EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1995, by and between IEH CORPORATION,
a New York corporation maintaining its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ residing at
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Employee").
WHEREAS, the Company is engaged in the design, development, manufacture
and distribution of high performance electronic printed circuit connectors and
specialized interconnection devices.
WHEREAS, the Company desires to employ the Employee, and the Employee
desires to accept such employment on the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter stated, the parties hereto hereby agree as follows:
1. Employment. The Company agrees to employ the Employee, and the
Employee hereby agrees to work for the Company, as a full- time employee during
the Term (as hereinafter defined). The Employee shall be employed as the
Secretary and Treasurer of the Company.
The Employee agrees to serve the Company faithfully and to the
best of his ability and to perform such services and duties of an executive
nature in connection with the business, affairs and operations of the Company as
may be reasonably and in good faith assigned or delegated to him from time to
time by or under the authority of the Board of Directors of the Company and
consistent with the positions of Secretary and Treasurer, and to use his best
efforts in the promotion and advancement of the Company and its welfare and
business. Subject to Section 3(g) herein, Employee shall be based in Brooklyn,
New York.
2. Salary and Other Compensation.
(a) Base Salary. The Employee's annual base salary during the
Term will be $56,000. Said salary shall be payable in accordance with the
employment practices of the Company generally, which currently calls for such
salary to be paid in equal semi-monthly payments during each year of the Term.
(b) Benefits. The Employee will be entitled to vacation,
holiday, sick time and health insurance benefits according to the standard
benefit policies applicable to other employees of the Company. The Company shall
also obtain for the benefit of the Employee a term life insurance policy
providing for a death benefit of $150,000 payable to a beneficiary named and
designated by the Employee provided that the Employee is insurable at standard
rates.
(c) Automobile Allowance. The Company shall reimburse the
Employee for the expenses incurred and paid by him for gas used in commutation
to and from his place of work.
(d) Travel and Entertainment Expenses. The Company shall
reimburse the Employee for reasonable travel and entertainment expenses incurred
and paid by him in connection with and during the Term and in furtherance of the
interests of the Company.
(e) Withholding. All references herein to compensation to be
paid to the Employee are to the gross amounts thereof which are due hereunder.
The Company shall have the right to deduct therefrom: (i) all taxes which may be
required to be deducted or withheld under any provisions of the law now in
effect or which may become effective any time during the term of this Agreement;
and (ii) all benefits costs payable by the Company's similarly situated salaried
employees.
3. Term and Termination.
(a) Term. The term of this Agreement shall be for a period of
five (5) years commencing as of January 1, 1995 and continuing through December
31, 1999 (the "Term") unless sooner terminated in accordance with the provisions
of this Section 3.
(b) Mutual Consent. This Agreement and the Employee's
employment hereunder may be terminated at any time by the mutual consent of the
parties hereto.
(c) For Cause. The Employee's employment hereunder may be
terminated at any time by the majority vote of the Board of Directors of the
Company taken at any regular or special meeting at which the Employee has been
afforded the opportunity to participate (without considering the vote of the
Employee for any purpose other than for purposes of establishing a quorum), and
shall be effective upon written notice of actual termination for "cause" to the
Employee which, for the purposes of the foregoing, shall solely be made upon a
determination made in good faith by the Company's Board of Directors, and upon
written notice from the Company that Employee has committed an act of personal
dishonesty intended to result in a substantial personal benefit or enrichment of
the Employee at the expense of the Company. For purposes of this agreement
"Cause" shall mean (i) willful disobedience by the Employee of a material and
lawful instruction of the Board of Directors or any senior executive of the
Company; or (ii) conviction of the Employee of any felony or any misdemeanor
involving fraud or embezzlement or similar crime; or (iii) breach by the
Employee of any material provision of this Agreement; or (iv) conduct amounting
to fraud, dishonesty, gross negligence, willful misconduct; provided that the
Company shall not have the right to terminate the employment of Employee
pursuant to the foregoing clause (i), (iii) or (iv) unless written notice
specifying such breach shall have been given to the Employee and, in the case of
breach which is capable of being cured, the Employee shall have failed to cure
such breach within twenty (20) days after his receipt of such notice.
