TIME ACCELERATED RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT dated September 24, 1998 between Comtech Telecommunications
Corp., a Delaware corporation ("Comtech"), and Xxxxxx Xxxxxxx ("Employee").
WHEREAS, Employee is employed by Comtech's wholly-owned subsidiary,
Comtech Mobile Datacom Corporation ("CMDC"), and Comtech and Employee desire to
(a) provide additional incentives to Employee in connection with Employee's
responsibilities for the management and growth of the business of CMDC, and (b)
more closely align Employee's interests with the interests of stockholders of
Comtech, through, in relation to both objectives, the sale and issuance to
Employee of restricted shares of Common Stock of Comtech.
NOW, THEREFORE, Comtech and Employee agree as follows:
1. Definitions
(a) "Comtech" means Comtech Telecommunications Corp., a Delaware
corporation.
(b) "Escrow Agent" means the Escrow Agent as defined in the Escrow
Agreement in the form annexed hereto as Exhibit A.
(c) "Cumulative CMDC Pre-Tax Profits" means CMDC's aggregate income
before income taxes minus CMDC's aggregate losses in the period from inception
of operations of CMDC to the end of the relevant fiscal year. Determinations of
such amounts shall be made in accordance with generally accepted accounting
principles, with the exception that no effect shall be given to
(i) interest or like charges or accruals ("Capital Charges") in
respect of Comtech cash advances to CMDC that are less than $1.5
million plus the amount of dividends paid by CMDC to Comtech
during the relevant fiscal year;
(ii) Capital Charges in excess of 1/2% above the average rate of
interest then charged to Comtech for all borrowings by Comtech, on
Comtech cash advances to CMDC exceeding $1.5 million at any time
outstanding plus the amount of dividends paid by CMDC to Comtech
during the relevant fiscal year;
(iii) general or administrative expenses of Comtech, including
charges for management or corporate services provided by Comtech
to CMDC; or
(iv) the sale of shares of Comtech Common Stock to Employee and
other employees of CMDC, or the repurchase of same.
1
(d) "Net Cash Borrowings" means the cumulative amount of cash advances
to CMDC by Comtech.
(e) "Net Cash Flow" means total cash refunds by CMDC to Comtech, net of
cash advances by Comtech to CMDC.
(f) "Restricted Shares" means the Shares subject to the restrictions
against transfer provided in Section 3 hereof and which are required to be
resold to Comtech under certain circumstances as provided in Section 3 hereof.
(g) "Unrestricted Shares" means Shares as to which all restrictions
against transfer and the obligation to resell to Comtech have lapsed.
(h) "Shares" shall have the meaning provided in Section 2 hereof.
2. Sale and Purchase of Shares
On the terms, and subject to the conditions hereinafter provided,
simultaneously with the execution and delivery of this Agreement, (i) Comtech is
selling and issuing to Employee, and Employee is purchasing from Comtech, 20,000
shares of Common Stock, par value $.10 per share, of Comtech (the "Shares");
(ii) Employee is paying to Comtech by certified or bank cashier's check a total
purchase price for the Shares of $2,000 (i.e., $.10 per share); and (iii)
Employee is depositing the Shares with the Escrow Agent, to be held by the
Escrow Agent pursuant and subject to the terms of an Escrow Agreement in the
form annexed hereto as Exhibit A.
3. Restrictions
(a) The Shares shall not be transferred until such time as they shall
become "Unrestricted Shares" pursuant to Section 4 hereof (the Shares subject to
such restriction being hereinafter referred to as "Restricted Shares"). As used
in this Agreement, "transfer" shall include, without limitation, any sale,
assignment, gift, pledge, hypothecation, bequest, devise, encumbrance, or other
disposition, whether voluntary or by operation of law. Any attempted transfer of
Restricted Shares (other than to Comtech pursuant to the provisions of Section 4
of this Agreement) shall be null and void and Comtech shall not give effect on
its records to any such attempted transfer.
(b) Employee authorizes Comtech and its transfer agents not to transfer
any certificates of Comtech Common Stock on its books and records transferred in
violation of this Agreement, and further agrees that any such purported transfer
shall be void and of no effect.
(c) An original of this Agreement shall be kept in the files of Comtech
at its principal office and reference to this Agreement shall be endorsed on all
stock certificates subject to this Agreement, now or hereafter issued, by
writing or stamping thereon a legend in substantially the following form:
2
"Sale, assignment, gift, bequest, devise, pledge,
hypothecation, encumbrance or other disposition of the shares
represented by this Certificate is restricted by the terms of
a Restricted Stock Agreement, dated September __, 1998, a
copy of which, and any amendments thereto, may be examined at
the principal office of Comtech Telecommunications Corp."
(d) Employee shall possess all rights as a stockholder (including,
without limitation, voting rights, rights to dividends, if any, declared and
rights on liquidation) except such as are expressly restricted by the provisions
of this Agreement.
4. Lapse of Restrictions; Forfeiture of Shares
(a) One-sixth of the Shares shall become Unrestricted Shares, subject
to satisfying the tax withholding requirements contained in Subsection 4(d)
hereof, upon the first anniversary of the date hereof.
(b) Subject to satisfying the tax withholding requirements contained in
Subsection 4(d) hereof, the remaining five-sixths of the Shares shall become
Unrestricted Shares on the tenth anniversary of the date hereof, except that
such Shares shall become Unrestricted Shares on an accelerated basis in the
one-sixth increments set forth in the following schedule after the Performance
Criteria set forth therein are achieved:
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- --------------------
o Fiscal year-end cumulative CMDC net sales One-sixth (1/6)
of $3,000,000 and Net Cash Borrowings at of Shares purchased
that time of less than $1,000,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $500,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$500,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $2,000,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$100,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $3,000,000 and fiscal year Net of Shares purchased
Cash Flow of $1,500,000 or more
3
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- --------------------
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $7,000,000 and fiscal year Net of Shares purchased
Cash Flow of $2,500,000 or more
(c) Notwithstanding anything to the contrary contained in this
Agreement, but subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, (i) all Restricted Shares shall become Unrestricted
Shares upon termination of Employee's employment with CMDC by reason of his
death, total and permanent disability (as determined in accordance with the
policies and practices of Comtech), normal retirement (at or after age 70 or,
with the consent of Comtech, before age 70), or early retirement at Comtech's
request; and (ii) upon discharge of Employee by CMDC other than for cause (which
for this purpose shall mean Employee's willful misconduct, dereliction of duty,
or conviction for a crime involving moral turpitude).
(d) If, at the time any Shares become Unrestricted Shares, Comtech
determines that it has withheld an amount which is less than the withholding
that may be required pursuant to the Internal Revenue Code or other applicable
law, Employee shall forthwith pay to Comtech the amount of monies necessary to
satisfy such withholding or equivalent requirements. Until the payment of such
monies or, alternatively the execution and delivery by Employee of an agreement
satisfactory to Comtech in it sole discretion providing for the payment of such
monies, the Unrestricted Shares shall not be released to Employee pursuant to
the terms of the Escrow Agreement. If payment of such monies is not made or such
agreement is not entered into, such Unrestricted Shares shall, at Comtech's
direction, be sold by Employee to Comtech for a purchase price equal to the
purchase price per share provided in Section 2 hereof, adjusted, as appropriate
for any subsequent stock-split, recapitalization or the like.
(e) In the event of Employee's termination of employment with CMDC for
any reason other than those specified in Subsection 4(c) hereof (including,
without limitation, any voluntary termination of employment) all Restricted
Shares shall be sold by Employee to Comtech, for the price and otherwise in the
manner provided in Subsection 4(d) hereof.
5. Representations and Warranties of Employee
Employee represents and warrants as follows:
(a) Assuming that Comtech has transferred to Employee good and
marketable title to the Shares, Employee has not taken any action or permitted
any action to occur, nor will employee take any action or permit any action to
occur, that would result in the Shares becoming subject to any claim, lien,
pledge or encumbrance of any nature whatsoever.
4
(b) Employee has full legal power and capacity to execute and deliver
this Agreement, and such execution and delivery and Employee's acceptance of
employment with CMDC contemporaneously with the execution and delivery of this
Agreement are not in violation of any other agreement, instrument or obligation
to which Employee is a party, including, without limitation, any employment
agreement or non-competition agreement of any kind whatsoever.
(c) This Agreement constitutes the legal, valid and binding obligation
of Employee.
(d) Employee has not employed any broker or finder or incurred any
liability for any brokerage fees or commissions or finders' fees in connection
with this Agreement.
(e) Employee is acquiring the Shares for investment purposes only and
not with a view to distribution, and acknowledges that he has been advised by
his counsel, and understands, that the Shares have not been registered under the
Securities Act of 1933, as amended, and under the securities laws, may not be
sold or transferred unless registered under such Act or pursuant to an exemption
from such registration and that a restrictive legend to that effect shall be
placed on the certificate(s) representing the Shares. Employee has further been
advised by his counsel with respect to making an election pursuant to Section
83(b) of the Internal Revenue Code and has chosen, or will choose, whether to
make such election as he deems appropriate.
