EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of September 30, 1996 by
and between Xxxxxx Xxxxxxx ("Xxxxxxx") and Total Control Products, Inc., an
Illinois corporation (the "Company").
R E C I T A L S:
A. The Company desires to employ Xxxxxxx as the Senior Vice President of
Operations of the Company and Xxxxxxx desires to be so employed by the Company,
all on the terms and subject to the conditions set forth herein.
B. The Company desires to bind Xxxxxxx to certain restrictive covenants
and Xxxxxxx agrees to be so bound, all on the terms and subject to the
conditions set forth herein.
A G R E E M E N T :
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. TERM. Subject to the terms and conditions set forth herein and unless
sooner terminated as hereinafter provided, the Company shall employ Xxxxxxx and
Xxxxxxx agrees to serve as an employee of the Company from the date hereof to
and including September 30, 1997 (the "Employment Term"). After the expiration
of the Employment Term, Xxxxxxx'x employment hereunder shall automatically renew
for successive one year periods (each, a "Renewal Term") unless either party
hereto delivers written notice to the other party hereto, at least ninety (90)
days prior to the expiration of the Employment Term or any Renewal Term thereof,
as the case may be, of his or its desire to terminate Xxxxxxx'x employment with
the Company. The Employment Term and any Renewal Term thereof are collectively
referred to herein as the "Term".
2. EMPLOYMENT DUTIES. During the Term, Xxxxxxx shall serve as the Senior
Vice President of Operations of the Company. Xxxxxxx shall report directly to
the President of the Company and shall be responsible for all aspects of the
Company's manufacturing and customer service activities. Xxxxxxx shall
faithfully, diligently and competently perform such duties and responsibilities
and shall perform such other duties and responsibilities as may from time to
time be assigned to him by the President or the Board of Directors of the
Company (the "Board").
3. COMPENSATION. As compensation for the services to be performed and
the duties and responsibilities to be assumed by Xxxxxxx during the Term, the
Company shall pay to Xxxxxxx the following compensation:
(a) A salary (the "Salary") in an amount equal to $110,000 per annum.
The Company shall review the Salary payable to Xxxxxxx on January 1 of each
year during the Term beginning on January 1, 1997 and any increases in
Salary shall be made at the sole discretion of the Company. The Salary
shall be payable to Xxxxxxx in accordance with the Company's ordinary
payment practices for salaried employees.
(b) Xxxxxxx shall be entitled to participate in the Company's
executive bonus plan (the "Bonus") on the same terms as the participation
of other executives of the Company; provided, however, that in addition to
the Bonus payable to Xxxxxxx for the Company's fiscal year ending March 31,
1997, the Company shall pay Xxxxxxx a bonus in the amount equal to $7,500.
In no event shall any Bonus be paid to Xxxxxxx for any fiscal year of the
Company unless Xxxxxxx is employed throughout the entire fiscal year. The
Bonus shall be determined from the Company's internal accounting records,
which shall be finally approved by the Board or any compensation committee
thereof. The Bonus awarded to Xxxxxxx in respect of any particular fiscal
year shall be paid at the same time as bonuses are paid to other executives
of the Company.
4. BENEFITS.
(a) During the Term, Xxxxxxx shall be entitled to participate in such
employee benefit plans and programs as are maintained by the Company, to
the extent that his position, tenure, compensation, age, health and other
qualifications make him eligible to participate. The Company does not
promise the adoption or continuance of any particular plan or program
during the Term, and Xxxxxxx'x (and his dependents') participation in any
such plan or program shall be subject to the provisions, rules, regulations
and laws applicable thereto.
(b) During the Term, Xxxxxxx shall be entitled to such other fringe
benefits as are provided to employees of the Company with comparable
positions, tenure and compensation as Xxxxxxx.
5. REIMBURSEMENT OF EXPENSES. During the Term, Xxxxxxx shall be entitled
to prompt reimbursement for ordinary, necessary and reasonable out-of-pocket
trade or business expenses which Xxxxxxx incurs in connection with performing
his duties under this Agreement. The reimbursement of all such expenses shall
be made upon presentation of evidence reasonably satisfactory to the Company of
the amounts and nature of such expenses and shall be subject to the reasonable
approval of the Board.
