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EXHIBIT 10.40
EXECUTIVE OFFICER
AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into this 24th day of March 1999 by and between UNIVERSAL
ELECTRONICS INC. (the "Employer") and XXXXXXX XXXXX ("Executive").
RECITALS:
WHEREAS, the Employer is presently headquartered in Cypress, California,
and is engaged in the business of developing and marketing easy to use,
pre-programmed universal remote control products primarily for home video and
audio entertainment equipment and home security and home automation devices; and
WHEREAS, Employer wishes to retain Executive as one of its key
executives and avail itself of Executive's expertise, experience and capability
in Employer's business, and in this connection has Executive, in addition to
being Employer's Chief Executive Officer and performing those duties and
assuming those responsibilities as set forth in this Agreement and as identified
and outlined in Employer's Amended and Restated By-Laws, and undertaking such
other duties and assuming such other responsibilities commensurate with
Executive's designated position(s) as may be reasonably assigned to Executive
from time to time by the Board of Directors of Employer, has recently been named
Employer's Chairman of the Board and has agreed to perform those duties and
assume those responsibilities as identified and outlined in Employer's Amended
and Restated By-Laws, and to undertake such other duties and to assume such
other responsibilities commensurate with Executive's designated position(s) as
may be reasonably assigned to Executive from time to time by the Board of
Directors of Employer; and
WHEREAS, Executive and Employer each desires to enter into this
Agreement to reflect fully the terms and conditions of Executive's employment
with Employer.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
1. EMPLOYMENT
Subject to all of the terms and conditions of this Agreement, effective
on the date of this Agreement as set forth in the preamble (the "Effective Date
of this Agreement"), Employer hereby employs Executive and Executive hereby
accepts employment with Employer.
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2. TITLE, AUTHORITY AND DUTIES
(a) TITLE(S) AND POSITION(S). On the Effective Date of this
Agreement, Executive shall be employed in the position(s) of and shall
have the title(s) of Chairman of the Board and Chief Executive Officer
of Employer, until this Agreement is terminated as provided herein.
(b) AUTHORITY AND DUTIES. Executive will, during the term of this
Agreement, perform those duties and assume those responsibilities as set
forth in this Agreement and as identified and outlined in Employer's
Amended and Restated By-Laws, as amended as of the date of this
Agreement, and to undertake such other duties and to assume such other
responsibilities commensurate with Executive's designated position(s) as
may be reasonably assigned to Executive from time to time by the Board
of Directors of Employer.
(c) EXCLUSIVE SERVICES AND EFFORTS OF EXECUTIVE. During the term
of this Agreement, Executive shall serve the Employer, under the
direction of the Board of Directors of Employer, and shall faithfully,
diligently, competently and, to the best of her ability, exclusively
devote her full time, energy and attention (unless otherwise agreed to
by the parties) to the business of the Employer and to the promotion of
its interest. Executive recognizes that Employer's organization,
business and relationship with clients, prospective clients and others
having business dealings with Employer are and will be the sole property
of Employer and Executive shall have no separate interests or rights
with respect thereto, except as an employee of Employer.
(d) OTHER ACTIVITIES AND INTERESTS. Employer shall be entitled to
all of the benefits, emoluments, profits, discoveries or other issues
arising from, incident to and related to any and all work, services and
advice of Executive to Employer in carrying out her duties and
responsibilities hereunder. Executive shall not, without the written
consent of Employer, directly or indirectly, render services to or for
any person, firm, corporation or other entity or organization, whether
or not in exchange for compensation, regardless of the form in which
such compensation, if any, is paid and whether or not it is paid
directly or indirectly to her if the rendering of such service would
interfere with the performance of her duties and responsibilities to
Employer hereunder. Notwithstanding the foregoing sentence, Executive
may spend time and attention to personal investment and community
activity matters and such other personal matters consistent with
Employer's policies and procedures set forth within Employer's policy
manual in effect from time to time which are equally applicable to all
of Employer's executive employees, so long as the spending of such time
and attention does not substantially interfere with the performance of
her duties and responsibilities to Employer hereunder.