6. Representations and Warranties of Comtech
Comtech represents and warrants as follows:
(a) Comtech is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with full power and legal right
to execute and deliver this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Comtech and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action and do not violate the terms of any outstanding
agreements to which it is a party. This Agreement constitutes the legal, valid
and binding obligation of Comtech.
7. Certain Employment Matters
(a) The purchase of Shares hereunder shall not preclude Employee from
being eligible to participate in any other plans, programs or benefits otherwise
available to employees of Comtech or its subsidiaries. Nothing in this Agreement
shall be construed to constitute or be evidence of an agreement or
understanding, express or implied, on the part of Comtech or CMDC to employ
Employee for any specific period of time.
(b) In consideration of his employment with CMDC and the sale and
issuance of the Shares to him pursuant to this Agreement, Employee shall not,
during the period he is employed by CMDC and for one year thereafter following
Employee's voluntary termination of is employment by CMDC, in any manner,
directly or indirectly, engage anywhere in the United States in any
5
business which competes with the business in which CMDC or Comtech or any of its
other subsidiaries is engaged at any time during the period in which Employee is
employed by CMDC, and he shall not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is so engaged; provided, however, that nothing herein
contained shall prohibit Employee from owning not more than 5% of the
outstanding stock of any publicly held corporation. If any restriction set forth
in this Subsection 7(b) is found by a court of competent jurisdiction or
arbitrator to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) Employee shall hold in a fiduciary capacity for the benefit of CMDC
and Comtech all confidential information, knowledge or data relating to CMDC and
Comtech or any of its other subsidiaries, and their respective businesses
obtained by Employee before or during the period in which he is employed by
CMDC.
(d) The restrictions contained in Subsections (b) and (c) of this
Section 7 are necessary for the protection of the business and goodwill of CMDC
and Comtech and are considered by Employee to be reasonable to such purpose.
Employee agrees that any breach of such Subsections (b) and (c) will cause CMDC
and/or Comtech substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, CMDC
and/or Comtech shall have the right to seek specific performance and injunctive
relief.
8. Liability of Comtech
The liability of Comtech under this Agreement is limited to the
obligations expressly set forth herein and nothing herein contained shall be
construed to impose any liability on Comtech in favor of Employee with respect
to any loss, cost or expense which Employee may incur or suffer in connection
with or arising out of this Agreement, including, without limitation, Employee's
purchase of the Shares.
9. Voting Concerning Certain Corporate Matters
(a) Employee agrees to have counted for purposes of a quorum, and to
vote, all Restricted Shares (whether such vote shall be by written consent or by
vote, in person or, if requested by Comtech, by proxy, at a meeting of
shareholders of Comtech) for the election to Comtech's Board of Directors of the
nominees from time to time designated by the Board of Directors of Comtech.
(b) To facilitate, and not in limitation of, the agreement contained in
Subsection 9(a) hereof, Employee irrevocably appoints the Chairman of the Board
and the Secretary of Comtech, and their respective successors in office, and
each of them, with full power of substitution, as the lawful proxy for Employee
as to all Restricted Shares, to vote all Restricted Shares which Employee is
entitled to vote, for and in the name, place and stead of Employee, at any
annual, special or other meeting of the holders of shares of Comtech Common
Stock and at any adjournment thereof, or
6
pursuant to any consent in lieu of a meeting, for the election to Comtech's
Board of Directors of the nominees designated by the Board of Directors of
Comtech. The foregoing proxy is coupled with an interest and therefore not
terminable by Employee without the consent of Comtech.
10. Additional Restricted Shares.
Employees agrees that the term "Restricted Shares" shall include any
shares or other securities which he may receive or be entitled to receive as a
result of the ownership of the original Restricted Shares whether the same are
issued as a result of a share split, share dividend, recapitalization, or other
subdivision or consolidation of shares effected without receipt of consideration
by Comtech or the result of the merger or consolidation of Comtech or sale of
assets of Comtech.
11. Binding Agreement
This Agreement shall inure to the benefit of, and be binding upon,
Comtech and its successors and assigns and Employee and his heirs, personal
representatives, successors and assigns.
12. Notices
Any notice, request or other communication hereunder shall be in
writing and shall be deemed to have been duly given if hand delivered or mailed
by registered or certified mail, return receipt requested, addressed as herein
set forth, or to such other address as may be designated by a notice given
pursuant hereto, which change of address notice shall be effective upon receipt
thereof.
If to Comtech:
Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, President
Copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Employee:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
7
13. Survival.
All of the representations, warranties, agreements and covenants
contained herein or made or deemed to have been made pursuant hereto or in
connection with the transactions contemplated hereby shall survive the execution
and delivery hereof and the consummation of the transactions contemplated
hereby.
14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one
instrument.
16. Expenses
Employee and Comtech shall each bear all the expenses incurred by them
or it in connection with this Agreement and the transactions contemplated
hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, Comtech and Employee have caused this Agreement to
be executed as of the date first above written.
COMTECH TELECOMMUNICATIONS CORP.
By:
----------------------------------
Authorized Signatory
By:
----------------------------------
Xxxxxx Xxxxxxx
9
TIME ACCELERATED RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT dated September 24, 1998 between Comtech Telecommunications
Corp., a Delaware corporation ("Comtech"), and Xxxxxx Xxxxxxx ("Employee").
WHEREAS, Employee is employed by Comtech's wholly-owned subsidiary,
Comtech Mobile Datacom Corporation ("CMDC"), and Comtech and Employee desire to
(a) provide additional incentives to Employee in connection with Employee's
responsibilities for the management and growth of the business of CMDC, and (b)
more closely align Employee's interests with the interests of stockholders of
Comtech, through, in relation to both objectives, the sale and issuance to
Employee of restricted shares of Common Stock of Comtech.
NOW, THEREFORE, Comtech and Employee agree as follows:
1. Definitions
(a) "Comtech" means Comtech Telecommunications Corp., a Delaware
corporation.
(b) "Escrow Agent" means the Escrow Agent as defined in the Escrow
Agreement in the form annexed hereto as Exhibit A.
(c) "Cumulative CMDC Pre-Tax Profits" means CMDC's aggregate income
before income taxes minus CMDC's aggregate losses in the period from inception
of operations of CMDC to the end of the relevant fiscal year. Determinations of
such amounts shall be made in accordance with generally accepted accounting
principles, with the exception that no effect shall be given to
(i) interest or like charges or accruals ("Capital Charges")
in respect of Comtech cash advances to CMDC that are less
than $1.5 million plus the amount of dividends paid by CMDC
to Comtech during the relevant fiscal year;
(ii) Capital Charges in excess of 1/2% above the average
rate of interest then charged to Comtech for all borrowings
by Comtech, on Comtech cash advances to CMDC exceeding $1.5
million at any time outstanding plus the amount of dividends
paid by CMDC to Comtech during the relevant fiscal year;
(iii) general or administrative expenses of Comtech,
including charges for management or corporate services
provided by Comtech to CMDC; or
(iv) the sale of shares of Comtech Common Stock to Employee
and other employees of CMDC, or the repurchase of same.
(d) "Net Cash Borrowings" means the cumulative amount of cash advances
to CMDC by Comtech.
(e) "Net Cash Flow" means total cash refunds by CMDC to Comtech, net
of cash advances by Comtech to CMDC.
(f) "Restricted Shares" means the Shares subject to the restrictions
against transfer provided in Section 3 hereof and which are required to be
resold to Comtech under certain circumstances as provided in Section 3 hereof.
(g) "Unrestricted Shares" means Shares as to which all restrictions
against transfer and the obligation to resell to Comtech have lapsed.
(h) "Shares" shall have the meaning provided in Section 2 hereof.
2. Sale and Purchase of Shares
On the terms, and subject to the conditions hereinafter provided,
simultaneously with the execution and delivery of this Agreement, (i) Comtech is
selling and issuing to Employee, and Employee is purchasing from Comtech, 35,000
shares of Common Stock, par value $.10 per share, of Comtech (the "Shares");
(ii) Employee is paying to Comtech by certified or bank cashier's check a total
purchase price for the Shares of $3,500 (i.e., $.10 per share); and (iii)
Employee is depositing the Shares with the Escrow Agent, to be held by the
Escrow Agent pursuant and subject to the terms of an Escrow Agreement in the
form annexed hereto as Exhibit A.
3. Restrictions
(a) The Shares shall not be transferred until such time as they shall
become "Unrestricted Shares" pursuant to Section 4 hereof (the Shares subject to
such restriction being hereinafter referred to as "Restricted Shares"). As used
in this Agreement, "transfer" shall include, without limitation, any sale,
assignment, gift, pledge, hypothecation, bequest, devise, encumbrance, or other
disposition, whether voluntary or by operation of law. Any attempted transfer of
Restricted Shares (other than to Comtech pursuant to the provisions of Section 4
of this Agreement) shall be null and void and Comtech shall not give effect on
its records to any such attempted transfer.
