FORM 8-K |
June 7, 2017 (June 6, 2017) | 0-7928 | |
Date of Report (Date of earliest event reported) | Commission File Number |
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(Exact name of registrant as specified in its charter) |
Delaware | 11-2139466 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
68 South Service Road, Suite 230 Melville, New York 11747 | ||
(Address of Principal Executive Offices) (Zip Code) | ||
(631) 962-7000 | ||
(Registrant’s telephone number, including area code) |
Item 1.01 | Entry into a Material Definitive Agreement. |
(i) | Consolidated EBITDA definition will now more closely align with the Company's Adjusted EBITDA metric by eliminating favorable adjustments to operating income related to settlements of TCS intellectual property matters; |
(ii) | Leverage Ratio will now be calculated on a “gross” basis using the quotient of Total Indebtedness (excluding unamortized deferred financing costs) divided by the Company's trailing twelve month Consolidated EBITDA. The prior Leverage Ratio was calculated on a “net” basis but did not include a reduction for any cash or cash equivalents above $50.0 million; |
(iii) | Fixed Charge Coverage Ratio will now include a deduction for all cash dividends, regardless of the amount of the Company's cash and cash equivalents, and the related allowable Quarterly Dividend Amount, will now align with the Company's current quarterly dividend target of $0.10 per common share; |
(iv) | Balloon, or final payment, of the Term Loan Facility, which is not due until February 23, 2021, was reduced by $22.5 million through increased borrowings from the Revolving Loan Facility, which does not expire until February 23, 2021; and |
(v) | Leverage Ratios will be adjusted, in certain conditions, to provide for additional flexibility for the Company to make acquisitions. |
Item 5.02(e) | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description |
First Amendment, dated June 6, 2017, to the Credit Agreement dated as of February 23, 2016, among Comtech Telecommunications Corp., the lenders party thereto and Citibank N.A., as administrative agent and issuing bank | |
Form of Change in Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO and Divisional/Subsidiary Presidents) and Certain Other Executive Officers | |
Form of Change in Control Agreement (Tier 2) between the Registrant and Named Executive Officers (other than the CEO and Divisional/Subsidiary Presidents) and Certain Other Executive Officers (California Employees) | |
Form of Change in Control Agreement (Tier 2) between the Registrant and Divisional/Subsidiary Presidents | |
Form of Change in Control Agreement (Tier 2) between the Registrant and Divisional/Subsidiary Presidents (California Employees) | |
Form of Change in Control Agreement (Tier 3) between the Registrant and Certain Non-Executive Officers | |
Amendment to Sixth Amended and Restated Employment Agreement between Comtech and Fred Kornberg | |
Form of Long-Term Performance Share Award Agreement pursuant to the 2000 Stock Incentive Plan - 2017 |
By: | /s/ Michael D. Porcelain Name: Michael D. Porcelain Title: Senior Vice President and |
Leverage Ratio: | ABR Spread | Eurodollar Spread | Commitment Fee Rate |
Category 1 ≥ 4.25 to 1.00 | 2.750% | 3.750% | 0.500% |
Category 2 < 4.25 to 1.00 | 2.250% | 3.250% | 0.450% |
Leverage Ratio: | ABR Spread | Eurodollar Spread | Commitment Fee Rate |
but ≥ 3.75 to 1.00 | |||
Category 3 < 3.75 to 1.00 but ≥ 3.25 to 1.00 | 1.750% | 2.750% | 0.400% |
Category 4 < 3.25 to 1.00 | 1.250% | 2.250% | 0.350% |
Period | Ratio |
February 1, 2017 through April 30, 2017 | 4.25 to 1.00 |
May 1, 2017 through July 31, 2017 | 3.75 to 1.00 |
August 1, 2017 through October 31, 2017 | 3.50 to 1.00 |
November 1, 2017 through January 31, 2018 | 3.35 to 1.00 |
February 1, 2018 through April 30, 2018 | 3.10 to 1.00 |
May 1, 2018 and thereafter | 3.00 to 1.00 |
COMTECH TELECOMMUNICATIONS CORP. | |
By: | |
Name: Michael D. Porcelain | |
Title: Senior Vice President and Chief Financial Officer |
CITIBANK, N.A., as the Administrative Agent, a Lender and the Issuing Bank | |
By: | |
Name: Stuart N. Berman | |
Title: Authorized Signatory |
By | |
Name: | |
Title: |
By | |
Name: | |
Title: |
COMTECH TELECOMMUNICATIONS CORP. | |
Name: Michael D. Porcelain | |
Title: Senior Vice President and Chief Financial Officer |
[SUBSIDIARY LOAN PARTIES] | |
Name: | |
Title: |
(A) | The Total Change in Control Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing ("Independent Advisors") selected by the Company, the Total Change in Control Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax. You will be provided a copy of any such written opinion, and all fees and expenses of the Independent Advisors shall be borne solely by the Company. |
(B) | The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. |
(i) | Annual Incentive Award. “Annual Incentive Award” shall mean the annual incentive compensation (including for this purpose any long term performance |
(ii) | Cause. “Cause” for Termination by the Company of your employment, during the Protected Period, shall mean (A) willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or fraud by you with regard to the Company or any of its assets or businesses; (B) your conviction or your pleading of nolo contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement which is not cured within 30 days after written notice to you of such breach from the Board of Directors of the Company. |
(iii) | Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given (except as otherwise provided in Section 3(f)(v)). |
(iv) | Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that, you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given, specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your Termination occurs within one year after the initial existence of circumstances constituting Good Reason: |
