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Exhibit 10.1.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of April 1, 1997 (the "Effective Date"), at Akron, Ohio, by and between
TELXON CORPORATION ("Employer"), a Delaware corporation with offices at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇- 3352, and ▇▇▇▇▇ ▇. BRICK ("Employee").
All initially capitalized terms which are not defined where first used
are defined in EXHIBIT A attached hereto and incorporated herein by this
reference.
In consideration of the mutual promises and agreements contained
herein, the parties hereto agree as follows:
1. EMPLOYMENT PERIOD. Employer agrees to employ Employee and Employee
agrees to serve Employer for the three (3) year period (the "Employment Period")
beginning on the Effective Date and ending at 11:59 p.m., Akron, Ohio, local
time, on March 31, 2000. This Agreement may be terminated earlier pursuant to
Section 4 hereof.
2. NATURE OF DUTIES.
(a) Employee shall serve as Employer's President and Chief
Executive Officer. As such, Employee shall act in conformity with the
management policies, guidelines and directions issued by Employer's
Board of Directors (the "Board"), and shall have general charge and
supervision of those functions and such other responsibilities as the
Board shall determine and assign as are typically performed by and the
responsibility of a chief executive officer of a publicly-held
corporation. Employee shall report to the Board.
(b) Employee shall work exclusively for Employer on a
full-time basis in such capacity and shall carry on his employment at
such location as shall be required by the Board, except for time spent
traveling on business on behalf of Employer. During normal business
hours, Employee shall devote all of his time and attention to
Employer's business.
(c) Employee shall perform his duties and responsibilities
hereunder diligently, faithfully and loyally in order to cause the
proper, efficient and successful operation of Employer's business.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY AND EXPENSES.
(i) During the Employment Period, Employer shall pay
to Employee a salary at the rate of Seven Hundred Fifty
Thousand Dollars ($750,000) per annum (the "Base Salary"). The
Base Salary shall be earned and paid in arrears, in equal
installments, every second Friday, or at such other interval
as the Board shall direct.
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(ii) Employer shall reimburse Employee for all
reasonable out-of-pocket expenses incurred by Employee on
Employer's behalf during the Employment Period, as approved by
Employer's Chief Financial Officer, to be periodically
reviewed by the Board.
(b) BONUS COMPENSATION.
(i) In addition to the Base Salary, in each year
during the Employment Period, Employer shall pay to Employee
bonus compensation of up to Two Hundred Fifty Thousand Dollars
($250,000) (the "Bonus Compensation"). The Bonus Compensation
shall be earned, if at all, if Employer meets or exceeds the
Operating Earnings target provided for in the Budget.
(ii) The Bonus Compensation shall have no pro rata
components thereto, except that in any fiscal year that ninety
percent (90%) or more, but less than one hundred percent
(100%), of the Operating Earnings target is met, Employer
shall pay to Employee One Hundred Twenty-Five Thousand Dollars
($125,000), or one-half of the potential Bonus Compensation,
for that fiscal year.
(iii) Bonus Compensation shall be earned, if at all,
at such time as the relevant goal is met, but no later than
the end of the fiscal year in question, and shall be paid
within thirty (30) days after the end of the fiscal year in
which it is earned.
(c) INCENTIVE COMPENSATION.
(i) In addition to the Base Salary and the Bonus
Compensation provided for in Sections 3(a) and 3(b), in each
year during the Employment Period that Employer's Operating
Earnings exceed the Operating Earnings target in the Budget,
Employer shall pay to Employee incentive compensation in an
amount equal to eight percent (8%) of such excess (the
"Incentive Compensation").
(ii) Incentive Compensation shall be earned, if at
all, at such time as the relevant goal is met, but no later
than the end of the fiscal year in question, and shall be paid
within thirty (30) days after the end of the fiscal year in
which it is earned.
(d) STOCK OPTIONS.
(i) On March 17, 1997, Employer granted Employee
options (the "Options") under Employer's then current employee
stock option plan, to purchase three hundred thousand
(300,000) shares of Employer's common stock ("Shares").
