Exhibit 10.7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into as of June 12, 1998, by Xxxxxxx
Electric Co., a Minnesota corporation with its principal place of business at
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, FAX (612) 371-
8036 ("Xxxxxxx"), and Xxxxx X. Xxxxxxxxx, an individual whose office is at 0000
Xxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, FAX (000) 000-0000 ("Executive").
RECITALS
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Xxxxxxx desires to employ Executive as President of the Division (as
hereinafter defined), and Executive desires to be employed by Xxxxxxx in such
capacity, on the terms and conditions contained herein. In consideration of the
mutual covenants and promises contained herein, the parties agree as follows:
1. Term of Employment. The initial term (the "Initial Term") of this
Agreement shall commence on the date hereof (the "Commencement Date") and,
unless sooner terminated as provided herein, shall end on August 31, 2001. At
the expiration of the Initial Term, this Agreement shall be automatically
renewed for successive periods of one year each (each, a "Renewal Term") unless
either party gives written notice of nonrenewal to the other not later than 90
days prior to the expiration of the Initial Term or any such Renewal Term.
Unless this Agreement is sooner terminated in accordance with Section 4, the
Initial Term and each Renewal Term during which this Agreement shall be in
effect shall be collectively referred to as the "Employment Period."
2. Title; Capacity. The corporation which formerly was known as
Xxxxxxxxx Electric Company, Inc. ("Xxxxxxxxx") is now a division of Xxxxxxx,
which is a wholly-owned subsidiary of Nationwide Electric, Inc. ("NEI"),
pursuant to an Agreement and Plan of Merger between NEI and Xxxxxxxxx and its
shareholders (the "Merger Agreement"). For purposes of this Agreement, Xxxxxxx
shall be referred to as the "Company" and Xxxxxxxxx shall be referred to as the
"Division." Executive shall serve as President of the Division and in such other
management position(s) as the Board of Directors of the Company (the "Board") or
the President of NEI, reasonably and in good faith, may determine from time to
time, not inconsistent with an executive officer's duties. Executive shall be
subject to the supervision of, and shall have such specific authority as is
delegated to him by, the Board and/or the President of NEI.
Executive accepts such employment and agrees to undertake the duties
and responsibilities inherent in such position and such other duties and
responsibilities as the Board or the President of NEI shall from time to time
reasonably assign to him. Executive shall perform his
duties primarily at the principal place of business of the Division currently
located at 0000 Xxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, subject to reasonable
travel requirements. Executive agrees to devote his entire business time,
attention and energies, during reasonable business hours, to the business and
interests of the Division during the Employment Period, except for vacation and
absence due to illness or injury and reasonable time devoted to the fulfillment
of civic and non-competitive personal responsibilities and activities and
activities of Executive on behalf of Xxxxxxxxx Properties, Inc. Executive
agrees to abide by the rules, regulations, instructions, personnel practices and
policies (collectively, the "Policies") applicable to the Division and
reasonably promulgated by the Board or the President of NEI, as amended or
modified from time to time and communicated in advance to Executive.
3. Compensation and Benefits.
a. Salary. The Company shall pay Executive, in semi-monthly installments,
an annual base salary of $158,400 for the one-year period commencing on the
Commencement Date. Executive's salary shall be subject to such increases as
determined by the Board or the President of NEI in their good faith discretion.
b. Fringe Benefits. At all times during the Employment Period, Executive
shall be entitled to participate in all benefit programs that NEI establishes
and makes available to the management executives of its other operating
subsidiaries and divisions, to the extent Executive's position, tenure, salary,
age, health and other qualifications make him eligible to participate. Such
benefits shall include, without limitation, those set forth on SCHEDULE A
attached hereto.
c. Reimbursement of Expenses. The Company shall reimburse Executive for
all reasonable travel, entertainment and other expenses incurred or paid by
Executive in connection with the performance of his duties under this Agreement,
upon presentation by Executive of such documentation as the Company may
reasonably request. The amount generally available for travel, entertainment
and other expenses may be fixed in advance by the Board or the President of NEI.
Upon prior approval by the Board, the Company shall reimburse Executive, or
directly pay for, dues and membership fees for organizations relevant to
Executive's duties.
d. Incentive Compensation. Executive shall be entitled to an incentive
bonus in the amount of 6% of the pre-tax net income contributed by the Division
to NEI (the "Incentive Base") each fiscal year during the Employment Period.
