EXHIBIT 10(b)(6)
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 9th day of March, 1998 by and between TII
INDUSTRIES, INC., a Delaware corporation, having a place of business at 0000
Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter designated and referred to
as "Company"), and Xxxxxx X. Xxxxxxxxxx residing at 00 Xxxxxxxxx Xxxx Xxxx Xxxx,
Xxxxxxxx, XX 00000 (hereinafter designated and referred to as "Employee" or
"him" ).
WHEREAS, Company desires to continue to employ the Employee as
Executive Vice President, COO of the Company; and
WHEREAS, the Employee is willing to continue such employment by the
Company, all in accordance with provisions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three (3)
years commencing March 9, 1998 and automatically terminating on March 8, 2001,
subject to earlier termination as provided herein or unless extended by mutual
consent of both parties in writing sixty (60) days prior to the end of the term
of this Agreement or any extension thereof, but nothing herein shall require the
Company or Employee to agree to any specific term or condition or to any
continuation of Employee's employment beyond the end of the term of this
Agreement.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee for and
during the term of this Agreement. Employee is hereby employed by the Company as
Executive Vice President, COO. The Employee does hereby accept such employment
and agrees to use his best efforts and to devote all normal business time,
during the term of this Agreement, to the performance of his duties faithfully,
diligently and to the best of his abilities upon the conditions hereinafter set
forth. Employee shall report to the President/CEO. Initially, Employee's primary
place of work shall be Puerto Rico and Employee agrees to spend
such time, from time to time, at the Company's other facilities and to visit
customers, and vendors, and various industry associations as required to fulfill
his duties and responsibilities as contemplated herein.
3. Compensation: During the term of this Agreement, the Company agrees
to pay Employee, and Employee agrees to accept, annual salary of Two Hundred,
Twenty-Five Thousand Dollars ($225,000.00) payable every two weeks, less all
applicable taxes, for all services rendered by Employee hereunder. Employee's
annual salary shall be reviewed at the end of each year of employment hereunder
and shall receive an increase as determined by the Company's Compensation
Committee of the Board of Directors, unless financial factors of the Company
deem otherwise as determined by the President. In addition, Employee shall be
eligible to participate in the Company's Executive Bonus Plan should the Company
adopt one.
4. Expenses:
The Company shall reimburse Employee, not less often than monthly, for
all reasonable and actual business expenses incurred by him in connection with
his service to the Company, upon submission of appropriate vouchers and expense
account reports.
5. Company Car: The Company shall provide Employee with a Company car
for Employee's use for business purposes in accordance with standard Company
guidelines. This car shall be insured and registered with the Motor Vehicle
Department by the Company. Employee is responsible for proper maintenance,
gasoline, traffic violation fines, etc. Repairs for other than routine
maintenance shall be the responsibility of the Company.
6. Benefits: The Company shall provide medical and dental insurance and
such other benefits, in accordance with the applicable Company benefit plans, as
such plans may exist from time to time. The Employee shall be entitled to annual
vacation in accordance with the Company's policy.
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7. Extent of Service: The Employee during the term of this Agreement
shall devote his full normal business time, attention and energy and render his
best efforts and skill to the business of the Company.
8. Restrictive Covenant:
[A] Employee acknowledges that: (i) the business in which the Company
is engaged is intensely competitive and that his employment by the Company will
require that he have access to and knowledge of confidential information of the
Company, including, but not limited to, certain of the Company's confidential
plans for the creation, acquisition or disposition of products, expansion plans,
product development plans, methods of pricing, special customer requirements for
service, information on methods of servicing the customer, operational
information such as formulas, financial status, and plans and personnel
information, which are of vital importance to the success of the Company's
business, and are "trade secrets" of the Company; (ii) the direct or indirect
disclosure of any such confidential information to existing or potential
competitors of the Company would place the Company at a competitive disadvantage
and would cause damage, financial and otherwise, to the Company's business; and
(iii) by his training, experience and expertise, some of his services to the
Company will be special and unique.
Employee understands and agrees that such trade secrets give or may
give the Company a significant competitive advantage. Employee further
recognizes that the success of the Company depends on keeping confidential both
the trade secrets already developed or to be acquired and any future
developments of trade secrets. Employee understands that in his capacity with
the Company he will be entrusted with knowledge of such trade secrets and, in
recognition of the importance thereof and in consideration of his employment by
the Company hereunder, agrees that he will not, without the consent of the
President/CEO in writing, make any disclosure of trade secrets now or hereafter
possessed by the Company to any person, partnership, corporation or entity
either during or after the term hereunder, except to such employees of the
Company or its subsidiaries or affiliates, if any, as may be necessary in the
regular course of business and except as
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may be required pursuant to any court order, judgment or decision from any court
of competent jurisdiction. The provisions of this Section 8[A] shall continue in
full force and effect notwithstanding any termination of this Agreement.
