EXHIBIT 10.22
EMPLOYMENT AGREEMENT
WITH XXXXXX XXXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this ________ of August 1997, by and between XXXXX, INC., a New York corporation
(hereinafter referred to as the "Corporation"), and XXXXXX XXXXXXX (hereinafter
referred to as the "Employee").
WHEREAS, Employee will serve the Corporation as the President of Xxxxx,
Inc., a subsidiary of CPI Aerostructures, Inc.; and
WHEREAS, the Corporation desires to initiate an agreement setting forth
the terms and conditions pursuant to which the Employee shall serve in such
capacity.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the parties
hereto do hereby agree as follows:
1. Employment.
The Corporation hereby employs Employee, and Employee hereby agrees to
continue to serve the Corporation as its employee, upon the terms and conditions
set forth herein.
2. Term.
The term of this Agreement shall commence on the date of this Agreement
(the "Effective Date") and, unless sooner terminated as provided herein, shall
continue until the third anniversary date of the Effective Date; provided,
however, that the term of this Agreement shall be continued and extended for an
additional three-year period upon the Employee's election to do so, subject to
earlier termination as provided herein.
3. Duties
During the period of employment hereunder, Employee shall serve as
President of Xxxxx and shall be responsible for the management of the operations
of Xxxxx subject to the directions of the Board of Directors of the Corporation.
The Employee shall serve the Corporation faithfully, diligently, and to the best
of his ability. The Employee shall devote substantially all of the Employee's
time, energy and skill to the business of the Corporation. The Corporation may
also have the Employee perform services on behalf of any subsidiaries in a
manner to be mutually agreed upon with the Employee.
4. Compensation
4.1 The Corporation will pay the Employee an annual base salary during the
term hereof of $150,000 commencing on the Effective Date.
4.2 Compensation payable to the Employee pursuant to this paragraph 4
shall be paid on a weekly basis and the Corporation shall withhold the amounts
as required by the appropriate federal, state and local tax laws. If this
Agreement is terminated other than for Cause, the remainder of all compensation
payable to Employee pursuant to this Agreement shall be due and payable.
4.3 Compensation payable to the Employee pursuant to this paragraph 4
shall terminate immediately if this Agreement is terminated for Cause, as set
forth in paragraph 8 herein.
5. Expenses
5.1 The Employee is authorized to incur ordinary and reasonable expenses
in connection with the performance of his duties hereunder. The Corporation
shall directly reimburse Employee for all expenses incurred
by the Employee in the performance of his duties hereunder. The Employee shall
submit an itemized account of such expenditures, together with such invoices,
vouchers, memoranda and such additional documents and information as may be
required by the Corporation to support the deduction of the expenses for federal
and state income tax purposes.
5.2 The Corporation shall pay automobile expenses for the Employee during
the term of this Agreement, to be used in connection with the business of the
Corporation. To the extent such automobile is used by the Employee for personal
transportation, such personal usage shall be deemed to be additional
compensation paid by the Corporation to the Employee and is therefore subject to
state and federal tax as additional income.
6. Vacation and Fringe Benefits
6.1 Nothing in this Agreement shall prevent the Employee from receiving or
participating in, subject to the discretion of the Board of Directors, all paid
vacation and fringe benefits such as medical, disability, hospital and health
insurance plans, and profit sharing, pension and stock option plans, life
insurance and other plans, if any, which the Corporation may generally make
available to its employees.
6.2 In the event of termination of employment of the Employee, for a
reason other than for Cause or death, the Employee shall be entitled to purchase
from the Corporation any policies of life insurance on the Employee's life for a
purchase price equal to the interpolated terminal reserve value as determined by
the issuer of such policy or policies. The Corporation shall transfer to the
Employee any disability policy or policies held by the Corporation on the
Employee. In addition, the Corporation shall continue to maintain hospital and
health insurance for the Employee.
7. Death or Disability
7.1 In the event of the permanent disability of the Employee, as
hereinafter defined, the Corporation shall have the right thereafter to
terminate the Employee's employment under this Agreement by sending written
notice of such termination to the Employee, and thereupon his employment
hereunder shall terminate. In the event of such termination, the Employee shall
be compensated as set forth in paragraph 4.1 hereof through the date of such
termination or the date which is six (6) months from the date the disability
first occurred, whichever is later. In addition, the Corporation shall transfer
to the Employee any disability policy or policies held by the Corporation or the
Employee.
For the purposes of this Agreement, "permanent disability" shall be
limited to a medical disability and shall mean: that the Employee shall have had
appointed a guardian or conservator to act for him and such appointment shall
have been made by a court of competent jurisdiction; or a physical or mental
disability resulting from injury, disease or other cause, which renders the
Employee incapable of performing his duties hereunder and which appears to be
permanent in nature and contemplates the continued, necessary and substantial
loss of the Employee's ability to fulfill his obligations to the Corporation.
