EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of July 10,
2000, is entered between Xxxx X. Xxxx, residing at 00 Xxxxxx Xxxx Xxx, Xxxxxx,
Xxxxxxx 00000 ("Executive"), and Precision Partners, Inc., a Delaware
corporation (the "Company").
RECITALS
A. The Company and Precision Partners Holding Company, a Delaware
corporation ("PPHC", and together with the Company collectively, "Precision",
and each individually, a "Precision Company"), and their respective Affiliates
are engaged in the business of the contract manufacturing of metal parts,
tooling and assemblies (the "Business").
B. The Company believes that the future growth, profitability and
success of the Business of Precision will be significantly enhanced by the
employment of Executive as the President and Chief Executive Officer of each
Precision Company during the Employment Term.
C. The Company desires to provide Executive with appropriate incentives
and rewards related to the performance by Executive and the Company desires to
encourage the employment or engagement of Executive in the service of Precision.
With capitalized terms used herein having the meanings ascribed to
such terms in Section 1.10, the parties agree as follows:
I. TERMS OF EMPLOYMENT
1.1 DUTIES, ETC. (a) During the Employment Term, the Company will
employ Executive as its President and Chief Executive Officer and the Company
will cause PPHC to appoint Executive as PPHC's President and Chief Executive
Officer. Executive will report directly to the board of directors of the Company
(the "Company Board") and to the board of directors of PPHC (the "PPHC Board"
and together with the Company Board, the "Precision Boards"), or to Executive
Committees , as may be designated from time to time by the Company Board or the
PPHC Board, as the case may be. In such capacity, Executive will perform such
duties and exercise such powers commensurate with his position as the President
and Chief Executive Officer of each Precision Company subject to the direction
of (and any restrictions imposed by) the Precision Boards or Executive
Committees as may be designated by the Company Board or the PPHC Board, as the
case may be, including but not limited to,
(i) Overseeing and managing all facets of the operations of
Precision and its Affiliates;
(ii) Assisting the Precision Boards in the development of corporate
strategies to maximize shareholder value of Precision and its Affiliates;
(iii) Assisting the Precision Boards in the identification and
implementation of acquisitions related to Precision and its Affiliates;
and
(iv) Performing such other responsibilities (commensurate with the
responsibilities customarily ascribed to a Chief Executive Officer and
President of similarly situated Persons) as may be assigned by the
Precision Boards (or an Executive Committee) from time to time.
Without limiting the generality or effect of the foregoing, during the
Employment Term, Executives' titles, responsibilities, reporting relationships
and authority will be at least commensurate with those held by or assigned to
Executive on the Effective Date. From and after the Notification Date through
the effective date of the termination of Executive's employment, Executive will
assist the Company in completing a prompt and effective management transition.
(b) PRECISION BOARDS; LLC MANAGEMENT COMMITTEE. To the extent that
Xxxxxx Xxxxxx is no longer Chairman of the Precision Boards and the management
committee of Precision Partners, L.L.C., a Delaware limited liability company
("LLC"), and PROVIDED, that, at such time, in the case of each Precision
Company, Executive is President and Chief Executive Officer and a member of the
board of directors of such Precision Company, and in the case of LLC, Executive
is a member of the management committee of LLC, the Company will offer Executive
the position of Chairman of the Company Board and will cause Executive to be
offered the positions of Chairman of the PPHC Board and Chairman of the
management committee of LLC, and if all three positions are accepted by
Executive , the Company will duly nominate Executive as Chairman of the Company
Board and will cause Executive to be duly nominated as Chairman of the PPHC
Board and Chairman of the management committee of LLC. As soon as practicable
after the Effective Date (as defined below) and, during the Employment Term,
once per year thereafter, the Company will cause the election or re-election, as
applicable, of Executive to the Company Board (as a member thereof) and will
cause the election or re-election, as applicable, of Executive to the PPHC Board
(as a member thereof) and to the management committee (as a member thereof) of
LLC.
(c) PRECISION'S LOCATION AND FACILITIES. During the Employment
Term, the Company will provide to Executive use of Company's offices and
facilities together with the services of secretarial and other support staff
commensurate with his position and duties as set forth in Section 1.1(a). The
initial location of Precision's main office will be in Dallas, Texas, with the
final location to be in either New Jersey, Florida or any other location
mutually agreed upon by the Precision Boards and Executive (the "Location");
provided that such final Location will not be more than 40 miles from Spring
Lake, New Jersey or Stuart, Florida. From July 10, 2000 until the earlier of (x)
December 31, 2000 or (y) the date on which Precision's headquarters is relocated
from Dallas, Texas, the Company will pay (within a reasonable period of time
after receipt of reasonably detailed invoices in respect thereof) one-half of
the actual costs up to a maximum of $25,000 of maintaining and operating an
office for Executive in Florida.
1.2 ACTIVITIES. During the Employment Term, Executive will devote
substantially all of his efforts during working hours to the business of
Precision and its Affiliates and, absent the approval of the Company Board,
Executive will not engage in any business activity other than that required of
him in connection with his duties and responsibilities pursuant to Section
1.1(a), including serving as a director or trustee of any entity other than
Precision, its Affiliates or LLC; PROVIDED, HOWEVER, that nothing herein will
prohibit Executive from (a) serving on the corporate boards of directors listed
in ANNEX A attached hereto or
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(b) managing his personal investments and office; in each case, so long as so
doing does not constitute or result in a breach of any provision of Article II
hereof or materially interfere with the discharge by Executive of his duties
hereunder.
1.3 SALARY; BONUS. During the Employment Term, the Company will
pay to Executive an aggregate annual salary of $250,000 which will be subject to
annual review commencing January 1, 2001 ("Salary"). Such Salary will be payable
consistent with the then current payroll practices of the Company. In addition,
Executive will be eligible for an annual cash bonus of up to 100% of his then
current salary based on his performance under a bonus plan to be implemented by
the Company Board; PROVIDED, HOWEVER, that Executive will receive a bonus of
$125,000 for year-end 2000 if Executive is continuously employed as President
and Chief Executive Officer of Precision from the Effective Date (as defined
below) through and including December 31, 2000.
1.4 EMPLOYMENT TERM. Executive's employment hereunder will
commence on July 10, 2000 (as may be adjusted, the "Effective Date") and will,
subject to automatic extension described below and subject to earlier
termination of Executive's employment in accordance with this Agreement, expire
on the second anniversary hereof (the "Initial Employment Term"). Executive's
employment will automatically be extended for subsequent one-year terms upon
expiration of the Initial Employment Term and each such subsequent one-year term
(each such subsequent term, a "Renewal Period") on the terms set forth in this
Agreement, unless the Company notifies Executive in writing of its determination
not to extend Executive's employment within 60 calendar days prior to the
expiration of the Initial Employment Term or any Renewal Period (any such
notice, a "Non-Renewal Notice"). The date on which Executive's employment with
the Company terminates is referred to herein as the "Termination Date."
