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Exhibit 10.2
EXECUTION VERSION
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EMPLOYMENT AGREEMENT
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This Employment Agreement dated as of April 3, 1998 (this "Agreement"),
is by and between XXXXXX, XXXXXXXX & ASSOC., INC., an Ohio corporation ("CCAi"),
and Xxxx Xxxxx ("Xxxxx").
R E C I T A L S:
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Concurrently with the execution and delivery of this Agreement, CCAi is
purchasing from Xxxxx and certain other individuals all of the issued and
outstanding shares of common stock of Xxxxx-Xxxxx & Associates, Inc. ("KLA")
pursuant to the terms and conditions of a Stock Purchase Agreement made as of
April __, 1998 (the "Purchase Agreement").
As a condition to entering into the Purchase Agreement, CCAi desires to
employ Xxxxx, and Xxxxx desires to serve, as District Manager of CCAi for the
time and upon and subject to the terms and conditions specified in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, CCAi and Xxxxx hereby agree as follows:
SECTION 1. EMPLOYMENT.
1.1 TERM. CCAi agrees to employ Xxxxx, and Xxxxx agrees to serve CCAi,
for a term beginning on the date of this Agreement and ending on October __,
2000 (the "Term") unless extended by mutual consent of the parties or sooner
terminated pursuant to the provisions of Section 5 of this Agreement.
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1.2 DUTIES. (a) As long as this Agreement is in effect, Xxxxx shall be
employed in a management capacity with the title of "District Manager". Xxxxx
shall, to the best of his ability, devote all reasonable efforts to such
employment and the management needs of the business of CCAi and discharge
faithfully, diligently and to the best of his ability as long as this Agreement
is in effect all reasonable management responsibilities and duties as may be
assigned to him from time to time by the Chairman or President.
(b) As long as this Agreement is in effect, Xxxxx shall devote one
hundred percent (100%) of his working time and attention during normal business
hours to his duties under this Agreement.
1.3 COMPENSATION. (a) As long as this Agreement is in effect, as
compensation for the services to be rendered during such period and the other
obligations undertaken by Xxxxx under this Agreement, Xxxxx shall be entitled to
the compensation described in ATTACHMENT A hereto.
(b) As long as this Agreement is in effect, CCAi shall provide Xxxxx
with the benefits and perquisites set forth on Attachment A hereto.
SECTION 2. CONFIDENTIALITY.
(a) Xxxxx acknowledges that by reason of the nature of Xxxxx'x
duties and his former position of trust with KLA, Xxxxx has had and will have
access to and become informed of confidential and secret information which is
not otherwise available to the Trade or public and which is a competitive asset
of CCAi (the "Confidential Information"), including, without limitation: (i)
customer information such as names,
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addresses, sales histories, purchasing habits, credit status, pricing levels,
current and anticipated customer requirements, etc.; (ii) certain prospective
customer information, mailing lists, etc.; (iii) product and systems
specifications, schematics, designs, concepts for new or improved products and
other product or systems data; (iv) product and parts suppliers' and prospective
suppliers' names, addresses and contracts; (v) new and future product and
systems development and planning data; (vi) future corporate planning data;
(vii) computer software and the data base technologies, systems, structures and
architectures; (viii) marketing strategies; (ix) CCAi's financial results and
business condition; (x) any other information, however documented, of CCAi that
is a "trade secret" either under common law or as such term is defined by
statute under the laws of any applicable jurisdiction, and (xi) any of the
foregoing which belong to any other person or company but to which Xxxxx has had
access by reason of his employment or relationship with CCAi (including, without
limitation, information which is delivered to CCAi in confidence by persons or
companies for whom CCAi is performing services). Xxxxx agrees faithfully to keep
in strict confidence, and not, either directly or indirectly, to make known,
divulge, reveal, furnish, make available or use (except for use in the regular
course of Xxxxx'x duties under this Agreement) any such Confidential
Information.
