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EMPLOYMENT AGREEMENT
THIS AGREEMENT,
effective as of March 31, 2004 (the "Effective Date"), is
made by and between Symbol Technologies,
Inc., a Delaware corporation (the
"Company") and William R. Nuti (the
"Executive").
RECITALS:
A. It is the
desire of the Company to assure itself of the services of the
Executive by continuing the employment of
the Executive as its President and
Chief Executive Officer.
B. The Executive
desires to commit himself to serve the Company on the
terms herein provided.
NOW, THEREFORE,
in consideration of the foregoing and of the respective
covenants and agreements set forth below,
the parties hereto agree as follows:
1. Certain Definitions
(a) "Affiliate" shall mean with respect to any Person, any
other
Person directly
or indirectly, through one or more intermediaries,
controlling,
controlled by, or under common control with, such Person. For
purposes of this
Section 1(a), "control" shall have the meaning given such
term under Rule
405 of the Securities Act of 1933, as amended.
(b) "Annual Base Salary" shall have the meaning set forth in
Section
5(a).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Bonus" shall have the meaning set forth in Section 5(b).
(e) The Company shall have "Cause" to terminate the Executive's
employment upon
(i) the Executive's failure to attempt in good faith to
substantially
perform his duties as President and Chief Executive Officer
(other than any
such failure resulting from the Executive's physical or
mental
incapacity) which is not remedied within 30 days after receipt
of
written notice
from the Company specifying such failure; (ii) the
Executive's
failure to attempt in good faith to carry out, or comply with,
in any material
respect any lawful and reasonable written directive of the
Board or the
Executive's willful material violation of the Company's
Statement of
Corporate Policy and Code of Conduct, in either case which is
not remedied
within 30 days after receipt of written notice from the
Company
specifying such failure or violation; (iii) the Executive's
indictment for,
conviction of, or plea of no contest to, or imposition of
unadjudicated
probation for any felony (or any other crime involving fraud,
embezzlement,
misappropriation or moral turpitude having a material adverse
impact on the Company), other than
as a result of vicarious liability or as
a result of a
traffic violation; (iv) the Executive's unlawful use
(including being
under the influence) or
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possession of
illegal drugs on the Company's premises or while performing
the Executive's
duties and responsibilities; or (v) the Executive's
intentional
commission at any time of any act of fraud, embezzlement,
misappropriation, or breach of fiduciary duty against the Company
that has
a material adverse
effect on the Company or that renders the Executive
unable to
perform any of his material duties hereunder.
(f) "Change in Control" shall occur when:
(i) A Person (which term, when used in this Section 1(f), shall
not include the Company, any underwriter temporarily holding
securities pursuant to an offering of such securities, any trustee
or
other fiduciary holding securities under an employee benefit plan
of
the Company, or any Company owned, directly or indirectly, by
the
stockholders of the Company in substantially the same proportions
as
their ownership of Voting Stock of the Company) is or becomes,
without
the prior consent of a majority of the Continuing Directors,
the
beneficial owner (as defined in Rule 13d-3 promulgated under
the
Securities Exchange Act of 1934, as amended), directly or
indirectly,
of Voting Stock representing, without the prior written consent of
a
majority of the Continuing Directors twenty-five percent (25%)
(or,
even with such prior consent, forty percent (40%)) or more of
the
combined voting power for election of directors of the Company's
then
outstanding securities; or
(ii) The Company consummates a reorganization, merger or
consolidation of the Company (which prior to the date of such
consummation has been approved by the Company's stockholders) or
the
Company sells, or otherwise disposes of, all or substantially all
of
the Company's property and assets (other than a reorganization,
merger, consolidation or sale which would result in all or
substantially all of the beneficial owners of the Voting Stock of
the
Company outstanding immediately prior thereto continuing to
beneficially own, directly or indirectly (either by remaining
outstanding or by being converted into voting securities of the
resulting entity), more than fifty percent (50%) of the
combined
voting power of the voting securities of the Company or such
entity
resulting from the transaction (including, without limitation,
an
entity which as a result of such transaction owns the Company or
all
or substantially all of the Company's property or assets, directly
or
indirectly) outstanding immediately after such transaction in
substantially the same proportions relative to each other as
their
ownership immediately prior to such transaction), or the
Company's
stockholders approve a liquidation or dissolution of the Company;
or
(iii) The individuals who are Continuing Directors of the
Company
(as defined below) cease for any reason to constitute at least
a
majority of the Board.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
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(h) "Committee" shall mean the Compensation/Stock Option Committee
of
the Board.
