EXHIBIT 10.20
EMPLOYMENT AGREEMENT
AGREEMENT, dated March 18, 1996, by and between E. Phillip Smoot (the
"Executive") and Park Electrochemical Corp., a New York corporation (the
"Company").
WHEREAS, the Executive is presently employed by the Company as an
Executive Vice President; and
WHEREAS, the Board of Directors of the Company (the "Board") desires to
continue to employ the Executive and the Executive desires to continue to
furnish services to the Company on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby accepts such continued employment, on
the terms and conditions hereinafter set forth.
2. Term. The period of employment of the Executive by the Company
hereunder (the "Employment Period") shall commence effective March 1, 1996
(the "Effective Date") and shall end on February 28, 1999, unless sooner
terminated as provided in Section 7; provided, however, that, if a Change in
Control (as defined in Section 7(e)) shall have occurred during the
Employment Period, the Employment Period shall continue in effect for at
least twenty-four (24) months subsequent to the month in which such Change
in Control occurs.
3. Position and Duties. During the Employment Period, the Executive
shall continue to serve as W an Executive Vice President of the Company and
(ii) the President and Chief Executive Officer and a director of Nelco
International Corporation, a subsidiary of the Company. In addition, during
the Employment Period, the Company will use its best efforts to cause the
Executive to be nominated and elected as a member of the Company's Board
and, if so elected, the Executive agrees to serve as a director of the
Company. The Executive shall report directly to the Company's President.
The Executive shall have such responsibilities and authority as may from
time to time be assigned to the Executive by the Company's President
provided that such responsibilities and authority are consistent with the
Executive's positions as stated herein. The Executive agrees to devote
substantially all of his working time and efforts to the performance of his
duties as set forth herein.
4. Place of Performance. The Executive's place of employment shall
be at the principal executive offices of Nelco International Corporation,
except for reasonably required travel on the Company's business.
5. Compensation and Related Matters.
(a) Base Salary. As compensation for.the performance by the
Executive of his obligations hereunder, during the Employment Period, the
Company shall pay the Executive a base salary at the rate of $325,000 per
annum ("Base Salary"). Base Salary may be increased in the discretion of
the Company and, if so increased, shall not thereafter during the Employment
Period be decreased.
(b) Bonuses. During the Employment Period, the Executive shall
be eligible to receive such annual bonus (the "Annual Bonus") as the Company
may determine in its discretion and consistent with past practice, based
upon the achievement of performance goals as established by the Company at
the beginning of each fiscal year.
(c) Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred during the
Employment Period and during the Consulting Period (as defined in Section 61
by the Executive in performing services hereunder, provided that such
expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company.
(d) Supplemental Account. Each year during the Employment
Period, an amount equal to the excess of W the sum of (x) the amount
contributed by the Company to the Park Electrochemical Corp. Employees,
Profit-Sharing Plan, as amended (the "Plan"), for such year plus (y) any
amounts forfeited by other participants in the Plan during such year, which
sum, but for the limitations imposed by section 415 of the Internal Revenue
Code of 1986, as amended (the "Code"), and by Section 4.14 of the Plan,
would have been allocated to the Executive's account under the Plan, over
(ii) the amount of contributions and forfeitures actually credited to the
Executive's account for such year, shall be credited by the Company to the
separate account previously established and currently maintained by the
Company for the Executive (the "Account"). In addition, interest shall be
credited annually to the Account at the same rate as net income, gains or
profits are earned on the Plan assets. Payments to the Executive from the
Account shall be made as and when distributions are made to the Executive
from the Plan and in the same proportion of the Account which the Plan
distribution bears to the Executive's account balance under the Plan. The
parties recognize and agree that the payments to be made by the Company to
the Executive from the Account are unsecured obligations of the Company,
that the Executive is only a general creditor of the Company in that respect
and that the amounts in the Account are assets of the Company which are
available to satisfy the claims of the Company's creditors generally.
(e) Other Benefits. During the Employment Period, the Executive
shall be entitled to participate in all of the employee benefit plans and
arrangements currently maintained by the Company, in accordance with the
terms of such plans and arrangements, and shall be entitled to participate
in or receive benefits under any employee benefit plan or arrangement made
available by the Company in the future to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements.
(f) Automobile. The Company shall continue to furnish to the
Executive an automobile in accordance with past practice.
