XXXXXX ELECTRONICS CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of January 1, 1998 by and between
Xxxxxx Electronics Corporation (the "Company"), a New York corporation and
Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Company
on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES
---------------------------
The Executive shall serve as Co-President of the Company, and shall have
such commensurate responsibilities, duties and authority as may from time to
time be assigned to the Executive by the Board of Directors of the Company
(the "Board"). The Executive shall devote substantially all his time, energy
and skill during reasonable business hours to the service of the Company.
The Executive's office shall be located at the Company's headquarters, which
shall be located at 00-00 00/xx/ Xxxx, Xxxx Xxxxxx Xxxx, Xxx Xxxx.
2. TERM OF AGREEMENT
-----------------
The Company shall employ the Executive and the Executive shall serve as
a full-time employee of the Company for a term of three (3) years from the
date hereof (the "Employment Period"). The Employment Period and this
Agreement shall be automatically extended for an additional one (1) year term
following the expiration of each Employment Period unless either the Company
or the Employee notifies the other in writing at least thirty (30) days prior
to such expiration that the Employment Period and this Agreement shall not be
so extended. Further, if employment is terminated for any reason other than
death, such termination will not result in the expiration of the term of this
Agreement.
3. COMPENSATION DURING TERM OF AGREEMENT
-------------------------------------
(a) Base Salary
-----------
The Company shall pay the Executive a salary of not less than
$200,000 (the "Base Salary"). Base Salary shall include any amounts of
compensation deferred by the Executive under any employee benefit plan
maintained by the Company. Such Base Salary shall be payable weekly. The
Executive's Base Salary shall be reviewed annually. Such review shall be
conducted by a Compensation Committee designated by the Board, and the Board
shall increase the Executive's Base Salary by a Cost of Living Allowance
("COLA") percentage and a 7% merit increase based on performance as
determined by the Board. The increased Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary
provided in this Section 3(a), the Company shall also provide the Executive,
at no cost to the Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Company.
(b) Short-Term Incentive Compensation Program
-----------------------------------------
The Executive shall participate in the Company's Short-Term
Incentive Compensation Program. Annual cash awards ("Short-Term Awards")
under this program will be based on the achievement of performance goals,
both corporate (80%) and individual (20%), expressed as a percentage of the
Executive's Base Salary adopted on or after the date of this Agreement.
Performance measures will include sales from new sources and operating
income. Performance goals, measures and annual awards will be determined by
the Compensation Committee and approved by the Board. The Company will pay
the Short-Term Award to the Executive within 60 days following the last day
of the Company's fiscal year.
(c) Long-Term Incentive Compensation Program
----------------------------------------
In addition to the Base Salary and Short-Term Award, the Executive
shall be entitled to participate, during the Employment Period, in the Long-
Term Incentive Compensation Program. Long-term cash or equity-based awards
("Long-
Term Awards") may include (i) stock options, (ii) stock appreciation rights,
(iii) restricted stock, (iv) deferred stock, (v) stock reload options and/or
(vi) other stock-based awards.
(d) The Company will provide the Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which the
Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement, and the Company will
not, without the Executive's prior written consent, make any changes in such
plans, arrangements or perquisites which would adversely affect the
Executive's rights or benefits thereunder. Without limiting the generality
of the foregoing provision of this Section 3(d), the Executive will be
entitled to participate in or receive benefits under any employee benefit
plans including, but not limited to, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident
plans, medical coverage or any other employee benefit plan or arrangement
made available by the Company in the future to its senior executives and key
management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements.
(e) In addition to the Base Salary provided for by Section 3(a) and
other compensation provided for by Sections 3(b), (c) and (d) hereof, the
Company shall pay or reimburse the Executive for all reasonable travel and
other reasonable expenses incurred by the Executive performing his
obligations under this Agreement and may provide such additional compensation
in such form and such amounts as the Board may from time to time determine.
4. TERMINATION OF EMPLOYMENT
-------------------------
(a) Death or Disability:
This Agreement shall terminate automatically upon the Executive's
death. The Company may terminate this Agreement, after having established
the Executive's Disability (pursuant to the definition of "Disability" set
forth below), by giving to the Executive written notice of its intention to
terminate the Executive's employment. In such a case, this Agreement (but
not the Executive's employment with the Company) shall terminate effective on
the 90th day after receipt of such notice (the "Disability Effective Date"),
provided that, within 90 days after such receipt, the Executive shall fail to
return to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means disability which, after the expiration of
more than 52 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement upon acceptability not to be withheld unreasonably).