3. TERM OF EMPLOYMENT AND TERMINATION
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(a) TERM. Unless earlier terminated as provided herein, the term
of this Agreement shall commence at the start of business on the
Effective Date of this Agreement and shall continue through the end of
business on February 1, 2001 (the "Initial Term"). Unless terminated by
either party by giving the other party written notice of an intent not
to renew this Agreement at least one hundred twenty (120) days prior to
the end of the Initial Term or any successive one (1) year term, this
Agreement shall automatically extend for one (1) additional year after
the Initial Term and then again for a one (1) year term after each
successive year.
(b) TERMINATION.
(i) BY EMPLOYER FOR JUST CAUSE. Employer may terminate the
employment of Executive under this Agreement for Just Cause (as
defined herein) at any time upon delivery of written notice to
her setting forth, in reasonable specificity, such Just Cause.
For purposes of this Agreement, and particularly this subsection
3(b)(i), "Just Cause" shall mean:
(1) The continued failure by or refusal of
Executive to substantially perform her duties and
responsibilities as set forth herein; or
(2) Executive's indictment for, conviction of or a
guilty plea to a felony or of any crime involving moral
turpitude, whether or not affecting the Employer; or
(3) The engagement by Executive of personal illegal
conduct which, in the reasonable judgment of Employer, by
association with her, is materially and demonstrably
injurious to the property and/or business of Employer; or
(4) Any material breach by Executive of the terms
and conditions contained herein, including without
limitation, those certain confidentiality provisions set
forth in Section 16; or
(5) The commission of any act opposed to the best
interests of Employer for which Executive would not be
entitled to indemnification under Employer's Restated
Certificate of Incorporation and Amended and Restated
By-Laws, each as amended as of the date of this Agreement;
or
(6) The failure by Executive to protect the best
interests of Employer through Executive's gross neglect of
duty.
(ii) BY EXECUTIVE FOR GOOD REASON. Executive may terminate
her employment with Employer under this Agreement for Good Reason
(as defined
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herein) at any time upon delivery of written notice to Employer
setting forth, in reasonable specificity, such Good Reason(s).
For purposes of this Agreement, and particularly this subsection
3(b)(ii), "Good Reason" shall mean:
(1) The attempted discontinuance or reduction in
Executive's "Base Cash Salary" (as defined herein); or
(2) The attempted discontinuance or reduction in
Executive's bonuses and/or incentive compensation award
opportunities under plans or programs applicable to her,
unless such discontinuance or reduction is a result of
Employer's policy applied equally to all executive
employees of Employer; or
(3) The attempted discontinuance or reduction in
Executive's stock option and/or stock award opportunities
under plans or programs applicable to her, unless such
discontinuance or reduction is a result of Employer's
policy applied equally to all executive employees of
Employer; or
(4) The attempted discontinuance or reduction in
Executive's perquisites from those historically provided
her during her tenure with the Employer and generally
applicable to executive employees of Employer; or
(5) The relocation of Executive to an office (other
than Employer's headquarters) located more than fifty (50)
miles from her then current office location; or
(6) The significant reduction in Executive's
responsibilities and status within the Employer or change
in her title(s) or position(s); or
(7) The attempted discontinuance of Executive's
participation in any benefit plans maintained by Employer
unless such plans are discontinued by reason of law or
loss of tax deductibility to the Employer with respect to
the contributions to or payments under such plans, or are
discontinued as a matter of the Employer's policy applied
equally to all participants; or
(8) The attempted reduction of Executive's paid
vacation to less than that as provided in this Agreement;
or
(9) The failure by Employer to obtain an assumption
of Employer's obligations under this Agreement by any
assignee of or successor to
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Employer, regardless of whether such entity becomes a
successor to Employer as a result of merger,
consolidation, sale of assets of Employer or other form of
reorganization; or
(10) The occurrence of any of the items set forth
in paragraphs (1) through (9) of this subsection 3(b)(ii),
if, in the reasonable determination by the Executive, such
occurrence happens as a result of and within the shorter
of six (6) months or the remaining term of this Agreement
following a "Change in Control" (as such term is defined
below). For the purposes of this Agreement, a "Change in
Control" shall be deemed to occur when and only when the
first of the following events occurs:
a. Any "person" or "group" (as such terms
are used in Sections 3(a), 3(d), and 14(d) of the
Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder
(the "1934 Act"), other than (i) a trustee or other
fiduciary holding securities under any employee
benefit plan of the Corporation or any of its
subsidiaries or (ii) a corporation owned directly
or indirectly by the stockholders of the
Corporation in substantially the same proportions
as their ownership of stock in the Corporation, is
or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the 1934 Act)), directly or
indirectly, of securities of the Corporation
representing 20% or more of the total voting power
of the then outstanding securities of the
Corporation entitled to vote generally in the
election of directors (the "Voting Stock"); or
b. Individuals who are members of the
Incumbent Board, cease to constitute a majority of
the Board of Directors of the Corporation. The term
"Incumbent Board" shall mean (i) the members of the
Board of Directors on the effective date of this
Agreement, and (ii) any individual who becomes a
member of the Board of Directors after the
effective date of this Agreement, if his or her
election or nomination for election as a director
was approved by the affirmative vote of a majority
of the then Incumbent Board; or
c. (i) The merger or consolidation of the
Corporation with any other corporation or entity,
other than a merger or consolidation which would
result in the Voting Stock outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity) at least
80% of the total voting power represented by the
Voting Stock or the voting securities of such
surviving entity outstanding immediately after such
merger or consolidation, (ii) the sale, transfer or
disposition of all or substantially all of the
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Corporation's assets to any other corporation or
entity, or (iii) the dissolution or liquidation of
the Corporation.
