EXHIBIT 10.37
AMENDED
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and effective as of the 1st day of
June, 1997, by and between Elcom International, Inc., a Delaware corporation
with its principal place of business at Xxx Xxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx
00000 ("Elcom" or the "Company"), and Xxxxxxxx X. Xxxxxxx currently residing at
00 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive is considered a key employee of the Company; and
WHEREAS, the Executive and the Company have entered into an Employment
Agreement as of July 1, 1996 which the parties recognize has become somewhat out
of date;
WHEREAS, the Company desires to employ Executive consistent with the terms
of this Agreement, and;
WHEREAS, it is the desire of the Company and Executive, in order to insure
Executive's continued employment with the Company, to further amend the existing
employment agreement in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Company and the Executive agree as follows:
1. Duties. The Company hereby employs Executive to be Chief
Financial Officer and a Corporate Executive Vice President of the Company.
During the course of his employment, Executive shall have those duties and
responsibilities, and the authority, customarily possessed by the Chief
Financial Officer and Corporate Executive Vice President of a major corporation
and such additional duties as may be assigned to him by the Chairman of Elcom
and/or from time to time by the Board of Directors of the Company (the "Board")
which are consistent with the positions of Chief Financial Officer and Corporate
Executive Vice President of a major corporation. Nothing in this Agreement shall
preclude the Executive from devoting reasonable periods of time to charitable
and community
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activities or the management of his investment assets, provided such activities
do not significantly interfere with the performance by the Executive of his
duties hereunder. Furthermore, service by the Executive on the boards of other
companies shall not be deemed to be a violation of this Agreement, provided such
service does not significantly interfere with the confidentiality provisions or
performance of his duties hereunder.
2. Salary. During the course of employment, unless modified by
the Compensation Committee of the Board (the "Compensation Committee") of the
Company, commencing on the date hereof, and continuing thereafter, the Company
will pay Executive for his performance of the duties specified herein at an
annual base salary of Two Hundred Seventy-Five Thousand Dollars ($275,000) per
year, subject to minimum increases and further review as hereinafter described
(the "Base Salary"), payable twice per month or otherwise in accordance with the
Company's payment policies for its other executives. On the first day of April
of each calendar year hereafter (commencing on April 1, 1998), Executive shall
receive an increase in his Base Salary hereunder of at least ten percent (10%)
of the then-prevailing Base Salary provided for hereunder (the "Minimum
Increase"). In addition, on an annual basis commencing in 1998, during the first
ninety (90) days of the fiscal year (which should be following the preparation
of the Company's annual audited financial statements), the Compensation
Committee will review Executive's Base Salary and other compensation during the
period of his employment hereunder and, at the discretion of a majority of the
Compensation Committee, they may increase, but not decrease, Executive's Base
Salary (beyond the Minimum Increase) and other compensation based upon his
performance, the generally prevailing industry executive salary scales and total
compensation packages, the Company's results of operation, and other relevant
facts. It is acknowledged that in the past, Executive has, and in the future,
Executive may, enter into temporary arrangements with the Company, and as an
accommodation may temporarily reduce the amount of his Base Salary then payable
in consideration for other matters and that, except to the extent expressly
provided in any other such arrangement in a writing signed by Executive,
Executive's Base Salary for all other purposes hereunder shall be and remain as
established pursuant to this Section 2.
3. Executive Profit Performance Bonus. The Executive shall
continue to be entitled to participate in the Company's Executive Profit
Performance Bonus Plan (or similar plan providing benefits no less favorable to
the Executive), that is being established by the Company, at a minimum rate of
17.5% of any bonus pool
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generated by such Plan, and such Plan, after its adoption shall not be modified,
amended or terminated in any way that may have an adverse effect on Executive
without his prior written consent.
