Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
(▇▇▇▇▇)
▇▇▇▇▇ Executive Employment Agreement
TABLE OF CONTENTS
PAGE
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RECITALS..................................................................... 1
AGREEMENT.................................................................... 1
1. General Duties of Employer and Executive................................ 1
2. Compensation and Benefits............................................... 2
3. Preservation of Business; Fiduciary Responsibility...................... 3
4. Term.................................................................... 3
5. Termination Other Than by Expiration of the Term........................ 3
6. Effect of Termination................................................... 4
7. Covenants of Confidentiality, Nondisclosure and Noncompetition.......... 7
8. Inventions.............................................................. 8
9. No Violation............................................................ 8
10. Return of Employer's Property........................................... 9
11. Injunctive Relief....................................................... 9
12. Dispute Resolution...................................................... 9
13. Miscellaneous........................................................... 10
APPENDIX I - Certain Definitions
EXHIBIT A - Indemnity Provisions
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▇▇▇▇▇ Executive Employment Agreement
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated ______________, effective as of ____________, 1999
("Effective Date"), is made and entered into by and between LITRONIC INC., a
Delaware corporation ("Employer") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. ("Executive").
RECITALS
Employer desires that the Executive enter into an employment relationship
with Employer in order to provide the necessary leadership and senior management
skills that are important to the success of Employer. Employer believes that
obtaining the Executive's services as an employee of Employer and the benefits
of his business experience are of material importance to Employer and Employer's
stockholders.
AGREEMENT
NOW, THEREFORE, in consideration of Executive's employment by Employer and
the mutual promises and covenants contained herein, the receipt and sufficiency
of which is hereby acknowledged, Employer and Executive intend by this Agreement
to specify the terms and conditions of Executive's employment relationship with
Employer.
1. GENERAL DUTIES OF EMPLOYER AND EXECUTIVE.
1.1 Employer agrees to employ Executive and Executive agrees to accept
employment by Employer and to serve Employer in an executive capacity upon the
terms and conditions set forth herein. Employer hereby employs Executive as the
President and Chief Operating Officer of Employer as of the Effective Date,
reporting to the Board of Directors of Employer (the "Board"). Executive will
also serve as a member of the Board. Executive's duties and responsibilities
shall be those normally assumed by the President and Chief Operating Officer of
a publicly-owned company similarly situated to Employer, as well as such other
or additional duties, as may from time-to-time be assigned to Executive by the
Board. Such other or additional duties shall be consistent with the senior
executive functions set forth above.
1.2 While employed hereunder, Executive shall use his best efforts to obey
the lawful directions of the Board. Executive shall also use his best efforts to
promote the interests of Employer and to maintain and to promote the reputation
of Employer. While employed hereunder, Executive shall devote his full business
time, efforts, skills and attention to the affairs of Employer and faithfully
perform his duties and responsibilities hereunder.
1.3 While this Agreement is in effect, Executive may from time to time
engage in any activities that do not compete directly with Employer, provided
that such activities do not interfere with his performance of his duties.
Executive shall be permitted to (i) invest his personal assets as a passive
investor in such form or manner as Executive may choose in his discretion, (ii)
participate in various charitable efforts, and (iii) serve as a member of the
Board of Directors of other corporations which are not competitors of Employer.
▇▇▇▇▇ Executive Employment Agreement
1.4 Executive shall perform his duties at the corporate office of Employer
located in Lanham, Maryland. Executive shall not be relocated to another
location more than thirty miles from Lanham, Maryland without his prior written
consent.
2. COMPENSATION AND BENEFITS.
2.1 As compensation for his services to Employer, Employer shall pay to
Executive an annual base salary of $175,000 during the first 12-month period
that this Agreement is in effect, payable in equal semimonthly payments in
accordance with the Employer's regular payroll policy for salaried employees
(the "Salary"). Thereafter, the Compensation Committee of the Board shall
perform an annual review of the Executive's Salary based on Executive's
performance of his duties and the Employer's other compensation policies. The
Compensation Committee may, at its sole discretion, increase (but not decrease)
the Salary after the first 12-month period that this Agreement is in effect.
2.2 In addition, Executive shall be entitled to an incentive bonus
("Incentive Bonus"), payable no later than March 31 of each year based on
Employer's earnings before interest and taxes (after adding back the
amortization of goodwill from Employer's acquisition of Pulsar Data Systems,
Inc.) (defined as "EBIT" for purposes of this Section 2.2) for the previous
fiscal year. The Incentive Bonus for fiscal year 1999 (payable on or before
March 31, 2000) shall be calculated on a pro forma basis in accordance with GAAP
as determined by Employer's Auditors as if the business combination of Employer
had occurred on January 1, 1999. If EBIT in any fiscal year during the term of
this Agreement exceeds $2,500,000, then Executive shall be entitled to an
Incentive Bonus of $100,000. For each additional $1,000,000 of annual EBIT,
Executive shall be entitled an additional $37,500 of Incentive Bonus (this
additional amount may only be earned by Employer's EBIT increasing in $1,000,000
increments, i.e., it shall not be prorated for amounts above the previous
threshold that are less than $1,000,000). Employer shall pay Executive a
prorated Incentive Bonus (the "Prorated Bonus") if this Agreement is terminated
for any reason other than for "Due Cause." The Prorated Bonus shall be based on
a fraction, the numerator of which is the number of calendar days during the
fiscal year during which Executive was employed prior to and including the
effective date of the termination of Executive's employment and the denominator
of which is 365.
2.3 Upon Executive's furnishing to Employer customary and reasonable
documentary support (such as receipts or paid bills) evidencing costs and
expenses incurred by him in the performance of his services and duties hereunder
(including, without limitation, travel and entertainment and cellular telephone
expenses) and containing sufficient information to establish the amount, date,
place and essential character of the expenditure, Executive shall be reimbursed
for such costs and expenses in accordance with Employer's normal expense
reimbursement policy.
