EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of [_______], 2006, by and
between Communications & Power Industries, Inc., a Delaware
corporation
(hereinafter called the "Corporation"), and Joel A. Littman
(hereinafter called
the "Executive").
WITNESSETH THAT:
WHEREAS, the Corporation desires to continue to employ the
Executive as
its Chief Financial Officer, and the Executive desires to continue
in such
employment;
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
Chief Financial 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 shall commence on the date hereof and end on the third
anniversary of
the date hereof, 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 hereof, 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 65.
2.
Duties. During the period of employment as provided in Section 1(b)
hereof, the Executive shall serve as Chief Financial Officer of the
Corporation
and Chief Financial 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 Two Hundred Thirty Thousand U.S. dollars
($230,000 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 0.60 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 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
effective
date of this Agreement.
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(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 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-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
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Agreement), 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
upon the earlier of (i) the end of a twelve (12) consecutive month
period during
which, by reason of any medically determinable physical or mental
impairment,
the Executive has been unable to engage in any substantial gainful
activity or
(ii) the date that a reputable physician selected by the Board, and
as to whom
the Executive has no reasonable objection, determines in writing
that the
Executive will, by reason of any medical determinable physical or
mental
impairment, be unable to engage in any substantial gainful
employment for a
period of at least twelve (12) consecutive 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 and of
any decision of the Board to terminate the Executive's employment
by reason
thereof. 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 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
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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.
(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
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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 "aff
