EMPLOYMENT AGREEMENT
Exhibit 10.8
THIS EMPLOYMENT AGREEMENT is made as of December 1, 2008, by and between STRATTEC SECURITY
CORPORATION, a Wisconsin corporation (the “Company”), and Xxxxxxx Xxxxxxx (the “Employee”).
RECITAL
The Company desires to employ the Employee and the Employee is willing to make his services
available to the Company on the terms and conditions set forth below.
AGREEMENTS
In consideration of the premises and the mutual agreements which follow, the parties agree as
follows:
1. Employment. The Company hereby employs the Employee and the Employee hereby
accepts employment with the Company on the terms and conditions set forth in this Agreement.
2. Term. The term of the Employee’s employment hereunder shall commence effective on
December 1, 2008 and shall continue through June 30, 2009, and shall thereafter be automatically
renewed for successive fiscal year terms unless either the Company or Employee gives notice of
nonrenewal not less than 30 days prior to the end of the then current term (the “Employment
Period”).
3. Duties. The Employee shall serve as the Vice President -Access Control
Products of the Company and will, under the direction of Chairman of the Board and Chief Executive
Officer, faithfully and to the best of Employee’s ability, perform the duties of the Vice President
– Access Control Products. The Vice President – Access Control Products shall be one of the
principal executive officers of the Company and shall, subject to the control of Chairman of the
Board and Chief Executive Officer supervise the Access Control functions of the Company. The
Employee shall also perform such additional duties and responsibilities which may from time to time
be reasonably assigned or delegated by the Chairman of the Board and Chief Executive Officer of the
Company. The Employee agrees to devote Employee’s entire business time, effort, skill and
attention to the proper discharge of such duties while employed by the Company. However, the
Employee may engage in other business activities unrelated to, and not in conflict with, the
business of the Company if the Chairman of the Board and Chief Executive Officer consents in
writing to such other business activity.
4. Compensation. The Employee shall receive a base salary of $145,000 per year,
payable in regular and semi-monthly installments (the “Base Salary”). Employee’s Base Salary shall
be reviewed annually by the Board of Directors of the Company to determine appropriate increases,
if any, in such Base Salary.
5. Fringe Benefits.
(a) Medical, Health, Dental, Disability and Life Coverage. The Employee shall be
eligible to participate in any medical, health, dental, disability and life insurance policy in
effect for senior management of the Company (collectively, the “Senior Management”).
(b) Incentive Bonus and Stock Ownership Plans. The Employee shall be entitled to
participate in any incentive bonus or other incentive compensation plan developed generally for the
Senior Management of the Company, on a basis consistent with Employee’s position and level of
compensation with the Company. The Employee shall also be entitled to participate in any incentive
stock option plan or other stock ownership plan developed generally for the Senior Management of
the Company, on a basis consistent with Employee’s position and level of compensation with the
Company.
(c) Reimbursement for Reasonable Business Expenses. Subject to the terms and
conditions of the Company’s expense reimbursement policy, the Company shall pay or reimburse the
Employee for reasonable expenses incurred by Employee in connection with the performance of
Employee’s duties pursuant to this Agreement, including, but not limited to, travel expenses,
expenses in connection with seminars, professional conventions or similar professional functions
and other reasonable business expenses.
6. Termination of Employment.
(a) Termination for Cause, Disability or Death. During the term of this Agreement,
the Company shall be entitled to terminate the Employee’s employment at any time upon the
“Disability” of the Employee or for “Cause” upon notice to the Employee. The Employee’s employment
hereunder shall automatically terminate upon the death of the Employee. For purposes of this
Agreement, “Disability” shall mean a physical or mental sickness or any injury which renders the
Employee incapable of performing the essential functions of Employee’s job (with or without
reasonable accommodations) and which does or may be expected to continue for more than 4 months
during any 12-month period. In the event Employee shall be able to perform the essential functions
of Employee’s job (with or without reasonable accommodations) following a period of disability, and
does so perform such duties, or such other duties as are prescribed by the President of the
Company, for a period of three continuous months, any subsequent period of disability shall be
regarded as a new period of disability for purposes of this Agreement. The Company and the
Employee shall determine the existence of a Disability and the date upon which it occurred. In the
event of a dispute regarding whether or when a Disability occurred, the matter shall be referred to
a medical doctor selected by the Company and the Employee. In the event of their failure to agree
upon such a medical doctor, the Company and the Employee shall each select a medical doctor who
together shall select a third medical doctor who shall make the determination. Such determination
shall be conclusive and binding upon the parties hereto.
