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EXHIBIT 10.22
January 31, 1994
Mr. Gerald A. Nathe
11448 Bronzedale Drive
Oakton, VA 22124
Dear Mr. Nathe:
This Agreement sets forth the terms of your employment with Baldwin
Technology Company, Inc., a Delaware corporation (the "Company"), and your
continued employment with Baldwin Americas Corporation, a Delaware corporation
and a wholly owned subsidiary of the Company ("BAM"), and is effective as of
August 5, 1993.
1. DUTIES. During the term of your employment hereunder, you
shall be employed as the President of each of the Company and BAM, and you
shall direct and manage the business, affairs and property of the Company
subject to the direction of the Chief Executive Officer of the Company (the
"Chief Executive Officer") and the Board of Directors of the Company (the
"Board of Directors").
2. COMPENSATION. As compensation for your services during the
term of your employment hereunder:
A. Salary. You shall be paid a salary at the annual
rate of one hundred seventy-five thousand dollars ($175,000) (hereinafter
referred to as your "base salary"), payable in appropriate installments to
conform with regular payroll dates for salaried personnel of the Company or
BAM.
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B. Reviews and Adjustments. As of July 1, 1994 and each
succeeding July 1 during the term of your employment hereunder, your
performance shall be reviewed by the Chief Executive Officer and your
attainment of mutually agreed-upon objectives evaluated; your base salary for
the twelve (12) months beginning on such July 1 may be adjusted upward (but not
downward) by the Board of Directors, with some consideration made for the level
of inflation over the immediately preceding July 1.
C. Incentive Compensation ("Bonus"). During the term of
your employment hereunder, and at such other times subsequent thereto as are
otherwise set forth herein, you shall be paid annually, within three (3) months
of the end of each fiscal year, beginning with the fiscal year ending June 30,
1994, incentive compensation equal to the aggregate of (i) one-half of one
percent (.5%) of the Company's net income after taxes (excluding extraordinary
items) for such fiscal year, as set forth in the Company's Consolidated and
Audited Statement of Income contained in its Annual Report on Form 10-K as
filed with the Securities and Exchange Commission ("SEC") and as reported to
the Company's stockholders, plus (ii) an amount determined for such fiscal year
under the Company's or BAM's Executive & Key Person Bonus Plan (the "Bonus
Plan"), as in effect at that time; provided, however, that such incentive
compensation shall not exceed the product of two (2) times your base salary
under Paragraph 2A hereof for such fiscal year.
D. Deferred Compensation. You shall be paid, at such
times as are set forth in this Agreement, deferred compensation based upon an
amount equal to forty percent (40%) of your Final Average Pay (the "Deferred
Compensation"). For purposes of this Agreement, the term "Final Average Pay"
shall mean an amount equal to (i) the total
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of (a) the sum of the base salaries and incentive compensation paid to you with
respect to each of the two (2) fiscal years ending immediately preceding the
fiscal year in which you become entitled to the Deferred Compensation, plus (b)
the base salary and incentive compensation payable to you at the time that you
become entitled to the Deferred Compensation (annualized to twelve (12)
months), (ii) divided by three (3). The annual amount of Deferred Compensation
payable to you under this Agreement shall not exceed one hundred seventy-five
thousand dollars ($175,000). The amount equal to forty percent (40%) of your
Final Average Pay, when calculated, shall then be restated to a monthly amount
by dividing such amount by twelve (12) (the "Monthly Amount"), and the Monthly
Amount shall be paid monthly, to you or your estate, as the case may be,
beginning on the day set forth in this Agreement, for a period of one hundred
eighty (180) months or the period ending with the month of your death,
whichever is longer. In this regard, if you die after the date on which you
first become entitled to payment of the Deferred Compensation, whether or not
the first payment of the Monthly Amount has been made, and prior to the payment
of the Monthly Amount for one hundred eighty (180) months, the Monthly Amount
shall be paid monthly for the balance of such one hundred eighty (180) month
period to the beneficiary or beneficiaries designated by you in writing to the
Company, or, if none are designated, to your estate. There shall be no
Deferred Compensation payable unless and until you shall have served under this
Agreement for a period of five years; from the beginning of the sixth year
through the end of the tenth year of service under this Agreement, the amount
of Deferred Compensation shall vest in twenty percent (20%) annual increments
so that only after a full ten (10) years of service under this Agreement
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shall the amount as set forth by formula above be due and payable, and then
only in certain instances as set forth elsewhere in this Agreement.