1.5 EQUITY INTERESTS. (a) OPTIONS. (i) As of the Effective Date,
the Company will cause there to be granted to Executive options to purchase
1,720,000 Investment Units of Class A Equity in LLC, at an exercise price in
cash of approximately $0.3735 per unit. Fifty percent of the options referred to
in this Section 1.5(a) (the "Time-Based Options") for Executive will vest on a
pro rata basis over a four-year time period beginning on the date of grant,
PROVIDED, HOWEVER, that in the event (x) of a Change in Control, vesting of all
such Time-Based Options shall accelerate immediately, and (y) of termination of
Executive's employment by the Company without Cause or by Executive with Good
Reason (as set forth in Section 1.8(a)(i)) , vesting of the Time-Based Options
shall accelerate immediately to the extent of the number of Time-Based Options
scheduled to vest from the Notification Date to the next succeeding anniversary
of the Effective Date. The remaining 50% of Executive's options will vest pro
rata over such four-year time period based upon Precision's meeting certain
financial goals, as determined in advance by the Company Board in consultation
with Executive, and will not be subject to accelerated vesting. Upon the
termination of Executive for any reason or for no reason as set forth in Section
1.8, vesting of the options will cease immediately on the Termination Date and
any unexercised but vested options will be exercisable within 60 days after the
Termination Date and will thereafter expire to the extent unexercised.
Notwithstanding anything to the contrary contained herein, all vested and
unvested options will expire on the 10th anniversary of the Effective Date. The
options may not be assigned or transferred in any manner except by will or the
laws of descent and distribution and any assignment or transfer in violation
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of this sentence will be null and void. All of the options to be granted to
Executive pursuant to this Section 1.5(a) will be in lieu of Executive's
participation in any bonus plan of Precision (other than the bonus referred to
in Section 1.3).
(ii) The Company represents and warrants to Executive that at least
$42.0 million of cash equity capital has been contributed to LLC since its
formation. During all periods when the aggregate cash equity contributions to
LLC are greater than $42.0 million and equal to or less than $52.0 million (the
"Additional Cash Equity"), the Company will cause there to be granted to
Executive additional options (50% of which will be time-based from the date of
grant and the remaining 50% of which will be performance based) to purchase the
number of Investment Units of Class A Equity in LLC equal to 3.5% of the
Additional Cash Equity. Executive will not be entitled to such grants in the
case of cash equity contributions to LLC which, when added to then existing
equity invested in LLC, exceed $52.0 million in the aggregate. The exercise
price of such options will be equal to $0.7470 per unit in cash and such options
will be subject to the vesting and exercise provisions to be agreed by Executive
and the Company but in any event not less favorable to Executive than such
vesting and exercise provisions described in Section 1.5(a)(i).
(iii) The Company represents and warrants to Executive that EXHIBIT
A attached hereto (constituting a summary of the capitalization and ownership
structure of LLC, the Company, PPHC and their Affiliates) is correct and
complete in all material respects.
(b) EQUITY PURCHASE. During the period from the Effective Date
through and including the earlier to occur of December 31, 2000 and the fifth
calendar day immediately following the sale by Executive of the shares of
capital stock issued upon exercise of the USI Options, Executive will purchase
and the Company will cause there to be sold to Executive, an aggregate of $2
million of Investment Units in LLC consisting of equal numbers of Preferred
Interests at a purchase price of $0.6265 per unit and Class A Equity at a
purchase price of $0.3735 per unit. The consummation of such purchases will be
subject to Executive then being President and Chief Executive Officer of
Precision as of the date of each such purchase. In addition, the Company will
cause there to be granted to Executive the opportunity to purchase additional
Investment Units in LLC consisting of Preferred Interests and Class A Equity in
connection with future additional equity investments in LLC in an amount to be
agreed upon by LLC and Executive but in any event on no less favorable terms
than which The SKM Equity Fund II, L.P. and the SK Investment Fund, L.P. or any
of their respective affiliates are granted the opportunity to purchase
additional Investment Units. The Company will grant or cause there to be granted
to Executive, as the case may be, customary "piggyback" registration rights
(subject to customary underwriter cutback provisions) with respect to his equity
interest in LLC in connection with Public Offerings of Voting Securities of LLC
or a Precision Company in which Precision Partners Investment Fund, L.L.C.
("Precision Investors") participates. The parties understand that Executive will
be entitled to participate (up to 25% of the Voting Securities then owned by
Executive) on a pro rata basis with Precision Investors in any Public Offering
of Voting Securities of LLC or a Precision Company in which Precision Investors
participates.
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(c) EQUITY REDEMPTION. (i) Notwithstanding anything to the
contrary contained herein or in the LLC Agreement, subject to Executive
assisting the Precision Boards in completing a prompt and effective
management transition,
(A) if before the first anniversary of the Effective Date of
the Initial Employment Term Executive's employment is terminated for
any reason or for no reason as set forth in Section 1.8, within 60
days after the Termination Date Executive will sell to LLC or its
designee, and the Company will cause LLC or its designee to purchase
in cash from Executive, his equity interest in LLC at cost;
(B) if on or after the first anniversary of the Effective
Date of the Initial Employment Term the Company terminates
Executive's employment without Cause or Executive terminates his
employment with Good Reason as set forth in Section 1.8(a)(i),
within 60 days after the Termination Date Executive will sell to LLC
or its designee, and the Company will cause LLC or its designee to
purchase in cash from Executive, his equity interest in LLC at the
fair market value thereof as of the Termination Date (as determined
by the management committee of LLC in its good faith discretion);
or
(C) if the Company provides a Non-Renewal Notice to
Executive, within 60 days after the Termination Date, at the
Executive's election, Executive will sell to LLC or its designee,
and the Company will cause LLC or its designee to purchase in cash
from Executive, his equity interest in LLC at the lower of cost and
the fair market value thereof as of the Termination Date (as
determined by the management committee of LLC in its god faith
discretion).
PROVIDED, HOWEVER, that in the case of Sections 1.5(c)(i)(A), (B) and (C), if
Executive breaches his obligation to assist the Precision Boards in completing a
prompt and effective management transition, LLC or its designee will retain for
a one-year period after such Termination Date the right, but not the obligation,
to purchase in cash from Executive, and Executive will sell to LLC or its
designee upon notice from LLC or its designee, his equity interest in LLC at
cost; PROVIDED, FURTHER, HOWEVER, subject to other applicable provisions of this
Agreement, if LLC or its designee has not purchased Executive's equity interest
in LLC within 60 days after the Termination Date, simple interest shall accrue
at an annual rate of 8% on such payment commencing on the 61st day following the
Termination Date to the date such payment is made by LLC or its designee to
Executive.
(ii) (A) Notwithstanding the foregoing, if Executive disagrees with
the good faith determination of fair market value by the management
committee of LLC as set forth in Sections 1.5(c)(i)(B) and (C) and
provides notice thereof to LLC within 5 days after such determination of
fair market value has been made (the "Dispute Notice"), then such fair
market value will be determined as follows:
(1) Executive and LLC (or its designee) will attempt to
agree upon the fair market value of Executive's equity interest in
LLC as of the Termination Date.