Upon termination for cause as provided in this subsection (c), the Employee
shall not be entitled to receive any compensation or other benefits pursuant to
this Agreement except for any compensation or benefits accrued under the terms
of this Agreement that remains unpaid as of the termination date specified in
the above-mentioned notice of actual termination for cause.
(d) Without Cause. The Company may, at its option, terminate
this Agreement at any time without cause upon written notice to the Employee,
subject to payment to Employee of a severance payment as hereinafter provided.
For purposes herein, "without cause" shall include, without limitation, any
substantial diminution by the Company of the Employee's duties without the
consent of the Employee and not resulting from (i) any act or omission by the
Employee which would otherwise constitute grounds for dismissal for "cause" or
(ii) any disability of the Employee. Except as provided in sub-paragraph (h)
hereof, in the event of termination without cause pursuant to this subsection
(d) during the Term of this Agreement, the Employee shall be entitled to receive
a severance payment equal to the sum of the amount of base salary that would
otherwise be payable to the Employee for the unexpired portion of the Term plus
the sum of $28,250. Such severance payment shall be paid by the Company to the
Employee in a single lump sum payment within 30 days following termination.
(e) Death of Employee. The Employee's employment under this
Agreement will terminate immediately upon his death, in which event there shall
be paid to Employee's estate, as a death benefit, the remaining amount of
Employee's base salary for the remainder of the Term following the date of
death.
(f) Disability of Employee. In the event that the Employee
shall suffer (i) permanent and total physical or mental disability or incapacity
or (ii) any illness, disability or incapacity which prevents him from performing
his duties for a period of three (3) consecutive months or 90 days in any 12
month period, this Agreement may be terminated by the Company, and the Employee
will be paid his accrued but unpaid salary to the date of such disability or
incapacity.
(g) Failure to Renew. If the initial five year Term of this
Agreement expires and Employee and the Company fail to agree upon mutually
acceptable terms for renewal within 30 days after the date of expiration of the
Term, then in such case, the Employee shall be paid the sum of $28,250 payable
in equal semi-monthly installments during the six (6) month period following the
expiration of the initial five year Term. Nothing contained in this clause (g)
shall require the Employee to relocate in the event the Board of Directors
determines to relocate the Company and the Employee shall be entitled to the
payment set forth in clause (i) hereof in such event
(h) Change of Control. Upon the occurrence of a Change of
Control Transaction (as hereinafter defined) during the Term, beginning on the
date of such occurrence and continuing for a period of one (1) year thereafter
(the "Change of Control Period"), in the event of the first to occur of the
termination of the Employee's employment for any reason other than for cause (as
defined in subsection (c) hereof) or the resignation of the Employee (for any
reason) during the Change of Control Period, the Employee shall be entitled to a
sum equal to the balance of the base salary for the unexpired portion of the
Term plus $28,250 payable in a single lump sum payment within 30 days following
the date of termination or resignation as the case may be. For purposes hereof,
a "Change of Control Transaction" shall mean any one of the following events:
(i) 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 "Act")) becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 promulgated under the Act)
(other than the Employee, the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company, or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company)
directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the
Company's then outstanding securities; or
(ii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation or
other entity, other than (a) a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50.1% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove
defined) acquires more than 30% of the combined voting power
of the Company's then outstanding securities; or
(iii) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets.
(i) Company Relocation. In the event the Board of Directors
determines to relocate the Company to a location outside of the New York City
Metropolitan area and the Employee determines, at his option, not to relocate
with the Company, then the Company shall pay the Employee a severance payment
equal to the amounts set forth in Section 3(d) hereof as if the Employee were
terminated without cause.
4. Noncompetition Agreement.
(a) The Employee will be a full-time employee of the Company
and shall devote all of his business time to the performance of his duties
hereunder.
Employee acknowledges that in the course of the performance of
his duties and as a necessary incident thereof, the Company may make available
or impart to Employee certain financial and business information concerning the
business, affairs, plans, and programs of the Company which is proprietary to
the Company and was not obtained by the Employee from sources other than the
Company (the "Proprietary Information").
(b) For the Term hereof and for a period of one (1) year after
the earlier of expiration of such Term or the termination of Employee's
employment for cause (as defined in Section 3(c) hereof), Employee shall not (i)
in business or otherwise use for himself or disclose to any other person any
Proprietary Information concerning the Company or any information with respect
to the business of the Company, for any purpose whatsoever; (ii) directly or
indirectly, individually or with others, solicit or attempt to solicit any
employees, or any representatives or agents of the Company, in connection with
any business which is the same as or similar to or competitive with the Business
of the Company, which representative or agent is known by Employee to be a
representative or agent of the Company and engaged in the Business of the
Company.
