Employee Benefits Agreement

Exhibit 10.23


EMPLOYEE BENEFITS AGREEMENT


This Employee Benefits Agreement (the "Agreement") is entered into as of the 1st day of August, 1997, by and between Elcom International, Inc. (the "Company") and Andres Escallon ("Employee").


WITNESSETH:


WHEREAS, Employee is a key employee of the Company; and


WHEREAS, the Company considers that providing Employee with certain employment benefits will operate as an incentive for Employee during the period of this Agreement, during which the Company and/or one or more of its subsidiaries may undergo a change in control or ownership; and


WHEREAS, this Agreement is intended to provide benefits only in the event of a change in control or ownership of the Company and/or one or more of its subsidiaries prior to January 1, 1999 (the "Expiration Date").


NOW THEREFORE, to induce Employee to remain productive, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Employee agree as follows:


1. Definitions.


(a) "Change of Control" shall mean the occurrence of any
one of the following events:


(i) The stockholders of the Company approve (A) a merger or
consolidation of the Company with any other
corporation, other than a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined
voting power of the voting securities of the Company or
such surviving entity outstanding immediately after
such merger or consolidation, or (B) a plan of complete
liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially
all the assets of the Company and/or one or more of its
subsidiaries to other than any of its subsidiaries; or


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(ii) During any period of one (1) year, a majority of the
Board of Directors of the Company ceases to be
comprised of "Continuing Directors," which term, for
purposes of this Subsection 1(a), shall mean
individuals who at the beginning of any period of one
(1) year (not including any period which ended prior to
the date of this Agreement) constitute the Board and
any new director(s) whose election by the Board or
nomination for election by the Company's stockholders,
as applicable, was approved by a vote of at least a
majority of the directors then still in office who
either were directors at the beginning of the period or
whose election or nomination for election was
previously so approved; or


(iii) Any "person" (as defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
and/or any of its subsidiaries representing fifty
percent (50%) or more of the combined voting power of
such entity's then outstanding securities; provided
that a Change of Control shall not be deemed to occur
under this clause (iii) by reason of the acquisition of
securities by the Company and/or any of its
subsidiaries or an employee benefit plan (or any trust
funding such a plan) maintained by the Company and/or
any of its subsidiaries.


(b) "Severance Payments" shall mean any payment or distribution of
compensation or benefits made pursuant to Section 3 of this
Agreement.


(c) "Separation Date" shall mean the date, if any, of termination
of Employee's employment relationship with the Company.


(d) "Voluntary Separation" shall mean the voluntary resignation by
Employee from employment with the Company other than a
voluntary resignation following either of the following two
events:


(i) any future reduction in Employee's base salary; or


(ii) a future relocation of Employee's place of employment
which results in an increase of twenty-five (25)
miles or more in the distance from Employee's
residence to Employee's place of employment.


(e) "Termination With Cause" shall mean any termination of
Employee by the Company for malfeasance, insubordination,
theft, fraud, embezzlement, conviction of a felony, being
under the influence of alcohol or unlawful drugs during
business hours, the violation of Section 4 of this Agreement
or of any other agreement with the Company, the removal of any
equipment without the Company's written permission, the
violation of any state or federal law, repeated


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tardiness without acceptable reasons therefor, and/or the
failure to comply with any of the Company's written
policies and procedures.


2. Termination of Employee Related to Change of Control. In the event of Employee's termination of employment with the Company within twelve (12) months following the date on which there is a Change of Control of the Company and/or any of its subsidiaries, the Company shall provide Employee with the Severance Payments outlined in Section 3, unless the termination is a Termination With Cause or a Voluntary Separation.


3. Severance Payments. In the event that Employee is entitled to Severance Payments pursuant to the terms of Section 2, the Company will make the payments described below, subject to Section 13 hereof.


(a) Compensation. The Company shall pay Employee an amount equal
to 24 (twenty-four) months base salary as of the Separation
Date, without giving effect to any future reduction in base
salary prior to the Separation Date, payable in accordance
with the provisions of Section 13 hereof. Subject to Section
13 hereof, such payments shall be made in accordance with the
Company's normal payroll practices as such practices shall be
in effect from time to time, provided, however, that the
Company may elect to accelerate payments required under this
Section 3(a).


(b) Employee Benefits. Employee shall be entitled to the
following benefits:


(i) Vacation. Any accrued vacation pay due but not yet
taken at the Separation Date shall be paid to
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