EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.26
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Execution Copy |
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effectively as of 1st day of July 2010 (the “Effective Date”), by and between Aeroflex Incorporated, a Delaware corporation (together with its successors and assigns permitted hereunder, the “Company”), and Xxxxxx X. Xxxxxxx (the “Executive”).
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company to employ the Executive, and the Executive desires to be employed by the Company, on the terms and conditions set forth herein.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Employment Period. Subject to Section 3, the Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the Company, in accordance with the terms and provisions of this Agreement, for a period commencing as of the Effective Date and continuing for a three (3) year period, renewing daily, unless either party provides notice of non-renewal (the “Employment Period”). Upon such notice of non-renewal, the Employment Period shall continue for a period of three (3) years from the date such notice is received by the non-notifying party; provided, however, if no such non-renewal notice is received by the non-notifying party prior to the five year anniversary of the Effective Date, the Employment Period shall continue for a period of one (1) year from the date such notice of non-renewal is thereafter received by the non-notifying party.
2. Terms of Employment.
(a) Positions and Duties.
(i) During the term of the Executive’s employment hereunder, the Executive shall serve as, and have the title of Senior Vice President, General Counsel and Secretary of the Company and, in so doing, shall report directly to the President and the Board of Directors of the Company. The Executive shall have such management, supervisory and operational functions and other powers, functions and duties consistent with the Executive’s title and duties as may from time to time reasonably be prescribed by the Board.
(ii) During the term of the Executive’s employment hereunder, and excluding any periods of vacation, paid holiday, and sick and personal leave to which the Executive is entitled, the Executive agrees to devote substantially all of his business time to the business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully, effectively and efficiently such responsibilities. During the term of the Executive’s employment, it shall not be a violation of this Agreement for the Executive to (1) serve on corporate, civic or charitable boards or committees, or (2) manage personal investments, or (3) serve as an officer of one or more affiliates of the Company, including the Company’s parent, so long as such activities, either individually or in the aggregate, do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.
(b) Compensation.
(i) Base Salary. During the term of the Executive’s employment hereunder, the Executive shall receive an annual salary of Three Hundred Seventy Five Thousand Dollars ($375,000.00), as the same may be increased (but not decreased) from time to time by the Board in its sole discretion (the “Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company for services rendered by officers of the Company.
(ii) Bonus. For each Fiscal Year ending during the Employment Period, the Executive shall be eligible to receive an annual bonus of between 50% and 75% of his Base Salary based upon the achievement of the Company’s EBITDA target for such Fiscal Year (the “FY EBITDA Target”) as established by the Board of Directors of the Company (the “Board”). More particularly, 50% of his Base Salary will be awarded to the Executive as a bonus if the Company’s EBITDA is $10,000,000 less than the FY EBITDA Target established by the Board (the “Threshold EBITDA”), and, correspondingly, 75% of his Base Salary will be awarded to the Executive as a bonus if the Company’s EBITDA is $10,000,000 or more than the FY EBITDA Target established by the Board (the “Maximum EBITDA”) The Executive’s bonus shall be determined by linear interpolation as follows:
(A) if the Company’s EBITDA is between the FY EBITDA Target and the Threshold EBITDA (but not less than the Threshold EBITDA), then the amount of the bonus to be paid to the Executive shall be calculated by (w) dividing by $10 million, the total of $10 million minus the difference between the FY EBITDA Target and the EBITDA achieved by the Company, (x) multiplying the result by 12.5% (y) adding the resultant percentage amount (rounded to the nearest hundredth of a percent) to 50% to obtain the “Multiplier Percentage”, and then (z) multiplying the Base Salary by the Multiplier Percentage.