(c) During the Term hereof Employee shall not in the States of
New York or New Jersey serve as or become an officer, director, shareholder,
consultant, partner, owner, principal, or otherwise, directly or indirectly,
enter into any business which is the same as or similar to or competitive with
the business of the Company or service customers of the Company within the
geographic areas indicated in this subsection.
(d) Employee further agrees that he will not use any of the
Proprietary Information in connection with the purchase or sale of any
securities of the Company. The provisions of this Section 4 shall survive the
termination of this Agreement.
(e) Notwithstanding the aforementioned one (1) year period
expressed in clauses (b) and (c) above, in the event the Employee is terminated
by the Company without "Cause" (as defined in Section 3(c) hereof) then the
period of non-competition shall be void and of no effect.
(f) Notwithstanding the foregoing, however, nothing contained
in this Agreement shall prohibit Employee from purchasing and holding as an
investment not more than 5% of any class of the issued and outstanding and
publicly traded (on a recognized national or regional securities exchange or in
the over-the-counter market) security of any corporation, partnership or other
business entity that conducts a business in competition with the Company and of
which he is not an employee or director.
5. Dispute Resolution. If the parties should disagree as to any
matter at law under this Agreement, the dispute shall be arbitrated in the City
of New York under the auspices of the American Arbitration Association. The
party desiring arbitration shall serve upon the other party by certified mail,
return receipt requested, a written demand that the dispute by submitted to
arbitration. Each party shall pay one-half the fees and expenses of the
arbitrator appointed pursuant to the procedures of the American Arbitration
Association. The decision or the arbitrator shall be binding upon the parties.
Judgment upon the award rendered may be entered and enforced in any court of
competent jurisdiction. Refusal of either party to participate in binding
arbitration concerning any disagreement of the provisions hereunder shall be
considered a breach of this Agreement.
6. Survival. The covenants and agreements contained in Section 4
hereof shall survive the term of this Agreement notwithstanding termination of
the Employee's employment.
7. Restriction or Alienation. The payments which shall become due
and payable to the Employee or his estate under this Agreement shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void. Such
payments shall not in any manner be liable or subject to the Employee's debts,
contracts, liabilities, engagements or torts.
8. Agreement Binding on Successors. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their legal
representatives, heirs, successors, and assigns. Nothing in this Agreement,
express or implied, is intended to confer on any person other than the parties
and their respective assigns any rights or remedies under or by this Agreement.
9. Notices. All notices, requests, waivers, demands, and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if mailed, exclusive of the date of
deposit in the U.S. mail, postage prepaid by certified or registered mail,
return receipt requested, as follows:
(a) To the Employee: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(b) To the Company: IEH Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Any such written notice shall be effective upon receipt, but not later than four
(4) days after the deposit with the U.S. Postal Service. Either party may change
such address by notice to the other party. Any other written notice shall be
effective upon receipt by the respective party.
10. Entire Agreement; Modification. This Agreement represents the
entire agreement between the parties, and no other prior written or oral
representation or understanding shall have any further force or effect. This
Agreement may be modified only by a subsequent writing signed by all parties
hereto.
11. Separability. The invalidity of any paragraph or subparagraph
hereof shall not affect the validity of any other paragraph or subparagraph
hereof.
12. Waivers. The failure of any of the parties to this Agreement
to require the performance of a term or obligation or to exercise any right
under this Agreement or the waiver by any of the parties to this Agreement of
any breach hereunder shall not prevent subsequent enforcement of such term or
obligation or exercise of such right or the enforcement at any time of any other
right hereunder or be deemed a waiver of any subsequent breach of the provision
so breached, or of any other breach, hereunder.
13. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York, and shall not be modified or
discharged in whole or in part except by an agreement in writing signed by the
parties hereto.
14. Counterparts. This Agreement may be executed in counterparts,
each of which shall be considered to be an original, and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first set forth above.
