▇▇▇▇▇▇ ELECTRONICS CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of November 20, 1998 (the "Effective Date")
by and between ▇▇▇▇▇▇ Electronics Corporation (the "Company"), a New York
corporation and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the Executive
for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Company on a
full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
1. DUTIES AND RESPONSIBILITIES
The Executive shall serve as President and Chief Operating Officer of
the Company. Subject to the supervision and direction of the Board of Directors
of the Company (the "Board") and the Chief Executive Officer or Co-Chief
Executive Officers, as the case may be, of the Company and unless otherwise
determined by the Board or such Chief Executive Officer or the Co-Chief
Executive Officers, as the case may be, the Executive in such capacity shall: be
responsible for managing the affairs of the Corporation; have supervision and
direction of all of the other officers of the Corporation other than such Chief
Executive Officer or Co-Chief Executive Officers, as the case may be; have the
powers and duties usually and customarily associated with the office of the
President and Chief Operating Officer; and have such commensurate
responsibilities, duties and authority as may from time to time be assigned to
the Executive by the Board or such Chief Executive Officer or Co-Chief Executive
Officers, as the case may be. The Executive shall be appointed to the Company's
Board reasonably promptly following the effective date of this Agreement. The
Executive shall devote substantially all his time, energy and skill during
reasonable business hours to the service of the Company. The Executive's office
shall be located at the Company's headquarters, which shall be located at ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
2. TERM OF AGREEMENT
The Company shall employ the Executive and the Executive shall serve as a
full-time employee of the Company for the term beginning on the effective date
of this Agreement and ending on December 31, 2001 (such period, as may be
extended in accordance herewith, being the "Employment Period"). The Employment
Period and this Agreement shall be automatically extended for successive one (1)
year terms following the expiration date of the Employment Period in effect
immediately prior to each such extension, unless either the Company or the
Executive notifies the other in writing at least twelve months prior to such
expiration that the Employment Period and this Agreement shall not be so
extended. Further, if employment is terminated for any reason other than death,
such termination will not result in the expiration of the term of this
Agreement.
3. COMPENSATION DURING TERM OF AGREEMENT
(a) Base Salary
The Company shall pay the Executive a salary (the "Base Salary") of not less
than the greater of (i) $200,000 per annum and (ii) the base salary of the Chief
Executive Officer of the Company or the higher of the base salaries of the
Co-Chief Executive Officers of the Company, as the case may be. Base Salary
shall include any amounts of compensation deferred by the Executive under any
employee benefit plan maintained by the Company. Such Base Salary shall be
payable weekly. The Executive's Base Salary shall be reviewed annually. Such
review shall be conducted by a Compensation Committee designated by the Board,
and the Board shall increase the Executive's Base Salary by a Cost of Living
Allowance ("COLA") percentage and a 7% merit increase based on performance as
determined by the Board. The increased Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary provided
in this Section 3(a), the Company shall also provide the Executive, at no cost
to the Executive, with all such other benefits as are provided uniformly to
permanent full-time employees of the Company.
(b) Short-Term Incentive Compensation Program
The Executive shall participate in the Company's Short-Term Incentive
Compensation Program. Annual cash awards ("Short-Term Awards") under this
program will be based on the achievement of performance goals, both corporate
(80%) and individual (20%), expressed as a percentage of the Executive's Base
Salary or dollar amount adopted on or after the date of this Agreement.
Performance measures will include sales from new sources and operating income.
