AMENDED EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of February, 1999 and
amended as of the 17th day of March, 2000 by and between Acme
Electric Corporation, a New York corporation having an office at
000 Xxxxxx Xxxx, Xxxx Xxxxxx, Xxx Xxxx, (the "Company") and Xx.
Xxxxxx X. XxXxxxx, residing at 0 Xxxxxxxxxxx Xxxxx, Xxxxxxx Xxxx,
Xxx Xxxx, ("Xx. XxXxxxx").
W I T N E S S E T H:
WHEREAS, Xx. XxXxxxx is Chief Executive Officer ("CEO"),
Chairman and President of the Company; and
WHEREAS, the Company believes that it is in its best
interest to assure the continued service of Xx. XxXxxxx as its
CEO, Chairman and President on the terms and conditions
hereinafter set forth; and
WHEREAS, Xx. XxXxxxx is desirous of receiving assurances
that, should a "change in control" as hereinafter defined take
place at the Company, he will be provided with security as to his
position, compensation and benefits.
NOW, THEREFORE, in consideration of the premises and mutual
agreement hereinafter contained, the parties hereto agree as
follows:
1. The Company hereby employs Xx. XxXxxxx and Xx. XxXxxxx
hereby accepts employment with the Company as its CEO, Chairman
and President upon the terms and conditions herein contained.
2A. The initial Term shall be for a period commencing on
the date hereof and terminating three years from the date of
commencement or three years from its most recent extension date,
whichever is later.
At the end of each month during the Term, the Term
shall be automatically continued and extended for one additional
month, unless on or before fifteen days prior to the end of any
month during the Term, the Company shall give to Xx. XxXxxxx or
Xx. XxXxxxx shall give to the Company a notice not to extend.
Then, in such event, the Term as theretofore automatically
extended shall be deemed further extended for one additional
month, and thereafter there shall be no further automatic
extensions. (As an example, should the Company or Xx. XxXxxxx
give to the other party a written notice not to extend on
November 15, 2000, the Agreement would be deemed extended to, and
would expire on, December 31, 2003.) "Term" as used in this
Agreement shall be deemed to mean the period of employment from
the date hereof through February 1, 2002, or as automatically
extended pursuant to this Paragraph 2A.
2B. Should the Company breach this Agreement pursuant to
the provisions of Paragraphs 8A, 8B, 8C and 9 herein, Xx. XxXxxxx
shall be entitled to the following:
a. Payments in an amount equal to the base salary
payable each year of the then remaining Term of the
Agreement, with such base salary to be in an amount equal to
Xx. XxXxxxx'x base salary in effect prior to such breach,
plus bonus each year of the remaining Term of the Agreement.
The bonus amount each year will be equal to the average of
Xx. XxXxxxx'x greatest two out of the previous three years'
bonuses, or 50% of base salary, whichever is greater.
b. Company paid full medical, dental and disability
insurance benefits and life insurance benefits comparable to
those enjoyed prior to such breach, which shall extend for
the duration of the lives of Xx. XxXxxxx and his spouse or
until Xx. XxXxxxx accepts other full-time employment which
provides the same or similar benefits and he elects to
accept such other benefits in lieu of the benefits provided
by the Company. In the event that Xx. XxXxxxx elects to
accept such other benefits, he and his spouse preserve the
right to require the Company to reinstate the benefits
enjoyed at the time of the breach for the duration of the
lives of Xx. XxXxxxx and his spouse.
c. The continuation over the then remaining Term of
this Agreement, in such amounts and in a manner consistent
with that provided immediately prior to such breach, of:
contributions in Xx. XxXxxxx'x behalf based on his base
salary to the Company's Pension Plan for Salaried Employees
and to the Supplemental Executive Retirement Plan; Xx.
XxXxxxx'x Company furnished automobile; and dues and fees
for Xx. XxXxxxx'x club memberships.
d. Payments made pursuant to this Paragraph 2B shall
be made monthly from the date the Company breached this
Agreement throughout the then remaining Term of the
Agreement, or at Xx. XxXxxxx'x option in a lump sum within
thirty (30) days of notification of such breach. Such lump
sum shall be an amount equal to the discounted present value
of the payments which were to be paid over the Term
specified herein discounted at a rate of 5% per annum.
