EXHIBIT 10.3
FORM OF EMPLOYMENT AGREEMENT
AGREEMENT made as of the ____ day of _______, 1997, by and between
SENTRY TECHNOLOGY CORPORATION, a Delaware corporation with its principal offices
at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx , Xxx Xxxx 00000 (the "Corporation"), and
Xxxxx X. Xxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive had previously entered into an employment
agreement (the "KNOGO Employment Agreement") with KNOGO North America Inc.
("KNOGO"), providing for the employment of the Executive by KNOGO subject to
certain terms and conditions,
WHEREAS, under the terms of KNOGO Employment Agreement KNOGO agreed to
arrange for a satisfactory agreement from any successor to assume and agree to
perform the KNOGO Employment Agreement.
WHEREAS, the parties intend that this Agreement shall be deemed to
fulfill the terms of the KNOGO Employment Agreement, and that this Agreement
shall be deemed to supersede the terms of the KNOGO Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows
1. Term. The Corporation hereby employs the Executive, and the
Executive agrees
to serve the Corporation, upon the terms and conditions hereof for the period
commencing on the date hereof and, unless Executive's employment under the
Agreement is otherwise terminated in accordance with the provisions hereof,
continuing through and including ________, 199__ [TWO YEARS FROM THE CLOSING
DATE OF THE MERGER] (the "Initial Term"); provided, however, that the term of
employment shall be automatically extended beyond the Initial Term for
successive one year periods (each, an "Additional Term") unless the Corporation
or the Executive shall give written notice of non-renewal to the other party
hereto of its or his intent to terminate this Agreement pursuant to the terms
hereof at least ninety (90) days but no more than one hundred and twenty (120)
days prior to the expiration of the Initial Term or any extension thereof (the
Initial Term and any and all Additional Terms are hereinafter collectively
referred to as the "Term of Employment"). In the event such notice of
non-renewal is given by the Corporation, the Corporation shall pay the Executive
an amount per annum equal to 50% of the Executive's Base Salary (as herein
defined) as in effect immediately prior to the expiration of the Term of
Employment, payable monthly, for a period of one (1) year after such expiration.
Notwithstanding anything to the contrary set forth in the Agreement, the Term of
Employment may be terminated pursuant to sections 7, 8 or 10 hereof.
2. Duties
A. The Corporation agrees to employ the Executive during the Term of
Employment as an executive officer of the Corporation, initially as Vice
President-Technology, to have such title and responsibilities with the
Corporation as the Board of Directors shall from time to time direct.
B. The Executive agrees that he will devote substantially all of his
time and attention to the affairs of the Corporation and use his best efforts to
promote the business and interests of the Corporation and that he will not
engage, directly or indirectly, in any other business or occupation during the
term of employment hereunder. It is understood, however, that the
-2-
foregoing will not prohibit the Executive from engaging in personal investment
activities for himself and his family which do not interfere with the
performance of his duties hereunder.
3. Compensation
A. The Corporation will pay the Executive for all services to be
rendered by the Executive hereunder (including, without limitation, all services
to be rendered by him as an officer and/or director of the Corporation and its
subsidiaries and affiliates) an annual Base Salary at the rate of $130,000 per
annum (the "Base Salary"), payable in accordance with customary payroll
practices for senior executives of the Corporation. Commencing with and
including the calendar year 1997, if in the immediately preceding calendar year
the Consumer Price Index All-Item Figures for Urban Wage Earners and Clerical
Workers Revised - N.Y.- Northern N.J. - Long Island (1982-84=100) published by
the United States Bureau of Labor Statistics (the "CPI") increases (measured by
the difference between the CPI on the first day of the year and the last day of
the year for such immediately preceding year), the Base Salary payable to the
Executive hereunder for each year shall be increased, retroactive to the
beginning of the then current calendar year, by the percentage of the change of
the CPI.
B. The Corporation may also pay the Executive an annual bonus with
respect to each fiscal year of the Corporation either on an "ad hoc" basis or
pursuant to a bonus plan or arrangement as may be in effect or may be
established at the Corporation's discretion for senior executives of the
Corporation. Nothing herein contained shall, however, obligate the Corporation
to pay any bonus to the Executive, it being understood that any such bonus shall
be in the sole discretion of the Board of Directors and that the amount thereof,
if any, may vary depending on actual performance of the Corporation and the
Executive as determined in the discretion of the Board.
