Exhibit 10(c)
AGREEMENT
THIS AGREEMENT dated as of the 9th day of February, 1995 (the
"Effective Date") between NAI Technologies, Inc., a New York corporation (the
"Company"), and Frank Tortorelli (the "Executive").
WHEREAS, to induce the Executive to continue in its employ the
Company desires to protect the Executive against potential adverse effects
arising as a result of the Company being sold or acquired;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants set forth in this Agreement, the Company and the Executive
agree as follows:
1. Definitions.
(a) "Cause" shall mean fraud, negligence, conflict of
interest, willful malfeasance or willful misfeasance in office.
(b) "Closing" shall mean any sale of all or substantially all
the assets, merger or business combination, or any share exchange or
share purchase by a person or group of persons acting in concert which
results in a change in ownership in excess of 50% in the record or
beneficial equity ownership of the Company (other than a
management-led leveraged buyout).
(c) "Closing Date" shall mean the earliest date on which the
events constituting the Closing occur.
(d) "Involuntary Termination" shall mean either:
(i) any termination of the Executive's employment at the
convenience of the Company during the Term hereof, but not
including either a termination for Cause or a termination
pursuant to Section l(d)(iii); or
(ii) any termination of the Executive's employment by the
Executive during the Term hereof following the occurrence of
any of the following:
(A) without the express prior written consent of the
Executive, a material diminution or limitation of the
Executive's position, duties or responsibilities with the
Company from those in existence on the Effective Date (or, if
greater, the highest permanent-assignment level in effect
thereafter) or the assignment to the Executive of duties
inconsistent with the position, duties, responsibilities or
status of the Executive as of the Effective Date (or, if
greater, the highest permanent-assignment level in effect
thereafter);
(B) any failure by the Company to pay, or any
reduction by the Company of, the base annual salary of the
Executive as in effect on the Effective Date or as the same
may be increased from time to time thereafter;
(C) the failure of the Company to provide the
Executive with the opportunity to participate, on terms no
less favorable than those existing on the Effective Date, in
any incentive benefit, bonus or compensation, insurance,
pension or other employee benefit plan of the Company in
effect on the Effective Date (or plans and benefits which
are, in the aggregate, no less favorable to the Executive
than those the Executive enjoyed on the Effective Date)
unless such failure results from the Company's termination or
amendment of any such plan in response to a change in
applicable statute or regulation, including any termination
or amendment resulting from a materially adverse alteration
of the tax treatment of any such plan to the Company or to
plan participants; provided, however, that Involuntary
Termination shall not include any
reduction in such benefit by the Company on a Company-wide
basis prior to the Closing Date; or
(D) the requirement by the Company that the
Executive, without the Executive's prior written consent, be
based primarily at a location other Longmont, Colorado.
(iii) Involuntary Termination shall not include
termination due to death or to medical disability which
prevents the Executive from substantially performing his job
function, or voluntary resignation of the Executive except as
provided in Section 1(d)(ii).
(e) "Other Termination" shall mean any termination of the
Executive's employment which is not an Involuntary Termination.
(f) "Term" shall mean the period (i) commencing on (A) the
date the Board of Directors approves a sale, consolidation or merger
of the Company or all or substantially all of its stock or takes
formal action to effect any such potential sale, consolidation or
merger or (B) the date on which any person or group of persons acting
in concert takes action which results in a change in ownership in
excess of 50% in the record or beneficial ownership of the Company
except in connection with the establishment of or actions by an
employee stock ownership plan of the Company and (ii) ending on the
earlier of (A) the termination of the actions or ownership described
under clause (i), (B) the first anniversary of the Closing Date and
(C) the occurrence of a management-led buyout; provided, however, that
if none of the events identified in clause (i) occurs on or prior to
January 31, 1996, this Agreement shall terminate unless extended for a
period of one year from the date of such extension by agreement of the
parties, in which case the Effective Date shall be deemed to be the
date of such extension.
2. Involuntary Termination. In the event of an Involuntary
Termination, the following shall apply:
(a) The Company shall provide to the Executive any payments
and benefits to which the Executive would be entitled without regard to
this Agreement.
(b) Within thirty days following the Involuntary Termination,
the Company shall pay to the Executive a payment (the "Payment") equal
to the sum of (i) two times the Executive's highest permanent annual
rate of base compensation during the Term hereof and (ii) an amount
equal to any incentive compensation to be earned by the Executive in
the year in which the Term commences without regard to whether the
criteria established with respect thereto are met.
