EXHIBIT 10(JJ)
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, dated 11/9/1998, by and between: C-COR ELECTRONICS,
INC., a Pennsylvania corporation (the "Company"),
AND
Xxxx X. Xxxxx (the "Employee").
Recital
A. Employee is an executive of the Company with significant policy-
making and operational responsibilities in the conduct of its business.
B. The Company recognizes that Employee is a valuable resource for
the Company and the Company desires to be assured of the continued service of
Employee,
C. The Company is concerned that upon a possible or threatened
change in control Employee may have concerns about the continuation of his
employment and/or his status and responsibilities and may be approached by
others with employment opportunities, and desires to provide Employee some
assurance as to the continuation of his employment status and responsibilities
on a basis consistent with that which he has earned in the event of such
possible or threatened change in control,
D. The Company desires to assure that if a possible change of
control situation should arise and Employee should be involved in deliberations
or negotiations in connection therewith that Employee would be in a secure
position to consider and/or negotiate such transaction as objectively as
possible and without implied threat to his financial well-being,
E. The Company is concerned about the possible effect on Employee
of the uncertainties created by any proposed change in control of the Company.
F. Employee is willing to continue to serve but desires that in the
event of such a change in control he will continue to have the responsibility,
status, income, benefits and perquisites that he received immediately prior to
that event.
Agreements
The parties do hereby agree as follows:
l. Change of Control. The provisions of Section 2 and 3 of this
Agreement shall become operative upon a change in control of the Company, as
hereinafter defined. For purposes of this Agreement, a "change in control"
shall be deemed to have occurred if and when:
(a) Subsequent to the date of this Agreement, any person or
group of persons acting in concert shall have acquired ownership of or the
right to vote or to direct the voting of shares of capital stock of the
Company representing 30% or more of the total voting power of the Company,
or
(b) The Company shall have merged into or consolidated with
another corporation, or merged another corporation into the Company, on a
basis whereby less than 50% of the total voting power of the surviving
corporation is represented by shares held by former shareholders of the
Company prior to such merger or consolidation, or
(c) The Company shall have sold more than 50% of its assets to
another corporation or other entity or person, or
(d) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets or
contested election, the persons who were Directors of the Company before
such transaction cease to constitute a majority of Directors of the
Company.
2. Termination Within Eighteen (18) Months. In the event that the
employment of Employee with the Company is terminated involuntarily within
eighteen (18) months after a change in control occurs:
(a) Employee shall be entitled to receive an amount of cash
equal to the sum of the following amounts:
(i) two (2) times his annual salary at his rate on the date of
termination of employment (but not less than two times Employee's
annual salary prior to the Change of Control); and
(ii) two (2) times the Company's annual 401(k) retirement plan
contribution at the Employee's contribution rate on the termination of
his employment (but not less than the amount the company was matching
prior to Change of Control) (subject to applicable limitations of the
Internal Revenue Code, which may dictate that such amount shall not be
added to the retirement plan but shall be paid in cash).
The sum of these amounts shall be paid in equal monthly
installments over a period of twenty-four (24) months, the first such
installment to be paid within ten (10) days after Employee's termination of
employment.
(b) Employee shall be entitled to receive an amount of cash
equal to two times the average of the Profit Incentive Plan ("PIP")
payments of the last two years awarded to him under the PIP of the Company,
pursuant to the terms of such Plan as in effect immediately prior to such
change of control. Such amount will be paid to the Employee within ten (10)
days after termination of employment.
(c) Employee shall continue for a period of 24 months from the
date of his termination to be covered at the expense of the Company by the
same or equivalent health, dental, accident, life and disability insurance
coverages as he was enrolled in immediately prior to termination of his
employment; provided, however, that the Employee may elect to be paid in
cash within thirty (30) days after termination of his employment an amount
equal to the Company's cost of providing such coverages during such period.
(d) If on the date of termination of employment, Employee were a
participant in the Company's Supplemental Retirement Plan, Employee shall
become eligible for the benefits payable under such Plan and such benefits
shall be paid to Employee, or, if applicable, Employee's beneficiary, in
the same manner, amounts and intervals as if Employee had, on the date of
his termination of employment following a change of control, retired from
employment with the Company. If Employee has not attained age fifty-five
(55) on the date of his termination of employment due to a change of
control, Employee shall be deemed to have attained age fifty-five (55) for
the purpose of determining his eligibility for benefits under the
Supplemental Retirement Plan, and only for this purpose.
(e) All outstanding options held by Employee, both exercisable
and nonexercisable, shall be immediately exercisable regardless of the time
the option has been held by Employee and shall remain exercisable until
their original expiration date, subject to applicable requirements of the
Internal Revenue Code.
