Exhibit 10.27
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of December 15, 1997, is by and
between Xxxxxxxxx X. Xxxxxxx (the "Employee") and CVC, Inc., a Delaware
corporation (the "Company").
The Company and the Employee hereby agree as follows:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment by the Company, upon the terms and conditions
hereinafter set forth.
2. Term. Subject to the provisions for earlier termination as
herein provided, the employment of the Employee hereunder will be for the period
commencing on the date hereof and ending on the third anniversary of such date.
Effective on the first anniversary of the date hereof and on each successive
anniversary date thereafter, the term shall automatically be extended by an
additional one year unless, no later than 90 days prior to any such anniversary
date, either the Company or the Employee gives written notice to the other that
the term will not be extended, in which case the Employee's employment hereunder
shall terminate upon the expiration of the then-current-term. The period of the
Employee's employment under this Agreement, as it may be terminated or extended
from time to time as provided herein, is referred to hereafter as the
"Employment Period."
3. Duties and Responsibilities. The Employee will be employed by
the Company in the position set forth on Annex A, a copy of which is attached
hereto and the terms of which are incorporated herein by reference. The
Employee will faithfully perform the duties and responsibilities of such office,
as they may be assigned from time to time by the Board of Directors of the
Company (the "Board") or the Board's designee, as specified on Annex A.
4. Time to be Devoted to Employment. Except for vacation in
accordance with the Company's policy in effect from time to time and absences
due to temporary illness, the Employee shall devote full time, attention and
energy during the Employment Period to the business of the Company. During the
Employment Period, the Employee will not be engaged in any other business
activity which, in the reasonable judgment of the Board or its designee,
conflicts with the duties of the Employee hereunder, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
5. Compensation; Reimbursement.
(a) Base Salary. The Company will pay to the Employee an annual base
salary of not less than the amount specified as the Initial Base Salary on Annex
A, payable in accordance with the Company's normal payroll policy. The
Employee's base salary shall be reviewed annually by the Compensation Committee
of the Board (the "Committee") and shall be subject to increase at the option
and sole discretion of the Committee.
(b) Bonus. The Employee shall be eligible to receive, at the sole
discretion of the Committee, an annual cash bonus based on pre-determined
performance standards of the Company, such as under the Company's Performance
Incentive Program as in effect on the date hereof.
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(c) Benefits; Stock Options. In addition to the salary and cash
bonus referred to above, the Employee shall be entitled during the Employment
Period to participate in such employee benefit plans or programs of the Company,
and shall be entitled to such other fringe benefits, as are from time to time
made available by the Company generally to employees of the Employee's position,
tenure, salary, and other qualifications. Without limiting the generality of
the foregoing, the Employee shall be eligible for such awards, if any, under the
Company's stock option plan as shall be granted to the Employee by the Committee
or other appropriate designee of the Board acting in its sole discretion.
Except to the extent provided in the next paragraph, the Employee acknowledges
and agrees that the Company does not guarantee the adoption or continuance of
any particular employee benefit plan or program or other fringe benefit during
the Employment Period, and participation by the Employee in any such plan or
program shall be subject to the rules and regulations applicable thereto.
(d) Expenses. The Company will reimburse the Employee, in accordance
with the practices in effect from time to time for other officers or staff
personnel of the Company, for all reasonable and necessary traveling expenses
and other disbursements incurred by the Employee for or on behalf of the Company
in the performance of the Employee's duties hereunder, upon presentation by the
Employee to the Company of appropriate vouchers or documentation.
6. Death; Disability. If the Employee dies or is incapacitated or
disabled by accident, sickness or otherwise, so as to render the Employee
mentally or physically incapable of performing the services required to be
performed by the Employee under this Agreement for a period that would entitle
the Employee to qualify for long-term
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disability benefits under the Company's then-current long-term disability
insurance program or, in the absence of such a program, for a period of 90
consecutive days or longer (such condition being herein referred to as a
"Disability"), then (i) in the case of the Employee's death, the Employee's
employment shall be deemed to terminate on the date of the Employee's death or
(ii) in the case of a Disability, the Company, at its option, may terminate the
employment of the Employee under this Agreement immediately upon giving the
Employee notice to that effect. Disability shall be determined by the Board or
the Board's designee. In the case of a Disability, until the Company shall have
terminated the Employee's employment hereunder in accordance with the foregoing,
the Employee shall be entitled to receive compensation provided for herein
notwithstanding any such physical or mental disability.
7. Termination For Cause. The Company may, with the approval of a
majority of the Board, terminate the employment of the Employee hereunder at any
time during the Employment Period for "cause" (such termination being
hereinafter called a "Termination for Cause") by giving the Employee notice of
such termination, upon the giving of which such termination will take effect
immediately. For purposes of this Agreement, "cause" means (i) the Employee's
willful and substantial misconduct, (ii) the Employee's repeated, after written
notice from the Company, neglect of duties or failure to act which can
reasonably be expected to affect materially and adversely the business or
affairs of the Company or any subsidiary or affiliate thereof, (iii) the
Employee's material breach of any of the agreements contained in Sections 12 or
13 hereof, (iv) the commission by the Employee of any material fraudulent act
with respect to the business and affairs of
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the Company or any subsidiary or affiliate thereof or (v) the Employee's
conviction of (or plea of nolo contendere to) a crime constituting a felony.
8. Termination Without Cause. The Company may terminate the
employment of the Employee hereunder at any time without "cause" (such
termination being hereinafter called a "Termination Without Cause") by giving
the Employee notice of such termination, upon the giving of which such
termination will take effect on the date specified on such notice which shall
not be later than 30 days from the date such notice is given.
9. Voluntary Termination. Any termination of the employment of the
Employee hereunder, otherwise than as a result of death or Disability, a
Termination For Cause, a Termination Without Cause or a termination for Good
Reason (as defined below) following a Change in Control (as defined below), will
be deemed to be a "Voluntary Termination." A Voluntary Termination will be
deemed to be effective immediately upon such termination or, at the Company's
option, up to 30 days following a notice of voluntary termination given by the
Employee.
10. Effect of Termination of Employment.
(a) Rights upon Termination. Upon the termination of the Employee's
employment hereunder, neither the Employee nor the Employee's beneficiaries or
estate will have any further rights or claims against the Company under this
Agreement except the right to receive (i) the unpaid portion of the base salary
provided for in Section 5(a) hereof, computed on a pro rata basis to the date of
termination, (ii) payment of his previously accrued but unpaid rights that are
then payable in accordance with the terms of any incentive compensation, stock
option, retirement, employee welfare or other employee
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benefit plans or programs of the Company in which the Executive is then
participating in accordance with Sections 5(b) and 5(c) hereof and (iii)
reimbursement for any expenses for which the Employee shall not have theretofore
been reimbursed as provided in Section 5(d) hereof.
(b) Forfeiture of Rights. In the event that, subsequent to
termination of employment hereunder, the Employee (i) breaches any of the
provisions of Section 12 or 13 hereof or (ii) directly or indirectly makes or
facilitates the making of any adverse public statements or disclosures with
respect to the business or securities of the Company, all payments and benefits
to which the Employee may otherwise have been entitled pursuant to Section 10(a)
hereof shall immediately terminate and be forfeited, and any portion of such
amounts as may have been paid to the Employee shall forthwith be returned to the
Company.
11. Change in Control Provisions.
(a) Effect of Change in Control. In the event of a Change in Control
during the Employment Period, all options held by the Employee to purchase
shares of the Company's stock that are not then vested and exercisable in
accordance with the terms of such options or the terms of any Company stock
option plan shall become immediately and fully vested and exercisable as of the
effective date of the Change in Control; provided, however, that no such vesting
shall occur if provision has been made in writing in connection with such
transaction for (a) the continuation of such plan and/or the assumption of such
options by a successor corporation (or a parent or subsidiary thereof) or (b)
the substitution for such options of new options covering the stock of a
successor corporation (or a parent or subsidiary thereof), with appropriate
adjustments as to the number and kinds
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of shares and exercise prices. In the event of any such continuation,
assumption or substitution, such plan and/or such options shall continue in the
manner and under the terms so provided.
(b) Effect of Termination Following Change in Control. In the event
of a Change in Control and a subsequent termination of the Employee's employment
during the Employment Period, either by the Company as a Termination Without
Cause or by the Employee for Good Reason (as defined below), (i) the Employee
shall be entitled to receive the same payments and other rights as provided for
in Sections 10(a) hereof, (ii) the Employee shall be entitled to receive a
severance payment in the form a cash lump sum, paid within 15 days of the date
of termination, with the amount of such payment to be the aggregate amount of
the Employee's base salary as in effect immediately prior to such termination
payable over the period of months specified in Annex A, but discounted to
present value from the dates such payments would otherwise be made to the
Employee, based on the 100% short-term Applicable Federal Rate (compounded
annually) under Section 1274(d) of the Internal Revenue Code as in effect at the
time of payment, (iii) if such termination occurred within 12 months following
the effective date of a Change in Control, any options held by the Employee as
of such effective date to purchase shares of the Company's stock that were not
vested and exercisable as of such date of termination shall become immediately
and fully vested and exercisable as of such date of termination and (iv) the
Employee shall retain the right to exercise any options to purchase shares of
the Company's stock until the earlier of (a) 12 months following the date of
such termination or (b) the expiration of the original full term of each such
option.
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(c) Definition of Change in Control. For purposes of this Agreement,
a "Change in Control" shall be deemed to have occurred upon:
(i) an acquisition subsequent to the date hereof by any person,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either (A) the then
outstanding shares of common stock of the Company ("Common Stock") or (B)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company,
(2) any acquisition by the Company and (3) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company;
(ii) a change in the composition of the Board such that during any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company
to effect a transaction described in clause (i), (iii) or (iv) of this
paragraph) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds 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
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approved, cease for any reason to constitute at least a majority of the
members thereof;
(iii) the approval by the stockholders of the Company of a merger,
consolidation, reorganization or similar corporate transaction, whether or
not the Company is the surviving corporation in such transaction, in which
outstanding shares of Common Stock are converted into (A) shares of stock
of another company, other than a conversion into shares of voting common
stock of the successor corporation (or a holding company thereof)
representing 80% of the voting power of all capital stock thereof
outstanding immediately after the merger or consolidation or (B) other
securities (of either the Company or another company) or cash or other
property;
(iv) the approval by the stockholders of the Company of (A) the sale
or other disposition of all or substantially all of the assets of the
Company or (B) a complete liquidation or dissolution of the Company; or
(v) the adoption by the Board of a resolution to the effect that any
person has acquired effective control of the business and affairs of the
Company.
(d) Good Reason Following Change in Control. For purposes of this
Agreement, termination for "Good Reason" shall mean termination by the
Employee of his employment with the Company, within six months immediately
following a Change in Control, based on:
(i) any diminution in the Employee's position, title,
responsibilities or authority from those in effect immediately prior to
such Change in Control; or
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(ii) the breach by the Company of any of its material obligations
under this Agreement.
12. Nondisclosure of Information. The Employee will not, at any time
during or after the Employment Period, disclose to any person, firm, corporation
or other business entity, except as required by law, any non-public information
concerning the business, products, clients or affairs of the Company or any
subsidiary or affiliate thereof for any reason or purpose whatsoever, nor will
the Employee make use of any of such non-public information for personal
purposes or for the benefit of any person, firm, corporation or other business
entity except the Company or any subsidiary or affiliate thereof.
13. Company Right to Inventions. The Employee will promptly
disclose, grant and assign to the Company, for its sole use and benefit, any and
all inventions, improvements, technical information and suggestions relating in
any way to the business of the Company which the Employee may develop or acquire
during the Employment Period (whether or not during usual working hours),
together with all patent applications, letters patent, copyrights and reissues
thereof that may at any time be granted for or upon any such invention,
improvement or technical information. In connection therewith:
(i) the Employee shall, without charge, but at the expense of the
Company, promptly at all times hereafter execute and deliver such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to any such
inventions, improvements, technical information, patent applications,
patents, copyrights or reissues thereof in
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the Company and to enable it to obtain and maintain the entire right and
title thereto throughout the world; and
(ii) the Employee shall render to the Company, at its expense
(including a reasonable payment for the time involved in case the Employee
is not then in its employ), all such assistance as it may require in the
prosecution of applications for said patents, copyrights or reissues
thereof, in the prosecution or defense of interferences which may be
declared involving any said applications, patents or copyrights and in any
litigation in which the Company may be involved relating to any such
patents, inventions, improvements or technical information.
14. Enforcement. It is the desire and intent of the parties hereto
that the provisions of this Agreement be enforceable to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, to the extent that a restriction
contained in this Agreement is more restrictive than permitted by the laws of
any jurisdiction where this Agreement may be subject to review and
interpretation, the terms of such restriction, for the purpose only of the
operation of such restriction in such jurisdiction, will be the maximum
restriction allowed by the laws of such jurisdiction and such restriction will
be deemed to have been revised accordingly herein.
15. Remedies; Survival. (a) The Employee acknowledges and
understands that the provisions of the covenants contained in Sections 12 and 13
hereof, the violation of which cannot be accurately compensated for in damages
by an action at law, are of crucial importance to the Company, and that the
breach or threatened breach of the provisions of this Agreement would cause the
Company irreparable harm. In the event of a
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breach or threatened breach by the Employee of the provisions of Section 12 or
13 hereof, the Company will be entitled to an injunction (without the posting of
any bond) restraining the Employee from such breach. Nothing herein contained
will be construed as prohibiting the Company from pursuing any other remedies
available for any breach or threatened breach of this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of Sections 12, 13, 14 and 15 hereof will survive the
expiration or other termination of this Agreement until, by their terms, such
provisions are no longer operative.
16. Notices. Notices and other communications hereunder will be in
writing and will be delivered personally or sent by air courier or first class
certified or registered mail, return receipt requested and postage prepaid,
addressed as follows:
if to the Employee: as specified in Annex A
and if to the Company: CVC, Inc.
000 Xxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Secretary
with a copy to: Xxxxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement will be deemed to have been given on the
date of delivery, if personally delivered; on the business day after the date
when sent, if sent by air courier; and
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on the third business day after the date when sent, if sent by mail, in each
case addressed to such party as provided in this Section 16 or in accordance
with the latest unrevoked direction from such party.
17. Binding Agreement; Benefit. The provisions of this Agreement
will be binding upon, and will inure to the benefit of, the respective heirs,
legal representatives and successors of the parties hereto.
18. Governing Law. This Agreement will be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without
reference to conflict of law principles.
19. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and will not
operate or be construed as a waiver of any subsequent breach by such other
party.
20. Entire Agreement; Amendments. This Agreement (including Annex A)
contains the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements or understandings among the
parties with respect thereof. This Agreement may be amended only by an
agreement in writing signed by the parties hereto.
21. Headings. The section headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
22. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof,
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and any such prohibition or unenforceability in any jurisdiction will not
invalidate or render unenforceable such provision in any other jurisdiction.
23. Assignment. This Agreement is personal in its nature and the
parties hereto shall not, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder; provided, that the
provisions hereof (including, without limitation, Sections 12 and 13) will inure
to the benefit of, and be binding upon, each successor of the Company, whether
by merger, consolidation, transfer of all or substantially all of its assets or
otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
EMPLOYEE CVC, INC.
_________________________ _____________________________
By:
Title:
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ANNEX A
to
Employment Agreement
Name of Employee: Xxxxxxxxx X. Xxxxxxx
1. Position: Chairman of the Board, President
and Chief Executive Officer
2. Board of Directors' Initial
Designee to whom Employee
Shall Report: None; reports to full Board
3. Initial Base Salary: $168,000
4. Number of months used to
calculate lump sum severance
payment in the event of a
Change in Control: 24 months
5. Employee's address for notices: 0 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
A-1