6. Consultancy. Upon expiration of the Employment Period and
provided that the Executive has continued in the Company's employ throughout
the Employment Period pursuant to this Agreement, then if the Company and
the Executive so agree, the Executive shall serve as a consultant to the
Company for a period of up to five years (the "Consulting Period"). During
the Consulting Period, the Executive shall make himself available to advise
and consult with officers and other employees of the Company so that the
Company may continue to have the benefit of his experience and knowledge of
the affairs of the Company and of his reputation and contacts in the
industries in which the Company is engaged in business. The Executive shall
be free, during the Consulting Period, to devote the balance of his time and
attention to such other business enterprises or activities as he may see
fit, subject to the restrictive covenant set forth in Section 11. During
the Consulting Period, the Executive's compensation shall be at the rate of
$75,000 per annum and he shall be entitled to the same medical and other
welfare benefits as are in effect on the date of his retirement. The
Consulting Period may terminate at any time upon 60 days' prior written
notice by either the Company or the Executive and shall terminate upon the
Executive's death.
7. Termination. The Executive's employment hereunder may be
terminated during the Employment Period without any breach of this Agreement
only under the circumstances set forth in the following subsections (a),
(b), (c) and (d):
(a) Death. The Executive's employment hereunder shall terminate
upon his death.
(b) Disability. If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been absent from
the full-time performance of his duties hereunder for the entire period of
six consecutive months, and within thirty (30) days after written Notice of
Termination (as defined in Section 8(a) hereof) is given shall not have
returned to the performance of his duties hereunder on a full-time basis,
the Company may terminate the Executive's employment hereunder for
"Disability."
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon the
occurrence of any of the following events:
(i) the conviction of the Executive for the commission of a
felony; or
(ii) the willful and continuing failure by the Executive to
substantially perform his duties hereunder (other than such failure
resulting from the Executive's incapacity due to physical or mental
illness or subsequent to the issuance of a Notice of Termination by the
Executive for Good Reason) that has not been fully cured within ten (10)
days following the date on which demand for substantial performance is
delivered by the Company in writing, specifically identifying the manner
in which the Company believes the Executive has not substantially
performed his duties; or
(iii) the willful misconduct by the Executive (including, but not
limited to, breach by the Executive of the provisions of Section 11)
that is demonstrably and materially injurious to the Company or its
subsidiaries, whether monetarily or otherwise.
On and after the occurrence of a Change in Control, the Executive's
employment may not be terminated for Cause unless and until the Company has
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds (2/3) of the entire membership
of the Board at a meeting called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with
his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board, the Executive was guilty of the conduct set forth in
this Section 7(c) and specifying the particulars thereof in detail. For
purposes of this Section 7(c), no act or failure to act on the Executive's
part shall be considered "willful" unless done or failed to be done by the
Executive in bad faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Company.
(d) Good Reason. On and after the occurrence of a Change in
Control, the Executive may terminate his employment during the Employment
Period hereunder for Good Reason. "Good Reason" shall mean the occurrence
(on or after a Change in Control), without the written consent of the
Executive, of an event constituting a material breach of this Agreement by
the Company that has not been fully cured within ten (10) days after written
notice thereof has been given by the Executive to the Company, provided
that, without limiting the generality of the foregoing, any one of the
following events shall constitute Good Reason:
(i) the assignment to the Executive of any duties inconsistent
with the Executive's status as an executive officer of the Company or a
substantial adverse alteration in the nature of the Executive's
responsibilities from those in effect immediately prior to the Change in
Control;
(ii) a reduction by the Company in the Executive's Base Salary as
in effect immediately prior to the Change in Control;
(iii) the relocation of the Executive's principal place of
employment to a location more than twenty-five (25) miles from the place
of such employment immediately prior to the Change in Control;
(iv) the failure by the Company to pay to the Executive any
portion of the Executive's current compensation or to pay to the
Executive any portion of an installment of deferred compensation under
any deferred compensation program of the Company within fifteen (15)
days of the date such compensation is due;
(v) the failure by the Company to provide the Executive with
compensation plans which, in the aggregate, provide the Executive with
substantially comparable compensation opportunities to those
compensation opportunities for which the Executive was eligible
immediately prior to the Change in Control;
(vi) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which the Executive was
participating at the time of the Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in
Control, or the failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled in
accordance with the Company's normal vacation policy in effect at the
time of the Change in Control;
(vii) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 8(a) or that does not comply with Section 7(c),
if applicable (and for purposes of this Agreement, no such purported
termination shall be effective); or
(viii) the failure of a successor to the Company to expressly
assume and agree to perform this Agreement pursuant to Section 13(a).