(v) | Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(vi) | Termination. “Termination” means an event by which your then current employment relationship with the Company and all subsidiaries has ended, regardless of whether you are subsequently hired into a new position (including without limitation a position as a consultant), provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur only at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h). |
(i) | You will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the "Restrictive Period") employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the termination of your employment with the Company. After your Termination of Employment: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be required by law or as requested by you. |
(ii) | You will not at any time, directly or indirectly, without the Company's prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company's business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and |
(iii) | You will not during your employment with the Company and during the Restrictive Period engage in Competition. For purposes of this Section 5(iii), “Competition” is the performance of services, whether as an employee, owner, advisor, consultant, director, stockholder, officer, or any other capacity, for any of the entities listed on Schedule 5(iii) to this Agreement. |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | ||
[Name] | ||
[Title] |
Agreed to this __ day of _________, [Year]. |
[Name] |
(A) | The Total Change in Control Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing ("Independent Advisors") selected by the Company, the Total Change in Control Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax. You will be provided a copy of any such written opinion, and all fees and expenses of the Independent Advisors shall be borne solely by the Company. |
(B) | The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. |
(i) | Annual Incentive Award. “Annual Incentive Award” shall mean the annual incentive compensation (including for this purpose any long term performance share awards, restricted stock, stock options or any other equity based award) |
(ii) | Cause. “Cause” for Termination by the Company of your employment, during the Protected Period, shall mean (A) willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or fraud by you with regard to the Company or any of its assets or businesses; (B) your conviction or your pleading of nolo contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement which is not cured within 30 days after written notice to you of such breach from the Board of Directors of the Company. |
(iii) | Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given (except as otherwise provided in Section 3(f)(v)). |
(iv) | Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that, you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given, specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your Termination occurs within one year after the initial existence of circumstances constituting Good Reason: |
(v) | Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(vi) | Termination. “Termination” means an event by which your then current employment relationship with the Company and all subsidiaries has ended, regardless of whether you are subsequently hired into a new position (including without limitation a position as a consultant), provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur only at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h). |
(i) | You will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the "Restrictive Period") employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the termination of your employment with the Company. After your Termination of Employment: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be required by law or as requested by you. |
(ii) | You will not at any time, directly or indirectly, without the Company's prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company's business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and markets, business opportunities, and financial, technical and other data |
(iii) | During the Restrictive Period, you will, upon the request of the Company from time to time, consult with the Company regarding any matter related to the business and operations of Comtech Xicom Technology, Inc., including, without limitation, projects and business opportunities that were under development during the period of your employment with the Company, and you will not perform services, whether as an employee, owner, advisor, consultant, director, stockholder, officer, or any other capacity, for any of the entities listed on Schedule 5(iii) to this Agreement. In addition to the payments and benefits provided by the Company under this Agreement, you shall be entitled to reimbursement of your reasonable out-of-pocket expenses incurred by you in connection with the performance of consulting services hereunder, subject to the Company’s policies for reimbursement of its employees for similar expenses. |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | ||
[Name] | ||
[Title] |
Agreed to this __ day of _________, [Year]. |
[Name] |
(A) | The Total Change in Control Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing ("Independent Advisors") selected by the Company, the Total Change in Control Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax. You will be provided a copy of any such written opinion, and all fees and expenses of the Independent Advisors shall be borne solely by the Company. |
(B) | The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. |
(i) | Annual Incentive Award. “Annual Incentive Award” shall mean the annual incentive compensation (including for this purpose any long term performance |
(ii) | Cause. “Cause” for Termination by the Company of your employment, during the Protected Period, shall mean (A) willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or fraud by you with regard to the Company or any of its assets or businesses; (B) your conviction or your pleading of nolo contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement which is not cured within 30 days after written notice to you of such breach from the Board of Directors of the Company. |
