EXHIBIT 10.6
AGREEMENT
This Agreement made as of this 11 day of May 2004 by and between BLACK BOX
CORPORATION, a Delaware corporation (the "Corporation"), and Xxxx Xxxxx an
executive of the Corporation (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Corporation has determined that it
is in the best interests of the Corporation to enter into this Agreement with
the Executive; and
WHEREAS, the Executive desires to obtain certain benefits in the event the
Executive's employment is terminated;
NOW, THEREFORE, the parties hereto, each intending to be legally bound
hereby, agree as follows:
1. Definition of Terms The following terms when used in this Agreement shall
have the meaning hereafter set forth:
(a) "ANNUAL SALARY ADJUSTMENT PERCENTAGE" shall mean the mean average
percentage increase in base salary for all executive officers of the
Corporation during the two full calendar years immediately preceding
the time to which such percentage is being applied; provided,
however, that if after a Change-in-Control, as hereinafter defined,
there should be a significant change in the number of executive
officers of the Corporation or in the manner in which they are
compensated, then the foregoing definition shall be changed by
substituting for the phrase "executive officers of the Corporation"
the phrase "persons then performing the functions formerly performed
by the executive officers of the Corporation."
(b) "CAUSE FOR TERMINATION" shall mean:
(i) the deliberate and intentional failure by the Executive to
devote substantially the Executive's entire business time and
best efforts to the performance of the Executive's duties
(other than any such failure resulting from the Executive's
incapacity due to physical or mental illness or disability);
or
(ii) engaging by the Executive in gross misconduct materially and
demonstrably injurious to the Corporation;
or
(iii) the conviction of the Executive of, or the entry of a plea of
guilty or Nolo Contendre by the Executive to, a crime
involving an act of fraud or embezzlement against the
Corporation or the conviction of the Executive of, or the
entry of a plea of Nolo Contendre by the Executive to, any
felony involving moral turpitude;
or
(iv) the Executive's material breach of Section 4 or Section 8
hereof which continues for ten (10) days after receiving
written notice thereof from the Corporation or the Executive's
willful failure to comply with instructions of the Board of
Directors of the Corporation provided that such instructions
would not give rise to Good Reason for Termination.
For purposes of this definition, no act, or failure to act, on the
Executive's part shall be considered "deliberate and intentional" or
to constitute gross misconduct unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief
that the Executive's action or omission was in the best interests of
the Corporation.
(c) "CHANGE-IN-CONTROL" shall mean a change in control of the
Corporation of such a nature that it would be required to be
reported by the Corporation in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of
1934, as in effect on the date hereof ("Exchange Act"); provided,
however, that:
(i) without respect to the foregoing, such a change in control
shall be deemed to have occurred if any "person" (as such term
is used in sections 13(d) and 14(d)(2) of the Exchange Act) or
any "group" (as such term is defined in Rule 13d-5(b)
promulgated under the Exchange Act), is or becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing twenty percent (20%) or more of the
combined voting power of the Corporation's then outstanding
securities coupled with or followed by the existence of a
majority of the board of directors of the Corporation
consisting of individuals other than individuals who
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either were directors of the Corporation at least one year
prior to or were nominated by those individuals who were
directors of the Corporation at least one year prior to such
person or group becoming a beneficial owner, directly or
indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then
outstanding securities;
and
(ii) without respect to the foregoing, if the Corporation shall
sell all or substantially all of its assets or shall merge,
consolidate or reorganize with another company, then such a
change in control shall be deemed to have occurred if (x) upon
conclusion of the transaction less than fifty-one percent
(51%) of the outstanding securities entitled to vote generally
in the election of directors of the acquiring company or
resulting company are owned by persons who were the
stockholders of the Corporation generally prior to the
transaction and following the transaction a majority of the
board of directors of the acquiring company or resulting
company consists of individuals other than individuals who
either were directors of the Corporation at least one year
prior to such sale, merger, consolidation or reorganization or
(y) following the transaction a person or group (as described
in subclause (i) above) would be a beneficial owner, directly
or indirectly, of securities of the acquiring company or
resulting company representing 20% or more of the combined
voting power of the acquiring company's or resulting company's
then outstanding securities as described in subclause (i)
above and a majority of the board of directors of the
acquiring company or resulting company consists of individuals
other than individuals who either were directors of the
Corporation at least one year prior to such sale, merger,
consolidation or reorganization.