2.4 Employer shall provide Executive with a luxury automobile satisfactory
to Executive (with monthly lease payments not to exceed $1,600), and shall pay
all maintenance and operating costs (including insurance) for that automobile.
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2.5 As long as this Agreement is in effect, Executive shall be entitled to
participate in the medical (including hospitalization), dental, life and
disability insurance plans, to the extent offered by Employer, and in amounts
consistent with the Employer's policy, for other senior executive officers of
Employer.
2.6 Executive shall have the right to participate in any additional
compensation, benefit, pension, stock option, stock purchase, 401(k) or other
plan or arrangement of Employer now or hereafter existing for the benefit of
other senior executive officers of Employer.
2.7 Executive shall be entitled to such vacation (but in no event less
than three weeks per year), holiday and other paid or unpaid leaves of absence
consistent with Employer's normal policies for other senior executive officers
of Employer or as otherwise approved by the Board. Executive shall be entitled
to accrue vacation time for one year. If he does not take the accrued vacation
during the next year, he shall be paid for the unused vacation at his Salary
rate then in effect.
3. PRESERVATION OF BUSINESS; FIDUCIARY RESPONSIBILITY.
Executive shall use his best efforts to preserve the business and
organization of Employer and to preserve the business relations of Employer. So
long as the Executive is employed by Employer, Executive shall observe and
fulfill proper standards of fiduciary responsibility attendant upon his service
and office.
4. TERM.
The term of this Agreement shall commence on the Effective Date and shall
end on __________, 2002, subject to earlier termination as set forth in Section
5, below. After the end of the initial term, this Agreement shall be subject to
successive one year renewals unless, at least 90 days prior to the expiration of
the initial term or any renewal term, either party gives written notice to the
other of his or its intention not to renew.
5. Termination Other Than by Expiration of the Term.
Employer or Executive may terminate Executive's employment under this
Agreement at any time, but only on the following terms:
5.1 Either Executive or Employer may terminate this Agreement in
accordance with Section 4.1.
5.2 Employer may terminate Executive's employment under this Agreement at
any time for "Due Cause" (as defined in Appendix I attached hereto and
incorporated herein by this reference) upon the good faith determination by the
Board that Due Cause exists for the termination of the employment relationship.
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5.3 If Executive is incapacitated by accident, sickness or otherwise so as
to render Executive mentally or physically incapable of performing the services
required under Section 1 of this Agreement for a period of 180 consecutive days,
and such incapacity is confirmed by the written opinion of two practicing
medical doctors licensed by and in good standing in the State of Maryland (one
selected by Employer and one by Executive), upon the expiration of such period
or at any time reasonably thereafter, Employer may terminate Executive's
employment under this Agreement upon giving Executive or his legal
representative written notice at least 30 days prior to the termination date,
subject to the provisions of Section 6.2, below. Executive agrees, after written
notice by the Board, to submit to examinations by such practicing medical
doctors. If such medical doctors do not agree as to whether Executive is
disabled, they shall promptly select a mutually acceptable third practicing
medical doctor to further evaluate Executive, whose conclusion shall be
rendered, in writing, within ten days of his or her selection. The conclusion of
the third practicing medical doctor shall be final and binding on Employer and
Executive.
5.4 This Agreement shall terminate immediately upon Executive's death,
subject to the provisions of Section 6.2, below.
5.5 Subject to the provisions of Section 6.3, below, Employer may
terminate Executive's employment under this Agreement at any time for any reason
whatsoever, even without Due Cause, by giving a written notice of termination to
Executive, in which case the employment relationship shall terminate immediately
upon the giving of such notice. If Employer terminates the employment of
Executive other than (i) pursuant to Section 5.2 for Due Cause, (ii) due to
incapacity pursuant to Section 5.3 or due to Executive's death pursuant to
Section 5.4, or (iii) Executive's Retirement (as defined in Appendix I attached
hereto and incorporated herein by this reference), then such action by Employer,
unless consented to in writing by Executive, shall be deemed to be a
constructive termination by Employer of Executive's employment (a "Constructive
Termination"), and, in such event, Executive shall be entitled to receive the
compensation set forth in Section 6.3 below.
5.6 Executive may terminate this Agreement at any time for "Good Reason"
(as defined in Appendix I attached hereto and incorporated herein by this
reference) within 30 days after Executive learns of the event or condition
constituting "Good Reason" and, in such event, shall be entitled to receive the
compensation set forth in Section 6.3 below.
6. EFFECT OF TERMINATION.
6.1 If the employment relationship is terminated (a) by Executive upon 90
days' written notice pursuant to Section 5.1, (b) by Employer for Due Cause
pursuant to Section 5.2, or (c) by Executive breaching this Agreement by
refusing to continue his employment and failing to give the requisite 90 days'
written notice, all compensation and benefits shall cease as of the date of
termination, other than: (i) those benefits that are provided by retirement and
benefit plans and programs specifically adopted and approved by Employer for
Executive that are earned and vested by the date of termination; (ii)
Executive's pro rata annual Salary (as in effect as of the date of termination,
payable in the manner as prescribed in the second sentence of Section 2.1)
through the date of termination; (iii) any stock options which have vested as of
the date of termination pursuant to the terms of the Agreement granting such
options; and (iv) accrued vacation as required by Maryland law.
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6.2 If Executive's employment relationship is terminated due to
Executive's incapacity pursuant to Section 5.3 or due to Executive's death
pursuant to Section 5.4, Executive or Executive's estate or legal
representative, will be entitled to (i) those benefits that are provided by
retirement and benefits plans and programs specifically adopted and approved by
Employer for Executive that are earned and vested at the date of termination, a
Prorated Bonus for the fiscal year in which incapacity or death occurs, and,
even though no longer employed by Employer, Executive shall continue to receive
the annual Salary compensation (as in effect as of the date of termination,
payable in the manner as prescribed in the second sentence of Section 2.1) for
six months following the date of termination, offset, however, by any payments
received by Executive as a result of any disability insurance maintained by
Employer for Executive's benefit.