For purposes of this Agreement, a Change in Control
approved by the Incumbent Board will be deemed a "friendly
acquisition" and a Change in Control not approved by the
Incumbent Board will be deemed a "hostile acquisition."
(iii) AUTOMATICALLY IN ACCORDANCE WITH SUBSECTION 3(a). In
addition to the rights to terminate this Agreement as set forth
in subsections 3(b)(i) and 3(b)(ii), this Agreement may also
terminate automatically in accordance with subsection 3(a).
(iv) DISAGREEMENTS. Any disagreement concerning whether
there has been Just Cause for termination by Employer or Good
Reason for termination by Executive will be resolved by binding
arbitration in accordance with the provisions of Section 18 of
this Agreement.
(c) EFFECT OF TERMINATION. Upon termination of Executive's
employment with Employer:
(i) BY EMPLOYER FOR JUST CAUSE. Executive shall not be
entitled to receive payment of any salary, bonus, expenses, or
other benefits beyond the date of termination and, subject to
this subsection 3(c)(i) and Section 17, this Agreement shall
become null and void effective as of the date of termination and
Employer and Executive shall have no further obligation hereunder
toward the other except for the payment of salary, bonus,
expenses and benefits, if any, which have accrued but remain
unpaid prior to and as of the termination date.
(ii) BY EXECUTIVE FOR GOOD REASON.
(1) Executive shall be paid by Employer in a lump
sum within twenty (20) business days of such termination,
an amount which is equal to the sum of the following:
(A) The amount equivalent to salary payments
for eighteen (18) months (twenty-four (24) months
if such termination is pursuant to subsection
3(b)(ii)(10) and such Change in Control is deemed a
"friendly acquisition" or thirty-six (36) months if
such termination is pursuant to subsection
3(b)(ii)(10) and such Change in Control is deemed a
"hostile acquisition"), at that rate of pay which
is not less than Executive's rate of Base Cash
Salary in effect immediately prior to the effective
date of such termination (without regard to any
attempted reduction or discontinuance of such
salary); and
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(B) The amount equivalent to eighteen (18)
months (twenty-four (24) months if such termination
is pursuant to subsection 3(b)(ii)(10) and such
Change in Control is deemed a "friendly
acquisition" or thirty-six (36) months if such
termination is pursuant to subsection 3(b)(ii)(10)
and such Change in Control is deemed a "hostile
acquisition"), multiplied by the greater of (i) the
monthly rate of the bonus payment for the bonus
period in the year immediately prior to Executive's
termination date or (ii) the estimated amount of
the bonus for the period which includes Executive's
termination date (without regard to any attempted
reduction or discontinuance of such bonus).