(iii) | Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given (except as otherwise provided in Section 3(f)(v)). |
(iv) | Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that, you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given, specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your Termination occurs within one year after the initial existence of circumstances constituting Good Reason: |
(v) | Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(vi) | Termination. “Termination” means an event by which your then current employment relationship with the Company and all subsidiaries has ended, regardless of whether you are subsequently hired into a new position (including without limitation a position as a consultant), provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur only at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h). |
(i) | You will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the "Restrictive Period") employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the termination of your employment with the Company. After your Termination of Employment: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be required by law or as requested by you. |
(ii) | You will not at any time, directly or indirectly, without the Company's prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company's business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and markets, business opportunities, and financial, technical and other data (collectively, the "Confidential Information"). After termination of your employment with the Company for any reason and upon the written request of the Company, you shall promptly return to the Company all originals and/or copies of written or recorded material (regardless of the medium) containing or reflecting any Confidential Information and shall promptly confirm in writing to the Company that such action has been taken. Notwithstanding the foregoing, the following shall not constitute Confidential Information: (A) Information that is already in the public domain at the time of its disclosure to you; (B) Information that, after its disclosure to you, becomes part of the public domain by publication or otherwise other than through your act; and (C) Information that |
(iii) | You will not during your employment with the Company and during the Restrictive Period engage in Competition. For purposes of this Section 5(iii), “Competition” is the performance of services, whether as an employee, owner, advisor, consultant, director, stockholder, officer, or any other capacity, for any of the entities listed on Schedule 5(iii) to this Agreement. |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | ||
[Name] | ||
[Title] |
Agreed to this __ day of _________, [Year]. |
[Name] |
(A) | The Total Change in Control Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing ("Independent Advisors") selected by the Company, the Total Change in Control Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax. You will be provided a copy of any such written opinion, and all fees and expenses of the Independent Advisors shall be borne solely by the Company. |
(B) | The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. |
(i) | Annual Incentive Award. “Annual Incentive Award” shall mean the annual incentive compensation (including for this purpose any long term performance share awards, restricted stock, stock options or any other equity based award) |
(ii) | Cause. “Cause” for Termination by the Company of your employment, during the Protected Period, shall mean (A) willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or fraud by you with regard to the Company or any of its assets or businesses; (B) your conviction or your pleading of nolo contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement which is not cured within 30 days after written notice to you of such breach from the Board of Directors of the Company. |
(iii) | Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given (except as otherwise provided in Section 3(f)(v)). |
(iv) | Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that, you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given, specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your Termination occurs within one year after the initial existence of circumstances constituting Good Reason: |
(v) | Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(vi) | Termination. “Termination” means an event by which your then current employment relationship with the Company and all subsidiaries has ended, regardless of whether you are subsequently hired into a new position (including without limitation a position as a consultant), provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur only at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h). |
(i) | You will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the "Restrictive Period") employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the termination of your employment with the Company. After your Termination of Employment: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be required by law or as requested by you. |
(ii) | You will not at any time, directly or indirectly, without the Company's prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company's business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and markets, business opportunities, and financial, technical and other data (collectively, the "Confidential Information"). After termination of your employment with the Company for any reason and upon the written request of the Company, you shall promptly return to the Company all originals and/or copies of written or recorded material (regardless of the medium) containing or reflecting any Confidential Information and shall promptly confirm in writing to the Company that such action has been taken. Notwithstanding the foregoing, the following shall not constitute Confidential Information: (A) Information that is already in the public domain at the time of its disclosure to you; (B) Information that, after its disclosure to you, becomes part of the public domain by publication or otherwise other than through your act; and (C) Information that you received from a third party having the right to make such disclosure without restriction on disclosure or use thereof. |
