Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") effective January 1, 2008
(the
"Effective Date") by and between ORBIT INTERNATIONAL CORP., a
Delaware
corporation, (the "Company") and BRUCE REISSMAN (the "Executive")
(collectively,
the "Parties").
WHEREAS, Executive is presently employed by the Company in a
senior
executive capacity pursuant to an Amended and Restated Employment
Agreement
dated as of February 15, 1999, as last amended on December 1,
2005;
WHEREAS, the Company desires to continue to employ Executive and to
enter into
an agreement embodying the terms of such employment; and
WHEREAS, Executive desires to continue his employment with the
Company on the
terms and conditions set forth herein and enter into such
agreement.
NOW
THEREFORE, in consideration of the premises and mutual covenants
herein
and for other good and valuable consideration, the Parties agree as
follows:
1.
EFFECTIVENESS; TERM OF EMPLOYMENT.
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A.
EFFECTIVENESS.
This Agreement shall constitute a binding agreement
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between the parties as of the date hereof.
B.
TERM OF EMPLOYMENT. The term of this Agreement
shall commence on the
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date first set forth above and shall continue until terminated
pursuant to
Paragraph 9 below (the "Term").
2.
POSITION.
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A.
During the Term, Executive shall serve as the Company's Executive
Vice
President and Chief Operating Officer. Executive shall have and perform
such
duties and authority generally associated with an Executive Vice
President and
Chief Operating Officer of a publicly owned defense electronics
corporation.
Executive will have and perform other duties as shall be determined
from time to
time
by the Company's Board of Directors (the "Board") consistent
with
Executive's position.
B.
During the Term, Executive shall, if elected, serve as a member of
the
Board and such other committees of the Board to which Executive may
be appointed
and/or as an officer or director of any subsidiary of the
Company.
C.
During the Term, Executive will devote substantially all of his
business
time and efforts (excluding periods of vacation and sick days) to
the
performance of Executive's duties hereunder, and will not engage in
any other
business, profession or occupation which would conflict or
interfere with the
rendition of such services either directly or indirectly, without
the prior
written consent of the Board, which consent shall not unreasonably
be withheld.
Executive may: (i) engage in personal investment activities
(including for
Executive's immediate family); (ii) serve on the boards of
nonprofit
organizations and business entities; and/or (iii) be involved in
other
organizations, in each case provided that any of such activities do
not
materially interfere with Executive's performance of his duties for
the Company
or create a conflict of interest with that of the Company.
D.
Subject to such travel as the performance of Executive's duties
may
reasonably require, Executive shall perform the duties required of
him by this
Agreement in Hauppauge, New York.
3.
COMPENSATION.
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A.
BASE SALARY.
Executive's Gross Base Salary, is hereinafter referred to
-----------
as "Base Salary." During the term, the Company shall pay to
Executive an annual
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Base Salary at the rate of $389,300, paid in accordance with the
Company's
regular payroll practices, but not less frequently than monthly.
Executive's
Base Salary will be subject to all appropriate legally required tax
deductions.
B.
ANNUAL INCENTIVE PLAN. During the Term,
Executive shall be eligible to
---------------------
participate in the Company's Executive Annual Incentive Plan, or
such other
individual annual incentive arrangement for Executive's benefit
approved by the
Company's Compensation Committee (the "AIP"). Pursuant to such AIP, for each
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year during the Term, Executive's annual target incentive will be
thirty five
percent (35%) of Executive's Base Salary, with an incentive range
of zero
percent (0%) to fifty two and one half percent (52.5%) of Executive's
Base
Salary annually (the "Annual Incentive"). The Company shall make payment of
the
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Annual Incentive in a lump sum payment consistent with the terms of
the AIP on
the March 15th following each year during the Term for which such
Annual
Incentive is earned, subject to the release of the Company's
audited financial
statements.
Executive's Annual Incentive will be based on strategic
objectives
submitted to and approved by the Board each year during the Term.
Executive's
Annual Incentive will be subject to all appropriate legally
required tax
deductions.
C.
