FIRST AMENDMENT TO
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS FIRST AMENDMENT, dated as of October 31, 1996 (the "First
Amendment"), TO THE EMPLOYMENT AND NONCOMPETITION AGREEMENT dated as of
October 28, 1993 (the "Original Agreement"), by and among HK SYSTEMS, INC.
(formerly known as HARNISCHFEGER ENGINEERS, INC.) (the "Company"), HEI
SYSTEMS, INC. ("Systems") and ______________ (the "Employee").
WHEREAS, the Company, Systems and the Employee are parties to the
Original Agreement; and
WHEREAS, the parties wish to set forth in this First Amendment
certain agreements that they have reached.
IN CONSIDERATION herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I
AMENDMENTS
1.1 Amendments. The parties hereby agree that the Original
Agreement be and it hereby is amended as follows:
(a) Section 14 of the Original Agreement is deleted in its entirety
and replaced with the following new Section 14:
14. Puts of and Calls on Stock.
a. Puts.
(1) Purchase of Stock at EmploYee's Death. Upon the death
of the Employee, the Representative may require Systems
to purchase all but not less than all of the Stock
owned by the Employee at the time of the Employee's
death, and any Transferee may require Systems to
purchase all but not less than all of the Stock owned
by it at the time of the Employee's death, in
accordance with the provisions of this Section 14 of
this Agreement. This option may be exercised by notice
to Systems given within six (6) months after the date
of death of the Employee. Upon the giving of such
notice, the Person who gave such notice shall be
obligated to sell and Systems shall be obligated to
purchase the Stock at Fair Market Value per share.
Systems shall pay to such Person by cash an amount
equal to the lesser of the Purchase Price or the Life
Insurance Proceeds at the closing of any such purchase.
Any remaining balance shall be payable by Systems
giving such Person a promissory note payable in equal
monthly installments over the course of 36 months at an
interest rate equal to the publicly announced prime
rate of interest of M&l Xxxxxxxx & Xxxxxx Bank,
changing on each day such prime rate changes. In the
event that more than one Person gives Systems such a
notice, the cash paid to each Person at the closing of
any such purchase shall be an amount equal to the
lesser of (i) the Purchase Price or (ii) the Life
Insurance Proceeds multiplied by a fraction, the
numerator of which is the number of shares of Stock
owned by such Person and the denominator of which is
the number of shares of Stock owned by all Persons who
have given notice to Systems under this Section
14(a)(1) of this Agreement.
(2) Purchase of Stock Upon Termination of Employment
Without Cause or for Disability. Upon the termination
of the employment of the Employee by the Company
without Cause or for Disability, the Employee may
require Systems to purchase all but not less than all
of the Stock owned by the Employee at the time of such
termination, and any Transferee may require Systems to
purchase all but not less than all of the Stock owned
by it at the time of such termination, in accordance
with the provisions of this Section 14 of this
Agreement. This option may be exercised by notice to
Systems given within six (6) months after the
termination. Upon the giving of such notice, Systems
shall be obligated to purchase and the Person who gave
such notice shall be obligated to sell the Stock at
Fair Market Value per share. Systems shall pay the
amount due by giving such Person a promissory note
payable in equal monthly installments over the course
of 36 months at an interest rate equal to the publicly
announced prime rate of interest of M&I Xxxxxxxx &
Ilsley Bank, changing on each day such prime rate
changes.
b. Systems' Calls.
(1) Purchase of Stock Upon Employee's Death Upon
Termination Without Cause or for Disability. Upon the
Employee's death, or termination of the Employee's
employment by the Company without Cause, or for
Disability, Systems may require the Employee and any
Transferees to sell all but not less than all of the
Stock owned by the Employee and any such Transferees in
accordance with the provisions of this Section 14 of
this Agreement. Systems may exercise such option by
notice to the Employee and any such Transferees given
within six (6) months after the Employee's death or
termination. Upon the giving of such notice, Systems
shall be obligated to purchase and the Employee and any
such Transferees shall be obligated to sell the Stock
at Fair Market Value per share.
(2) Purchase of Stock Upon Employee's Resignation or
Termination with Cause. Upon Employee's resignation of
his employment with the Company for any reason,
including Good Reason, or upon termination by the
Company of the Employee's employment for Cause, Systems
may require the Employee and any Transferees to sell
all but not less than all of the Stock owned by the
Employee and any such Transferees in accordance with
the provisions of this Section 14 of this Agreement.
