EXHIBIT 10.l
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is entered into
the 28th day of August, 1999 (the "Effective Date"), by and between XXXXX X.
XXXXXX ("Employee"), and CONTINENTAL ELECTRONICS CORPORATION, a Nevada
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company wants to engage the services and labor of Employee
and to preclude Employee from engaging in any competitive business or soliciting
any customers of the Company during the term of this Agreement and for a period
of time thereafter; and
WHEREAS, Employee wishes to be employed by the Company under the terms and
conditions stated herein;
NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and undertakings of the parties hereto, the parties hereto do agree
as follows:
1. EMPLOYMENT. The Company hereby employs Employee, and Employee accepts
such employment, upon the terms and conditions hereinafter set forth.
2. TERM OF EMPLOYMENT. Subject to the provisions for termination
hereinafter provided, Employee's term of employment by the Company shall be for
a period of one (1) year from the Effective Date hereof (the "Employment
Period"). If Employee continues to be employed by the Company after the
Employment Period, he shall be deemed to be an employee at the will of the
Company, unless the parties expressly extend the term of this Agreement or enter
into a new agreement, and this Agreement shall not be construed to confer any
rights upon Employee beyond the Employment Period. However, the noncompetition
covenants set forth in Section 9 below shall survive the expiration of the
Employment Period.
3. SERVICES TO BE RENDERED BY EMPLOYEE. Employee shall perform such
services and such duties as from time to time may be reasonably decided upon by
the President or the Board of Directors of the Company. Employee shall devote
his full productive time, energy and ability to the proper and efficient conduct
of Company's business. Employee shall observe and comply with all lawful and
reasonable directions and instructions by and on the part of the Company,
endeavor to promote the interests of Company and not at any time do anything
which may cause or tend to be likely to cause any loss or damage to the Company
in business, reputation or otherwise. Employee's initial assignment shall be as
President of the Company.
4. COMPENSATION. For the services to be rendered by the Employee
hereunder, the Company shall pay Employee, and Employee agrees to accept:
(a) a salary at the rate of $208,000 per year; provided, that the
Board of Directors of the Company may review Employee's rate of salary
from time to time and increase or decrease such salary based upon
Employee's performance of services for the Company, but in no event shall
such rate of salary be less than $208,000 per year. Employee's salary
shall be payable in semi-monthly installments from which shall be deducted
income tax withholding, social security and other customary employee
deductions in conformity with the Company's payroll policies in effect
from time to time;
(b) car allowance of $500 a month; and
(c) a bonus upon the sale of the Company during the Employment
Period, or while Employee is assigned to CEC, whichever is longer, payable
at the time of closing, equal to the greater of $100,000 or 1.5% of the
excess of the sales price over the book value provided, however, that such
bonus shall not be paid if, prior to the closing, Employee voluntarily
terminates his employment with the Company or Employee's employment is
terminated by the Company pursuant to Section 6 below.
5. BENEFITS. Employee shall be entitled to participate in the employee
benefit plans, programs, group insurance policies, vacation and sick leave that
from time to time may be reasonably established for the general benefit of the
employees of the Company by its Board of Directors.
6. TERMINATION OF EMPLOYMENT. During the term of this Agreement, the
Company shall have the right, if exercised in good faith, to terminate the
employment of Employee hereunder by giving written notice thereof to Employee in
the event of any of the following:
(a) If Employee has (i) failed or refused to carry out or to perform
the reasonable duties required of him hereunder or otherwise breached any
material provision of this Agreement, or (ii) breached any statutory or
common law duty of loyalty to the Company;
(b) If the Board of Directors of the Company, or a duly authorized
committee thereof, acting in good faith and upon reasonable grounds,
determines that Employee has engaged in personal conduct which would
injure the reputation of the Company or otherwise adversely affect either
of their interests if Employee were retained as an employee of the
Company; or
(c) If the Employee dies or becomes unable by reason of physical
disability or other incapacity to carry out or to perform the duties
required of him hereunder for a continuous period of 30 days; provided,
however, that Employee's salary during any period in which he is unable to
perform the duties required of him hereunder shall be reduced by any
disability payments (excluding any reimbursements for medical expenses and
the like) which Employee is entitled to receive under group or other
disability insurance policies of Company of Tech-Sym during such period.
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In the event of any termination of employment pursuant to this Section 6,
Employee (or Employee's estate, as the case may be) shall be entitled to receive
the salary herein provided prorated to the date of such termination.