3. Other Events, If Employee resigns from the Company within
eighteen (18) months of a change of control, Employee shall be entitled to
receive all payments and enjoy all of the benefits specified in Section 2 hereof
should one or more of the following events occur within eighteen (18) months
following a change in control:
(a) If Employee determines that there has been a significant
change in his responsibilities or duties with the Company and, for that
reason, Employee resigns from the Company; or
(b) If the base salary paid by the Company to Employee is
reduced by more than ten (10%) percent from his salary immediately prior to
the change in control; or
(c) If the Company requires Employee to relocate his principal
place of work to a location more than forty (40) miles from the Employee's
former place of work,
4. Agreements Not Exclusive. The specific agreements referred to
herein are not intended to exclude Employee's participation in other benefits
available to executive personnel generally or to preclude other compensation
benefits as may be authorized by the Board of Directors of the Company at any
time, and shall be in addition to the provisions of any other employment or
similar agreements.
5. Enforcement Costs. The Company is aware that upon the occurrence
of a change in control the Board of Directors or a shareholder of the Company
may then cause or attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the Company
to institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take, or attempt to take, other action to deny
Employee the benefits intended under this Agreement. In these circumstances,
the purpose of this Agreement could be frustrated. It is the intent of the
Company that Employee not be required to incur the expenses associated with the
enforcement of his rights under this agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits extended to Employee hereunder, nor be bound to negotiate any
settlement of his rights hereunder under threat of incurring such expenses.
Accordingly, if following a change of control, it should appear to Employee that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish or to recover from
Employee the benefits intended to be provided to Employee hereunder and that
Employee has complied with all reasonable obligations related to Employee's
employment with the Company, the Company irrevocably authorizes Employee from
time to time to retain counsel of his choice at the direct expense and liability
of the Company as provided in this Section 5, to represent Employee in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, shareholder
or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Employee entering
into an attorney-client relationship with such counsel, and in that connection
the Company and Employee agree that a confidential relationship shall exist
between Employee and such counsel. The reasonable fees and expenses of counsel
selected from time to time by Employee as hereinabove provided shall be paid or
reimbursed to Employee by the Company on a regular, periodic basis upon
presentation by Employee of a statement or statements prepared by such counsel
in accordance with its customary practices up to a maximum aggregate amount of
$500,000, said amount to be "grossed up" to cover federal and state income
taxes. The amount of the gross up shall be calculated in accordance with the
following formula: A/ (1-R), where A is the amount of legal fees and R is the
combined highest marginal tax rate applicable to employee in the tax year that
the payment is made.
6. No Set-Off. The company shall not be entitled to set-off against
the amount payable to Employee any amounts earned by Employee in other
employment after termination of his employment with the Company, or any amounts
which might have been earned by Employee in other employment had he sought other
employment. The amounts payable to Employee under this Agreement shall not be
treated as damages but as severance compensation to which Employee is entitled
by reason of termination of his employment in the circumstances contemplated by
this Agreement. However, a set-off may be taken by the Company against the
amounts payable to Employee for expenses covering the same or equivalent
hospital, medical, accident, and disability insurance coverages as set forth in
Section 2(c) of this Agreement if such benefit is paid for the Employee by the
Employer to which the Employee may join after termination by the Company or
after resignation as defined in Section 3 of this Agreement.
7. Termination. This Agreement has no specific term, but shall
terminate if, prior to a change in control of the Company, the employment of
Employee with the Company shall terminate, so long as such termination was not
in anticipation of or related to Change of Control.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns, and shall be
binding upon and inure to the benefit of Employee and his legal representatives,
heirs, and assigns.
9. Severability. In the event that any Section, paragraph, clause
or other provision of this Agreement shall be determined to be invalid or
unenforceable in any jurisdiction for any reason, such Section, paragraph,
clause or other provision shall be enforceable in any other jurisdiction in
which valid and enforceable and, in any event, the remaining Sections,
paragraphs, clauses and other provisions of this Agreement shall be unaffected
and shall remain in full force and effect to the fullest extent permitted by
law.
10. Governing Law. This Agreement shall be interpreted, construed
and governed by the laws of the Commonwealth of Pennsylvania.
11. Headings. The headings used in this Agreement are for ease of
reference only and are not intended to affect the meaning or interpretation of
any of the terms hereof.
12. Gender and Number. Whenever the context shall require, all
words in this Agreement in the male gender shall be deemed to include the female
or neuter gender, all singular words shall include the plural, and all plural
words shall include the singular.
IN WITNESS WHEREOF, this Agreement has been executed the date and year
first above written.
ATTEST: C-COR ELECTRONICS, INC.
Xxxxxx X. Xxxxx By: Xxxxx X. Xxxxxx
President and CEO
Xxxx X. Xxxxx
Employee
4/20/93
