SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10(a)
SECOND
AMENDED AND RESTATED
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) dated September
16, 2008 between Comtech Telecommunications Corp. (the “Company”) and Xxxx Xxxxxxxx
(“Xxxxxxxx”).
Kornberg
is presently Chairman of the Board of Directors, President and Chief Executive
Officer of the Company and is employed pursuant to an amended and restated
employment agreement dated September 17, 2007, as amended (the “Prior
Agreement”). The Company and Kornberg now desire to enter into
a further amended and restated employment agreement on the terms and conditions
set forth herein.
Accordingly,
the Company and Kornberg hereby amend and restate the Prior Agreement to read in
its entirety as follows:
1. The
Company hereby employs Kornberg as general manager and chief executive officer
of its business for the period (hereinafter referred to as the “Employment Period”) commencing
as of August 1, 2008 and, except as otherwise provided in Paragraph 6 hereof,
terminating at the close of business on July 31, 2011. Kornberg shall
have supervision over the business and affairs of the Company and its
subsidiaries, shall report and be responsible only to the Board of Directors of
the Company, and shall have powers and authority superior to those of any other
officer or employee of the Company or any of its
subsidiaries. Kornberg accepts such employment and agrees to devote
his full business time and effort to the business and affairs of the Company
and, subject to his election as such, to serve as a director and as Chairman of
the Board and President of the Company. He shall not be required to
relocate his principal residence or to perform services which would make the
continuance of such residence inconvenient to him. Except as
otherwise specifically provided herein, if Kornberg remains employed by the
Company following the expiration of the Employment Period, his employment with
the Company shall be “at will.”
2. The
Company shall pay to Kornberg, for all services rendered by him during the
Employment Period, compensation as follows:
(a) Salary
(“Base Salary”) at the
annual rate of $695,000, commencing as of August 1, 2008, plus such additional
amounts, if any, as the Board of Directors may from time to time determine,
payable in accordance with the Company’s current practice. Once
increased, the Base Salary may not be decreased without Kornberg’s prior written
consent.
(b) Incentive
compensation (“Incentive
Compensation”) for each fiscal year in which any part of the Employment
Period falls in an amount equal to 3.0% of the Company’s Pre-Tax Income for each
such fiscal year; provided, however, that (1) the amount payable under this
Paragraph 2(b) in respect of a completed fiscal year and paid at a time that
Kornberg remains employed shall be reduced such that the amount, together with
Base Salary
projected
to be payable in that fiscal year, will equal $1 million (references to
“Incentive Compensation” elsewhere in this Agreement refer to the amount
calculated without regard to this reduction); and (2) if the Employment
Period terminates earlier than at the end of a fiscal year, Incentive
Compensation shall be based upon the Company’s Pre-Tax Income for the then
current fiscal year through the date of termination of employment, but without
duplication of any payout of an annual incentive award authorized under the
Company's 2000 Stock Incentive Plan (the “2000 Plan”). In
addition, Kornberg may receive from time to time, in the sole discretion of the
Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”),
additional incentive compensation, which may be intended to comply with the
“performance-based compensation” exception under Section 162(m) of the Internal
Revenue Code, under the 2000 Plan on such terms and conditions as determined by
the Compensation Committee. For purposes of this Paragraph
2(b):
(i) The
Company’s “Pre-Tax Income” for any fiscal year or period shall be the
consolidated earnings of the Company and its subsidiaries for such fiscal year
or period, as determined by the independent accounting firm employed by the
Company as its regular auditors in accordance with generally accepted accounting
principles applied on a consistent basis, before:
(1) for
fiscal years prior to 2009: (A) any extraordinary item, (B) provision
for federal, state or municipal income taxes thereon, (C) provision for any
Incentive Compensation payable to Kornberg hereunder, (D) any write-off of
in-process research and development acquired, (E) at the discretion of the
Compensation Committee, any non-recurring items, (F) any amortization of
intangibles relating to future acquisitions, and (G) any stock-based
compensation expense before income tax benefit under SFAS 123(R).
