Ex-10(B)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT dated as of June 2, 2003 between Comtech Telecommunications
Corp., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx
("Executive").
W I T N E S S E T H
WHEREAS, Executive is employed as a senior executive of the Company
pursuant to an Employment Agreement dated as of July 16, 2001. The Company and
Executive desire to extend the term of Executive's employment and effect certain
other changes.
Accordingly, the Company and Executive hereby amend and restate the
Employment Agreement to read in its entirety as follows:
1. Definitions. For purposes of this Agreement, the following capitalized
terms shall have the meanings set forth below and shall include the plural as
well as the singular:
(a) "Affiliate" shall mean any Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, any other Person.
(b) "Annual Base Salary" shall mean Executive's annual base salary,
as determined from time to time in accordance with Section 5(a) hereof.
(c) "Cause" shall mean the termination of Executive's employment
with the Company for any of the reasons or causes set forth below:
(i) willful misconduct, dishonesty, misappropriation, breach
of fiduciary duty or fraud by Executive with regard to the Company
or any of its assets or businesses;
(ii) conviction of Executive or the pleading of nolo
contendere with regard to any felony or crime (for the purpose
hereof, traffic violations and misdemeanors shall not be deemed to
be a crime); or
(iii) any material breach by the Executive of the provisions
of this Agreement which is not cured within thirty days after
written notice to Executive of such breach from the Chief Executive
Officer of the Company.
(d) "Disability" shall mean the inability to perform substantially
all of Executive's duties in the capacity hereinafter set forth for a period of
not less than 60 consecutive days or any 90 days in any six-month period.
(e) "Person" shall mean any individual, partnership, firm, trust,
corporation or other similar entity. When two or more Persons act as a
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities of the Company, such syndicate or
group shall be deemed a "Person" for purposes of this Agreement.
2. Employment. The Company hereby employs Executive in the capacity
hereinafter set forth, and Executive accepts such employment, upon the terms and
conditions herein set forth.
3. Term. This Agreement shall be for a term commencing on the date hereof
and ending on July 31, 2005 (the "Expiration Date"); provided, however, that the
Expiration Date shall be automatically extended (subject to Sections 7, 8, and 9
of this Agreement) for successive one-year periods unless either party gives
notice of non-extension to the other at least three months in advance of the
then current Expiration Date. The period during which Executive is employed by
the Company pursuant to this Agreement is referred to hereafter as the "Term".
4. Duties and Responsibilities. During the Term, Executive shall serve as
and have the title of Senior Vice President and Chief Financial Officer of the
Company, or such other equivalent or more senior positions and titles as the
Board of Directors of the Company may determine. In serving in such capacities,
he shall perform such duties and have such responsibilities, consistent with his
executive position, as the Board of Directors of the Company and/or the Chief
Executive Officer of the Company, may from time to time determine and assign to
Executive. Executive shall perform his duties hereunder at the Company's
principal executive offices in Melville, New York or such other location within
Long Island at which such offices may be located from time to time in the
discretion of the Board of Directors, and shall travel as may be required from
time to time in connection with the performance of his duties hereunder. During
the Term, Executive agrees that he will (i) devote his full business time,
attention, skill and efforts to the performance of his duties hereunder and (ii)
generally promote the interests of the Company and its clients.
5. Compensation. As compensation for services hereunder and in
consideration of the covenants contained herein, during the Term, Executive
shall be entitled to receive the following compensation:
(a) Base Compensation. The Company shall pay Executive, in
accordance with the Company's normal payroll practices and subject to required
withholding, an Annual Base Salary during the Term at the rate per annum of
$270,000 commencing the date hereof (to be automatically increased to $285,000
as of August 1, 2003.) The Company's Board of Directors may, in its sole
discretion, increase the Annual Base Salary. Once increased, the Annual Base
Salary may not be decreased without Executive's prior written consent.
(b) Incentive Compensation. Incentive Compensation for each fiscal
year in which any part of the Term falls in an amount (not to exceed Executive's
Base Salary at the rate then in effect) equal to 1.5% of the Company's Pre-Tax
Income for each such fiscal year, plus such additional amounts, if any, as the
Board of Directors may from
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time to time determine; provided, however, that if the Employment Period
terminates other than at the end of a fiscal year, Incentive Compensation shall
be based upon the Company's Pre-Tax income for the then current fiscal year
through the most recent fiscal quarter ended prior to such termination. For
purposes of this Section 5(b):
(i) The Company's "Pre-Tax Income" for any fiscal year or
period shall be the consolidated earnings of the Company and its subsidiaries
for such fiscal year or period, as determined by the independent accounting firm
employed by the Company as its regular auditors in accordance with generally
accepted accounting principles applied on a consistent basis, before (i) any
extraordinary item, (ii) provision for federal, state or municipal income taxes
thereon, (iii) provision for any Incentive Compensation payable to Executive
hereunder, (iv) any write-off of in-process research and development acquired,
and (v) at the discretion of the Compensation Committee of the Company's Board
of Directors, any non-recurring items.