[B] Employee agrees that during the term of his employment with the
Company and for a period of two years thereafter he will not directly or
indirectly become affiliated as an officer, director, employee or consultant or
as a substantial security holder with any other company or entity whose business
is directly or indirectly competitive with any business then being planned or
conducted by the Company or its divisions and subsidiaries. For the purpose
hereof, "substantial security holder" shall mean ownership, directly or
indirectly, of more than 3% of any class of securities of a company or
partnership interest in any partnership or indebtedness of any such entity in
excess of $25,000. The provisions of this Section 8[B] shall continue in full
force and effect notwithstanding any termination of this Agreement.
9. Discoveries, etc.:
[A] The Company shall be the owner, without further compensation, of
all rights of every kind in and with respect to any reports, materials,
inventions, processes, discoveries, improvements, modifications, know-how or
trade secrets hereafter made, prepared, invented, discovered, acquired,
suggested or reduced to practice (hereinafter designated and referred to as
"Property Rights") by Employee in connection with Employee's performance of his
duties pursuant to this Agreement, and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.
[B] The Employee agrees to and shall promptly disclose to the
President/CEO or his designee all Property Rights (whether or not patentable)
made, discovered or conceived of by him , alone or with others, at any time
during his employment with the Company, whether on the Company's or his own time
and irrespective of whether on or off the Company's premises, provided only that
such Property Rights (1) relate to or are useful in any phase of the business in
which the Company may be engaged during the period of employment, or (2) relate
to any subject matter or problems within the scope of Employee's employment, or
(3) relate to or involve the use of any data or information of
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which the Employee has been or may become informed by reason of employment with
the Company. The Employee hereby appoints the Company as Employee's
attorney-in-fact to execute in accordance with the laws of any country patent
applications, assignments or other documents considered necessary or desirable
by the Company. Any such Property Rights will be the sole and exclusive property
of the Company, and Employee will execute any assignments requested by the
Company of his right, title or interest in any such Property Rights without
further demand or consideration, and, in addition, the Employee will also
provide the Company with any other instruments or documents requested by the
Company, at the Company's expense, as may be necessary or desirable in applying
for and obtaining patents with respect thereto in the United States and all
foreign countries. The Employee also agrees to cooperate with the Company in the
prosecution or defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, service marks, secret
processes, discoveries or improvements, during his employment by the Company.
Employee's cooperation after his employment is subject to his availability and
the Company agrees to reimburse Employee for loss of income and expenses
incurred in connection therewith. Said cooperation shall not be withheld by
Employee.
10. Confidential Information: Employee recognizes and acknowledges that
the Company, through the expenditure of considerable time and money, will
acquire, has developed and will continue to develop in the future, information,
skills, confidential information, know-how, formulae, technical expertise and
methods relating to or forming part of the Company's services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade secrets" of the Company. Employee understands and agrees that such
trade secrets give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on keeping
confidential both the trade secrets already developed or to be acquired and any
future developments of trade secrets. Employee understands that in his capacity
with the Company he will be entrusted with knowledge of such trade secrets and,
in recognition of the importance thereof and in consideration of his
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employment by the Company hereunder, agrees that he will not, without the
consent of the President/CEO in writing, make any disclosure of trade secrets
now or hereafter possessed by the Company to any person, partnership,
corporation or entity either during or after the term hereunder, except to such
employees of the Company or its subsidiaries or affiliates, if any, as may be
necessary in the regular course of business and except as may be required
pursuant to any court order, judgment or decision from any court of competent
jurisdiction. The provisions of this Section shall continue in full force and
effect notwithstanding any termination of the Agreement.
11. Irreparable Harm: Employee agrees that any breach or threatened
breach by Employee of provisions set forth in Section Eight (8), Nine (9), and
Ten (10) of this Agreement, would cause the Company irreparable harm and the
Company may obtain injunctive relief against such actual or threatened conduct
and without the necessity of a bond.
12. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs,
customer lists, books, notes, electronically stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
the Employee.
13. Termination:
[A] Death: In the event of the Employee's death during the term of his
employment, this Agreement shall automatically terminate on the date of death,
and Employee's estate shall be entitled to payment of Employee's salary until
date of death. All other benefits and compensation described herein shall
terminate on the date of death unless otherwise stipulated in the applicable
Company plan.
[B] Disability: In the event the Employee, by reason of physical or
mental incapacity, shall be disabled for a period of at least two (2)
consecutive months or three
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(3) months in the aggregate in any twelve (12) month period of this Agreement or
any extension hereof, the Company shall have the option at any time thereafter
to terminate Employee's employment and to terminate this Agreement. Such
termination to be effective ten (10) days after the Company gives written notice
of such termination to the Employee, and all obligations of the Company
hereunder shall cease upon the date of such termination unless otherwise
stipulated in the appropriate Company plan. "Incapacity" as used herein shall
mean the inability of the Employee to perform his normal duties.
