XXXXXX ELECTRONICS, INC.
October 26, 0000
Xxxxxxxx X. Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx
Dear Xx. Xxxx:
This letter sets forth the agreement between you and Xxxxxx Electronics,
Inc. and its affiliates (collectively, the "Company") relating to your
resignation from the Company.
1. Resignation. Effective as of October 26, 2006, you resign your
employment with the Company and all offices, directorships and memberships on
managing bodies which you hold with the Company and its affiliates.
2. Payments and Benefits. In consideration of your agreement to the terms
of this letter agreement, your resignation and the release, as well as your
commitment to abide by these terms, the Company will pay you the sum of One
Hundred Seventy Five Thousand ($175,000) Dollars, as follows:
(a) (i) $55,000 less required deductions, to be paid within two (2)
business days of the closing of the Transaction, as such term is
defined in the Company's Definitive Proxy Statement dated September
21, 2006; and
(ii) $10,000 per month, plus such amounts equal to medical insurance
premiums payable under COBRA, less required deductions, for a period
of twelve months, commencing on November 30, 2006, in arrears, and
continuing on the same day of each successive month (or if there is no
such day, on the last day of such month) until all payments have been
made.
(b) In the event the Company shall default on any payments due to you
pursuant to Section 2(a)(i) or (ii) hereof, the Company shall have a
period of fifteen calendar days following notice of such default from
you within which to cure such default. In the event a default is not
cured within such 15-day period, all remaining payments shall become
immediately due and payable.
(c) Entitlement. You agree that if you are found by a court of
competent jurisdiction, in accordance with paragraph 11, to have
breached any of your covenants under this letter agreement you will
not be entitled to the foregoing payments and benefits and will be
obligated to return any such payments received by you.
3. Cooperation. You agree to provide assistance to and shall cooperate with
the Company upon its reasonable request with respect to matters within the scope
of your duties and responsibilities during employment. The Company agrees and
acknowledges that it shall, to the maximum extent possible under then prevailing
circumstances, coordinate any such request with your other commitments and
responsibilities to minimize the degree to which such request interferes with
such commitments and responsibilities. The Company agrees that it will reimburse
you for reasonable travel expenses (i.e., travel, meals, and lodging) that you
may incur in providing assistance to the Company hereunder.
You agree you will not act in any manner that might damage the business of
the Company and its affiliates. You agree that you will not counsel or assist
any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by any third
party against the Company and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company, unless under a subpoena
or other court order to do so.
4. Announcement/Handling of Inquiries. You and the Company will use the
Announcement attached hereto when advising employees, clients, customers,
suppliers and the public regarding your separation from the Company. That
Announcement will also be used by the Company when responding to inquires from
prospective employers and others concerning your employment with, and
resignation from, the Company.
5. Nondisclosure and Nondisparagement. Unless required by law, you will
not, for yourself or any other person or entity, directly or indirectly,
divulge, communicate or in any way make use of any confidential or proprietary
information acquired in the performance of your services for the Company or any
of its affiliates, without the prior written consent of the Chairman of the
Board. You agree that all documents and property of the Company and its
affiliates including those containing confidential or proprietary information,
will be returned to the Company promptly. Except as otherwise required by law,
or as permitted in the immediately succeeding sentence, you agree to keep
confidential the existence and terms and content of this letter agreement as
well as the amount of the Company's payments and benefits provided to you
hereunder. You represent that you have not disclosed, and will not disclose such
information except for (i) private conversation with members of your family who
are not members of the media or stock analyst community, (ii) private
conversations with your personal accountant, and tax and legal adviser(s), and
(iii) communications to a prospective new employer about the existence of this
letter agreement and the covenants by which you are bound hereunder, and without
the Chairman of the Board's consent you will not disclose the specific economic
terms or amounts of your payments and benefits hereunder, other than to the
parties described in the immediately preceding clauses (i) and (ii). You agree
that you will not make any statements, written or oral, which would be
reasonably likely to disparage or damage the Company, its affiliates or the
personal or professional reputation of any present or former employees, officers
or members of the board or committees of the Company or its affiliates. The
Company agrees that it will instruct each of its officers and members of its
board of directors not to make any statements, written or oral, which would be
reasonably likely to disparage or damage you or your personal or professional
reputation and no director, officer or employee of the Company will be
authorized on the Company's behalf to make any such disparaging communications
regarding you.
Notwithstanding the foregoing, nothing contained in this Letter Agreement
will prohibit you, the Company or any other party from complying with legal
process to the extent required by applicable law, provided, however, that (1)
you must provide the Company, and (2) the Company shall provide you, with
written notice of any such process as soon as practicable upon your or the
Company's receipt of such process.
6. Nonsolicitation and Noncompetition. You agree that from the date hereof
until October 26, 2008 you will not (a) solicit or recruit any employee of the
Company or any affiliate for the purpose of being employed by you or by any
entity other than the Company or a Company subsidiary, or employ or engage or
cause to be employed or engaged any such employee as an employee or independent
contractor of any person or entity other than the Company or a Company
subsidiary, and (b) you will not solicit or entice any current customer of the
Company to become a customer of yourself or any future employer or refer any
customer of the Company to any competitor of the Company within one-hundred
fifty (150) miles of New York City.
