Exhibit 99.01
[DEL GLOBAL TECHNOLOGIES CORP. LETTERHEAD]
SEVERANCE BENEFITS AGREEMENT
May 23, 2005
Xxxxxx X. Xxxxxxxxx
00 Xxxxxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
The Board of Directors of the Company has determined that it is in the best
interests of the Company and its stockholders to offer to you certain severance
benefits in accordance with the terms and conditions of this severance benefits
agreement (the "Agreement").
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS
Whenever used in this Agreement, the following capitalized terms shall have
the meanings set forth in this Section, certain other capitalized terms being
defined elsewhere in this Agreement:
(a) "Affiliate" shall have the meaning given such term in Rule 405
promulgated under the Securities Act of 1933, as amended.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Cause" means the termination of your employment as a result of
(i) your indictment for or conviction of, or your entering of a plea of NOLO
CONTENDERE with respect to, having committed a felony, (ii) your abuse of
controlled substances or alcohol, (iii) your acts of dishonesty or moral
turpitude that are detrimental to one or more of the Companies, (iv) your acts
or omissions that you knew were likely to damage the business of one or more of
the Companies, (v) your willful and repeated failure to perform any material
duties, whether under any employment agreement to which you are a party with the
Company or otherwise, or your gross negligence in the performance of such duties
or (vi) your failure to obey the reasonable and lawful orders and policies of
the Board of Directors of the Company that are consistent with the provisions of
such employment agreement or otherwise (provided that, in the case of an
indictment described in clause (i) above, and in the case of clause (ii), (iii),
(iv) or (v) above, you shall have received written notice of such proposed
termination and a reasonable opportunity to discuss the matter with the Board of
Directors, followed by your receipt of written notice that the Board of
Directors adheres to its position following the provision of such opportunity.
(d) "Company" means Del Global Technologies Corp., a New York
corporation, and any successor or assignee as provided in Article V.
(e) "Companies" means the Company and any present and future
Subsidiaries of the Company.
(f) "Disability" means a physical or mental infirmity that
substantially impairs your ability to perform your material duties for a period
of 180 or more days, whether or not consecutive, during a period of 12
consecutive months and, as a result of which you have not returned to your
full-time regular employment prior to termination.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Good Reason" means:
(i) Without your express written consent, you are placed in any
position of substantially lesser stature than your position with the Company as
of the date of this Agreement; provided, however, that you shall not be deemed
to have been placed in a position of substantially lesser stature than your
position with the Company as of the date of this Agreement solely because the
Company hires a person mutually acceptable to you and the Company as the
President of the Company;
(ii) Your base annual salary, as the same may hereafter be
increased from time to time, is reduced; or
(iii) The Company hires a person for the position of President of
the Company and such person is not acceptable to you.
(i) "Person" shall have the meaning ascribed to such term in Section
3 of the Exchange Act and the rules and regulations promulgated thereunder.
(j) "Severance Payment" means the payment of severance compensation
as provided in Article II.
(k) "Subsidiary" means any corporation or other Person, a majority of
the voting power, equity securities or equity interest of which is owned
directly or indirectly by the Company.
ARTICLE II
SEVERANCE PAYMENTS
2.1 RIGHT TO SEVERANCE PAYMENT
You shall be entitled to receive a Severance Payment from the Company in
the amount provided in Section 2.2 if, (a) your employment is involuntarily
terminated by the Company other than for Cause, Disability or your death, or (b)
you voluntarily terminate your employment for Good Reason.
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2.2 AMOUNT OF SEVERANCE PAYMENT
(a) If you become entitled to a Severance Payment under this
Agreement, you shall receive a payment equal to the sum of the amounts provided
below:
(i) The Company shall pay you your full base salary through the
date of the termination of your employment at the rate in effect immediately
prior to the time your employment is terminated; and
(ii) In lieu of any further payments to you for periods
subsequent to the date you become entitled to a Severance Payment as provided in
Section 2.1, the Company shall pay as severance to you a severance payment (the
"Severance Payment") equal to one (1) times your annual base salary in effect
immediately prior to such date.
2.3 NO DUTY OF MITIGATION
The Company acknowledges that it would be very difficult and generally
impracticable to determine your ability to, or the extent to which you may,
mitigate any damages or injuries you may incur by reason of termination of your
employment. The Company has taken this into account in entering into this
Agreement and, accordingly, the Company acknowledges and agrees that you shall
have no duty to mitigate any such damages and that you shall be entitled to
receive your entire Severance Payment regardless of any income that you may
receive from other sources following the date you become entitled to receive a
Severance Payment.
