Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 31st day of
December, 1996, by and between SCAN-OPTICS, INC., a Delaware corporation with
its principal office in East Hartford, Connecticut (the "Corporation"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇, (the "Executive").
W I T N E S S E T H:
WHEREAS, The Corporation desires to employ the Executive and to be
assured of its rights to his services in an executive capacity on the terms and
conditions hereinafter set forth, and the Executive is willing to accept such
employment;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment.
The Corporation hereby employs the Executive as its President
and Chief Executive Officer and in such other executive capacities as the Board
of Directors of the Corporation may from time to time designate, and the
Executive accepts such employment and agrees to serve in such capacities upon
the terms and conditions hereinafter set forth.
2. Term.
The term of the Executive's employment under this Agreement (the
"Term") shall commence on December 31, 1996 and shall continue until the
Executive's employment is terminated by either party in accordance with the
terms of this Agreement.
3. Duties of Employment.
During the Term, the Executive shall perform all duties assigned
or delegated to him from time to time by the Board of Directors of the
Corporation, and shall perform all acts and services customarily associated
with his position as President and Chief Executive Officer of the Corporation,
devoting his full time, best efforts and attention to the advancement of the
interests and business of the Corporation hereunder, and shall not be engaged
in or concerned with any other duties or pursuits which are competitive or
inconsistent with the business of the Corporation.
4. Compensation and Benefits.
As compensation for the services to be rendered by the Executive
hereunder:
(a) The Corporation shall pay to the Executive a base salary
of TWO HUNDRED THOUSAND DOLLARS ($200,000) per year of the Term or such greater
amount as the Board of Directors of the Corporation may from time to time
determine, payable in equal monthly installments.
(b) The Corporation shall pay the Executive annual incentive
compensation as a participant in the Corporation's annual management bonus
program, involving both potential cash and option benefits, in amounts to be
determined by the Stock Options and Executive Compensation Committee of the
Board of Directors following the availability of annual financial results and
taking into consideration the Executive's attainment of the management
objectives determined annually by agreement between said Committee and the
Executive. Such incentive compensation will be paid within sixty (60) days
after the end of each year of the Term.
(c) During the Term, the Corporation shall purchase and
maintain for the Executive and his designated beneficiaries term life insurance
on the life of the Executive in the face amount of $550,000.
(d) During the Term, the Corporation shall provide the
Executive with a late model automobile of a model chosen by the Executive,
equipped with a telephone, shall replace such automobile every three years, and
shall pay all maintenance, insurance, tax and licensing expenses associated
with such automobile. The automobile shall be leased at a lease rate not to
exceed $800 per month or owned by the Corporation.
(e) The Executive shall be entitled to participate in the
Corporation's health and disability insurance plans in effect from time to
time. The Executive may participate in other Employee Benefits of the
Corporation available generally to its executive employees to the extent and on
such terms as the Board of Directors of the Corporation shall in its sole
discretion determine.
5. Expense Reimbursement.
(a) The Corporation shall reimburse the Executive for
reasonable expenses not exceeding $2,000 per year incurred by the Executive for
accounting and income tax return preparation services and tax advice. Such
amount shall be deemed income to the Executive for purposes of income taxation.
(b) The Corporation shall reimburse the Executive for ordinary
and necessary business expenses incurred by the Executive in the course of
performing his duties hereunder in accordance with the expense reimbursement
policies or practices of the Corporation in effect from time to time.
6. Vacation.
The Executive shall be entitled each year of the Term to a
vacation of four (4) weeks or of a length determined by the Corporation's
vacation policy in effect from time to time, whichever is greater, during which
time his compensation shall continue to be paid as provided in Section 4.
7. Confidential Information.
The Executive understands that in the course of his employment
by the Corporation, the Executive will receive certain trade secrets, lists of
customers and other confidential information concerning the business of the
Corporation, which the Corporation desires to protect. The Executive agrees
that he will not, at any time during or after his employment by the
Corporation, divulge to anyone outside the Corporation or use for his own
benefit any confidential information or trade secrets of the Corporation,
including but not limited to the management methods, operating techniques,
customer lists, costs, technology, know-how, prospective acquisitions,
employee lists, training manuals and procedures, personnel evaluation
procedures, collection procedures and non-public financial reports of the
Corporation. The Executive further agrees not to use any such confidential
information or trade secrets in competing with the Corporation at any time
during or after his employment by the Corporation.