C. Nothing contained herein shall prohibit the Board of Directors of
the Corporation, in
-3-
its sole discretion, from increasing the compensation payable to the Executive
pursuant to this Agreement and/or making available to the Executive other
benefits in addition to those to which the Executive is entitled hereunder.
D. In addition to the Base Salary and any annual bonus, the Corporation
hereby agrees, subject to approval by Corporation's the Board of Directors, to
issue promptly to the Executive, under the Corporation's 1997 Stock Incentive
Plan, an option to purchase 40,000 shares of the Corporation's common stock, par
value $0.001 per share, the terms and conditions of which are attached hereto as
Exhibit A.
4. Expenses. The Executive shall be entitled to reimbursement by the
Corporation, in accordance with the Corporation's policies, against appropriate
vouchers or other receipts for authorized travel, entertainment and other
business expenses reasonably incurred by him in the performance of his duties
hereunder.
5. Executive Benefits.
A. The Executive shall be entitled to participate in, and receive
benefits under, any pension, profit sharing, insurance, hospitalization,
medical, disability, stock purchase, stock option, stock ownership, vacation or
other employee benefit plan, program or policy of the Corporation which may be
in effect at any time during the course of his employment by the Corporation and
which shall be generally available to senior executives of the Corporation,
subject to the terms of such plans, programs or policies.
B. The Executive shall be entitled to take paid vacations in accordance
with the
-4-
customary practices of the Corporation, and if any calendar year during the
Executive's employment the Executive is unable to take his full vacation, such
unused vacation time may be carried forward to subsequent calendar years.
6. Withholding. All payments required to be made by the Corporation
hereunder to the Executive shall be subject to the withholding of such amounts
relating to taxes and other governmental assessments as the Corporation may
reasonably determine it should withhold pursuant to any applicable law, rule or
regulation.
7. Death; Disability. Upon the death of the Executive during the term
of this Agreement, this Agreement shall terminate. If during the term of this
Agreement the Executive fails because of illness or other incapacity to perform
the services required to be performed by him hereunder for any consecutive
period of more than 180 days, or for shorter periods aggregating more than 180
days in any consecutive twelve-month period (any such illness or incapacity
being hereinafter referred to as "disability"), then the Corporation, it its
discretion, may at any time thereafter terminate this Agreement upon not less
than 10 day's notice thereof to the Executive, and this Agreement shall
terminate upon the date set forth in said notice as if said date were the
termination date of this Agreement; provided, however, that no such termination
shall be effective if prior to the date when such notice is given, the
Executive's illness or incapacity shall have terminated and he shall be
physically and mentally able to perform the services required hereunder and
shall have taken up and be performing such duties.
If the Executive's employment shall be terminated by reason of his
death or disability, the Executive or his estate as the case may be, shall be
entitled to receive (I) any earned and unpaid salary accrued through the date of
termination, (ii) a pro rata portion of any annual bonus which the Executive
would otherwise have been entitled to receive pursuant to any bonus plan or
arrangement for senior executives of the Corporation (such pro rata portion to
be payable at the time such annual bonus would otherwise have been payable to
the Executive)
-5-
(iii) an amount per annum equal to 100% of the Executive's Base Salary as in
effect at termination, payable monthly for a period of one (1) year after such
termination, and (iv) subject to the terms thereof, any benefits which may be
due to the Exchange on the date of termination under the provisions of any
employee benefit plan, program or policy.
8. Termination for Cause. The Corporation may at any time during the
term of this Agreement, by written notice, terminate the employment of the
Executive for cause, the cause to be specified in the notice. For purposes of
this Agreement, "cause" shall mean (I) conviction (or nolo contendere plea) in
connection with a felony, (ii) any willful misconduct of the Executive in
connection with the performance of any of his duties hereunder, including
without limitation misappropriation of funds or property of the Corporation or
any subsidiary of the Corporation, or any other fraud against or involving the
Corporation or any subsidiary; (iii) willful failure, neglect or refusal to
perform the Executive's duties hereunder; or (iv) breach of any material
covenants contained in this Agreement; provided, however, that it is
specifically understood that "cause" shall not include any act of commission or
omission by the Executive in the good faith exercise of the Executive's business
judgment as Vice President-Technology. Termination for cause shall be effective
upon the giving of such notice and the Executive shall be entitled to receive
(i) any earned and unpaid salary accrued through the date of termination and
(ii) subject to the terms thereof, any benefits which may be due to the
Executive on such date under the provisions of any employee benefit plan,
program or policy. The Executive hereby disclaims any right to receive a pro
rata portion of any annual bonus with respect to the fiscal year in which such
termination occurs.