(ii) The Options vest as follows: on each of the
first three (3) anniversaries of the grant date of the
Options, either (A) Options to purchase fifty thousand
(50,000) Shares will vest for each Thirty Million Dollar
($30,000,000)
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incremental increase in Employer's market capitalization value
(determined in accordance with Section 3(d)(iii)) during that
year (Employer's market value must then exceed Three Hundred
Million Dollars ($300,000,000)), or (B) Options to purchase
one hundred thousand (100,000) Shares will vest, whichever is
greater.
(iii) Market capitalization value for purposes of
determining the vesting schedule of the Options shall be the
price of one Share at the close of business on each of the
annual measurement dates, multiplied by the total number of
Shares issued and outstanding on each of those dates.
(iv) All of Employee's then outstanding un-vested
Employer stock options (including the Options) and restricted
stock shall immediately vest and be exercisable for the
remainder of their original term:
(1) upon Employer's termination of Employee
other than for Cause pursuant to Sections 4(b) and
(c);
(2) upon Employee's death prior to
termination or expiration of this Agreement;
(3) after an Un-Approved Change in Control
(defined in Exhibit A) if Employee terminates his
employment no more than thirty (30) days after such
Un-Approved Change in Control; or
(4) if this Agreement expires and is not
renewed by Employer.
(v) This Section 3(d) amends all prior agreements
between Employer and Employee relating to Employer stock
options and restricted stock.
(e) MARKET APPRECIATION BONUS.
(i) So long as the average closing sale price of the
Shares on the Nasdaq Stock Market quotation system calculated
over the twenty (20) consecutive trading days for which a sale
price was reported immediately preceding, but not including,
April 1, 2000 (the "Average Share Value"), is higher than
Twenty Six Dollars ($26) per Share and this Agreement has not
been terminated or expired, Employer shall pay to Employee (in
Shares and/or cash, at the discretion of the Board), subject
to Section 5, an amount calculated as follows (the "Market
Appreciation Bonus"):
(1) one and one-half percent (1-1/2%) of
that portion of Employer's market capitalization
value in excess of Four Hundred Seventeen Million
Dollars ($417,000,000) but equal to or less than Five
Hundred Eighty-Five Million Dollars ($585,000,000);
and
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(2) two percent (2%) of that portion of
Employer's market capitalization value in excess of
Five Hundred Eighty-Five Million Dollars
($585,000,000).
If any extraordinary events or transactions, such as
acquisitions by Employer in stock-for-stock mergers, or the
issuance of additional capital stock or other securities, have
contributed to the market capitalization values in Sections
3(e)(i)(1) and (2), the amounts to be paid to Employee as
Market Appreciation Bonus shall be equitably adjusted as
agreed upon and negotiated in good faith by the Board and
Employee.
(ii) The date with reference to which the Average
Share Value is determined (but not the payment date) shall be
accelerated in the following circumstances:
(1) if prior to April 1, 2000, either
Employer terminates Employee other than for Cause
pursuant to Section 4(b) or (c), or Employee has died
prior to the expiration of this Agreement, or this
Agreement expires and is not renewed by Employer,
then the Average Share Value shall be determined
based on the twenty (20) consecutive trading days
immediately preceding the date of such termination,
expiration or death, not April 1, 2000;
(2) in further consideration for Employee's
covenant not to compete under Section 7(a), if prior
to April 1, 2000, Employee resigns his employment
following an Un-Approved Change in Control, or an
Approved Change in Control, then the Average Share
Value shall be determined based on the twenty (20)
consecutive trading days immediately preceding the
date of such resignation, not April 1, 2000; or
(3) if Employer becomes privately held, then
the Average Share Value shall be determined based on
the twenty (20) consecutive trading days immediately
preceding the last day on which Employer's stock is
publicly traded.
(iii) Market capitalization value shall be determined
by multiplying the relevant Average Share Value by the total
number of Shares which are issued and outstanding at the time
of measurement.
(iv) The Average Share Value used in this Section
3(e) shall be adjusted ratably up or down from time to time
for all increases and decreases in the total number of Shares
issued and outstanding as a result of stock dividends,
stock-splits and reverse stock-splits which have been approved
by the Board.
