EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 7th day of March, 1996 (the
"Effective Date"), by and between LOGIMETRICS, INC., a corporation
organized and existing under the laws of the State of Delaware and duly
qualified to do business as a foreign corporation in the State of New York
(the "Company"), and XXXXXXX X. XXXXX, an individual residing at
0000 Xxx Xxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxx Xxxxxx 00000 (the "Executive").
The aforementioned are sometimes hereinafter referred to as the "Parties".
WHEREAS, the Company recognizes the Executive can effectively
contribute to the growth and success of the Company and desires to assure
the Executive's employment with the Company on a long-term basis; and
the Executive desires to be employed by the Company under the terms and
conditions contained herein; and
WHEREAS, the parties have determined that it is in their mutual
best interests to memorialize in writing their mutual understandings for the
Executive's employment with the Company.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the
parties hereto agree as follows:
ARTICLE 1. REPRESENTATIONS OF THE COMPANY.
(a) Company Materials. Attached hereto as Exhibit A is a true
and correct copy as of the date hereof of the Private Placement
Memorandum, dated February 5, 1996 (the "PPM" and, together with the
Company's Proxy Statement, dated January 29, 1996, the "Company
Materials"), as in effect as of the date hereof. The Company shall provide
the Executive with any and all amendments to the PPM. The PPM and all
amendments thereto are true and complete in all material respects.
(b) Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is validly authorized to do business as a foreign
corporation in the State of New York. Attached hereto as Exhibit B are
complete and correct copies of the Company's Certificate of Incorporation
and its By-Laws as presently in effect.
(c) Authorization. The Company has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Board of Directors of the Company
has duly approved and authorized the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby, and no other corporate proceedings on the part of the Company are
necessary to approve and authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company
and this Agreement constitutes the valid and binding agreement of the
Company enforceable against it in accordance with its terms.
(d) No Violation. The Company is not in violation of, and
knows of no investigation currently pending or known to be threatened
which alleges a violation of, any applicable law, statute, order, rule,
regulation or ordinance promulgated, or judgment entered, by any Federal,
State, local or foreign court or governmental authority relating to the
Company or its business or property. The Company is not subject to any
material injunction, judgment or judicial or regulatory decree or consent
order.
(e) Financial Statements. The Financial Statements of the
Company included in the PPM are true and correct as of the date thereof,
have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent throughout the periods reflected
therein (except as reflected in the notes thereto), and accurately reflect the
financial condition of the Company and its operations for the periods
covered by said Financial Statements. Since the date of said Financial
Statements the Company has experienced no material or adverse changes
in its financial conditions or operations.
(f) Compliance with Law. The Company is in compliance in
all material respects with all laws, regulations and orders applicable to its
business, including without limitation, all applicable environmental laws
and building zoning laws, ordinances and regulations applicable to its
plants, structures and equipment or any properties owned, leased or
operated by the Company. The Company has not received any notification
that it is in violation of any laws, regulations or orders described above.
(g) Composition of Board of Directors. The Board of Directors
of the Company shall, as of the Effective Date, be comprised of the
following individuals: Xxxxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx
Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxx and Xxxxx X.
Xxxxxxxxx.
(h) Shareholders of the Company. The Company Materials set
forth, as of the dates referenced therein, the true and correct number of
shares held by any person, entity or group known to the Company to be
the beneficial holder of 5% or more of the outstanding Common Stock.
There are no voting arrangements with respect to the shares of the
Company except as described in the Company Materials.
(i) Shares, Warrants and Options Outstanding. The Company
Materials set forth, as of the dates referenced therein, the capitalization of
the Company. Exhibit C hereto sets forth a complete listing of all options
authorized, issued and outstanding to purchase or otherwise acquire shares
of the Company and all warrants or other agreements to purchase or
otherwise acquire shares of stock or other voting securities of the
Company and the persons to whom such are issued and the terms thereof.
(j) Directors and Officers Liability Insurance. Set forth in
Exhibit D hereto is a true and correct copy of the binder issued by Xxxxxx
Xxxxxxx, insurance brokers, Cranford, NJ, on behalf of Zurich Insurance
Company as to the Officers Liability Insurance Policy currently in force
and effect or which will be in effect as of the Effective Date.