9. Insurance. The Executive agrees that the Corporation may procure
insurance on the life of the Executive, in such amounts as the Corporation may
in its discretion determine, and with the Corporation named as the beneficiary
under the policy or policies. The Executive agrees that upon request from the
Corporation he will submit to a physical examination and will executer such
applications and other documents as may be required for the procurement of such
-6-
insurance.
10. Termination Following a Change in Control
A. If, during the Term of Employment, a change in control of the
corporation occurs, the Term of Employment shall be automatically extended for
the period ending one year following the date of such change in control.
Following a change in control the Executive shall be entitled to the benefits
provided in Section 10(G) upon the termination of the Executive's employment
during the Term of Employment unless such termination is (a) pursuant to Section
7 because of the Executive's death or disability, (b) by the Corporation
pursuant to Section 8 for cause, or (C) by the Executive other than for Good
Reason.
B. For purposes of this Agreement, a "change in control" of the
Corporation shall be deemed to have occurred if:
1. any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 30% or more of the combined voting power of
the Corporation's then outstanding securities;
2. during any one-year period (not including any period prior
to the execution of this Agreement), individuals who at the beginning
of such period constitute the Board cease for any reason to constitute
at least a majority thereof;
3. the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than
a merger or consolidation which would result in all or substantially
all of the individuals and entities who were the
-7-
respective beneficial owners of the voting securities of the
Corporation outstanding immediately prior thereto continuing to
beneficially own more than 80% of the combined voting power of the
voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation in
substantially the same proportions as their ownership, immediately
prior to such merger or consolidation, of the voting securities of the
Corporation then outstanding; or
4. the shareholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
C. Vesting of Incentive Awards. Upon the occurrence of a change in
control of the Corporation, any and all stock options, share appreciation
rights, phantom stock awards and restricted stock awards theretofore granted to
the Executive under the Corporation's stock option plan(s) but not then
presently exercisable shall thereupon become vested and immediately exercisable.
D. Good Reason. The Executive shall be entitled to terminate the
Executive's employment for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean, without the Executive's express written consent, the
occurrence after a change in control of the Corporation of any of the following
circumstances unless, in the case of paragraphs 1,5,6,7 or 8 of this subsection,
such circumstances are fully corrected prior to the Date of Termination
specified in the Notice of Termination, as defined in subsection E, given in
respect thereof:
1. the assignment to the Executive of any duties inconsistent
with the position with the Corporation he occupied immediately prior to
the change in control;
-8-
2. a reduction by the Corporation in the Executive's annual
base salary as in effect prior to the change in control or as the same
may be increased from time to time pursuant to the Executive's
employment agreement with the Corporation or otherwise;
3. the relocation of the Corporation's principal executive
offices to a location more than one hundred miles from the location of
such offices immediately prior to the change in control of the
Corporation or the Corporation's requiring the executive to be based
anywhere other than the Corporation's principal executive offices
except for required travel on the Corporation's business to an extent
substantially consistent with the Executive's business travel
obligations prior to the change in control of the Corporation;
4. the failure by the Corporation to pay to the Executive any
portion of the Executive's regular compensation within seven (7) days
of the date such compensation is due;
5. the failure by the Corporation to continue in effect any
compensation plan in which the Executive participates immediately prior
to the change in control of the Corporation which is material to the
Executive's total compensations, or the failure by the Corporation to
continue the Executive's participation therein on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to
other participants, as existed at the time of the change in control;
6. the failure by the Corporation to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Corporation's life insurance, medical,
health and accident, or disability plans in which
-9-
the Executive was participating at the time of the change in control of
the Corporation, the taking of any action by the Corporation which
would directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of the change in control of the Corporation, or
the failure by the Corporation to provide the Executive with the number
of paid vacation days to which the Executive is entitled on the basis
of years of service with the Corporation in accordance with the
Corporation's normal vacation policy in effect at the time of the
change in control of the Corporation;
7. the failure of the Corporation to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 20 hereof; or
8. any purported termination by the Corporation of the
Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of subsection E of this Section
10; for purposes of this Agreement, no such purported termination shall
be effective.
