EXHIBIT 99.1
AGREEMENT
AGREEMENT dated October 14, 2005 between TII NETWORK TECHNOLOGIES, INC., a
Delaware corporation (together with its subsidiaries, the "Company"), and
XXXXXXX X. XXXXXXXX, an individual ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has been a valuable senior executive employee of the
Company for a number of years; and
WHEREAS, the Company and Employee desire to set forth in writing certain
agreements between them in the event of the termination of the employment of
Employee by the Company under certain circumstances.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and Employee hereby agree as follows:
1. Employee at Will.
The Company and Employee hereby acknowledge and agree that Employee is an
employee at will, and that the Company may terminate the employment of Employee
at any time for any reason or for no reason whatsoever.
2. Severance Payments Upon Termination other than for Cause.
(a) In the event that (i) the Company shall terminate the employment of
Employee for any reason other than (A) for Cause, as such term is defined below,
or (B) if Employee's employment is terminated as a result of the death of
Employee or (ii) Employee shall voluntary terminate his employment with the
Company but only for Good Reason, as defined below (a "Termination Event"), the
Company will continue to pay to Employee his base salary at the per annum rate
in effect on the Termination Date (as such term is defined below), for a period
of at least six months commencing on the Termination Date and ending on the day
immediately preceding the six month anniversary of the Termination Date (the
"Severance Period"), less, in each case, the Required Deductions as defined
below (the "Severance Payments"). Such payments shall be made in substantially
equal installments at the time of the Company's regular pay intervals for its
executive officers, or in such other manner as shall be mutually agreeable to
the Company and Employee; provided that no Severance Payment that constitutes a
deferral of compensation under Section 409A of the Internal Revenue Code of
1986, as amended, may be made before the date which is six months after the
Termination Date (in which event all amounts that otherwise would have been paid
prior to such date shall be paid in a single lump sum as of the last day of the
month following such six month delay).
(b) Upon a Termination Event, the Company, to the extent permitted under
the terms of its group insurance plans, shall continue, at the Company's cost,
to maintain, the Company's then existing group medical and other insurance for
Employee and (to the extent then participating therein) his family during the
Severance Period. If not so permitted then, if Employee shall elect to maintain,
for himself and/or his family, group medical insurance pursuant to the federal
"COBRA" law, presently 29 U.S.C. sec. 1161 et. seq., the Company will reimburse
Employee for, or, at the Company's option, the Company will pay directly, all
premium costs associated therewith for the Severance Period for coverage for him
and his family under the Company's group medical insurance in effect on the
Termination Date (after which the Company will allow Employee to continue such
coverage at Employee's own expense for the remainder of any COBRA continuation
period pursuant to applicable law). Furthermore, any stock option granted to
Employee which has not, by its express terms, vested shall be deemed to have
vested upon the occurrence of a Termination Event and the exercise period under
any such stock option shall be extended to a date which is the fifteenth (15th)
day of the third month following the date on which, or, if later, December 31 of
the calendar year in which, the stock option otherwise would have expired in
accordance with the terms of such option but, in no event after the last day of
the scheduled term of such option.
(c) The Company shall withhold, and the payments otherwise payable to
Employee hereunder shall be reduced by, all applicable federal, state and local
taxes, FICA, unemployment compensation taxes and other taxes, assessments and
withholdings required by applicable law to be withheld (the "Required
Deductions").
(d) In no event, however, will Employee be entitled to receive any rights,
amounts, or benefits under this Agreement unless (i) he executes and delivers to
the Company a Release and Covenant Not to Xxx in the form annexed hereto as
Exhibit "A" which is not revoked by Employee and (ii) Employee is not in
violation of any of the terms and provisions of this Agreement. The first
Severance Payment may be withheld by the Company until such Release and Covenant
Not to Xxx can no longer be, and is not, revoked by Employee.
(e) Employee will not be required to mitigate the amount of any Severance
Payments to which he might be entitled hereunder.
