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EXHIBIT 10.7
AMENDMENT AND TERMINATION OF EMPLOYMENT AGREEMENT
AGREEMENT dated as of November 18, 1996 (this "Agreement) between TSX
Corporation (the "Company"), a Nevada corporation, and Xxxxxx X. Xxxxxxxx (the
"Executive").
PRELIMINARY STATEMENT
A. The Executive has been employed by the Company pursuant to an
Employment Agreement dated as of May 1, 1995 (the Employment Agreement).
Capitalized terms not otherwise defined herein are used herein as defined in
the Employment Agreement.
B. The Company, ANTEC Corporation, a Delaware corporation
("ANTEC"), and TSX Acquisition Corporation, a Nevada corporation ("Merger Sub")
have entered into a Plan of Merger dated as of October 28, 1996 pursuant to
which Merger Sub will be merged into the Company and the Company shall continue
to exist as the surviving corporation (the "Merger"). Such Plan of Merger, as
same may be amended, supplemented or modified from time to time, is referred to
herein as the "Merger Agreement."
C. Certain disputes (the "Disputes") have arisen between the
Company and the Executive, including but not limited to (i) the Executive's
claim that the calculation of "incentive compensation" under Section 9(c)(i) of
the Employment Agreement included the income received from exercise of stock
options, (ii) and the matters set forth in letters from Scott, Hulse, Marshall,
Feuille, Finger & Xxxxxxxx, P.C. ("Xxxxx & Xxxxx"), counsel to the Executive,
to Kemp, Smith, Xxxxxx & Xxxxxxx, P.C. ("Xxxx Xxxxx"), counsel to the Company,
dated October 18, 21, 23, 30 and November 11, 1996; letters from Xxxx Xxxxx to
Xxxxx & Xxxxx dated October 18, 19, 22 and November 12, 1996; and letter from
Xxxxxxx X. Xxxxxxx, Chairman and C.E.O. of the Company, to the Executive dated
October 28, 1996.
D. The Company on October 28, 1996 declared the Employment
Agreement to be void and terminated, and the Executive has filed with the
American Arbitration Association ("AAA") a demand for arbitration under Section
14 of the Employment Agreement. The parties have reached an understanding
whereby such voiding and termination will be rescinded, the Employment
Agreement will be modified and further actions will be taken in settlement and
compromise of disputed claims as provided below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and in settlement and compromise of disputes and claims
between the parties and for other good and valuable consideration, the parties
agree as follows:
1. The prior determination by the Company to void and terminate
the Employment Agreement and to terminate the Executive's employment is
rescinded and such prior determination is void ab initio as of October 28,
1996; and the Executive's employment with the Company under the Employment
Agreement, as amended hereby, shall remain in effect until terminated as
hereinafter provided.
2. The parties agree that the Executive is entitled to terminate
his employment under Section 8(f) of the Employment Agreement because on and
after October 28, 1996, he is no longer serving as, and accordingly is no
longer authorized to discharge the usual duties of, Senior Vice President,
Chief Financial Officer and Secretary of the Company; and the Executive has
elected to and does hereby terminate his Employment Period pursuant to Section
8(f) effective as of the date of this Agreement
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(which date is the "Termination Date" within the meaning of Section 8(h) of the
Employment Agreement). Pursuant thereto, the parties have agreed as follows:
(a) The Company shall pay to the Executive, and
simultaneously with the execution and delivery of this Agreement has
paid to Executive, in lump sum, in cash, the sum of $343,304,
consisting of the following:
(i) The Company shall pay to the
Executive the amount of his Base Salary, $10,153.83,
from October 29, 1996 through the date of this
Agreement, and the amount of accrued vacation pay,
$17,266.97, through the date of this Agreement,
aggregating $27,421, less normal deductions for
medical insurance, Medicare, Federal income tax
withholding and 401k plan; and the Executive
acknowledges that payment of such amount is in full
and final payment of all Base Salary and accrued
vacation pay to which he is entitled.
(ii) The Company shall pay to the
Executive in lump sum, in cash, the agreed amount of
$448,000 due to the Executive under the provisions of
Section 9(c)(i) of the Employment Agreement (less
withholding for Federal income tax and Medicare) and
no additional amounts shall be claimed or payable
under said Section 9(c)(i); and the Executive
acknowledges that payment thereof constitutes full
and final payment of all amounts due under said
Section 9(c)(i), waives and releases the Executive's
claim that the calculation of "incentive
compensation" under said Section 9(c)(i) includes the
income received from exercise of stock options, and
agrees that no additional amounts shall be claimed or
payable under said Section 9(c)(i) of the Agreement.