4. Benefits.
A. Payment of Compensation. The annual Base Salary
described in Section 2 hereof shall be paid throughout the term of this
Agreement subject to the following:
i. Such compensation shall not
terminate, but rather shall be
payable to the extent of two times
the amount of the Executive's
then-applicable annual Base Salary,
upon the Executive's death or
disability as described in Section
5, A and B hereof, respectively;
ii. Such compensation shall terminate
upon the Executive's resignation
other than for "Good Reason" as
described in Section 5, C hereof, or
upon the termination of the
Executive's employment by the
Company "For Cause" as described in
Section 5, D hereof; and
iii. Such compensation shall not
terminate, but rather shall be
payable to the extent of two times
the amount of the Executive's then
applicable annual Base Salary, upon
the Executive's resignation for
"Good Reason" as described in
Section 5, C hereof or upon the
termination of the Executive's
employment by the Company other than
"For Cause" as described in Section
5, D hereof.
B. Vacations. During the course of employment,
Executive shall be entitled to five (5) weeks of vacation per year, to be taken
at a time or times acceptable to the Executive and otherwise consistent with the
terms and conditions of this Agreement.
C. Stock Options. Following each annual
compensation review date during the term of this Agreement, but no later than
July of each year, the Company shall make or cause to be made under its Stock
Option Plan(s) grants of options to Executive in amounts not less than previous
annual regular grants and commensurate with his position and performance (on
terms no less favorable than the terms of options as granted to other
executives), taking into account Executive's current salary level and expected
performance for the next fiscal year. Such options shall be exercisable within a
maximum of one (1) year from the date of grant, unless a different exercise
period is requested by Executive and agreed to by the Compensation Committee. To
the maximum extent allowable, all such options shall be incentive stock options
under the Internal Revenue Code. All other options shall have an exercise price
per share equal to the fair market value as of the date of grant. The option
grants described
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herein need not be the exclusive options granted to Executive by the Company
under the Stock Option Plan(s) or otherwise.
D. Additional Compensation. The Executive shall
be eligible to participate in incentive, profit-sharing, annual cash bonus,
deferred compensation, supplemental retirement and any other similar plans
maintained by the Company for the benefit of one or more of its executives as
determined by the Compensation Committee, and shall be entitled to participate
in any other plans deemed appropriate by the Compensation Committee.
E. Other Executive Fringe Benefits. The
Executive shall be included to the extent eligible thereunder (at the expense of
the Company, if provided at Company expense for other executives of the Company)
under any and all existing plans or arrangements (and any plans or arrangements
which may be adopted) providing benefits for its employees, including but not
limited to group life insurance, hospitalization, medical, pension, financial
services and any and all other similar or comparable benefits at least to the
extent they may be in effect for other executives of the Company from time to
time during the term of this Agreement.
Nothing in this Agreement shall adversely affect
the rights of the Executive or his beneficiaries under the present or any future
retirement, profit-sharing, insurance, or other fringe benefit or compensation
plans or arrangements which the Company now has or may adopt for its employees,
and no rights of the Executive thereunder shall be forfeited by any action set
forth in this Agreement unless so provided in such plans or arrangements.
5. Termination of Employment.
A. Death.
If the Executive shall die during the term
of this Agreement, the duties of the Company and the Executive, one to the
other, under this Agreement shall terminate as of the date of the Executive's
death, except (i) as provided in Section 6 below, and (ii) the death of the
Executive shall not adversely affect the rights of his beneficiaries to any
benefits under the Company's employee benefit plans or arrangements in which he
may be a participant, in accordance with the terms thereof, including but not
limited to those referred to in Section 5, F hereof.
B. Disability.
If the Executive shall become "disabled" (as
herein defined) during the term of this Agreement, the duties of the Company and
the Executive, one to the other, under this Agreement shall terminate as of
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the date the Executive is determined to be disabled, except (i) as provided in
Section 6 below, and (ii) the disability of the Executive shall not adversely
affect his rights to any benefits under the Company's employee benefit plans or
arrangements in which he may be a participant, in accordance with the provisions
thereof, including but not limited to those referred to in Section 5, F hereof.
The term "disability" as used in this Agreement shall mean Executive's
inability, due to a mental or physical condition, to continue to provide
services to the Company substantially consistent with past practice for a period
of at least ninety (90) consecutive days, as evidenced by a written
certification as to such condition from a physician designated by Executive and
reasonably acceptable to the Board of Directors.