(2) for
fiscal year 2009 and thereafter: (A) any extraordinary item, (B)
stock-based compensation expense before income tax benefit under SFAS 123R, (C)
provision for federal, state or municipal income taxes thereon, (D) provision
for any Incentive Compensation payable to Kornberg hereunder, (E) costs
associated with exit or disposal activities under SFAS 146, (F) impairment loss
on Goodwill under SFAS 142, (G) expenses relating to a potential or
actual Change in Control (as defined in Section 14.2 of the 2000 Plan),
(H) expenses in connection with a purchase
business combination under EITF 95-3 or other accounting literature, (I) expenses associated with termination of
employees under FASB Staff Position FAS 146-1, (J) write-off
of purchased in-process research and development under FASB Interpretation No. 4
(FIN 4), (K) amortization of newly acquired intangibles with finite lives
relating to the acquisition of a trade or business, (L) any adjustment to income
before provision of income taxes as required by adoption of a new accounting
standard (M) at the discretion of the Committee, any non-recurring items, and
(N) any amortization of intangibles relating to future
acquisitions.
(ii) Incentive
Compensation payable with respect to any fiscal year shall be paid in cash to
Kornberg. Incentive Compensation payable under clause (1) of the
preamble of this Paragraph 2(b) shall be paid in the fiscal year following the
fiscal year to which
2
it
relates promptly after completion of the Company’s audited year-end financial
statements for such fiscal year (but in any event by the end of that following
fiscal year) and at the same time as incentive compensation is paid to the other
most senior executive officers of the Company. Incentive Compensation
payable under clause (2) of the preamble of this Paragraph 2(b) shall be paid on
the 60th day
after his termination of employment based on unaudited financial information for
the relevant period, subject to Paragraph 15(c). If Kornberg
voluntarily terminates his employment with the Company other than as permitted
by Paragraph 6(b) of this Agreement, or if the Company terminates his employment
for “cause” as defined in Paragraph 6(a) hereof, Kornberg
shall forfeit his right to receive any Incentive Compensation accrued but unpaid
in accordance with this Paragraph 2(b)(ii).
3. During
the Employment Period, Kornberg shall be entitled to participate in, and receive
benefits in accordance with, the Company’s employee benefit plans and programs
at the time maintained by the Company for its executives, subject to the
provisions of such plans and programs. In addition, during the Employment Period, the Company
will provide Kornberg, at the Company’s expense, with an automobile similar to
the automobile currently furnished to Kornberg or, alternatively, a monthly
automobile allowance equal to an amount required to lease such an
automobile.
4. During
the Employment Period, Kornberg shall be entitled to receive reimbursement for
all expenses reasonably incurred by him in connection with his duties hereunder
in accordance with the usual procedures of the Company.
5.
(a) During
the Employment Period, Kornberg shall be entitled to annual reimbursement from
the Company of the cost of premiums paid by Kornberg to secure such life
insurance coverage on Kornberg’s life as Kornberg determines in his discretion;
provided that the Company’s maximum annual reimbursement obligation under this
Paragraph 5(a) shall be capped based on the annual cost of a customary term life
insurance policy with a maximum face amount of $3.5 million (or, if higher, five
times Kornberg’s then Base Salary) purchased for a five-year term for a
non-smoker at the same age as Kornberg as of the date hereof, such cost to be
determined within six months after the date hereof. This benefit is
intended to be in addition to, and not in lieu of, any group life insurance
coverage provided by the Company.
(b) In
addition to the insurance provided for in Paragraph 5(a) hereof, the Company, in
its discretion, and at its own cost and expense, may also obtain insurance
covering Kornberg’s life in such amount as it considers advisable, payable to
the Company, and Kornberg agrees to cooperate fully to enable the Company to
obtain such insurance.
6. The
Employment Period may be earlier terminated only as follows:
(a) By action
of the Board of Directors of the Company, upon notice to Kornberg, if during the
Employment Period Kornberg shall fail to render the services provided for
hereunder for a continuous period of 12 months because of his physical or mental
incapacity, or for “cause,” which shall mean (i) willful misconduct, gross
negligence, dishonesty, misappropriation, breach of fiduciary duty or fraud by
Kornberg with regard to the Company or any of its assets or businesses; (ii)
conviction of Kornberg or the pleading of nolo contendere with
regard to any felony or crime (for the purpose hereof, traffic violations and
misdemeanors
3
shall not
be deemed to be a crime); or (iii) any material breach by Kornberg of the
provisions of this Agreement which is not cured within thirty days after written
notice to Kornberg of such breach from the Board of Directors of the
Company.