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(2) If no such agreement is reached within 30 days after the
Dispute Notice, then an appraisal will be undertaken by an Appraiser
to be mutually selected by Executive and LLC (or its designee). If
Executive and LLC (or its designee) cannot agree on an Appraiser
within 10 days thereafter, then Executive and LLC (or its designee)
will each choose an Appraiser and such Appraisers will together
select and appoint a third Appraiser to conduct the appraisal.
(3) Executive and LLC (or its designee) will instruct the
Appraiser to render its determination as soon as practicable
thereafter, but in no event later than 30 days after the Appraiser
is chosen. The Appraiser's determination will be conclusive and
binding upon each of Executive and LLC (or its designee). Nothing
herein will be construed to authorize or permit the Appraiser to
determine any question or matter whatsoever under or in connection
with this Agreement except the determination of the fair market
value of Executive's equity interest in LLC as of the Termination
Date.
(4) The fees and expenses of the Appraiser or Appraisers
selected hereunder will be shared equally by Executive and the
Company.
(B) As used herein, "APPRAISER" means a nationally-
recognized investment banking or valuation firm (1) that does not
(and whose directors, officers, employees and affiliates do not)
have a direct or indirect equity interest in the Company, PPHC or
any of their Affiliates or LLC or with respect to Executive or in
any affiliate of Executive and (2) that is otherwise qualified to
serve as an appraiser.
(C) Notwithstanding the last proviso in Section 1.5(c)(i),
if Executive delivers a Dispute Notice to LLC pursuant to Section
1.5(c)(ii)(A), then the calculation of the 60-day period following
the Termination Date will be tolled.
(d) LLC AGREEMENT. The Company will (i) to the extent necessary,
cause the amendment of the LLC Agreement to effect the grant of the options
contemplated by Section 1.5(a) and the issuance of the Investment Units
contemplated by Section 1.5(b) and (ii) will use reasonable best efforts to
effect all other terms and conditions referred to in Section 1.5.
Notwithstanding anything to the contrary contained herein, (x) Section 1.5
constitutes the definitive terms of Executive's equity interest and options in
LLC, (y) Section 1.5 will control in the event of any conflict between such
definitive terms and the LLC Agreement, and (z) the Company will not cause the
LLC Agreement to be amended which amendment would materially and adversely
affect the rights of Executive contained in Section 1.5 without the prior
written consent of Executive.
(e) JOINDER. Executive will execute a joinder to the LLC Agreement
in a form reasonably acceptable to LLC and Executive upon the earlier to occur
of (x) the exercise of any or all of the options set forth in Section 1.5(a) or
(y) the closing of the equity purchase set forth in the first sentence of
Section 1.5(b).
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1.6 BENEFITS, ETC. (a) BENEFITS. During the Employment Term,
Executive will be entitled to participate in such pension and other retirement
and medical, term life, disability, dental insurance programs and other
non-equity-based benefits, together with participation in a matching 401(K) plan
if any, as the Company may provide from time to time for other senior executives
of the Company generally. Notwithstanding the foregoing, Executive will not,
during the Employment Term, be entitled to participate in any severance pay or
bonus plan (other than the bonus referred to in Section 1.3) of the Company.
Executive's severance benefits will be solely as set forth in Section 1.8.
(b) VACATION. During the Employment Term, Executive will be
entitled to four weeks of vacation time each calendar year, to be prorated
monthly for partial calendar years (ten days for the year 2000). Any vacation
not taken will not be carried over and no vacation or other pay will be due in
respect thereof, including in respect of any period in which the Termination
Date occurs.
(c) EXPENSES. Subject to compliance with Precision's policies as
from time to time in effect regarding the incurrence, substantiation and
verification of business expenses, Executive is authorized to incur on behalf of
Precision, and the Company will, or will cause PPHC to, pay, or reimburse
Executive for, all customary and reasonable expenses incurred in connection with
the performance of duties as set forth in Sections 1.1(a), including cellular
phone expenses, travel, home facsimiles, computer on-line charges, meals and
entertainment.
(d) PREREQUISITES. During the Employment Term, the Company
will provide Executive with an automobile allowance of $1,000 per month.
1.7 DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which
become payable hereunder will be subject to any deductions and withholdings
required by law.
1.8 TERMINATION. (a) Termination of Employment during the
Employment Term.
(i) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE WITH
GOOD REASON. The Company, by action of the Company Board, may terminate
Executive's employment hereunder without Cause at any time during the
Employment Term, upon 30 calendar days' written notice to Executive, and
Executive may terminate his employment hereunder with Good Reason at any
time during the Employment Term, upon 30 calendar days' written notice to
the Company. In the event Executive's employment is terminated by action
of the Company Board without Cause or Executive terminates his employment
with Good Reason as aforesaid, the Company agrees that, if Executive
executes the release attached hereto as EXHIBIT B (as may be amended by
the Company from time to time prior to its execution as necessary to
comply with applicable law to the extent necessary in the reasonable
judgment of the Company (on the advice of counsel) to make such release
valid, binding and enforceable, the "Release"), commencing promptly upon
the effective date of the Release, the Company will pay to Executive as
consideration for signing the Release an amount equal to Executive's then
current Salary for one-year (the "Release Payment"). The Release Payment
will be payable periodically, consistent with the then current payroll
practices of the Company. Executive agrees that the sum entailed
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by the Release is good and valuable consideration for the surrender of
rights entailed by the Release. In addition, in the event Executive is
terminated by the Company without Cause or Executive terminates his
employment hereunder with Good Reason during the Employment Term, the
Company will (A) pay to Executive accrued but unpaid Salary through the
effective date of such termination, (B) pay to Executive all unreimbursed
expenses incurred in accordance with this Agreement prior to such
termination, which payments in the case of clauses (A) and (B) will become
due and payable within ten calendar days following the Termination Date,
and (C) provide to Executive such benefits described in Section 1.6(a)
that have accrued prior to the Termination Date and which are subject to
continuance after the Termination Date in accordance with the terms of
such benefits. Other than (x) as set forth in Section 1.5 or otherwise in
the LLC Agreement, (y) with respect to any obligations of the Company to
indemnify Executive or (z) as set forth in Section 1.8(e), and, except as
provided in this subparagraph (i), the Company will have no additional
obligations to Executive hereunder and the payments to be made in
accordance with this Section 1.8(a)(i) will constitute exclusive
liquidated damages payable as a result of the termination of Executive's
employment by the Company without Cause or Executive's termination of his
employment for Good Reason.
(ii) TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. Executive may
terminate his employment hereunder during the Employment Term without Good
Reason, provided that Executive first gives to the Company a written
notice of intent to terminate at least 90 calendar days prior to the
effective date of any such termination. In the event Executive terminates
his employment without Good Reason during the Employment Term, the Company
will (A) pay to Executive accrued but unpaid Salary through the effective
date of such termination, (B) pay to Executive all unreimbursed expenses
incurred in accordance with this Agreement prior to such termination,
which payments in the case of clauses (A) and (B) will become due and
payable within ten calendar days following the Termination Date, and (C)
provide to Executive such benefits described in Section 1.6(a) that have
accrued prior to the Termination Date and which are subject to continuance
after the Termination Date in accordance with the terms of such benefits.