Such bonus shall be payable quarterly and reconciled annually. The Incentive
Base shall be determined by NEI, which determination shall be final and binding
for all purposes. Notwithstanding the foregoing, no incentive compensation shall
be paid for any fiscal year in which this Agreement is terminated by the Company
pursuant to Section 4.b. For purposes of the Incentive Base, the pre-tax net
income contribution of the Division: (i) shall include the pre-tax net income
contributed by the entity formerly known as Eagle Electrical Systems, Inc.; and
(ii) shall not include any home office corporate charge or home office overhead.
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At Executive's option, Executive may elect to receive, in lieu of the base
salary provided for in Section 3 and the incentive compensation provided above
in this Section 3.d., a base salary of $178,400 and a bonus equal to 5% of the
Incentive Base. Check below:
[_] I elect to receive a base [_] I elect to receive a base
salary of $158,400 and salary of $178,400 and
a 6% bonus. a 5% bonus.
4. Employment Termination. Executive's employment by the Company shall
terminate upon the occurrence of any of the following:
a. Expiration of the Employment Period, as defined in Section 1;
b. At the election of the Company, for "cause," immediately upon
receipt of written notice by the Company to Executive specifying in reasonable
detail such cause and, in the case of Section 4.b.ii, the nature of the injury
incurred. "Cause" for termination shall mean any of the following:
i. Dishonesty of Executive with respect to the Company or NEI;
ii. Willful misfeasance or nonfeasance of duty intended to
injure or having the tendency or effect of injuring, in any material respect,
the reputation, business or business relationships of the Company, the Division
or NEI or their respective officers, directors or employees;
iii. Upon a charge by a governmental entity against Executive of
any crime involving moral turpitude (other than minor traffic offenses) or which
could, in the reasonable, good faith judgment of the Board or the President of
NEI, reflect unfavorably upon the Company or NEI; upon the filing of any civil
action against Executive involving a charge of embezzlement, theft, fraud or
other similar act; or any other serious job-related conduct which the Board or
the President of NEI, reasonably and in good faith, determines is materially and
substantially detrimental to the Company or NEI or relations with customers,
suppliers, employees, shareholders or the investment community;
iv. Executive's willful or prolonged absence from work (other
than by reason of disability due to physical or mental illness) or willful
failure, neglect or refusal by Executive to perform his material duties and
responsibilities, unless corrected within 10 days after receipt of written
notice from the Company;
v. Executive's failure to meet any performance standards agreed
upon by Executive and the Company or NEI, unless due to factors beyond
Executive's control; or
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vi. Breach by Executive of any of the other material covenants
contained in this Agreement, unless corrected within 10 days after receipt of
written notice from the Company.
c. Immediately upon the death or disability of Executive. As used
in this Agreement, the term "disability" shall mean the inability of Executive,
due to a physical or mental disability, for a period of 90 days, whether or not
consecutive, during any 360 day period to perform, in all material respects, the
services contemplated under this Agreement. A determination of disability shall
be made by a qualified physician reasonably satisfactory to the Company and
Executive. If the Company and Executive (or his personal representative) are
unable to reasonably agree on the identity of a qualified physician, each shall
designate a physician and the two physicians so designated shall select a third
physician whose determination of disability shall be binding on the parties.
d. At the election of the Company or Executive, with or without
cause, upon 90 days written notice by one party to the other.
5. Effect of Termination.
a. Termination for Cause. If Executive's employment is terminated
for cause pursuant to Section 4.b., the Company shall pay to Executive the
salary and benefits (but not any incentive compensation) payable to him under
Section 3 through the last day of his actual employment by the Company.
Notwithstanding the foregoing, if Executive's employment is terminated pursuant
to Section 4.b.v., Executive shall be paid any incentive compensation to which
he would otherwise be entitled, adjusted to reflect the portion of the fiscal
year in which Executive was employed by the Company.
b. Elective Termination. If Executive's employment is terminated by
either party under Section 4.d., the Company shall pay to Executive the salary
and benefits payable to him under Section 3 through the last day of his actual
employment by the Company. In addition, within 30 days after the last day of
Executive's actual employment by the Company, Executive shall be paid any
incentive compensation to which he would otherwise be entitled, adjusted to
reflect the portion of the fiscal year in which Executive was employed by the
Company.
c. Termination for Death or Disability. If Executive's employment
is terminated by death or because of disability pursuant to Section 4.c., the
Company shall pay to Executive or his estate, as the case may be, the salary
pursuant to Section 3 which would otherwise be payable to Executive through the
end of the month in which the termination of his employment because of death or
disability occurs; plus any incentive compensation to which he would otherwise
be entitled, prorated for the portion of the fiscal year in which Executive was
employed by the Company.
