AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
and entered into effective as of the 20th day of June, 2002, by and between
ELCOM INTERNATIONAL, INC., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxx ("Executive"). Certain capitalized terms used herein shall have the
meanings set forth in Section 18 below.
WITNESSETH:
WHEREAS, the Executive and the Company entered into an Employment
Agreement dated as of July 1, 1997 (the "Prior Agreement"); and
WHEREAS, the Company has determined that it is in its best interests to
insure the continued employment of Executive as the Chairman and Chief Executive
Officer of the Company by amending and restating the Prior Agreement in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Company and Executive agree as follows:
1. Duties. The Company hereby employs Executive as Chairman and Chief
Executive Officer of the Company on the terms set forth herein. During the
course of his employment, Executive shall have those duties and
responsibilities, and the authority, customarily possessed by the Chairman and
Chief Executive Officer of a major corporation and such additional duties as may
be assigned to him from time to time by the Board of Directors of the Company
(the "Board") which are consistent with the positions of Chairman and Chief
Executive Officer of a major corporation. Nothing in this Agreement shall
preclude the Executive from devoting reasonable periods of time to charitable
and community activities or the management of his investment assets, provided
such activities do not significantly interfere with
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the performance by the Executive of his duties hereunder. Furthermore, service
by the Executive on the boards of other companies shall not be deemed to be a
violation of this Agreement, provided such service does not significantly
interfere with the confidentiality provisions or performance of his duties
hereunder. If the Executive voluntarily relinquishes the title, duties and
responsibilities of Chief Executive Officer in writing after request from the
Board, in order to function solely as the Chairman of the Board with the title,
duties and responsibilities thereof, then Executive shall thereafter still be
entitled to all of the same rights, benefits, privileges and protections
hereunder.
2. Term. Executive's employment hereunder shall commence on the
effective date of this Agreement (the "Commencement Date") and shall, unless
earlier terminated in accordance with the terms hereof, terminate on the fourth
(4th) anniversary of the Commencement Date (the "Term"). Executive's obligations
and the Company's rights under Sections 8 through 13 below, and Executive's
other post-employment covenants, shall survive the expiration or earlier
termination of this Agreement for any reason.
3. Base Salary. During the Term of this Agreement, the Company shall
continue to pay Executive a base salary equivalent to his salary in effect as of
the Commencement Date, less applicable payroll taxes, withholdings and
deductions, which is currently $525,000 per year (the "Base Salary"), paid in
periodic payments in the manner that the Company normally pays its executives.
If Executive shall take a voluntary and temporary pay decrease in order to
assist the Company, as he did during 2002 when Executive voluntarily reduced his
salary by 30%, such decrease shall not be considered a decrease in Base Salary
for purposes of this Agreement. On an annual basis, during the first one hundred
and twenty (120) days of the fiscal year (which should be following the
preparation of the Company's annual audited financial statements), the
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Compensation Committee will review Executive's Base Salary and other
compensation during the period of his employment hereunder and, at the
discretion of a majority of the Compensation Committee, may increase, but not
decrease Executive's Base Salary based upon his performance, the Company's
results of operation, and other relevant factors.
4. Benefits.
A. Vacation. Executive shall be entitled to six (6) weeks paid
vacation, to be taken at a time or times acceptable to the Company and otherwise
consistent with the terms and conditions of this Agreement.
B. Executive Profit Performance Bonus Plan. The Executive shall
be entitled to participate in the Company's Executive Profit Performance Bonus
Plan (or similar plan providing benefits no less favorable to the Executive), at
a minimum rate of 50% of any bonus pool generated by such Plan; provided,
however, that, notwithstanding any other term or provision of the Plan,
Executive shall not be entitled to participate in the Plan with respect to any
year in which the Company reports a Net Loss on its annual, audited, year-end
financial statements and Executive hereby agrees to waive and relinquish any
right that he may have with respect to any such participation. Such Plan shall
not otherwise be modified, amended or terminated in any way that may have an
adverse effect on Executive without his prior written consent.