2C. "Change in Control" as used in this Agreement shall
mean any one of the following:
a. An acquisition of 35% or more of the beneficial
ownership, directly or indirectly, of the Company's then
outstanding stock, or merger or consolidation by or with
another person, entity or group;
b. A tender offer or tender offers for the Company's
stock in which 35% or more of the then outstanding stock of
the Company is tendered or purchased by a person, single
entity or affiliated group;
c. A reclassification of securities or
recapitalization of the Company which, directly or
indirectly, disproportionately increases or decreases the
outstanding shares of any class of equity securities of the
Company by 35% or more;
d. A sale, lease, exchange, mortgage, pledge,
transfer or other disposition of all or substantially all
the assets of the Company approved by the Board of Directors
to which Xx. XxXxxxx dissented;
e. A change in control shall be deemed to have
occurred if at any time less than 51% of the members of the
Board of Directors shall be persons who were either
nominated for election by the Board of Directors or were
elected by the Board of Directors.
3. Except as otherwise herein provided during the Term of
the Agreement, the Company shall employ Xx. XxXxxxx as its CEO,
Chairman and President and he shall serve the Company in such
capacity, performing the normal duties of a CEO, Chairman and
President of a corporation in the Company's business, subject at
all times to the direction and control of the Board of Directors
of the Company, shall devote his time, attention, skill and
energy to the business, welfare and affairs of the Company and
shall use his best efforts to promote the interests of the
Company, it being understood that the conduct of such duties does
not require his attendance at the offices of the Company during
any particular fixed periods. Xx. XxXxxxx hereby consents to
continue to serve as a Director of the Company or any subsidiary
thereof without additional compensation.
4A. The Company shall pay and Xx. XxXxxxx shall accept as
compensation for all services to be rendered hereunder and during
the Term a base salary determined by the Board of Directors of
the Company pursuant to its normal procedure for setting yearly
salaries for officers of the Company ($295,000 per annum as of
March 17, 2000). Such payments hereunder shall be payable in
accordance with the prevailing salary payroll practices of the
Company and subject to such deductions as are agreed to by Xx.
XxXxxxx. Nothing contained in this Agreement shall be deemed to
prevent the Company during the Term hereof from giving bonuses or
other additional consideration to Xx. XxXxxxx from time to time
as determined by the Board of Directors or, except as otherwise
specifically provided herein, prevent Xx. XxXxxxx from receiving
benefits in accordance with any benefit plan or program made
available by the Company to its officers, salaried employees or
directors.
4B. The Company shall reimburse Xx. XxXxxxx for all
expenses reasonably incurred by him in connection with his
performance of services to the Company, including entertainment
and travel. Xx. XxXxxxx shall be entitled to receive or
participate in all other fringe benefits, such as medical and
hospital plans, profit-sharing plans and pension plans, stock
options under the then existing corporate stock option plan, and
use and maintenance of an automobile of a type and in a manner
consistent with the practices prevailing at the time of the
execution of this Agreement.
5A. Xx. XxXxxxx acknowledges that during the course of his
employment hereunder he will acquire, possess and become exposed
to confidential and proprietary information and materials of the
Company. Accordingly, during his employment hereunder and for a
period of eighteen (18) months thereafter, he shall not, for any
reason whatever, except in the regular authorized course of the
Company's business under appropriate secrecy provisions, directly
or indirectly, use or exploit or disclose or divulge to anyone
(who is not authorized to receive the same), without the prior
written permission of the Company, any proprietary information,
including, but not limited to, trade secrets, know-how, data,
materials or other knowledge relating to or pertaining to the
business of the Company, unless the same (i) has been published
and/or has become a part of the public domain other than by acts
of omission by Xx. XxXxxxx; (ii) has been lawfully furnished or
made known to Xx. XxXxxxx by a third party without restriction on
disclosure or use; and (iii) was in Xx. XxXxxxx'x possession at
the time he first became associated with the Company and was not
acquired by Xx. XxXxxxx either directly or indirectly from the
Company.
5B. All documents, records, prototypes or other tangible
embodiments or evidence of the discoveries, trade secrets,
information, know-how, data, materials or other knowledge
previously referred to, which may at any time be acquired by or
come into the possession of Xx. XxXxxxx during his employment
hereunder (except materials excluded in Subparagraph A hereof),
are the sole and exclusive property of the Company and must be
surrendered to the Company, without demand therefor, upon
termination of Xx. XxXxxxx'x employment hereunder, or upon the
request by the Company at any other time; and, in addition, prior
to such termination of employment or upon the reasonable request
by the Company at any other time, Xx. XxXxxxx will prepare
materials to accurately and adequately describe, set forth or
embody any of the foregoing and deliver the same to the Company
in order to accomplish or complete the transfer of any and all of
the foregoing to the Company and shall be reimbursed by the
Company for all of his reasonable out-of-pocket expenses in
connection therewith.
5C. Xx. XxXxxxx agrees to execute all documents and to
take all such other action as the Company may reasonably require
(being reimbursed for all of his reasonable out-of-pocket
expenses in this connection) in order to assign to the Company
any and all rights to any materials prepared by him during and in
connection with his employment hereunder.