(b) Employee authorizes Comtech and its transfer agents not to
transfer any certificates of Comtech Common Stock on its books and records
transferred in violation of this Agreement, and further agrees that any such
purported transfer shall be void and of no effect.
(c) An original of this Agreement shall be kept in the files of
Comtech at its principal office and reference to this Agreement shall be
endorsed on all stock certificates subject to this Agreement, now or hereafter
issued, by writing or stamping thereon a legend in substantially the following
form:
2
"Sale, assignment, gift, bequest, devise, pledge, hypothecation,
encumbrance or other disposition of the shares represented by this
Certificate is restricted by the terms of a Restricted Stock
Agreement, dated September __, 1998, a copy of which, and any
amendments thereto, may be examined at the principal office of Comtech
Telecommunications Corp."
(d) Employee shall possess all rights as a stockholder (including,
without limitation, voting rights, rights to dividends, if any, declared and
rights on liquidation) except such as are expressly restricted by the provisions
of this Agreement.
4. Lapse of Restrictions; Forfeiture of Shares
(a) One-sixth of the Shares shall become Unrestricted Shares, subject
to satisfying the tax withholding requirements contained in Subsection 4(d)
hereof, upon the first anniversary of the date hereof.
(b) Subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, the remaining five-sixths of the Shares shall become
Unrestricted Shares on the tenth anniversary of the date hereof, except that
such Shares shall become Unrestricted Shares on an accelerated basis in the
one-sixth increments set forth in the following schedule after the Performance
Criteria set forth therein are achieved:
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end cumulative CMDC net sales
of $3,000,000 and Net Cash Borrowings at One-sixth (1/6)
that time of less than $1,000,000 of Shares purchased
o Fiscal year-end Cumulative CMDC Pre-Tax
Profits of $500,000 and Net Cash One-sixth (1/6)
Borrowings at such time of less than of Shares purchased
$500,000
o Fiscal year-end Cumulative CMDC Pre-Tax
Profits of $2,000,000 and Net Cash One-sixth (1/6)
Borrowings at such time of less than of Shares purchased
$100,000
o Fiscal year-end Cumulative CMDC Pre-Tax
Profits of $3,000,000 and fiscal year Net One-sixth (1/6)
Cash Flow of $1,500,000 or more of Shares purchased
3
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end Cumulative CMDC Pre-Tax
Profits of $7,000,000 and fiscal year Net One-sixth (1/6)
Cash Flow of $2,500,000 or more of Shares purchased
(c) Notwithstanding anything to the contrary contained in this
Agreement, but subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, (i) all Restricted Shares shall become Unrestricted
Shares upon termination of Employee's employment with CMDC by reason of his
death, total and permanent disability (as determined in accordance with the
policies and practices of Comtech), normal retirement (at or after age 70 or,
with the consent of Comtech, before age 70), or early retirement at Comtech's
request; and (ii) upon discharge of Employee by CMDC other than for cause (which
for this purpose shall mean Employee's willful misconduct, dereliction of duty,
or conviction for a crime involving moral turpitude).
(d) If, at the time any Shares become Unrestricted Shares, Comtech
determines that it has withheld an amount which is less than the withholding
that may be required pursuant to the Internal Revenue Code or other applicable
law, Employee shall forthwith pay to Comtech the amount of monies necessary to
satisfy such withholding or equivalent requirements. Until the payment of such
monies or, alternatively the execution and delivery by Employee of an agreement
satisfactory to Comtech in it sole discretion providing for the payment of such
monies, the Unrestricted Shares shall not be released to Employee pursuant to
the terms of the Escrow Agreement. If payment of such monies is not made or such
agreement is not entered into, such Unrestricted Shares shall, at Comtech's
direction, be sold by Employee to Comtech for a purchase price equal to the
purchase price per share provided in Section 2 hereof, adjusted, as appropriate
for any subsequent stock-split, recapitalization or the like.
(e) In the event of Employee's termination of employment with CMDC for
any reason other than those specified in Subsection 4(c) hereof (including,
without limitation, any voluntary termination of employment) all Restricted
Shares shall be sold by Employee to Comtech, for the price and otherwise in the
manner provided in Subsection 4(d) hereof.
5. Representations and Warranties of Employee
Employee represents and warrants as follows:
(a) Assuming that Comtech has transferred to Employee good and
marketable title to the Shares, Employee has not taken any action or permitted
any action to occur, nor will employee take any action or permit any action to
occur, that would result in the Shares becoming subject to any claim, lien,
pledge or encumbrance of any nature whatsoever.
4
(b) Employee has full legal power and capacity to execute and deliver
this Agreement, and such execution and delivery and Employee's acceptance of
employment with CMDC contemporaneously with the execution and delivery of this
Agreement are not in violation of any other agreement, instrument or obligation
to which Employee is a party, including, without limitation, any employment
agreement or non-competition agreement of any kind whatsoever.
(c) This Agreement constitutes the legal, valid and binding obligation
of Employee.
(d) Employee has not employed any broker or finder or incurred any
liability for any brokerage fees or commissions or finders' fees in connection
with this Agreement.
(e) Employee is acquiring the Shares for investment purposes only and
not with a view to distribution, and acknowledges that he has been advised by
his counsel, and understands, that the Shares have not been registered under the
Securities Act of 1933, as amended, and under the securities laws, may not be
sold or transferred unless registered under such Act or pursuant to an exemption
from such registration and that a restrictive legend to that effect shall be
placed on the certificate(s) representing the Shares. Employee has further been
advised by his counsel with respect to making an election pursuant to Section
83(b) of the Internal Revenue Code and has chosen, or will choose, whether to
make such election as he deems appropriate.
6. Representations and Warranties of Comtech
Comtech represents and warrants as follows:
(a) Comtech is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with full power and legal right
to execute and deliver this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Comtech and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action and do not violate the terms of any outstanding
agreements to which it is a party. This Agreement constitutes the legal, valid
and binding obligation of Comtech.
7. Certain Employment Matters
(a) The purchase of Shares hereunder shall not preclude Employee from
being eligible to participate in any other plans, programs or benefits otherwise
available to employees of Comtech or its subsidiaries. Nothing in this Agreement
shall be construed to constitute or be evidence of an agreement or
understanding, express or implied, on the part of Comtech or CMDC to employ
Employee for any specific period of time.
(b) In consideration of his employment with CMDC and the sale and
issuance of the Shares to him pursuant to this Agreement, Employee shall not,
during the period he is employed by CMDC and for one year thereafter following
Employee's voluntary termination of is employment by CMDC, in any manner,
directly or indirectly, engage anywhere in the United States in any
5
business which competes with the business in which CMDC or Comtech or any of its
other subsidiaries is engaged at any time during the period in which Employee is
employed by CMDC, and he shall not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is so engaged; provided, however, that nothing herein
contained shall prohibit Employee from owning not more than 5% of the
outstanding stock of any publicly held corporation. If any restriction set forth
in this Subsection 7(b) is found by a court of competent jurisdiction or
arbitrator to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) Employee shall hold in a fiduciary capacity for the benefit of
CMDC and Comtech all confidential information, knowledge or data relating to
CMDC and Comtech or any of its other subsidiaries, and their respective
businesses obtained by Employee before or during the period in which he is
employed by CMDC.
(d) The restrictions contained in Subsections (b) and (c) of this
Section 7 are necessary for the protection of the business and goodwill of CMDC
and Comtech and are considered by Employee to be reasonable to such purpose.
Employee agrees that any breach of such Subsections (b) and (c) will cause CMDC
and/or Comtech substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, CMDC
and/or Comtech shall have the right to seek specific performance and injunctive
relief.
8. Liability of Comtech
The liability of Comtech under this Agreement is limited to the
obligations expressly set forth herein and nothing herein contained shall be
construed to impose any liability on Comtech in favor of Employee with respect
to any loss, cost or expense which Employee may incur or suffer in connection
with or arising out of this Agreement, including, without limitation, Employee's
purchase of the Shares.
9. Voting Concerning Certain Corporate Matters
(a) Employee agrees to have counted for purposes of a quorum, and to
vote, all Restricted Shares (whether such vote shall be by written consent or by
vote, in person or, if requested by Comtech, by proxy, at a meeting of
shareholders of Comtech) for the election to Comtech's Board of Directors of the
nominees from time to time designated by the Board of Directors of Comtech.
(b) To facilitate, and not in limitation of, the agreement contained
in Subsection 9(a) hereof, Employee irrevocably appoints the Chairman of the
Board and the Secretary of Comtech, and their respective successors in office,
and each of them, with full power of substitution, as the lawful proxy for
Employee as to all Restricted Shares, to vote all Restricted Shares which
Employee is entitled to vote, for and in the name, place and stead of Employee,
at any annual, special or other meeting of the holders of shares of Comtech
Common Stock and at any adjournment thereof, or
6
pursuant to any consent in lieu of a meeting, for the election to Comtech's
Board of Directors of the nominees designated by the Board of Directors of
Comtech. The foregoing proxy is coupled with an interest and therefore not
terminable by Employee without the consent of Comtech.