7. CONFIDENTIAL INFORMATION. Employee, both during the term of this
Agreement and thereafter, will not, directly or indirectly (without the
Company's prior written consent), use for himself or use for, or disclose to,
any party other than the Company, any secret, confidential or proprietary
information, technology or data regarding the business of the Company or its
subsidiaries or any secret, confidential or proprietary information, technology
or data regarding the costs, uses, methods, applications, customers, accounts or
suppliers (and pertinent information respecting prior transactions and
prospective transactions therewith) of products made, produced and sold by the
Company, or regarding any secret, confidential or proprietary apparatus,
process, system, manufacturing or other method at any time used, developed or
investigated by or for the Company, whether or not invented, developed,
acquired, discovered or investigated by Employee. At the termination of
Employee's employment or at any other time that the Company may request,
Employee shall promptly deliver to the Company all memoranda, notes, records,
plats, sketches, plans, customer lists or other documents made or compiled by,
delivered to, or otherwise acquired by Employee concerning secret, confidential
or proprietary costs, uses, methods, designs, technology, applications, systems
or purchasers of products made or sold by the Company, or any secret or
confidential product, apparatus or process, manufactured, used, developed,
acquired or investigated by the Company.
8. DISCOVERIES. Any and all inventions, discoveries, processes, methods,
designs, systems, technology and know-how, whether or not patentable, which
Employee may conceive, develop or make, either alone or in conjunction with
others, during Employee's term of employment with the Company relating to, or in
any way pertaining to or in connection with the business of the Company, shall
be the sole and exclusive property of the Company; and Employee, whenever
requested to do so by the Company or without further compensation or
consideration, shall promptly execute any and all applications, assignments and
other instruments which the Company shall deem necessary in order to apply for
and obtain letters patent of the United States and of foreign countries for said
inventions, discoveries and technology and in order to assign and convey to the
Company, the sole and exclusive right, title and interest in and to said
inventions, discoveries, processes, methods, designs, systems, technology and
know-how, or any applications or patents thereon. Employee hereby confirms that
he neither holds nor has any interest in any patent, patent right, patent
application, trademark, trademark application, license agreement, trade secret
or other proprietary information and technology now owned or heretofore used by
the Company in the conduct of its business.
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9. COMPETITION WITH THE COMPANY.
(a) While employed by the Company, Employee will not engage in or
carry on, directly or indirectly, either for himself or as a member of a
partnership or as a stockholder (except as a stockholder of less than one
percent (1%) of the issued and outstanding stock of a publicly held
corporation), investor, partner, officer or director of a corporation, or
as an employee, agent, partner, representative, associate or consultant of
any person, partnership, corporation or other entity any business of any
kind whatsoever in competition with that carried on by the Company and its
subsidiaries.
(b) In addition, Employee hereby covenants and agrees that for a
period of one year from and after the termination of his employment with
the Company, he will not engage in or carry on, directly or indirectly,
either for himself or as a member of a partnership or as a stockholder
(other than as a stockholder of less than one percent (1%) of the issued
and outstanding stock of a publicly held corporation), investor, partner,
officer or director of a corporation, or as an employee, agent, partner,
representative, associate or consultant of any person, partnership,
corporation or other entity in any business of any kind whatsoever in
competition with those carried on by the Company.
(c) It is acknowledged and agreed that, because of the national and
international scope of the Company's business and customers, that the
noncompetition covenants contained in this Section 9 shall be applicable
to and enforceable in all States of the United States.
10. EFFECT OF TERMINATION OR BREACH.
(a) If (i) Employee voluntarily terminates his employment with the
Company prior to the expiration of the Employment Period or (ii)
Employee's employment is terminated by the Company pursuant to Section
6(a) or 6(b) of this Agreement prior to the expiration of the Employment
Period, then the noncompetition covenants of Employee contained in Section
9(b) above shall continue to be in full force and effect for the remainder
of the Employment Period plus the one-year period thereafter and the
Company shall be under no obligation to pay Employee any compensation or
provide any benefits. This remedy is in addition to any and all other
equitable, statutory, or common law remedies available to the Company.
