EXHIBIT 10.c
INCENTIVE AGREEMENT
This INCENTIVE AGREEMENT (the "Agreement") made and entered into effective
as of March 28, 2000, is by and between TECH-SYM CORPORATION, a Nevada
corporation (the "Company"), and J. XXXXXXX XXXX (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company considers it essential to the best interests of its
stockholders to xxxxxx the continued employment of key management personnel; and
WHEREAS, the Company's Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
members of the Company's management, including Employee, to their assigned
duties without distraction in potentially disturbing circumstances arising from
the possibility of a Change in Control (as defined herein) of the Company:
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Employee hereby agree
as follows:
1. DEFINED TERMS. The definitions of capitalized terms used in this
Agreement are provided in ATTACHMENT "A" hereto.
2. TERM. This Agreement shall commence on the Effective Date and shall
continue until the earliest of (a) Employee's 65th birthday, (b) termination of
Employee's employment by the Company for Cause prior to a Change in Control, and
(c) termination of Employee's employment by Employee for other than Good Reason
prior to a Change in Control; provided, however, that the Company may terminate
this Agreement by giving written notice to Employee any time after December 31,
2000, that the Agreement will terminate not earlier than fifteen months after
the date notice is received by Employee. Termination of this Agreement shall not
alter or impair the rights of Employee arising hereunder prior to such
termination.
3. EMPLOYEE BENEFIT. Unless Employee's employment is terminated prior to a
Change in Control by (i) the Company for Cause, or (ii) Employee without Good
Reason, then within five days following a Change in Control the Company shall
pay to Employee a cash, lump sum payment of $970,000 (the "Incentive Payment"),
less applicable income and FICA tax withholdings. Except as provided in Section
7 hereof, the Incentive Payment shall not be payable under this Agreement unless
there shall have been a Change in Control.
4. NO EMPLOYMENT CONTRACT. This Agreement shall not be construed as
creating an express or implied contract of employment and, except as otherwise
agreed in writing between Employee and the Company, Employee shall not have any
right to be retained in the employ of the Company.
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5. NO OBLIGATION TO MITIGATE DAMAGES. Employee shall not be required to
mitigate damages or the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Employee as a result of employment by another employer or by retirement
benefits, or otherwise.
6. EFFECT ON OTHER CONTRACTUAL RIGHTS. The provisions of this Agreement,
and any payment provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish Employee's existing rights, or rights which
would accrue solely as a result of the passage of time, under any benefit plan,
severance agreement or other contract, plan or arrangement, except that the
Termination Agreement dated May 1, 1998, between the parties shall be terminated
and rendered null and void upon the execution of this Agreement by both parties.
7. SUCCESSORS
(A) The Company shall require any successor or assign (whether direct or
indirect), by purchase, merger, consolidation or otherwise, to more than half of
the business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to Employee, expressly, absolutely and unconditionally
to assume and agree to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount as
provided in this Agreement immediately upon the effectiveness of such
succession.
(B) This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Employee should die
while any amounts or benefits would still be payable to Employee if Employee had
continued to live, all such amounts and benefits, unless otherwise provided
herein, shall be paid or provided in accordance with the terms of this Agreement
to the Employee's devisee, legatee, or other designee or, if there be no such
designee, to Employee's estate.
8. NOTICE. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when actually delivered or five days after deposit in the
United States mail, certified or registered, postage prepaid and addressed to
the respective addressees as set forth on the signature page(s) of this
Agreement, or to such other address as either party shall have furnished to the
other in writing in accordance herewith.
9. LIMITED INDEMNITY. In the event the payment under the Noncompetition
Agreement to be entered into by the parties providing for a two-year period of
noncompetition after termination of employment (x) for any reason on or after a
Change in Control, or (y) prior to a Change in Control, by the Company other
than for Cause or by the Employee for Good Reason is determined to be part of
all payments or benefits received or to be received by Employee which are or
will be subject to the Excise Tax, the Company shall fully indemnify Employee
against any such Excise Tax by paying to
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Employee an additional amount of cash in a lump sum, within five days of written
notice to the Company, such that after such additional payment Employee is in
the same net after-tax position that Employee would have been in had he not been
subject to the Excise Tax.
