EXHIBIT 10.5
EG&G, Inc.
EMPLOYMENT AGREEMENT
This Agreement made as of the 1st day of November, 1993, between EG&G, Inc., a
Massachusetts corporation (hereinafter called the "Company"), and Xxxx X.
Xxxxxxxxx, XX of Southborough, Massachusetts (hereinafter referred to as the
"Employee").
WITNESSETH:
WHEREAS, the Employee has been employed in a management position with the
Company; and
WHEREAS, the Employee hereby agrees to continue to perform such services
and duties of a management nature as shall be assigned to him; and
WHEREAS, the Employee hereby agrees to the compensation herein provided
and agrees to serve the Company to the best of his ability during the period
of this Agreement.
NOW, THEREFORE, in consideration of the sum of One Dollar, and of the
mutual covenants herein contained, the parties agree as follows:
1. a) Except as hereinafter otherwise provided, the Company agrees
to continue to employ the Employee in a management position with the
Company, and the Employee agrees to remain in the employment of the
Company in that capacity for a period of one year from the date
hereof and from year to year thereafter until such time as this
Agreement is terminated.
b) The Company will, during each year of the term of this Agreement,
place in nomination before the Board of Directors of the Company the
name of the Employee for election as an Officer of the Company except
when a notice of termination has been given in accordance with
Paragraph 5(b).
2. The Employee agrees that, during the specified period of employment,
he shall, to the best of his ability, perform his duties, and shall not
engage in any business, profession or occupation which would conflict with
the rendition of the agreed upon services, either directly or indirectly,
without the prior approval of the Board of Directors.
3. During the period of his employment under this Agreement, the
Employee shall be compensated for his services as follows:
a) Except as otherwise provided in this Agreement, he shall be paid
a salary during the period of this Agreement at a base rate to be
determined by the Company on an annual basis. Except as provided in
Subparagraph 3d, such annual base salary shall under no circumstances
be fixed at a rate below the annual base rate then currently in
effect.
b) He shall be reimbursed for any and all monies expended by him in
connection with his employment for reasonable and necessary expenses
on behalf of the Company in accordance with the policies of the
Company then in effect;
c) He shall be eligible to participate under any and all bonus,
benefit, pension, compensation, and option plans which are, in
accordance with company policy, available to persons in his position
(within the limitation as stipulated by such plans). Such
eligibility shall not automatically entitle him to participate in
any such plan;
d) if, because of adverse business conditions or for other reasons,
the Company at any time puts into effect salary reductions applicable
to all management employees of the Company generally, the salary
payments required to be made under this Agreement to the Employee
during any period in which such general reduction is in effect may be
reduced by the same percentage as is applicable to all management
employees of the Company generally. Any benefits made available to
the Employee which are related to base salary shall also be reduced
in accordance with any salary reduction;
4. a) During the period of his employment by the Company or for any
period which the Company shall continue to pay the Employee his
salary under this Agreement, whichever shall be the longer, the
Employee shall not directly or indirectly own, manage, control,
operate, be employed by, participate in or be connected with the
ownership, management, operation or control of any business which
competes with the Company or its subsidiaries, provided, however,
that the foregoing shall not apply to ownership of stock in a
publicly held corporation which ownership is disclosed to the Board
of Directors nor shall it apply to any other relationship which is
disclosed to and approved by the Board of Directors.
b) During the period of his employment by the Company and two years
following the Company's last payment of salary to him, the Employee
shall not utilize or disclose to others any proprietary or
confidential information of any type or description which term shall
be construed to mean any information developed or identified by the
Company which is intended to give it an advantage over its
competitors or which could give a competitor an advantage if obtained
by him. Such information includes, but is not limited to, product
or process design, specifications, manufacturing methods, financial
or statistical information about the Company, marketing or sales
information about the Company, sources or supply, lists of customers,
and the Company's plans, strategies, and contemplated actions.
c) During the period of his employment by the Company or for any
period during which the Company shall continue to pay the Employee
his salary under this Agreement, whichever shall be longer, the
Employee shall not in any way whatsoever aid or assist any party
seeking to cause, initiate or effect a Change in Control of the
Company as defined in Paragraph 6 without the prior approval of the
Board of Directors.