(b) If the Company terminates the employment of Employee for any
other reason prior to the expiration of the Employment Period, then the
noncompetition covenants set forth in Section 9 shall be void and of no
further force and effect unless the Company continues for the remainder of
the Employment Period to pay Employee compensation and provide benefits at
the same or higher level than Employee was receiving at the time of his
termination, in which case such noncompetition covenants shall continue
for the remainder of the Employment Period plus the one-year period
thereafter as set forth in Section 9; provided, however, that the Company
shall be entitled to deduct from such compensation the amount of any
compensation (including without limitation any "earned income" as that
term is defined in Section 401(c)(2) of the Internal Revenue Code of 1986,
as amended) received or accrued by Employee from any other source during
the Employment Period.
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(c) In the event that Employee is terminated by the Company pursuant
to Section 6(a) or 6(b) of this Agreement and Employee disputes whether
such termination was for cause as described in such Sections, then
Employee shall give written notice to the Company within ten (10) business
days of termination stating the grounds for such dispute. The dispute
shall then be settled by arbitration in accordance with the rules of the
American Arbitration Association (or any successor thereto) then in
effect. The sole function of the arbitrator will be to decide whether
Employee was terminated for cause as described in Section 6(a) and 6(b)
hereof, and the decision of the arbitrator with respect thereto shall be
final, conclusive and binding on Employee and the Company. The losing
party in such arbitration shall pay all the costs and expenses of such
arbitration and all the reasonable attorney's fees and expenses of the
prevailing party. During the pendency of any arbitration proceeding,
Employee agrees not to compete with the Company in accordance with Section
9(b) of this Agreement.
11. MERGER OR REORGANIZATION. This Agreement shall not be terminated by
the merger or consolidation, dissolution or reorganization of the Company
(including but not limited to any reorganization where the Company is not the
surviving or resulting corporation), or any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation,
reorganization liquidation or transfer of assets, the provisions of this
Agreement shall inure to the benefit of and shall be binding upon the surviving
or resulting corporation or the corporation or person(s) to which such assets
shall be transferred.
12. REMEDIES. Except as it may elect otherwise, the Company shall
severally or jointly have all remedies provided by law or equity for breach of
this Agreement available to it. Without limiting the generality of the
foregoing, Employee agrees that, in addition to all other rights and remedies
available at law or in equity, the Company shall each be entitled to enforcement
of this Agreement in accordance with the principles of equity, the remedy at law
being hereby agreed and acknowledged by Employee to be inadequate.
13. ASSIGNMENT. The rights of the Company hereunder may, without the
consent of Employee, be assigned by the Company to any parent, subsidiary,
affiliate or successor of the Company. Except as provided in the preceding
sentence or in Section 10 hereof, the Company may not assign all or any of its
rights, duties or obligations hereunder without prior written consent of
Employee. This Agreement is not assignable by Employee.
14. NOTICES. All notices, requests, demands and other communications
permitted or required hereunder shall be in writing and shall be deemed to have
been duly given if delivered or if mailed, registered or certified United States
mail, postage prepaid:
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(a) If to Employee, addressed to him at the address set forth below
his name on the execution pages hereof.
(b) If to the Company, addressed to:
Tech-Sym Corporation
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: J. Xxxxxxx Xxxx
or to such other address as either party hereto may request by
notice.
15. SEVERABILITY. Any provision hereof prohibited by or unenforceable
under any applicable law of any jurisdiction shall as to such jurisdiction be
deemed ineffective and deleted herefrom without affecting any other provision of
this Agreement. It is the desire of the parties hereto that this Agreement be
enforced to the maximum extent permitted by law, and should any provision
contained herein be held unenforceable, the parties hereby agree and consent
that such provision shall be reformed to make it a valid and enforceable
provision to the maximum extent permitted by law.
16. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
17. ENTIRE AGREEMENT AND AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter covered hereby and
may be amended, waived or terminated only by an instrument in writing signed by
the party or parties against whom such change, waiver or termination is sought
to be enforced. This Agreement supersedes and replaces that Employment and
Noncompetition Agreement dated August 28,1998, between Tech-Sym Corporation and
Xxxxx X. Xxxxxx.
IN WITNESS WHEREOF, this Agreement is EXECUTED AND EFFECTIVE as of the
Effective Date.
EMPLOYEE CONTINENTAL ELECTRONICS
CORPORATION
/s/ XXXXX X. XXXXXX By: /s/ J. XXXXXXX XXXX
Xxxxx X. Xxxxxx J. Xxxxxxx Xxxx
Continental Electronics Corporation Chairman
0000 Xxxxx Xxxxxxx Xxxx.
Xxxxxx XX 00000-0000
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