EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 1st day of May, 1997 by and between TII
INDUSTRIES, INC., a Delaware corporation, having a place of business at 0000
Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter designated and referred to
as "Company"), and Xxxx X. Xxxxxxx residing at 00 Xxxxxxxx Xxxxxx, Xxx Xxxxx, XX
00000 (hereinafter designated and referred to as "Employee" or ["him"] ["her"]).
WHEREAS, Company desires to continue to employ the Employee as Vice
President, Finance of the Company; and
WHEREAS, the Employee is willing to continue such employment by the
Company, all in accordance with provisions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three
(3) years commencing May 1, 1997 and automatically terminating on April 30,
2000, subject to earlier termination as provided herein or unless extended by
mutual consent of both parties in writing sixty (60) days prior to the end of
the term of this Agreement or any extension thereof, but nothing herein shall
require the Company or Employee to agree to any specific term or condition or to
any continuation of Employee's employment beyond the end of the term of this
Agreement.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee for and
during the term of this Agreement. Employee is hereby employed by the Company as
Vice President, Finance. The Employee does hereby accept such employment and
agrees to use [his] [her] best efforts and to devote all normal
business time, during the term of this Agreement, to the performance of [his]
[her] duties faithfully, diligently and to the best of [his] [her] abilities
upon the conditions hereinafter set forth. Employee shall report to the
President or his designee. Employee's primary place of work shall be on Long
Island, New York and Employee agrees to spend such time, from time to time, at
the Company's other facilities and to visit customers, and vendors, and various
industry associations as required to fulfill [his] [her] duties and
responsibilities as contemplated herein.
3. Compensation: During the term of this Agreement, the Company
agrees to pay Employee, and Employee agrees to accept, annual salary of One
Hundred, Ten Thousand dollars ($110,000.00) payable every two weeks, less all
applicable taxes, for all services rendered by Employee hereunder. Employee's
annual salary shall be reviewed at the end of each year of employment hereunder
and shall receive an increase of up to 10% per year but not less than the
percentage of increase of the Local Component of the National Consumer Index
issued by the United States Department of Labor unless financial factors of the
Company deem otherwise as determined by the President. In addition, Employee
shall be eligible to participate in the Company's Executive Bonus Plan should
the Company adopt one.
4. Expenses:
[A] The Company shall reimburse Employee, not less often than
monthly, for all reasonable and actual business expenses incurred by [him] [her]
in connection with [his] [her] service to the Company, upon submission of
appropriate vouchers and expense account reports.
[B] The Company shall provide the Employee with an allowance to
reimburse him for the cost of maintaining a place of abode in the Commonwealth
of Puerto Rico, in the amount of Six Thousand Dollars ($6,000.00) per year.
Company acknowledges that Employee is a resident of
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the State of New York and that Employee shall not be required to change his
residence. Company and Employee both acknowledge that the discharge of the
Employee's duties will require his presence in the Commonwealth of Puerto Rico
from time to time.
5. Company Car: The Company shall provide Employee with a Company
car for Employee's use for business purposes in accordance with standard Company
guidelines. This car shall be insured and registered with the Motor Vehicle
Department by the Company. Employee is responsible for proper maintenance,
gasoline, traffic violation fines, etc. Repairs for other than routine
maintenance shall be the responsibility of the Company.
6. Benefits: The Company shall provide medical and dental insurance
and such other benefits, in accordance with the applicable Company benefit
plans, as such plans may exist from time to time. The Employee shall be entitled
to annual vacation in accordance with the Company's policy.
7. Extent of Service: The Employee during the term of this
Agreement shall devote [his] [her] full normal business time, attention and
energy and render [his] [her] best efforts and skill to the business of the
Company.