(iii) | During the Restrictive Period, you will, upon the request of the Company from time to time, consult with the Company regarding any matter related to the business and operations of Comtech Xicom Technology, Inc., including, without limitation, projects and business opportunities that were under development during the period of your employment with the Company, and you will not perform services, whether as an employee, owner, advisor, consultant, director, stockholder, officer, or any other capacity, for any of the entities listed on Schedule 5(iii) to this Agreement. In addition to the payments and benefits provided by the Company under this Agreement, you shall be entitled to reimbursement of your reasonable out-of-pocket expenses incurred by you in connection with the performance of consulting services hereunder, subject to the Company’s policies for reimbursement of its employees for similar expenses. |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | ||
[Name] | ||
[Title] |
Agreed to this __ day of _________, [Year]. |
[Name] |
(A) | The Total Change in Control Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing ("Independent Advisors") selected by the Company, the Total Change in Control Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax. You will be provided a copy of any such written opinion, and all fees and expenses of the Independent Advisors shall be borne solely by the Company. |
(B) | The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. |
(i) | Annual Incentive Award. “Annual Incentive Award” shall mean the annual incentive compensation (including for this purpose any long term performance |
(ii) | Cause. “Cause” for Termination by the Company of your employment, during the Protected Period, shall mean (A) willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or fraud by you with regard to the Company or any of its assets or businesses; (B) your conviction or your pleading of nolo contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement which is not cured within 30 days after written notice to you of such breach from the Board of Directors of the Company. |
(iii) | Date of Termination. “Date of Termination” shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given (except as otherwise provided in Section 3(f)(v)). |
(iv) | Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that, you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given, specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your Termination occurs within one year after the initial existence of circumstances constituting Good Reason: |
(v) | Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(vi) | Termination. “Termination” means an event by which your then current employment relationship with the Company and all subsidiaries has ended, regardless of whether you are subsequently hired into a new position (including without limitation a position as a consultant), provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur only at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h). |
(i) | You will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the "Restrictive Period") employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the termination of your employment with the Company. After your Termination of Employment: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be required by law or as requested by you. |
(ii) | You will not at any time, directly or indirectly, without the Company's prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company's business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and |
(iii) | You will not during your employment with the Company and during the Restrictive Period engage in Competition. For purposes of this Section 5(iii), “Competition” is the performance of services, whether as an employee, owner, advisor, consultant, director, stockholder, officer, or any other capacity, for any of the entities listed on Schedule 5(iii) to this Agreement. |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | ||
[Name] | ||
[Title] |
Agreed to this __ day of _________, [Year]. |
[Date] |
1. | Section 7(a)(ii) of the Agreement is hereby amended and restated in its entirety to read as follows: |
COMTECH TELECOMMUNICATIONS CORP. | ||
By: | /s/ Michael D. Porcelain | |
Authorized Signatory | ||
/s/ Fred Kornberg | ||
Fred Kornberg |
(i) | In the event of the Participant’s death or Disability prior to the Final Certification/Vesting Date and prior to forfeiture of the Performance Shares, the Performance Goals for the Full Three-Year Performance Period shall be deemed to be satisfied at a level equal to the greater of the designated Target Performance level or the Projected Performance Level (as defined in Appendix A) as of the date of such death or Disability, and the resulting number of Earned Shares less any Earned Shares earned for a prior completed Applicable Performance Period (if any), together with the number of Earned Shares earned for any prior completed Applicable Performance Period shall become fully vested and shall (subject to Plan Section 17.13) be distributed to the Participant or his or her beneficiary within sixty (60) days following the end of the fiscal quarter in which the Participant’s death or Disability occurs. The term “Disability” shall have the meaning as set forth in Plan Section 2.14 treating the Performance Shares as being subject to Code Section 409A, provided that a “Disability” shall be deemed to have occurred only if it qualifies as a disability within the meaning of Treasury Regulation Section 1.409A-1(e)(1). |