Other than (x) as set forth in Section 1.5 or otherwise in the LLC
Agreement, (y) with respect to any obligations of the Company to indemnify
Executive or (z) as set forth in Section 1.8(e), and, except as provided
in this subparagraph (ii), the Company will have no additional obligations
to Executive after such termination hereunder and the payments to be made
in accordance with this Section 1.8(a)(ii) will constitute exclusive
liquidated damages payable as a result of the termination of Executive's
employment by Executive without Good Reason.
(iii) TERMINATION BY THE COMPANY FOR CAUSE. The Company, by action
of the Company Board, may terminate Executive's employment hereunder for
Cause during the Employment Term upon written notice to Executive. In the
event Executive's employment is terminated by action of the Company Board
for Cause during the Employment Term, the Company will (A) pay to
Executive accrued but unpaid Salary through the effective date of such
termination, (B) pay to Executive all unreimbursed expenses incurred in
accordance with this Agreement prior to such termination, which payments
in the case of clauses (A) and (B) will become due and payable within ten
calendar days following the Termination Date, and (C) provide to Executive
such
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benefits described in Section 1.6(a) that have accrued prior to the
Termination Date and which are subject to continuance after the
Termination Date in accordance with the terms of such benefits. Other than
(x) as set forth in Section 1.5 or otherwise in the LLC Agreement, (y)
with respect to any obligations of the Company to indemnify Executive or
(z) as set forth in Section 1.8(e), and, except as provided in this
subparagraph (iii), the Company will have no additional obligations to
Executive after such termination hereunder and the payments to be made in
accordance with this Section 1.8(a)(iii) will constitute exclusive
liquidated damages payable as a result of the termination of Executive's
employment by the Company for Cause.
(iv) TERMINATION BY DEATH OF EXECUTIVE. In the event of
Executive's death, the Company will pay to such Person or Persons as
Executive may designate in writing or, in the absence of such designation,
to the estate of Executive, the sum of (A) accrued but unpaid Salary
through the date of Executive's death, (B) all unreimbursed expenses
incurred in accordance with this Agreement prior to such termination, and
(C) an amount of life insurance benefit provided to Executive by the
Company equal to three (3) times Executive's then current Salary. Any such
insurance benefit payment contemplated hereby will be made within 10
calendar days following the insurance payment date under the applicable
policies of insurance and the amounts contemplated by clauses (A) and (B)
will be paid within 45 calendar days following the date of such death.
Additionally, in the event of Executive's death the Company will provide
to Executive such benefits described in Section 1.6(a) that have accrued
prior to the Termination Date and which are subject to continuance after
the Termination Date in accordance with the terms of such benefits. Other
than (x) as set forth in Section 1.5 or otherwise in the LLC Agreement,
(y) with respect to any obligations of the Company to indemnify Executive
or (z) as set forth in Section 1.8(e), and, except as provided in this
subparagraph (iv), this Agreement in all other respects will terminate
upon the death of Executive and the payments to be made in accordance with
this Section 1.8(a)(iv) will constitute exclusive liquidated damages
payable as a result of the termination of Executive's employment by reason
of death.
(v) TERMINATION FOR DISABILITY. In the event Executive's
employment is terminated by action of the Company Board during the
Employment Term because of Executive's Disability, the Company will pay to
Executive the sum of (A) accrued but unpaid Salary at the date of
Executive's Disability, (B) all unreimbursed expenses incurred in
accordance with this Agreement prior to such termination, and (C) an
amount of disability insurance benefit provided to Executive by the
Company equal to three (3) times Executives then current Salary. Any such
insurance benefit payment will be made within 10 days of the insurance
payment date under the applicable policies of insurance and the amounts
contemplated by clauses (A) and (B) will be paid within 45 days following
the date of Executive's Disability. Additionally, in the event of
Executive's Disability the Company will provide to Executive such benefits
described in Section 1.6(a) that have accrued prior to the Termination
Date and which are subject to continuance after the Termination Date in
accordance with the terms of such benefits. Other than (x) as set forth in
Section 1.5 or otherwise in the LLC Agreement, (y) with respect to any
obligations of the Company to indemnify Executive or (z) as set forth in
Section 1.8(e), and, except as provided in this subparagraph (v), this
Agreement in all
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other respects will terminate upon the Disability of Executive and the
payments to be made in accordance with this Section 1.8(a)(v) will
constitute exclusive liquidated damages payable as a result of the
termination of Executive's employment by reason of Disability. The Company
acknowledges that the Americans and Disability Act ("ADA") provides
certain protections to individuals with disabilities and nothing in this
Section 1.8(a)(v) should be interpreted to permit conduct that violates
the ADA.
(b) NOTICE OF NON-RENEWAL. Unless otherwise specified in the text
of a Non-Renewal Notice, the delivery by the Company to Executive of a Notice of
Non-Renewal in accordance with this Agreement will not constitute the
termination of Executive's employment as contemplated by Sections 1.8(a)(i) or
1.8(a)(iii). In the event of the delivery by the Company to Executive of a
Notice of Non-Renewal, the Company will provide to Executive such benefits
described in Section 1.6(a) that have accrued prior to the Termination Date and
which are subject to continuance after the Termination Date in accordance with
the terms of such benefits. Other than (x) as set forth in Section 1.5 or
otherwise in the LLC Agreement, (y) with respect to any obligations of the
Company to indemnify Executive or (z) as set forth in Section 1.8(e), and,
except as provided in this Section 1.8(b), the Company will have no additional
obligations to Executive after such Termination Date.
(c) MITIGATION. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise. The amount of any Release Payment provided for in this Agreement
shall be reduced by any cash compensation received by Executive as a result of
employment by another employer.
(e) INSURANCE. During the Employment Term and thereafter, the
Company will, or will cause PPHC to, provide to Executive with respect to his
duties set forth in Sections 1.1(a) and (b), continuous coverage for Executive
under a directors and officers liability insurance on terms that are
commercially reasonable for entities similarly situated to the Company and PPHC,
as the case may be, on terms no less favorable than the directors and officers
liability insurance in effect on the Effective Date.
1.9 EXCISE TAX GROSS-UP PAYMENTS. (a) AMOUNT OF GROSS-UP PAYMENT.
Anything in this Agreement to the contrary notwithstanding, in the event that it
is determined (as hereinafter provided) that any payment (other than the
Gross-Up Payment provided for in this Section 1.9) or distribution by LLC, the
Company, PPHC or any of their Affiliates to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation the lapse or termination of
any restriction on or the vesting or exercisability of any benefit payable
pursuant to any of the foregoing (a "Payment"), would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any successor provision thereto) by reason of being considered
"contingent on a change in ownership or control" of Precision within the meaning
of Section 280G of the Code (or any successor provision thereto) or to any
similar tax imposed by state or local law, or any interest or penalties with
respect to such tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the "Excise Tax"), then
Executive will be entitled to receive from the Company an additional payment or
payments (collectively, a "Gross-Up Payment"). The Gross-Up Payment will be in
an amount
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such that, after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment. For purposes of determining
the amount of the Gross-Up Payment, Executive will be considered to pay (x)
federal income taxes at the highest rate in effect in the year in which the
Gross-Up Payment will be made and (y) state and local income taxes at the
highest rate in effect in the state or locality in which the Gross-Up Payment
would be subject to state or local tax, net of the maximum reduction in federal
income tax that could be obtained from deduction of such state and local taxes.