(2) In addition to such amount under subsection
3(c)(ii)(1) above, Executive shall also receive, (i) in
cash, the value of the incentive compensation (including,
but not limited to, employer contributions to the
Universal Electronics Inc. 401(K) and Profit Sharing Plan)
and (ii) the rights to receive grants of stock options and
stock awards to which she would have been entitled under
all incentive compensation and stock option and stock
award plans maintained by Employer if Executive had
remained in the employ of Employer for eighteen (18)
months (twenty-four (24) months if such termination is
pursuant to subsection 3(b)(ii)(10) and such Change in
Control is deemed a "friendly acquisition" or thirty-six
(36) months if such termination is pursuant to subsection
3(b)(ii)(10) and such Change in Control is deemed a
"hostile acquisition"), without regard to any attempted
reduction or discontinuance of such incentive
compensation. The amount of such payment and/or grants
shall be determined as of the date of termination and
shall be paid and/or issued as promptly as practicable and
in no event later than 30 days after such termination.
(3) Employer shall also maintain in full force and
effect for the Executive's continued benefit (and, to the
extent applicable, the continued benefit of her
dependents) all of the employee benefits (including, not
limited to, coverage under any medical and insurance
plans, programs or arrangements) to which she would have
been entitled under all employee benefit plans, programs
or arrangements maintained by Employer if Executive had
remained in the employ of Employer for eighteen (18)
months (twenty-four (24) months if such termination is
pursuant to subsection 3(b)(ii)(10) and such Change in
Control is deemed a "friendly acquisition" or thirty-six
(36) months if such termination is pursuant to subsection
3(b)(ii)(10) and such Change in Control is deemed a
"hostile acquisition"), without regard to any attempted
reduction or discontinuance of such benefits, or if such
continuation is not possible under the terms and
provisions of such
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plans, programs or arrangements, Employer shall arrange to
provide benefits substantially similar to those which
Executive (and, to the extent applicable, her dependents)
would have been entitled to receive if she had remained a
participant in such plans, programs or for such eighteen
(18) month (twenty-four (24) months if such termination is
pursuant to subsection 3(b)(ii)(10) and such Change in
Control is deemed a "friendly acquisition" or thirty-six
(36) months if such termination is pursuant to subsection
3(b)(ii)(10) and such Change in Control is deemed a
"hostile acquisition") period.
(4) Subject to this subsection 3(c)(ii) and Section
17, this Agreement shall become null and void effective as
of the date of termination and Employer and Executive
shall have no further obligation hereunder toward the
other.
(ii) PURSUANT TO SUBSECTION 3(b)(III). Executive
acknowledges and agrees that in the event that this Agreement
terminates in accordance with subsection 3(b)(iii), that Employer
and Executive shall have no further obligation hereunder toward
the other except for the payment of salary, bonus, expenses and
benefits, if any, which have accrued but remain unpaid prior to
and as of the termination date.
(iv) SUBMISSION OF RESIGNATIONS BY EXECUTIVE. Upon
termination of this Agreement by either Employer or Executive as
set forth herein and the receipt by Executive of (1) all cash
amounts due her as set forth herein and (2) a written
representation signed by an authorized representative of Employer
that all non-cash obligations of Employer as set forth herein
have been fulfilled or, as the case may be, have been commenced,
Executive shall immediately submit Executive's resignation for
any and all offices or directorships of Employer and/or any and
all subsidiaries and affiliates of Employer which resignation
shall have retroactive application and effect to such termination
date; provided however that during such time period from the
effective date of such termination to the date Executive submits
her resignation, Executive acknowledges and agrees that she does
not have authority to bind Employer to any contracts or
commitments and agrees not to create any obligation for Employer
or bind or attempt to bind Employer in any manner whatsoever.
Executive also acknowledges that she shall have no supervisory or
managerial responsibility or authority from and after the
effective date of her termination, regardless of whether she
submits the resignation or not, and agrees not to involve herself
in any activities of Employer, except as may be requested by the
an authorized officer of Employer.