Performance goals, measures and annual awards will be determined by the
Compensation Committee and approved by the Board. The Company will pay the
Short-Term Award to the Executive within 60 days following the last day of the
Company's fiscal year. Notwithstanding whether any such performance goals are
achieved, the Short-Term Awards payable to the Executive shall be not less than
$150,000 per annum in respect of each year or fraction thereof of employment
under this Agreement. In the event that such performance goals are achieved or
the Chief Executive Officer or either or both Co-Chief Executive Officers, as
the case may be, of the Company receives Short-Term Awards in respect of any
year or fraction thereof during the Executive's employment under this Agreement,
then the Short-Term Award in respect of such year or fraction thereof payable to
the Executive shall be not less than $150,000 per annum plus not less than 75%
of any amount in excess of $150,000 per annum awarded to such Chief Executive
Officer or Co-Chief Executive Officer, as the case may be, provided, that for
purposes of calculating any such excess amount in the event that both Co-Chief
Executive Officers are awarded any such Short-Term Award in excess of $150,000,
the amount that shall be used for calculating the amount of such excess shall be
the higher of the Short-Term Awards to the Co-Chief Executive Officers.
(c) Long-Term Incentive Compensation Program
In addition to the Base Salary and Short-Term Award, the Executive shall be
entitled to participate, during the Employment Period, in the Company's
Long-Term Incentive Compensation Program. Long-term cash or equity-based awards
("Long-Term Awards") may include (i) stock options, (ii) stock appreciation
rights, (iii) restricted stock, (iv) deferred stock, (v) stock reload options
and/or (vi) other stock-based awards. The Executive shall receive an initial
stock option award under the Company's 1998 Stock Plan (the "Plan") covering
250,000 shares of the Common Stock, par value $.50 per share (each a "Share"),
of the Company at an exercise price of $8.875 per share, the market price as of
the date of this agreement. Each equity-based, Long-Term Award granted to the
Executive shall vest as follows: 25% shall vest on the first anniversary of such
award; an additional 25% shall vest on the second anniversary of such award; and
the remaining 50% shall vest on the third anniversary of such award.
Furthermore, the Executive will receive no less than 75% of all subsequent
Long-Term Awards given to the Chief Executive Officer or Co-Chief Executive
Officers, as the case may be, provided, that for purposes of calculating the
Long-Term Award, the number of shares used for calculating the amount shall be
the higher of the Long-Term Awards granted to the Co-Chief Executive Officers.
(d) The Company will provide the Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which the
Co-Presidents of the Company were participating or otherwise deriving benefit
from immediately prior to the beginning of the term of this Agreement, and the
Company will not, without the Executive's prior written consent, make any
changes in such plans, arrangements or perquisites which would adversely affect
the Executive's rights or benefits thereunder. Without limiting the generality
of the foregoing provision of this Section 3(d), the Executive will be entitled
to (i) participate in or receive benefits under any employee benefit plans
including, but not limited to, retirement plans, supplemental retirement plans,
pension plans, profit-sharing plans, health-and-accident plans, medical coverage
or any other employee benefit plan or arrangement made available by the Company
in the future to its senior executives and key management employees, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plans and arrangements, (ii) a car to be leased and appropriately
maintained and insured by the Company, (iii) annual fixed costs (including dues,
capital assessments and the like) not to exceed $6,500 per annum related to
membership in a club of the Executive's choice, (iv) four weeks of vacation per
year, with the right to carry vacation time not used in any year (excluding
vacation time so carried over) to the immediately subsequent year, and (v)
reimbursement for attendance and related reasonable travel expenses, if any, at
training sessions for the purpose of maintaining the Executive's Certified
Public Accountant's license.
(e) In addition to the Base Salary provided for by Section 3(a) and other
compensation provided for by Sections 3(b), (c) and (d) hereof, the Company
shall pay or reimburse the Executive for all reasonable travel and other
reasonable expenses incurred by the Executive performing his obligations under
this Agreement and may provide such additional compensation in such form and
such amounts as the Board may from time to time determine.
4. TERMINATION OF EMPLOYMENT
(a) Death or Disability:
This Agreement shall terminate automatically upon the Executive's death. The
Company may terminate this Agreement, after having established the Executive's
Disability (pursuant to the definition of "Disability" set forth below), by
giving to the Executive written notice of its intention to terminate the
Executive's employment. In such a case, this Agreement (but not the Executive's
employment with the Company) shall terminate effective on the 90th day after
receipt of such notice (the "Disability Effective Date"), provided that, within
90 days after such receipt, the Executive shall fail to return to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means disability which, after the expiration of more than 52 weeks
after its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement upon acceptability not to be
withheld unreasonably).