(b) DETERMINATION OF EXCISE TAX AND GROSS-UP PAYMENT. All
determinations required to be made under this Section 1.9, including whether an
Excise Tax is payable by Executive and the amount of such Excise Tax and whether
a Gross-Up Payment is required to be paid by the Company to Executive and the
amount of such Gross-Up Payment, if any, will be made by a nationally recognized
accounting firm (the "National Firm") selected and paid for by the Company in
its sole discretion, which National Firm may be the Company's independent public
accounting firm. The federal, state and local income or other tax returns filed
by Executive will be prepared and filed on a consistent basis with the
determination of the National Firm with respect to the Excise Tax payable by
Executive.
(c) CONTESTED AMOUNTS. As a result of the uncertainty in the
application of Section 4999 of the Code and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of any
determination by the National Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made hereunder.
Executive will notify the Company in writing of any claim by the Internal
Revenue Service or any other taxing authority that, if successful, would require
the payment by the Company of a Gross-Up Payment. Such notification will be
given as promptly as practicable but no later than 10 business days after
Executive actually receives notice of such claim and Executive will further
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid (in each case, to the extent known by Executive).
Executive will not pay such claim prior to the expiration of the 30-calendar-day
period following the date on which he gives such notice to the Company or, if
earlier, the date that any payment of amount with respect to such claim is due.
If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive will fully cooperate
with the Company in contesting such claim, and the Company will bear all costs
and expenses of such contest.
1.10 DEFINITIONS. For purposes of this Agreement, the following
terms will have the following meanings when used herein with initial capital
letters:
"ACQUISITION" has the meaning ascribed to such term in Section
2.2(a).
"ADA" has the meaning ascribed to such term in Section 1.8(a)(v).
"ADDITIONAL CASH EQUITY" has the meaning ascribed to such term in
Section 1.5(a)(ii).
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"AGREEMENT" has the meaning specified in the introductory paragraph
hereof.
"AFFILIATE" means (i) any Person directly or indirectly controlled
by LLC or (ii) any Person engaged in the Business and which is directly or
indirectly controlling or under common control with LLC. For purposes of this
definition, "CONTROL," when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any such Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"CONTROLLED" and "CONTROLLING" have the meaning correlative to the foregoing.
"APPRAISER" has the meaning ascribed to such term in Section
1.5(c)(ii)(B).
"BUSINESS" has the meaning ascribed to such term in Recital A.
"CAUSE" means (i) the material breach by Executive of this
Agreement; (ii) the indictment of Executive of any felony; (iii) fraud,
embezzlement or misappropriation by Executive relating to the Company, PPHC,
their Affiliates or LLC or any of their funds, properties, corporate
opportunities or other assets; (iv) the breach by Executive of any of the terms
of Article II; (v) alcohol or substance abuse; or (vi) an act of moral turpitude
adversely affecting the ability of Executive to perform his duties hereunder.
Notwithstanding anything to the contrary contained herein, Executive's
employment shall not be deemed to have been terminated for Cause unless and
until a majority of the Company Board shall have approved such termination.
"CHANGE IN CONTROL" means the consummation of any transaction (other
than a Public Offering or Management Investment) which results (x) in the
reduction in the percentage of the issued and outstanding Voting Securities of
LLC held in the aggregate by The SKM Equity Fund II, L.P. and SK Investment
Fund, L.P. and any of their respective affiliates on the Effective Date by more
than 70% or (y) an unrelated third party acquiring at least 90% of the assets of
Precision.
"CLASS A EQUITY" has the meaning ascribed to such term in the LLC
Agreement.
"CODE" has the meaning ascribed to such term in Section 1.9(a).
"COMPANY" has the meaning ascribed to such term in the introductory
paragraph hereof.
"COMPANY BOARD" has the meaning ascribed to such term in Section
1.1(a).
"CONSOLIDATION" has the meaning ascribed to such term in Section
2.2(a).
"CONSOLIDATION PERIOD" has the meaning ascribed to such term in
Section 2.2(a).
"CONTRACT MANUFACTURER" has the meaning ascribed to such term in
Section 2.2(a).
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"CONTRACT MANUFACTURING ENTITY" has the meaning ascribed to such
term in Section 2.2(a).
"CONFIDENTIAL INFORMATION" has the meaning ascribed to such term in
Section 2.1(a).
"CUSTOMERS" has the meaning ascribed to such term in Section
2.1(a)(i).
"DISABILITY" means a physical or mental incapacity as a result of
which Executive becomes unable to continue to perform fully his duties, with
"reasonable accommodation," as defined in the Americans with Disability Act and
applicable state laws, hereunder for 90-calendar days or for shorter periods
aggregating 90 or more days in any 12-month period or a determination by a
physician selected in accordance with this Agreement that Executive will be
unable to return to work and perform his duties on a full-time basis within 90
consecutive calendar days following the date of such determination on account of
mental or physical incapacity. A determination of Disability will be certified
by a medical doctor agreed to by the Company and Executive or, in the event of
Executive's incapacity to designate a doctor, Executive's legal representative.
In the absence of agreement between Precision and Executive, each party will
nominate a medical doctor and the two doctors so nominated will select a third
doctor, who will make the determination as to Disability.
"DISPUTE NOTICE" has the meaning ascribed to such term in Section
1.5(c)(ii)(A).
"EFFECTIVE DATE" has the meaning ascribed to such term in Section
1.4(a).
"EMPLOYMENT TERM" means the Initial Employment Term as extended by
one or more Renewal Periods.
"EXCISE TAX" has the meaning ascribed to such term in Section
1.9(a).
"EXCLUDED BUSINESSES" has the meaning ascribed to such term in
Section 2.2(a)(i)(B).
"EXECUTIVE" has the meaning ascribed to such term in the
introductory paragraph hereof.
"EXECUTIVE COMMITTEE" means the executive committee of the
applicable Precision Board consisting of directors thereof.
"GOOD REASON" means without Executive's express prior written
consent (i) the material diminution of Executive's positions, titles, authority,
duties, responsibilities or status with Precision; (ii) a reduction by the
Company in Executive's Salary; (iii) any breach to the LLC Agreement that
materially and adversely affects Executive or any other material breach by the
Company of this Agreement; or (iv) the failure of any successor to all or
substantially all of the assets of the Company and its Affiliates to assume all
the obligations of the Company under this Agreement.
"GROSS-UP PAYMENT" has the meaning ascribed to such term in Section
1.9(a).
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"INITIAL EMPLOYMENT TERM" has the meaning specified in Section
1.4(a).
"INVESTMENT UNITS" has the meaning ascribed to such term in the LLC
Agreement.
"LITIGABLE PROVISIONS" has the meaning ascribed to such term in
Section 3.7(a).
"LLC" has the meaning ascribed to such term in Section 1.1(b).
