Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is
made and entered into as of January 17, 2008, by and between
Communications & Power Industries, Inc., a Delaware
corporation (hereinafter called the “ Corporation
”), and Robert A. Fickett (hereinafter called the “
Executive ”).
WITNESSETH THAT:
WHEREAS, the
Corporation and the Executive are party to an Employment Agreement,
dated as of April 27, 2006 (the “ Original Employment
Agreement ”), providing for the employment of the
Executive as President and Chief Operating Officer of the
Corporation; and
WHEREAS, the
parties desire to amend and restate the Original Employment
Agreement pursuant to the terms and provisions set forth
herein;
NOW, THEREFORE,
the Corporation and the Executive, each intending to be legally
bound, hereby mutually covenant and agree as follows (certain
defined terms are set forth in Section 8(d)
hereof):
1.
Employment and Term .
(a)
Employment . The Corporation shall employ the
Executive as the President and Chief Operating Officer of the
Corporation, and the Executive shall so serve, for the term set
forth in Section 1(b) .
(b)
Term . The term of the Executive’s employment
under this Agreement commenced on April 27, 2006 (the “
Commencement Date ”) and shall end on the third
anniversary of the Commencement Date, subject to the extension of
such term as hereinafter provided and subject to earlier
termination as provided in Section 8 . The term
of this Agreement shall be extended automatically for one
(1) additional year as of the third anniversary of the
Commencement Date, and each anniversary date thereafter unless, no
later than six (6) months prior to any such renewal date,
either the Corporation or the Executive gives written notice to the
other, in accordance with Section 14 , that the term of
this Agreement shall not be so extended; provided, however, no
automatic extension of the term shall occur with respect to an
anniversary date if Executive has attained the age of sixty-five
(65).
2.
Duties . During the period of employment as provided
in Section 1(b) hereof, the Executive shall serve
as President and Chief Operating Officer of the Corporation and
President and Chief Operating Officer of the Parent and have all
powers and duties consistent with such positions, subject to the
reasonable direction of the Chief Executive Officer. The
Executive shall devote substantially his entire time during
reasonable business hours (reasonable sick leave and vacations
excepted) and reasonable best efforts to fulfill faithfully,
responsibly and to the best of his ability his duties
hereunder.
3.
Salary .
(a)
Base Salary . For services performed by the Executive
for the Corporation pursuant to this Agreement during the period of
employment as provided in Section 1(b) hereof,
the Corporation shall pay the Executive a base salary at the rate
of Three Hundred Thousand U.S. dollars ($300,000 U.S.) per year,
payable in substantially equal installments in accordance with the
Corporation’s regular payroll practices. The
Executive’s base salary (with any increases under
Section 3(b) , below) shall not be subject to
reduction; provided, however, in connection with an
across-the-board salary reduction that applies to substantially all
of the management executives of Parent and its subsidiaries,
Executive’s base salary may be reduced by a percentage amount
equal to the average amount of the percentage decrease affecting
such other management executives, but in no event more than
10%. Any compensation which may be paid to the Executive
under any additional compensation or incentive plan of the
Corporation or Parent or which may be otherwise authorized from
time to time by the Board (or an appropriate committee thereof)
shall be in addition to the base salary to which the Executive
shall be entitled under this Agreement.
(b)
Salary Increases . During the period of employment as
provided in Section 1(b) hereof, the base salary
of the Executive shall be reviewed no less frequently than annually
by the Board to determine whether or not the same should be
increased in light of the duties and responsibilities of the
Executive and the performance thereof, and if it is determined that
an increase is merited, such increase shall be promptly put into
effect and the base salary of the Executive as so increased shall
constitute the base salary of the Executive for purposes of
Section 3(a) .
4.
Annual Bonuses . For each fiscal year during the term
of employment, the Executive shall be eligible to receive a bonus
payable in cash and/or in Parent’s common stock. The
amount of the bonus shall be based on the achievement of certain
operating and/or financial goals, in accordance with the terms of a
bonus plan adopted and administered by the Board for senior
executives of the Parent and its subsidiaries, which plan may be
amended from time to time by the Board in its discretion.
Executive’s target annual bonus for fiscal year 2006 will be
equal to 0.75 times his current annual salary.
5.
