XXXXXX ELECTRONICS CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of April 12, 2000 (the "Effective
Date") by and between Xxxxxx Electronics Corporation (the "Company"), a New
York corporation and Xxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Company
on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES
The Executive shall serve as Co-Chairman and Co-Chief Executive Officer
of the Company. Subject to the supervision and direction of the Board of
Directors of the Company (the "Board") and unless otherwise determined by the
Board, the Executive in such capacity shall: be responsible for managing the
affairs of the Corporation; have the powers and duties usually and customarily
associated with the office of the Co-Chairman and Co-Chief Executive Officer;
and have such commensurate responsibilities, duties and authority as may from
time to time be assigned to the Executive by the Board. The Executive shall
devote substantially all his time, energy and skill during reasonable business
hours to the service of the Company. The Executive's office shall be located
at the Company's headquarters, which shall be located at 00 Xxxxxxxx Xxxx Xx.,
Xxxxxxxx, Xxx Xxxx, 00000.
2. TERM OF AGREEMENT
The Company shall employ the Executive and the Executive shall serve as a
full-time employee of the Company for a term of three (3) years from the date
hereof (such period and any additional periods thereafter in respect of which
this Agreement is extended in accordance herewith being each an "Employment
Period"). Each Employment Period and this Agreement shall be automatically
extended for an additional one (1) year term following the expiration of such
Employment Period, unless either the Company or the Employee notifies the
other in writing at least twelve months prior to such expiration that the
Employment Period and this Agreement shall not be so extended. Further, if
employment is terminated for any reason other than death, such termination
will not result in the expiration of the term of this Agreement.
3. COMPENSATION DURING TERM OF AGREEMENT
(a) Base Salary
The Company shall pay the Executive a salary (the "Base Salary") of
not less than (i) $200,000 per annum. Base Salary shall include any amounts of
compensation deferred by the Executive under any employee benefit plan
maintained by the Company. Such Base Salary shall be payable weekly. The
Executive's Base Salary shall be reviewed annually. Such review shall be
conducted by a Compensation Committee designated by the Board, and the Board
shall increase the Executive's Base Salary by a Cost of Living Allowance
("COLA") percentage and a 7% merit increase based on performance as determined
by the Board. The increased Base Salary shall become the "Base Salary" for
purposes of this Agreement. In addition to the Base Salary provided in this
Section 3(a), the Company shall also provide the Executive, at no cost to the
Executive, with all such other benefits as are provided uniformly to permanent
full-time employees of the Company.
(b) Short-Term Incentive Compensation Program
The Executive shall participate in the Company's Short-Term Incentive
Compensation Program. Annual cash awards ("Short-Term Awards") under this
program will be based on the achievement of performance goals, both corporate
(80%) and individual (20%), expressed as a percentage of the Executive's Base
Salary or dollar amount adopted on or after the date of this Agreement.
Performance measures will include sales from new sources and operating income.
Performance goals, measures and annual awards will be determined by the
Compensation Committee and approved by the Board. The Company will pay the
Short-Term Award to the Executive within 60 days following the last day of the
Company's fiscal year. Notwithstanding whether any such performance goals are
achieved, the Short-Term Awards payable to the Executive shall be not less
than $150,000 per annum in respect of each year or fraction thereof of
employment under this Agreement.
(c) Long-Term Incentive Compensation Program
In addition to the Base Salary and Short-Term Award, the Executive
shall be entitled to participate, during the Employment Period, in the
Company's Long-Term Incentive Compensation Program. Long-term cash or
equity-based awards ("Long-Term Awards") may include (i) stock options, (ii)
stock appreciation rights, (iii) restricted stock, (iv) deferred stock, (v)
stock reload options and/or (vi) other stock-based awards. Each equity-based,
Long-Term Award granted to the Executive shall vest as follows: 25% shall vest
on the first anniversary of such award; an additional 25% shall vest on the
second anniversary of such award; and the remaining 50% shall vest on the
third anniversary of such award.
