XXXXXX ELECTRONICS CORPORATION
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of April 12, 2000 (the "Effective
Date") by and between Xxxxxx Electronics Corporation (the "Company"), a New
York corporation and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the
Company on a full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES
The Executive shall serve as Co-Chairman and Co-Chief Executive
Officer of the Company. Subject to the supervision and direction of the Board
of Directors of the Company (the "Board") and unless otherwise determined by
the Board, the Executive in such capacity shall: be responsible for managing
the affairs of the Corporation; have the powers and duties usually and
customarily associated with the office of the Co-Chairman and Co-Chief
Executive Officer; and have such commensurate responsibilities, duties and
authority as may from time to time be assigned to the Executive by the Board.
The Executive shall devote substantially all his time, energy and skill during
reasonable business hours to the service of the Company. The Executive's
office shall be located at the Company's headquarters, which shall be located
at 00 Xxxxxxxx Xxxx Xx., Xxxxxxxx, Xxx Xxxx, 00000.
2. TERM OF AGREEMENT
The Company shall employ the Executive and the Executive shall serve
as a full-time employee of the Company for a term of three (3) years from the
date hereof (such period and any additional periods thereafter in respect of
which this Agreement is extended in accordance herewith being each an
"Employment Period"). Each Employment Period and this Agreement shall be
automatically extended for an additional one (1) year term following the
expiration of such Employment Period, unless either the Company or the
Employee notifies the other in writing at least twelve months prior to such
expiration that the Employment Period and this Agreement shall not be so
extended. Further, if employment is terminated for any reason other than
death, such termination will not result in the expiration of the term of this
Agreement.
3. COMPENSATION DURING TERM OF AGREEMENT
(a) Base Salary
The Company shall pay the Executive a salary (the "Base
Salary") of not less than (i) $200,000 per annum. Base Salary shall include
any amounts of compensation deferred by the Executive under any employee
benefit plan maintained by the Company. Such Base Salary shall be payable
weekly. The Executive's Base Salary shall be reviewed annually. Such review
shall be conducted by a Compensation Committee designated by the Board, and
the Board shall increase the Executive's Base Salary by a Cost of Living
Allowance ("COLA") percentage and a 7% merit increase based on performance as
determined by the Board. The increased Base Salary shall become the "Base
Salary" for purposes of this Agreement. In addition to the Base Salary
provided in this Section 3(a), the Company shall also provide the Executive,
at no cost to the Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Company.
(b) Short-Term Incentive Compensation Program
The Executive shall participate in the Company's Short-Term
Incentive Compensation Program. Annual cash awards ("Short-Term Awards") under
this program will be based on the achievement of performance goals, both
corporate (80%) and individual (20%), expressed as a percentage of the
Executive's Base Salary or dollar amount adopted on or after the date of this
Agreement. Performance measures will include sales from new sources and
operating income. Performance goals, measures and annual awards will be
determined by the Compensation Committee and approved by the Board. The
Company will pay the Short-Term Award to the Executive within 60 days
following the last day of the Company's fiscal year. Notwithstanding whether
any such performance goals are achieved, the Short-Term Awards payable to the
Executive shall be not less than $150,000 per annum in respect of each year or
fraction thereof of employment under this Agreement.
(c) Long-Term Incentive Compensation Program
In addition to the Base Salary and Short-Term Award, the
Executive shall be entitled to participate, during the Employment Period, in
the Company's Long-Term Incentive Compensation Program. Long-term cash or
equity-based awards ("Long-Term Awards") may include (i) stock options, (ii)
stock appreciation rights, (iii) restricted stock, (iv) deferred stock, (v)
stock reload options and/or (vi) other stock-based awards. Each equity-based,
Long-Term Award granted to the Executive shall vest as follows: 25% shall vest
on the first anniversary of such award; an additional 25% shall vest on the
second anniversary of such award; and the remaining 50% shall vest on the
third anniversary of such award.