6.3 In the event of a Constructive Termination or a termination of this
Agreement by Executive for Good Reason, then Employer shall:
(a) pay to Executive on the date of termination his Salary in effect as of
the date of termination through the end of the month during which such
termination occurs plus credit for any vacation earned but not taken;
(b) pay to Executive as severance pay Executive's Salary in effect as of
the date of termination for the greater of (i) the balance of the term
of this Agreement or (ii)an additional two years, payable in equal
semimonthly payments in accordance with the Employer's regular payroll
policy for salaried employees;
(c) pay to Executive the Prorated Bonus for the fiscal year during which
termination occurs;
(d) pay to or reimburse Executive any amounts due Executive pursuant to
Section 2.4 of this Agreement for a period of 12 months after the date
of termination; and
(e) maintain, at Employer's expense, in full force and effect, for
Executive's continued benefit, all medical and life insurance to which
Executive was entitled immediately prior to the date of termination (or
at the election of Executive in the event of a Change in Control,
immediately prior to the date of the Change in Control) until the
earliest of (i) 12 months or (ii) the date or dates that Executive's
continued participation in Employer's medical and/or life insurance
plans, as applicable, is not possible under the terms of such plans
(the earliest of (i) and (ii) is referred to herein as the "Benefits
Date"). If Employer's medical and/or life insurance plans do not allow
Executive's continued participation in such plan or plans, then
Employer will pay to Executive, in monthly installments, from the date
on which Executive's participation in such medical and/or life
insurance, as applicable, is prohibited until the Benefits Date, the
monthly premium or premiums which had been payable by Employer with
respect to Executive for such discontinued medical and/or life
insurance, as applicable.
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6.4 Anything in this Agreement to the contrary notwithstanding, if the
Auditors (as defined in Appendix I attached hereto and incorporated herein by
this reference) determine that any payment or distribution by Employer to or for
the benefit of Executive, whether paid or payable (or distributed or
distributable) pursuant to the terms of this Agreement or otherwise (a
"Payment"), would be nondeductible by Employer for federal income tax purposes
because of the application of Section 280G of the Code (as defined in Appendix I
attached hereto and incorporated herein by this reference), or because of the
application of any federal or state income tax law enacted after the date hereof
which restricts or limits the deductibility of compensation paid to an Executive
(a "Subsequent Law"), then the aggregate present value of the amounts payable or
distributable to or for the benefit of Executive pursuant to this Agreement (the
"Payments") shall be reduced (but not below zero) to the Reduced Amount. For
purposes of this Section 6.4, the "Reduced Amount" shall be an amount which
maximizes the aggregate amount of Payments without causing any Payment to be
nondeductible by Employer because of the application of Subsequent Law, or which
maximizes the aggregate present value of Payments without causing any Payment to
be nondeductible by Employer because of the application of Section 280G of the
Code. For purposes of this Section 6.4, present value shall be determined in
accordance with Section 280G(d)(4) of the Code and Income Tax Regulations
promulgated thereunder.
6.5 If the Auditors determine that any Payment would be nondeductible by
Employer because of the application of Section 280G of the Code, or because of
the application of Subsequent Law, then Employer shall promptly give notice to
that effect and a copy of the detailed calculation thereof and of the Reduced
Amount, and Executive may then elect, in his sole discretion, which and how much
of the Payments shall be eliminated or reduced (as long as after such election
the aggregate present value of the Payments equals the Reduced Amount) and shall
advise Employer in writing of his election within 20 days of his receipt of
notice. If no such election is made by Executive within such 20 day period, then
Employer may elect which and how much of the Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of Executive
Payments equals the Reduced Amount) and shall notify Executive promptly of such
election. All determinations made by the Auditors under this Section 6.5 and
Section 6.4 shall be binding upon Employer and Executive and shall be made
within 60 days of Executive's termination of employment. As promptly as
practicable following such determination and the elections hereunder, Employer
shall pay to or distribute to or for the benefit of Executive such amounts as
are then due to him under this Agreement, as modified by Section 6.4 and this
Section 6.5, and shall promptly pay to or distribute for the benefit of
Executive in the future such amounts as become due to him under this Agreement.
6.6 If it is determined by the Auditors that Payments have been made by
Employer which should not have been made (an "Overpayment") or that additional
Payments which will not have been made by Employer could be due (an
"Underpayment"), consistent in each case with the calculation of the Reduced
Amount pursuant to Section 6.4, then the following actions are to be taken: If
the Auditors, based upon the assertion of a deficiency by the Internal Revenue
Service against Employer or Executive which the Auditors believe has a high
probability of success, determine that an Overpayment has been made, such
Overpayment shall be treated for all purposes as a loan to Executive which he
shall repay to Employer, together with interest at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code. If the Auditors, based upon
controlling precedent, determine that an Underpayment has occurred, such
Underpayment shall promptly be paid by
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Employer to or for the benefit of Executive, together with interest at the
applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.
6.7 Executive shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by Executive as the result of employment
by another Employer after the date of termination, or otherwise.
6.8 Except as expressly provided herein, the provisions of this Agreement,
and any payment or benefit provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish Executive's existing rights, or rights
which would accrue solely as a result of the passage of time, under any Employer
benefit plan, employment agreement or other contract, plan or arrangement.
6.9 Except as may be required pursuant to Section 6.4 above, the amount of
any payment provided under this Agreement shall not be reduced by reason of any
present value calculation.
6.10 In case of termination of this Agreement, compensation and benefits
shall be paid to the Executive as set forth in the applicable subsection of this
Section 6 and stock options granted to Executive, if any, shall be governed by
the provisions of all stock option agreements between Employer and Executive. In
the event of a Constructive Termination or a termination of this Agreement by
Executive for Good Reason, all other rights and benefits Executive may have
under the employee and/or executive benefit plans and arrangements of Employer
generally shall be determined in accordance with the terms and conditions of
such plans and arrangements.
