EXHIBIT 10.1
AMENDED AND RESTATED
EMPLOYMENT AND RELEASE AGREEMENT
1. Parties. The parties to this Amended and Restated Employment and
Release Agreement ("Agreement") are as follows:
1.1 Xxxx Xxxxx, an individual, and his heirs, successors and
assigns, and any other related or affiliated individual or entity, if any
(collectively referred to throughout this Agreement as "Employee"); and
1.2 Communications & Power Industries, Inc., and its related or
affiliated individuals and entities (all collectively referred to throughout
this Agreement as "CPI").
2. Recitals. This Agreement is entered into with reference to the
following facts:
2.1 Employee and CPI are parties to an employment letter
agreement dated as of November 2, 2002 (such agreement, together with all prior
employment agreements between Employee and CPI shall be referred to as the
"Prior Agreement.")
2.2 This Agreement is intended to supersede and replace the
Prior Agreement.
3. Terms of Employment.
3.1 Term; Duties. Employee agrees that his employment with CPI
will continue until March 30, 2007 (the "Resignation Date"), on which date he
will resign from his employment at the Company and all positions he holds as an
officer of the Company and his employment shall terminate. During the period
between the Effective Date (as defined in Section 4.2.6 below) and the date of
termination of Employee's employment ("Remaining Employment Period"), Employee
shall report to, and accept assignments from, CPI's President (or any other
individual designated by CPI's President) and shall perform projects and
services as are mutually agreed to by CPI and Employee, provided that in no
event shall Employee provide, during the Remaining Employment Period, on
average, less than one day of full-time service per week (i.e., 20% of current
levels of service). CPI acknowledges that Employee may seek to obtain an
employment position or consulting assignment with another entity during the
Remaining Employment Period; provided, no such assignment may interfere with
Employee's performance of services pursuant to the preceding sentence; provided,
further, that prior to accepting any paid employment or consulting work,
Employee must seek the consent of CPI (which may be withheld by CPI in its sole
and absolute discretion).
3.2 Termination for Cause. Notwithstanding Section 3.1, CPI may
terminate Employee's employment prior to the Resignation Date for Cause. For
these purposes, "Cause" shall mean (i) a material breach of this Agreement which
is not cured within five days after written notice thereof from CPI, (ii) a
material violation of any applicable CPI policies, including, without
limitation, those in CPI's Employee Handbook, CPI's Ethical and Legal Conduct
policy and Conflict of Interest policy, which is not cured within five days
after written notice thereof from CPI, and (iii) the commission by Employee of
an act of dishonesty or fraud relating to CPI or its business.
3.3 Base Salary. Employee's base salary will continue at his
current rate of $171,000 per annum until his employment is terminated.
3.4 Management Incentive Plan. Subject to Employee's remaining
an employee on the applicable date of payment, Employee will be eligible to
receive a bonus in accordance with CPI's existing Management Incentive Plan for
fiscal year 2006.
3.5 Certain Benefits
3.5.1 Auto. Until the termination of Employee's
employment, Employee shall continue to be eligible to participate in CPI's
executive car program.
3.5.2 Health Benefits. Employee's participation in CPI's
health plan shall cease at the end of the last day of the month during which the
Effective Date occurs. At that time, Employee may elect to participate in CPI's
retiree medical program (subject to the terms and conditions thereof) and CPI
shall pay the employer portion of health insurance premiums through the
Remaining Employment Period (Employee shall be responsible for any remaining
portion of premiums). After termination of Employee's employment, CPI shall not
be required to make any payments to or on behalf of Employee in respect of
health benefits.
3.5.3 Dental Plan. Employee's participation in CPI's
dental plan shall cease at the end of the last day of the month during which the
Effective Date occurs. At that time, Employee may elect to participate in CPI's
dental program (subject to the terms and conditions thereof) through COBRA, and
CPI shall pay the employer portion of dental insurance premiums through the
Remaining Employment Period (Employee shall be responsible for any remaining
portion of premiums). After termination of Employee's employment, CPI shall not
be required to make any payments to or on behalf of Employee in respect of
dental benefits.
3.5.4 Insurance. Employee's participation in CPI's
voluntary life insurance, disability insurance and business travel and death
benefit insurance plans will terminate immediately upon the Effective Date.