3. STOCK AND STOCK OPTIONS.
A. Class A Stock.
(i) The Company shall issue or transfer to you,
at such times when you have earned them and at no cost to you, a total of two
hundred thousand (200,000) shares of the Company's Class A Common Stock, par
value $.01 per share ("Class A Stock") in five (5) equal installments of forty
thousand (40,000) shares each. You will be deemed to have earned the first
installment of forty thousand (40,000) shares of Class A Stock on a date (the
"First Installment Date") when (a) on or after the first anniversary of the
effective date of this Agreement (August 5, 1994), (b) the closing price of the
Class A Stock on the American Stock Exchange (the "Fair Market Value")
increases by two dollars ($2.00) per share over the price at which it traded on
the effective date of this Agreement ($3.875 per share); each subsequent
installment of Class A Stock shall similarly be deemed to be earned by you when
the Fair Market Value of the Class A Stock increases by an additional two
dollars ($2.00) per share over the Fair Market Value at which the previous
installment was earned. A stock certificate for the Class A Stock so earned
shall be issued and delivered to you within fifteen (15) days of the date such
stock was deemed to be earned by you.
(ii) In the event of a reorganization,
recapitalization, change of shares, stock split, spinoff, stock dividend,
reclassification, subdivision or combination of shares, merger, consolidation,
rights offering, or any other change in the corporate structure
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or shares of capital stock of the Company, the number of shares and increase in
price of the Fair Market Value as stated in Paragraph 3A(i) hereof shall be
adjusted appropriately.
(iii) With regard to each installment of the Class
A Stock issued under Paragraph 3A(i) hereof, the Company grants to you the
right to require the Company to include the Class A Stock issued to you in any
registration statement that the Company may file in the future (said right to
be known as the "Piggy-Back Registration Rights"). In the event the Company
does not file and cause to become effective a registration statement subsequent
to your earning each installment of the Class A Stock as outlined in Paragraph
3A(i) hereof on which you could have exercised your Piggy-Back Registration
Rights, the Company further grants to you a one-time right to demand that the
Company file and cause to become effective a registration statement for each
installment of the Class A Stock issued to you under Paragraph 3A(i) hereof, by
written notice to the Company (said right to be known as the "Demand
Registration Rights"). In the event you notify the Company of your exercise of
a Demand Registration Right, the Company shall use its best efforts to have a
registration statement with respect to the Class A Stock issued under Paragraph
3A(i) hereof prepared, filed and declared effective by the SEC as soon as
practicable. Notwithstanding anything in this section to the contrary, the
Company shall not be required to file a registration statement during the
period between (a) the date on which its financial statements for any fiscal
year become available and (b) the date on which it is required to file an
annual report with respect to such fiscal year on Form 10-K under the
Securities Exchange Act of 1934; provided, however, that the Company shall
during such period be required to continue to use its best efforts to prepare
such registration statement for filing
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and to file such registration statement as soon as possible after the date
described in clause (b) above. Your rights to exercise each of the Demand
Registration Rights shall expire, respectively, on or before the earlier of (a)
the date the Company files and causes to become effective a registration
statement on which you could have exercised your Piggy-Back Registration Rights
for each installment of Class A Stock issued under Paragraph 3A(i) hereof, or
(b) three years after the date each installment of shares of the Class A Stock
is issued to you under Paragraph 3A(i) hereof.
B. Class A Stock Options. On August 5, 1993, the
Company granted to you a non-qualified stock option, pursuant to the Company's
1986 Amended and Restated Stock Option Plan (the "1986 Plan"), to purchase up
to two hundred thousand (200,000) shares of Class A Stock. A copy of the
written agreement evidencing such grant is attached as Exhibit "A".