7. Covenants of Confidentiality, Nondisclosure and Noncompetition.
7.1 During the term of this Agreement, Employer will provide to Executive
certain confidential and proprietary information owned by Employer as more fully
described below. Executive acknowledges that he occupies or will occupy a
position of trust and confidence with Employer, and that Employer would be
irreparably damaged if Executive were to breach the covenants set forth in this
Section 7.1. Accordingly, Executive agrees that he will not, without the prior
written consent of Employer, at any time during the term of this Agreement or
any time thereafter, except as may be required by competent legal authority or
as required by Employer to be disclosed in the course of performing Executive's
duties under this Agreement for Employer, use or disclose to any person, firm or
other legal entity, any confidential records, secrets or information obtained by
Executive during his employment hereunder related to Employer or any parent,
subsidiary or affiliated person or entity (collectively, "Confidential
Information"). Confidential Information shall include, without limitation,
information about Employer's inventions (as defined in Section 8.1 below),
customer lists and product pricing, data, know-how, formulae, processes, ideas,
past, current and planned product development, market studies, computer software
and programs, database and network technologies, strategic planning and risk
management. Executive acknowledges and agrees that all Confidential Information
of Employer and/or its affiliates will be received in confidence and as a
fiduciary of Employer. Executive will exercise utmost diligence to protect and
guard such Confidential Information.
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7.2 Executive agrees that he will not, without the express written consent
of the Board, take with him upon the termination of this Agreement, any document
or paper, or any photocopy or reproduction or duplication thereof, relating to
any Confidential Information.
7.3 Executive agrees that, while Executive is employed with Employer and
for a period of 24 months after the date of termination of this Agreement (the
"Restricted Period"), provided that Executive continues to be paid his Salary
(as in effect at the date of termination) during the Restricted Period, he will
not, either directly or indirectly, have an interest in any business (whether as
manager, operator, licensor, licensee, partner, 5% or greater equity holder,
employee, consultant, director, advisor or otherwise) competitive with Employer
or any of its business activities or solicit individuals or other entities that
are customers or competitors of Employer during the six-month period immediately
prior to the date of termination of this Agreement. Executive also agrees that,
for the Restricted Period, he will not, either directly or indirectly, solicit
any employee of Employer to terminate his employment with Employer.
7.4 For purposes of this Section 7, "Employer" shall include any of its
subsidiaries or any other entity in which it holds a 50% or greater equity
interest.
8. INVENTIONS.
8.1 Any and all inventions, product, discoveries, improvements, processes,
formulae, manufacturing methods or techniques, designs or styles, software
applications or programs (collectively, "Inventions") made, developed or created
by Executive, alone or in conjunction with others, during regular hours of work
or otherwise, during the term of Executive's employment with Employer and for a
period of two years thereafter that may be directly or indirectly related to the
business of, or tests being carried out by, Employer, or any of its
subsidiaries, shall be promptly disclosed by Executive to Employer and shall be
Employer's exclusive property.
8.2 Executive will, upon Employer's request and without additional
compensation, execute any documents necessary or advisable in the opinion of
Employer's legal counsel to direct the issuance of patents to Employer with
respect to Inventions that are to be Employer's exclusive property under this
Section 8 or to vest in Employer title to such Inventions; the expense of
securing any patent, however, shall be borne by Employer.
8.3 Executive will hold for Employer's sole benefit any Invention that is
to be Employer's exclusive property under this Section 8 for which no patent is
issued.
9. NO VIOLATION.
Executive represents that he is not bound by any Agreement with any former
employer or other party that would be violated by Executive's employment by
Employer.
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10. RETURN OF EMPLOYER'S PROPERTY.
Upon the termination of this Agreement or whenever requested by Employer,
Executive shall immediately deliver to Employer all property in his possession
or under his control belonging to Employer, in good condition, ordinary wear and
tear excepted.
11. INJUNCTIVE RELIEF.
Executive acknowledges that the breach, or threatened breach, by Executive
of the provisions of this Agreement shall cause irreparable harm to Employer,
which harm cannot be fully redressed by the payment of damages to Employer.
Accordingly, Employer shall be entitled, in addition to any other right or
remedy it may have at law or in equity, to seek an injunction or restraining
Executive from any violation or threatened violation of this Agreement.
12. DISPUTE RESOLUTION.
Subject to Section 11, all claims, disputes and other matters in
controversy ("dispute") arising, directly or indirectly out of or related to
this Agreement, or the breach thereof, whether contractual or noncontractual,
and whether during the term or after the termination of this Agreement, shall be
resolved exclusively according to the procedures set forth in this Section 12,
and not through resort to any judicial proceedings.
12.1 Neither party shall commence an arbitration proceeding pursuant to the
provisions of Subsection 12.2 below unless such party shall first give a written
notice (a "Dispute Notice") to the other party setting forth the nature of the
dispute. The parties shall attempt in good faith to resolve the dispute by
mediation under the American Arbitration Association Commercial Mediation Rules
in effect on the date of the Dispute Notice. If the parties cannot agree on the
selection of a mediator within 20 days after delivery of the Dispute Notice, the
mediator will be selected by the American Arbitration Association. If the
dispute has not been resolved by mediation within 60 days after delivery of the
Dispute Notice, then the dispute shall be determined by arbitration in
accordance with the provisions of Subsection 12.2 below.
12.2 Any dispute that is not settled by mediation as provided in Subsection
12.1 above shall be resolved by arbitration before a single arbitrator appointed
by the American Arbitration Association or its successor in Prince George's
County, Maryland. The determination of the arbitrator shall be final and
absolute. The arbitrator shall be governed by the duly promulgated rules and
regulations of the American Arbitration Association or its successor then in
effect, and the pertinent provisions of the laws of the State of Maryland
relating to arbitration. The decision of the arbitrator may be entered as a
final judgment in any court of the State of Maryland or elsewhere. The
prevailing party in any such arbitration shall also be entitled to recover
reasonable attorneys', accountants' and experts' fees and costs of suit in
addition to any other relief awarded such prevailing party.
