EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is dated as of August 31, 1998, and
is between ENCORE SYSTEMS, INC., a Georgia corporation ("Encore" or the
"Company") and wholly owned subsidiary of Eltrax Systems, Inc., ("Eltrax")
and XXXXXXXX XXXXXXX, an individual residing in the State of Georgia
("Employee"). The parties agree as follows:
ARTICLE
1.
EMPLOYMENT, DUTIES AND TERM
1.1. EMPLOYMENT; POSITION. Upon the terms and conditions set forth in this
Agreement, the Company hereby employs Employee as President of Encore and
Employee accepts such employment.
1.2. DUTIES.
(a) Employee shall devote her full-business time and give her best
efforts to Encore and to fulfilling the duties of her position
which shall include such duties with respect to the Company as may
from time to time be assigned to her by the CEO of Eltrax,
commensurate with Employee's position, experience and/or skills or
expertise.
(b) Employee shall in good faith perform her duties in a manner
consistent with the best interests of the Company and its
shareholder.
(c) Employee shall comply with the Company's policies and procedures
to the extent they are not inconsistent with this Agreement in
which case the provisions of this Agreement prevail. In addition,
Employee shall comply with the Company's lawful policies on
employee conduct and business ethics.
1.3. TERM. The term of this Agreement shall commence September 1, 1998 and
shall terminate on August 31, 1999 (the "Base Term"), unless earlier
terminated pursuant to Article 3 of this Agreement. Commencing
September 1, 1999 and on each September 1st thereafter, the term of
Employee's employment hereunder shall be automatically extended for one
(1) additional year unless at least thirty (30) days before the end of
the Base Term or any extension, either party gives written notice to
the other of the cessation of further extensions.
ARTICLE
2.
BASE COMPENSATION, EXPENSES, AND BENEFITS
2.1. BASE SALARY. For all services rendered under this Agreement during the
term of Employee's employment, the Company shall pay Employee, in
accordance with Eltrax's usual pay practices (which is currently every
two weeks), a base salary, exclusive of benefits and bonuses, at an
annual rate of $94,800 (the "Base Salary"). The Base Salary may be
increased annually in an amount determined by the Compensation
Committee of
the Eltrax Board of Directors, in its sole discretion.
2.2. BONUS. At any time during the term of this Agreement, the Company may
pay Employee a discretionary bonus as additional compensation, which
shall be determined by the Compensation Committee of the Eltrax Board
of Directors, in its sole discretion (the "Bonus").
2.3. BENEFITS. In addition to other compensation, Employee shall be
entitled to participate in all benefit plans currently maintained or
hereafter established by Eltrax for the benefit of its executive
officers generally, in accordance with the terms and conditions of such
plans (each a "Benefit Plan"); provided, however, that such benefits to
which employee shall be entitled will be at least comparable to those
provided to similarly situated executive officers of Eltrax. In
addition to Eltrax's holidays, Employee shall be entitled to six (6)
weeks vacation annually. The current Benefit Plans of Eltrax are set
forth in Exhibit A attached to this Agreement. Employee shall also be
entitled to reimbursement of cellular phone usage commensurate with the
Company's policies prior to the date hereof, and Employee's membership
dues and Company - related expenses to the Vinings Club shall be paid
during the term of this Agreement.
2.4. EXPENSES. The Company shall reimburse Employee for all expenses
reasonably incurred by Employee during the course and in furtherance of
her employment, subject to and made in accordance with such reasonable
and nondiscriminatory policies and procedures as may be established by
Eltrax as applicable to its executive officers.
2.5 LOCATION. During Employee's employment, Employee's principal place of
employment shall be at 000 Xxxxxx 00 Xxxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx (the "Office"), or at such other address located in the
metropolitan Atlanta area, within a reasonable distance of the Office,
as the CEO of Eltrax may determine.
ARTICLE
3.