[C] Company's Rights to Terminate This Agreement:
[a] The Company shall have the right, before the expiration of
the term of this Agreement and during any extension hereof, to terminate this
Agreement and to discharge Employee for cause (hereinafter "Cause"), and all
compensation to Employee shall cease to accrue upon discharge of the Employee
for Cause. For the purposes of this Agreement, the term "Cause" shall mean the
Employee's (I) violation of the Company's written policy or specific written
directions of the President or his designee, and/or Board of Directors, which
directions are consistent with normally acceptable business practices or the
failure to observe, or the failure or refusal to perform any obligations
required to be performed in accordance with this Agreement, (ii) if the
President determines that Employee has committed a demonstrable act (or
omission) of malfeasance seriously detrimental to the Company (which shall not
include any exercise of business judgment in good faith).
[b] If the Company elects to terminate Employee's employment
for Cause, the Company shall first give Employee written notice and a period of
ten (10) days to cure such Cause, and if such Cause is not cured in said ten (10
) days, such termination shall be effective five (5) days after the Company
gives written notice of such failure to cure to the Employee. In the event of a
termination of the Employee's employment for Cause in accordance with the
provisions of Section 11[C][b], the Company shall have no further obligation to
the Employee, except for the payment of salary through the date of such
termination from employment.
[c] Notwithstanding anything in this Agreement to the
contrary, the Company may terminate the Employee's employment for reasons other
than Cause.
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[D] Employee's Right to Terminate This Agreement:
[a] If the Company elects to reduce in rank or authority the
Employee's duties under this Agreement, without the mutual agreement of the
Employee, the Employee shall first give Company written notice and a period of
ten (10) days to cure same, and if same is not cured in said ten (10) days
Employee may terminate this Agreement effective five (5) days after the Employee
gives written notice of such failure to cure.
[E] Severance: In the event the Employee's employment hereunder shall
be terminated by the Company for other than Cause, death or disability, or by
the Employee pursuant to Section 13 [D] hereof, (1) the Employee shall thereupon
receive as severance pay in a lump sum the amount of Compensation pursuant to
Section 3 hereof and bonuses which the Employee would have received for the
remaining term of this Agreement (including any extension of the Agreement
mutually agreed upon by the parties), provided, however, that in no event shall
such lump sum payment be less than one year's compensation and bonus; and (2)
the Employee's (and his dependents') participation in any medical, dental and
other insurance plans shall be continued, or equivalent benefits provided to him
or them by the Company, at no cost to him or them, for a period of one year from
the termination; and (3) any options granted to the Employee which have not, by
the terms of the options, vested, shall be deemed to have vested at the
termination of employment, and shall thereafter be exercisable for the maximum
period of time allowed for exercise thereof under the terms of the applicable
Company stock option plan(s), provided that such period shall not be less than
90 days following such termination. An election by the Employee to terminate his
employment under the provisions of Section 13[D] shall not be deemed a voluntary
termination of employment of the Employee for the purpose of interrupting the
provisions of any of the Company's employee benefits plans, programs or
policies.
14. Waiver: Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
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15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without reference to its choice
of law rules.
16. Notice: Any notice required to be given pursuant to the provisions
of this Agreement shall be in writing and by facsimile or registered or
certified mail or equivalent (i.e., Federal Express) and mailed to the following
addresses:
Company: TII Industries, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
President/CEO
Employee: Xxxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
17. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be assignable and binding to a corporation or other business
entity that succeeds to all or substantially all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of the Company and which assumes Company's
obligations under this Agreement.
18. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
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19. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on either party hereunder, which are stated to exist or continue after
termination of Employee's employment with the Company, shall exist and continue
on both parties irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.
20. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate any others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
21. Representation: Employee represents and warrants that he has the
legal right to enter into this Agreement and to perform all of the duties and
obligations on his part to be performed hereunder in accordance with its terms
and that he is not a party to any agreement or understanding, written or oral,
which prevents Employee from entering into this Agreement or performing all of
his duties and obligations hereunder. In the event of a breach of such
representation or warranty on his part or if there is any other legal impediment
which prevents him from entering into this Agreement or performing all of his
duties and obligations hereunder, the Company shall have the right to terminate
this Agreement in accordance with Section 13[C] [a]. Without limiting the
foregoing, Employee represents and warrants that he is not a party to any
agreement which prohibits or limits his ability to fulfill his duties and
responsibilities contemplated herein.
22. Descriptive Headings: The paragraph headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of
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this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
TII INDUSTRIES, INC.
By: ____________________
Xxxxxxx X. Xxxxx
President, CEO and
Vice Chairman of the Board
Employee:
--------------------------
Xxxxxx X. Xxxxxxxxxx
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