"LLC AGREEMENT" means the Limited Liability Company Agreement
of Precision Partners, L.L.C., dated as of September 30, 1998, as may be
amended from time to time.
"LOSING PARTY" has the meaning ascribed to such term in Section
3.7(c).
"LOCATION" has the meaning ascribed to such term in Section 1.1(c).
"MANAGEMENT INVESTMENT" means the offer or sale of securities of
LLC, the Company, PPHC, or any of their respective Affiliates to directors,
members of the management committee, officers, other employees or consultants of
LLC, the Company, PPHC or any of their respective Affiliates (including
directors, members of the management committee, officers, other employees or
consultants of Persons acquired by or to be acquired by LLC, the Company, PPHC
or any of their respective Affiliates) pursuant to any agreement, plan or
arrangement (including stock option plans, other equity participation plans and
the LLC Agreement).
"NATIONAL FIRM" has the meaning ascribed to such term in Section
1.9(b).
"NON-COMPETITION PERIOD" has the meaning ascribed to such term in
Section 2.2(a).
"NON-RENEWAL NOTICE" has the meaning ascribed to such term in
Section 1.4(a).
"NOTIFICATION DATE" means the date on which (i) the Company notifies
Executive of the termination of his employment under this Agreement or (ii)
Executive notifies the Company of the termination of his employment under this
Agreement, as applicable.
"OEM" has the meaning ascribed to such term in Section 2.2(a).
"PAYMENT" has the meaning ascribed to such term in Section 1.9(a).
"PERSON" means any individual, corporation, partnership, trust,
association or other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"PPHC" has the meaning ascribed to such term in Recital A.
"PPHC BOARD" has the meaning ascribed to such term in Section
1.1(a).
"PRECISION" has the meaning ascribed to such term in Recital A.
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"PRECISION BOARDS" has the meaning ascribed to such term in Section
1.1(a).
"PRECISION COMPANY" has the meaning ascribed to such term in Recital
A.
"PRECISION IP" has the meaning ascribed to such term in Section 2.3.
"PREFERRED INTEREST" has the meaning ascribed to such term in the
LLC Agreement.
"PRECISION INVESTORS" has the meaning ascribed to such term in
Section 1.5(b).
"PREVAILING PARTY" has the meaning ascribed to such term in Section
3.7(c).
"PUBLIC OFFERING" means the offer or sale of securities of LLC, the
Company, PPHC, or any of their respective Affiliates that is registered or
required to be registered under the Securities Act of 1933, as amended, or any
similar law of any other jurisdiction.
"RELEASE" has the meaning ascribed to such term in Section
1.8(a)(i).
"RELEASE PAYMENT" has the meaning ascribed to such term in Section
1.8(a)(i).
"RENEWAL PERIOD" has the meaning ascribed to such term in Section
1.4(a).
"SALARY" has the meaning ascribed to such term in Section 1.3.
"TERMINATION DATE" has the meaning ascribed to such term in Section
1.4(a).
"TIME-BASED OPTIONS" has the meaning ascribed to such term in
Section 1.5(a).
"UNDERPAYMENT" has the meaning ascribed to such term in Section
1.9(c).
"USI OPTIONS" means the options to purchase 420,000 shares of
capital stock of U.S. Industries, Inc. granted to and held by Executive
and which are referred to in Section 1.5(b).
"VOTING SECURITIES" means, with respect to any Person, securities of
such person (including capital stock and membership interests) entitling the
holders thereof to vote generally to elect the members of the board of directors
or equivalent governing body of such Person.
II. CONFIDENTIALITY; NON-COMPETITION, ETC.
2.1 CONFIDENTIALITY. (a) Executive acknowledges that during the
Employment Term, Executive will be given and will continue to have in connection
with the conduct of the Business, access and exposure to trade secrets and
confidential information in written, oral, electronic and other form regarding
LLC, the Company, PPHC and their Affiliates and their respective businesses,
equipment, products and employees ("Confidential Information"), including but
not limited to:
15
(i) the identities of each such Person's customers and key
accounts and potential customers and key accounts (hereinafter referred to
collectively as "Customers"), including, without limitation, the identity of
Customers who or which Executive cultivates or maintains while providing
services at Precision using Precision's products, name and infrastructure, and
the identities of contact persons at those Customers;
(ii) the particular preferences, likes, dislikes and needs of
those Customers and contact persons with respect to product types, pricing,
sales calls, timing, sales terms, rental terms, lease terms, service plans, and
other marketing terms and techniques;
(iii) each such Person's business methods, practices, strategies,
forecasts, pricing, and marketing techniques;
(iv) the identities of each such Person's licensors, vendors and
other suppliers and the identities of each such Person's contact persons at such
licensors, vendors and other suppliers; the identities of each such Person's key
sales representatives and personnel and other employees;
(v) advertising and sales materials, research, computer software
and related materials;
(vi) information provided by or on behalf of Xxxxxx & Co., LLC
relating to potential Acquisitions of a Person by LLC, the Company, PPHC and
their Affiliates; and
(vii) other material facts and financial and other business
information concerning or relating to each such Person and its business,
operations, financial condition, results of operations and prospects.
"CONFIDENTIAL INFORMATION" will not include (i) information which is
already in or subsequently enters the public domain, other than as a result of
any direct or indirect action or inaction by Executive, and (ii) information
which is approved for release by the Precision Boards.
(b) Executive will use Confidential Information only for purposes
of carrying out his duties for LLC, the Company, PPHC and their Affiliates, and
not for any other purpose, including, without limitation, not in any way or for
any purpose detrimental to such Persons. During the Employment Term and
thereafter, Executive will not at any time use for himself or others, directly
or indirectly, any such Confidential Information, and, except as required by
law, Executive will not disclose such Confidential Information, directly or
indirectly, to any other Person.
(c) If Executive is requested or required, by subpoena, oral
deposition, interrogatories, request for production of documents, administrative
order or otherwise, to disclose any Confidential Information, then Executive
will provide the Company with prompt notice of any such request so that the
Company (or its designee) may seek, at the Company's
16
expense, an appropriate protective order. If, in the absence of a protective
order or waiver, Executive is compelled, in the written opinion of Executive's
counsel, to disclose any Confidential Information, then Executive may make such
disclosure after notice to the Company.
(d) All physical property and all notes, memoranda, files,
records, writings, documents and other materials of any and every nature,
written or electronic, which Executive will prepare or receive in the course of
his association with LLC, the Company, PPHC and their Affiliates and which
relate to or are useful in any manner to the Business or any other business now
or hereafter conducted by LLC, the Company, PPHC and their Affiliates, are and
will remain the sole and exclusive property of such Persons. Executive will not
remove from any such Person's premises any such physical property, the original
or any reproduction of any such materials nor the information contained therein,
except for the purposes of carrying out his duties hereunder, and all such
physical property (except for any items of personal property of Executive),
materials and information in his possession or under his custody or control
will, upon the termination of his employment be immediately turned over to the
Company.