(k) SEC Documents. The Company has delivered to the
Executive a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by the Company with the
Securities and Exchange Commission ("SEC") under the Securities Act of
1933 (the "Securities Act") or the Securities Exchange Act of 1934 (the
"Exchange Act") since December 31, 1993 (the "Company SEC
Documents"). As of their respective dates, the Company SEC Documents
complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Company SEC Documents.
(l) Other Information. No representations or warranties by the
Company in this Agreement, and none of the information or documents
furnished or to be furnished by the Company to the Executive pursuant to
this Agreement or in connection with the transactions contemplated under
this Agreement (including, without limitation, all items referred to on
Schedules or Exhibits attached hereto) contain or will contain at the time
of their delivery any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE 2. REPRESENTATIONS OF THE EXECUTIVE. The
Executive represents that he has full power and authority to execute and
deliver this Agreement and to enter into the transactions contemplated
hereby. The Executive's service hereunder will not conflict with, or result
in a breach of, any agreement, understanding, order, judgment or other
obligation to which the Executive is presently a party or by which he may
be bound. The Executive is not subject to, or bound by, any covenant
against competition, confidentiality obligation or any other agreement,
order, judgment or other obligation which would conflict with, restrict or
limit the performance of the services to be provided by him hereunder.
The Executive knows of no reason why he would not be insurable at
regular rates. This Agreement has been duly executed and delivered by
the Executive and constitutes a valid and binding Agreement of the
Executive and is enforceable against him in accordance with its terms.
ARTICLE 3. RELIANCE ON REPRESENTATIONS. The
foregoing representations and warranties have been made by each of the
parties to the other as a material inducement for each of the parties to
enter into this Agreement, knowing and intending that each such party
shall rely thereon in entering into the transactions contemplated hereby.
ARTICLE 4. APPOINTMENT OF EXECUTIVE AS
CHAIRMAN, PRESIDENT, CEO, DIRECTOR AND TERM.
(a) Employment. The Company hereby employs the Executive
as the Chairman, President and Chief Executive Officer of the Company.
(b) Status. On the Effective Date, the Company will take all
action necessary to appoint the Executive as a director of the Company.
During the term of this Agreement, so long as the Executive continues to
be the Chief Executive Officer of the Company, the Company shall use its
best efforts to cause the Executive to be elected as a Director of the
Company and to amend the By-Laws to require that the individual in the
Company holding the title of Chairman and President be a member of the
Board of Directors with full voting power.
(c) Term of Appointment. The Executive shall be employed
by the Company for an initial period expiring on June 30, 2000 and
commencing with the Effective Date hereof as Chairman, President and
CEO of the Company and shall continue as such until terminated as
provided in Article 9 hereof or until this Agreement expires.
ARTICLE 5. DUTIES OF THE EXECUTIVE.
(a) Duties. The Executive shall have such duties, authorities
and responsibilities as are set forth in the By-Laws of the Company with
respect to the office of the Chairman, President and Chief Executive
Officer, as such By-Laws may be amended from time to time (the By-
Laws of the Company as may hereafter be amended being hereinafter
sometimes referred to as "By-Laws"), and shall have such other duties,
authorities and responsibilities as may be assigned to him from time to
time by the Board of Directors of the Company. Without limiting the
generality of the foregoing, the Executive shall be the Chairman, President
and Chief Executive Officer of the Company with general charge and
supervision of the affairs of the Company.
(b) Exclusivity. During the term of this Agreement, and except
for illness, incapacity, vacations in accordance with Article 7(e) hereof and
other reasonable absences, the Executive shall devote substantially all of
his business time, attention, skill and efforts exclusively to the business
and affairs of the Company and its subsidiaries and affiliates; provided,
however, that the Executive may engage in charitable, educational,
religious, civic and similar types of activities (all of which shall be deemed
to benefit the Company), speaking engagements, membership on the board
of directors of other organizations, and similar activities to the extent that
such activities do not inhibit or prohibit the performance of his duties
hereunder or inhibit or conflict in any material way with the business of
the Company, its subsidiaries and affiliates.