5. Except for the Employee covenants set forth in Paragraph 4 which
covenants shall remain in effect for the periods stated therein, and
subject to Paragraph 6, this Agreement shall terminate upon the happening
of any of the following events and (except as provided herein) all the
Company's obligation under this Agreement, including, but not limited to,
making payments to the Employee shall cease and terminate:
a) On the effective date set forth in any resignation submitted by
the Employee and accepted by the Company, or if no effective date is
agreed upon, the date of receipt of such letter.
b) One year after written notice of termination is given by either
party to the other party.
c) At the end of the month in which the Employee shall have
attained the age of sixty-five years;
d) At the death of the Employee;
e) At the termination of the Employee for cause. As used in the
Agreement, the term "cause" shall mean:
1) Misappropriating any funds or property of the Company;
2) Unreasonable refusal to perform the duties assigned to him
under this Agreement;
3) Conviction of a felony;
4) Continuous conduct bringing notoriety to the Company and
having an adverse effect on the name or public image of the
Company;
5) Violation of the Employee's covenants as set forth in
Paragraph 4 above; or
6) Continued failure by the Employee to observe any of the
provisions of this Agreement after being informed of such
breach.
f) At termination of the Employee by the Company without cause.
g) Twelve months after written notice of termination is given by
the Company to the Employee based on a determination by the Board of
Directors that the Employee is disabled (which, for purposes of this
Agreement, shall mean that the Employee is unable to perform his
regular duties, with such determination to be made by the Board of
Directors, in reliance upon the opinion of the Employee's physician
or upon the opinion of one or more physicians selected by the
Company). Such notice shall be given by the Company to the Employee
on the 106th day of continuous disability of the Employee.
Notwithstanding the foregoing, if, during the twelve-month notice
period referred to above, the Employee is no longer disabled and is
able to return to work, such notice of employment termination shall
be rescinded, and the employment of the Employee shall continue in
accordance with the terms of this Agreement. During the first 106
days of continuous disability of the Employee, the Company will make
periodic payments to the Employee in an amount equal to the
difference between his base salary and the benefits provided by the
Company's Short-Term Disability Income Plan. During the twelve-month
notice period following 106 days of continuous disability, the
Company will make periodic payments to the Employee in an amount
equal to the difference between his base salary and the benefits
provided by the Company's Long-Term Disability Plan. If the
employment of the Employee terminates at the end of such twelve-month
notice period, the Company will make periodic payments to the
Employee, up to the amount remaining in his sick leave reserve
account, in an amount equal to the difference between his base pay
and the post-employment benefits provided to him under the Company's
Long-Term Disability Plan. Due to the fact that payments to the
Employee under the Company's Long-Term Disability Plan are not
subject to federal income taxes, the payments to be made directly by
the Company pursuant to the two preceding sentences shall be reduced
such that the total amount received by the Employee (from the Company
and from the Long-Term Disability Plan), after payment of any income
taxes, is equal to the amount that the Employee would have received
had he been paid his base salary, after payment of any income taxes
on such base salary.
h) Notwithstanding the foregoing provisions, in the event of the
termination of the Employee by the Company without cause, the
Employee shall, until the expiration of his then current employment
term or one year from the date of such termination, whichever is
later, (i) continue to receive his Full Salary (as defined below),
which shall be payable in accordance with the payment schedule in
effect immediately prior to his employment termination, and (ii)
continue to be entitled to participate in all employee benefit plans
and arrangements of the Company (such as life, health and disability
insurance and automobile arrangements) to the same extent (including
coverage of dependents, if any) and upon the same terms as were in
effect immediately prior to his termination. For purposes of this
Agreement, "Full Salary" shall mean the Employee's annual base
salary, plus the amount of any bonus or incentive payments received
by the Employee with respect to the last full fiscal year of the
Company for which all bonus or incentive payments to be made have
been made.