3.5.5 401(k). CPI shall cease making contributions to
CPI's 401(k) plan on behalf of Employee as of the Effective Date and shall
instead make a lump sum cash payment to Employee upon termination of employment
equal to the dollar amount that otherwise would have been contributed to the
401(k) plan by CPI on behalf of Employee during the Remaining Employment Period.
3.6 Personal Paid Leave. Employee will not accrue personal paid
leave after the Effective Date. The Employee's current balance of personal paid
leave will be frozen at the level as of May 26, 2006, and shall be paid upon
termination.
3.7 Nonqualified Deferred Compensation Plan. CPI will cease
making contributions to CPI's Nonqualified Deferred Compensation Plan with
respect to Employee as of the Effective Date. Instead, CPI will pay directly to
Employee, upon termination of employment, a lump sum equal to the dollar amount
that CPI would have otherwise contributed to such plan during the Remaining
Employment Period with respect to fiscal year 2006. Following Employee's
termination of employment, Employee shall be entitled to receive any payouts to
which he is entitled under CPI's Nonqualified Deferred Compensation Plan;
provided, no such payments shall be made less than six months after termination
of his employment by CPI.
3.8 CPI Policies. Employee is aware of, and agrees to comply
with, all applicable CPI policies, including, without limitation, those in CPI's
Employee Handbook, CPI's Ethical and Legal Conduct policy and Conflict of
Interest policy.
3.9 No termination benefits, severance, separation pay or
salary continuation. Employee agrees that from and after the termination of his
employment, he shall not be entitled to any payments or benefits other than the
post-termination benefits in the Nonqualified Deferred Compensation Plan, his
benefits under the 401(k) plan, the opportunity to enroll in CPI's retiree
medical plan, at employee's expense, within 30 days of Employee's termination
date, the opportunity to participate in COBRA plans, at employee's expense,
payment of his accrued and unpaid personal paid leave and his benefits under his
stock option agreements to the extent vested as of the date of termination.
Employee acknowledges that he will not be entitled to receive from CPI, and
hereby irrevocably waives, any right or claim to any other payment or benefit of
any nature following or in connection with his termination of employment,
including without limitation, any payments or benefits in the nature of
severance, salary continuation, termination payments or continuation of benefits
or any claim pursuant to any Prior Agreement.
4. Release and Waiver.
4.1 In consideration of the terms and provisions of this
Agreement, Employee, on behalf of himself and his current related or affiliated
individuals and entities, if any, including, but not limited to any
predecessors, successors, heirs, assigns, attorneys, representatives, agents,
accountants, and any and all other related or affiliated individuals and
entities, if any, and each of them, shall and does hereby forever relieve,
release and discharge CPI and its respective predecessors, successors, heirs,
assignees, owners, attorneys, representatives, affiliates, parent corporations,
subsidiaries (whether or not wholly owned), divisions, parts, and their
officers, directors, agents, employees, servants, executors, administrators,
accountants, shareholders, investigators, insurers, and any and all other
related individuals and entities, if any, from any and all claims, debts,
liabilities, demands, obligations, liens, promises, acts, agreements, costs and
expenses (including, but not limited to, attorneys' fees), damages, actions and
causes of action, of whatever kind or nature, including, without limitation, any
statutory, civil or administrative claim, or any claim, arising out of acts,
whether known or unknown, suspected or unsuspected, fixed or contingent,
apparent or concealed (collectively referred to as "claims"), including, but not
limited to, any claims based on, arising out of, related to or connected with
Employee's employment or termination of employment, any claims pursuant to any
Prior Agreement, any claims arising from rights under federal, state, and local
laws relating to the regulation of federal or state tax payments, banking or
accounting, to federal or state laws which prohibit discrimination on the basis
of race, national origin, religion, sex, age, marital status, veteran status,
disability, perceived disability, medical condition, ancestry, sexual
orientation, or any other form of discrimination, or to laws such as workers'
compensation laws, which provide rights and remedies for injuries sustained in
the workplace or any common law claims of any kind, including, but not limited
to, contract, tort, and property rights including, but not limited to, breach of
contract, breach of the implied covenant of good faith and fair dealing,
tortious interference with contract or current or prospective economic
advantage, fraud, deceit, breach of privacy, unfair competition,
misrepresentation, defamation, wrongful termination, tortious infliction of
emotional distress, loss of consortium, breach of fiduciary duty, violation of
public policy and any other common law claim of any kind whatever, any claims
for severance pay, paid time off, life insurance, health insurance, continuation
of health benefits, disability or medical insurance or any other fringe benefit
or compensation, including stock options, and any and all rights or claims
arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), or
pertaining to ERISA regulated benefits, or any claim for damages or declaratory
or injunctive relief of any kind.