IEH CORPORATION
By:_________________
Name:
Title:
____________________
▇▇▇▇▇▇ ▇▇▇▇▇
Amendment No. 1
to
Employment Agreement
This Amendment No. 1 to Employment Agreement, dated as of November 27,
1996, amends that certain Employment Agreement by and between IEH CORPORATION, a
New York corporation maintaining its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ residing at
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Employee") dated as of January
1, 1995 ("Employment Agreement").
1. The Employment Agreement is hereby amended as follows:
A. Section 2(a) is hereby amended and restated to read as
follows:
(a) Base Salary. The Employee's annual base salary commencing
August 10, 1996 will be $59,500 per annum. Said salary shall be payable in
accordance with the employment practices of the Company generally, which
currently calls for such salary to be paid in equal semi-monthly payments during
each year of the Term.
B. Sections 3(d),(f),(g), (h) and (i) are hereby amended and
restated to read as follows:
(d) Without Cause. The Company may, at its option, terminate
this Agreement at any time without cause upon written notice to the Employee,
subject to payment to Employee of a severance payment as hereinafter provided.
For purposes hereof, "without cause" shall include, without limitation, any
substantial diminution by the Company of the Employee's duties without the
consent of the Employee and not resulting from (i) any act or omission by the
Employee which would otherwise constitue grounds for dismissal for "cause" or
(ii) any disability of the Employee. Except as provided in sub-paragraph (h)
hereof, in the event of termination without cause pursuant to this subsection
(d) during the Term of this Agreement, the Employee shall be entitled to receive
a severance payment equal to the sum of the amount of base salary that would
otherwise be payable to the Employee for the unexpired portion of the Term plus
the sum of $44,625. Such severance payments shall be paid by the Company to the
Employee in a single lump sum payment within 30 days following termination.
(f) Disability of Employee. In the event that the Employee
shall suffer (i) permanent and total physical or mental disability or incapacity
or (ii) any illness, disability or incapacity which prevents him from performing
his duties for a period of three (3) consecutive months or 90 days in any 12
month period, this Agreement may be terminated by the Company, and the Employee
will be paid (i) his accrued but unpaid salary to the date of such disability or
incapacity and (ii) a severance payment equal to the sum of the amount of base
salary that would otherwise be payable to the Employee for the unexpired portion
of the Term plus the sum of $44,625. Such severance payments shall be paid by
the Company to the Employee in a single lump sum payment within 30 days
following termination.
(g) Failure to Renew. If the initial five year Term of this
Agreement expires and Employee and the Company fail to agree upon mutually
acceptable terms for renewal within 30 days after the date of expiration of the
Term, then in such case, the Employee shall be paid the sum of $44,625 payable
in equal semi-monthly installments during the six (6) month period following the
expiration of the initial five year Term. Nothing contained in this clause (g)
shall require the Employee to relocate in the event the Board of Directors
determines to relocate the Company and the Employee shall be entitled to the
payment set forth in clause (i) hereof in such event.
(h) Change of Control. Upon the occurrence of a Change of
Control Transaction (as hereinafter defined) during the Term, beginning on the
date of such occurrence and continuing for a period of one (1) year thereafter
(the "Change of Control Period"), in the event of the first to occur of the
termination of the Employee's employment for any reason other than for cause (as
defined in subsection (c) hereof) or the resignation of the Employee (for any
reason) during the Change of Control Period, the Employee shall be entitled to a
sum equal to the balance of the base salary for the unexpired portion of the
Term plus $44,625 payable in a single lump sum payment within 30 days following
the date of termination or resignation as the case may be. For purposes hereof,
a "Change of Control Transaction" shall mean any one of the following events:
(i) 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 "Act")) becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 promulgated under the Act)
(other than the Employee, the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company, or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company)
directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the
Company's then outstanding securities; or
(ii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation or
other entity, other than (a) a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50.1% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove
defined) acquires more than 30% of the combined voting power
of the Company's then outstanding securities; or
(iii) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets.
(i) Company Relocation. In the event the Board of Directors
determines to relocate the Company to a location outside of the New York City
Metropolitan area and the Employee determines, at his option, not to relocate
with the Company, then the Company shall pay the Employee a severance payment
equal to the amounts set forth in Section 3(d) hereof as if the Employee were
terminated without cause.
2. Counterparts. This Amendment No.1 may be executed in
counterparts, each of which shall be considered to be an original, and all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Employment Agreement as of the date first set forth above.
IEH CORPORATION
By
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