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(v) Market Cap Bonus shall be earned, if at all, at
the following dates:
(1) April 1, 2000 if the Average Share Value
is determined under Section 3(e)(i);
(2) the date of termination, expiration or
death, as the case may be, if the Average Share Value
is determined under Section 3(e)(ii)(1); and
(3) the date of resignation if the Average
Share Value is determined under Section 3(e)(ii)(2).
Market Cap Bonus shall be paid within thirty (30)
days after the date of being earned.
(f) SEVERANCE. In addition to all other amounts due hereunder:
(i) other than after an Un-Approved Change in
Control, if:
(1) Employer terminates Employee other than
for Cause pursuant to Section 4(b) or (c); or
(2) this Agreement expires and is not
renewed by Employer,
then Employer shall continue to pay to Employee as severance,
his Base Salary during the twenty-four (24) month period
following the date of such termination or expiration, or for
the remaining term of this Agreement, whichever is longer; or
(ii) after an Un-Approved Change in Control, if:
(1) Employee terminates his employment no
more than thirty (30) days after such Un-Approved
Change in Control;
(2) Employer terminates Employee other than
for Cause pursuant to Section 4(b) or (c); or
(3) this Agreement expires and is not
renewed by Employer,
then Employer shall immediately upon such event pay
to Employee a lump sum amount equal to two and
ninety-nine one-hundredths (2.99) times his Base
Salary.
(g) VACATION. During the Employment Period, Employee shall be
entitled to take vacation time in accordance with Employer's policies.
In the event that all or any part of said vacation is not taken for any
reason during any such year, there will be no compensation
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paid in lieu thereof, and accrued and unused vacation time shall not be
carried over and added to the vacation time for the succeeding year in
accordance with such policy, unless otherwise approved by the Board.
(h) HEALTH, DISABILITY, RETIREMENT, DEATH AND INSURANCE
BENEFITS.
(i) Employer shall provide Employee with the same
health, disability, retirement and death and other fringe
benefits as are generally provided to the executive employees
of Employer in accordance with such terms, conditions and
eligibility requirements as may from time to time be
established or modified by Employer.
(ii) Employer shall obtain "split-dollar" universal
policies of life insurance with aggregate death benefits of at
least Five Million Dollars ($5,000,000) on the life of
Employee. Such policies shall provide that at the time of
Employee's death, Employer is entitled to receive a return of
any premium paid by it, and Employee's designated
beneficiaries shall receive the balance of the policies' death
benefit. If Employee remains employed by Employer until at
least age sixty (60), Employer shall pay to Employee from, but
only from, the cash value of the policies deferred salary
continuation of $158,000 per year for 15 years, or such lesser
amount as may then be payable to Employer from the cash value
of the policies at the time of Employee's retirement. Employer
is the owner of such policies of life insurance.
Employee shall have the right and option to purchase
such life insurance policies from Employer if Employee
resigns, is terminated by Employer, or this Agreement expires
and is not renewed by Employer, prior to Employee reaching age
sixty (60). Employee must provide Employer with written notice
of Employee's election to purchase the life insurance policies
no more than ten (10) days after such triggering event. The
purchase price shall be equal to the policy's cash surrender
value (as determined by the insurance company) on the date
Employer receives Employee's written notice (less any
indebtedness against such policy), plus any unearned premium
as of such date.
After any life insurance policy is transferred to
Employee, he shall be solely responsible for all premium
payments and entitled to all proceeds from such policy. Any
transfer of a life insurance policy is subject to the terms of
the policy and the consent, if required, of the insurer.
(iii) Employer shall, to the extent allowable by law,
regulation, contract and policy, continue to pay Employee's
basic medical insurance premiums for eighteen (18) months
following a termination of Employee by Employer other than for
Cause, or if this Agreement expires and is not renewed by
Employer.
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4. TERMINATION.
(a) This Agreement shall terminate automatically upon
Employee's death.