(d) The Company will provide the Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which the
Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement, and the Company will
not, without the Executive's prior written consent, make any changes in such
plans, arrangements or perquisites which would adversely affect the
Executive's rights or benefits thereunder. Without limiting the generality of
the foregoing provision of this Section 3(d), the Executive will be entitled
to (i) participate in or receive benefits under any employee benefit plans
including, but not limited to, retirement plans, supplemental retirement
plans, pension plans, profit-sharing plans, health-and-accident plans, medical
coverage or any other employee benefit plan or arrangement made available by
the Company in the future to its senior executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, (ii) a car to be leased
and appropriately maintained and insured by the Company, (iii) annual fixed
costs (including dues, capital assessments and the like) not to exceed $6,500
per annum related to membership in a club of the Executive's choice, and (iv)
four weeks of vacation per year, with the right to carry vacation time not
used in any year (excluding vacation time so carried over) to the immediately
subsequent year.
(e) In addition to the Base Salary provided for by Section 3(a) and other
compensation provided for by Sections 3(b), (c) and (d) hereof, the Company
shall pay or reimburse the Executive for all reasonable travel and other
reasonable expenses incurred by the Executive performing his obligations under
this Agreement and may provide such additional compensation in such form and
such amounts as the Board may from time to time determine.
4. TERMINATION OF EMPLOYMENT
(a) Death or Disability:
This Agreement shall terminate automatically upon the Executive's
death. The Company may terminate this Agreement, after having established the
Executive's Disability (pursuant to the definition of "Disability" set forth
below), by giving to the Executive written notice of its intention to
terminate the Executive's employment. In such a case, this Agreement (but not
the Executive's employment with the Company) shall terminate effective on the
90th day after receipt of such notice (the "Disability Effective Date"),
provided that, within 90 days after such receipt, the Executive shall fail to
return to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means disability which, after the expiration of
more than 52 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement upon acceptability not to be withheld unreasonably).
(b) Cause:
The Company may terminate the Executive's employment for Cause (as
defined below). For purposes of this Agreement, "Cause" means:
(i) an act or acts of dishonesty (other than insubstantial or
inadvertent acts that do not materially affect the business, results
of operations or financial condition of the Company) taken by the
Executive at the expense of the Company;
(ii) repeated material violations by the Executive of the
Executive's obligations under Section 1 of this Agreement; or
(iii) the conviction of the Executive of a felony.
(c) Good Reason:
The Executive's employment may be terminated by the Executive for
Good Reason (as defined below). For purposes of this Agreement, "Good Reason"
means:
(i) (A) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles, and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1 of this Agreement or
(B) any other action by the Company which results in a diminishment
in such position, authority, duties or responsibilities, other than
an insubstantial and inadvertent action which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 3 of this Agreement, other than an insubstantial and
inadvertent failure which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location more than 50 miles from the location of the
Company's headquarters set forth in Section 1, except for travel
reasonably required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Company of the Executive's
employment other than as permitted by this Agreement, it being
understood that any such purported termination shall not be
effective for any purpose of this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
15(a) of this Agreement; or
(vi) failure of the Executive to be nominated for election to the
Board at each meeting of the shareholders of the Company during the
term of this Agreement called for the purpose of, in addition to any
other matters, electing the members of the Board, unless either the
Company or the Executive in accordance with Section 2 notifies the
other in writing at least twelve months prior to such expiration
that the Employment Period and this Agreement shall not be extended.
(d) Effect of Termination:
Termination shall not affect any rights that the Executive may have
under any other program or arrangement.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION
(a) Death
If the Executive's employment is terminated by reason of the
Executive's death, this Agreement shall terminate without further obligations
to the Executive's legal representatives under this Agreement other than those
obligations accrued hereunder at the date of the Executive's death. Anything
in this Agreement to the contrary notwithstanding, the Executive's family
shall be entitled to receive benefits at least equal to those provided by the
Company to surviving families of executives of the Company under such plans,
programs and policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the date of the
Executive's death, or if more favorable to the Executive and/or the
Executive's family, as in effect at any time thereafter with respect to other
key executives and their families. The unvested portion of such stock options
shall immediately become vested upon the Executive's death.