(b) Cause:
The Company may terminate the Executive's employment for Cause (as defined
below). For purposes of this Agreement, "Cause" means:
(i) an act or acts of dishonesty (other than insubstantial or
inadvertent acts that do not materially affect the business, results of
operations or financial condition of the Company) taken by the Executive at the
expense of the Company;
(ii) repeated material violations by the Executive of the
Executive's obligations under Section 1 of this Agreement; or
(iii) the conviction of the Executive of a felony.
(c) Good Reason:
The Executive's employment may be terminated by the Executive for Good Reason
(as defined below). For purposes of this Agreement, "Good Reason" means:
(i) (A) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles, and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 1 of this Agreement or (B) any other action by the Company which
results in a diminishment in such position, authority, duties or
responsibilities, other than an insubstantial and inadvertent action which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the provisions of Section
3 of this Agreement, other than an insubstantial and inadvertent failure which
is remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at any office or
location more than 50 miles from the location of the Company's headquarters set
forth in Section 1, except for travel reasonably required in the performance of
the Executive's responsibilities;
(iv) any purported termination by the Company of the Executive's employment
other than as permitted by this Agreement, it being understood that any such
purported termination shall not be effective for any purpose of this Agreement;
(v) any failure by the Company to comply with and satisfy Section 15(a) of this
Agreement; or
(vi) failure of the Executive to be nominated for election to the Board at each
meeting of the shareholders of the Company during the term of this Agreement
called for the purpose of, in addition to any other matters, electing the
members of the Board, unless either the Company or the Executive in accordance
with Section 2 notifies the other in writing at least twelve months prior to
such expiration that the Employment Period and this Agreement shall not be
extended.
(d) Effect of Termination:
Termination shall not affect any rights that the Executive may have under any
other program or arrangement.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION
(a) Death
If the Executive's employment is terminated by reason of the Executive's death,
this Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement other than those obligations accrued
hereunder at the date of the Executive's death. Anything in this Agreement to
the contrary notwithstanding, the Executive's family shall be entitled to
receive benefits at least equal to those provided by the Company to surviving
families of executives of the Company under such plans, programs and policies
relating to family death benefits, if any, as in effect at any time during the
90-day period immediately preceding the date of the Executive's death, or if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter with respect to other key executives and their families. The
unvested portion of such stock options shall immediately become vested upon the
Executive's death.
(b) Disability
If this Agreement is terminated by reason of the Executive's Disability, the
Executive shall be entitled after the Disability Effective Date to receive
disability and other benefits at least equal to those provided by the Company to
disabled employees and/or their families in accordance with such plans, programs
and policies relating to disability, if any, as in effect during the 90-day
period immediately preceding the Disability Effective Date or, if more favorable
to the Executive and/or the Executive's family, as in effect at any time
thereafter with respect to other key executives and their families. The unvested
portion of such stock options shall immediately become vested upon the
Executive's Disability.
(c) Cause
If the Executive's employment shall be terminated for Cause pursuant to Section
4(b), the Company shall pay the Executive his full Base Salary through the Date
of Termination (as defined below) at the rate in effect at the time Notice of
Termination (as defined below) is given and provide to the Executive all then
vested benefits, deferred compensation and the like due to the Executive under
this Agreement, and the Company shall have no further obligations to the
Executive under this Agreement. In addition, the Executive shall be afforded the
opportunity to convert any term policies insuring the Executive's health or life
that are owned by the Company to individual policies, where permitted by the
terms of such policies.