(d) "DATE OF TERMINATION" shall mean:
(i) if the Executive's employment is terminated for Disability,
the date that a Notice of Termination is given to the
Executive;
(ii) if the Executive's employment terminates due to the
Executive's death or Retirement, the date of death or
Retirement, respectively;
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(iii) if the Executive decides to terminate employment upon Good
Reason for Termination, the date specified by the Executive in
a Notice of Termination; or
(iv) if the Executive's employment is terminated for any other
reason, the date on which a termination becomes effective
pursuant to a Notice of Termination or, if no Notice of
Termination is provided, the date that the Executive's
employment was terminated.
(e) "DISABILITY" shall mean such incapacity due to physical or mental
illness or injury as causes the Executive to be unable to perform
the Executive's duties with the Corporation during 90 consecutive
days or 120 days during any six month period.
(f) "GOOD REASON FOR TERMINATION" shall mean the occurrence of:
(i) without the Executive's express written consent, following a
Change-in-Control the assignment to the Executive of any
duties materially and substantially inconsistent with the
Executive's positions, duties, responsibilities and status
immediately prior to a Change-in-Control, or a material change
in the Executive's reporting responsibilities, titles or
offices as in effect immediately prior to a Change-in-Control,
or any removal of the Executive from or any failure to
re-elect the Executive to any of such positions except in
connection with the termination of the Executive's employment
due to Cause for Termination, Disability or Retirement (as
hereinafter defined) or as a result of the Executive's death;
(ii) a reduction by the Corporation after a Change-in-Control in
the Executive's base salary as in effect immediately prior to
any Change-in-Control;
(iii) a failure by the Corporation after a Change-in-Control to
continue to provide incentive compensation comparable to that
provided to the Executive immediately prior to any
Change-in-Control;
(iv) the failure by the Corporation after a Change-in-Control to
continue in effect any benefit or compensation plan, stock
option plan, pension plan, life insurance plan, health and
accident plan or disability plan in which the Executive is
participating immediately prior thereto (provided, however,
that there shall not be deemed to be any such failure if the
Corporation substitutes for the
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discontinued plan, a plan providing the Executive with
substantially similar benefits) or the taking of any action by
the Corporation which would adversely affect the Executive's
participation in or materially reduce the Executive's benefits
under any of such plans or deprive the Executive of any
material fringe benefit enjoyed by the Executive immediately
prior to a Change-in-Control;
(v) the failure of the Corporation to obtain the assumption of
this Agreement by any successor as contemplated in Section
10(c) hereof;
(vi) any purported termination of the employment of the Executive
by the Corporation following a Change-in-Control which is not
(A) due to the Executive's Disability, Retirement (as
hereinafter defined) or in accordance with Section 2 hereof,
or (B) effected pursuant to a Notice of Termination satisfying
the requirements of subsection 1(h) below; or
(vii) the relocation of the Executive following a Change-in-Control
to a facility or a location more than 50 miles from the
Employee's then present location, without the Executive's
prior written consent.
Notwithstanding the foregoing, Good Reason for Termination shall be
deemed to exist during a period of thirty (30) days commencing on
the date which is six (6) months after a Change in Control.
(g) "LTIP PLAN" shall mean an incentive compensation plan of the
Corporation which would pay bonuses to the Executive based upon the
achievement of specified goals during or at the end of an award
period of more than one year (such as a three year incentive
compensation plan).
(h) "NOTICE OF TERMINATION" shall mean a written statement which sets
forth the specific reason for termination and, if such is claimed to
be Cause for Termination or Good Reason for Termination, in
reasonable detail the facts and circumstances thereof.
(i) "OPTIONS" shall mean any stock options issued pursuant to any
present or future stock option plan of the Corporation.
(j) "RETIREMENT" shall mean a termination of the Executive's employment
after age 65 or in accordance with any mandatory retirement
arrangement with respect to an earlier age agreed to by the
Executive.
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(k) "STOCK AWARD" shall mean any stock-based awards, other than Options,
including any stock appreciation rights, restricted stock awards, or
performance stock awards, issued pursuant to any present or future
stock plan of the Corporation.