C. Stock Options. Following each Base Salary review date during
the Term, but no later than July of each year, the Company shall, subject to the
approval of the Compensation Committee if no Change of Control has occurred,
make or cause to be made an option grant to Executive to purchase at least
400,000 shares of the Company's stock under its Stock Option Plan(s). Such
options shall have an exercise price per share equal to the fair market
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value as of the date of grant and shall become vested and exercisable by
Executive as determined by the Compensation Committee and all as set forth in
one or more written stock option agreements between the Company and Executive
pursuant to the terms of the Company's Stock Option Plan(s). To the maximum
extent allowable, all such options shall be incentive stock options under the
Internal Revenue Code of 1986, as amended (or similar successor statute) (the
"Code"). The option grants described herein need not be the exclusive options
granted to Executive by the Company under the Stock Option Plan(s) or otherwise.
D. Term Life Insurance. The Company, in its discretion, may
purchase one or more term life insurance policies on the life of the Executive,
with the Company named as beneficiary, with an aggregate death benefit of up to
$5,000,000 (the "Company Policy"). In addition, the Company shall provide an
annual bonus (the "Insurance Bonus") to the Executive, subject to the
limitations described herein, equal to the amount necessary to enable the
Executive to purchase one or more additional term life insurance policies on his
life, with a beneficiary(ies) as designated by the Executive, with an aggregate
death benefit of up to $5,000,000 (regardless of whether the Company determined
pursuant to the previous sentence to purchase $5,000,000 of insurance, or a
lesser amount); provided, however, that in any one calendar year, the total
premium cost actually paid by the Company for the Company Policy plus the
Insurance Bonus to the Executive shall be limited to $40,000. The Company and
Executive shall fully cooperate with each other by taking all actions reasonably
necessary to carry out the intentions of this section. Each party shall
cooperate in purchasing the insurance policies, including taking into
consideration the wishes of the other party with respect to the type of policy
purchased and the quality of the insurance provider, and the Executive shall
submit to any application process, including medical testing, requested by the
Company or any applicable insurance provider.
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E. Other Fringe Benefits. Executive shall be included to the
extent eligible thereunder in Company benefit plans providing group life
insurance, hospitalization, medical, pension, financial services and any other
similar or comparable benefits that are generally made available to all or a
substantial majority of the other executives of the Company from time to time
during the Term of this Agreement. Executive shall be entitled to participate in
any such plans on a basis comparable to such other executives, taking into
account relative qualifications (for example, age, seniority, title, years of
service, salary, etc.).
5. Expenses. The Company shall reimburse Executive for reasonable
out-of-pocket business expenses incurred by him on behalf of the Company in the
performance of his duties as specified herein and documented in accordance with
the requirements of the Internal Revenue Service and the Company's policies in
effect from time to time.
6. Termination of Employment. The consequences of termination of
Executive's employment are described in this Section 6 and Section 7 below.
Executive expressly agrees not to discuss, except with his official advisors (on
a confidential basis), any information or aspects of his employment regarding
the Company or his termination circumstances unless and only to the extent
required under compulsion from a court of competent jurisdiction or otherwise
required by law.
A. Death or Disability. In the event of Executive's death or
Disability, the duties of the Company and Executive, one to the other, under
this Agreement shall terminate as of the date of Executive' death or as of the
date that Executive's Disability is determined as set forth herein, as the case
may be, subject to the Company, in the case of Executive's Disability, providing
the payments and other benefits specified in Section 7 below.
B. Termination by the Company.
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(i) For Cause. The Company may terminate Executive's
employment at any time For Cause upon a majority vote of the Board of
Directors of the Company, in which case the duties of the Company and
Executive, one to the other, under this Agreement shall terminate as of
the date of Executive's termination of employment.