10. Additional Restricted Shares.
Employees agrees that the term "Restricted Shares" shall include any
shares or other securities which he may receive or be entitled to receive as a
result of the ownership of the original Restricted Shares whether the same are
issued as a result of a share split, share dividend, recapitalization, or other
subdivision or consolidation of shares effected without receipt of consideration
by Comtech or the result of the merger or consolidation of Comtech or sale of
assets of Comtech.
11. Binding Agreement
This Agreement shall inure to the benefit of, and be binding upon,
Comtech and its successors and assigns and Employee and his heirs, personal
representatives, successors and assigns.
12. Notices
Any notice, request or other communication hereunder shall be in
writing and shall be deemed to have been duly given if hand delivered or mailed
by registered or certified mail, return receipt requested, addressed as herein
set forth, or to such other address as may be designated by a notice given
pursuant hereto, which change of address notice shall be effective upon receipt
thereof.
If to Comtech:
Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, President
Copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Employee:
000 X. Xxxxxxxxx Xxx
Xxxxxx Xxxx, XX 00000
7
13. Survival.
All of the representations, warranties, agreements and covenants
contained herein or made or deemed to have been made pursuant hereto or in
connection with the transactions contemplated hereby shall survive the execution
and delivery hereof and the consummation of the transactions contemplated
hereby.
14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one
instrument.
16. Expenses
Employee and Comtech shall each bear all the expenses incurred by them
or it in connection with this Agreement and the transactions contemplated
hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, Comtech and Employee have caused this Agreement to
be executed as of the date first above written.
COMTECH TELECOMMUNICATIONS CORP.
By: _________________________
Authorized Signatory
__________________________
Xxxxxx Xxxxxxx
9
TIME ACCELERATED RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT dated September 24, 1998 between Comtech Telecommunications
Corp., a Delaware corporation ("Comtech"), and Xxx Xxxxxxxx ("Employee").
WHEREAS, Employee is employed by Comtech's wholly-owned subsidiary,
Comtech Mobile Datacom Corporation ("CMDC"), and Comtech and Employee desire to
(a) provide additional incentives to Employee in connection with Employee's
responsibilities for the management and growth of the business of CMDC, and (b)
more closely align Employee's interests with the interests of stockholders of
Comtech, through, in relation to both objectives, the sale and issuance to
Employee of restricted shares of Common Stock of Comtech.
NOW, THEREFORE, Comtech and Employee agree as follows:
1. Definitions
(a) "Comtech" means Comtech Telecommunications Corp., a Delaware
corporation.
(b) "Escrow Agent" means the Escrow Agent as defined in the Escrow
Agreement in the form annexed hereto as Exhibit A.
(c) "Cumulative CMDC Pre-Tax Profits" means CMDC's aggregate income
before income taxes minus CMDC's aggregate losses in the period from inception
of operations of CMDC to the end of the relevant fiscal year. Determinations of
such amounts shall be made in accordance with generally accepted accounting
principles, with the exception that no effect shall be given to
(i) interest or like charges or accruals ("Capital Charges") in
respect of Comtech cash advances to CMDC that are less than $1.5
million plus the amount of dividends paid by CMDC to Comtech
during the relevant fiscal year;
(ii) Capital Charges in excess of 1/2% above the average rate of
interest then charged to Comtech for all borrowings by Comtech, on
Comtech cash advances to CMDC exceeding $1.5 million at any time
outstanding plus the amount of dividends paid by CMDC to Comtech
during the relevant fiscal year;
(iii) general or administrative expenses of Comtech, including
charges for management or corporate services provided by Comtech
to CMDC; or (iv) the sale of shares of Comtech Common Stock to
Employee and other employees of CMDC, or the repurchase of same.
1
(d) "Net Cash Borrowings" means the cumulative amount of cash advances
to CMDC by Comtech.
(e) "Net Cash Flow" means total cash refunds by CMDC to Comtech, net
of cash advances by Comtech to CMDC.
(f) "Restricted Shares" means the Shares subject to the
restrictions against transfer provided in Section 3 hereof and which are
required to be resold to Comtech under certain circumstances as provided in
Section 3 hereof.
(g) "Unrestricted Shares" means Shares as to which all restrictions
against transfer and the obligation to resell to Comtech have lapsed.
(h) "Shares" shall have the meaning provided in Section 2 hereof.
2. Sale and Purchase of Shares
On the terms, and subject to the conditions hereinafter provided,
simultaneously with the execution and delivery of this Agreement, (i) Comtech is
selling and issuing to Employee, and Employee is purchasing from Comtech, 25,000
shares of Common Stock, par value $.10 per share, of Comtech (the "Shares");
(ii) Employee is paying to Comtech by certified or bank cashier's check a total
purchase price for the Shares of $2,500 (i.e., $.10 per share); and (iii)
Employee is depositing the Shares with the Escrow Agent, to be held by the
Escrow Agent pursuant and subject to the terms of an Escrow Agreement in the
form annexed hereto as Exhibit A.
3. Restrictions
(a) The Shares shall not be transferred until such time as they
shall become "Unrestricted Shares" pursuant to Section 4 hereof (the Shares
subject to such restriction being hereinafter referred to as "Restricted
Shares"). As used in this Agreement, "transfer" shall include, without
limitation, any sale, assignment, gift, pledge, hypothecation, bequest, devise,
encumbrance, or other disposition, whether voluntary or by operation of law. Any
attempted transfer of Restricted Shares (other than to Comtech pursuant to the
provisions of Section 4 of this Agreement) shall be null and void and Comtech
shall not give effect on its records to any such attempted transfer.
(b) Employee authorizes Comtech and its transfer agents not to
transfer any certificates of Comtech Common Stock on its books and records
transferred in violation of this Agreement, and further agrees that any such
purported transfer shall be void and of no effect.
(c) An original of this Agreement shall be kept in the files of
Comtech at its principal office and reference to this Agreement shall be
endorsed on all stock certificates subject to this Agreement, now or hereafter
issued, by writing or stamping thereon a legend in substantially the following
form:
2
"Sale, assignment, gift, bequest, devise, pledge, hypothecation,
encumbrance or other disposition of the shares represented by this
Certificate is restricted by the terms of a Restricted Stock Agreement,
dated September __, 1998, a copy of which, and any amendments thereto,
may be examined at the principal office of Comtech Telecommunications
Corp."
(d) Employee shall possess all rights as a stockholder (including,
without limitation, voting rights, rights to dividends, if any, declared and
rights on liquidation) except such as are expressly restricted by the provisions
of this Agreement.
4. Lapse of Restrictions; Forfeiture of Shares
(a) One-sixth of the Shares shall become Unrestricted Shares, subject
to satisfying the tax withholding requirements contained in Subsection 4(d)
hereof, upon the first anniversary of the date hereof.
(b) Subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, the remaining five-sixths of the Shares shall become
Unrestricted Shares on the tenth anniversary of the date hereof, except that
such Shares shall become Unrestricted Shares on an accelerated basis in the
one-sixth increments set forth in the following schedule after the Performance
Criteria set forth therein are achieved:
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end cumulative CMDC net sales One-sixth (1/6)
of $3,000,000 and Net Cash Borrowings at of Shares purchased
that time of less than $1,000,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $500,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$500,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $2,000,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$100,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $3,000,000 and fiscal year Net of Shares purchased
Cash Flow of $1,500,000 or more
3
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $7,000,000 and fiscal year Net of Shares purchased
Cash Flow of $2,500,000 or more
(c) Notwithstanding anything to the contrary contained in this
Agreement, but subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, (i) all Restricted Shares shall become Unrestricted
Shares upon termination of Employee's employment with CMDC by reason of his
death, total and permanent disability (as determined in accordance with the
policies and practices of Comtech), normal retirement (at or after age 70 or,
with the consent of Comtech, before age 70), or early retirement at Comtech's
request; and (ii) upon discharge of Employee by CMDC other than for cause (which
for this purpose shall mean Employee's willful misconduct, dereliction of duty,
or conviction for a crime involving moral turpitude).
(d) If, at the time any Shares become Unrestricted Shares, Comtech
determines that it has withheld an amount which is less than the withholding
that may be required pursuant to the Internal Revenue Code or other applicable
law, Employee shall forthwith pay to Comtech the amount of monies necessary to
satisfy such withholding or equivalent requirements. Until the payment of such
monies or, alternatively the execution and delivery by Employee of an agreement
satisfactory to Comtech in it sole discretion providing for the payment of such
monies, the Unrestricted Shares shall not be released to Employee pursuant to
the terms of the Escrow Agreement. If payment of such monies is not made or such
agreement is not entered into, such Unrestricted Shares shall, at Comtech's
direction, be sold by Employee to Comtech for a purchase price equal to the
purchase price per share provided in Section 2 hereof, adjusted, as appropriate
for any subsequent stock-split, recapitalization or the like.
