EXHIBIT 10.25
March 11, 1998
Xx. Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxxxx:
This Agreement sets forth the terms of your employment with
Xxxxxxx Technology Company, Inc., a Delaware corporation (the
"Company"), and is effective as of July 1, 1997, and unless sooner
terminated, shall expire on June 30, 2003.
1. DUTIES. During the term of your employment hereunder, you
shall be employed as the Chief Financial Officer of the Company,
and you shall direct and manage the financial business, affairs and
property of the Company subject to the direction of the Chief
Executive Officer of the Company (the "Chief Executive Officer").
2. COMPENSATION. As compensation for your services during the
term of your employment hereunder:
A. Salary. You shall be paid a salary at the annual rate of
one-hundred eighty-one thousand four-hundred and forty dollars
($181,440) (hereinafter referred to as your "base salary"), payable
in appropriate installments to conform with regular payroll dates
for salaried personnel of the Company. Notwithstanding the
foregoing, in determining the amount of the appropriate
installments referred to above, the base salary amount is to be
reduced by any premiums in excess of one thousand dollars
($1,000.00) paid by the Company on a split-dollar insurance policy
in accordance with the agreement, dated September 29, 1994, between
you and the Company, as such agreement may be modified from time to
time. (As of July 1, 1997, the amount by which the base salary is
reduced is $8,500.00).
B. Reviews and Adjustments. On or about April 24, 1998 and
each succeeding April 24 during the term of your employment
hereunder, your performance shall be reviewed by the Chief
Executive Officer and your attainment of mutually agreed-upon
objectives evaluated; your base salary for the ensuing twelve (12)
months commencing on such April 24 may be adjusted, subject to
approval by the Compensation Committee of the Board of Directors of
the Company, in accordance with your level of performance. In no
case, however, will any such adjustment to your salary ever be a
negative amount unless you expressly agree to such a reduction.
C. Incentive Compensation. During the term of your
employment hereunder, and at such other times subsequent thereto as
are otherwise set forth herein, you shall be paid annually, within
three (3) months of the end of each fiscal year, beginning with the
fiscal year ending June 30, 1998, incentive compensation in an
amount determined for such fiscal year under the Company's
Executive and Key Person Cash Incentive Program (the "Incentive
Program") as in effect at that time.
D. Deferred Compensation. On the first day of each month
that you are still performing services under the terms of this
Agreement, the Company shall accrue for your benefit deferred
compensation (the "Deferred Compensation") in the amount of three-
thousand seven hundred and fifty dollars ($3,750).The sum of all
such monthly accruals of Deferred Compensation shall constitute the
"Aggregate Deferred Compensation". The Aggregate Deferred
Compensation, to the extent vested, is to be paid to you in equal
monthly installments, over a ten (10) year period beginning at such
times as are set forth in this Agreement. Wherever so used in this
Agreement, the term "Monthly Deferred Compensation" shall mean the
Aggregate Deferred Compensation divided by one-hundred-twenty (120)
months. Effective July 1, 1997 the Aggregate Deferred Compensation
has vested to the extent of 40%, as of June 30, 1998 it shall be
vested to the extent of 50%, as of June 30,1999 it shall be vested
to the extent of 60%, as of June 30, 2000 it shall be vested to the
extent of 70%, as of June 30, 2001 it shall be vested to the extent
of 80%, as of June 30, 2002 it shall be vested to the extent of
90%, and as of June 30, 2003 it shall be vested to the extent of
100% so that as of the latter date the full amount of the Aggregate
Deferred Compensation shall be due and payable in the instances set
forth elsewhere in this Agreement.
3. Stock and Loans. In order to permit you (but only if you, in
your sole discretion so elect) to purchase shares of the Company's
Class B Common Stock, par value $.01 per share (the "Class B
Stock"), that may become available from time to time, you shall be
eligible, to the extent allowable under the Company's various loan
covenants or any other legal restrictions under which the Company
may operate, to obtain loans from the Company in the aggregate
principal amount of up to twice your then-current base salary which
shall be used by you to purchase such shares of Class B Stock. Any
loans made under this section shall (i) not exceed one million
dollars ($1,000,000.00) in the aggregate, (ii) bear interest,
payable annually, at a rate equal to the Company's borrowing rate
(as adjusted on the first day of each calendar quarter) on its U.S.