(ii) Other Than For Cause. Executive's employment may be
terminated at any time other than For Cause upon a majority vote of the
Board of Directors of the Company, in which case, the duties of the
Company and Executive, one to the other, under this Agreement shall
terminate as of the date of Executive's termination of employment,
subject to the Company providing the severance payments and other
benefits, if any, specified in Section 7 below.
Any termination of Executive's employment by the Company shall be
communicated by written notice of termination to the other party hereto, which
shall set forth the effective date and time of such termination (not earlier
than the date of mailing, or delivery by other means, of the notice).
C. Voluntary Resignation. If the Executive voluntarily leaves
the employ of the Company during the Term of this Agreement, the duties of the
Company and the Executive, one to the other, under this Agreement shall
terminate as of the date of the Executive's termination of employment, provided,
however, that if Executive voluntarily leaves the employ of the Company during
the Term of this Agreement under circumstances that constitute a Resignation for
Good Reason after a Change of Control, the Company shall provide the severance
payments and other benefits, if any, specified in Section 7 below.
D. Post-Employment Obligations. In the event that Executive's
employment with the Company is terminated due to any reason other than death,
the provisions of Sections 8 through 13 below and Executive's other
post-employment covenants shall survive any such termination.
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7. Obligations upon Termination.
A. Termination by Reason of Disability. If Executive's
employment with the Company is terminated by reason of the Executive's
Disability, then Executive shall be entitled to the following benefits:
(i) The Company shall pay Executive a payment equal to
two (2) years' Base Salary, payable in twenty-four (24) equal, monthly
installments, without interest. Such payment shall be made with respect
to Executive's Base Salary as in effect as of the date of his
termination of employment with the Company.
(ii) For a twenty-four (24) month period following the
date of Executive's termination of employment with the Company, the
Executive shall be entitled to Benefits Continuation.
B. Termination by Company Other Than For Cause or upon
Executive's Resignation for Good Reason After a Change of Control. If, during
the Term of this Agreement, Executive's employment with the Company is
terminated by the Company other than For Cause, or in the event of a Resignation
for Good Reason after a Change of Control, then Executive shall be entitled to
the following severance benefits:
(i) The Company shall, subject to the provisions of
Section 7.D. below, pay Executive a severance payment equal to 2.99
times his Base Salary (50% of such severance payment shall be paid in a
lump sum (payable promptly upon the first date provided for such payment
pursuant to Section 7.D below), and the remaining fifty percent (50%) of
such severance payment shall be payable in twelve (12) equal, monthly
installments, without interest). Such severance payment shall be made
with respect to Executive's Base Salary as in effect as of the date of
his termination of employment with the Company, but without giving
effect to any reduction in Base Salary that might have occurred after a
Change of Control.
(ii) All of Executive's stock options shall become
immediately vested and exercisable (which exercise, at Executive's
option, may be a "cashless" exercise) for up to the longer of (i) three
years after termination of Executive's employment with the Company, or
(ii) the remainder of the exercise period provided for in the applicable
option agreement(s), provided that this provision shall not extend the
exercise period of Executive's options beyond the term of the option and
the Company agrees to cause such exercise to be allowed (including
following the request of the Compensation Committee to permit such
exercise) pursuant to the Company's Stock Option Plan(s) or the
comparable provision of any future plan or agreement; and
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(iii) For a three (3) year period following the date of
Executive's termination of employment with the Company, the Executive
shall be entitled to Benefits Continuation. If Executive commences other
full-time employment, the Company's obligation to provide Benefits
Continuation shall cease, except with respect to any pre- existing
conditions.