(b) By
Kornberg, on thirty days notice to the Company within two years after a Change
in Control of the Company, as defined in Paragraph 7(d) hereof,
occurs.
(c) By
Kornberg, voluntarily upon ninety days prior written notice other than under
Paragraph 6(b).
7. If either
(A) Kornberg terminates the Employment Period in accordance with Paragraph 6(b)
hereof, or (B) following the Employment Period Kornberg remains employed by the
Company and during the two year period following the end of the Employment
Period he terminates his employment on thirty days notice to the Company within
two years after a Change in Control of the Company that occurred during the
Employment Period, the following provisions shall apply
(a) The
Company shall pay to Kornberg, on the 60th day
after the effective date of the termination (the “Effective Date”), subject to
Paragraph 15(c) hereof, a lump sum equal to:
(i) the
greater of (x) Kornberg’s Base Salary, at the rate in effect at the time such
notice is given, for the full unexpired term of the Employment Period, and (y)
2.5 times Kornberg’s Base Salary then in effect; plus
(ii) an amount equal to 2.5 times Kornberg’s average
Incentive Compensation plus annual incentive awards under the 2000 Plan actually
paid or payable for performance in the three fiscal years preceding the year in
which the Change in Control occurs (which for this purpose shall also include
any annual incentive amounts paid to Kornberg for service to the Company or to a
subsidiary that was at the time of such service wholly owned (directly or
indirectly) by the Company); plus
(iii) the
amount of any unpaid Incentive Compensation (x) accrued with respect to any
fiscal year ended prior to the Effective Date, and/or (y) accrued with respect
to the then current fiscal year, pursuant to the proviso in Paragraph
2(b).
(b) Subject
to Paragraph 15(c) hereof to the extent considered to result in the “deferral of
compensation” under Code Section 409A, for the greater of (x) the full unexpired
term of the Employment Period (but not beyond the December 31, of the second
calendar year following termination) or (y) the two year period following
Kornberg’s termination (the “Continuation Period”), the
Company shall continue Kornberg’s participation in each employee benefit plan or
reimbursement arrangement (including, without limitation, life insurance (and
the life insurance reimbursement provided in Paragraph 5(a) above) and medical
plans and including, to the extent allowed, amending such plans) in which
Kornberg was entitled to participate immediately prior to the Effective Date as
if he continued to be employed by the Company hereunder. If the terms
of any benefit plan of the Company may not under Section 401(a) or other similar
provisions of the Internal Revenue Code of 1986, as amended (the “Code”), permit continued
participation by Kornberg, the Company will arrange to credit to
4
Kornberg
benefits substantially equivalent to, as to time and amount, and no less
favorable than, on an after-tax basis, the benefits he would have been entitled
to receive under such plan (assuming he had elected to participate voluntarily
to the maximum extent permissible) if he had been continuously employed by the
Company during the Continuation Period with payment of any accrued amount on the
date of the end of the Continuation Period. Kornberg shall have the
option to have assigned to him, at no cost and with no apportionment of prepaid
premiums, any assignable insurance policies owned by the Company that relate
specifically to Kornberg and are payable to his estate or his
designee(s).
(c) Notwithstanding
any other provision of this Agreement, in the event Kornberg becomes entitled to
any amounts or benefits payable in connection with a Change in Control (whether
or not such amounts are payable pursuant to this Agreement) (the “Change in Control Payments”),
if any of such Change in Control Payments are subject to the tax (the “Excise Tax”) imposed by
Section 4999 of the Code (or any similar federal, state or local tax that
may hereafter be imposed), the Company shall pay to Kornberg at the time
specified in Paragraph 7(c)(iii) below, an additional amount (the “Gross-Up Payment”) such that
the net amount retained by Kornberg, after deduction of any Excise Tax on the
Total Payments (as hereinafter defined) and any federal, state and local income
tax and Excise Tax upon the payment provided for by Paragraph 7(a), shall be
equal to the Total Payments.