C. Resignation.
If the Executive voluntarily leaves the
employ of the Company during the term of this Agreement for "Good Reason" (as
hereafter defined), the duties of the Company and the Executive, one to the
other, under this Agreement shall terminate as of the date of the Executive's
termination of employment except (i) as provided in Section 6 below, and (ii)
the termination of employment by Executive for Good Reason shall not adversely
affect his rights to any benefits under the Company's employee benefit plans or
arrangements in which he may be a participant, in accordance with the terms
thereof, including, but not limited to those referred to in Section 5, F hereof.
If the Executive voluntarily leaves the employ of
the Company during the term of this Agreement for reasons not constituting "Good
Reason", the duties of the Company and the Executive, one to the other, under
this Agreement shall terminate as of the date of the Executive's termination of
employment, except that such voluntary termination of employment by the
Executive shall not adversely affect (i) his rights to any benefits under the
Company's employee benefit plans or arrangements in which he may be a
participant, in accordance with the provisions thereof, including but not
limited to those referred to in Section 5, F hereof or (ii) any pre-existing
obligations of the Company to Executive for his benefit, including any accrued
but unpaid compensation or benefits.
For purposes of this Agreement, "Good Reason" means
the occurrence of a significant reduction in the aggregate direct remuneration
of the Executive or any reduction in the position, authority or office of the
Executive, any significant reduction in the Executive's responsibilities or
duties for the Company or any significant reduction in the Executive's support
staff or direct or secondary reports, any pattern of events or circumstances
which impedes the Executive in the exercise of his authorities, powers,
functions or duties hereunder in the manner in which they would normally be
exercised by the Chief Financial Officer and Corporate Executive Vice President
of a major
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corporation, any significant adverse change or reduction in the aggregate
Executive benefits, perquisites or fringe benefits provided to the Executive as
of the date of this Agreement (provided that any reduction in such aggregate
Executive benefits, perquisites or fringe benefits that is required by law or
applies generally to all employees of the Company shall not constitute "Good
Reason" as defined hereunder), a change in the Executive's reporting
relationship, any relocation of the Executive's principal place of work with the
Company to a place more than twenty-five (25) miles from the current office or
the breach or default by the Company of any of its agreements or obligations
under any provision of this Agreement. As used in this Section 5, C, a
"significant reduction" in the aggregate direct remuneration or in the aggregate
Executive benefits, perquisites or fringe benefits shall be deemed to result
from any reduction or any series of reductions which, in the aggregate, exceeds
five percent (5%) of such aggregate direct remuneration or such aggregate
Executive benefits, perquisites or fringe benefits, as the case may be. The
Executive shall give written notice to the Company on or before the date of
termination of employment for Good Reason specifying the reasons for such
termination.
D. Termination by Company.
The Company may terminate the Executive's
employment at any time, without cause, upon a majority vote of the Board of
Directors of the Company (the "Board"), subject to providing the benefits herein
specified in accordance with the terms hereof. The Company, by action of the
Chairman and/or Chief Executive Officer and/or the Board, may terminate the
Executive's employment at any time "For Cause" (as hereinafter defined), in
which case, the duties of the Company and the Executive, one to the other, under
this Agreement shall terminate as of the date of the Executive's termination of
employment, except that such termination of employment of the Executive by the
Company "For Cause" shall not adversely affect (i) his rights to any benefits
under the Company's employee benefit plans or arrangements in which he may be a
participant, in accordance with the provisions thereof, including but not
limited to those referred to in Section 5, F hereof or (ii) any pre-existing
obligations of the Company to Executive or for his benefit, including any
accrued but unpaid compensation or benefits.