(e) In the event of Employee's termination of employment with CMDC
for any reason other than those specified in Subsection 4(c) hereof (including,
without limitation, any voluntary termination of employment) all Restricted
Shares shall be sold by Employee to Comtech, for the price and otherwise in the
manner provided in Subsection 4(d) hereof.
5. Representations and Warranties of Employee
Employee represents and warrants as follows:
(a) Assuming that Comtech has transferred to Employee good and
marketable title to the Shares, Employee has not taken any action or permitted
any action to occur, nor will employee take any action or permit any action to
occur, that would result in the Shares becoming subject to any claim, lien,
pledge or encumbrance of any nature whatsoever.
4
(b) Employee has full legal power and capacity to execute and
deliver this Agreement, and such execution and delivery and Employee's
acceptance of employment with CMDC contemporaneously with the execution and
delivery of this Agreement are not in violation of any other agreement,
instrument or obligation to which Employee is a party, including, without
limitation, any employment agreement or non-competition agreement of any kind
whatsoever.
(c) This Agreement constitutes the legal, valid and binding obligation
of Employee.
(d) Employee has not employed any broker or finder or incurred any
liability for any brokerage fees or commissions or finders' fees in connection
with this Agreement.
(e) Employee is acquiring the Shares for investment purposes only and
not with a view to distribution, and acknowledges that he has been advised by
his counsel, and understands, that the Shares have not been registered under the
Securities Act of 1933, as amended, and under the securities laws, may not be
sold or transferred unless registered under such Act or pursuant to an exemption
from such registration and that a restrictive legend to that effect shall be
placed on the certificate(s) representing the Shares. Employee has further been
advised by his counsel with respect to making an election pursuant to Section
83(b) of the Internal Revenue Code and has chosen, or will choose, whether to
make such election as he deems appropriate.
6. Representations and Warranties of Comtech
Comtech represents and warrants as follows:
(a) Comtech is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with full power and legal right
to execute and deliver this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Comtech and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action and do not violate the terms of any outstanding
agreements to which it is a party. This Agreement constitutes the legal, valid
and binding obligation of Comtech.
7. Certain Employment Matters
(a) The purchase of Shares hereunder shall not preclude Employee from
being eligible to participate in any other plans, programs or benefits otherwise
available to employees of Comtech or its subsidiaries. Nothing in this Agreement
shall be construed to constitute or be evidence of an agreement or
understanding, express or implied, on the part of Comtech or CMDC to employ
Employee for any specific period of time.
(b) In consideration of his employment with CMDC and the sale and
issuance of the Shares to him pursuant to this Agreement, Employee shall not,
during the period he is employed by CMDC and for one year thereafter following
Employee's voluntary termination of is employment by CMDC, in any manner,
directly or indirectly, engage anywhere in the United States in any
5
business which competes with the business in which CMDC or Comtech or any of its
other subsidiaries is engaged at any time during the period in which Employee is
employed by CMDC, and he shall not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is so engaged; provided, however, that nothing herein
contained shall prohibit Employee from owning not more than 5% of the
outstanding stock of any publicly held corporation. If any restriction set forth
in this Subsection 7(b) is found by a court of competent jurisdiction or
arbitrator to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) Employee shall hold in a fiduciary capacity for the benefit of
CMDC and Comtech all confidential information, knowledge or data relating to
CMDC and Comtech or any of its other subsidiaries, and their respective
businesses obtained by Employee before or during the period in which he is
employed by CMDC.
(d) The restrictions contained in Subsections (b) and (c) of this
Section 7 are necessary for the protection of the business and goodwill of CMDC
and Comtech and are considered by Employee to be reasonable to such purpose.
Employee agrees that any breach of such Subsections (b) and (c) will cause CMDC
and/or Comtech substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, CMDC
and/or Comtech shall have the right to seek specific performance and injunctive
relief.
8. Liability of Comtech
The liability of Comtech under this Agreement is limited to the
obligations expressly set forth herein and nothing herein contained shall be
construed to impose any liability on Comtech in favor of Employee with respect
to any loss, cost or expense which Employee may incur or suffer in connection
with or arising out of this Agreement, including, without limitation, Employee's
purchase of the Shares.
9. Voting Concerning Certain Corporate Matters
(a) Employee agrees to have counted for purposes of a quorum, and to
vote, all Restricted Shares (whether such vote shall be by written consent or by
vote, in person or, if requested by Comtech, by proxy, at a meeting of
shareholders of Comtech) for the election to Comtech's Board of Directors of the
nominees from time to time designated by the Board of Directors of Comtech.
(b) To facilitate, and not in limitation of, the agreement contained
in Subsection 9(a) hereof, Employee irrevocably appoints the Chairman of the
Board and the Secretary of Comtech, and their respective successors in office,
and each of them, with full power of substitution, as the lawful proxy for
Employee as to all Restricted Shares, to vote all Restricted Shares which
Employee is entitled to vote, for and in the name, place and stead of Employee,
at any annual, special or other meeting of the holders of shares of Comtech
Common Stock and at any adjournment thereof, or
6
pursuant to any consent in lieu of a meeting, for the election to Comtech's
Board of Directors of the nominees designated by the Board of Directors of
Comtech. The foregoing proxy is coupled with an interest and therefore not
terminable by Employee without the consent of Comtech.
10. Additional Restricted Shares.
Employees agrees that the term "Restricted Shares" shall include any
shares or other securities which he may receive or be entitled to receive as a
result of the ownership of the original Restricted Shares whether the same are
issued as a result of a share split, share dividend, recapitalization, or other
subdivision or consolidation of shares effected without receipt of consideration
by Comtech or the result of the merger or consolidation of Comtech or sale of
assets of Comtech.
11. Binding Agreement
This Agreement shall inure to the benefit of, and be binding upon,
Comtech and its successors and assigns and Employee and his heirs, personal
representatives, successors and assigns.
12. Notices
Any notice, request or other communication hereunder shall be in writing
and shall be deemed to have been duly given if hand delivered or mailed by
registered or certified mail, return receipt requested, addressed as herein set
forth, or to such other address as may be designated by a notice given pursuant
hereto, which change of address notice shall be effective upon receipt thereof.
If to Comtech:
Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, President
Copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Employee:
00000 Xxxx Xxxx
Xxxxxxxx, XX 00000
7
13. Survival.
All of the representations, warranties, agreements and covenants
contained herein or made or deemed to have been made pursuant hereto or in
connection with the transactions contemplated hereby shall survive the execution
and delivery hereof and the consummation of the transactions contemplated
hereby.
14. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
15. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one
instrument.
16. Expenses
Employee and Comtech shall each bear all the expenses incurred by them or
it in connection with this Agreement and the transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, Comtech and Employee have caused this Agreement to be
executed as of the date first above written.
COMTECH TELECOMMUNICATIONS CORP.
By:_______________________________________
Authorized Signatory
_______________________________________
Xxx Xxxxxxxx
9
TIME ACCELERATED RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT dated September 24, 1998 between Comtech Telecommunications
Corp., a Delaware corporation ("Comtech"), and Xxxxx Xxxxxx ("Employee").
WHEREAS, Employee is employed by Comtech's wholly-owned subsidiary,
Comtech Mobile Datacom Corporation ("CMDC"), and Comtech and Employee desire to
(a) provide additional incentives to Employee in connection with Employee's
responsibilities for the management and growth of the business of CMDC, and (b)
more closely align Employee's interests with the interests of stockholders of
Comtech, through, in relation to both objectives, the sale and issuance to
Employee of restricted shares of Common Stock of Comtech.
NOW, THEREFORE, Comtech and Employee agree as follows:
1. Definitions
(a) "Comtech" means Comtech Telecommunications Corp., a Delaware
corporation.
(b) "Escrow Agent" means the Escrow Agent as defined in the Escrow
Agreement in the form annexed hereto as Exhibit A.
(c) "Cumulative CMDC Pre-Tax Profits" means CMDC's aggregate income
before income taxes minus CMDC's aggregate losses in the period from inception
of operations of CMDC to the end of the relevant fiscal year. Determinations of
such amounts shall be made in accordance with generally accepted accounting
principles, with the exception that no effect shall be given to
(i) interest or like charges or accruals ("Capital Charges") in
respect of Comtech cash advances to CMDC that are less than
$1.5 million plus the amount of dividends paid by CMDC to
Comtech during the relevant fiscal year;
(ii) Capital Charges in excess of 1/2% above the average rate of
interest then charged to Comtech for all borrowings by
Comtech, on Comtech cash advances to CMDC exceeding $1.5
million at any time outstanding plus the amount of dividends
paid by CMDC to Comtech during the relevant fiscal year;
(iii) general or administrative expenses of Comtech, including
charges for management or corporate services provided by
Comtech to CMDC; or
(iv) the sale of shares of Comtech Common Stock to Employee and
other employees of CMDC, or the repurchase of same.
