EMPLOYMENT AGREEMENT
THIS AGREEMENT made on May 1, 1998, by and between Ballantyne of Omaha,
Inc., (Ballantyne), an Omaha corporation with offices at 0000 XxXxxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000 (the "Company") and Xxxx X. Xxxxxx, an
individual residing at 0000 Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000 (the
"Employee").
W I T N E S S E T H:
In consideration of the mutual promises and covenants herein contained,
the parties intending to be legally bound agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee and the
Employee hereby agrees to be employed by the Company upon the terms and
conditions hereinafter set forth. The Employee agrees to serve as Secretary,
Treasurer and Chief Financial Officer (CFO) of Ballantyne of Omaha, Inc.
2. DUTIES AND SERVICES.
(a) The Employee shall perform such services as may be assigned to
the Employee by the Chairman, President, or Board of Directors of Ballantyne of
Omaha, Inc.
(b) The Employee agrees to devote all of the Employee's time and
efforts to the performance of the Employee's duties as an employee of the
Company. The Employee shall not during the term hereof perform any services for
any person, firm or corporation, other than as approved in writing by the
Company. The prohibitions of this section shall apply to indirect activities of
the Employee as well as direct activities, and will accordingly prohibit
activities of persons with whom the Employee is "affiliated," as that term is
defined under the Securities Act of 1933, as amended, and the Rules and
Regulations thereunder.
(c) The Employee shall undertake such travel as may be necessary or
desirable to promote the business and affairs of the Company.
3. TERM
(a) Except as otherwise hereinafter specifically provided, the term
of this employment agreement shall be for a period of five years from the date
hereof.
(b) Either party may give notice to the other of its intention to
extend the term of this employment agreement within 120 days of its then
expiration date. In the event no such notice is given, the term described at
subparagraph (a) above shall automatically continue for an additional year, and
this subsection (b) shall be applicable again within such extension.
(c) This Agreement may be terminated by the Company, at any time,
at its discretion, upon the Employee's death, inability to perform or incapacity
(being
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defined as inability to perform normal activities and functions for a period
of one hundred eighty consecutive days), or for cause. A termination for
cause for purposes of this Agreement shall be that the Employee (i) acted
dishonestly or incompetently or engaged in willful misconduct in the
performance of the Employee's duties, (ii) breached a fiduciary duty to the
Company, (iii) intentionally failed to perform reasonably assigned duties,
(iv) willfully violated any law, rule or regulation (other than minor traffic
violations or similar offenses) or any final cease and desist order, or (v)
breached this Agreement and such breach is not cured by Employee after ten
(10) days written notice.
(d) This Agreement may be terminated by the Employee in the
event the Company breaches this Agreement and such breach is not cured by the
Company after 10 days notice.
(e) In the event the Company shall be sold, whether by a sale of
assets or stock, such sale will automatically trigger a simultaneous renewal
of the term of this Agreement as provided in paragraph 4(a) hereof, with the
first day of such renewal term being the day of closing of the sale, and this
Agreement shall remain in full force and effect.
4. COMPENSATION.
(a) BASIC COMPENSATION. For all of the services to be rendered by
the Employee in any capacity hereunder, the Company shall pay the Employee
salary at the annual rate of one hundred ten thousand dollars effective January
1, 1998. The Company shall review such salary annually as of January 1 during
each subsequent year of this Agreement but in no event shall the basic
compensation in each subsequent year be less than the aforesaid amount. The
compensation paid hereunder to the Employee shall be paid in accordance with the
payroll practices conducted by the Company and shall be subject to the customary
withholding taxes and other employment taxes as required with respect to
compensation paid by a corporation to an employee.
(b) The Company agrees to furnish an automobile, selected by the
Company, for the use of the Employee. All expenses for the maintenance,
insurance and upkeep of the automobile shall be borne by the Company.
5. EXPENSES AND VACATIONS.
(a) The Company shall reimburse the employee for all reasonable and
necessary travel and entertainment expenses incurred by the Employee in the
performance of the Employee's duties hereunder upon submission of vouchers and
receipts evidencing such expenses.
(b) The Employee shall be entitled to vacation during each twelve
months of employment in accordance with applicable Company policy. All
vacations shall be in addition to recognized national holidays. During all
vacations, the Employee's compensation and other benefits as stated herein shall
continue to be paid in full. Such vacations shall be taken only at times
convenient for the Company, as approved by the President.
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6. OTHER BENEFITS. In addition to the compensation and to the rights
provided for elsewhere in this agreement, the employee shall be entitled to
participate in each plan of the Company now or hereafter adopted for the benefit
of executive employees of the Company, to the extent permitted by such plans and
by applicable law, including, but not limited to, (i) profit sharing plan, (ii)
medical expense insurance program, (iii) pension plan, and (iv) incentive
compensation plan.
7. DISCLOSURE OF INFORMATION. The Employee acknowledges that the
Company's trade secrets, as they may exist from time to time, including, but not
limited to, the Company's list of customers, processes, ideas, plans, programs,
procedures and know how, are valuable, special and unique assets of the
Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The parties agree that the
Employee will not, during or after the term of the Employee's employment by the
Company, disclose such secrets to any person, firm, corporation, association or
other entity or use such trade secrets for any reason or purpose whatsoever; nor
shall the Employee make use of any such property for the Employee's own purposes
or for the benefit of any person, firm, corporation or other entity (except the
Company) under any circumstances during or after the term of the Employee's
employment. Nothing in this section shall limit the Employee's right to carry
the Employee's accumulated career knowledge and professional skills to any
future employment, subject to the specific limitations of the foregoing
provisions of this section and the restrictive covenant elsewhere set forth
herein.
