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Exhibit 10.6
EMPLOYMENT AGREEMENT
AGREEMENT,
entered into as of the 8th day of January 2005 between Imagistics
International Inc., a Delaware corporation ("Company") and Timothy
E. Coyne, currently residing at 51 Hunter Ridge Road, Monroe, CT
06468, Connecticut ("Executive");
WHEREAS,
the Company desires to employ Executive as its Chief Financial
Officer upon the terms and conditions set forth herein and
Executive is willing to be so employed;
NOW,
THEREFORE, in consideration of the promises and the agreements
contained herein, the Company and Executive hereby agree as
follows:
1. Term of Employment. Company shall employ Executive under
this Agreement, and Executive hereby accepts such employment, for
the period commencing on the date hereof (the "Effective Date") and
ending on the third anniversary hereof, unless Executive is given
notice by Company of its intention to extend or renew the term of
this Agreement within 120 days of the expiration of the initial
term, or unless the Agreement is terminated sooner in accordance
with the provisions of Section 5. The initial term and any renewal
term shall be referred to as the "Term of Employment".
2. Position and Duties. During the Term of Employment:
(A)
Executive shall serve as an executive officer of the Company, and
shall have such authority and duties (the "Duties") as may be
assigned to him from time to time by the Chief Executive Officer of
the Company (the "CEO"), commensurate with such position.
(B)
Executive will devote all of his business time and attention to the
business of the Company in performing such Duties and promoting the
interests and goodwill of the Company.
(C)
Executive may serve on corporate, civic or charitable boards or
committees, deliver lectures, fulfill speaking engagements, teach
at educational institutions or manage personal investments,
provided in each case that such activities do not individually or
in the aggregate interfere with the performance of his Duties under
this Agreement; provided, however, that Executive shall obtain the
prior written consent of the CEO for service on any for-profit
board or committee.
3. Base Salary. Commencing as of the Effective Date, the
Company shall pay Executive an annualized salary of Two Hundred
Twenty Five Thousand Dollars ($225,000.00) (the "Base Salary") in
accordance with its regular payroll practices, subject to
applicable tax withholding. Executive’s performance shall be
reviewed annually by the CEO or the COO. Executive’s Base
Salary may be reviewed for increase in the discretion of the Board
of Directors of the Company (the "Board") after consultation with
the CEO. Base Salary, as adjusted, shall be considered the new Base
Salary for all purposes of this Agreement and shall not thereafter
be reduced.
4. Annual Cash Incentive. Executive shall be eligible, as
determined by the Committee in its discretion, for an annual
performance cash bonus ("Annual Bonus") in accordance with the
terms of the Company’s Key Employees’ Incentive Plan,
as it may be amended or restated from time to time ("KEIP"). To the
extent earned, Executive shall be paid his Annual Bonus at the same
time that other senior-level executives receive their awards.
5. Termination.
(A) Due to Executive’s Death or Disability or
Retirement. If Executive’s employment terminates during
the Term of Employment due to Executive’s death, Disability,
or Retirement, as defined in the 2001 Stock Plan, Company shall
provide Executive, Executive’s estate or beneficiaries, as
applicable, with: (i) continuation of Base Salary for three (3)
full months following the month in which Executive’s
Termination Date occurs; (ii) a Pro-rata Annual Bonus; (iii) the
right to exercise each outstanding stock option for the full
remaining term of such option, all such options to be deemed fully
vested and exercisable as of the date of Executive’s
Termination Date;(iv) payment of outstanding restricted stock
awards, all such restricted stock to be deemed fully vested as of
Executive’s Termination Date; (v) such benefits as Executive
may be entitled to under any applicable employee benefit plan or
program of the Company including, continued participation in any
welfare benefit plan, but only to the extent provided under the
terms of any plan or policy applicable to senior executive
employees; and (vi) any other entitlements described in Section
5(C).
(B) Termination In Connection with a Change in Control. If
Executive’s employment is terminated by Company without
Cause, other than for death or Disability, or Executive terminates
for Good Reason, and in each case such termination occurs within
two (2) years following a Change in Control, Company shall provide
Executive with: (i) a lump sum amount in immediately available
funds equal to two times the Executive’s annualized Base
Salary, plus two times the Executive’s full maximum Annual
Bonus for the year in which the Termination Date occurs; (ii)
immediate vesting in, and the right to exercise, each outstanding
stock option for the Severance Period following the Termination
Date; (iii) immediate vesting and payment of restricted stock as of
the Termination Date; (iv) the continuation for the Severance
Period of the health, welfare, savings, retirement and other fringe
benefits to which Executive is entitled as of the Date of
Termination (or, if such benefits are not available, or cannot be
provided due to applicable law, a lump sum amount equal to the
after-tax economic equivalent thereof; provided that with respect
to any benefit to be provided on an insured basis, such value shall
be the present value of the premiums expected to be paid for such
coverage, and with respect to other benefits, such value shall be
the present value of the expected net cost to the Company of
providing such benefits); and (v) the entitlements described in
Section 5(C).
(C) Other Termination Benefits; No Mitigation Required. In
addition to any amounts or benefits payable under this Section 5,
upon termination for any reason, Executive shall be entitled (i) to
payment of his or her Base Salary through the Termination Date;
(ii) any payments or benefits provided under the terms of any
Company benefit plan, program or policy, or as required by
applicable law, and (iii) prompt payment, when due, of all amounts
owing under the Agreement. Any COBRA rights that Executive (or any
other qualified beneficiary) has shall run concurrently with the
health insurance benefit continuation provisions, if any, otherwise
applicable in this Section 5. The Company agrees that Executive is
not required to seek other employment, or to mitigate the amounts
payable under this Agreement. No compensation earned from
subsequent employment will reduce any amount payable hereunder.
However, Executive shall notify Company, within 30 days, of
becoming covered under another group health plan of a subsequent
employer, and the health benefit coverage provided hereunder will
become secondary to any such coverage provided by another
employer.
6. Excise Tax Gross-Up. If any payment to Executive pursuant
to this Agreement or any other payment or benefit from the Company,
any Affiliate, any shareholder of the Company or any other person
is determined to be subject to the excise tax imposed by Section
4999 of the Code or any similar tax payable under any United States
federal, state, local or other law (the "Excise Tax"), then
Executive shall receive a Tax Gross-Up Payment with respect to all
such excise taxes and similar taxes. The "Tax Gross-Up Payment"
shall mean an amount payable to the Executive such that, after
payment of all federal, state and local taxes on such Tax Gross-Up
Payment, there remains a balance sufficient to pay the Excise Tax
being reimbursed. The Company’s outside auditor (the
"Auditor") shall determine whether any payment under this Agreement
is subject to an Excise Tax and, if so, the amount and timing of
the Tax Gross-Up Payment. The foregoing notwithstanding, if any
payments subject to the Excise Tax exceed the amount that may be
paid to Executive without the imposition of the Excise Tax (the
"Allowable Amount") by an amount which is not more than 10% of the
Allowable Amount, the Executive shall relinquish the right to
receive such payments to the extent and only to the extent that
such payments exceed the Allowable Amount. In the event that
Executive is required to relinquish a portion of the compensation
otherwise due Executive by application of the immediately preceding
sentence, compensation shall be relinquished in the following order
i) stock option acceleration commencing with options having the
highest exercise price, ii) the accelerated vesting of restricted
stock or other equity awards and iii) cash compensation.
7. Non-Compete; Non-Solicitation; Confidentiality and
Non-Disparagement. Executive agrees that:
(A) Non-compete and Non-solicitation. At no time during the
Term of Employment, nor during any Severance Period following
Executive’s Termination Date, will Executive:
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(i)
become employed by, enter into a consulting arrangement with, or
otherwise agree to perform personal services for a
Competitor;
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(ii)
manage, acquire an ownership interest in, participate in the
management or ownership of, or otherwise be connected in any
material manner with a Competitor, provided, however that nothing
herein shall prevent Executive from acquiring up to 5% of any class
of outstanding equity securities of any company whose equity
securities are regularly traded on a national securities exchange
or in an "over-the-counter market";
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(iii)
directly or indirectly employ, or seek to employ or secure the
services in any capacity of, any person employed at that time by
Company or any of its Affiliates, or otherwise encourage or entice
any such person to leave such employment;
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(iv)
solicit any customers or vendors of Company on behalf of, or for
the benefit of a Competitor.
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(B) Non-disclosure. At no time during the Term of
Employment, nor thereafter, will Executive, without prior written
consent of Company, divulge, disclose or make accessible to any
person or entity any confidential non-public document or
information concerning the business or affairs of the Company that
he has acquired in the course of his employment hereunder, except
(i) to the Company or to any authorized (or apparently authorized)
agent or representative of Company, (ii) in connection with
performing his Duties under this Agreement, or (iii) when required
to do so by law or by legal process. These restrictions shall not
apply to any document or information (i) that has previously been
disclosed to the public, or is in the public domain, other than as
a result of the E
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