(f) The term "cause" shall mean (i) a willful refusal or willful failure by
Employee to perform any duties consistent with his present position with the
Company which is not cured within 14 days after notice of such breach shall have
been given to Employee by the Company (or within 30 days after such notice if
such breach shall not be curable within 14 days after such notice and Employee
shall, at all times, diligently pursue the cure of such breach within such
30-day period), (ii) the commission by Employee of an act involving moral
turpitude, dishonesty, theft, misappropriation of assets, or unethical business
conduct, in each case which materially impairs or xxxxx the reputation, or is
otherwise to the material detriment, of the Company, or any of its subsidiaries
or affiliated corporations, or which could reasonably be expected to do so,
(iii) the possession or use of illegal drugs or prohibited
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substances, (iv) excessive drinking which impairs Employee's ability to perform
his duties and responsibilities hereunder, (v) the conviction of Employee of, or
the pleading of nolo contendere by Employee to, any felony, or a misdemeanor
involving any of the acts referred to in clause (e)(ii) above, or (vi) a breach
by Employee of Employee's Employee (Confidentiality) Agreement, dated September
5, 2000, as same may hereinafter be amended, or a breach by Employee of any of
the Company's Codes of Ethics, in either case which is not which is not cured
within 14 days after notice of such breach shall have been given to Employee by
the Company (or within 30 days after such notice if such breach shall not be
curable within 14 days after such notice and Employee shall, at all times,
diligently pursue the cure of such breach within such 30-day period).
(g) The term "Good Reason" shall mean any of the following conditions or
events which condition(s) or event(s) remain in effect thirty (30) days after
written notice is provided by Employee to the Company detailing such condition
or event: (i) the assignment by the Company or an affiliate of the Company to
Employee of any duty substantially adverse and inconsistent with the position in
the Company presently held by Employee or a significant adverse alteration in
the nature or status of Employee's responsibilities or conditions of employment
from those currently in effect, provided, however, that a mere change in job
title which does not result in the assignment to Employee of substantially
adverse and inconsistent duties or which does not constitute a significant
alternation in the nature or status of Employee's responsibilities or conditions
of employment shall not constitute "Good Reason;" (ii) the Company reduces
Employee's annual salary or fails to pay or provide any material item of
compensation or benefits when due; or (iii) the Company requires Employee to
relocate his principal place of employment by more than 50 miles from its
current location.
(h) The term "Termination Date" shall mean the last day Employee is
employed by the Company.
4. Representations.
(a) Employee represents and warrants that he has full authority and legal
capacity to execute and deliver this Agreement and perform his duties and
obligations hereunder, that he has duly executed this Agreement, and that he is
not under any contractual, legal or other restraint or prohibition that would
restrict, prohibit or prevent Employee from performing this Agreement and his
duties and obligations hereunder.
(b) Employee acknowledges that he is free to seek advice from independent
counsel with respect to this Agreement. Employee has obtained such advice and is
not relying on any representation or advice from the Company or any of its
officers, directors, attorneys, or other representatives regarding this
Agreement, its contents or effect.
(c) The Company represents and warrants that it has full corporate power
and authority to execute and deliver this Agreement and perform its duties and
obligations hereunder, that it has duly executed this Agreement, and that it is
not under any contractual,
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legal or other restraint or prohibition that would restrict, prohibit or prevent
Employer from performing this Agreement and his duties and obligations
hereunder.
5. Assignability.
This Agreement may not be assigned by Employee and all of its terms and
conditions shall be binding upon and inure to the benefit of Employee and his
heirs, executors, administrators, legal representatives and assigns. This
Agreement may be assigned, in whole or in part, by the Company and shall be
binding upon and inure to the benefit of the Company, its successors and
assigns. Successors of the Company shall include, without limitation, any
corporation or other entity acquiring directly or indirectly all or a
substantial part of the business of the Company whether by merger,
consolidation, tender, exchange or other stock acquisition, purchase, lease or
other acquisition of all or substantially all of its assets, or otherwise, and
such successor shall thereafter be deemed the "Company" for purposes hereof.
6. Notices.
Except as otherwise expressly provided, any notice, request, demand or
other communication permitted or required to be given under this Agreement shall
be in writing, shall be sent by one of the following means to Employee at his
address set forth on the first page of this Agreement and to the Company at its
address set forth on the first page of this Agreement, Attention: President, (or
to such other address as shall be designated hereunder by notice to the other
party to receive such notice) and shall be deemed conclusively to have been
given: (a) on the first business day following the day timely deposited for
overnight delivery with Federal Express (or other equivalent national overnight
courier service) or United States Express Mail; (b) on the fifth business day
following the day duly sent by certified or registered United States mail,
return receipt requested; or (c) when otherwise actually received by the
addressee on a business day (or on the next business day if received after the
close of normal business hours or on any non-business day), in each case with
postage and delivery charges prepaid by the sender.
