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Exhibit 99.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 3 day of May,
2001 is entered into by ECC International Corp., a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Company and the Executive previously entered into
an Employment Agreement on June 15, 1998, as amended August 9, 1999 (as
so amended the "Original Agreement");
WHEREAS, the Original Agreement terminates on June 28, 2001
(the "Initial Termination Date");
WHEREAS, the Company desires to amend and restate the Original
Agreement effective upon the execution of this Agreement and continue
the employment of the Executive beyond the Initial Termination Date,
and the Executive desires to amend and restate the Original Agreement
effective upon the execution of this Agreement and continue employment
with the Company. Accordingly, in consideration of the mutual covenants
and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties agree to enter into
this Agreement as follows and upon the Commencement Date (as
hereinafter defined) of this Agreement, this Agreement shall amend and
supercede the Original Agreement.
1. TERM OF EMPLOYMENT; RENEWAL. The Company hereby agrees to employ and
retain the Executive, and the Executive hereby accepts continued employment with
the Company, upon the terms set forth in this Agreement, for the period
commencing on May 3, 2001 (the "Commencement Date") and ending on July 1, 2002
(the "Extended Employment Period"), unless sooner terminated in accordance with
the provisions of Section 5. Without limiting any of the Company's rights
otherwise provided under this Agreement, within 30 days following January 1,
2002, the Company shall either (i) commence good faith negotiations with the
Executive to extend the Extended Employment Period or (ii) notify the Executive
in writing that the Company does not intend to extend the Extended Employment
Period.
2. TITLE; CAPACITY. The Executive shall serve as President and Chief
Executive Officer, as elected annually by the Board of Directors (the "Board").
The Executive shall be based at the Company's offices in Orlando, Florida. The
Executive shall be subject to supervision of, and shall have such authority as
is delegated to him by, the Board. The Executive hereby accepts such employment
and agrees to undertake the duties and responsibilities inherent in such
position and such other duties and responsibilities as the Board shall from time
to time reasonably assign to him, which duties and responsibilities shall be
commensurate with the Executive's position. The Executive
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agrees to devote his entire business time, attention and energies to the
business and interests of the Company during the term of this Agreement. The
Executive agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company, provided that, without the Executive's
consent, such changes shall not effect a change in this Agreement or any
agreement contemplated herein. The Executive acknowledges receipt of copies of
all such rules and policies committed to writing as of the date of the
Agreement.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall continue to pay the Executive,
in bi-weekly installments, an annual base salary (the "Base Salary") of
$250,000.
3.2 FRINGE BENEFITS. The Executive shall be entitled to
participate in all bonus and benefit programs that the Company establishes and
makes available to its executive officers, to the extent that Executive's
position, tenure, salary, age, health and other qualifications make him eligible
to participate ("Fringe Benefits"), including, but not limited to, the programs
indicated on Exhibit A to this Agreement. The Executive's Fringe Benefits shall
not be reduced without the Executive's consent.
3.3 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with the performance of his duties,
responsibilities or services under this Agreement, upon presentation by the
Executive of documentation, expense statements, vouchers and/or other supporting
information as the Company may require.
3.4 INCENTIVE PAYMENTS. In addition to the salary and benefits
payable pursuant to this Section 3, the Executive shall be entitled to receive
the following:
(a) annual cash bonuses if the Executive satisfies
agreed-upon discrete goals/objectives found in the Annual Performance Incentive
Plan for the Executive to be established by the Board of Directors in
consultation with the Executive on an annual basis.
(b) annual options to purchase shares of the
Company's Common Stock if the Company satisfies agreed-upon long-term
performance objectives found in the Long-Term Incentive Plan (LTIP) for the
Executive established by the Board of Directors in consultation with the
Executive.
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4. ANCILLARY AGREEMENTS.
4.1 NON-COMPETITION AND NON-SOLICITATION AGREEMENT. The
Amended and Restated Non-Competition and Non-Solicitation Agreement between the
Company and the Executive, dated August 9, 1999, in the form attached hereto as
Exhibit B, shall remain in full force and effect and such agreement, as so
extended, shall be incorporated herein by this reference and made a part hereof
as if set forth herein its entirety.
4.2 STOCK PURCHASE AGREEMENT. The Executive and the Company
agree that the maturity date of the promissory note dated June 15, 1998 that
Executive delivered to the Company in connection with a Stock Purchase Agreement
will be extended on the same terms from [June 15, 2001 to July 1, 2002].
4.3 CHANGE OF CONTROL. On the date hereof, the Executive and
the Company shall enter into a Change of Control Contract in the form attached
as Exhibit C (the "Change of Control Contract") and such Change of Control
Contract shall be incorporated herein by this reference and made a part hereof
as if set forth herein in its entirety.