(b) In the event Xxxxx is requested in connection with any
legal proceeding to disclose any Confidential Information, Xxxxx shall give CCAi
prompt notice of such request so that CCAi may seek an appropriate protective
order or other remedy and/or waive compliance with the provisions of this
Agreement, and Xxxxx shall cooperate with CCAi to obtain such protective order.
In the event that such protective
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order or other remedy is not obtained or CCAi waives compliance with Section 2
of this Agreement, Xxxxx shall furnish only that portion of the Confidential
Information which is ordered to be disclosed or is legally required, in the
opinion of Xxxxx'x counsel, to be disclosed. Xxxxx'x disclosure in accordance
with this 2(b) shall not constitute a violation of this Section 2.
(c) Xxxxx acknowledges that all sales manuals, instruction books,
catalogs, price lists, information and records, technical manuals and
documentation, drafts of instructions, guides and manuals, maintenance manuals,
schematics, engineering and technical notes and drafts, mechanical drawings,
blueprints and other engineering, mechanical or technical documentation (whether
in draft or final form), and other sales or technical information and aids
relating to CCAi's business, and any and all other documents containing
Confidential Information furnished to Xxxxx by CCAi or otherwise acquired or
developed by Xxxxx shall at all times be the property of CCAi. Upon termination
of Xxxxx'x employment, Xxxxx shall return to CCAi any such property or documents
which are in Xxxxx'x possession, custody or control, but Xxxxx'x obligation of
confidentiality shall survive such termination of employment until and unless
any such Confidential Information shall have become, through no fault of Xxxxx,
generally known to the trade.
(d) For purposes of this Section 2 and Sections 3 and 4, the term
"CCAi" shall include its wholly-owned subsidiary, KLA.
SECTION 3. NON-COMPETITION.
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3.1 COVENANT NOT TO COMPETE. Xxxxx acknowledges that as long as
Xxxxx is employed by CCAi, Xxxxx'x access to the Confidential Information will
enable Xxxxx to benefit from CCAi's goodwill and know-how. To protect these
vital interests of CCAi, Xxxxx agrees that as long as this Agreement is in
effect and for a period of two years following the termination of Xxxxx'x
employment, Xxxxx will not, without the prior written consent of CCAi, except as
set forth in Section 3.2 of this Agreement, directly or indirectly, as a
shareholder, director, officer, employee, agent or consultant, (a) invest or
engage in any business which is competitive with that of CCAi or accept
employment with or render services to a competitor of CCAi or take any action
inconsistent with the relationship of an employee to CCAi; (b) solicit sales of,
or sell or deliver, any product or system of a competitor of CCAi that is of the
kind and character manufactured, sold or distributed by CCAi to any person, firm
or corporation called upon or served by Xxxxx on behalf of CCAi; (c) solicit or
divert from CCAi the business or patronage of any person, firm or corporation
with whom Xxxxx has had business relations on CCAi's behalf in the 12 month
period immediately prior to Xxxxx'x termination of employment, including
performing services similar to those performances while an employee of CCAi with
any customer of CCAi; (d) invest or engage in any business which is a member of
the so-called "SAP Alliance Partners", a list of which is attached hereto as
ATTACHMENT B and may be updated from time to time by CCAi; or (e) engage or
assist in or influence the engagement or hiring by any competing organization of
any salesman, distributor, contractor or employee of CCAi at the time of Xxxxx'x
termination of employment, or otherwise cause or encourage any person, firm or
corporation having a business relationship with CCAi at the time of Xxxxx'x
termination of employment to sever such
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relationship with, or commit any act materially adverse to, CCAi. Xxxxx further
agrees that this covenant not to compete applies whether Xxxxx acts as an
individual for his own account, or as a partner, employee, agent, salesman,
distributor, consultant or representative of any person, firm or corporation.