The Executive's right to terminate his employment hereunder for Good Reason
shall not be affected by his incapacity due to physical or mental illness.
The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Definition of Change in Control. For purposes of this Agreement,
a "Change in Control', of the Company shall mean the occurrence of any one
of the following events:
(i) any Person (as defined below) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) , directly or indirectly, of
securities of the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company
or its affiliates other than in connection with the acquisition by the
Company or its affiliates of a business) representing 35% or more of the
combined voting power of the Company's then outstanding securities; or
(ii) the following individuals cease for any reason to constitute
a majority of the number of directors then serving: individuals who, on
the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(iii) there is consummated a merger or consolidation of the
Company or a direct or indirect subsidiary thereof with any other
corporation other than (i) a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, at least a majority of the
combined voting power of the securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger
or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its subsidiaries other than in connection
with the acquisition by the Company or its subsidiaries of a business)
representing 35-. or more of the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's
assets to an entity, at least a majority of the combined voting power of
the voting securities of which are owned by Persons in substantially the
same proportions as their ownership of the Company immediately prior to
such sale.
For purposes of this Section 7(e), "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include W the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or Uv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
8. Termination Procedure.
(a) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive on and after a Change in
Control (other than termination pursuant to Section 7(a) hereof) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 14. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set 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.
(b) Date of Termination. "Date of Termination" shall mean, as
applicable, the date of death or the date specified in the Notice of
Termination, which, following a Change in Control, shall not be prior to the
date on which a Notice of Termination is given; provided, however, that,
following a Change in Control, if within thirty (30) days after any Notice
of Termination is given the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination,
the Date of Termination shall be the date on which the dispute is finally
determined.
(c) Compensation During Dispute. If a purported termination
occurs on or after a Change in Control, and such termination is disputed in
accordance with subsection (b) of this Section 8, the Company shall continue
to pay the Executive the full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation and employee
benefit plans in which the Executive was participating when the notice
giving rise to the dispute was given, until the Date of Termination.
Amounts paid under this Section 8 (c) are in addition to all other amounts
due under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
9. Compensation upon Termination or During Disability.
(a) Disability; Death. During any period that the Executive
fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness ("Disability Period") I the Executive shall con-
tinue to receive his full Base Salary at the rate in effect at the beginning
of such period, reduced by any compensation payable to the Executive under
the Company's disability plan, if any, as in effect during such period,
until his employment is terminated for Disability pursuant to Section 7(b)
. For the two-year period following the Executive's termination for
Disability pursuant to Section 7(b), the Executive shall receive fifty
percent (50%) of his Base Salary, reduced by any compensation payable to the
Executive under the Company's disability plan, if any, as in effect during
such period. Subsequent to the two-year period following the termination of
the Executive's employment pursuant to Section 7 (b), or in the event the
Executive's employment is terminated by reason of his death, the Company
shall have no further obligations to the Executive under this Agreement and
the Executive's benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance with
the terms of such programs.
(b) By Company without Cause or by the Executive for Good
Reason. If the Executive's employment is terminated by the Company other
than for Cause or Disability or by the Executive for Good Reason, then --
(i) in addition to any amounts due the Executive pursuant to
Sections 5(a) or 5(b), the Company shall continue to pay to the
Executive (or his legal representatives or estate) his Base Salary as in
effect on the Date of Termination for the remainder of the Employment
Period or, if greater, for one year; provided, however, that if such
termination occurs on or after a Change in Control, then the Company
shall pay to the Executive a lump sum amount, in cash, equal to three
(3) times the sum of Base Salary (at the rate in effect immediately
prior to the occurrence of the circumstance giving rise to the Notice of
Termination) and the Annual Bonus awarded in respect of the fiscal year
immediately prior to the fiscal year in which occurs the Change in
Control or the Date of Termination, whichever resulting bonus is
greater; and
(ii) the Company shall maintain in full force and effect, for the
continued benefit of the Executive and his dependents for the remainder
of the Employment Period or, if greater, for one year, all employee
welfare benefit plans and programs in which the Executive was entitled
to participate immediately prior to the Date of Termination, provided
that the Executive's continued participation is possible under the
general terms and provisions of such plans and programs; provided,
however, that if such termination occurs on or after a Change in
Control, then such benefit plans and programs shall be continued for a
period of three (3) years. In the event that the Executive's par-
ticipation in any such plan or program is barred, the Company shall
arrange to provide the Executive and his dependents with benefits
substantially similar to those which the Executive and his dependents
would otherwise have been entitled to receive under such plans and
programs from which their continued participation is barred.