(b) Cause:
-----
The Company may terminate the Executive's employment for Cause (as
defined below). For purposes of this Agreement, "Cause" means:
(i) an act or acts of dishonesty (other than insubstantial or
inadvertent acts) taken by the Executive at the expense of the
Company;
(ii) repeated material violations by the Executive of the
Executive's obligations under Section 1 of this Agreement; or
(iii) the conviction of the Executive of a felony.
(c) Good Reason:
-----------
The Executive's employment may be terminated by the Executive for
Good Reason (as defined below). For purposes of this Agreement, "Good
Reason"
means:
(i) (A) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles, and reporting requirements), authority, duties
or responsibilities as contemplated by Section 1 of this Agreement
or (B) any other action by the Company which results in a
diminishment in such position, authority, duties or
responsibilities,
other than an insubstantial and inadvertent action which is
remedied
by the Company promptly after receipt of notice thereof given by
the
Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 3 of this Agreement, other than an
insubstantial and inadvertent failure which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at any
office or location more than 50 miles from that at which the
Executive is based at the Effective Date, except for travel
reasonably required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Company of the
Executive's employment other than as permitted by this Agreement,
it being understood that any such purported termination shall not
be effective for any purpose of this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
15 of this Agreement.
(d) Effect of Termination:
Termination shall not affect any rights which the Executive
may have under any other program or arrangement.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION
-------------------------------------------
(a) Death
-----
If the Executive's employment is terminated by reason of the
Executive's death, this Agreement shall terminate without further obligations
to the Executive's legal representatives under this Agreement other than
those
obligations accrued hereunder at the date of the Executive's death. Anything
in this Agreement to the contrary notwithstanding, the Executive's family
shall be entitled to receive benefits at least equal to those provided by the
Company to surviving families of executives of the Company under such plans,
programs and policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the Effective
Date, or if more favorable to the Executive and/or the Executive's family, as
in effect at any time thereafter with respect to other key executives and
their families.
(b) Disability
----------
If this Agreement is terminated by reason of the Executive's
Disability, the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to those
provided
by the Company to disabled employees and/or their families in accordance with
such plans, programs and policies relating to disability, if any, as in
effect
during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter with respect to other key executives and their families.
(c) Cause
-----
If the Executive's employment shall be terminated for Cause, the
Company shall pay the Executive his full Base Salary through the Date of
Termination (as defined below) at the rate in effect at the time Notice of
Termination (as defined below) is given and shall have no further obligations
to the Executive under this Agreement. In addition, the Executive shall be
afforded the opportunity to convert any term policies insuring the
Executive's
health or life which are owned by the Company to individual policies, where
permitted by the terms of such policies.
(d) Good Reason; Other Than for Cause
---------------------------------
If, during the Employment Period, the Company shall terminate
the
Executive's employment other than for Cause, or the employment of the
Executive
shall be terminated by the Executive for Good Reason, the Company shall pay
to the Executive a sum equal to (i) the amount of the remaining salary
payments
that the Executive would have earned if he continued his employment with the
Company during the remaining unexpired term of this Agreement at the
Executive's Base Salary at the Date of Termination; (ii) the average of the
amount of bonus and any other compensation paid to the Executive during the
term of this Agreement times the remaining number of years of this Agreement
and any fraction thereof; and (iii) an amount equal to the average of the
annual contributions that were made on the Executive's behalf to any employee
benefit plans of the Company during the term of this Agreement times the
remaining number of years of this Agreement and any fraction thereof. At the
election of the Executive, which election is to be made within thirty (30)
days of the Date of Termination, such payments shall be made in a lump sum or
paid monthly during the remaining term of this Agreement following the
Executive's termination. In the event that no election is made, payment to
the Executive will be made on a monthly basis during the remaining term of
this Agreement. Such payments shall not be reduced in the event the
Executive obtains other employment following termination of employment.
The Company will continue life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Company
for the Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Company employees
on a nondiscriminatory basis. Such coverage shall cease upon the expiration
of the remaining term of this Agreement.
The Executive will be entitled to receive benefits due him under or
contributed by the Company on his behalf pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other employee
benefit plan maintained by the Company on the Executive's behalf to the
extent such benefits are not otherwise paid to the Executive under a separate
provision of this Agreement.
(e) Election
--------
In the event that the Executive is receiving monthly payments
pursuant to Section 4(d) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, the Executive shall elect
whether the balance of the amount payable under this Agreement at that time
shall be paid in a lump sum or on a pro rata basis. Such election shall be
irrevocable for the year for which such election is made.