4.2 Waiver of rights or claims arising under the Age
Discrimination in Employment Act of 1967.
4.2.1 Employee represents that he was afforded a period of
at least twenty-one (21) days to consider an unexecuted copy of this Agreement;
4.2.2 Employee acknowledges that he understands all of the
terms and conditions of this Agreement;
4.2.3 CPI advises Employee to consult with an attorney
prior to executing this Agreement;
4.2.4 Employee warrants and represents that he has
consulted with an attorney regarding all of the terms and conditions of this
Agreement before executing this Agreement, to the extent he so desires.
4.2.5 Employee specifically waives any rights or claims he
may have against CPI, as set forth in Section 4.1, including, but not limited
to, rights or claims which may have arisen prior to the date hereof under the
Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. ss. 621 et.
seq., as a result of Employee's employment or termination of employment with
CPI. This waiver is in exchange for the consideration and covenants set forth in
Section 3.
4.2.6 This Agreement shall become effective and
enforceable on the seventh (7) day following its execution by Employee
("Effective Date"); provided, the Agreement shall be null and void if Employee
shall revoke this Agreement in writing during such seven (7) day period.
5. Confidentiality; Trade Secrets and Noncompetition.
5.1 Confidential Information. Employee further agrees that he
will not in any fashion, form or manner, either directly or indirectly, solicit
or use for his own purposes or for the purposes of any third party, whether
person, firm entity or corporation, or divulge, disclose, or communicate to any
person, firm, corporation or entity of any kind material "confidential
information" in any form concerning CPI. As used herein "confidential
information" means (i) descriptions of or information concerning the projects
agreed to and undertaken by CPI; (ii) technical data, know-how and manufacturing
techniques, (iii) the status of work in progress or future development plans,
including, but not limited to, work or plans relating to projects of CPI; (iv)
any list, compilation, report or other description or information relating to
pricing information, projects, contacts, customers, contract terms, services
performed, employees, employee histories or relations, client or customer
information or relations with dealers, shareholders, contractors or other
business-related contacts of any kind; (v) any list, compilation, report or
other description of or information concerning business or product or process
development, projections, data, figures, estimates, accounting procedures or tax
records; or (vi) any other legally-protected confidential information concerning
the business of CPI, its manner of operation, its plans, including without
limitation for product or process development, processes, trade secrets,
commercial intentions, business practices or financial condition.
5.2 Company Information. Employee also warrants and represents
that within seven (7) days following the termination of Employee's employment,
he will return to CPI in its entirety and all information and related reports,
files, memoranda, records, financial records or statements or technical or
business information, credit cards, cardkey passes, door and file keys, computer
access codes, software, electronic equipment and other physical or personal
property pertaining to or owned by CPI which he received or prepared or helped
prepare during his employment, or in any other capacity or pertaining in any
respect to CPI ("Company Information and Assets"). Employee further warrants and
represents that after such date, he will not retain any copies, duplicates,
reproductions or excerpts in any form of Company Information and Assets, or
provide such Company Information and Assets to any third party, including any
person, firm, corporation or entity of any kind.
5.3 Trade Secrets and Noncompetition. Employee acknowledges
that due to his lengthy service for CPI and his access to CPI Confidential
Information and Assets, Employee possesses knowledge of CPI Information and
Assets, including trade secrets which are material to CPI. Employee acknowledges
that if he were to become employed by, or otherwise perform services for or on
behalf of, L-3, Thales, Teledyne, Radyne/Xicom, Xxxxxxxxxx Electronics, e2v or
any affiliate of any of the foregoing, or any other direct competitor of CPI,
such service would involve the inevitable disclosure of CPI Information and
Assets, and would cause material damage to CPI and its business. Accordingly,
Employee agrees, during the one-year period beginning at the end of the
Remaining Employment Period, that he shall not, directly or indirectly, become
an employee of, consultant to, advisor to, owner of, or investor in any person
or entity of any of the aforementioned companies or any other entity or person
which directly competes with CPI. Employee acknowledges that the foregoing
restriction is reasonably required to protect the trade secrets and proprietary
information of CPI; provided, however, notwithstanding the foregoing, Employee
shall not be prohibited from owning securities representing less than 1% of the
ownership of any publicly-traded company.
