EXHIBIT 2.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of May 1, 1997, by and
between ASAHI/AMERICA, INC., a Massachusetts corporation (the "Company"), and
XXXXX XXXXX, an individual (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to retain the Employee as Assistant Vice
President and Director of Research and Development of the Company;
WHEREAS, the Employee is willing to provide his services as an employee
of the Company for the inducements and on the terms and conditions set forth
below in this Agreement; and
WHEREAS, as an integral part of the employment of the Employee, the
Company has bargained for a covenant by the Employee not to solicit Company
employees or customers or to compete with the Company;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company employs the Employee and the Employee accepts employment
with the Company in the capacity hereinafter set forth.
(a) Term of Employment. The term of Employee's employment by
the Company under this Agreement shall commence as of May 1, 1997 and shall
terminate on April 30, 2002 subject to earlier termination as provided below
(the "Employment Period").
(b) Duties; Title. The Employee shall be responsible for
directing and participating in the research and development of products to be
marketed and sold by the Company and its affiliates, subject to the direction
and control of the President and the Board of Directors of the Company (the
"Board"). Employee's title shall be Assistant Vice President and Director of
Research & Development.
Except for illness and permitted vacation periods, during the
Employment Period the Employee shall: (i) devote his full time and attention
during normal business hours to the business and best interests of the Company;
and (ii) discharge such duties as may be assigned to him by the President or the
Board and report to and obey the lawful directions of the President or the
Board; provided that such instructions do not violate or cause a violation of
law and do not constitute a breach of the directors' fiduciary duties to the
Company.
2. Compensation.
(a) Base Compensation, Annual Adjustment. In consideration of
the services rendered by the Employee hereunder, and the covenants contained in
Section 4 hereof, the Company will pay to the Employee a base salary at the
annual rate of $110,000 payable bi-monthly or in such other manner as the
Employee and the Company may mutually agree (the "Base Salary"). The Base Salary
shall be increased during each year of the Employment Period by a minimum of an
additional five percent (5%) of the then effective Base Salary. Such increases
shall be effective on each anniversary of the effective date of the Employment
Period. Upon each annual increase of the then effective Base Salary, the
adjusted Base Salary shall become the new Base Salary.
(b) Bonus. The Employee shall also be eligible to receive a
portion of the officers' annual bonus pool, if any, as determined in the sole
discretion of the President and the Board.
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(c) Other Employee Benefits. During the Employment Period, the
Employee shall be entitled to the following benefits:
(i) two (2) weeks vacation time;
(ii) participation in all employee life, medical,
retirement and profit sharing plans and other benefit programs
now or hereafter maintained by the Company for all employees
of the Company for which he is eligible;
(iii) use of a Company automobile as determined by
the Company and $75 per week car allowance;
(iv) reimbursement for up to $10,000 per year in
non-insurance reimbursed medical expenses;
(v) Company payment of $5,000 annually to the
Employee's 401(k) account; and
(vi) payment for or reimbursement for all reasonable
and properly documented expenses incurred or paid by him in
connection with the performance of his duties hereunder.
(d) Insurance. Employee shall cooperate in the Company's
attempts to secure and maintain key man insurance on the life of the Employee in
the amount of $1,000,000, for the Company's benefit, including by way of
submitting to physical exams.
3. Termination Provisions. The Employment Period shall terminate upon
the occurrence of any of the events set forth below:
(a) Termination by Reason of Permanent Disability. If at any
time during the Employment Period the Board determines in good faith that the
Employee has been unable, as a result of physical or mental illness or
incapacity, to perform his duties hereunder for a period of 60 consecutive days
or 90 days during any twelve-month period, the Employment Period may be
terminated by the President or Board upon thirty days' written notice to the
Employee.
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(b) Termination by Reason of Death. The Employment Period
shall automatically terminate on the date of the Employee's death.
(c) Termination for Cause. The Board may terminate the
Employment Period for Cause, as hereinafter defined, immediately upon written
notice to the Employee. For purposes of this Agreement, "Cause" shall mean (i) a
breach of any material provision of this Agreement, including, without
limitation, any breach of Sections 4(a) through (d) hereof which breach, if
curable, is not cured within ten (10) days after written notice thereof,
specifying the particulars of such breach, is given to the Employee by the
Board; (ii) one or more acts of dishonesty or fraud of the Employee during the
Employment Period in the performance of his duties on behalf of the Company or
otherwise affecting Employer; (iii) any conviction of the Employee of any felony
or any crime involving moral turpitude or any other crime which conviction has,
or is reasonably likely to have, a material adverse effect on the Company or its
business or reputation; (iv) any material act or omission by the Employee during
the Employment Period involving willful malfeasance or gross negligence in the
performance of his duties hereunder which breach, if curable, is not cured
within ten (10) days after written notice thereof, specifying the particulars of
such breach, is given to the Employee by the President or Board; (v) gross
incompetence on the part of Employee in the performance of the duties undertaken
by Employee under the terms of this Agreement; (vi) the willful failure or
refusal of the Employee to follow the instructions of the President or Board
when such instructions are consistent with the scope and nature of Employee's
duties under this Agreement; or (vii) the inability of the Employee as a result
of continued alcohol or drug use to carry out his responsibilities hereunder as
determined by the President or Board in the exercise of good faith judgment.
