EMPLOYMENT AGREEMENT
AGREEMENT (the "Agreement") made by and between PRESSTEK, INC., a Delaware
corporation (the "Employer"), and Xxxxxxx X. Xxxxxxxx (the "Employee").
WHEREAS, the Employee has heretofore been employed as Chairman of the Board
of Directors and Chief Scientific Officer of the Employer;
WHEREAS, the Employee wishes to continue in his employment with the
Employer and the Employer wishes to continue its employment of Employee; and
WHEREAS, the parties desire to amend, restate and supersede all previous
agreements between the Employer and the Employee to the extent that they relate
to the Employee's continued employment by Employer.
NOW, THEREFORE, in consideration of the premises and of the promises
hereafter contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, it is AGREED as follows:
1. Employment. The Employee is employed as Chairman of the Board and
Chief Scientific Officer of the Employer from the date hereof through the
term of this Agreement. The Employee shall render executive, policy,
operations and other management services to the Employer of the type
customarily performed by persons situated in similar executive and
management capacities. The Employee shall perform such other related duties
as the Board of Directors of the Employer may from time to time reasonably
direct.
2. Compensation. The Employer agrees to pay the Employee during the
Term of this Agreement a base salary as follows: Through December 31, 1999,
a salary (the "Salary") at an annual rate equal to $215,000.00 with the
Salary to be reviewed annually thereafter during the Term of this Agreement
by the Board of Directors of the Employer. In the annual Salary review, the
Board of Directors may compensate the Employee for increases in the market
value of the Employee's duties and responsibilities hereunder and may
provide for performance or merit increases. The base Salary of the Employee
shall not be decreased at any time during the Term of this Agreement from
the amount then in effect, unless the Employee otherwise agrees in writing.
The Salary shall be payable to the Employee not less frequently than
monthly.
Participation in discretionary bonuses, retirement and other employee
benefit plans and fringe benefits shall not reduce the Salary payable to
the Employee under this Section 2.
3. Discretionary Bonuses. During the Term of this Agreement, the
Employee shall be entitled to participate in an equitable manner with all
other eligible executive employees of the Employer in any incentive
compensation and bonus programs authorized and declared by the Board of
Directors of the Employer for executive employees. No other compensation
provided for in this Agreement shall compensation or bonus programs when
and as declared.
4. Participation in Stock Option, Retirement and Employee Benefit
Plans; Fringe Benefits. Subject to the eligibility requirements that may be
applicable, the Employee shall be entitled to participate in any plan or
arrangement of the Employer relating to stock options, stock purchases,
pension, thrift, or profit sharing benefits, or other benefits under
qualified or non-qualified deferred compensation plans, group life
insurance, medical coverage, education or any other employee benefits that
the Employer may adopt or make available for the benefit of the Employee or
of executive employees generally.
In addition, during the term hereof, the Employer will cooperate in
providing life insurance coverage on the life of the Employee through a
split-dollar life insurance policy collateral assignment agreement, the
terms and conditions of which shall be provided for in an agreement
separate from this Agreement.
The Employee shall also be entitled during the term of this Agreement
to any fringe benefits which may be or become available, during the Term of
this Agreement, to executive employees of the Employer, and to the payment
or reimbursement of reasonable expenses for attending annual and periodic
meetings of trade associations, and any other benefits which are
commensurate with the duties and responsibilities to be performed by the
Employee under this Agreement.
5. Employment Term. "Term," as used in this Agreement, shall refer to
the Term of this Agreement as defined in this paragraph. The Term of the
employment under this Agreement is initially for a period ending December
31, 1999 unless sooner terminated in accordance with the provisions hereof.
The Term of employment under this Agreement shall, on each December 31
hereafter, be automatically extended for an additional calendar year unless
the Employee or the Employer gives written notice to the other, by no later
than the preceding November 30, that he or it does not concur in such
extension. If neither party gives notice of non-concurrence in such
extension, the Term will automatically extend for one additional year.
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6. Standards. The Employee shall perform his duties and Responsi-
bilities under this Agreement in accordance with such reasonable standards
as are established from time to time by the Board of Directors of the
Employer. The reasonableness of such standards shall be measured against
standards for executive performance generally prevailing in similar high
technology companies.
7. Voluntary Absences: Vacations. The Employee shall be entitled to an
annual paid vacation during the Term of this Agreement of four weeks per
year or such longer period as the Board of Directors may approve or such
longer periods to which the Employee may be entitled as an employee of the
Employer. The timing of paid vacations shall be scheduled in a reasonable
manner by the Employee.
8. Termination of Employment.
(a) (i) The Board of Directors of the Employer may terminate the
Employee's employment at any time, but any termination by the
Board of Directors other than termination for Cause shall require
180 days prior written notice and shall not prejudice the
Employee's right to receive the compensation and other benefits
set forth in this Agreement. In the event of a termination for
Cause, the Employee shall have no right to receive such
compensation or other benefits, including payment of legal fees
and expenses incurred, for any period after the termination for
Cause. Regardless of the reason for the termination of Employee's
employment, other than termination for Cause, the Employer shall
continue to be subject to any independent obligation to the
Employee under any employee benefit plan in which the Employee is
then a participant, and to any obligation for severance pay, if
any, in accordance with the then existing severance policies of
the Employer.