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The Company may terminate the Employee’s employment under this Agreement for “Cause,”
effective immediately upon delivery of notice to the Employee. Cause shall be deemed to exist if
the Employee shall have (1) materially breached the terms of this Agreement; (2) willfully failed
to substantially perform his duties, other than a failure resulting from incapacity due to physical
or mental illness; or (3) serious misconduct which is demonstrably and substantially injurious to
the Company. No act or failure to act will be considered “cause” if such act or failure is done in
good faith and with a reasonable belief that it is in the best interests of the Company.
In the event of termination for Disability or death, payments of the Employee’s Base Salary
shall be made to the Employee, his designated beneficiary or Employee’s estate for a period of six
months after the date of the termination (even if this period would extend beyond the Employment
Period); provided, however that the foregoing payments in the event of a Disability shall be
reduced by the amount, if any, that is paid to Employee pursuant to a disability plan or policy
maintained by the Company. During this period, the Company shall also reimburse the Employee for
amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of
the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also
continue Employee’s life insurance and disability coverage, to the extent permitted under
applicable policies, and will pay to the Employee the fringe benefits pursuant to section 5 which
have accrued prior to the date of termination. Termination of this Agreement for a Disability
shall not change Employee’s rights to receive benefits, if any, pursuant to any disability plan or
policy then maintained by the Company.
(b) Termination Without Cause. If the Employee’s employment is terminated by the
Company for any reason other than for Cause, Disability or death, or if this Agreement is
terminated by the Company for what the Company believes is Cause or Disability, and it is
ultimately determined that the Employee was wrongfully terminated, Employee shall, as damages for
such a termination, receive Employee’s Base Salary, for the remainder of the Employment Period or
six months, if longer. During this period, the Company shall also reimburse the Employee for
amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of
the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also
continue Employee’s life insurance and disability coverage, to the extent permitted under
applicable policies, and will pay to the Employee the fringe benefits pursuant to section 5 which
have accrued prior to the date of termination. The Company’s termination of the Employee’s
employment under this section 6(b) shall immediately relieve the Employee of all obligations under
this Agreement (except as provided in sections 7 and 8) and, except as provided below, shall not be
construed to require the application of any compensation which the Employee may earn in any such
other employment to reduce the Company’s obligation to provide severance benefits and liquidated
damages under this section 6(b).
(c) Effect of Termination. The termination of the Employee’s employment pursuant to
section 6 shall not affect the Employee’s obligations as described in sections 7 and 8.
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7. Noncompetition. The parties agree that the Company’s customer contacts and
relations are established and maintained at great expense and by virtue of the Employee’s
employment with the Company, the Employee will have unique and extensive exposure to and personal
contact with the Company’s customers, and that Employee will be able to establish a unique
relationship with those individuals and entities that will enable Employee, both during and after
employment, to unfairly compete with the Company. Further, the parties agree that the terms and
conditions of the following restrictive covenants are reasonable and necessary for the protection
of the Company’s business, trade secrets and confidential information and to prevent great damage
or loss to the Company as a result of action taken by the Employee. The Employee acknowledges that
the noncompete restrictions and nondisclosure of confidential information restrictions contained in
this Agreement are reasonable and the consideration provided for herein is sufficient to fully and
adequately compensate the Employee for agreeing to such restrictions. The Employee acknowledges
that Employee could continue to actively pursue Employee’s career and earn sufficient compensation
in the same or similar business without breaching any of the restrictions contained in this
Agreement.
