Exhibit 10.5
[Letterhead of General Instrument]
[RECEIVED
MAR 20 1997
LEGAL DEPT.]
May 20, 1993
Xx. Xxxxx X. Xxxxxxx, President
Comm/Scope, Inc.
0000 Xxxxxx-Xxxxx Xxxxxxxxx
XX Xxx 000
Xxxxxxx, XX 00000
Re: Employment Agreement
------------------------
Dear Xxxxx:
This letter confirms our agreement that, while you are employed by
General Instrument Corporation ("GI"), if GI maintains a management incentive
compensation plan for the benefit of its executive officers, your participation
in that plan on a substantially similar basis as the presidents of GI's other
broadband divisions shall satisfy Section 4 of that certain Employment
Agreement, dated as of November 28, 1988, by and between Comm/Scope, Inc.
(formerly Comm/Scope Company) and you.
Very truly yours,
/s/ Xxxxxx X. Xxxxx
Accepted and Agreed to:
/s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
EMPLOYMENT AGREEMENT
This AGREEMENT is made as of November 28, 1988 by and between
COMM/SCOPE COMPANY, a North Carolina corporation (the "Company"), and XXXXX X.
XXXXXXX (the "Executive"). General Instrument Corporation, a Delaware
corporation ("General Instrument"), is also a party to this Agreement to the
extent set forth in Section 8 hereof and the related provisions of Sections 9
through 18 hereof.
WHEREAS, pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") dated as of November 28, 1988 by and between General Instrument,
Cable/Home Communication Corp., the Company, the Executive and FMD Acquisition
Corp. ("FMD"), FMD has agreed to merge with and into the Company;
WHEREAS, it is a condition of the Merger Agreement that the Executive
enter into this Agreement providing for the continued employment of the
Executive by the Company from and after the Effective Time (as such term is
defined in the Merger Agreement), and providing for the non-competition and
other arrangements set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the continued employment of the Executive, and other
good and valuable consideration, the parties agree as follows:
1. Employment Term.
The Company hereby employs the Executive, and the Executive hereby
accepts exclusive full-time employment with the Company. Such employment shall
commence at the Effective Time and continue until terminated pursuant to Section
5 hereof. The period during which the Executive is employed hereunder shall be
referred to as the "Employment Term".
2. Duties.
The Executive shall serve as the President and Chief Executive Officer
of the Company and shall have such powers, duties and responsibilities as are
prescribed from time to time consistent with such offices by the by-laws and the
board of directors of the Company (the "Board of Directors"). The Executive
agrees faithfully to discharge such duties and responsibilities and, generally,
to perform
such other functions consistent with such offices for the Company. The
compensation herein provided to be paid to the Executive shall cover and include
all services and functions performed by the Executive for the Company. Except as
otherwise provided herein, the terms of the Executive's employment by the
Company shall be in accordance with the policies established by the Board of
Directors as to working facilities, vacation, sick leave and all other benefits
for, and restrictions upon, its senior executives, to the extent that such
policies are applicable to the President and Chief Executive Officer. The
Executive shall comply at all times with the requirements of all policies,
rules, practices and procedures established by the Board of Directors relating
to the conduct of the Company's senior executives, as in effect from time to
time during the Employment Term and to the extent applicable to the President
and Chief Executive Officer, except as otherwise expressly provided herein.
3. Extent of Services; Place of Performance.
(a) The Executive agrees that during the Employment Term he will
devote his normal working time (except for vacations and periods of illness),
attention and best efforts to the business and interests of the Company, that he
will perform all duties and responsibilities assigned to him and that he will do
his utmost to enhance and develop the business, interests and welfare of the
Company and shall not, without the prior written consent of the Board of
Directors, work for any other employer or take any other position or undertake
any activity (whether or not compensated) not related to his employment that
would in the aggregate require any substantial portion of his working time or
otherwise adversely affect his ability to perform hereunder.
(b) The Executive shall perform his duties at the principal office of
the Company in Hickory, North Carolina, except to the extent the Executive may
reasonably be required to travel and render services in different locations from
time to time incident to the performance of such duties.
4. Compensation.
The Executive's compensation, including any participation in bonus,
stock option and other employee benefit plans and arrangements and other fringe
benefits, is set forth in Exhibit A attached hereto and made a part
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hereof. In addition, unless otherwise expressly provided in this Agreement or
Exhibit A, the Executive shall be eligible to participate in all benefit plans,
programs and arrangements available to senior executives in accordance with the
terms thereof and as the same may be amended from time to time during the
Employment Term. Notwithstanding the foregoing, the Board of Directors may
increase the Executive's compensation at any time during the Employment Term.