6. a) In the event that there is a Change in Control of the Company
(as defined below), the provisions of this Agreement shall be amended
as follows:
1) Xxxxxxxxx 0x xxxxx xx amended to read in its entirety as
follows:
"Except as hereinafter otherwise provided, the
Company agrees to continue to employ the Employee
in a management position with the Company, and the
Employee agrees to remain in the employment in the
Company in that capacity, for a period of five (5) years
less one day from the date of the Change in Control.
Except as provided in Paragraph 3d, the Employee's
salary as set forth in Paragraph 3a and his other
employee benefits pursuant to the plans described in
Paragraph 3c shall not be decreased during such
period."
2) Xxxxxxxxx 0x xxxxx xx amended by the addition of the
following provision at the end of such paragraph:
", provided that the Employee agrees not to resign,
except for Good Reason (as defined below), during the
one-year period following the date of the Change in
Control."
3) Paragraph 5b shall be deleted in its entirety.
4) Paragraph 5h shall be amended to read in its entirety as
follows:
"Notwithstanding the foregoing provisions, in the event
of the termination of the Employee by the Company
without cause, or the resignation of the Employee for
Good Reason, the Employee shall (i) receive, on the
date of his employment termination, a cash payment in
an amount equal to his Full Salary (as defined below)
multiplied by the number of years (including any
portions thereof) remaining until the expiration of his
then current employment term or five years from the
date of such termination, whichever is later (it being
agreed that such amount shall not be discounted based
upon the present value of such amount), and (ii)
continue to be entitled to participate in all employee
benefit plans and arrangements of the Company (such
as life, health and disability insurance and automobile
arrangements) to the same extent (including coverage
of dependents, if any) and upon the same terms as
were in effect immediately prior to his termination. For
purposes of this Agreement, "Full Salary" shall mean
the Employee's annual base salary, plus the amount of
any bonus or incentive payments received by the
Employee with respect to the last full fiscal year of the
Company for which all bonus or incentive payments to
be made have been made. Payments under this
Paragraph 5h shall be made without regard to whether
the deductibility of such payments (or any other
"parachute payments," as that term is defined in
Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), to or for the benefit of the
Employee) would be limited or precluded by Section
280G and without regard to whether such payments
(or any other "parachute payments" as so defined)
would subject the Employee to the federal excise tax
levied on certain "excess parachute payments" under
Section 4999 of the Code; provided that if the total of
all "parachute payments" to or for the benefit of the
Employee, after reduction for all federal, state and local
taxes (including the tax described in Section 4999 of
the Code, if applicable) with respect to such payments
(the "Total After-Tax Payments"), would be increased
by the limitation or elimination of any payment under
this Paragraph 5h, amounts payable under this
Paragraph 5h shall be reduced to the extent, and only
to the extent, necessary to maximize the Total
After-Tax Payments. The determination as to whether
and to what extent payments under this Paragraph 5h
are required to be reduced in accordance with the
preceding sentence shall be made at the Company's
expense by Xxxxxx Xxxxxxxx LLP or by such other
certified public accounting firm as the Board of
Directors of the Company may designate prior to a
Change in Control of the Company. In the event of any
underpayment or overpayment under this Paragraph 5h
as determined by Xxxxxx Xxxxxxxx LLP (or such other
firm as may have been designated in accordance with
the preceding sentence), the amount of such
underpayment or overpayment shall forthwith be paid
to the Employee or refunded to the Company, as the
case may be, with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code."