C. {Intentionally Omitted.}
D. Release. As a condition to and in consideration for the
receipt of the severance payment(s) and other benefits to which Executive may be
entitled pursuant to Section 7.B hereof, Executive agrees to execute a Release
Agreement with the Company, in substantially the same form as that attached
hereto as Exhibit A (the "Release Agreement"), within the thirty (30) day period
beginning twenty-one (21) days after the date of his cessation of employment
with the Company. The Company shall not be obligated to make any severance
payment or provide any other benefits unless and until the Company shall have
received from Executive a validly executed Release Agreement that shall not have
been revoked by Executive during the applicable Revocation Period (as such term
is defined in the Release Agreement). Provided that Company receives from
Executive a validly executed Release Agreement which is not revoked during the
applicable Revocation Period, the Company agrees to commence making the
severance payments and provide the other benefits theretofore withheld within
three (3) days of the end of the Revocation Period. Executive acknowledges and
agrees that the benefits provided by this Agreement constitute adequate
consideration to render enforceable such Release Agreement against Executive.
8. Noncompetition. Executive agrees that during the period (the
"Noncompetition Period") commencing on the date hereof and ending on the date
that is two (2) years after the later of the date of his cessation of employment
with the Company, or the last date on which he is supposed to be paid by the
Company any severance payment provided for in this Agreement, he will not,
without the prior consent of the Board of Directors of the Company, either
directly or
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indirectly, in any capacity whatsoever, (a) compete (as defined below) with the
Company, or (b) operate, control, advise, be employed and/or engaged by, perform
any consulting services for, invest in (other than the purchase of no more than
five percent (5%) of the publicly traded securities of a company whose
securities are traded on a national stock exchange) or otherwise become
associated with, any person, company or other entity who or which, at any time
during the Noncompetition Period, competes with the Company.
As used above, "compete" is defined as the development, marketing,
distribution or sale of automated purchasing software or similar systems.
Executive further expressly represents and understands that if Executive's
employment is terminated, this Agreement will prohibit the Executive from future
employment with all companies that compete with the Company, as defined in this
Agreement, and as such, will constrain some of the Executive's overall
possibilities for future employment. By Executive's signature to this Agreement,
Executive expressly represents that his training, education and background are
such that his ability to earn a living shall not be impaired by the restriction
in this Agreement.
9. Nondisclosure. Executive agrees during the period commencing on the
date hereof and thereafter, at all times to hold as a secret and confidential
(unless disclosure is required pursuant to court order, subpoena, in a
governmental proceeding, arbitration, or pursuant to other requirement of law)
any and all knowledge, technical information, business information,
developments, trade secrets, and confidences of the Company or its business,
including, without limitation, (a) information or business secrets relating to
the products, customers, business, conduct or operations of the Company, or any
of its respective clients, customers, consultants or licensees; and (b) any of
the Company's customer lists, pricing and purchasing information or policies
(collectively, "Confidential Information"), of which he has acquired knowledge
during or after his
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employment with the Company, to the extent that such matters (i) have not
previously been made public or are not thereafter made public, or (ii) do not
otherwise become available to Executive, in either case, via a source not bound
by any confidentiality obligations to the Company. The phrase "made public" as
used in this Agreement shall apply to matters within the domain of the general
public or the Company's industry. Executive agrees not to use, directly or
indirectly, such knowledge for his own benefit or for the benefit of others
and/or disclose any of such Confidential Information without prior written
consent of the Company. At the cessation of employment with the Company, the
Executive agrees to promptly return to the Company any and all written
Confidential Information received from the Company which relates in any way to
any of the foregoing items covered in this paragraph and to destroy any
transcripts or copies the Executive may have of such Confidential Information
unless an alternative method of disposition is approved by the Company.
10. {Intentionally Omitted.}
11. Intellectual Property Assignment. Executive agrees that all ideas,
improvements, computer programs, code, flowcharts, inventions, and discoveries
that are directly related to the business of the Company (either as previously
conducted or as conducted at any time during Executive's employment), that
Executive may have made or that Executive may make or conceive, alone or jointly
with others, prior to or during Executive's employment with the Company, only to
the extent developed substantially during Company time and using Company
equipment, shall be the sole property of the Company, and Executive agrees:
(a) to promptly disclose any such ideas, improvements, inventions,
and discoveries to the Company; and
(b) to treat such ideas, improvements, inventions, and discoveries
as Confidential Information and as the trade secrets of the
Company; and
(c) not to disclose such ideas, improvements, inventions, and
discoveries to anyone, both during and after Executive's
employment with the Company, without the Company's prior written
approval.