(i) For
purposes of determining whether any of the Change in Control Payments will be
subject to the Excise Tax and the amount of such Excise Tax:
a) any other
payments or benefits received or to be received by Kornberg in connection with a
Change in Control or Kornberg’s termination of employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Change in Control or any person
affiliated with the Company or such person) (which, together with the Change in
Control Payments, constitute the “Total Payments”) shall be
treated as “parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless in the opinion of a nationally-recognized
tax counsel selected by the Company such other payments or benefits (in whole or
in part) do not constitute parachute payments, or such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code in
excess of the base amount within the meaning of Section 280G(b)(3) of
the Code, or are otherwise not subject to the Excise Tax;
b) the
amount of the Total Payments which shall be treated as subject to the Excise Tax
shall be equal to the lesser of (x) the total amount of the Total Payments and
(y) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying
Paragraph 7(c)(i)(a) hereof); and
5
c) the value
of any non-cash benefits or any deferred payments or benefit shall be determined
by a nationally-recognized accounting firm selected by the Company in accordance
with the principles of Sections 280G(d)(3) and (4) of the
Code.
(ii) For
purposes of determining the amount of the Gross-Up Payment, Kornberg will be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of Kornberg’s residence on the date of termination, net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise
Tax is subsequently determined to be less than the amount taken into account
hereunder at the time of the Change in Control, Kornberg will repay to the
Company within ten days after the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by Kornberg if such repayment
results in a reduction in Excise Tax and/or federal and state and local income
tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the Change in Control (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional Gross-Up Payment in respect of
such excess within ten days after the time that the amount of such excess is
finally determined.
(iii) The
Gross-Up Payment provided for in this Paragraph 7(c) shall be made at the same
time as the Change in Control Payments are made; provided, however, that if the
amount of such Gross-Up Payment cannot be finally determined at the same time as
the Change in Control Payments are made, the Company shall pay to Kornberg at
the time the Change in Control Payments are made an estimate, as determined in
good faith by the Company, of the minimum amount of such Gross-Up Payment and
shall pay the remainder of such Gross-Up Payment (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code) at the time provided in
Paragraph 7(c)(ii) above. In any event, any Gross-Up Payment shall be
made under this Paragraph 7(c) not later than the last day of Kornberg’s taxable
year next following the taxable year in which Kornberg is required to remit the
Excise Tax. Anything in this Paragraph 7(c) to the contrary
notwithstanding, any Gross-Up Payment to be made hereunder shall be subject to
Paragraph 15(c). Kornberg’s right to payments under this Paragraph
7(c) shall be treated as a right to a series of separate payments under Treasury
Regulation § 1.409A-2(b)(2)(iii). In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall be repayable on the terms set forth in Paragraph
7(c)(ii). Other provisions of this Paragraph 7(c) notwithstanding,
nothing in this Paragraph 7(c) is intended to violate the Xxxxxxxx-Xxxxx Act of
2002, and to the extent that any advance or repayment obligation hereunder would
do so, such obligation shall be modified so as to make the advance a
nonrefundable payment to Kornberg and the repayment obligation null and
void.
6
(iv) All
determinations under this Paragraph 7(c) shall be made at the expense
of the Company by a nationally recognized public accounting firm selected by the
Company, and such determination shall be binding upon you and the
Company.
(d) Except as
provided below, for purposes of this Agreement a Change in Control shall be
deemed to have occurred:
(i) upon any
“person” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) (other than the
Company, any trustee or other fiduciary holding securities under any employee
benefit plan of the Company, or any company owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of common stock of the Company), becoming the owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company’s
then outstanding securities;
(ii) during
any period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company, and any new
director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in sub-paragraph
(i), (iii), or (iv) of this Paragraph or a director whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such term is used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board of Directors of the Company)
whose election by the Board of Directors of the Company or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two-year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors of the Company;
(iii) upon a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (other than those covered by the exceptions in (i) above)
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities shall not constitute a Change in Control of the Company;
or
(iv) upon the
stockholders of the Company approval of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets other than the sale or disposition of
all or substantially all of the assets of the Company to a person or persons who
beneficially own, directly or indirectly, at least 50% or more of the combined
voting power of the outstanding voting securities of the Company at the time of
the sale.