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6. Non-Compete.
a. During the Employment Period and for a period of five years after
the expiration or termination for any reason of this Agreement, Executive shall
not directly or indirectly, anywhere in a territory comprised of the continental
United States:
i. as an individual proprietor, partner, stockholder, member,
officer, Executive, director, joint venturer, consultant, investor, lender, or
in any other capacity whatsoever (other than as the holder of not more than 5%
of the total outstanding stock of a publicly held company), engage in or assist
any other entity in engaging in the business of developing, providing, marketing
or selling products or services (including but not limited to commercial and
electrical contracting services) of the kind developed, provided, marketed or
sold by the Division while Executive was employed by the Company; or
ii. recruit, solicit or induce, or attempt to induce, any
employee(s) of the Company or NEI or its operating subsidiaries or divisions to
terminate their employment; or
iii. solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the Company or any
other operating subsidiaries or divisions of NEI which were contacted, solicited
or serviced by Executive while employed by the Company.
b. If any restriction set forth in this Section 6 is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
7. Proprietary Information and Developments
a. Proprietary Information.
i. Executive agrees that all information and know-how, whether in
oral, written, electronic or other medium, of a private, secret or confidential
nature concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and shall be the exclusive property of the
Company. By way of illustration, but not limitation, Proprietary Information
shall include inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, strategies, research
data, clinical data, analyses, financial data, personnel data, computer
programs, customer and supplier lists, bids, pricing information, cost
information, contractual relations, business contacts and trade secrets.
Executive shall not disclose any Proprietary Information to others outside the
Company (except as required in the performance of his duties on behalf of the
Company) or use the same for any purpose other than the performance of his
duties hereunder without written approval by an officer of the Company, either
during or after
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his employment, unless and until such Proprietary Information has become public
knowledge without the fault of Executive.
ii. Executive agrees that all files, letters, memoranda, notes,
abstracts, reports, records, data, sketches, drawings, laboratory notebooks,
program listings and other written, photographic, electronic or other tangible
material containing or prepared on the basis of Proprietary Information, whether
created by Executive or others, which shall come into his custody or possession,
shall be and are the exclusive property of the Company to be used by Executive
only in the performance of his duties for the Company.
iii. Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs i. and
ii. above also extends to similar types of information, know-how, records and
disclosures of customers of the Company or suppliers to the Company or other
third parties identified as being confidential or proprietary and which may have
been disclosed or entrusted to the Company or to Executive in the course of the
Company's business.
b. Developments.
i. Executive shall make full and prompt disclosure to the Board of
all inventions, improvements, discoveries, methods, developments, software and
works of authorship, whether patentable or not, which are created, made,
conceived or reduced to practice by Executive or under his direction or jointly
with others during his employment by the Company and relating to the business of
the Company (all of which are collectively referred to in this Agreement as
"Developments").
ii. Executive agrees to assign and does hereby assign to the Company
(or any person or entity designated by the Company) all his right, title and
interest in and to all Developments and all related patents, patent
applications, rights to patent, copyrights and copyright applications. However,
this Section 7.b.ii. shall not apply to Developments which do not relate to the
present or planned business or research or developments of the Company and which
are made and conceived by Executive at times other than normal working hours,
not on the Company's premises and without use of any tools, devices, equipment
or Proprietary Information of the Company.
iii. Executive agrees to cooperate fully with the Company, at the
Company's expense and as the Company may reasonably request, both during and
after his employment with the Company, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the United States
and foreign countries) relating to Developments. Executive shall sign all
papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of
proprietary rights, and powers of attorney, which the Company may reasonably
deem necessary or desirable in order to protect its rights and interests in any
Developments.