C. Class B Stock. In order to facilitate your purchase
of three hundred fifteen thousand one hundred forty four (315,144) shares of
the Company's Class B Common Stock, par value $.01 per share (the "Class B
Stock"), the Company has loaned to you one million eight hundred seventeen
thousand three hundred twenty-one dollars and sixteen cents ($1,817,321.16)
(the "Loan") for you to purchase the Class B Stock. The Loan shall (i) bear
interest, payable annually, at a rate equal to the Company's borrowing rate (as
adjusted quarterly) on its U.S. short-term banking facilities, (ii) require
pledging by you of the Class B Stock (until sold in part or in full as
described herein) and (iii) require repayment by you prior to the last day of
your employment by the Company, except in case of your death, in which instance
repayment shall be within six (6) months of the date of your
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death. Notwithstanding anything to the contrary contained in this Paragraph
3C, at any time that you sell any of the shares of Class B Stock while any
amount of the Loan remains unpaid, you shall, within five (5) days of receipt
of the funds from such sale, pay to the Company, in repayment of part or all,
as the case may be, of the Loan, an amount equal to $5.77 times the number of
shares of the Class B Stock so sold, but not in excess of the unpaid balance of
the Loan, plus interest, as set forth in this Paragraph 3C, on the amount so
repaid to the extent that such interest accrued to the date of such repayment.
4. LIFE INSURANCE. During the term of your employment
hereunder, the Company, subject to your insurability, shall pay the premiums on
a contract or contracts of life insurance on your life in the aggregate amount
of five hundred thousand dollars ($500,000), which contract or contracts may be
owned by your spouse or such other party as may be designated by you.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation
provided for herein, the Company shall reimburse to you, or pay directly, all
reasonable expenses incurred by you in connection with the business of the
Company, and its subsidiaries and affiliates, including but not limited to
business-class travel if overseas, reasonable accommodations, and
entertainment, subject to documentation in accordance with the Company's
policy. In this connection, it is understood that certain business of the
Company will require the presence of your spouse, and this Paragraph 5 applies
as well to such expenses relating to her.
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6. EXTENT OF SERVICES.
A. In General. During the term of your employment
hereunder, except as otherwise permitted by this Paragraph 6, you shall devote
your best and full-time efforts to the business and affairs of the Company.
B. Limitation on Other Services. During the term of
your employment hereunder, you shall not undertake employment with, or
participate in, the conduct of the business affairs of any other person,
corporation, or entity, except at the direction or with the written approval of
the Board of Directors. The foregoing limitation shall not apply to your
current part- time involvement in the business affairs of Graphic Equipment
Technologies A/S, a Denmark corporation, and its subsidiaries, and Polestar,
Ltd., a Bermuda corporation (the "Outside Businesses"); provided, however, that
the time you devote to such activities shall not interfere with the performance
by you of your duties and obligations to the Company.
C. Personal Investments. Nothing herein shall preclude
you from having, making, or managing personal investments which do not involve
your active participation in the affairs of the entities in which you so
invest, but, unless approved in writing by the Board of Directors, during the
term of your employment hereunder, you shall not have more than a one percent
(1%) ownership interest in any entity which is directly competitive with any
business conducted by the Company at that time; provided, however, that the
foregoing limitation shall not apply to any investment you may have in the
Outside Businesses. The phrase "conducted by the Company" as used in this
Paragraph 6C and in Paragraph 13 hereof shall mean the business conducted by
the Company or by any corporation or other
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entity in which the Company owns stock possessing fifty percent (50%) or more
of the stock (either voting or non-voting) in such corporation or fifty percent
(50%) or more of the equity interests (either voting or non-voting) in such
other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the
Company worldwide, with particular emphasis in BAM's office in Elkwood,
Virginia.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment
hereunder, you shall be entitled to a vacation or vacations, with pay,
totalling four (4) weeks in each fiscal year. You may accumulate up to twelve
(12) weeks vacation, but not more than three (3) weeks from any single prior
year. Any such accumulated vacation may be used in any subsequent year or
years in addition to the four (4) weeks of vacation to which you are entitled
for each such year.