8. Inventions and Discoveries.
(a) The Executive agrees that all inventions patentable or
otherwise, trade secrets, discoveries, improvements and ideas (hereinafter
collectively called "developments"), which he, alone or jointly with others,
may conceive, make, develop, or acquire during the period of his employment by
the Corporation (whether or not pursuant to this Agreement) or within one (1)
year thereafter, shall be the sole property of the Corporation.
(b) The Executive shall promptly and fully disclose all such
developments to the Board of Directors of the Corporation or to such persons as
the Board of Directors may designate, and shall not at any time during the
period of his employment or thereafter disclose to or use for the benefit of
any other person any of such developments. The Executive, at any time upon the
request of the Corporation, whether or not then in the Corporation's employ,
shall execute, acknowledge and deliver to the Corporation all instruments which
the Corporation shall prepare, give evidence and do all other things which are
necessary and desirable to enable the Corporation to file and prosecute
applications for, and to acquire, maintain and enforce, all letters patent,
trademark registrations or copyrights in all countries covering such
developments. The Executive shall not contest, or take any action which might
impair, the issuance, validity or scope of any of the foregoing.
(c) The Executive acknowledges that he shall not be entitled
to any further consideration or remuneration for the performance of his
obligations under this Section 8.
9. Covenants Not to Compete.
(a) The Executive covenants and agrees that, while he is
employed by the Corporation and, if the Corporation elects an extension
pursuant to Section 9(b), during the one (1) year period from and after the
termination of his employment with the Corporation, the Executive will not
(i) directly or indirectly in any manner or under any
circumstances or conditions whatsoever be or become interested, as an
individual, partner, principal, agent, employee, stockholder, officer,
director, trustee, or in any other capacity whatsoever, except as an owner of
not more than one percent (1%) of the voting or other equity stock of a public
corporation, in any other business similar to that of the Corporation or in any
way in competition with the business of the Corporation within the United
States of America, Canada, Japan and the other countries and jurisdictions in
which the Corporation then conducts its business;
(ii) directly or indirectly establish, conduct,
assist, or lend his name to any business organization which is then competing
or attempting to compete or which may compete with any line of business now or
during the term of this Agreement engaged in by the Corporation; or
(iii) directly or indirectly request, induce or
otherwise solicit or attempt to influence any employee of the Corporation to
leave such employment.
(b) At any time on or before the 15th day following the
termination of the Executive's employment with the Corporation, the Corporation
may, by giving written notice to the Executive, elect to extend the time in
which the covenants in Section 9(a) shall be binding upon the Executive for a
period of one-year from and after the termination of the Executive's employment
with the Corporation. If the Corporation so elects such an extension, then, in
addition to any severance pay that may otherwise be due the Executive pursuant
to this Agreement, the Corporation shall also pay the Executive a Non-
Competition Amount in an amount equal to the Executive's annual base salary at
the time of termination, payable in twelve equal monthly installments.
(c) The Executive covenants and agrees that, during the one (1)
year period from and after the termination of his employment with the
Corporation, the Executive will not directly or indirectly solicit from any
person, company or organization which was a client or customer of the
Corporation during any of the twelve (12) months immediately preceding such
termination, any business of any character similar to that done by the
Corporation at the time of such termination or use any trademark or trade
name which is similar to or might be confused with any trademark or trade name
used in the Corporation's business.
(d) If the Executive breaches any of the covenants in this
Section 9 and such breach remains uncured for more than ten (10) business days
after the receipt by the Executive of written notice from the Corporation of a
claimed breach and the nature of the claimed breach, then in addition to all
other remedies available to the Corporation, the Executive shall forfeit all
amounts otherwise due and unpaid under this Agreement.
(e) The parties hereto believe that the restrictive
covenants of this Section 9 are reasonable. However, if at any time it shall
be determined by any court of competent jurisdiction that this Section 9 or any
portion of it, as written, is unenforceable because the restrictions are
unreasonable, the parties hereto agree that such portions as shall have been
determined to be unreasonably restrictive shall thereupon be deemed so amended
as to make such restrictions reasonable in the determination of such court, and
the said covenants, as so modified, shall be enforceable between the parties to
the same extent as if such amendments had been made prior to the date of any
alleged breach of said covenants.