8. Restrictive Covenant:
[A] Employee acknowledges that: (I) the business in which the
Company is engaged is intensely competitive and that [his] [her] employment by
the Company will require that [she] [he] have access to and knowledge of
confidential information of the Company, including , but not limited to, certain
of the Company's confidential plans for the creation, acquisition or disposition
of products, expansion plans, product development plans, methods of pricing,
special customer requirements for service, information on methods of servicing
the customer, operational information such as formulas, financial status, and
plans and personnel information, which are of vital importance
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to the success of the Company's business, and are "trade secrets" of the
Company; (ii) the direct or indirect disclosure of any such confidential
information to existing or potential competitors of the Company would place the
Company at a competitive disadvantage and would cause damage, financial and
otherwise, to the Company's business; and (iii) by [his] [her] training,
experience and expertise, some of [his] [her] services to the Company will be
special and unique.
Employee understands and agrees that such trade secrets give or
may give the Company a significant competitive advantage. Employee further
recognizes that the success of the Company depends on keeping confidential both
the trade secrets already developed or to be acquired and any future
developments of trade secrets. Employee understands that in [his] [her] capacity
with the Company [he] [she] will be entrusted with knowledge of such trade
secrets and, in recognition of the importance thereof and in consideration of
[his] [her] employment by the Company hereunder, agrees that [he] [she] will
not, without the consent of the President in writing, make any disclosure of
trade secrets now or hereafter possessed by the Company to any person,
partnership, corporation or entity either during or after the term hereunder,
except to such employees of the Company or its subsidiaries or affiliates, if
any, as may be necessary in the regular course of business and except as may be
required pursuant to any court order, judgment or decision form any court of
competent jurisdiction. The provisions of this Section 8[A] shall continue in
full force and effect notwithstanding any termination of this Agreement.
[B] Employee agrees that during the term of [his] [her]
employment with the Company and for a period of two years thereafter [he] [she]
will not directly or indirectly become affiliated as an officer, director,
employee or consultant or as a substantial security holder with any other
company or entity whose business is directly or indirectly competitive with any
business then
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being planned or conducted by the Company or its divisions and subsidiaries. For
the purpose hereof, "substantial security holder" shall mean ownership, directly
or indirectly, of more than 3% of any class of securities of a company or
partnership interest in any partnership or indebtedness of any such entity in
excess of $25,000. The provisions of this Section 8[B] shall continue in full
force and effect notwithstanding any termination of this Agreement.
9. Discoveries, etc.:
[A] The Company shall be the owner, without further
compensation, of all rights of every kind in and with respect to any reports,
materials, inventions, processes, discoveries, improvements, modifications,
know-how or trade secrets hereafter made, prepared, invented, discovered,
acquired, suggested or reduced to practice (hereinafter designated and referred
to as "Property Rights") by Employee in connection with Employee's performance
of [his] [her] duties pursuant to this Agreement, and the Company shall be
entitled to utilize and dispose of such in such manner as it may determine.
[B] The Employee agrees to and shall promptly disclose to the
President or his designee all Property Rights (whether or not patentable) made,
discovered or conceived of by [him] [her], alone or with others, at any time
during [his] [her] employment with the Company, whether on the Company's or
[his] [her] own time and irrespective of whether on or off the Company's
premises, provided only that such Property Rights (1) relate to or are useful in
any phase of the business in which the Company may be engaged during the period
of employment, or (2) relate to any subject matter or problems within the scope
of Employee's employment, or (3) relate to or involve the use of any data or
information of which the Employee has been or may become informed by reason of
employment with the Company. The Employee hereby appoints the Company as
Employee's
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attorney-in-fact to execute in accordance with the laws of any country patent
applications, assignments or other documents considered necessary or desirable
by the Company. Any such Property Rights will be the sole and exclusive property
of the Company, and Employee will execute any assignments requested by the
Company of [his] [her] right, title or interest in any such Property Rights
without further demand or consideration, and, in addition, the Employee will
also provide the Company with any other instruments or documents requested by
the Company, at the Company's expense, as may be necessary or desirable in
applying for and obtaining patents with respect thereto in the United States and
all foreign countries. The Employee also agrees to cooperate with the Company in
the prosecution or defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, service marks, secret
processes, discoveries or improvements, during [his] [her] employment by the
Company. Employee's cooperation after [his] [her] employment is subject to [his]
[her] availability and the Company agrees to reimburse Employee for loss of
income and expenses incurred in connection therewith. Said cooperation shall not
be withheld by Employee.
