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Exhibit 10(b)(2)
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 1st day of May, 1997 by and between TII
INDUSTRIES, INC., a Delaware corporation, having a place of business at 0000
Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter designated and referred to
as "Company"), and Xxxx X. Xxxxxxx residing at 00 Xxxxxxxx Xxxxxx, Xxx Xxxxx, XX
00000 (hereinafter designated and referred to as "Employee" or ["him"] ["her"]).
WHEREAS, Company desires to continue to employ the Employee as Vice
President, Finance of the Company; and
WHEREAS, the Employee is willing to continue such employment by the
Company, all in accordance with provisions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three (3)
years commencing May 1, 1997 and automatically terminating on April 30,
2000, subject to earlier termination as provided herein or unless
extended by mutual consent of both parties in writing sixty (60) days
prior to the end of the term of this Agreement or any extension
thereof, but nothing herein shall require the Company or Employee to
agree to any specific term or condition or to any continuation of
Employee's employment beyond the end of the term of this Agreement.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee
for and during the term of this Agreement.
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Employee is hereby employed by the Company as Vice President, Finance.
The Employee does hereby accept such employment and agrees to use [his]
[her] best efforts and to devote all normal business time, during the
term of this Agreement, to the performance of [his] [her] duties
faithfully, diligently and to the best of [his] [her] abilities upon
the conditions hereinafter set forth. Employee shall report to the
President or his designee. Employee's primary place of work shall be on
Long Island, New York and Employee agrees to spend such time, from time
to time, at the Company's other facilities and to visit customers, and
vendors, and various industry associations as required to fulfill [his]
[her] duties and responsibilities as contemplated herein.
3. Compensation: During the term of this Agreement, the Company agrees to
pay Employee, and Employee agrees to accept, annual salary of One
Hundred, Ten Thousand dollars ($110,000.00) payable every two weeks,
less all applicable taxes, for all services rendered by Employee
hereunder. Employee's annual salary shall be reviewed at the end of
each year of employment hereunder and shall receive an increase of up
to 10% per year but not less than the percentage of increase of the
Local Component of the National Consumer Index issued by the United
States Department of Labor unless financial factors of the Company deem
otherwise as determined by the President. In addition, Employee shall
be eligible to participate in the Company's Executive Bonus Plan should
the Company adopt one.
4. Expenses:
a. The Company shall reimburse Employee, not less often than
monthly, for all reasonable and actual business expenses
incurred by [him] [her] in connection with [his] [her] service
to the Company, upon submission of appropriate vouchers and
expense account reports.
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b. The Company shall provide the Employee with an allowance to
reimburse him for the cost of maintaining a place of abode in
the Commonwealth of Puerto Rico, in the amount of Six Thousand
Dollars ($6,000.00) per year. Company acknowledges that
Employee is a resident of the State of New York and that
Employee shall not be required to change his residence.
Company and Employee both acknowledge that the discharge of
the Employee's duties will require his presence in the
Commonwealth of Puerto Rico from time to time.
5. Company Car: The Company shall provide Employee with a Company car for
Employee's use for business purposes in accordance with standard
Company guidelines. This car shall be insured and registered with the
Motor Vehicle Department by the Company. Employee is responsible for
proper maintenance, gasoline, traffic violation fines, etc. Repairs for
other than routine maintenance shall be the responsibility of the
Company.
6. Benefits: The Company shall provide medical and dental insurance and
such other benefits, in accordance with the applicable Company benefit
plans, as such plans may exist from time to time. The Employee shall be
entitled to annual vacation in accordance with the Company's policy.
7. Extent of Service: The Employee during the term of this Agreement shall
devote [his] [her] full normal business time, attention and energy and
render [his] [her] best efforts and skill to the business of the
Company.
8. Restrictive Covenant:
a. Employee acknowledges that: (I) the business in which the
Company is engaged is intensely competitive and that [his]
[her] employment by the Company will require that [she] [he]
have access to and knowledge of confidential information of
the
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Company, including , but not limited to, certain of the
Company's confidential plans for the creation, acquisition or
disposition of products, expansion plans, product development
plans, methods of pricing, special customer requirements for
service, information on methods of servicing the customer,
operational information such as formulas, financial status,
and plans and personnel information, which are of vital
importance to the success of the Company's business, and are
"trade secrets" of the Company; (ii) the direct or indirect
disclosure of any such confidential information to existing or
potential competitors of the Company would place the Company
at a competitive disadvantage and would cause damage,
financial and otherwise, to the Company's business; and (iii)
by [his] [her] training, experience and expertise, some of
[his] [her] services to the Company will be special and
unique.
Employee understands and agrees that such trade secrets give
or may give the Company a significant competitive advantage. Employee further
recognizes that the success of the Company depends on keeping confidential both
the trade secrets already developed or to be acquired and any future
developments of trade secrets. Employee understands that in [his] [her] capacity
with the Company [he] [she] will be entrusted with knowledge of such trade
secrets and, in recognition of the importance thereof and in consideration of
[his] [her] employment by the Company hereunder, agrees that [he] [she] will
not, without the consent of the President in writing, make any disclosure of
trade secrets now or hereafter possessed by the Company to any person,
partnership, corporation or entity either during or after the term hereunder,
except to such employees of the Company or its subsidiaries or affiliates, if
any, as may be necessary in the regular course of business and except as may be
required pursuant to any court order, judgment or decision form any court of
competent
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jurisdiction. The provisions of this Section 8[A] shall continue in full force
and effect notwithstanding any termination of this Agreement.
b. Employee agrees that during the term of [his] [her] employment
with the Company and for a period of two years thereafter [he]
[she] will not directly or indirectly become affiliated as an
officer, director, employee or consultant or as a substantial
security holder with any other company or entity whose
business is directly or indirectly competitive with any
business then being planned or conducted by the Company or its
divisions and subsidiaries. For the purpose hereof,
"substantial security holder" shall mean ownership, directly
or indirectly, of more than 3% of any class of securities of a
company or partnership interest in any partnership or
indebtedness of any such entity in excess of $25,000. The
provisions of this Section 8[B] shall continue in full force
and effect notwithstanding any termination of this Agreement.
9. Discoveries, etc.:
a. The Company shall be the owner, without further compensation,
of all rights of every kind in and with respect to any
reports, materials, inventions, processes, discoveries,
improvements, modifications, know-how or trade secrets
hereafter made, prepared, invented, discovered, acquired,
suggested or reduced to practice (hereinafter designated and
referred to as "Property Rights") by Employee in connection
with Employee's performance of [his] [her] duties pursuant to
this Agreement, and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.
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b. The Employee agrees to and shall promptly disclose to the
President or his designee all Property Rights (whether or not
patentable) made, discovered or conceived of by [him] [her],
alone or with others, at any time during [his] [her]
employment with the Company, whether on the Company's or [his]
[her] own time and irrespective of whether on or off the
Company's premises, provided only that such Property Rights
(1) relate to or are useful in any phase of the business in
which the Company may be engaged during the period of
employment, or (2) relate to any subject matter or problems
within the scope of Employee's employment, or (3) relate to or
involve the use of any data or information of which the
Employee has been or may become informed by reason of
employment with the Company. The Employee hereby appoints the
Company as Employee's attorney-in-fact to execute in
accordance with the laws of any country patent applications,
assignments or other documents considered necessary or
desirable by the Company. Any such Property Rights will be the
sole and exclusive property of the Company, and Employee will
execute any assignments requested by the Company of [his]
[her] right, title or interest in any such Property Rights
without further demand or consideration, and, in addition, the
Employee will also provide the Company with any other
instruments or documents requested by the Company, at the
Company's expense, as may be necessary or desirable in
applying for and obtaining patents with respect thereto in the
United States and all foreign countries. The Employee also
agrees to cooperate with the Company in the prosecution or
defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, service
marks, secret processes, discoveries or improvements, during
[his] [her] employment by the
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Company. Employee's cooperation after [his] [her] employment
is subject to [his] [her] availability and the Company agrees
to reimburse Employee for loss of income and expenses incurred
in connection therewith. Said cooperation shall not be
withheld by Employee.
10. Confidential Information: Employee recognizes and acknowledges that the
Company, through the expenditure of considerable time and money, will
acquire, has developed and will continue to develop in the future,
information, skills, confidential information, know-how, formulae,
technical expertise and methods relating to or forming part of the
Company's services and products and conduct of its business, and that
the same are confidential and proprietary, and are "trade secrets" of
the Company. Employee understands and agrees that such trade secrets
give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on
keeping confidential both the trade secrets already developed or to be
acquired and any future developments of trade secrets. Employee
understands that in [his] [her] capacity with the Company [he] [she]
will be entrusted with knowledge of such trade secrets and, in
recognition of the importance thereof and in consideration of [his]
[her] employment by the Company hereunder, agrees that [he] [she] will
not, without the consent of the President in writing, make any
disclosure of trade secrets now or hereafter possessed by the Company
to any person, partnership, corporation or entity either during or
after the term hereunder, except to such employees of the Company or
its subsidiaries or affiliates, if any, as may be necessary in the
regular course of business and except as may be required pursuant to
any court order, judgment or decision from any court of competent
jurisdiction. The provisions of this Section shall continue in full
force and effect notwithstanding any termination of the Agreement.
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11. Irreparable Harm: Employee agrees that any breach or threatened breach
by Employee of provisions set forth in Section Eight (8), Nine (9), and
Ten (10) of this Agreement, would cause the Company irreparable harm
and the Company may obtain injunctive relief against such actual or
threatened conduct and without the necessity of a bond.
12. Return of Company Property: Employee agrees that following the
termination of [his] [her] employment for any reason, [he] [she] shall
return all property of the Company which is then in or thereafter comes
into [his] [her] possession, including, but not limited to, documents,
contracts, agreements, plans, photographs, customer lists, books,
notes, electronically stored data and all copies of the foregoing as
well as any other materials or equipment supplied by the Company to the
Employee.
13. Termination:
a. Death: In the event of the Employee's death during the term of
[his] [her] employment, this Agreement shall automatically
terminate on the date of death, and Employee's estate shall be
entitled to payment of Employee's salary until date of death.
All other benefits and compensation described herein shall
terminate on the date of death unless otherwise stipulated in
the applicable Company plan.
b. Disability: In the event the Employee, by reason of physical
or mental incapacity, shall be disabled for a period of at
least two (2) consecutive months or three (3) months in the
aggregate in any twelve (12) month period of this Agreement or
any extension hereof, the Company shall have the option at any
time thereafter to terminate Employee's employment and to
terminate this Agreement. Such termination to be effective ten
(10) days after the Company gives written notice of such
termination to the Employee, and all obligations of the
Company hereunder shall
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cease upon the date of such termination unless otherwise
stipulated in the appropriate Company plan. "Incapacity" as
used herein shall mean the inability of the Employee to
perform [his] [her] normal duties.
c. Company's Rights to Terminate This Agreement:
i. The Company shall have the right, before the
expiration of the term of this Agreement and during
any extension hereof, to terminate this Agreement and
to discharge Employee for cause (hereinafter
"Cause"), and all compensation to Employee shall
cease to accrue upon discharge of the Employee for
Cause. For the purposes of this Agreement, the term
"Cause" shall mean the Employee's (I) violation of
the Company's written policy or specific written
directions of the President or his designee, and/or
Board of Directors, which directions are consistent
with normally acceptable business practices or the
failure to observe, or the failure or refusal to
perform any obligations required to be performed in
accordance with this Agreement, (ii) if the President
determines that Employee has committed a demonstrable
act (or omission) of malfeasance seriously
detrimental to the Company (which shall not include
any exercise of business judgment in good faith).
ii. If the Company elects to terminate Employee's
employment for Cause, the Company shall first give
Employee written notice and a period of ten (10) days
to cure such Cause, and if such Cause is not cured in
said ten (10 ) days, such termination shall be
effective five (5) days after the Company gives
written notice of such failure to cure to the
Employee. In the event of a termination of the
Employee's employment for Cause in accordance with
the
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provisions of Section 11[C][b], the Company shall
have no further obligation to the Employee, except
for the payment of salary through the date of such
termination from employment.
iii. Notwithstanding anything in this Agreement to the
contrary, the Company may terminate the Employee's
employment for reasons other than Cause.