(B) if the Company’s EBITDA is equal to or greater than the FY EBITDA Target, then the amount of the bonus to be paid to the Executive shall be calculated by (w) dividing by $10 million, the sum of $10 million plus the difference between the EBITDA achieved by the Company (up to an amount no greater than $10 million more than the FY EBITDA Target) and the FY EBITDA Target, (x) multiplying the result by 12.5%, (y) adding the resultant percentage amount (rounded to the nearest hundredth of a percent) to
50% to obtain the Multiplier Percentage, and then (z) multiplying the Base Salary by the Multiplier Percentage.
No annual bonus will be paid if the Company’s EBITDA is below the Threshold EBITDA for any Fiscal Year. The FY EBITDA Target shall be equitably adjusted by the Board in the event of any divestiture, acquisition or other extraordinary event. Any annual bonus payable hereunder shall be paid on or prior to March 15 of the year following the year such bonus is earned. In the event the Threshold EBITDA and the Maximum EBITDA parameters are revised by the Board and the employment agreements of the other senior executive officers are amended accordingly, the Threshold EBITDA and the Maximum EBITDA parameters herein shall be deemed amended as well in a manner commensurate therewith.
(iii) Investment Plans. During the term of the Executive’s employment hereunder, the Executive shall be entitled to participate in all savings, equity and retirement plans, practices, policies and programs (“Investment Plans”) appertaining to his position in accordance with practices established by the Board, including 401K and supplemental life insurance plans, but Executive shall not participate in the Company’s Supplemental Executive Retirement Plan.
(iv) Welfare Benefit Plans. During the term of the Executive’s employment hereunder, the Executive shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs (“Welfare Plans”) provided by the Company (including, without limitation, medical, prescription, dental, disability, salary continuance, group life, accidental death and travel accident insurance plans and programs) to the extent applicable to executive employees generally in accordance with practices established by the Board.
(v) Expenses. During the term of the Executive’s employment hereunder, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in performing his duties hereunder, including, without limitation, transportation, hotel, and living expenses and other business and entertainment expenses, in accordance with the policies, practices and procedures of the Company.
(vi) Vacation and Holidays. During each complete twelve month period of the Executive’s employment hereunder, the Executive shall be entitled to 20 paid vacation days and such paid holiday and leave time as are in accordance with the plans, policies, programs and practices of the Company.
(vii) Equity Awards. The Company shall grant to Executive an option to purchase shares of the common stock of Aeroflex Holding Corp., on or after the effective date of the initial public offering of Aeroflex Holding Corp., which shall not be mutually exclusive of any other equity grants or awards as the Board (or any committee thereof) shall grant to the Executive from time to time during the Employment Period. The option granted hereunder will be subject to the terms of an option award
agreement and may be subject to the terms of an applicable equity plan of the Company or its affiliates. The per share exercise price of the option will be no less than the fair market value of a share of the common stock of Aeroflex Holding Corp. on the date of grant.
(viii) Car Allowance. The Company will provide the Executive with a car allowance of One Thousand Dollars ($1,000.00) per month, such amount to be paid monthly in accordance with the normal payroll practices of the Company.
3. Termination of Employment.
(a) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If a Disability (as defined below) of the Executive has occurred during the Employment Period, the Company may give to the Executive written notice in accordance with Section 13(b) of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”); provided, that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the Executive’s inability to perform his duties and obligations hereunder for a period of 90 consecutive days due to mental or physical incapacity as determined by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be withheld unreasonably). Notwithstanding the foregoing, no such condition shall be considered a “Disability” unless such condition also meets the requirements of being “disabled” under Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the “Code”).
(b) Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean (i) a breach by the Executive of the Executive’s material obligations under Section 2(a) which is not cured within ten (10) days of the receipt by the Executive of written notice thereof from the Company; (ii) commission by the Executive of an act of fraud upon, or willful misconduct of a material nature toward, the Company, as reasonably determined by a majority of the Board, (iii) a material breach by the Executive of any of Sections 6, 8 or 10; (iv) the conviction of the Executive of any felony or the conviction of the Executive of any misdemeanor involving any acts of dishonesty including embezzlement, fraud or any other act that results or reasonably could be expected to result in an economic loss or harm to the Employer (or a plea of nolo contendere thereto); (v) the Executive being found liable in any civil proceeding for an act by the Executive constituting work place harassment; or (vi) the willful and continuing failure of the Executive to carry out, or comply with, in any material respect any reasonable directive of the Board or the President consistent with the terms of this Agreement.