(c) By Company for Cause or by the Executive Other than for Good
Reason. If the Executive's employment shall be terminated by the Company
for Cause or by the Executive other than for Good Reason, then the Company
shall pay the Executive his Base Salary (at the rate in effect at the time
Notice of Termination is given) through the Date of Termination, and the
Company shall have no additional obligations to the Executive under this
Agreement except as set forth in subsection (d) of this Section 9.
(d) Upon Expiration of the Agreement. if the Executive's
employment is terminated by the Company upon the expiration of the
Employment Period, the Company shall W continue to pay to the Executive (or
his legal representatives or estate) his Base Salary as then in effect for
one year and (ii) continue coverage under the Executive's employee welfare
benefit plans and arrangements described in Section 9(b)(iii) for one year;
provided, however, the provisions of this Section 9(d) shall not be
applicable if the Company and the Executive agree, in accordance with
Section 6, that the Executive shall continue to serve as a consultant to the
Company.
(e) Compensation Plans. Following any termination of the
Executive's employment, the Company shall pay the Executive all unpaid
amounts, if any, to which the Executive is entitled as of the Date of Termi-
nation under any compensation plan or program of the Company, at the time
such payments are due.
(f) Reduction. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be
received by the Executive in connection with a Change in Control or the
termination of the Executive's employment (whether pursuant to the terms of
this Agreement (the "Severance Payments") or any other plan, arrangement or
agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be deductible (in whole or part) by the
Company, an affiliate or Person making such payment or providing such
benefit as a result of section 280G of the Code, then, to the extent
necessary to make such portion of the Total Payments deductible (and after
taking into account any reduction in the Total Payments provided by reason
of section 28OG of the Code in such other plan, arrangement or agreement),
the cash Severance Payments shall first be reduced (if necessary, to zero),
and all other Severance Payments shall thereafter be reduced (if necessary,
to zero); provided, however, that the Executive may elect (at any time prior
to the delivery of a Notice of Termination hereunder) to have the noncash
Severance Payments reduced (or eliminated) prior to any reduction of the
cash Severance Payments.
For purposes of this limitation, (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have effectively
waived in writing shall be taken into account, (ii) no portion of the Total
Payments shall be taken into account which, in the opinion of tax counsel
(the "Tax Counsel") reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control,
the Company's independent auditor (the "Auditor"), does not constitute a
"parachute payment" within the meaning of section 28OG(b)(2) of the Code,
including by reason of section 28OG(b)(4)(A) of the Code, (iii) the
Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses W or (ii)) in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of section 28OG(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions by reason of section 28OG of the Code,
in the opinion of the Tax Counsel, and (iv) the value of any noncash benefit
or any deferred payment or benefit included in the Total Payments shall be
determined by the Auditor in accordance with the principles of sections
28OG(d)(3) and (4) of the Code.
(g) Time of Payments. The lump sum payments provided for in
Section 9(b) shall be made not later than the fifth day following the Date
of Termination; Provided, however, that if the amount of such payments
cannot be finally determined on or before such day, the Company shall pay
the Executive on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments and shall pay the remainder
of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined
but in no event later than the thirtieth day after the Date of Termination.
In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth day after demand
by the Company (together with interest at the rate provided in section
1274(b)(2)(B) of the Code).
10. Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for the Executive by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for
the Executive hereunder be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive
to the Company or otherwise except as is hereinafter specifically provided
in this Section 10. To the extent that the Executive, during the relevant
period described in Section 9(b)(ii), shall receive from a subsequent
employer benefits similar to those to be provided under Section 9(b)(ii),
the benefits to be provided under the provisions of said Section shall be
correspondingly reduced.
11. Confidential Information; Noncompetition Requirement.
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all trade secrets,
confidential information, and knowledge or data relating to the Company and
its subsidiaries and their businesses, which shall have been obtained by the
Executive at any time during the Executive's employment by the Company
(whether during the Employment Period or otherwise) and which shall not have
been or now or hereafter have become public knowledge (other than by acts by
the Executive or representatives of the Executive in violation of this
Agreement). The Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such trade secrets, information, knowledge or
data to anyone other than the Company and those designated by the Company.
Any termination of the Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 11(a).