(b) Employer may terminate Employee at any time upon not less
than thirty (30) days prior written notice to Employee:
(i) other than for Cause; or
(ii) if at any time Employee is unable to perform the
essential functions of his job, even with reasonable
accommodations, as a result of a disability or illness
(determined in accordance with the same standards applicable
to the employees of Employer generally under the disability
benefits referred to in Section 3(h)(i)). If Employer
terminates Employee for disability or illness reasons, such
termination shall be deemed to be a termination by Employer
other than for Cause.
(c) If at any time during the Employment Period Employer
assigns Employee to serve in a capacity other than as Employer's
President and Chief Executive Officer or assigns Employee to perform
tasks inconsistent with such position ("Demotion"), then Employee may
resign his employment within thirty (30) days of such event and such
resignation shall be deemed to be a termination by Employer other than
for Cause.
(d) Employer shall have the right to terminate Employee at any
time, immediately, for Cause. "Cause" shall mean behavior of Employee
which is adverse to Employer's interest, including, without limitation,
Employee's dishonesty, grossly negligent misconduct, willful
misconduct, disloyalty, acts of bad faith, neglect of duty or material
breach of this Agreement.
5. EFFECTS OF TERMINATION.
(a) In the event of automatic termination of his employment
pursuant to Section 4(a) by reason of Employee's death, all of
Employer's obligations under this Agreement shall end except for
Employer's obligations to pay Employee's Base Salary, Bonus
Compensation, if any, Incentive Compensation, if any, and Market Cap
Bonus, if any, in each case earned and accrued but unpaid to the date
of death. In such event, Employee's designated beneficiaries (or his
estate if there are no designated beneficiaries) shall have the right
to receive the death benefits due under the life insurance policies
provided to Employee pursuant to Sections 3(h)(i) and (ii), if any.
(b) In the event that Employer exercises its right of
termination other than for Cause pursuant to Section 4(b) or 4(c),
Employee resigns within thirty (30) days following an Un-Approved
Change in Control or an Approved Change in Control, or if this
Agreement expires and is not renewed or extended by Employer, all of
Employer's obligations under this Agreement shall end except:
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(i) for Employer's obligations to pay Employee's Base
Salary, Bonus Compensation, if any, Incentive Compensation, if
any, and Market Cap Bonus, if any, in each case earned and
accrued but unpaid to the date of termination (which, for
purposes of this Section 5(b), shall be thirty (30) days after
the date on which notification is provided by Employer to
Employee pursuant to Section 4(b) or at the expiration of this
Agreement, whichever the case may be);
(ii) if such termination is for disability or
illness, Employee shall have the right to receive the benefits
due under the disability insurance policies provided to
Employee pursuant to Section 3(h)(i), if any; and
(iii) payment of health insurance premiums under
Section 3(h)(iii) and severance payments due under Section
3(f), if any.
(c) In the event that Employer exercises its right of
termination pursuant to Section 4(d) for Cause, or Employee voluntarily
leaves the employ of Employer prior to the expiration of this Agreement
for any reason other than following a Demotion (as permitted in Section
4(c)) or within thirty (30) days after either an Un-Approved Change in
Control or an Approved Change in Control (which event is governed by
Section 5(b)), all of Employer's obligations under this Agreement shall
end except for Employer's obligations to pay Employee's Base Salary, if
any, earned and accrued but unpaid to the date of termination (which,
for the purposes of this Section 5(c), shall be at the date of
termination or at the date Employee otherwise leaves the employ of
Employer).
(d) All payments to be made to Employee under this Agreement
are subject to offset by Employer for any claims for damages,
liabilities, expenses or other indebtedness which Employer may have
against Employee.
(e) Any controversy or claim arising out of or relating to the
benefits and entitlements of Employee following a Change of Control (as
defined in Exhibit A as an "approved change of control" or an
"unapproved change of control") under this Section 5, as well as those
provided for in Sections 3 and 6, shall be settled by submitting the
matter to binding arbitration in Cleveland, Ohio, by and pursuant to
the rules of the American Arbitration Association then in effect. The
determination of the arbitrator shall be conclusive and binding on the
Employer and Employee, and judgment may be entered on the arbitrator's
award in any court of competent jurisdiction. Employer shall pay to
Employee all legal fees and expenses incurred by Employee in disputing
in good faith any issue arising hereunder related to such benefits or
entitlements of Employee. Such payments shall be made within five (5)
business days after delivery of Employee's written request for payment
accompanied by such evidence of fees and expenses incurred as Employer
reasonably may require.