10. Confidential Information: Employee recognizes and acknowledges
that the Company, through the expenditure of considerable time and money, will
acquire, has developed and will continue to develop in the future, information,
skills, confidential information, know-how, formulae, technical expertise and
methods relating to or forming part of the Company's services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade secrets" of the Company. Employee understands and agrees that such
trade secrets give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on keeping
confidential both the trade secrets already developed or to be acquired
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and any future developments of trade secrets. Employee understands that in [his]
[her] capacity with the Company [he] [she] will be entrusted with knowledge of
such trade secrets and, in recognition of the importance thereof and in
consideration of [his] [her] employment by the Company hereunder, agrees that
[he] [she] will not, without the consent of the President in writing, make any
disclosure of trade secrets now or hereafter possessed by the Company to any
person, partnership, corporation or entity either during or after the term
hereunder, except to such employees of the Company or its subsidiaries or
affiliates, if any, as may be necessary in the regular course of business and
except as may be required pursuant to any court order, judgment or decision from
any court of competent jurisdiction. The provisions of this Section shall
continue in full force and effect notwithstanding any termination of the
Agreement.
11. Irreparable Harm: Employee agrees that any breach or threatened
breach by Employee of provisions set forth in Section Eight (8), Nine (9), and
Ten (10) of this Agreement, would cause the Company irreparable harm and the
Company may obtain injunctive relief against such actual or threatened conduct
and without the necessity of a bond.
12. Return of Company Property: Employee agrees that following the
termination of [his] [her] employment for any reason, [he] [she] shall return
all property of the Company which is then in or thereafter comes into [his]
[her] possession, including, but not limited to, documents, contracts,
agreements, plans, photographs, customer lists, books, notes, electronically
stored data and all copies of the foregoing as well as any other materials or
equipment supplied by the Company to the Employee.
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13. Termination:
[A] Death: In the event of the Employee's death during the term
of [his] [her] employment, this Agreement shall automatically terminate on the
date of death, and Employee's estate shall be entitled to payment of Employee's
salary until date of death. All other benefits and compensation described herein
shall terminate on the date of death unless otherwise stipulated in the
applicable Company plan.
[B] Disability: In the event the Employee, by reason of physical
or mental incapacity, shall be disabled for a period of at least two (2)
consecutive months or three (3) months in the aggregate in any twelve (12) month
period of this Agreement or any extension hereof, the Company shall have the
option at any time thereafter to terminate Employee's employment and to
terminate this Agreement. Such termination to be effective ten (10) days after
the Company gives written notice of such termination to the Employee, and all
obligations of the Company hereunder shall cease upon the date of such
termination unless otherwise stipulated in the appropriate Company plan.
"Incapacity" as used herein shall mean the inability of the Employee to perform
[his] [her] normal duties.
[C] Company's Rights to Terminate This Agreement:
[a] The Company shall have the right, before the
expiration of the term of this Agreement and during any extension hereof, to
terminate this Agreement and to discharge Employee for cause (hereinafter
"Cause"), and all compensation to Employee shall cease to accrue upon discharge
of the Employee for Cause. For the purposes of this Agreement, the term "Cause"
shall mean the Employee's (I) violation of the Company's written policy or
specific written directions of the President or his designee, and/or Board of
Directors, which directions are consistent with
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normally acceptable business practices or the failure to observe, or the failure
or refusal to perform any obligations required to be performed in accordance
with this Agreement, (ii) if the President determines that Employee has
committed a demonstrable act (or omission) of malfeasance seriously detrimental
to the Company (which shall not include any exercise of business judgment in
good faith).