(d) "Net Cash Borrowings" means the cumulative amount of cash advances
to CMDC by Comtech.
(e) "Net Cash Flow" means total cash refunds by CMDC to Comtech, net of
cash advances by Comtech to CMDC.
(f) "Restricted Shares" means the Shares subject to the restrictions
against transfer provided in Section 3 hereof and which are required to be
resold to Comtech under certain circumstances as provided in Section 3 hereof.
(g) "Unrestricted Shares" means Shares as to which all restrictions
against transfer and the obligation to resell to Comtech have lapsed.
(h) "Shares" shall have the meaning provided in Section 2 hereof.
2. Sale and Purchase of Shares
On the terms, and subject to the conditions hereinafter provided,
simultaneously with the execution and delivery of this Agreement, (i) Comtech is
selling and issuing to Employee, and Employee is purchasing from Comtech, 35,000
shares of Common Stock, par value $.10 per share, of Comtech (the "Shares");
(ii) Employee is paying to Comtech by certified or bank cashier's check a total
purchase price for the Shares of $3,500 (i.e., $.10 per share); and (iii)
Employee is depositing the Shares with the Escrow Agent, to be held by the
Escrow Agent pursuant and subject to the terms of an Escrow Agreement in the
form annexed hereto as Exhibit A.
3. Restrictions
(a) The Shares shall not be transferred until such time as they shall
become "Unrestricted Shares" pursuant to Section 4 hereof (the Shares subject to
such restriction being hereinafter referred to as "Restricted Shares"). As used
in this Agreement, "transfer" shall include, without limitation, any sale,
assignment, gift, pledge, hypothecation, bequest, devise, encumbrance, or other
disposition, whether voluntary or by operation of law. Any attempted transfer of
Restricted Shares (other than to Comtech pursuant to the provisions of Section 4
of this Agreement) shall be null and void and Comtech shall not give effect on
its records to any such attempted transfer.
(b) Employee authorizes Comtech and its transfer agents not to transfer
any certificates of Comtech Common Stock on its books and records transferred in
violation of this Agreement, and further agrees that any such purported transfer
shall be void and of no effect.
(c) An original of this Agreement shall be kept in the files of Comtech
at its principal office and reference to this Agreement shall be endorsed on all
stock certificates subject to this Agreement, now or hereafter issued, by
writing or stamping thereon a legend in substantially the following form:
2
"Sale, assignment, gift, bequest, devise, pledge,
hypothecation, encumbrance or other disposition of the
shares represented by this Certificate is restricted by the
terms of a Restricted Stock Agreement, dated September __,
1998, a copy of which, and any amendments thereto, may be
examined at the principal office of Comtech
Telecommunications Corp."
(d) Employee shall possess all rights as a stockholder
(including, without limitation, voting rights, rights to dividends, if
any, declared and rights on liquidation) except such as are expressly
restricted by the provisions of this Agreement.
4. Lapse of Restrictions; Forfeiture of Shares
(a) One-sixth of the Shares shall become Unrestricted Shares,
subject to satisfying the tax withholding requirements contained in
Subsection 4(d) hereof, upon the first anniversary of the date hereof.
(b) Subject to satisfying the tax withholding requirements
contained in Subsection 4(d) hereof, the remaining five-sixths of the
Shares shall become Unrestricted Shares on the tenth anniversary of
the date hereof, except that such Shares shall become Unrestricted
Shares on an accelerated basis in the one-sixth increments set forth
in the following schedule after the Performance Criteria set forth
therein are achieved:
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end cumulative CMDC net sales One-sixth (1/6)
of $3,000,000 and Net Cash Borrowings at of Shares purchased
that time of less than $1,000,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $500,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$500,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $2,000,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$100,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $3,000,000 and fiscal year Net of Shares purchased
Cash Flow of $1,500,000 or more
3
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- -------------------
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $7,000,000 and fiscal year Net of Shares purchased
Cash Flow of $2,500,000 or more
(c) Notwithstanding anything to the contrary contained in this
Agreement, but subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, (i) all Restricted Shares shall become Unrestricted
Shares upon termination of Employee's employment with CMDC by reason of his
death, total and permanent disability (as determined in accordance with the
policies and practices of Comtech), normal retirement (at or after age 70 or,
with the consent of Comtech, before age 70), or early retirement at Comtech's
request; and (ii) upon discharge of Employee by CMDC other than for cause (which
for this purpose shall mean Employee's willful misconduct, dereliction of duty,
or conviction for a crime involving moral turpitude).
(d) If, at the time any Shares become Unrestricted Shares, Comtech
determines that it has withheld an amount which is less than the withholding
that may be required pursuant to the Internal Revenue Code or other applicable
law, Employee shall forthwith pay to Comtech the amount of monies necessary to
satisfy such withholding or equivalent requirements. Until the payment of such
monies or, alternatively the execution and delivery by Employee of an agreement
satisfactory to Comtech in it sole discretion providing for the payment of such
monies, the Unrestricted Shares shall not be released to Employee pursuant to
the terms of the Escrow Agreement. If payment of such monies is not made or such
agreement is not entered into, such Unrestricted Shares shall, at Comtech's
direction, be sold by Employee to Comtech for a purchase price equal to the
purchase price per share provided in Section 2 hereof, adjusted, as appropriate
for any subsequent stock-split, recapitalization or the like.
(e) In the event of Employee's termination of employment with CMDC for
any reason other than those specified in Subsection 4(c) hereof (including,
without limitation, any voluntary termination of employment) all Restricted
Shares shall be sold by Employee to Comtech, for the price and otherwise in the
manner provided in Subsection 4(d) hereof.
5. Representations and Warranties of Employee
Employee represents and warrants as follows:
(a) Assuming that Comtech has transferred to Employee good and
marketable title to the Shares, Employee has not taken any action or permitted
any action to occur, nor will employee take any action or permit any action to
occur, that would result in the Shares becoming subject to any claim, lien,
pledge or encumbrance of any nature whatsoever.
4
(b) Employee has full legal power and capacity to execute and deliver
this Agreement, and such execution and delivery and Employee's acceptance of
employment with CMDC contemporaneously with the execution and delivery of this
Agreement are not in violation of any other agreement, instrument or obligation
to which Employee is a party, including, without limitation, any employment
agreement or non-competition agreement of any kind whatsoever.
(c) This Agreement constitutes the legal, valid and binding obligation
of Employee.
(d) Employee has not employed any broker or finder or incurred any
liability for any brokerage fees or commissions or finders' fees in connection
with this Agreement.
(e) Employee is acquiring the Shares for investment purposes only and
not with a view to distribution, and acknowledges that he has been advised by
his counsel, and understands, that the Shares have not been registered under the
Securities Act of 1933, as amended, and under the securities laws, may not be
sold or transferred unless registered under such Act or pursuant to an exemption
from such registration and that a restrictive legend to that effect shall be
placed on the certificate(s) representing the Shares. Employee has further been
advised by his counsel with respect to making an election pursuant to Section
83(b) of the Internal Revenue Code and has chosen, or will choose, whether to
make such election as he deems appropriate.
6. Representations and Warranties of Comtech
Comtech represents and warrants as follows:
(a) Comtech is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with full power and legal right
to execute and deliver this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Comtech and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action and do not violate the terms of any outstanding
agreements to which it is a party. This Agreement constitutes the legal, valid
and binding obligation of Comtech.
7. Certain Employment Matters
(a) The purchase of Shares hereunder shall not preclude Employee from
being eligible to participate in any other plans, programs or benefits otherwise
available to employees of Comtech or its subsidiaries. Nothing in this Agreement
shall be construed to constitute or be evidence of an agreement or
understanding, express or implied, on the part of Comtech or CMDC to employ
Employee for any specific period of time.
(b) In consideration of his employment with CMDC and the sale and
issuance of the Shares to him pursuant to this Agreement, Employee shall not,
during the period he is employed by CMDC and for one year thereafter following
Employee's voluntary termination of is employment by CMDC, in any manner,
directly or indirectly, engage anywhere in the United States in any
5
business which competes with the business in which CMDC or Comtech or any of its
other subsidiaries is engaged at any time during the period in which Employee is
employed by CMDC, and he shall not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is so engaged; provided, however, that nothing herein
contained shall prohibit Employee from owning not more than 5% of the
outstanding stock of any publicly held corporation. If any restriction set forth
in this Subsection 7(b) is found by a court of competent jurisdiction or
arbitrator to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) Employee shall hold in a fiduciary capacity for the benefit of CMDC
and Comtech all confidential information, knowledge or data relating to CMDC and
Comtech or any of its other subsidiaries, and their respective businesses
obtained by Employee before or during the period in which he is employed by
CMDC.
(d) The restrictions contained in Subsections (b) and (c) of this
Section 7 are necessary for the protection of the business and goodwill of CMDC
and Comtech and are considered by Employee to be reasonable to such purpose.