(iii) As the following coverage under
Benefit Plans (as defined in Section 9(c)(iv) of the
Employment Agreement) is paid for by the Company
(except for the Executive's portion described below)
and afforded to the Executive and his dependents,
then in accordance with Section 9(c)(iv) of the
Employment Agreement:
(A) The Company shall pay to
Executive the present value of life insurance
premiums for three years (less Federal income
tax and Medicare withholding) totaling
$2,267;
(B) The Company shall pay to
Executive the present value of MERP (medical
and dental for three years, less Federal
income tax and Medicare withholding),
totaling $13,365; and
(C) The remaining portion of such
coverage which is paid for by the Company
shall be paid by the Company and afforded to
the Executive and his dependents for a three
(3) year period beginning on the Date of
Termination (i.e., the date of this
Agreement); and the present value ($3,754) of
the portion of the coverage which the
Executive is obligated to pay for such three
year period (based upon the current amount of
$26.31 per week) has been deducted from the
amount payable to the Executive (as reflected
on Schedule A referred to below), and
accordingly, the Company shall pay for the
Executive's portion of the coverage for such
three year period.
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Attached hereto as Schedule A is a schedule of the amounts
payable, less applicable withholding amounts, under Sections 2(a)(i),
2(a)(ii) and 2(a)(iii)(A) and (B) of this Agreement, aggregating
$491,053, less withholding of $145,242, plus refund to Executive of a
previous COBRA payment of $1,245 and less the present value of the
Executive's portion of Benefit Plan coverages as provided in
Subparagraph (C) above, totaling $343,304. The Company has paid such
amount of $343,304 to Executive by wire transfer to an account
designated by the Executive, the receipt of which Executive hereby
acknowledges, in full and final payment of all amounts due under
Sections 9(c)(i), 9(c)(ii) and 9(c)(iv) of the Employment Agreement,
except for additional amounts hereafter payable under Section 9(c)(iv)
of the Employment Agreement as provided in Section 2(a)(iii)(C) of
this Agreement above.
(b) The provisions of Section 9(c)(ii) of the Employment
Agreement shall be inapplicable, and the Executive shall have no right
to elect to receive cash for his outstanding options for shares of the
Company's Common Stock. The three month period following termination
of employment specified in Section 2(b)(i) of the Non-Statutory Stock
Option Agreements dated May 23, 1995 and September 29, 1995 between
the Company and the Executive (the "Stock Option Agreements"), during
which period the Executive is entitled to exercise his stock options
then exercisable under the terms of the respective Stock Option
Agreements, shall not commence until the termination of the
restrictions contained in paragraph (c) of the Affiliates Letter
referred to in Section 5 of this Agreement, and this sentence shall
constitute an amendment of Section 2(b)(i) of each of the Stock Option
Agreements.
(c) No benefits are payable to the Executive under
Section 9(c)(iii) of the Employment Agreement.
(d) Excepting Executive's remaining benefits under
Benefit Plans as provided in Section 2(a)(iii)(C) of this Agreement,
the Executive waives and releases all further claims for benefits or
compensation from the Company.
(e) Notwithstanding anything in this Agreement to the
contrary, the parties agrees that the provisions of Section 11 of the
Employment Agreement shall survive the termination of the Employment
Agreement.
3. Pursuant to Section 14 of the Employment Agreement, the
Executive has requested reimbursement of his legal fees and expenses in the
amount of $29,719.20 (as reflected by a statement of Xxxxx & Xxxxx dated
November 18, 1996, a copy of which has been delivered by the Executive to the
Company) incurred by the Executive in connection with certain disputes arising
between the Company and the Executive. Without agreeing or disagreeing that
Executive is entitled to such reimbursement, the Company acknowledges that the
Employment Agreement is reasonably susceptible of an interpretation that
Executive is entitled to such reimbursement. Accordingly, in settlement and
compromise of disputes between the parties, the Company has agreed to and does
hereby recognize that it is obligated under the provisions of Section 14 of the
Employment Agreement to pay such legal fees and expenses of the Executive and,
simultaneously with the execution and delivery of this Agreement by the Company
and Executive, has paid such amount in full directly to Xxxxx & Xxxxx.
