's then current policies and
procedures and shall require an accounting by Employee, including presentation
of receipts and vouchers. If the Company requires Employee to attend functions
at which a presence of a spouse or guest is expected and appropriate, then The
Company shall pay the expenses of such accompanying persons' actual and
reasonable expenses.
11. Restrictive covenants.
11.1 Employee acknowledges that the Company may have proprietary and
confidential information constituting protectable trade secrets under applicable
law. As to any such protectable trade secrets, Employee covenants and agrees
(all of which covenants and agreements shall survive the expiration or
termination of this Agreement) that during the term of this Agreement and for
three (3) years after its expiration or termination, Employee shall keep
confidential and shall not use or disclose (except as necessary to discharge his
duties hereunder) any such trade secrets.
11.2 Employee agrees that during the term of this Agreement and for one year
after its expiration or termination for any reason, he will not take any action
or make any statement, the natural consequence of which would be to discredit
the reputation of the Company or its products or services. If the Employee is
terminated, the Company agrees that it will in the case of inquiries, only
provide dates of employment and position (s) held while working for the Company.
11 .3 During the term of his Agreement and for a period of one year after its
expiration or termination, Employee shall not be employed by, render services
to, own, advise or assist (whether as an employee, officer, director, agent,
consultant or independent contractor) any business activity or entity located in
the Restricted Territory, which competes with the Company, provided this
provision and restriction shall apply only in the event Employee is terminated
for cause as provided in paragraph 14.1 or in the event of Employee's voluntary
termination of the Agreement pursuant to paragraph 13, provided Employee
receives the payments and benefits provided in paragraph 13.2.
For purposes of this paragraph 11.3, a business shall be deemed to compete with
the Company if the business activity which the Employee primarily assists is to
provide engineering services and/or electronic guidance and control equipment to
manufacturers, or other providers of automated guided vehicle systems (AGVS)
located in North America to commercial, institutional or industrial end users.
Employee shall not be deemed to have violated this covenant if he accepts
employment by or renders services to any company now affiliated with the Company
by significant common ownership or control.
Employee acknowledges that any breach of this Agreement could cause the Company
irreparable harm and, in the event of any breach or impending breach, the
Company shall be entitled to the issuance of a restraining order, preliminary or
permanent injunction, restraining or enjoining such breach by Employee or any
entity or person acting in concert with Employee. Such remedy shall be
additional to and not in limitation of any other remedy which may be otherwise
available to the Company.
For purpose of this paragraph 11.3, the phrase "Restricted Territory" shall mean
the largest territory which may be judicially enforced of the following:
(a) North America;
(b) the United States of America; and
(c) the State of North Carolina.
11.4 For as long as this Agreement is in effect and for a period of one year
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after its expiration or termination, except pursuant to paragraph 13, Employee
shall not solicit, induce, aid, or suggest or counsel any employees, consultants
to other persons having substantial contractual relationship with the Company to
leave such employment, cease counseling or terminate such contractual
relationships with the Company.
12. Termination on Account of Death or Disability.
The Company shall have the right to terminate this Agreement in the event of
Employee's death, or if Employee becomes permanently and totally disabled or if
Employee becomes partially disabled for a period exceeding twenty-four (24)
consecutive months. The Company shall provide and maintain disability insurance
coverage for Employee as outlined in Article 6.1.
For the purposes of this Agreement, total disability shall mean the inability to
perform satisfactorily Employee's regular duties for at least sixty-five (65%)
of Employee's full-time work week and Employee is eligible to collect insurance
benefits. Partial disability shall mean the inability to perform consistently
and satisfactorily Employee's regular duties for at least eighty percent (80%),
but not less than sixty-five percent (65%), of Employee's full-time work week.
Any total disability which continues without interruption for three (3)
consecutive months or for a total of four (4) months in any six (6) consecutive
months shall be deemed permanent, unless in the written medical opinion of the
physician primarily responsible for the medical treatment of Employee, Employee
will be able to resume performing consistently his regular, full-time duties
within a period of six (6) months from the date on which the period of total
disability commenced. In any event, if total disability exists for a period of
one year, the Company shall thereafter no longer be obligated to pay any
compensation to Employee or, if partial disability continues for a period of
twenty-four (24) consecutive months, then the Company shall be entitled to
reduce Employee's compensation proportionately to his disability, in either case
until Employee resumes his full-time duties.