(c) Termination for Good Reason by the Executive. The Executive may terminate this Agreement for Good Reason and such termination shall constitute a termination without Cause by the Company. “Good Reason” shall mean the occurrence of a breach by the Company of its material obligations to the Executive which is not cured within ten (10) Business Days of the receipt by the Company of written notice thereof from the Executive and shall include, without limitation, (i) the loss of, or an adverse change in, the Executive’s position or titles; (ii) a diminution or materially adverse change in the duties and responsibilities of the Executive or the assignment to the Executive of duties and responsibilities which are inconsistent with the Executive’s position in the Company; (iii) a reduction in the Executive’s Base Salary or the failure to pay the same or any bonus or other benefits hereunder when due or within a reasonable period of time thereafter, (iv) the relocation of the Executive’s office to a location which is more than 25 miles from the current location of corporate headquarters of the Company.
(d) Notice of Termination. Any termination (i) by the Company, whether for Cause or without Cause, or (ii) by the Executive, whether or not for Good Reason, shall be communicated by Notice of Termination (as defined below) to the other party hereto given in accordance with Section 13(b). For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances, if any, claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company for asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of the Notice of Termination or any later date specified therein, as the case may be; (ii) if the Executive’s employment is terminated by the Company other than for Cause, the date on which the Company notifies the Executive of such termination or any later date specified by the Board; and (iii) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the Disability Effective Date, as the case may be.
4. Obligations of the Company upon Termination.
(a) Without Cause. If during the Employment Period, the Company shall terminate the Executive’s employment without Cause or the Executive shall terminate his employment for Good Reason, except in either such case within eighteen (18) months following a Change in Control (as defined below), the Company shall pay to the Executive or his heirs (1) within ten (10) days after the Date of Termination, the sum
of the Executive’s Base Salary through the Date of Termination, to the extent not theretofore paid, plus all accrued vacation pay, unreimbursed business expenses and other accrued but unpaid compensation described in Section 2(b) above (the “Accrued Obligations”) (2) an amount equal to the Executive’s Base Salary for the remainder of the Employment Period immediately following the Date of Termination, but no event less than one (1) year if such termination shall occur after the 5 year anniversary of the Effective Date, payable in such increments and at such intervals as is in accordance with the Company’s normal payroll practices, as if the Executive had remained an employee of the Company through the expiration of such period; and (3) any amount arising from the Executive’s participation in, or benefits under, any Investment Plans (“Accrued Investments”), which amounts shall be payable in accordance with the terms and conditions of such Investment Plans; and (4) annual bonuses for the remainder of the Employment Period in accordance with Section 2(b) (ii), as if the Executive had not been terminated, such bonuses, if any, shall be paid at the time the company pays bonuses to other senior executives of the Company; provided, however, if such termination occurs after the five year anniversary of the Effective Date, then the bonus applicable for the Fiscal Year in which the Date of Termination occurs, shall be prorated to the Date of Termination, but in no event less than 50% of the bonus to which the Executive otherwise would have been entitled for that Fiscal Year pursuant to Section 2(b)(ii). In addition, all outstanding equity compensation awards, including the equity awards described in Section 2(b) (vii), shall immediately vest, and the Executive and qualifying members of the Executive’s family shall be entitled to continue to participate, at the Company’s expense, in the Company’s Welfare Plans, including medical, dental and prescription coverage, for the remainder of such Employment Period, but in no event less than one year.