(d) Good Reason; Other Than for Cause
If, during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause, or the employment of the Executive shall be
terminated by the Executive for Good Reason, the Company shall pay to the
Executive a sum equal to (i) the amount of the remaining Base Salary payments
that the Executive would have earned if he continued his employment with the
Company during the remaining unexpired term of this Agreement at the Executive's
Base Salary at the Date of Termination; (ii) an amount equal to the product of
the highest annual amount of bonus and any other compensation paid to the
Executive during the term of this Agreement multiplied by the remaining number
of years of this Agreement and any fraction thereof; and (iii) an amount equal
to the product of the highest annual amount of contributions that were made on
the Executive's behalf to any employee benefit plans of the Company during the
term of this Agreement times the remaining number of years of this Agreement and
any fraction thereof. At the election of the Executive, which election is to be
made within thirty (30) days of the Date of Termination, such payments shall be
paid monthly during the remaining term of this Agreement following the
Executive's termination. Such payments shall not be reduced in the event the
Executive obtains other employment following termination of employment.
The Company will continue life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Company for the
Executive prior to his termination, except to the extent such coverage may be
changed in its application to all Company employees on a nondiscriminatory
basis. Such coverage shall cease upon the expiration of the remaining term of
this Agreement.
The Executive will be entitled to receive benefits due him under or contributed
by the Company on his behalf pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the Company on the Executive's behalf to the extent such benefits
are not otherwise paid to the Executive under a separate provision of this
Agreement.
6. CHANGE IN CONTROL
(a) For purposes hereof, a "change in control" shall be defined as:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13D-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of Directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) below; or
(ii) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Incumbent Board, provided, however, that
any individual becoming a director subsequent to the date hereof whose election
or nomination for election by the Company's shareholders was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board,
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Incumbent Board; or
(iii) Consummation of a reorganization, merger, consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of
the then outstanding shares of common stock and the combined voting power,
respectively, of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Incumbent Board, providing for
such Business Combination; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(b) Upon the occurrence of a Change in Control, the Company shall pay the
Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to the greater of
(i) the payments and benefits due for the remaining term of this Agreement and
(ii) five (5) times the Executive's average annual compensation from the Company
for the five (5) preceding taxable years, or if the Executive's employment by
the Company is then less than five (5) years, the Executive's average annual
compensation from the Company during the Executive's employment by the Company,
provided, that if such period of employment includes a short taxable year or
less than all of a taxable year, compensation for such short or incomplete
taxable year must be annualized before determining the average annual
compensation for the period of employment. In annualizing compensation, the
frequency with which payments are expected to be made over an annual period must
be taken into account, such that any amount of compensation for such a short or
incomplete taxable year that represents a payment that will not be made more
often than once per year is not annualized. Such annual compensation shall
include any commissions, bonuses, pension and profit sharing plan benefits,
severance payments, retirement benefits, director or committee fees and fringe
benefits paid or to be paid to the Executive during such years. At the election
of the Executive, which election is to be made within thirty (30) days of the
Change in Control, such payment may be made in a lump sum or paid in equal
monthly installments during the thirty-six (36) months following the Executive's
termination. In the event that no election is made, payment to the Executive
will be made on a monthly basis during the thirty-six (36) months following the
Executive's termination.
(c) All restrictions on the restricted stock then held by the Executive will
lapse immediately, all stock options and stock appreciation rights then held by
the Executive will become immediately exercisable, and any performance shares or
units then held by the Executive will vest immediately, in full, in the event of
a Change in Control.
(d) Upon the occurrence of a Change in Control, the Executive will be entitled
to receive benefits due him under or contributed by the Company on his behalf
pursuant to any retirement, incentive, profit sharing, bonus, performance,
disability or other employee benefit plan maintained by the Company on the
Executive's behalf to the extent such benefits are not otherwise paid to the
Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control followed by the Executive's
termination of employment, the Company will cause to be continued life, medical,
dental and disability coverage substantially identical to the coverage
maintained by the Company for the Executive prior to his severance, except to
the extent that such coverage may be changed in its application for all Company
employees on a nondiscriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) full calendar months following the Date
of Termination.