Employee agrees that any breach of such Subsections (b) and (c) will cause CMDC
and/or Comtech substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, CMDC
and/or Comtech shall have the right to seek specific performance and injunctive
relief.
8. Liability of Comtech
The liability of Comtech under this Agreement is limited to the
obligations expressly set forth herein and nothing herein contained shall be
construed to impose any liability on Comtech in favor of Employee with respect
to any loss, cost or expense which Employee may incur or suffer in connection
with or arising out of this Agreement, including, without limitation, Employee's
purchase of the Shares.
9. Voting Concerning Certain Corporate Matters
(a) Employee agrees to have counted for purposes of a quorum, and to
vote, all Restricted Shares (whether such vote shall be by written consent or by
vote, in person or, if requested by Comtech, by proxy, at a meeting of
shareholders of Comtech) for the election to Comtech's Board of Directors of the
nominees from time to time designated by the Board of Directors of Comtech.
(b) To facilitate, and not in limitation of, the agreement contained in
Subsection 9(a) hereof, Employee irrevocably appoints the Chairman of the Board
and the Secretary of Comtech, and their respective successors in office, and
each of them, with full power of substitution, as the lawful proxy for Employee
as to all Restricted Shares, to vote all Restricted Shares which Employee is
entitled to vote, for and in the name, place and stead of Employee, at any
annual, special or other meeting of the holders of shares of Comtech Common
Stock and at any adjournment thereof, or
6
pursuant to any consent in lieu of a meeting, for the election to Comtech's
Board of Directors of the nominees designated by the Board of Directors of
Comtech. The foregoing proxy is coupled with an interest and therefore not
terminable by Employee without the consent of Comtech.
10. Additional Restricted Shares.
Employees agrees that the term "Restricted Shares" shall include any
shares or other securities which he may receive or be entitled to receive as a
result of the ownership of the original Restricted Shares whether the same are
issued as a result of a share split, share dividend, recapitalization, or other
subdivision or consolidation of shares effected without receipt of consideration
by Comtech or the result of the merger or consolidation of Comtech or sale of
assets of Comtech.
11. Binding Agreement
This Agreement shall inure to the benefit of, and be binding upon,
Comtech and its successors and assigns and Employee and his heirs, personal
representatives, successors and assigns.
12. Notices
Any notice, request or other communication hereunder shall be in
writing and shall be deemed to have been duly given if hand delivered or mailed
by registered or certified mail, return receipt requested, addressed as herein
set forth, or to such other address as may be designated by a notice given
pursuant hereto, which change of address notice shall be effective upon receipt
thereof.
If to Comtech:
Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, President
Copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Employee:
00000 Xxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
7
13. Survival.
All of the representations, warranties, agreements and covenants
contained herein or made or deemed to have been made pursuant hereto or in
connection with the transactions contemplated hereby shall survive the execution
and delivery hereof and the consummation of the transactions contemplated
hereby.
14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one
instrument.
16. Expenses
Employee and Comtech shall each bear all the expenses incurred by them
or it in connection with this Agreement and the transactions contemplated
hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, Comtech and Employee have caused this Agreement to
be executed as of the date first above written.
COMTECH TELECOMMUNICATIONS CORP.
By:
---------------------------------------
Authorized Signatory
By:
---------------------------------------
Xxxxx Xxxxxx
9
TIME ACCELERATED RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT dated September 24, 1998 between Comtech Telecommunications
Corp., a Delaware corporation ("Comtech"), and Xxxx Xxxxx ("Employee").
WHEREAS, Employee is employed by Comtech's wholly-owned subsidiary,
Comtech Mobile Datacom Corporation ("CMDC"), and Comtech and Employee desire to
(a) provide additional incentives to Employee in connection with Employee's
responsibilities for the management and growth of the business of CMDC, and (b)
more closely align Employee's interests with the interests of stockholders of
Comtech, through, in relation to both objectives, the sale and issuance to
Employee of restricted shares of Common Stock of Comtech.
NOW, THEREFORE, Comtech and Employee agree as follows:
1. Definitions
(a) "Comtech" means Comtech Telecommunications Corp., a Delaware
corporation.
(b) "Escrow Agent" means the Escrow Agent as defined in the Escrow
Agreement in the form annexed hereto as Exhibit A.
(c) "Cumulative CMDC Pre-Tax Profits" means CMDC's aggregate income
before income taxes minus CMDC's aggregate losses in the period from inception
of operations of CMDC to the end of the relevant fiscal year. Determinations of
such amounts shall be made in accordance with generally accepted accounting
principles, with the exception that no effect shall be given to
(i) interest or like charges or accruals ("Capital Charges") in
respect of Comtech cash advances to CMDC that are less than
$1.5 million plus the amount of dividends paid by CMDC to
Comtech during the relevant fiscal year;
(ii) Capital Charges in excess of 1/2% above the average rate of
interest then charged to Comtech for all borrowings by
Comtech, on Comtech cash advances to CMDC exceeding $1.5
million at any time outstanding plus the amount of dividends
paid by CMDC to Comtech during the relevant fiscal year;
(iii)general or administrative expenses of Comtech, including
charges for management or corporate services provided by
Comtech to CMDC; or
(iv) the sale of shares of Comtech Common Stock to Employee and
other employees of CMDC, or the repurchase of same.
(d) "Net Cash Borrowings" means the cumulative amount of cash advances
to CMDC by Comtech.
(e) "Net Cash Flow" means total cash refunds by CMDC to Comtech, net of
cash advances by Comtech to CMDC.
(f) "Restricted Shares" means the Shares subject to the restrictions
against transfer provided in Section 3 hereof and which are required to be
resold to Comtech under certain circumstances as provided in Section 3 hereof.
(g) "Unrestricted Shares" means Shares as to which all restrictions
against transfer and the obligation to resell to Comtech have lapsed.
(h) "Shares" shall have the meaning provided in Section 2 hereof.
2. Sale and Purchase of Shares
On the terms, and subject to the conditions hereinafter provided,
simultaneously with the execution and delivery of this Agreement, (i) Comtech is
selling and issuing to Employee, and Employee is purchasing from Comtech, 35,000
shares of Common Stock, par value $.10 per share, of Comtech (the "Shares");
(ii) Employee is paying to Comtech by certified or bank cashier's check a total
purchase price for the Shares of $3,500 (i.e., $.10 per share); and (iii)
Employee is depositing the Shares with the Escrow Agent, to be held by the
Escrow Agent pursuant and subject to the terms of an Escrow Agreement in the
form annexed hereto as Exhibit A.
3. Restrictions
(a) The Shares shall not be transferred until such time as they shall
become "Unrestricted Shares" pursuant to Section 4 hereof (the Shares subject to
such restriction being hereinafter referred to as "Restricted Shares"). As used
in this Agreement, "transfer" shall include, without limitation, any sale,
assignment, gift, pledge, hypothecation, bequest, devise, encumbrance, or other
disposition, whether voluntary or by operation of law. Any attempted transfer of
Restricted Shares (other than to Comtech pursuant to the provisions of Section 4
of this Agreement) shall be null and void and Comtech shall not give effect on
its records to any such attempted transfer.
(b) Employee authorizes Comtech and its transfer agents not to transfer
any certificates of Comtech Common Stock on its books and records transferred in
violation of this Agreement, and further agrees that any such purported transfer
shall be void and of no effect.
(c) An original of this Agreement shall be kept in the files of
Comtech at its principal office and reference to this Agreement shall be
endorsed on all stock certificates subject to this
2
Agreement, now or hereafter issued, by writing or stamping thereon a legend in
substantially the following form:
"Sale, assignment, gift, bequest, devise, pledge,
hypothecation, encumbrance or other disposition of the shares
represented by this Certificate is restricted by the terms of
a Restricted Stock Agreement, dated September __, 1998, a
copy of which, and any amendments thereto, may be examined at
the principal office of Comtech Telecommunications Corp."
(d) Employee shall possess all rights as a stockholder (including,
without limitation, voting rights, rights to dividends, if any, declared and
rights on liquidation) except such as are expressly restricted by the provisions
of this Agreement.
4. Lapse of Restrictions; Forfeiture of Shares
(a) One-sixth of the Shares shall become Unrestricted Shares, subject
to satisfying the tax withholding requirements contained in Subsection 4(d)
hereof, upon the first anniversary of the date hereof.