B. The Company's Benefit Plans. During the term of your
employment hereunder, you shall be eligible for inclusion, to the extent
permitted by law, as a full-time employee of the Company or any Subsidiary, in
any and all (i) pension, profit sharing, savings, and other retirement plans
and programs as in effect at the time, (ii) life and health (medical, dental,
hospitalization, short-term and long-term disability) insurance plans and
programs as in effect at the time, (iii) stock option and stock purchase plans
and programs as in effect at the time, (iv) accidental death and dismemberment
protection plans and programs as in effect at the time, (v) travel accident
insurance plans and programs as in effect at the time, and (vi) other plans and
programs at the time sponsored by the Company or any Subsidiary for employees
or executives generally as in effect at the time, including
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any and all plans and programs that supplement any or all of the foregoing
types of plans or programs (except for any annual bonus plan, other than the
Bonus Plan, for employees in general).
C. Automobile and Professional Services. During the
term of your employment hereunder, (i) the Company shall provide an automobile
for your continued business use pursuant to the arrangement between you and BAM
that was in effect immediately prior to this Agreement, and (ii) the Company
shall reimburse to you, or pay directly, upon submission by you to the Company
of statements for services, the amounts payable by you to any person or persons
of your choice that you retain to advise you with regard to financial,
investment, and tax matters; provided, however, that such reimbursement or
payment shall not exceed six thousand dollars ($6,000) per fiscal year
beginning with the fiscal year ending June 30, 1994.
D. Post-Termination Benefits. In addition to any other
payments and benefits provided in this Agreement, effective with the
termination of your employment by the Company without cause, you shall be
entitled to (a) continued medical and dental benefits for a period of two (2)
years from the effective date of your termination or until you secure other
employment, whichever occurs first, and (b) reimbursement of reasonable
expenses incurred by you in connection with job search services.
9. TERMINATION OF EMPLOYMENT.
A. Termination by the Company Without Cause. The
Company may, without cause, terminate your employment hereunder at any time
upon ten (10) or more
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days' written notice to you. In the event your employment is terminated under
this Paragraph 9A, the Company shall pay to you the following:
(i) A single lump sum payment, not later than the
last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A (as adjusted by Paragraph 2B) hereof, including salary in
respect of any accrued and accumulated vacation, due to you at the date of such
termination;
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof; and
(c) An amount equal to the product of
two and nine-tenths (2.9) times your "base salary" as defined in Paragraph 2A
(as adjusted by Paragraph 2B) hereof;
(ii) A single lump sum payment of any accrued but
unpaid incentive compensation set forth in Paragraph 2C hereof due to you at
the date of such termination for the fiscal year ending immediately prior to
the date of such termination, which shall be paid within three (3) months of
the end of such fiscal year;
(iii) A single lump sum payment of any incentive
compensation set forth in Paragraph 2C hereof earned in the fiscal year of the
termination of your employment, which incentive compensation shall be
determined on the basis of the Company's operations through June 30 of such
fiscal year, and shall be pro-rated through the last day of your employment,
and shall be paid within three (3) months of such June 30; and
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(iv) If and to the extent vested, the Deferred
Compensation as set forth in Paragraph 2D hereof, with payment of the Monthly
Amount beginning on the first day of the month immediately succeeding the last
day of your employment. The Company shall have no further obligation to you
under this Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and Paragraph 13
hereof.
B. Termination by Mutual Consent. You may terminate
your employment hereunder at any time with the written consent of the Company.
In the event your employment is terminated under this Paragraph 9B, the Company
shall pay to you the following:
(i) A single lump sum payment, not later than the
last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A (as adjusted by Paragraph 2B) hereof, including salary in
respect of any accrued and accumulated vacation, due to you at the date of such
termination;
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof; and
(c) An amount equal to your annual "base
salary" as defined in Paragraph 2A hereof (as adjusted by Paragraph 2B);
(ii) A single lump sum payment of any accrued but
unpaid incentive compensation set forth in Paragraph 2C hereof due to you at
the date of such termination
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for the fiscal year ending immediately prior to the date of such termination,
which shall be paid within three (3) months of the end of such fiscal year;
(iii) A single lump sum payment of any incentive
compensation set forth in Paragraph 2C hereof earned in the fiscal year of the
termination of your employment, which incentive compensation shall be
determined on the basis of the Company's operations through June 30 of such
fiscal year, and shall be pro-rated through the last day of your employment,
and shall be paid within three (3) months of such June 30; and
(iv) If and to the extent vested, the Deferred
Compensation as set forth in Paragraph 2D hereof, with payment of the Monthly
Amount beginning on the first day of the month immediately succeeding the last
day of your employment. The Company shall have no further obligation to you
under this Agreement and you shall have no further obligation to the Company
under this Agreement except as provided in Paragraph 12 and Paragraph 13
hereof.