(a) During Term of Employment. The Employee hereby covenants and agrees that, during
Employee’s employment with the Company, Employee shall not, directly or indirectly, either
individually or as an employee, principal, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant or in any other capacity, participate in, become
associated with, provide assistance to, engage in or have a financial or other interest in any
business, activity or enterprise which is competitive with or a supplier to the Company or any
successor or assign of the Company. The ownership of less than a one percent interest in a
corporation whose shares are traded in a recognized stock exchange or traded in the
over-the-counter market, even though that corporation may be a competitor of the Company, shall not
be deemed financial participation in a competitor.
(b) Upon Termination of Employment. The Employee agrees that during a period after
termination of Employee’s employment with the Company equal to the shorter of one year or the
duration of Employee’s employment with the Company, Employee will not, directly or indirectly,
either individually or as an employee, agent, partner, shareholder, owner, trustee, beneficiary,
co-venturer, distributor, consultant or in any other capacity:
(i) Canvass, solicit or accept from any person or entity who is a customer of the Company (any
such person or entity is hereinafter referred to individually as a “Customer” and collectively as
the “Customers”) any business in competition with the business of the Company or the successors or
assigns of the Company, including the canvassing, soliciting or accepting of business from any
individual or entity which is or was a Customer of the Company within the two-year period preceding
the date on which the canvassing, soliciting or accepting of business begins.
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(ii) Request or advise any of the Customers, suppliers, or other business contacts of the
Company who currently have or have had business relationships with the Company within two years
preceding the date hereof or within two years preceding the date of such action, to withdraw,
curtail or cancel any of their business or relations with the Company.
(iii) Induce or attempt to induce any employee, sales representative, consultant or other
personnel of the Company to terminate his or her relationship or breach his or her agreements with
the Company.
(iv) Use, disclose, divulge or transmit or cause to be used by or disclosed, divulged or
transmitted to any third party, any information acquired by the Employee during the Employment
Period which relates to the trade secrets and confidential information of the Company, except as
may be required by law.
(v) Participate in, become associated with, provide assistance to, engage in or have a
financial or other interest in any business, activity or enterprise which is competitive with the
business of the Company or any successor or assign of the Company to the extent such activities
relate to products or services which are competitive with the products and services of the Company;
provided, however, that the ownership of less than 1% of the stock of a corporation whose shares
are traded in a recognized stock exchange or traded in the over-the-counter market, even though
that corporation may be a competitor of the Company, shall not be deemed financial participation in
a competitor.
For purposes of this section 7, a competitive business is defined as a business which is
involved in designing, developing, manufacturing or marketing mechanical, electro-mechanical and/or
electronic security and access control products in the global motor vehicle industry.
8. Confidential Information. The parties agree that the Company’s customers, business
connections, suppliers, customer lists, procedures, operations, techniques, and other aspects of
its business are established at great expense and protected as confidential information and provide
the Company with a substantial competitive advantage in conducting its business. The parties
further agree that by virtue of the Employee’s employment with the Company, Employee will have
access to, and be entrusted with, secret, confidential and proprietary information, and that the
Company would suffer great loss and injury if the Employee would disclose this information or use
it to compete with the Company. Therefore, the Employee agrees that during the term of Employee’s
employment, and for a period of two years after the termination of his employment with the Company,
Employee will not, directly or indirectly, either individually or as an employee, agent, partner,
shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant or in any other
capacity, use or disclose, or cause to be used or disclosed, any secret, confidential or
proprietary information acquired by the Employee during Employee’s employment with the Company
whether owned by the Company prior to or discovered and developed by the Company subsequent to the
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Employee’s employment, and regardless of the fact that the Employee may have participated in the
discovery and the development of that information. Employee also agrees and acknowledges that
Employee will comply with all applicable laws regarding xxxxxxx xxxxxxx or the use of material
nonpublic information in connection with the trading of securities.