13. MISCELLANEOUS.
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13.1 If any provisions contained in this Agreement is for any reason held
to be totally invalid or unenforceable, such provision will be fully severable,
and in lieu of such invalid or unenforceable provision there will be added
automatically as part of this Agreement a provision as similar in terms as may
be valid and enforceable.
13.2 All notices and other communications required or permitted hereunder
or necessary or convenience in connection herewith shall be in writing and shall
be deemed to have been given when mailed by registered mail or certified mail,
return receipt requested or hand delivered, as follows (provided that notice of
change of address shall be deemed given only when received):
If to Employer: Litronic Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
If to Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other names or addresses as Employer or Executive, as the case may
be, shall designate by notice to the other party hereto in the manner specified
in this Subsection 13.2.
13.3 This Agreement shall be binding upon and inure to the benefit of
Employer, its successors, legal representatives and assigns, and Executive, his
heirs, executors, administrators, representatives, legatees and permitted
assigns. Executive agrees that his rights and obligations hereunder are personal
to him and may not be assigned without the express written consent of Employer.
If Executive should die while any amounts are due to him pursuant to this
Agreement, all such amounts shall be paid to Executive's devisee, legatee or
other designee, or if there be no such designee, to Executive's estate. Employer
will require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer, by Agreement in form and substance satisfactory to
Executive and his legal counsel, expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform each of them if no such
succession or assignment had taken place. Any failure of Employer to obtain such
Agreement prior to the effectiveness of any such succession or assignment shall
be a material breach of this Agreement and shall entitle Executive to terminate
Executive's employment for Good Reason. As used in this Agreement, "Employer"
shall mean Employer as hereinbefore defined and any successor or assign to its
business and/or assets as aforesaid which executes and delivers the Agreement
provided for in this Section or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law. If at any time during the
term of this Agreement Executive is employed by any corporation a majority of
the voting securities of which is then owned by Employer, "Employer" as used in
this Agreement shall in addition include such Employer. In such event, Employer
agrees that it shall pay or shall cause such Employer to pay any amounts owed to
Executive pursuant to this Agreement.
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13.4 This Agreement replaces and merges all previous agreements and
discussions relating to the same or similar subject matters between Executive
and Employer with respect to the subject matter of this Agreement. This
Agreement may not be modified in any respect by any verbal statement,
representation or Agreement made by any employee, officer, or representative of
Employer or by any written Agreement unless signed by an officer of Employer who
is expressly authorized by Employer to execute such document.
13.5 The laws of the State of Maryland will govern the interpretation,
validity and effect of this Agreement without regard to principles of conflicts
of law, the place of execution or the place for performance thereof, except that
the laws of the State of Delaware shall govern matters of indemnity set forth in
Exhibit A. Employer and Executive agree that the state and federal courts
situated in Prince George's County, Maryland shall have personal jurisdiction
over Employer and Executive to hear all disputes arising under this Agreement.
This Agreement is to be at least partially performed in Prince George's County,
Maryland and, as such, Employer and Executive agree that venue shall be proper
with the state or federal courts in Prince George's County, Maryland to hear
such disputes.
13.6 Executive and Employer shall execute and deliver any and all
additional instruments and agreements that may be necessary or proper to carry
out the purposes of this Agreement.
13.7 The descriptive headings of the several sections of this Agreement
are inserted for convenience only and do not constitute a party of this
Agreement.
13.8 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement.
13.9 Executive acknowledges that Executive has had the opportunity to read
this Agreement and discuss it with advisors and legal counsel, if Executive has
so chosen. Executive also acknowledges the importance of this Agreement and that
Employer is relying on this Agreement in entering into an employment
relationship with Executive.
13.10 The Indemnity provisions attached as Exhibit A are hereby
specifically incorporated into and made a part of this Agreement.
The undersigned, intending to be legally bound, have executed this
Agreement on the date first written above, but effective as of ____________,
1999.
EMPLOYER: LITRONIC INC.
By:
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▇▇▇▇ ▇▇▇▇, Chief Executive Officer
EXECUTIVE:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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APPENDIX I
ADDITIONAL DEFINITIONS
For purposes of this Agreement, the following additional capitalized terms
shall have the respective definitions set forth below:
AUDITORS. The term "Auditors" as used in this Agreement shall mean
Employer's independent auditors.
BENEFIT PLAN. The term "Benefit Plan" as used herein shall mean any benefit
plan or arrangement (including, without limitation, Employer's profit sharing or
stock option plans, if any, and medical, disability and life insurance plans) in
which Executive is participating (or any other plans providing Executive with
substantially similar benefits).
CHANGE IN CONTROL. A "Change in Control" of Employer shall be deemed to
have occurred if (A) there shall be consummated any consolidation or merger of
Employer in which Employer is not the continuing or surviving corporation or
pursuant to which all or substantially all of the shares of Employer's Common
Stock would be converted into cash, securities or other property, other than a
merger of Employer in which the holders of Employer's Common Stock immediately
prior to the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; (B) there shall be
consummated any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
Employer; (C) the shareholders of Employer approve any plan or proposal for the
liquidation or dissolution of Employer; (D) any "person" (as such term is used
in Sections 13(d) and 14(d) (2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than Executive, ▇▇▇▇ ▇▇▇▇ or any members of
their immediate families, shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of 30% or more of Employer's outstanding
Common Stock after the date hereof; (E) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
Board shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by Employer's shareholders, of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period or; (F) there
shall be any change of control of a nature required to be reported in response
to Item 6 (e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 or any successor regulation of substantially similar
import, regardless of whether Employer is subject to such reporting requirement.
CODE. The term "Code" as used in this Agreement shall mean the Internal
Revenue Code of 1986, as amended.
