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EXHIBIT 10.5
EG&G, INC.
EMPLOYMENT AGREEMENT
This Agreement made as of the 1st day of November, 1993, between EG&G, Inc., a
Massachusetts corporation (hereinafter called the "Company"), and Xxxx X.
Xxxxxxxxx, XX of Southborough, Massachusetts (hereinafter referred to as the
"Employee").
WITNESSETH:
WHEREAS, the Employee has been employed in a management position with the
Company; and
WHEREAS, the Employee hereby agrees to continue to perform such services
and duties of a management nature as shall be assigned to him; and
WHEREAS, the Employee hereby agrees to the compensation herein provided and
agrees to serve the Company to the best of his ability during the period of this
Agreement.
NOW, THEREFORE, in consideration of the sum of One Dollar, and of the
mutual covenants herein contained, the parties agree as follows:
1. a) Except as hereinafter otherwise provided, the Company agrees to
continue to employ the Employee in a management position with the
Company, and the Employee agrees to remain in the employment of the
Company in that capacity for a period of one year from the date hereof
and from year to year thereafter until such time as this Agreement is
terminated.
b) The Company will, during each year of the term of this Agreement,
place in nomination before the Board of Directors of the Company the
name of the Employee for election as an Officer of the Company except
when a notice of termination has been given in accordance with
Paragraph 5(b).
2. The Employee agrees that, during the specified period of employment,
he shall, to the best of his ability, perform his duties, and shall not
engage in any business, profession or occupation which would conflict with
the rendition of the agreed upon services, either directly or indirectly,
without the prior approval of the Board of Directors.
3. During the period of his employment under this Agreement, the Employee
shall be compensated for his services as follows:
a) Except as otherwise provided in this Agreement, he shall be paid
a salary during the period of this Agreement at a base rate to be
determined by the Company on an annual basis. Except as provided in
Subparagraph 3d, such annual base salary shall under no circumstances
be fixed at a rate below the annual base rate then currently in
effect.
b) He shall be reimbursed for any and all monies expended by him in
connection with his employment for reasonable and necessary expenses
on
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behalf of the Company in accordance with the policies of the Company
then in effect;
c) He shall be eligible to participate under any and all bonus,
benefit, pension, compensation, and option plans which are, in
accordance with company policy, available to persons in his position
(within the limitation as stipulated by such plans). Such eligibility
shall not automatically entitle him to participate in any such plan;
d) if, because of adverse business conditions or for other reasons,
the Company at any time puts into effect salary reductions applicable
to all management employees of the Company generally, the salary
payments required to be made under this Agreement to the Employee
during any period in which such general reduction is in effect may be
reduced by the same percentage as is applicable to all management
employees of the Company generally. Any benefits made available to the
Employee which are related to base salary shall also be reduced in
accordance with any salary reduction;
4. a) During the period of his employment by the Company or for any
period which the Company shall continue to pay the Employee his salary
under this Agreement, whichever shall be the longer, the Employee
shall not directly or indirectly own, manage, control, operate, be
employed by, participate in or be connected with the ownership,
management, operation or control of any business which competes with
the Company or its subsidiaries, provided, however, that the foregoing
shall not apply to ownership of stock in a publicly held corporation
which ownership is disclosed to the Board of Directors nor shall it
apply to any other relationship which is disclosed to and approved by
the Board of Directors.
b) During the period of his employment by the Company and two years
following the Company's last payment of salary to him, the Employee
shall not utilize or disclose to others any proprietary or
confidential information of any type or description which term shall
be construed to mean any information developed or identified by the
Company which is intended to give it an advantage over its competitors
or which could give a competitor an advantage if obtained by him. Such
information includes, but is not limited to, product or process
design, specifications, manufacturing methods, financial or
statistical information about the Company, marketing or sales
information about the Company, sources or supply, lists of customers,
and the Company's plans, strategies, and contemplated actions.
c) During the period of his employment by the Company or for any
period during which the Company shall continue to pay the Employee his
salary under this Agreement, whichever shall be longer, the Employee
shall not in any way whatsoever aid or assist any party seeking to
cause, initiate or effect a Change in Control of the Company as
defined in Paragraph 6 without the prior approval of the Board of
Directors.