(b) Death or Disability. If the Executive’s employment is terminated by reason of the Executive’s death or Disability during the Employment Period, the Company shall pay to his legal representatives (i) in a lump sum in cash within twenty (20) days after the Date of Termination, the Accrued Obligations; and (ii) the Accrued Investments which shall be payable in accordance with the terms and conditions of the Investment Plans; and (iii) the unpaid bonus provided for in Section 2(b)(ii) applicable for the year in which the Executive’s death or Disability occurs, based on the actual performance of the Company for such year, paid at the time the Company pays such bonuses to other senior executives of the Company. In addition, the qualifying members of the Executive’s family shall be entitled to continue their participation at the Company’s expense in the Company’s Welfare Plans for a period of twenty-four months after the Date of Termination.
(c) Cause. If the Executive’s employment shall be terminated by the Company for Cause during the Employment Period, the Company shall have no further payment obligations to the Executive other than for payment of Accrued Obligations, Accrued Investments (which shall be payable in accordance with the terms and conditions of the Investment Plans), and the continuance of benefits under the Welfare Plans to the Date of Termination.
(d) Change of Control. In the event there shall be, and only upon the occurrence of, a Change in Control as hereinafter defined, then, if the Executive’s employment is terminated by the Company without Cause (including by a notice of non-renewal by the Company pursuant to Section 1), or by the Executive for Good Reason, in either case within eighteen (18) months thereafter, the Company shall pay to the Executive or his heirs within ten (10) days of the Date of Termination (subject to Section 4(e)), the following: (i) the Accrued Obligations, (ii) the Accrued Investments, and (iii) a lump sum severance payment equal to (A) the amount of the Executive’s Base Salary for the remainder of the Employment Period, but in no event less than three years, if such termination shall occur prior to the five year anniversary of the Effective Date or (B) the Executive’s Base Salary for one year if such termination shall occur at any time after the five year anniversary of the Effective Date, together with an amount equal to either (x) three times the average of the annual bonuses received by the Executive for the prior three Fiscal Years of the Company if the termination occurs prior to the 5 year anniversary of the Effective Date or (y) one times the average of the annual bonuses received by the Executive for each of the prior three Fiscal Years of the Company if the termination occurs after the 5 year anniversary of the Effective Date. In addition, all outstanding equity compensation awards, including the equity awards described in Section 2(b) (vii), shall vest immediately, and the Executive and the qualifying members of the Executive’s family shall continue their participation at the Company’s expense in all of the Company’s Welfare Plans, including medical, dental and prescription coverage, for the balance of the Employment Period but in no event less than one year. Notwithstanding the foregoing, if all or any portion of the payments and/or benefits provided under this Agreement, and/or any other payments and benefits that the Executive receives or is entitled to receive from the Company, its subsidiaries or any of its affiliates, constitutes an excess “parachute payment” within the meaning of Section 280G(b) of the Internal Revenue Code of 1986, as amended, (the “Code”) (each such parachute payment, a “Parachute Payment”) and will result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then, the Parachute Payments shall instead be reduced to the aggregate amount of Parachute Payments that may be made to the Executive without incurring such excise tax, as determined by the Company’s auditors. Any such reduction in the preceding sentence shall be done first by reducing any cash payments with the last payment reduced first; next any equity or equity derivatives that are included under Section 280G of the Code at full value rather than accelerated value; next any equity or equity derivatives based on acceleration value shall be reduced with the highest value reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); finally any other non-cash benefits will be reduced. For the purpose of this Section, a “Change in Control” (which in all respects shall satisfy the requirements of a “change in control event” as set forth in Treasury Regulations § 1.409A-3(i) (5)), shall mean the occurrence of a “change in the ownership”, a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the Company determined as follows:
(i) a “change in the ownership” of the Company shall occur on the date on which any one person or more than one person acting as a group, directly or indirectly, acquires ownership of stock of the Company that, together with the stock held