6A. Xx. XxXxxxx agrees that, during his employment
hereunder for a period of eighteen (18) months after termination
of his employment hereunder for whatever reason (except in the
event such termination is caused by (a) a material breach of this
Agreement by the Company, or (b) the Company's bankruptcy (as
defined in Paragraph 14 hereof)), he shall not (without the prior
written consent of the Company) (i) solicit as a client or
customer in competition with the Company any persons or entities
which were, during his employment hereunder, clients or customers
of the Company, (ii) enter into any business arrangements with
any of the foregoing which could be reasonably deemed to be
materially competitive with or materially injurious to any
business in which the Company is engaged at the time of such
termination, or (iii) solicit, or be instrumental in any way in
causing, any other person to leave the employ of the Company.
Xx. XxXxxxx further agrees that he shall not (without the prior
written consent of the Company) for a period of eighteen (18)
months after the termination of his employment hereunder for any
reason (except in the event the termination is caused by a breach
of this Agreement by the Company), directly or indirectly,
individually or as a director, partner, employee, officer or
agent, engage in any employment, performance of services or other
activity on behalf of any company if such employment, performance
of services or other activity can be reasonably deemed to be
materially competitive with or materially injurious to any
business in which the Company is engaged at the time of such
termination.
6B. For purposes only of determining whether services by
Xx. XxXxxxx during the aforesaid eighteen (18) month period after
his termination of employment hereunder shall be "materially
competitive with or materially injurious to the Company" within
the meaning of this paragraph, either party may initiate
arbitration proceedings to make such determination pursuant to
Paragraph 13 hereof.
6C. If Xx. XxXxxxx commits a material breach of any of the
provisions of Paragraph 5A, 5B, 5C or 6A, the Company shall have
the right and remedy to have such provisions specifically
enforced by any court having equity jurisdiction, since any such
breach or threatened breach will cause irreparable injury to the
Company and money damages will not provide an adequate remedy to
the Company. The initiation of, or participation in, any such
proceeding shall not constitute a waiver of the arbitration
provisions of Paragraph 10.
7. During the Term, Xx. XxXxxxx will not directly or
indirectly engage in the business of, or own or control any
interest in (except as a passive investor owning less than ten
percent (10%) of the equity securities of a publicly-owned
company), or act as a director, officer or employee of, or
consultant to, any individual, partnership, joint venture,
corporation or other business entity directly or indirectly
engaged anywhere in the United States in any business competing
with the business carried on by the Company or any of its
subsidiaries.
8A. It is specifically understood and agreed that the
Company may terminate this Agreement and its obligations to Xx.
XxXxxxx hereunder prior to a change in control or upon voluntary
retirement by Xx. XxXxxxx from active employment with the
Company. Notwithstanding the foregoing, at any time during the
Term of this Agreement, after a change of control has taken
place, any termination or notice of termination shall be deemed a
breach of this Agreement and a notice not to extend, and the
provisions of Paragraph 2B above shall apply so as to have the
effect of fixing the Term as provided herein and terminating Xx.
XxXxxxx'x employment with the Company.
8B. At any time during the Term of this Agreement, after a
change in control has taken place, should the Company reduce the
compensation or benefits then being paid to Xx. XxXxxxx, it shall
be deemed a breach of this Agreement and a notice not to extend,
and the provisions of Paragraph 2B above shall apply so as to
have the effect of fixing the Term as provided herein and
terminating Xx. XxXxxxx'x employment with the Company.
8C. At any time during the Term of this Agreement, after a
change in control has taken place, should the Company change Xx.
XxXxxxx'x position or duties without his written consent, it
shall be deemed a breach of this Agreement and a notice not to
extend, and the provisions of Paragraph 2B above shall apply so
as to have the effect of fixing the Term as provided herein and
terminating Xx. XxXxxxx'x employment with the Company.
9. In the event that during Xx. XxXxxxx'x lifetime and
during the Term of this Agreement, after a change in control has
taken place, the Company defaults as to any payment under this
Agreement or fails to make any payments provided for in this
Agreement and fails to cure such default or make such payment
within ten (10) days after written notice thereof, or written
demand therefor, or in the event that the Company terminates this
Agreement for cause and it is ultimately determined that such
termination was wrongful, Xx. XxXxxxx may elect to treat such
default or wrongful termination as a breach of this Agreement and
shall he entitled to recover all of his expenses, including
reasonable attorneys' fees, in prosecuting or defending any
actions or proceedings arising out of, or in any other way
relating to, the matters referred to in this paragraph, and the
provisions of Paragraph 2B of this Agreement shall apply.