6. RESTRICTIVE COVENANTS. Xxxxxxx acknowledges and agrees that (a)
through his continuing services to the Company, he will learn valuable trade
secrets and other proprietary information relating to the Company's business;
(b) Xxxxxxx'x services to the Company are unique in nature; (c) the Company's
business is national in scope; and (d) the Company would be irreparably damaged
if Xxxxxxx was to provide services to any person or entity in violation of the
restrictions contained in this Agreement. Accordingly, as an inducement to the
Company to enter
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into this Agreement, Xxxxxxx agrees that during the Term and for one year
thereafter (such period being referred to herein as the "Restricted Period"),
Xxxxxxx shall not, directly or indirectly, either for himself or for any
other person or entity, without the prior written consent of the Company:
(a) anywhere in the United States, engage or participate in, or
assist, advise or be connected with (including as an employee, owner,
partner, shareholder, officer, director, advisor, consultant, agent or
(without limitation by the specific enumeration of the foregoing)
otherwise), or permit his name to be used by or render services for, any
person or entity engaged in, or making plans to engage in, a business that
competes with the business conducted by, or proposed to be conducted by,
the Company (a "Competing Business");
(b) take any action which might divert from the Company or any of its
Affiliates (as defined herein) any opportunity (each, an "Opportunity")
which would be within the scope of the Company's or such Affiliate's then
business and shall offer each Opportunity to the Company, which the Company
may, in its sole discretion, decide to pursue or not;
(c) solicit, attempt to solicit, aid in the solicitation of or accept
any orders from any person or entity who is or has been a customer of the
Company or its Affiliates, at any time during the period beginning one year
prior to the date hereof through the Restrictive Period, to purchase
products or services from any person or entity which products or services
could have been supplied or performed, as the case may be, by the Company
or its Affiliates (other than from the Company or its Affiliates);
(d) solicit, attempt to solicit or aid in the solicitation of any
person or entity who is or has been a customer, supplier, licensor,
licensee or person or entity having any other business relationship with
the Company or any of its Affiliates, at any time during the period
beginning one year prior to the date hereof through the Restrictive Period,
to cease doing business with or alter its business relationship with the
Company or its Affiliates; or
(e) solicit or hire any person or entity who is a director, officer,
employee, independent contractor or agent of the Company or any of its
Affiliates to perform services for any person or entity other than the
Company or its Affiliates or to terminate his or her employment with the
Company or its Affiliates.
As used herein, an "Affiliate" shall mean and include any person or entity
which controls a party, which such party controls or which is under common
control with such party. "Control" means the power, direct or indirect, to
direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
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7. DISCLOSURE OF CONFIDENTIAL INFORMATION. Xxxxxxx recognizes that he
will occupy a position of trust and confidence with the Company as to
Confidential Information (as herein defined) pertaining to the Company and its
Affiliates. As an inducement for the Company to enter into this Agreement,
Xxxxxxx therefore agrees that:
(a) for the longest period permitted by law from the date of this
Agreement, Xxxxxxx and each Affiliate of Xxxxxxx shall hold in the
strictest confidence and shall not, other than as required by law, without
the prior written consent of the Company, use for his own benefit or that
of any third party or disclose to any person, firm or corporation (except
the Company, an Affiliate of the Company or employees of the Company and
its Affiliates) any Confidential Information. For purposes of this
Agreement, intending that the term shall be broadly construed to include
anything protectible as a trade secret under applicable law, "Confidential
Information" shall mean all information, and all documents and other
tangible items which record information relating to or useful in connection
with the Company's business (including the business of any of the Company's
Affiliates), which at the time or times concerned is protectible as a trade
secret under applicable law, and which has been or is from time to time
disclosed to or known by Xxxxxxx.
(b) Xxxxxxx and each Affiliate of Xxxxxxx (and if deceased, their
personal representatives) shall promptly following a request therefor from
the Company return to the Company, without retaining copies, all tangible
items which are or which contain Confidential Information. Xxxxxxx shall
also surrender all computer print-outs, laboratory books, floppy disks and
other such media for storing software and information, work papers, files,
client lists, telephone and/or address books, rolodex cards, internal
memoranda, appointment books, calendars, keys and other tangible things
entrusted to Xxxxxxx by the Company or authored in whole or in part by
Xxxxxxx within the scope of his duties to the Company even if such things
do not contain Confidential Information; and
(c) at the request of the Company made at any time or from time to
time hereafter, Xxxxxxx and each Affiliate of Xxxxxxx (and if deceased,
their personal representatives) shall make, execute and deliver all
applications, papers, assignments, conveyances, instruments or other
documents and shall perform or cause to be performed such other lawful acts
as the Company may reasonably deem necessary or desirable to implement any
of the provisions of this Agreement, and shall give testimony and cooperate
with the Company, its Affiliates or their respective representatives in any
controversy or legal proceedings involving the Company, its Affiliates or
their respective representatives with respect to any Confidential
Information.
