EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1997 between CONOLOG CORPORATION
("Company"), a Delaware corporation having an office at 0 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 and XXXX X. XXXXX ("Executive"), residing at
___________________ , ___________________ ,_________________ .
W I T N E S S E T H:
1. Employment.
1.01 Term. Company hereby employs Executive, and Executive hereby accepts
employment with Company with the duties hereinafter set forth, for a period
commencing on June 1, 1997 and ending May 31, 2002 subject, however, to earlier
termination in accordance with the provisions of this Agreement. This Agreement
shall automatically renew on a year-to-year basis unless terminated by either
party hereto giving written notice to the other at least 90 days prior to May
31, 2002 or any May 31 thereafter.
2. Duties. Executive shall be Vice President of Company and shall perform
such duties as may from time to time be assigned to him by Company's President.
Executive agrees that, during the term of this Agreement, he will devote his
full time, skills and efforts to the performance of his duties hereunder and to
the furtherance of the interests of the business of Company.
3. Compensation and Related Matters.
3.01 Fixed Salary. As compensation for Executive's services Company shall
pay Executive a salary of $55,000 per annum for the period June 1, 1997 through
May 31, 1998, and an increase of $6,000 per annum for each twelve month period
thereafter (the "Fixed Salary") in equal monthly (or more frequent) installments
less appropriate payroll deductions as required by law. In addition to his Fixed
Salary, Executive shall receive, with respect to each full fiscal year during
the term hereof, commencing with the year ending July 31, 1998, an annual bonus
(the "Profit Bonus") equal to three percent (3%) of the Company's annual "Income
Before Income Tax Provision" as stated on the Company's Annual Report on Form
10-K. The Profit Bonus shall be payable within 120 days after the end of the
Company's fiscal year.
3.02 Expenses. Company shall pay or reimburse Executive for all reasonable
travel (including automobile), hotel, entertainment and other business expenses
incurred in the performance of Executive's duties upon submission of appropriate
vouchers and other supporting data.
3.03 Automobile. Executive shall retain exclusive use of the Company's
automobile now in his possession which Company shall replace every three years.
Company shall pay or reimburse Executive for all insurance, gasoline,
maintenance and repair and other expenses incurred in use of the automobile upon
submission of appropriate invoices, vouchers, receipts and other supporting
data.
3.04 Benefits. Executive shall be entitled to (i) participate in all
general pension, profit-sharing, life, medical, disability and other insurance
and executive benefit plans at any time in effect for executives of Company,
provided, however, that nothing herein shall obligate Company to establish or
maintain any executive benefit plan, whether of the type referred to in this
clause (i) or otherwise, and (ii) three (3) weeks vacation during each
twelve-month period of employment at mutually agreeable times.
4. Termination for Cause; Disability; Death; Change of Control.
4.01 For Cause. Company shall have the right to terminate the employment of
Executive hereunder at any time for cause upon written notice. For purposes of
the preceding sentence "for cause" shall mean and be limited to the occurrence
of any of the following acts or events by or relating to Executive: (i) any
material breach of any obligations of Executive under this Agreement which
remains uncured for more than twenty (20) days after written notice thereof by
Company to Executive; (ii) habitual insobriety of Executive while performing his
duties hereunder; (iii) theft or embezzlement from Company or any other material
acts of dishonesty; (iv) repeated insubordination respecting reasonable orders
or directions of Company's Board of Directors, which remains uncured for more
than twenty (20) days after written notice thereof by Company to Executive; or
(v) conviction of a crime (other than traffic violations and minor
misdemeanors). In the event of termination for cause, Executive's Fixed Salary
and Profit Bonus shall terminate as of the effective date of termination of
employment after written notice thereof.
4.02 Without Cause. In the event that during the term hereof, Company
discharges Executive without cause or in the event Company discharges Executive
on written notice under Section 4.01 within six months after a Change of Control
(as that term is hereinafter defined), Executive shall be entitled to receive a
payment equal to 2.99 times Executive's average annual compensation paid by
Company (including Profit Bonus, if any) during the term of this Agreement (the
"Severance Payment"). The Severance Payment shall be immediately due and payable
to Executive in one payment.
4.03 Disability. If Executive, by reason of illness, mental or physical
incapacity (as determined by a physician) or other disability, is unable to
perform his regular duties
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hereunder for any consecutive period of 90 days or more from its commencement or
for non-consecutive periods aggregating 120 days in any consecutive twelve-month
period, then, in either such event, Company may terminate this Agreement at any
time thereafter upon ten days' written notice to Executive. Any payments to
Executive under any disability insurance or plan maintained by Company shall be
applied against and shall reduce the amount of the salary payable by Company
under this Agreement.
4.04 Death. In the event of Executive's death, this Agreement shall
terminate effective as of the date of death.
4.05 Payment. Subject to the provisions of Section 4.02 and 4.05, in the
event of termination of this Agreement under this Section 4, Executive's Fixed
Salary shall cease as of the date of termination and his Profit Bonus shall be
prorated by multiplying by a fraction the numerator of which is equal to the
number of days in the year prior to termination and the denominator of which is
365.