C. Termination by the Company With Cause. The Company
may for cause terminate your employment hereunder at any time by written notice
to you. In such event, the Company shall pay to you the following:
(i) A single lump sum payment, within ten (10)
days of the last day of your employment, of
(a) Any accrued but unpaid salary set
forth in Paragraph 2A (as adjusted by Paragraph 2B) hereof, including salary in
respect of any accrued and accumulated vacation, due to you at the date of such
termination; and
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(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof;
(ii) A single lump sum payment of any accrued but
unpaid incentive compensation set forth in Paragraph 2C hereof due to you at
the date of such termination for the fiscal year ending immediately prior to
the date of such termination, which shall be paid within three (3) months of
the end of such fiscal year; and
(iii) If and to the extent vested, the Deferred
Compensation as set forth in Paragraph 2D hereof, with payment of the Monthly
Amount beginning on the first day of the month immediately succeeding the last
day of your employment. You shall forfeit the incentive compensation set forth
in Paragraph 2C hereof for the fiscal year in which such termination occurs.
The Company shall have no further obligation to you under this Agreement and
you shall have no further obligation to the Company under this Agreement except
as provided in Paragraph 12 and Paragraph 13 hereof. For purposes of this
Agreement, the term "cause" shall mean (1) a failure by you to remedy either
(a) a continuing neglect in the performance of your duties under this
Agreement, or (b) any action taken by you that seriously prejudices the
interests of the Company, in either event within ten (10) days of the Company's
written notice to you of such neglect or action, or (2) your conviction of a
felony.
D. Events. If any of the following described events
occurs during the term of your employment hereunder, you may terminate your
employment hereunder by written notice to the Company either prior to, or not
more than six (6) months after, the happening of such event. In such event,
your employment hereunder will be terminated effective as
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of the later of ten (10) days after the notice or ten (10) days after the event
and the Company shall make to you the same payments that the Company would have
been obligated to make to you under Paragraph 9A hereof if the Company had
terminated your employment hereunder effective on such date. The events, the
occurrence of which shall permit you to terminate your employment hereunder
under this Paragraph 9D, are as follows:
(i) New CEO. The failure of the Company to
appoint you the Chief Executive Officer of the Company, effective within seven
(7) days of any termination of employment of Wendell M. Smith as the Chief
Executive Officer.
(ii) New President. The removal of you or the
election of any other person as the President of the Company; provided,
however, that you shall not have approved such removal or such election, in
your capacity as a director, by voting for such removal or such election.
(iii) Merger, etc.. Any merger or consolidation by
the Company or BAM with or into any other entity or any sale by the Company or
BAM of substantially all of its assets; provided, however, that you shall not
have approved such transaction, in your capacity as a director, by voting for
it.
(iv) Change of Control. Any change of a majority
of the directors of the Company occurring within any thirteen (13) month
period, or the acquisition by a single person or entity or a related group of
persons or entities, of shares of any class or classes of voting stock of the
Company representing twenty-five percent (25%) or more of the total votes
entitled to be cast by all of the then outstanding shares of all classes of
voting
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stock of the Company; provided, however, that you shall not have approved such
change in directors or acquisition, in your capacity as a shareholder or
director, by voting for any of such new directors or for such acquisition and
that there shall be excluded from any such calculation of percentage of
ownership all stock held by any officer of the Company on the effective date of
this Agreement.
(v) Liquidation. The adoption by the Company of
any plan of liquidation providing for the distribution of all or substantially
all of its assets; provided, however, that you shall not have approved the
adoption of such plan, in your capacity as a director, by voting for it.
(vi) Breach of Agreement. The failure by the
Company to observe or comply in any material respect with any of the provisions
of this Agreement, including a material diminution in your duties, or the
assignment to you of duties that are materially inconsistent with your duties
or that materially impair your ability to function as the President of the
Company, the President of BAM, or both, if such failure has not been cured
within thirty (30) days after written notice thereof has been given by you to
the Company.