10. Any controversy, claim or dispute arising out of or
relating to this Agreement, including without limitation, any
claim for breach of this Agreement, shall be settled by
arbitration in accordance with the Rules of the American
Arbitration Association (AAA) obtaining at the time of such
proceeding, except that the authority of the arbitrators shall be
limited to the interpretation and enforcement of the terms and
conditions of this Agreement and the arbitrators shall set forth
in writing the reasons for their decisions. Judgment upon any
award rendered by the arbitrators pursuant hereto may be entered
in any court having jurisdiction thereof and thereafter enforced.
Either party shall have the right to initiate arbitration
proceedings. Any arbitration shall take place under the auspices
of the AAA in Buffalo, New York. There shall be three
arbitrators. Each party shall appoint one arbitrator. If either
party fails to appoint an arbitrator within five (5) days from
the date upon which the notice of the initiating party of its
intention to arbitrate is received by the other party to such
proceedings, the AAA shall make the appointment for that party.
The two arbitrators appointed in the manner provided for above
shall appoint a third arbitrator, mutually acceptable to them.
If the two arbitrators first appointed cannot, for any reason,
agree upon a third arbitrator, or an acceptable person is unable
to act, the AAA shall appoint the third arbitrator in accordance
with its rules.
11. Xx. XxXxxxx may terminate this Agreement prior to the
date of expiration of the Term herein above set forth by written
notice to the Company if the Company shall file a petition in
bankruptcy, make a voluntary assignment for the benefit of
creditors, file a petition or an answer seeking an arrangement
with creditors or take advantage of any insolvency law, or if the
Company applies for or consents to the appointment of a receiver
or trustee of all or a substantial part of its assets, or an
order, judgment or decree shall be entered in any court of
competent jurisdiction appointing a receiver of all or a
substantial part of its assets, and such order, judgment or
decree shall continue unstayed and in effect for any consecutive
period of ninety (90) days.
12. This Agreement and all rights hereunder are personal to
Xx. XxXxxxx and shall not be assignable; provided, however, that
all of Xx. XxXxxxx'x rights under the Agreement shall inure to
the benefit of his heirs, distributees, personal representatives
or designees or other legal representatives, as the case may be.
Any person, firm or corporation succeeding to the business of the
Company by merger, purchase, consolidation or otherwise, shall
assume by contract or operations of law the obligations of the
Company hereunder; provided, however, that the Company shall,
notwithstanding such assumption or assignment, remain liable and
responsible for fulfilling the obligations of the Company under
this Agreement.
This Agreement supersedes and replaces any and all
present written or oral agreements of employment between the
parties hereto, and all such agreements are hereby deemed
canceled, revoked and of no further force or effect; provided,
however, that in the event that Xx. XxXxxxx'x employment is
terminated prior to a change in control or under circumstances
not involving a breach of this Agreement, Xx. XxXxxxx, in
addition to the other benefits provided by this Agreement, shall
be entitled to an amount equal to six (6) months base salary paid
in a lump sum in accordance with the letter of August 12, 1992
from the Company to Xx. XxXxxxx.
13. Without in any way implying that any provisions hereof
is invalid or unenforceable, the validity or unenforceability of
any provision hereof shall in no way affect the validity or
enforceability of any other provision.
14. This Agreement constitutes the whole agreement between
the parties hereto, and there are no terms other than those
stated herein. No variation hereof shall be deemed valid unless
in writing and signed by the parties hereto, and no discharge of
the terms hereof shall be deemed valid unless by full performance
by the parties hereto or by a writing signed by the parties
hereto. No waiver by either party of any provisions or condition
of this Agreement to be performed by them should be deemed a
waiver of any other provisions of this Agreement.
15. Any notice, statement, report, request or demand
required or permitted to be given by this Agreement shall be in
writing, and shall be sufficient if addressed and sent by
certified mail, return receipt requested, to the parties at the
addresses set forth above, or at such other place that either
party may designate by notice to the other and shall be deemed
given when so mailed.
16. This Agreement has been made in, and shall be
interpreted according to the laws of, the State of New York. The
parties hereto submit to the jurisdiction of the courts of the
New York 7upreme Court, County of Erie, for the purpose of any
actions or proceedings which may be required to enforce the
provisions of this Agreement or an award made in any arbitration
proceeding initiated hereunder.
IN WITNESS WHEREOF, the parties have hereunto set their
respective hands and seals causing these presents to be executed
as of the day and year first above written.
Witnessed:
/s/ Xxxx X. Xxx /s/
Xxxxxx X. XxXxxxx
Witnessed: ACME ELECTRIC CORPORATION
/s/ Xxxxxxx X. Xxxx By: /s/
Xxxxxxx X. Xxxxx
Chairman, Compensation Committee
BFLODOCS:335560_1 (76X401)