(ii) Incentive Compensation payable with respect to any fiscal
year shall be paid to Executive promptly after completion of the Company's
audited year-end financial statements for such fiscal year, or, for purposes of
the proviso in paragraph (b), promptly after completion of the relevant
unaudited quarterly statements, as the case may be. At the discretion of the
Compensation Committee, one-third of the amount of any Incentive Compensation
may be paid by the issuance to Executive of shares of Common Stock of the
Company having an aggregate fair market value as of the day prior to issuance
equal to such one-third of the Incentive Compensation. The per share fair market
value of the Common Stock as of a date, for purposes of this provision, shall be
the average mean of the daily high asked and low bid prices of the Common Stock,
if then traded in the over-the-counter market, or the average mean of the daily
high and low closing prices of the Common Stock, if then traded on the National
Market System of the NASDAQ Stock Market or on a national securities exchange,
for the 30 trading days immediately preceding the relevant date.
6. Other Compensation and Benefits. In addition to the compensation
provided for under Section 5, during the Term, Executive shall be entitled to:
(a) participate in all benefit, pension, retirement, savings,
welfare and other employee benefit plans and policies in which members of the
Company's senior management generally are entitled to participate, in accordance
with their respective terms as in effect from time to time.
(b) receive all fringe benefits and perquisites generally maintained
by the Company from time to time for members of senior management, including,
without limitation, reimbursement for all reasonable, ordinary and necessary
business and entertainment expenses incurred in the performance of his services
hereunder, in accordance with the Company's policies as in effect from time to
time;
(c) the accrual of vacation days at the rate of three weeks per
annum in accordance with the Company's policies as in effect from time to time;
provided, however, that such accrual will increase to the rate of four weeks per
annum on August l, 2005, if the executive is then employed by the Company; and
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(d) at the Company's cost and expense during the Term, and subject
to Executive's insurability, insurance covering Executive's life in the amount
of $1 million (or, if higher, three times Executive's then Annual Base Salary)
(including any insurance obtained pursuant to Section 6(a) or (b) hereof) plus
such additional amounts, if any, as the Board of Directors may from time to time
determine, payable to his estate or such other person or persons as he may from
time to time direct. (In addition to this insurance, the Company, in its
discretion, and at its own cost and expense, may also obtain insurance covering
Executive's life in such amount as it considers advisable, and payable to the
Company, Executive agrees to cooperate fully to enable the Company to obtain
such insurance.)
7. Termination by the Company for Cause or Disability.
(a) Subject to the provisions of this Agreement, the Company may
immediately terminate Executive's employment hereunder for Cause upon written
notice of such termination, in which case the Company shall have no other
liability or obligation to Executive hereunder except to pay to Executive, when
otherwise due: (i) all accrued and unpaid Annual Base Salary to the date of
termination, (ii) reimbursement of any unpaid business expenses, and (iii) any
accrued but unpaid Incentive Compensation under Section 5(b) for the fiscal year
preceding the fiscal year in which the termination occurs and/or for the then
current fiscal year, pursuant to the proviso in paragraph 5(b).
(b) In the event of Executive's Disability, the Company may
terminate Executive's employment hereunder upon 30 days prior written notice, in
which case the Company shall have no other liability or obligation to Executive
hereunder except to pay to Executive (i) all accrued and unpaid Annual Base
Salary to the date of termination, (ii) reimbursement of any unpaid business
expenses, and (iii) any accrued but unpaid Incentive Compensation under Section
5(b) for the fiscal year preceding the fiscal year in which the termination
occurs and/or for the then current fiscal year, pursuant to the proviso in
paragraph 5(b) (the payments provided for under clauses (i), (ii), and (iii) of
Sections 7(a) and 7(b) being collectively referred to as the "Accrued
Obligations").
8. Death of Executive. In the event of Executive's death, the Term of this
Agreement shall terminate and the Company shall have no other liability or
obligation to Executive hereunder other than to pay to Executive's estate, the
Accrued Obligations.