10. INCENTIVE PAYMENT REDUCTION. In the event the net present value of
accelerated stock options is or will be subject to the Excise Tax, the Incentive
Payment shall be reduced to the largest amount as will result in no portion of
the Incentive Payment not being fully deductible by the Company as a result of
Section 280G of the Code. The paragraph shall not limit in any way the
provisions of paragraph 9 above.
11. NONWAIVER. No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver, or discharge is agreed to in
writing signed by both parties. No waiver of either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
12. GOVERNING LAW. The interpretation, construction and performance of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Texas without regard to the principle of conflicts of laws. Both
parties hereto consent to the nonexclusive jurisdiction of the state and federal
courts sitting in Xxxxxx County, Texas.
13. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, each of which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same instrument.
15. DESCRIPTIVE HEADINGS. Descriptive headings are for convenience only
and shall not control or affect the meaning or construction of any provision of
this Agreement.
16. CORPORATE APPROVAL. This Agreement has been approved by the Company's
Board of Directors and has been duly executed and delivered to Employee on
behalf of the Company by its duly authorized representative.
17. LEGAL AND ACCOUNTING FEES AND EXPENSES. The Company shall pay all
legal and accounting fees and expenses incurred by Employee in disputing in good
faith any issue hereunder relating to the termination of Employee's employment,
in seeking in good faith to obtain or enforce any benefit or right provided by
this Agreement on in connection with any actual or threatened tax audit or
proceeding to the extent attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder or otherwise in connection
with a Change in Control or termination of employment. Such payments shall be
made within five days after delivery of Employee's written requests for payment
accompanied with such evidence of fees and expenses as the Company may
reasonably require.
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18. INTEREST. The Company shall pay to Employee interest at the maximum
rate allowed by law on any payment not paid when due.
IN WITNESS WHEREOF, the parties have entered into this Agreement for all
purposes as of the day and year first above written.
EMPLOYEE TECH-SYM CORPORATION
/S/J. XXXXXXX XXXX By:/S/X. XXXXXX XXXXXXX
------------------ ---------------------
J. Xxxxxxx Xxxx X. Xxxxxx Xxxxxxx
Vice President
Address:
Suite 200
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx XX 00000-0000
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Attachment A
DEFINITIONS
BENEFICIAL OWNER shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.
BOARD shall mean the Board of Directors of the Company.
BONUS PLAN shall mean the Company's Incentive Bonus Plan as the same may be
modified from time to time, but substantially in the form in effect on the
Effective Date.
CAUSE for termination by the Company of Employee's employment shall mean (a) the
willful and continued failure by Employee to substantially perform the
Employee's duties with the Company (other than any such failure resulting from
or anticipated to result from Employee's death or incapacity due to physical or
mental illness) which continues unabated for another thirty days after a written
demand for substantial performance is delivered to Employee by the Board, which
demand specifically identifies the manner in which the Board believes Employee
has not substantially performed Employee's duties, or (b) the willful engaging
by the Employee in gross misconduct which is demonstrably and materially
monetarily injurious to the Company and its subsidiaries taken as a whole. For
purpose of this paragraph, (x) no act, or failure to act, on Employee's part
shall be deemed "willful" unless done, or omitted to be done, by Employee not in
good faith and without reasonable belief that Employee's act, or failure to act,
was in the interest of the Company and (y) in the event of a dispute concerning
the application of this provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to the Compensation
Committee of the Board by clear and convincing evidence that Cause exists.
Notwithstanding the foregoing, Employee shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
Employee a certified copy of a resolution adopted pursuant to the recommendation
of the Compensation Committee, by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
which was called and held for the purpose of considering such termination (after
reasonable notice to the Employee and an opportunity for Employee, together with
Employee's counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, Employee was guilty of conduct set forth in clause
(a) or (b) of the definition of Cause herein, and specifying the particulars
thereof in detail.