ARTICLE 6. COMPENSATION.
(a) Salary. For services rendered by the Executive during the
period beginning with the Effective Date and ending on June 30, 1996
("First Fiscal Year"), the Executive shall be paid an initial base salary at
an annual rate of $150,000 (the "Base Salary"), payable in such
installments and at such regular intervals (not less than equal monthly
installments) as are consistent with the normal payroll practices of the
Company with respect to its executive officers, subject to such withholding
for any Federal, State and local taxes. For periods subsequent to the First
Fiscal Year, the annual base salary shall be in such amounts, but never less
than the initial annual base salary, as shall be established by the Board of
Directors after first consulting with the Executive and taking into account
such factors as the Board of Directors and the Executive may deem
appropriate, including but not limited to, cost of living factors, increased
responsibility, the Executive's performance, profitability of the Company
and demands on the Executive's time to carry out his responsibilities. Any
increase in annual base salary may never be decreased thereafter.
(b) Signing Bonus. On the Effective Date, the Company shall
pay to the Executive a one-time bonus of $200,000 (net of any required
withholdings).
(c) Performance Bonus. In addition to the Base Salary provided
under Article 6(a), the Executive shall be entitled to a cash performance
bonus in respect of each fiscal year (excluding the First Fiscal Year)
during the term of this Agreement in the event that the Company meets or
exceeds certain performance criteria (the "Performance Targets") to be
mutually established through good faith negotiations between the Board of
Directors and the Executive no later than sixty (60) days immediately
preceding the commencement of the fiscal year for which such
performance criteria are being established (the "Target Year"). It is the
mutual intention of the parties that such bonus arrangements will provide
for a minimum bonus equal to the Executive's Base Salary as in effect at
the commencement of the Target Year in the event that the Company
meets the Performance Targets for the Target Year and that such
arrangements will provide for an increased bonus in the event that the
Company's performance materially exceeds the Performance Targets for
the Target Year. The Company's fiscal year currently is July 1 through
June 30 of the following year.
(d) Stock Option Grants. On the Effective Date, the Company
shall issue to the Executive initial stock options to purchase Common
Stock in the amounts and at the exercise prices and other conditions as set
forth in the Option Schedule 1 attached hereto and made a part hereof (the
"Options"). The Options shall expire ten (10) years from the date of grant
unless exercised prior thereto or earlier terminated in accordance with
Article 9 hereof. The Executive and the Company shall enter into a
mutually acceptable stock option agreement relating to the Options. The
Options shall vest as provided herein and shall not be transferable by the
Executive except pursuant to the laws of descent and distribution. Upon
receipt of not less than two business days' notice in connection with any
exercise of Options by the Executive, the Company shall provide the
Executive with an interest-free loan in an amount up to, but not exceeding,
the aggregate exercise price of the Options being exercised by the
Executive. The Executive shall use the proceeds of such loan solely for
the purpose of paying the aggregate exercise price of the Options being
exercised. Each such loan shall mature and be payable under the earliest
of (i) five years from the date of such loan, (ii) the date specified in
Article 9 following the termination of the Executive's employment, and
(iii) the sale by the Executive of the underlying Common Stock; provided,
however, that in the event that less than all of such shares of Common
Stock are sold by the Executive, the amount to be repaid by the Executive
shall be appropriately pro rated to reflect the number of shares actually
being sold. In no event shall the Company have any obligation to make
such loans to the Executive from and after the date notice is given, either
by the Executive or by the Company, that Executive's employment is
being terminated for any reason.
(e) Registration of Shares. In the event that any of the
Company's shares of stock or other equity shall be registered with the SEC
under either the Securities Act or the Exchange Act or any other similar
legislation, the shares of stock of the Company issued or to be issued to
the Executive pursuant to the Options and the shares of stock represented
by the Options shall be registered at no cost to the Executive.
