Exhibit 10(ee)
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 18th day of June, 2002, by and between
X-XXX.xxx CORP., a Pennsylvania Business Corporation with its principal place of
business at 00 Xxxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx ("Corporation"),
-AND-
XXXXX X. XXXXXX, an individual, of 000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000 ("Employee").
BACKGROUND
A. Employee has been employed by Corporation since July 20, 1998.
Employee now serves as Corporation's Chairman, President and Chief Executive
Officer.
B. Corporation and Employee entered into an Amended and Restated Employment
Agreement on September 14, 1999 and an Amendment to Employment Agreement on
January 18, 2000 (the "Employment Contracts").
C. The January 18, 2000 Amendment to Employment Agreement deleted Section V
of the September 14, 1999 Amended and Restated Employment Agreement which
contained certain measures and protections for Employee in the event of a change
of control of the Corporation. Corporation and Employee have entered into an
Amended and Restated Change of Control Agreement. Accordingly, no change of
control provisions are contained in this Second Amended and Restated Employment
Agreement.
D. Corporation and Employee mutually desire to set forth the terms of
certain amendments and additions to the Employment Contracts in this Amended and
Restated Employment Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and intending to be legally bound thereby, the parties hereto agree as
follows:
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SECTION I.
Description of Employment
1.01. Employment and Term. The term of Employee's employment with
Corporation commenced on July 20, 1998 and shall extend to June 30, 2007 (the
"Term").
1.02. Capacity. During the balance of the Term, Employee shall serve as
Corporation's Chairman, Chief Executive Officer and President, or in such other
offices or capacities as shall be determined by Corporation's Board of
Directors. Further, if elected by Corporation's shareholders, Employee shall,
without additional compensation therefor, serve as a member of Corporation's
Board of Directors.
1.03. Time and Efforts. During the Term, Employee shall diligently and
conscientiously devote his best efforts and his full time and attention to the
discharge of his duties as Chairman, Chief Executive Officer and President and
of such other duties as may be determined by the Board of Directors of
Corporation. Employee acknowledges that during the period of his employment
pursuant to this Agreement as the Chairman, Chief Executive Officer and
President of Corporation, he will not have any other employment or business
affiliations without the prior approval of the Board of Directors of
Corporation.
SECTION II
Compensation
2.01. Salary. Commencing on July 1, 2002 and during the period of Employee's
employment hereunder as Chairman, Chief Executive Officer and President
(irrespective of such other offices or titles as may be held by Employee) the
Corporation shall pay to Employee a salary at an annual rate of Four Hundred
Thousand and 00/100 ($400,000) Dollars, payable bi-weekly, for services
rendered. The amount of Employee's salary shall be reviewed annually by the
Compensation Committee of the Board of Directors.
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2.02. Business Expenses. Employee shall be reimbursed by Corporation for all
reasonable expenses incurred in carrying out his employment duties or in
otherwise promoting the business of Corporation by presenting to the designated
officer of Corporation an itemized expense account report with receipts
attached.
2.03. Incentive Compensation. During the Term, Corporation shall include
Employee as a participant under Corporation's "Profit Incentive Plan." Employee
will be entitled to such awards as are declared from time to time by the Board
of Directors under the terms of the "Profit Incentive Plan."
2.04. Additional Retirement Benefit. Employee shall receive an annual
additional retirement benefit of Fifty Thousand and 00/100 ($50,000.00) Dollars
commencing at Employee's "retirement," as defined below and continuing until
Employee's death. For this purpose "retirement" shall have the same definition
as under the X-XXX.xxx Corp. Incentive Plan.
2.05. Life Insurance Coverage. Corporation will provide to Employee group
term life insurance in a face amount equal to three times the Employee's salary.
Changes in life insurance coverage will occur at the same time Employee's salary
is changed pursuant to Section 2.01 hereof.
2.06. Automobile Allowance. During the Term, Corporation shall pay Employee,
on or about the first of each month, a monthly allowance of Eight Hundred and
00/100 ($800.00) Dollars to be used to defray Employee's automobile expenses.
2.07. Financial and Tax Planning Reimbursement. Corporation agrees to
reimburse Employee for expenses incurred in his personal financial and tax
planning up to an amount not exceeding One Thousand Five Hundred and 00/100
($1,500.00) Dollars per year during the Term of this Agreement.
2.08. Other Benefit Plans. Employee shall also be eligible to participate in
Corporation's other fringe benefit plans, including both those plans presently
existing and those which may in the future be adopted, in accordance with the
terms and provisions of such plans.
2.09. Vacation. Employee shall be entitled to a reasonable amount of
vacation but not less than three (3) weeks per year.