(b) Subject to satisfying the tax withholding requirements contained in
Subsection 4(d) hereof, the remaining five-sixths of the Shares shall become
Unrestricted Shares on the tenth anniversary of the date hereof, except that
such Shares shall become Unrestricted Shares on an accelerated basis in the
one-sixth increments set forth in the following schedule after the Performance
Criteria set forth therein are achieved:
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- --------------------
o Fiscal year-end cumulative CMDC net sales One-sixth (1/6)
of $3,000,000 and Net Cash Borrowings at of Shares purchased
that time of less than $1,000,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $500,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$500,000
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $2,000,000 and Net Cash of Shares purchased
Borrowings at such time of less than
$100,000
3
Number of Shares
that become
Performance Criteria Unrestricted Shares
-------------------- --------------------
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $3,000,000 and fiscal year Net of Shares purchased
Cash Flow of $1,500,000 or more
o Fiscal year-end Cumulative CMDC Pre-Tax One-sixth (1/6)
Profits of $7,000,000 and fiscal year Net of Shares purchased
Cash Flow of $2,500,000 or more
(c) Notwithstanding anything to the contrary contained in this
Agreement, but subject to satisfying the tax withholding requirements contained
in Subsection 4(d) hereof, (i) all Restricted Shares shall become Unrestricted
Shares upon termination of Employee's employment with CMDC by reason of his
death, total and permanent disability (as determined in accordance with the
policies and practices of Comtech), normal retirement (at or after age 65 or,
with the consent of Comtech, before age 65), or early retirement at Comtech's
request; and (ii) upon discharge of Employee by CMDC other than for cause (which
for this purpose shall mean Employee's willful misconduct, dereliction of duty,
or conviction for a crime involving moral turpitude).
(d) If, at the time any Shares become Unrestricted Shares, Comtech
determines that it has withheld an amount which is less than the withholding
that may be required pursuant to the Internal Revenue Code or other applicable
law, Employee shall forthwith pay to Comtech the amount of monies necessary to
satisfy such withholding or equivalent requirements. Until the payment of such
monies or, alternatively the execution and delivery by Employee of an agreement
satisfactory to Comtech in its sole discretion providing for the payment of such
monies, the Unrestricted Shares shall not be released to Employee pursuant to
the terms of the Escrow Agreement. If payment of such monies is not made or such
agreement is not entered into, such Unrestricted Shares shall, at Comtech's
direction, be sold by Employee to Comtech for a purchase price equal to the
purchase price per share provided in Section 2 hereof, adjusted, as appropriate
for any subsequent stock-split, recapitalization or the like.
(e) In the event of Employee's termination of employment with CMDC for
any reason other than those specified in Subsection 4(c) hereof (including,
without limitation, any voluntary termination of employment) all Restricted
Shares shall be sold by Employee to Comtech, for the price and otherwise in the
manner provided in Subsection 4(d) hereof.
5. Representations and Warranties of Employee
Employee represents and warrants as follows:
(a) Assuming that Comtech has transferred to Employee good and
marketable title to the Shares, Employee has not taken any action or permitted
any action to occur, nor will employee
4
take any action or permit any action to occur, that would result in the Shares
becoming subject to any claim, lien, pledge or encumbrance of any nature
whatsoever.
(b) Employee has full legal power and capacity to execute and deliver
this Agreement, and such execution and delivery and Employee's acceptance of
employment with CMDC contemporaneously with the execution and delivery of this
Agreement are not in violation of any other agreement, instrument or obligation
to which Employee is a party, including, without limitation, any employment
agreement or non-competition agreement of any kind whatsoever.
(c) This Agreement constitutes the legal, valid and binding obligation
of Employee.
(d) Employee has not employed any broker or finder or incurred any
liability for any brokerage fees or commissions or finders' fees in connection
with this Agreement.
(e) Employee is acquiring the Shares for investment purposes only and
not with a view to distribution, and acknowledges that he has been advised by
his counsel, and understands, that the Shares have not been registered under the
Securities Act of 1933, as amended, and under the securities laws, may not be
sold or transferred unless registered under such Act or pursuant to an exemption
from such registration and that a restrictive legend to that effect shall be
placed on the certificate(s) representing the Shares. Employee has further been
advised by his counsel with respect to making an election pursuant to Section
83(b) of the Internal Revenue Code and has chosen, or will choose, whether to
make such election as he deems appropriate.
6. Representations and Warranties of Comtech
Comtech represents and warrants as follows:
(a) Comtech is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with full power and legal right
to execute and deliver this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Comtech and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action and do not violate the terms of any outstanding
agreements to which it is a party. This Agreement constitutes the legal, valid
and binding obligation of Comtech.
7. Certain Employment Matters
(a) The purchase of Shares hereunder shall not preclude Employee from
being eligible to participate in any other plans, programs or benefits otherwise
available to employees of Comtech or its subsidiaries. Nothing in this Agreement
shall be construed to constitute or be evidence of an agreement or
understanding, express or implied, on the part of Comtech or CMDC to employ
Employee for any specific period of time.
5
(b) In consideration of his employment with CMDC and the sale and
issuance of the Shares to him pursuant to this Agreement, Employee shall not,
during the period he is employed by CMDC and for one year thereafter following
Employee's voluntary termination of his employment by CMDC, in any manner,
directly or indirectly, engage anywhere in the United States in any business
which competes with the business in which CMDC or Comtech or any of its other
subsidiaries is engaged at any time during the period in which Employee is
employed by CMDC, and he shall not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is so engaged; provided, however, that nothing herein
contained shall prohibit Employee from owning not more than 5% of the
outstanding stock of any publicly held corporation. If any restriction set forth
in this Subsection 7(b) is found by a court of competent jurisdiction or
arbitrator to be unenforceable because it extends for too long a period of time
or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) Employee shall hold in a fiduciary capacity for the benefit of CMDC
and Comtech all confidential information, knowledge or data relating to CMDC and
Comtech or any of its other subsidiaries, and their respective businesses
obtained by Employee before or during the period in which he is employed by
CMDC.
(d) The restrictions contained in Subsections (b) and (c) of this
Section 7 are necessary for the protection of the business and goodwill of CMDC
and Comtech and are considered by Employee to be reasonable to such purpose.
Employee agrees that any breach of such Subsections (b) and (c) will cause CMDC
and/or Comtech substantial and irreparable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, CMDC
and/or Comtech shall have the right to seek specific performance and injunctive
relief.
8. Liability of Comtech
The liability of Comtech under this Agreement is limited to the
obligations expressly set forth herein and nothing herein contained shall be
construed to impose any liability on Comtech in favor of Employee with respect
to any loss, cost or expense which Employee may incur or suffer in connection
with or arising out of this Agreement, including, without limitation, Employee's
purchase of the Shares.
9. Voting Concerning Certain Corporate Matters
(a) Employee agrees to have counted for purposes of a quorum, and to
vote, all Restricted Shares (whether such vote shall be by written consent or by
vote, in person or, if requested by Comtech, by proxy, at a meeting of
shareholders of Comtech) for the election to Comtech's Board of Directors of the
nominees from time to time designated by the Board of Directors of Comtech.
(b) To facilitate, and not in limitation of, the agreement contained in
Subsection 9(a) hereof, Employee irrevocably appoints the Chairman of the Board
and the Secretary of Comtech, and
6
their respective successors in office, and each of them, with full power of
substitution, as the lawful proxy for Employee as to all Restricted Shares, to
vote all Restricted Shares which Employee is entitled to vote, for and in the
name, place and stead of Employee, at any annual, special or other meeting of
the holders of shares of Comtech Common Stock and at any adjournment thereof, or
pursuant to any consent in lieu of a meeting, for the election to Comtech's
Board of Directors of the nominees designated by the Board of Directors of
Comtech. The foregoing proxy is coupled with an interest and therefore not
terminable by Employee without the consent of Comtech.
10. Additional Restricted Shares.
Employees agrees that the term "Restricted Shares" shall include any
shares or other securities which he may receive or be entitled to receive as a
result of the ownership of the original Restricted Shares whether the same are
issued as a result of a share split, share dividend, recapitalization, or other
subdivision or consolidation of shares effected without receipt of consideration
by Comtech or the result of the merger or consolidation of Comtech or sale of
assets of Comtech.
11. Binding Agreement
This Agreement shall inure to the benefit of, and be binding upon,
Comtech and its successors and assigns and Employee and his heirs, personal
representatives, successors and assigns.
12. Notices
Any notice, request or other communication hereunder shall be in
writing and shall be deemed to have been duly given if hand delivered or mailed
by registered or certified mail, return receipt requested, addressed as herein
set forth, or to such other address as may be designated by a notice given
pursuant hereto, which change of address notice shall be effective upon receipt
thereof.
If to Comtech:
Comtech Telecommunications Corp.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, President
Copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
7
If to Employee:
00 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
13. Survival.
All of the representations, warranties, agreements and covenants
contained herein or made or deemed to have been made pursuant hereto or in
connection with the transactions contemplated hereby shall survive the execution
and delivery hereof and the consummation of the transactions contemplated
hereby.
14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15. Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one
instrument.
16. Expenses
Employee and Comtech shall each bear all the expenses incurred by them
or it in connection with this Agreement and the transactions contemplated
hereby.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, Comtech and Employee have caused this Agreement to
be executed as of the date first above written.
COMTECH TELECOMMUNICATIONS CORP.
By:
-----------------------------------
Authorized Signatory
-----------------------------------
Xxxx Xxxxx
9
