Exhibit 10(5)
SEVERANCE PROTECTION AGREEMENT
THIS AGREEMENT made as of the 11th day of February, 1999, by and between
Axsys Technologies, Inc. (the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the
"Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the threat or the occurrence of a Change in Control can result in
significant distraction of the Company's key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interests of the Company and its stockholders for the Company to retain the
services of the Executive in the event of a threat or occurrence of a Change in
Control and to ensure the Executive's continued dedication and efforts in such
event without undue concern for the Executive's personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company and/or one of its Affiliates (the entity or entities employing the
Executive, the "Employing Affiliate"), particularly in the event of a threat or
the occurrence of a Change in Control, the Company desires to enter into this
Agreement with the Executive to provide the Executive with certain benefits in
the event the Executive's employment is terminated as a result of, or in
connection with, a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of February 11,
1999, and shall continue in effect until February 11, 2001 (the "Term");
provided, however, that on February 11, 2000, and on each February 11
thereafter, the Term shall automatically be extended for one year unless either
the Executive or the Company shall have given written notice to the other at
least ninety days prior thereto that the Term shall not be so extended;
provided, further, however, that following the occurrence of a Change in
Control, the Term shall not expire prior to the expiration of twenty-four months
after such occurrence.
2. Termination of Employment. If, during the Term, the Executive's
employment with the Company or an Employing Affiliate shall be terminated within
twenty-four months following a Change in Control, the Executive shall be
entitled to the following compensation and benefits:
(a) If the Executive's employment with the Company or an Employing
Affiliate shall be terminated (1) by the Company for Cause or Disability, (2) by
reason of the Executive's death, or (3) by the Executive other than for Good
Reason or pursuant to a Window Period Termination, the Company shall pay to the
Executive the Accrued Compensation.
(b) If the Executive's employment with the Company or an Employing
Affiliate shall be terminated for any reason other than as specified in Section
2(a), or if the Executive terminates his employment with or without Good Reason
during the one month period commencing six months following a Change in Control
(a "Window Period Termination"), the Executive shall be entitled to the
following:
(1) the Company shall pay the Executive the Accrued
Compensation;
(2) the Company shall pay the Executive as severance pay an
amount equal to 2 times the Executive's Base Amount; and
(3) for twelve months following the Termination Date (the
"Continuation Period"), the Company shall continue on behalf of the Executive
and his dependents and beneficiaries the life insurance, disability, medical,
dental, prescription drug and hospitalization coverages and benefits provided to
the Executive immediately prior to a Change in Control (the "Benefits
Continuation"), or, if greater, the coverages and benefits provided at any time
thereafter; provided, however, that within five days following the Termination
Date, the Executive may elect to receive from the Company in cash, in lieu of
the Benefits Continuation, the value of the Benefits Continuation. The coverages
and benefits (including deductibles and costs to the Executive) provided in this
Section 2(b)(3) during the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries than the most favorable of such
coverages and benefits referred to above. The Company's obligation hereunder
with respect to the foregoing coverages and benefits shall be reduced to the
extent that the Executive obtains any such coverages and benefits pursuant to a
subsequent employer's benefit plans, in which case the Company may reduce any of
the coverages or benefits it is required to provide the Executive hereunder so
long as the aggregate coverages and benefits (including deductibles and costs to
the Executive) of the combined benefit plans are no less favorable to the
Executive than the coverages and benefits required to be provided hereunder.
This Section 2(b)(3) shall not be interpreted so as to limit any benefits to
which the Executive, his dependents or beneficiaries may be entitled under any
of the Company's employee benefit plans, programs or practices following the
Executive's termination of employment, including but not limited to retiree
medical and life insurance benefits.
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(c) The cash amounts provided for in Sections 2(a) and 2(b) shall be
paid in a single lump sum cash payment within ten days after the Termination
Date (or earlier, if required by applicable law).