6. CHANGE IN CONTROL
-----------------
(a) For purposes hereof, a "change in control" shall be defined
as:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13D-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of Directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (4) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) below;
or
(ii) Individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Incumbent
Board, provided, however, that any individual becoming a director
subsequent to the date hereof whose election or nomination for
election by the Company's shareholders was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board, shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election
or removal of directors or other actual or threatened solicitation
of
proxies or consents by or on behalf of a Person other than the
Incumbent Board; or
(iii) Consummation of a reorganization, merger, consolidation
or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively, immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then outstanding shares of common
stock and the combined voting power, respectively, of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Incumbent Board, providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(b) Upon the occurrence of a Change in Control, the Company shall
pay the Executive, or in the event of his subsequent death, his beneficiary
or beneficiaries, or his estate, as the case may be, a sum equal to the
greater of the payments due for the remaining term of this Agreement or three
(3) times the Executive's average annual compensation for the five (5)
preceding taxable years. Such annual compensation shall include any
commissions, bonuses, pension and profit sharing plan benefits, severance
payments, retirement benefits, director or committee fees and fringe benefits
paid or to be paid to the Executive during such years. At the election of
the Executive, which election is to be made within thirty (30) days of the
Change in Control, such payment may be made in a lump sum or paid in equal
monthly installments during the thirty-six (36) months following the
Executive's termination. In the event that no election is made, payment to
the Executive will be made on a monthly basis during the thirty-six (36)
months following the Executive's termination.
(c) All restrictions on the restricted stock then held by the
Executive will lapse immediately, incentive stock options and stock
appreciation rights then held by the Executive will become immediately
exercisable, and any performance shares or units then held by the Executive
will vest immediately, in full, in the event of a Change in Control.
(d) Upon the occurrence of a Change in Control, the Executive will
be entitled to receive benefits due him under or contributed by the Company
on his behalf pursuant to any retirement, incentive, profit sharing, bonus,
performance, disability or other employee benefit plan maintained by the
Company on the Executive's behalf to the extent such benefits are not
otherwise paid to the Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Company will cause to be continued
life, medical, dental and disability coverage substantially identical to the
coverage maintained by the Company for the Executive prior to his severance,
except to the extent that such coverage may be changed in its application for
all Company employees on a nondiscriminatory basis. Such coverage and
payments shall cease upon the expiration of thirty-six (36) full calendar
months following the Date of Termination.
(f) In the event that the Executive is receiving monthly payments
pursuant to Section 5(b) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, the Executive shall elect
whether the balance of the amount payable under the Agreement at that time
shall be paid in a lump sum or on a pro rata basis pursuant to such section.
Such election shall be irrevocable for the year for which such election is
made.
(g) Any and all payments to be made to the Executive under this
Agreement or otherwise as a result of a Change in Control whether in the
nature of severance payments, liquidated damage payments, compensation or
other payments (all of the foregoing being hereinafter referred to as "Change
in Control Payments"), shall be made free and clear of, and without deduction
or withholding for or on account of, any tax which may be payable under
Section 4999 of the Internal Revenue Code of 1986 (the "Code"), now or
hereafter imposed, levied, withheld or assessed (such amounts being
hereinafter referred to as the "Excise Taxes"). If, notwithstanding the
foregoing provision, any Excise Taxes are withheld from any Change in Control
Payments made or to be made to the Executive, the amounts so payable to the
Executive shall be increased to the extent necessary to yield to the
Executive (after payment of any tax which may be payable under Section 4999
of the Code) the full amount which he is entitled to receive pursuant to the
terms of this Agreement or otherwise without regard to liability for any
Excise Taxes and any other Federal, State, FICA/Medicare and unemployment
taxes thereon. In the event any Excise Taxes are now or hereafter imposed,
levied, assessed, paid or collected with respect to the Change of Control
Payments made or to be made to the Executive, Excise Taxes and any other
Federal, State, FICA/Medicare and unemployment taxes thereon shall be paid
by the Company or, if paid by the Executive, shall be reimbursed to the
Executive by the Company upon its receipt of satisfactory evidence of such
payment having been made.
7. NOTICE
------
(a) Any purported termination by the Company or by the Executive
shall be communicated by Notice of Termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a
written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the
Notice of Termination (which, in the case of a termination for Cause, shall
not be less than thirty (30) days from the date such Notice of Termination is
given).