(i) "Common Stock" shall mean the $.01 par value common stock of
the
Company.
(j) "Company" shall, except as otherwise provided in Section 9,
have
the meaning set
forth in the preamble hereto.
(k) "Competitive Business" shall mean (i) at any time during the
Term
and during the
12-month period immediately following the Date of
Termination, any
entity (which term "entity" shall for purposes of this
Section 1(k)
include any subsidiaries, parent entities or other Affiliates
thereof) that,
as of the Date of Termination, competes with any of the
businesses of
the Company; and (ii) during the period beginning on the
first
anniversary of the Date of Termination and ending on the
18-month
anniversary of
the Date of Termination, those certain entities (which shall
not number more
than 10) designated as "Competitive Businesses" by the
Committee;
provided, however, that, notwithstanding the foregoing, Section
1(k)(ii) shall
not apply in connection with any termination of the
Executive's
employment hereunder due to the Company's non-extension of the
Term as
described in Section 6(a)(vii). In order to effectuate Section
1(k)(ii), the
Committee shall provide the Executive with a written list of
"Competitive
Businesses" on or prior to the 90th day following the Date of
Termination.
(l) "Continuing Director" means (i) any member of the Board
(other
than an employee
of the Company) immediately following the election of
directors at the
Company's 2004 annual meeting of stockholders or (ii) any
person who
subsequently becomes a member of the Board (other than an
employee of the
Company) whose appointment, election or nomination for
election to the
Board is recommended by a majority of the Continuing
Directors.
(m) Date of Termination" shall mean (i) if the Executive's
employment
is terminated by
his death, the date of his death; (ii) if the Executive's
employment is
terminated as a result of Disability, the date provided in
Section
6(a)(ii); and (iii) if the Executive's employment is terminated
pursuant to
Sections 6(a)(iii) - (vi), the date specified in the Notice of
Termination (or
if no such date is specified, the last day of the
Executive's
active employment with the Company), in each case provided in
accordance with
this Agreement.
(n) "Disability" shall mean any mental or physical illness,
condition,
disability or
incapacity which:
(i) Prevents the Executive from discharging substantially all
of
his essential job responsibilities and employment duties; and
(ii) Has prevented the Executive from so discharging his duties
for any 180 days in any 365-day period.
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A Disability
shall be deemed to have occurred on the 180th day in any such
365-day
period.
(o) "Executive" shall have the meaning set forth in the
preamble
hereto.
(p) "Extension Term" shall have the meaning set forth in Section
2.
(q) The Executive shall have "Good Reason" to resign his
employment
upon the
occurrence of any of the following without the Executive's
prior
written consent:
(i) failure of the Company to continue the Executive in
the position of,
and with the title of, President and Chief Executive
Officer; (ii) a
material diminution in the nature or scope of the
Executive's
employment responsibilities, duties or authority or the
assignment to
the Executive of duties or responsibilities that are
materially and
adversely inconsistent with his then position; (iii) failure
of the Executive
to be elected to the Board at any annual meeting of the
Company's
stockholders that occurs during the Term (unless the Executive
is
prohibited from
serving as a member of the Board by any applicable law,
rule or
regulation (including without limitation any rule promulgated
by
the New York
Stock Exchange)); (iv) relocation of the Company's executive
offices more
than 60 miles east, or 20 miles in any other direction of its
current
location; (v) failure of the Company to timely make any
material
payment or
provide any material benefit under this Agreement, or the
Company's
material reduction of any compensation, equity or benefits that
the Executive is
eligible to receive under this Agreement; or (vi) the
Company's
material breach of this Agreement; provided, however, that
notwithstanding
the foregoing the Executive may not resign his employment
for Good Reason
unless: (x) the Executive provides the Company with at
least 30 days
prior written notice of his intent to resign for Good Reason
(which notice is
provided not later than the 90th day following the
occurrence of
the event constituting Good Reason) and (y) the Company does
not remedy the
alleged violation(s) within such 30-day period; and,
provided,
further, that notwithstanding the foregoing if the Executive is
suspended
pursuant to Section 6(a)(iii), such suspension (and any
corresponding
diminution of the Executive's title, duties or compensation,
or other change
to the Executive's employment arrangements described
hereunder) shall
not, in and of itself, give the Executive Good Reason to
resign his
employment.
(r) "Initial Term" shall have the meaning set forth in Section
2.
(s) "Intellectual Property" shall have the meaning set forth in
Section
9(f).