(f) Adjustments upon Change in Capitalization. In the event
that the number of issued and outstanding shares of Common Stock is
increased, decreased, changed into or exchanged for a different number or
kind of shares or securities after the Effective Date through merger,
consolidation, combination, exchange of shares, other reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock
split, an appropriate and proportionate adjustment shall be made by the
Company in the number and kind of shares as to which any unexercised
Options are then exercisable. Any such adjustment shall be made without
change in the aggregate purchase price applicable to the unexercised
Options but with a corresponding adjustment in the price for each share or
other unit of any security covered thereby. In making any adjustment
pursuant to this Article 6(f), any fractional shares shall be disregarded.
ARTICLE 7. BENEFITS.
(a) Standard Executive Benefits Package. In addition to the
Base Salary, the Performance Bonus and the Options, the Executive will
be entitled to participate in any medical, life insurance, disability insurance
or retirement plans that may be provided by the Company from time to
time to its executive employees during the term of this Agreement as
recommended to the Board of Directors by the Executive and as approved
by the Board of Directors and subject to conditions with respect to vesting
of benefits under such plans, and subject to any provisions permitting
amendment or termination thereof.
(b) Key Man Insurance. The Executive agrees that if requested
by the Board of Directors, "Key Man" life insurance policy may be issued,
such policy covering the life of the Executive, the beneficiaries of which
shall be determined by the Board of Directors.
(c) Supplemental Life Insurance. The Company shall purchase
a policy insuring the life of the Executive in an amount of not less than
two million dollars ($2,000,000) at no cost to the Executive with the
beneficiary to be designated by the Executive and the policy to be owned
by the Executive, provided, however, that the cost of payment of premiums
toward such policy shall be treated as additional income to the Executive,
consistent with requirements of the Internal Revenue Code, and the
premiums therefor shall be paid by the Company. In the event that the
Executive is receiving severance benefits under this Agreement, the
Company shall continue to pay the premiums on such supplemental life
insurance. Such supplemental life insurance policy shall contain standard
clauses regarding waiver of premium in the event of disability of the
Executive and shall contain accidental death and dismemberment insurance
provisions coverage of three (3) times the amount of the primary insurance
in force and effect under such policy.
(d) Company Car. Recognizing the Executive's need for an
automobile for business purposes, the Executive shall be provided with an
automobile of the Executive's choice, including all related maintenance,
repairs, insurance and other costs including car telephone installation and
mobile telephone communication facilities subject to a monthly cap of
$1,000.
(e) Vacation. The Executive shall be entitled to vacation as
follows: for each of the calendar years 1996 and 1997, four (4) weeks
paid vacation and for each of the calendar years 1998, 1999 and thereafter,
five (5) weeks paid vacation.
(f) Annual Health Examination. The Company will provide
and pay for an annual comprehensive preventative health maintenance
examination for the Executive at a medical facility or facilities and by
doctors designated by the Executive.
ARTICLE 8. BUSINESS EXPENSES. During the term hereof, the
Executive shall be entitled to be reimbursed for all reasonable, customary
and ordinary expenses incurred by him in the course of his duties
hereunder subject to the Executive's presentation of appropriate vouchers
in accordance with such procedures as the Company may from time to
time establish for senior officers and to preserve any deductions for
Federal income taxation purposes to which the Company may be entitled.
ARTICLE 9. TERMINATION.
(a) In the event that during the term of this Agreement the
Company terminates the Executive's employment other than as a result of
the Executive's death, Permanent Disability or for "Good Cause" or the
Executive terminates his employment for "Good Reason", the Company
shall, as liquidated damages or severance pay, or both pay the Executive
an amount equal to $750,000 (net of any required withholdings) in
monthly installments over a period of twelve (12) months from the
effective date of such termination (the "Severance Period"). In such an
event, all of the Options outstanding and unexercised at the effective date
of termination (the "Termination Date") shall become immediately and
fully exercisable by the Executive at the Termination Date until the earlier
of (i) the scheduled expiration date of such Options or (ii) the end of the
two-year period immediately following the Termination Date and all loans
made to the Executive pursuant to Article 6(d) hereof shall become due
and payable no later than the end of such period. In addition, earned but
unpaid Base Salary as of the date of termination of employment shall be
payable in full. Group hospitalization, health and dental care insurance
shall continue through the end of the Severance Period. For purposes
hereof, any termination of the Executive's employment by the Company
shall be approved by a majority of the entire Board of Directors and shall
not be effective until 30 days after the Company has given notice of
termination to the Executive.