EARLY TERMINATION
3.1. TERMINATION FOR CAUSE. The Company may terminate this Agreement and
Employee's employment immediately for cause. For the purpose hereof,
"cause" means: (a) fraud against the Company; (b) theft or
embezzlement of the Company's assets; (c) willful violation of law
constituting a felony in the course of the Company's business or the
conviction of any felony not in the Company's business; or (d) the
continued failure by Employee to perform her duties (other than due to
disability) as reasonably assigned to Employee under this Agreement for
a period of thirty (30) days after written notice describing such
failure. In the event of termination for cause pursuant to this
section, Employee shall be paid at the usual rate of Employee's annual
Base Salary through the date of termination specified in any notice of
termination (the "Termination Date") and any amounts to which the
Employee is entitled under any Benefit Plan.
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3.2. TERMINATION FOR GOOD REASON. The Employee may terminate this Agreement
and Employee's employment immediately for Good Reason, by sending
written notice of such termination to the Company (the "Notice of Good
Reason"). For the purpose hereof, "Good Reason" means: (a) a material
breach by the Company of the terms and conditions of this Agreement not
cured within thirty (30) days after the Company's receipt of written
notice (other than a breach relating to the Company's failure to pay
Employee salary pursuant to this Agreement, in which case the
applicable cure period shall be ten (10) business days, (b) the
assignment of the Employee without her consent to a position of a
materially lesser status than on the date hereof, or (c) the
requirement that Employee be based anywhere other than the Company's
Office. In the event of termination for Good Reason pursuant to this
Section, Employee shall be paid her Base Salary through the Base Term
or the applicable renewal period, as well as the Bonus, if any,
declared or accrued prior to the Notice of Good Reason. All of
Employee's benefits described in Section 2.3 shall continue through the
end of the Base Term or the applicable renewal term.
3.3. TERMINATION WITHOUT CAUSE. Either Employee or the Company may
terminate this Agreement and Employee's employment without cause upon
thirty (30) days' advance written notice (the "Termination Notice").
In the event of termination of this Agreement and of Employee's
employment pursuant to this section, compensation shall be paid as
follows:
(a) If the termination is by Employee, Employee shall be paid her Base
Salary through the date specified in the Termination Notice as
well as the Bonus, if any, declared or accrued prior to the
Termination Notice.
(b) If the termination is by the Company, Employee shall be paid her
Base Salary through the Base Term or the applicable renewal
period, as well as the Bonus, if any, declared or accrued prior to
the Termination Notice. All of Employee's benefits described in
Section 2.3 shall continue through the end of the Base Term or the
applicable renewal term.
3.4. TERMINATION IN THE EVENT OF DEATH OR DISABILITY. This Agreement and
Employee's employment shall terminate in the event of death or
Disability of Employee. "Disability" shall mean Employee's inability,
as reasonably determined by the Eltrax Board of Directors, to perform
the essential functions of her duties under this Agreement because of
illness or incapacity for a continuous period of six (6) months. In
the event of Employee's death, Base Salary shall be terminated as of
the end of the month in which Employee's death occurs. Employee's
estate shall receive any Bonus declared or accrued prior to the end of
such month and unpaid as of the date of Employee's death. In the event
of Disability, Base Salary shall be terminated as of the end of the
month in which the last day of the six-month period of Employee's
Disability. Notwithstanding anything to the contrary in this
paragraph, the Company shall make reasonable accommodation as required
by the Americans with Disabilities Act or similar state law.
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3.5. ENTIRE TERMINATION PAYMENT. The compensation provided in this
Agreement for early termination shall constitute Employee's sole
compensation for such termination, provided that such termination was
not in violation of applicable law.
ARTICLE
4.
CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT
4.1. CONFIDENTIALITY. Employee will not, during the term or after the
termination or expiration of this Agreement, publish, disclose, or
utilize in any manner any Confidential Information (as hereinafter
defined) obtained while employed by the Company. If Employee leaves
the employ of the Company, Employee will not, without its prior written
consent, retain or take away any drawing, writing or other record in
any form containing any Confidential Information. "Confidential
Information" means information or material which is not generally
available to or used by others, or the utility or value of which is not
generally known or recognized as standard practice, whether or not the
underlying details are in the public domain, including: (a) information
or material relating to the Company, and its businesses as conducted or
anticipated to be conducted, business plans, operations, past, current
or anticipated software, products or services, customers or prospective
customers, or research, engineering, development, manufacturing,
purchasing, accounting, or marketing activities; (b) information or
material relating to the Company's inventions, improvements,
discoveries, "know-how," technological developments, or unpublished
works, or to the materials, apparatus, processes, formulae, plans or
methods used in the development, manufacture or marketing of the
Company's software, products or services; (c) any information marked
"proprietary," "private," or "confidential"; (d) trade secrets; (e)
software in any stage of development, including source code and binary
code, software designs, specifications, programming aids (including
subroutines and productivity tools), programming languages, interfaces,
visual displays, technical documentation, user manuals, data files and
databases; and (f) any similar information of the type described above
which the Company obtained from another party and which the Company
treats as or designates as being proprietary, private or confidential,
whether or not owned or developed by the Company.
4.2. BUSINESS CONDUCT AND ETHICS. During the term of employment with the
Company, Employee will engage in no activity or employment which
conflicts with the businesses of the Company and Eltrax and will
dutifully comply with all reasonable, nondiscriminatory Company
policies and guidelines and will observe the highest standard of
ethical business conduct.
4.3. DISCLOSURE. Employee will disclose promptly in writing to a director
of the Company all inventions, discoveries, software, writings and
other works of authorship which are conceived, made, discovered, or
written jointly or singly on business time during the term of the
Agreement, provided the invention, improvement, discovery, software,
writing or other work of authorship is related to the business or
activities of the Company in the normal course of business, and all
such inventions, improvements, discoveries, software,
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writings and other works of authorship shall belong solely to the Company.
4.4. INSTRUMENTS OF ASSIGNMENT. Employee will sign and execute all
instruments of assignment and other papers to evidence the granting of
all entire right, title and interest in the inventions, improvements,
discoveries, software, writings or other works of authorship described
in Section 4.3 to the Company, at the request and the expense of
Company, and Employee will do all reasonable acts, give any needed
testimony and sign all instruments of assignment and other papers the
Company may reasonably request relating to applications for patents,
copyrights, and the enforcement and protection thereof.
4.5. SURVIVAL. The obligations of this Article 4 shall survive the
expiration or termination of this Agreement.
ARTICLE
5.
NON-COMPETITION
5.1. NON-COMPETITION. Employee agrees that during the Base Term and any
extension thereof, and for two additional years:
(a) Employee will not, directly or indirectly, alone or as a partner,
member, officer, director, shareholder or employee of any other
firm or entity, engage in any commercial activity in competition
with any part of the Company's business which was under Employee's
management or supervision at any time during the term of this
Agreement or any part of the Company's business with respect to
which Employee has Confidential Information. For purposes of this
section, "shareholder" shall not include beneficial ownership of
less than five percent (5%) of the combined voting power of all
issued and outstanding voting securities of a publicly held
corporation whose voting stock is traded in a public market. Also
for purposes of this section, "the Company's business" shall
include businesses conducted by the Company, any subsidiary of the
Company and any partnership or joint venture of the Company;
(b) Employee will not divert, or by aid to others, do anything which
would tend to divert, or may divert from the Company, any trade or
business with any customer, supplier or vendor with whom the
Company has had any contact or association during the term of this
Agreement; or
(c) Employee will not take any affirmative action to induce or attempt
to induce any person employed by the Company to leave the
employment of the Company.
5.2. EFFECT OF TERMINATION. Upon the termination of Employee's employment, no
additional compensation shall be paid for the non-competition obligation.
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ARTICLE
6.
GENERAL PROVISIONS
6.1. NO ADEQUATE REMEDY. The parties acknowledge it is impossible to
measure in money the damages which will accrue to either party by
reason of a failure to perform any of the obligations under this
Agreement. Therefore, in the event of a claim for equitable relief,
each party hereby waives the claim or defense that the other has an
adequate remedy at law.
6.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. This Agreement shall not be
assignable by the Employee, but its economic terms shall inure to the
benefit of the Employee's heirs and beneficiaries.