As used herein, the words "For Cause"
shall be deemed to mean only the following: (i) commission by the Executive
(evidenced by a conviction or written, voluntary and freely given confession) of
a criminal act constituting a felony which causes the Company or any affiliated
company a substantial detriment; or (ii) acting in material breach or
contravention of the non-competition, non-solicitation and non-disclosure
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covenants set forth in Sections 9, 10 and 11 hereof, which is not cured in all
material respects within thirty (30) days after the Board gives written notice
thereof to the Executive; or (iii) commission by the Executive, when carrying
out the Executive's duties under this Agreement, of acts or the omission of any
act, which both: (A) constitute gross negligence or willful misconduct and (B)
results in material economic harm to the Company, which is not cured in all
material respects within thirty (30) days after the Board gives written notice
thereof to the Executive.
E. Notice of Termination.
Any termination of the Executive's
employment by the Company or by the Executive shall be communicated by written
Notice of Termination to the other party hereto, which shall set forth the
effective date of such termination (not earlier than the date of mailing, or
delivery by other means, of the notice).
F. Continuation of Executive Benefits.
The death, disability or termination of
employment of the Executive, whether or not voluntary, whether or not for "Good
Reason" and whether or not "For Cause" shall not result in the loss by the
Executive or his beneficiaries of any benefits under any life insurance, death
benefit, pension, profit sharing, stock option, medical, deferred compensation,
supplemental executive retirement plan or other employee benefit plan or
arrangement except as specifically provided for in such plan or arrangement.
6. Compensation Upon Death or Disability of Executive, Upon
Voluntary Termination for Good Reason or Involuntary Termination Other Than For
Cause. If the Executive's employment with the Company shall be terminated during
the term of this Agreement, by the death or disability of the Executive, by the
Executive for "Good Reason" or by the Company other than "For Cause", then the
Executive shall be entitled to the benefits provided below:
i. the Company shall pay the Executive, on
a monthly basis and in equal payment
amounts, the amount described in Section 4,
A, (i) or (iii) hereof, whichever shall be
applicable, determined by reference to his
Base Salary determined under Section 2
hereof as of the date of his termination of
employment, through the date that is twelve
monthly payments thereafter (irrespective
of the then remaining term of the
Agreement);
ii. full participation (without
proration) in the annual Executive Profit
Performance Plan Bonus, or applicable
similar plan, for that year if his
termination of employment is on or
subsequent to March 1 of the respective
fiscal year;
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iii. full participation in any other
performance award if the performance
measuring period ends within six months
following his termination of employment;
iv. the choice of exercising all vested
stock options up to the longer of (i) one
year after his termination of employment,
or (ii) the exercise period following such
termination provided for in the applicable
option agreement, provided that this
provision shall not extend the term of his
options beyond their terms as initially
granted and the Company agrees to cause
such exercise to be allowed (including
following the request of the Compensation
Committee to permit such exercise) pursuant
to the Company's Stock Option Plan(s) or
the comparable provision of any future plan
or agreement; and
v. the Company shall maintain in full
force and effect, following the cessation
of the Executive's active employment by the
Company, for the Executive's continued
benefit through the end of the term of this
Agreement, and any period during which
Executive is acting as a consultant to the
Company, all employee medical, dental or
other fringe benefit plans and arrangements
in which he was entitled to participate
immediately prior to the date of Notice of
Termination as in effect under Section 4
hereof at the time of such termination,
provided that if such continued coverage
would jeopardize the tax qualified status
of such plan or arrangement with respect to
any other employee or the Company, the
Company may elect to provide the said
benefit on an individual basis or provide
cash compensation equivalent to the benefit
which otherwise would have been provided,
so that the Executive shall suffer no
financial loss whatsoever due to such
substitution.
Except as provided in Section 6 (iv) above, nothing in this
Agreement shall be construed as amending any compensation or fringe benefit plan
or arrangement of the Company. All rights of the Executive under any such plan
or arrangement upon his termination of employment must be determined under the
terms of such plans or arrangements at the time of the Executive's termination
of employment. Executive expressly agrees not to discuss, except with his
official advisors, any information or aspects of his employment regarding the
Company or his termination circumstances unless under compulsion from a court of
competent jurisdiction and further, upon Executive's violation of this
provision, in addition to the Company immediately canceling any and all
remaining severance payments or other obligation to Executive, Executive agrees
that injunctive relief may be granted.