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2.10. Club Memberships. Corporation agrees to reimburse Employee for annual
dues he is required to pay as a condition of membership at the Centre Hills
Country Club during the Term of this Agreement.
2.11. Physical Examination. Corporation agrees to reimburse Employee for the
expense of an annual physical examination by a physician selected by Employee.
SECTION III
Intellectual Property
3.01. Disclosure. Employee agrees to promptly and fully disclose to
Corporation all inventions, improvements, original works of authorship,
formulas, processes, computer programs, techniques, know-how and data
(hereinafter collectively referred to as "Inventions"), whether or not
patentable or copyrightable, made or conceived or first reduced to practice or
learned by Employee either alone or jointly with others, whether during
Employee's regular hours of employment and directly or indirectly relating to or
capable of being used for the benefit of Corporation's business. Employee
agrees, without compensation additional to that provided for in Section II of
this Agreement, to assign all rights in and to such Inventions to Corporation
and to execute, at Corporation's request, appropriate documents effectuating
such assignments.
3.02. Maintenance of Records. Employee agrees to maintain accurate and
current written records of all such Inventions, in the form of notes, sketches,
drawings, or reports which shall be and will remain the property of and be
available to Corporation at all times.
3.03. Provision of Assistance. Employee agrees, upon Corporation's request,
during and after the Term of employment set forth herein, to assist Corporation,
its attorneys, and nominees at its or their expense in preparing and prosecuting
applications for letters patent on Inventions created by him and applications to
register copyrights on inventions created by him providing, however, that time
actually spent by Employee at such work after termination of employment, at
Corporation's request, shall be paid for by Corporation at a reasonable rate,
and that necessary expenses incurred by Employee in connection with Employee's
duties under this paragraph shall be paid by Corporation.
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3.04. Previous Inventions. Employee expressly retains an interest in and
title to Inventions patented or unpatented which Employee conceived prior to his
Term of employment with Corporation.
3.05. Term of Obligations. Employee's termination of employment by
Corporation under this Agreement shall not affect the obligations imposed on
Employee by Paragraphs 3.01, 3.02 and 3.03 and such obligations shall be binding
on Employee's heirs, executors and administrators.
SECTION IV
Confidentiality and Noncompetition
4.01. Confidentiality. Employee agrees, during and after his Term of
employment hereunder, without the prior written consent of Corporation, not to
disclose to any person other than Corporation, by publication or otherwise, or
use for his own benefit, any confidential information of Corporation or any
Inventions, whether conceived in whole or in part by Employee or by others.
Employee's duty under this paragraph includes but is not limited to the
nondisclosure of trade secrets or confidential information, knowledge or data of
Corporation which he may obtain during the course of his employment relating to
Corporation's business, technical or otherwise, including but not limited to
manufacturing methods, processes, techniques, products, engineering development
products, computer programs, customer lists, machines, research, compositions,
inventions or discoveries. Employee agrees that upon leaving the employ of
Corporation, he will not take with him any original or copy of documents, or
records relating to the foregoing matters, without the written consent of
Corporation. This Section does not apply to any Inventions described in Section
3.04 above.
4.02. Noncompetition. In consideration of Employee's employment, for the
duration of his employment by Corporation, and for a period of two (2) years
after the termination thereof, Employee agrees:
(a) Not to, on behalf of himself or any other entity or corporation,
directly or indirectly, as an employee, agent, independent contractor,
owner, stockholder, partner, officer, director or otherwise, engage in the
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business of the manufacture or sale of electronic equipment for use in cable
television or broadband data transmission systems in Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx xxx Xxxxx Xxxxxxx, Europe, the Middle East and the Far East,
including the Pacific Rim.
(b) Not to call on or solicit, on behalf of himself or on behalf of
any other entity or corporation, any of the customers of Corporation for the
purpose of selling or distributing to any of said customers any product or
service comparable to or competitive with products or services developed,
sold and/or distributed by Corporation or products or services which
Corporation may have under development during the period of time Employee
was employed by Corporation ("Corporation's Products"); nor will Employee in
any way, directly or indirectly, for himself or on behalf of any other
entity or corporation, solicit, divert or take away any customer of
Corporation. For purposes of this Agreement, "customer" shall mean any
person, entity or corporation which has purchased Corporation's Products, or
has received a price quotation from Corporation for Corporation's Products,
at any time within the three (3) year period prior to the date of
termination of Employee's employment.
(c) Not to enter or attempt to enter into an employment or agency
relationship with any person who, at the time of such entry (or attempted
entry), or at the time of termination of Employee's service with
Corporation, was an officer, director, employee, principal or agent of
Corporation if, but only if, such employment or agency relationship is with
respect to a business in competition with Corporation.