4. TOTAL COMPENSATION
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While employed under this Agreement and in consideration of the
services to be rendered by Executive pursuant hereto, Executive shall receive
the following amounts/benefits as the sole and total compensation for the
performance of her duties and obligations under this Agreement:
(a) BASE CASH SALARY. A salary at the rate of Three Hundred
Thousand Dollars (US$300,000) per annum (the "Base Cash Salary"), which
shall be deemed to accrue from day to day, payable in accordance with
Employer's standard payroll practices and procedures;
(b) BONUS. A bonus calculated in accordance with the plans or
programs established by Employer from time to time; provided that the
bonus for the 1999 calendar year shall be calculated in accordance with
the Bonus Plans attached hereto as Exhibit A, payable in accordance with
Employer's standard payroll practices and procedures; and provided
further, that any such bonuses whenever earned and paid shall be
determined without regard to any material gains and losses which occur
outside of the scope of Employer's ordinary operating business unless
any such plans or programs explicitly include such material gains and
losses within the determination of any such bonuses;
(c) STOCK OPTIONS. Stock options granted or stock awards in
accordance with the plans or programs established by Employer from time
to time; provided that the stock options and/or stock awards granted for
the 1999 calendar year shall be determined in accordance with the Stock
Option Plans attached hereto as Exhibit B;
(d) INCENTIVE COMPENSATION. Participation in Employer's incentive
compensation plans and/or programs, including, but not limited to,
receipt of employer contributions to the Universal Electronics Inc.
401(K) and Profit Sharing Plan and the right to receive stock awards and
to exercise stock options under the Universal Electronics Inc. 1993
Stock Incentive Plan, the Universal Electronics Inc. 1995 Stock
Incentive Plan, the Universal Electronics Inc. 1996 Stock Incentive
Plan, the Universal Electronics Inc. 1998 Stock Incentive Plan, the
Salaried Employee Cash Incentive Program, and such other plans and/or
programs which are established from time to time;
(e) BENEFITS. The benefits provided by Employer to its executive
employees generally, including without limitation, the benefits and
perquisites included under the Universal Electronics Inc. group family
health insurance program, which includes comprehensive medical
insurance, dental insurance, group disability, group life insurance, and
executive bonus (supplemental life); provided that the benefits provided
to Executive shall be no less extensive than that provided her
immediately prior to the date of this Agreement;
(f) VACATION. Three (3) weeks (fifteen (15) working days)
vacation with pay, determined and carried over in accordance with the
policies and procedures set forth within Employer's policy manual in
effect from time to time which are equally applicable to all of
Employer's executive employees;
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(g) OTHER PERQUISITES. Such other employee benefits and
perquisites which are provided by Employer to executives generally,
provided that the other perquisites provided to Executive shall be no
less extensive than the most extensive perquisites provided to any other
executive employee of the Employer;
(h) D&O INSURANCE. Director and Officer Liability insurance in a
reasonably sufficient amount;
(i) DISCRETIONARY BONUS. Such other amounts of compensation
and/or bonus which is determined by Employer from time to time;
(j) REVIEWS. The total amount of compensation to be paid and/or
provided to Executive shall be reviewed by the Board of Directors, or
such committee thereof, of Employer as of the first day of each calendar
year while this Agreement is in force and effect. In no event shall such
review result in a reduction or discontinuance of the amount of
compensation paid and/or provided to Executive hereunder except if such
reduction or discontinuance occurs by reason of law or loss of tax
deductibility to the Employer with respect to the contributions to such
plans, or are discontinued as a matter of the Employer's policy applied
equally to all participants;
(k) ENTITLEMENT TO EMPLOYER'S EXECUTIVE RELOCATION POLICY.
Effective of the date of this Agreement, Executive has agreed to change
her principal place of residence from Northern California to Southern
California. In this connection, Employer acknowledges and agrees that
such change by Executive will benefit the Corporation. Therefore,
Employer agrees that in connection with such relocation by Executive,
Executive shall be entitled to receive such assistance as set forth in
Employer's Executive Relocation Policy Number 4.10, effective date
August 1, 1995.
5. ADJUSTMENTS IN CASE OF EXCESS PARACHUTE PAYMENTS
In the event that the aggregate present value (determined in accordance
with applicable federal, state and local income tax law, rules and regulations)
of all payments to be made and benefits to be provided to Executive under this
Agreement and/or under any other plan, program or arrangement maintained or
entered into by Employer or any of its subsidiaries shall result in "excess
parachute payments" to her within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), or any comparable provision of
successor legislation, which subject her to the Excise Tax under Section 4999 of
the Code or any comparable provision of successor legislation, Employer shall
pay to Executive an additional amount (the "gross-up payment") calculated so
that the net amount received by her after deduction of the Excise Tax and of all
federal, state and local income taxes upon the gross-up payment shall equal the
payments to be made and the benefits to be provided to her under this Agreement.