Systems may exercise such option by notice to the
Employee and any such Transferees given within six (6)
months after the termination or resignation. Upon the
giving of such notice, Systems shall be obligated to
purchase and the Employee and any such Transferees
shall be obligated to sell the Stock at the greater of
its Book Value or the actual purchase price paid by the
Employee for such Stock.
c. Purchase of Employee's and Transferee's Stock. The Employee
or any Transferee may, if the Employee terminates his
employment with the Company for reason on or after November
1, 1998, request the Board of Directors of Systems to
consider a purchase of the Stock owned by the Employee or
such Transferee at Fair Market Value per share. The Board of
Directors of Systems shall reasonably consider such request
taking into account the reasons for the request, the personal
health and financial situation of the Employee at that time
and the financial condition of Systems at that time. If the
Board of Directors of Systems agrees to such request by the
Employee or any Transferee, the noncompetition provisions
contained in Section 13(a) of this Agreement shall be
extended to five (5) years from and after the date of
termination of employment. The Board of Directors of Systems
can only grant such request upon an 80% vote of the entire
Board of Directors of Systems.
d. Determination of Fair Market Value. In the event that a
notice which requires Systems to purchase the Stock is given
pursuant to Section 14(a)(1), Section 14(a)(2), Section
14(b)(1) or Section 14(b)(2) of this Agreement, Systems and
the Employee (or the Representative, if applicable) shall
attempt to reach agreement on the Fair Market Value. If
Systems and the Employee (or the Representative, if
applicable) cannot agree on the Fair Market Value within
sixty (60) calendar days after the date the relevant notice
was given, then Systems or the Employee (or the
Representative, if applicable) may notify the other that an
Appraiser shall be selected and the Fair Market Value shall
be determined by the Appraiser. If Systems and the Employee
(or the Representative, if applicable) agree on the Fair
Market Value, each Transferee may either (i) sell its Stock
at the Fair Market Value agreed upon by Systems and the
Employee (or the Representative, if applicable) or (ii)
within sixty (60) calendar days after the date the relevant
notice was given notify Systems that an Appraiser shall be
selected and the Fair Market Value shall be determined by the
Appraiser.
e. Closing of Sale.
(1) The Employee or the Representative, if applicable,
and/or any Transferee shall sell the relevant Stock at
a closing to be held at the principal place of business
of Systems on a date which is ninety (90) calendar days
after the date any notice exercising an option
described in this Section 14 is given; provided,
however, that a closing pursuant to a sale under
Section 14(a)(1) of this Agreement need not be held
prior to the time that all Persons who may give notice
to Systems pursuant to such subsection have given such
notice and/or have given notice to Systems that they do
not intend to exercise the option described in such
subsection. At such Closing: (A) Systems shall
deliver to the Employee (or the Representative or
Transferee, if applicable) a bank cashier's or
certified check, or Systems' promissory note (or both,
if applicable), in the full amount of the purchase
price; and (B) the Employee (or the Representative or
Transferee, if applicable) shall deliver to Systems
certificates representing the relevant Stock duly
endorsed in blank.
(2) Notwithstanding anything to the contrary in this
Section 14 of this Agreement, Systems shall not be
required to purchase Stock while, and to the extent,
such purchase would result in a violation of applicable
law or of any contract to which Systems or the Company
is a party (including, without limitation, a violation
of any covenant with may be contained in any loan
agreement in effect from time to time); provided,
however, that Systems and the Company will use
reasonable efforts to cure or avoid such violation in
order to permit such repurchase.
(b) The following new Section 1(u) is added to the Original
Agreement:
u. Transferee. "Transferee" shall mean a person to whom a
"Permitted Transfer" of Stock has been made pursuant to
the First Amended and Restated Shareholders Agreement
dated as of October 28, 1993 as amended and restated on
February 13, 1995, and amended as of the date hereof,
among the Employee, Systems and certain others.
ARTICLE II
MISCELLANEOUS
2.1 Continuance of Agreement. Except as specifically amended by
this First Amendment, the Original Agreement shall remain in full force
and effect.
2.2 Governing Law. This First Amendment shall be governed by the
internal laws of the State of Wisconsin.
