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EXHIBIT 10X
EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") made and entered into to be effective on
the 1st day of January, 1997, by and between LTX Corporation, a corporation duly
organized and existing under Massachusetts law, having a principal place of
business located at LTX Park at University Avenue, Westwood, Massachusetts,
("Employer"), and Xxxxxxx X. Xxxx, an individual resident of Los Gatos,
California, ("Employee");
W I T N E S S E T H:
WHEREAS, Employee has been employed by Employer for ten (10) continuous
years in various capacities including the following: Vice President, Western
Operations; Vice President, North American Sales; Senior Vice President, North
American Sales; and Senior Vice President, North American Sales and Asia Pacific
Operations; and
WHEREAS, Employer desires to employ employee in a new capacity at its
business location based in Westwood, Massachusetts; and
WHEREAS, Employer and Employee wish to set forth their understanding
concerning Employee's new employment position in the business conducted by the
Employer.
NOW, THEREFORE, in consideration of these premises and covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. TERM OF EMPLOYMENT. Employer hereby employs in the capacity, and under
the title, of Senior Vice President, Business Development ("Senior Vice
President") effective as of the date first set forth above (hereinafter called
the "Employment Date"), and Employee hereby accepts such employment effective as
of the Employment Date, on the terms and conditions hereinafter set forth. The
initial term of this Agreement shall be one (1) year beginning on the Employment
Date (the "Initial Term"), and thereafter the employment relationship shall be
at will until terminated in accordance with one of the clauses of Paragraph 6
(such entire period being referred to hereinafter as the "Employment Period").
2. SERVICES. In his capacity as Senior Vice President, the Employee shall
be responsible for the day to day business and operations of the Employer's
division, which shall include the performance of such duties consistent with his
position as Senior Vice President as shall be specified by the Employer's
President. During the Employment Period, the Employee shall devote his full
working time and attention to the performance of his duties hereunder, and shall
comply to the best of his abilities with all reasonable directions given him by
the President of the Employer.
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3. COMPENSATION.
a. SALARY AND BONUS. As payment for the services to be rendered
hereunder, and subject to the full performance of all such services, Employer
shall pay to the employee a base salary (the "Base Salary") at the annual rate
of $226,000, payable in conformity with the Employer's regular payroll dates for
salaried personnel. In addition to the Base Salary, Employer shall pay to the
Employee, within forty-five (45) days following the close of the fiscal year
ending July 31, 1997 an annual cash bonus (the "Bonus") if the Company's income
before income taxes and minority interest, without regard to inventory and
restructuring charges ("Pretax Income") for fiscal 1997 is at least $1,100,000.
The amount of the Bonus shall be $50,000 plus 1.667% of Pretax Income in excess
of $1,100,000 up to a maximum total Bonus for fiscal 1997 of $150,000. During
the Employment Period, the Compensation Committee of the Board of Directors of
the Employer shall review the Base Salary and Bonus for the purpose of
determining increases to the Base Salary and Bonus at the time of review of
compensation of other executive officers of the Employer.
b. SPECIAL BONUS, TERMINATION BY EMPLOYEE. In the event that a Change
of Control (as hereinafter defined) shall occur, then the Employee may, at his
election, terminate his employment hereunder and this Agreement upon written
notice given at any time not earlier than six (6) months after nor later than
twelve (12) months after the occurrence of such event. In the event the Employee
voluntarily terminates his employment with Employer in accordance with the
foregoing sentence, then at or before the Employee's last day of employment with
the Employer, the Employer will pay to the Employee as compensation for services
rendered to the Employer, a lump sum cash amount equal to the then current
annual Base Salary. For the purposes of this provision a "Change of Control"
shall be deemed to have taken place if (a) a party other than Employer or
Employee, including a "Group" as defined in Section 13(d)(3) of the Securities
Act of 1934, acquires shares of the Employer, with the result that such party
then owns a majority of the total number of votes that may be cast for the
election of directors of the Employer, or (b) as a result of any cash tender or
exchange offer, merger or other business combination or transactions
("Transaction"), the persons who were directors of the Employer before the
Transaction cease to constitute a majority of the Board of Directors of the
Employer or any successor to the Employer.
c. FRINGE BENEFITS. Employee shall be entitled to such fringe benefits
as are set forth in the attached EXHIBIT A, which EXHIBIT A is incorporated by
reference herein.