5) Paragraph 8 shall be amended to read in its entirety as
follows:
"The Employee may pursue any lawful remedy he
deems necessary or appropriate for enforcing his rights
under this Agreement following a Change in Control of
the Company, and all costs incurred by the Employee in
connection therewith (including without limitation
attorneys' fees) shall be promptly reimbursed to him by
the Company, regardless of the outcome of such
endeavor."
b) For purposes of this Agreement, a "Change in Control of the
Company" shall occur or be deemed to have occurred only if (i) any
"person", as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of
stock in the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding
securities; (ii) during any period of two consecutive years ending
during the term of this Agreement, individuals who at the beginning
of such period constitute the Board of Directors of the Company, and
any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or
whose election or whose nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board
of Directors; (iii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially
all of the Company's assets.
c) For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events, except as provided in
Paragraph 3d: (i) a reduction in the Employee's base salary as in
effect on the date hereof or as the same may be increased from time
to time; (ii) a failure by the Company to pay annual cash bonuses to
the Employees in an amount at least equal to the most recent annual
cash bonuses paid to the Employee; (iii) a failure by the Company to
maintain in effect any material compensation or benefit plan in which
the Employee participated immediately prior to the Change in Control,
unless an equitable arrangement has been made with respect to such
plan, or a failure to continue the Employee's participation therein
on a basis not materially less favorable than existed immediately
prior to the Change in Control; (iv) any significant and substantial
diminution in the Employee's position, duties, responsibilities or
title as in effect immediately prior to the Change in Control;
(v) any requirement by the Company that the location at which the
Employee performs his principal duties be changed to a new location
outside a radius of 25 miles from the Employee's principal place of
employment immediately prior to the Change in Control; or (vi) any
requirement by the Company that the Employee travel on an overnight
basis to an extent not substantially consistent with the Employee's
business travel obligations immediately prior to the Change in
Control. Notwithstanding the foregoing, the resignation shall not be
considered to be for Good Reason if any such circumstances are fully
corrected prior to the date of resignation.
7. Neither the Employee nor, in the event of his death, his legal
representative, beneficiary or estate, shall have the power to
transfer, assign, mortgage or otherwise encumber in advance any of
the payments provided for in this Agreement, nor shall any payments
nor assets or funds of the Company be subject to seizure for the
payment of any debts, judgments, liabilities, bankruptcy or other
actions.
8. Any controversy relating to this Agreement and not resolved by the
Board of Directors and the Employee shall be settled by arbitration in the
City of Boston, Commonwealth of Massachusetts, pursuant to the rules then
obtaining of the American Arbitration Association, and judgment upon the
award may be entered in any court having jurisdiction, and the Board of
Directors and Employee agree to be bound by the arbitration decision on
any such controversy. Unless otherwise agreed by the parties hereto,
arbitration will be by three arbitrators selected from the panel of the
American Arbitration Association. The full cost of any such arbitration
shall be borne by the Company.
9. 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 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 by either
party.
10. All notices or other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered personally to
the Employee or to the General Counsel of the Company or when mailed by
registered or certified mail to the other party (if to the Company, at
00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, attention General
Counsel; if to the Employee, at the last known address of the Employee
as set forth in the records of the Company).
11. This Agreement has been executed and delivered and shall be construed
in accordance with the laws of the Commonwealth of Massachusetts. This
Agreement is and shall be binding on the respective legal representatives
or successors of the parties, but shall not be assignable except to a
successor to the Company by virtue of a merger, consolidation or
acquisition of all or substantially all of the assets of the
Company. All previous employment contracts between the Employee and the
Company or any of the Company's present or former subsidiaries or
affiliates is hereby canceled and of no effect.
IN WITNESS WHEREOF, the Company has caused its seal to be hereunto
affixed and these presents to be signed by its proper officers, and the
Employee has hereunto set his hand and seal the day and year first above
written.
EG&G, INC.
(SEAL) By:/s/Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx,
Chairman and Chief
Executive Officer
Employee:/s/Xxxx X. Xxxxxxxxx, XX
Xxxx X. Xxxxxxxxx, XX