7. Waivers, No Cumulative Rights, Etc.
Each and every modification and amendment of this Agreement shall be in
writing and signed by the parties hereto, and any waiver of, or consent to any
departure from, any term or provision of this Agreement shall be in writing and
signed by the party granting the waiver or consent. Any waiver or consent from
either party respecting any term or provision of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given and shall not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of either party at any time
or times to require performance of, or to exercise any of its powers, rights or
remedies with respect to, any term or provision of this Agreement in no manner
shall affect that party's right at a later time to enforce any such term or
provision.
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8. Interpretation, Headings.
The parties acknowledge and agree that the terms and provisions of this
Agreement have been negotiated, shall be construed fairly as to all parties
hereto, and shall not be construed in favor of or against any party (regardless
of the party causing the drafting of this Agreement). The section headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
9. Severability.
The invalidity or unenforceability of any provision of this Agreement shall
not affect, impair or invalidate any other provision of this Agreement.
10. Counterparts; Facsimile Signatures; New York Governing Law;
Amendments, Entire Agreement.
This Agreement may be executed in two counterpart copies, each of which may
be executed by only one of the parties hereto, but both of which, when taken
together, shall constitute a single agreement binding upon the parties hereto.
Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of laws that would defer to the
substantive laws of another jurisdiction. This Agreement contains the entire
agreement of the parties and supersedes all prior representations, agreements
and understandings, oral or otherwise, between the parties with respect to the
matters contained herein.
IN WITNESS WHEREOF, the Company and Employee have signed this Agreement on
the date set forth on the first page of this Agreement.
TII NETWORK TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Print Name: Xxxxxxx X. Xxxxx
Print Title: President
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
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EXHIBIT A
Release and Covenant Not to Xxx
________________, 20[__]
[Name and Address of Employee]
Re: Separation from Employment
Dear xxxxxxxx:
This letter ("Agreement") sets forth the agreement reached concerning the
termination of your employment with TII Network Technologies, Inc. (the
"Company"), including its current and former parents, subsidiaries and
affiliated entities, and theft respective current and former successors,
assigns, representatives, agents, attorneys, shareholders, officers, directors
and employees, both individually and in their official capacities (collectively
known as the "Company").
1. Your employment with the Company will terminate effective __________,
20[__]. The Company will also provide you with a lump-sum payment, less
applicable withholdings and deductions, which represents the value of your
accrued unused vacation, if any. You acknowledge and agree that your employment
with the Company ends for all purposes on _________________, 20[__].
2. In addition, in consideration for signing this Agreement and in exchange
for the promises, covenants and waivers set forth herein, the Company will,
provided you have executed and delivered this Agreement and have not revoked
this Agreement, in either case as set forth below, provide you with the
Severance Payments (net of Required Deductions), pursuant to, and as such terms
are defined in, and the benefits provided in, Section 2 of that certain
Severance Agreement between you and the Company, dated [DATE] (the "Severance
Agreement").
3. In consideration of the payment described in paragraph 2 above, and for
other good and valuable consideration, you hereby release and forever discharge,
and by this instrument release and forever discharge, the Company from all
debts, obligations, promises, covenants, agreements, contracts, endorsements,
bonds, controversies, suits, actions, causes of action, judgments, damages,
expenses, claims or demands, in law or in equity, which you ever had, now have,
or which may arise in the future, regarding any matter arising on or before the
date of your execution of this Agreement, including but not limited to all
claims (whether known or unknown) regarding your employment at or termination of
employment from the Company, any contract (express or implied), any claim for
equitable relief or recovery of punitive, compensatory, or other damages or
monies, attorneys' fees, any tort, and all claims for alleged discrimination
based upon age, race, color, sex, sexual orientation, marital status, religion,
national origin, handicap, disability, or retaliation,
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including any claim, asserted or unasserted, which could arise under Title VII
of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act of 1990; the Americans With Disabilities Act of 1990; the Civil Rights Act
of 1866, 42 U.S.C. ss. 1981; Employee Retirement Income Security Act of 1974;
the Family and Medical Leave Act of 1993; the Civil Rights Act of 1991; the
Worker Adjustment and Refraining Notification Act of 1988; the New York State
Human Rights Law; the New York City Human Rights Law; and any other federal,
state or local laws, rules or regulations, whether equal employment opportunity
laws, rules or regulations or otherwise, or any right under any pension,
welfare, or stock plans, provided, however, that there shall be expressly
excluded from this Release and Covenant Not to Xxx any and all claims that may
arise under the Severance Agreement. This Agreement may not be cited as, and
does not constitute any admission by the Company of, any violation of any such
law or legal obligation with respect to any aspect of your employment or
termination therefrom.