For purposes of determining the amount of the gross-up payment, Executive shall
be deemed to pay federal, state and local income taxes at the
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highest marginal rates thereof in the calendar year in which the gross-up
payment is to be made, net of the maximum reduction in federal income taxes
obtainable from deduction of such state and local taxes. The computations
required by this Section 5 shall be made by the independent public accountants
then regularly retained by Employer, in consultation with tax counsel selected
by and acceptable to Executive. Employer shall pay all of its accountants' fees
and the lesser of (i) one-half of Executive's tax counsel's fees or (ii) $2,500.
6. REIMBURSEMENT FOR BUSINESS RELATED EXPENSES
Employer shall reimburse Executive for all reasonable expenses incurred
and paid by her in connection with Employer's business in accordance with
Employer's policy manual in effect from time to time.
7. INTEREST
In the event any payment to Executive under this Agreement is not paid
within five (5) business days after it is due, such payment shall thereafter
bear interest at the prime rate from time to time in effect at Bank of America,
Los Angeles, California; provided however, that this provision shall not excuse
the timely payment of such sums required by this Agreement.
8. NOTICES
Written notices to be given under this Agreement shall be personally
delivered or sent by overnight courier (such as Federal Express, DHL or UPS and
the like) or by registered or certified mail, return receipt requested, to the
addresses set forth below:
To Employer:
Universal Electronics Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Corporate Secretary
With a required copy to:
Universal Electronics Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: The Board of Directors
To Executive:
Xx. Xxxxxxx Xxxxx
At her last known address as reflected in Employer's records
9. SEVERABILITY
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If any one or more of the provisions contained in this Agreement shall
be invalid, illegal or unenforceable in any respect under applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be ineffective or impaired thereby.
10. GOVERNING LAW
This Agreement shall be governed by the law of the state of California
and not the law of conflicts of the state of California.
11. WAIVER
The failure of either party to insist in any one or more instances on
strict performance of any of this Agreement's provisions, or to exercise or
enforce any right, remedy or obligation under this Agreement, shall not be
construed as a waiver or relinquishment of any right, remedy or obligation, and
the right, remedy or obligation shall continue in full force and affect.
12. ENTIRE AGREEMENT AND MODIFICATION
This Agreement sets forth the entire agreement of the parties concerning
the employment of Executive by the Employer and any oral or written statements,
representations, agreements or understandings made or entered into prior to or
contemporaneously with the execution of this Agreement are hereby rescinded,
revoked, and rendered null and void by the parties. The parties hereto further
acknowledge and agree that the terms of that certain (a) Offer Letter dated
November 5, 1997 and (b) Executive Officer Employment Agreement dated January
29, 1998 have each been incorporated in this Agreement and such Offer Letter and
Executive Officer Employment Agreement has each been superseded by this
Agreement and therefore, each is hereby terminated in its entirety and shall be
of no further force and effect. This Agreement may be modified only by a written
instrument duly executed by each party hereto.
13. ASSIGNMENT
This Agreement shall be binding upon the parties hereto, their
respective heirs, personal representatives, executors, administrators,
successors and assigns. Any such assignee or successor of Employer shall, within
ten (10) business days after receipt of a written request by Executive, send to
Executive its acknowledgment and agreement that such assignee or successor
expressly assumes all of Employer's obligations under this Agreement as if such
assignee or successor was the original employer and the term "Employer" as used
herein as include any such assignee or successor.
14. INTERPRETATION OF AGREEMENT
The parties have cooperated in the drafting and preparation of this
Agreement. Therefore, the parties hereto agree that, in any construction to be
made of the Agreement the same shall not be
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construed against any of the parties. Each of the parties hereto has carefully
read this Agreement and has been given the opportunity to have it reviewed by
legal counsel and negotiate its terms.
15. SPECIFIC OBLIGATIONS OF THE EXECUTIVE
In addition to the general duties set forth herein, Executive shall use
her reasonable efforts for the benefit of Employer by whatever activities
Employer finds reasonably appropriate to maintain and improve Employer's
standing in the community generally and among current and prospective customers,
including such entertainment for professional purposes as Executive and Employer
mutually consider appropriate. Executive shall undertake business development
endeavors as reasonably directed by Employer.