4.4 STOCK OPTIONS. The Executive and the Company agree that
the Non-Statutory Option Agreement and Incentive Option Agreement each between
the Company and the Executive and dated June 15, 1998 shall remain in full force
and effect.
5. EMPLOYMENT TERMINATION. The employment of the Executive by the
Company pursuant to this Agreement shall terminate immediately upon the
occurrence of any of the following:
(a) Expiration without renewal of the Extended Employment
Period in accordance with Section 1;
(b) For cause, at the election of the Company, immediately
upon written notice by the Company to the Executive. For the purposes of this
section 5(b), cause shall mean any willful misconduct by the Executive which
affects the business reputation of the Company or willful failure by the
Executive to perform his material responsibilities to the Company (including,
without limitation, breach by the Executive of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Executive and the Company); or
(c) For good reason by the Executive immediately upon written
notice by the Executive to the Company. For the purposes of this Section 5(c),
good reason shall mean any significant diminution in the Executive's title,
authority or responsibilities or any reduction in the Base Salary.
(d) Upon a "Change of Control" as such term is defined in the
Change of Control Contract.
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6. EFFECT OF TERMINATION
6.1 EXPIRATION OR EXTENDED EMPLOYMENT PERIOD. In the event the
Extended Employment Period expires without renewal in accordance with Section 1,
the following severance payments and arrangements (less applicable deductions
for social security, payroll and other applicable taxes) shall be made for the
benefit of the Executive:
(a) cash payments in bi-weekly installments at the
Executive's current bi-weekly Base Salary at the time of termination (which for
purposes of the payments due to the Executive under this Section 6.1(a) shall
not be not less than $250,000) for a period of 12 months commencing with the
month immediately succeeding the month during which the Extended Employment
Period expires without renewal;
(b) payment of bonuses otherwise earned but not yet
paid to the Executive under Section 3 through the date of termination; and
(c) normal employee medical benefits shall be
continued for the Executive for a period of 12 months, commencing with the month
immediately succeeding the month during which the Extended Employment Period
expires without renewal.
6.2 TERMINATION FOR CAUSE. In the event the Executive's
employment is terminated for cause pursuant to Section 5(b), the Company shall
pay to the Executive the compensation, benefits and bonuses otherwise payable to
him under Section 3 through the date of termination.
6.3 TERMINATION OTHER THAN FOR CAUSE OR TERMINATION FOR GOOD
REASON. In the event the Executive's employment is terminated (i) by the Company
other than for cause or (ii) by the Executive for good reason, as defined in
Section 5(c), the following severance payments and arrangements (less applicable
deductions for social security payroll and other applicable taxes) shall be made
for the benefit of the Executive:
(a) cash payments in bi-weekly installments at the
Executive's current bi-weekly Base Salary at the time of termination (which for
purposes of calculating the amount of any payments due to the Executive under
this Section 6.3(a) shall not be less than $250,000) for a period equal to [the
greater of (i) the otherwise remaining term of the Extended Employment Period or
(ii)] 24 months, commencing with the month immediately succeeding the month
during which the termination occurred;
(b) Employee group medical and dental benefits shall
be continued for the Executive for a period of 24 months, commencing with the
month immediately succeeding the month during which the termination occurred;
and
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(c) payment of bonuses otherwise earned but not yet
paid to Executive under Section 3 through the date of termination.
6.4 CHANGE OF CONTROL. In the event of a Change of Control,
the terms and conditions of the Change of Control Contract shall govern the
Executive's compensation.
6.5 SURVIVAl. The provisions of Section 6 shall survive the
termination of this Agreement.
7. PROPRIETARY INFORMATION AND DEVELOPMENT.
7.1 PROPRIETARY INFORMATION.
(a) The Executive agrees that all information,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business, business relationships or financial affairs
(collectively, "Proprietary Information") is and shall be the exclusive property
of the Company. By way of illustration, but not limitation, Proprietary
Information may include inventions, products, processes, methods, techniques,
formulas, compositions, compounds, projects, developments, plans, research data,
clinical data, personnel data, computer programs, customer and supplier lists,
and contacts at or knowledge of customers or prospective customers of the
Company. The Executive will not disclose any Proprietary Information to any
person or entity other than employees of the Company or use the same for any
purposes (other than in the performance of his duties as an employee of the
Company) without written approval by an officer of the Company, either during or
after his employment with the Company, unless and until such Proprietary
Information has become public knowledge without fault by the Executive.