2. Termination by the Corporation Due to Cause for Termination. Should the
Board of Directors of the Corporation determine that Cause for Termination
exists, the Board of Directors of the Corporation by resolution duly
adopted may at that time or during a period of two months thereafter
terminate the Executive's employment due to Cause for Termination by
delivering a Notice of Termination. If the Board of Directors of the
Corporation fails to duly adopt within such two month period a resolution
terminating the Executive's employment, then the Corporation shall be
deemed to have waived its right to terminate the Executive due to those
circumstances which constituted the Cause for Termination previously found
to exist by the Board.
3. Payments Following Termination of Employment or a Change-in-Control.
(a) If during the term of this Agreement the Executive's employment with
the Corporation shall be terminated:
(i) due to the Executive's death or Disability,
(ii) by the Executive other than the Executive's having terminated
for Good Reason for Termination, or
(iii) by the Corporation in accordance with Section 2 hereof or in
accordance with Retirement,
then, except as set forth in Section 7, the Corporation shall have
no obligations hereunder to the Executive from and after the Date of
Termination and the only obligations of the Corporation to the
Executive shall be in accordance with any other employment agreement
applicable to the Executive and the then various policies, practices
and benefit plans of the Corporation.
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(b) If during the term of this Agreement a Change-in-Control shall have
occurred and the Executive's employment shall have been terminated
on or before the third anniversary of the date of the
Change-in-Control other than under the circumstances above described
in subsection 3(a) (for example, a termination by the Executive for
Good Reason for Termination within the foregoing period following a
Change-in-Control shall entitle the Executive to the payments set
forth in this subsection), then the Corporation shall pay the
Executive on or before the sixtieth (60th) day following the Date of
Termination the following sums:
(i) in cash any unpaid portion of the Executive's full base salary
for the period from the last period for which the Executive
was paid to the Date of Termination; and
(ii) an amount in cash as liquidated damages for lost future
remuneration equal to the sum of
(A) the product obtained by multiplying:
(1) the lesser of
(i) three (3.0), or
(ii) a number equal to the number of calendar months
remaining from the Date of Termination to the date
on which the Executive is 65 years of age (or, if
earlier, the age agreed to by the Executive pursuant
to any prior arrangement) divided by twelve,
times
(2) the sum of
(i) the greater of
(x) the Executive's annual base salary for the
year in effect on the Date of Termination,
(y) in the case of termination by the Executive
for Good Reason for Termination, the Executive's
annual base salary in effect on the
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date immediately preceding the date of the
earliest event which gave rise to the
termination by the Executive for Good Reason for
Termination,
or
(z) the Executive's annual base salary for the
year in effect on the date of the
Change-in-Control,
plus
(ii) the greater of
(x) one third (1/3) of the aggregate cash
bonuses or awards (including any payments under
an LTIP Plan) received by the Executive as
incentive compensation or bonus during the three
calendar years immediately preceding the Date of
Termination
(y) in the case of termination by the Executive
for Good Reason for Termination, one third (1/3)
of the aggregate cash bonuses or awards
(including any payments under an LTIP Plan)
received by the Executive as incentive
compensation or bonus during the three calendar
years immediately preceding the date of the
earliest event which gave rise to the
termination by the Executive for Good Reason for
Termination,
or
(z) one third (1/3) of the aggregate cash
bonuses or awards (including any payments under
an LTIP Plan) received by the Executive as
incentive compensation or bonus for the three
calendar years immediately preceding the date of
the Change-in-Control,
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plus
(B) if the Executive immediately preceding the date of the
Change-in-Control is a participant in an LTIP Plan and the
award period has not been completed prior to the date of the
Change-in-Control, an amount equal to
(1) the total cash award or bonus which would have been
received by the Executive under such LTIP Plan assuming
that, in addition to any goals met on or before the date
of the Date of Termination, all goals that were to be
measured after the date of the Date of Termination were
achieved and the Executive remained in the employ of the
Corporation at all relevant times under the LTIP Plan,
less
(2) any portion of the cash award or bonus for that
award period previously paid to the Executive pursuant
to such LTIP Plan.