(b) Disability
If this Agreement is terminated by reason of the Executive's
Disability, the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to those provided
by the Company to disabled employees and/or their families in accordance with
such plans, programs and policies relating to disability, if any, as in effect
during the 90-day period immediately preceding the Disability Effective Date
or, if more favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter with respect to other key executives and their
families. The unvested portion of such stock options shall immediately become
vested upon the Executive's disability.
(c) Cause
If the Executive's employment shall be terminated for Cause pursuant
to Section 4(b), the Company shall pay the Executive his full Base Salary
through the Date of Termination (as defined below) at the rate in effect at
the time Notice of Termination (as defined below) is given and provide to the
Executive all then vested benefits, deferred compensation and the like due to
the Executive under this Agreement, and the Company shall have no further
obligations to the Executive under this Agreement. In addition, the Executive
shall be afforded the opportunity to convert any term policies insuring the
Executive's health or life that are owned by the Company to individual
policies, where permitted by the terms of such policies.
(d) Good Reason; Other Than for Cause
If, during the Employment Period, the Company shall terminate the
Executive's employment other than for Cause, or the employment of the
Executive shall be terminated by the Executive for Good Reason, the Company
shall pay to the Executive a sum equal to (i) the amount of the remaining
salary payments that the Executive would have earned if he continued his
employment with the Company during the remaining unexpired term of this
Agreement at the Executive's Base Salary at the Date of Termination; (ii) an
amount equal to the product of the highest annual amount of bonus and any
other compensation paid to the Executive during the term of this Agreement
multiplied by the remaining number of years of this Agreement and any fraction
thereof; and (iii) an amount equal to the product of the highest annual amount
of contributions that were made on the Executive's behalf to any employee
benefit plans of the Company during the term of this Agreement times the
remaining number of years of this Agreement and any fraction thereof. At the
election of the Executive, which election is to be made within thirty (30)
days of the Date of Termination, such payments shall be paid monthly during
the remaining term of this Agreement following the Executive's termination.
Such payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.
The Company will continue life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Company for
the Executive prior to his termination, except to the extent such coverage may
be changed in its application to all Company employees on a nondiscriminatory
basis. Such coverage shall cease upon the expiration of the remaining term of
this Agreement.
The Executive will be entitled to receive benefits due him under or
contributed by the Company on his behalf pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other employee
benefit plan maintained by the Company on the Executive's behalf to the extent
such benefits are not otherwise paid to the Executive under a separate
provision of this Agreement.
6. CHANGE IN CONTROL
(a) For purposes hereof, a "change in control" shall be defined as:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13D-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of Directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (4) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) below; or
(ii) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Incumbent Board,
provided, however, that any individual becoming a director
subsequent to the date hereof whose election or nomination for
election by the Company's shareholders was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board, shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Incumbent Board; or
(iii) Consummation of a reorganization, merger, consolidation or
sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or substantially all of
the individuals and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively, immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60%
of the then outstanding shares of common stock and the combined
voting power, respectively, of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Incumbent Board, providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(b) Upon the occurrence of a Change in Control, the Company shall pay the
Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to the greater
of (i) the payments and benefits due for the remaining term of this Agreement
and (ii) five (5) times the Executive's average annual compensation from the
Company for the five (5) preceding taxable years, or if the Executive's
employment by the Company is then less than five (5) years, the Executive's
average annual compensation from the Company during the Executive's employment
by the Company, provided, that if such period of employment includes a short
taxable year or less than all of a taxable year, compensation for such short
or incomplete taxable year must be annualized before determining the average
annual compensation for the period of employment. In annualizing compensation,
the frequency with which payments are expected to be made over an annual
period must be taken into account, such that any amount of compensation for
such a short or incomplete taxable year that represents a payment that will
not be made more often that once per year is not annualized. Such annual
compensation shall include any commissions, bonuses, pension and profit
sharing plan benefits, severance payments, retirement benefits, director or
committee fees and fringe benefits paid or to be paid to the Executive during
such years. At the election of the Executive, which election is to be made
within thirty (30) days of the Change in Control, such payment may be made in
a lump sum or paid in equal monthly installments during the thirty-six (36)
months following the Executive's termination. In the event that no election is
made, payment to the Executive will be made on a monthly basis during the
thirty-six (36) months following the Executive's termination.