Equity Incentive Compensation . During the term of
employment hereunder the Executive shall be eligible to
participate, in an appropriate manner relative to other senior
executives of the Parent and its subsidiaries, in any equity-based
incentive compensation plan or program approved by the Board from
time to time, including (but not by way of limitation) any plan
providing for the granting of (a) options to purchase stock of
the Parent, (b) restricted stock of the Parent or
(c) similar equity-based units or interests.
6.
Other Benefits . In addition to the compensation
described in Sections 3, 4 and 5 , above, the Executive
shall also be entitled to the following:
(a)
Participation in Benefit Plans . The Executive shall
be entitled to participate in all of the various retirement,
welfare, disability, fringe benefit, executive perquisite and
expense reimbursement plans, and any other programs and
arrangements of the Corporation and Parent to the extent the
Executive is eligible for participation under the
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terms of such
plans, programs and arrangements, with the participation levels to
be determined by Executive’s salary, position and tenure, and
such other factors as apply in such plans and programs.
Except as otherwise specifically provided in this Agreement, the
Executive shall also be entitled to all benefits provided to him
under the practices of the Corporation as in effect immediately
prior to the Commencement Date.
(b)
Vacation and Holidays . The Executive shall be
entitled to the number of weeks of vacation during each year of
this Agreement per the formula determined by the existing policies
of the Corporation, or such greater period as the Board may
approve, and to the paid holidays given by the Corporation to its
employees generally, without reduction in salary or other
benefits.
7.
Covenants of the Executive . In order to induce the
Corporation to enter into this Agreement, the Executive hereby
agrees as follows:
(a)
Confidentiality . Except for and on behalf of the
Corporation with the consent of or as directed by the Board, the
Executive shall keep confidential and shall not divulge to any
other person or entity, during the term of employment or
thereafter, any of the business secrets or other confidential
information regarding the Parent and its subsidiaries which has not
otherwise become public knowledge; provided, however, that nothing
in this Agreement shall preclude the Executive from disclosing
information (i) to an appropriate extent to parties retained
to perform services for the Parent or its subsidiaries or
(ii) under any other circumstances to the extent such
disclosure is, in the reasonable judgment of the Executive,
appropriate or necessary to further the best interests of the
Corporation or its subsidiaries or (iii) as may be required by
law, legal process or subpoena.
(b)
Records . All papers, books and records of every kind
and description relating to the business and affairs of the Parent
and its subsidiaries, whether or not prepared by the Executive,
other than personal notes prepared by or at the direction of the
Executive, shall be the sole and exclusive property of the
Corporation, and the Executive shall surrender them to the
Corporation at any time upon request by the Board.
(c)
Non-Competition . The Executive hereby agrees with the
Corporation that during the term of his employment hereunder, and
in certain instances, as provided below, for a period following
termination of his employment hereunder, he shall not, directly or
indirectly, engage in, or be employed by, or act as a consultant
to, or be a director, officer, owner or partner of, or acquire a
substantial interest in, any business activity or entity which
competes significantly with the Parent or any of its subsidiaries,
provided, however, that as to the period after termination of the
Executive’s employment hereunder, the restrictive covenants
set forth in this Section 7(c) shall apply only
in the case of terminations without Cause or resignations for Good
Reason and then only for a period beginning on the Date of
Termination and ending, as applicable, eighteen (18) months or
twenty-four (24) months later (which period will be based the
applicable multiplier pursuant to subsection (ii) of
Section 9(b) of this Agreement);
(d)
Non-Solicitation . During the time period after
termination (if any) during which the Executive is subject to the
noncompetition covenants of Section 7(c) of this
Agreement, he shall not induce or attempt to induce any customer,
supplier, licensee or
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other
individual, corporation or other business organization having a
business relation with the Parent or its subsidiaries to cease
doing business with the Parent or its subsidiaries or in any way
interfere with the relationship between any such customer,
supplier, licensee or other person and the Parent or its
subsidiaries. In addition, during the eighteen (18) month
period following termination of employment for any reason (or, if
longer, the period during which the Executive is subject to the
non-competition covenants of Section 7(c) of this
Agreement), the Executive shall not solicit any employee of the
Parent or any of its subsidiaries to leave the employment thereof
or in any way interfere with the relationship of such employee with
the Parent or its subsidiaries.