(d) The severance pay and benefits provided for in this Section 2
shall be in lieu of any other severance pay to which the Executive may be
entitled under any severance or employment agreement with the Company or any
other plan, agreement or arrangement of the Company or any other Affiliate of
the Company. The Executive's entitlement to any compensation or benefits other
than as provided herein shall be determined in accordance with the employee
benefit plans of the Company and any of its Affiliates and other applicable
agreements, programs and practices as in effect from time to time.
(e) If the Executive's employment is terminated by the Company or an
Employing Affiliate without Cause prior to the date of a Change in Control but
the Executive reasonably demonstrates that such termination (1) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a "Third Party") and who
effectuates a Change in Control or (2) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or proposed and
which actually occurs, such termination shall be deemed to have occurred after a
Change in Control, it being agreed that any such action taken following
shareholder approval of a transaction which if consummated would constitute a
Change in Control, shall be deemed to be in anticipation of a Change in Control
provided such transaction is actually consummated.
3. Effect of Section 280G of the Internal Revenue Code.
(a) Notwithstanding anything contained in this Agreement to the
contrary, to the extent that the payments and benefits provided under this
Agreement and benefits provided to, or for the benefit of, the Executive under
any other Company plan or agreement (such payments or benefits collectively
referred to herein as the "Payments") would be subject to the excise tax (the
"Excise Tax") imposed under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), the Payments shall be reduced (but not below zero) if
and to the extent necessary so that no Payment to be made or benefit to be
provided to the Executive shall be subject to the Excise Tax (such reduced
amount is hereinafter referred to as the "Limited Payment Amount"). Unless the
Executive shall have given prior written notice specifying a different order to
the Company to effectuate the foregoing, the Company shall reduce or eliminate
the Payments by first reducing or eliminating the portion of the Payments which
are not payable in cash and then by reducing or eliminating cash payments, in
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each case in reverse order beginning with payments or benefits which are to be
paid the farthest in time from the Determination (as hereinafter defined). Any
notice given by the Executive pursuant to the preceding sentence shall take
precedence over the provisions of any other plan, arrangement or agreement
governing the Executive's rights and entitlements to any benefits or
compensation.
(b) The determination of whether the Payments shall be reduced to
the Limited Payment Amount pursuant to this Agreement and the amount of such
Limited Payment Amount shall be made, at the Company's expense, by an accounting
firm selected by the Company and reasonably acceptable to the Executive which is
one of the five largest accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation to the Company and the Executive within ten days of the
Termination Date, if applicable, or such other time as requested by the Company
or by the Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the Accounting Firm determines
that no Excise Tax is payable by the Executive with respect to the Payments, it
shall furnish the Executive with an opinion reasonably acceptable to the
Executive that no Excise Tax will be imposed with respect to any such Payments.
The Determination shall be binding, final and conclusive upon the Company and
the Executive.
4. Notice of Termination. Following a Change in Control, any intended
termination of the Executive's employment by the Company or an Employing
Affiliate shall be communicated by a Notice of Termination from the Company to
the Executive, and any intended termination of the Executive's employment by the
Executive for Good Reason shall be communicated by a Notice of Termination from
the Executive to the Company.
5. Fees and Expenses. The Company shall pay, as incurred, all legal fees
and related expenses (including the costs of experts, evidence and counsel) that
the Executive may reasonably incur following a Change in Control as a result of
or in connection with (a) the Executive's contesting, defending or disputing the
basis for the termination of the Executive's employment, (b) the Executive's
hearing before the Board of Directors of the Company as contemplated in Section
16.4 or (c) the Executive's seeking to obtain or enforce any right or benefit
provided by this Agreement or by any other plan or arrangement maintained by the
Company or one of its Affiliates under which the Executive is or may be entitled
to receive benefits.