2.3 Counterparts; Headings. This First Amendment may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same agreement.
The article and section headings in this First Amendment are inserted for
convenience of reference only and shall not constitute a part hereof.
IN WITNESS THEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
HK SYSTEMS, INC.
By:
Xxxx X. Xxxxx, Vice President
Attest:
Xxxx X. Xxxxxxxxxx, Secretary
HEI SYSTEMS, INC.
By:
Xxxx X. Xxxxx, Vice President
Attest:
Xxxx X. Xxxxxxxxxx, Secretary
_________________________(SEAL)
HARNISCHFEGER ENGINEERS, INC.
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment and Noncompetition Agreement is entered into as of
this 28th day of October, 1993, by and among HARNISCHFEGER ENGINEERS,
INC., HEI SYSTEMS, INC. and _______________.
RECITALS:
WHEREAS, the Company desires to continue to employ the Employee and
to set forth the terms and conditions of the Employee's employment and the
Employee desires to continue to be employed by the Company on the terms
and conditions set forth in this Agreement; and
WHEREAS, during the course of employment, the Employee has learned
and will learn the identities of the Company's customers, their purchasing
needs and habits and the names of the personnel charged with purchasing
responsibilities and the Company's methods of doing business; and
WHEREAS, the Company's list of customers has been compiled by the
Company and the Company's methods of doing business have been developed by
the Company at considerable expense over a number of years; and
WHEREAS, but for his employment at the Company, Employee would not be
able to easily duplicate the Company's customer list or be thoroughly
familiar with its methods of doing business; and
WHEREAS, the Company's customer list and methods of doing business
are of considerable economic value to the Company; and
WHEREAS, Systems owns all of the issued and outstanding shares of
capital stock of the Company and the Employee owns certain shares of the
issued and outstanding shares of capital stock of Systems;
WHEREAS, THE EMPLOYEE HAS REVIEWED THE MATTERS RECITED IN THE SIX
PARAGRAPHS ABOVE AND CONFIRMS THAT HE AGREES WITH THOSE RECITALS.
NOW, THEREFORE
In consideration of the Recitals and of the mutual promises and
covenants set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is hereby
agreed as follows:
1. Definitions. When used in this Agreement, the following terms shall
have the meanings specified:
a. Agreement. "Agreement" shall mean this Employment and
Noncompetition Agreement, as the same shall be amended from time
to time in accordance with the terms hereof.
b. Appraiser. "Appraiser" shall mean a Person of recognized
standing whose usual and regular business is the determination
of the fair market value of businesses which shall be: (1)
jointly selected by Systems and the Employee (or the
Representative, if applicable); or (2) if Systems and the
Employee (or the Representative, if applicable) cannot agree on
the identity of the Appraiser within ten (10) calendar days
after the giving of a notice from any Person requiring the
selection of an Appraiser under this Agreement, then the
identity of the Appraiser shall be selected by the Chief Judge
of the United States District Court for the Eastern District of
Wisconsin.
c. Book Value. "Book Value" shall mean an amount equal to: (1)
all consolidated assets of Systems and the Company (including
goodwill, patents, trademarks, trade names, copyrights and other
intangible assets) determined in accordance with generally
accepted accounting principles; minus (2) all consolidated
liabilities of Systems and the Company determined in accordance
with generally accepted accounting principles; minus, without
duplication (3) the amount of the liquidation value plus all
cumulative and unpaid dividends payable by Systems for all
shares of Preferred Stock of Systems issued and outstanding on
the date of such calculation; minus, without duplication (4) the
amount of the liquidation value plus all cumulative and unpaid
dividends payable by the Company for all shares of Preferred
Stock of the Company issued and outstanding on the date of
calculation.
d. Cause. The following actions on the part of the Employee shall
be considered as "Cause":
(1) Personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, willful violation
of any law, rule, or regulation (other than traffic
violations or similar offenses), or habitual use of alcohol
or drugs: (A) which materially impairs the Employee's
ability to carry out his duties; and (B) as to which the
Board of Directors of the Company makes a good faith
determination that such conduct has occurred and that such
conduct meets the standard set forth in Section 1(d)(1)(A)
of this Agreement;
(2) Rendering any assistance to any Person in that Person's
competitive efforts with the Company;
(3) Use of the Company's proprietary information or customer
lists for the Employee's own benefit or in a way adverse to
the Company's interests; or
(4) A good faith determination by the Company, after a notice
to the Employee and an opportunity to meet with the Board
of Directors of the Company concerning such matter, that
the Employee has breached any material provision of this
Agreement.
