EXHIBIT 10.61
EMPLOYMENT AGREEMENT
AGREEMENT, made April 30, 1997 by and between L-3 Communications
Holdings, Inc., a Delaware corporation (the "Company") and Xxxxxx X. XxXxxxx
(the "Executive").
RECITALS
In order to induce Executive to serve as the President and Chief
Financial Officer of the Company, the Company desires to provide Executive
with compensation and other benefits on the terms and conditions set forth in
this Agreement.
Executive is willing to accept such employment and perform services
for the Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as
follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the Term hereof as its President
and Chief Financial Officer. In his capacity as the President and Chief
Financial Executive Officer of the Company, Executive shall report to the
Chief Executive Officer (the "CEO") and shall have the customary powers,
responsibilities and authorities of presidents and chief financial officers
of corporations of the size, type and nature of the Company, as it exists
from time to time, and as are assigned by the CEO.
1.2 Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as the President and Chief Financial
Officer of the Company commencing as of the date hereof (the "Commencement
Date") and agrees to devote his full business time and efforts to the
performance of services, duties and responsibilities in connection therewith,
subject at all times to review and control of the CEO. In addition, during
the Initial Term and any Renewal Term, (i) the Company agrees to nominate
Executive for election to the Board of Directors of the Company (the "Board")
and use its best efforts to cause his election to the Board and Executive
agrees to serve on the Board of the Company and (ii) during the Term of
Employment, Executive also agrees to serve, if elected, as an officer and/or
director of any Subsidiary of the Company, without the payment of any
additional compensation therefor. Upon the termination of Executive's
employment for any reason, Executive shall resign as a member of the Board of
the Company or any Subsidiary of the Company.
1.3 Nothing in this Agreement shall preclude Executive from
engaging in charitable work and community affairs, from managing any
investment made by him with respect to which Executive is not substantially
involved with the management or operation of the entity in which Executive
has invested (provided that no such investment in publicly traded equity
securities or other property may exceed 5% of the equity of any entity,
without the prior approval of the Board) or from serving, subject to the
prior approval of the Board, as a member of boards of directors or as a
trustee of any other corporation, association or entity, to the extent that
any of the above activities do not materially interfere with the performance
of his duties hereunder. For purposes of the preceding sentence, any approval
by the Board required therein shall not be unreasonably withheld.
2. Term of Employment. Executive's term of employment under this
Agreement (the "Term of Employment") shall commence on the Commencement Date
and, subject to the terms hereof, shall terminate on the earlier of (i) the
fifth anniversary of the Commencement Date "Initial Term") or (ii)
termination of Executive's employment pursuant to this Agreement.
Notwithstanding the foregoing, subsequent to the Initial Term, Executive's
Term of Employment under this Agreement shall automatically renew annually
for one year renewal terms (the "Renewal Term") unless either party shall
deliver to the other written notice, at least 90 days prior to the expiration
of the Initial Term or any Renewal Term, that the Term of Employment shall
not be extended. In such event, the Term of Employment will end at its then
scheduled expiration date and shall not be further extended except by written
agreement of the Company and Executive.
3. Compensation.
3.1 Salary. During the Initial Term of Executive's employment
under the terms of this Agreement, the Company shall pay Executive a base
salary ("Base Salary") at an initial rate of $500,000 per annum. Base Salary
shall be payable in accordance with the ordinary payroll practices of the
Company. During the Term of Employment, the Board shall, in good faith,
review, at least annually, the Executive's Base Salary in accordance with the
Company's customary procedures and practices regarding the salaries of senior
executives and may, if determined by the Board to be appropriate, increase
Executive's Base Salary following such review. Increases in the rate of
salary, once granted, shall not be subject to revocation or decrease
thereafter, and "Base Salary" for all purposes herein shall be deemed to be a
reference to such higher amount.
4. Employee Benefits.
4.1 Equity and Stock Options. Simultaneously with the execution
of this Agreement, the Company and Executive are entering into the
Subscription Agreement, the Option Agreement and the Stockholders' Agreement
in the forms attached hereto as Exhibits A, B and C, respectively (the
"Ancillary Documents"). Executive shall not be eligible to receive any stock
option or other equity incentive other than as set forth in the Ancillary
Documents.
4.2 Employee Benefit Programs, Plans and Practices. The Company
shall provide Executive while employed hereunder with coverage under such
employee benefits (commensurate with his position in the Company and to the
extent permitted under any employee benefit plan) in accordance with the
terms thereof, which the Company makes available to its senior executives.