9. Other Termination by Company.
(a) Subject to Section 9(b), in the event the Company terminates
Executive's employment hereunder prior to the Expiration Date other than
pursuant to Section 7 hereof, then Executive shall be entitled, subject to
Section 12 hereof, to receive from the Company (i) the Accrued Obligations (ii)
continued medical and dental benefits coverage through the Expiration Date and
(iii) as severance, continued payment of the Annual Base Salary (at the rate
then in effect) through the Expiration Date (subject to applicable withholding),
payable in accordance with the Company's normal payroll practices; provided,
however, that (x) the severance amounts otherwise payable by the Company shall
be reduced by any amounts that Executive may receive from any other employment
or consulting arrangement for services prior to the Expiration Date and (y) the
Company's obligations to pay severance shall terminate
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upon a material breach by Executive of his obligations under Section 10 hereof.
Executive acknowledges and agrees that (i) the severance compensation provided
under this Section 9 shall be in lieu of any other severance benefits to which
Executive may otherwise be entitled, all rights to which Executive hereby
irrevocably waives, and (ii) the failure of the Company to offer to continue
Executive's employment from and after the Expiration Date shall not entitle
Executive to any severance under this Agreement.
(b) If, prior to the Expiration Date, the Company terminates
Executive's employment other than pursuant to Section 7 hereof or the Executive
terminates his employment due to a material diminution in his responsibilities,
including a material diminution resulting from the Company becoming privately
held, or becoming a subsidiary or division of another entity as a result of a
Change in Control, as such term is defined in the Company's 2000 Stock Incentive
Plan, and any such termination occurs (i) after the occurrence of a Change in
Control, as so defined, and (ii) at a time when Xxxx Xxxxxxxx is not the Chief
Executive Officer of the Company, then the Company shall pay to Executive, in
lieu of the amounts provided in Section 9(a) hereof, within 30 days after the
effective date of the termination, a lump sum equal to 299% of Executive's
Annual Base Salary at the rate then in effect.
10. Non-Competition; Non-solicitation; Inventions; Confidential
Information.
(a) Executive acknowledges that his services hereunder are of a
special and unique nature and his position with the Company places him in a
position of confidence and trust with clients and employees of the Company.
Therefore, and in consideration of the Company's performance of its covenants
and agreements under this Agreement, Executive will not at any time during his
employment with the Company and for a period of one year thereafter (the
"Restrictive Period"), directly or indirectly, engage in any business (as an
owner, joint venturer, partner, stockholder, director, officer, consultant,
agent or otherwise) that directly competes with the Company in the
telecommunications transmission, RF microwave amplifiers or mobile data
communications services market areas.
(b) Executive agrees that he will not (except on behalf of the
Company during his employment with the Company), during the Restrictive Period,
employ or retain, solicit the employment or retention of, or knowingly cause or
encourage any entity to retain or solicit the employment or retention of, any
person who is or was an employee of the Company at any time during the period
commencing 12 months prior to the termination of Executive's employment with the
Company. After termination of Executive's employment with the Company: (i)
Executive will refrain from disparaging, whether orally, in writing or in other
media, the Company, its Affiliates, the officers, directors and employees of
each of them, and the products and services of each of them, and (ii) the
Company will not disparage Executive or otherwise comment upon the employment
performance of Executive other than as may be required by law or as requested by
Executive.
(c) Any discovery, design, invention or improvement (whether or not
patentable) that Executive develops during his employment with the Company
(whether or not during his regular working hours or on the Company's premises)
and that is
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related to the Company's business or operations as then conducted or
contemplated, shall belong solely to the Company and shall be promptly disclosed
to the Company. During the period of his employment with the Company and
thereafter, Executive shall, without additional compensation, execute and
deliver to the Company any instruments of transfer and take any other action
that the Company may reasonably request to carry out the provisions of this
paragraph, including executing and filing, at the Company's expense, patent
and/or copyright applications and assignments of such applications to the
Company.
(d) Executive will not at any time, directly or indirectly, without
the Company's prior written consent, disclose to any third party or use (except
as authorized in the regular course of the Company's business or in the
Executive's performance of his responsibilities as the Company's Chief Financial
Officer) any confidential, proprietary or trade secret information that was
either acquired by him during his employment with the Company or thereafter,
including, without limitation, sales and marketing information, information
relating to existing or prospective customers and markets, business
opportunities, and financial, technical and other data (collectively, the
"Confidential Information"). After termination of Executive's employment with
the Company for any reason and upon the written request of the Company,
Executive shall promptly return to the Company all originals and/or copies of
written or recorded material (regardless of the medium) containing or reflecting
any Confidential Information and shall promptly confirm in writing to the
Company that such action has been taken. Notwithstanding the foregoing, the
following shall not constitute Confidential Information: (i) information that is
already in the public domain at the time of its disclosure to Executive; (ii)
information that, after its disclosure to Executive, becomes part of the public
domain by publication or otherwise other than through Executive's act; and (iii)
information that Executive received from a third party having the right to make
such disclosure without restriction on disclosure or use thereof.