[b] If the Company elects to terminate Employee's
employment for Cause, the Company shall first give Employee written notice and a
period of ten (10) days to cure such Cause, and if such Cause is not cured in
said ten (10 ) days, such termination shall be effective five (5) days after the
Company gives written notice of such failure to cure to the Employee. In the
event of a termination of the Employee's employment for Cause in accordance with
the provisions of Section 11[C][b], the Company shall have no further obligation
to the Employee, except for the payment of salary through the date of such
termination from employment.
[c] Notwithstanding anything in this Agreement to the
contrary, the Company may terminate the Employee's employment for reasons other
than Cause.
[D] Employee's Right to Terminate This Agreement:
[a] If the Company elects to reduce in rank or authority
the Employee's duties under this Agreement, without the mutual agreement of the
Employee, the Employee shall first give Company written notice and a period of
ten (10) days to cure same, and if same is not cured in said ten (10) days
Employee may terminate this Agreement effective five (5) days after the Employee
gives written notice of such failure to cure.
[E] Severance: In the event the Employee's employment hereunder
shall be terminated by the Company for other than Cause, death or disability, or
by the Employee pursuant to Section 13 [D] hereof, (1) the Employee shall
thereupon receive as severance pay in a lump sum
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the amount of Compensation pursuant to Section 3 hereof and bonuses which the
Employee would have received for the remaining term of this Agreement (including
any extension of the Agreement mutually agreed upon by the parties), provided,
however, that in no event shall such lump sum payment be less than six months
compensation and bonus; and (2) the Employee's (and [his] [her]) dependents')
participation in any medical, dental and other insurance plans shall be
continued, or equivalent benefits provided to [him] [her] or them by the
Company, at no cost to [him] [her] or them, for a period of one year from the
termination; and (3) any options granted to the Employee which have not, by the
terms of the options, vested, shall be deemed to have vested at the termination
of employment, and shall thereafter be exercisable for the maximum period of
time allowed for exercise thereof under the terms of the applicable Company
stock option plan(s), provided that such period shall not be less than 90 days
following such termination. An election by the Employee to terminate [his] [her]
employment under the provisions of Section 13[D] shall not be deemed a voluntary
termination of employment of the Employee for the purpose of interrupting the
provisions of any of the Company's employee benefits plans, programs or
policies.
14. Waiver: Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without reference to its choice
of law rules.
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16. Notice: Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and by facsimile or registered
or certified mail or equivalent (i.e., Federal Express) and mailed to the
following addresses:
Company: TII Industries, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
President
Employee: Xxxx X. Xxxxxxx
00 Xxxxxxxx Xxx.
Xxx Xxxxx, XX 00000
17. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be assignable and binding to a corporation or other business
entity that succeeds to all or substantially all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of the Company and which assumes Company's
obligations under this Agreement.
18. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
19. Obligations of a Continuing Nature: It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed on either party hereunder, which are stated to exist or continue after
termination of Employee's employment with the Company, shall
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exist and continue on both parties irrespective of the method or circumstances
of such termination from employment or termination of this Agreement.
20. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate nay others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
21. Representation: Employee represents and warrants that [he] [she]
has the legal right to enter into this Agreement and to perform all of the
duties and obligations on [his] [her] part to be performed hereunder in
accordance with its terms and that [she] [he] is not a party to any agreement or
understanding, written or oral, which prevents Employee from entering into this
Agreement or performing all of [his] [her] duties and obligations hereunder. In
the event of a breach of such representation or warranty on [his] [her] part or
if there is any other legal impediment which prevents [him] [her] from entering
into this Agreement or performing all of [his] [her] duties and obligations
hereunder, the Company shall have the right to terminate this Agreement in
accordance with Section 13[C] [a]. Without limiting the foregoing, Employee
represents and warrants that [he] [she] is not a party to any agreement which
prohibits or limits [his] [her] ability to fulfill [his] [her] duties and
responsibilities contemplated herein.
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22. Descriptive Headings: The paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
TII INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
President, CEO and
Vice Chairman of the Board
Employee:
/s/ Xxxx X. Xxxxxxx
--------------------------------
Xxxx X. Xxxxxxx
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