(t) "Non-Compete Term" shall have the meaning set forth in
Section
9(a).
(u) "Notice of Termination" shall have the meaning set forth in
Section
6(b).
(v) "Option" shall mean an option to purchase Common Stock pursuant
to
the Company's
1997 Employee Stock Option Plan, as amended from time to
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time (or any
other equity based compensation plan or agreement that may be
adopted or
entered into by the Company from time to time).
(w) "Person" shall mean an individual, partnership,
corporation,
business trust, limited liability
company, joint stock company, trust,
unincorporated
association, joint venture, governmental authority or other
entity of
whatever nature.
(x) "Prior Agreement" shall having the meaning set forth in
Section
19.
(y) "Pro-Rata Bonus" shall have the meaning set forth in Section
7(d).
(z) "Release" shall have the meaning set forth in Section 7(b).
(aa) "Retention Program" shall have the meaning set forth in
Section
7(a).
(bb) "Term" shall have the meaning set forth in Section 2.
(cc) "Voting Stock" means all capital stock of the Company which
by
its terms may be
voted on all matters submitted to stockholders of the
Company
generally.
2. Employment.
Subject to Section 6, the Company shall employ the Executive
and the Executive shall continue in the
employ of the Company, for the period
set forth in this Section 2, in the
positions set forth in the first sentence of
Section 3 and upon the other terms and
conditions herein provided. The initial
term of employment under this Agreement
(the "Initial Term") shall be for the
period beginning on the Effective Date and
ending on July 31, 2009, unless
earlier terminated as provided in Section
6. The Initial Term shall
automatically be extended for successive
one-year periods (each, an "Extension
Term") unless either party hereto gives
written notice of non-extension to the
other party no later than 60 days prior to
the scheduled expiration of the
Initial Term or the then applicable
Extension Term (the Initial Term and any
Extension Term shall be collectively
referred to hereunder as the "Term").
3. Position and
Duties. The Executive shall serve as President and Chief
Executive Officer of the Company, reporting
directly to the Board, with such
responsibilities, duties and authority as
are customary for such role. During
the Term, the Company shall nominate the
Executive for a seat on the Board upon
the expiration of Executive's current term
as a director, and upon the
expiration of each subsequent term
thereafter (or, in the event that the
Executive is not elected to the Board at
any annual meeting of the Company's
stockholders, at not less than one annual
meeting following the first annual
meeting at which he in not elected). The
Executive also agrees to serve, without
additional compensation, as the chief
executive officer or director of any
subsidiary, division or Affiliate of the
Company if so requested by the Board.
The Executive shall devote substantially
all of his business time, attention and
efforts, toward the performance of his
duties under this Agreement.
Notwithstanding the foregoing, the
Executive may manage his personal
investments, be involved in charitable and
professional activities (including
serving on charitable and professional
boards), and, with the consent of the
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Board, serve on for-profit boards of
directors and advisory committees so long
as such service does not materially
interfere with the performance of the
Executive's duties hereunder or violate
Section 9 hereof, provided that any
boards that the Executive serves on as of
the Effective Date and which have been
previously approved shall be deemed to be
continued as approved.
4. Place of
Performance. In connection with his employment during the Term,
the Executive shall be based at the
Company's offices in Holtsville, New York,
except for necessary travel on the
Company's business.
5. Compensation
and Related Matters
(a) Annual Base Salary. At the commencement of the Term, the
Executive
shall receive a
base salary at a rate of $1,000,000 per annum (the "Annual
Base Salary"),
paid in accordance with the Company's general payroll
practices for
executives, but no less frequently than monthly. No less
frequently than
annually during the Term, the Board and the Committee shall
review the rate
of Annual Base Salary payable to the Executive, and may, in
their
discretion, increase (but not decrease) the rate of Annual Base
Salary payable
hereunder; provided, however, that any increased rate shall
thereafter be
the rate of "Annual Base Salary" hereunder.