(c) If during the term of this Agreement and prior to a
Change-in-Control occurring, the Executive's employment with the
Corporation shall have been terminated (x) by the Corporation other
than under the circumstances above described in subsection 3(a)(i)
or 3(a)(iii) or (y) by the Executive following the Corporation's
removal of the Executive from or failure to re-elect the Executive
to the position of its chief executive officer or removal or
diminution of the powers and status consistent with that position
other than at a time when the Corporation could have terminated the
Executive due to Cause for Termination, then the Corporation shall
pay the Executive on or before the sixtieth (60th) day following the
Date of Termination the following sums:
(i) in cash any unpaid portion of the Executive's full base salary
for the period from the last period for which the Executive
was paid to the Date of Termination; and
(ii) an amount in cash as liquidated damages for lost future
remuneration equal to the sum of
(A) the product obtained by multiplying:
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(1) the lesser of
(i) three (3.0), or
(ii) a number equal to the number of calendar
months remaining from the Date of Termination to
the date on which the Executive is 65 years of
age (or, if earlier, the age agreed to by the
Executive pursuant to any prior arrangement)
divided by twelve,
times
(2) the sum of
(i) the greater of the Executive's annual base
salary for the year in effect on the Date of
Termination, or in the case of termination by
the Executive for Good Reason for Termination,
the Executive's annual base salary in effect on
the date immediately preceding the date of the
earliest event which gave rise to the
termination by the Executive for Good Reason for
Termination,
plus
(ii) the greater of (x) one third (1/3) of the
aggregate cash bonuses or awards (including any
payments under an LTIP Plan) received by the
Executive as incentive compensation or bonus
during the three calendar years immediately
preceding the Date of Termination or (y) in the
case of termination by the Executive for Good
Reason for Termination, one third (1/3) of the
aggregate cash bonuses or awards (including any
payments under an LTIP Plan) received by the
Executive as incentive compensation or bonus
during the three calendar years immediately
preceding the date of the earliest event which
gave rise to the termination by the Executive
for Good Reason for Termination,
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plus
(B) if the Executive immediately preceding the Date of
Termination is a participant in an LTIP Plan and the award
period has not been completed prior to the Date of
Termination, an amount equal to
(1) the total cash award or bonus which would have been
received by the Executive under such LTIP Plan assuming
that, in addition to any goals met on or before the date
of the Date of Termination, all goals that were to be
measured after the date of the Date of Termination were
achieved and the Executive remained in the employ of the
Corporation at all relevant times under the LTIP Plan,
less
(2) any portion of the cash award or bonus for that
award period previously paid to the Executive pursuant
to such LTIP Plan.
4. Nondisclosure of Information.
(a) Executive acknowledges that the Corporation has invested and will
continue to invest considerable resources in the research,
development and advancement of the Corporation's business, which
investment has or may result in the generation of proprietary,
confidential and/or trade secret data, information, techniques and
materials, tangible and intangible, which properly belong to the
Corporation or in which the Corporation has an interest. Executive
acknowledges and agrees that it would be unlawful for Executive to
appropriate, to attempt to appropriate, or to disclose to anyone or
use for a third party's benefit such data, information, techniques
or materials, subject to the following:
(i) Executive acknowledges that the following constitute
protectable confidential, trade secret or otherwise
proprietary information of the Corporation or of a third
party: all computer software and firmware and computer aided
mechanisms related to the foregoing, files, programs, data or
information received by the Corporation from a customer or
prospective customer of the Corporation if such is
confidential or proprietary to the customer, data base
management systems or other instrumentations, any proposals
for development,
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any reports on findings of tests, investigative studies,
consultations or the like, pricing policies, budgets, customer
lists, strategic plans (whether or not communicated in
writing), marketing and sales information, all written
documents not generally in the public domain, any and all
copies or imitations of the foregoing, and all other
confidential, trade secret or proprietary information, whether
or not copyrighted or patented and whether created solely by
Executive, jointly with others, or solely by others.
(ii) For purposes of this Section 4, all confidential, proprietary,
or trade secret information enumerated or mentioned in Section
4(a)(i) is hereinafter referred to as "Information." Any
restrictions on disclosure and use of the Information will
apply to all copies of the Information, whether in whole or in
part.
(iii) During the term of this Agreement and at all times after
termination of this Agreement, unless authorized in writing by
the Corporation, the Executive will not:
(1) use for the Executive's benefit or advantage the
Information, or
(2) use the Information for the benefit or advantage of
any third party, or
(3) disclose or cause to be disclosed the Information or
authorize or permit such disclosure of the
Information to any unauthorized third party, or
(4) use the Information in any manner which is intended
to injure or cause loss, whether directly or
indirectly, to the Corporation.
