EXHIBIT 10.10
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL EMPLOYMENT AGREEMENTS ENTERED INTO
WITH EXECUTIVE OFFICERS
The Company entered into an employment agreement dated November 2, 2001,
with Xxxxxx X. Xxxx, the Chairman, President and Chief Executive Officer of the
Company. His employment agreement has a term ending on December 31, 2003, and
provides that Xx. Xxxx will receive an annual salary of no less than $475,000,
plus bonuses to be determined from time to time by the Board of Directors of the
Company. To the extent he is otherwise eligible during the term of his
Employment Agreement, Xx. Xxxx will participate in and receive the benefits of
any and all stock options, pension, retirement, vacation, profit sharing,
health, disability insurance and other benefit plans, programs and policies
maintained by the Company.
Xx. Xxxx'x employment agreement provides that during its term, but subject
to election and removal by the Board of Directors of the Company, Xx. Xxxx will
serve as Chairman, President and Chief Executive Officer of the Company.
In the event that the Company were to terminate Xx. Xxxx'x employment
without Cause (as defined in his employment agreement), or Xx. Xxxx were to
terminate his employment for Good Reason (as defined in his employment
agreement), he would continue to be paid the compensation he would otherwise
have earned for the remaining balance of the term of his employment agreement
plus monthly payments of $20,833.33 for twenty-four months commencing January 1,
2004, in lieu of the compensation which would have been paid to Xx. Xxxx by the
Company under his consulting agreement described below.
Xx. Xxxx has agreed that he will not compete with the Company for a period
of two years after any termination of his employment during the term of his
employment agreement, unless the Company shall terminate his employment without
Cause or Xx. Xxxx terminates his employment for Good Reason.
In the event Xx. Xxxx continues as an employee of the Company for the
entire term of his employment agreement, the Company and he have agreed to enter
into a two-year consulting agreement which will pay Xx. Xxxx $250,000 per year
and which will require him to provide certain consulting services to the
Company. If so requested by the Board of Directors of the Company and elected by
the stockholders of the Company, Xx. Xxxx has agreed to serve as a Director of
the Company during the two-year term of his consulting agreement.
The Company entered into change of control employment agreements dated
November 2, 2001, with Xx. Xxxx and dated September 1, 2001, with Xxxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx. These change of control
employment agreements are designed to provide these individuals with certain
employment and compensation protection in the event that there was a Change of
Control (as defined in these agreements) with respect to the Company at any time
prior to January 1, 2004, with respect to Xx. Xxxx, and prior to September 1,
2006, with respect to the others. If such a Change of Control were to occur and
any of these individual's employment with the Company was terminated at any time
during the two-year period thereafter, other than for Cause (as defined in these
agreements), or if during these time periods any of these individuals were to
terminate his employment for Good Reason (as defined in these agreements), then
the Company would be obligated to make the payments described below for the
benefit of these individuals.
Under Xx. Xxxx'x change of control employment agreement, and in order to
compensate Xx. Xxxx for the compensation he would have received under his
consulting agreement, Xx. Xxxx'x annual base salary would be increased by
$250,000 and the Company would pay him his compensation which had accrued prior
to the date of termination, including an annualized bonus, plus an amount equal
to the product of two times the sum of Xx. Xxxx'x annual base salary plus bonus.
Additionally, the Company would contribute on behalf of Xx. Xxxx to the
Company's Supplemental Executive Retirement Plan (the "SERP") an amount equal to
the amount which would have been credited to Xx. Xxxx'x account under the SERP
if Xx. Xxxx had continued in the employment of the Company for an additional two
years after the date of termination and Xx. Xxxx'x SERP account balance would no
longer be subject to forfeiture in the event he were to be employed by a
competitor of the Company.
In the event any payments received by Xx. Xxxx upon a Change of Control
would require him to pay the 20% excise tax imposed by Section 4999 of the
Internal Revenue Code, the Company would make an additional payment to Xx. Xxxx
in an amount such that, after payment by Xx. Xxxx of such excise tax, Xx. Xxxx
would retain the same amount of the payments made by the Company to him which he
would have retained if he had not paid the excise tax.
With respect to the other individuals, under their change of control
employment agreements they will be paid their accrued compensation and
annualized bonus, and will receive an amount equal to two times the sum of their
annual salary plus bonus, two additional years of crediting under the SERP and
two years of continuing medical insurance benefits. They will also receive the
excise tax "gross-up" payment described above. Additionally, if any individual
were to terminate his employment with the Company for Good Reason (as defined in
these agreements) or be terminated by the Company other than for Cause (as
defined in these agreements) during the two-year period following a Change of
Control the individual's account balance under the SERP would not be subject to
forfeiture in the event he were to work for a competitor of the Company.
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Unless the Company were to terminate Xx. Xxxx'x employment for Cause or Xx.
Xxxx were to terminate his employment with the Company without Good Reason, upon
any termination of Xx. Xxxx'x employment with Littelfuse (either during the term
of his employment agreement or his change of control employment agreement) he
will receive the following benefits: (1) the maturity date of any outstanding
loans made by the Company to Xx. Xxxx under the Littelfuse Executive Loan
Program would be extended until the first anniversary of any such termination;
(2) all of Xx. Xxxx'x outstanding stock options would vest and he would have
three years after any such termination to exercise these stock options; and (3)
Xx. Xxxx and his spouse would continue to receive for ten years after any such
termination life insurance and medical insurance benefits comparable to those
which were being provided to Xx. Xxxx and his spouse immediately prior to such
termination.
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