short-term banking facilities, (iii) require pledging by you to the
Company of all shares of Class B Stock purchased using the proceeds
of any such loans (until sold in part or in full as described
herein), and (iv) require repayment by you within six (6) months of
the last day of your employment by the Company, except in case of
your death, in which instance repayment shall be within twelve (12)
months of the date of your death. Notwithstanding anything to the
contrary contained in this Paragraph 3, if at any time you sell any
of such shares of Class B Stock while any amount of any said loan
remains unpaid, you shall, within five (5) days of receipt of the
funds from such sale, pay to the Company, in repayment of part or
all, as the case may be, of any said loan, an amount equal to (a)
that amount (the "Principal Repayment") equal to the product of
(i) the aggregate unpaid amount of all such loans, multiplied by
(ii) a fraction, the numerator of which is the number of shares of
the Class B Stock sold and the denominator of which is the number
of shares of Class B Stock purchased using the proceeds of all such
loans (provided, however that the Principal Repayment shall not
exceed the unpaid balance of all such loans), plus (b) any accrued
but unpaid interest on the amount of the Principal Repayment to the
date of such repayment.
4. INSURANCE. During the term of your employment hereunder, the
Company, subject to your insurability, shall (i) pay the premiums
on a contract or contracts of life insurance on your life providing
for an aggregate death benefit of five hundred thousand dollars
($500,000), which contract or contracts will be owned by you, your
spouse or such other party as may be designated by you; (ii)
purchase key person term life insurance on your life in the
aggregate amount of one million dollars ($1,000,000), which
contract or contracts will be owned by the Company; provided,
however, that upon your death if there are any loans outstanding
between you and the Company pursuant to Section 3 of this
Agreement, the Company agrees to pay to your survivors or estate an
amount equal to the unpaid balance of such loans, up to but not
exceeding five hundred thousand dollars ($500,000), of the death
benefits received by the Company from such key person term life
insurance policy.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation
provided for herein, the Company shall reimburse to you, or pay
directly, in accordance with the policies of the Company as in
effect at the time, all reasonable expenses incurred by you in
connection with the business of the Company, and its subsidiaries
and affiliates, including but not limited to business-class travel
if overseas, reasonable accommodations, and entertainment, subject
to documentation in accordance with the Company's policy.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment
hereunder, you shall devote your best and full-time efforts to the
business and affairs of the Company.
B. Limitation on Other Services. During the term of your
employment hereunder, you shall not undertake employment with, or
participate in the conduct of the business affairs of, any other
person, corporation, or entity, except at the direction or with
written approval of the Board of Directors of the Company.
C. Personal Investments. Nothing herein shall preclude you
from having, making, or managing personal investments which do not
involve your active participation in the affairs of the entities in
which you so invest, but, unless approved in writing by the Board
of Directors of the Company, during the term of your employment
hereunder, you shall not have more than a one percent (1%)
ownership interest in any entity which is directly competitive with
any business conducted by the Company at that time. The phrase
"conducted by the Company" as used in this Xxxxxxxxx 0X and in
Paragraph 13 hereof shall mean the business conducted by the
Company or by any corporation or other entity in which the Company
owns fifty percent (50%) or more of the stock or equity interests
(either voting or non-voting) in such other entity (a
"Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the
Company worldwide, with substantial time in the Company's offices
in Norwalk, Connecticut.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment hereunder,
you shall be entitled to a vacation or vacations, with pay, in
accordance with the Company's vacation policy as in effect at the
time. At the sole discretion of the Chief Executive Officer you
may be granted additional paid vacation days; such variations are
to be confirmed, in advance, in writing. You may accumulate up to
twelve (12) weeks vacation, but not more than three (3) weeks from
any single prior year. Any such accumulated vacation may be used
in any subsequent year or years (but no more than two (2) weeks of
such accumulated vacation in any one year) in addition to the
vacation to which you are entitled for each such year.
B. The Company's Benefit Plans. During the term of your
employment hereunder, you shall be eligible for inclusion, to the
extent permitted by law, as a full-time employee of the Company or
any Subsidiary, in any and all (i) pension, profit sharing,
savings, and other retirement plans and programs as in effect at
the time, (ii) life and health (medical, dental, hospitalization,
short-term and long-term disability) insurance plans and programs
as in effect at the time, (iii) stock option and stock purchase
plans and programs as in effect at the time, (iv) accidental death
and dismemberment protection plans and programs as in effect at the
time, (v) travel accident insurance plans and programs as in effect
at the time, and (vi) other plans and programs sponsored by the
Company or any Subsidiary for employees or executives generally as
in effect at the time, including any and all plans and programs
that supplement any or all of the foregoing types of plans or
programs.