(c) If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected) and provided further that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence. Notwithstanding the pendency of any such dispute,
the Company will continue to pay the Executive his full compensation in
effect when the notice giving rise to the dispute was given (including, but
not limited to, Base Salary) and continue him as a participant in all
compensation, benefit and insurance plans in which he was participating when
the notice of dispute was given, until the dispute is finally resolved in
accordance with this Agreement. Amounts paid under this Section are in
addition to all other amounts due under this Agreement and shall not be
offset against or reduce any other amounts due under this Agreement.
8. POST-TERMINATION OBLIGATIONS
----------------------------
(a) All payments and benefits to the Executive under this
Agreement shall be subject to the Executive's compliance with Section 8(b),
hereof during the term of this Agreement and for one (1) full year after the
expiration or termination hereof.
(b) The Executive shall, upon reasonable notice, furnish such
information and assistance to the Company as may reasonably be required by
the Company in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.
9. NON-COMPETITION
---------------
(a) Upon any termination of the Executive's employment hereunder
pursuant to Section 6 hereof, the Executive agrees not to compete with the
Company for a period of one (1) year following such termination in any city,
town or county in which the Company has an office or has filed an application
for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a
resolution duly adopted by the Board. The Executive agrees that during such
period and within said cities, towns and counties, the Executive shall not
work for or advise, consult or otherwise serve with, directly or indirectly,
any entity whose business materially competes with the depository, lending or
other business activities of the Company. The parties hereto, recognizing
that irreparable injury will result to the Company, its business and property
in the event of the Executive's breach of this Section 9(a) agree that in the
event of any such breach by the Executive, the Company will be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by the Executive, the Executive's partners,
agents, servants, employers, employees and all persons acting for or with the
Executive. The Executive represents and admits that in the event of the
termination of his employment pursuant to Section 6 hereof, the Executive's
experience and capabilities are such that the Executive can obtain employment
in a business engaged in other lines and/or of a different nature than the
Company, and that the enforcement of a remedy by way of injunction will not
prevent the Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Executive.
(b) The Executive recognizes and acknowledges that the knowledge
of the business activities and plans for business activities of the Company
is a valuable, special and unique asset of the business of the Company. The
Executive will not, during or after the term of his employment, disclose any
knowledge of the past, present, planned or considered business activities of
the Company or affiliates thereof to any person, firm, corporation, or other
entity for any reason or purpose whatsoever. Notwithstanding the foregoing,
the Executive may disclose any concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Company.
In the event of a breach or threatened breach by the Executive of the
provisions of this Section 9(b), the Company will be entitled to an
injunction restraining the Executive from disclosing, in whole or in part,
the knowledge of the past, present, planned or considered business activities
of the Company, or from rendering any services to any person, firm,
corporation or other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Executive.
10. NO ATTACHMENT
-------------
(a) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge,
pledge, or hypothecation, or to execution, attachment, levy or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit
of, the Executive and the Company and their respective successors and
assigns.
11. MODIFICATION AND WAIVER
-----------------------
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel. No such written waiver shall be deemed
a continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.
12. SEVERABILITY
------------
If, for any reason, any provision of this Agreement or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not so held
invalid, and each such other provision and part thereof shall, to the full
extent consistent with law, continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
---------------------------
The headings of sections and paragraphs herein are included solely
for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
14. ARBITRATION
-----------
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of the Company's executive office,
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrators' award in any court
having jurisdiction, provided, however, that the Executive shall be entitled
to seek specific performance of his right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
In the event any dispute or controversy arising under or in
connection with the Executive's termination is resolved in favor of the
Executive, whether by judgment, arbitration or settlement, the Executive
shall be entitled to the payment of all back-pay, including salary, bonuses
and any other cash compensation, fringe benefits and any compensation and
benefits due the Executive under this Agreement
15. PAYMENT OF LEGAL FEES
---------------------
All reasonable legal fees and other expenses paid or incurred by
the Executive pursuant to any dispute or question of interpretation relating
to this Agreement shall be paid or reimbursed by the Company if the Executive
is successful pursuant to a legal judgment, arbitration or settlement.
16. SUCCESSOR TO THE COMPANY
------------------------
The Company shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally, to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.
17. UNFUNDED AGREEMENT SUBJECT TO CLAIMS OF COMPANY CREDITORS
---------------------------------------------------------
The Company's obligation under this Agreement will be unfunded and
the Executive will not have any claims or rights superior to those of any
general creditor of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its duly authorized
officer and its directors, and the Executive has signed this
Agreement, on the 1st day of January, 1998.
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Co-President
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
