AGREEMENT
---------
THIS AGREEMENT dated as of this 1st day of September, 2009, between IEH
Corporation, a New York corporation maintaining its principal place of business
at 000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx, 00000 (the "Company"), and XXXXXX XXXXX,
residing at _________________________________________________ ("Executive").
WHEREAS, the Company desires to continue Executive in its employ and in
order to make it attractive for Executive to remain in its employment, desires
to provide him with certain family and retirement benefits, and desires to
assure that, if and when Executive retires from fulltime employment, the
services of Executive will continue to be made available to the Company for
advice and consultation on management matters.
NOW, THEREFORE, the parties hereto, each in consideration of the
promises of the other, agree as follows:
1. Employment Periods. The employment of the Executive by the Company
------------------
shall be divided into (a) the "Active Period", and (b) the "Retirement Period"
(each as defined below):
(a) The Active Period is defined as such period of time until
the Executive attains the age of 70 years, or further period of
employment beyond such date if extended by mutual agreement of
Executive and the Company; and
(b) The "Retirement Period" is defined as the period beginning
with the Executive attaining the age of 70 years and continuing until
ten (10) years thereafter, unless his employment has been previously
terminated or extended by mutual agreement of Executive and the
Company. The Retirement Period shall take effect only on termination of
the Active Period pursuant to the provisions of Section 2 below.
2. Termination of Employment Periods.
---------------------------------
(a) The Active Period shall terminate with the first to occur
of any of the following events:
(i) Expiration of the later of either the original
time limit for such Active Period, or the renewal or extension
thereof by the Company.
(ii) Executive attaining the age of 70 years, unless
his Active Period of employment has been extended by mutual
agreement of Executive and the Company.
(iii) Death of Executive before attaining an age of
70 years.
(iv) Disability of Executive before attaining an age
of 70 years. For purposes of this subsection (a)(4),
"Disability" shall mean (i) Executive's incapacity due to
physical or mental illness that results in his being
substantially unable to perform his duties to the Company for
six (6) consecutive months (or for six (6) months out of any
nine (9) month period) or (ii) a qualified independent
physician mutually acceptable to the Company and Executive
determines that Executive is mentally or physically disabled
so as to be unable to regularly perform the duties of his
position and such condition is expected to be of a permanent
duration.
(v) Termination of Executive by mutual consent of
Executive and the Company before attaining age 70 years.
(vi) The passage of sixty (60) days following receipt
by Executive of notice in writing from Company's intention to
terminate the employment relationship for cause. "Cause" means
(i) willful malfeasance or willful misconduct by Executive in
connection with his employment; (ii) Executive's gross
negligence in performing any of his duties under this
Agreement; (iii) Executive's conviction of, or entry of a plea
of guilty to, or entry of a plea of nolo contendre with
respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Executive's material
breach of any written policy applicable to all Executives
adopted by the Company which is not cured to the reasonable
satisfaction of the Company within thirty (30) business days
after notice thereof; or (v) material breach by Executive of
any of his obligations in this Agreement which is not cured to
the reasonable satisfaction of the Company within thirty (30)
business days after notice thereof.
2
(b) The Retirement Period shall terminate with the first to
occur of either of the following events:
(i) Expiration of the time limit for such Retirement
Period.
(ii) The death of Executive, subject to the
provisions of Section 6(a).
(iii) Violation by Executive of Sections 3 and 4 of
this Agreement, such termination being a termination for
Cause. The Company shall give sixty (60) days notice, in
writing, to Executive of its intention to terminate for Cause.
(iv) Termination by mutual consent of the Company and
Executive.
3. Employment Duties.
-----------------
(a) Active Period: During the Active Period, Executive shall
faithfully, to the best of his ability, perform all duties incident to
his position as Chief Financial Officer of the Company, or any other
position obtained by change of office, and all other duties incident to
his employment as may be required of, or assigned, to him by the Board
of Directors of the Company, and shall devote his full time, energy,
skill and attention to the affairs of the Company.
(b) Retirement Period: During the Retirement Period, it shall
be the duty of Executive (as his health may permit) to be available for
such advice and counsel as the officers and directors of the Company
may reasonably request. However, Executive shall not be required to be
in daily or other regular attendance at the offices or other business
locations of the Company.