e. Company. "Company" shall mean Harnischfeger Engineers, Inc., a
Delaware corporation.
f. Competitive Product. "Competitive Product" shall mean a product
or service, made or provided by a Competitor, which is the same
as or is directly competitive with one with respect to which the
Employee acquired confidential information relating to the
Company, or its business, products or services by reason of the
Employee's work with the Company.
g. Competitor. "Competitor" shall mean any Person engaged in, or
about to become engaged in, the production or sale, or both, of
any product or service in any part of the United States of
America which is directly competitive with one with respect to
which the Employee acquired confidential information relating to
the Company, or its business, products or services by reason of
the Employee's work with the Company.
h. Creations. "Creations" shall mean all manuscripts, programs,
writings, pictorial materials, and other creations created by
the Employee, either individually or jointly, during the
Employee's employment by the Company, and which relate to the
business of the Company.
i. Disability. "Disability" shall mean that the Employee has been
declared mentally incompetent by a Wisconsin court or shall have
been disabled for a consecutive period of 120 days so that the
Employee is unable to perform the Employee's duties as an
employee of the Company under this Agreement. Any dispute as to
the existence of a Disability or its duration shall be submitted
to a licensed physician agreed upon by the Employee and the
Company or, failing such agreement, to one appointed by the
President of the Medical Society of Wisconsin at the request of
either the Employee or the Company. The Employee shall
cooperate in such determination and the determination of such
physician shall be binding and conclusive upon the parties.
j. Employee. "Employee" shall mean ______________.
k. Fair Market Value. "Fair Market Value" shall mean the aggregate
fair market value of the Stock at the date of appraisal
calculated: (1) without any discount of any kind, whether for
lack of marketability, minority holdings, the size of Systems or
any other factor; and (2) as if such value were calculated for
sale of Systems as a whole to a Person who is not an affiliate
of Systems or the Company.
l. Good Reason. "Good Reason" shall mean that the Company has
breached any provision of this Agreement.
m. Inventions. "Inventions" shall mean all inventions,
discoveries, developments, improvements, works, ideas, and other
contributions, whether or not patented or patentable or
otherwise protectable in law, which are conceived, made,
developed or acquired by the Employee, either individually or
jointly, during the employment of the Employee by the Company
and which relate in any manner to the Employee's work, the
research or business of the Company, or fields to which the
business of the Company may reasonably extend.
n. Investors. "Investors" shall mean the owners of shares of the
Class B Cumulative Preferred Stock of Systems.
o. Life Insurance Proceeds. "Life Insurance Proceeds" shall mean
the net amount of cash proceeds actually received by Systems or
the Company as a result of the Employee's death, which are: (1)
not pledged by Systems or the Company to secure any indebtedness
of Systems or the Company; and (2) not required to be paid by
Systems or the Company to other Persons by any contract entered
into by Systems or the Company prior to the Employee's death.
p. Person. "Person" shall mean and include an individual,
partnership, corporation, trust, incorporated organization and a
government or any department or agency thereof.
q. Representative. "Representative" shall mean, after the
Employee's death, the duly appointed and qualified executor or
personal representative of the estate of the Employee.
r. Restricted Area. "Restricted Area" shall mean anywhere within a
twenty-five (25) mile radius of any location in any U.S. city in
which the Company had, at any time while the Employee was
employed by the Company, a place of business or customers.
s. Stock. "Stock" shall mean all shares of Common Stock of Systems
owned by the Employee at the execution of this Agreement or
acquired hereafter.
t. Systems. "Systems" shall mean HEI Systems, Inc., a Wisconsin
corporation.
2. Employment. The Company hereby agrees to continue the employment of
the Employee and the Employee hereby accepts continued employment
with the Company in accordance with the terms and conditions set
forth in this Agreement. Except for illness, vacation periods and
reasonable leaves of absence approved by the Board of Directors of
the Company, the Employee agrees to devote the Employee's full time,
skill, knowledge, and attention to the business of the Company and
the performance of the duties of the Employee under this Agreement.