The restriction contained in this Section 3 as it relates to the period
following the termination of Xxxxx'x employment shall be limited to those
geographic areas in which CCAi is then doing or soliciting business or selling
products or services, and no business shall be considered competitive with CCAi
unless CCAi was actually and actively engaged in such business or had definitive
plans to enter such business at the time of the termination of Xxxxx'x
employment.
3.2 EXCEPTIONS. Nothing herein shall be interpreted to prohibit
Xxxxx from acquiring, for investment purposes, securities of a corporation that
may compete with CCAi, provided such securities are listed on a national
securities exchange or are regularly quoted in an over-the-counter market by one
or more members of the National Association of Securities Dealers or similar
organization and provided further that the securities acquired by Xxxxx comprise
less than one percent of the total outstanding voting securities of such
corporation.
SECTION 4. COVENANTS REGARDING INVENTIONS.
(a) While Xxxxx is employed by CCAi, Xxxxx shall keep CCAi informed
of any inventions, discoveries, improvements, trade secrets and secret processes
made by him, in whole or in part, or conceived by him alone or with others,
which result from
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any work he may do for, or at the request of, CCAi or which relate to the
business, operations, activities, research, investigation or obligations of
CCAi.
(b) Xxxxx, and his heirs, assigns and representatives, shall
assign, transfer and set over, and do hereby assign, transfer and set over to
CCAi, its successors and its assigns, all his and their right, title and
interest in and to all inventions, discoveries, improvements, trade secrets,
secret processes, patents, patent applications, service marks, trademarks,
trademark applications, copyrights and copyright registrations which he solely
or jointly with others has conceived, made, acquired or suggested at any time
prior to the termination of Xxxxx'x employment and which relate either to the
business, operations, activities, research or investigations of CCAi.
(c) To the extent CCAi deems it necessary or desirable to effect
the intent of this Section 4 and the assignments, transfers and set overs
provided in Sections 4(a) or 4(b), Xxxxx shall, at the expense of CCAi, assist
CCAi or its nominees to obtain patents for any inventions, discoveries,
improvements, trade secrets and secret processes in any countries throughout the
world; and Xxxxx shall execute and deliver any applications, assignments, or
other instruments and all papers necessary to secure United States or foreign
country letter patents or the renewal or continuation thereof and to transfer to
CCAi, as requested, all the right, title, and interest in and to such formulae,
inventions, discoveries, improvements, trade secrets, secret processes, or the
renewal or continuation thereof.
(d) To the extent CCAi deems it necessary or desirable to effect
the intent of this Section 4 and the assignments, transfers and set overs
provided in
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Sections 4(a) or 4(b), Xxxxx shall deliver to CCAi any and all facts, sketches,
drawings, models, figures and other information with respect to such formulae,
inventions, discoveries, improvements, trade secrets and secret processes at any
time requested by CCAi and shall execute and deliver any applications,
assignments or other instruments in writing reasonably necessary or desirable in
obtaining such patents, or the renewal or continuation thereof, or in any
litigation or other proceedings connected therewith.
SECTION 5. TERMINATION; OBLIGATIONS.