5. Except for the Employee covenants set forth in Paragraph 4 which
covenants shall remain in effect for the periods stated therein, and
subject to Paragraph 6, this Agreement shall terminate upon the happening
of any of the following events and (except as provided herein) all the
Company's obligation under
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this Agreement, including, but not limited to, making payments to the
Employee shall cease and terminate:
a) On the effective date set forth in any resignation submitted by
the Employee and accepted by the Company, or if no effective date is
agreed upon, the date of receipt of such letter.
b) One year after written notice of termination is given by either
party to the other party.
c) At the end of the month in which the Employee shall have attained
the age of sixty-five years;
d) At the death of the Employee;
e) At the termination of the Employee for cause. As used in the
Agreement, the term "cause" shall mean:
1) Misappropriating any funds or property of the Company;
2) Unreasonable refusal to perform the duties assigned to him
under this Agreement;
3) Conviction of a felony;
4) Continuous conduct bringing notoriety to the Company and
having an adverse effect on the name or public image of the
Company;
5) Violation of the Employee's covenants as set forth in
Paragraph 4 above; or
6) Continued failure by the Employee to observe any of the
provisions of this Agreement after being informed of such
breach.
f) At termination of the Employee by the Company without cause.
g) Twelve months after written notice of termination is given by the
Company to the Employee based on a determination by the Board of
Directors that the Employee is disabled (which, for purposes of this
Agreement, shall mean that the Employee is unable to perform his
regular duties, with such determination to be made by the Board of
Directors, in reliance upon the opinion of the Employee's physician or
upon the opinion of one or more physicians selected by the Company).
Such notice shall be given by the Company to the Employee on the 106th
day of continuous disability of the Employee. Notwithstanding the
foregoing, if, during the twelve-month notice period referred to
above, the Employee is no longer disabled and is able to return to
work, such notice of employment termination shall be rescinded, and
the employment of the Employee shall continue in accordance with the
terms of this Agreement. During the first 106 days of continuous
disability of the Employee, the Company will make periodic payments to
the Employee in an amount equal to the difference between his base
salary and the benefits provided by the Company's Short-Term
Disability Income Plan. During the twelve-month notice period
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following 106 days of continuous disability, the Company will make
periodic payments to the Employee in an amount equal to the difference
between his base salary and the benefits provided by the Company's
Long-Term Disability Plan. If the employment of the Employee
terminates at the end of such twelve-month notice period, the Company
will make periodic payments to the Employee, up to the amount
remaining in his sick leave reserve account, in an amount equal to the
difference between his base pay and the post-employment benefits
provided to him under the Company's Long-Term Disability Plan. Due to
the fact that payments to the Employee under the Company's Long-Term
Disability Plan are not subject to federal income taxes, the payments
to be made directly by the Company pursuant to the two preceding
sentences shall be reduced such that the total amount received by the
Employee (from the Company and from the Long-Term Disability Plan),
after payment of any income taxes, is equal to the amount that the
Employee would have received had he been paid his base salary, after
payment of any income taxes on such base salary.
h) Notwithstanding the foregoing provisions, in the event of the
termination of the Employee by the Company without cause, the Employee
shall, until the expiration of his then current employment term or one
year from the date of such termination, whichever is later, (i)
continue to receive his Full Salary (as defined below), which shall be
payable in accordance with the payment schedule in effect immediately
prior to his employment termination, and (ii) continue to be entitled
to participate in all employee benefit plans and arrangements of the
Company (such as life, health and disability insurance and automobile
arrangements) to the same extent (including coverage of dependents, if
any) and upon the same terms as were in effect immediately prior to
his termination. For purposes of this Agreement, "Full Salary" shall
mean the Employee's annual base salary, plus the amount of any bonus
or incentive payments received by the Employee with respect to the
last full fiscal year of the Company for which all bonus or incentive
payments to be made have been made.