The permanency of the disability shall be presumed if the Employee is unable to
assume his duties for the Corporation for a continuous period of six (6) months.
If a disagreement arises as to whether a condition of disability exists, the
Employee shall submit to a physical examination by a physician of his own choice
and by a physician of the Corporation's choice. If either physician so chosen
does not agree as to the determination of disability, the two physicians shall
mutually select a third qualified physician, whose determination shall be
conclusive upon all parties. Each party shall bear the expense of the physician
selected by such party and the expense of the third physician shall be borne
equally by the Employee and the Corporation. The Employee hereby consents to the
examination provided for herein, and waives, if applicable, any privilege which
exists between any physician and the Employee as a result of such termination.
8. Termination
8.1 In addition to, and not in lieu of, the termination provisions set
forth in paragraph 7 hereof, the Corporation shall have the right to terminate
for Cause the employment of the Employee hereunder at any time effective
immediately upon delivery of written notice to the Employee setting forth the
reason or reasons for such
termination. For the purposes of this paragraph 8, the term "termination for
Cause" shall mean that the Employee is guilty of (i) reckless disregard to
perform his duties as set forth in paragraph 3 herein, (ii) willful misfeasance,
or (iii) a conviction of a felony or a crime of moral turpitude.
8.2 In the event that the employment of the Employee is terminated for
Cause by the Corporation pursuant to this paragraph 8, the Employee shall not be
entitled to receive the compensation provided in paragraph 4 hereof after the
date of such termination.
9. Restrictive Covenant
9.1 The Employee hereby agrees that during the term of this Agreement, the
Employee will not, directly or indirectly, become an owner, officer, director,
stockholder, partner, employee, independent contractor, consultant to, investor
in or have any other interest in any other business occupation, enterprise,
trade or activity involved in the same or similar scope of business as that of
the Corporation other than the Corporation (except as set forth below) or that
competes or attempts to compete with the Corporation, (collectively referred to
as a "Competitor"), unless such opportunity has first been presented in writing
to the Corporation and the Corporation has, in writing, declined to participate
in such activity or investment and has approved in writing, the Employee's
participation therein as not interfering with the Employee's duties hereunder
which approval shall not be unreasonably withheld. Nothing herein contained
shall be construed as preventing the Employee from purchasing securities in any
entity, if such purchases shall not result in his owning beneficially 5% or more
of the equity securities of such company, provided such investment is not made
in a company directly or indirectly in competition with the Corporation or any
subsidiary.
9.2 Upon termination of the Employee's employment with the Corporation for
any reason, Employee shall not, within a period of five (5) years from the date
of such termination render services of any nature, directly or indirectly, to
any Competitor, with the business engaged in by the Corporation or any
subsidiary on the date of such termination if such Competitor is located within
a 500 mile radius of Ithaca, New York or if outside of such 500 mile radius
shall not do business with any customer of Xxxxx.
9.3 Any and all trade secrets and confidential information relating to the
Corporation heretofore or hereafter received by the Employee shall be kept and
maintained by him on a strictly confidential basis and in complete secrecy, and
the Employee shall not disclose for a period of five (5) years from the date on
which disclosed to the Employee, either orally, in writing, or otherwise, in any
manner, directly or indirectly, any such trade secrets or confidential
information which the Employee has acquired, except to other employees of the
Corporation to the extent that any such employees require such secrets and
information in the performance of their duties to the Corporation.
9.4 The Employee shall not induce or encourage, or assist or participate
in any way in inducing or encouraging, any employee, officer, director or
independent contractor to resign from, terminate or cease any position,
agreement, employment or relationship with the Corporation and shall not in any
way interfere with or induce or encourage any breach of any such agreement,
employment or relationship. During the period of one (1) year after any
termination of Employee's employment by the Corporation, the Employee shall not
hire, retain or employ any person who is or has been an employee, officer or
independent contractor of the Corporation.
9.5 During the period of the Employee's employment or retention by the
Corporation, and for a period of five (5) years after any termination of such
retention or employment, the Employee shall not, in connection with any
Competitor solicit, do business with or provide goods or services to any entity
that, before such termination, was a customer or client of the Corporation or a
party to any agreement with the Corporation or that received goods, services or
information from the Corporation. The Employee shall not interfere with or
intervene in any transaction or relationship between the Corporation and any
such entity. The Employee shall not induce, encourage or recommend, directly or
indirectly, that any such entity engage in any business or transaction with any
third party in connection with any business, commercial activity or field
engaged in by the Corporation prior to such termination. The Employee shall not
knowingly or intentionally damage or destroy the reputation or goodwill of the
Corporation
or any regard for the Corporation among its suppliers, employees, independent
contractors, customers or others that have acquired goods or services from the
Corporation or that have engaged in any transaction with the Corporation.