by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, as determined in accordance with Treasury Regulations § 1.409A-3(i)(5)(v); provided, however, if any one person or more than one person acting as a group is considered to own already more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a “change in the ownership” of the Company (or to cause a “change in the effective control” of the Company as contemplated in subsection (ii) or (iii) below); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition by or from the Company or any corporation or other entity in which the Company owns or controls, directly or indirectly, at least 50 percent of the total combined voting power represented by all classes of stock issued by such corporation, or in the case of a noncorporate entity, at least 50% of the profits or capital interest in such entity or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary, (B) any acquisition by an individual who as of the Effective Date is a member of the Board, (C) any acquisition by any underwriter in any firm commitment underwriting of securities to be issued by the Company, or (D) any acquisition by any corporation (or other entity) if, immediately following such acquisition, 50% or more of the then outstanding shares of common stock (or other equity unit) of such corporation (or other entity) and the combined voting power of the then outstanding voting securities of such corporation (or other entity), are beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who, immediately prior to such acquisition, were the beneficial owners of the then outstanding voting securities of the Company in substantially the same proportions, respectively, as their ownership immediately prior to the acquisition of the stock and Voting Securities (collectively with (A), (B), and (C), the “Exempt Acquisitions”)
(ii) a “change in the effective control” of the Company shall occur on the date any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company; provided, however, that none of the Exempt Acquisitions shall constitute a Change in Control;
(iii) a “change in the effective control” of the Company shall occur on the date on which a majority of the members of the Company’s Board of Directors is replaced during any 12 month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the date of the appointment or election, as determined in accordance with Treasury Regulations § 1.409A-3(i)(vi); and
(iv) a “change in the ownership of a substantial portion of the assets” of the Company shall occur on the date on which any one person or more than one person acting as a group, acquires (or has acquired during the 12 month period ending on the date of the most recent acquisition by such person or persons), directly or indirectly, assets from the Company that have a total gross fair market value equal to or
more than 50% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5) (viii); provided, however, a transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets” of the Company when such transfer is made to an entity that is controlled by the shareholders of the Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vii)(B).
(e) Payments; Compliance with Section 409A of the Code. Notwithstanding anything herein to the contrary, if (i) the Executive is to receive payments or benefits under Section 4 by reason of his separation from service (as such term is defined in Section 409A of the Code) other than as a result of his death, (ii) the Executive is a “specified employee” within the meaning of Code Section 409A for the period in which the payment or benefits would otherwise commence, and (iii) such payment or benefit would otherwise subject the Executive to any tax, interest or penalty imposed under Section 409A of the Code (or any regulation promulgated thereunder) if the payment or benefit would commence within six months of a termination of the Executive’s employment, then such payment or benefit required under Section 4 shall not commence until the first day which is at least six months after the termination of the Executive’s employment. Such payments or benefits, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment or otherwise provided to the Executive as soon as administratively feasible after the first day which is at least six months after the termination of the Executive’s employment. Thereafter, the payments and benefits shall continue, if applicable, for the relevant period set forth in Section 4. Each severance installment contemplated under Section 4 shall be treated as a separate payment in a series of separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii). For purposes of this Agreement, all references to “termination of employment” and other similar language shall be deemed to refer to the Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h).
5. Full Settlement, Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Neither the Executive nor the Company shall be liable to the other party for any damages in addition to the amounts payable under Section 4 arising out of the termination of the Executive’s employment prior to the end of the Employment Period; provided, however, that the Company shall be entitled to seek damages for any breach of Sections 6, 7, 8, 10 or criminal misconduct.
6. Confidential Information.
(a) The Executive acknowledges that the Company and their affiliates have trade, business and financial secrets and other confidential and proprietary information (collectively, the “Confidential Information”). As defined herein,
Confidential Information shall not include (i) information that is known to other persons or entities generally, (ii) information required to be disclosed by the Executive pursuant to a subpoena or court order, or pursuant to a requirement of a governmental agency or law of the United States of America or a state thereof or any governmental or political subdivision thereof, and (iii) information that the Executive possessed on or prior to the Effective Date.