4. You represent and agree that you have not filed any lawsuits against the
Company or filed or caused to be filed any charges or complaints against the
Company with any municipal, state or federal agency charged with the enforcement
of any law. Pursuant to and as a part of your release and discharge of the
Company, as set forth herein, with the sole exception of your right to bring a
proceeding pursuant to the Older Workers Benefit Protection Act to challenge the
validity of your release of claims pursuant to the Age Discrimination in
Employment Act, you agree, not inconsistent with EEOC Enforcement Guidance On
Non-Waivable Employee Rights Under EEOC-Enforced Statutes dated April 11, 1997
and, to the fullest extent permitted by law, not to xxx or file a charge,
complaint, grievance or demand for arbitration against the Company in any forum
or assist or otherwise participate willingly or voluntarily in any claim,
arbitration, suit, action, investigation or other proceeding of any kind which
relates to any matter that involves the Company, and that occurred up to and
including the date of your execution of this Agreement, unless required to do so
by court order, subpoena or other directive by a court, administrative agency,
arbitration panel or legislative body, or unless required to enforce this
Agreement. To the extent any such action may be brought by a third party, you
expressly waive any claim to any form of monetary or other damages, or any other
form of recovery or relief in connection with any such action. Nothing in the
foregoing paragraph shall prevent you (or your attorneys) from (i) commencing an
action or proceeding to enforce the Severance Agreement or (ii) exercising your
right under the Older Workers Benefit Protection Act of 1990 to challenge the
validity of your waiver of ADEA claims set forth in paragraph 3 of this
Agreement.
5. You represent, warrant and acknowledge that the Company owes you no
wages, commissions, bonuses, sick pay, personal leave pay, severance pay,
vacation pay or other compensation or benefits or payments or form of
remuneration of any kind or nature, other than that specifically provided for in
this Agreement.
6. Neither you nor the Company will disparage or criticize the other, or
issue any communication, written or otherwise, that reflects adversely on or
encourages any
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adverse action against the other, including, without limitation, disclosing any
claims that have been or could have been raised against the other, except if
testifying truthfully under oath pursuant to any lawful court order or subpoena
or otherwise responding to or providing disclosures required by law.
7. You hereby acknowledge that you will continue to be bound by your
Employee (Confidentiality) Agreement, dated September 5, 2000, between you and
the Company, as same has been amended. You hereby confirm that you have
delivered to the Company and retained no copies of any written materials, data,
software, files, records and documents (including those that are electronically
stored) made by you or coming into your possession during the course of your
employment with the Company that related to the business of the Company or any
subsidiary of the Company. You further confirm that you have delivered to the
Company any and all property (including, without limitation, Company credit
cards) and equipment of the Company (including, without limitation, laptop and
other computers, etc.) which may have been in your possession.
8. Upon service on you, or anyone acting on your behalf, of any subpoena,
order, directive or other legal process requiring you to engage in conduct
encompassed within paragraphs 6 or 7 of this Agreement, you or your attorney
shall immediately notify the Company of such service and of the content of any
testimony or information to be provided pursuant to such subpoena, order,
directive or other legal process and within two (2) business days send to the
President of the Company via overnight delivery (at the Company's expense) a
copy of said documents served upon you.
9. You agree that you will reasonably assist and cooperate with the Company
in connection with the defense or prosecution of any claim that may be made
against or by the Company, or in connection with any ongoing or future
investigation or dispute or claim of any kind involving the Company, including
any proceeding before any arbitral, administrative, judicial, legislative, or
other body or agency, including testifying in any proceeding to the extent such
claims, investigations or proceedings relate to services performed or required
to be performed by you, pertinent knowledge possessed by you, or any act or
omission by you. You further agree to perform all acts and execute and deliver
any documents that may be reasonably necessary to carry out the provisions of
this paragraph.