7. Release.* Is this better than release in his agreement? Alternatively
add language from letter. You release and waive all claims and causes of action
(including, without limitation, any claims under the Age Discrimination in
Employment Act) which you have or may have against the Company, directors,
officers and employees, any party participating in any way in the Transaction,
and their respective affiliates (collectively, the "Released Parties") arising
out of your employment by and your service as an officer of any such entity and
the termination of such employment and service in each case on or prior to the
date hereof, other than such claims or causes of action as may arise under the
terms of this letter agreement. You represent that as of the date hereof you
have not instigated, initiated or in any way aided, participated in or
encouraged the initiation or prosecution of any claim, cause of action or
proceeding against any Released Parties. You agree that you will not at any
future time instigate, initiate, aid, participate in or encourage the initiation
or prosecution of any claim, cause of action or proceeding against any Released
Party based on or relating to any facts, events or conditions occurring or
existing on or before the date hereof, regardless of whether such facts, events
or conditions have any continued or additional effect on or after the date
hereof.
You acknowledge that you have been advised by the Company to, and have,
consulted with an attorney in connection with this Agreement. You acknowledge
that you fully understand the terms, conditions, significance and consequences
of this Agreement. You further acknowledge that you have had at least 21 days in
which to consider, execute, and return this Agreement. Notwithstanding your
right to consider this Agreement for 21 days, if you sign this Agreement before
the expiration of the 21-day period, you will have done so knowingly and
voluntarily, and will have expressly waived your right to consider this
Agreement for the balance of the 21-day period.
8. Intentionally Deleted.
9. Other Agreements. Effective as of the date hereof, all prior agreements
relating to your employment by the Company and your service as an employee,
director, consultant or other independent contractor to the Company and each of
its affiliates will terminate and be no further force or effect and you hereby
waive all rights, benefits, claims and causes of action under those agreements,
including, without limitation, the Employment Agreement between you and the
Company dated as of November 14, 2000. This letter agreement contains the entire
understanding between you and the Company regarding the matters discussed herein
and supersedes all prior agreements, written or oral, between the Company and
you. It is acknowledged and agreed between the parties that you will retain any
and all rights you may have as a former employee under any employee benefit
plan, program or arrangement, as applicable (other than any severance benefit
plan, program or arrangement). The terms of this letter agreement may not be
waived or varied, other than by a writing signed by the Company and you after
the date hereof.
10. Successors. The Company's rights under this letter agreement will inure
to the benefit of any successor to all or substantially all of the business or
assets of the Company, and the Company may assign its rights under this letter
agreement to such a successor if necessary, as a matter of law, to effect the
transfer of such rights to such successor.
11. Governing Law and Jurisdiction. This letter agreement will be construed
and enforced in accordance with the laws of New York, without regard for the
conflicts of law principles thereof. The parties irrevocably agree that any
legal action or proceeding with respect to this letter agreement or for
recognition and enforcement of any judgment in respect hereof brought by a party
hereto or its successors or assigns may be brought and determined in any New
York state court or Federal court sitting in the State of New York, County of
Nassau or the Eastern District of New York, and each of the parties hereby (x)
irrevocably submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the exclusive
personal jurisdiction of the aforesaid courts in the event any dispute arises
out of this letter agreement, (y) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (z) agrees that it will not bring any action relating to this
letter agreement or any transaction contemplated hereby in any court other than
any New York state or Federal court sitting in the State of New York. Any
service of process to be made in such action or proceeding may be made by
delivery of process in accordance with the notice provisions contained in
paragraph 12 hereof. Each party hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this letter agreement, (a) the defense of
sovereign immunity, (b) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure to
serve process in accordance with this paragraph, (c) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (d) to the fullest extent permitted by applicable law that (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this letter agreement, or the subject matter hereof, may not be enforced in or
by such courts.
12. Notices. Except as otherwise explicitly provided in this letter
agreement, any notice provided hereunder will be deemed to be given when
delivered in writing by hand or sent by overnight courier. All notices to the
Company will be addressed to Xxxxxx X. Xxxxxxxxx, with a copy sent by the same
means to Ruskin Moscou Faltischek, P.C., 0000 Xxxxxxx Xxxxx, Xxxx Tower, 15th
Floor, Uniondale, New York 11556, Attn: Xxxx X. Xxxxx, Esq., or such other
persons or addresses as the Company may provide from time to time by notice to
you. All notices to you will be addressed to you and sent to your home address,
as on file with the Company as of the date hereof, or such other address as you
may provide from time to time by notice to the Company, with a copy to
Ledy-Gurren Bass & Siff, LLP, 000 Xxxx Xxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Xxxxx Xxxx-Gurren, Esq., or any other persons or addresses as
you may request from time to time by notice to the Company.
13. Taxes. The Company makes no representations or warranties with respect
to the tax consequences of the payment of any sums to you under the terms of
this Agreement. You agree and understand that you are responsible for payment,
if any, of local, state and/or federal taxes on the sums paid hereunder by the
Company and any penalties or assessments thereon. You further agree to indemnify
and hold the Company harmless from any claims, demands, deficiencies, penalties,
assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of your failure to
pay federal or state taxes or damages sustained by the Company by reason of any
such claims, including reasonable attorneys' fees.
14. Conditions. Notwithstanding anything to the contrary, all obligations
of the Company contained herein which relate to the payment of money to you are
subject to the consummation of the Transaction. Subject to satisfaction of the
foregoing condition, such payments represent the only payments from the Company
to which you shall be entitled.
15. Costs. The parties hereto shall each bear their own costs, attorneys'
fees and other fees incurred in connection with this Agreement.
16. No Representations. Each party hereto represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
17. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
18. Payment of Compensation. Except for those items specifically identified
in Section 2(a) above, you acknowledge and represent that the Company has paid
all salary, wages, bonuses, accrued vacation, commissions and any and all other
benefits due to you up through and including the date hereof.
XXXXXX ELECTRONICS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board
Accepted and Agreed:
By: __________________
Xxxxxxxx X. Xxxx