8. INVENTIONS. Xxxxxxx acknowledges that in his capacity as an executive
officer of the Company, he will be involved in (i) the conception or making of
improvements, discoveries, inventions or the like (whether patentable or
unpatentable and whether or not reduced to practice), (ii) the authorship of
copyrightable works or (iii) the development of trade secrets relating to the
Company. Xxxxxxx acknowledges that all such intellectual property is the
exclusive property of the Company. Xxxxxxx hereby waives any rights he may have
in or to such
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intellectual property, and Xxxxxxx hereby assigns to the Company all right,
title and interest in and to such intellectual property. At the Company's
request and at no expense to Xxxxxxx, Xxxxxxx shall execute and deliver all
such papers, including, without limitation, any assignment documents, and
shall provide such cooperation as may be necessary or desirable, or as the
Company may reasonably request, in order to enable the Company to secure and
exercise its rights to such intellectual property.
9. SPECIFIC PERFORMANCE. Xxxxxxx agrees that any violation by him of
Sections 6, 7 or 8 of this Agreement would be highly injurious to the Company
and its Affiliates and would cause irreparable harm to the Company and its
Affiliates. By reason of the foregoing, Xxxxxxx consents and agrees that if he
violates any provision of Sections 6, 7 or 8 of this Agreement, the Company and
its Affiliates shall be entitled, in addition to any other rights and remedies
that it may have, to apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any continuing violation of, the provisions of such section. In the event
Xxxxxxx breaches a covenant contained in this Agreement, the Restricted Period
applicable to Xxxxxxx with respect to such breached covenant shall be extended
for the period of such breach. Xxxxxxx also recognizes that the territorial,
time and scope limitations set forth in Sections 6 and 7 are reasonable and are
properly required for the protection of the Company and its Affiliates and in
the event that any such territorial, time or scope limitation is deemed to be
unreasonable by a court of competent jurisdiction, the Company and Xxxxxxx
agree, and Xxxxxxx submits, to the reduction of any or all of said territorial,
time or scope limitations to such an area, period or scope as said court shall
deem reasonable under the circumstances. Xxxxxxx represents, warrants and
acknowledges that he has available to him sufficient other means of support so
that observance of the covenants contained in Sections 6, 7 and 8 shall not
deprive him of his ability to earn a livelihood or support his dependents.
10. TERMINATION FOR CAUSE. During the Term, Xxxxxxx'x employment with the
Company may be terminated by the Board "for cause", which shall include (a)
Xxxxxxx'x conviction for, or plea of nolo contendere to, a felony or a crime
involving moral turpitude; (b) Xxxxxxx'x commission of an act which the Board,
in its reasonable discretion, determines involved personal dishonesty or fraud
involving personal profit in connection with Xxxxxxx'x employment with the
Company; (c) Xxxxxxx'x commission of an act which the Board shall have found to
have involved willful misconduct or gross negligence on the part of Xxxxxxx in
the conduct of his duties hereunder; or (d) Xxxxxxx'x breach of any material
provision of this Agreement. In the event of termination under this Section 10,
the Company's obligations under this Agreement shall cease and Xxxxxxx shall
forfeit all his rights to receive any compensation or benefits under this
Agreement, except that Xxxxxxx shall be entitled to his Salary and benefits for
services already performed as of the date of termination of Xxxxxxx'x employment
hereunder.
11. GOOD REASON. Xxxxxxx shall be entitled to terminate his employment
hereunder at any time for Good Reason. For the purposes of this Agreement,
Xxxxxxx shall have "Good Reason" to terminate his employment hereunder upon (i)
a significant demotion or material adverse change in his duties and
responsibilities; (ii) a significant reduction in Salary or in fringe benefits
provided to him; (iii) a requirement to relocate, except for office relocations
that would
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not increase Xxxxxxx'x one-way commute distance by more than fifty (50) miles
from the most recent principal residence selected by Xxxxxxx prior to notice
of relocation; or (iv) a material breach by the Company of its agreements and
covenants set forth herein.
12. DEATH OR DISABILITY.
(a) This Agreement shall terminate upon Xxxxxxx'x death.