8. RESTRICTIVE COVENANT. The Employee agrees that at the expiration of
this Agreement or at termination for any reason whatsoever, the Employee shall
not, for a period of three years thereafter, engage in any business, as
principal employee or otherwise, which competes with the Company in the United
States with respect to the manufacture, production, assembling, distribution, or
sale of products which are the same or similar or related to use or function to
those which are manufactured, assembled, sold, or being developed by the Company
at any time during the Employee's employment with the Company, or directly or
indirectly solicit or contact any present or past (one having active contact
within twelve months prior to termination of the Employee's employment)
distributor, dealer, customer, client, employee or consultant of the Company (or
the Company's subsidiaries or affiliates). In the event that this agreement is
not renewed and the Employee is terminated, the Employee will be entitled to one
week of severance for each year of employment. In addition all existing
insurance benefits shall remain in force during the severance period. It is the
desire and intent of the parties that the provision of this section shall be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought.
The parties hereto recognize and agree that in the event of the breach of
any provision of this covenant, there is not a remedy at law adequate to protect
the rights and interest of the Company set forth herein, and the parties
therefor agree that the Company shall have the right to an injunction enjoining
the Employee from violating the provisions of this section. Nothing herein
shall be construed as prohibiting the Company from
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pursuing any other remedies available for such breach or threatened breach,
including the recovery of damages from the Employee. In the event that any
restriction contained in this covenant is deemed by any court to be void
because it is for an excessive period of time or restricts the Employee from
engaging in a business competing with the Company in an excessive
geographical area, it is agreed by the parties that said court shall have the
right to decrease the time period or geographical area covered by such
restriction to a time period and/or geographical area which is not excessive.
It is understood and agreed that in the event the Company terminates the
Employee without cause or if the Company breaches this Agreement and does not
cure said breach as provided in paragraph 3(d), the provisions of paragraph 9
are null and void.
9. INVENTIONS AND DISCOVERIES. The Employee hereby sells, transfers
and assigns to the Company or to any person or entity designated by the Company
all of the entire right, title and interest of the Employee in and to all
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material made or conceived by the Employee, solely or jointly,
during the term hereof which relate to the products and services provided by the
Company or which otherwise relate or pertain to the business, functions or
operations of the Company. The Employee agrees to communicate promptly and to
disclose to the Company in such form as the Employee may be required to do so
all information, details and data pertaining to such inventions, ideas,
disclosures and improvements and to execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
required of the Employee to permit the Company or any person or entity
designated by the Company to file and prosecute the patent applications and, as
to copyrightable material, to obtain copyrights thereof.
10. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified mail,
return receipt requested, to the Employee's residence, in the case of the
Employee, or to the Company, at the principal offices of Ballantyne of Omaha,
Inc., attention of the President.
11. CONSTRUCTION OF AGREEMENT. This Agreement is intended to be
construed and enforced in accordance with the laws of the State of Nebraska and
without regard to or aid of any presumption or other rule requiring construction
against the party drawing or causing this Agreement to be drawn.
12. COMMENCEMENT OF ACTIONS OR PROCEEDINGS. Any action or proceeding
brought by a party hereto against another and arising out of the Agreement or
any breach thereof, may be commenced by the service of process in the same
manner as a notice may be served under this Agreement.
13. NON-WAIVER. No provision of this agreement shall be deemed to have
been waived except if such waiver is contained in a notice given to the party
claiming such waiver has occurred and no such waiver shall be deemed to be a
waiver of any other
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or further similar or dissimilar obligation or liability of the party in
whose favor the waiver was given.
14. ILLEGALITY. If any provision or provisions hereof (or any part
thereof) or the application thereof to any particular facts or circumstances
shall be illegal and unenforceable by reason of any statute or rule of law, the
remaining provisions (or parts thereof) of this Agreement or the application of
the particular provision or provisions (or parts thereof) to the other facts or
circumstances shall not be affected thereby and shall remain in full force and
effect, it being the intention by this section to make clear the agreement of
the parties that this Agreement shall be enforced insofar as it may be enforced
consistent with law.
15. HEADINGS. The headings of the sections herein are for convenience
only and are not part of this Agreement and shall not affect the interpretation
thereof.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties. All prior agreements or understandings are merged herein. It may
not be changed orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall insure to the benefit of, the successors and assigns of the Company,
whether by merger, consolidation, sale or lease of assets, or otherwise.
18. DEFINITION AND GENDER. All terms used herein shall have their
defined meaning, unless the context clearly indicates otherwise. Pronouns for
defined terms shall be construed as masculine, feminine, or neuter, or in the
singular or plural, as the sense requires, and to include any and all successors
and substitutions therefor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date and year first above written.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx
President and Chief Executive Officer
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Secretary, Treasurer and Chief Financial Officer
May 1, 1998
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Date
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