7. Expenses. The Company shall reimburse Executive for
reasonable business expenses incurred by him on behalf of the Company and
documented according to the Company's policies in the performance of his duties
as specified herein.
8. Term. Subject to the following sentence, this Agreement's
term shall begin on the effective date written above and shall terminate three
(3) years thereafter; provided, however, that if one party has not notified the
other party in writing prior to the date that is three (3) months before the end
of the term of this Agreement that such
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notifying party wishes the Agreement to terminate at the end of such term, then
the term of this Agreement automatically shall extend for additional one (1)
year terms, subject again to the same automatic extension provisions.
Notwithstanding the foregoing, at any time during the sixty (60) day period
ending thirty (30) days prior to each of March 31, 1999 and March 31, 2000,
respectively, Executive shall be entitled to notify the Company that he desires
to terminate this Agreement and this Agreement shall terminate upon such
respective March 31st; provided, that, in order to assure the Company that it
has access to Executive's significant expertise and knowledge base, within five
days thereafter, the Company and the Executive shall enter into a Consulting
Agreement providing for Executive's specified availability for a two (2) year
period for $100,000 per year, in a form to be mutually agreed within ninety (90)
days hereafter, which form shall thereafter be attached hereto as Exhibit A.
9. Noncompetition. Executive agrees that during the period
(the "Noncompetition Period") commencing on the date hereof and ending on the
date that is 24 months after the later of the date of his/her cessation of
employment with the Company, or the last date on which he is paid by the Company
he will not, without prior written consent of the Chairman of the Company,
either directly or indirectly, in any capacity whatsoever, (a) compete with the
Company by soliciting the sale of personal computer products (such as computers,
printers, monitors, software, etc.) or services to any customer (including
affiliates of such customer) of the Company by whatever method or (b) operate,
control, advise, be employed and/or engaged by, perform any consulting services
for, invest in (other than the purchase of no more than 5 percent of the
publicly traded securities of a company whose securities are traded on a
national stock exchange) or otherwise become associated with, any person,
company or other entity who or which, at any time during the Noncompetition
Period, competes with the Company via the use of an electronic ordering
methodology as defined herein. For purposes of Sections 9, 10, 11 and 12 of this
Agreement, the "Company" shall mean the Company and any affiliates controlling,
controlled by or under common control with Elcom, including their predecessors.
As used above, "compete" is defined as the marketing,
distribution or sale of desktop, laptop, notebook or other commonly called
"personal computer" equipment, existing software "shrink-wrapped" applications
(i.e., in existence as of June 1, 1997), services, peripherals, or accessories
in the geographical area in which the Company maintains offices, sales agents,
has customers or otherwise conducts business; provided, however, that "competes"
shall not mean the involvement in any of the following: (i) a company with less
than 10% of its revenues
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for any fiscal year during the Non-competition Period from any of the foregoing
defined "competitive" activities, or (ii) a company with a primary purpose of
marketing and developing its own software that otherwise does not exceed the
threshold in subclause (i), if such threshold was thirty percent (30%), or (iii)
any entity which has annualized revenues (at the time Executive commences, or
were to commence, his relationship with such entity) of less than $3 million.
The Executive further expressly represents and understands that if Executive's
employment is terminated, this Agreement will prohibit the Executive from future
employment with all major companies that compete with the Company, as defined in
this Agreement, and as such, will constrain some of the Executive's overall
possibilities for future employment. By Executive's signature to this Agreement,
Executive expressly represents that his training, education and background are
such that his ability to earn a living shall not be impaired by the restriction
in this Agreement.