LONG TERM INCENTIVE PLAN. During the Term, Executive shall
be eligible
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to participate in the Company's Executive Long Term Incentive Plan,
or such
other individual long term incentive arrangement for Executive's
benefit
approved by the Board which shall grant to Executive, at the
Board's discretion,
cash
or shares or options of the Company's stock pursuant to a three
year
vesting schedule, with such cash, shares or options to vest at a
rate determined
at the time of such grant (the "LTIP"). The LTIP value will be $37,500
annually
----
during the Term.
D.
DISCRETIONARY BONUS. During the Term, the
Company's Chief Executive
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Officer may submit a written request to the Company's Compensation
Committee
detailing specifics for the Compensation Committee to consider a
discretionary
bonus. The
determination of whether to authorize a discretionary bonus and
the
timing and amount of such discretionary bonus, shall be made by the
Company's
Compensation Committee, at its sole discretion.
4.
BENEFITS AND INSURANCE.
----------------------
A.
EXECUTIVE BENEFITS. During the Term, Executive
shall be entitled to
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participate in the Company's employee and/or executive benefit
plans (other than
any
annual incentive or other compensation or severance plans or
programs,
which benefits are set forth in this Agreement) as in effect from
time to time
(collectively "Executive Benefits"), on the same basis as those
benefits are
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generally made available to other senior Company executives.
Such Executive
Benefits shall include but not be limited to health, dental,
defined
contribution plan, disability and life insurance benefits.
The Company
reserves
the right to change or cancel any Executive Benefits at its sole
discretion,
except as specifically set forth in this Agreement.
B.
LIFE INSURANCE.
During the Term, the Company shall maintain life
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insurance on Executive in the amount of one million dollars.
C.
DIRECTORS AND OFFICERS LIABILITY INSURANCE. During the Term, and for
a
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reasonable period (not less than two years) thereafter, the Company
shall
maintain Directors and Officers liability insurance coverage for
Executive in a
total coverage amount determined by the Board to be reasonable,
provided that,
if Executive's employment is terminated for "Cause" or Executive
resigns his
employment without "Good Reason," each term as defined herein, the
Company may,
at its discretion, elect not to maintain Directors and Officers
liability
insurance coverage for Executive after Executive's termination
date.
D.
CLUB MEMBERSHIP.
During the Term, the Company shall pay (or reimburse
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Executive) for annual membership dues for Executive's country club
consistent
with the Company's past practice.
5.
BUSINESS EXPENSES. During the Term, the Company
shall reimburse
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Executive for, or pay on behalf of Executive, all reasonable and
customary
business expenses, including but not limited to travel expenses
incurred by
Executive in the performance of Executive's duties hereunder.
6.
TAX PLANNING.
During the Term, the Company shall reimburse Executive
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for, or pay on behalf of Executive, reasonable expenses for
Executive's taxation
and tax planning services, not to exceed $1,500 per year in the
aggregate.
7.
VEHICLE EXPENSES. During the Term, the Company
shall provide Executive
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with (or reimburse Executive for, as applicable) a
Company-leased,
individually-owned or individually-leased vehicle, provided that
the total
expense to the Company for such vehicle shall not exceed $1,500 per
month
(exclusive of, but not limited to, one time charges for taxes, bank
fees and
registration costs).
The Company shall pay for Executive's use and operation of
such vehicle, including but not limited to costs for maintaining,
insuring and
fueling such vehicle.
8.
VACATIONS.
During the Term, Executive shall be entitled to 25 paid days
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of vacation annually.
Up to one week of paid vacation time unused at the end of
a calendar year may be carried over until March 31 of the following
year, at
which time it shall be forfeited if unused. One week of unpaid vacation
shall
be available to Executive on an annual basis. Such unpaid vacation shall not
carry over from year to year and shall be forfeited if unused at
the end of a
calendar year.
9.
TERMINATION. The
Term and Executive's employment hereunder shall
-----------
continue from the effective date of this Agreement through December
31, 2010,
unless terminated earlier by the Company or by Executive pursuant
to this
Paragraph 9. The
Company and Executive agree to enter into good faith
negotiations for any successor agreement or extension of the Term
no later than
6 months prior to the expiration of the Term, unless the Company
provides notice
to Executive of its intention not to extend the Agreement with
Executive. No
later than 6 months prior to the expiration of the Term, Executive
shall submit
written notice to the Company requesting the Company's intent to
initiate
negotiations for a successor Agreement, extend the Term, or not to
extend the
Agreement with Executive. The Company shall respond to
Executive, in writing,
no later than 10 days after receipt of Executive's request.