(e)
Enforcement . The Executive recognizes that the
provisions of this Section 7 are vitally important to
the continuing welfare of the Corporation and its subsidiaries and
that money damages would constitute an inadequate remedy for any
violation thereof. Accordingly, in the event of any such
violation by the Executive, the Corporation and its subsidiaries,
in addition to any other remedies they may have, shall have the
right to institute and maintain a proceeding to compel specific
performance thereof or to seek an injunction restraining any action
by the Executive in violation of this Section 7
.
8.
Termination . Unless earlier terminated in accordance
with the following provisions of this Section 8 , the
Corporation shall continue to employ the Executive and the
Executive shall remain employed by the Corporation during the
entire term of this Agreement as set forth in
Section 1(b) . Section 9 hereof sets
forth certain obligations of the Corporation in the event that the
Executive’s employment is terminated.
(a)
Death or Disability . Except to the extent otherwise
provided in Section 9 with respect to certain post-Date
of Termination payment obligations of the Corporation, this
Agreement shall terminate immediately as of the Date of Termination
in the event of the Executive’s death or in the event that
the Executive becomes disabled. The Executive will be deemed
to be disabled when he is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than twelve
(12) months, or begins receiving income replacement benefits for a
period of not less than three (3) months under an accident and
health plan of the Corporation or an affiliate by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months. If any
question arises as to whether the Executive is disabled, upon
reasonable request therefor by the Board, the Executive shall
submit to reasonable medical examination for the purpose of
determining the existence, nature and extent of any such
disability. In accordance with Section 14 , the
Board shall promptly give the Executive written notice of any such
determination of the Executive’s disability. In the
event of disability, until the Date of Termination, the base salary
payable to the Executive under Section 3 hereof shall
be reduced dollar-for-dollar by the amount of disability benefits,
if any, paid to the Executive in accordance with any disability
policy or program of the Corporation or its affiliates.
(b)
Discharge for Cause . In accordance with the
procedures hereinafter set forth, the Board may discharge the
Executive from his employment hereunder for Cause. Except to the
extent otherwise provided in Section 9 with respect to
certain post-Date of
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Termination
obligations of the Corporation, this Agreement shall terminate
immediately as of the Date of Termination in the event the
Executive is discharged for Cause. Any discharge of the
Executive for Cause shall be communicated by a Notice of
Termination to the Executive given in accordance with
Section 14 of this Agreement. For purposes of
this Agreement, a “ Notice of Termination ”
means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated and (iii) if the Date of
Termination is to be other than the date of receipt of such notice,
specifies the Date of Termination (which date shall in all events
be within thirty (30) days after the giving of such notice).
In the case of a discharge of the Executive for Cause, the Notice
of Termination shall include a copy of a resolution duly adopted by
the Board at a meeting called and held for such purpose (after
reasonable notice to the Executive and reasonable opportunity for
the Executive to be heard before the Board prior to such vote),
finding that, in the reasonable and good faith opinion of the
Board, the Executive was guilty of conduct constituting
Cause. No purported termination of the Executive’s
employment for Cause shall be effective without a Notice of
Termination.
(c)
Termination for Other Reasons . The Corporation may
discharge the Executive without Cause by giving written notice to
the Executive in accordance with Section 14 at least
thirty (30) days prior to the Date of Termination. The
Executive may resign from his employment by giving written notice
to the Corporation in accordance with Section 14 at
least thirty (30) days prior to the Date of Termination.
Except to the extent otherwise provided in Section 9
with respect to certain post-Date of Termination obligations of the
Corporation, this Agreement shall terminate immediately as of the
Date of Termination in the event the Executive is discharged
without Cause or resigns.
(d)
Definitions . For purposes of this Agreement, the
following capitalized terms shall have the meanings set forth
below:
(i)
“ Accrued Obligations ” shall mean, as of the
Date of Termination, the sum of (A) the Executive’s base
salary hereunder through the Date of Termination to the extent not
theretofore paid, (B) the amount of any incentive
compensation, deferred compensation and other cash compensation
accrued by the Executive as of the Date of Termination to the
extent not theretofore paid, (C) any vacation pay, expense
reimbursements and other cash entitlements accrued by the Executive
as of the Date of Termination to the extent not theretofore paid,
and (D) with respect to any bonus plans for the fiscal year of
termination, if Executive has been employed for at least six
(6) months during such fiscal year and has not been terminated
for Cause or resigned without Good Reason, a partial bonus for the
fiscal year of termination equal to the bonus payable for the full
fiscal year in accordance with the applicable plan, program or
policy, multiplied by a fraction equal to the fraction of the
fiscal year preceding Executive’s termination.