7
(e) In
connection with a termination of Kornberg’s employment triggering payments and
benefits under this Xxxxxxxxx 0, Xxxxxxxx shall have no further obligations
hereunder and shall be under no duty to seek other employment or otherwise
mitigate his damages, and no compensation or other payment from a third party
shall reduce or offset his damages.
8.
(a) In
order to induce Kornberg to enter into this Agreement, the Company agrees that
if it terminates Kornberg’s employment hereunder without cause, or if it
otherwise breaches this Agreement and Kornberg terminates his employment as a
result of such breach, Kornberg shall have no further obligations hereunder and
shall be under no duty to seek other employment or otherwise mitigate his
damages, no compensation or other payment from a third party shall reduce or
offset his damages, and the Company shall pay Kornberg the following amounts as
liquidated damages in lieu of any further obligations hereunder:
(i) Subject
to Paragraph 15(c), an amount equal to his total Base Salary, at the rate in
effect at the time of such breach, for the full unexpired term of the Employment
Period, such amount to be payable on the 60th day
after such termination; plus
(ii) Subject
to Paragraph 15(c), an amount equal to his Incentive Compensation for the full
fiscal year in which the breach occurs, such amount to be payable when it
otherwise would have been paid in accordance with Paragraph 2;
(iii) for the
18 month period following Kornberg’s termination, the Company shall continue
Kornberg’s participation in the Company’s medical plans (under COBRA) as if he
continued to be employed by the Company hereunder; and
(iv) for the
two year period following Kornberg’s termination, the Company shall continue
Kornberg’s participation in the Company’s life insurance plan or continue to
provide the life insurance reimbursement provided in Paragraph 5(a) above, as
applicable, as if he continued to be employed by the Company
hereunder;
provided
however, that if a Change in Control of the Company has occurred at any time
prior to the date of such breach, Kornberg shall be entitled to receive as
liquidated damages amounts and benefits equal to the amounts and benefits he
would have been entitled to receive pursuant to Paragraph 7 hereof (including
Paragraph 7(c)) if he had terminated the Employment Period effective on the date
of breach, to the extent such payments or benefits would exceed the level of
corresponding payments or benefits under this Paragraph 8(a) (i.e., without
duplication of the payments and benefits provided in this Paragraph
8(a)).
(b) The
Company shall be responsible for Kornberg’s reasonable attorney’s fees and
disbursements in any action to recover any amounts due him or obtain other
relief under this Agreement or in any action relating to a breach by the Company
of this Agreement.
9.
(a) Kornberg
acknowledges that his services hereunder are of a special and unique nature and
his position with the Company places him in a position of confidence and trust
with clients and employees of the Company. Therefore, and in
consideration of the Company’s performance of its covenants and agreements under
this Agreement, Kornberg will
8
not at
any time during his employment with the Company and for a period of two years
thereafter (the “Restrictive
Period”), directly or indirectly, engage in any business (as an owner,
joint venturer, partner, stockholder, director, officer, consultant, agent or
otherwise, other than as the owner of less than 1% of the outstanding class of a
publicly traded security) which competes with the business in which the Company
is presently engaged or may be engaged at any time during his employment with
the Company.
(b) Kornberg
agrees that he will not (except on behalf of the Company during his employment
with the Company), during the Restrictive Period, employ or retain, solicit the
employment or retention of, or knowingly cause or encourage any entity to retain
or solicit the employment or retention of, any person who is or was an employee
of the Company at any time during the period commencing 12 months prior to the
termination of Kornberg’s employment with the Company. After
termination of Kornberg’s employment with the Company: (i) Kornberg
will refrain from disparaging, whether orally, in writing or in other media, the
Company, its affiliates, the officers, directors and employees of each of them,
and the products and services of each of them, and (ii) the Company will not
disparage Kornberg or otherwise comment upon the employment performance of
Kornberg other than as may be required by law or as requested by
Kornberg.
