EMPLOYMENT AGREEMENT
ARIZONA INSTRUMENT CORPORATION
AND
Xxxxxx X. Xxxx
THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of April 1, 1997 is
between Arizona Instrument Corporation ("AZI" or the "Company" or "Employer")
and Xxxxxx X. Xxxx ("Employee").
1. Employment Duties. Employer hereby employs Employee and Employee
hereby accepts employment on the terms and conditions set forth herein. Employee
shall serve in the position of Vice President and Chief Financial Officer, with
responsibility for overseeing the financial operations of the Company, and will
have such other powers and duties consistent with such position as may from time
to time be prescribed by the Board of Directors.
2. Term. Employee's employment shall continue for a period of three
years, beginning with the effective date of this Agreement and ending three
years thereafter. At the conclusion of the three-year period, this Agreement
shall be automatically renewed for a one-year period unless the Company has
given Employee written notice of nonrenewal at least six months prior to the
conclusion of the three-year term.
3. Full-time Employment. Employee shall devote substantially all his
employment energies, intrest, abilities and time to the performance of his
obligations hereunder.
4. Compensation. Employer shall pay to employee the sum of $140,000.00
per year during the term hereof, to be paid in accordance with the Employer's
normal payroll practice, but in no event shall such salary be paid less
frequently than twice a month. Employee shall participate in an annual incentive
bonus plan equal to at least 30% of annual salary. The Company will consider
merit increases on a periodic basis commensurate with the executive compensation
practices of the Company. Additionally, the base pay will be annually adjusted
based on the cost of living index for the Greater Phoenix area. Employer may
deduct from the compensation to Employee social security taxes and all federal,
state and municipal taxes and charges as may now be in effect or which may
hereafter be enacted or required. Employer shall pay or reimburse Employee for
reasonable travel and other expenses incurred by Employee in furtherance of or
in connection with the performance of his duties hereunder, consistent with
Employer policies regarding such expenses.
5. Participation in Employee Benefits. Employee shall be entitled to
and shall receive all other benefits and conditions of employment available
generally to executives of AZI pursuant to Employer plans and programs,
including group health insurance, benefits, life insurance benefits and the
opportunity to participate in any stock option, profit sharing or retirement
income plan; provided, however, that Employee may request leave of absence
without pay during the term hereof, and Employer agrees to grant such leave if
it determines that the leave would not be materially injurious to the operations
of Employer; and provided, further, that Employee shall be
entitled to a vacation of four weeks in each twelve-month period during the term
of this Agreement, during which time his compensation shall be paid in full. The
manner of implementation of such benefits with respect to such items as
procedures and amounts is discretionary with the Company.
6. Termination.
A) For Cause. The Company may terminate this Agreement for
cause upon written notice to the Employee stating the facts constituting such
cause, provided that Employee shall have 10 days following such notice to cure
any conduct or act, if curable, alleged to provide grounds for termination for
cause hereunder. In the event of termination for cause, the Company shall be
obligated to pay the Employee only the base salary due him through the date of
termination. Cause shall include material neglect of duties, wilful failure to
abide by ethical and good faith instructions or policies from or set by the
Chairman or the Board, commission of a felony or serious misdemeanor offense or
pleading guilty or nolo contendere to same, the commission by Employee of an act
of dishonesty or moral turpitude involving the Company, Employee's material
breach of this Agreement, the filing of bankruptcy proceedings by or against
Employee, or breach by Employee of any other material obligation to the Company.
B) Without Cause. The Company may terminate this Agreement at
any time immediately, without cause, by giving written notice to Employee. Upon
termination under this Section 6(b), the Company shall be obligated to pay
Employee the base salary payable hereunder for the balance of the employment
term set forth in Section 2. At the Company's election, such payment can be made
in a lump sum or pursuant to the Company's normal payroll practices over the
balance of the term. The Company shall also maintain Employee's participation in
the employee benefit programs referred to in Section 5 hereof for the remainder
of the employment term set forth in Section 2 and to the extent contemplated in
Section 5 hereof, except that the Company shall have no obligation to Employee
under any profit sharing or retirement plan other than amounts due through the
date of termination of employment. If continued coverage or participation in any
such benefit program is prohibited by the terms thereof, the Company will
provide a substantially similar benefit during such period. The obligations
provided in this Section 6(b) shall be the Company's sole obligations upon
termination under this Section 6(b).