4.3 Vacation. Executive shall be entitled to twenty (20) business
days paid vacation each calendar year, which shall be taken at such times as
are consistent with Executive's responsibilities hereunder. Any vacation days
not taken during the calendar year in which they are accrued may be carried
over into the next subsequent year.
5. Expenses. Subject to prevailing Company policy or such
guidelines as may be established by the Board, the Company will reimburse
Executive for all reasonable expenses incurred by Executive in carrying out
his duties.
6. Termination of Employment.
6.1 Termination Not for Cause or for Good Reason. (a) The
Company or Executive may terminate Executive's Term of Employment at any time
for any reason by written notice at least thirty (30) days in advance. If
Executive's employment is terminated (i) by the Company other than for Cause
(as defined in Section 6.2(b) hereof), Disability (as defined in Section 6.3
hereof) or death or (ii) by Executive for Good Reason (as defined in Section
6.1(b) hereof) prior to the end of the Initial Term or any Renewal Term, the
Company shall continue to pay Executive's Base Salary through the end of the
Initial Term or the Renewal Term (the "Continuation Period"), as the case may
be, with such payments to be made in accordance with the terms of Section
3.1. (the "Severance Payments"). In addition, the Company shall continue to
provide Executive during the Continuation Period with life insurance, medical
and hospitalization benefits (collectively, the "Continuation Benefits")
comparable to those provided to other senior executives; provided, however,
that any such coverage shall terminate to the extent that Executive is
offered or obtains comparable life insurance, medical or hospitalization
benefits coverage from any other employer during the Continuation Period.
Notwithstanding the foregoing, if Executive breaches any provision of Section
11 hereof, the remaining balance of the Severance Payments and any
Continuation Benefits shall be forfeited. Executive shall be entitled to
receive the benefits, if any, provided under the employee benefit programs,
plans and practices referred to in Section 4.2, in accordance with their
terms.
(b) For purposes of this Agreement, "Good Reason" shall mean any
of the following (without Executive's express prior written consent):
(i) A reduction by the Company in Executive's Base Salary (in
which event Severance Payments shall be made based upon Executive's Base
Salary in effect prior to any such reduction); or
(ii) Any material diminution or material adverse change in
Executive's titles, duties or responsibilities, unless due to a
promotion or increased responsibility of Executive.
(c) Termination by Executive for Good Reason shall be made by
delivery to the Company by Executive of written notice, given at least 45
days prior to such termination, which sets forth the conduct believed to
constitute Good Reason; provided, however, that the Company shall have the
opportunity to cure the Good Reason during the first 30 days of such notice
period and if the Good Reason is cured within such 30-day period, Executive's
notice of termination shall be deemed withdrawn. If no notice is given within
90 days of the event giving rise to Good Reason, the Good Reason shall be
deemed waived.
6.2 Voluntary Termination by Executive; Discharge for Cause. (a)
In the event that Executive's employment is terminated (i) by the Company for
Cause, as hereinafter defined or (ii) by Executive other than for Good
Reason, Disability or death, Executive shall only be entitled to receive
(A) any Base Salary accrued but unpaid prior to such termination and (B) any
benefits provided under the employee benefit programs, plans and practices
referred to in Section 4.2 hereof, in accordance with their terms. After the
termination of Executive's employment under this Section 6.2, the obligations
of the Company under this Agreement to make any further payments, or provide
any benefits specified herein, to Executive shall thereupon cease and
terminate.
(b) As used herein, the term "Cause" shall be limited to (i) gross
neglect of or willful and continuing refusal by Executive to substantially
perform Executive's duties hereunder (other than due to death or Disability,
as such term is defined in Section 6.3 hereof), (ii) any breach of the
provisions of Section 11 of this Agreement by Executive, (iii) willfully
engaging in conduct that is demonstrably injurious to the Company or the
Company's subsidiaries or affiliates by Executive or (iv) conviction of, or
plea of nolo contendere, by Executive to (a) any felony or (b) a misdemeanor
involving moral turpitude. Termination of Executive pursuant to this Section
6.2 shall be made by delivery to Executive of written notice, given at least
30 days prior to such Termination, from the Board specifying the particulars
of the conduct by Executive set forth in any of clauses (i) through (iv)
above. Termination shall be effected by a majority vote of the Board at a
meeting at which Executive shall have had the opportunity (along with
counsel) to be heard unless within 30 days after receiving such notice,
Executive shall have cured Cause to the reasonable satisfaction of the Board;
provided, however, that no cure shall be possible if termination for Cause is
made pursuant to this Section 6.2(b)(ii) or (iv). As long as Executive is on
the Board, he shall reasonably cooperate to cause a valid Board meeting to
occur.