(iv) The Executive will not be liable for the disclosure of
Information which:
(1) is in the public domain generally and as such becomes
known to Executive through no wrongful act or breach
of this Agreement; or
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(2) is received rightfully by Executive from a third
party having a lawful right to possess and to release
the Information, provided the Executive agrees to
promptly notify the Corporation if the Executive
suspects that the information possessed by the third
party is within the meaning of Information under this
Agreement.
(v) In any judicial proceeding, it will be presumed that the
Information constitutes protectable trade secrets, and the
Executive will bear the burden of proving that any Information
is publicly or rightfully known by the Executive.
(vi) The Executive will surrender to the Corporation at any time
upon request, and upon termination of the Executive's
employment with the Corporation for any reason, all written or
otherwise tangible documentation representing or embodying the
Information, in whatever form, whether or not copyrighted,
patented, or protected as a mask work, and any copies or
imitations of the Information, whether or not made by the
Executive.
(vii) The Executive agrees to be available upon request for
consultation after termination of employment to provide
information and details with respect to any work or activity
performed or materials created by the Executive alone or with
others during the Executive's employment by the Corporation.
The Executive will be reimbursed for these services.
(b) Any and all creations, developments, discoveries, inventions, works
of authorship, enhancements, modifications and improvements,
including without limitation computer programs, data bases, data
files and the like, (hereinafter collectively referred to as
"Development" or "Developments"), whether or not the Developments
are copyrightable, patentable, protectable as mask works or
otherwise protectable (such as by contract or implied duty), and
whether published or unpublished, conceived, invented, developed,
created or produced by the Executive alone or with others during the
term of the Executive's employment, whether or not during working
hours and whether on the Corporation's premises or elsewhere, will
be the sole and exclusive property of the Corporation if the
Development is:
(i) connected with the Corporation in any way, or
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(ii) within the scope of the Executive's duties assigned or implied
in accordance with the Executive's position, or
(iii) a product, service, or other item which would be in
competition with the products or services offered by the
Corporation or which is related to the Corporation's products
or services, whether presently existing, under development, or
under active consideration, or
(iv) in whole or in part, the result of the Executive's use of the
Corporation's resources, including without limitation
personnel, computers, data bases, communications facilities,
word processing systems, programs, office facilities or
otherwise.
During the term of the Executive's employment with the Corporation
and, if the Corporation should then so request, after termination of
such employment, the Executive agrees to assign and does hereby
assign to the Corporation all rights in the Developments created by
the Executive alone or with others during the term of the
Executive's employment, and all rights in any trademarks,
copyrights, patents, trade secrets and analogous intellectual
property rights and any applications for registration for same, of
the United States and such foreign countries as the Corporation may
designate which are related to the Developments, including without
limitation all accompanying goodwill and the right to xxx for
infringement or misappropriation and to receive all proceeds related
to any judgment or settlement of same. The Executive agrees to
execute and deliver to the Corporation any instruments the
Corporation deems necessary to vest in the Corporation sole title to
and all exclusive rights in the Developments created by the
Executive alone or with others during the term of the Executive's
employment, and in all related trademarks, copyrights, mask work
protection rights, and/or patent rights so created during the term
of employment. The Executive agrees to execute and deliver to the
Corporation all proper papers for use in applying for, obtaining,
maintaining, amending and enforcing all such trademarks, copyrights,
patents or such other legal protections as the Corporation may
desire. The Executive further agrees to assist fully the Corporation
or its nominees in the preparation and prosecution of any trademark,
copyright, mask work protection, patent, or trade secret arbitration
or litigation. The Executive shall be reimbursed on a reasonable
hourly basis consistent with the compensation provided for herein
for the Executive's services rendered following termination of
employment.
(c) The Executive's obligations and covenants in this Section 4 will be
binding upon the Executive's heirs, legal representatives,
successors and assigns.
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(d) The Corporation and the Executive agree that the rights conveyed by
this Agreement are of a unique and special nature. The Executive and
the Corporation agree that any violation of this Section 4 will
result in immediate and irreparable harm to the Corporation and that
in the event of any actual or threatened breach or violation of any
of the provisions of this Section 4, the Corporation will be
entitled as a matter of right to an injunction or a decree of
specific performance without bond from any equity court of competent
jurisdiction. The Executive waives the right to assert the defense
that such breach or violation can be compensated adequately in
damages in an action at law. Nothing in this Agreement will be
construed as prohibiting the Corporation from pursuing any other
remedies at law or in equity available to it for such breach or
violation or threatened violation.