10. Remedies.
The Executive hereby acknowledges that his services are unique
and extraordinary, and are not readily replaceable, and hereby expressly agrees
that the Corporation in enforcing the covenants contained in Sections 7, 8 and
9, in addition to any other remedies provided for herein or otherwise available
at law, shall be entitled to apply to any court of equity having jurisdiction
for injunctive relief restraining him in the event of a breach, actual or
threatened, of the agreements and covenants contained in Section 7, 8 and 9.
11. Termination of Employment.
(a) Upon Death or Disability. The Executive's employment
under this Agreement shall terminate upon the death or disability (as
hereinafter defined) of the Executive. In such event, the Corporation shall
pay the Executive or his legal representative the accrued amounts specified in
Section 11(f), and the Corporation shall have no further obligations under this
Agreement. For purposes hereof, the Executive shall be deemed disabled if his
physical and/or mental condition medically is such that he personally is unable
to perform those duties he would otherwise be expected to continue to perform
as President and Chief Executive Officer of the Corporation and his
nonperformance of such duties can reasonably be expected to continue or does
continue for not less than three months. The final decision of total
disability hereunder shall be made by the Board of Directors of the
Corporation.
(b) By the Corporation for Cause. The Corporation may
terminate the Executive's employment upon written notice if the Executive,
prior to any termination by the Executive for Good Reason, has (i) breached his
obligations under this Agreement and such breach remains uncured for more than
ten (10) business days after receipt by the Executive of written notice from
the Corporation of a claimed breach and the nature of the claimed breach, (ii)
neglected or refused to attend to the material duties assigned to him by the
Board of Directors of the Corporation, and such neglect or refusal remain
uncured for more than ten (10) business days after receipt by the Executive of
written notice from the Corporation of the nature of the claimed neglect or
refusal, (iii) engaged in willful or reckless misconduct or gross negligence in
the performance of his duties under this Agreement, (iv) misappropriated any
property of, or committed fraud or embezzlement against, the Corporation or any
of its subsidiaries or (v) been convicted of any crime (other than minor
traffic violations) . If the Corporation terminates the Executive's employment
pursuant to clauses (i), (ii) or (v) of this Section 11 (b), then the
Corporation shall pay the Executive the accrued amounts specified in Section
11(f) and the Corporation shall have no further obligations under this
Agreement. Upon termination of the Executive's employment pursuant to clauses
(iii) or (iv) of this Section 11(b) the Executive shall forfeit all accrued and
unpaid amounts otherwise due him under this Agreement and the Corporation shall
have no further obligations under this Agreement.
(c) Otherwise by the Corporation. The Corporation in its
sole discretion may, upon thirty (30) days' written notice to the Executive,
terminate the Executive's employment under this Agreement for any reason not
otherwise specified in this Section 11 or for no reason at all. If the
Corporation terminates the Executive's employment pursuant to this Section
11(c), then the Corporation shall pay him the accrued amounts specified in
Section 11(f) and the severance pay specified in Section 11(g) and the
Corporation shall have no further obligations under this Agreement.
(d) By the Executive Upon Diminishment of Responsibility.
The Executive may, upon thirty (30) days' written notice to the Corporation,
terminate his employment under this Agreement if the Corporation has
significantly diminished his job responsibilities and such diminishment has not
been cured within ten (10) business days after receipt by the Corporation of
written notice from the Executive of a claimed diminishment in his job
responsibilities and the nature of the diminishment. If the Executive
terminates his employment pursuant to this Section 11(d), then the Corporation
shall pay him the accrued amounts specified in Section 11(f) and the
severance pay specified in Section 11(g) and the Corporation shall have no
further obligations under this Agreement.
(e) Otherwise By the Executive. The Executive may, upon
ninety (90) days' written notice to the Corporation, terminate his employment
under this Agreement for any reason not otherwise specified in this Section 11
or for no reason at all. If the Executive terminates his employment pursuant
to this Section 11 (e), then the Corporation shall pay him the accrued amounts
specified in Section 11(f) and the Corporation shall have no further
obligations under this Agreement.