(b) Noncompetition Requirement. During any period that the
Executive is performing services hereunder as an employee or a consultant or
in respect of which the Executive is entitled to payment pursuant to Section
9(b)(i) and for an additional period of two (2) years thereafter (the
"Additional Period"), the Executive agrees that, without the prior written
consent of the Company, he shall not, directly or indirectly, with or
without pay, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director, manager, investor,
lender, advisor, owner, associate or in any other individual or
representative capacity, (i) solicit, entice, encourage or otherwise attempt
to procure business from any customers (determined as of the Date of
Termination) of the Company or a subsidiary thereof for a business that is
competitive in any manner whatsoever (a "Competitive Business") with any
business in which the Company is then engaged, (ii) solicit, entice or
encourage any employee (determined as of the Date of Termination) of the
Company or a subsidiary thereof to leave the employ of the Company or any of
its subsidiaries, or (iii) engage or participate in any Competitive
Business; provided, however, that clause (iii) of this Section 11(b) shall
not apply during the Additional Period; and further provided, however, that
this Section 11(b) shall have no further force or effect upon the
termination of the Executive's employment on or after a Change in Control.
If any provision of Section 11(a) or of this Section 11(b) should be deemed
invalid, illegal or unenforceable because its scope is considered excessive,
such provision shall be modified so that the scope of the provision is
reduced only to the minimum extent necessary to render the modified
provision valid.
(c) Injunctive Relief. In the event of a breach or threatened
breach of subsections (a) or (b) of this Section 11, the Executive agrees
that the Company shall be entitled to injunctive relief in a court of
appropriate jurisdiction to remedy any such breach or threatened breach, the
Executive acknowledging that damages would be inadequate and insufficient.
12. Legal Fees. The Company shall reimburse the Executive for
any legal fees and expenses incurred by the Executive following a Change in
Control in contesting or disputing any termination of the Executive's
employment or in seeking to obtain or enforce any right or benefit provided
by this Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder) other than for any such expenses,
costs, liabilities or legal fees incurred as a result of the Executive's bad
faith or gross negligence. Such payments shall be made at the time
specified in Section 9(g), or within five (5) days after the Executive's
request for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 12.
13. Successors; Binding Agreement.
(a) Company's Successors. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain
such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the
same terms as he would be entitled to hereunder if the Company had
terminated his employment on or after a Change in Control without Cause,
except that for purposes of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the Date of Termina-
tion. In the event of failure of the Company to obtain such assumption and
agreement prior to the effective date of any such succession, the Executive
shall have no rights or remedies other than as specifically set forth in the
preceding sentence. As used in this Agreement, "Company" shall mean the
Company as herein before defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for
in this Section 13 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) Executive's Successors. This Agreement and all rights of
the Executive hereunder shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive should die while any amounts would still be payable to him
hereunder if he had continued to live, all such amounts unless otherwise
provided herein shall be paid in accordance with the terms of this Agreement
to the Executive's devisee, legatee, or other designee or, if there be no
such designee, to the Executive's estate.
14. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
E. Phillip Smoot
218 Apolena Avenue
Balboa Island, California 92662
If to the Company:
Park Electrochemical Corp.
5 Dakota Drive
Lake Success, New York 11042
Attention: President
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and an appropriate officer of the
Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. This Agreement shall be binding on all successors to the
Company. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without
regard to its conflicts of law principles. Any action or proceeding
relating to this Agreement or any matters arising out of or in connection
with this Agreement, and any action for enforcement of any judgment in
respect thereof, shall be brought exclusively in the courts of the State of
New York or of the United States of America for the Eastern District of New
York, and the Company and the Executive each hereby accepts the exclusive
jurisdiction of the aforesaid courts and the appellate courts thereof. The
Company and the Executive each irrevocably consents to service of process
out of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof registered or certified mail, postage prepaid, to
the Company or the Executive at their respective addresses referred to in
Section 14. All references herein to "Sections" pertain to Sections of this
Agreement unless otherwise specified. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal, state or
local law. The obligations of the Company under Section 9 and of the
Executive under Section 11 shall survive the expiration of the term of this
Agreement. The compensation and benefits payable to the Executive under
this Agreement shall be in lieu of any other severance benefits to which the
Executive may otherwise be entitled upon his termination of employment under
any severance plan, program, policy or arrangement of the Company.
16. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
17. Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
PARK ELECTROCHEMICAL CORP.
/s/ Jerry Shore
Name: Jerry Shore
Title: Chairman
/s/ E. Phillip Smoot
E. Phillip Smoot