9. Common Law of Torts and Trade Secrets. The parties agree that nothing in this
Agreement shall be construed to limit or negate the common law of torts or trade secrets where it
provides the Company with broader protection than that provided herein.
10. Specific Performance. The Employee acknowledges and agrees that irreparable
injury to the Company may result in the event the Employee breaches any covenant and agreement
contained in sections 7 and 8 and that the remedy at law for the breach of any such covenant will
be inadequate. Therefore, if the Employee engages in any act in violation of the provisions of
sections 7 and 8, the Employee agrees that the Company shall be entitled, in addition to such other
remedies and damages as may be available to it by law or under this Agreement, to injunctive relief
to enforce the provisions of sections 7 and 8.
11. Waiver. The failure of either party to insist, in any one or more instances, upon
performance of the terms or conditions of this Agreement shall not be construed as a waiver or a
relinquishment of any right granted hereunder or of the future performance of any such term,
covenant or condition.
12. Notices. Any notice to be given hereunder shall be deemed sufficient if addressed
in writing, and delivered by registered or certified mail or delivered personally, in the case of
the Company, to its principal business office, and in the case of the Employee, to his address
appearing on the records of the Company, or to such other address as he may designate in writing to
the Company.
13. Severability. In the event that any provision shall be held to be invalid or
unenforceable for any reason whatsoever, it is agreed such invalidity or unenforceability shall not
affect any other provision of this Agreement and the remaining covenants, restrictions and
provisions hereof shall remain in full force and effect and any court of competent jurisdiction may
so modify the objectionable provision as to make it valid, reasonable and enforceable.
Furthermore, the parties specifically acknowledge the above covenant not to compete and
covenant not to disclose confidential information are separate and independent agreements.
14. Amendment. This Agreement may only be amended by an agreement in writing signed
by all of the parties hereto.
15. Governing Law. This Agreement shall be governed by and construed exclusively in
accordance with the laws of the State of Wisconsin, regardless of choice of law requirements. The
parties hereby consent to the jurisdiction of the state
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courts of the State of Wisconsin and of any federal court in the venue of Wisconsin for the purpose
of any suit, action or proceeding arising out of or related to this Agreement, and expressly waive
any and all objections they may have as to venue in any of such courts.
16. Dispute Resolution. The parties hereto shall attempt to resolve disputes arising
out of or relating to this Agreement. Any dispute not resolved in writing within 21 days may be
referred by either party to mediation involving a mediator (a third party neutral), trained and
experienced in the mediation process and mutually agreed to by the parties. The mediator shall
ascribe to and follow the AAA/SPIDR or ABA code of ethics for mediators in conduct and management
of the mediation process. Expenses for the mediation shall be shared equally by the parties unless
otherwise agreed during the mediation process. The parties may be accompanied in the mediation
process by legal counsel, and/or other persons mutually agreed to by the parties and the mediator.
All participants will openly and honestly participate in the mediation. The mediation may be
terminated at any time, for any reason by the mediator or by either party. Any resolution reached
by the parties during the mediation shall be recorded in writing and agreed to by the parties.
Such resolution may be drafted and/or revised by the parties’ legal counsel and shall be legally
binding on the parties.
17. Benefit. This Agreement shall be binding upon and inure to the benefit of and
shall be enforceable by and against the Company, its successors and assigns and the Employee, his
heirs, beneficiaries and legal representatives. It is agreed that the rights and obligations of
the Employee may not be delegated or assigned.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of
the day, month and year first above written.
| EMPLOYEE | STRATTEC SECURITY CORPORATION | |||
| /s/ Xxxxxxx Xxxxxxx | BY | /s/ Xxxxxx X. Xxxxxxxx XX | ||
| Xxxxxxx Xxxxxxx | Xxxxxx X. Xxxxxxxx XX, Chairman of the Board and Chief Executive Officer |
|||
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