EXHIBIT 10.19
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 00 Xxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000
("Elcom" or the "Company"), and Xxxxxx X. Xxxxxxx, currently residing at 000
Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000 (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 September 20, 1995, which is due soon for renewal and which the
parties recognize has become somewhat out of date; and
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 and for convenience sake, the parties desire to
amend and restate the 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 Chairman of the
Board and Chief Executive Officer of the Company. During the course of his
employment, Executive shall have those duties and
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responsibilities, and the authority, customarily possessed by the Chairman and
Chief Executive Officer of a major corporation and such additional duties as may
be assigned to him from time to time by the Board of Directors of the Company
(the "Board") which are consistent with the positions of Chairman and Chief
Executive Officer of a major corporation. Nothing in this Agreement shall
preclude the Executive from devoting reasonable periods of time to charitable
and community 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. If the
Executive voluntarily relinquishes the title, duties and responsibilities of
Chief Executive Officer in writing after request from the Board, in order to
function solely as the Chairman of the Board with the title, duties and
responsibilities thereof, then Executive shall thereafter still be entitled to
all of the same rights, benefits, privileges and protections 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 Three Hundred Twenty-Five Thousand Dollars ($325,000.00)
per year, subject to 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 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 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
factors. 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
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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 35% of any bonus
pool 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 six (6)weeks vacation per year, without carryover, 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
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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. So long as Executive owns at least 10% of the outstanding stock of
the Company, all options which are incentive stock options shall have an
exercise price of 110% of the fair market value of the underlying common stock.
All other options (including any options granted when Executive no longer owns
10% of the Company's outstanding stock) shall have an exercise price per share
equal to the fair market value as of the date of grant. The option grants
described 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 (even if only for Executive) 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.
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F. Level of Additional Compensation and Fringe Benefits.
Additional compensation as described in Section 4, D above or other executive
fringe benefits as described in Section 4, E above are to be calculated for and
awarded to the Executive in at least as beneficial a manner as they are
calculated for and awarded to any other executives.
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 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
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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 any reduction in the aggregate direct remuneration of the
Executive or any reduction in the position, authority or office of the
Executive,
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any reduction in the Executive's responsibilities or duties for the Company or
any 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 Chairman and Chief Executive
Officer of a major corporation, any 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. 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 unanimous vote of the Board of Directors of
the Company (the "Board") (with Executive abstaining), subject to providing the
benefits herein specified in accordance with the terms hereof. The Company, by
action of the Board of Directors, may terminate the Executive's employment at
any time "For Cause" (as hereafter 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.
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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 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.
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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;
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 suchexercise) 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 financialloss 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
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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.
7. Expenses.
The Company shall reimburse Executive for reasonable business
expenses incurred by him on behalf of the Company 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 two (2) months before the end of the
term of this Agreement that such 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
anniversary of the effective date written above, Executive shall be entitled to
notify the Company that he desires to terminate this Agreement and this
Agreement shall terminate upon such respective anniversary date; 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 three (3) year period for $125,000 per year, in a
form to be mutually agreed within ninety (90) days hereafter, which form shall
thereafter be attached hereto as Exhibit A.
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9. Noncompetition.
Executive agrees that during the thirty-six (36) month period
commencing on the date of his cessation of employment with the Company hereunder
(the "Noncompetition Period"), he will not, either directly or indirectly, in
any capacity whatsoever, (a) compete with the Company by soliciting any 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. 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 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.
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10. Nondisclosure.
Executive agrees 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
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. 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 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 two (2) year period
commencing on the date of his cessation of employment with the Company (the
"Nonsolicitation Period"), 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
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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. Intellectual Property Assignment.
Executive agrees that all ideas, improvements, computer
programs, code, or flowcharts, inventions, and discoveries that are directly
related to the business of the Company either as previously conducted or as
conducted at any time during Executive's employment, that Executive may have
made or that Executive may make or conceive, alone or jointly with others, prior
to or during Executive's employment with the Company shall be the sole property
of the Company, and Executive agrees:
(a) to promptly disclose any such ideas,
improvements, inventions, and discoveries to
the Company; and
(b) to treat such ideas, improvements,
inventions, and discoveries as the trade
secrets of the Company; and
(c) not to disclose such ideas, improvements,
inventions, and discoveries to anyone, both
during and after Executive's employment with
the Company, without the Company's prior
written approval.
Executive hereby assigns all of Executive's right, title and interest, in and to
any such ideas, improvements, inventions, or discoveries, including any
potential patent rights and any additional rights conferred by law upon
Executive as the author, designer, or inventor thereof, to (a) vest full title
in the idea, improvement, invention, or discovery in the Company, and (b) to
enable the Company to seek, maintain or enforce patent or other protection
thereon anywhere in the world.
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Executive agrees that the Company is the author (owner) of any work of
authorship or copyrightable work ("Work") created by Executive, in whole or in
part, during Executive's employment by the Company and directly relating to the
business of the Company as previously conducted or as conducted at any time
during Executive's employment. Executive acknowledges that each writing and
other literary Work , each drawing and other pictorial and/or graphic Work and
any audio-visual Work, created by Executive, in whole or in part, and directly
relating to his position or responsibilities with the Company has been prepared
by Executive for the Company as a Work for hire. Executive agrees that in the
event that such Work is not considered Work for hire, Executive hereby assigns
all copyright and any other rights conferred in law unto Executive in and to
such Work to the Company. Executive agrees that at the request of the Company,
Executive will execute any documents deemed necessary by the Company to (a) vest
full title to the Work in the Company, and (b) enable the Company to register,
maintain, or enforce copyrights in the Work anywhere in the world. Executive
will treat any such Work as the trade secrets of the Company and will not
disclose it to anyone both during and after Executive's employment by the
Company, without the Company's prior written approval.
Executive recognizes that the ideas, improvements, inventions,
discoveries and Works directly relating to Executive's activities while working
for the Company and conceived or made by him, alone or with others, within one
(1) year after termination of Executive's employment may have been conceived in
significant part while employed by the Company. Accordingly, Executive agrees
that such ideas, improvements, inventions, discoveries and Works, if directly
related to any of the business activities or computer software or software
development processes of the Company, shall be presumed to have been conceived
during Executive's employment with the Company and shall be and hereby are
assigned in accordance with the foregoing provisions, unless Executive receives
prior written consent from the Company otherwise.
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
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that such court(s) may exercise its discretion in reforming such provision(s) to
the end that Executive shall be subject to noncompetition, nondisclosure,
nonsolicitation/noninterference, and intellectual property assignment 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 a license agreement, if any, was entered into by the Company or
any of its affiliates, (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.
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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
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
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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 Catalink Direct, Inc. and/or
any other 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
of 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 arising out of any subsequent breach.
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.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above
written.
ELCOM INTERNATIONAL, INC.
"Elcom"
Date: June 1, 1997
/s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx, Vice Chairman
XXXXXX X. XXXXXXX
"Executive"
Date: June 1, 1997
/s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
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