6. Unauthorized Disclosure.
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(a) The Executive agrees and understands that during the Executive's
employment with the Company or an Employing Affiliate, the Executive has been
and will be exposed to and receive information relating to the affairs of the
Company considered by the Company to be confidential and in the nature of trade
secrets (including but not limited to procedures, memoranda, notes, records and
customer lists, whether such information has been or is made, developed or
compiled by the Executive or otherwise has been or is made available to him)
(any and all such information, the "Confidential Information"). The Executive
agrees that, during the Term and thereafter, he shall keep such Confidential
Information confidential and will not disclose such Confidential Information,
either directly or indirectly, to any third person or entity without the prior
written consent of the Company; provided, however, that (i) the Executive shall
have no such obligation to the extent such Confidential Information is or
becomes publicly known other than as a result of the Executive's breach of his
obligations hereunder or is received by the Executive following the Termination
Date and (ii) the Executive may, after giving prior notice to the Company to the
extent practicable under the circumstances, disclose such Confidential
Information to the extent required by applicable laws or governmental
regulations or judicial or regulatory process.
(b) The Executive agrees that all Confidential Information is and
will remain the property of the Company. The Executive further agrees that,
during the Term and thereafter, he shall hold in the strictest confidence all
Confidential Information, and shall not, directly or indirectly, duplicate,
sell, use, lease, commercialize, disclose or otherwise divulge to any person or
entity any portion of the Confidential Information or use any Confidential
Information for his own benefit or profit or allow any person or entity, other
than the Company and its authorized employees, to use or otherwise gain access
to any Confidential Information.
(c) All memoranda, notes, records, customer lists and other
documents made or compiled by the Executive or otherwise made available to him
concerning the business of the Company or its subsidiaries or Affiliates shall
be the Company's property and shall be delivered to the Company upon the
termination of the Executive's employment with the Company or an Employing
Affiliate or at any other time upon request by the Company, and the Executive
shall retain no copies of those documents. The Executive shall never at any time
have or claim any right, title or interest in any material, invention or matter
of any sort created, prepared or used in connection with the business of the
Company or its subsidiaries or Affiliates.
7. Non-competition.
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(a) By and in consideration of the Company's entering into this
Agreement and the payments to be made and benefits to be provided by the Company
hereunder and further in consideration of the Executive's exposure to the
proprietary information of the Company, the Executive agrees that the Executive
will not, during the Term, and thereafter during the Non-competition Term (as
hereinafter defined), directly or indirectly, own, manage, operate, join,
control, be employed by, or participate in the ownership, management, operation
or control of, or be connected in any manner with, including but not limited to
holding any position as a shareholder, director, officer, consultant,
independent contractor, employee, partner, or investor in, any Restricted
Enterprise (as defined below); provided, however, that in no event shall
ownership of less than one percent of the outstanding equity securities of any
issuer whose securities are registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), standing alone, be prohibited by this
Section 7. For purposes of this paragraph, the term "Restricted Enterprise"
shall mean any person, corporation, partnership or other entity that competes,
directly or indirectly, with any business or activity conducted or proposed to
be conducted by the Company or any of its subsidiaries or Affiliates as of the
date of the Executive's termination of employment. Following termination of
employment, upon request of the Company, the Executive shall notify the Company
of the Executive's then current employment status. For purposes of this
Agreement, the "Non-competition Term" shall mean the period beginning on the
Termination Date and ending on the first anniversary of such date. Any material
breach of the terms of this paragraph shall be considered Cause under Section
16.4.
