Exhibit 10.23
EMPLOYEE BENEFITS AGREEMENT
This Employee Benefits Agreement (the "Agreement") is entered into as
of the 1st day of August, 1997, by and between Elcom International, Inc. (the
"Company") and Xxxxxx Xxxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employee is a key employee of the Company; and
WHEREAS, the Company considers that providing Employee with certain
employment benefits will operate as an incentive for Employee during the period
of this Agreement, during which the Company and/or one or more of its
subsidiaries may undergo a change in control or ownership; and
WHEREAS, this Agreement is intended to provide benefits only in the
event of a change in control or ownership of the Company and/or one or more of
its subsidiaries prior to January 1, 1999 (the "Expiration Date").
NOW THEREFORE, to induce Employee to remain productive, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:
1. Definitions.
(a) "Change of Control" shall mean the occurrence of any
one of the following events:
(i) The stockholders of the Company approve (A) a merger or
consolidation of the Company with any other
corporation, other than a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined
voting power of the voting securities of the Company or
such surviving entity outstanding immediately after
such merger or consolidation, or (B) a plan of complete
liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially
all the assets of the Company and/or one or more of its
subsidiaries to other than any of its subsidiaries; or
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(ii) During any period of one (1) year, a majority of the
Board of Directors of the Company ceases to be
comprised of "Continuing Directors," which term, for
purposes of this Subsection 1(a), shall mean
individuals who at the beginning of any period of one
(1) year (not including any period which ended prior to
the date of this Agreement) constitute the Board and
any new director(s) whose election by the Board or
nomination for election by the Company's stockholders,
as applicable, was approved by a vote of at least a
majority of the directors then still in office who
either were directors at the beginning of the period or
whose election or nomination for election was
previously so approved; or
(iii) Any "person" (as defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
and/or any of its subsidiaries representing fifty
percent (50%) or more of the combined voting power of
such entity's then outstanding securities; provided
that a Change of Control shall not be deemed to occur
under this clause (iii) by reason of the acquisition of
securities by the Company and/or any of its
subsidiaries or an employee benefit plan (or any trust
funding such a plan) maintained by the Company and/or
any of its subsidiaries.
(b) "Severance Payments" shall mean any payment or distribution of
compensation or benefits made pursuant to Section 3 of this
Agreement.
(c) "Separation Date" shall mean the date, if any, of termination
of Employee's employment relationship with the Company.
(d) "Voluntary Separation" shall mean the voluntary resignation by
Employee from employment with the Company other than a
voluntary resignation following either of the following two
events:
(i) any future reduction in Employee's base salary; or
(ii) a future relocation of Employee's place of employment
which results in an increase of twenty-five (25)
miles or more in the distance from Employee's
residence to Employee's place of employment.
(e) "Termination With Cause" shall mean any termination of
Employee by the Company for malfeasance, insubordination,
theft, fraud, embezzlement, conviction of a felony, being
under the influence of alcohol or unlawful drugs during
business hours, the violation of Section 4 of this Agreement
or of any other agreement with the Company, the removal of any
equipment without the Company's written permission, the
violation of any state or federal law, repeated
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tardiness without acceptable reasons therefor, and/or the
failure to comply with any of the Company's written
policies and procedures.
2. Termination of Employee Related to Change of Control. In the event
of Employee's termination of employment with the Company within twelve (12)
months following the date on which there is a Change of Control of the Company
and/or any of its subsidiaries, the Company shall provide Employee with the
Severance Payments outlined in Section 3, unless the termination is a
Termination With Cause or a Voluntary Separation.
3. Severance Payments. In the event that Employee is entitled to
Severance Payments pursuant to the terms of Section 2, the Company will make the
payments described below, subject to Section 13 hereof.
(a) Compensation. The Company shall pay Employee an amount equal
to 24 (twenty-four) months base salary as of the Separation
Date, without giving effect to any future reduction in base
salary prior to the Separation Date, payable in accordance
with the provisions of Section 13 hereof. Subject to Section
13 hereof, such payments shall be made in accordance with the
Company's normal payroll practices as such practices shall be
in effect from time to time, provided, however, that the
Company may elect to accelerate payments required under this
Section 3(a).
(b) Employee Benefits. Employee shall be entitled to the
following benefits:
(i) Vacation. Any accrued vacation pay due but not yet
taken at the Separation Date shall be paid to
Employee within thirty (30) days following the
Separation Date.
(ii) Health Benefits. If Employee participated in any health
benefit plan in effect immediately prior to the
Separation Date, and if Employee elects to continue
participating in such plan pursuant to the terms of
said plan and the Comprehensive Omnibus Budget
Reconciliation Act ("COBRA"), the Company shall pay for
its normal portion of the costs of Employee's
participation in such plan from the Separation Date
until the earlier of: (a) the date which is three
months following the Separation Date; or (b) the date
of Employee's eligibility in any health benefit plan
offered by Employee's new employer, if any. Employee
shall notify the Company in writing within thirty (30)
days of any new employment.