The Executive's right to terminate the Executive's employment pursuant to this
Section shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder. The Executive's good faith determination of "Good Reason"
shall be conclusive and binding on the Corporation. In the event the Executive
terminates his employment for Good Reason, Section 11(A) of the Agreement shall,
from and after the Date of Termination, cease to apply to conduct by the
Executive.
E. Notice of Termination. Any purported termination of the Executive's
employment by the Corporation or by the Executive shall be communicated by
written Notice of
-10-
Termination to the other party hereto in accordance with Section 19 of the
Agreement. "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provisions so indicated.
F. Date of Termination. "Date of Termination" shall mean the date
specified in the Notice of Termination.
G. Compensation Upon Termination or During Disability. Following a
change in control of the Corporation, the Executive shall be entitled to the
following benefits during a period of disability, or upon termination of the
Executive's employment, as the case may be, provided that such period or
termination occurs during the Term of Employment:
1. During any period that the Executive fails to perform the
Executive's full-time duties with the Corporation as a result of death
or disability, the Executive shall be compensated as set forth in
Section 7 of the Agreement.
2. If the Executive's employment shall be terminated by the
Corporation pursuant to Section 8 for cause or by the Executive other
than for Good Reason, the Executive shall be compensated as set forth
in Section 8 of the Agreement, and the Corporation shall have no
further obligations to the Executive.
3. If the Executive's employment by the Corporation shall be
terminated by the Executive for Good Reason or by the Corporation other
than for Cause or death or disability, then, subject to the provisions
of subsection (iv) hereof, the Executive shall be entitled to the
benefits provided below:
-11-
i) the Corporation shall pay to the Executive the sum of (A)
the Executive's full base salary through the end of the Term of
Employment (without giving effect to such termination) plus (B) a bonus
equal to the most recent annual bonus paid to the Executive multiplied
by the number of partial weeks of service served by the Executive
during the then current bonus period divided by 52, plus (C) all other
amounts to which the Executive is entitled under any compensation plan
of the Corporation, which sum shall be payable in accordance with the
usual payroll practices of the Corporation;
ii) in lieu of shares of common stock of the Corporation or
any of its subsidiaries ("Common Shares") issuable upon exercise of
outstanding options ("Options"), if any, granted to the Executive under
any stock option plan maintained by the Corporation or any of its
subsidiaries, the Executive shall receive an amount in cash equal to
the product of (1) in the case of Incentive Stock Options ("ISOs")
granted under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), the excess of the fair value of the Common Shares
on the day nearest the Date of Termination (which shall be the closing
price of Common Shares as reported on such date on the New York Stock
Exchange or, if not then listed on such exchange, on a nationally
recognized exchange or quotation system on which trading volume in
Common Shares is highest or, if not quoted on a quotation system, the
average of the bid and asked prices for the Common Shares quoted by a
market maker in the Common Shares or, if no market is then made in the
shares, as determined as of such date in good faith by the Board of
Directors of the Corporation) and, in the case of all other Options,
the higher of such closing price or the highest per share price for
Common Shares actually paid in connection with any change in control of
the Corporation, over the per share option price of each Option held by
the Executive (whether or not then fully exercisable), and (2) the
number of
-12-
Common Shares covered by each such Option. Not withstanding the
foregoing, the Executive shall not be entitled to cash in lieu of
option shares if the transaction resulting in the change of control was
approved by a majority of the Continuing Directors (as such term is
defined in the Certificate of Incorporation of the Corporation).
iii) the Corporation also shall pay to the Executive all legal
fees and expenses incurred by the Executive as a result of such
termination (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or
enforce any right or benefit provided by this Agreement); and
iv) the Corporation shall arrange to provide the Executive
through the end of the Term of Employment with life, disability,
accident and group health insurance benefits substantially similar to
those which the Executive was receiving immediately prior to the Notice
of Termination. Insurance benefits otherwise receivable by the
Executive pursuant to this paragraph (iv) shall be reduced to the
extent comparable benefits are actually received by the Executive from
a new employer, and any such benefits actually received by the
Executive shall be reported to the Corporation.