DUE CAUSE. The term "Due Cause" as used in this Agreement shall mean any of
the following events:
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(a) any intentional misapplication by Executive of Employer's funds or
other material assets, or any other act of dishonesty injurious to Employer
committed by Executive; or
(b) Executive's conviction of (i) a felony or (ii) a crime involving
moral turpitude; or
(c) Executive's use or possession of any controlled substance or
chronic abuse of alcoholic beverages, which use or possession the Board
reasonably determines renders Executive unfit to serve in his capacity as a
senior executive of Employer; or
(d) Executive's breach, nonperformance or nonobservance of any of the
terms of this Agreement, including but not limited to Executive's failure
to adequately perform his duties or comply with the reasonable directions
of the Board. Notwithstanding anything in the foregoing subsections (c) or
(d) to the contrary, Employer shall not terminate Executive unless the
Board first provides Executive with a written memorandum describing in
detail how his performance hereunder is not satisfactory and Executive is
given a reasonable period of time (not less than 30 days) to remedy the
unsatisfactory performance related by the Board to Executive in that
memorandum. A determination of whether Executive has satisfactorily
remedied such unsatisfactory performance shall be promptly made by a
majority of the disinterested directors of the Board at the end of the
period provided to Executive for such remedy and such determination shall
be final.
GOOD REASON. The term "Good Reason" as used in this Agreement shall mean
any of the following which occur without Executive's written consent:
(a) the assignment to Executive by the Board of duties substantially
inconsistent with Executive's position, duties, responsibilities or
status with Employer; a substantial change in Executive's titles or
offices; any removal of Executive from or any failure to reelect
Executive to any of his positions as an officer, except in connection
with the termination of his employment for disability or as a member
of the Board; Retirement; Executive's death; or by Executive other
than for Good Reason;
(b) a purported reduction by Employer in Executive's base salary to an
amount less than the greater of (i) the base salary as in effect on
the date hereof or (ii) 10% below the base salary in effect at the
time of the purported reduction;
(c) any failure by Employer to continue in effect any Benefit Plan;
(d) any failure by Employer to obtain the assumption of this Agreement by
any successor or assign of Employer;
(e) a failure by Employer to comply with any material provision of this
Agreement which has not been cured within 30 days after notice of such
noncompliance has been given by Executive to Employer, or if such
failure is not capable of being cured in such time, a cure shall not
have been diligently initiated by Employer within such 30 day period;
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(f) a material reduction in the highest level of support services and
staff, office space and accouterments available to Executive during
the term of this Agreement and that which is necessary to perform any
additional duties assigned to Executive thereafter, which reduction is
not generally effective for all officers employed by Employer; or
(g) If Employer avails itself of, or is subjected by any third party to, a
proceeding in bankruptcy in which Employer is the named debtor, an
assignment by Employer for the benefit of its creditors, the
appointment of a receiver for Employer, or any other proceeding
involving insolvency or the protection of or from creditors and the
same has not been discharged or terminated within 90 days;
provided, however, that any of the foregoing actions shall not be
considered to be Good Reason if such action is undertaken by Employer as a
termination for Due Cause.
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EXHIBIT A
[INDEMNITY PROVISIONS]
1. DEFINITIONS. As used herein, the following terms shall have the meanings
set forth below:
"PROCEEDING" shall mean any threatened, pending or completed action, suit
or proceeding, whether brought in the name of Employer or otherwise and whether
of a civil, criminal, administrative or investigative nature, by reason of the
fact that Executive is or was an officer and/or a director of Employer, or is or
was serving at the request of Employer as a director, officer, employee or agent
of another enterprise, whether or not he is serving in such capacity at the time
any liability or Expense is incurred for which indemnification or advancement of
Expenses (as defined in subparagraph (b) below) is to be provided under these
indemnity provisions.
"EXPENSES" means, all costs, charges and expenses incurred in connection
with a Proceeding, including, without limitation, attorneys' fees, disbursements
and retainers, accounting and witness fees, travel and deposition costs,
expenses of investigations, judicial or administrative proceedings or appeals,
and any expenses of establishing a right to indemnification pursuant to this
Agreement or otherwise, including reasonable compensation for time spent by
Executive in connection with the investigation, defense or appeal of a
Proceeding or action for indemnification for which he is not otherwise
compensated by Employer or any third party; provided, however, that the term
Expenses includes only those costs, charges and expenses incurred with
Employer's prior consent, which consent shall not be unreasonably withheld; and
provided, further, that the term "Expenses" does not include (i) the amount of
damages, judgments, amounts paid in settlement, fines or penalties relating to
any Proceeding or (ii) excise taxes under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") relating to any Proceeding, either of
which are actually levied against Executive or paid by or on behalf of
Executive.
2. AGREEMENT TO SERVE. Executive agrees to continue to serve as and officer
and/or a director of Employer at the will of Employer for so long as Executive
is duly elected or appointed or until such time as Executive tenders a
resignation in writing or is terminated as an officer or director by Employer.
Nothing in these indemnity provisions shall be construed to create any right in
Executive to continued employment with Employer or any subsidiary or affiliate
of Employer. Nothing in these indemnity provisions shall affect or alter any of
the terms of any otherwise valid employment agreement or other agreement between
Executive and Employer relating to Executive's conditions and/or terms of
employment.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. Employer shall indemnify Executive
in accordance with the provisions of this Section 3 if Executive is a party to
or threatened to be made a party to or is otherwise involved in any Proceeding
(other than a Proceeding by or in the right of Employer to procure a judgment in
its favor), by reason of the fact that Executive is or was an officer and/or a
director of Employer, or is or was serving at the request of Employer as a
director, officer, employee or agent of another enterprise, against all
Expenses, damages, judgments, amounts paid in settlement, fines, penalties and
ERISA excise taxes actually and reasonably incurred by Executive in connection
with the defense or settlement of such Proceeding, to the fullest extent
permitted by Delaware law,
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whether or not Executive was the successful party in any such Proceeding;
provided that any settlement shall be approved in writing by Employer.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF EMPLOYER. Employer
shall indemnify Executive in accordance with the provisions of this section if
Executive is a party to or threatened to be made a party to or is otherwise
involved in any Proceeding by or in the right of Employer to procure a judgment
in its favor by reason of the fact that Executive is or was an officer and/or a
director of Employer, or is or was serving at the request of Employer as a
director, officer, employee or agent of another enterprise, against all Expenses
actually and reasonably incurred by Executive in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law,
whether or not Executive is the successful party in any such Proceeding.