(c) Any
discovery, design, invention or improvement (whether or not patentable) that
Kornberg develops during his employment with the Company (whether or not during
his regular working hours or on the Company’s premises) and that is related to
the Company’s business or operations as then conducted or contemplated, shall
belong solely to the Company and shall be promptly disclosed to the
Company. During the period of his employment with the Company and
thereafter, Kornberg shall, without additional compensation, execute and deliver
to the Company any instruments of transfer and take any other action that the
Company may reasonably request to carry out the provisions of this Paragraph,
including executing and filing, at the Company’s expense, patent and/or
copyright applications and assignments of such applications to the
Company.
(d) Kornberg
will not at any time, directly or indirectly, without the Company’s prior
written consent, disclose to any third party or use (except as authorized in the
regular course of the Company’s business or in Kornberg’s performance of his
responsibilities as the Company’s Chief Executive Officer) any confidential,
proprietary or trade secret information that was either acquired by him during
his employment with the Company or thereafter, including, without limitation,
sales and marketing information, information relating to existing or prospective
customers and markets, business opportunities, and financial, technical and
other data (collectively, the “Confidential
Information”). After termination of Kornberg’s employment with
the Company for any reason and upon the written request of the Company, Kornberg
shall promptly return to the Company all originals and/or copies of written or
recorded material (regardless of the medium) containing or reflecting any
Confidential Information and shall promptly confirm in writing to the Company
that such action has been taken. Notwithstanding the foregoing, the
following shall not constitute Confidential Information: (i)
information that is already in the public domain at the time of its disclosure
to Kornberg; (ii) information that, after its disclosure to Kornberg, becomes
part of the public domain by publication or otherwise other than through
Kornberg’s act; and (iii) information that Kornberg
9
received
from a third party having the right to make such disclosure without restriction
on disclosure or use thereof.
10. Kornberg
acknowledges that, in view of the nature of the Company’s business, the
restrictions contained in this Agreement are reasonably necessary to protect the
legitimate business interests of the Company and its affiliates and that any
violation of such restrictions will result in irreparable injury to the Company
for which money damages will not be an adequate remedy. Accordingly,
Kornberg agrees that, in addition to such money damages, he may be restrained
and enjoined from any continuing breach of such covenants without any bond or
other security being required by any court. In the event of a
material violation by Kornberg of any provision of Paragraph 9 hereof, any
severance compensation being paid to Kornberg pursuant to this Agreement or
otherwise shall immediately cease, and any severance compensation previously
paid to Kornberg (other than $1,000) shall be immediately repaid to the
Company. If any restriction contained in this Agreement shall be
deemed to be invalid, illegal or unenforceable by reason of the extent, duration
or geographical scope, or otherwise, then the court making such determination
shall have the right to reduce such extent, duration, geographical scope or
other provisions hereof, and in its reduced form such restriction shall then be
enforceable in the manner contemplated thereby.
11. In
consideration of the payments and other undertakings set forth herein, Kornberg
acknowledges that it is an express condition to his right to receive any
payments or benefits pursuant to Paragraph 7 or Paragraph 8 that he deliver to
the Company a fully effective copy of a release, in substantially the form
attached hereto as Exhibit A (with such changes therein, if any, as
are legally necessary at the time of execution to make it
enforceable), within
sixty (60) days following the date of termination. The Company will
provide Kornberg with a copy of the release to be executed within seven (7) days
following the date of termination.
12. Any
offer, notice, request or other communication hereunder shall be in writing and
shall be deemed to have been duly given if hand delivered or mailed by
registered or certified mail, return receipt requested, addressed to the
respective address of each party hereinafter set forth, or to such other address
as each party may designate by a notice pursuant hereto, which change of address
notice shall be effective upon receipt thereof
|
If
to the Company:
|
Comtech
Telecommunications Corp.
00
Xxxxx Xxxxxxx Xxxx
Xxxxxxxx,
XX 00000
|
|
Attention: Secretary
|
|
|
If
to Kornberg:
|
At
his home address appearing in the records of the Company.
|
13. If
any provision of this Agreement shall be held for any reason to be
unenforceable, the remainder of this Agreement shall nevertheless remain in full
force and effect.