C. Automobile, Professional Services and Club Dues. During
the term of your employment hereunder, (i) the Company shall
provide an automobile for your use pursuant to the Company's
written policy on company autos as in effect at that time; (ii) the
Company shall reimburse to you, or pay directly, upon submission by
you to the Company of statements for services, the amounts payable
by you to any person or persons of your choice that you retain to
advise you with regard to financial, investment, and tax matters,
including any related legal fees; provided, however, that the costs
for such services for which you shall be reimbursed or which shall
be paid shall not, in the aggregate, exceed five thousand dollars
($5,000) per fiscal year beginning with the fiscal year ending June
30, 1998; and (iii) the Company shall reimburse to you, or pay
directly, upon submission by you to the Company of invoices for
same, a reasonable annual membership or user fee at a health,
fitness, golf, tennis, social or other similar club, provided,
however, that said fee for which you shall be reimbursed or which
shall be paid shall not exceed three thousand dollars ($3,000.00)
per fiscal year beginning with the fiscal year ending June 30,
1998.
9. TERMINATION OF EMPLOYMENT.
In the event your employment is terminated for any of the reasons
set forth under this Paragraph 9, the Company shall pay to you or
your legal representative, estate or heirs, as the case may be, the
following amounts, which are in addition to the amounts stipulated
under any subparagraph of this Paragraph 9:
(i) A single lump sum payment, not later than the last day of
your employment, of:
(a) Any accrued but unpaid salary set forth in Xxxxxxxxx
0X (xx xxxxxxxx xx Xxxxxxxxx 0X) hereof, including salary in
respect of any accrued and accumulated vacation, due to you at the
date of such termination; and
(b) Any amounts owing, but not yet paid, pursuant to
Paragraph 5 hereof.
(ii) Any accrued but unpaid incentive compensation as set
forth in Paragraph 2C hereof due to you at the date of such
termination for the fiscal year ending on or immediately prior to
the date of such termination which shall be paid within three (3)
months of the end of such fiscal year.
A. Termination by the Company Without Cause. The Company
may, without cause, terminate your employment hereunder at any time
upon ten (10) or more days' written notice to you. In the event
your employment is terminated under this Paragraph 9A, the Company
shall pay to you the following:
(i) A single lump sum payment, not later than the last
day of your employment, of severance pay in an amount equal to your
then current annual base salary as defined in Xxxxxxxxx 0X (xx
xxxxxxxx xx Xxxxxxxxx 0X) hereof;
(ii) A single lump sum payment of any incentive
compensation set forth in Paragraph 2C hereof earned in the fiscal
year of the termination of your employment, which incentive
compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-
rated through the last day of your employment, and shall be paid
within three (3) months of such June 30; and
(iii) To the extent vested, the Monthly Deferred
Compensation with the first payment beginning on the first day of
the month immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
B. Termination by the Company With Cause. The Company may, for
cause, terminate your employment hereunder at any time by written
notice to you. In the event your employment is terminated under
this Paragraph 9B, you shall forfeit the incentive compensation set
forth in Xxxxxxxxx 0X hereof for the fiscal year in which such
termination or resignation occurs. In the event your employment is
terminated under this paragraph 9B, the Company shall pay to you,
to the extent vested, the Monthly Deferred Compensation as set
forth in Paragraph 2D with the first payment beginning on the first
day of the month immediately succeeding the month in which you
attain the age of 55.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof. For purposes of this Agreement, the term
"cause" shall mean (1) a failure by you to remedy, within ten (10)
days of the Company's written notice to you, either (a) a
continuing neglect in the performance of your duties under this
Agreement, or (b) any action taken by you that seriously prejudices
the interests of the Company, or (2) your conviction of a felony.