Employer shall further indemnify Executive for any damages, judgments, amounts
paid in settlement, fines, penalties and ERISA excise taxes actually and
reasonably incurred by Executive in any such Proceeding described in the
immediately preceding sentence, provided either (i) the Proceeding is settled
with the approval of a court of competent jurisdiction, or (ii) indemnification
of such amounts is otherwise ordered by a court of competent jurisdiction in
connection with such Proceeding.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT. Executive shall be
conclusively presumed to have met the relevant standards of conduct required by
Delaware law for indemnification pursuant to these indemnity provisions, unless
a determination is made that Executive has not met such standards (i) by the
Board of Directors of Employer by a majority vote of a quorum thereof consisting
of directors who were not parties to such Proceeding, (ii) by the shareholders
of Employer by majority vote, or (iii) in a written opinion of Employer's
independent legal counsel. Further, the termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, rebut such presumption that Executive met the
relevant standards of conduct required for indemnification pursuant to these
indemnity provisions.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any of the
other provisions hereof, to the extent that Executive has been successful on the
merits or otherwise in defense of any Proceeding or in defense of any claim,
issue or matter therein, Executive shall be indemnified against all Expenses
incurred in connection therewith to the fullest extent permitted by Delaware
law. For purposes of this paragraph, Executive will be deemed to have been
successful on the merits if the Proceeding is terminated by settlement or is
dismissed with prejudice.
7. ADVANCES OF EXPENSES. The Expenses incurred by Executive in connection with
any Proceeding shall be paid promptly by Employer in advance of the final
disposition of the Proceeding at the written request of Executive to the fullest
extent permitted by Delaware law; provided that Executive shall undertake in
writing to repay such amount to the extent that it is ultimately determined that
Executive is not entitled to indemnification by Employer.
8. PARTIAL INDEMNIFICATION. If Executive is entitled under any of these
indemnity provisions to indemnification by Employer for some or a portion of the
Expenses, damages, judgments, amounts paid in settlement, fines, penalties or
ERISA excise taxes actually and reasonably incurred by Executive in the
investigation, defense, appeal or settlement of any Proceeding but not, however,
for the total amount thereof, Employer shall nevertheless indemnify Executive
for the portion of such
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Expenses, damages, judgments, amounts paid in settlement, fines, penalties or
ERISA excise taxes to which Executive is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Promptly after receipt by Executive of notice of the commencement of
any Proceeding with respect to which Executive intends to claim indemnification
or advancement of Expenses pursuant to these indemnity provisions, Executive
will notify Employer of the commencement thereof. The omission to so notify
Employer will not relieve Employer from any liability which it may have to
Executive under these indemnity provisions or otherwise.
(b) If a claim for indemnification or advancement of Expenses under these
indemnity provisions is not paid by or on behalf of Employer within 30 days of
receipt of written notice thereof, Executive may at any time thereafter bring
suit in any court of competent jurisdiction against Employer to enforce the
right to indemnification or advancement of Expenses provided by these indemnity
provisions. It shall be a defense to any such action (other than an action
brought to enforce a claim for Expenses incurred in defending any Proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to Employer) that Executive has failed to meet the
standard of conduct that makes it permissible under Delaware law for Employer to
indemnify Executive for the amount claimed. The burden of proving by clear and
convincing evidence that indemnification or advancement of Expenses is not
appropriate shall be on Employer. The failure of the directors or shareholders
of Employer or independent legal counsel to have made a determination prior to
the commencement of such Proceeding that indemnification or advancement of
Expenses are proper in the circumstances because Executive has met the
applicable standard of conduct shall not be a defense to the action or create a
presumption that Executive has not met the applicable standard of conduct.
(c) Executive's Expenses incurred in connection with any action concerning
Executive's right to indemnification or advancement of Expenses in whole or in
part pursuant to these indemnity provisions shall also be indemnified in
accordance with the terms of these indemnity provisions by Employer regardless
of the outcome of such action, unless a court of competent jurisdiction
determines that each of the material claims made by Executive in such action was
not made in good faith or was frivolous.
(d) With respect to any Proceeding for which indemnification is requested,
Employer will be entitled to participate therein at its own expense and, except
as otherwise provided below, to the extent that it may wish, Employer may assume
the defense thereof, with counsel satisfactory to Executive. After notice from
Employer to Executive of its election to assume the defense of a Proceeding,
Employer will not be liable to Executive under these indemnity provisions for
any Expenses subsequently incurred by Executive in connection with the defense
thereof, other than reasonable costs of investigation or as otherwise provided
below. Employer shall not settle any Proceeding in any manner which would impose
any penalty or limitation on Executive without Executive's prior written
consent. Executive shall have the right to employ counsel in any such
Proceeding, but the Expenses of such counsel incurred after notice from Employer
of its assumption of the defense thereof and Executive's approval of Employer's
counsel shall be at the expense of Executive, unless (i) the employment of
counsel by Executive has been authorized by Employer, (ii)
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Executive shall have reasonably concluded that there may be a conflict of
interest between Employer and Executive in the conduct of the defense of a
Proceeding, or (iii) Employer shall not in fact have employed counsel to assume
the defense of a Proceeding, in each of which cases the Expenses of Executive's
counsel shall be at the expense of Employer. Notwithstanding the foregoing,
Employer shall not be entitled to assume the defense of any Proceeding brought
by or on behalf of Employer or as to which Executive has concluded that there
may be a conflict of interest between Employer and Executive.
10. RETROACTIVE EFFECT. Notwithstanding anything to the contrary contained in
these indemnity provisions, Employer's obligation to indemnify Executive and
advance Expenses to Executive shall be deemed to be in effect since the
Effective Date.