(b) The Executive agrees that any breach of the terms of this
Section 7 would result in irreparable injury and damage to the Company and/or
its subsidiaries or Affiliates for which the Company and/or its subsidiaries or
Affiliates would have no adequate remedy at law; the Executive therefore also
agrees that in the event of said breach or any threat of breach, the Company
and/or its subsidiaries or Affiliates, as applicable, shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Executive and/or any and all
persons and/or entities acting for and/or with the Executive, without having to
prove damages, in addition to any other remedies to which the Company and/or its
subsidiaries or Affiliates may be entitled at law or in equity. The terms of
this paragraph shall not prevent the Company and/or its subsidiaries or
Affiliates from pursuing any other available remedies for any breach or
threatened breach hereof, including but not limited to the recovery of damages
from the Executive. The Executive and the Company further agree that the
provisions of the covenants contained in this Section 7 are reasonable and
necessary to protect the businesses of the Company and its subsidiaries or
Affiliates because of the Executive's access to Confidential Information and his
material participation in the operation of such businesses. Should a court or
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arbitrator determine, however, that any provision of the covenants contained in
this Section 7 is not reasonable or valid, either in period of time,
geographical area, or otherwise, the parties hereto agree that such covenants
should be interpreted and enforced to the maximum extent which such court or
arbitrator deems reasonable or valid.
The existence of any claim or cause of action by the Executive against the
Company and/or its subsidiaries or Affiliates, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the covenants contained in this Section 7.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement (including any Notice of
Termination) shall be in writing, shall be signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive, and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other, provided that all
notices to the Company shall be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof (whichever is earlier), except that
notice of change of address shall be effective only upon receipt.
9. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any other
Affiliate of the Company for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Company or any other Affiliate of the Company. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any other Affiliate of the Company
shall be payable in accordance with such plan or program, except as explicitly
modified by this Agreement.
10. (a) Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including but not limited
to any set-off, counterclaim, defense, recoupment, or other claim, right or
action which the Company may have against the Executive or others.
(b) No Mitigation. The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any
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compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 2(b)(3).
11. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by any party
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement.
12. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company and its Successors and Assigns. The Company shall require
its Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in the State of Delaware.
14. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto,
with respect to the subject matter hereof.
16. Definitions.
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16.1. Accrued Compensation. For purposes of this Agreement, "Accrued
Compensation" shall mean all amounts of compensation for services rendered to
the Company or an Employing Affiliate that have been earned or accrued through
the Termination Date but that have not been paid as of the Termination Date,
including (a) base salary, (b) reimbursement for reasonable and necessary
business expenses incurred by the Executive on behalf of the Company or an
Employing Affiliate during the period ending on the Termination Date and (c)
vacation pay; provided, however, that Accrued Compensation shall not include any
amounts described in clause (a) that have been deferred pursuant to any salary
reduction or deferred compensation elections made by the Executive.
16.2. Affiliate. For purposes of this Agreement, "Affiliate" means,
with respect to any Person, any entity, directly or indirectly, controlled by,
controlling or under common control with such Person.
16.3. Base Amount. For purposes of this Agreement, "Base Amount"
shall mean, with respect to a Change in Control, the Executive's "base amount"
as determined under Section 280G of the Code and the regulations proposed
thereunder.
16.4. Cause. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive
(a) has been convicted of a felony (including a plea of nolo
contendere);
(b) intentionally and continually failed substantially to
perform his reasonably assigned duties with the Company or an Employing
Affiliate (other than a failure resulting from the Executive's incapacity due to
physical or mental illness or from the assignment to the Executive of duties
that would constitute Good Reason) which failure continued for a period of at
least thirty days after a written notice of demand for substantial performance,
signed by a duly authorized officer of the Company, has been delivered to the
Executive specifying the manner in which the Executive has failed substantially
to perform such duties; or
(c) intentionally engaged in illegal conduct or willful
misconduct which is demonstrably and materially injurious to the Company or an
Employing Affiliate.
For purposes of this Agreement, no act, or failure to act, on the Executive's
part shall be considered "intentional" unless the Executive has acted, or failed
to act, with a lack of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest of the Company or
an Employing Affiliate. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the
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Board or upon the instructions of the Company's Chairman of the Board, Chief
Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the Company
or an Employing Affiliate. The termination of employment of the Executive shall
not be deemed to be for Cause pursuant to subparagraph (b) or (c) above unless
and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-fourths
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (b) or (c) above, and specifying
the particulars thereof in detail. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Executive after a Notice
of Termination is given to the Company by the Executive shall constitute Cause
for purposes of this Agreement.