(d) Entitlement Upon Termination. Subject to the provisions
hereof, upon any termination of the Employment Period as provided in this
Section 3(a), (b) and (c), the Employee shall be entitled to
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all payments and benefits accrued, and shall be entitled to reimbursement of all
expenses incurred, through the effective date of such termination, including
through any required notice period.
(e) Termination Without Cause. In addition to the Board's
right to terminate the Employment Period for the reasons set forth in
subsections 3(a), (b) and (c) hereof, the Board may also terminate the
Employment Period without cause upon written notification to Employee that the
Employment Period has been terminated and the effective date of such
termination. Upon receipt of such notification, the Employee shall, in addition
to any other benefits and compensation accruing to Employee through the
Employment Period, be entitled to receive severance pay in an amount equal to
three (3) months of the Employee's then Base Salary (the "Severance Pay"). In
the Board's discretion, the Severance Pay shall be payable either in a lump sum
or in periodic payments that are made at such intervals and in such amounts as
if Employee were still receiving his regular compensation as an employee of the
Company.
(f) At any time during the Employment Period, Employee shall,
upon notification to Company, have the right to discontinue providing his
services as an employee of Company. No penalty shall be incurred by Employee
solely due to the fact that Employee has elected to and has notified Company of
his decision to cease his employment with the Company. Resignation from his
position as an employee of the Company shall not, however, relieve Employee from
any of his other obligations under this Agreement, including, but not limited
to, Employee's obligation to keep confidential Company's proprietary information
as set forth in Section 4(c) hereof. Company shall have the right to treat
Employee's notification of resignation as effective upon receipt of such
notification or upon the date specified by Employee in such resignation or at
any date in between, provided, however, that Company shall be obligated to
provide compensation and benefits to Employee through any period during which
Employee's services continue to be used by Company. In the event that Employee
resigns from the Company, then, upon the effective
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date of his resignation, Employee shall only be entitled to those benefits and
compensation that accrue to Employee prior to termination of the Employment
Period.
4. Covenants of the Employee.
(a) Non solicitation of Customers or Employees of the Company.
During the Employment Period and for a period of 3 years thereafter (together,
the "Restricted Period"), the Employee will not communicate disparagingly with
any suppliers to, or customers of, the Company, its direct or indirect
subsidiaries or any joint ventures to which the Company or any of such
subsidiaries is a party (all such subsidiaries and joint ventures, "Affiliates")
with respect to any matter relating to the business of the Company or its
Affiliates. During the Restricted Period and following the termination of the
Restricted Period, the Employee shall not, and shall use his best efforts to
cause each other business or entity with which he is or shall become associated
in any capacity not to, directly or indirectly employ any person who at any time
during the Restricted Period was employed in any capacity by the Company or any
of its Affiliates. During the Restricted Period, the Employee shall not, and
shall use his best efforts to cause each other business or entity with which he
is or shall become associated in any capacity not to, (i) directly or indirectly
solicit for employment any person who at any time during the Restricted Period
was employed in any capacity by the Company or any of its Affiliates; (ii)
directly or indirectly solicit any person or entity who at any time during the
Employment Period or the period two years prior to the date of termination or
non-renewal of this Agreement was a customer of the Company or its Affiliates in
respect of the products or services supplied by the Company or its Affiliates;
or (iii) directly or intentionally indirectly interfere or seek to interfere
with the continuance of supplies to the Company or its Affiliates (or with the
terms relating to such supplies) from any persons or entities who have been
supplying materials or services to the Company during the Restricted Period.