4. The Company agrees that all of the payments to be made
pursuant to Sections 2 and 3 hereof shall be made in full without any remaining
dispute between the Executive and the Company with regard to such payments, and
the Company releases any defenses to, and agrees that no offset, counterclaim,
charge or deduction (except as set forth in Section 2(a) of this Agreement) of
any kind shall be asserted or taken against, payment of such amounts.
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5. The Executive, simultaneously with the execution and delivery
of this Agreement and as contemplated by the Merger Agreement, has executed and
delivered a letter dated October 28, 1996 addressed to ANTEC, the Company and
Merger Sub (the "Affiliates Letter") which, among other things, places certain
restrictions on the sale or other disposition of TSX Common Stock before the
Merger or ANTEC Common Stock after the Merger. The Company represents that the
form of such Affiliates Letter executed by the Executive is the same as that
executed by other executive officers of TSX.
6. Except as otherwise provided in this Agreement, the Executive
hereby releases, discharges and acquits the Company and its subsidiaries and
their respective officers, directors, employees, shareholders, agents and
attorneys of and from any claims, damages, liabilities, costs or expenses
arising from or growing out of the prior termination on October 28, 1996 of the
Employment Agreement and the Executive's employment, including but not limited
to the Disputes. Except as otherwise provided in this Agreement, the Company,
for itself and its subsidiaries, hereby releases, discharges and acquits the
Executive, his agents and attorneys, and the Executive hereby releases,
discharges and acquits the Company and its subsidiaries and their respective
officers, directors, employees, shareholders, agents and attorneys, of and from
any claims, damages, liabilities, costs or expenses (collectively, the
"Liabilities") existing on the date hereof or arising from or growing out of
events, actions or omissions occurring prior to the date hereof, of whatever
kind or nature, known or unknown, liquidated or unliquidated, fixed or
contingent, including but not limited to the Disputes; and the Company agrees
to indemnify and save harmless the Executive from any such Liabilities to its
subsidiaries. Executive agrees to dismiss his demand for arbitration with AAA.
7. The Employment Agreement and this Agreement shall be construed
and interpreted in accordance with the laws of Texas, and the parties consent
to the exclusive venue and jurisdiction of the Federal and state courts located
in El Paso County, Texas. The Employment Agreement, as amended by this
Agreement, contains the entire agreement between the Company and the Executive
and supersedes any and all previous agreements, written or oral, between the
parties relating to the subject matter hereof. No amendment or modification of
the terms of the Employment Agreement or this Agreement shall be binding upon
the parties hereto unless reduced to writing and signed by the Company and the
Executive. This Agreement may be executed in counterparts, each of which shall
be deemed an original.
8. The parties hereto acknowledge and agree that Executive has
returned to the Company all property in his possession which belongs to the
Company.
9. Each party to this Agreement agrees to perform all further
acts and to execute and deliver all further documents that may be reasonably
necessary, and otherwise reasonably cooperate and use
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reasonable efforts, to carry out the provisions of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive
and the Company as of the day and year first above written.
TSX CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Chairman,
President and Chief Executive Officer
/s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
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SCHEDULE A
PAY PAYMENT
1 10/29/96 THRU 11/18/96 $10,153.83
Vacation Pay 17,266.97
Total $27,420.80 $27,421
2 Life Ins. 11/16/96 to 11/15/97 $666
11/16/97 to 11/15/98 $789
11/16/98 to 11/15/99 $963 3 yr pres val @ 6% 2,267
3 MERP Medical $2000/yr
Dental $3000/yr
Total $5000/yr 3 yr pres val @ 6% 13,365
4a 1993 1994 1995 1996
Base 125,306 134,935 148,770 160,000
0 94,400 95,420 85,000
Severance 2 x ($160,000 + ($94,400 + $95,420) /3) 446,547
4b 1997 target bonus $160,000 x 40% $64,000
Severance 2 x ($160,000 + $64,000) 448,000
TOTAL DUE (Gross) 491,053
Med ins 3 wks 78.93 79
401K 548.07 548
Fed Tx @ 28% 28% of 491,053 137,495
Medicare @ 1.45% 1.45% of 491,0534 7,120
Subtotal 145,242
Net Due 345,811
Cobra refund 1,245
Deduct present value, Executive's portion of Benefit
Plan Coverage ($26.31/mo - 3 yr pres val @ 6%) 3,754
Net payment due 343,304