During the term of employment, it shall not be a violation of this
Agreement for the Employee to do one or more of the following, so
long as such activities do not interfere with the performance of the
Employee's responsibilities as an employee of the Company in
accordance with this Agreement: (a) serve on corporate, civic, trade
or charitable boards or committees; (b) deliver lectures or fulfill
speaking engagements; and (c) manage personal investments.
3. Term. This Agreement shall commence on the date first above written
and continue indefinitely until effective notice of termination is
given by the Employee or the Company to the other. THE EMPLOYEE'S
EMPLOYMENT WITH THE COMPANY IS ON AN AT-WILL BASIS. Either the
Employee or the Company may terminate the Employee's employment with
the Company at any time and for any reason or no reason at all,
subject only to the parties' obligations as described in Section 8 of
this Agreement.
4. Duties. The Employee shall be employed as a Senior Vice President of
the Company or in such other executive position with the Company as
may be mutually agreed to between the Company and the Employee. The
Employee shall perform such services and duties as are usually and
customarily required of a Person holding such position with a
business corporation. The services to be performed by the Employee
shall be principally rendered in or about Milwaukee, Wisconsin or
such other place at which the Company makes its corporate
headquarters, together with such business travel as may be necessary
for the Employee to satisfactorily perform the duties required under
this Agreement.
5. Compensation. The Company shall pay to the Employee a base annual
salary of $140,000, which salary shall be reviewed annually by the
Board of Directors of the Company for possible adjustment and shall
be paid in approximately equal installments at the usual and
customary times established by the Company. The Company shall deduct
from all payments made to the Employee under this Agreement any
federal, state or local withholding or other taxes or charges which
the Company is required to deduct under applicable law. The Company
shall have the right to rely upon a written opinion of counsel if any
questions arise as to any deductions.
6. Additional Benefits. The Employee shall be entitled to the following
additional benefits:
a. Vacation/Holidays. The Employee shall be entitled to paid
vacations and holidays as provided to other senior executive
employees of the Company.
b. Expense Reimbursement. The Company shall pay, upon submission
of appropriate vouchers and supporting documentation, all
expenses of the Employee incurred in connection with the
rendering of services to the Company as an employee pursuant to
this Agreement in accordance with the Company's usual and
ordinary practices, provided that such expenses are reasonable
and necessary business expenses of the Company.
c. Automobile. The Company shall provide the Employee with the use
of a Company-provided vehicle in accordance with Company policy.
d. Bonus Program. The Employee will be eligible to participate in
an executive bonus program to be established by the Board of
Directors of the Company, pursuant to which the Employee may
earn up to 40% of the Employee's base salary in any year. The
bonus program will include a combination of annual performance
benchmarks and long-term benchmarks for both the Employee and
the Company.
e. Miscellaneous. The Employee shall be entitled to other fringe
benefits generally provided to senior management of the Company,
including health insurance, disability insurance, term life
insurance, pension and profit-sharing and other programs
established by the Board of Directors of the Company.
7. Life Insurance. The Company will purchase life insurance on the
Employee's life, payable to the Company or Systems in an amount equal
to at least Four Hundred Thousand Dollars ($400,000) in excess of the
amount required by the Company's or Systems' lenders.
8. Termination.
a. Termination Without Cause or for Good Reason. As stated in
Section 3 of this Agreement, the Employee's employment may be
terminated by the Company or by the Employee at any time and for
any reason or for no reason at all. However, if the Employee's
employment with the Company is terminated by the Company without
Cause, or by the Employee for Good Reason, or as the result of
the Employee's Disability, the Employee shall receive the
Employee's then current base salary for a one (1) year period
after such termination, plus the continuation in the health,
disability and term life insurance programs of the Company
during such one year period at the Company's expense. The
severance pay shall be paid to the Employee at the same times as
the Company generally pays management employees. If the
Employee's employment is terminated as the result of Disability,
any severance payments shall be reduced by any gross insurance
proceeds actually received by the Employee from the Company
sponsored disability insurance. The severance payments shall
not be reduced by any other compensation received by the
Employee during the severance period unless such compensation is
received from Competitors. The Employee shall have no
obligation to seek other employment or otherwise mitigate
damages hereunder.
b. Termination for Cause or Without Good Reason. In the event that
the Employee's employment with the Company is terminated by the
Company for Cause or by the Employee without Good Reason, the
Employee shall be paid compensation only through the date of
such termination and all other financial obligations of the
Company to the Employee under this Agreement and all benefits
under this Agreement shall cease as of the date of such
termination.
c. Return of the Company's Materials. Upon termination for any
reason, the Employee shall immediately return to the Company all
files, credit cards, keys, computers, instruments, equipment,
vehicles, and other materials owned or provided by the Company.