10
14. This
Agreement, including, without limitation, the provisions of this Paragraph 14,
shall be binding upon and inure to the benefit of, and shall be deemed to refer
with equal force and effect to, any corporate or other successor to the Company
which shall acquire, directly or indirectly, by merger, consolidation, purchase
or otherwise, all or substantially all of the assets or business of the
Company. This Agreement shall not be assignable by the Company or any
such successor, except to the corporate or other successor referred to in the
preceding sentence. Kornberg may not assign, pledge or encumber his
interest in this Agreement without the written consent of the
Company. This Agreement shall be binding upon and inure to the
benefit of Kornberg, his heirs and personal representatives. This
Agreement constitutes the entire agreement by the Company and Kornberg with
respect to the subject matter hereof and supersedes any and all prior agreements
or understandings between Kornberg and the Company with respect to the subject
matter hereof, whether written or oral (including, without limitation, the Prior
Agreement). This Agreement may be amended or modified only by a
written instrument executed by Kornberg and the Company. This
Agreement shall be construed and enforced in accordance with the laws of the
State of New York, without regard to its conflict of law
principles.
15.
(a) The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
(b) The
intent of the parties is that payments and benefits under this Agreement comply
with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. If Kornberg notifies the
Company (with specificity as to the reason therefor) that Kornberg believes that
any provision of this Agreement (or of any award of compensation) would cause
Kornberg to incur any additional tax or interest under Code Section 409A, the
Company shall, after consulting with Kornberg, reform such provision to try to
comply with Code Section 409A through good faith modifications to the minimum
extent reasonably appropriate to conform with Code Section 409A. To
the extent that any provision hereof is modified in order to comply with Code
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to Kornberg and the Company of the applicable provision without
violating the provisions of Code Section 409A.
(c) Notwithstanding
any provision to the contrary in this Agreement, payments to be made hereunder
which constitute a deferral of
compensation for purposes of Code Section 409A upon a termination of
employment shall only be made upon a “separation from service,” as defined in
Treasury Regulation Section 1.409A-1(h) and, if Kornberg is deemed on the date
of termination to be a “specified employee” within the meaning of that term
under Code Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is specified as subject to this Paragraph, such
payment or benefit shall be made or provided (subject to the second to last
sentence of this Paragraph 15(c)) at the date which is the earlier of (i) the
expiration of the six (6)-month period measured from the date of such
“separation from service” of Kornberg, and (ii) the date of Kornberg’s death
(the “Delay
Period”). Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Paragraph 15(c) (whether they
would have otherwise been payable in a single sum or in
11
installments
in the absence of such delay) shall be paid or reimbursed to Kornberg in a lump
sum, and any remaining payments and benefits due under this Agreement shall be
paid or provided in accordance with the normal payment dates specified for them
herein. Notwithstanding the foregoing, to the extent that the
foregoing applies to the provision of any ongoing welfare benefits to Kornberg
that would not be required to be delayed if the premiums therefor were paid by
Kornberg, Kornberg shall pay the full cost of the premiums for such welfare
benefits during the Delay Period and the Company shall pay Kornberg an amount
equal to the amount of such premiums paid by Kornberg during the Delay Period
promptly after its conclusion. Subject to the previous sentence, the
Company shall pay the Company portion of the premiums for any such ongoing
welfare plan benefits on a monthly basis not later than the month following the
due date for such premiums.
(d) Following
the occurrence of a Change in Control, in the event that Kornberg becomes liable
for any additional tax, interest or penalty under Code Section 409A or any
damages resulting from the failure of the payments and benefits provided under
this Agreement or any other arrangement between Kornberg and the Company to
comply with Code Section 409A, Kornberg shall be entitled to receive an
additional gross-up payment from the Company to fully indemnify him on an
after-tax basis for the effect of such additional tax, interest, penalty or
damages. Such additional gross-up payment shall be made within ninety
days following the date on which Kornberg remits such additional tax, interest,
penalty or damages.