(a) The employment of Xxxxx shall terminate upon the occurrence of
any of the following events:
(i) the death of Xxxxx;
(ii) six months after the "disability" of Xxxxx. Xxxxx will be
considered disabled for purposes of this Agreement when, in the judgment of
CCAi, after having had consultation with medical experts in the applicable
field, CCAi determines that Xxxxx will be incapable of performing his duties
under this Agreement for a future period of 60 days or more or such disability
meets the criteria of "permanent and total disability" within the meaning of
Section 22(e)(3) of the Internal Revenue Code;
(iii) the delivery of written notice to Xxxxx stating that Xxxxx is
being terminated for "cause", with such written notice setting forth such cause
in reasonable detail. As used herein, the term "cause" shall mean:
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(A) misappropriating any funds or property of CCAi, committing
fraud or embezzlement or engaging in any criminal or illegal activity any of
which shall have a material adverse effect on CCAi;
(B) except for providing services to CCAi in exchange for
compensation in accordance with the terms of this Agreement, attempting to
obtain material personal gain, profit or enrichment at the expense of CCAi or
from any transaction in which Xxxxx has an interest which is known by Xxxxx to
be materially adverse to the interest of CCAi, unless Xxxxx shall have obtained
the prior written consent of the Board;
(C) being finally convicted of a felony involving moral turpitude
or any felony involving incarceration;
(D) committing any material breach of this Agreement, provided such
breach continues unremedied for a period of 30 days after CCAi shall have
notified Xxxxx in writing of such breach; or
(E) performing or committing any act intended by Xxxxx to cause a
material adverse affect on CCAi, including, without limitation, acts of sexual
harassment, provided such act continues unremedied for a period of 30 days after
CCAi shall have notified Xxxxx in writing of such act.
(b) Upon termination of employment in accordance with Section 5(a)
above or upon termination by Xxxxx: (i) CCAi shall have no further obligation to
Xxxxx except to pay Xxxxx (or Xxxxx'x estate in the case of death) the Base
Salary and other benefits provided herein as he may be entitled to receive
pursuant to Section 1.3 of this Agreement only up to the time of termination
(provided, however, Xxxxx shall continue
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to be entitled to the Warrant (as defined in the Purchase Agreement) or any
stock or options in CCAi that Xxxxx was issued or granted by CCAi prior to the
date of his termination); and (ii) Xxxxx shall have no further obligation to
CCAi except that he shall (A) continue to be bound by the provisions of Sections
2, 3 and 4 of this Agreement; (B) remain liable to CCAi for any actual damages,
if any caused by Xxxxx'x conduct described in Section 5(a)(iii) of this
Agreement; and (C) if Xxxxx'x employment was terminated under Section 5(a)(iii),
continue to cooperate with CCAi without charge to CCAi (but subject to
reimbursement by CCAi of any out-of-pocket costs incurred by Xxxxx in the course
of such cooperation) as to matters within Xxxxx'x personal knowledge.
(c) In the event that Xxxxx is terminated by CCAi for reasons other
than those set forth in Section 5(a) above, Xxxxx shall be entitled to (i)
continue to receive his Base Salary for the longer of (A) the remainder of the
Term of this Agreement or (B) three months following such termination, and (ii)
participate in all applicable company health, accident, and other benefit plans
or programs in effect for employees of CCAi.
SECTION 6. REMEDIES.
Inasmuch as any breach of, or failure to comply with, this
Agreement will cause serious and substantial damage to CCAi, if Xxxxx should in
any way breach, or fail to comply with, the terms of this Agreement, CCAi shall
be entitled to an injunction restraining Xxxxx from such breach or failure. All
remedies expressly provided for herein are cumulative of any and all other
remedies now existing at law or in equity. Resort to any remedy provided for
under this Section 6 or provided for by law shall not
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prevent the concurrent or subsequent employment of any other appropriate remedy
or remedies, or preclude the recovery by CCAi of monetary damages.
SECTION 7. MISCELLANEOUS.
7.1 AMENDMENT. This Agreement may be amended only by a writing
executed by the parties to this Agreement.
7.2 ENTIRE AGREEMENT. This Agreement and the other agreements
expressly referred to in this Agreement set forth the entire understanding of
the parties to this Agreement regarding the subject matter of this Agreement and
supersede all prior contracts, agreements, arrangements, communications,
discussions, representations and warranties, whether oral or written, between
the parties regarding the subject matter of this Agreement. The Attachments to
this Agreement are incorporated in this Agreement and shall be part of this
Agreement for all purposes.
7.3 NOTICES. Any notice, request, consent and other communication
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when received if personally delivered or sent
by facsimile, (b) within one day after being sent by recognized overnight
delivery service, or (c) within 5 days after being sent by registered or
certified mail, return receipt requested, postage prepaid, to the parties (and
to the persons to whom copies shall be sent) at their respective addresses set
forth below.