(b) The Executive agrees that all files, letters,
memoranda, reports, records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the Executive or others,
which shall come into his custody or possession, shall be and are the exclusive
property of the Company to be used by the Executive only in the performance of
his duties for the Company. All such materials or copies thereof and all
tangible property of the Company in the custody or possession of the Executive
shall be delivered to the Company, upon the earlier of (i) a request by the
Company or (ii) termination of his employment. After such delivery, the
Executive shall not retain any such materials or copies thereof or any such
tangible property.
(c) The Executive agrees that his obligation not to
disclose or to use information and materials of the types set forth in
paragraphs (a) and (b) above, and his obligation to return materials and
tangible property, set forth in paragraph (b) above, also extends to such types
of information, materials and tangible property of customers of the
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Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to the Executive.
7.2 DEVELOPMENTS.
(a) The Executive will make full and prompt
disclosure to the Company of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, whether patenable or not, which
are created, made, conceived or reduced to practice by him or under his
direction or jointly with others during his employment by the Company, whether
or not during normal working hours or on the premises of the Company (all of
which are collectively referred to in this Agreement as "Developments").
(b) The Executive agrees to assign and does hereby
assign to the Company (or any person or entity designated by the Company) all
his right, title and interest in and to all Developments and all related
patents, patent applications, copyrights and copyright applications. However,
this Section 7.2(b) shall not apply to Developments which do not relate to the
present or planned business or research and development of the Company and which
are made and conceived by the Executive not during normal working hours, not on
the Company's premises and not using the Company's tools, devices, equipment or
Propriety Information. The Executive understands that, to the extent this
Agreement shall be construed in accordance with the laws of any state which
precludes a requirement in an employee agreement to assign certain classes of
inventors made by an employee, this Section 7.2(b) shall be interpreted not to
apply to any invention which a court rules and/or the Company agrees falls
within such classes. The Executive also hereby waives all claims to moral rights
in any Developments.
(c) The Executive agrees to cooperate fully with the
Company, both during and after his employment with the Company, with respect to
the procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and foreign countries)
relating to Developments. The Executive shall sign all papers, including,
without limitation, copyright applications, patent applications, declarations,
oaths, formal assignments, assignments of priority rights, and powers of
attorney, which the Company may deem necessary or desirable in order to protect
its rights and interests in any Development. The Executive further agrees that
if the Company is unable, after reasonable effort, to secure the signature of
the Executive on any such papers, any executive officer of the Company shall be
entitled to execute any such papers as the agent and the attorney-in-fact of the
Executive, and the Executive, and the Executive hereby irrevocably designates
and appoints each executive officer of the Company as his agent and
attorney-in-fact to execute any such papers on his behalf, and to take any and
all actions as the Company may deem necessary or desirable in order to protect
its rights and interests in any Development, under the conditions described in
this sentence.
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7.3 OTHER AGREEMENTS. The Executive hereby represents that,
except as the Executive has disclosed in writing to the Company, the Executive
is not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with the Company or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. The Executive further represents that his
performance of all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by the Executive in confidence or in
trust prior to his employment with the Company, and the Executive will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others.
8. ATTORNEY'S FEES AND EXPENSES. The Company shall pay, on the
Commencement Date, the reasonable costs and expenses of one counsel to the
Executive, in connection with the preparation of this Agreement and the other
agreements contemplated hereby, up to a maximum of $2,000.
9. NOTICES. Any notice required to be given pursuant to the provisions
of this Agreement shall be in writing and, if mailed, sent by registered or
certified mail, postage prepaid, with a copy delivered by an overnight courier
service of recognized standing, to the party named at the address set forth
below, or at such other address as each party may hereafter designate in writing
to the other party:
Employer: ECC International Corp.
0000 Xxxx Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. XxXxxx,
Chairman of the Board
With a copy to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Executive: Xxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxx X. Xxxxxx, Esq.
2560 Gulf to Xxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
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Any such notices shall be deemed to have been delivered when served
personally, or 48 hours after being mailed in the manner specified above.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
11. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
12. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Delaware.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by him.
14. MISCELLANEOUS.
(a) No delay or omission by the Company or the Executive in
exercising any right under this Agreement shall operate as a waiver of that or
any other right. A waiver or consent given by the Company or the Executive on
any one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
(b) The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
(c) In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
15. LEGAL FEES. In the event that legal proceedings are commenced by
the Executive against the Company, or by the Company against the Executive, in
connection with this Agreement or the transactions contemplated hereby, the
party or parties which do not prevail in such proceedings shall pay the
reasonable attorneys' fees and other costs and expenses, including investigation
costs, incurred by the prevailing party in such proceedings.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
ECC INTERNATIONAL CORP
By:
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Name:
Title:
EXECUTIVE
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Xxxxx X. Xxxxxxx
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