(d) Not to induce or attempt to induce any person described in
subparagraph (c) to leave his or her employment, agency, directorship or
office with Corporation to enter into a business in competition with
Corporation.
It is understood by and between the parties to this Agreement that the aforesaid
covenants set forth in this Section 4.02 are essential elements of this
Agreement, and that, but for the agreement of Employee to comply with such
covenants, Corporation would not have agreed to the terms of employment set
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forth in this Agreement. Such covenants by Employee shall be construed as
agreements independent of any other provisions in this Agreement. The existence
of any claim or cause of action by Employee against Corporation, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Corporation of such covenants. In addition to all other legal
remedies available to Corporation for enforcement of the covenants of this
Section 4.02, the parties agree that Corporation shall be entitled to an
injunction by any court of competent jurisdiction to prevent or restrain any
breach or threatened breach hereof. The parties to this Agreement agree that, if
any court of competent jurisdiction determines the specified time period or the
specified geographical area of application, or the definition of Corporation's
Products in such covenants to be unreasonable, arbitrary or against public
policy, then a lesser time period and/or a smaller geographical area and/or a
less encompassing definition of Corporation's Products which are determined to
be reasonable, nonarbitrary and not against public policy may be enforced
against Employee. The parties to this Agreement agree and acknowledge that they
are familiar with the present and proposed operations of Corporation and believe
that the restrictions set forth in this Section 4.02 are reasonable with respect
to its subject matter, duration and geographical application. The provisions of
this Section 4.02 may be waived, in part or fully, in writing by Corporation at
its option. These restrictive covenants shall survive the termination of this
Agreement.
SECTION V
Indemnification for Service as Director and Officer
5.01. Indemnity of Employee. Should Employee serve Corporation as a director
or officer during the Term, Corporation shall hold harmless and indemnify
Employee as a director or officer to the full extent authorized or permitted by
the provisions of the Pennsylvania Business Corporation Law (the "State
Statute"), or by any amendment thereof or other statutory provisions authorizing
or permitting such indemnification which is adopted after the date hereof.
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5.02. Maintenance of Insurance and Self-Insurance.
(a) Corporation represents that it presently has in force and effect
policies of Directors and Officers Liability Insurance ("D&O Insurance") in
insurance companies and amounts as follows (the "Insurance Policies"):
Insurer Amount
------- ------
AIG $10,000,000
ARCH Insurance Group $5,000,000 in excess of the above
$10,000,000
Royal and Sun Alliance $5,000,0000 in excess of the above
$15,000,000
St. Xxxx Excess $5,000,000 in excess of the
above $20,000,000
Xxxxxx $5,000,000 in excess of the
above $25,000,000
Subject only to the provisions of Section 5.02(b) hereof, Corporation hereby
agrees that, so long as Employee shall serve as a director or officer of
Corporation (or shall continue at the request of Corporation to serve as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise) and thereafter so long as Employee
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal or investigative by
reason of the fact that Employee was a director or officer of Corporation
(or served in any of said other capacities), Corporation will purchase and
maintain in effect for the benefit of Employee one more valid, binding and
enforceable policy or policies of D&O Insurance providing, in all respects,
coverage at least comparable to that presently provided pursuant to the
Insurance Policies.
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(b) Corporation shall not be required to maintain said policy or
policies of D&O Insurance in effect if said insurance is not reasonably
available or if, in the reasonable business judgment of the then directors
of Corporation, either (i) the premium cost for such insurance is
substantially disproportionate to the amount of coverage or (ii) the
coverage provided by such insurance is so limited by exclusions that there
is insufficient benefit from such insurance.
(c) In the event Corporation does not purchase and maintain in effect
said policy or policies of D&O Insurance pursuant to the provisions of
Section 5.02(b) hereof, Corporation agrees to hold harmless and indemnify
Employee to the full extent of the coverage which would otherwise have been
provided for the benefit of Employee pursuant to the Insurance Policies.
5.03. Additional Indemnity. Subject only to the exclusions set forth in
Section 5.04 hereof, Corporation hereby further agrees to hold harmless and
indemnify Employee:
(a) Against any and all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by Employee in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Corporation) to
which Employee is, was or at any time becomes a party, or is threatened to
be made a party, by reason of the fact that Employee is, was or at any time
becomes a director, officer, employee or agent of Corporation, or is or was
serving or at any time serves at the request of Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise; and
(b) Otherwise to the fullest extent as may be provided to Employee by
Corporation under the non-exclusivity provisions of Section 7-1 of the
Bylaws of Corporation and the State Statute.