C) Disability. If during the term of this Agreement, Employee
fails to perform his duties hereunder because of illness or other incapacity for
a period of two consecutive months, or for 90 days during any 150-day period,
the Company shall have the right to terminate this Agreement without further
obligation hereunder except for any amounts payable pursuant to disability plans
generally applicable to executive employees.
D) Death. If Employee dies during the term of this Agreement,
this Agreement shall terminate immediately, and Employee's legal representatives
shall be entitled to receive the base salary due Employee through the last day
of the calendar month in which his death shall have occurred and any other death
benefits generally applicable to executive employees.
E) Employee Termination. Employee may terminate this Agreement
at any time upon written notice to the Company.
7. Cooperation with Employer After Termination of Employment. Following
any termination of employment hereunder, Employee shall fully cooperate with
Employer in all matters relating to the winding up of his pending work on behalf
of Employer and the orderly transfer of any such pending work to other employees
of Employer as may be designated by Employer. Employer shall be entitled to such
full time or part time services of Employee as Employer may reasonably require
during all or any part of the 30-day period following any termination hereunder,
and shall compensate Employee for such services on a basis consistent with
Employee's compensation pursuant to Section 4 hereof.
8. Non-Competition. The parties acknowledge that the Employee will
acquire much knowledge and information concerning the business of the Company
and its affiliates as the result of his employment. The parties further
acknowledge that the scope of business in which the Company is engaged as of the
date of execution of this Agreement is world-wide and very competitive and one
in which few companies can successfully compete. Competition by Employee in that
business after this Agreement is terminated would severely injure the Company.
Accordingly, for a period of one year after this Agreement is terminated for any
reason (except termination by the Company without cause), Employee agrees not to
become an employee, consultant, advisor, principal, partner or substantial
shareholder of any firm or business that in any way competes with the Company or
its affiliates in any of their presently existing or then existing products and
markets.
9. Specific Performance. The parties agree that the provisions in
Sections 3 and 8 are of a special, unique and extraordinary character, which
gives them a peculiar value, the loss of which could not be reasonably or
adequately compensated in damages in any action at law, and that a breach by
Employee will cause Employer great and irreparable injury and damage. Employee
hereby expressly agrees that Employer shall be entitled to the remedies of
injunction, specific performance and other equitable relief to prevent a breach
by Employee. This provision shall not, however, be construed as a waiver of any
of the rights which Employer may have for damages.
10. Miscellaneous Provisions.
10.1 Decisions by Employer. For all purposes herein, Employee
may not make any decisions or take any action with respect to this Agreement as
an agent of Employer. Actions of Employer hereunder shall be taken by its
President..
10.2 Governing Law. This Agreement is governed by Arizona law.
10.3 Entire Agreement. This Agreement supersedes all prior
agreements between the parties concerning the subject matter hereof and this
Agreement constitutes the entire agreement between the parties with respect
hereto. This Agreement may be modified only with a
written instrument duly executed by each of the parties. No person has any
authority to make any representation or promise not set forth herein on behalf
of any of the parties and this Agreement has not been executed in reliance upon
any representation or promise except those contained herein.
10.4 Notices. Any notice, request, demand or other
communication hereunder shall be in writing and shall be deemed given when
personally delivered to AZI or to Employee, as the case may be, or when
delivered by certified mail, return receipt requested.
To the Company: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
To the Employee: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
10.5 Waiver of Breach. The failure of either party to require
the performance of any term or condition of the Agreement, or the waiver by
either party of any breach of this Agreement shall not prevent a subsequent
enforcement of any such term or any other term nor be deemed to be a waiver of
any subsequent breach.
10.6 Severability. The provisions of this Agreement shall be
deemed severable. If any part of this Agreement shall be held unenforceable, the
remainder shall remain in full force and effect, and such unenforceable
provisions shall be reformed so as to give maximum legal effect to the intent of
the parties as expressed herein.
11. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by binding arbitration
conducted in Phoenix, Arizona in accordance with the laws of the State of
Arizona conducted in accordance with the rules of the American Arbitration
Association. Judgement upon the award rendered by the arbitration may be entered
in any court having jurisdiction thereof.
/s/ Xxxx X. Xxxxxxx 4-1-97 /s/ Xxxxxx X. Xxxx 4-1-97
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Employer Date Employee Date