(c) All restrictions on the restricted stock then held by the Executive
will lapse immediately, all stock options and stock appreciation rights then
held by the Executive will become immediately exercisable, and any performance
shares or units then held by the Executive will vest immediately, in full, in
the event of a Change in Control.
(d) Upon the occurrence of a Change in Control, the Executive will be
entitled to receive benefits due him under or contributed by the Company on
his behalf pursuant to any retirement, incentive, profit sharing, bonus,
performance, disability or other employee benefit plan maintained by the
Company on the Executive's behalf to the extent such benefits are not
otherwise paid to the Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Company will cause to be continued
life, medical, dental and disability coverage substantially identical to the
coverage maintained by the Company for the Executive prior to his severance,
except to the extent that such coverage may be changed in its application for
all Company employees on a nondiscriminatory basis. Such coverage and payments
shall cease upon the expiration of thirty-six (36) full calendar months
following the Date of Termination.
(f) In the event that the Executive is receiving monthly payments
pursuant to Section 6(b) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, the Executive shall elect
whether the balance of the amount payable under the Agreement at that time
shall be paid in a lump sum or on a pro rata basis pursuant to such section.
Such election shall be irrevocable for the year for which such election is
made.
(g) Any and all payments to be made to the Executive under this Agreement
or otherwise as a result of a Change in Control whether in the nature of
severance payments, liquidated damage payments, compensation or other payments
(all of the foregoing being hereinafter referred to as "Change in Control
Payments"), shall be made free and clear of, and without deduction or
withholding for or on account of, any tax which may be payable under Section
4999 of the Internal Revenue Code of 1986 (the "Code"), now or hereafter
imposed, levied, withheld or assessed (such amounts being hereinafter referred
to as the "Excise Taxes"). If, notwithstanding the foregoing provision, any
Excise Taxes are withheld from any Change in Control Payments made or to be
made to the Executive, the amounts so payable to the Executive shall be
increased to the extent necessary to yield to the Executive (after payment of
any tax which may be payable under Section 4999 of the Code) the full amount
which he is entitled to receive pursuant to the terms of this Agreement or
otherwise without regard to liability for any Excise Taxes and any other
Federal income taxes, State income taxes, FICA/Medicare and unemployment taxes
thereon. In the event any Excise Taxes are now or hereafter imposed, levied,
assessed, paid or collected with respect to the Change of Control Payments
made or to be made to the Executive, Excise Taxes and any other Federal,
State, FICA/Medicare and unemployment taxes thereon shall be paid by the
Company or, if paid by the Executive, shall be reimbursed to the Executive by
the Company upon its receipt of satisfactory evidence of such payment having
been made.
7. NOTICE
(a) Any purported termination by the Company or by the Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay the Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary) and
continue him as a participant in all compensation, benefit and insurance plans
in which he was participating when the notice of dispute was given, until the
dispute is finally resolved in accordance with this Agreement. Amounts paid
under this Section are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.
8. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to the Executive under this Agreement shall
be subject to the Executive's compliance with Section 8(b), hereof during the
term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Following the expiration or termination of this Agreement, the
Executive shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, that, if the Executive's
assistance is so required by the Company subsequent to the expiration or
termination of this Agreement, then the Company shall pay to the Executive for
such assistance a fee of $300 per hour plus reasonable and necessary travel
costs related to the provision of such assistance; and provided, however, that
Executive would not be required to furnish such information and assistance to
the Company in connection with any litigation between the Executive and the
Company or any of its subsidiaries or affiliates.