2.4 TIME OF SEVERANCE PAYMENT
The Severance Payment shall be conditioned upon the execution of a
mutual release of claims by you and the Company and, subject to the provisions
of Section 2.7 hereof, the Severance Payment to which you are entitled shall be
paid to you, in cash and in full, as soon as practicable after the date you
become entitled to receive a Severance Payment, but in no event more than ten
(10) days after the date you become entitled to receive a Severance Payment.
2.5 HEALTH INSURANCE COVERAGE
If you are entitled to receive a Severance Payment under Section 2.1,
you will also be entitled to receive health insurance coverage for you and your
dependents under the same plan or plans under which you were covered immediately
prior to the termination of your employment or substantially similar plan(s)
established by the Company or any of its Subsidiaries thereafter. Such health
insurance coverage shall be paid for by the Company to the same extent as if you
were still employed by the Company, and you will be required to make such
payments as you would be required to make if you were still employed by the
Company. This coverage will continue for a period of one year following the date
you become entitled to receive a Severance Payment.
2.6 WITHHOLDING OF TAXES
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes required by applicable law to be
withheld by the Company.
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2.7 SETOFF AND RECOUPMENT
The Company's obligation to make a Severance Payment to you pursuant
to this Agreement and otherwise to perform its obligations hereunder is subject
to a right of setoff and recoupment in respect of any and all amounts or
payments due to the Company from you.
2.8 BENEFITS UNDER OTHER PLANS
The benefits that you may be entitled to receive pursuant to Section
2.5 of this Agreement are not intended to be duplicative of any similar benefits
to which you may be entitled from the Company or any of its Subsidiaries under
any other severance plan, agreement, policy or program maintained by the Company
or any of its Subsidiaries. Accordingly, the benefits to which you are entitled
under Section 2.5 shall be reduced to take account of any other similar benefits
to which you are entitled from the Company or any of its Subsidiaries; provided,
however, that if the amount of benefits to which you are entitled under such
other severance plan, agreement, policy or program is greater than the benefits
to which you are entitled under Section 2.5 of this Agreement, you will be
entitled to receive the full amount of the benefits to which you are entitled
under such other plan, agreement, policy or program.
ARTICLE III
OTHER RIGHTS AND BENEFITS NOT AFFECTED
3.1 OTHER BENEFITS
(a) This Agreement does not provide a pension for you nor shall any
payment hereunder be characterized as deferred compensation. Except as set forth
in Section 2.8 and Section 3.1(b), neither the provisions of this Agreement nor
the Severance Payment provided for hereunder shall reduce any amounts otherwise
payable, or in any way diminish your rights as an employee, whether existing now
or hereafter, under any benefit, incentive, retirement, stock option, stock
bonus or stock purchase plan or any employment agreement or other plan or
arrangement not related to severance.
(b) The Severance Payment that you may be entitled to receive
pursuant to this Agreement is not intended to be duplicative of any similar
benefits to which you may be entitled from the Company or any of its
Subsidiaries under any employment or other agreement with any such company.
Accordingly, the Severance Payment to which you may become entitled pursuant to
this Agreement shall be reduced on a dollar-for-dollar basis by the amount of
any other severance payments to which you become entitled upon the termination
of your employment by the Company.
3.2 EMPLOYMENT STATUS
This Agreement does not constitute a contract of employment or impose
on you any obligation to remain in the employ of the Company, nor does it impose
on the Company or any of its Subsidiaries any obligation to retain you in your
present or any other position, or to change the status of your employment as an
employee at will. Nothing in this Agreement shall in any way require the Company
or any of its Subsidiaries to provide you with any severance benefits prior to
termination of your employment, nor shall this Agreement ever be construed in
any way as establishing any policies or requirements of the Company or any of
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its Subsidiaries for the termination of your employment, nor shall anything in
this Agreement in any way affect the right of the Company or any of its
Subsidiaries in its absolute discretion to change one or more benefit plans,
including but not limited to pension plans, dental plans, health care plans,
savings plans, bonus plans, vacation pay plans, disability plans, and the like.