(iii) Retirement and Benefit Plans. Notwithstanding
anything in this Agreement to the contrary,
Employee's rights in any retirement, pension, stock
option or profit-sharing plans offered by the Company
shall be governed by the rules of such plans as well
as by applicable law.
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(iv) Outplacement Assistance. The Company will provide
Employee up to two (2) months of employment
outplacement services with a Company-selected
service.
4. Continuing Obligations. In order to induce the Company to enter into
this Agreement, Employee hereby agrees that all documents, records, techniques,
business secrets and other information which have come into Employee's
possession from time to time during Employee's continued employment by the
Company or which may come into Employee's possession during Employee's
employment hereunder, shall be deemed to be confidential and proprietary to the
Company, and Employee further agrees to retain in confidence any confidential
information known to Employee concerning the Company, any subsidiary of the
Company, and their respective businesses so long as such information is not
publicly disclosed. Employee further agrees to cooperate fully as requested from
time to time by the Company's Board of Directors or Company Management in
connection with any transaction involving the possible sale of the Company
and/or any of its subsidiaries. Employee further agrees not to speak about a
possible sale of the Company and/or any of its subsidiaries with or otherwise
respond to requests to or from any third parties involving the possible sale of
the Company and/or any of its subsidiaries, unless specifically authorized to do
so by the Company. The obligations of Employee under this Section 4 shall be in
addition to, and shall not limit, any other obligation of Employee to the
Company with respect to the matters set forth herein or otherwise.
5. Assignments and Transfers. Employee agrees that Employee will not
assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Agreement, nor shall Employee's rights be subject to encumbrance or the claims
of creditors. Any purported assignment shall be null and void. This Agreement
shall inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. This Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place,
except no assumption shall be required if this Agreement is automatically
assumed by operation of law. The term "the Company" as used herein shall include
such successors and assigns. The term "successors and assigns" as used herein
shall include a corporation or other entity acquiring at least 51% of the
outstanding shares of the Company or all or substantially all of the assets and
business of the Company.
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6. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given and received when delivered, including by a national over
night courier service or when mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company at:
Elcom International, Inc.
00 Xxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Financial Officer
and to Employee at:
Xxxxxx Xxxxxxxx
00 Xxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
or such address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
7. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts.
8. At-Will Employment. At the present time, the Company and Employee
have, and will continue to have, an at-will employment relationship. That is,
either party can terminate the employment relationship for any reason at any
time. Nothing contained in this Agreement shall be interpreted to amend or alter
this at-will employment relationship.
9. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to Employee's
severance benefits and supersedes any previous or contemporaneous agreements.
10. Amendments; Waivers. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by Employee and by a
duly authorized representative of the Company other than Employee. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power provided herein or by law
or in equity.
11. Severability; Enforcement. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect.
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Notwithstanding any other provision in this Agreement to the contrary, if
Employee breaches any term of this Agreement, the Company may immediately cease
making Severance Payments.
12. Arbitration. The parties agree to submit any unresolved substantial
dispute arising under this Agreement to arbitration. Arbitration shall be by a
single arbitrator in the Norwood, Massachusetts area experienced in the matters
at issue selected by the Company and Employee in accordance with the commercial
arbitration rules of the American Arbitration Association. The decision of the
arbitrator shall be final and binding as to any matter submitted to arbitration
under this Agreement. All costs and expenses incurred in connection with any
such arbitration proceeding shall be borne by the party against whom the
decision is rendered as provided by the arbitrator.
13. Release. As a condition to and in consideration for the receipt of
Severance Payments to which Employee may be entitled pursuant to Section 3
hereof, Employee agrees to execute a Release Agreement with the Company, in
substantially the same form as that attached hereto as Exhibit A (the "Release
Agreement"), within the 30-day period beginning 21 days after Employee's
Separation Date. The Company shall not be obligated to make any Severance
Payments unless and until the Company shall have received from Employee a
validly executed Release Agreement that shall not have been revoked by Employee
during the applicable Revocation Period, as such term is defined in the Release
Agreement, in compliance with applicable law. Provided that Company receives
from Employee a validly executed Release Agreement which is not revoked during
the applicable Revocation Period, the Company agrees to commence making any
Severance Payments theretofore withheld within 30 days of the expiration of such
Revocation Period.
14. Expiration Date. This Agreement shall be null and void in the event
that a Change of Control does not occur on or before the Expiration Date.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year set forth above.
ELCOM INTERNATIONAL, INC.
("Company")
By /S/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
By /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
("Employee")
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RELEASE AGREEMENT
This Release Agreement (the "Agreement") is entered into as of the
Effective Date of the Agreement stated on the signature page below, by and
between Elcom International, Inc. (the "Company") and Xxxxxx Xxxxxxxx
("Employee").