(b) In the event that during the term of this Agreement the
Company terminates the Executive's employment as a result of a
Permanent Disability, the Company shall, as liquidated damages or
severance pay, or both pay the Executive an amount equal to the Base
Salary as in effect at the time of such termination in monthly installments
over the Severance Period, such payments shall be offset by any amounts
otherwise paid to the Executive under the Company's disability program
generally available to other employees In such an event, all of the Options
which have not vested on or prior to the Termination Date shall be
forfeited and all vested Options shall be exercisable by the Executive or
his personal representative until the earlier of (i) the scheduled expiration
date of such options or (ii) the end of the one-year period immediately
following the Termination Date and all loans made to the Executive
pursuant to Article 6(d) hereof shall become due and payable no later than
the end of such period. In addition, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full and the
Executive shall be entitled to the bonus award he would have received
pursuant to Article 6(c) had he been employed throughout the year in
which such termination of employment occurs only. Group hospitalization,
health and dental care insurance shall continue through the end of the
Severance Period.
(c) In the event that the Executive's employment terminates due
to the death of the Executive, the Company shall, as liquidated damages
or severance pay, or both, pay to the person or persons designated by the
Executive (provided such designation complies with applicable law) an
amount equal to the Base Salary as in effect at the time of such
termination in monthly installments over the Severance Period. In such an
event, all of the Options which have not vested on or prior to the
Termination Date shall be forfeited and all vested Options shall be
exercisable by the Executive's personal representative until the earlier of
(i) the scheduled expiration date of such Options or (ii) the end of the one-
year period immediately following the Termination Date and all loans
made to the Executive pursuant to Article 6(d) hereof shall become due
and payable no later than the end of such period. In addition, earned but
unpaid Base Salary as of the date of termination of employment shall be
payable in full. However, notwithstanding the other provisions of this
Agreement, no other payments shall be made, or benefits provided, by the
Company under this Agreement except for benefits payable under the
Retirement Plan and benefits that he is already entitled to under the terms
of employee benefit programs maintained by the Company or its affiliates
for its employees and except as otherwise required by law.
(d) In the event that the Executive's employment terminates due
to a termination for Good Cause or the Executive terminates employment
with the Company for reasons other than Good Reason, Permanent
Disability or retirement pursuant to the Company's retirement plan (the
"Retirement Plan"), earned but unpaid Base Salary as of the date of
termination of employment shall be payable in full. In such an event, all
of the Options which have not vested on or prior to the Termination Date
shall be forfeited and all loans made to the Executive pursuant to Article
6(d) hereof shall become due and payable no later than the end of the
nine-month period immediately following the Termination Date. However,
notwithstanding the other provisions of this Agreement, no other payments
shall be made, or benefits provided, by the Company under this Agreement
except for benefits payable under the Retirement Plan and benefits that he
is already entitled to under the terms of employee benefit programs
maintained by the Company or its affiliates for its employees and except
as otherwise required by law.
(e) In the event that a Change in Control occurs during the term
of this Agreement, the Executive shall have the right, upon not less than
thirty (30) days' prior written notice to the Board of Directors, to terminate
his employment for any reason effective on or prior to the first anniversary
of the Change in Control. In the event that the Executive exercises such
right, the Company shall, as liquidated damages or severance pay, or both
pay the Executive an amount equal to $750,000 (net of any required
withholdings) in monthly installments over the Severance Period. In such
event, all of the Options outstanding and unexercised at the Termination
Date shall become immediately and fully exercisable by the Executive at
the Termination Date until the earlier of (i) the scheduled expiration date
of such Options or (ii) the end of the two-year period immediately
following the Termination Date and all loans made to the Executive
pursuant to Article 6(d) hereof shall become due and payable no later than
the end of such period. In addition, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full. However,
notwithstanding the other provisions of this Agreement, no other payments
shall be made, or benefits provided, by the Company under this Agreement
except for benefits that he is already entitled to under the terms of
employee benefit programs maintained by the Company or its affiliates for
its employees and except as otherwise required by law.