C. TERMINATION BY MUTUAL CONSENT. You may terminate your
employment hereunder at any time with the written consent of the
Company. In the event your employment is terminated pursuant to
this paragraph 9C, the Company shall pay to you the following:
(i) A single lump sum payment, of any incentive
compensation set forth in Paragraph 2C hereof earned in the fiscal
year of the termination of your employment, which incentive
compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-
rated through the last day of your employment, and shall be paid
within three (3) months of such June 30; and
(ii) To the extent vested, the Monthly Deferred
Compensation as set forth in Paragraph 2D with the first monthly
payment beginning on the first day of the month immediately
succeeding the last day of your employment.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
D. DISABILITY. If you should suffer a Permanent Disability
at any time, the Company may terminate your employment hereunder
upon ten (10) or more days' prior written notice to you. For
purposes of this Agreement, a "Permanent Disability" shall be
deemed to have occurred only when you are qualified for benefits
under the Company's Long Term Disability Insurance Policy. In the
event of the termination of your employment hereunder by reason of
Permanent Disability, the Company shall pay to you or your legal
representative:
(i) In conformity with regular payroll dates for
salaried personnel of the Company, an amount equal to fifty percent
(50%) of the base salary you were receiving at the date of such
termination under Paragraph 2A hereof (as adjusted by Paragraph 2B
hereof), payable until you attain the age of 65 or die, whichever
occurs first; provided, however, that the amount payable under this
Paragraph 9D(i) shall be reduced to the extent of any payments made
to you through any Company-sponsored group long term disability
plan and also to the extent of any payments made to you under any
other long term disability insurance policy (the "Supplemental LTD
Policy") where the premiums for said Supplemental LTD Policy have
either been paid by the Company or reimbursed to you by the
Company.
(ii) Any incentive compensation set forth in Paragraph 2C
hereof earned in the fiscal year in which the termination of your
employment occurs, which incentive compensation shall be determined
on the basis of the Company's operations through June 30 of such
fiscal year, and shall be pro-rated through the last day of your
employment, and shall be paid within three (3) months of such June
30;
(iii) Upon your attainment of age 65 or your death,
whichever occurs first, to the extent vested, the Monthly Deferred
Compensation as set forth in Paragraph 2D with the first monthly
payment beginning on the first day of the month immediately
succeeding the month in which you attained the age of 65 or died.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
E. Termination by Death. In the event of the termination of
your employment by reason of death, at any time, the Company shall
pay to your legal representative, estate or heirs:
(i) Any incentive compensation set forth in Paragraph 2C
hereof earned in the fiscal year in which the termination of your
employment occurs, which incentive compensation shall be determined
on the basis of the Company's operations through June 30 of such
fiscal year, and shall be pro-rated through the last day of your
employment, and shall be paid within three (3) months of such June
30;
(ii) To the extent vested, the Monthly Deferred
Compensation as set forth in Paragraph 2D with the first monthly
payment beginning on the first day of the month immediately
succeeding the last day of your employment.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
F. Termination Upon Expiration of Agreement. If not
previously terminated, your employment with the Company shall
terminate upon the expiration of the full term of this Agreement on
June 30, 2003. Upon the expiration of this agreement the Company
shall pay to you the Monthly Deferred Compensation as set forth in
Paragraph 2D hereof, with the first monthly payment beginning on
the first day of the month immediately succeeding the month in
which you shall have attained the age of 55.
The Company shall have no further obligation to you under this
Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall
be paid from the general funds of the Company. The Company may,
but shall not be required to, make any investment or investments
whatsoever, including the purchase of a life insurance contract or
contracts on your life, to provide it with funds to satisfy its
obligations hereunder; provided, however, that neither you nor your
beneficiary or beneficiaries, nor any other person, shall have any
right, title, or interest whatsoever in or to any such investments
or contracts. If the Company shall elect to purchase a life
insurance contract or contracts on your life to provide the Company
with funds to satisfy its obligations hereunder, the Company shall
at all times be the sole and complete owner and beneficiary of such
contract or contracts, and shall have the unrestricted right to use
all amounts and to exercise all options and privileges thereunder
without the knowledge or consent of you, your beneficiary or
beneficiaries, or any other person, it being expressly agreed that
neither you, any such beneficiary or beneficiaries, nor any other
person shall have any right, title, or interest whatsoever in or to
any such contract or contracts unless expressly provided otherwise
in this Agreement.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no
action taken pursuant to its terms, shall create or be construed to
create a trust or escrow account of any kind, or a fiduciary
relationship between the Company and you, your beneficiary or
beneficiaries, or any other person. You, your beneficiary or
beneficiaries, and any other person or persons claiming a right to
any payments or interests hereunder shall rely solely on the
unsecured promise of the Company, and nothing herein shall be
construed to give you, your beneficiary or beneficiaries, or any
other person or persons, any right, title, interest, or claim in or
to any specific asset, fund, reserve, account, or property of any
kind whatsoever owned by the Company or in which it may have any
right, title, or interest now or in the future, but you or your
beneficiary or beneficiaries shall have the right to enforce a
claim for benefits hereunder against the Company in the same manner
as any unsecured creditor.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall
be employed by the Company, you agree promptly to make known to the
Company the existence of any and all creations, inventions,
discoveries, and improvements made or conceived by you, either
solely or jointly with others, during the term of this Agreement
and for three (3) years thereafter, and to assign to the Company
the full exclusive right to any and all such creations, inventions,
discoveries, and improvements relating to any subject matter with
which the Company is now or shall become concerned, or relating to
any other subject matter if made with the use of the Company's
time, materials, or facilities. To the fullest extent permitted by
law, any and all of the foregoing creations, inventions,
discoveries and improvements shall be considered as "work-made-for-
hire" and the Company shall be the owner thereof. You further
agree, without charge to the Company but at its expense, if
requested to do so by the Company, to execute, acknowledge, and
deliver all papers, including applications or assignments for
patents, trademarks, and copyrights relating thereto, as may be
considered by the Company to be necessary or desirable to obtain or
assign to the Company any and all patents, trademarks, or
copyrights for any and all such creations, inventions, discoveries,
and improvements in any and all countries, and to vest title
thereto in the Company in all such creations, inventions,
discoveries, and improvements as indicated above conceived during
your employment by the Company, and for three (3) years thereafter.