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4. EXPENSES. Employer shall reimburse Employee for reasonable business
expenses incurred in direct furtherance of the business of Employer in
accordance with the Employer's standard expense policy.
5. VACATIONS. Employee shall be entitled to an annual vacation of four (4)
weeks in accordance with the Employer's standard policy, during which time his
Base Salary shall be paid and his bonus compensation shall continue to accrue.
6. TERMINATION. Notwithstanding the provisions of paragraph 1, Employee's
employment under this Agreement shall terminate prior to the expiration of the
Initial Term, or thereafter, under the following circumstances:
a. DEATH: Upon the death of the Employee;
b. DISABILITY: Upon the permanent disability of the Employee. For
purposes of this Section 6.b "permanent disability" shall mean the substantial
inability of the Employee, due to illness or physical or mental disability, to
perform his duties as an officer or employee if such inability is likely to
continue for a period of more than one hundred eighty (180) continuous days. The
determination of permanent disability shall be made by mutual agreement of the
parties or, if they cannot agree, by a physician or psychiatrist acceptable to
both the Employer and Employee. If the parties cannot agree upon the selection
of a physician or psychiatrist, each shall select an arbitrator in accordance
with the commercial arbitration rules of the American Arbitration Association,
and such arbitrator shall select a physician or psychiatrist. In either case,
the opinion of such physician or psychiatrist shall be binding on and
non-appealable by the parties. The Employer or Employee may request an
examination, and the Employee shall submit to examination at reasonable times
and under reasonable conditions. For purposes hereof, a continuous period of
incapacity shall be deemed interrupted when the employee returns to
substantially full-time work for a continuous period of at least five (5)
business days;
c. BY THE EMPLOYEE UPON A CHANGE OF CONTROL: Upon an election by the
Employee to terminate this Agreement following a Change of Control, as provided
in Paragraph 3.b;
d. BY THE EMPLOYEE UPON WRITTEN NOTICE: Upon thirty (30) days prior
written notice by Employee;
e. BY THE EMPLOYER FOR CAUSE: The Employer shall have the right to
terminate this Agreement and Employee's employment for cause immediately and
without prior written notice. For purposes of this Paragraph 6.e, the following
shall constitute "cause" for termination by the Employer:
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(1) Employee's repeated or willful failure or unwillingness to
perform the responsibilities of his position or such duties
and responsibilities as shall be reasonably assigned to him
by the Employer's President;
(2) theft, embezzlement, fraud, or other criminal conduct or
dishonesty occurring in connection with the Employee's
performance of his duties hereunder;
(3) Employee's prolonged or repeated unexcused absences from
duty without the consent of the Employer;
(4) willful violation by the Employee of any material provision
of this Agreement or violation of any written policy of the
Employer.
Upon termination of the Employee's employment for cause or under any of the
circumstances described in Paragraphs 6.a, 6.b or 6.d, the Employee shall be
entitled to receive only his Base Salary through the date of termination of
employment, and the Employee shall not be entitled to any other or further
compensation, bonus, severance or other fringe benefits except as otherwise
explicitly provided by law.
f. BY THE EMPLOYER WITHOUT CAUSE: The Employer may at any time upon
thirty (30) days prior written notice or payment in lieu of notice terminate the
Employee's employment without cause. In the event of a termination without cause
during the Initial Term, the Employee shall continue to receive his Base Salary
for the remainder of the Initial Term, and the Employee shall receive in
addition thereto severance payments at his then Base Salary for a period of one
year beyond the Initial Term. If the Employer terminates the Employee's
employment without cause after the Initial Term, then, notwithstanding that the
employment may be otherwise "at will", the Employee shall receive severance
payments at his then Base Salary for a period of one year from the date of
termination. Notwithstanding any other provision of this Paragraph 6.f, it shall
be a condition of the Employee's receipt of severance payments under this
Paragraph that, upon termination, the Employee execute a general release of
claims against the Employer in a form reasonably satisfactory to counsel for the
Employer.