4. Except as provided in Section 10(G)(3)(iv) hereof, the Executive
shall not be required to mitigate the amount of any payment provided for in this
Section 10 by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Section 10 be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Corporation or otherwise.
-13-
H. Successors; Binding Agreement. The Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Corporation to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be breach of this Agreement and shall entitle the Executive to
compensation from the Corporation in the same amount and on the same terms to
which the Executive would be entitled hereunder if the Executive terminated the
Executive's employment for Good Reason following a change in control of the
Corporation. As used in this Agreement, "Corporation" shall mean the Corporation
as herein before defined any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
I. Termination of Executive's Rights Following Change of Control.
Notwithstanding the foregoing, in the event the Executive shall not have
exercised any of the particular rights granted to him pursuant to paragraph D of
the Section 10 upon the occurrence of a change in control within one year after
the occurrence thereof, then such rights of the Executive under paragraph D
shall be terminated with respect to such change of control.
11. Non-Competition; Solicitation.
A. The Executive agrees that during his employment with the Corporation
and for a period of two years after Executive leaves the Corporation's employ
for any reason, he shall not, without the written consent of the Corporation,
directly or indirectly, either individually or as an employee, agent, partner,
shareholder, consultant, option holder, lender or money, guarantor or in any
other capacity, participate in, engage in or have a financial interest or
-14-
management position or other interest in any business, firm, corporation or
other entity if it competes directly with any business operation conducted by
the Corporation or its subsidiaries or affiliates or any successor or assign
thereof, nor will he solicit any other person to engage in any of the foregoing
activities. Participation in the management of any business operation other than
in connection with the management of a business operation which is in direct
competition with the Corporation or its subsidiaries or affiliates or any
successor or assign thereof shall not be deemed to be a breach of this Section
11(A). The foregoing provisions of this Section 11(A) shall not prohibit the
ownership by the Executive (as the result of open market purchase) of 1% or less
of any class of capital stock of a corporation which is regularly traded on a
national securities exchange or on the NASDAQ System.
B. The Executive will not at any time during his employment with the
Corporation and for a period of two years after Executive leaves the
Corporation's employ for any reason, solicit (or assist or encourage the
solicitation of ) any employee of the Corporation or any of its subsidiaries or
affiliates to work for Executive or for any business, firm, corporation or other
entity in which the Executive, directly or indirectly, in any capacity described
in Section 11(A) hereof, participates or engages (or expects to participate or
engage) or has (or expects to have) a financial interest or management position.
C. If any of the covenants contained in this Section 11 or any part
thereof, is held by a court of competent jurisdiction to be unenforceable
because of the duration of such provision, the activity limited by or the
subject of such provision and/or the area covered thereby, then the court making
such determination shall construe such restriction so as to thereafter be
limited or reduced to be enforceable to the greatest extent permissible by
applicable law.
12. Inventions, Etc. The Executive agrees that any and all systems,
work-in-progress, inventions, discoveries, improvements, processes, compounds,
formulae, patents,
-15-
copyrights and trademarks, made, discovered or developed by him, solely or
jointly with others, or otherwise, during the term of his employment by the
Corporation, and which may be useful in or relate to any business of the
Corporation and/or any subsidiary or affiliate of the Corporation shall be fully
disclosed by the Executive to the Corporation, and shall be the sole and
absolute property of the Corporation. The Executive agrees that at all times,
both during his employment and after the termination of his employment, he will
keep all of the same secret from everyone except the Corporation and its duly
authorized employees and will disclose the same to no one except as required in
good faith in the course of his employment with the Corporation, or by law, or
unless otherwise authorized by the Corporation.
13. Patents. The Executive agrees, at the request of the Corporation,
to make application in due form for United States Letters Patent and foreign
Letters Patent on any of such systems, inventions, discoveries, improvements,
processes, compounds and formulae referred to in Section 12 hereof, and to
assign to the Corporation all of his right, title and interest in and to said
inventions, discoveries, improvements, processes, compounds, formulae and patent
applications therefor or patents thereon, and to execute at any and all times
any and all instruments, and to do any and all acts which the Corporation with
the advice of counsel may deem necessary or desirable, in connection with such
applications for Letters Patent, in order to establish and perfect in the
Corporation the entire right, title and interest in and to said systems,
inventions, discoveries, improvements, processes, compounds, formulae and patent
applications therefor, or in the conduct of any proceedings or litigation in
regard thereto. It is understood and agreed that all costs and expenses,
including but not limited to reasonable attorneys' fees, incurred at the request
of the Corporation in connection with any action taken by an Executive pursuant
to this Section 13, shall be borne by the Corporation.