(d) The Company will provide the Executive with employee benefit
plans, arrangements and perquisites substantially equivalent to those in which
the Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement, and the Company will
not, without the Executive's prior written consent, make any changes in such
plans, arrangements or perquisites which would adversely affect the
Executive's rights or benefits thereunder. Without limiting the generality of
the foregoing provision of this Section 3(d), the Executive will be entitled
to (i) participate in or receive benefits under any employee benefit plans
including, but not limited to, retirement plans, supplemental retirement
plans, pension plans, profit-sharing plans, health-and-accident plans, medical
coverage or any other employee benefit plan or arrangement made available by
the Company in the future to its senior executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, (ii) a car to be leased
and appropriately maintained and insured by the Company, (iii) annual fixed
costs (including dues, capital assessments and the like) not to exceed $6,500
per annum related to membership in a club of the Executive's choice, and (iv)
four weeks of vacation per year, with the right to carry vacation time not
used in any year (excluding vacation time so carried over) to the immediately
subsequent year.
(e) In addition to the Base Salary provided for by Section 3(a) and
other compensation provided for by Sections 3(b), (c) and (d) hereof, the
Company shall pay or reimburse the Executive for all reasonable travel and
other reasonable expenses incurred by the Executive performing his obligations
under this Agreement and may provide such additional compensation in such form
and such amounts as the Board may from time to time determine.
4. TERMINATION OF EMPLOYMENT
(a) Death or Disability:
This Agreement shall terminate automatically upon the
Executive's death. The Company may terminate this Agreement, after having
established the Executive's Disability (pursuant to the definition of
"Disability" set forth below), by giving to the Executive written notice of
its intention to terminate the Executive's employment. In such a case, this
Agreement (but not the Executive's employment with the Company) shall
terminate effective on the 90th day after receipt of such notice (the
"Disability Effective Date"), provided that, within 90 days after such
receipt, the Executive shall fail to return to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" means
disability which, after the expiration of more than 52 weeks after its
commencement, is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement upon acceptability not to be
withheld unreasonably).
(b) Cause:
The Company may terminate the Executive's employment for
Cause (as defined below). For purposes of this Agreement, "Cause" means:
(i) an act or acts of dishonesty (other than insubstantial
or inadvertent acts that do not materially affect the
business, results of operations or financial condition of
the Company) taken by the Executive at the expense of the
Company;
(ii) repeated material violations by the Executive of the
Executive's obligations under Section 1 of this Agreement; or
(iii) the conviction of the Executive of a felony.
(c) Good Reason:
The Executive's employment may be terminated by the
Executive for Good Reason (as defined below). For purposes of this Agreement,
"Good Reason" means:
(i) (A) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles, and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 1 of this Agreement or (B) any other
action by the Company which results in a diminishment in
such position, authority, duties or responsibilities, other
than an insubstantial and inadvertent action which is
remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 3 of this Agreement, other than an
insubstantial and inadvertent failure which is remedied by
the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location more than 50 miles from the location
of the Company's headquarters set forth in Section 1, except
for travel reasonably required in the performance of the
Executive's responsibilities;
(iv) any purported termination by the Company of the
Executive's employment other than as permitted by this
Agreement, it being understood that any such purported
termination shall not be effective for any purpose of this
Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 15(a) of this Agreement; or
(vi) failure of the Executive to be nominated for election
to the Board at each meeting of the shareholders of the
Company during the term of this Agreement called for the
purpose of, in addition to any other matters, electing the
members of the Board, unless either the Company or the
Executive in accordance with Section 2 notifies the other in
writing at least twelve months prior to such expiration that
the Employment Period and this Agreement shall not be
extended.
(d) Effect of Termination:
Termination shall not affect any rights that the Executive
may have under any other program or arrangement.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION
(a) Death
If the Executive's employment is terminated by reason of the
Executive's death, this Agreement shall terminate without further obligations
to the Executive's legal representatives under this Agreement other than those
obligations accrued hereunder at the date of the Executive's death. Anything
in this Agreement to the contrary notwithstanding, the Executive's family
shall be entitled to receive benefits at least equal to those provided by the
Company to surviving families of executives of the Company under such plans,
programs and policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the date of the
Executive's death, or if more favorable to the Executive and/or the
Executive's family, as in effect at any time thereafter with respect to other
key executives and their families. The unvested portion of such stock options
shall immediately become vested upon the Executive's death.
(b) Disability
If this Agreement is terminated by reason of the Executive's
Disability, the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to those provided
by the Company to disabled employees and/or their families in accordance with
such plans, programs and policies relating to disability, if any, as in effect
during the 90-day period immediately preceding the Disability Effective Date
or, if more favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter with respect to other key executives and their
families. The unvested portion of such stock options shall immediately become
vested upon the Executive's disability.