(f) Accrued Amounts. If the Executive's employment under
this Agreement is terminated pursuant to ▇▇▇▇▇▇▇ ▇▇ (▇), ▇▇(▇) (▇) , ▇▇(▇)
(▇▇), 11(b) (v) , 11(c), 11(d) or 11(e), then within thirty (30) days after the
date of such termination, the Corporation shall pay the Executive or his legal
representative the Executive's Base Pay and Incentive Pay to the extent such
amounts are accrued and unpaid on the date of such termination and all expense
reimbursements that are due under Section 5 and unpaid. For purposes of this
Agreement, one-twelfth (1/12) of the Executive's Base Pay shall accrue at the
end of each month of his employment under this Agreement and his Incentive Pay
shall accrue on the last day of the relevant calendar year.
(g) Severance Pay. If the Executive's employment is
terminated pursuant to Section 11(c) or 11(d), then (i) the Corporation shall
pay the Executive severance pay in an amount equal to the Executive's Base Pay
at the time of termination, payable in twelve equal monthly installments, and
(ii) during the one (1) year period following such termination the Executive
shall be entitled to continue to participate in all health and disability
insurance plans of the Corporation to the extent permitted under the general
terms and provisions of such plans and programs, with the Corporation and the
Executive each paying the same portion of the cost thereof as they did before
the termination of the Executive's employment. If the Executive's continued
participation in any group plans is not permitted, then in lieu thereof, the
Corporation shall acquire individual insurance policies providing comparable
coverage for the Executive, with the Corporation and the Executive sharing the
cost of such insurance in the same proportion as they shared the cost of the
Executive's health and disability insurance prior to the termination of the
Executive's employment. Notwithstanding the foregoing, the Corporation shall
not be required to pay for all such individual coverage an aggregate of more
than two (2) times the aggregate cost of all of the Executive's group coverage
at the time his employment terminated.
12. Termination Following a Change of Control (a) If, during the
Severance Period, the Executive's employment is terminated, the Executive will
be entitled to the benefits provided by Section 13 unless such termination is
by reason of one or more of the following events:
(i) Pursuant to Section 11(a);
(ii) Cause; or
(iii) The Executive's voluntary termination in circumstances
in which Good Reason does not exist.
(b) In the event of the occurrence of a Change of Control, the
Executive may terminate his employment during the Severance Period with the
right to severance compensation as provided in Section 13 upon the occurrence
of one or more of the following events (regardless of whether any other reason,
other than Cause as hereinabove provided, for termination exists or has
occurred, including, without limitation, other employment):
(i) An adverse change in the nature or scope of the
authorities, powers, functions, responsibilities, or duties
attached to the position with the Corporation which the
Executive held immediately prior to the Change of Control;
(ii) A reduction in the Executive's Base Pay as in
effect immediately prior to any Change of Control, or as it may
have been increased from time to time thereafter;
(iii) Any failure by the Corporation to continue in
effect any plan or arrangement providing Incentive Pay in which
the Executive is participating at the tine of a Change of
Control (or any other plans or arrangements providing
substantially similar benefits) or the taking of any action by
the Corporation which would adversely affect the Executive's
participation in any such plan or arrangement or reduce the
Executive's benefits under any such plan or arrangement in a
manner inconsistent with the practices of the Corporation prior
to the Change of Control;
(iv) Any failure by the Corporation to continue in
effect any Employee Benefits in which the Executive is
participating at the time of a Change of Control (or any other
plans or arrangements providing the Executive with substantially
similar benefits) or the taking of any action by the Corporation
which would adversely affect the Executive's participation
in or materially reduce the Executive's benefits under any
Employee Benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of a Change
of Control;
(v) The liquidation, dissolution, merger,
consolidation, or reorganization of the Corporation or transfer
of all or substantially all of its business and/or assets,
unless the successor or successors (by liquidation, merger,
consolidation, reorganization, transfer, or otherwise)
to which all or a significant portion of its business and/or
assets have been transferred (directly or by operation of law)
assumed all duties and obligations of the Corporation under this
Agreement pursuant to Section 18;
(vi) Without limiting the generality or effect of the
foregoing, any material breach of this Agreement by the
Corporation or any successor thereto; or
(vii) Any action by the Corporation which causes the
Executive's services to be performed regularly at any office or
location greater than thirty-five (35) miles from the office or
location where the Executive was employed immediately preceding
the date of the Change of Control.