(ii) Unless termination is for Cause, the Employer shall be
obligated concurrently with such termination, in lieu and
replacement of Employee's entitlement to any compensation and
other benefits under this Agreement pursuant to Section 8(a)(i),
to make a lump sum cash payment to the Employee as liquidated
damages of an amount equal to the present value of the Employee's
then current Salary under this Agreement calculated for a period
based on the remainder of the Term hereof when the Agreement is
terminated; provided, however, that if the termination of
employment occurs in connection with or within two years after a
"Change in Control" as defined in Section 9(b) hereof, the amount
payable to the Employee shall be determined under Section
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9(a) as limited by Section 9(c) hereof. Such payment to the
Employee shall be made on or before the Employee's last day of
employment with the Employer. The liquidated damages shall not be
reduced by any compensation which the Employee may receive for
other employment with another employer after termination of his
employment with the Employer. In addition, the Employee shall be
entitled to have all existing retirement or employee benefits of
the type referred to in Section 4 hereof continue for the
remainder of the Term hereof when the Agreement is terminated,
except as otherwise required by law or provided in the related
retirement or other employee benefit plans or agreements.
(iii) References in this Agreement to "termination for Cause"
shall mean termination on account of acts or omissions of the
Employee which constitute Cause as defined below. Any
determination with respect to a termination for Cause shall
require the approval of a two-thirds vote of the full Board of
Directors of the Employer. "Cause" shall mean any one or more,
but only one or more, of the following:
(A) Conviction of a felony,
(B) Theft from the Employer,
(C) Breach of fiduciary duty involving personal profit,
(D) Sustained and continuous conduct by the Employee which
adversely affects the reputation of the Employer, or
(E) Continued failure of the Employee substantially and
satisfactorily to perform his duties or obligations under
this Agreement following 30 days' notice by the Employer to
the Employee and a failure by the Employee to correct the
deficiency cited in such notice (other than any such failure
resulting from the Employee's incapacity due to physical or
mental illness).
(b) The Employee shall have no right to terminate his employment under
this Agreement prior to the end of the Term of this Agreement, unless
such termination is either approved by the Board of Directors of the
Employer or is for Good Reason (as described in Section 9(a) hereof)
in connection with or within two years after a Change in Control (as
defined in Section 9(b) hereof). In the event that the Employee
violates this provision, or in the event that the Employee is
terminated for Cause, the
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Employee shall be entitled to no further payments pursuant to this
Agreement, and the Employer shall be entitled, in addition to its
other legal remedies, to request a court of competent jurisdiction to
enjoin the employment of the Employee with any significant competitor
of the Employer, within a 30 mile radius of the Employer or any
location at which the Employer operates at the time, for a period of
one year or the remaining Term of this Agreement, whichever is less.
Upon written consent, the Board may permit the Employee to work for a
significant competitor during such period. During such period, even if
the Employee is permitted to be employed by a significant competitor,
he shall not without the approval of the Board of Directors of the
Employer induce any officer of the Employer to accept employment from
such significant competitor, nor shall he use proprietary and
confidential information of the Employer for the benefit of such a
significant competitor.
9. Change in Control.
(a) (i) If during the Term of this Agreement there is a Change
in Control of the Employer, and the Employee's employment
with the Employer is terminated involuntarily (other than
for Cause), or voluntarily for Good Reason (as defined
below), in connection with or within two years after such
Change in Control, then the Employee shall be entitled to
receive as a severance payment, for services previously
rendered to the Employer, a lump sum cash payment as
provided in Section 9(a)(ii) below.
(ii) Subject to Section 9(c) hereof, the amount of the lump sum
cash payment (the "Payment") shall equal three times the
Employee's average annual Salary and cash bonuses which were
payable by the Employer and were includible by the Employee
in his gross income for federal income tax purposes with
respect to the five most recent taxable years of the
Employee ending prior to such Change in Control of the
Employer (or such portion of such period during which the
Employer was a full-time employee of the Employer), less one
dollar.
(iii) As used herein, the term "Good Reason" means, unless
previously consented to in writing by the Employee, the
occurrence of any one of the following:
(A) The assignment to the Employee of duties and
responsibilities that are not at least substantially
equivalent to the Employee's duties and
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responsibilities with the Employer immediately prior to such
Change in Control;
(B) the failure to continue the Employee in a position and title
that is at least substantially equivalent to the position
held by the Employee with the Employer immediately prior to
such Change in Control, except in connection with the
termination of the Employee's employment for Cause or as a
result of death or permanent disability;
(C) a reduction in or failure to pay currently total annual cash
compensation in an amount equal to or greater than the sum
of (i) the Employee's Salary at the highest annual rate in
effect during the 12-month period immediately prior to such
Change in Control, and (ii) the bonus paid to similarly
situated employees pursuant to the acquiring employer's
executive bonus plan for the fiscal year ending immediately
prior to such Change in Control;
(D) the Employee's benefits under any employee benefit or
welfare plan of the acquiring employer are less, or are
reduced to less, other than reductions mandated by a change
in law, than the benefits of similarly situated employees
under any employee benefit or welfare plan of the acquiring
employer in effect immediately prior to such Change in
Control;
(E) the Employee is reassigned to a place of business which is
more than 30 miles from Hudson, New Hampshire; or
(F) any breach by the Employer or the acquiring employer of this
Agreement.