E. DISABILITY OR DEATH. If you should suffer a
Permanent Disability, the Company may terminate your employment hereunder upon
ten (10) or more days' prior written notice to you. For purposes of this
Agreement, a "Permanent Disability" shall be deemed to have occurred only when
you are qualified for benefits under the Company's or a Subsidiary's Long Term
Disability Insurance Policy. In the event of the termination of your
employment hereunder by reason of Permanent Disability or death at any time,
the Company shall pay:
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(i) In the case of Permanent Disability only, to
you, in conformity with regular payroll dates for salaried personnel of the
Company or BAM, an amount equal to fifty percent (50%) of the base salary you
were receiving at the date of such termination under Paragraph 2A (as adjusted
by Paragraph 2B) hereof, payable through August 5, 2003, at which time monthly
payments of the Deferred Compensation set forth in Paragraph 2D hereunder shall
begin; provided, however, that the amount payable under this Paragraph 9E(i)
(but not the Deferred Compensation payments) shall be reduced to the extent of
any payments made to you through any company-sponsored group disability plan;
(ii) To you or your legal representative, or any
beneficiary or beneficiaries designated by you in writing to the Company, a
single lump sum payment of:
(a) Within ten (10) days of the last day
of your employment, any accrued but unpaid salary set forth in Paragraph 2A (as
adjusted by Paragraph 2B) hereof, including salary in respect of any accrued
and accumulated vacation, due to you at the date of such termination;
(b) Within ten (10) days of the last day
of your employment, any amounts owing, but not yet paid, pursuant to Paragraph
5 hereof;
(c) A single lump sum payment of any
accrued but unpaid incentive compensation as set forth in Paragraph 2C hereof
due to you at the date of such termination for the fiscal year ending
immediately prior to the date of such termination, which shall be paid within
three (3) months of the end of such fiscal year; and
(d) Any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year in which the termination of
your employment occurs, which
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incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30; and
(iii) In the case of death only, to your legal
representative, or any beneficiary or beneficiaries designated by you in
writing, the vested portion of the Deferred Compensation set forth in Paragraph
2D hereof, with payment of the Monthly Amount beginning on the first day of the
month immediately succeeding the last day of your employment.
F. No Excess Parachute Payments Notwithstanding
anything to the contrary contained in this Agreement, if the Company obtains a
written opinion of its tax counsel ("Tax Counsel") to the effect that there
exists a material possibility that any payment to which you would (but for the
application of this Paragraph 9F) be entitled under this Agreement, would (but
for such application) be treated as an "excess parachute payment" (as defined
in Section 280G(b) of the Internal Revenue Code and the Treasury Regulations
promulgated thereunder):
(i) Unless you and the Company agree to an
alternative amendment of this Agreement that satisfies the requirements of
Paragraph 9F(ii) hereof, this Agreement shall be amended by reducing the
payments to which you are entitled hereunder, in the order specified in the
last sentence of this Paragraph 9F, to the extent necessary so that, in the
opinion of Tax Counsel, there does not exist a material possibility that any
payment to which you are entitled under this Agreement (as so amended) will be
treated as an excess parachute payment; or
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(ii) If you and the Company agree to amend this
Agreement by modifying the amount and/or timing of the payments to which you
are entitled hereunder in a manner other than that specified in Paragraph 9F(i)
hereof, and if, in the opinion of Tax Counsel, there does not exist a material
possibility that any payment to which you are entitled under this Agreement (as
so amended) will be treated as an excess parachute payment, this Agreement
shall be so amended.
An amendment to this Agreement pursuant to Paragraph 9F(i) hereof
shall reduce, first, the Deferred Compensation (and, concomitantly, the Monthly
Amount), second (if applicable), the amount payable under Paragraph 9A(i)(c)
hereof by virtue of your election under Paragraph 9D hereof to treat an event
described therein as constituting the termination of your employment, and
third, on a pro-rata basis, all other amounts (other than amounts payable
pursuant to Paragraph 5 hereof, which shall in any event be paid in full) to
which you are entitled hereunder.