You further agree that you will not disclose to any third person
any trade secrets or proprietary information of the Company, or use
any trade secrets or proprietary information of the Company in any
manner, except in the pursuit of your duties as an employee of the
Company, and that you will return to the Company all materials
(whether originals or copies) containing any such trade secrets or
proprietary information (in whatever medium) on termination of
your employment by the Company. The obligations set forth in this
Paragraph 12 shall survive the termination of your employment
hereunder. This Paragraph 12 replaces a previous agreement
executed by you pertaining to this subject, which prior agreement
is now null and void.
13. RESTRICTIVE COVENANT. For a period of three (3) years after
the termination of your employment by the Company, you shall not,
in any geographical location at which there is at that time
business conducted by the Company which was conducted by the
Company at the date of such termination, directly or indirectly,
own, manage, operate, control, be employed by, participate in, or
be connected in any manner with, the ownership, management,
operation, or control of, any business similar to or competitive
with such business conducted by the Company without the written
consent of the Company; provided, however, that you may have an
ownership interest of up to one percent (1%) in any entity,
notwithstanding that such entity is directly competitive with any
business conducted by the Company at the date of such termination.
14. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach or asserted breach
thereof, shall be settled by arbitration to be held in New York,
New York in accordance with the rules then obtaining of the
American Arbitration Association, and the judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
The arbitrator shall determine which party shall bear the costs of
such arbitration, including attorneys' fees.
15. NON-ASSIGNABILITY. Your rights and benefits hereunder are
personal to you, and shall not be alienated, voluntarily or
involuntarily, assigned or transferred.
16. BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, and their respective assigns, successors,
executors, administrators, and heirs. In the event the Company
becomes a party to any merger, consolidation, or reorganization,
this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of
the payments provided for by this Agreement shall be subject to
seizure for payment of any debts or judgments against you or your
beneficiary or beneficiaries, nor shall you or any such beneficiary
or beneficiaries have any right to transfer or encumber any right
or benefit hereunder; provided, however, that the undistributed
portion of the Aggregate Deferred Compensation shall at all times
be subject to set-off by the Company for debts owed by you to the
Company.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement relating to your employment by the Company. It may only
be changed by written agreement signed by the party against whom
enforcement of any waiver, change, modification, extension,
deletion or revocation is sought.
18. NOTICES. All notices and communications hereunder shall be in
writing, sent by certified or registered mail, return receipt
requested, postage prepaid; by facsimile transmission, time and
date of receipt noted thereon; or by hand-delivery properly
receipted. The actual date of receipt as shown by the receipt
therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you shall be sent
postage prepaid, or, at your election, shall be transferred to you
electronically to such bank as you designate in writing to the
Company, including designation of the applicable electronic
address. The foregoing items (other than any electronic transfer
to you) shall be addressed as follows (or to such other address as
the Company or you may designate in writing from time to time):
To you: To the Company:
Xxxxxxx X. Xxxxxxxxxx Xxxxxxx Technology Company, Inc.
000 Xxxxxxxxx Xxxx Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
19. LAW TO GOVERN. This Agreement shall be governed by, and
construed and enforced according to, the laws of the State of
Connecticut without giving effect to the principles of conflict of
laws.
Very truly yours,
XXXXXXX TECHNOLOGY COMPANY, INC.
By:__________________________________
Xxxxxx X. Xxxxx
Its President
Duly Authorized
AGREED TO AND ACCEPTED:
_________________________________
Xxxxxxx X. Xxxxxxxxxx