2.2 NON-COMPETITION. (a)(i) During the Employment Term and for a
period commencing on the Termination Date and terminating on the second
anniversary of the Termination Date ("Non-Competition Period"), Executive will
not:
(A) promote, participate or engage or have any other
interest (whether acting as owner, purchaser, shareholder, employee,
broker, agent, principal, trustee, corporate officer, director,
consultant or in any other capacity) in any Person which is engaged
in, or a primary purpose of which is to engage in, the Consolidation
(as defined below) of Contract Manufacturers (as defined below);
(B) (x) promote, participate or engage or have any other
interest (whether acting as owner, purchaser, shareholder, employee,
broker, agent, principal, trustee, corporate officer, director,
consultant or in any other capacity) in any Person (all such
Persons, collectively, "Excluded Businesses") which Executive has
visited or with which Executive has had substantial discussions, in
each case, at any time during the Employment Term concerning a
potential Acquisition (as defined below) of such Person by LLC, the
Company PPHC or any of their Affiliate or (y) directly or indirectly
solicit, canvass or approach any Person which is an Excluded
Business to endeavor to cause or effect an Acquisition involving
such Person;
(C) directly or indirectly solicit, canvass or approach any
Person who, to the knowledge of Executive after due inquiry, was
provided with products or services by LLC, the Company, PPHC or any
of their Affiliates at any time prior to the Termination Date or
with whom LLC, the Company, PPHC or any of their Affiliates was
involved in discussions regarding the supply of products or services
by LLC, the Company, PPHC or any of their Affiliates as of the
Termination Date, to offer that Person products or services similar
to or derivative of products or services provided by LLC, the
Company, PPHC or any of their Affiliates at any time during the
Non-Competition Period;
17
(D) directly or indirectly solicit, canvass or approach any
Person who, to the knowledge of Executive after due inquiry,
provided products or services to LLC, the Company, PPHC or any of
their Affiliates at any time prior to the Termination Date or with
whom LLC, the Company, PPHC or any of their Affiliates was involved
in discussions regarding the supply or products or services to LLC,
the Company, PPHC or any of their Affiliates as of the Termination
Date, to endeavor to cause such Person to cease providing products
or services to LLC, the Company, PPHC or any of their Affiliates;
(E) except for the individuals listed on EXHIBIT C attached
hereto, directly or indirectly solicit or entice away any director,
management committee member, officer or employee of LLC, the
Company, PPHC or any of their Affiliates; and
(F) except for the individuals listed on EXHIBIT C attached
hereto, directly or indirectly employ any director, management
committee member, officer or employee of LLC, the Company, PPHC or
any of their Affiliates, unless such individual has not been
employed by or has not otherwise performed services for LLC, the
Company, PPHC or any of their Affiliates, in each case, for at least
90 consecutive calendar days.
As used in this Section 2.2(a), (i) "CONSOLIDATION" means during any
consecutive 36-month period within the Consolidation Period, the execution of
letters of intent (which have not been terminated in writing other than as a
result of execution and delivery of definitive documentation and the transaction
contemplated thereby abandoned) relating to, or the consummation of, the
Acquisition of more than two Contract Manufacturers; (ii) "ACQUISITION" means,
with respect to any Person, the acquisition (in any case, whether, directly or
indirectly, by merger, stock purchase, asset purchase, recapitalization or other
similar transaction) of all or any portion of the capital stock, assets (other
than the purchase of inventory or equipment in the ordinary course of
operations) or business of a Person; and (iii) "CONSOLIDATION PERIOD" means the
period beginning 36 months immediately preceding the Termination Date through
and including the last day of the Non-Competition Period.
As used in this Agreement, "CONTRACT MANUFACTURER" means a Person
(each a "Contract Manufacturing Entity") more than 50% of the annual gross sales
of which for the most recent fiscal year of such Contract Manufacturing Entity
is derived from the contract-manufacturing of metal parts, tooling and/or
assemblies primarily for original equipment manufacturers ("OEM") for use in
such OEM's products; PROVIDED, HOWEVER, that (a) the gross sales of castings,
forgings and non-metal tooling produced by such Contract Manufacturing Entity
will not be deemed to constitute gross sales of contract-manufactured metal
parts, tooling and/or assemblies, and (b) "CONTRACT MANUFACTURER" will not
include a Contract Manufacturing Entity primarily engaged in the assembly of
metal parts unless more than 30% of the number of such parts and/or 30% of the
value of such parts utilized in such assembly during any fiscal year of such
Contract Manufacturing Entity consists of parts manufactured by a Person or
Persons that is or are controlled by such Contract Manufacturing Entity.
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(b) For an indefinite period after the Termination Date, Executive
will not use in the conduct of any business activities or for Executive's
personal use (other than on Executive's resume), the name of LLC, the Company,
PPHC or any of their Affiliates or the name "PRECISION PARTNERS", or any names
confusingly similar to any of the foregoing, in each case, without the prior
written consent of the Company.
(c) The provisions of this Section 2.2 will be modified without
any action on the part of the parties hereto to conform to the law as determined
by the order of any court or other tribunal of competent jurisdiction finding
all or any portion of such provisions to be invalid.
2.3 PATENTS, INVENTIONS AND OTHER INTELLECTUAL PROPERTY. (a) If at
any time during the Employment Term, Executive, whether alone or with any other
Person, makes, discovers or produces any invention, process, development or
design which relates to, affects or, in the opinion of the Company Board, is
capable of being used or adapted for use in or in connection with the Business
or any product, process or intellectual property right of LLC, the Company, PPHC
or any of their Affiliates, (i) the invention, process, development or design
(collectively, "Precision IP") will be the sole property of the Company and (ii)
Executive will immediately disclose Precision IP to the Company in writing.
(b) Executive will, if and when required to do so by the Company
(whether during the Employment Term or thereafter) and at the Company's expense,
(i) apply, or join with Precision in applying, for patents or other protection
in any jurisdiction in the world for any Precision IP; (ii) execute or procure
to be executed all instruments, and do or procure to be done all things, which
are necessary or, in the opinion of the Company, advisable for vesting such
patents or other protection in the name of the Company or any nominee thereof,
or subsequently for renewing and maintaining the same in the name of the Company
or its nominees; and (iii) assist in defending any proceedings relating to, or
to any application for, such patents or other protection.
2.4 SPECIFIC PERFORMANCE. Executive acknowledges that the Company
will suffer an adverse effect in its Business and have no adequate remedy at law
if Executive materially breaches any of the provisions of Section 2.1 or
breaches any of the provisions of Section 2.2. In the event of such a breach,
Executive agree that the Company will have the right, in addition to any other
rights it may have, to seek specific performance (without the need to post a
bond or similar collateral) of either of Sections 2.1 or 2.2. Upon a finding by
a court of competent jurisdiction that Executive has breached either of Sections
2.1 or 2.2, all expenses, including without limitation reasonable attorneys'
fees, disbursements and other expenses, arising out of or in connection with the
Company's claim under either of Sections 2.1 or 2.2 will be borne by Executive
to the fullest extent permitted by law. This Section 2.4 will not limit the
Company's right to such specific performance or injunctive or other equitable
relief in connection with any other provision of this Agreement.
2.5 SURVIVAL. The provisions contained in this Article II will
survive termination of this Agreement.