(f) For purposes of this Agreement, the following terms have
the following meanings:
(i) The term "Good Cause" shall mean (A) the
Executive's conviction of any felony or a misdemeanor involving fraud,
dishonesty or breach of trust, (B) the Executive's willful engagement in
gross misconduct in the performance of his duties, (C) a material breach
by the Executive of any representation or warranty of the Executive
contained herein, or (D) the Executive's continuing to be in material
breach of this Agreement for more than thirty (30) days after being
notified in writing by the Company of such breach provided the Company
has given such notice to the Executive within thirty (30) days of the Board
of Directors first becoming aware of the facts constituting such breach.
(ii) The term "Good Reason" shall mean (A) the
Company's continuing to be in material breach of this Agreement for more
than thirty (30) days after being notified in writing by the Executive of
such breach provided the Executive has given such notice to the Company
within thirty (30) days of the Executive first becoming aware of the facts
constituting such breach, or (B) any failure to elect or re-elect or to
appoint or reappoint the Executive to the office of Director, Chairman,
President and Chief Executive Officer.
(iii) The term "Permanent Disability" shall mean
the Executive, in the opinion of his attending physician, shall be rendered
incapable of complying with the terms, conditions and provisions on his
part of this Agreement by reason of or medically determined physical or
mental impairment that can be expected to result in death or that can be
expected to last for a continuous period of no less than twelve (12)
months.
(iv) A "Change in Control" of the Company shall
mean (A) any "person" (as such term is used in Section 13(d) and 14(d)
of the Exchange Act) (other than a person who, on the Effective Date and
after giving effect to the transactions contemplated by the Company
Materials, is the beneficial owner of 10% or more of the Common Stock,
together with their respective affiliates and accounts managed by the
foregoing) is or becomes the "beneficial owner" (as defined in Rule 13(d)-
3 under the Exchange Act) directly or indirectly of securities of the
Company representing more than fifty percent (50%) of the combined
voting power of the Company's voting securities; or (B) there is a merger
or consolidation of the Company in which the Company does not survive
as an independent public company; or (C) the sale by the Company of all
or substantially all of its assets in one transaction or a series of related
transactions; or (D) during any period of two (2) consecutive years during
the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute
at least a majority thereof, unless the election of each Director who is not
a Director at the beginning of such period has been approved in advance
by Directors representing at least a majority of the Directors then in office
who were Directors at the beginning of the period.
(g) Death and Severance Benefits. In the event of the death of
the Executive before or during the period that the Executive is entitled to
receive any severance benefits hereunder, the Executive's estate shall be
entitled to the unpaid balance of any severance benefits to which the
Executive is entitled hereunder. As a means of funding the obligation
under this Article, the Company may maintain at its own expense a term
policy insuring the life of the Executive.
ARTICLE 10. REIMBURSEMENT OF CERTAIN EXPENSES.
In the event that during the term of this Agreement the Company
terminates the Executive's employment other than as a result of the
Executive's death, Permanent Disability or for Good Cause or the
Executive terminates his employment for Good Reason or following a
Change in Control in accordance with the provisions of Article 9, the
Company shall, in addition to its other obligations hereunder, reimburse or
pay on the Executive's behalf, the reasonable out-of-pocket expenses
directly incurred by the Executive in effecting such termination (including,
but not limited to, the reasonable fees and disbursements of counsel,
accountants and other advisers retained by the Executive), subject to an
aggregate cap of $15,000, upon presentation by the Executive of
appropriate documentation of such expenses; provided, however, that if in
connection with any Change in Control or other termination of his
employment the Executive institutes proceedings to compel performance
by the Company of its obligations hereunder or to seek to obtain or
enforce any right or benefit provided by this Agreement and the Executive
substantially prevails on the merits in connection with such proceedings,
such cap shall not apply to the Executive's reasonable out-of-pocket
expenses (including, but not limited to, the reasonable fees and
disbursements of counsel, accountants and other advisers retained by the
Executive) incurred in connection therewith.