(b) Bonus. Except as otherwise provided for herein, with respect
to
(i) 2004 and
(ii) each subsequent fiscal year on which the Executive is
employed
hereunder on the last day of the applicable year, the Executive
shall be
eligible to receive a bonus (the "Bonus"), as determined
pursuant
to the Company's Executive
Bonus Plan or another "qualified
performance-based compensation" bonus plan that has been approved
by the
stockholders of
the Company in accordance with the provisions for such
approval under
Code Section 162(m) and the regulations promulgated
thereunder
(collectively, the "Bonus Plan"), and on the basis of the
Executive's or
the Company's attainment of objective financial or other
operating
criteria established by the Committee in its sole good faith
discretion and
in accordance with Code Section 162(m) and the regulations
promulgated
thereunder. With respect to each fiscal year during the Term
(i) the
Executive shall be eligible to receive a maximum Bonus in an
amount
equal to 200% of
his Annual Base Salary and (ii) the Executive's
target-level
Bonus shall be equal to 100% of the amount of his Annual Base
Salary. The
Bonus for each fiscal year shall be paid to the Executive no
later than 90
days following the completion of such fiscal year. In
addition, the
Executive shall be eligible to participate in any other bonus
plan or program
that may be established by the Committee and that covers
the Executive
(even if such plan or program does not provide for qualified
performance-based bonuses within the meaning of Code Section
162(m)), at a
level
commensurate with the Executive's position.
(c) Equity Awards
(i) During the Term, the Executive shall be eligible to be
granted Options and other equity compensation awards at such
time(s)
and in such amount(s) as may be determined by the Committee in
its
sole discretion, at a level commensurate with the Executive's
position.
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(ii) In addition to any Options or other equity compensation
awards granted in accordance with subsection (i), in recognition
of
his promotion to the position of Chief Executive Officer of the
Company effective as of December 30, 2003, as soon as
reasonably
practicable following the Effective Date the Executive shall be
granted an Option or other equity compensation award at a level
commensurate with the Executive's position and upon such terms
and
conditions as shall be determined by the Committee and set forth in
a
written award agreement between the Executive and the Company.
(iii) Notwithstanding any provision to the contrary in any
Option
agreement, effective immediately upon the occurrence of a Change
in
Control, all Options and other equity compensation awards then held
by
the Executive shall become fully vested and exercisable with
respect
to all shares subject thereto.
(iv) Upon a termination of the Executive's employment for any
reason, other than for Cause, any Option that is granted on or
following the Effective Date and that is exercisable as of the date
of
such termination of employment shall remain exercisable for at
least
180 days following the date of termination of employment, but
not
beyond the original term of such Option.
(d) Benefits. The Executive shall be entitled to receive such
benefits
(including,
without limitation, fringe benefits and perquisites) and to
participate in
such employee group benefit plans, including life, health
and disability
insurance policies and the Company's Code Section 401(k)
pension plan, as
are generally provided by the Company to its senior
executives in
accordance with the plans, practices and programs of the
Company, at a
level commensurate with the Executive's position. In
addition, the
Executive shall continue to participate in the Company's
Executive
Retirement Plan, as amended from time to time.
(e) Expenses. The Company shall reimburse the Executive for all
reasonable and
necessary expenses incurred by the Executive in connection
with the
performance of the Executive's duties as an employee of the
Company. Such
reimbursement is subject to the submission to the Company by
the Executive of
appropriate documentation and/or vouchers in accordance
with the
customary procedures of the Company for expense reimbursement,
as
such procedures
may be revised by the Company from time to time and to such
caps on
reimbursement as the Company may from time to time impose.
(f) Vacations. The Executive shall be entitled to paid vacation
in
accordance with
the Company's vacation policy as in effect from time to
time. However,
in no event shall the Executive be entitled to less than
four weeks
vacation per annum. The Executive shall also be entitled to
paid
holidays and
personal days in accordance with the Company's practice with
respect to same
as in effect from time to time.
(g) Automobile. During the Term, the Company shall provide the
Executive with
use of a Company-leased automobile, based on an allowance or
lease
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allotment of up
to $1,000 per month, and shall pay gasoline, maintenance
and insurance
expenses for such automobile.
6. Termination.
The Executive's employment hereunder may be terminated by
the Company, on the one hand, or the
Executive, on the other hand, as
applicable, without any breach of this
Agreement only under the following
circumstances:
(a) Terminations
(i) Death. The Executive's employment hereunder shall terminate
upon his death.
(ii) Disability. In the event of the Executive's Disability,
the
Company may give the Executive written notice of its intention
to
terminate the Executive's employment while he remains so disabled.
In
such event, the Executive's employment with the Company shall
terminate effective on the 14th day after delivery of such
notice,
provided that within the 14 days after such delivery, the
Executive
shall not have returned to full-time performance of his duties.