A.
TERMINATION BY THE COMPANY FOR CAUSE; RESIGNATION BY EXECUTIVE
WITHOUT
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GOOD REASON.
---------
(I)
The Term and Executive's employment hereunder may be terminated
by
the Company for Cause.
Additionally, Executive's employment shall terminate
automatically upon Executive's resignation without Good Reason (as
hereinafter
defined).
(II)
For
purposes of this Agreement, "Cause" shall mean: (A)
Executive's willful misconduct in the performance of Executive's
duties
hereunder that has an adverse effect on the Company; (B)
Executive's indictment
for, or plea of nolo contendere to a felony under the laws of the
United States
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or any state thereof or a misdemeanor involving moral turpitude; or
(C)
Executive's willful malfeasance or willful misconduct in connection
with
Executive's duties hereunder which is materially injurious to the
financial
condition or business reputation of the Company; provided, that no
such
termination shall be effective as a termination for "Cause" unless
Executive has
been given written notice by the Board of its intention to
terminate Executive's
employment for Cause, stating the grounds for such purported
termination.
(III)
If Executive's employment is terminated by the Company for
Cause
or if Executive resigns without Good Reason (as hereinafter
defined), Executive
shall be entitled only to receive:
(A)
Executive's Base Salary earned through the date of Executive's
termination, paid in one lump sum within the payroll period
immediately
following Executive's date of termination;
(B)
reimbursement for any business expenses properly incurred by
Executive
in accordance with Company policy prior to the date of Executive's
termination;
(C)
such Executive Benefits, if any, pursuant to Paragraph 4 herein as
to
which Executive may be entitled as of the effective date of
termination under
the employee benefit plans of the Company;
The
amounts described in clauses 9(a)(iii)(A) through (C) are referred
to
herein as the "Accrued Rights".
B.
TERMINATION BY THE COMPANY WITHOUT CAUSE; RESIGNATION BY EXECUTIVE
FOR
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GOOD REASON; OR NON-EXTENSION OF AGREEMENT BY THE COMPANY.
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(I)
The Term and Executive's employment hereunder may be terminated
by
the Company without Cause, by Executive's resignation for Good
Reason (as
defined below) or if Executive's employment terminates upon the
expiration of
the Term due to the Company's decision not to extend this Agreement
or enter
into a successor employment agreement with Executive, at the
Company's election.
(II)
For purposes of this Agreement, "Good Reason" shall mean only:
(A)
the failure of the Company to pay or cause to be paid, or to
provide or cause to
be provided, any part of Executive's compensation, benefits or
perquisites when
due hereunder, that is not applicable to all other senior
executives; (B) any
diminution in Executive's title, position, authority
responsibilities from those
described herein, except in connection with the Company's
successorship plan or
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planning as duly authorized by the Board; or (C) failure of any
successor
company that acquires assets or stock of the Company to assume the
Agreement and
the obligations hereunder, except in connection with the Company's
successorship
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plan or planning as duly authorized by the Board; provided that the
events
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described in clauses (A) through (C) of this Paragraph 9(b)(ii)
shall constitute
Good Reason only if the Company fails to cure such event to
Executive's
----
reasonable satisfaction within 30 days after receipt from Executive
of written
notice of the event which constitutes Good Reason. Executive's determination
that Good Reason exists shall be subject to review, at the
Company's election,
through arbitration in accordance with Paragraph 17 herein.
(III)
For purposes of this Agreement, Executive's employment
terminates
upon "Expiration of the Term due to the Company's decision not to
extend
Executive's Agreement or enter into a successor employment
agreement with
Executive" only if: (A) the Company does not, on or before December
31, 2010,
offer to Executive to extend the Term of the Agreement for a period
of at least
one year; or (B) the Company does not, on or before December 31,
2010, offer
Executive a successor employment agreement for a period of at least
one year on
at least as favorable terms as contained in this Agreement.
The Company agrees
to enter into good faith negotiations for such extension of the
Term or
successor agreement at least six months prior to the expiration of
the Term.