5. Medical Insurance or Similar Benefit Plans
(a) If the Executive's employment should terminate under such
circumstance as entitle the Executive to receive payments pursuant
to Section 3(b) or 3(c) hereof, the Executive shall be deemed for
purposes of all employee medical insurance or similar benefits of
the Corporation, to have remained in the continuous employment of
the Corporation for the three year period following the Date of
Termination and shall be entitled to all of the medical insurance or
similar benefits provided by the Corporation as though the Executive
had so remained in the employment of the Corporation.
(b) If for any reason, whether by law or provisions of the Corporation's
employee medical insurance or similar benefit plans, any benefits
which the Executive would be entitled to under the foregoing
subsection of this Section 5 cannot be paid pursuant to such
employee benefit plans, then the Corporation hereby contractually
agrees to pay to the Executive the difference between the benefits
which the Executive would have received in accordance with the
foregoing subsections of this Section if the relevant employee
medical insurance or similar benefit plan could have paid such
benefit and the amount of benefits, if any, actually paid by such
employee medical insurance or similar benefit plan. The Corporation
shall not be required to fund its obligation to pay the foregoing
difference.
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6. Other Employment. In the event of a termination of employment under the
circumstances above described in Section 3(b) or 3(c) hereof, the
Executive shall have no duty to seek any other employment after
termination of the Executive's employment with the Corporation and the
Corporation hereby waives and agrees not to raise or use any defense based
on the position that the Executive had a duty to mitigate or reduce the
amounts due the Executive hereunder by seeking other employment whether
suitable or unsuitable and should the Executive obtain other employment,
then the only effect of such on the obligations of the Corporation
hereunder shall be that the Corporation shall be entitled to credit
against any payments which would otherwise be made pursuant to Sections
5(a) or 5(b) hereof, any comparable payments to which the Executive is
entitled under the employee benefit plans maintained by the Executive's
other employer or employers in connection with services to such employer
or employers after termination of the Executive's employment with the
Corporation.
7. Stock Awards and Options. If the Executive's employment should terminate
under the circumstances described in Section 3(a)(i) hereof (other than
death) or 3(a)(iii), the Executive's rights, if any, with respect to any
outstanding Stock Awards and/or Options shall be governed by the plans and
any related agreements pursuant to which such Stock Awards and/or Options
were granted. If the Executive's employment should terminate under such
circumstances as entitle the Executive to receive payments pursuant to
Section 3(b) or 3(c) hereof or due to the death of the Executive or occurs
on or after the third anniversary of the date of this Agreement by the
resignation of the Executive other than at a time when the Corporation
could have terminated the Executive due to Cause for Termination, then
with respect to outstanding Stock Awards and/or Options:
(a) in the event that the Executive's employment is terminated and the
Executive is entitled to receive payments pursuant to Section 3(b)
hereof, with respect to each outstanding Option or Stock Award which
did not immediately vest and/or become exercisable upon the
occurrence of a Change-in-Control, such Stock Award or Option shall
remain outstanding in accordance with its terms provided that in any
event it shall automatically vest upon termination of employment
and/or become and remain exercisable at any time after termination
of employment until the stated expiration date contained in the
grant for such Stock Award or Option;
(b) in the event that the Executive's employment is terminated and the
Executive is entitled to receive payments pursuant to Section 3(c)
hereof, each outstanding Stock Award or Option shall remain
outstanding in accordance with its terms provided that in any event
it shall automatically vest upon termination of employment and
become and/or remain exercisable at any time
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after termination of employment until the stated expiration date
contained in the grant for such Stock Award or Option;
(c) in the event that the Executive's employment is terminated due to
the Executive's death or termination occurs on or after the third
anniversary of the date of this Agreement by the resignation of the
Executive other than at a time when the Corporation could have
terminated the Executive due to Cause for Termination, each
outstanding Stock Award or Option shall remain outstanding in
accordance with its terms provided that in any event it shall
automatically vest upon termination of employment and become and/or
remain exercisable at any time after termination of employment (and
in the case of termination of employment due to the death of the
Executive, by the Executive's estate) until the stated expiration
date contained in the grant for such Stock Award or Option.
