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Exhibit
99.1
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
AGREEMENT made and entered
into as of the 1st day of October, 2004 between BENTHOS,
INC. , a Massachusetts corporation with a principal place of
business situated at 49 Edgerton Drive, North Falmouth,
Massachusetts 02556 (the “Company”) and RONALD L.
MARSIGLIO of 11 Fetlock Circle, East Falmouth, Massachusetts
02536 (the “Executive”).
WITNESSETH:
WHEREAS, the Executive and
the Company entered into a certain Employment Agreement, dated as
of May 21, 2001 (the “Employment Agreement”);
and
WHEREAS, pursuant to Section
14 of the Employment Agreement, the Executive and the Company want
to amend and restate the Employment Agreement; and
WHEREAS, the Company and the
Executive want to reduce such amendment and restatement to
writing.
NOW, THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Executive hereby mutually agree
as follows:
Pursuant to Section 14 of the
Employment Agreement, the Employment Agreement is amended in its
entirety and effective as of the date hereof, the Employment
Agreement shall be as follows:
1. Employment .
Subject to the terms and conditions set forth in this Agreement,
the Company hereby offers, and the Executive hereby accepts
employment.
2. Term . Subject to
earlier termination as hereafter provided, the Executive’s
employment hereunder shall be for an initial term commencing on the
date hereof and ending on September 30, 2006, and thereafter such
term will be automatically extended for consecutive two (2) year
terms with the first such two (2) year term commencing on October
1, 2006, unless either the Company or the Executive provides the
other party with at least six (6) months written notice prior to
the expiration of the initial term, or any subsequent two (2) year
term, of such party’s intention not to extend the term beyond
the last day of the then current term, in which event the term will
expire on the last day of the then current term (the
“Term”).
3. Capacity and
Performance .
a. During the Term, the
Executive shall:
i. serve the Company as its
President and Chief Executive Officer, and without further
compensation, the Executive shall also serve as a director and/or
officer of one or more of the affiliates of the Company, or in such
other offices or positions as the Company may from time to time
determine;
ii. be employed by the
Company on a full-time basis and perform such duties and
responsibilities on behalf of the Company as may be designated from
time to time by the Board of Directors of the Company (the
“Board of Directors”); and
iii. devote his full business
time and his best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the
Company and to the discharge of duties and responsibilities of the
Executive hereunder and not engage in any other business activity
or serve in any industry, trade, professional, governmental or
academic position during the term of this Agreement, except as may
be expressly approved in advance by the Board of Directors in
writing.
b. Election to Board of
Directors . The Executive is currently serving as a Class I
Member of the Board of Directors of the Company, the current term
of which will expire at the time of the 2006 annual meeting of
stockholders of the Company. If the Executive is then employed by
the Company, has not served the Company with a notice of
termination of this Agreement pursuant to Section 2 hereof, is not
then in default under this Agreement and is otherwise eligible to
serve as a member of the Board of Directors, the Company will
propose at each appropriate annual meeting of the stockholders of
the Company during the Term that the Executive be re-elected to
serve as a member of the Board of Directors.
c. Noncompetition
Agreement . Attached hereto as Exhibit A is a certain
Noncompetiton, Nondisclosure and Assignment of Inventions Agreement
that is hereby incorporated herein by reference (the
“Noncompetiton Agreement”). Simultaneously with the
execution and delivery of this Agreement, the Executive will
execute and deliver to the Company the Noncompetiton
Agreement.
4. Compensation and
Benefits . As compensation for all services performed by the
Executive during the Term and subject to performance of the
Executive’s duties and the obligations of the Executive to
the Company and its affiliates, pursuant to this Agreement or
otherwise:
a. Base Salary . The
Company shall pay the Executive a base salary of Two Hundred Fifty
Thousand ($250,000.00) Dollars per annum, payable in accordance
with the payroll practices of the Company for its executives and
subject to increase from time to time by the Compensation Committee
of the Board of Directors, in its sole discretion. Such base
salary, which may from time to time be increased, is hereafter
referred to as the “Base Salary”.
b. Incentive
Compensation . The Compensation Committee of the Board of
Directors will review the Base Salary and incentive compensation of
the Executive annually prior to the start of each fiscal year
during the Term and may make such increases to the Base Salary and
adjustments to incentive compensation as the Compensation Committee
in its sole discretion shall determine.