9.6 Except as permitted in Sections 9.1 and 9.2 hereof, the Employee
represents to the Corporation that he does not intend to engage in, to have any
interest in or to be connected with, and will not engage in or have any interest
in or be connected with, during the period of his employment or retention by the
Corporation and for five (5) years after any termination of such retention or
employment, directly or indirectly, any Competitor of the Corporation. The
Employee acknowledges that the Corporation will retain or employ the Employee in
reliance on the foregoing representations, as set forth in Sections 9.1, 9.2,
9.3, 9.4 and 9.5 here and the provisions of this Agreement and that such
representations and provisions are material and essential inducements to the
Corporation to retain or employ the Employee. The Employee acknowledges that he
has carefully considered the nature and extent of the restrictions under this
Section 9 and the rights and remedies of the Corporation under this Agreement.
The Employee acknowledges and agrees that such restrictions, rights and remedies
are reasonable in duration and territory, are designed to eliminate competition
that would be unfair to the Corporation do not stifle the Employee's skill and
experience, would not operate as a bar to the Employee disproportionate to the
detriment to the Employee. The Employee acknowledges and agrees that the
relevant areas and markets in which the Corporation and any affiliates will
conduct business and will compete include the area of Employee's
non-competition. The Employee acknowledges that markets, business and
competition relating to the activities of the Corporation in connection with
which the employee is employed or retained is located within a 500 mile radius
of Ithaca, New York. Employee acknowledges and agrees that the geographic region
of non-competition is reasonable and appropriate for the purposes of the parties
to this Agreement.
9.7 The provisions of this Section 9 shall not be held invalid or
unenforceable because of the scope of the territory or actions subject hereto or
restricted hereby, or the period of time within which such provisions are
effective, but the maximum territory, the action subject to such provisions and
the period of time during which such provisions are enforceable and effective
shall be subject to determination and limitation in accordance with Section 11.4
of this Agreement.
9.8 The provisions of this paragraph 9 shall survive the termination or
expiration of this Agreement irrespective of the reason therefor.
10. Remedies
In the event the Employee violates any of the provisions of paragraph 9
hereof, the Corporation shall sustain irreparable harm and, therefore, in
addition to any other remedies which the Corporation may have under this
Agreement or otherwise, the Corporation shall be entitled to institute and
prosecute proceedings, at law or in equity, in any court of common jurisdiction,
to obtain an injunction restraining Employee from committing or continuing any
such violation. Nothing in this Agreement shall be construed as prohibiting the
Corporation from pursuing any other remedy or remedies, including, without
limitation, recovery of damages.
11. Miscellaneous Provisions
11.1 Any notice to be given hereunder by the Corporation or the Employee
shall be given in writing and delivered in person or forwarded by certified
mail, postage prepaid, return receipt requested, to the address indicated below,
unless the party given any such notice has been notified in writing, or a change
of such address:
To the Corporation: CPI Aerostructures, Inc.
000X Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx August
To the Employee: Xxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Any such notice shall be deemed effective seventy-two (72) hours after posting,
if mailed, or upon date of delivery to a responsible person at the party's place
of business or residence.
11.2 This Agreement contains the complete understanding and agreement of
the parties hereto with respect to all matters referred to herein, and all prior
representations, negotiations and understandings are superseded hereby and
merged into this Agreement. No party shall be liable or bound to any other
person hereto in any manner by an agreement, warranty, representation or
guarantee, except as specifically set forth herein.
11.3 In the event either party hereto finds it necessary to employ legal
counsel to bring an action at law or other proceedings against the other party
to enforce any of the terms, covenants or conditions hereof, the party
prevailing in any such action or other proceeding shall be paid all reasonable
attorneys' fees by the other party, all such attorneys' fees, as determined by
the Court and not by jury, shall be included in any such judgment.
11.4 Should any part of this Agreement, for any reason whatsoever, be
declared invalid, illegal, or incapable of being enforced in whole or in part,
such decision shall not affect the validity of any remaining portion, which
remaining portion shall remain in full force and effect as if this Agreement had
been executed with the invalid portion thereof eliminated, and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any portion which
may for any reason be declared invalid.
11.5 Subject to the rights of the Employee pursuant to paragraph 9 hereof,
this Agreement shall be binding upon and inure to the benefit of any successor
of the Corporation, and any successor shall be deemed as substituted for the
Corporation under the terms hereof. As used in this Agreement, the term
"successor" shall include any person, firm, corporation, or other business
entity which at any time, whether by merger, purchase, or otherwise acquires all
or substantially all of the assets of the business of the Corporation.
11.6 This Agreement and the rights of the parties hereto shall be governed
and construed in accordance with the laws of the State of New York.
11.7 The paragraph headings of this Agreement are for convenience of
reference only and shall not expand, limit or define the text thereof. Reference
to a paragraph number shall include all of its subparagraphs.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the date first herein above written.
"EMPLOYEE" "CORPORATION"
XXXXX, INC.
a New York corporation
By
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XXXXXX XXXXXXX Name: Xxxxxx August
Title: Chairman of the Board