5. Termination.
(a) Subject to the provisions of paragraphs (b) and (c) of this
Section 5, the initial term of this Agreement shall extend from the date hereof
to November 28, 1991; provided, however, that, subject to such provisions,
commencing on November 29, 1989 and on each day thereafter, the remaining term
of this Agreement shall be two years from such day. Commencing on November 29,
1989, unless earlier terminated pursuant to paragraph (b) or (c) of this Section
5, this Agreement shall terminate on the second anniversary of the day on which
either party shall have given notice to the other party that such party has
elected to terminate this Agreement. The provisions of Sections 6, 7, 8 and 9
hereof shall survive any termination of this Agreement.
(b) This Agreement shall be terminated automatically upon the
Executive's death and may be terminated at the discretion of the Board of
Directors if the Executive is unable satisfactorily to render services to the
Company for a period of six (6) continuous months due to physical or mental
disability. A condition of disability under this Agreement shall be determined
by the Board of Directors on the basis of competent medical advice. A written
opinion of a licensed physician certified in his field of specialization and
acceptable to the Board of Directors, or the Executive's receipt of or
entitlement to disability benefits under any insurance policy or employee
benefit plan provided or made available by the Company or under Federal Social
Security laws, shall be conclusive evidence of disability.
(c) The Board of Directors shall have the right at any time, upon not
less than sixty (60) days' written notice, to terminate the Executive's
employment for cause, with the facts relating thereto to be specified in such
notice, unless such cause shall have been removed or otherwise cured to the
satisfaction of the Board of
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Directors prior to the termination date specified in such notice. "Cause" shall
mean (i) a material failure by the Executive to perform his duties as provided
in Sections 2 and 3 hereof or to comply with the provisions of Sections 6 and 7
hereof; (ii) the willful engaging by the Executive, in his capacity as an
employee of the Company, in gross misconduct; or (iii) the Executive's fraud,
embezzlement, theft, conviction of a felony or any act of moral turpitude that,
in the good faith opinion of the Board of Directors, is harmful to the Company.
(d) Upon termination of the Executive's employment pursuant to this
Section 5 or for any other reason except breach of this Agreement by the
Company, all further compensation to which the Executive would otherwise have
been entitled under Section 4 hereof shall cease.
6. Non-Disclosure of Confidential Information.
(a) The Executive recognizes and acknowledges that as a consequence of
or through his employment with the Company the Executive may have access to
certain confidential information regarding the Business (as defined below).
Confidential information regarding the Business ("Confidential Information")
includes, without limitation, the following insofar as they relate to the
Business: technical know-how; customer lists; credit information; sources of
supply; private processes, techniques and formulae; research and development
activities and data; and inventions; but does not include any of the foregoing
or other information which otherwise than by the Executive's action (i) is or
becomes generally available or known to the public or in the industry in which
the Company is or may be engaged, (ii) was or became available to the Executive
prior to its disclosure to the Executive by the Company, or (iii) becomes
available to the Executive on a nonconfidential basis from a person other than
the Company or any of its employees or agents. The Executive further recognizes
and acknowledges that the Company may suffer irreparable damage if, except as
may be necessary in the proper performance of the Executive's duties hereunder,
any Confidential Information is obtained by or disclosed to any person engaged
in a business similar to or that is or might be competitive with the Company, or
is used by the Executive or any other person in any way in competition with the
Company. As used herein, "Business" means the business in which the Company is
engaged from time to time other than activities that are not at such time
material to the business of the Company or that were not engaged in during the
Employment Term.
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(b) The Executive covenants and agrees that all Confidential
Information shall be the sole property of the Company, and its successors and
assigns, and that during the Employment Term and after the termination of the
Employment Term, without the express prior written consent of the Board of
Directors, he will not disclose in whole or in part any Confidential Information
to any person for any reason or purpose whatsoever or make use of any
Confidential Information for his own purposes or for the benefit of any person
(except the Company) under any circumstances except (i) as may be necessary in
the proper performance of the Executive's duties hereunder, (ii) to the extent
Confidential Information becomes lawfully obtainable from other sources or (iii)
as required by law, provided that in the case of (iii) above the Executive shall
have given the Company prior written notice setting forth the scope of such
required disclosure.
(c) Upon termination of the Employment Term, all documents, records,
notebooks and similar repositories of Confidential Information, including all
copies thereof, then in the Executive's possession or control, whether prepared
by him or others, will be delivered to the Company.
7. Non-Competition Covenants of the Executive.
(a) The Executive covenants and agrees that during the Employment Term
he will not engage in any business that is in competition with the Business as
it exists at such time.