4.06 Change of Control. If during the term of this Agreement there shall
occur a Change of Control, Executive may, during the six month period following
such Change of Control, voluntarily terminate his employment and such
termination shall, for purposes of all payments and benefits to be provided to
Executive under this Agreement, be treated as a termination without cause. As
used in this Agreement, a Change of Control shall be deemed to have occurred on
the first day on which a majority of the Directors of the Company do not consist
of individuals recommended by Company's current President, Xxxxxx X. Xxxxx.
5. Confidential Information; Non-Competition.
5.01 Confidential Information. Executive shall not, at any time during or
following termination or expiration of the term of this Agreement, directly or
indirectly, disclose, publish or divulge to any person (except in the regular
course of Company's business), or appropriate, use or cause, permit or induce
any person to appropriate or use, any proprietary, secret or confidential
information of Company including, without limitation, knowledge or information
relating to its trade secrets, business methods, the names or requirements of
its customers or clients or the terms of any agreement between the Company and
third parties, all of which Executive agrees are and will be of great value to
Company and shall at all times be kept confidential. Upon termination or
expiration of this Agreement, Executive shall promptly deliver or return to
Company all materials of a proprietary, secret or confidential nature relating
to Company together with any other property of Company which may have
theretofore been delivered to or may then be in possession of Executive.
5.02 Non-Competition. During the term of this Agreement and for a period of
six months after the sooner of the
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expiration date of this Agreement or the date when Executive ceases to be
employed by Company, Executive shall not either directly or indirectly, engage,
hire, employ, or induce or encourage to leave employment any employee of the
Company. Anything contained herein to the contrary notwithstanding, in the event
Executive's employment is terminated for cause by Company pursuant to Section
4.01, or in the event Executive shall terminate his employment in breach of this
Agreement, Executive shall not, within the boundary of the United States,
without the prior written consent of Company in each instance, directly or
indirectly, in any manner or capacity, whether for himself or any other person
and whether as proprietor, principal, owner, shareholder, partner, investor,
director, officer, executive, representative, distributor, consultant,
independent contractor or otherwise, engage or have any interest in any entity
which at any time during such term or such one year period is engaged in the
business of providing products and services similar to those provided by
Company.
5.03 Reasonableness. Executive agrees that each of the provisions of this
Section 5 is reasonable and necessary for the protection of Company; that each
such provision is and is intended to be divisible; that if any such provision
(including any sentence, clause or part) shall be held contrary to law or
invalid or unenforceable in any respect in any jurisdiction, or as to any one or
more periods of time, areas or business activities, or any part thereof, the
remaining provisions shall not be affected but shall remain in full force and
effect as to the other and remaining parts; and that any invalid or
unenforceable provision shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited to the extent necessary to
render the same valid and enforceable in such jurisdiction. Executive further
recognizes and agrees that any violation of any of his agreements in this
Section 5 would cause such damage or injury to Company as would be irreparable
and the exact amount of which would be impossible to ascertain and that, for
such reason, among others, Company shall be entitled, as a matter of course, to
injunctive relief from any court of competent jurisdiction restraining any
further violation. Such right to injunctive relief shall be cumulative and in
addition to, and not in limitation of, all other rights and remedies which
Company may possess.
5.04 Survival. The provisions of this Section 5 shall survive the
expiration or termination of this Agreement for any reason.
6. Miscellaneous.
6.01 Notices. All notices under this Agreement shall be in writing and
shall be deemed to have been duly given if personally delivered against receipt
or if mailed by first class registered or certified mail, return receipt
requested, addressed to Company and to Executive at their respective addresses
set forth on the first page of this Agreement, or to such other
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person or address as may be designated by like notice hereunder. Any such notice
shall be deemed to have been given on the day delivered, if personally
delivered, or on the third day after the date of mailing if mailed.
6.02 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and, in the case of Company, assigns,
but no other person shall acquire or have any rights under or by virtue of this
Agreement, and the obligations of Executive under this Agreement may not be
assigned or delegated.
6.03 Governing Law; Severability. This Agreement shall be governed by and
construed and enforced in accordance with the laws and decisions of the State of
New York applicable to contracts made and to be performed therein without giving
effect to the principles of conflict of laws. In addition to the provisions of
5.03 above, the invalidity or unenforceability of any other provision of this
Agreement, or the application thereof to any person or circumstance, in any
jurisdiction shall in no way impair, affect or prejudice the balance of this
Agreement, which shall remain in full force and effect, or the application
thereof to other persons and circumstances.
6.04 Entire Agreement; Modification; Waiver; Interpretation. This Agreement
contains the entire agreement and understanding between the parties with respect
to the subject matter hereof and supersedes all prior negotiations and oral
understandings, if any. Neither this Agreement nor any of its provisions may be
modified, amended, waived, discharged or terminated, in whole or in part, except
in writing signed by the party to be charged. No waiver of any such provision or
any breach of or default under this Agreement shall be deemed or shall
constitute a waiver of any other provision, breach or default. All pronouns and
words used in this Agreement shall be read in the appropriate number and gender,
the masculine, feminine and neuter shall be interpreted interchangeably and the
singular shall include the plural and vice versa, as the circumstances may
require.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
CONOLOG CORPORATION
By____________________________________
Xxxxx X. Xxxxxx,
Executive Vice President
______________________________________
Xxxx X. Xxxxx
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