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c. Vacations . During
the Term, the Executive shall be entitled to four (4) weeks of
vacation per annum, to be taken at such times and intervals as
shall be determined by the Executive, subject to the reasonable
business needs of the Company. Any unused vacation will be credited
in accordance with the policy of the Company with respect to unused
vacation by employees.
d. Other Benefits .
During the Term and subject to any contribution generally required
of employees of the Company, the Executive shall be entitled to
participate in any and all employee benefit plans from time to time
generally in effect for employees of the Company, except to the
extent that such plans are in a category of benefit otherwise
provided to the Executive. Such participation shall be subject to
(i) the terms of the applicable plan documents, (ii) generally
applicable Company policies, and (iii) the discretion of the Board
of Directors or any administrative or other committee provided for
in or contemplated by such plan. The Company may alter, modify, add
to or delete its employee benefit plans at any time as it, in its
sole judgment, determines to be appropriate, without recourse by
the Executive.
e. Business Expenses .
The Company shall pay or reimburse the Executive for all
reasonable, customary and necessary business expenses incurred or
paid by the Executive in the performance of the duties and
responsibilities of the Executive hereunder, subject to any maximum
annual limitations and other restrictions on such expenses set by
the Board of Directors and to such reasonable substantiation and
documentation as may be from time to time specified by the
Company.
f. Stock Options . The
Company may from time to time grant to the Executive additional
stock options as the Company in its sole discretion shall
determine.
5. Termination of
Employment and Severance Benefits . Notwithstanding the
provisions of Section 2 hereof, the Executive’s employment
hereunder shall terminate prior to the expiration of the Term under
the following circumstances:
a. Death . In the
event of the Executive’s death during the Term, the
Executive’s employment hereunder shall immediately and
automatically terminate and the Company shall pay to the
Executive’s designated beneficiary or, if no beneficiary has
been designated by the Executive, to the estate of the Executive,
any earned and unpaid Base Salary and any earned and unpaid
incentive compensation earned by the Executive in a fiscal year
prior to the fiscal year during which the death of the Executive
occurs.
b. Disability
.
i. The Company may terminate
the employment of the Executive hereunder, upon notice to the
Executive, in the event that the Executive becomes disabled during
the Term through any illness, injury, accident or condition of
either a physical or psychological nature and, as a result, is
unable to perform substantially all duties and responsibilities
hereunder for ninety (90) days during any period of three hundred
sixty-five (365) consecutive calendar days.
ii. The Board of Directors
may designate another employee to act in the Executive’s
place during any period of the Executive’s disability.
Notwithstanding any such
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designation, the Executive shall
continue to receive the Base Salary in accordance with Section 4.a.
and benefits in accordance with Section 4.d., to the extent
permitted by the then current terms of the applicable benefit
plans, until the Executive becomes eligible for disability income
benefits under any Company disability income plan or until the
termination of the employment of the Executive, whichever shall
first occur.
iii. While receiving
disability income payments under the Company’s disability
income plan, the Executive shall not be entitled to receive any
Base Salary under Section 4.a. hereof, but shall continue to
participate in Company benefit plans in accordance with Section
4.d. and the terms of such plans, until the termination of the
employment of the Executive.
iv. If any question shall
arise during any period the Executive is disabled through any
illness, injury, accident or condition of either a physical or
psychological nature as to whether the Executive is able to perform
substantially all of the duties and responsibilities of the
Executive hereunder, the Executive may, and at the request of the
Company shall, submit to a medical examination by a physician
selected by the Company to whom the Executive or the duly appointed
guardian of the Executive, if any, has no reasonable objection, to
determine whether the Executive is so disabled, and such
determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the
Executive shall fail to submit to such medical examination, the
Company’s determination of the issue shall be binding on the
Executive.
c. By the Company for
Cause . The Company may, immediately and unilaterally terminate
the Executive’s employment hereunder “for cause”
at any time during the term of this Agreement without prior written
notice to the Executive. Termination of the Executive’s
employment by the Company shall constitute a termination “for
cause” under this Section 5(c) if such termination, as
determined by the Board of Directors, is for one or more of the
following causes:
i. Willful failure of the
Executive to perform (other than by reason of disability under
Section 5.b., or gross negligence in the performance of the duties
and responsibilities of the Executive to the Company;
ii. The commission by the
Executive of any act or acts of dishonesty, a breach of fiduciary
duty, a material breach of the terms of this Agreement or any other
agreement between the Executive and the Company;
iii. The commission by the
Executive of an act of fraud or embezzlement;
iv. The conviction by the
Executive of, or plea of no contest for, any felony; or
v. The commission of an act
by the Executive that constitutes a willful, reckless or grossly
negligent violation of the federal or state securities
laws.