G. Retirement. If not previously terminated under any
of the previously outlined provisions, your employment hereunder shall
terminate when you retire from full-time employment with the Company, which
shall occur no earlier than August 5, 2003, at which time the Company shall pay
to you the following:
(i) A single lump sum payment, not later than the
last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A (as adjusted by Paragraph 2B) hereof, including salary in
respect of any accrued and accumulated vacation, due to you at the date of such
termination; and
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(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof;
(ii) A single lump sum payment of any accrued but
unpaid incentive compensation as set forth in Paragraph 2C hereof due to you at
the date of such termination for the fiscal year ending immediately prior to
the date of such termination, which shall be paid within three (3) months of
the end of such fiscal year;
(iii) A single lump sum payment of any incentive
compensation set forth in Paragraph 2C hereof earned in the fiscal year of the
termination of your employment, which incentive compensation shall be
determined on the basis of the Company's operations through June 30 of such
fiscal year, and shall be pro-rated through the last day of your employment,
and shall be paid within three (3) months of such June 30; and
(iv) The Deferred Compensation as set forth in
Paragraph 2D hereof, with payment of the Monthly Amount beginning on the first
day of the month immediately succeeding the last day of your employment. The
Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall
be paid from the general funds of the Company. The Company may, but shall not
be required to, make any investment or investments whatsoever, including the
purchase of a life insurance contract or contracts on your life, to provide it
with funds to satisfy its obligations
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hereunder; provided, however, that neither you nor your beneficiary or
beneficiaries, nor any other person, shall have any right, title, or interest
whatsoever in or to any such investment or contracts. If the Company shall
elect to purchase a life insurance contract or contracts on your life to
provide the Company with funds to satisfy its obligations hereunder, the
Company shall at all times be the sole and complete owner and beneficiary of
such contract or contracts, and shall have the unrestricted right to use all
amounts and to exercise all options and privileges thereunder without the
knowledge or consent of you, your beneficiary or beneficiaries, or any other
person, it being expressly agreed that neither you, any such beneficiary or
beneficiaries, nor any other person shall have any right, title, or interest
whatsoever in or to any such contract or contracts. Notwithstanding anything
to the contrary contained in this Paragraph 10, if the Company purchases any
such contract or contracts, you shall have the right, upon the termination of
your employment by the Company to purchase as soon after such termination as
possible any one or more of such contracts for an amount equal to the cash
surrender value thereof; provided, however, that you notify the Company in
writing of your intention to make any such purchase no later than thirty (30)
days subsequent to such termination.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no
action taken pursuant to its terms, shall create or be construed to create a
trust or escrow account of any kind, or a fiduciary relationship between the
Company and you, your beneficiary or beneficiaries, or any other person. You,
your beneficiary or beneficiaries, and any other person or persons claiming a
right to any payments or interests hereunder shall rely solely on the unsecured
promise of the Company, and nothing herein shall be construed to give
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you, your beneficiary or beneficiaries, or any other person or persons, any
right, title, interest, or claim in or to any specific asset, fund, reserve,
account, or property of any kind whatsoever owned by the Company or in which it
may have any right, title, or interest now or in the future, but you or your
beneficiary or beneficiaries shall have the right to enforce a claim for
benefits hereunder against the Company in the same manner as any unsecured
creditor. Notwithstanding anything to the contrary set forth in this Paragraph
11, the Company agrees to consider the feasibility of paying to a so-called
"rabbi trust," as described in the Internal Revenue Service's Revenue Procedure
92-64, the amounts necessary for the Company to fund the Deferred Compensation
set forth in Paragraph 2D hereof.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall
be employed by the Company or BAM, you agree promptly to make known to the
Company the existence of any and all creations, inventions, discoveries, and
improvements made or conceived by you, either solely or jointly with others,
during the term of this Agreement and for three (3) years thereafter, and to
assign to the Company the full exclusive right to any and all such creations,
inventions, discoveries, and improvements relating to any subject matter with
which the Company is now or shall become concerned, or relating to any other
subject matter if made with the use of the Company's time, materials, or
facilities. To the fullest extent permitted by law, any of the foregoing
inventions shall be considered as "work-made-for-hire" and the Company shall be
the owner thereof. You further agree, without charge to the Company but at its
expense, if requested to do so by the Company, to execute, acknowledge, and
deliver all papers, including applications or assignments for patents,
trademarks, and copyrights, and papers relating
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thereto, as may be considered by the Company to be necessary or desirable to
obtain or assign to the Company any and all patents, trademarks, or copyrights
for any and all such creations, inventions, discoveries, and improvements in
any and all countries, and to vest title thereto in the Company in all such
creations, inventions, discoveries, and improvements as indicated above
conceived during your employment by the Company, and for three (3) years
thereafter. You further agree that you will not disclose to any third person
any trade secrets or proprietary information of the Company, or use any trade
secrets or proprietary information of the Company in any manner, except in the
pursuit of your duties as an employee of the Company, and that you will return
to the Company all materials (whether originals or copies) containing any such
trade secrets or proprietary information (in whatever medium) on termination
of your employment by the Company. The obligations set forth in this Paragraph
12 shall survive the termination of your employment hereunder. This Paragraph
12 replaces the agreement executed by you on January 5, 1993, which prior
agreement is now null and void.