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c. Other Agreements. Executive hereby represents that he is not
bound by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Executive further represents that his performance of all
the terms of this Agreement and as an Executive of the Company does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company.
d. Company's Right to Notify Subsequent Employers. The Company may
do all permissible things, and take all permissible action, necessary or
advisable, in the Company's discretion, to protect its rights under this Section
7, including, without limitation, notifying any subsequent employer of Executive
of the existence of (and furnishing to any such employer) the provisions of this
Agreement.
8. Liquidated Damages. Insofar as any damages sustained by the Company
in the case of a breach by Executive of the provisions of this Agreement are
difficult to calculate, the parties hereto agree that if Executive breaches or
violates any provision of this Agreement, the Company shall be entitled, in
addition to any other right and remedy available to it, to offset against, and
retain as liquidated damages, any sums otherwise owed but not paid by the
Company to Executive.
9. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery, confirmed
facsimile transmission or upon deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
the address or facsimile number shown above, or at such other address or
facsimile number as either party shall designate to the other in accordance with
this Section 9.
10. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with regard to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral, relating to the
subject matter of this Agreement.
12. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and Executive.
13. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Kentucky, without giving
effect to that State's conflict of laws provisions.
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14. Choice of Venue. All actions or proceedings with respect to this
Agreement shall be instituted only in any state or federal court sitting in
Louisville, Kentucky, and by execution and delivery of this Agreement, the
parties irrevocably and unconditionally subject themselves to the jurisdiction
(both subject matter and personal) of each such court and irrevocably and
unconditionally waive: (a) any objection that the parties might now or hereafter
have to the venue of any of such court; and (b) any claim that any action or
proceeding brought in any such court has been brought in an inconvenient forum.
15. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company or
Division may be merged or consolidated, or which may succeed to its assets or
business, provided, however, that such successor or assignee shall expressly
assume the Company's obligations hereunder; and provided further that the
obligations of Executive are personal and may not be assigned by him.
16. Waiver. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
17. Captions and Headings. The captions of the sections of this Agreement
are for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
18. Severability. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
19. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same agreement, and it shall not be necessary
for all parties to execute the same counterpart hereof.
20. Facsimile Signatures. The parties hereby agree that, for purposes of
the execution of this Agreement, facsimile signatures shall constitute original
signatures.
21. Incorporation by Reference. The preamble and recitals to this
Agreement are hereby incorporated by reference and made a part hereof.
22. Indemnification. The Company agrees that it will indemnify and hold
Executive harmless to the fullest extent permitted by applicable law or the
Articles of Incorporation or Bylaws of the Company, from and against all
liabilities, costs, claims, expenses, actions and causes of action to which
Executive may be subject or exposed and arising from his service as an
Executive, including, without limitation, all costs and expenses incurred in the
defense of any litigation,
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arbitration or other proceedings of any nature, including the reasonable
attorneys' fees incurred by Executive in connection therewith, except to the
extent a court of competent jurisdiction determines that any such claim arose as
a result of Executive's breach of this Agreement or the gross negligence or
willful misconduct of Executive in the performance of his duties as an Executive
of the Company.
23. Survival. The relevant provisions of Sections 5, 6, 7.a., 7.b.iii, 8,
22 and 24 shall survive expiration or termination of this Agreement for the
periods recited therein or, if no period is recited, for such period as required
to implement the terms thereof.
24. Enforcement. The covenants contained in Sections 6 and 7 are
necessary for the protection of the business and goodwill of the Company and are
considered by Executive to be reasonable for such purpose. Executive agrees
that any breach of his covenants in Section 6 or 7 will cause the Company
substantial and irrevocable injury which would not be fully compensable in
damages. Accordingly, in the event of any such breach, in addition to such
other remedies which may be available, the Company shall have the right to seek
specific performance and/or injunctive relief, without the necessity of posting
bond (to the extent permitted under applicable law) or proving lack of an
adequate remedy at law. The prevailing party in a legal proceeding to remedy a
breach under this Agreement shall be entitled to receive its reasonable
attorneys' fees, expert witness fees and out-of-pocket costs incurred in
connection with such proceeding, in addition to any other relief to which it may
be entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
XXXXXXX ELECTRIC CO.
By _______________________________________
Name:
Title:
The "Company"
EXECUTIVE:
__________________________________________
Xxxxx X. Xxxxxxxxx
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SCHEDULE A
Benefits
Benefit Plans consistent with those currently received by Executive as
President of Xxxxxxxxx Electric Company, Inc.