(ii) | In the event of the Participant’s Termination of Employment without Cause (and other than due to death or Disability) on a date that is both prior to the Final Certification/Vesting Date and prior to a 409A Change in Control occurring, the Participant shall earn for each Applicable Performance Period not completed on the date of the Termination of Employment a number of Earned Shares (which shall not be less than zero) in an amount equal to: (I) the product of (x) the number of Performance Shares the Participant would have earned based on the projected achievement of each of the Performance Goals for the Applicable Performance Period which shall be calculated utilizing the actual achievement of the applicable portion of the Performance Goals and assuming the same level of performance through the end of the Applicable Performance Period, measured on the last day of the fiscal quarter in which the Termination of Employment without Cause occurs, times (y) a fraction, the numerator of which is the number of days during the Applicable Performance Period in which the Participant was employed, and the denominator of which is the number of days in the Applicable Performance Period; less (II) any Earned Shares earned for any previously completed Applicable Performance Periods. The resulting number of Earned Shares (if any) plus the Earned Shares previously earned for previously completed Applicable Performance Periods (if any), shall become fully vested and shall (subject to Plan Section 17.13) be distributed to the Participant (i) with respect to the previously Earned Shares described in clause (II) above, within sixty (60) days following the Participant’s Termination of Employment without Cause and (ii) with respect to the remaining Earned Shares, within sixty (60) days following the end of the fiscal quarter in which the Participant’s Termination of Employment without Cause occurs. |
(iii) | In the event of any Termination of Employment (other than a Termination of Employment without Cause or due to death or after Disability) prior to the Final Certification/Vesting Date, except as otherwise provided in Section 3.2 (with respect to Alternative Performance Shares following a 409A Change in Control), all Performance Shares, including any Earned Shares, shall be forfeited on the date of such Termination of Employment. |
(i) | Each Alternative Performance Share must be based on stock which is traded on an established securities market, or which |
(ii) | The Alternative Performance Shares must provide such Participant with rights, terms, conditions and entitlements substantially equivalent to or better than the rights, terms, conditions and entitlements applicable under the Performance Shares, including, but not limited to, an identical or better vesting schedule; |
(iv) | In furtherance of clause (ii) above, the performance goal applicable to the Alternative Performance Shares (the “Alternative Performance Goal”) and the corresponding level at which Alternative Performance Shares shall be earned must be determined by the Committee to be not less probable of being achieved than the Performance Goal immediately prior to the 409A Change in Control (assuming the 409A Change in Control had not occurred and assuming that the Company had incurred no expense in connection with the 409A Change in Control); |
(v) | The Alternate Performance Shares must be structured in a manner intended to comply with Section 409A of the Code to avoid any adverse tax consequences thereunder, to the extent applicable; and |
(vi) | The Alternative Performance Shares shall provide that, in the event that, within two years following the 409A Change in Control and prior to the Final Certification/Vesting Date, either the Participant has a Termination of Employment by his or her employer other than for Cause (with the result that immediately thereafter the Participant is not employed by such employer or its parent or other affiliates or that the Alternative Performance Shares otherwise would be forfeited under their terms but for this provision), or if the Participant would be paid a CIC Payment under Section 3(b)(i) of the Company’s Change-in-Control Agreement upon a Termination of Employment by the Participant for “Good Reason” (however designated), or under any other agreement with the employer or its parent or other affiliates and Participant effects a Termination of Employment for such Good Reason, then the Alternative Performance Goal for the Full Three-Year Performance Period shall be deemed to be satisfied at the Maximum Performance level as of the date of such Termination of Employment, and the resulting number of earned Alternative Performance Shares less any Performance Shares previously earned for a completed Applicable Performance Period, which together with Performance Shares previously earned for previously completed Applicable Performance Periods (if any) shall be the resulting Earned Shares (or awarded cash), shall become fully vested and shall be distributed to the Participant within five (5)business days thereafter. |
(vii) | Any changes after the 409A Change in Control to the businesses the performance of which is measured under the Alternative Performance Goal, including but not limited to asset sales or dispositions, reorganizations, restructurings, acquisitions, or discontinuations of operations, that will or could have an adverse effect on the performance criteria under the Alternative Performance Goal during the Full Three-Year Performance Period shall be accompanied by adjustments to the Alternative Performance Goal to the extent permitted under Section 162(m) of the Code so that such changes do not reduce the probability of the Performance Goal being achieved at the level that would have been obtained in the absence of such changes. |
COMTECH TELECOMMUNICATIONS CORP. | ||||
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