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Executive hereby assigns all of Executive's right, title and interest in and to
any such ideas, improvements, inventions, or discoveries, including any
potential patent rights and any additional rights conferred by law upon
Executive as the author, designer, or inventor thereof, to (i) vest full title
in the idea, improvement, invention, or discovery in the Company, and (ii) to
enable the Company to seek, maintain or enforce patent or other protection
thereon anywhere in the world.
Executive agrees that the Company is the author (owner) of any work of
authorship or copyrightable work ("Work") created by Executive, in whole or in
part, during Executive's employment by the Company during Company time and/or
using Company equipment and directly relating to the business of the Company as
previously conducted or as conducted at any time during Executive's employment.
Executive acknowledges that each writing and other literary Work, each drawing
and other pictorial and/or graphic Work and any audio-visual Work, created by
Executive, in whole or in part, during Company time and/or using Company
equipment and directly relating to his position or responsibilities with the
Company has been prepared by Executive for the Company as a Work for hire.
Executive agrees that in the event that such Work is not considered Work for
hire, Executive hereby assigns all copyright and any other rights conferred in
law unto Executive in and to such Work to the Company. Executive agrees that at
the request of the Company, Executive will execute any documents deemed
necessary by the Company to (i) vest full title to the Work in the Company, and
(ii) enable the Company to register, maintain, or enforce copyrights in the Work
anywhere in the world. Executive will treat any such Work as Confidential
Information and as the trade secrets of the Company and will not disclose it to
anyone both during and after Executive's employment by the Company, without the
Company's prior written approval.
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Executive and Company agree that the concept developed by Executive
regarding the electronic management and transmission of electronic awards and
greeting cards via the Internet and e-mail (including the URL "ecardcare" for
which Executive has personally registered) shall be specifically excluded from
this Section 11.
Executive recognizes that the ideas, improvements, inventions,
discoveries and Works directly relating to Executive's activities while working
for the Company and developed by him, alone or with others, within one (1) year
after termination of Executive's employment may have been developed in
significant part while employed by the Company. Accordingly, Executive agrees
that such ideas, improvements, inventions, discoveries and Works, if directly
related to any of the business activities or computer software or software
development of the Company, shall be presumed to have been developed during
Executive's employment with the Company and shall be and hereby are assigned in
accordance with the foregoing provisions, unless Executive receives prior
written consent from the Company otherwise.
12. Severability. In the event that Sections 8, 9 or 11 shall be found
by a court of competent jurisdiction to be invalid or unenforceable as written
as a matter of law, the parties hereto agree that such court(s) may exercise its
discretion in reforming such provision(s) to the end that Executive shall be
subject to noncompetition, nondisclosure, nonsolicitation/ noninterference and
intellectual property ownership covenants that are reasonable under the
circumstances and enforceable by the Company.
13. Acknowledgment. Executive specifically acknowledges that the
covenants set forth herein restricting competition, disclosure and
solicitation/interference are reasonable, appropriate and necessary as to
duration, scope and geographic area in view of the nature of the relationship
between Executive and the Company and the investment by the Company of
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significant time and resources in the training, development and employment of
Executive. Executive warrants and represents that in the event that any of the
restrictions set forth in these covenants become operative, he will be able to
engage in other activities for the purpose of earning a livelihood, and shall
not be impaired by these restrictions.
Executive further acknowledges that the remedy at law for any breach of
these covenants, including monetary damages to which the Company may be
entitled, will be inadequate and that the Company, its successors and assigns,
shall be entitled to injunctive relief against any breach without bond. Such
injunctive relief shall not be exclusive, but shall be in addition to any other
rights or remedies which the Company may have for any such breach.