8. Noncompetition. During the period of employment of Executive by the
Corporation and for five (5) years thereafter, the Executive will not, in
any geographic area in which the Corporation is offering its services and
products, without the prior written consent of the Corporation:
(a) directly or indirectly engage in,
(b) assist or have an active interest in (whether as proprietor,
partner, investor, shareholder, officer, director or any type of
principal whatsoever), or
(c) enter the employ of, or act as agent for, or advisor or consultant
to, any person, firm, partnership, association, corporation or
business organization, entity or enterprise which is or is about to
become directly or indirectly engaged in,
any business which is competitive with any business of the Corporation or
any subsidiary or affiliate thereof in which Executive is or was engaged;
provided, however, that the foregoing provisions of this paragraph 8 are
not intended to prohibit and shall not prohibit Executive from purchasing,
for investment, not in excess of 1% of any class of stock or other
corporate security of any company which is registered pursuant to Section
12 of the Securities Exchange Act of 1934.
Executive acknowledges that the breach by the Executive of the provisions
of this Section 8 would cause irreparable injury to the Corporation,
acknowledges and agrees that remedies at law for any such breach will be
inadequate and consents and agrees that the Corporation shall be entitled,
without the necessity of proof of actual damage, to injunctive relief in
any proceedings which may be brought to enforce the
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provisions of this Section 8. Executive acknowledges and warrants that the
Executive will be fully able to earn an adequate livelihood for the
Executive and the Executive's dependents if this Section 8 should be
specifically enforced against the Executive and that such enforcement will
not impair the Executive's ability to obtain employment commensurate with
the Executive's abilities and fully acceptable to the Executive .
If the scope of any restriction contained in this Section 8 is too broad
to permit enforcement of such restriction to its full extent, then such
restriction shall be enforced to the maximum extent permitted by law and
Executive and the Corporation hereby consent and agree that such scope may
be judicially modified in any proceeding brought to enforce such
restriction.
9. Terms. This Agreement shall be for an initial term of five years
commencing on the date hereof. This Agreement shall automatically renew
for an additional term of one year commencing on the fifth anniversary of
the date hereof and for succeeding additional terms each of one year on
each succeeding anniversary thereof until and unless either party sends
written notice of non-renewal to the other party at least six months prior
to a renewal date; provided, however, that if a Change-in-Control shall
occur during the initial or a renewed term of this Agreement, then this
Agreement shall remain in effect until the third anniversary of the date
of the Change-in-Control.
10. Miscellaneous.
(a) This Agreement shall be construed under the laws of the Commonwealth
of Pennsylvania.
(b) This Agreement constitutes the entire understanding of the parties
hereto with respect to the subject matter hereof and may only be
amended or modified by written agreement signed by the parties
hereto.
(c) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation,
by agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same
manner required of the Corporation and to perform it as if no such
succession had taken place. Failure of the Corporation to obtain
such agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive
to terminate employment due to Good Reason for Termination. As used
in this Agreement, "Corporation" shall mean the Corporation as
hereinbefore
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defined and any successor to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this
subsection (c) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(d) This Agreement shall inure to the benefit of and be enforceable by
the Executive and the Corporation and their respective legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die
while any amounts would still be payable to the Executive hereunder
if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there be no such designee, to the Executive's
estate.
(e) Any notice or other communication provided for in this Agreement
shall be in writing and, unless otherwise expressly stated herein,
shall be deemed to have been duly given if mailed by United States
registered mail, return receipt requested, postage prepaid,
addressed in the case of the Executive to the Executive's office at
the Corporation with a copy to the Executive's residence and in the
case of the Corporation to its principal executive offices,
attention of the corporate Secretary.
(f) No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and approved by resolution of
the Board of Directors of the Corporation. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement. Nothing contained herein shall impair
the right of the Corporation to terminate the Executive's
employment, subject to making any payments required to be made
hereunder.
(g) The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force
and effect.
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(h) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
(i) If litigation should be brought to enforce, interpret or challenge
any provision contained herein, the prevailing party in such
litigation, if any, shall be entitled to its reasonable attorney's
fees and disbursements and other costs incurred in such litigation
and to interest on any money judgment obtained calculated at the
prime rate of interest in effect from time to time at Citizens Bank,
N.A. (or its successor), from the date that the payment should have
been made under this Agreement.
(j) Excise Taxes.