ARTICLE 11. NON-COMPETE OBLIGATION. Upon the
termination of the Executive's employment for any reason (other than a
termination by the Company without Good Cause or a termination by the
Executive for Good Reason), the Executive agrees that for a period of one
(1) year from the date of termination of his employment with the Company
he will not alone or as a member of a partnership, association or joint
venture or as a key employee, officer, director or stockholder of any
corporation or in any other capacity engage in any activity which is
competitive with the business of the Company as actively engaged in by
the Company at the time of termination by the Executive, provided that the
foregoing provision shall not be deemed to prohibit the Executive from
purchasing for investment any securities or interests in any publicly-owned
organization which is competitive with the business of the Company as
actively engaged in by the Company at the time of termination by the
Executive so long as his investment in any such organization does not
exceed two percent (2%) of its outstanding capital stock of any corporation
engaged in or controlling any such business having more than five hundred
(500) shareholders or does not exceed three percent (3%) of its outstanding
capital stock of any corporation engaged in controlling any such business
having less than five hundred (500) shareholders.
ARTICLE 12. SECRECY OBLIGATION. Without the express
prior written consent of the Company, the Executive shall not disclose or
use at any time other than on the Company's behalf, either during or
subsequent to his employment with the Company, any secret or
confidential information, knowledge or data of the Company. Upon
termination of his employment, the Executive shall turn over to the
Company all notes, memoranda, notebooks, drawings or other documents,
compiled by or delivered to him concerning any product, apparatus or
process manufactured, used or developed or investigated by the Company
during the period of his employment and which contains any secret or
confidential information. Notwithstanding the foregoing, nothing in this
Agreement shall prohibit or limit either the Executive's use of information
(including, but not limited to ideas, concepts, know-how, techniques and
methodologies): (i) previously known to him; (ii) independently developed
by him; (iii) acquired by him from a third party which is not to the
Executive's knowledge under an obligation to the Company not to disclose
such information; or (iv) which is or becomes publicly available through
no breach by the Executive of this Agreement.
ARTICLE 13. INDEMNIFICATION. On the Effective Date the
Company and the Executive shall enter into a mutually acceptable
Indemnity Agreement and the Company shall maintain such Indemnity
Agreement in full force and effect during the term of this Agreement.
ARTICLE 14. SUCCESSORS; BINDING AGREEMENT.
(a) The obligations of the Company and the Executive under
this Agreement shall survive the termination or expiration of the term of
this Agreement. This Agreement shall be binding upon and inure to the
benefits of the parties hereto and their respective successors, heirs, assigns
and personal representatives. In the event the Company wishes to engage
in (i) any merger or consolidation in which it is not the surviving entity
thereof, or (ii) any sale of all or substantially all of its assets to any third
party, the Company shall require as a condition thereof that the Company's
obligations hereunder be expressly assumed by such successor or purchaser
in writing.
ARTICLE 15. TAXES. The Company shall pay to the Executive
the amount of any excise taxes imposed on the Executive under
Section 4999 of the Internal Revenue Code as currently written or any
amendments thereto by reason of payments or benefits received by the
Executive under the other provisions of this Agreement.