ARTICLE IV
CONFIDENTIALITY
You hereby covenant, agree and acknowledge as follows:
4.1 You have and will have access to and will participate in the
development of or be acquainted with confidential or proprietary information and
trade secrets related to the business of the Company and any present and future
subsidiaries or affiliates of the Company (collectively with the Company, the
"Companies"), including but not limited to (i) customer lists; related records
and compilations of information; the identity, lists or descriptions of any new
customers, referral sources or organizations; financial statements; cost reports
or other financial information; contract proposals or bidding information;
business plans; training and operations methods and manuals; personnel records;
software programs; reports and correspondence; and management systems policies
or procedures, including related forms and manuals; (ii) information pertaining
to future developments such as future marketing or acquisition plans or ideas,
and potential new business and (iii) all other tangible and intangible property
that are used in the business and operations of the Companies but not made
public. The information and trade secrets relating to the business of the
Companies described hereinabove in this Section 4.1, whether acquired while you
were employed on an "at will" basis or pursuant to an employment agreement, are
hereinafter referred to collectively as the "Confidential Information," provided
that the term Confidential Information shall not include any information (x)
that is or becomes generally publicly available (other than as a result of
violation of this Agreement by you or the violation of an agreement of like
tenor by any other person or entity) or (y) that you receive on a
nonconfidential basis from a source (other than the Companies or their
representatives) that is not known by you to be bound by an obligation of
secrecy or confidentiality to any of the Companies.
4.2 You shall not disclose, use or make known for your or another's
benefit any Confidential Information or use such Confidential Information in any
way, except as is in the best interests of the Companies in the performance of
your duties as an employee of the Company. You may disclose Confidential
Information when required by a third party and applicable law or judicial
process, but only after providing (i) immediate notice to the Company at any
third party's request for such information, which notice shall include your
intent with respect to such request, and (ii) sufficient opportunity for the
Company to challenge or limit the scope of the disclosure on behalf of the
Companies, you or both.
4.3 Upon termination of your employment with the Company for any reason,
you shall forthwith return to the Company all Confidential Information in
whatever form maintained (including, without limitation, computer discs and
other electronic media).
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4.4 The foregoing provisions of this Article IV shall survive the
expiration or termination of this Agreement and shall be binding upon your
heirs, successors and legal representatives.
ARTICLE V
SUCCESSOR TO 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. In
such event, the term "Company," as used in this Agreement, shall mean (from and
after, but not before, the occurrence of such event) any such successor or
assignee.
ARTICLE VI
MISCELLANEOUS
6.1 BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of the
Company, its successors and assigns, and you and shall be enforceable by them
and your legal personal representatives.
6.2 NOTICES
All notices that are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be sufficient in all respects if given
in writing and (i) delivered personally, (ii) mailed by certified or registered
mail, return receipt requested and postage prepaid, or (iii) sent via a
nationally recognized overnight courier, to the parties at their respective
addresses set forth above, or to such other address or addresses as either party
shall have designated in writing to the other party hereto. The date of the
giving of such notices delivered personally or by carrier shall be the date of
their delivery and the date of giving of such notices by certified or registered
mail shall be the date five days after the posting of the mail.
6.3 LAW GOVERNING
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, except that body of law relating to choice of
laws.
6.4 SEVERABILITY
If any provision of this Agreement shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of this Agreement
and this Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included.
6.5 WAIVER
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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.
6.6 ENTIRE AGREEMENT; MODIFICATION
This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior agreements, oral and
written, between the parties hereto with respect to the subject matter hereof
including, but not limited to, that certain Change in Control Agreement, dated
October 28, 2002, between you and the Company. This Agreement may be modified or
amended only by an instrument in writing signed by both parties hereto.
6.7 ASSIGNABILITY
(a) Neither this Agreement nor any right or interest hereunder shall
be assignable by you or your beneficiaries or legal representatives without the
Company's prior written consent; provided, however, that nothing in this Section
6.7 shall preclude you from designating a beneficiary to receive any benefit
payable hereunder upon your death or incapacity.
(b) 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 exclusion,
attachment, levy or similar process or to assignment by operation of law, and
any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
6.8 TERM
Except as otherwise specified in this Agreement, this Agreement shall
expire and be of no further force and effect on December 31, 2007.
6.9 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
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If this Agreement is acceptable to you, please sign the enclosed copy of
this Agreement in the space provided below and return it to me.
Sincerely,
DEL GLOBAL TECHNOLOGIES CORP.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Name: Xxxx X. Xxxx
Title: Treasurer and Principal
Accounting Officer
ACCEPTED AND AGREED TO:
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxx
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