(b) The Executive further covenants and agrees that, for a period of
five years after the last day of the Employment Term, he will not, directly or
indirectly, either for himself or as a principal, stockholder, director,
officer, partner, investor, affiliate, licensee, employee, agent, consultant,
manager, trustee or representative of, or in any other regard or capacity for,
on behalf of, or in conjunction with, any person other than the Company (i)
engage, in any country where the Company then conducts business, in any business
that is in competition with the Business as it exists at such time, or (ii) call
upon, solicit, divert or take away any of the then existing customers or patrons
of the Company for the purpose of causing or attempting to cause any such person
to purchase products sold or services rendered by the Company from any person
other than the Company or otherwise divert any business from the Company.
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(c) Notwithstanding anything in Section 7(a) and 7(b) to the contrary,
the Executive shall not be prohibited from holding (i) as a passive investment,
securities of a business organization listed on a national securities exchange
in the United States or abroad or whose securities are otherwise regularly
publicly traded, provided that the Executive does not beneficially own in excess
of 5% of the outstanding voting securities of any such business organization
which is engaged in the Business, and (ii) the investments listed on Exhibit B
attached hereto and made a part hereof.
(d) The Executive further covenants and agrees that, for a period of
five years after the last day of the Employment Term, he will not influence or
persuade, or attempt to influence or persuade, any employee, agent, distributor
or supplier of the Company to terminate such employee's, agent's, distributor's
or supplier's relationship with the Company.
(e) The Executive agrees that the specified duration of the covenants
set forth in this Section 7 shall be extended by and for the term of any period
during which the Executive is in violation of any such covenant.
(f) If the Executive wishes to engage in any conduct that would
otherwise be proscribed by a covenant set forth in this Section 7, he shall
solicit the prior written consent of the Board of Directors by submitting a
written request therefor setting forth in full all facts pertinent to the
proposed conduct. Any such consent will be binding upon the Company unless it
shall be subsequently discovered that such consent was given based upon a
statement of facts by the Executive that was incorrect, incomplete or misleading
in any material respect.
8. Additional Non-Competition Covenants of the Executive.
The Executive covenants and agrees that his non-competition covenants
set forth in Section 7 hereof shall also extend to General Instrument, except
that for the purposes of such extension the references in Section 7 hereof shall
be deemed to be modified as follows: (i) references to the "Company" (other than
such references in the definition of "affiliated" and references to "affiliated
with the Company") shall be deemed to be references to General Instrument, (ii)
references to the "Business" shall be deemed to be references to the Broadband
Business, as described in Exhibit C attached hereto and made a part hereof, in
which General Instrument
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shall be engaged from time to time, and (iii) references to the "Board of
Directors" shall be deemed to be references to General Instrument.
9. Breach of Covenants.
The Executive and the Company agree that it may be impossible to
measure in money the damages that will accrue to the Company in the event that
the Executive breaches any of the provisions of Section 6 or 7 hereof, and the
Executive and General Instrument agree that it may be impossible to measure in
money the damages that will accrue to General Instrument in the event that the
Executive breaches any of the provisions of Section 8 hereof. Therefore, if the
Company (in the case of Section 6 or 7) or General Instrument (in the case of
Section 8) shall institute any action or proceeding to enforce such provisions,
the Executive hereby waives the claim or defense that the Company or General
Instrument, as the case may be, has an adequate remedy at law and agrees not to
assert in any such action or proceeding the claim or defense that the Company or
General Instrument, as the case may be, has an adequate remedy at law. The
foregoing shall not prejudice the right of the Company or General Instrument, as
the case may be, (i) to require the Executive to account for and pay over to it
the compensation, profits, monies, accruals or other benefits derived or
received by him as a result of any transaction constituting a breach of any of
the provisions of Section 6 or 7 hereof (in the case of the Company) or Section
8 hereof (in the case of General Instrument) or (ii) to receive from the
Executive an amount equal to the damages actually suffered by the Company or
General Instrument, as the case may be, as a result of such breach.
10. Benefit and Assignability.
This Agreement shall be binding upon the Executive and, except with
respect to Sections 1, 2, 3, 4 and 5, his legal representatives, heirs and
distributees. Except as expressly permitted herein, the Executive may not assign
any of his rights or duties hereunder or any interest herein without the prior
written approval of the Board of Directors. The Company shall not unreasonably
withhold its consent to the Executive's assignment of his rights to compensation
hereunder.
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11. Modification; Waiver.
