EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of January 19, 2006, by and between Xxxxxx X.
Xxxxxxx (“Executive”) and TransTechnology Corporation, a Delaware corporation, and any of
its subsidiaries and affiliates as may employ Executive from time to time (collectively the
“Company”).
WITNESSETH:
WHEREAS, Executive and the Company deem it to be in their respective best interests to enter
into an agreement providing for the Company’s continued employment of Executive pursuant to the
terms herein stated;
NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements
contained herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be effective as of January 19, 2006, which
date shall be referred to herein as the “Effective Date.”
2. Position and Duties.
(a) The Company hereby agrees to continue to employ Executive and Executive hereby agrees to
continue his employment as Chief Financial Officer for the “Term of the Agreement” (as defined in
Section 5). In this capacity, Executive shall devote his best efforts and his full business time
and attention to the performance of the services customarily incident to such office and position
and to such other services of a senior executive nature as may be reasonably requested by the Board
of Directors (the “Board”) of the Company which may include services for one or more
subsidiaries or affiliates of the Company. Executive shall report to the Chief Executive Officer of
the Company.
(b) Executive shall devote his full business time and attention to such duties, except for
sick leave, reasonable vacations and excused leaves of absence. Executive shall use his best
efforts during the Term of the Agreement to protect, encourage, and promote the interests of the
Company.
(c) In carrying out his duties as contemplated in this paragraph 2 after March 31, 2006,
Executive may, in his discretion, elect to work out of his personal residence or elsewhere for up
to two (2) business days each week.
3. Compensation.
(a) Initial Base Salary. [INTENTIONALLY OMITTED]
(b) Adjusted Base Salary. With respect to the period beginning on April 1, 2006 and
ending on the last day of the Term of the Agreement (as defined in Section 5) the Company shall pay
to Executive base salary at a rate of not less than $144,900 per annum. Such base salary shall
be payable in accordance with the Company’s customary payroll
procedures. Executive’s annual base salary described in Section 3(b) shall be referred to
herein as “Base Salary.”
(c) Annual Bonuses. With respect to each fiscal year during which Executive remains
an employee of the Company, Executive shall be eligible to participate in an incentive based bonus
compensation program pursuant to which Executive may be paid an amount determined by the Company in
its discretion, consistent with comparable executives of the Company.
4. Benefits. During the Term of the Agreement:
(a) Executive shall be eligible to participate in any life, health and long-term disability
insurance programs, 401(k) plans, and other fringe benefit programs made available to senior
executive employees of the Company from time to time and Executive shall be entitled to receive
such other fringe benefits as may be granted to him from time to time by the Board.
(b) Executive shall be allowed vacations, sabbaticals and leaves of absence with pay on the
same basis as other senior executive employees of the Company.
(c) The Company shall reimburse Executive for reasonable business expenses incurred in
performing Executive’s duties hereunder. Such reimbursement shall be made in accordance with the
Company’s customary business expense reimbursement policies and procedures and shall be consistent
with the reimbursement policies and procedures applicable to other comparable executives of the
Company and its affiliated companies.
(d) The Company shall bear the reasonable and documented costs of legal counsel and/or other
advisors incurred by the Executive in the review and negotiation of this Agreement.
5. Term; Termination of the Agreement. As used herein, the phrase “Term of the
Agreement” shall mean the period commencing on the Effective Date and, except as otherwise
specifically provided below, ending on March 31, 2009. Notwithstanding the foregoing, the Term of
the Agreement shall expire on the first to occur of the following:
(a) Termination for any reason other than Cause. In the event Executive’s employment
hereunder is terminated for any reason other than for Cause, the Company shall (i) to the extent
not otherwise paid prior to the effective date of termination, pay to Executive a lump sum amount
equal to all amounts not theretofore paid under Section 3(c) of the employment agreement between
the Executive and the Company dated Xxxxx 00, 0000, (xx) pay to Executive all Base Salary that is
accrued but unpaid as of the date of such termination of employment and (iii) pay to Executive a
lump sum amount equal to the amount of Base Salary that, absent such termination of employment,
would have been payable to Executive hereunder during the period beginning on the date of such
termination of employment and ending on March 31, 2009, all such amounts to be paid no later than
the tenth day after the Executive’s last day of employment with the Company.
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(b) Termination for Cause. In the event that the Company terminates Executive’s
employment for Cause, the Company shall pay to Executive all Base Salary that is accrued but unpaid
as of the date of such termination of employment and the Company shall have no further obligation
hereunder from and after the effective date of such termination. For purposes of this Agreement,
“Cause” shall mean Executive’s conviction of, or plea of guilty or nolo contendere to, a
felony or crime of moral turpitude.