6.3 Disability. In the event of the Disability (as defined below)
of Executive during the Term of Employment, the Company may terminate
Executive's Term of Employment upon written notice to Executive (or
Executive's personal representative, if applicable) effective upon the date
of receipt thereof (the "Disability Commencement Date"). The obligation of
the Company to make any further payments under this Agreement shall, except
for earned but unpaid Base Salary, cease as of the Disability Commencement
Date; provided, however, that Executive shall continue to receive payments
equal to Executive's Base Salary otherwise payable under this Agreement for a
period equal to the lesser of (i) six months after the date of the occurrence
of the incapacity causing Executive's Disability and (ii) the number of
months otherwise remaining in the Term of Employment, in either case, reduced
by the amount of any disability payments otherwise payable to Executive under
any insurance program of the Company. The term "Disability," for purposes of
this Agreement, shall mean Executive's absence from the full-time performance
of Executive's duties pursuant to a reasonable determination made in
accordance with the Company's disability plan that Executive is disabled as a
result of incapacity due to physical or mental illness that lasts, or is
reasonably expected to last, for at least six months.
6.4 Death. In the event of Executive's death during his Term of
Employment hereunder or at any time thereafter while payments are still owing
to Executive under the terms of this Agreement, all obligations of the
Company to make any further payments, other than the obligation to pay any
accrued but unpaid Base Salary or remaining payments that were payable to
Executive by reason of his termination of employment under Section 6.1 to
which Executive was entitled at the time of his death, shall terminate upon
Executive's death, and benefits shall become payable under the Company's life
and accidental death insurance program in accordance with its terms. Benefits
under all other employee benefit programs, plans and practices shall be paid
in accordance with their terms.
6.5 No Further Notice or Compensation. Executive understands and
agrees that he shall not be entitled to any further notice or compensation
upon Termination of Employment under this Agreement, other than amounts
specified in this Section 6 and the Ancillary Documents. Executive shall not
have any obligation to seek comparable employment following such termination
or resignation, nor shall any compensation received from any subsequent
employment reduce the Company's obligations hereunder.
6.6 Executive's Duty to Provide Materials. Upon the termination
of the Term of Employment for any reason, Executive or his estate shall
surrender to the Company all correspondence, letters, files, contracts,
mailing lists, customer lists, advertising materials, ledgers, supplies,
equipment, checks, and all other materials and records of any kind that are
the property of the Company or any of its subsidiaries or affiliates, that
may be in Executive's possession or under his control, including all copies
of any of the foregoing; provided, however, Executive shall not be required
to surrender his personal rolodex, telephone book, appointment book and
personal materials acquired by Executive prior to the date hereof.
7. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company:
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xxxxxx X. XxXxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxxxxx
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after
the actual date of sending shall constitute the time at which notice was
given.
8. Separability. If any provision of this Agreement shall be
declared to be 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.
9. Assignment. This contract shall be binding upon and inure to
the benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except by will or, in the case of the Options, by
trust for the benefit of Executive's spouse and/or children or by operation
of the laws of intestate succession) or by the Company, except that the
Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder.
10. Amendment. This Agreement may only be amended by written
agreement of the parties hereto.
11. Nondisclosure of Confidential Information; Non-Competition.
(a) While employed by the Company, and at any time thereafter, the Executive
shall not, without the prior written consent of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed
by the Company, in the business of and for the benefit of the Company or (ii)
when required to do so by applicable law, by a court, by any governmental
agency, or by any administrative body or legislative body (including a
committee thereof); provided, however, that Executive shall give reasonable
notice under the circumstances to the Company that he has been notified that
he will be required to so disclose as soon as possible after receipt of such
notice in order to permit the Company to take whatever action it reasonably
deems necessary to prevent such disclosure and Executive shall cooperate with
the Company to the extent that it reasonably requests him to do so. For
purposes of this Section 11(a), "Confidential Information" shall mean
non-public information concerning the financial data, strategic business
plans, product development (or other proprietary product data), customer
lists, marketing plans and other non-public, proprietary and confidential
information of the Company, its subsidiaries, its affiliates or customers,
that, in any case, is not otherwise available to the public (other than by
Executive's breach of the terms hereof).