9. NON-COMPETITION
(a) Upon any termination of the Executive's employment hereunder pursuant
to Section 6 hereof, the Executive agrees not to compete with the Company for
a period of one (1) year following such termination in any city, town or
county in which the Company has an office or has filed an application for
regulatory approval to establish an office, determined as of the effective
date of such termination, except as agreed to pursuant to a resolution duly
adopted by the Board. The Executive agrees that during such period and within
said cities, towns and counties, the Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the business activities of the Company. The
parties hereto, recognizing that irreparable injury will result to the
Company, its business and property in the event of the Executive's breach of
this Section 9(a) agree that in the event of any such breach, as judicially
determined, by the Executive, the Company will be entitled, in addition to any
other remedies and damages available, to an injunction to restrain the
violation hereof by the Executive, the Executive's partners, agents, servants,
employers, employees and all persons acting for or with the Executive. The
Executive represents and admits that in the event of the termination of his
employment pursuant to Section 6 hereof, the Executive's experience and
capabilities are such that the Executive can obtain employment in a business
engaged in other lines and/or of a different nature than the Company, and that
the enforcement of a remedy by way of injunction will not prevent the
Executive from earning a livelihood. Nothing herein will be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of
damages from the Executive.
(b) The Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Company is a
valuable, special and unique asset of the business of the Company. The
Executive will not, during or after the term of his employment, disclose any
knowledge of the past, present, planned or considered business activities of
the Company or affiliates thereof to any person, firm, corporation, or other
entity for any reason or purpose whatsoever. Notwithstanding the foregoing,
the Executive may disclose any concepts or ideas that are not solely and
exclusively derived from the business plans and activities of the Company. In
the event of a breach or threatened breach by the Executive of the provisions
of this Section 9(b), the Company will be entitled to an injunction
restraining the Executive from disclosing, in whole or in part, the knowledge
of the past, present, planned or considered business activities of the
Company, or from rendering any services to any person, firm, corporation or
other entity to whom such knowledge, in whole or in part, has been disclosed
or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of
damages from the Executive.
10. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
the Executive and the Company and their respective successors and assigns.
11. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.
12. SEVERABILITY
If, for any reason, any provision of this Agreement or any part of any
provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not so held invalid,
and each such other provision and part thereof shall, to the full extent
consistent with law, continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
14. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of the Company's headquarters set
forth in Section 1, in accordance with the rules of the American Arbitration
Association then in effect. One arbitrator shall be selected by the Company;
one arbitrator shall be selected by the Executive; and one arbitrator shall be
selected by the to arbitrators respectively selected by the Company and the
Executive. Judgment may be entered on the arbitrators' award in any court
having jurisdiction, provided, however, that the Executive shall be entitled
to seek specific performance of his right to be paid and receive benefits
until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
In the event any dispute or controversy arising under or in connection
with the Executive's termination is resolved in favor of the Executive,
whether by judgment, arbitration or settlement, the Executive shall be
entitled to the payment of all back-pay, including salary, bonuses and any
other cash compensation, fringe benefits and any compensation and benefits due
the Executive under this Agreement.
15. PAYMENT OF LEGAL FEES; DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
(a) All reasonable legal fees and other expenses paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to
this Agreement shall be paid or reimbursed by the Company if the Executive is
successful pursuant to a legal judgment, arbitration or settlement.
(b) The Company shall maintain a directors' and officers' liability
insurance policy containing such provisions and amounts of coverage that are
usual and customary for companies of size similar to the Company and subject
to risks similar to those to which the Company is subject, provided that such
coverage can be obtained at commercially reasonable rates.
16. SUCCESSOR TO THE COMPANY
The Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally, to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.
17. UNFUNDED AGREEMENT SUBJECT TO CLAIMS OF COMPANY CREDITORS
The Company's obligation under this Agreement will be unfunded and the
Executive will not have any claims or rights superior to those of any general
creditor of the Company.
18. GOVERNING LAW: JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to any choice of law or
conflict of law provision or rule whether of the State of New York or any
other jurisdictionh that would cause the application hereto of the laws of any
jurisdiction other than the State of New York. Each party agrees to that any
action arising under this Agreement may be brought in the federal or state
courts in the County of New York, State of New York, and each party agrees to
submit to the personal jurisdiction of such courts.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and the Executive has signed this
Agreement, on the day first above written.
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Co-Chairman & Co-Chief Executive Officer
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