(f) In the event that the Executive is receiving monthly payments pursuant to
Section 6(b) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, the Executive shall elect whether the
balance of the amount payable under the Agreement at that time shall be paid in
a lump sum or on a pro rata basis pursuant to such section. Such election shall
be irrevocable for the year for which such election is made.
(g) Any and all payments to be made to the Executive under this Agreement or
otherwise as a result of a Change in Control whether in the nature of severance
payments, liquidated damage payments, compensation or other payments (all of the
foregoing being hereinafter referred to as "Change in Control Payments"), shall
be made free and clear of, and without deduction or withholding for or on
account of, any tax which may be payable under Section 4999 of the Internal
Revenue Code of 1986 (the "Code"), now or hereafter imposed, levied, withheld or
assessed (such amounts being hereinafter referred to as the "Excise Taxes"). If,
notwithstanding the foregoing provision, any Excise Taxes are withheld from any
Change in Control Payments made or to be made to the Executive, the amounts so
payable to the Executive shall be increased to the extent necessary to yield to
the Executive (after payment of any tax which may be payable under Section 4999
of the Code) the full amount which he is entitled to receive pursuant to the
terms of this Agreement or otherwise without regard to liability for any Excise
Taxes and any other Federal income taxes, State income taxes, FICA/Medicare and
unemployment taxes thereon. In the event any Excise Taxes are now or hereafter
imposed, levied, assessed, paid or collected with respect to the Change of
Control Payments made or to be made to the Executive, Excise Taxes and any other
Federal, State, FICA/Medicare and unemployment taxes thereon shall be paid by
the Company or, if paid by the Executive, shall be reimbursed to the Executive
by the Company upon its receipt of satisfactory evidence of such payment having
been made.
7. NOTICE
(a) Any purported termination by the Company or by the Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected) and provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay the Executive his full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, Base Salary) and continue
him as a participant in all compensation, benefit and insurance plans in which
he was participating when the notice of dispute was given, until the dispute is
finally resolved in accordance with this Agreement. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and shall
not be offset against or reduce any other amounts due under this Agreement.
8. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to the Executive under this Agreement shall be
subject to the Executive's compliance with Section 8(b), hereof during the term
of this Agreement and for one (1) full year after the expiration or termination
hereof.
(b) Following the expiration or termination of this Agreement, the Executive
shall, upon reasonable notice, furnish such information and assistance to the
Company as may reasonably be required by the Company in connection with any
litigation in which it or any of its subsidiaries or affiliates is, or may
become, a party; provided, that, if the Executive's assistance is so required by
the Company subsequent to the expiration or termination of this Agreement, then
the Company shall pay to the Executive for such assistance a fee of $300 per
hour plus reasonable and necessary travel costs related to the provision of such
assistance; and provided, however, that Executive would not be required to
furnish such information and assistance to the Company in connection with any
litigation between the Executive and the Company or any of its subsidiaries or
affiliates.
9. NON-COMPETITION
(a) Upon any termination of the Executive's employment hereunder pursuant to
Section 6 hereof, the Executive agrees not to compete with the Company for a
period of one (1) year following such termination in any city, town or county in
which the Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted by the
Board. The Executive agrees that during such period and within said cities,
towns and counties, the Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose business
materially competes with the business activities of the Company. The parties
hereto, recognizing that irreparable injury will result to the Company, its
business and property in the event of the Executive's breach of this Section
9(a) agree that in the event of any such breach, as judicially determined, by
the Executive, the Company will be entitled, in addition to any other remedies
and damages available, to an injunction to restrain the violation hereof by the
Executive, the Executive's partners, agents, servants, employers, employees and
all persons acting for or with the Executive. The Executive represents and
admits that in the event of the termination of his employment pursuant to
Section 6 hereof, the Executive's experience and capabilities are such that the
Executive can obtain employment in a business engaged in other lines and/or of a
different nature than the Company, and that the enforcement of a remedy by way
of injunction will not prevent the Executive from earning a livelihood. Nothing
herein will be construed as prohibiting the Company from pursuing any other
remedies available to the Company for such breach or threatened breach,
including the recovery of damages from the Executive.