(b) In consideration of the Company's obligations under this
Agreement, Executive agrees that during the period of his employment
hereunder and for a period of twelve (12) months thereafter, without the
prior written consent of the Board, (A) he will not, directly or indirectly,
either as principal, manager, agent, consultant, officer, stockholder,
partner, investor, lender or employee or in any other capacity, carry on, be
engaged in or have any financial interest in, any entity which is in
competition with the business of the Company or its subsidiaries and (B) he
shall not, on his own behalf or on behalf of any person, firm or company,
directly or indirectly, solicit or offer employment to any person who is or
has been employed by the Company or its subsidiaries at any time during the
twelve (12) months immediately preceding such solicitation; provided,
however, that if the Executive's employment terminates following the
expiration of the Initial Term, this subsection 11(b) shall only be effective
during the period, if any, that the Company pays the Executive the Severance
Payments.
(c) For purposes of this Section 11, an entity shall be deemed to
be in competition with the Company if it is principally involved in the
purchase, sale or other dealing in any property or the rendering of any
service purchased, sold, dealt in or rendered by the Company as a part of the
business of the Company within the same geographic area in which the Company
effects such sales or dealings or renders such services. Notwithstanding this
subsection 11(c) or subsection 11(b), nothing herein shall (i) prohibit
Executive from serving as an officer, employee or independent consultant of
any business unit or subsidiary which would not otherwise be in competition
with the Company or its subsidiaries, but which business unit is a part of,
or which subsidiary is controlled by, or under common control with, an entity
that would be in competition with the Company or its subsidiaries, so long as
Executive does not engage in any activity which is in competition with any
business of the Company or its subsidiaries or (ii) be construed so as to
preclude Executive from investing in any publicly or privately held company,
provided Executive's beneficial ownership of any class of such company's
securities does not exceed 5% of the outstanding securities of such class.
(d) Executive agrees that this covenant not to compete is
reasonable under the circumstances and will not interfere with his ability to
earn a living or to otherwise meet his financial obligations. Executive and
the Company agree that if in the opinion of any court of competent
jurisdiction such restraint is not reasonable in any respect, such court
shall have the right, power and authority to excise or modify such provision
or provisions of this covenant as to the court shall appear not reasonable
and to enforce the remainder of the covenant as so amended. Executive agrees
that any breach of the covenants contained in this Section 11 would
irreparably injure the Company. Accordingly, Executive agrees that, in the
event the Company determines that Executive has breached the covenants
contained in this Section 11, the Company may, in addition to pursuing any
other remedies it may have in law or in equity, cease making any payments
otherwise required by this Agreement and obtain an injunction against
Executive from any court having jurisdiction over the matter restraining any
further violation of this Agreement by Executive.
12. Beneficiaries; References. Executive shall be entitled to
select (and change, to the extent permitted under any applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following Executive's death, and may change such election, in
either case by giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of his incompetence, reference
in this Agreement to Executive shall be deemed, where appropriate, to refer
to his beneficiary, estate or other legal representative. Any reference to
the masculine gender in this Agreement shall include, where appropriate, the
feminine.
13. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
The provisions of this Section 13 are in addition to the survivorship
provisions of any other section of this Agreement.
14. Dispute Resolution; Legal Fees. Any dispute or controversy
arising under or in connection with this Agreement shall be resolved by the
court with the appropriate jurisdiction in the State of New York. The
prevailing party shall be entitled to be reimbursed for any reasonable legal
fees and other fees and expenses which may be incurred in respect of
enforcing its respective rights under this Agreement.
15. Governing Law. This Agreement shall be construed, interpreted
and governed in accordance with the laws of the State of New York, without
reference to rules relating to conflicts of law.
16. Effect on Prior Agreements. This Agreement and the Ancillary
Documents contain the entire understanding between the parties hereto and
supersedes in all respects any prior or other agreement or understanding,
both written and oral, between the Company, any affiliate of the Company or
any predecessor of the Company or affiliate of the Company and Executive.
17. Withholding. The Company shall be entitled to withhold from
payment any amount of withholding required by law.
18. Survival. Notwithstanding the expiration of the term of this
Agreement, the provisions of Section 11 hereunder shall remain in effect as
long as is reasonably necessary to give effect thereto in accordance with the
terms hereof.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
L-3 Communications Holdings, Inc.
By /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President, Finance and Controller
/s/ Xxxxxx X. XxXxxxx
Xxxxxx X. XxXxxxx