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(b) Non-Competition. The Employee acknowledges that the
services to be rendered by him to the Company are of a special and unique
character. The Employee agrees that, in consideration of his employment
hereunder, the Employee will not, during the Restricted Period, engage, directly
or indirectly, whether as officer, director, principal, agent, distributor,
lender, representative, partner, consultant, trustee, attorney-in-fact,
receiver, trustee in bankruptcy, debtor in possession, assignee, consultant,
stockholder (other than an investment of not more than one percent (1%) of the
stock or equity of any corporation the capital stock of which is publicly
traded), employee or otherwise, in any activity or business venture which is
competitive with the business being conducted by the Company or its Affiliates,
including any business proposed or planned to be conducted by the Company or its
Affiliates as of the date of termination. Notwithstanding the foregoing,
following termination of the Employment Period, Employee's engagement in
activities in, or providing services to third parties, either directly or
indirectly, in the following areas shall not, by itself, be deemed to be an
activity that is competitive with the business of the Company or its Affiliates:
flowmeters; temperature sensors; pressure sensors; or pH, ORP or other chemical
sensors.
(c) Disclosure of Information and Intellectual Property.
(i) The Employee recognizes and acknowledges that the
Company's and its Affiliates' trade secrets and proprietary information and
processes (which shall include, but shall not be limited to, products and the
raw materials, manufacture of and/or finishing processes related thereto,
research, customer lists, marketing plans, financial information, pricing and
activities of the Company), as they may exist from time to time, are valuable,
special and unique assets of the Company's and its Affiliates' businesses,
access to and knowledge of which are essential to the performance of the
Employee's duties hereunder. The Employee will not, during or after the term of
his employment by the Company, in whole or in part, disclose such secrets,
information or processes to any person,
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firm, corporation, association or other entity for any reason or purpose
whatsoever, nor shall the Employee make use of any such property for his 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 his
employment, provided that subject to Section 4(b) hereof, after the term of his
employment these restrictions shall not apply to such secrets, information and
processes which are then in the public domain (provided that the Employee proves
by preexisting documentary evidence that he was not responsible, directly or
indirectly, for such secrets, information or processes entering the public
domain without the Company's consent). The Employee agrees to hold as the
Company's or Affiliates', as the case may be, property, all memoranda, books,
papers, letters, formulas and other data, and all copies thereof and therefrom,
in any way relating to the Company's and its Affiliate's businesses and affairs,
whether made by him or otherwise coming into his possession, and on termination
of his employment, or on demand of the Company, at any time, to deliver the same
to the Company. In the event that the Employee is required, by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, to disclose any confidential material
relating to the Company or its Affiliates, the Employee shall provide the
Company with prompt notice thereof so that the Company or its Affiliates may
seek an appropriate protective order; provided, however, that if in the absence
of a protective order or the receipt of such a waiver, the Employee is, in the
opinion of counsel for the Company, compelled to disclose confidential material
not otherwise disclosable hereunder to any legislative, judicial or regulatory
body, agency or authority, or else be exposed to liability for contempt, fine or
penalty or to other censure, such confidential material may be so disclosed.
(ii) Any and all inventions made, developed or
created by the Employee during the Employment Period (whether at the request or
suggestion of the Company or otherwise, whether alone or in conjunction with
others, and whether during regular hours of work or otherwise) until this
Agreement is terminated which may be
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directly or indirectly useful to the Company, shall be promptly and fully
disclosed by the Employee to the President or Board pursuant to applicable
notice and shall be the Company's exclusive property as against the Employee,
and the Employee shall promptly deliver to the Board all papers, drawings,
models, data and other material relating to any invention made, developed or
created by him as aforesaid. The Employee shall, at the request of the Company
and without any payment therefor, execute any documents necessary or advisable
in the opinion of the Company's counsel to direct issuance of patents or
copyrights to the Company with respect to such inventions as are to be the
Company's exclusive property as against the Employee or to vest in the Company
title to such inventions as against the Employee. The expense of securing any
such patent or copyright shall be borne by the Company.
(d) Cooperation. During the Employment Period and following
any termination of the Employment Period, Employee agrees to cooperate with
Company in any patent infringement or other action brought by or against Company
relating to any projects on which Employee's services have been provided to
Company, including, without limitation, the patents and other proprietary
information to be acquired by Company from Universal Flow Monitors, Inc. and The
Rosaen Company, each of Hazel Park, Michigan. In the event that Company elects
to require Employee's cooperation in such actions, Company shall be responsible
for all reasonable costs and expenses incurred by Employee in providing such
cooperation.
5. Representation and Warranties.
(a) The Company. The Company hereby represents and warrants to
the Employee as follows:
(i) the Company is duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Massachusetts;
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(ii) this Agreement has been duly authorized,
executed and delivered by the Company; and
(iii) the execution and delivery of this Agreement by
the Company, the performance by the Company of its obligations
hereunder and the consummation by the Company of the
transactions contemplated hereby will not violate any
agreement to which the Company is a party or any provision of
its Restated Articles of Organization or Bylaws.