ARTICLE 16. ARBITRATION. All disputes or controversies or
claims arising out of or relating to this Agreement, including, but not
limited to, a breach thereof or a refusal to perform the whole or part of
this Agreement or a refusal to submit any existing dispute or controversy
as to termination of this Agreement or termination of the employment of
the Executive hereunder shall be submitted to arbitration pursuant to the
revised statutes of New Jersey Section 2A:24-I et seq. and in accordance
with the following terms and conditions:
(a) Any arbitration proceedings shall be conducted in Newark,
New Jersey before three (3) arbitrators selected by the Executive and the
Company pursuant to the Employment Resolution Rules of Arbitration of
the American Arbitration Association;
(b) If either party elects to proceed to arbitration hereunder, that
party shall first have filed a demand for expedited arbitration, to be
conducted within thirty (30) days of the filing and shall have served a
written notice on the other party hereto by certified mail, demanding such
arbitration and specifying the facts and circumstances which are the basis
for its action, including the names of witnesses and copies of any
documents to be relied upon;
(c) The expense of the arbitration proceeding shall be shared
equally by the parties and each party shall bear its own legal expenses and
those of the witnesses to the hearing (subject to the provisions of Article
10 hereof) and provided, further, that if the Executive prevails on the
merits in such arbitration, the Company shall reimburse the Executive for
the Executive's arbitration expenses in connection with such arbitration
proceedings, including reasonable attorney's fees;
(d) At the request of either party all arbitration proceedings
shall be recorded by a Certified Court Reporter and each party shall have
the right in any such arbitration proceedings to full discovery and to
subpoena witnesses in accordance with the discovery rules and procedures
of the Courts of the State of New Jersey including discovery rules and
procedures of the United States District Court for the District of New
Jersey and each party hereto and the arbitrators shall have the right to avail
themselves of the benefits and shall observe the obligations under such
rules and procedures under the supervision of the arbitrators or a majority
of them and in accordance with the time frames and constraints set forth
by the arbitrators or a majority of them conducting the arbitration;
(e) The arbitrators' decision shall be issued within ten (10) days
of the close of the hearing, shall be in writing and shall contain findings
of fact, conclusions of law and the reasons for the arbitration decision and
shall be signed by all arbitrators or the majority decision shall be signed
by a majority of the arbitrators and the minority decision shall be signed
by the dissenting arbitrator;
(f) Judgment upon any award rendered may be entered in any
Court having appropriate jurisdiction and the parties hereto expressly
consent to having all such judicial proceedings occur in the Superior Court
of the State of New Jersey, Essex County;
(g) Such arbitration proceedings shall be subject to appeal to the
Superior Court of the State of New Jersey in Essex County and either
party to the arbitration shall be entitled to appeal on the basis of errors of
law or findings of fact that are not supported by the evidence and such
other grounds as may be appropriate for the appeal of the arbitration
decision, including failure to follow the procedures set forth in this Article.
ARTICLE 17. MISCELLANEOUS PROVISIONS.
(a) Entire Agreement. This Agreement constitutes the entire
Agreement between the parties in connection with the subject matter
hereof, and may be changed only by the written consent of the parties
hereto.
(b) Assignment. This Agreement may not be assigned by a
party hereto without the prior written consent of the other party; provided,
however, that the Company shall have the right to assign this Agreement
to any purchaser of all or substantially all of the Company's assets;
provided, that, such assignment shall not release the Company from its
obligations hereunder unless the Executive expressly agrees.
(c) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New
Jersey.
(d) Notices. Other than as specifically provided herein, all
notices required or permitted to be given under this Agreement shall either
be delivered personally or be given in writing and delivered by certified
mail, return receipt requested, to the Company's principal office to the
attention of the Secretary, or the Executive's home address as first set forth
hereinabove. Each such notice so mailed shall be deemed to have been
given seven (7) days after the date of mailing. Any notice given hereunder
shall state in reasonable detail the factual basis underlying such notice.
(e) Paragraph Headings. The paragraph headings contained in
this Agreement are for reference purposes only and shall not effect in any
way the meaning or interpretation of this Agreement.
(f) Waiver. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach by said party.
(g) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective as to
such jurisdiction to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, or affecting the
validity or enforceability of such provision in any other jurisdiction.
(h) Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and month and year first above written.
--------------------------------
Xxxxxxx X. Xxxxx, Executive
LOGIMETRICS, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxx
Director, on behalf of the Board of Directors
Exhibits to Employment Agreement
Exhibit A
Private Placement Memorandum
Exhibit B-1
Certificate of Incorporation of LogiMetrics, Inc.
Exhibit B-2
By-Laws of LogiMetrics, Inc.
Exhibit C
Shares, Warrants and Options Authorized, Issued and Outstanding
Persons to Whom Such are Issued
Terms and Conditions of Warrants and Options
Exhibit D
Insurance Binder
Option Schedule 1
Number of Exercise
Year Vested Options Price
----------- --------- --------
Immediate 125,000 $0.40
End of Fiscal Year 1996 125,000 $0.40
End of Fiscal Year 1997 125,000 $0.40
End of Fiscal Year 1998 125,000 $0.40
End of Fiscal Year 1999 250,000 $3.20
December 31, 1999 250,000 $4.00
-------
Total 1,000,000
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