(b) The Executive recognizes and acknowledges that the knowledge of the business
activities and plans for business activities of the Company is a valuable,
special and unique asset of the business of the Company. The Executive will not,
during or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Company or affiliates
thereof to any person, firm, corporation, or other entity for any reason or
purpose whatsoever. Notwithstanding the foregoing, the Executive may disclose
any concepts or ideas that are not solely and exclusively derived from the
business plans and activities of the Company. In the event of a breach or
threatened breach by the Executive of the provisions of this Section 9(b), the
Company will be entitled to an injunction restraining the Executive from
disclosing, in whole or in part, the knowledge of the past, present, planned or
considered business activities of the Company, or from rendering any services to
any person, firm, corporation or other entity to whom such knowledge, in whole
or in part, has been disclosed or is threatened to be disclosed. Nothing herein
will be construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Executive.
10. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy
or similar process or assignment by operation of law, and any attempt, voluntary
or involuntary, to affect any such action shall be null, void and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of, the
Executive and the Company and their respective successors and assigns.
11. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.
12. SEVERABILITY
If, for any reason, any provision of this Agreement or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not so held invalid, and each
such other provision and part thereof shall, to the full extent consistent with
law, continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. ARBITRATION
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators sitting in a location selected by the Executive within fifty (50)
miles from the location of the Company's headquarters set forth in Section 1, in
accordance with the rules of the American Arbitration Association then in
effect. One arbitrator shall be selected by the Company; one arbitrator shall be
selected by the Executive; and one arbitrator shall be selected by the two
arbitrators respectively selected by the Company and the Executive. Judgment may
be entered on the arbitrators' award in any court having jurisdiction, provided,
however, that the Executive shall be entitled to seek specific performance of
his right to be paid and receive benefits until the Date of Termination during
the pendency of any dispute or controversy arising under or in connection with
this Agreement.
In the event any dispute or controversy arising under or in connection with the
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, the Executive shall be entitled to the
payment of all back-pay, including salary, bonuses and any other cash
compensation, fringe benefits and any compensation and benefits due the
Executive under this Agreement.
15. PAYMENT OF LEGAL FEES; DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
(a) All reasonable legal fees and other expenses paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to this
Agreement shall be paid or reimbursed by the Company if the Executive is
successful pursuant to a legal judgment, arbitration or settlement.
(b) The Company shall maintain a directors' and officers' liability insurance
policy containing such provisions and amounts of coverage that are usual and
customary for companies of size similar to the Company and subject to risks
similar to those to which the Company is subject, provided that such coverage
can be obtained at commercially reasonable rates.
16. SUCCESSOR TO THE COMPANY
The Company shall require any successor or assignee, whether direct or indirect,
by purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Company, expressly and unconditionally, to assume and
agree to perform the Company's obligations under this Agreement, in the same
manner and to the same extent that the Company would be required to perform if
no such succession or assignment had taken place.
17. UNFUNDED AGREEMENT SUBJECT TO CLAIMS OF COMPANY CREDITORS
The Company's obligation under this Agreement will be unfunded and the Executive
will not have any claims or rights superior to those of any general creditor of
the Company.
18. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to any choice of law or conflict
of law provision or rule whether of the State of New York or any other
jurisdiction that would cause the application hereto of the laws of any
jurisdiction other than the State of New York. Each party agrees to that any
action arising under this Agreement may be brought in the federal or state
courts in the County of New York, State of New York, and each party agrees to
submit to the personal jurisdiction of such courts.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has signed this
Agreement, on the day first above written.
▇▇▇▇▇▇ ELECTRONICS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Chief Executive Officer
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