(ii)
“ Base Salary ” shall mean the annual base
salary paid to Executive immediately prior to the termination of
employment, provided that such amount shall in no event be less
than the annual base salary payable to Executive during the one
(1) year period immediately prior to the
termination.
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(iii)
“ Board ” means the board of directors of
Parent.
(iv)
“ Cause ” shall mean (i) acts or omissions
by the Executive which constitute intentional material misconduct
or a knowing violation of a material policy of the Parent or any of
its subsidiaries, (ii) the Executive personally receiving a
benefit in money, property or services from the Parent or any of
its subsidiaries or from another person dealing with the Parent or
any of its subsidiaries, in material violation of applicable law or
policy of Parent or any of its subsidiaries, (iii) an act of
fraud, conversion, misappropriation, or embezzlement by the
Executive or his conviction of, or entering a guilty plea or plea
of no contest with respect to, a felony, or the equivalent thereof
(other than DUI), or (iv) any deliberate and material misuse
or deliberate and material improper disclosure of confidential or
proprietary information of Parent or any of its subsidiaries.
Notwithstanding the foregoing, no act or omission by the Executive
shall constitute Cause hereunder unless the Corporation has given
detailed written notice thereof to the Executive, and the Executive
has failed to remedy such act or omission within a reasonable time
after receiving such notice.
(v)
A “ Change of Control ” shall be deemed to have
occurred if:
(A)
Any individual or group constituting a “person”, as
such term is used in Sections l3(d) and l4(d)(2) of the
Securities Exchange Act of 1934, as amended (“ Exchange
Act ”) (other than (A) the Parent or any of its
subsidiaries, (B) any trustee or other fiduciary holding
securities under an Executive benefit plan of the Parent or of any
of its subsidiaries or (C) any Cypress Fund(s)), is or becomes
the beneficial owner, directly or indirectly, of securities of the
Parent representing fifty percent (50%) or more of the combined
voting power of the Parent’s outstanding securities then
entitled ordinarily (and apart from rights accruing under special
circumstances) to vote for the election of directors;
or
(B)
Continuing Directors cease to constitute at least a majority of the
Board; or
(C)
there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Parent (a “
Transaction ”), in each case with respect to which the
stockholders of the Parent immediately prior to such Transaction do
not, immediately after the Transaction, own more than 50% of the
combined voting power of the Parent or other corporation resulting
from such Transaction; or
(D)
all or substantially all of the assets of the Corporation or Parent
are sold, liquidated or distributed.
(vi)
“ Continuing Directors ” shall mean (A) the
directors of the Parent in office on the date hereof and
(B) any successor to any such director who (x) was
nominated or selected by a majority of the Continuing Directors in
office at the time of the director’s nomination or selection,
and (y) who is not an “affiliate” or
“associate” (as defined in rule 12b-2 under the
Exchange Act) of any Ten Percent Owner.
(vii)
“ Cypress Fund ” shall mean any investment fund
which is an “affiliate” of Cypress Associates II
LLC.
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(viii)
“ Date of Termination ” shall mean
(A) in the event of a discharge of the Executive by the Board
for Cause, the date the Executive receives a Notice of Termination,
or any later date specified in such Notice of Termination, as the
case may be, (B) in the event of a discharge of the Executive
without Cause or a resignation by the Executive, the date specified
in the written notice to the Executive (in the case of discharge)
or the Corporation (in the case of resignation), which date shall
be no less than thirty (30) days from the date of such written
notice, (C) in the event of the Executive’s death, the
date of the Executive’s death, and (D) in the event
of the Executive’s disability pursuant to
Section 8(a) , the date the Executive receives written
notice of determination of disability (or, if earlier, twelve (12)
months from the date the Executive’s disability
began).
(ix)
“ Good Reason ” shall mean any of the
following (A) the assignment to the Executive of any duties
inconsistent in any respect with the Executive’s positions
with the Corporation and Parent as set fort
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