(IV)
If the Term and Executive's employment is terminated by the
Company without Cause, if Executive resigns for Good Reason, or if
Executive's
employment terminates upon Expiration of the Term due to the
Company's decision
not to extend Executive's Agreement or enter into a successor
employment
agreement with Executive (each term as defined above), Executive
shall be
entitled only to receive:
(A)
the amount equal to two years of Executive's Base Salary, payable
in
monthly installments equal to Executive's monthly Base Salary for
the first
twelve (12) months beginning with the Company's payroll date
following
Executive's date of termination and the remainder in one lump sum
on the
Company's monthly payroll date commencing on the thirteenth month
immediately
following Executive's date of termination;
(B)
the amount equal to the sum of two years of Executive's target
Annual
Incentive for the then-current contract year, payable in one lump
sum on the
Company's payroll date immediately following Executive's date of
termination or
as soon thereafter as is consistent with the AIP;
(C)
all non-vested shares of Company stock or other non-vested option
or
equity grants to Executive pursuant to the LTIP shall vest on the
date of
termination;
(D)
reimbursement for any business expenses properly incurred by
Executive
in accordance with Company policy prior to the date of Executive's
termination
on or before the Company's payroll period immediately following
Executive's date
of termination;
(E)
payment of any accrued but unused vacation days on or before the
Company
payroll period immediately following Executive's date of
termination;
(F)
such Executive Benefits, if any, pursuant to Paragraph 4 herein as
to
which Executive may be entitled for a period of two years
immediately following
Executive's date of termination;
(G)
notwithstanding Paragraph 9(b)(iv)(F) above, payment of premiums by
the
Company for health, disability, long term care and life insurance
coverage
equivalent to that provided to Executive pursuant to the Company's
benefit plans
through the end of the Term or Executive's 65th birthday, whichever
period is
longer. After such
period, Executive may elect continuation of health coverage
under COBRA, as eligible;
(H)
payment of substitute lease payments equal to what was paid for
Executive's Company-owned or Company-leased vehicle for a period of
two years
after Executive's termination date; and
(I)
Directors and Officers liability insurance coverage in a total
coverage
amount determined by the Board to be reasonable for a period of two
years after
Executive's termination date.
(V)
If the Term and Executive's employment with the Company
terminates
at the expiration of the Term as a result of Executive's refusal of
the
Company's offer to extend the Term of the Agreement or offer of a
successor
employment agreement on at least as favorable terms as contained in
this
Agreement as provided in Paragraph 9(b)(iii) herein (or refusal to
execute an
Agreement consistent therewith), Executive shall be entitled only
to receive the
Accrued Rights.
C.
TERMINATION DUE TO CHANGE IN CONTROL.
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(I)
The Term and Executive's employment hereunder may be terminated
by
Executive upon a Change in Control (as defined below) of the
Company. For
purposes of this Agreement, "Change in Control" shall occur in the
event that,
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during any period of three (3) consecutive months commencing after
the date of
this Agreement, a majority of the Board is not comprised of any
combination of
(A) Board members as of the date of the Agreement (collectively,
the "Initial
Board"); (B) individuals recommended by a majority of the Initial
Board to
succeed members of the Initial Board; and (C) individuals added to
the Initial
Board by decision of a majority of the Initial Board.
(II)
If the Term and Executive's employment is terminated by
Executive
due to a Change in Control, Executive shall be entitled only to
receive:
(A)
the Accrued Rights;
(B)
the maximum amount that can be paid to Executive, without any
portion
thereof constituting an "excess parachute payment" as defined in
280G(b)(1) of
the Internal Revenue Code of 1986, as amended (the "Code") or any
successor
section of the Code. Such payment shall be made to Executive in one
lump sum on
or before the Company's next regular payroll date immediately
following
Executive's date of termination due to a Change in Control, or as
soon
thereafter as is consistent with the Annual Incentive Plan and/or
Long Term
Incentive Plan, as applicable. The computation of such payment
shall be made,
at the sole cost and expense of the Company, by the independent
auditors then
retained by the Company, or if such auditors notify the Company
that they are
unwilling to perform such computation, then by any nationally or
regionally
recognized independent public accounting firm selected by
Executive. The
computation provided by such auditors shall be final and binding on
the Company
and Executive. The
Company and Executive s