6.3. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder will be made in writing and will be
deemed to have been duly given and effective: (i) on the date of
delivery, if delivered personally; (ii) on the day following delivery,
if sent by a nationally recognized overnight delivery service (receipt
requested); (iii) on the earlier of the fourth (4th) day after mailing
or the date of the return receipt acknowledgment, if mailed, postage
prepaid, by certified or registered mail, return receipt requested; or
(iv) on the date of transmission, if sent by facsimile, telecopy,
telegraph, telex or other similar telegraphic communications equipment,
and telephonic confirmation of receipt is obtained promptly after
completion of transmission; provided, however, that a copy is promptly
mailed by certified or registered mail, return receipt requested.
(a) If to the Company:
Eltrax Systems, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Clunet X. Xxxxx
Fax: (000) 000-0000
With a copy to (which shall not serve as notice):
Jaffe, Raitt, Heuer & Xxxxx, P.C.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
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(b) If to the Employee:
Xxxxxxxx Xxxxxxx
c/o Sellers, Xxxxxxxx & Xxxx, P.C.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000-0000
With a copy to (which shall not constitute notice):
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
16th Floor
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Xxxxx X. XxXxxxx, Xx.
Fax: (000) 000-0000
6.4. CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of
this Agreement.
6.5. GOVERNING LAW. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Georgia without
giving effect to the conflict of laws principles thereof.
6.6. CONSTRUCTION. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited
or invalid, all remaining clauses shall remain fully enforceable.
6.7. WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any partial exercise of any right or remedy
hereunder preclude any exercise of that or any other right or remedy
granted hereby by law.
6.8. MODIFICATION. This Agreement may not be and shall not be modified or
amended except by written instrument signed by all parties.
6.9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the
matters herein agreed upon and supersedes all prior or contemporaneous
agreements, understandings and negotiations with respect to the subject
matter hereof.
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6.10. ARBITRATION. With the sole exception of injunctive relief as
contemplated by Section 6.1 of this Agreement, any controversy or claim
arising out of any aspect of the relationship of the parties hereto,
will be settled by binding arbitration in Atlanta, Georgia by a panel
of three arbitrators of which Eltrax will choose one arbitrator,
Employee will choose one arbitrator, and those arbitrators will choose
the third arbitrator, who will act as chairman of the panel. The
arbitrators will select the rules and procedures under which the
arbitration will be conducted. Judgment upon any arbitration award may
be entered in any court having jurisdiction thereof and the parties
consent to the jurisdiction of the courts of the State of Georgia for
this purpose.
6.11. ATTORNEYS' FEES. In the event there is litigation or other proceedings
between the parties hereto with respect to their rights and obligations
under this Agreement, the prevailing party in any such litigation shall
be entitled to recover from the opposing party all reasonable
attorneys' fees and expenses (including fees of accountants) incurred
by the prevailing party in connection with such proceeding.
6.12. VENUE; JURISDICTION. The parties agree that all actions or proceedings
arising in connection with this Agreement and the instruments,
agreements and documents executed pursuant to the terms of this
Agreement shall be tried, litigated and arbitrated only in the courts
of the United States located in the Northern District of Georgia, the
Georgia state courts or at an arbitration venue located near Atlanta,
Georgia. The Employee irrevocably accepts for herself and in respect
of her property, generally and unconditionally, the jurisdiction of
such courts. The Employee irrevocably consents to the service of
process out of any such courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to her, at her address as set forth in the records of the
Company, such service to become effective ten (10) days after such
mailing. Nothing in this Section 6.12 shall affect the right of any
party to serve process in any other manner permitted by law. Employee
irrevocably waives any right he may have to assert the doctrine of
FORUM NON CONVENIENS or to object to venue to the extent any proceeding
is brought in accordance with this Section 6.12.
6.13. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
EMPLOYEE ENCORE SYSTEMS, INC.
/s/ Xxxxxxxx Xxxxxxx By: /s/ Clunet X. Xxxxx
----------------------- ---------------------------
Xxxxxxxx Xxxxxxx Clunet X. Xxxxx, Secretary
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