(i) For purposes of this subsection 10(j), (1) a Payment shall mean
any payment or distribution in the nature of compensation to or for
the benefit of the Executive, whether paid or payable pursuant to
this Agreement or otherwise; (2) Agreement Payment shall mean a
Payment paid or payable pursuant to this Agreement (disregarding
this subsection 10(j)); (2) Net After Tax Receipt shall mean the
Present Value of a Payment net of all taxes imposed on the Executive
with respect thereto under Sections 1 and 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), determined by
applying the highest marginal rate under Section 1 of the Code
applicable to the Executive's taxable income for such year; (4)
"Present Value" shall mean such value determined in accordance with
Section 280G(d) (4) of the Code; and (5) "Reduced Amount" shall mean
the greatest aggregate amount of Payments, if any, which (x) is less
than the sum of all Payments and (y) results in aggregate Net After
Tax Receipts which are greater than the Net After Tax Receipts which
would result if the aggregate Payments were made.
(ii) Anything in this Agreement to the contrary notwithstanding, in
the event PriceWaterhouseCoopers L.L.P. (or if
PriceWaterhouseCoopers L.L.P. is the audit firm for the Corporation
at the time, another accounting firm of nationally recognized
standing selected by Executive) (the "Accounting Firm") shall
determine that receipt of all Payments would subject the Executive
to tax under Section 4999 of the Code, it shall determine whether
some amount of Payments would meet the definition of a "Reduced
Amount." If the Accounting Firm determines that there is a Reduced
Amount, the aggregate Agreement Payments shall be reduced to such
Reduced Amount; provided, however, that if the Reduced Amount
exceeds the aggregate Agreement Payments, the aggregate Payments
shall, after the reduction of all Agreement Payments, be reduced
(but not below zero) in the amount of such
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excess. All determinations made by the Accounting Firm under this
Section shall be binding upon the Corporation and the Executive and
shall be made within 60 days of the occurrence of an event which
requires the Corporation to make payments to the Executive under
this Agreement. No later than two business days following the making
of this determination by the Accounting Firm, the Corporation shall
pay to or distribute for the benefit of the Executive such Payments
as are then due to the Executive under this Agreement and shall
promptly pay to or distribute for the benefit of the Executive in
the future such Payments as become due to the Executive under this
Agreement. The Corporation or its successor shall pay for the work
done by the Accounting Firm. In the event that the Accounting Firm
is unable or unwilling to make the determinations to be made under
this subsection 10(j) or for any reason such determinations are not
made within 60 days of the occurrence of the event which requires
the Corporation to make payments to the Executive under this
Agreement, the Corporation shall make all Payments as are then due
to the Executive without reduction no later than two business days
following the 60th day after the occurrence of the event which
required the Corporation to make payments to the Executive under
this Agreement.
(iii) While it is the intention of the Corporation and the Executive
to reduce the amounts payable or distributable to the Executive
hereunder only if the aggregate Net After Tax Receipts to the
Executive would thereby be increased, as a result of the uncertainty
in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that amounts will have been paid or distributed by the
Corporation to or for the benefit of the Executive pursuant to this
Agreement which should not have been so paid or distributed
("Overpayments") or that additional amounts which will not have been
paid or distributed by the Corporation to or for the benefit of the
Executive pursuant to this Agreement could have been so paid or
distributed ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or the
Executive which the Accounting Firm believes has a high probability
of success or controlling precedent or other substantial authority,
determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Corporation to or for the benefit of the
Executive shall be treated for all purposes as a loan ab initio to
the Executive which the Executive shall repay to the Corporation
together with interest at the applicable federal rate provided for
in Section 7872(f) (2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by the Executive to the Corporation if
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and to the extent such deemed loan and payment would not either
reduce the amount on which the Executive is subject to tax under
Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Accounting Firm, based upon controlling
precedent or other substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly
paid by the Corporation to or for the benefit of the Executive
together with interest at the applicable federal rate provided for
in Section 7872(f) (2) of the Code.
IN WITNESS WHEREOF, this Agreement has been executed on the date first
above written.
ATTEST: BLACK BOX CORPORATION
By: /s/ Xxxxxxx XxXxxxxx By: Xxxxxx X. Xxxxx
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Title: Chairman of the Board
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WITNESS: /s/ Xxxxxxx XxXxxxxx /s/ Xxxx X. Xxxxx
----------------------------- ----------------------------------
Xxxx X. Xxxxx
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