(iii) Cause. The Board may, with the approval of a majority of
the Continuing Directors after a meeting (of which the Executive
is
provided with at least 10 days prior written notice of the intent
of
the meeting and the specifics of the grounds for Cause
termination
being alleged) at which the Executive has been given an opportunity
to
appear with counsel, terminate the Executive's employment
hereunder
for Cause. If the Board has reasonable belief that the Executive
has
committed any act or omission that has resulted in or that may
reasonably be expected to result in the occurrence any of the
events
described in Section 1(e)(iii), the Board may suspend the
Executive
while it investigates whether to terminate the Executive's
employment
for Cause. During any such suspension period (which may not be
longer
in the aggregate than 12 consecutive months (including any
renewals))
(the "Suspension Period") the Executive shall continue to
----------------- receive his Annual Base Salary and the
benefits
described in Section 5(d); provided, that if the Executive
ultimately
is convicted of, pleads no contest to, or receives
unadjudicated
probation for, any felony (or any other crime involving fraud,
embezzlement, misappropriation or moral turpitude having a
material
adverse impact on the Company), other than as a result of
vicarious
liability or as a result of a traffic violation, then the
Executive
shall
repay to the Company all amounts of Annual Base Salary paid to
him by the Company with respect to the Suspension Period.
Notwithstanding any other provision of this Agreement (or any
Option
or other equity compensation award agreement) to the contrary,
no
Option or other equity compensation award held by the Executive
shall
become vested or exercisable during the Suspension Period;
provided,
that if the Executive's employment is not ultimately terminated
for
Cause any Option or other equity compensation award (or portion
thereof) that would have otherwise become vested or exercisable
during
the Suspension Period shall become vested or exercisable following
the
expiration of the Suspension Period (and not less than
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10 business days prior to the Date of Termination). No Bonus shall
be
payable to the Executive with respect to the Suspension Period
(but
the Executive shall remain eligible to receive a pro-rata Bonus
with
respect to any portion of the fiscal year in which the
Suspension
Period commences that has elapsed prior to the commencement of
the
Suspension Period, to the extent such Bonus would otherwise have
been
payable to the Executive with respect to such fiscal year pursuant
to
the terms of the Bonus Plan). The Company may terminate the
Executive's employment at any time following the commencement of
the
Suspension Period upon 10 days written notice to the Executive.
(iv) Good Reason. The Executive may terminate his employment
for
Good Reason; provided that if such termination is due to the
Executive's failure to be elected to the Board as described in
Section
1(q)(iii), then the Executive shall provide the Company with not
less
than 60 days advanced written notice of such termination.
(v) Without Cause. The Company may terminate the Executive's
employment without Cause upon 30 days written notice to the
Executive.
(vi) Resignation without Good Reason. The Executive may resign
his employment without Good Reason upon 60 days written notice to
the
Company.
(vii) Non-Extension of Term. The Executive's employment shall
terminate as of the last day of the Term if either party
provides
notice of non-extension of the Term to the other pursuant to
Section
2.
(b) Notice of Termination. Any termination of the Executive's
employment by
the Company or by the Executive under this Section 6 (other
than termination
pursuant to paragraph (a)(i) or (a)(vii)) shall be
communicated by
a written notice to the other party hereto indicating the
specific
termination provision in this Agreement relied upon, setting
forth
in reasonable
detail any facts and circumstances claimed to provide a basis
for termination
of the Executive's employment under the provision so
indicated, and
specifying a Date of Termination in accordance with this
Agreement (a
"Notice of Termination"); provided, the Company may suspend
the Executive
from his positions with pay during any notice period so long
as he is
retained as an employee of the Company during such notice
period.
7. Severance
Payments and Benefits
(a) Termination for any Reason. In the event the Executive's
employment with
the Company is terminated for any reason, as soon as
reasonably
practicable after such termination the Company shall pay the
Executive (or
his beneficiary in the event of his death) a lump sum equal
to any unpaid
Annual Base Salary that has accrued as of the Date of
Termination, any
unreimbursed expenses due to the Executive and an amount
for any accrued
but unused vacation days and any earned but
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unpaid Bonus for
any fiscal year of the Company completed prior to the date
of such
termination. The Executive shall also be entitled to accrued,
vested benefits
under the Company's benefit plans and programs as provided
therein. In
addition, any shares of Common Stock held by the Executive
shall cease to
be subject to the Company's 2002 Stock Ownership and Option
Retention
Program (or any successor thereto) (the "Retention Program")
and
any shares held
in escrow under Section 5 of the Retention Program shall
immediately be
released to the Executive (with any restrictive legends
imposed because
of the Retention Program having been removed) and any
forfeiture
provisions applicable