4. Competitive Activities.
----------------------
(a) Executive shall not at any time during the Active Period
or Retirement Period enter into competition with the Company.
(b) For the purposes of this Section, Executive shall be
considered to have entered into competition with the Company if he
finances or engages, directly or indirectly, in any productive effort,
on his own behalf or on behalf of others, directly or indirectly, in
3
competition with the Company's business. However, Executive may own
publicly traded securities in any entity which is in competition with
the Company, provided that Executive is not an officer or director or
an Executive of such entity.
5. Employment Compensation.
-----------------------
(a) Compensation of the Executive:
(i) During the Active Period, the compensation shall
be the amount fixed by the Board of Directors of the Company
from time to time.
(ii) During the Retirement Period, the amount payable
shall be at the rate of $12,000 per year annum for a period of
ten (10) years, payable in equal monthly installments of
$1,000, with the first payment to be made on the 1st day of
the next month following the month in which the last to occur
of the following events: (a) Executive has attained the age of
70 years; or (b) if Executive's employment and active service
has been extended by the Company beyond Executive attaining
the age of 70 years, from the date of termination of such
active service.
(b) All reasonable expenses incurred by Executive in
connection with his employment duties as specified in Section 3 hereof,
shall be paid by the Company to the extent approved by the Board of
Directors.
6. Termination Payments. The Company shall pay the following
--------------------
termination amounts:
(a) On termination of his Active Period, except by reason of
termination by the Company for Cause or by mutual consent of Executive
and the Company, Executive shall be paid at the rate of $12,000 per
annum for a period often (10) years, payable in equal monthly
installments of $1,000 as above provided in Section 5(a)(ii). If
Executive, however, dies after commencement of the Retirement Period
and before the expiration of said ten (10) year Retirement Period, the
monthly payments shall be made to Executive's estate, or to the
4
beneficiary or beneficiaries designated by Executive in writing, on an
appropriate form as may be submitted to the Company by Executive, for
the balance of the Retirement Period in accordance with the terms and
conditions of this Agreement.
However, the aggregate of such termination payments under this Section
6(a) shall not in any event exceed the sum of $120,000.
(b) On termination of the Active Period, by reason of death of
Executive, Executive's estate or beneficiary(ies) designated by him in
writing shall be paid at the rate of $12,000 per annum for a period not
exceeding ten (10) years, payable in equal monthly installments with
the first payment to be made on the 1st day of the next month following
the month in which the death of Executive occurs. The aggregate of such
payments to Executive's estate or beneficiary(ies) shall not exceed the
sum of $120,000.
(c) Any beneficiary so designated by Executive may be changed
by Executive at any time on written notice to the Company on an
appropriate form as may be submitted to the Company by Executive.
(d) Notwithstanding anything to the contrary, it is expressly
understood and agreed that if Executive continues to be actively
employed by the Company after he attains the age of 70 years, he shall
not be entitled to commence receiving payment of the retirement
benefits provided for in Section 5(a)(ii) until the next calendar month
following the month in which the termination of his Active Period
occurs.
7. Miscellaneous.
-------------
(a) This Agreement shall be binding on Executive and the
Company, and each of their respective heirs, successors and assigns.
The obligations of the Company under this Agreement may not be assigned
except to a successor to all or substantially all of the business or
assets of the Company or by operation by law. Executive's obligations
may not be assigned. In the event of Executive's death, pursuant to
this Agreement, all future payments hereunder will be made to
Executive's estate or designated beneficiary(ies).
5
(b) Taxes. Any payments made or benefits provided to Executive
under this Agreement will be reduced by any applicable federal and
state withholding and employment taxes.
(c) Enforceability/Severability. The parties hereto
affirmatively acknowledge that this Agreement, and each of its
provisions, is enforceable, and expressly agree not to challenge nor
raise any defense against the enforceability of this Agreement or any
of its provisions in the future. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement. In the event
that any provision or portion of this Agreement shall be determined to
be invalid or unenforceable for any reason, the remaining provisions or
portions of this Agreement shall be unaffected thereby and shall remain
in full force and effect to fullest extent the permitted by law.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
the day and year first above written.
IEH CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
/s/ Xxxxxx Xxxxx
----------------------------
Xxxxxx Xxxxx - Executive
6