No provision of this Agreement may be changed, modified or discharged
unless such change, modification or discharge is agreed to in writing by the
Executive and the Board of Directors, or in the case of Section 8 hereof or any
other provision hereof applicable to General Instrument, by the Executive and by
General Instrument. No waiver by either party hereto of any breach by the other
party of 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 time or at any prior or subsequent time.
12. Severability.
In the event any section, provision, term or clause of this Agreement,
or any combination of the same, shall be found or held to be illegal, invalid or
unenforceable at law or in equity under present or future laws, such finding or
holding shall not in any way affect the remainder of this Agreement which shall
continue in full force and effect. If the time periods, territorial
restrictions, activities or subjects contained in the covenants of Section 7 or
Section 8 are deemed invalid or unenforceable in law or equity, they shall be
deemed amended by the parties to be for such period, territories, activities or
subjects as shall be valid and enforceable.
13. Entire Agreement.
This Agreement and the Merger Agreement constitute the entire
agreement of the parties relating to the subject matter hereof and there are no
written or oral terms or representations made by either party other than those
contained herein and therein. Any prior agreements or understandings of the
Executive, the Company and General Instrument with respect to the subject matter
hereof are hereby terminated and superseded.
14. Governing Law.
The construction and performance of this Agreement shall be governed
by the law of the State of North Carolina.
15. Counterparts.
This Agreement may be executed in counterparts, each of which shall be
considered an original and taken together shall constitute one and the same
instrument.
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16. Captions.
The captions of the various sections of this Agreement are inserted
only as a matter of convenience and for reference, and in no way define, limit,
amplify, explain or in any way affect the scope or intent of this Agreement or
any of the terms of this Agreement.
17. Notices.
Any notice required or permitted to be given to any party hereto
pursuant to this Agreement shall be in writing and shall be delivered personally
or sent by registered or certified mail, return receipt requested. Notices to
the Executive may be delivered or sent to the Executive at 0000 Xxxxxx-Xxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxxxx.
Notices to the Company may be delivered or sent to the Company at 0000
Xxxxxx-Xxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxxx, with a copy to General Instrument Corporation, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esq. Notices to General
Instrument may be delivered or sent to General Instrument at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esq., with a copy to
Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxx X. Xxxxxx, Esq. The parties may designate other addresses
by notice given in accordance with the requirements of this Section 17. Notices
shall be deemed given upon receipt.
18. Miscellaneous.
(a) Wherever used herein, the singular of any word may denote two or
more, the plural may denote only one and words of one gender may denote or
include another gender, wherever appropriate under the actual circumstances.
(b) As used in this Agreement, the term "person" includes any natural
person, corporation, partnership, association, organization or other entity and
the term "affiliate" means any person directly or indirectly controlling,
controlled by or under common control with another person including, without
limitation, a subsidiary and a parent of such person.
(c) All references herein to General Instrument (except for such
references with respect to the solicitation by the Executive of the written
consent of General Instrument and such references in Section 11
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hereof) shall be deemed to refer to General Instrument and its affiliates other
than (i) the Company and (ii) any person directly or indirectly controlled by
the Company. References to the Company in Sections 6 and 7 hereof (except for
such references with respect to notice or delivery to the Company and in the
definition of "affiliated" and in references to "affiliated with the Company")
shall be deemed to refer to the Company and any person directly or indirectly
controlled by the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
/s/ XXXXX X. XXXXXXX
--------------------------------
XXXXX X. XXXXXXX
COMM/SCOPE COMPANY
By:
-----------------------------
Title: V.P.
GENERAL INSTRUMENT CORPORATION
By:
-----------------------------
Title: VP
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Exhibit A
COMPENSATION
Base Salary: $230,000 per annum.
Target Bonus Opportunity: Up to 50% of Base Salary under the Management
Incentive Compensation Plan expected to be adopted
by the Company or otherwise.
Exhibit B
PERMITTED INVESTMENTS
Investments in corporations or other entities the principal business
of which is providing cable television services to subscribers.
Exhibit C
DESCRIPTION OF GENERAL INSTRUMENT'S
BROADBAND BUSINESS
General Instrument's "Broadband Business" consists of General
Instrument's activities with respect to (i) the design, development,
manufacture, sale and installation of electronic equipment and systems,
subscriber terminals and distribution electronics for community antenna
television ("CATV") systems (other than wire and cable), (ii) the design,
development, manufacture and sale of encryption/decryption equipment and
software for the scrambling and descrambling of satellite-delivered television
programming, (iii) the construction and management of construction of turnkey
CATV systems and (iv) the provision, to CATV operators and franchise holders, of
on-site signal analysis and system designs for antennas, headend and
distribution equipment.