16.5. Change in Control. A "Change in Control" shall mean the
occurrence during the Term of:
(a) An acquisition (other than directly from the Company) of
any common stock of the Company ("Common Stock") or other voting securities of
the Company entitled to vote generally for the election of directors (the
"Voting Securities") by any "Person" (as the term "person" is used for purposes
of Section 13(d) or 14(d) of the Exchange Act), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent or more of the then outstanding shares
of Common Stock or the combined voting power of the Company's then outstanding
Voting Securities; provided, however, in determining whether a Change in Control
has occurred, Common Stock or Voting Securities which are acquired in a
Non-Control Acquisition (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (a
"Subsidiary"), (ii) the Company or its Subsidiaries, (iii) any Person in
connection with a Non-Control Transaction (as hereinafter defined) or (iv) an
Affiliate;
(b) The individuals who, as of February 11, 1999, are members
of the Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the members of the Board; provided, however, that if the
election, or nomination for election by the Company's shareholders, of any new
director was
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approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(1) A merger, consolidation, reorganization or other
business combination with or into the Company or in which securities of the
Company are issued, unless such merger, consolidation, reorganization or other
business combination is a "Non-Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation, reorganization or other business combination
with or into the Company or in which securities of the Company are issued where:
(A) the shareholders of the Company, immediately
before such merger, consolidation, reorganization or other business combination
own directly or indirectly immediately following such merger, consolidation,
reorganization or other business combination, at least fifty percent of the
combined voting power of the outstanding voting securities of the corporation
resulting from such merger or consolidation, reorganization or other business
combination (the "Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before such merger,
consolidation, reorganization, or other business combination,
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation, reorganization or other business combination
constitute at least two-thirds of the members of the board of directors of the
Surviving Corporation, or a corporation beneficially directly or indirectly
owning a majority of the combined voting power of the outstanding voting
securities of the Surviving Corporation, and
(C) no Person other than (i) the Company, (ii) any
Subsidiary, (iii) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to such merger, consolidation, reorganization
or other business combination was maintained by the Company, the Surviving
Corporation, or any Subsidiary, or (iv) any Person who, immediately prior to
such merger, consolidation, reorganization or other business combination had
Beneficial Ownership of fifty percent
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or more of the then outstanding Voting Securities or common stock of the
Company, has Beneficial Ownership of fifty percent or more of the combined
voting power of the Surviving Corporation's then outstanding voting securities
or its common stock.
(2) A complete liquidation or dissolution of the
Company; or
(3) The sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than (i) any
such sale or disposition that results in at least fifty percent of the Company's
assets being owned by a Subsidiary or Subsidiaries or (ii) a distribution to the
Company's stockholders of the stock of a Subsidiary or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or Voting
Securities as a result of the acquisition of Common Stock or Voting Securities
by the Company which, by reducing the number of shares of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of shares of Common Stock or Voting Securities by the Company, and
after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional shares of Common Stock or Voting Securities
which increase the percentage of the then outstanding shares of Common Stock or
Voting Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
16.6. Company. For purposes of this Agreement, all references to the
Company shall include its Successors and Assigns.
16.7. Disability. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which impairs the Executive's ability to
substantially perform his duties with the Company or an Employing Affiliate for
six consecutive months, and within the time period set forth in a Notice of
Termination given to the Executive (which time period shall not be less than
thirty days), the Executive shall not have returned to full-time performance of
his duties; provided, however, that if the Company's Long Term Disability Plan,
or any successor plan (the "Disability Plan"), is then in effect, the Executive
shall not be deemed disabled for purposes of this Agreement unless the Executive
is also eligible for long-term disability benefits under the Disability Plan (or
similar benefits in the event of a successor plan).