(c) The Company shall continue to provide the Executive with
life insurance, long-term disability, health and dental coverage at
levels which were applicable to the Executive on the Closing Date (or,
if greater, the highest levels in effect thereafter) for a period of
two years following the Involuntary Termination or until the Executive
obtains employment and the benefits program of the subsequent employer
becomes effective; provided, however, that the Company may, without
liability hereunder, terminate or amend a plan under which such
coverage was provided in response to a change in applicable statute or
regulation, including any termination or amendment resulting from a
materially adverse alteration of the tax treatment of any such plan to
the Company or to plan participants.
(d) If the Company has provided the Executive with the use of
an automobile on a continuous basis prior to the Involuntary
Termination, the Executive shall be given the option to purchase such
automobile on the terms outlined in the Company policy with respect
thereto at the value in effect two years after the date of the
Involuntary Termination.
(e) Notwithstanding any other provision to the contrary
herein, the Payment shall be reduced to the extent necessary to prevent
the Payment from constituting an "excess parachute payment" within the
meaning of section 280G(b) of the Internal Revenue Code of 1986, as
amended, if, and only if, the Board of Directors determines that such
reduction will have the likely effect of increasing the after-tax
benefit to the Executive. Such determination, and the determination of
any reduction pursuant to this paragraph, shall be based upon the
opinion of the Company's regular accounting firm.
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3. Other Termination. In the event of any Other Termination,
the Executive, his estate or his beneficiaries shall be entitled solely to such
benefits and payments that would exist were this Agreement not in effect at the
time of such Other Termination.
4. Nondisclosure of Confidential Information. The Executive
shall not, except as may be necessary in the discharge of duties with the
Company or as may be required by applicable law or regulations, disclose any
confidential information, knowledge or data obtained by the Executive prior to
the date of this Agreement or during the Executive's employment concerning the
Company or the business of the Company so long as such information is not
publicly available.
5. Stock Options. In the event of a Closing, all stock
options held by the Executive shall become immediately exercisable on the
Closing Date but otherwise governed by the terms and conditions therefor
applicable to such stock options.
6. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach of this Agreement which cannot be
resolved by the Executive and the Company shall, at the instance of either the
Executive or the Company, be submitted to arbitration in accordance with New
York law and the procedures of the American Arbitration Association. The
determination of the arbitrator shall be conclusive and binding on the Company
and the Executive and judgment may be entered on the arbitrator's award in any
court having jurisdiction.
7. Legal Expenses. The Company shall pay all reasonable costs
and expenses, including attorneys' fees and disbursements, of the Company and,
at least monthly, the Executive in connection with any legal proceedings (in the
case of the Executive any legal proceedings brought or maintained in good faith)
(including, but not limited to, arbitration), whether or not instituted by the
Company or the Executive, relating to the interpretation or enforcement of any
provision of this Agreement. The Company shall also pay prejudgment interest on
any money judgment obtained by the Executive as a result of such proceedings,
calculated at a rate per annum equal to the federal short-term rate as defined
in Section 1274(d) of the Internal Revenue Code of 1986, as in effect from time
to time, from the date that payment should have been made to the Executive under
this Agreement.
8. Assignability. The respective rights and obligations of the
Executive and the Company under this Agreement shall inure to the benefit of and
be binding upon the heirs and legal representatives of the Executive and the
successors and assigns of the Company. The Executive's rights and obligations
under this Agreement may not be assigned or alienated and any attempt to do so
by the Executive shall be void. Any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company shall 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. The provisions of
this Section 8 shall continue to apply to each subsequent employer of the
Executive hereunder in the event of any subsequent merger, consolidation or
transfer of assets of such subsequent employer.
9. Severability. If any provision of this Agreement is deemed
to be invalid or unenforceable or is prohibited by the laws of the state or
place where it is to be performed, this Agreement shall be considered to be
divisible as to such provision and such provision shall be inoperative in such
state or place and shall not be part of the consideration moving from either of
the parties to the other. The remaining provisions of the Agreement, however,
shall be valid and binding and of like effect as though such provision were not
included.
10. Miscellaneous. This Agreement is to be construed and
enforced in accordance with the internal substantive laws of the State of New
York. The waiver of any breach of this Agreement by any party shall not be
construed as a waiver of any subsequent breach by any party. This Agreement may
not be changed orally, but only by an agreement in writing signed by the parties
to this Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement as of the day and year first above written.
NAI TECHNOLOGIES, INC.
By: Robert A. Carlson Frank Tortorelli
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Title: President
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