(e) Any
expense reimbursement under Paragraph 4, 5(a), 7(b), 8(a)(iv) or 8(b) hereof
shall, except as permitted under Code Section 409A, be made on or before the
last day of the taxable year following the taxable year in which such expense
was incurred by Kornberg, and no such reimbursement or the amount of expenses
eligible for reimbursement in any taxable year shall in any way affect the
expenses eligible for reimbursement in any other taxable year. The
right to receive a reimbursement or an in-kind benefit payable hereunder is not
subject to liquidation or exchange for another benefit.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first written
above.
|
COMTECH
TELECOMMUNICATIONS CORP.
|
|
|
By:
/s/ Xxxxxxx X. Porcelain
|
|
|
Authorized Signatory
|
|
|
Approval
of Chairman of the Compensation Committee of the
Board of Directors
|
||
| /s/ Xxx Xxxxxx | /s/ Xxxx Xxxxxxxx | |
|
Xxxx
Xxxxxxxx
|
13
Exhibit
A
General
Release
For good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, I, for myself and my successors, assigns, heirs and
representatives (each, a “Releasing Party”), hereby release and forever
discharge Comtech Telecommunications Corp. (the “Company”), its
stockholders, officers, directors, employees, agents and attorneys, and their
respective successors, assigns, heirs and representatives (each, a “Released
Party”), individually and collectively, from any and all claims, demands, causes
of action, liabilities or obligations, known or unknown, pending or not pending,
liquidated or not liquidated, of every kind and nature whatsoever (collectively,
the “Released Claims”) which the Releasing Party has, has had or may have
against any one or more of the Released Parties arising out of, based upon or in
any way, directly or indirectly, related to the Company’s business, my
employment with the Company or the termination of such employment; provided, however, that this
General Release shall have no effect whatsoever upon: (a) the Company’s
obligations, if any, to pay any amounts or provide any benefits pursuant to the
Second Amended and Restated Employment Agreement between the undersigned and the
Company, dated September 16, 2008 (the “Employment Agreement”) or the rights of
the undersigned to enforce such obligations; (b) any and all obligations of the
Released Parties to defend, indemnify, hold harmless or reimburse the
undersigned under the Employment Agreement and/or the Indemnification Agreement
between the Company and the undersigned, and/or under applicable law and/or
under their respective charters and by-laws and/or pursuant to insurance
policies, if any, for acts or omissions in the undersigned’s capacity as a
director, officer and/or employee thereof; and (c) any and all rights the
undersigned may have to vested or accrued benefits or entitlements under and in
accordance with any applicable plan, agreement, program, award, policy or
arrangement of a Released Party.
The
Released Claims include, without limitation, (a) all claims arising out of or
relating to breach of contract, the Fair Labor Standards Act, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1866, the National Labor Relations Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act and/or any other
federal, state or local statute, law, ordinance, regulation or order as the same
may be amended or supplemented from time to time, (b) all claims for back pay,
lost benefits, reinstatement, liquidated damages, punitive damages, and damages
on account of any alleged personal, physical or emotional injury, and (c) all
claims for attorneys’ fees and costs.
I agree
that I am voluntarily executing this General Release. I acknowledge that I
am knowingly and voluntarily waiving and releasing any rights I may have under
the Age Discrimination in Employment Act of 1967 and that the consideration
given for the waiver and release is in addition to anything of value to which I
was already entitled. I further acknowledge that I have been advised
by this writing, as required by the Age Discrimination in Employment Act of
1967, that: (a) my waiver and release specified herein does not
apply to any rights or claims that may arise after the date I sign this General
Release or my rights with respect to severance compensation, if any, payable to
me pursuant to the Employment Agreement; (b) I have the right to consult
with an attorney prior to signing this General Release; (c) I have
twenty-one (21) days to consider this General Release (although I may choose to
sign it earlier); (d) I have seven (7) days after I sign this General
Release to revoke it; and (e) this General Release
A-1
will not
be effective until the date on which the revocation period has expired, which
will be the eighth day after I sign this General Release, assuming I have
returned it to the Company by such date.
|
|
||
| Dated: _____________________ | _______________________ | |
|
Xxxx
Xxxxxxxx
|
X-0