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III. MISCELLANEOUS
3.1 NOTICES. All notices, requests and other communications to any
party hereunder will be in writing (including facsimile transmission), unless
otherwise provided in this Agreement, will be deemed to have been duly given
when delivered in person or by a nationally recognized overnight courier service
or when dispatched during normal business hours by electronic facsimile transfer
(confirmed in writing by mail simultaneously dispatched) to the appropriate
party at the address specified below:
(a) If to Company, to it at:
Precision Partners, L.L.C.
x/x Xxxxxxxx, Xxxx & Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxx Xxxxxx
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
If to Executive, to:
Xx. Xxxx X. Xxxx
00 Xxxxxx Xxxx Xxx
Xxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
with a copy to:
Salisbury & Xxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxx, Esq.
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
3.2 AMENDMENTS AND WAIVERS; CUMULATIVE REMEDIES. (a) Any provision
of this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
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(b) No failure or delay by any party in exercising any right,
power or privilege hereunder will operate as a waiver thereof nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided will be cumulative and not exclusive of any rights or
remedies provided by law.
3.3 EXPENSES. Except as otherwise expressly provided for herein,
the parties will pay or cause to be paid all of their own fees and expenses
incident to this Agreement and in preparing to consummate and consummating the
transactions contemplated hereby, including the fees and expenses of any broker,
finder, financial advisor, legal advisor or similar person engaged by such
party.
3.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement will
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that Executive may not assign,
delegate or otherwise transfer any of his rights or obligations under this
Agreement without the prior written consent of Company.
3.5 NO THIRD-PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied will give or be construed to give to any Person, other than
the parties hereto and such permitted assigns any legal or equitable rights
hereunder, PROVIDED that it is expressly acknowledged that LLC, PPHC, and its
Affiliates are intended third party beneficiaries of this Agreement.
3.6 GOVERNING LAW. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflict of laws rules of such state.
3.7 DISPUTE RESOLUTION; JURISDICTION. (a) Any dispute or
controversy arising under or in connection with this Agreement, but excluding in
its entirety the provisions of Article II or any determination on whether there
is or has been a breach by Executive of any of the terms of Article II (all such
provisions and determinations concerning Article II, "LITIGABLE PROVISIONS"),
shall be settled exclusively by arbitration in New York, New York in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered or the arbitrator's award in any court having jurisdiction.
(b) Any suit, action or proceeding seeking to enforce any
Litigable Provision of, or based on any matter arising out of or in connection
with, any Litigable Provision of this Agreement may be brought in any court of
competent jurisdiction in the State of New York and each of the parties hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 3.1 will be deemed effective service of
process on such party.
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(c) Each party (the "Losing Party") agrees to pay the reasonable
attorneys' fees and expenses of the other party (the "Prevailing Party")
incurred in connection with enforcing the Prevailing Party's rights under this
Agreement as contemplated by this Section 3.7 to the extent that the arbitrator
or court rules substantially in favor of the Prevailing Party, as determined by
such arbitrator or court taking into account the circumstances of the case, the
conduct of the parties during the proceeding and the result.
3.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING
OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
3.9 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
3.10 HEADINGS. The headings in this Agreement are for convenience
of reference only and will not control or affect the meaning or construction of
any provisions hereof.
3.11 ENTIRE AGREEMENT. This Agreement (including the Exhibits
hereto) and the LLC Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof. This Agreement (including the
Schedules and Exhibits hereto) and the LLC Agreement supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
3.12 SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any Person or circumstance is held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision hereof. If any provision of this Agreement is finally judicially
determined to be invalid, ineffective or unenforceable, the determination will
apply only in the jurisdiction in which such final adjudication is made, and
such provision will be deemed severed from this Agreement for purposes of such
jurisdiction only, but every other provision of this Agreement will remain in
full force and effect, and there will be substituted for any such provision held
invalid, ineffective or unenforceable, a provision of similar import reflecting
the original intent of the parties to the extent permitted under applicable law.
3.13 NO WAIVER. No action or inaction taken or omitted pursuant to
this Agreement will be deemed to constitute a waiver of compliance with any
covenants contained in this Agreement and will not operate or be construed as a
waiver of any subsequent breach, whether of a similar or dissimilar nature.
3.14 CERTAIN INTERPRETIVE MATTERS. (a) Unless the context
otherwise requires, (i) all references to Sections and Articles are to Sections
and Articles of this Agreement, (ii) each term defined in this Agreement has the
meaning assigned to it, (iii) words in the singular include
22
the plural and vice versa and (iv) the term "INCLUDING" means "including but not
limited to." All references to $ or dollar amounts will be to lawful currency of
the United States.
(b) No provision of this Agreement will be interpreted in favor
of, or against, any of the parties hereto by reason of the extent to which any
such party or his or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any prior
draft hereof or thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
PRECISION PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Member
EXECUTIVE
/s/ Xxxx X. Xxxx
------------------------------------------
Xxxx X. Xxxx
24
EXHIBIT A
See Attached
EXHIBIT B
R E L E A S E
I, ____________, in consideration of and as a precondition to the
agreement by ________________ ("Company") to provide payment to me in the amount
of $_______, (less applicable local, state and federal taxes and other
deductions) for and on behalf of myself, my agents, heirs, executors,
administrators, and assigns, do hereby release and forever discharge Company and
all of its parents, affiliates, subsidiaries, divisions, successors, and
assigns, past and present, and each of them, as well as each of their respective
agents, directors, officers, partners, employees, representatives, insurers,
attorneys, and joint venturers, and each of them (the "Released Parties"), from
any and all claims which are based upon acts or events that occurred on or
before the date on which this Release becomes enforceable, including any and all
claims arising under any federal, state, or local employment laws or
anti-discrimination statutes, which include, but are not limited to, Title VII
of the Civil Rights Acts of 1964 (42 U.S.C. Section 2000e), the Age
Discrimination In Employment Act (29 U.S.C. Sections 621, ET SEQ.) and the
Americans With Disabilities Act (42 U.S.C. Sections 12101, ET SEQ.) The
phrase "any and all claims" will be interpreted liberally to preclude any
further disputes, litigation, or controversies between myself and any of the
Released Parties based upon events that occurred on or before the effective
date of this Release. The phrase does not cover such disputes based upon
events occurring after the effective date of this Release.
I am not waiving any rights or claims that may arise out of acts or
events that occur after the date on which I sign this Release.
I have been given at least 21 days to consider whether or not to
sign this Release and have been advised in writing to consult with an attorney
prior to signing it. I understand that I may revoke this Release at any time on
or before the date which is seven calendar days after the date of my signature
on this Release and that, unless previously revoked, the Release will be
effective and enforceable upon the expiration of the seven-day revocation
period. I acknowledge that I was not already entitled to receive the severance
payment described above and that this payment is valuable consideration in
exchange for my waiver of rights and claims in this Release.
I have read this Release and understand all of its terms. I execute
it voluntarily and with full knowledge of its significance.
Signed at ___________, ___________ this ____ day of ___________,
_____.
EXECUTIVE
-----------------------------------
EXHIBIT C
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
ANNEX A
Numerex Corp.
TearDrop Golf Company