(c) Cause
If the Executive's employment shall be terminated for Cause
pursuant to Section 4(b), the Company shall pay the Executive his full Base
Salary through the Date of Termination (as defined below) at the rate in
effect at the time Notice of Termination (as defined below) is given and
provide to the Executive all then vested benefits, deferred compensation and
the like due to the Executive under this Agreement, and the Company shall have
no further obligations to the Executive under this Agreement. In addition, the
Executive shall be afforded the opportunity to convert any term policies
insuring the Executive's health or life that are owned by the Company to
individual policies, where permitted by the terms of such policies.
(d) Good Reason; Other Than for Cause
If, during the Employment Period, the Company shall
terminate the Executive's employment other than for Cause, or the employment
of the Executive shall be terminated by the Executive for Good Reason, the
Company shall pay to the Executive a sum equal to (i) the amount of the
remaining salary payments that the Executive would have earned if he continued
his employment with the Company during the remaining unexpired term of this
Agreement at the Executive's Base Salary at the Date of Termination; (ii) an
amount equal to the product of the highest annual amount of bonus and any
other compensation paid to the Executive during the term of this Agreement
multiplied by the remaining number of years of this Agreement and any fraction
thereof; and (iii) an amount equal to the product of the highest annual amount
of contributions that were made on the Executive's behalf to any employee
benefit plans of the Company during the term of this Agreement times the
remaining number of years of this Agreement and any fraction thereof. At the
election of the Executive, which election is to be made within thirty (30)
days of the Date of Termination, such payments shall be paid monthly during
the remaining term of this Agreement following the Executive's termination.
Such payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.
The Company will continue life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Company for the Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Company employees on a
nondiscriminatory basis. Such coverage shall cease upon the expiration of the
remaining term of this Agreement.
The Executive will be entitled to receive benefits due him
under or contributed by the Company on his behalf pursuant to any retirement,
incentive, profit sharing, bonus, performance, disability or other employee
benefit plan maintained by the Company on the Executive's behalf to the extent
such benefits are not otherwise paid to the Executive under a separate
provision of this Agreement.
6. CHANGE IN CONTROL
(a) For purposes hereof, a "change in control" shall be defined
as:
(i) The acquisition by any individual, 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
20% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding 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"); provided, however,
that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (1)
any acquisition directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by
the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A),
(B) and (C) of subsection (iii) below; or
(ii) Individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board")
cease for any reason to constitute at least a majority of
the Incumbent Board, provided, however, that any individual
becoming a director subsequent to the date hereof whose
election or nomination for election by the Company's
shareholders was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board, shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Incumbent Board; or
(iii) Consummation of a reorganization, merger,
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 60% of the then outstanding shares of
common stock and the combined voting power, respectively, of
the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be,
of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and (C) at least
a majority of the members of the board of directors of the
corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Incumbent
Board, providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(b) Upon the occurrence of a Change in Control, the Company shall pay
the Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to the greater
of (i) the payments and benefits due for the remaining term of this Agreement
and (ii) five (5) times the Executive's average annual compensation from the
Company for the five (5) preceding taxable years, or if the Executive's
employment by the Company is then less than five (5) years, the Executive's
average annual compensation from the Company during the Executive's employment
by the Company, provided, that if such period of employment includes a short
taxable year or less than all of a taxable year, compensation for such short
or incomplete taxable year must be annualized before determining the average
annual compensation for the period of employment. In annualizing compensation,
the frequency with which payments are expected to be made over an annual
period must be taken into account, such that any amount of compensation for
such a short or incomplete taxable year that represents a payment that will
not be made more often that once per year is not annualized. Such annual
compensation shall include any commissions, bonuses, pension and profit
sharing plan benefits, severance payments, retirement benefits, director or
committee fees and fringe benefits paid or to be paid to the Executive during
such years. At the election of the Executive, which election is to be made
within thirty (30) days of the Change in Control, such payment may be made in
a lump sum or paid in equal monthly installments during the thirty-six (36)
months following the Executive's termination. In the event that no election is
made, payment to the Executive will be made on a monthly basis during the
thirty-six (36) months following the Executive's termination.
(c) All restrictions on the restricted stock then held by the
Executive will lapse immediately, all stock options and stock appreciation
rights then held by the Executive will become immediately exercisable, and any
performance shares or units then held by the Executive will vest immediately,
in full, in the event of a Change in Control.