5.4 The parties acknowledge and agree that it would be
impossible to determine definitely the damages that would be caused as a result
of a breach of this Section 5, or any of its subparts, would be substantial and
irreparable, and, for this reason, in addition to any monetary damages that
could be awarded for a breach of any provision of Section 5, or its subparts,
injunctive relief shall be appropriate.
5.5 Employee agrees that upon the termination of his employment
with CPI, he will not in any manner imply or represent, directly or indirectly,
to any person or entity that he is an agent of CPI with any authority to bind or
represent CPI.
5.6 Fees. Each party is to bear its own attorneys' fees, if
any, costs, and any other expenses to date incurred in connection with the
subject matter of this Agreement.
6. Non-Assignment of Claims. Employee represents and warrants that he
has not assigned or transferred any portion of the claims released under this
Agreement to any other individual, firm, corporation or other entity, and that
no other individual, firm, corporation or other entity has any lien, claim or
interest in any such claims, including but not limited to, any claim or interest
arising out of, related to or connected with the matters referenced in Section
4, above. Employee agrees to indemnify CPI, defend and hold it harmless from and
against any claims arising out of, related to, or in connection with any such
prior assignment or transfer, or any such purported assignment or transfer, or
any claims or other matters released or assigned in this Agreement. Employees
covenants and agrees not to bring, induce, or assist, except to the extent
required by law or process, any claim, action or proceeding of any kind or
nature brought by any person against any party to this Agreement, directly or
indirectly, regarding, connected with, arising out of, or relating or pertaining
to in any manner the matters released by this Agreement or any matter in any way
connected with, regarding, pertaining or relating to or arising out of
Employee's employment with CPI or the termination of that employment. Employee
further covenants and agrees that this Agreement is a bar to any such claim,
action, suit, or proceeding and, if a breach of the provisions of this paragraph
is proved, Employee agrees to indemnify CPI for any liability and any costs and
expenses of any claims, suit, action or proceeding (including, without
limitation, the costs of expert consultants and expert witnesses) and attorneys'
fees incurred as a direct or indirect result of any claims released in this
Agreement being asserted in a lawsuit or other action, suit, claim, or
proceeding by any individual, firm, corporation, or other entity as a direct or
indirect result of any act or omission by Employee.
7. Indemnification and Attorneys' Fees. In the event that any action,
suit, or other proceeding is instituted to remedy, prevent, or obtain relief
from a breach of this Agreement, or arising out of a breach of this Agreement,
the prevailing party shall recover all of such party's reasonable attorneys'
fees incurred in each and every such action, suit, or other proceeding,
including any and all appeals or petitions.
8. Section 1542 of the Civil Code. Employee expressly waives any and
all rights under Section 1542 of the Civil Code of the State of California, or
any other federal or state statutory rights or rules, or principles of common
law or equity, or those of any jurisdiction, government, or political
subdivision, similar to Section 1542 ("similar provision"). Thus, he may not
invoke the benefits of Section 1542 or any similar provision in order to
prosecute or assert in any manner any claims that are released under this
Agreement. Section 1542 provides as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
9. Successors and Assigns. This Agreement shall inure to the benefit
of and shall be binding upon the successors and assigns of the parties to this
Agreement, and each of them. In the case of CPI, this Agreement is intended to
release and inure to the benefit of CPI's affiliated corporations, parent
corporations, brother-sister corporations, subsidiaries (whether or not wholly
owned), divisions and their shareholders, officers, directors, agents,
representatives, employees, and subsidiaries and any and all other related
individuals and entities, if any, individually as well as in the capacity
indicated.
10. Integration. This Agreement constitutes a single, integrated
written contract expressing the entire agreement of the parties to this
Agreement. No covenants, agreements, representations, or warranties of any kind
whatsoever, whether express or implied in law or fact, have been made by any
party to this Agreement, except as specifically set forth in this Agreement. All
prior and contemporaneous discussions, negotiations and agreements (including
without limitation, any Prior Agreement) have been and are merged and integrated
into, and are superseded by, this Agreement.
11. Modifications. No modification, amendment or waiver of any of the
provisions contained in this Agreement, or any future representations, promise,
or condition in connection with the subject matter of this Agreement, shall be
binding upon any party to this Agreement unless made in writing and signed by
such party or by a duly authorized officer or agent of such party. In the case
of CPI, any such writing shall bind CPI only if signed respectively by an
authorized director or officer of CPI.