5.04. Limitations on Additional Indemnity. No indemnity pursuant to Section
5.03 hereof shall be paid by Corporation:
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(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of One Thousand and 00/100 ($1,000.00) Dollars
plus the amount of such losses for which Employee is indemnified either
pursuant to Sections 5.01 or 5.02 hereof or pursuant to any D&O Insurance
purchased and maintained by the Corporation;
(b) in respect to remuneration paid to Employee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(c) on account of any suit in which judgment is rendered against
Employee for an accounting of profits made from the purchase or sale by
Employee of securities of Corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law;
(d) on account of Employee's conduct which is finally adjudged by a
court of competent jurisdiction to have been knowingly fraudulent or
deliberately dishonest or to have constituted willful misconduct or
recklessness;
(e) if a final decision by a court of competent jurisdiction shall
determine that such indemnification is not lawful.
5.05. Continuation of Indemnity. All agreements and obligations of
Corporation contained herein shall continue during the period Employee is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporations, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Employee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Employee was a director of
Corporation or serving in any other capacity referred to herein.
5.06. Notification and Defense of Claim. Promptly after receipt by Employee
of notice of the commencement of any action, suit or proceeding, Employee will,
if a claim in respect thereof is to be made against Corporation under this
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Section V, notify Corporation of the commencement thereof; but the omission so
to notify Corporation will not relieve it from any liability which it may have
to Employee otherwise than under this Section V. With respect to any such
action, suit or proceeding as to which Employee notifies Corporation of the
commencement thereof:
(a) Corporation will be entitled to participate therein at its own
expense; and
(b) Except as otherwise provided below, to the extent that it may
wish, Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to Employee. After notice from Corporation to Employee of its
election so to assume the defense thereof, Corporation will not be liable to
Employee under this Section V for any legal or other expenses subsequently
incurred by Employee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Employee
shall have the right to employ Corporation's counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred after notice
from Corporation of its assumption of the defense thereof shall be at the
expense of Employee unless (i) the employment of counsel by Employee has
been authorized by Corporation, (ii) Employee shall have reasonably
concluded that there may be a conflict of interest between Corporation and
Employee in the conduct of the defense of such action or (iii) Corporation
shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall be at
the expense of Corporation. Corporation shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of
Corporation or as to which Employee shall have made the conclusion provided
for in (ii) above.
(c) Corporation shall not be liable to indemnify Employee under this
Section V for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall not settle any action or
claim in any manner which would impose any penalty or limitation on Employee
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with Employee's written consent. Neither Corporation nor Employee will
unreasonably withhold its or his consent to any proposed settlement.
5.07. Repayment of Expenses. Employee will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Employee in the event and only to the extent
that it shall be ultimately determined that Employee is not entitled to be
indemnified by Corporation for such expenses under the provisions of the State
Statute, the Bylaws of Corporation, this Section V or otherwise.
5.08. Enforcement.
(a) Corporation expressly confirms and agrees that it has entered into
this Section V and assumed the obligations imposed on Corporation hereby in
order to induce Employee to, if elected, serve as a director of Corporation,
and acknowledges that Employee is relying upon this Section V in agreeing to
serve Corporation in such capacity.
(b) In the event Employee is required to bring any action to enforce
rights or to collect monies due under this Agreement and is successful in
such action, Corporation shall reimburse Employee for all of Employee's
reasonable fees and expenses in bringing and pursuing such action.
SECTION VI
Miscellaneous
6.01. Use of Name. Employee agrees to allow Corporation to have his name or
picture used by Corporation for advertising or trade purposes during the Term of
this Agreement.
6.02. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon Employee and upon Corporation, their successors and assigns,
including, without limitation, any person, partnership, company or corporation
which may acquire substantially all of Corporation's assets or business or into
which Corporation may be consolidated, merged or otherwise combined.
6.03. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
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6.04. Legal Construction. In the event any one or more of the provisions
contained in this Agreement shall for any reason beheld invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision thereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
6.05. Amendment. No amendment, modification or alteration of the terms
hereof shall be binding unless the same be in writing, dated subsequent to the
date hereof and duly executed by the parties hereto.
6.06. Integration. This Agreement constitutes the entire understanding and
agreement between Corporation and Employee with regard to the subject matter
hereof and supersedes all other agreements and understandings between
Corporation and Employee.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
with the intent to be legally bound thereby on the day and year first above
written.
CORPORATION:
X-XXX.xxx CORP.
By: /s/ Xxxxxx X. Xxxx
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Print Name: Xxxxxx X. Xxxx
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Title: C-COR Board of Directors
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EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX