EXHIBIT 10.50
AGREEMENT
This AGREEMENT (the "Agreement") is made as of this 19th day
of August, 2004 between XxXxxx Corporation, a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxxx of Randolph, NJ (hereinafter, the "Executive").
WHEREAS, the Executive is currently employed by the Company in
an executive capacity and has entered into an Employment Agreement, dated as of
August 13, 2001 (the "Employment Agreement"), which agreement provides for a
term of employment;
WHEREAS, the Company and the Executive wish to provide for
certain rights, compensation, benefits and responsibilities in the event that
the Executive's employment with the Company is terminated;
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
ARTICLE 1
TERMINATION
1.1. TERMINATION FOR JUST CAUSE.
(a) The Company may terminate the employment of the Executive
at any time for Just Cause, such termination to be communicated by the
Company to the Executive by written notice. For the purposes hereof,
"Just Cause" means a determination by the Board, in the exercise of its
reasonable judgment and after permitting the Executive a reasonable
opportunity to be heard by the Board, that any of the following has
occurred:
(i) the willful and continued failure by the
Executive, if not cured within thirty (30) days after receipt
by the Executive of written notice from the Company reasonably
detailing the matters to be cured, to substantially perform
his material duties and responsibilities with the Company
under this Agreement (other than any such failure resulting
from his incapacity due to physical or mental illness);
(ii) the engaging by the Executive in any act that is
intentionally and materially injurious to the Company,
financial or otherwise, if not cured (if curable) within
thirty (30) days after receipt by the Executive of written
notice from the Company reasonably detailing the matters to be
cured;
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(iii) the conviction of the Executive of a criminal
offense involving fraud, dishonesty or other felony; and
(iv) the engaging by the Executive in any intentional
act of dishonesty resulting or intended to result, directly or
indirectly, in personal gain to the Executive at the Company's
expense, if not cured (if curable) within thirty (30) days
after receipt by the Executive of notice from the Company.
(b) Upon the termination of the Executive's employment for
Just Cause, the Executive shall not be entitled to any severance,
termination or other compensation payment other than such portion of
the Executive's then current base salary ("Base Salary") and target
bonus ("Bonus") pursuant to the Company's bonus plan for senior
employees as remains earned but unpaid on the date of termination,
together with any amount to which the Executive may be entitled under
the provisions of applicable employment legislation in force at the
date of termination of the Executive's employment.
1.2. TERMINATION WITHOUT JUST CAUSE OR FOR GOOD REASON.
(a) The Company may terminate the employment of the Executive
hereunder at any time without Just Cause, such termination to be
communicated by the Company to the Executive by sixty (60) days prior
written notice. In addition, the Executive may terminate his employment
for Good Reason, such termination to be communicated by the Executive
to the Company by sixty (60) days prior written notice. For purposes of
this Agreement, "Good Reason" shall mean any one or more of the
following:
(i) a substantial adverse alteration in the nature or
status of the Executive's duties or responsibilities with the
Company which is not cured (if curable) to the Executive's
satisfaction within thirty (30) days after written notice of
such breach is provided to the Company by the Executive,
(ii) any purported termination of the Executive's
employment which is not effected in accordance with this
Agreement (which purported termination shall not be
effective),
(iii) any failure by the Company to pay the Executive
his Base Salary and Bonus in accordance with its agreement
with the Executive which is not cured (if curable) to the
Executive's satisfaction within thirty (30) days after written
notice of such breach is provided to the Company by the
Executive,
(iv) there has been an Acquisition, a Change in
Control or a Hostile Takeover (as defined in the Company's
2003 Stock Incentive Plan as in existence on this date) and
within two (2) years thereafter the Executive is required to
relocate to or regularly perform duties at any location other
than within a 30-mile radius of Chestnut Ridge, New York,
except for periodic travel in the ordinary course of the
Company's business as it is conducted in the ordinary course,
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(v) there has been an Acquisition, a Change in
Control or a Hostile Takeover (as defined in the Company's
2003 Stock Incentive Plan as in existence on this date) and
within two (2) years thereafter the Company either terminates
the Executive's employment or provides notice thereof to the
Executive, or
(vi) the Company is liquidated or the Board takes
formal action to commence the process of liquidation.
The Executive's right to terminate his employment for Good
Reason shall not be affected by his incapacity due to physical or
mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder.
(b) Upon the termination of the Executive's employment without
Just Cause or for Good Reason, the Company shall pay to or to the order
of the Executive immediately after the date of termination of the
Executive's employment such portion of the Executive's then current
Base Salary and Bonus as remains earned but unpaid on the date of
termination. The unpaid Bonus amount shall be based on the greater of
the current year's target Bonus (whether achieved or not) or the most
recent Bonus paid to the Executive. In addition to the foregoing, in
exchange for the Executive providing the Company with a full and
complete release of all claims of every name and nature (substantially
in the form of Exhibit A hereto), the Company shall have the following
obligations:
(i) the Company shall pay as salary continuation to
or to the order of the Executive, as compensation for the
Executive's loss of employment, eighteen (18) months of the
Executive's Base Salary (at the rate in effect on the date of
termination) and eighteen (18) months of Bonus. The Bonus
amount shall be calculated at 1.5 times the greater of the
maximum target Bonus payable in the current year (whether
achieved or not) or the actual bonus paid with respect to the
prior fiscal year;
(ii) to the extent permissible under the relevant
plans, the Company shall provide the Executive with medical,
dental and life insurance identical or substantially similar
to those which the Executive is receiving immediately prior to
the written notice of termination referenced in section 1.2(a)
herein), provided that the Executive shall be required to pay
the then-current employee premiums therefor;
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(iii) provided that the Executive has terminated his
employment for Good Reason other than for Good Reason under
either section 1.2(a)(iv) or (v), then all stock options shall
be exercisable to the extent then vested as permitted under
the stock option plan and related stock option agreements, and
all restricted stock held by Executive shall be exercisable
only on a pro rata basis based on the time elapsed from the
date of grant until the date of termination, calculated to the
next nearest calendar month, and any such stock options and
restricted stock may be exercised for all or any portion of
such shares within the time period permitted under the stock
option plan; and, provided further, that the Executive has
terminated his employment for Good Reason under either section
1.2(a)(iv) or (v), then all stock options and restricted stock
held by Executive shall automatically become immediately
exercisable with respect to the total number of shares subject
thereto and such stock options and restricted stock may be
exercised for all or any portion of such shares within twelve
(12) months, notwithstanding the time period permitted under
the stock option plan;
(c) the Company shall provide the Executive with
outplacement counseling services by a provider of the
Executive's choosing, up to an aggregate maximum cost not to
exceed ten thousand dollars ($10,000); and
(d)(i) In the event that any of the payments provided
for herein, together with any other payments or benefits
received or to be received by the Executive in connection with
the termination of employment of the Executive or otherwise
(the "Severance Payments"), will be subject to the tax (the
"Excise Tax") imposed by section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall
immediately pay to or to the order of the Executive an
additional amount (the "Gross-up Payment") such that the net
amount retained by the Executive, after deduction of any
Excise Tax on the Severance Payments and any federal, state
and local income tax and Excise Tax on the payment provided
for by this section 3.3(c), shall be equal to the Severance
Payments, placing the Executive in the same after-tax
financial position in which he would have been if he had not
incurred any tax liability under section 4999 of the Code. For
purposes of determining the amount of the Gross-up Payment,
the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the
calendar year in which the Gross-up Payment is to be made and
state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's
residence on the date of termination, net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
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(ii) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account
hereunder at the time of termination of the Executive's
employment, the Executive shall repay to the Company at the
time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-up Payment
attributable to such reduction (plus the portion of the
Gross-up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-up Payment
being repaid by the Executive, if such repayment results in a
reduction in Excise Tax or in federal, state and local income
tax deductions) plus interest on the amount of such repayment
at the rate provided in section 1274(d) of the Code.
(iii) In the event that the Excise Tax is determined
to exceed the amount taken into account hereunder at the time
of the termination of the Executive's employment (including by
reason of any payment the existence or amount of which cannot
be determined at the time the Gross-up Payment is made), the
Company shall make an additional Gross-up Payment in respect
to such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally
determined.
1.3. VOLUNTARY TERMINATION BY EXECUTIVE FOR OTHER THAN GOOD REASON.
(a) The Executive may, upon sixty (60) days prior written
notice to the Company, voluntarily terminate his employment for other
than Good Reason.
(b) Upon the voluntary termination by the Executive of his
employment (other than for Good Reason) at any time, if not theretofore
paid, the Company shall pay to or to the order of the Executive within
10 days after the date of voluntary termination of the Executive's
employment such portion of the Executive's then current Base Salary and
Bonus, if any, as remains earned but unpaid on the date of termination.
(c) The several payments and other obligations of the Company
described in this section 1.3, together with the Company's obligations
and the Executive's rights under the provisions of the Company's stock
option agreements and restricted stock agreements with the Executive,
are the only severance, compensation or termination payments or
benefits that the Executive will receive in the event of the voluntary
termination of his employment (other than for Good Reason) as
contemplated by this section 1.3.
1.4. TERMINATION UPON DEATH OR DISABILITY.
(a) The Executive's employment shall be terminated upon his
death. The Company may terminate the employment of the Executive
hereunder at any time forthwith upon the permanent disability of the
Executive, such termination to be communicated by written notice given
by the Company to the Executive. The Executive shall be considered to
have become permanently disabled upon the earlier of: (i) his
eligibility for long-term disability insurance benefits, or (ii) if in
any period of 12 consecutive months, because of ill health, physical or
mental disability, or for other causes beyond the control of the
Executive, the Executive has been continuously unable or unwilling or
has failed to perform his duties and responsibilities hereunder for 180
consecutive days, or if, during any period of 12 consecutive months,
the Executive has been unable or unwilling or has failed to perform his
duties and responsibilities hereunder for a total of 180 days,
consecutive or not.
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(b) On termination of the Executive's employment as a result
of the Executive's death or as a result of the Executive having become
permanently disabled, the Company shall continue to pay to or to the
order of the Executive or his estate, as the case may be, such portion
of the Executive's then current Base Salary and Bonus as remains earned
but unpaid on the date of termination.
1.5. RETURN OF PROPERTY. Upon the termination of the employment of the
Executive, regardless of the reason therefor, the Executive will immediately
deliver or cause to be delivered to the Company all books, documents, effects,
money, securities or other property (including manuals, computer disks and
software products) belonging to the Company, or for which the Company is liable
to others, which are in the possession, charge or custody of the Executive.
ARTICLE 2
GENERAL
2.1. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company and its subsidiaries and their
respective businesses which shall have been obtained by the Executive during the
Executive's employment by the Company and which shall not be or become public
knowledge (other than by acts of the Executive or representatives of the
Executive). If the employment of the Executive is terminated for any reason, the
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to any person other than the Company and those
persons designated by it.
2.2. COVENANT NOT TO COMPETE; NO SOLICITATION. If the Executive has not
terminated his employment for Good Reason under either section 1.2(iv) or (v)
hereof, the provisions of this section 2.2 shall apply. The Executive agrees
that for a period of eighteen (18) months after the termination of his
employment for any reason, including the expiration of a term of employment
under the Executive's Employment Agreement, the Executive will not, without the
written consent of the Chief Executive Officer of the Company, directly or
indirectly engage in any commercial activity that competes with the business of
the Company. Competitive activities shall include, but are not limited to,
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engaging in activities or services for a competitor of the Company in the test
and measurement industry that are reasonably related to (i) services which the
Executive has provided to or for the Company, (ii) current or prospective
products with respect to which the Executive has worked as an employee of the
Company, or (iii) current or prospective services or products with respect to
which the Executive has Confidential Information. A competitor of the Company
shall mean any person or organization engaged in a competing business (a
"Competing Business"). The Executive also shall not, during such period, solicit
for the account of any Competing Business, any customer or client of the Company
or its affiliates, or, in the event of the Executive's termination of his
employment, any entity or individual that was such a customer or client during
the eighteen (18) month period immediately preceding the Executive's termination
of employment. The Executive agrees that, during the Term and for a period of
eighteen (18) months following the date of termination of the Executive's
employment, he shall not, directly or indirectly, solicit, employ or cause to be
solicited or employed in any capacity, or solicit, retain or cause to be
retained as a consultant, any person who was employed by the Company at any time
during the six (6) month period ending on the date of termination of Executive's
employment.
2.3. REMEDIES. The Company's obligation to make payments, or provide
for any benefits under this Agreement (except to the extent vested or
exercisable) shall cease upon a violation of the preceding provisions of
sections 2.1 and 2.2. The Executive acknowledges that the restrictions contained
in sections 2.1 and 2.2 are reasonable and necessary to protect the legitimate
interests of the Company and that any breach by the Executive of any provision
hereof will result in irreparable injury to the Company. The Executive
acknowledges that, in addition to all remedies available at law, the Company
shall be entitled to equitable relief, including injunctive relief upon
application to any court having competent jurisdiction, and an equitable
accounting of all earnings, profits or other benefits arising from such breach
and shall be entitled to receive such other damages, direct or consequential, as
may be appropriate. The Company shall not be required to post any bond or other
security in connection with any proceeding to enforce section 2.2. If any of the
restrictions contained in section 2.2 shall be deemed to be unenforceable by
reason of the extent, duration or geographical scope or other provision hereof,
then the parties hereto contemplate that the court shall reduce such extent,
duration, geographical scope or other provision hereof and enforce section 2.2
in its reduced form for all purposes in the manner contemplated hereby.
2.5. RESIGNATIONS. If the employment of the Executive hereunder is
terminated in accordance with the terms of this Agreement, the Executive shall
tender his resignation from all positions he may hold as an officer of the
Company or any of its subsidiaries.
2.6. MITIGATION. The Executive shall have no duty to mitigate the
amount of any payment provided for in Article 1 herein by seeking, other
employment.
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2.7. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be properly given if delivered
personally or mailed by prepaid registered mail addressed as follows:
(a) in the case of the Company, to:
XxXxxx Corporation
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Vice President, Human Resources
with a copy to:
Fish & Xxxxxxxxxx P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) in the case of the Executive, to such address as he or she
shall have furnished to the Company as his or her home
address,
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or, if mailed
by registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee.
2.8. FULL SATISFACTION. The terms set out in this Agreement, provided
that such terms are satisfied by the Company, are in lieu of (and not in
addition to) and in full satisfaction of any and all other claims or entitlement
which the Executive has or may have against the Company relating to the
Executive's employment by the Company and as a result of the termination of his
employment by the Company in the circumstances contemplated in this Agreement.
2.9. AMENDMENTS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer of the Company as may be
specifically designated by the Board of Directors. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
2.10. ENTIRE AGREEMENT. This Agreement and the Executive's Employment
Agreement constitutes the entire agreement between the parties with respect to
the employment relationship contemplated hereby and cancels and supersedes all
prior understandings and agreements between the parties with respect thereto and
no agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. To the extent that there are any
inconsistencies between the terms of this Agreement and the Executive's
Employment Agreement, then the terms of this Agreement shall control.
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2.11. SUCCESSORS AND ASSIGNS. Neither the Executive nor the Company may
assign its rights hereunder to another person without the consent of the other;
provided, however that the Company may assign its rights hereunder to a
successor corporation which acquires (whether directly or indirectly, by
purchase, arrangement, merger, consolidation, dissolution or otherwise) all or
substantially all of the business and/or assets of the Company and expressly
assumes and agrees to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place and provided that such successor shall reasonably be able to
perform all of its obligations under this Agreement.
2.12. ENUREMENT. This Agreement shall enure to the benefit of and be
binding upon the Executive and his personal representatives and upon the Company
and its successors and permitted assigns.
2.13. FURTHER ASSURANCES. Each of the Company and the Executive agrees
to execute all such documents and to do all such acts and things as the other
party may reasonably request and as may be lawful and within its power to do or
to cause to be done in order to carry out and/or implement in full the
provisions and intent of this Agreement.
2.14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York and the federal laws of the
United States of America applicable therein. Each of the parties consents to the
jurisdiction of the courts of the State of New York to hear all actions, suits
and proceedings arising in connection with this Agreement, including without
limitation those referenced in Sections 4.1 and 4.2 herein.
2.15. DEFINITIONS. For purposes of this Agreement, the following
defined terms shall have the following meanings:
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IN WITNESS WHEREOF the parties hereto have executed this Agreement.
/s/ R. Xxxxx Xxxxxxxx
----------------------------
Executive: Xxxxx Xxxxxxxx
XXXXXX CORPORATION
By /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President Finance, Chief
Financial Officer
EXHIBIT A
NOTE: THIS IS A SAMPLE SEVERANCE AGREEMENT, SUBSTANTIALLY SIMILAR TO ONE THAT
MAY BE GIVEN TO YOU. PLEASE NOTE THAT THE AGREEMENT'S PROVISIONS MAY BE REVISED,
ADDED OR OMITTED AS APPROPRIATE AND AS REQUIRED BY LAW.
SEVERANCE AGREEMENT
XXXXXX CORPORATION
Date
CONFIDENTIAL
Name
Address
Dear __________:
This will confirm that your employment with XxXxxx Corporation (the "Company")
will cease as of ______________________.
The Company will pay you your compensation in accordance with your Agreement
dated _____________, 2004 [and your Employment Agreement, dated as of
_____________, collectively] the "Agreements"). Information concerning your
group insurance programs is enclosed with this letter.
Should you be enrolled in the 401-K plan, you will receive information under
separate cover within the next ____ weeks.
[Deal with other benefit plans here, as appropriate]
All Company property such as equipment, all copies of Company data (whether hard
copy or electronically stored), keys, credit card, etc., must be returned to
__________________ before 4:00 p.m., on ________________.
In accordance with your Agreements, in order to receive the severance pay and
benefits outlined therein (collectively, the "Program") you are required to
execute and deliver a release of all claims against the Company, whether or not
you actually have any such claims:
It is a condition of this offer of the Program that you:
1. comply with the terms of your Agreements, including without
limitation the provisions of sections __ and __ thereof;
2. not make any statement or otherwise take any other action that would
or might reasonably be interpreted as harmful to the Company;
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3. agree to keep the terms and conditions of this Agreement in strict
confidence, except as required by law;
4. agree and recognize that your employment relationship with [Company]
will be permanently and irrevocably severed as of [date], and that you will not
apply for or otherwise seek reemployment with [Company] and that [Company] and
its affiliates have no obligation to reemploy, recall, or otherwise hire you in
the future.
This offer is made without prejudice and without any admission of liability.
This is an important legal document, and you may wish to consult with counsel of
your own choice in deciding whether to accept this offer.
You may take up to 21 days from receipt of this letter to consider whether to
accept this offer of the Program. You should confirm your acceptance of the
Program by signing below and returning one signed copy to _______________ by
________________, ________________, 20__. This Agreement shall not be effective
until 8 days after you sign it, and you may revoke it at any time during the
intervening 7-day period by either delivering a signed revocation notice to
___________________ or mailing such notice to ___________________ so that it is
postmarked no later than 7 days after you sign this Agreement. You will not be
entitled to receive any of the Program until the 7-day revocation period has
expired without revocation. Should you revoke your acceptance, no severance or
benefits under the Program will be provided.
By accepting the terms of this offer and signing in the space provided below,
you hereby release and forever discharge and hold the Company, its successors,
insurers, employers, employees, officers, directors, shareholders and affiliates
harmless of all claims or suits, of any nature whatsoever, present or future,
including those arising from the law, being directly or indirectly related to
your employment or the termination of such employment with the Company and
specifically but without limitation including any claims for notice, pay in lieu
of notice, wrongful dismissal, severance pay, bonus, overtime pay, incentive
compensation, interest or vacation pay. Nothing in this Agreement shall be
construed to affect the Equal Employment Opportunity Commission's independent
right and responsibility to enforce the law. You should recognize, however, that
while this Agreement does not affect your right to file charge or participate in
an investigation or proceeding conducted by the Commission, it does bar any
claim you might have to receive monetary damages in connection with any
Commission proceeding concerning matters covered by this Agreement. You also
agree not to file a lawsuit asserting any such claims. This Release and
Agreement-Not-To-Xxx includes, but is not limited to, contract and tort claims,
claims growing out of any legal restriction on the Company's right to terminate
its employees and claims or rights under federal, state, and local laws
prohibiting employment discrimination (including but not limited to, claims or
rights under the federal Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Benefit Protection Act of 1990), which arose before
the date this Agreement is signed. You agree that these terms represent a full
and final settlement of any and all claims you may have arising out of your
employment with the Company, except that this Agreement shall not release or
affect any vested rights you may have (1) under Company's _____________ plan,
(2) under the terms of this Agreement, (3) to continue health insurance coverage
under COBRA, and (4) which by law cannot be released in this manner (e.g.,
Worker's Compensation claims).
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Both you and the Company agree that should any court of competent jurisdiction
rule that any part of this Agreement is unenforceable, that part of the
Agreement shall be considered severed from the rest of the Agreement, and the
rest of the Agreement shall remain in full force and effect.
Yours very truly,
XXXXXX CORPORATION
--------------------------
NAME AND TITLE
I the undersigned, having had the time to reflect, freely accept the
above settlement. I acknowledge and agree that no Company representative has
made any representation to or agreement with me relating to this Agreement which
is not contained in the express terms of this Agreement. I acknowledge and agree
that my execution and delivery of this Agreement is based upon my independent
review of this Agreement, and I hereby expressly waive any and all claims or
defenses by me against the enforcement of this Agreement which are based upon
allegations or representations, projections, estimates, understandings or
agreements by the Company or any of its representatives that are not contained
in the express terms of this Agreement.
-------------------------------- ----------------------------
[NAME OF EMPLOYEE] DATE