12. Severability. In the event that any provision of this Agreement
should be held to be void, voidable, unlawful or for any reason unenforceable,
the remaining provisions or portions of this Agreement shall remain in full
force and effect.
13. Miscellaneous Terms. Each of the parties to this Agreement further
represents, warrants, and agrees as follows:
13.1 Knowing and Voluntary Consent. Each of the parties has read
the Agreement carefully, knows and understands the contents of this Agreement,
and has made such investigation of the facts pertaining to this Agreement and of
all matters pertaining to this Agreement as Employee or CPI deem necessary or
desirable.
13.2 Negotiated Agreement. The terms of this Agreement are
contractual, not a mere recital, and are the result of negotiations between the
parties.
13.3 Non-Interference and Non-Disparagement. Each party agrees
that such party will not take any action that would interfere with the
performance of this Agreement by any of the parties to this Agreement or that
would adversely affect the rights provided for in this Agreement. Each party
further agrees not to directly or indirectly disparage any of the other parties
to this Agreement.
13.4 Authority. The corporate officers reviewing and executing
the Agreement have been duly authorized and empowered by their respective
corporations to do so.
13.5 Construction. Whenever the context so requires, the
masculine gender shall include the feminine or neuter gender, and singular
number shall include the plural number, and vice versa.
13.6 Disputed Rights. The parties explicitly acknowledge and
covenant that this Agreement represents a settlement and compromise of disputed
rights, claims and defenses, and that, by entering into this Agreement, no party
to this Agreement admits or acknowledges the existence of facts which would
impact negatively on the resolution of the party's pleadings, if any, and no
party admits or acknowledges any liability, wrongdoing, or negligence, all such
liability, wrongdoing or negligence being expressly denied.
13.7 Mistake in Facts/Voluntary Consent. The parties hereby
expressly and knowingly acknowledge that each may, after the execution of this
Agreement, discover facts different from or in addition to those which each now
knows or believes to be true with respect to the claims released in this
Agreement. Nonetheless, each party agrees that this Agreement shall be and
remain in full force and effect in all respects, notwithstanding such different
or additional facts. It is the intention hereby fully, finally, and forever to
settle and release all such matters, and any and all claims relating to those
matters, which do now exist, may exist, or previously have existed by and among
the parties, including without limitation claims arising out of, related to, or
connected with the matters referenced in Section 4 above, and any and all facts
in any manner arising out of, related to, or connected with those claims or
Employee's employment with CPI or the termination of that employment. In
furtherance of such intention, the releases given in this Agreement shall be and
remain in effect as full and completed releases of such matters, notwithstanding
the discovery by any of the parties of the existence of any additional or
different claims or facts relating to the claims. Similarly, in entering into
this Agreement, each party assumes the risk of misrepresentations, concealments,
or mistakes, and if any party should subsequently discover that any fact he or
it relied upon in entering into this Agreement was untrue, that any fact was
concealed from him/her or it, or that his or its understanding of the facts or
law was incorrect, such party shall not be entitled to set aside this Agreement
or the settlement reflected in this Agreement or be entitled to recover any
damages on that account. This Agreement is intended to be final and binding
between and among the parties to this Agreement regardless of any claims of
misrepresentations, or promises made without the intention of performance, or
concealments of facts, or mistakes of fact or law, or of any other circumstances
whatsoever.
13.8 Paragraph Descriptions. The use of headings in this
Agreement is only for ease of reference and the headings have no effect and are
not considered to be part or terms of this Agreement.
13.9 Execution in Counterparts. This Agreement may be executed
and delivered by facsimile or in any number of counterparts or copies
("counterpart") by the parties to this Agreement. When each party has signed and
delivered at least one counterpart to each other party to this Agreement, each
counterpart shall be deemed an original and, taken together, shall constitute
one and the same Agreement, which shall be binding and effective as to the
parties to this Agreement.
SIGNATURE PAGE TO AMENDED AND RESTATED
EMPLOYMENT AND RELEASE AGREEMENT
IN WITNESS WHEREOF, the parties executed this Agreement on the dates
specified below.
EMPLOYEE
June 1, 2006 /s/ Xxxx Xxxxx
Date ---------------------------------------
Xxxx Xxxxx
COMMUNICATIONS & POWER INDUSTRIES, INC.
June 1, 2006 By: /s/ Xxxx X. Xxxxxxx
Date ---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