6. EXCESS PARACHUTE PAYMENTS. Anything in this Agreement to the
contrary notwithstanding, in the event that any amounts payable to Employee
hereunder, alone or together
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with other payments which Employee has a right to receive from Employer, would
constitute an "excessive parachute payment" (as defined in Section 280G of the
Internal Revenue Code of 1954, as amended (the "Code")), then Employer shall pay
the excise tax imposed by Section 4999 of the Code as well as any taxes that
would be due from Employee as a result of Employer's payment of the excise tax
and the payment of such taxes, until the payments due to employee are fully
grossed-up.
7. COVENANT NOT TO COMPETE.
(a) INDUCEMENT. This covenant between Employee and Employer is
being executed and delivered by Employee in consideration of Employee's
employment with employer and Employer's obligations hereunder
(including, without limitation, the Base Salary, Bonus Compensation,
Incentive Compensation, Market Cap Bonus, and other benefits and
payments set forth herein). Employer and Employee agree that in further
consideration for this covenant, the Average Share Value shall be
determined as set forth in Section 3(e)(ii)(2) in the event that
Employee resigns his employment following an Approved or Un-Approved
Change in Control. Employee acknowledges that Employer's business and
Employee's responsibilities are international in scope. Employee
further acknowledges that the covenant not to compete with Employer
contained in this Section 7 was and has been a condition of his
employment since Employee was originally employed by Employer.
(b) RESTRICTED ACTIVITIES - DURATION. Except as otherwise
consented to or approved by the Board in writing, Employee agrees that,
in addition to being operative during the term of this Agreement, the
provisions of Sections 7(b)(i) through (iii) hereof, inclusive, shall
be operative for a period of twenty-four (24) months after Employee's
termination of employment with Employer, regardless of the time, manner
or reasons for termination, and regardless of whether terminated by
Employee or Employer. During such period, Employee will not, directly
or indirectly, acting alone or as a member of a partnership or as an
owner, director, officer, employee, manager, representative or
consultant of any corporation or other business entity:
(i) engage in any business in competition with or
adverse to the business that is conducted by Employer, or,
without limiting the generality of the foregoing, engage in
any business which manufactures, sells, distributes, services
or supports products which are of the type manufactured, sold,
marketed, serviced or supported by Employer, or which are in
the process of development in which Employee has participated
or has knowledge of, at the time of the termination of
Employee's employment with Employer, in the United States,
Canada or any European, Asian, Pacific or other foreign
country in which Employer then or thereafter transacts
business or is making a bona fide attempt to do so;
(ii) induce, request or attempt to influence any
customers or suppliers of Employer to curtail or cancel their
business or prospective business with Employer or in any way
interfere with Employer's business relationships; or
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(iii) induce, solicit, assist or facilitate the
inducement or solicitation by a third person of any employee,
officer, agent or representative of Employer, to terminate
their respective relationship with Employer or in any way
interfere with Employer's employee, officer, agent or
representative relationships.
(c) TOLLING; RELIEF OF OBLIGATIONS. In the event that Employee
breaches any provision of this Section 7, such violation (i) shall toll
the running of the twenty-four (24) month period set forth in Section
7(b) from the date of commencement of such violation until such
violation ceases, and (ii) shall relieve Employer of any obligations to
Employee under this Agreement.
(d) "BLUE PENCILING" OR MODIFICATION. If either the length of
time, geographic area or scope of restricted business activity set
forth in Section 7(b) is deemed unreasonably restrictive or
unreasonable in any other respect in any court proceeding, Employee and
Employer agree and consent to such court's modifying or reducing such
restriction(s) to the extent deemed reasonable under the circumstances
then presented.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) Employee acknowledges that the discharge of Employee's
duties under this Agreement will necessarily involve his access to
Confidential Information. Employee acknowledges that the unauthorized
use by him or disclosure by him of such Confidential Information to
third parties might cause irreparable damage to Employer and Employer's
business. Accordingly, Employee agrees that at all times after the date
hereof he will not copy, publish, disclose, divulge to or discuss with
any third party nor use for his own benefit or that of others, without
the prior express written consent of the Board, except in the normal
conduct of his duties under this Agreement, any Confidential
Information, it being understood and acknowledged by Employee that all
Confidential Information created, compiled or obtained by Employee or
Employer, or furnished to Employee by any person while Employee is
associated with Employer remains its exclusive property.