(d) Upon the occurrence of a Change in Control, the Executive will be
entitled to receive benefits due him under or contributed by the Company on
his behalf pursuant to any retirement, incentive, profit sharing, bonus,
performance, disability or other employee benefit plan maintained by the
Company on the Executive's behalf to the extent such benefits are not
otherwise paid to the Executive under a separate provision of this Agreement.
(e) Upon the occurrence of a Change in Control followed by the
Executive's termination of employment, the Company will cause to be continued
life, medical, dental and disability coverage substantially identical to the
coverage maintained by the Company for the Executive prior to his severance,
except to the extent that such coverage may be changed in its application for
all Company employees on a nondiscriminatory basis. Such coverage and payments
shall cease upon the expiration of thirty-six (36) full calendar months
following the Date of Termination.
(f) In the event that the Executive is receiving monthly payments
pursuant to Section 6(b) hereof, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, the Executive shall elect
whether the balance of the amount payable under the Agreement at that time
shall be paid in a lump sum or on a pro rata basis pursuant to such section.
Such election shall be irrevocable for the year for which such election is
made.
(g) Any and all payments to be made to the Executive under this
Agreement or otherwise as a result of a Change in Control whether in the
nature of severance payments, liquidated damage payments, compensation or
other payments (all of the foregoing being hereinafter referred to as "Change
in Control Payments"), shall be made free and clear of, and without deduction
or withholding for or on account of, any tax which may be payable under
Section 4999 of the Internal Revenue Code of 1986 (the "Code"), now or
hereafter imposed, levied, withheld or assessed (such amounts being
hereinafter referred to as the "Excise Taxes"). If, notwithstanding the
foregoing provision, any Excise Taxes are withheld from any Change in Control
Payments made or to be made to the Executive, the amounts so payable to the
Executive shall be increased to the extent necessary to yield to the Executive
(after payment of any tax which may be payable under Section 4999 of the Code)
the full amount which he is entitled to receive pursuant to the terms of this
Agreement or otherwise without regard to liability for any Excise Taxes and
any other Federal income taxes, State income taxes, FICA/Medicare and
unemployment taxes thereon. In the event any Excise Taxes are now or hereafter
imposed, levied, assessed, paid or collected with respect to the Change of
Control Payments made or to be made to the Executive, Excise Taxes and any
other Federal, State, FICA/Medicare and unemployment taxes thereon shall be
paid by the Company or, if paid by the Executive, shall be reimbursed to the
Executive by the Company upon its receipt of satisfactory evidence of such
payment having been made.
7. NOTICE
(a) Any purported termination by the Company or by the Executive
shall be communicated by Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination (which, in the case of a termination for Cause, shall not be
less than thirty (30) days from the date such Notice of Termination is given).
(c) If, within thirty (30) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined, either by mutual
written agreement of the parties, by a binding arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay the Executive his full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, Base Salary) and
continue him as a participant in all compensation, benefit and insurance plans
in which he was participating when the notice of dispute was given, until the
dispute is finally resolved in accordance with this Agreement. Amounts paid
under this Section are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.
8. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to the Executive under this Agreement
shall be subject to the Executive's compliance with Section 8(b), hereof
during the term of this Agreement and for one (1) full year after the
expiration or termination hereof.
(b) Following the expiration or termination of this Agreement, the
Executive shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, that, if the Executive's
assistance is so required by the Company subsequent to the expiration or
termination of this Agreement, then the Company shall pay to the Executive for
such assistance a fee of $300 per hour plus reasonable and necessary travel
costs related to the provision of such assistance; and provided, however, that
Executive would not be required to furnish such information and assistance to
the Company in connection with any litigation between the Executive and the
Company or any of its subsidiaries or affiliates.