In the event of a termination
“for cause” pursuant to any of the provisions of
clauses (i)
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through (v) above, inclusive, the
Executive will be paid any earned and unpaid Base Salary as of the
termination date, but shall not be entitled to any Severance
Benefits, as hereinafter defined, or any other termination benefits
under this Agreement.
d. By the Company Other
Than for Cause .
i. The Company may terminate
the Executive’s employment under this Agreement at any time
without cause upon thirty (30) days prior written notice to the
Executive or upon payment of one month’s Base Salary in lieu
of such notice if the Company elects to accelerate the
Executive’s departure date. Such a termination of the
Executive by the Company is sometimes hereafter referred to as a
termination for “other than for cause.” For the
purposes hereof, a substantial adverse diminution in duties will be
deemed to be a termination for other than for cause. In such event,
the Company shall pay the Executive Severance Benefits as described
in Section 5.d.ii. below. Notwithstanding the foregoing, in no
event will an exercise by the Company of its election to terminate
this Agreement by at least six (6) months prior written notice
pursuant to Section 2 hereof be deemed to be a termination of the
Agreement for other than for cause or entitle the Executive to
Severance Benefits. The period commencing on the date of the
receipt of a notice by the Executive from the Company of the
Company’s election not to renew the then term of this
Agreement pursuant to the provisons of Section 2 hereof and the
last day of the then current term of this Agreement on which this
Agreement will terminate pursuant to such notice shall sometimes
hereinafter be referred to as the “Interim Period.”
During the last 6 months of the Interim Period, the Company may
assign to the Executive different or diminished duties and such
diminished duties will not be deemed to be a termination for other
than cause or entitle the Executive to Severance Benefits. During
the Interim Period the Executive will continue to earn any
incentive compensation that the Executive is eligible to earn
pursuant to any incentive compensation plan then in effect for the
Company. Any such incentive compensation earned by the Executive
during any fiscal year that encompasses an Interim Period will be
paid to the Executive by the Company in accordance with any
incentive compensation then in effect.
ii. In the event the Company
exercises its right to terminate the Executive for other than for
cause under Section 5.d.i. or in the event of a termination of the
employment of the Executive pursuant to the provisions of Section
5.e. below, pursuant to a Change of Control, as hereafter defined,
subject to the requirements of Section 5.f., the Severance Benefits
to be provided to the Executive by the Company will consist of the
following:
(a) The Company will pay
severance to the Executive equal to the then Base Salary of the
Executive. All severance payments will be made in accordance with
the payroll practices of the Company and will be paid periodically
over the one-year period after the date of termination.
(b) The Company will pay the
Executive any earned and unpaid incentive compensation earned by
the Executive in a fiscal year prior to the fiscal year during
which the employment of the Executive is terminated in connection
with a Change of Control.
(c) During the one-year post
employment period, as long as the
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Executive is entitled to receive
severance pay from the Company, the Executive may elect to
participate in the group medical insurance program on the same
basis as the Executive had been participating prior to the date of
termination, provided that, the arrangement is acceptable to the
then medical coverage insurer of the Company. For example, if the
Executive had been paying for 20% of the medical coverage prior to
termination and the Company had been paying for 80% of the medical
coverage of the Executive, then the Company will pay 80% of the
premium and the Executive will pay for 20% of the premium for the
medical insurance coverage during the severance period.
The severance benefits for the Executive
set forth in Subparagraphs 5.d.ii.(a), 5.d.ii.(b), and 5.d.ii.(c)
are sometimes hereinafter collectively referred to as the
“Severance Benefits”
e. Upon a Change of
Control.
i. If a Change of Control
occurs and within one (1) year following such Change of Control the
Company terminates the Executive’s employment other than for
cause as defined in Section 5.d i, the Company shall pay the
Severance Benefits to the Executive.
ii. If a Change of Control
occurs, and thereafter, without the consent of the Executive, the
Company materially and adversely reduces the duties of the
Executive, requires the Executive
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