7. NON-COMPETITION. During the Employment Period and for a period of six
(6) months following the end of the Employment Period, Employee shall not,
directly or indirectly (as owner, partner, director, trustee, agent, employee or
otherwise), establish or engage in any business which sells any item of
manufacture which is similar to or used in connection with the products
manufactured by Employer during the one (1) year period ending on the date of
termination of this Agreement. The Employee will not be deemed
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to have breached his obligations under this Paragraph 7 if (i) he shall have
notified the Employer in writing at least thirty (30) days prior to any proposed
new employment, investment or other business relationship of the name of the
proposed new employer or person, firm, corporation, association or other entity
and the nature of his duties, investment or business relationship, and (ii) the
Employer shall have failed to notify him in writing within fifteen (15) days
after its receipt of such notice from him that it considers such employment,
investment or relationship in violation of any provision of this Paragraph 7; or
if, in the case of passive ownership only, the Employee's equity interest in the
aggregate is less than ten percent (10%) of the value of all outstanding shares
of capital stock or other evidence of equitable ownership of such person, firm,
corporation, association, or other entity, whether such class of equitable
ownership is privately held or publicly traded.
8. NON-INTERFERENCE WITH EMPLOYEES. During the Employment Period and for a
period of one (1) year from the end of the Employment Period, the Employee will
not, without the Employer's prior written approval, engage the services of any
employee of the Employer, whether as employee, consultant, agent or otherwise,
for any business (other than the business of Employer) in which he might be
associated as owner, stockholder, partner, consultant, employee, agent or
otherwise.
9. NON-INTERFERENCE WITH CUSTOMERS. During the Employment Period, and for a
period of six (6) months following the end of the Employment Period, the
Employee agrees not, without the Employer's prior written approval, to perform
services (other than in the capacity as agent of the Employer), whether as an
employee, consultant, agent, or otherwise, for any then-existing customer or
client of the Employer.
10. CONFIDENTIAL INFORMATION. The Employee agrees never, directly or
indirectly, to use, publish, disseminate or otherwise disclose any confidential
information without the prior written consent of the Employer. For the purposes
of this Agreement, "confidential information" shall mean that secret proprietary
information of the Employer of whatever kind or nature disclosed to or known by
the Employee (whether or not invented, discovered or developed by the Employee)
as a consequence of or through his employment by the Employer, including,
without limitation, sources of supply and material, operating and other cost
data, lists of present, past or prospective clients or customers, pricing
information, and records of the Employer, particularly those legended or
otherwise identified by the Employer as confidential information.
11. RETURN OF DOCUMENTS. Upon termination of the Employee's employment for
any reason, all documents, procedural manuals, guides, specifications, plans,
drawings, designs and similar materials, lists of present,
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past or prospective clients or customers, client or customer proposals,
invitations to submit proposals, price lists and data relating to pricing of the
Employer's products and services, records, notebooks and similar repositories of
or containing confidential information, including all copies thereof, then in
the Employee's possession or control, whether prepared by the Employee or
others, will be left with or forthwith returned by the Employee to the Employer.
12. SURVIVAL; REMEDIES. The duties and obligations of Employee under
Paragraphs 7 through 11, inclusive, of this Agreement shall survive the
termination of the Employee's employment with the Employer. The Employee
acknowledges that a remedy at law for any breach or threatened breach by the
Employee of Paragraphs 7 through 11 of this Agreement may be inadequate, and the
Employee therefore agrees that the Employer shall be entitled, without limiting
any other of its legal rights, to injunctive relief and other equitable remedies
in case of any such breach or threatened breach.
13. RESTRICTION AGAINST EMPLOYEE ASSIGNMENT. The services to be rendered by
Employee pursuant to this Agreement are personal in nature and therefore the
Employee shall not assign or transfer this Agreement or any rights or
obligations hereunder without the written consent of Employer.
14. NOTICES. All notices required hereunder or voluntarily given shall be
in writing and shall be deemed given when personally delivered or when sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party for which it is intended at their following respective
address, or at such other address as either party may designate to the other by
like notice:
If to Employer: Attn: President
LTX Corporation
0 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
If to Employee: Xxxxxxx X. Xxxx
000 Xxxxxxxx Xxx
Xxx Xxxxx, Xxxxxxxxxx 00000
15. GOVERNING LAW. This Agreement shall be construed and governed by the
laws of the Commonwealth of Massachusetts exclusive of conflict of law
principles.
16. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provisions had
never been contained herein. If, moreover, any provision contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
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geographical scope, activity or subject matter, such provision shall be
construed by limiting and reducing it by the minimum extent necessary to render
it enforceable under applicable law.
17. BENEFIT; PERSONS BOUND. This Agreement shall inure to the benefit of
and bind the Employer and Employee and their respective heirs, executors,
administrators, successors and permitted assigns, if any.
18. CONSTRUCTION. The headings in this Agreement are for purposes of
reference only and shall not be considered in construing this Agreement.
19. ARBITRATION. In the event of any dispute between the parties hereto
arising out of the Employee's employment or relating to the validity,
construction, enforcement or performance of this Agreement, such dispute shall
be settled by arbitration before a single arbitrator conducted at Boston,
Massachusetts, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The decision of the arbitrator shall be final
and binding on all parties thereto, and judgment upon any award entered in such
proceeding may be entered in any court having jurisdiction thereof. Each party
to such arbitration shall pay one-half of all costs and expenses of such
arbitration and each such party shall pay their respective attorneys' fees. The
determination of the arbitrator shall be conclusive on the matter of which party
is successful for purposes hereof.
In no event, however, shall this Paragraph 19 be deemed to preclude a party
hereto from instituting legal action seeking relief in the nature of a
restraining order, an injunction or the like in order to protect his or its
rights pending the outcome of an arbitration hereunder. With respect to matters
submitted to arbitration other than claims for payment of monies due, the
parties shall continue to perform their obligations hereunder relative to said
matters pending resolution of the dispute by arbitration.
20. INDEMNIFICATION. During and after the term of this Agreement, the
Employer will indemnify the Employee against all claims brought against him
which arise in the course of his employment by the Employer pursuant to this
Agreement to the maximum extent permitted under the laws of the Commonwealth of
Massachusetts, notwithstanding any provision of the By-laws of the Employer or
any action by the Board of Directors of the Employer, either before or after the
Employment Date, which is to the contrary or inconsistent with this provision.
This Paragraph 20 shall survive termination of the Agreement except a
termination For Cause based upon the same facts as those based on which the
claim against the Employee is made for which he seeks indemnification.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
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EMPLOYER:
LTX CORPORATION
BY:
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Xxxxx X. Xxxxxxx
President and CEO
EMPLOYEE:
BY:
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Xxxxxxx X. Xxxx,
Individually
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EXHIBIT A
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FRINGE BENEFITS
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The Employer shall provide the Employee with the following benefits during the
term of this Agreement:
(i) Health and disability insurance under such policies or plans as the Employer
may adopt, which policies or plans shall provide coverage comparable to the
coverage provided by Employer for the other senior executive level employees of
the Employer;
(ii) An automobile, comparable in value to automobiles furnished to other senior
executive level employees of the Employer, plus payment of all insurance
premiums, maintenance costs and gasoline charges incurred by the Employee while
engaged in the performance of his duties as Employee hereunder;
(iii) An office and staffing commensurate with the office and staffing furnished
to other senior executive level employees of the Employer;
(iv) Payment or reimbursement to Employee of all reasonable moving and job
relocation expenses (including income tax liability of Employee, if any,
incurred by Employee by reason of such payment or reimbursement, and the cash
payment for income tax thereof) incurred by Employee relating to a change of his
principal address from Los Gatos, California to the Boston, Massachusetts
metropolitan area, and from the Boston, Massachusetts metropolitan area to Los
Gatos, California, provided the latter relocation to Los Gatos, California
occurs during the Employment Period or within twelve (12) months after the
Employment Period;
(v) Such policies or plans of life insurance as Employee may adopt from time to
time having coverage amounts and limits comparable to that provided by Employer
to other senior executive level employees of the Employer; and
(vi) Employer shall provide such other fringe benefits to Employee comparable to
those provided from time to time by Employer to other senior executive level
employees of the Employer.