WITNESSETH:
WHEREAS, Employee and the Company have entered into a Employee Benefits
Agreement dated as of August 1, 1997 (the "Employee Benefits Agreement"); and
WHEREAS, Employee is entitled to certain benefits under the Employee
Benefits Agreement, pursuant to Section 13 of which payment of such benefits is
made conditional upon and in consideration for Employee's valid execution of a
Release Agreement, all as more completely described in the Employee Benefits
Agreement (Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Employee Benefits Agreement.).
NOW THEREFORE, to induce the Company to make the Severance Payments
pursuant to the Employee Benefits Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:
1. Release. Employee does hereby, for Employee and for Employee's
heirs, executors, successors and assigns, release and forever discharge the
Company, and the subsidiaries, divisions and affiliated businesses of the
Company, together with all of their officers, directors, management,
representatives, employees, shareholders, agents, successors, assigns, attorneys
and other affiliated persons, both known and unknown, in both their personal and
agency capacities (collectively, the "Releasees"), of and from any and all
claims, demands, actions or causes of action, damages, or suits at law or
equity, of whatsoever kind or nature, including, but not limited to, all claims
and/or demands for back pay, reinstatement, hire or re-hire, front pay, group
insurance or employee benefits of whatsoever kind (except as to rights expressly
provided for herein and in the Employee Benefits Agreement), claims for monies
and/or expenses, any claims arising out of or relating to the cessation of
Employee's employment with the Company, the sale of the stock or assets of the
Company and/or any of its subsidiaries, any claims for failing to obtain
employment at any other company or with any other person or employer, and/or
demands for attorneys' fees and legal expenses that Employee has or may have by
reason of any matter or thing arising out of, or in any way connected with,
directly or indirectly, any act and/or omission that has occurred prior to the
Effective Date of Agreement (as hereinafter defined). Employee further agrees
not to directly or indirectly pursue or initiate any action or legal proceeding
of any kind against the Releasees arising out of or related to the claims
released in the preceding sentence of this Section 1, or the sale of the stock
or assets of the
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Company and/or any of its subsidiaries and also waives any right to recover as a
result of any such proceedings initiated on Employee's behalf. Notwithstanding
the foregoing, Employee and the Company agree and acknowledge that this Release
shall not apply to the obligations of the Company arising solely under this
Agreement or under the Employee Benefits Agreement.
2. ADEA. Employee recognizes and understands that, by executing this
Agreement, Employee shall be releasing the Releasees from any and all claims
that Employee now has, or subsequently may have, under the Age Discrimination in
Employment Act of 1967, 19 U.S.C. ss.ss.621 et seq., as amended (the "ADEA"), by
reason of any matter or thing arising out of, or in any way connected with,
directly or indirectly, any acts or omissions which have occurred prior to and
including the Effective Date of this Agreement. In other words, Employee will
have none of the legal rights against the aforementioned Releasees that Employee
would have had otherwise under federal age discrimination law by signing this
Agreement.
3. "Consideration Period." The Company hereby notifies Employee of his
right to consult with Employee's chosen legal counsel before executing this
Agreement. The Company shall afford, and Employee acknowledges receiving, not
less than twenty-one (21) calendar days in which to consider this Agreement to
insure that Employee's execution of this Agreement is knowing and voluntary. In
signing below, Employee expressly acknowledges that Employee has had at least
twenty-one (21) days to consider this Agreement and that Employee's execution of
same is with full knowledge of the consequences thereof and is of Employee's own
free will.
4. Revocation Period. Employee and the Company agree and recognize
that, for a period of seven (7) calendar days following Employee's execution of
this Agreement (the "Revocation Period"), Employee may revoke this Agreement by
providing written notice revoking the same, within the Revocation Period, to
Catalink Direct, Inc., 00 Xxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, Attn: Chief
Financial Officer. Such revocation of this Agreement by Employee will
automatically revoke the Severance Payments provided for in the Employee
Benefits Agreement and Employee will not be entitled to any of the amounts
described therein.
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IN WITNESS WHEREOF, Employee and the Company have executed this
Agreement effective and binding as of the Effective Date.
Date of Execution by Employee
"Effective Date of Agreement" is AGREED TO AND ACCEPTED BY
the 8th calendar day after this DateEMPLOYEE
Xxxxxx Xxxxxxxx
Execution witnessed by:
Date of Execution by the Company AGREED TO AND ACCEPTED BY
THE COMPANY
ELCOM INTERNATIONAL, INC.
By:
Its:
Execution witnessed by:
Date of Receipt by Employee RECEIPT ACKNOWLEDGED BY
EMPLOYEE
Xxxxxx Xxxxxxxx
Receipt witnessed by:
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