(b) Promptly upon termination of his employment, irrespective
of the time or manner thereof or reason therefor, and whether such
termination is by Employer or Employee, Employee agrees to return and
surrender to Employer all Confidential Information in any manner in his
control or possession, as well as all other Employer property.
9. REMEDIES INADEQUATE.
(a) Employee acknowledges that the services to be rendered by
him to Employer as contemplated by this Agreement are special, unique
and of extraordinary character. Employee expressly agrees and
understand that the remedy at law for any breach by him of Section 7 or
8 of this Agreement will be inadequate and that the damages flowing
from such breach are not readily susceptible to being measured in
monetary terms. Accordingly, upon
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adequate proof of Employee's violation of any legally enforceable
provision of Section 7 or 8, Employer shall be entitled to immediate
injunctive relief, including, without limitation, a temporary order
restraining any threatened or further breach. In the event any
equitable proceedings are brought to enforce the provisions of any of
Section 7, 8 or 9, Employee agrees that he will not raise in such
proceedings any defense that there is an adequate remedy at law, and
Employee hereby waives any such defense. Nothing in this Agreement
shall be deemed to limit Employer's remedies at law or in equity for
any breach by Employee of any of the provisions of Section 7 or 8 which
may be pursued or availed of by Employer. Without limiting the
generality of the immediately preceding sentence, any covenant on
Employee's part contained in Section 7 or 8, which may not be
specifically enforceable shall nevertheless, if breached, give rise to
a cause of action for monetary damages.
(b) Employee has carefully considered, and has had adequate
time and opportunity to consult with his own counsel or other advisors
regarding the nature and extent of the restrictions upon him and the
rights and remedies conferred upon Employer under Sections 7, 8 and 9,
and hereby acknowledges and agrees that such restrictions are
reasonable in time, territory and scope, are designed to eliminate
competition which otherwise would be unfair to Employer, do not stifle
the inherent skill and experience of Employee, would not operate as a
bar to Employee's sole means of support, are fully required to protect
the legitimate interests of Employer and do not confer a benefit upon
Employer disproportionate to the detriment to Employee.
(c) The covenants and agreements made by Employee in Sections
7, 8 and 9 shall survive full payment by Employer to Employee of the
amounts to which Employee is entitled under this Agreement, the
expiration of the Employment Period and this Agreement.
10. RIGHTS. Employee acknowledges and agrees that any procedure, design
feature, schematic, invention, improvement, development discovery, know how,
concept, idea or the like (whether or not patentable, registrable under
copyright or trademark laws, or otherwise protectable under similar laws) that
Employee may conceive of, suggest, make, invent, develop or implement, during
the course of his service pursuant to this Agreement (whether individually or
jointly with any other person or persons), relating in any way to the business
of Employer or to the general industry of which Employer is a part, as shall all
physical embodiments and manifestations thereof, and all patent rights,
copyrights, trademarks (or applications therefor) and similar protections
therein (all of the foregoing referred to as "Work Product"), shall be the sole,
exclusive and absolute property of Employer. All Work Product shall be deemed to
be works for hire, and to the extent that any Work Product may not constitute a
work for hire, Employee hereby assigns to Employer all right, title and interest
in, to and under such Work Product, including without limitation, the right to
obtain such patents, copyright registrations, trademark registrations or similar
protections as Employer may desire to obtain. Employee will immediately disclose
all Work Product to Employer and agrees, at any time, upon Employer's request
and without additional compensation, to execute any documents and otherwise to
cooperate with Employer respecting the perfection of its right, title and
interest in, to and under such Work Product, and in nay litigation or
controversy in connection therewith, all expenses incident thereto to be borne
by Employer.