d. Employee's Right to Terminate This Agreement:
i. If the Company elects to reduce in rank or authority
the Employee's duties under this Agreement, without
the mutual agreement of the Employee, the Employee
shall first give Company written notice and a period
of ten (10) days to cure same, and if same is not
cured in said ten (10) days Employee may terminate
this Agreement effective five (5) days after the
Employee gives written notice of such failure to
cure.
x. Xxxxxxxxx: In the event the Employee's employment hereunder
shall be terminated by the Company for other than Cause, death
or disability, or by the Employee pursuant to Section 13 [D]
hereof, (1) the Employee shall thereupon receive as severance
pay in a lump sum the amount of Compensation pursuant to
Section 3 hereof and bonuses which the Employee would have
received for the remaining term of this Agreement (including
any extension of the Agreement mutually agreed upon by the
parties), provided, however, that in no event shall such lump
sum payment be less than six months compensation and bonus;
and (2) the Employee's (and [his] [her]) dependents')
participation in any medical, dental and other insurance plans
shall be continued, or equivalent benefits provided to [him]
[her] or them by the Company, at no cost to [him] [her] or
them, for a period of one year from the termination; and
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(3) any options granted to the Employee which have not, by the
terms of the options, vested, shall be deemed to have vested
at the termination of employment, and shall thereafter be
exercisable for the maximum period of time allowed for
exercise thereof under the terms of the applicable Company
stock option plan(s), provided that such period shall not be
less than 90 days following such termination. An election by
the Employee to terminate [his] [her] employment under the
provisions of Section 13[D] shall not be deemed a voluntary
termination of employment of the Employee for the purpose of
interrupting the provisions of any of the Company's employee
benefits plans, programs or policies.
14. Waiver: Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws
of the State of New York, and this Agreement and its provisions shall
be construed according to the laws of the State of New York, without
reference to its choice of law rules.
16. Notice: Any notice required to be given pursuant to the provisions of
this Agreement shall be in writing and by facsimile or registered or
certified mail or equivalent (i.e., Federal Express) and mailed to the
following addresses:
Company: TII Industries, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
President
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Employee: Xxxx X. Xxxxxxx
00 Xxxxxxxx Xxx.
Xxx Xxxxx, XX 00000
17. Assignment: The Employee's assignment of this Agreement or any interest
herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void.
This Agreement shall be assignable and binding to a corporation or
other business entity that succeeds to all or substantially all of the
business of the Company through merger, consolidation, corporate
reorganization or by acquisition of all or substantially all of the
assets of the Company and which assumes Company's obligations under
this Agreement.
18. Miscellaneous: This Agreement contains the entire understanding between
the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or
waiver or cancellation of any provision shall be valid except by a
writing signed by the party to be charged therewith.
19. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or
imposed on either party hereunder, which are stated to exist or
continue after termination of Employee's employment with the Company,
shall exist and continue on both parties irrespective of the method or
circumstances of such termination from employment or termination of
this Agreement.
20. Severability: Employee agrees that if any of the covenants, agreements
or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any
of the other covenants, agreements and/or restrictions herein contained
and such invalid provisions shall be severable so that the invalidity
of any such provision shall
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not invalidate nay others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively
broad as to duration, activity or subject, such provisions shall be
construed by limiting and reducing them so as to be enforceable to the
maximum extent allowed by applicable law.
21. Representation: Employee represents and warrants that [he] [she] has
the legal right to enter into this Agreement and to perform all of the
duties and obligations on [his] [her] part to be performed hereunder in
accordance with its terms and that [she] [he] is not a party to any
agreement or understanding, written or oral, which prevents Employee
from entering into this Agreement or performing all of [his] [her]
duties and obligations hereunder. In the event of a breach of such
representation or warranty on [his] [her] part or if there is any other
legal impediment which prevents [him] [her] from entering into this
Agreement or performing all of [his] [her] duties and obligations
hereunder, the Company shall have the right to terminate this Agreement
in accordance with Section 13[C] [a]. Without limiting the foregoing,
Employee represents and warrants that [he] [she] is not a party to any
agreement which prohibits or limits [his] [her] ability to fulfill
[his] [her] duties and responsibilities contemplated herein.
22. Descriptive Headings: The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
TII INDUSTRIES, INC.
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By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President, CEO and
Vice Chairman of the Board
Employee:
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
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