10. Nondisclosure. Executive agrees during the period (the
"Nondisclosure Period") commencing on the date hereof and ending on the date
that is ten years after the later of the date of his cessation of employment
with the Company, or the date on which he is last paid by the Company, whether
or not under this Agreement, at all times to hold as secret and confidential
(unless disclosure is required pursuant to court order, subpoena, in a
governmental proceeding, arbitration, or pursuant to other requirement of law)
any and all knowledge, technical information, business information,
developments, trade secrets, and confidences of the Company or its business,
including, without limitation, (a) information or business secrets relating to
the products, customers, business, conduct or operations of the Company, or any
of its respective clients, customers, consultants or licensees; and (b) any of
the Company's customer lists, pricing and purchasing information or policies
(collectively, "Confidential Information"), of which he has acquired knowledge
of during or after his employment with the Company, to the extent that such
matters (i) have not previously been made public or are not thereafter made
public, or (ii) do not otherwise become available to Executive, in either case,
via a source not bound by any confidentiality obligations to the Company. The
phrase "made public" as used in this Agreement shall apply to matters within the
domain of the general public or the Company's industry. During the Nondisclosure
Period, Executive agrees not to use, directly or indirectly, such knowledge for
his own benefit or for the benefit of others and/or disclose any of such
Confidential Information without prior written consent of the Company. At the
cessation of employment with the Company, the Executive agrees to promptly
return to the Company any and all written Confidential Information received from
the Company
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which relates in any way to any of the foregoing items covered in this paragraph
and to destroy any transcripts or copies the Executive may have of such
Information unless an alternative method of disposition is approved by the
Company.
11. Nonsolicitation/Noninterference. Executive agrees that
during the period (the "Nonsolicitation Period") beginning on the date hereof
and ending on the date that is two (2) years after the later of the date of his
cessation of employment with the Company, or the last date on which he is paid
by the Company, he will not at any time, without prior written consent of the
Company, directly or indirectly solicit, induce, or attempt to solicit or induce
any employee, former employee (as herein defined), agent, consultant, or other
representative or associate of the Company for the purpose of providing
employment opportunities or to terminate such individual's relationship with the
Company. Executive further covenants and agrees that, during the Nonsolicitation
Period, he will not, without the prior written consent of the Company, directly
or indirectly, induce or attempt to induce any actual or prospective customers
or suppliers of the Company to terminate, alter or change its relationship with
the Company or otherwise interfere with any relationship between the Company and
any of its actual or prospective suppliers or customers. A "former employee"
shall mean any person who was employed by the Company at any time during the one
(1) year period prior to Executive's cessation of employment with the Company.
12. Proprietary Rights. It shall be part of the normal duties
of the Executive at all times to consider in what manner and by what new methods
or devices the products, services, processes, equipment or systems of the
Company might be improved and promptly to give to the Board full details of any
invention, discovery, design or improvement which he may from time to time make
or discover in the course of his duties and to further the interests of the
Company's undertaking with regard thereto. The Executive hereby agrees that the
sole ownership of any such invention, discovery, design or improvement aforesaid
and all proprietary rights therein discovered or made by him (whether alone or
jointly with others) at any time during his engagement hereunder, shall belong
free of charge and exclusively to the Company or as it may direct, and he agrees
to execute and deliver all documentation related thereto deemed necessary or
helpful by the Company.
13. Severability; Certain Exclusions. In the event that
Sections 9, 10, 11 or 12 (the "Restrictive Covenants") hereof shall be found by
a court of competent jurisdiction to be invalid or unenforceable as written as a
matter of law, the parties hereto agree that such court(s) may exercise its
discretion in reforming such provision(s) to the end that Executive shall be
subject to intellectual property ownership, noncompetition, nondisclosure and
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nonsolicitation/ noninterference covenants that are reasonable under the
circumstances and enforceable by the Company.
Notwithstanding any other provision contained in this
Agreement, none of the Restrictive Covenants contained in Sections 9, 10 or 12
hereof shall be binding on, be applicable to, or shall limit the Executive in
connection with any relationship that he may have or develop with any entity
that, at the time of his cessation of employment with the Company, was a
licensee of the Company (and/or any of its affiliates, including a licensee of
the technology of its Elcom Systems, Inc. subsidiary) or is an affiliate of the
Company (hereafter, "Related Entities"). Further, the covenants contained in
Section 11 hereof shall not be binding on or be applicable to the Executive in
connection with any relationship that he has or may develop with a Related
Entity, more than 10% of the equity (represented by the right to vote in the
election of directors or similar governing body) of which was beneficially owned
by the Company or any of its affiliates, at any of the following times: (i) at
the time that the license agreement, if any, was entered into, (ii) at the time
of Executive's cessation of employment with the Company, and/or (iii) at such
subsequent time as the activity under Section 11 is undertaken.