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11. ASSIGNMENT OF EMPLOYEE'S RIGHTS. In no event shall Employer be
obligated to make any payment under this Agreement to any assignee or creditor
of Employee. Prior to the time of payment under this Agreement, neither Employee
nor his legal representative shall have any right by way of anticipation or
otherwise dispose of any interest under this Agreement.
12. EMPLOYER'S OBLIGATIONS UNFUNDED. Except as to any benefits that may
be required to be funded under any benefit plan of Employer pursuant to law or
pursuant to other agreements and which are not for the sole benefit of Employee,
the obligations of Employer under this Agreement are not funded and Employer
shall not be required to set aside or deposit in escrow any monies in advance of
the due date for payment thereof to Employee.
13. NOTICES. Any notice to be given hereunder by Employer to Employee
shall be deemed to be given if delivered to Employee in person, or if mailed to
Employee, by certified mail, postage prepaid, return receipt requested, at his
address last known on the records of Employer, and any notice to be given by
Employee to Employer shall be deemed to be given if delivered in person or by
mail, postage prepaid, return receipt requested, to the Chairman of the Board of
Employer at Employer's offices in Akron, Ohio, unless Employee or Employer shall
have duly notified the other parties in writing of a change of address. If
mailed, such notice shall be deemed to have been given when deposited in the
mail as set forth above.
14. AMENDMENTS. This Agreement shall not be modified or discharged, in
whole or in part, except by an agreement in writing signed by the parties
hereto.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties. The parties are not relying on any other representation,
express or implied, oral or written. This Agreement supersedes any prior
employment agreement, written or oral, between Employee and Employer.
16. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not affect the meaning of any terms or
provisions hereof. References to "termination of employment," "termination of
Employee," "termination of this Agreement," "termination of the Employment
Period," "resigns" and any other terms of similar meaning shall all be deemed
equivalent.
17. BINDING EFFECT; STOCKHOLDER APPROVAL. The rights and obligations of
Employer hereunder shall inure to the benefit of, and shall be binding upon,
Employer and its successors and assigns, and the rights and obligations of
Employee hereunder shall inure to the benefit of, and shall be binding upon,
Employee and his heirs, personal representatives and estate. Prior to the
payment of the Bonus Compensation, Incentive Compensation or Market Cap Bonus,
such compensation must be approved by Employer's stockholders in accordance with
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder. Employer hereby represents that a "Section
162(m) Performance-Based Bonus Plan" was approved by its stockholders at
Employer's September 1997 stockholders meeting.
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18. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially enforceable provision shall be binding and enforceable to the extent
enforceable in any jurisdiction.
19. GOVERNING LAW AND VENUE. This Agreement shall be interpreted,
construed, and enforced in all respects in accordance with the laws of the State
of Ohio. Any and all actions brought arising out of, or based in whole or in
part upon this Agreement or the employment relationship, shall be brought in
either a federal or state court sitting in the State of Ohio, specifically and
exclusively in either the Cuyahoga County Court of Common Pleas sitting in
Cleveland, Ohio, the Summit County Court of Common Pleas sitting in Akron, Ohio,
or the Federal District Court for the Northern District of Ohio, Eastern
Division, and the parties consent to jurisdiction thereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written, effective the Effective Date.
EMPLOYER:
TELXON CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇
-------------------------------------
Dr. ▇▇▇ ▇▇▇▇▇, Chairman of the
Board of Directors
EMPLOYEE:
/s/ ▇▇▇▇▇ ▇. Brick
-----------------------------------------
▇▇▇▇▇ ▇. Brick
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EXHIBIT A
EMPLOYMENT AGREEMENT
▇▇▇▇▇ ▇. BRICK/TELXON CORPORATION
DEFINITIONS
"Approved Change in Control" of Employer shall mean a change in control
of Employer of a nature which would be required to be reported in response to
Item 1(a) of the Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") if the transaction causing such a change shall have
been approved by the affirmative vote of at least a majority of the Continuing
Directors. Without limitation, such an Approved Change in Control shall be
deemed to have occurred at such time as: (i) any "person" (as such term is used
in Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of fifteen percent (15%) or more of the combined voting power of
Employer's Voting Securities; (ii) liquidation of all or substantially all of
the assets of Employer, or any merger, consolidation, or reorganization to which
Employer is a party and as the result of which Employer's stockholders prior to
the transaction do not own at least fifty percent (50%) of the voting power of
the surviving entity in the election of directors; or (iii) individuals who
constitute the Continuing Directors cease for any reason to constitute at least
a majority of Employer's Board of Directors.