6. a) In the event that there is a Change in Control of the Company (as
defined below), the provisions of this Agreement shall be amended as
follows:
1) Xxxxxxxxx 0x xxxxx xx amended to read in its entirety as
follows:
"Except as hereinafter otherwise provided, the Company
agrees to continue to employ the Employee in a
management position with the Company, and the Employee
agrees to remain in the employment in the Company in
that capacity, for a period of five (5) years less one
day from the date of the Change in Control. Except as
provided in Paragraph 3d, the Employee's salary as set
forth in Paragraph 3a and his other employee benefits
pursuant to the plans described in Paragraph 3c shall
not be decreased during such period."
2) Xxxxxxxxx 0x xxxxx xx amended by the addition of the
following provision at the end of such paragraph:
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", provided that the Employee agrees not to resign,
except for Good Reason (as defined below), during
the one-year period following the date of the Change
in Control."
3) Paragraph 5b shall be deleted in its entirety.
4) Paragraph 5h shall be amended to read in its entirety as
follows:
"Notwithstanding the foregoing provisions, in the event
of the termination of the Employee by the Company
without cause, or the resignation of the Employee for
Good Reason, the Employee shall (i) receive, on the date
of his employment termination, a cash payment in an
amount equal to his Full Salary (as defined below)
multiplied by the number of years (including any
portions thereof) remaining until the expiration of his
then current employment term or five years from the date
of such termination, whichever is later (it being agreed
that such amount shall not be discounted based upon the
present value of such amount), and (ii) continue to be
entitled to participate in all employee benefit plans
and arrangements of the Company (such as life, health
and disability insurance and automobile arrangements) to
the same extent (including coverage of dependents, if
any) and upon the same terms as were in effect
immediately prior to his termination. For purposes of
this Agreement, "Full Salary" shall mean the Employee's
annual base salary, plus the amount of any bonus or
incentive payments received by the Employee with respect
to the last full fiscal year of the Company for which
all bonus or incentive payments to be made have been
made. Payments under this Paragraph 5h shall be made
without regard to whether the deductibility of such
payments (or any other "parachute payments," as that
term is defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), to or for the
benefit of the Employee) would be limited or precluded
by Section 280G and without regard to whether such
payments (or any other "parachute payments" as so
defined) would subject the Employee to the federal
excise tax levied on certain "excess parachute payments"
under Section 4999 of the Code; provided that if the
total of all "parachute payments" to or for the benefit
of the Employee, after reduction for all federal, state
and local taxes (including the tax described in Section
4999 of the Code, if applicable) with respect to such
payments (the "Total After-Tax Payments"), would be
increased by the limitation or elimination of any
payment under this Paragraph 5h, amounts payable under
this Paragraph 5h shall be reduced to the extent, and
only to the extent,
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necessary to maximize the Total After-Tax Payments. The
determination as to whether and to what extent payments
under this Paragraph 5h are required to be reduced in
accordance with the preceding sentence shall be made at
the Company's expense by Xxxxxx Xxxxxxxx LLP or by such
other certified public accounting firm as the Board of
Directors of the Company may designate prior to a Change
in Control of the Company. In the event of any
underpayment or overpayment under this Paragraph 5h as
determined by Xxxxxx Xxxxxxxx LLP (or such other firm as
may have been designated in accordance with the
preceding sentence), the amount of such underpayment or
overpayment shall forthwith be paid to the Employee or
refunded to the Company, as the case may be, with
interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code."