16.8. Good Reason.
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(a) For purposes of this Agreement, "Good Reason" shall mean
the occurrence after a Change in Control of any of the following events or
conditions:
(1) a material adverse change in the Executive's duties
or responsibilities (including reporting responsibilities), except in connection
with the termination of his employment for Disability, Cause, as a result of his
death or by the Executive other than for Good Reason;
(2) a reduction in the Executive's annual base salary;
(3) the relocation of the offices of the Company or an
Employing Affiliate at which the Executive is principally employed to a location
more than 25 miles from the location of such offices immediately prior to a
Change in Control, or the requirement that the Executive be based anywhere other
than at such offices, except to the extent the Executive was not previously
assigned to a principal location and except for required travel on the business
of the Company or an Employing Affiliate to an extent substantially consistent
with the Executive's business travel obligations at the time of a Change in
Control; or
(4) the failure by the Company or an Employing Affiliate
to pay to the Executive any portion of the Executive's current compensation or
to pay to the Executive any portion of an installment of deferred compensation
under any deferred compensation program of the Company or an Employing Affiliate
in which the Executive participated, within seven days of the date such
compensation is due.
(b) Any event or condition described in Section 16.8(a)(1)
through (4) which occurs prior to a Change in Control but which the Executive
reasonably demonstrates (i) was at the request of a Third Party who effectuates
a Change in Control or (ii) otherwise arose in connection with or in
anticipation of a Change in Control which has been threatened or proposed and
which actually occurs, shall constitute Good Reason for purposes of this
Agreement notwithstanding that it occurred prior to a Change in Control, it
being agreed that any such action taken following shareholder approval of a
transaction which if consummated would constitute a Change in Control, shall be
deemed to be in anticipation of a Change in Control provided such transaction is
actually consummated.
16.9. Notice of Termination. For purposes of this Agreement,
following a Change in Control, "Notice of Termination" shall mean a written
notice of termination of the Executive's employment, signed by the Executive if
to the Company or by a duly authorized officer of the Company if to the
Executive, which indicates the specific termination provision in this Agreement,
if any, relied upon and which sets forth in
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reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason, Disability or Cause shall not serve to waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
16.10. Successors and Assigns. For purposes of this Agreement,
"Successors and Assigns" shall mean, with respect to the Company, a corporation
or other entity acquiring all or substantially all the assets and business of
the Company, as the case may be, whether by operation of law or otherwise.
16.11. Termination Date. For purposes of this Agreement,
"Termination Date" shall mean (a) in the case of the Executive's death, his date
of death, (b) if the Executive's employment is terminated for Disability, thirty
days after Notice of Termination is given (provided that the Executive shall not
have returned to the performance of his duties on a full-time basis during such
thirty day period) and (c) if the Executive's employment is terminated for any
other reason, the date specified in the Notice of Termination (which, in the
case of a termination for Cause shall not be less than thirty days, and in the
case of a termination for Good Reason shall not be more than sixty days, from
the date such Notice of Termination is given); provided, however, that if within
thirty days after any Notice of Termination is given the party receiving such
Notice of Termination in good faith notifies the other party that a dispute
exists concerning the basis for the termination, the Termination Date shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by the final judgment, order or decree of a court
of competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been taken). Notwithstanding the pendency of any such dispute, the
Company or an Employing Affiliate shall continue to pay the Executive his base
salary and continue the Executive as a participant (at or above the level
provided prior to the date of such dispute) in all compensation, incentive,
bonus, pension, profit sharing, medical, hospitalization, prescription drug,
dental, life insurance and disability benefit plans in which he was
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved whether or not the dispute is resolved in favor of
the Company, and the Executive shall not be obligated to repay to the Company or
an Employing Affiliate any amounts paid or benefits provided pursuant to this
sentence.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officers and the Executive has executed this Agreement as
of the day and year first above written.
AXSYS TECHNOLOGIES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chairman and Chief Executive
Officer
EXECUTIVE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
ATTEST
/s/▇▇▇▇ ▇▇▇▇▇▇▇
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By:
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