11. Specific Performance. Executive acknowledges that, in view of the
nature of the Company's business, the restrictions contained in this Agreement
are reasonably necessary to protect the legitimate business interests of the
Company and its Affiliates and that any violation of such restrictions will
result in irreparable injury to the Company for which money damages will not be
an adequate remedy. Accordingly, Executive agrees that, in addition to such
money damages, he may be restrained and enjoined from any continuing breach of
such covenants without any bond or other security being required by any court.
If any restriction contained in this Agreement shall be deemed to be invalid,
illegal or unenforceable by reason of the extent, duration or geographical
scope, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope or other provisions
hereof, and in its reduced form such restriction shall then be enforceable in
the manner contemplated thereby.
12. General Release of the Company. In consideration of the payments and
other undertakings set forth herein, Executive acknowledges that upon the
termination of his employment with this Company, the execution of a release, in
substantially the form attached hereto as Exhibit A, is an express condition to
his right to receive
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severance compensation pursuant to Section 9 hereof in the event such section is
applicable.
13. Notice. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
certified mail, return receipt requested, by Federal Express, Express Mail or
similar overnight delivery or courier service, or by telecopy. Notice to
Executive shall be delivered to his address set forth at the foot of this
Agreement, and notice to the Company shall be sent as follows:
c/o Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Any notice given by certified mail shall be deemed given five days after
the time of certification thereof. Any notice given by other means permitted
hereby will be deemed given at the time of receipt thereof. Either party may by
notice given in accordance herewith to the other party, designate another
address or person for receipt of notices hereunder.
14. Successors-, Binding Agreement. Neither party may assign this
Agreement; provided, however, this Agreement and the rights of the Company
hereunder may be assigned, without the consent of Executive, to any purchaser or
other transferee of all or substantially all of the business and/or assets of
the Company. The Company shall require any such transferee to expressly assume
and agree, in a written instrument in form and substance satisfactory to
Executive and his counsel, to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors permitted
assigns, heirs and representatives.
15. Separability. If any provisions of this Agreement shall be declared
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
16. Waiver. The rights of each party hereunder may be waived only by a
writing signed by the waiving party giving such waiver expressly setting forth
the rights so waived and the matters as to which they are so waived, and any
such waiver shall be limited to the matters expressly set forth in such writing.
No failure or delay of any party hereto in enforcing any of its rights hereunder
at any time shall constitute or evidence any waiver of such rights.
17. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together will constitute one
document.
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18. Headings. The headings used in this Agreement are for convenience of
reference only and shall not be deemed to be of any substance.
19. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters. This Agreement may not be amended, modified, or supplemented in any
respect except by a subsequent written agreement entered into by both parties.
20. Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of New York, without regard to its
conflict of law principles.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
COMTECH TELECOMMUNICATIONS CORP.
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Authorized Signatory
EXECUTIVE:
/s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Address: 00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
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Exhibit A
General Release
For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, I, for myself and my successors, assigns, heirs and
representatives (each, a "Releasing Party"), hereby release and forever
discharge Comtech Telecommunications Corp. (the "Company"), its stockholders,
officers, directors, employees, agents and attorneys, and their respective
successors, assigns, heirs and representatives (each, a "Released Party"),
individually and collectively, from any and all claims, demands, causes of
action, liabilities or obligations, known or unknown, pending or not pending,
liquidated or not liquidated, of every kind and nature whatsoever (collectively,
the "Released Claims") which the Releasing Party has, has had or may have
against any one or more of the Released Parties arising out of, based upon or in
any way, directly or indirectly, related to the Company's business, my
employment with the Company or the termination of such employment; provided,
however, that this General Release shall have no effect whatsoever upon the
Company's obligations, if any, to pay severance compensation pursuant to the
Amended and Restated Employment Agreement between the undersigned and the
Company, dated June 2, 2003 or the rights of the undersigned to enforce such
obligations.
The Released Claims include, without limitation, (a) all claims arising
out of or relating to breach of contract, the Fair Labor Standards Act, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1866, the National Labor Relations Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act and/or any other
federal, state or local statute, law, ordinance, regulation or order as the same
may be amended or supplemented from time to time, (b) all claims for back pay,
lost benefits, reinstatement, liquidated damages, punitive damages, and damages
on account of any alleged personal, physical or emotional injury, and (c) all
claims for attorneys' fees and costs.
I understand and acknowledge that I am hereby being advised to consult
with an attorney prior to signing this General Release. My decision to sign this
General Release is my own voluntary decision made with full knowledge that I
have been advised to consult with an attorney and I intend to be bound by this
General Release in accordance with its terms.
Dated:
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Xxxxxx X. Xxxxx
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