5) Paragraph 8 shall be amended to read in its entirety as
follows:
"The Employee may pursue any lawful remedy he deems
necessary or appropriate for enforcing his rights under
this Agreement following a Change in Control of the
Company, and all costs incurred by the Employee in
connection therewith (including without limitation
attorneys' fees) shall be promptly reimbursed to him by
the Company, regardless of the outcome of such
endeavor."
b) For purposes of this Agreement, a "Change in Control of the
Company" shall occur or be deemed to have occurred only if (i) any
"person", as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of
stock in the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities; (ii) during
any period of two consecutive years ending during the term of this
Agreement, individuals who at the beginning of such period constitute
the Board of Directors of the Company, and any new director whose
election by the Board of Directors 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 were either directors at the
beginning of the period or whose election or whose nomination for
election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors; (iii) the
stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the
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voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iv) the
stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets.
c) For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events, except as provided in
Paragraph 3d: (i) a reduction in the Employee's base salary as in
effect on the date hereof or as the same may be increased from time to
time; (ii) a failure by the Company to pay annual cash bonuses to the
Employees in an amount at least equal to the most recent annual cash
bonuses paid to the Employee; (iii) a failure by the Company to
maintain in effect any material compensation or benefit plan in which
the Employee participated immediately prior to the Change in Control,
unless an equitable arrangement has been made with respect to such
plan, or a failure to continue the Employee's participation therein on
a basis not materially less favorable than existed immediately prior
to the Change in Control; (iv) any significant and substantial
diminution in the Employee's position, duties, responsibilities or
title as in effect immediately prior to the Change in Control; (v) any
requirement by the Company that the location at which the Employee
performs his principal duties be changed to a new location outside a
radius of 25 miles from the Employee's principal place of employment
immediately prior to the Change in Control; or (vi) any requirement by
the Company that the Employee travel on an overnight basis to an
extent not substantially consistent with the Employee's business
travel obligations immediately prior to the Change in Control.
Notwithstanding the foregoing, the resignation shall not be considered
to be for Good Reason if any such circumstances are fully corrected
prior to the date of resignation.
7. Neither the Employee nor, in the event of his death, his legal
representative, beneficiary or estate, shall have the power to transfer,
assign, mortgage or otherwise encumber in advance any of the payments
provided for in this Agreement, nor shall any payments nor assets or funds
of the Company be subject to seizure for the payment of any debts,
judgments, liabilities, bankruptcy or other actions.
8. Any controversy relating to this Agreement and not resolved by the
Board of Directors and the Employee shall be settled by arbitration in the
City of Boston, Commonwealth of Massachusetts, pursuant to the rules then
obtaining of the American Arbitration Association, and judgment upon the
award may be entered in any court having jurisdiction, and the Board of
Directors and Employee agree to be bound by the arbitration decision on any
such controversy. Unless otherwise agreed by the parties hereto,
arbitration will be by three arbitrators selected from the panel of the
American Arbitration Association. The full cost of any such arbitration
shall be borne by the Company.
9. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition, nor shall any waiver or relinquishment of any right
or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times by either
party.
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10. All notices or other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered personally to the
Employee or to the General Counsel of the Company or when mailed by
registered or certified mail to the other party (if to the Company, at 00
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, attention General Counsel;
if to the Employee, at the last known address of the Employee as set forth
in the records of the Company).
11. This Agreement has been executed and delivered and shall be construed
in accordance with the laws of the Commonwealth of Massachusetts. This
Agreement is and shall be binding on the respective legal representatives
or successors of the parties, but shall not be assignable except to a
successor to the Company by virtue of a merger, consolidation or
acquisition of all or substantially all of the assets of the Company. All
previous employment contracts between the Employee and the Company or any
of the Company's present or former subsidiaries or affiliates is hereby
canceled and of no effect.
IN WITNESS WHEREOF, the Company has caused its seal to be hereunto affixed
and these presents to be signed by its proper officers, and the Employee has
hereunto set his hand and seal the day and year first above written.
EG&G, INC.
(SEAL) By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx,
Chairman and Chief
Executive Officer
Employee:/s/Xxxx X. Xxxxxxxxx, XX
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Xxxx X. Xxxxxxxxx, XX