"Average Share Value" shall have the meaning defined in Section
3(e)(i).
"Base Salary" shall have the meaning defined in Section 3(a)(i).
"Board" shall have the meaning defined in Section 2(a).
"Bonus Compensation" shall have the meaning defined in Section 3(b)(i).
"Budget" shall mean for each fiscal year, Employer's management budget
presented to and approved by the Board for the fiscal year in question.
"Code" shall have the meaning defined in Section 6.
"Confidential Information" means all information or trade secrets of
any type or description belonging to Employer which are proprietary and
confidential to Employer and which are not publicly disclosed or are only
disclosed with restrictions. Without limiting the generality of the foregoing,
Confidential Information includes strategic plans for carrying on business,
other business plans, cost data, internal financial information, customer lists,
employee lists, vendor lists, business partner or alliances lists manufacturing
methods or processes, product research or engineering data, drawings, designs,
schematics, flow charts, computer programs, program decks, routines,
subroutines, translators, compilers, operating systems, object and source codes,
specifications, inventions, calculations, discoveries and any letters, papers,
documents or instruments disclosing or
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reflecting any of the foregoing, and all information revealed to, acquired or
created by Employee during Employee's employment by Employer relating to any of
the foregoing.
"Continuing Directors" shall mean and include the persons constituting
Employer's Board of Directors as of the date of this Agreement, and any person
who becomes a director of Employer subsequent to the date hereof whose election,
or nomination for election by Employer's stockholders, was approved by an
affirmative vote of at least a majority of the then Continuing Directors (either
by a specific vote or by approval of the proxy statement of Employer in which
such person is named as a nominee for director or of the inclusion of such
person in such Proxy Statement as such a nominee, in any case without objection
by any member of such approving majority of the then Continuing Directors to the
nomination of such person or the naming of such person as a director nominee).
"Demotion" shall have the meaning defined in Section 4(c).
"Employment Period" shall have the meaning defined in Section 1.
"Excessive parachute payment" shall have the meaning defined in Section
6.
"Incentive Compensation" shall have the meaning defined in Section
3(c)(i).
"Voting Securities" shall mean Employer's outstanding securities
ordinarily having the right to vote at elections of directors.
"Market Cap Bonus" shall have the meaning defined in Section 3(e)(i).
"Operating Earnings" shall be generally defined as operating earnings
before interest and taxes and excluding capital and extraordinary gains and
losses, and after accrual for all executive bonuses including Employee's Bonus
Compensation under Section 3(b) and Incentive Compensation under Section 3(c).
"Options" shall have the meaning defined in Section 3(d)(i).
"Shares" shall have the meaning defined in Section 3(d)(i).
"Un-Approved Change in Control" of Employer shall mean a change in
control of Employer of a nature which would be required to be reported in
response to Item 1(a) of the Current Report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") if the transaction causing such a change
shall not have been approved by the affirmative vote of at least a majority of
the Continuing Directors. Without limitation, such an Un-Approved Change in
Control shall be deemed to have occurred at such time as: (i) any "person" (as
such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of fifteen percent (15%) or more of the combined voting
power of
2
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Employer's Voting Securities; (ii) liquidation of all or substantially all of
the assets of Employer, or any merger, consolidation, or reorganization to which
Employer is a party and as the result of which Employer's stockholders prior to
the transaction do not own at least fifty percent (50%) of the voting power of
the surviving entity in the election of directors; or (iii) individuals who
constitute the Continuing Directors cease for any reason to constitute at least
a majority of Employer's Board of Directors.
"Work Product" shall have the meaning defined in Section 10.
3