EXHIBIT 10.23(b)
CONFORMED COPY
EMPLOYMENT AGREEMENT
Employment Agreement dated as of April 1, 1996, between Memorex Telex N.V.
organized under the laws of the Netherlands (the "Company"), Memorex Telex
Corporation, a Delaware corporation (the "Company Subsidiary") and Peter H.
Dailey (the "Executive").
The Company desires to employ the Executive as its Chief Executive Officer,
and the Company Subsidiary desires that the Executive shall also perform
services in a responsible managerial capacity, and the Executive desires to
accept such employment by the Company and the Company Subsidiary, on the terms
and subject to the conditions set forth herein.
In consideration of the premises and the mutual agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT. The Company and the Company Subsidiary hereby employ the
Executive, and the Executive hereby accepts employment in the positions and with
the duties and responsibilities as set forth in paragraph 3 below subject to the
terms and conditions hereinafter set forth.
2. TERM. Subject to the provisions for earlier termination as herein provided,
the initial term of employment under this agreement shall be for the period
commencing April 1, 1996, and ending March 31, 1997 (the "Initial Term") and
shall automatically renew for successive twelve-month periods unless either
party notifies the other in writing at least three months prior to the end of
the then current term of employment that such term of employment shall no so
renew (the Initial Term and any renewal thereof referred to herein,
collectively, the "Term of Employment").
3. POSITION AND DUTIES. During the Term of Employment, the Executive shall be
employed as Chief Executive Officer of the Company and shall serve upon election
by the shareholders of the Company as a member and Chairman of the Company's
Management Board, and, subject to supervision by the Company's Supervisory Board
of Directors, shall have overall charge of the business affairs of the Company,
with the duties, responsibilities, and authorities normally associated with such
position. The Executive shall serve the Company faithfully, diligently, and to
the best of his ability and shall devote substantially all of his business time
and efforts to his employment, provided however, the Executive may serve as a
member of the Board of Directors of other entities with the
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approval of the Chairman of the Company's Supervisory Board of Directors.
Nothing herein shall preclude the Executive from making personal investments
and spending time on immaterial business activities unrelated to the Company
and its business. The Executive shall also serve as an officer and/or
director of the Company Subsidiary and such one or more other subsidiaries of
the Company as the Supervisory Board of Directors shall request, and shall be
entitled to no additional remuneration for such service.
4. COMPENSATION. During the Initial Term, the Executive shall (a) be paid by
the Company Subsidiary an annual base salary of $500,000, payable in accordance
with the payroll practices of the Company Subsidiary, which currently provides
for bi-weekly pay periods, and (b) be eligible for participation in the
Company's management incentive compensation plan which will provide for a bonus
of up to one hundred percent (100%) of the Executive's base salary upon one
hundred percent achievement of objectives. Of such bonus amount, seventy-five
percent will be based upon the Company's results, and twenty-five percent will
be based upon mutually agreed, individual objectives determined by the Company's
Supervisory Board of Directors.
5. STOCK OPTIONS. The Executive shall receive options to acquire 250,000
shares of common stock of the Company in accordance with the terms of the
Company's amended and restated stock option plan for management.
6. EMPLOYEE BENEFIT PROGRAMS. The Executive shall be entitled to participate
in all employee incentive and benefit programs of the Company Subsidiary now or
hereafter made available to the Company's senior executives or salaried
employees generally, as such programs may be in effect from time to time.
7. ADDITIONAL PERQUISITES. The Executive shall be entitled to additional
perquisites as follows:
a. ANNUAL PHYSICAL. The Executive shall be reimbursed for the cost of an
annual physical examination.
b. TAX RETURNS. The Company shall pay $10,000.00 for the preparation of
the Executive's income tax returns.
c. BUSINESS EXPENSES. The Company and the Company Subsidiary shall
reimburse the Executive (in accordance with the practice from time to
time for other officers of the Company) for all reasonable and
necessary travel and other disbursement incurred by the Executive for
or on behalf of the Company in the performance his duties hereunder
upon presentation by the Executive to the Company of appropriate
expense reimbursement claims. Reasonable travel expenses shall
include, but not be limited to, the expense of travel to and from the
Executive's permanent residence within the continental United States.
In addition to such
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travel expenses, the Company Subsidiary shall during the Initial
Term of employment pay up to $80,000.00 of the rental or hotel costs
and automobile rental for the Executive at the location of Executive's
employment.
8. TERMINATION OF EMPLOYMENT.
(a) TERMINATION WITHOUT CAUSE. In the event the Executive's employment is
terminated by the Company without Cause (as defined in paragraph 9(a)
hereof), which shall not include a termination due to the Executive's
death or Disability (as defined in paragraph 9(c) hereof), the
Executive shall be entitled to continued payments of his then current
base salary for the current term of employment.
(b) TERMINATION DUE TO DEATH OR DISABILITY. In the event the Executive's
employment is terminated due to his death of Disability, then the
Executive or his legal representative shall be entitled to continued
payments of his then current base salary for the then current term of
employment.
(c) OTHER PAYMENTS. Upon the termination of the Executive's employment
for any reason, the Executive shall be entitled to receive, in
addition to the amounts, if any, payable under paragraph 8(a) hereof,
the following: (i) any annual bonus earned during one or more
preceding years but not yet paid; (ii) reimbursement for reasonable
expenses incurred but not yet reimbursed by the Company; (iii) any
other benefits to which the Executive or his legal representative may
be entitled under applicable plans and programs of the Company.