If to CCAi:
Xxxxxx, Xxxxxxxx & Assoc., Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
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Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx X. Xxxxxxxx
If to Xxxxx:
Xxxx X. Xxxxx
00000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile:_________________
Any party by written notice to the other party may change the address or the
persons to whom notices or copies thereof shall be directed.
7.4 ASSIGNMENT. This Agreement and the rights and duties hereunder
shall be binding upon and inure to the benefit of successors and permitted
assigns of each party to this Agreement, but shall not be assignable or
delegable by either party without the prior written consent of the other,
provided, however, CCAi shall be entitled to assign this Agreement and the
rights and duties hereunder to KLA.
7.5 GOVERNING LAW. This Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of Ohio. Each party
agrees to submit to the personal jurisdiction of the state and federal courts
located in the State of Ohio.
7.6 SEVERABILITY. Each section and subsection of this Agreement
constitutes a separate and distinct provision hereof. It is the intent of the
parties to this Agreement that the provisions of this Agreement be enforced to
the fullest extent permissible under the laws and public policies applicable in
each jurisdiction in which enforcement is sought. Accordingly, if any provision
of this Agreement shall be
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adjudicated to be invalid, ineffective or unenforceable, the remaining
provisions shall not be affected thereby. The invalid, ineffective or
unenforceable provision shall, without further action by the parties, be
automatically amended to effect the original purpose and intent of the invalid,
ineffective and unenforceable provision; PROVIDED, HOWEVER, that such amendment
shall apply only with respect to the operation of such provision in the
particular jurisdiction with respect to which such adjudication is made.
7.7 WAIVERS. Any waiver by any party or any violation of, breach of
or default under any provision of this Agreement by the other party shall not be
construed as, or constitute, a continuing waiver of such provision, or waiver of
any other violation of, breach of or default under any other provision of this
Agreement.
7.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
7.9 THIRD PARTIES. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person or entity
other than CCAi and Xxxxx any rights or remedies under, or by reason of, this
Agreement.
7.10 WITHHOLDING OF TAXES. CCAi may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required to be withheld pursuant to any law or government regulation or ruling.
7.11 SURVIVAL OF CERTAIN OBLIGATIONS. The obligations of CCAi and
Xxxxx set forth in this Agreement which by their terms extend beyond or survive
the termination of this Agreement shall not be affected or diminished in any way
by the termination of this Agreement.
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IN WITNESS WHEREOF, CCAi has caused this Agreement to be duly
executed and delivered by its duly authorized officer, and Xxxxx has duly
executed and delivered this Agreement, as of the date first written above.
XXXXXX, XXXXXXXX & ASSOC., INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Title: Chairman & CEO
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/s/ Xxxx Xxxxx
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XXXX XXXXX
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ATTACHMENT A
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Salary, Benefits ad Perquisites
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SALARY
$225,000 per year of salary ("Base Salary"). During the Term of this Agreement,
Xxxxx'x Base Salary shall be reviewed annually and may be increased by CCAi in
its sole discretion.
BENEFITS
1. As long as this Agreement is in effect, Xxxxx shall be entitled
to participate in all applicable company health, accident and other benefit
plans or programs in effect for employees of CCAi on the same basis and in the
same manner as other employees of CCAi similarly situated.
2. As long as this Agreement is in effect, Xxxxx shall be entitled
to vacation, and to such holidays, sick leave and other time off consistent with
the practices of CCAi on the same basis and in the same manner as other
employees of CCAi similarly situated.
3. All reasonable out-of-pocket documented expenses incurred by
Xxxxx on behalf of CCAi in the ordinary and normal course of business shall be
reimbursed by CCAi in accordance with its past policies on the same basis and in
the same manner as other employees of CCAi similarly situated.