(b) The Executive agrees (i) to hold such Confidential Information in confidence and (ii) not to release such information to any person (other than Company employees and other persons to whom the Company has authorized the Executive to disclose such information and then only to the extent that such Company employees and other persons authorized by the Company have a need for such knowledge or to the Executive’s attorneys, accountants and personal representatives for purposes of representing the Executive).
(c) The Executive further agrees not to use any Confidential Information for the benefit of any person or entity other than the Company or as authorized by the Company.
(d) As used in this Section 6 and in Sections 7, 8 and 10, “Company” shall include the Company and any of its subsidiaries.
7. Surrender of Materials Upon Termination. Upon any termination of the Executive’s employment, the Executive shall immediately return to the Company all copies, in whatever form, of any and all Confidential Information and other properties of the Company and their affiliates which are in the Executive’s possession custody or control and shall cause any third parties to whom he has entrusted such information whether or not in compliance with Section 6, to return such information to the Company.
8. Non-Competition. During the Employment Period, the Executive will not, without the Company’s express written consent, engage in any other employment or business activity directly related to the business in which the Company is at the time involved or actively considering becoming involved, nor will the Executive engage in any other activities which conflict with his obligations to the Company except as provided in Section 2(a)(ii) above. During the Employment Period and (a) in the case of termination by the Company for Cause or termination by the Executive without Good Reason, for one year after the Date of Termination, (x) directly or indirectly, either as principal, agent, employee, consultant, officer, director, stockholder, or in any other capacity, engage in or have a financial interest in, any business, or the relevant division or subsidiary of any such business, which is competitive with the business of the Company or any of its subsidiaries or affiliates, provided, however, that the Executive’s ownership of not more than two percent (2%) of the outstanding stock of a publicly traded company shall not be prohibited by this clause (x); (y) induce employees of the Company or any of its subsidiaries or affiliates to join with the Executive in any capacity, direct or indirect, in any business in which the Executive may be or become interested whether or not competitive with the Company; or (z) solicit customers of the Company. If any
restriction set forth in this Section is found by any court of competent jurisdiction to be unenforceable cause it extends for too long a period of time or over too great a range of activities or in too broad a geographic areas, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic areas as to which it may be enforceable.
9. Effect of Agreement on Other Benefits. The existence of this Agreement shall not prohibit or restrict the Executive’s entitlement to full participation in the executive compensation, employee benefit and other plans or programs appertaining to his position in accordance with any policy or practice established by the Board.
10. Ownership and Disclosure of Information, Ideas, Concepts, Improvements, Discoveries and Inventions, and All Original Works of Authorship. All information, ideas, concepts, improvements, discoveries and inventions, whether patentable or not, which are conceived, made, developed or acquired by the Company or which are created by the Executive in the course and scope of his employment or which are disclosed or made known to the Executive, individually or in conjunction with others, during the Executive’s employment by the Company whether during or outside of usual working hours, and whether on the Company’s premises or not, and which relate to the Company’s past, present or reasonably anticipated business, products or services (including all such information relating to research, formulations, processes, computer programs, simulations, and data bases, manufacturing techniques, designs, financial and sales models and other data, pricing and trading terms, evaluations, opinions, interpretations, the identity of customers or their requirements or of key contacts within the customer’s organizations, or marketing and merchandising techniques), operating and acquisition strategies, are and shall be (insofar s the Executive is concerned) the sole and exclusive property of the Company. Moreover, all drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, maps and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries and inventions are and shall be (insofar the Executive is concerned) the sole and exclusive property of the Company.