A CHANGE IN CONTROL shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:
(A) any person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities;
(B) during any period of two consecutive years commencing with the annual
meeting of stockholders on May 11, 1999, individuals who at the beginning of
such period constitute the Board cease for any reason to constitute at least
two-thirds of the directors constituting the Board;
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(C) there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other company other than
(a) merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of a complete or
substantially complete liquidation or dissolution of the Company; or
(E) there is consummated an agreement for the sale or disposition by the
Company of a significant portion of the Company's assets. For the purposes of
this paragraph, the phrase "the sale or disposition by the Company of a
significant portion of the Company's assets" shall mean a transaction or series
of transactions involving the sale or disposition of assets of the Company or
any subsidiaries (including the stock of any subsidiaries) in which the value of
the assets or stock being sold or otherwise disposed of (as measured by the
consideration being paid or received therefor) constitutes more than 60% of the
fair market value of the Company as determined by the aggregate market value of
the Company's outstanding equity securities on the date of the transaction or,
in the event of a series of transactions, on the date of the last transaction
constituting a significant portion of the Company's assets.
CODE shall mean the Internal Revenue Code of 1986, as amended from time to time.
EFFECTIVE DATE of this Agreement shall mean March 28, 2000.
EMPLOYEE shall mean the individual named in the first paragraph of this
Agreement.
EXCISE TAX shall mean any excise tax imposed under section 4999 of the Code or
any successor section.
GOOD REASON for termination by the Employee of Employee's employment shall mean
the occurrence of any of the following without Employee's express written
consent:
(A) an adverse change in Employee's positions, duties, responsibilities,
titles or offices as in effect on the Effective Date or any removal of Employee
from or any failure to re-elect or appoint Employee to any of such
responsibilities, titles, offices or positions, except in connection with the
termination of Employee's employment for Cause;
(B) a reduction in Employee's annual base salary as in effect on the
Effective Date or as the same may be increased from time to time;
(C) the failure by the Company to continue the Bonus Plan, or a failure by
the Company to continue Employee as a significant participant in the Bonus Plan
in at least the same amount as the lowest annual amount paid or payable to
Employee with respect to the three calendar years preceding the Effective Date;
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(D) the failure by the Company to continue in effect any other material
employee benefit or compensation plan, program or policy in which Employee is
participating as of the Effective Date, unless the Company establishes such new
plans, programs or policies as is necessary to provide Employee with
substantially comparable benefits, the taking of any action by the Company not
required by law that would adversely affect Employee's participation in or
materially reduce Employee's benefits under any of such plans, programs or
policies, or deprive Employee of any material fringe benefit enjoyed by Employee
immediately prior to the Effective Date;
(E) the relocation of the Company's principal executive offices to a
location outside the greater Houston area, or the Company's requiring the
Employee to relocate anywhere other than the location of the Company's principal
executive offices except for required travel on the Company's business to an
extent substantially consistent with Employee's business travel obligations as
of the Effective Date;
(F) the amendment, modification or repeal of any provision of the
Certificate of Incorporation, as amended, or the ByLaws of the Company which was
in effect as of the Effective Date, if such amendment, modification or repeal
would materially adversely effect Employee's right to indemnification by the
Company;
(G) the failure of the Company to obtain the assumption of this Agreement
by any successor;
(H) any purported termination of the Employee's employment which is not
effected pursuant to the requirements stated in the definition of "Cause;" for
purposes of this Agreement, no such purported termination shall be effective.
The Employee's right to terminate the Employee's employment shall not be
affected by the Employee's incapacity due to physical or mental illness.
The Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
For purposes of any determination regarding the existence of Good Reason,
any claim by the Employee that Good Reason exists shall be presumed to be
correct unless the Company establishes by clear and convincing evidence that
Good Reason does not exist.
INCENTIVE PAYMENT shall have the meaning set forth in Section 3.
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