Notwithstanding any other provision of this Agreement to the contrary,
if Executive breaches any material term of this Agreement, the Company may
immediately cease making severance payments or providing severance benefits.
Executive acknowledges and agrees that the references in the foregoing
Sections 8, 9 and 11 to the "Company" are intended to be applicable to, and for
the benefit of, any affiliated entity controlling, controlled by or under common
control with the Company, and such term for all purposes thereof shall include
any such entities.
14. Limitation of Payment. Notwithstanding anything in this Agreement to
the contrary, if receipt of any of the benefits hereunder would subject the
Executive to tax under Section 4999 of the Code (hereafter "Section 4999"), the
Company shall promptly pay to the Executive a "gross up" amount that would allow
the Executive to receive the net after-tax amount he would have received but for
the application of said Section 4999 to any payments hereunder, including any
payments made pursuant to this Section 14.
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15. Governing Law. This Agreement shall be governed and performed in
accordance with, and only to the extent permitted by, the laws of the
Commonwealth of Massachusetts applicable to contracts made and to be performed
entirely within such Commonwealth of Massachusetts.
16. Assignment. This Agreement shall inure to the benefit of, and shall
be binding upon, the Company, its successors and assigns. Executive shall not
assign this Agreement without the prior written consent of the Company.
17. Entire Agreement; Amendments; Waivers. This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and replaces or supersedes any previous agreements (written or oral),
letters, offers, term sheets or other communication between the Company and
Executive on such subject matter. It may not be changed orally, but only by
agreement, in writing, signed by each of the parties hereto. The terms or
covenants of this Agreement may be waived only be a written instrument
specifically referring to this Agreement, executed by the party waiving
compliance. The failure of the Company at any time, or from time to time, to
require performance of any of Executive's obligations under this Agreement shall
in no manner affect the Company's right to enforce any provisions of this
Agreement at a subsequent time, and the waiver by the Company of any right
arising out of any breach shall not be construed as a waiver of any right
arising out of any subsequent breach.
18. Certain Definitions. The following terms when used in this Agreement
shall have the meanings as set forth below:
A. "Benefits Continuation" shall mean for the referenced period
of time following the date of Executive's termination of employment with the
Company, that the Company shall use its best efforts to provide or otherwise
make available to Executive, his
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spouse and his dependents (as applicable), an election (with respect to health
and dental coverage in lieu of coverage under the group health plan continuation
coverage provisions of ERISA and the Code) to continue coverage under the
Company's health and dental benefit plans and group term life insurance plan
(collectively, the "Continuation Plans") on the same terms and conditions that
such plans are then provided to the Company's employees. The Company shall use
its best efforts to arrange for such coverage with its insurance providers. The
cost to Executive of including Executive, his spouse and his dependents in the
Continuation Plans shall be no more than that paid by the Company's other
employees and may be deducted from any regular payments made to Executive under
this Agreement. If at any time the Company is precluded by the terms of any of
the Continuation Plans from providing such coverage to Executive, his spouse, or
his dependents, for reasons reasonably determined to be beyond the control of
the Company, such coverage shall cease, provided, however, that the Executive,
his spouse and his dependents shall be entitled to continuation of coverage
under the Company's medical and/or dental benefit plans pursuant to any
statutory rights Executive, his spouse or his dependents may then have under the
group health plan continuation coverage provisions of ERISA and the Code, or
otherwise, at Company's expense, so long as Executive timely complies with all
applicable statutory requirements. The prior provisions notwithstanding, the
right of Executive, his spouse or dependents to coverage as provided by the
group health plan continuation coverage provisions of ERISA and the Code or
otherwise shall be deemed to run concurrently with the continuation of health
and/or dental benefits under the first sentence of this paragraph.