11. Indemnification. The Company shall indemnify and hold harmless the Executive from and against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees) (collectively, “Losses”) incurred by the Executive in connection with the investigation, defense or disposition of any action, suit or other proceeding in which the Executive may be involved or with which the Executive may be threatened (whether arising out of or relating to matters asserted by third parties or incurred or sustained by the Executive in the absence of a third-party claim), by reason of his being a director, officer or employee of the Company or of any subsidiary or affiliate of the Company, or that arises out of or results from any act taken, or any failure to act, by the Executive which was, in his good faith judgment, in the best interests of the Company, whether within the course of performance of his duties or otherwise; provided, however, that the Company shall not be required to indemnify or hold the Executive harmless from any Losses which arise out of or result from the Executive’s gross negligence or willful misconduct or any other action
or non-action that would constitute a basis for termination for cause by the Company pursuant to Section 3(b).
12. Compliance with Code Section 409A. It is intended that any expense reimbursement made under this Agreement shall be exempt from Code Section 409A. Notwithstanding the foregoing, if any expense reimbursement shall be determined to be “deferred compensation” within the meaning of Code Section 409A, including, without limitation, any reimbursement under Sections 2(b)(v) or 4(a), then the reimbursement shall be made to the Executive as soon as practicable after submission of the reimbursement request, but no later than December 31 of the year following the year during which the expense was incurred.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to such states conflict of laws principles. For all actions or proceedings arising under, or relating to, this Agreement, the parties unconditionally and irrevocably consent to the personal jurisdiction of the courts of the State of New York situated in Nassau County, and agree not to commence any such action in any other courts. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. Whenever the terms “hereof”, “hereby”, “herein”, or words of similar import are used in this Agreement, they shall be construed as referring to this Agreement in its entirely rather than to a particular section or provision, unless the context specifically indicates to the contrary. Any reference to a particular “Section” or “paragraph” shall be construed as referring to the indicated section or paragraph of this Agreement unless the context indicates to the contrary. The use of the term “including” herein shall be construed as meaning “including without limitation.” This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be delivered by hand, overnight courier or given by electronic facsimile transmission or mailed by first class, certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive: |
Xx. Xxxxxx X. Xxxxxxx 0 Xxxxxxxxxxx Xxxxxx Xxxxxxx, Xxx Xxxx 00000 Mobile Telephone No.: (000) 000-0000 |
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If to the Company: |
Aeroflex Incorporated 00 Xxxxx Xxxxxxx Xxxx X.X. Xxx 0000 Xxxxxxxxx, Xxx Xxxx 00000-0000 Attention: President |
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Telecopier No.: (000) 000-0000 Telephone No.: (000) 000-0000 |
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with a copy to: |
Moomjian, Waite, Wactlar & Xxxxxxx, LLP. 000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000 Xxxxxxx, Xxx Xxxx 00000 Attention: Xxxxxx Xxxxxxx, Esq. Telecopier No.: (000) 000-0000 Telephone No.: (000) 000-0000 |
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(f) The Executive acknowledges that money damages would be both incalculable and an insufficient remedy for a breach of Sections 6, 7, 8 and 10 by the Executive and that any such breach would cause the Company irreparable harm. Accordingly, the Company, in addition to any other remedies at law or in equity it may have, including a claim for damages, shall be entitled to seek equitable relief, including injunctive relief and specific performance, in connection with a breach of Sections 6, 7, 8 and 10 by the Executive.
(g) The provisions of this Agreement constitute the complete understanding and agreement, and supersede and entirely replace any other agreement, between the parties with respect to the subject matter hereof.
(h) This Agreement may be executed in two or more counterparts.
(i) As used in this Agreement, “affiliate” means, with respect to a person, any other person controlling, controlled by or under common control with the first person; the term “Control”, and correlative terms, means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a person; and “person” means an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.
(j) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s heirs, successors, estate and legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(k) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written.
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EXECUTIVE: |
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/s/ Xxxxxx X. Xxxxxxx |
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Xxxxxx X. Xxxxxxx |
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AEROFLEX INCORPORATED |
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By: |
/s/ Xxxxxxx Xxxxx |
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Xxxxxxx Xxxxx, President, Chief Executive Officer |