(iv) Payment under this Section 9(a) shall be in lieu of any
amount owed to the Employee as liquidated damages for
termination without Cause under Sections 8(a)(i) and (ii)
hereof. Payment under this Section 9(a) shall not be reduced
by any compensation which the Employee may receive from
other employment with another employer after termination of
his employment with the Employer.
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(b) A "change in control of the Employer," for purposes of this Agree-
ment, shall be deemed to have taken place if: (i) a third person, including
a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of
1934, becomes the beneficial owner of shares of the Employer having 20
percent or more of the total number of votes that may be cast for the
election of directors of the Employer; or (ii) as the result of, or in
connection with, any cash tender or exchange offer, merger, or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions, the persons who were directors
of the Employer before such transaction shall cease to constitute a
majority of the Board of Directors of the Employer or any successor
institution.
(c) Notwithstanding any other provisions of the Agreement or of any other
agreement, contract, or understanding heretofore or hereafter entered into
by the Employee with the Employer, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this Section 9(c) ("Other Agreements"), and notwithstanding
any formal or informal plan or other arrangement heretofore or hereafter
adopted by the Employer for the direct or indirect provision of
compensation to the Employee (including groups or classes of participants
or beneficiaries of which the Employee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or
for the Employee (a "Benefit Plan"), the Employee shall not have any right
to receive any payment or other benefit under this Agreement, any Other
Agreement, or any Benefit Plan if such payment or benefit, taking into
account all other payments or benefits to or for the Employee under this
Agreement, all Other Agreements, and all Benefit Plans, would cause any
payment to the Employee under this Agreement to be considered a "parachute
payment" within the meaning of Section 280G(b)(2) of the Internal Revenue
Code as then in effect (a "Parachute Payment"), as determined by a
nationally recognized accounting firm selected by the Board. In the event
that the receipt of any such payment or benefit under this Agreement, any
Other Agreement, or any Benefit Plan would cause the Employee to be
considered to have received a Parachute Payment under this Agreement, then
the Employee shall have the right, in the Employee's sole discretion, to
designate those payments or benefits under this Agreement, any Other
Agreements, and/or any Benefit Plans, which should be reduced or eliminated
so as to avoid having the payment to the Employee under this Agreement be
deemed to be a Parachute Payment.
10. Expenses. The Employee is authorized to incur, during the Term of
this Agreement, reasonable expenses for promoting the business of the
Employer, including without limitation expenses for entertainment, travel
and similar items. The Employer will promptly reimburse the Employee for
all such
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expenses, upon the presentation by the Employee, from time to time, of an
itemized account of such expenses.
11. Legal Expenses. The Employer shall indemnify and hold harmless the
Employee from and against any and all costs and liabilities, including
without limitation reasonable attorneys' fees, arising out of or in
connection with being or having been an officer or director of the
Employer, except in relation to matters as to which the Employee shall be
finally adjudged not to have acted in good faith in the reasonable belief
that his action or failure to act was in the best interest of the Employer.
12. Successors and Assigns; Assumption by Successors. All rights
hereunder shall inure to the benefit of the parties hereto, their personal
or legal representatives, heirs, successors or assigns. This Agreement may
not be assigned or pledged by the Employee. The Employer will require any
successor (whether direct or indirect, by purchase, assignment, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Employer in any consensual transaction expressly to
assume this Agreement and to agree to perform hereunder in the same manner
and to the same extent that the Employer would be required to perform if no
such succession had taken place. References herein to the Employer will be
understood to refer to the successor or successors of the Employer,
respectively.
13. Other Contracts. The Employee shall not, during the Term of this
Agreement, have any other paid employment (other than with a subsidiary or
affiliate of the Employer) except with the prior approval of the Board of
Directors of the Employer.
14. Entire Agreement. This Agreement constitutes the entire Agree-
ment between the parties and supersedes all prior employment agreements and
understandings, whether written or oral.
15. Amendments or Additions. No amendments or additions to this
Agreement shall be binding unless in writing and signed by the parties.
16. Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
17. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
18. Governing Law. This Agreement shall be governed by the laws of the
United States where applicable and otherwise by the laws of the State of
New Hampshire, except the choice of law rules thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement this 24th day
of March, 1999.
PRESSTEK, INC. (the "Employer")
By: /s/ Xxxxxx X. Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx (the "Employee")
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