13. RESTRICTIVE COVENANT. For a period of three (3) years after
the termination of your employment by the Company, you shall not, in any
geographical location at which there is at that time business conducted by the
Company which was conducted by the Company at the date of such termination,
directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with, the ownership, management,
operation, or control of any business similar to or competitive with such
business conducted by the Company without the written consent of the Company.
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14. LEGAL FEE. The Company shall reimburse to you, or pay
directly, upon submission in either event to the Company of a statement for
services, the amount payable by you to any attorney of your choice that you
have retained to advise you with regard to this Agreement; provided, however,
that such reimbursement or payment shall not exceed ten thousand dollars
($10,000).
15. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach or asserted breach thereof, shall be
settled by arbitration to be held in New York, New York in accordance with the
rules then obtaining of the American Arbitration Association, and the judgment
upon the award rendered may be entered in any court having jurisdiction
thereof. The arbitrator shall determine which party shall bear the costs of
such arbitration, including attorneys' fees.
16. NON-ASSIGNABILITY. Your rights and benefits hereunder are
personal to you, and shall not be alienated, voluntarily or involuntarily,
assigned or transferred.
17. BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, and their respective assigns, successors, executors,
administrators, and heirs. In the event the Company becomes a party to any
merger, consolidation, or reorganization, this Agreement shall remain in full
force and effect as an obligation of the Company or its successors in interest.
None of the payments provided for by this Agreement shall be subject to seizure
for payment of any debts or judgments against you or your beneficiary or
beneficiaries, nor shall you or any such beneficiary or beneficiaries have any
right to transfer or encumber any right or benefit hereunder; provided,
however, that the undistributed
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portion of the Deferred Compensation shall at all times be subject to set-off
by the Company for debts owed by you to the Company.
18. ENTIRE AGREEMENT. This Agreement contains the entire
agreement relating to your employment by the Company and BAM. It may not be
changed orally, and may be changed only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification,
extension, deletion or revocation is sought.
19. NOTICES. All notices and communications hereunder shall be in
writing, sent by certified or registered mail, return receipt requested,
postage prepaid; by facsimile transmission, time and date of receipt noted
thereon; or by hand-delivery properly receipted. The actual date of receipt as
shown by the receipt therefor shall determine the time at which notice was
given. All payments required hereunder by the Company to you shall be sent
postage prepaid, or, at your election, shall be transferred to you
electronically to such bank as you designate in writing to the Company,
including designation of the applicable electronic address. The foregoing
items (other than any electronic transfer to you) shall be addressed as follows
(or to such other address as the Company and you may designate in writing from
time to time):
To the Company: To you:
- - - - - --------------- -------
Baldwin Technology Company, Inc. Gerald A. Nathe
65 Rowayton Avenue 11448 Bronzedale Drive
Rowayton, CT 06853 Oakton, VA 22124
Facsimile: 203-852-7040 Facsimile: 703-825-7525
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20. NEW YORK LAW TO GOVERN. This Agreement shall be governed by,
and construed and enforced according to, the domestic laws of the State of New
York without giving effect to the principles of conflict of laws thereof.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By: /s/ Wendell M. Smith
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AGREED TO AND ACCEPTED:
/s/ Gerald A. Nathe
- - - - - --------------------
Gerald A. Nathe
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