(c) Any termination of the Executive's employment will be
communicated by Notice of Termination given in accordance with Section
19 of this Agreement.
13. Severance Compensation.
(a) If, following the occurrence of a Change of Control, the
Executive's employment is terminated by the Corporation during the
Severance Period other than in the circumstances set forth in Section
12(a)(i), 12(a)(ii), or 12(a)(iii) or if the Executive terminates his
employment for Good Reason:
(i) The Corporation will pay to the Executive in a
lump sum in cash within five business days after the later of
the date on which he receives the determination of the
Accounting Firm required in Section 14 hereof or the Date of
Termination an amount (the "Severance Payment") equal to the sum
of (A) 2.5 times the Base Pay at the highest rate in effect
at any time within the 90-day period preceding the date the
Notice of Termination was given or, if higher, at the highest
rate in effect at any time within the 90-day period preceding
the date of the first occurrence of a Change of Control, plus
(B) an amount equal to 2.5 times the greatest amount of
Incentive Pay received by the Executive during any year from
and including the third year prior to the first occurrence of a
Change of Control, plus (C) an amount equal to 2.5 times the
matching contribution that would be made by the Corporation to
the Scan-Optics, Inc. Retirement Savings Plan on Executive's
behalf if the Executive deferred under such Plan four percent
(adjusted for any applicable limitation under the Internal
Revenue Code of 1986, as amended) of the sum of Base Pay
and Incentive Pay (at the rates used in (A) and (B) above) or
such higher percentage as may then be eligible for Corporation
matching contributions, plus (D) an amount equal to the value
(determined as of the Date of Termination and assuming
exercisability as of such date) of all options granted to the
Executive to acquire Corporation common stock that will not
become exercisable as a result of Executive's termination;
and
(ii) For two years following the Date of Termination,
the Executive shall be eligible for participation in and shall
receive all benefits under such benefit plans, practices,
policies and programs of the Corporation that provide medical,
prescription, dental, disability, accident and life insurance
coverage, with the costs of such participation to be paid
by the Corporation to the same extent as prior to the
Executive's termination. In the event that such continued
participation is not allowed under the terms and provisions of
such plans or programs, then in lieu thereof, the Corporation
shall acquire individual insurance policies providing comparable
coverage for the Executive; provided that if any such individual
coverage is unavailable, the Corporation shall pay to the
Executive an amount equal to the contributions that would have
been made by the Corporation for such coverage on the
Executive's behalf if the Executive had remained in the employ
of the Corporation for two years following the Date of
Termination.
(b) There will be no right of set-off or counterclaim in respect of
any claim, debt, or obligation against any payment to or benefit for the
Executive provided for in this Section 13.
(c) Without limiting the rights of the Executive at law or in
equity, if the Corporation fails to make any payment or provide any benefit
required to be made or provided under this Agreement on a timely basis, the
Corporation will pay interest on the amount or value thereof at an annualized
rate of interest equal to the so-called composite "prime rate" as quoted from
time to time during the relevant period in the Northeast Edition of The Wall
Street Journal. Such interest will be payable as it accrues on demand. Any
change in such prime rate will be effective on and as of the date of such
change.
(d) Notwithstanding any other provision hereof, the parties'
respective rights and obligations under this Section 13 and under Sections 14
and 16 will survive any termination or expiration of this Agreement following a
Change of Control or any termination of employment following a Change of
Control for any reason whatsoever.
14. Excise and Other Taxes.
The Executive shall bear all expense of, and be solely responsible for,
all federal, state, local or foreign taxes due with respect to any payment
received hereunder, including, without limitation, any excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code");
provided, however, that the Severance Payment shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code. The foregoing determination will be made by a
nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive and reasonably acceptable to the Corporation (which may, but will not
be required to be, the Company's independent auditors). The Executive will
direct the Accounting Firm to submit its determination and detailed supporting
calculations to both the Corporation and the Executive within fifteen (15)
days after the Date of Termination. If the Accounting Firm determines that
such reduction is required by this Section 14, the Corporation shall pay such
reduced amount to the Executive in accordance with Section 13(a)(i). If the
Accounting Firm determines that no reduction is necessary under this Section
14, it will, at the same time as it makes such determination, furnish the
Corporation and the Executive an opinion that the Executive will not be liable
for any excise tax under Section 4999 of the Code. The Corporation and the
Executive will each provide the Accounting Firm access to and copies of any
books, records, and documents in the possession of the Corporation or the
Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determinations and calculations contemplated by this
Section 14. The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by this
Section 14 will be borne by the Corporation.