(b) The Employee. The Employee hereby represents and warrants
to the Company as follows:
(i) the Employee has full legal capacity to enter
into this Agreement;
(ii) this Agreement has been duly executed and
delivered by the Employee;
(iii) the execution and delivery of this Agreement by
the Employee, the performance by the Employee of his
obligations hereunder and the consummation by the Employee of
the transactions contemplated hereby will not violate any
agreement to which he is a party; and
(iv) the Employee has made such investigations of the
business and properties of the Company as he deems necessary
or appropriate before entering into this Agreement.
6. Successors: Assignment.
(a) The Company. Except as herein provided, the Company may
not assign any of its rights or obligations under this Agreement without the
written consent of the Employee; provided, however, that the Company may assign
this Agreement without such consent if assigned to the acquiring party as part
of a transfer by the Company of all or substantially all of its assets. A change
in control of the Company or merger of the Company with and into any other
entity (whether or not the Company shall be the surviving entity) shall not be
deemed an assignment of this Agreement.
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(b) The Employee. Neither this Agreement, nor any right,
obligation or interest hereunder, may be assigned by the Employee, his
beneficiaries, or his legal representatives.
7. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered by hand, or three
business days after being mailed by first-class certified mail, postage prepaid
and return receipt requested, addressed as follows:
If to the Company:
Asahi/America, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with copies to:
Xxxxxx & Hannah, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
and Xxxxxxxx Xxxxxxxx, Esq.
If to the Employee:
Xxxxx Xxxxx
000 Xxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts without
giving effect to the conflicts of law principles thereof and each party consents
to the jurisdiction of the courts located within said Commonwealth.
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9. Entire Agreement. This Agreement contains the entire agreement of
the parties and their affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral with respect thereto.
10. Severability.
(a) Generally. If any term or provision of this Agreement or
the application thereof to any person, property or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons, property or circumstances,
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
(b) Duration and Scope of Certain Covenants. Without limiting
Section 10(a) hereof, if any court or arbitrator determines that any of the
covenants contained in Section 4 hereof, or any part of such covenants, are
unenforceable because of the duration or geographic scope of such provision,
such court or arbitrator shall have the power to and is hereby requested to
modify the duration or scope of such provisions as the case may be to the extent
necessary to make such provision enforceable, and in its modified form, such
provision shall then be enforceable.
11. Arbitration. In the event of any dispute arising out of or relating
to this Agreement or in the case of breach hereof, the parties shall try in the
first instance to arrive at an amicable settlement, within sixty (60) days after
a notice thereof has been given in writing by the complaining party. Should this
fail, the dispute or breach shall be referred to and finally settled by
arbitration which shall be held in Boston, Massachusetts and conducted in the
English language in accordance with the commercial arbitration rules of the
American Arbitration Association ("AAA"); The AAA shall select three arbitrators
(or in the
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event of a monetary dispute involving less than $25,000, one arbitrator) to
arbitrate the disputed matter. The arbitration decision shall be binding and
final and judgment on any award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
12. Remedies.
Equitable Relief. The Employee acknowledges and agrees that
the covenants and obligations of the Employee contained in Section 4 hereof
relate to special, unique and extraordinary matters and are reasonable and
necessary to protect the legitimate interests of the Company and its Affiliates
and that a breach of any of the terms of such covenants and obligations will
cause the Company irreparable injury for which adequate remedies at law are not
available. The Company therefore, in the event of any such breach, shall be
entitled to, and the Employee hereby consents to, injunctive relief, a
restraining order, an order of specific performance or any other equitable
relief (together, "Equitable Relief") with respect to any of its obligations
under Section 4. The Employee hereby waives any claim or defense therein that
the Company has an adequate remedy at law or that money damages would provide an
adequate remedy. It shall, however, be the election of the Company as to whether
or not to seek Equitable Relief. An order for Equitable Relief shall be among
the remedies which can be granted pursuant to an arbitration action instituted
under Section 11 hereof and enforced by any court of competent jurisdiction.
Additionally, solely for the purpose of provisional relief pending a
determination on the merits pursuant to the arbitration process provided for in
Section 11 hereof, the Company may seek from an appropriate court Equitable
Relief.
13. Amendments. Miscellaneous, etc. Neither this Agreement, nor any
term hereof, may be amended, modified, waived, discharged or terminated except
by an instrument in writing signed by the party against which such change,
waiver, discharge or termination is sought to be enforced. The Agreement may be
executed in one or more
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counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All references to Sections
shall be to Sections of this Agreement
14. Effective Date. By their execution hereof, the parties agree that
this Agreement shall be effective upon May 1, 1997.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement under seal as of the date first written above.
ASAHI/AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ Xxxxx X. Xxxxx
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Xxxxx Xxxxx
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