10. This Agreement and the provisions of your Severance Agreement setting
forth your obligations following your termination of employment constitute the
entire agreement between the Company and you, and supersedes and cancels all
prior and contemporaneous written and oral agreements between the Company and
you. You affirm that, in entering into this Agreement, you are not relying upon
any oral or written promise or statement made by anyone at any time on behalf of
the Company.
11. This Agreement is binding upon the parties hereto and theft successors,
assigns, heirs, executors, administrators and legal representatives.
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12. If any of the provisions, terms or clauses of this Agreement is
declared illegal, unenforceable or ineffective in a legal forum, those
provisions, terms and clauses shall be deemed severable, such that all other
provisions, terms and clauses of this Agreement shall remain valid and binding
upon both parties.
13. Without detracting in any respect from any other provision of this
Agreement:
a. You, in consideration of the payments and benefits provided to you
as described in paragraph 2 of this Agreement, agree and acknowledge that this
Agreement constitutes a knowing and voluntary waiver of all rights or claims you
have or may have against the Company as set forth herein, arising on or before
the date of your execution of this Agreement, including, but not limited to, all
rights or claims arising under the Age Discrimination in Employment Act of 1967,
as amended ("ADEA"), including, but not limited to, all claims of age
discrimination in employment and all claims of retaliation in violation of the
ADEA; and you have no physical or mental impairment of any kind that has
interfered with your ability to read and understand the meaning of this
Agreement or its terms, and that you are not acting under the influence of any
medication or mind-altering chemical of any type in entering into this
Agreement.
b. You understand that, by entering into this Agreement, you do not
waive rights or claims that may
arise after the date of your execution of this Agreement, including
without limitation any rights or claims that you may have to secure enforcement
of the terms and conditions of this Agreement.
c. You agree and acknowledge that the consideration provided to you
under Section 2 of this Agreement is in addition to anything of value to which
you are already entitled.
d. The Company hereby advises you to consult with an attorney prior to
executing this Agreement.
e. You acknowledge that you were informed that you had at least
twenty-one (21) days in which to review and consider this Agreement, and to
consult with an attorney regarding the terms and effect of this Agreement.
14. The Company agrees that you may revoke this Agreement within seven (7)
days from the date you sign this Agreement, in which case this Agreement shall
be null and void and of no force or effect on either the Company or you. Any
revocation must be in writing and received by the Company by 5:00 p.m. on or
before the seventh day after this Agreement is executed by you. Such revocation
must be sent to the undersigned at the Company.
15. This Agreement may not be changed or altered, except by a writing
signed by the Company and you. This Agreement is entered into in the State of
New York, and the laws of the State of New York will apply to any dispute
concerning it, excluding the conflict-of-law principles thereof that would defer
to the laws of another jurisdiction.
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YOU EXPRESSLY ACKNOWLEDGE, REPRESENT, AND WARRANT THAT YOU HAVE READ THIS
AGREEMENT CAREFULLY; THAT YOU FULLY UNDERSTAND THE TERMS, CONDITIONS, AND
SIGNIFICANCE OF THIS AGREEMENT; THAT THE COMPANY HAS ADVISED YOU TO CONSULT WITH
AN ATTORNEY CONCERNING THIS AGREEMENT; THAT YOU HAVE HAD A FULL OPPORTUNITY TO
REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT YOU UNDERSTAND THAT THIS AGREEMENT
HAS BINDING LEGAL EFFECT; AND THAT YOU HAVE EXECUTED THIS AGREEMENT FREELY,
KNOWINGLY AND VOLUNTARILY.
PLEASE READ CAREFULLY. THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES.
TII NETWORK TECHNOLOGIES, INC.
By:
------------------------------------
Name: xxxxxxxxxxxxxxxxxx
Title: xxxxxxxxxxxxxx
Date: _________________ 20[__]
AGREED:
_____________________________________
Name
Date:________________
On this____ day of ___________ 20[__] before me personally came
________________, to me known to be the individual described in the foregoing
instrument, who executed the foregoing instrument in my presence, and who duly
acknowledged to me that he executed the same.
_____________________________________
Notary Public
You must sign and return this Agreement to the Company no later than 5:00 p.m.
on the 21st day following receipt of this document or irrevocably lose the
opportunity to receive the consideration detailed herein.
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