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Exhibit (10)(b)(xiv)
EMPLOYMENT AGREEMENT
This Agreement is made as of January 31, 1996 by and between American Science
and Engineering, Inc. (the "Company"), a Massachusetts corporation having its
principal place of business in Billerica, Massachusetts, and Xxxxxxx X. Xxxxxxxx
(the "Executive").
The Company desires to retain the services of the Executive, and the Executive
is willing to render such services, in accordance with the terms hereinafter set
forth.
Accordingly, the Company and the Executive agree as follows:
1. The Company agrees to hire the Executive as, and the Executive agrees to
accept and perform the duties of, Vice President, General Counsel and Clerk of
the Company. Management will recommend to the Board of Directors of the Company
that Executive be elected to the positions at the next meeting of the Board.
2. The Executive will initially receive a Base Salary at the annual rate of
$120,000, payable not less frequently than monthly. The Executive's Base Salary
may be increased at the discretion of the President.
3. The Executive will participate in the Company's Compensation Plan for
Senior Management and will initially be eligible for an annual cash bonus of up
to $20,000, assuming that the Executive achieves his individual goals and the
Company achieves its target for pre-tax earnings. The President of the Company,
in consultation with the Executive, will establish individual goals for the
Executive promptly after the initiation of his employment at the Company. Goals
will relate to accomplishments during the first six months, and new goals will
be established every six months thereafter. This bonus will be distributed on an
annual basis. If the Company exceeds its pre-established target(s) by a defined
amount, the Executive's bonus may be up to 33% higher.
4. The Company hereby agrees to grant the Executive stock options entitling
him to purchase up to 24,000 shares of the company's stock. These will be
non-qualified stock options, vesting at the rate of 6,000 shares on the
Executive's first day as an employee of the Company and then 6,000 shares at the
end of each of the first three years of employment. The price of the options
will be the market close price on the American Stock Exchange on the Executive's
first day of employment.
5. The Executive will be eligible to participate in the Company's full
corporate officer benefit package, including reduced-contribution full medical
and dental coverage and company-paid life insurance at four times his base
salary.
6. The Executive will be eligible for company-paid vacation according to
established policy at the rate of not less than three weeks per year.
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7. (a) The term of the Executive's employment shall be from March 1, 1996,
through February 28, 1999. The Company may terminate the Executive prior to
February 28, 1999 only for Cause (as defined below).
(b) For the purposes of this Agreement, "Cause" shall mean: (i) the
determination by the President of the Company, in agreement with the Board of
Directors, that the Executive has failed to perform his duties in the course of
his employment under this Agreement as expressly instructed by the
President/CEO; or (ii) the final conviction of the Executive for, or his plea of
nolo contendere to, a felony or any other crime which involves fraud, dishonesty
or moral turpitude.
8. (a) Notwithstanding the provisions hereof permitting termination of the
Executive in certain circumstances, the Company shall pay to the Executive the
"Severance Payment" in the event that the Executive is terminated by the Company
within thirty (30) days prior to or twelve (12) months after the occurrence of a
"Change of Control," as defined below. The Severance Payment shall be made at
the time of such termination.
(b) The "Severance Payment" shall be a one-time payment equal to the higher
of: (i) the annual rate of the Executive's base salary in effect one month prior
to the occurrence of the Change of Control, or (ii) the annual rate of the
Executive's base salary in effect at the time of such termination. The Severance
Payment shall also include the continuation of all benefits received by the
Executive prior to termination for a period equal to the lesser of one year or
the start of employment by the Executive, in which he receives substantially
similar benefits.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) any person (as defined in Section 13(d) or 14(d)(2) of the Securities
Exchange Act of 1934) shall have become the beneficial owner of 50 percent
or more of the combined voting power of the Company's voting securities;
(ii) the Continuing Directors shall have ceased for any reason to
constitute a majority of the Board of Directors of the Company. For this
purpose, a "Continuing Director" shall include member of the Board of
Directors of the Company as of the date of this Agreement and any person
nominated for election to the Board of Directors of the Company by a vote
of the majority of the then Continuing Directors;
(iii) the stockholders approve the complete liquidation or dissolution of
the Company, or
(iv) the stockholders approve by the requisite vote any of the following
transactions: (A) a merger or consolidation of the Company (except for a
merger in respect of which no vote of the stockholders of the Company is
required); (B) a sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), whether as
part of a dissolution or otherwise, of assets of the Company or of any
direct or indirect majority-owned subsidiary or the Company (other than to
any direct or indirect wholly-owned subsidiary or to the Company) having an
aggregate market value equal to 50% or more of either that aggregate market
value of all of the
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assets of the Company determined on a consolidated basis or the aggregate
market value of all the outstanding stock of the Company immediately prior
to the transaction; or (C) a tender or exchange offer for 50% or more of
the outstanding voting stock of the Company.
9. If the Executive is terminated for any reason other than Cause or in
connection with a Change of Control ("Termination for Convenience") the
Executive shall receive an amount equal to the greater of the amount that would
be due under the Company's then-current severance policy, if any, or six months
of his then-current Base Pay, payable on the last date of his employment. In
case of Termination for Convenience, the Executive shall be entitled to a
continuation of all benefits for the lesser of six (6) months from the date of
termination, or until the date in which the Executive begins employment in which
he receives substantially similar benefits. If the Executive is Terminated for
Convenience within twelve (12) months of a change in the Company's
President/CEO, the Executive shall be entitled to receive the severance Payment
described in Paragraph 8(b).
10. The Company may not assign all or any part of its obligations under
this Agreement. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. As used in this
Agreement, unless the context requires otherwise, the "Company" shall mean the
Company as defined above or any successor to its business or assets as aforesaid
which assumes and agrees to perform this Agreement, by operation of law, or
otherwise. This Agreement shall inure to the benefit of and be enforceable by
and binding upon (i) any such successor and (ii) the Executive's personal or
legal representatives, executors, administrators and designated beneficiaries.
11. This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior oral and written
agreements, understandings and commitments between the parties relating to this
Agreement. Notwithstanding the foregoing, the Executive shall at all times
remain subject to all policies and procedures of the Company that relate to
employees of the Company, except to the extent that this Agreement contains
terms or provisions that are contrary to such policies and procedures. No
amendment to this Agreement shall be made except by a written instrument signed
by both parties.
12. This Agreement shall be construed and enforced under and be governed in all
respects by the law of The Commonwealth of Massachusetts, without regard to the
conflict of law principles thereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed on its
behalf by a duly authorized officer and the Executive has executed this
instrument, all as of the date set forth above.
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By:
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Xxxxx X. Xxxxxxxx, President
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Xxxxxxx X. Xxxxxxxx
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