14. Acknowledgment. Executive specifically acknowledges that
the covenants set forth herein restricting competition, disclosure,
solicitation/interference and ownership of intellectual property are reasonable,
appropriate, and necessary as to duration, scope, and geographic area in view of
the nature of the relationship between Executive and the Company and the
investment by the Company of significant time and resources in the training,
development, and employment of Executive. Executive warrants and represents that
in the event that any of the restrictions set forth in these covenants become
operative, he will be able to engage in other activities for the purpose of
earning a livelihood, and shall not be impaired by these restrictions.
Executive further acknowledges that the remedy at law for any
breach of these covenants, including monetary damages to which the Company may
be entitled, will be inadequate and that the Company, its successors and/or
assigns, shall be entitled to injunctive relief against any breach without bond.
Such injunctive relief shall not be exclusive, but shall be in addition to any
other rights or remedies which the Company may have for any such breach.
15. Limitation of Payment. Notwithstanding anything in this
Agreement to the contrary, if receipt of any of the benefits hereunder would
subject the Executive to tax under Section 4999 of the Internal Revenue Code of
1986, as amended (or similar successor statute) (hereafter "Section 4999"), the
Company shall promptly pay to
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the Executive a "gross up" amount that would allow the Executive to receive the
net after-tax amount he would have received but for the application of said
Section 4999 to any payments hereunder, including any payments made pursuant to
this Section 15.
16. Governing Law. This Agreement shall be governed and
performed in accordance with, and only to the extent permitted by, the laws of
the Commonwealth of Massachusetts applicable to contracts made and to be
performed entirely within such Commonwealth of Massachusetts.
17. Assignment. This Agreement shall inure to the benefit of,
and shall be binding upon, the Company, its successors and assigns. If
substantially all the assets of the Company are sold or otherwise transferred to
another corporation or party, it shall be a condition to such sale or transfer
that the transferee agrees to expressly assume the obligations hereunder such
that the provision of this Agreement shall be binding upon and inure to the
benefit of the corporation to which such assets shall be sold or transferred,
and this provision shall apply in the event of any subsequent sale or transfer.
Neither the Company nor Executive shall assign this Agreement without the prior
written consent of the other party hereto.
18. Entire Agreement; Amendments; Waivers. This Agreement
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and replaces or supersedes any previous agreements on such
subject matter, including any and all prior employment agreements between
Executive and the Company and/or any affiliate of the Company. It may not be
changed orally, but only by agreement, in writing, signed by each of the parties
hereto. The terms or covenants of this Agreement may be waived only by a written
instrument specifically referring to this Agreement, executed by the party
waiving compliance. Any such waiver, amendment or modification on behalf of the
Company, unless otherwise specified herein, may be authorized either by a simple
majority to the Board (excluding Executive for all purposes) or a majority of
the Compensation Committee members. The failure of the Company at any time, or
from time to time, to require performance of any of Executive's obligations
under this Agreement shall in no manner affect the Company's right to enforce
any provision of this Agreement at a subsequent time; and the waiver by the
Company of any right arising out of any breach shall not be construed as a
waiver of any right raising out of any subsequent breach.
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19. Headings. The headings in this Agreement are
intended solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in
multiple counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed
this Employment Agreement as of the date first above written.
ELCOM INTERNATIONAL, INC.
"Elcom"
Date: June 1, 1997
/s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx, Chairman of the Board and Chief
Executive Officer
XXXXXXXX X. XXXXXXX
"Executive"
Date: June 1, 1997
/s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxxx X. Xxxxxxx
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