B. "Change of Control" shall mean the occurrence of any one of
the following events:
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(i) The consummation of a merger or consolidation of the
Company with any other corporation or entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding and owned by the stockholders of the Company immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than fifty-one (51%) of the combined voting power of the voting
securities of the Company or such surviving entity, as applicable,
outstanding and owned by such holders immediately after such merger or
consolidation; or
(ii) Any "person" (as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities; provided that a
Change of Control shall not be deemed to occur under this clause by
reason of the acquisition of securities by the Company or any of its
subsidiaries or an employee benefit plan (or any trust funding such a
plan) maintained by the Company.
C. "Disability" shall mean Executive's ongoing inability, due to
a mental or physical condition, to continue to provide services to the Company
substantially consistent with past practice, as evidenced by a written
certification as to such condition from a physician (which shall not be
Executive's physician) mutually acceptable to Executive and the Company's Board
of Directors, using reasonable good faith judgment.
D. "For Cause" shall mean any of the following: (i) a conviction
of theft, fraud, embezzlement, or any felony, or the commission of an act or
series of acts which are materially inimical to the best interests of the
Company; (ii) the violation of Sections 8, 9 or 11 or any other provision of
this Agreement or of any other written agreement with the Company which is not
cured in all material respects within thirty (30) days after the Board gives
written notice thereof to the Executive; or (iii) commission by the Executive,
when carrying out the Executive's duties under this Agreement, of acts or the
omission of any act, which both: (A) constitute gross negligence or willful
misconduct and (B) results in material economic harm to the Company, which is
not cured in all material respects within thirty (30) days after the Board gives
written notice thereof to the Executive.
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E. "Resignation for Good Reason" shall mean the resignation by
Executive of his employment with the Company as a result of the occurrence of
any reduction in the aggregate direct remuneration of the Executive or any
reduction in the position, authority or office of the Executive, any reduction
in the Executive's responsibilities or duties for the Company or any reduction
in the Executive's support staff or direct or secondary reports, any pattern of
events or circumstances which impedes the Executive in the exercise of his
authorities, powers, functions or duties hereunder in the manner in which they
would normally be exercised by the Chairman and Chief Executive Officer of a
major corporation, any adverse change or reduction in the aggregate Executive
benefits, perquisites or fringe benefits provided to the Executive as of the
date of this Agreement (provided that any reduction in such aggregate Executive
benefits, perquisites or fringe benefits that is required by law or applies
generally to all employees of the Company shall not constitute "Good Reason" as
defined hereunder), a change in the Executive's reporting relationship, any
relocation of the Executive's principal place of work with the Company to a
place more than twenty-five (25) miles from the Company's current Norwood,
Massachusetts offices or the breach or default by the Company of any of its
agreements or obligations under any provision of this Agreement. The Executive
shall give written notice to the Company on or before the date of termination of
employment for Good Reason specifying the reasons for such termination.
19. Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same document.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ELCOM INTERNATIONAL, INC.
"Company"
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice Chairman, Board of Directors
Chairman Compensation Committee
"Executive"
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Witness:
/s/ Xxxxx X. Xxxxxxx
Chief Financial Officer and Secretary
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EXHIBIT A
RELEASE AGREEMENT
This RELEASE AGREEMENT (the "Agreement") is entered into as of the ___
day of ___________, ______, (the "Effective Date") by and between Elcom
International, Inc. (the "Company"), a Delaware corporation, and Xxxxxx X.
Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, Executive and the Company have entered into a certain
Employment Agreement dated as of ___________, 2002 (the "Employment Agreement");
and
WHEREAS, Executive is entitled to certain severance payments and other
benefits under the Employment Agreement, pursuant to which payment of the
severance payments and other benefits is made conditional upon and in
consideration for Executive's valid execution of a Release Agreement, all as
more completely described in the Employment Agreement (Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the
Employment Agreement.).