16. NONDISCLOSURE AND NONAPPROPRIATION OF INFORMATION
(a) Executive recognizes and acknowledges that while employed by
Employer, she has and will have access to, learn, be provided with and,
in some cases, prepare and create certain confidential, proprietary
business information and/or trade secrets for Employer, including, but
not limited to, lists, files and forms, (hereinafter collectively
referred to as the "trade secrets"), all of which are of substantial
value to Employer and its business. In this connection, Executive
expressly covenants and agrees, during her employment with Employer and
continuing thereafter, to:
(i) Hold in a fiduciary capacity and not reveal,
communicate, use or cause to be used for her own benefit or
divulge any trade secrets, or other proprietary right now or
hereafter owned by the Employer;
(ii) Not sell, exchange or give away, or otherwise dispose
of any trade secrets now or hereafter owned by Employer, whether
the same shall or may have been originated or discovered by
Employer or otherwise;
(iii) Not reveal, divulge or make known to any person,
firm, corporation or other entity any trade secrets of Employer;
(iv) Not reveal, divulge or make known to any person
(other than her spouse, attorney and/or accountant), firm,
company or corporation any of the terms of this Agreement;
(v) Not solicit, interfere with or endeavor to entice away
from Employer any person, firm, company or corporation in the
habit of dealing with Employer; and
(vi) Not interfere with or solicit for hire or hire any
other executive employee of Employer.
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(b) Executive further covenants and agrees to return to Employer
either before or immediately upon her termination of employment with
Employer any and all written information, material or equipment that
constitutes, contains or relates to Employer's proprietary information
trade secrets and which relate to Employer's business which are in
Executive's possession, custody and control, whether confidential or
not, including any and all copies thereof which may have been made by or
for Executive. Executive shall maintain no copies thereof after
termination of her employment.
17. SURVIVAL OF OBLIGATIONS
In addition to those specific provisions of Section 3, which by their
express terms, survive the termination of this Agreement under certain
circumstances, the terms and conditions and obligations of the parties as
contained Sections 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, and 18 shall
survive the termination of this Agreement and, notwithstanding such termination,
shall remain fully binding on the parties hereto.
18. ARBITRATION
Except for any claim or dispute in which equitable relief under this
Agreement is sought, any disagreement, dispute or controversy concerning whether
there has been Just Cause, Good Reason or breach of any of the terms of this
Agreement shall be settled exclusively and finally by arbitration. The
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in effect from time to time (the
"AAA Rules"). The arbitration shall be conducted in Los Angeles, California, or
in such other city as the parties to the dispute may designate by mutual
consent. The arbitral tribunal shall consist of three arbitrators (or such
lesser number as may be agreed upon by the parties) selected according to the
procedure set forth in the AAA Rules, with the chairman of the arbitral tribunal
selected in accordance with the AAA Rules. Except as otherwise set forth in this
Agreement, the fees and expenses of the arbitral tribunal in connection with
such arbitration shall be borne by the parties to the dispute as shall be
determined by the arbitral tribunal.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the
Effective Date of this Agreement.
Signed and acknowledged in UNIVERSAL ELECTRONICS INC.
the presence of:
By:
------------------------------ -----------------------------------
An Authorized Member of the Board
of Directors
XXXXXXX XXXXX
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Signature
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EXHIBIT A
BONUS PLAN
PURSUANT TO SECTION 4(b) FOR 1999
If Minimum, Bonus shall equal Thirty percent (30%) of Executive's Base Salary.
If Target, Bonus shall equal Sixty percent (60%) of Executive's Base Salary.
If Maximum, Bonus shall equal One Hundred and Twenty percent (120%) of
Executive's Base Salary.
The determination shall be made in accordance with criteria established by the
Compensation Committee of Employer's Board of Directors which shall use the
following percentage ranges:
Financial Percentage Range -- 0% to 150%
Strategic Percentage Range -- 75% to 133%
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EXHIBIT B
STOCK OPTION AWARD
PURSUANT TO SECTION 4(c) FOR 1999
Options to acquire up to 80,000 shares of the common stock of Employer with an
exercise price determined as market price of the average of the beginning and
the end of business on January 28, 1999. These options shall vest at a rate of
33.3% per year for three years, but all in accordance with the terms and
conditions of the Stock Option Agreement and Stock Option Plans of Employer.
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