9. DEFINITIONS. For purpose of the Agreement, the following terms shall be
defined as set forth below:
(a) The Executive shall be deemed to be terminated for "Cause" if (i) the
Executive shall theretofore have been convicted by any federal, state,
or local authority for, or shall have pleaded guilty to, an act
constituting a felony, (ii) the Executive shall have habitually abused
any substance (such as narcotics or alcohol), or (iii) the Executive
is terminated because of (x) acts of fraud, material dishonesty or
gross misconduct by the Executive in connection with the business of
the Company, or (y) repeated and willful failure by the Executive to
perform his duties hereunder after a demand for such performance is
delivered to the Executive by the Company's Supervisory Board of
Directors.
(b) "Disability" means the Executive's inability, for a period of three
consecutive months, to render substantially the services provided in
this Agreement by reason of mental or physical disability, whether
resulting from illness, accident, or otherwise.
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10. DISCLOSURE OF INFORMATION. The Executive agrees that he will not, at any
time during or after any Term of Employment, disclose to any person, firm,
corporation, or other business entity (other than agents and representatives of
the Company, its subsidiaries who need to know) except as required by law, any
non-public information concerning the business, customers, or affairs of the
Company or any subsidiary thereof for any reason or purpose whatsoever nor shall
the Executive make use of any of such non-public information for his own
purposes or for the benefit of any person, firm, corporation, or other business
entity except the Company or any subsidiary thereof.
11. COVENANT NOT TO COMPETE. The Executive acknowledges and recognizes that
during any Term of Employment he will be privy to trade secrets and confidential
proprietary information critical to the business of the Company (including the
Company's subsidiaries) and, accordingly, the Executive agrees that, in
consideration of the premises contained herein, he will not, from and after the
date hereof until the first anniversary of the termination of his employment
hereunder, (i) directly or indirectly engage in, represent in any way, or be
connected with, any business or activity (such business or activity being
hereinafter called a "Competing Business"), directly competing with the
Company's business, within any country in which the Company transacts business,
whether such engagement shall be as an officer, director, owner, employee,
partner, affiliate, or other participant in any Competing Business, except that
the provisions of this paragraph 11 shall not be deemed breached merely because
the Executive owns not more than five percent of the outstanding common stock of
a corporation or other entity if at the time of its acquisition by the
Executive, such stock is listed on a national securities exchange, or is
regularly traded in the over-the-counter market, (ii) assist others in engaging
in any Competing Business in the manner described in the foregoing clause (i),
(iii) induce other employees of the Company or any subsidiary thereof to
terminate their employment with the Company or any subsidiary thereof, or engage
in any Competing Business, or (iv) solicit any of the customers or suppliers of
the Company or induce such customers or suppliers to terminate their
relationships with the Company.
12. INDEMNIFICATION. The Company and the Company Subsidiary hereby indemnifies
and holds harmless the Executive to the fullest extent permitted under the laws
and regulations applicable to such entities against all actions, suit,
proceedings, and claims, actual or threatened, based upon or arising out of
Executive's service as a director, officer, employee, or agent thereof The
Executive will also be covered under any directors and officers liability
insurance policies applicable to directors and officers of the Company and/or
the Company Subsidiary.
13. ASSIGNABILITY; BINDING NATURE. This agreement shall be binding upon, and
shall inure to the benefit of; the respective heirs, legal representatives, and
successors of the parties hereto.
14. SEVERABILITY. In the event that any provision or portion of the agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the
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remaining provisions of the agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
15. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of the agreement to the extent necessary
to the intended preservation of such rights and obligations.
16. GOVERNING LAW. The Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of California without
reference to principles of conflict of laws. The parties hereto hereby
irrevocably agree that any legal action or proceeding arising out of; related
to, or in connection with this agreement shall be brought in a court of
competent jurisdiction in California, and by their execution and delivery of
this agreement each party hereby irrevocably accepts and submits to the
jurisdiction of such court in person, generally and unconditionally in
connection with any such action or proceeding.
17. NOTICES. Any notice given to either party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned, if to the Company and Company Subsidiary, at their
principal office, and if the Executive, 1999 Oak Knoll Avenue, San Marino,
California 91108, or at such other address as such party may give notice of.
18. HEADINGS. The headings of the paragraphs contained in the Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of the Agreement.
19. COUNTERPARTS. The Agreement may be executed in two or more counterparts.
20. ENTIRE AGREEMENT; AMENDMENTS. The Agreement contains the entire agreement
between the parties hereto concerning the subject matter hereof and supersedes
all prior agreements, understandings, discussions, negotiations, and
undertakings, whether written or oral, between them with respect thereto. This
Agreement may be amended only by an agreement in writing signed by the parties
hereto.
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IN WITNESS WHEREOF, the undersigned have executed the Agreement as of the
date first written above.
EXECUTIVE
/s/ Peter H. Dailey
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MEMOREX TELEX N.V.
By: /s/ David J. Faulkner
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Managing Director
MEMOREX TELEX CORPORATION
By: /s/ Anthony J. Barbieri
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Secretary