14. Trade Secrets, Etc. The Executive agrees that he shall not, during
or after the termination of this Agreement, divulge, furnish or make accessible
to any person, firm, corporation or other business entity, any information,
trade secrets, technical data or know-how
-16-
relating to the business, business practices, methods, products, processes,
equipment, clients' prices or other confidential or secret aspect of the
business of the Corporation and/or any subsidiary or affiliate, except as may be
required in good faith in the course of his employment with the Corporation or
by law, without the prior written consent of the Corporation, unless such
information shall become public knowledge (other than by reason of Executive's
breach of the provisions hereof).
15. Acceptance by Executive. The Executive accepts all of the terms and
provisions of this Agreement and agrees to perform all of the covenants on his
part to be performed hereunder.
16. Equitable Remedies. The Executive acknowledges that he has been
employed for his unique talents and that his leaving the employ of the
Corporation would seriously hamper the business of the Corporation and that the
Corporation will suffer irreparable damage if any provisions of Sections 11,12,
13 or 14 hereof are not performed strictly in accordance with their terms or are
otherwise breached. The Executive hereby expressly agrees that the Corporation
shall be entitled as a matter of right to injunctive or other equitable relief,
in addition to all other remedies permitted by law, to prevent a breach or
violation by the Executive and to secure enforcement of the provisions of
Sections 11, 12, 13 or 14 hereof. Resort to such equitable relief, however,
shall not constitute a waiver of any other rights or remedies which the
Corporation may have.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and there are no other terms other than those
contained herein. No amendment hereof shall be valid unless in writing and
signed by the parties hereto and no discharge of the terms hereof shall be valid
unless by full performance of the parties hereto or by a writing signed by the
parties hereto. No waiver by the Corporation of any breach by the Executive of
any provision or condition of this Agreement by him to be performed shall be
deemed a waiver
-17-
of a breach of a similar or dissimilar provision or condition at the same time
or any prior or subsequent time.
18. Severability. In case any provision in the Agreement shall be
declared invalid, illegal or unenforceable by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
19. Notices. All notices, requests, demands, and other communications
provided for by this Agreement shall be in writing and shall be given to the
parties at their address or telecopy number set forth below, or at such other
address of telecopy number as such party may hereafter specify for the purpose
by notice to the other party and shall be either delivered personally or sent by
telecopy, courier service or registered mail, return receipt requested, postage
prepaid, and shall be deemed to have been given (i) if by telecopier, when
transmitted and the appropriate confirmation notice is received, (ii) if given
by registered mail, two business days after mailing and (iii) if given by any
other means, when delivered.
To the Corporation: at the address set forth above.
To the Executive: at the address of the Corporation set forth above.
provided, however, that any notice of change of address shall be effective only
upon receipt.
20. Successors and Assigns. This Agreement is personal in its nature
and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder (except
for an assignment or transfer by the Corporation to a successor as contemplated
by the following proviso); provided, however, that the provisions hereof shall
inure to the benefit of, and be binding upon, any successor of the Corporation,
whether by merger, consolidation, transfer of all or substantially all of the
assets of the
-18-
Corporation, or otherwise, and upon the Executive, his heirs, executors,
administrators and legal representatives.
21. Governing Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of New York without giving effect to any principles of conflict of laws.
22. Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.
-19-
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands
and seals the day and year first above written.
SENTRY TECHNOLOGY CORPORATION
By:__________________________________
Name:
Title:
--------------------------------
Xxxxx X. Xxxx
-20-
EXHIBIT A
TERMS OF STOCK OPTION GRANT
Options (the "Options") granted to the Executive pursuant to the
Corporation's 1997 Stock Incentive Plan (the "Option Plan") shall be incentive
options. The Options shall have an exercise price equal to 100% of the Fair
Market Value (as defined in the Option Plan) of the common stock of the
Corporation, par value $0.001 per share (the "Common Stock") at the time such
Option is granted and vesting at the rate of 20% of the number of shares of
Common Stock subject to the Option on each of the first five anniversary dates
of the grant of the Option.
-21-