13. Termination in the Event of Change in Control or of Termination of Business.
13.1 Notwithstanding anything in this Agreement to the contrary, Employee may
terminate this Agreement by giving thirty (30) days written notice thereof to
the Company at any time within six months following the occurrence of any of the
following events (each, a Change of Control or Termination of Business):
13.1.1 The Company sells all or substantially all of its assets to a single
purchaser or group of associated purchasers in a single transaction or series of
related transactions;
13.1.2 At least fitly (50%) of the outstanding voting shares of the Company are
sold, exchanged or otherwise disposed of in a single transaction or a series of
related transactions;
13.1.3 The Company terminates its business or liquidates its assets; or
13.1.4 There is a merger or consolidation of the Company in a single transaction
or series of related transactions pursuant to which the Company's shareholders
receive less than fifty percent (50%) of the outstanding voting shares in the
surviving corporation.
13.2 In the event a Change of Control according to paragraphs 13.1.1, 13.1.2,
13.1.3 and 13.1.4 occurs and Employee elects to terminate this Agreement, the
Company shall pay severance equal to twelve (12) months base salary plus health
benefits in accordance with current labor laws. Severance pay shall be paid out
in equal monthly payments for twelve (12) months.
14 Term and Termination.
14.1 Except as provided in this section 14.1 or in Articles 12 or 13, this
Agreement shall continue in full force and effect for a period of three (3)
years beginning on the date hereof. Following the expiration of the initial
three (3) year term, this Agreement shall renew for successive one (1) year
terms unless the Company gives written notice to the Employee at least three (3)
months prior to the expiration of the current term of employment.
Notwithstanding the above, Employee may terminate this Agreement for any reason
at any time. In such case no severance, salary or other reimbursement will be
paid to employee after his resignation. The Company may terminate Employee and
this Agreement only for cause, which shall mean conviction of a felony,
malfeasance in office, a material breach of this Agreement or unsatisfactory
performance of his duties as determined by a vote of the Company's BOD. Employee
shall not be dismissed for cause except upon a majority vote of the Company's
BOD.
14.2 Employee shall be entitled to retain all unexercised, unexpired stock
options previously granted him, and may exercise them thereafter, according to
their terms and the terms of the Stock Option Plan pursuant to which they were
issued, despite the expiration or termination of this Agreement for any reason.
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14.3 In the event the Company elects not to renew Employee's contract as
provided in 14.1, or Employee elects to terminate his Employment because of an
event as outlined in paragraph 13, Employee will receive severance equal to
twelve (12) months base salary plus health benefits in accordance with current
labor laws. Severance pay shall be paid out in equal monthly payments for twelve
(12) months, and may be withheld by the Company during any period oftime in
which Employee is in violation of his covenants under Article 11 .(Restrictive
covenants)
14.4 The Company shall provide adequate Director and Officer liability insurance
for Employee for the full term of this Agreement and for five (5) years after
its expiration or termination.
14.5 In the event this Agreement expires or terminates for any reason, the
parties agree not to make any public statement concerning the same without the
approval of the other.
15. Arbitration
Any claim or controversy arising out of or related to this Agreement, or its
breach (except an action seeking a restraining order or injunction pursuant to
Paragraph 11.3), shall be finally settled by binding arbitration in the City of
Charlotte, North Carolina, in accordance with the then governing rules of the
American Arbitration Association, Judgment upon the award rendered may be
entered and enforced in any court of competent jurisdiction. This Agreement
shall be interpreted and construed according to the laws of the State of North
Carolina. If the Arbitration panel rules in favor of the Employee, all costs for
the arbitration shall be borne by the Company. If the Arbitration panel rules in
favor ofthe Company, the costs for the arbitration shall be shared between the
two parties on a 50/50 basis. Each side shall, in any event, bear the cost of
its own legal counsel.
16. Assignment
This Agreement shall be binding upon the Company, its successors and assigns,
but it may not be assigned by the Company except as part of a general assignment
or conveyance by the Company of substantially all of its assets or business.
This Agreement may not be assigned by Employee.
17. Entire Agreement
This Agreement constitutes the complete understanding of the parties, all prior
agreement representation and discussions being merged herein. This Agreement may
not be changed or amended orally, but only by a written agreement signed by both
parties.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
originals, under seal, as of the First day of March 1999.
EMPLOYEE NDC AUTOMATION, INC.
/s/ Xxxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx, Chairman
ATTEST;
/s/ Jan Jutander, Director, NDC Automation Inc.
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