9. NON-COMPETITION
(a) Upon any termination of the Executive's employment hereunder
pursuant to Section 6 hereof, the Executive agrees not to compete with the
Company for a period of one (1) year following such termination in any city,
town or county in which the Company has an office or has filed an application
for regulatory approval to establish an office, determined as of the effective
date of such termination, except as agreed to pursuant to a resolution duly
adopted by the Board. The Executive agrees that during such period and within
said cities, towns and counties, the Executive shall not work for or advise,
consult or otherwise serve with, directly or indirectly, any entity whose
business materially competes with the business activities of the Company. The
parties hereto, recognizing that irreparable injury will result to the
Company, its business and property in the event of the Executive's breach of
this Section 9(a) agree that in the event of any such breach, as judicially
determined, by the Executive, the Company will be entitled, in addition to any
other remedies and damages available, to an injunction to restrain the
violation hereof by the Executive, the Executive's partners, agents, servants,
employers, employees and all persons acting for or with the Executive. The
Executive represents and admits that in the event of the termination of his
employment pursuant to Section 6 hereof, the Executive's experience and
capabilities are such that the Executive can obtain employment in a business
engaged in other lines and/or of a different nature than the Company, and that
the enforcement of a remedy by way of injunction will not prevent the
Executive from earning a livelihood. Nothing herein will be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of
damages from the Executive.
(b) The Executive recognizes and acknowledges that the knowledge of
the business activities and plans for business activities of the Company is a
valuable, special and unique asset of the business of the Company. The
Executive will not, during or after the term of his employment, disclose any
knowledge of the past, present, planned or considered business activities of
the Company or affiliates thereof to any person, firm, corporation, or other
entity for any reason or purpose whatsoever. Notwithstanding the foregoing,
the Executive may disclose any concepts or ideas that are not solely and
exclusively derived from the business plans and activities of the Company. In
the event of a breach or threatened breach by the Executive of the provisions
of this Section 9(b), the Company will be entitled to an injunction
restraining the Executive from disclosing, in whole or in part, the knowledge
of the past, present, planned or considered business activities of the
Company, or from rendering any services to any person, firm, corporation or
other entity to whom such knowledge, in whole or in part, has been disclosed
or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of
damages from the Executive.
10. NO ATTACHMENT
(a) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action
shall be null, void and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit
of, the Executive and the Company and their respective successors and assigns.
11. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act
other than that specifically waived.
12. SEVERABILITY
If, for any reason, any provision of this Agreement or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not so held invalid,
and each such other provision and part thereof shall, to the full extent
consistent with law, continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely
for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
14. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of the Company's headquarters set
forth in Section 1, in accordance with the rules of the American Arbitration
Association then in effect. One arbitrator shall be selected by the Company;
one arbitrator shall be selected by the Executive; and one arbitrator shall be
selected by the to arbitrators respectively selected by the Company and the
Executive. Judgment may be entered on the arbitrators' award in any court
having jurisdiction, provided, however, that the Executive shall be entitled
to seek specific performance of his right to be paid and receive benefits
until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
In the event any dispute or controversy arising under or in
connection with the Executive's termination is resolved in favor of the
Executive, whether by judgment, arbitration or settlement, the Executive shall
be entitled to the payment of all back-pay, including salary, bonuses and any
other cash compensation, fringe benefits and any compensation and benefits due
the Executive under this Agreement.
15. PAYMENT OF LEGAL FEES; DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
(a) All reasonable legal fees and other expenses paid or incurred
by the Executive pursuant to any dispute or question of interpretation
relating to this Agreement shall be paid or reimbursed by the Company if the
Executive is successful pursuant to a legal judgment, arbitration or
settlement.
(b) The Company shall maintain a directors' and officers' liability
insurance policy containing such provisions and amounts of coverage that are
usual and customary for companies of size similar to the Company and subject
to risks similar to those to which the Company is subject, provided that such
coverage can be obtained at commercially reasonable rates.
16. SUCCESSOR TO THE COMPANY
The Company shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally, to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.
17. UNFUNDED AGREEMENT SUBJECT TO CLAIMS OF COMPANY CREDITORS
The Company's obligation under this Agreement will be unfunded and
the Executive will not have any claims or rights superior to those of any
general creditor of the Company.
18. GOVERNING LAW: JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to any choice of law
or conflict of law provision or rule whether of the State of New York or any
other jurisdictionh that would cause the application hereto of the laws of any
jurisdiction other than the State of New York. Each party agrees to that any
action arising under this Agreement may be brought in the federal or state
courts in the County of New York, State of New York, and each party agrees to
submit to the personal jurisdiction of such courts.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has signed
this Agreement, on the day first above written.
XXXXXX ELECTRONICS CORPORATION
By:/s/ Xxxxxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
By:/s/ Xxxx X. Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Co-Chairman & Co-Chief Executive Officer
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