(b) If Xxxxxxx becomes permanently disabled (determined as provided
below) during the Term, his employment with the Company shall terminate as
of the date such permanent disability is determined. Xxxxxxx shall be
considered to be permanently disabled for purposes of this Agreement if he
is unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company and is
(i) not expected to recover from his disability within a period of six (6)
months from the commencement of the disability; or (ii) not expected to be
able to perform his material duties of his regular position with the
Company for a period of six (6) months in any consecutive twelve (12) month
period as a result of the same disability. If at any time Xxxxxxx claims
or is claimed to be permanently disabled, a physician acceptable to both
Xxxxxxx, or his personal representative, and the Company (which acceptances
shall not be unreasonably withheld) shall be retained by the Company and
shall examine Xxxxxxx. Xxxxxxx shall cooperate fully with the physician.
If the physician determines that Xxxxxxx is permanently disabled, the
physician shall deliver to the Company a certificate certifying both that
Xxxxxxx is permanently disabled and the date upon which the condition of
permanent disability commenced. The determination of the physician shall
be conclusive.
(c) Except as otherwise provided in Section 13 below, Xxxxxxx'x right
to his compensation and benefits under this Agreement shall cease upon his
death or disability, except that Xxxxxxx (or his estate or heirs) shall be
entitled to his Salary and a pro rata portion of his Bonus and benefits for
services already performed as of the date of his death or disability.
13. EFFECT OF TERMINATION. If the Company terminates Xxxxxxx'x employment
hereunder for any reason other than cause, but including upon the decision of
the Company not to renew the term of Xxxxxxx'x employment hereunder pursuant to
Section 1 of this Agreement, or if Xxxxxxx terminates his employment hereunder
for Good Reason, the Company shall pay Xxxxxxx an amount equal to $150,000 in
one lump sum payment. If Xxxxxxx terminates his employment with the Company for
any reason whatsoever other than for Good Reason, the Company's obligations
under this Agreement shall cease and Xxxxxxx shall forfeit all his rights to
receive any compensation or benefits under this Agreement, except that Xxxxxxx
shall be entitled to his Salary and benefits for services already performed as
of the date of termination of this Agreement.
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14. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be
in writing and shall be deemed given (i) when delivered in person at the
time of such delivery or by telecopy with receipt of transmission
indicating the date and time (provided, however, that notice delivered by
telecopy shall only be effective if such notice is also delivered by hand
or deposited in the United States mail, postage prepaid, registered or
certified mail, on or before two (2) business days after its delivery by
telecopy), (ii) when received if given by a nationally recognized overnight
courier service or (iii) two (2) business days after being deposited in the
United States mail, postage prepaid, registered or certified mail,
addressed as follows:
if to Xxxxxxx:
Xxxxxx Xxxxxxx
4N762 Country Club Dr.
-----------------------
Xxxx Xxxxxxx, XX 00000
-----------------------
Fax:
with a copy to:
------------------
------------------
------------------
Attn:
Fax:
If to the Company:
Total Control Products, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Nic Gihl, President
Fax: (000) 000-0000
with a copy to:
X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
and/or to such other address or addressees as may be designated by notice
given in accordance with the provisions hereof.
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(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted
assigns. As to Xxxxxxx, this Agreement is a personal service contract and
shall not be assignable by Xxxxxxx, but all obligations and agreements of
Xxxxxxx hereunder shall be binding upon and enforceable against Xxxxxxx and
Xxxxxxx'x personal representatives, heirs, legatees and devices.
(c) The parties adopt the Recitals to this Agreement and agree and
affirm that construction of this Agreement shall be guided thereby; this
Agreement contains all of the agreements between the parties with respect
to the subject matter hereof; and this Agreement supersedes all other
agreements, oral or written, between the parties hereto with respect to the
subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing
and signed by the waiving party. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall,
for any reason, be invalid or unenforceable, such provisions (or portions
thereof) shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions of this Agreement (or
portions thereof) shall nevertheless be valid, enforceable and of full
force and effect.
(f) The section or paragraph headings or titles herein are for
convenience of reference only and shall not be deemed a part of this
Agreement.
(g) This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which taken together
shall constitute a single instrument.
(h) Notwithstanding anything to the contrary contained herein,
Xxxxxxx'x rights and obligations under Sections 6, 7, 8, 9 and 13 shall
survive the expiration or termination of this Agreement.
(i) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects
by the laws of the State of Illinois applicable to contracts made in that
State (other than any conflict of laws rule which might result in the
application of the laws of any other jurisdiction).
(j) Xxxxxxx hereby expressly submits and consents in advance to the
jurisdiction of the federal and state courts of the State of Illinois for
all purposes in connection with any action or proceeding arising out of or
relating to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
THE COMPANY:
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Xxxxxxxx Xxxx
-----------------------------
Nic Gihl, President
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