6. Non-Solicitation. Subject to the condition that the Company is not in default
under this Agreement, the Executive agrees that during the Term of the Agreement and for two years
thereafter, he will not directly or indirectly:
(a) Solicit, divert or take away any of the customers, business or patronage of the Company or
its subsidiaries or affiliates; or
(b) Induce or attempt to influence any employee of the Company or its subsidiaries or
affiliates to terminate his or her employment therewith.
In the event of a breach or threatened breach by the Executive of the provisions of this Section 6
the Company, or any duly authorized officer thereof, will be entitled to a temporary restraining
order or injunction.
7. Taxes. All payments to be made to Executive under this Agreement will be subject to
any applicable withholding of federal, state and local income and employment taxes.
8. Miscellaneous. This Agreement shall also be subject to the following:
(a) Executive and the Company each represent and warrant to the other that he or it has the
authorization, power and right to deliver, execute, and fully perform his or its obligations under
this Agreement in accordance with its terms.
(b) If any provision of this Agreement or any portion thereof is declared invalid, illegal, or
incapable of being enforced by any court of competent jurisdiction, the remainder of such
provisions and all of the remaining provisions of this Agreement shall continue in full force and
effect.
(c) This Agreement shall be governed by and construed in accordance with the internal laws of
the State of New Jersey, except to the extent governed by federal law.
(d) The Company will require any successor (whether by merger, consolidation, spin-off,
purchase or otherwise) to all or substantially all of the stock, assets or business of the Company
or any subsidiary or parent of the Company to expressly agree to assume this Agreement and to
perform all duties and obligations hereunder in the same manner and to the same extent that the
Company would have been required to perform had no such succession taken place. Failure by the
Company to obtain a successor’s agreement to assume this Agreement shall constitute a breach of
this Agreement and Executive shall be entitled to receive payments and benefits from the Company in
the same amount and on the same terms that he would be entitled to under Section 5(a) if his
employment is terminated other than for Cause;
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provided, that in no event shall the foregoing result in a duplication of any payments or
benefits provided for hereunder.
(e) Subject to the provisions of Section 10, any rights of Executive hereunder shall be in
addition to any rights Executive may otherwise have under benefit plans, agreements, or
arrangements of the Company to which he is a party or in which he is a participant, including, but
not limited to, any stock option grants.
(f) For the purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given when delivered by
Federal Express, or similar overnight express delivery service, or mailed by United States
certified or registered mail, return receipt requested, postage prepaid, addressed to the named
Executive at the address contained in the Company’s records concerning the Executive. All notices
to the Company shall be directed to the attention of the Secretary of the Company.
(g) Section headings in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
(h) Failure to insist upon strict compliance with any of the terms, covenants, or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or power at any other
time or times.
(i) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.
9. Resolution of Disputes. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted in Princeton, New Jersey
in accordance with the rules of the American Arbitration Association governing employment disputes
as then in effect. The Company and Executive hereby agree that the arbitrator will not have the
authority to award punitive damages, damages for emotional distress or any other damages that are
not contractual in nature. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or
injunction in any court of competent jurisdiction to prevent any continuation of any violation of
the provisions of Section 6, and Executive consents that such restraining order or injunction may
be granted without the necessity of the Company’s posting any bond except to the extent otherwise
required by applicable law. The fees and expenses of the American Arbitration Association and the
arbitrator shall be borne by the Company.
10. Entire Agreement. Except as otherwise provided for herein, this Agreement shall
constitute the entire agreement between Executive and the Company with respect to the subject
matter hereof and shall supersede that certain Executive Severance
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Agreement by and between Executive and the Company, as originally dated November 11, 1996, and
as amended on each of October 15, 1998 and January 18, 2001) (the “Severance Agreement”),
and, as of April 1, 2006, that certain Employment Agreement between Executive and the Company dated
March 28, 2003. In exchange for the payments and benefits described in this Agreement, Executive
agrees, on behalf of himself and, to the maximum extent permitted by applicable law, on behalf of
his heirs, agents, representatives and assigns, to irrevocably waive and forever release and
discharge the Company, its parents, subsidiaries, affiliates, officers, directors, employees,
agents, predecessors, successors and assigns from any and all payments and obligations that the
Company now has, has ever had or may hereafter have arising under or in connection with
the Severance Agreement. Nothing herein shall be deemed to modify or supersede any stock option
grant or restricted stock award outstanding on the Effective Date or any of Executive’s rights or
benefits thereunder.
11. Indemnification Letter. That certain Indemnification Letter dated January 13, 2000
by and between Executive and the Company shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| XXXXXX X. XXXXXXX | ||||
| TRANSTECHNOLOGY CORPORATION | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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