11. LIMITATIONS ON INDEMNIFICATION. No payments pursuant to these indemnity
provisions shall be made by Employer:
(a) to indemnify or advance Expenses to Executive with respect to actions
initiated or brought voluntarily by Executive and not by way of defense, except
with respect to actions brought to establish or enforce a right to
indemnification or advancement of Expenses under these indemnity provisions or
any other statute or law or otherwise as required under Delaware law, but such
indemnification or advancement of Expenses may be provided by Employer in
specific cases if approved by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who are not parties to such action;
(b) to indemnify Executive for any Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes for which payment is
actually made to Executive under a valid and collectible insurance policy,
except in respect of any excess beyond the amount paid under such insurance;
(c) to indemnify Executive for any Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes for which Executive
has been or is indemnified by Employer or any other party otherwise than
pursuant to these indemnity provisions;
(d) to indemnify Executive for any Expenses, damages, judgments, fines or
penalties sustained in any Proceeding for an accounting of profits made from the
purchase or sale by Executive of securities of Employer pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder or similar provisions of
any federal, state or local statutory law;
(e) to indemnify Executive for any Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes in connection with
any Proceeding where a court of competent jurisdiction has determined that (i)
Executive failed to act in good faith and in a manner reasonably believed to be
in or not opposed to the best interest of Employer, or (ii) with respect to any
Proceeding which is of a criminal nature, Executive had reasonable cause to
believe his conduct was unlawful; or
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(f) if a court of competent jurisdiction shall enter a final order,
decree or judgment to the effect that such indemnification or advancement of
Expenses hereunder is unlawful under the circumstances.
12. LIMITATION OF ACTIONS AND RELEASE OF CLAIMS. Notwithstanding anything to
the contrary contained herein, no legal action shall be brought and no cause of
action shall be asserted by or on behalf of Employer, any affiliate or
subsidiary of Employer or any other enterprise that Executive was serving as a
director, officer, employee or agent at the request of Employer against
Executive, or Executive's spouse, heirs, executors of administrators after the
expiration of two years from the date Executive ceases (for any reason) to serve
in any one or more of the capacities covered by this Agreement, and any claim or
cause of action of Employer, its affiliates or subsidiaries or any such other
enterprise shall be extinguished and deemed released unless asserted by the
filing of a legal action within such two-year period.
13. MAINTENANCE OF D&O INSURANCE.
(a) Upon Executive's request, Employer hereby agrees to maintain in full
force and effect, at its sole cost and expense, directors' and officers'
liability insurance ("D&O Insurance") by an insurer, in an amount and with a
deductible reasonably acceptable to Executive, covering the period during which
Executive is serving in any one or more of the capacities covered by these
indemnity provisions and for so long thereafter as Executive shall be subject to
any possible claim or threatened, pending or completed Proceeding by reason of
the fact that Executive is serving in any of the capacities covered by these
indemnity provisions.
(b) In all policies of D&O Insurance to be maintained pursuant to
Paragraph 13(a) above, Executive shall be named as an insured in such a manner
as to provide Executive with the greatest rights and benefits available under
such policy.
(c) Notwithstanding the foregoing, Employer shall have no obligation to
maintain D&O Insurance if Employer determines, in good faith, that (i) such
insurance cannot be obtained on terms which are commercially reasonable, (ii)
the premium costs for such insurance is significantly disproportionate to the
amount of coverage provided, (iii) the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or (iv)
Employer, after using best efforts, is otherwise unable to obtain such
insurance.
14. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and
advancement of Expenses provided by these provisions shall not be deemed to
limit or preclude any other rights to which Executive may be entitled under
Employer's Certificate of Incorporation, Employer's Bylaws, any agreement, any
vote of shareholders or disinterested directors of Employer, Delaware law, or
otherwise.
15. SUCCESSORS AND ASSIGNS. These indemnity provisions shall be binding upon,
and shall inure to the benefit of (i) Executive and Executive's heirs, devisees,
legatees, personal representatives, executors, administrators and assigns and
(ii) Employer and its successors and assigns, including any transferee of all or
substantially all of Employer's assets and any successor or assign of Employer
by merger or by operation of law.
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16. SEVERABILITY. Each of these indemnity provisions is a separate and distinct
agreement and independent of the other, so that if any provision hereof shall be
held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceable of the other
provisions hereof. To the extent required, any of these indemnity provisions may
be modified by a court of competent jurisdiction to preserve its validity and to
provide Executive with the broadest possible indemnification and advancement of
Expenses permitted under Delaware law. If any of these indemnity provisions or
any portion thereof is invalidated on any ground by any court of competent
jurisdiction, then Employer shall nevertheless indemnify Executive as to
Expenses, damages, judgments, amounts paid in settlement, fines, penalties and
ERISA excise taxes with respect to any Proceeding to the full extent permitted
by any of these indemnity provisions that shall not have been invalidated or by
any applicable provision of Delaware law or the law of any other applicable
jurisdiction.
17. AMENDMENTS AND WAIVERS. No amendment, waiver, modification, termination or
cancellation of this indemnity shall be effective unless in writing and signed
by the party against whom enforcement is sought. The indemnification rights
afforded to Executive hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to Employer's Certificate of
Incorporation, Bylaws or agreements, including any directors' and officers'
liability insurance policies, whether the alleged actions or conduct giving rise
to indemnification hereunder arose before or after any such amendment. No waiver
of any provision of this indemnity shall be deemed or shall constitute a waiver
of any other provision hereof, whether or not similar, nor shall any waiver
constitute a continuing waiver.
18. SUBROGATION. In the event of any payment under this indemnity to or on
behalf of Executive, Employer shall be subrogated to the extent of such payment
to all of the rights of recovery of Executive against any person, firm,
corporation or other entity (other than Employer) and Executive shall execute
all papers requested by Employer and shall do any and all things that may be
necessary or desirable to secure such rights for Employer, including the
execution of such documents necessary or desirable to enable Employer to
effectively bring suit to enforce such rights.
19. SUBJECT MATTER AND PARTIES. The intended purpose of this indemnity is to
provide for indemnification and advancement of Expenses, and this indemnity is
not intended to affect any other aspect of any relationship between Executive
and Employer and is not intended to and shall not create any rights in any
person as a third party beneficiary hereunder.
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