15. No Mitigation Obligation.
The Corporation hereby acknowledges that it will be difficult, and may
be impossible, for the Executive to find reasonably comparable employment
following the Date of Termination. The payment of severance compensation by
the Corporation to the Executive in accordance with the terms of this Agreement
will be liquidated damages, and the Executive will not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor will any profits, income, earnings, or other
benefits from any source whatsoever create any mitigation, offset, reduction,
or any other obligation on the part of the Executive hereunder or otherwise.
16. Legal Fees and Expenses.
If the Corporation has failed to comply with any of its obligations
under this Agreement or in the event that the Corporation or any other person
takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive hereunder, the Corporation irrevocably
authorizes the Executive from time to time to retain counsel of the Executive's
choice, at the expense of the Corporation to the extent hereafter provided, to
advise and represent the Executive in connection with any such interpretation,
enforcement, or defense, including, without limitation, the initiation or
defense of any litigation, arbitration or other legal action, whether by or
against the Corporation or any member of the Board, officer, stockholder, or
other person or entity affiliated with the Corporation, in any jurisdiction.
If the Executive prevails, in whole or in part, in connection with any such
litigation, arbitration or other legal action, the Corporation will pay and be
solely financially responsible for any and all attorneys' and related fees' and
expenses incurred by the Executive in connection with such litigation.
17. Withholding of Taxes.
Except as otherwise provided in this Agreement, the Corporation may
withhold from any amounts payable under this Agreement all federal, state,
city, or other taxes as the Corporation is required to withhold pursuant to any
law or government regulation or ruling.
18. Successors and Binding Agreement: (a) The Corporation
will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization, or otherwise) to all or substantially all of the
business and/or assets of the Corporation, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Corporation would be
required to perform if no such succession had taken place. This Agreement will
be binding upon and inure to the benefit of the Corporation and any successor
to the Corporation, including, without limitation, any persons acquiring
directly or indirectly all or substantially all of the business and/or
assets of the Corporation whether by purchase, merger, consolidation,
reorganization, or otherwise (and such successor will thereafter be deemed the
"Corporation" for the purposes of this Agreement), but will not otherwise be
assignable, transferable, or delegable by the Corporation.
(b) This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, and/or legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto will, without the consent of the other, assign, transfer, or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Sections 18(a) and 18(b). Without limiting the generality or
effect of the foregoing, the Executive's right to receive payments hereunder
will not be assignable, transferable, or delegable, whether by pledge, creation
of a security interest, or otherwise, other than by a transfer by will or
by the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 18(c), the Corporation will
have no liability to pay any amount so attempted to be assigned, transferred,
or delegated.
19. Notice.
Any notice permitted or required under this Agreement shall be
deemed to have been given three (3) days after written notice is sent by
registered mail or one (1) day after written notice is sent by overnight
"Express Mail" or overnight courier service, addressed as follows: (a) if to the
Corporation, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Secretary; and (b) if to the Executive, at ▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any party may, in accordance with the
provisions of this Section, give written notice of change of address, in which
event all such notices shall be given as above provided at such changed address,
except that notices of changes of address will be effective only upon receipt.
20. Arbitration.
Any dispute that may arise between the parties hereunder, other
than a dispute in which the primary relief sought is an equitable remedy such
as an injunction, shall be submitted to binding arbitration in Hartford,
Connecticut in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association;
provided that any such dispute shall first be submitted to the Corporation's
Board of Directors in an effort to resolve such dispute without resort to
arbitration.
21. Entire Agreement.
This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes and merges all prior
agreements between them relating thereto. The parties agree that no other
promises or inducement have been made unless contained in writing and attached
hereto or incorporated by reference. Neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated, except by a written
instrument signed by the parties hereto. Failure by any party to exercise any
right or privilege granted by this Agreement or to insist upon full performance
of all obligations or duties hereunder shall not be construed as a waiver of
any such rights, privileges, obligations or duties or as the creation of any
custom contrary thereto.