NOW THEREFORE, to induce the Company to make the severance payments and
provide the other benefits pursuant to the Employment Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
1. Release. Executive does hereby, for Executive and for Executive's
heirs, executors, successors and assigns, release and forever discharge the
Company, and the subsidiaries, divisions and affiliated businesses of the
Company, together with all of their officers, directors, management,
representatives, employees, shareholders, agents, successors, assigns, attorneys
and other affiliated persons, both known and unknown, in both their personal and
agency capacities (collectively, the "Releasees"), of and from any and all
claims, demands, actions or causes of action, damages, or suits at law or
equity, of whatsoever kind or nature, including, but not limited to, all claims
and/or demands for back pay, reinstatement, hire or rehire, front pay, group
insurance or employee benefits of whatsoever kind (except as to rights expressly
provided for herein and in the Employment Agreement), claims for monies and/or
expenses, any claims arising out of or relating to the cessation of Executive's
employment with the Company, the sale of the stock or assets of the Company
and/or any of its subsidiaries, any claims for failing to obtain employment at
any other company or with any other person or employer, and/or demands for
attorneys' fees and legal expenses that Executive has or may have by reason of
any matter or thing arising out of, or in any way connected with, directly or
indirectly, any act and/or omission that has occurred prior to the date of this
Agreement. Executive further agrees not to directly or indirectly pursue or
initiate any action or legal proceeding of any kind against the Releasees
arising out of or related to the claims released in the preceding sentence of
this Section 1, including but not limited to the sale of the stock or assets of
the Company and/or any of its subsidiaries and also waives any right to recover
as a result of any such proceedings initiated on Executive's behalf.
Notwithstanding the foregoing, Executive and the Company agree and acknowledge
that this Release shall not apply to the
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obligations of the Company arising solely under this Agreement or under the
Employment Agreement.
2. ADEA. Executive recognizes and understands that, by executing this
Agreement, Executive shall be releasing the Releasees from any and all claims
that Executive now has, or subsequently may have, under the Age Discrimination
in Employment Act of 1967, 29 U.S.C. ss.ss.621 et seq., as amended (the "ADEA"),
by reason of any matter or thing arising out of, or in any way connected with,
directly or indirectly, any acts or omissions which have occurred prior to and
including the Effective Date of this Agreement. In other words, Executive will
have none of the legal rights against the aforementioned Releasees that
Executive would have had otherwise under federal age discrimination law by
signing this Agreement.
3. Consideration Period. The Company hereby notifies Executive of his
right to consult with Executive's chosen legal counsel before executing this
Agreement. The Company shall afford, and Executive acknowledges receiving, not
less than twenty-one (21) calendar days in which to consider this Agreement to
insure that Executive's execution of this Agreement is knowing and voluntary. In
signing below, Executive expressly acknowledges that Executive has had at least
twenty-one (21) days to consider this Agreement and that Executive's execution
of same is with full knowledge of the consequences thereof and is of Executive's
own free will. If Executive signs this Agreement before the twenty-one (21) day
period has expired, then he understands that he has waived the twenty-one (21)
day period for consideration.
4. Revocation Period. Executive and the Company agree and recognize
that, for a period of seven (7) calendar days following Executive's execution of
this Agreement (the "Revocation Period"), Executive may revoke this Agreement by
providing written notice revoking the same, within the Revocation Period, to the
Company, 00 Xxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, Attn: Chief Financial
Officer. Such revocation of this Agreement by Executive will automatically
revoke the severance payments provided for in the Employment Agreement and
Executive will not be entitled to any of the severance payments described
therein.
[Signature Page Follows]
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IN WITNESS WHEREOF, Executive and the Company have executed this
Agreement effective and binding as of the Effective Date.
AGREED TO AND ACCEPTED BY
EXECUTIVE
Date of Execution by Executive Xxxxxx X. Xxxxxxx
Execution witnessed by:
AGREED TO AND ACCEPTED BY
THE COMPANY
ELCOM INTERNATIONAL, INC.
Date of Execution by the Company
By:
Name:
Title:
Execution witnessed by:
================================================================================
RECEIPT ACKNOWLEDGED BY
EXECUTIVE
Date of Receipt by Executive Xxxxxx X. Xxxxxxx
Receipt witnessed by:
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