22. Applicable Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut applicable to agreements executed and
to be performed in such State, without giving effect to the principles of
conflicts of laws of such State, to the extent not preempted by applicable
federal law.
23. Validity.
If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable, or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstances will not be affected, and the
provision so held to be invalid, unenforceable, or otherwise illegal will be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid, or legal.
24. Non-Exclusivity of Rights.
Nothing in this Agreement will prevent or limit the Executive's present
or future participation in any benefit, bonus, incentive, or other plan or
program provided by the Corporation for which the Executive may qualify, nor
will this Agreement in any manner limit or otherwise affect such rights as the
Executive may have under any stock option or other agreements with the
Corporation. Amounts or benefits which are vested or which the Executive is
otherwise entitled to receive under any plan or program of the Corporation at
or subsequent to the Date of Termination will be payable in accordance
with such plan or program, except as otherwise expressly provided in this
Agreement; provided, however, that any amounts received by the Executive
pursuant to this Agreement shall be in lieu of (but, if necessary to give
effect to this provision, shall be reduced by) any benefits which the Executive
is entitled to receive or may become entitled to receive under any reduction-
in-force or severance pay plan or practice which the Corporation now has in
effect or may hereafter put into effect, and any severance benefits required
under federal or state law to be paid to the Executive.
25. Certain Defined Terms.
In addition to terms defined elsewhere herein, the following terms have
the following meanings when used in this Agreement with initial capital
letters:
(a) "Base Pay" means the Executive's annual aggregate base
salary from the Company at the time in question.
(b) "Change of Control" means a change in control of a
nature that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Corporation is then subject to such reporting requirement; provided
that, without limitation, such a Change of Control shall be deemed to
have occurred if (A) any "person" (as such term is used in Sections
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 securities of the Corporation representing 22% or more
of the combined voting power of the Corporation's then outstanding
securities; or (B) during any period of two consecutive years (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation and any new directors, whose election by
the Board or nomination for election by the Corporation's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof.
(c) "Cause" means that, prior to any termination of
employment by the Executive for Good Reason, there shall have occurred
any of the events listed in clauses (i) through (v) of the first
sentence of Section 11(b).
(d) "Date of Termination" means the date of receipt of a
Notice of Termination or any later date specified therein, as the case
may be; provided, however, that if the Executive's employment is
terminated by the Corporation other than for Cause or for disability
pursuant to Section 11(a), the Date of Termination will be the date on
which the Executive receives a Notice of Termination from the
Corporation; and provided further, if the Executive's employment is
terminated by reason of death or disability pursuant to Section
11(a), the Date of Termination will be the last day of the month in
which occurs the date of death or the disability effective date, as the
case may be.
(e) "Employee Benefits" means the perquisites, benefits and
service credit for benefits as provided under the plans and programs
maintained by the Corporation, including, but not limited to, plans and
programs which are "employee benefit plans" under Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and any
amendment or successor to such plans or programs (whether insured,
funded or unfunded).
(f) "Good Reason" means the occurrence of any of the events
listed in Sections 12(b)(i) through 12(b)(vii), inclusive.
(g) "Incentive Pay" means an annual amount equal to the
aggregate annual bonus, incentive compensation or performance pay, in
addition to Base Pay, made or to be made in regard to services rendered
in any calendar year or performance period pursuant to any bonus,
incentive compensation or performance pay plan of the Corporation.
(h) "Notice of Termination" means a written notice which (i)
indicates the specific provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for the termination under the provision so indicated,
and (iii) if the effective date of the termination is other than the
date of receipt of such notice, specifies the effective date of
termination (which date will be not more than sixty (60) days after the
giving of such notice). The failure by the Executive to set forth in
the Notice of Termination any fact or circumstance which contributes to
a showing that the Executive is entitled to the benefits intended to be
provided by this Agreement will not constitute a waiver of any right of
the Executive hereunder or otherwise preclude the Executive from later
asserting such fact or circumstance in enforcing the Executive's rights
hereunder.
(i) "Severance Period" means the period of time commencing
on the date of an occurrence of a Change of Control and continuing
until the earlier of (i) the date which is two years following the
occurrence of the Change of Control and (ii) the Executive's death.
26. Counterparts.
This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SCAN-OPTICS, INC.
ATTEST: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary Name: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director, Chairman
Compensation Committee
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