9. Confidential Information. The Employee acknowledges that through the
services to be performed for the Company, the Employee will obtain
confidential information regarding the Company's business affairs,
including such matters as computer programs, research, customer
lists, customer development, planning, purchasing, finance,
marketing, customer relations, and other information of a similar
nature not available to the public. This information may be oral or
written and may be that which the Employee originates as well as that
which otherwise comes into the possession or knowledge of the
Employee. The Employee agrees to treat all matters relating to the
business activities of the Company as confidential and not to divulge
or disclose any information gained in connection with the employment
of the Employee by the Company to any other Person except upon the
written request or instruction of the Company or in the normal course
of the duties of the Employee as an employee of the Company. The
Employee agrees not to use or disclose, for purposes of marketing or
otherwise, any of the customer information the Employee receives
while working at the Company (including, but not limited to,
customers' identity, financial status and holdings), either on behalf
of the Employee or as a representative, agent, employee, officer,
director, trustee, stockholder, or creditor of, or partner, joint
venturer, or investor with or in any Competitor, except for any
information which is or becomes generally available to the public, or
otherwise comes into possession of the Competitor, other than as a
result of disclosure by the Employee. This Section 9 is intended to
protect confidential information and customer relationships, both
during and after the period of the Employee's employment with the
Company, and not to limit the Employee's right to seek and obtain
employment in competition with the Company after termination of the
Employee's employment with the Company, which is covered by Section
13 of this Agreement.
10. Relationship with Others. The parties agree that the profitability
and goodwill of the Company depend on continued amicable relations
with its suppliers and customers, and the Employee: (a) except on
behalf of the Company, will not approach for any reason, nor solicit
any business of any kind from, any former, present or future customer
of the Company; or (b) cause, request or advise any suppliers or
customers of the Company to curtail or cancel their business with the
Company. Nothing in Section 10(a) shall, after termination of the
Employee's employment with the Company for any reason, prevent the
employment of the Employee by a customer or supplier of the Company
unless such employment violates Section 13(a) of this Agreement.
This provision shall apply to any customers or suppliers of the
Company during the three (3) year period prior to the termination of
the Employee's employment or to Persons with an active proposal from
the Company on the date of the termination of the Employee's
employment. This provision shall apply for three (3) years after
termination of the Employee's employment with the Company if the
termination is for Cause and for one (1) year if the termination is
for any other reason.
11. Inventions and Creations.
a. Inventions. The Employee agrees that all Inventions shall
belong to the Company. The Employee agrees to and does hereby
assign and transfer to the Company the entire right, title, and
interest of the Employee in and to all Inventions. The Employee
further agrees to promptly and fully disclose all Inventions to
the Company, in writing if requested by the Company, and to
execute and deliver any and all lawful applications,
assignments, and other documents which the Company requests for
protecting the Inventions in the United States or in any other
country. The Company shall have the full and sole power to
prosecute such applications and to take all other actions
concerning the Inventions, and the Employee agrees to cooperate
fully, at the expense of the Company, in the preparation and
prosecution of all such applications and in any legal actions
and proceedings concerning the Inventions.
b. Creations. The Employee agrees to and does hereby assign,
convey, and transfer to the Company all Creations. The Company
shall have the full right to seek and procure copyrights on the
Creations, and the Employee shall cooperate fully, at the
expense of the Company, in securing copyrights and in any legal
actions and proceedings concerning the Creations.
c. Presumption of Company Ownership. Without diminishing any
rights granted to the Company in Sections 11(a) and 11(b), if an
Invention is described in a patent application or is disclosed
to third parties by the Employee within two (2) years after
leaving the employ of the Company, or if a Creation is published
or is disclosed to third parties by the Employee within two (2)
years after leaving the employ of the Company, the Employee
agrees that it is to be rebuttably presumed that the Invention
or the Creation was conceived, made, developed, acquired, or
created by the Employee during the period of employment of the
Employee by the Company, and the Invention or Creation will
belong the Company.
12. Noncompetition While Employed By The Company. The Employee agrees
not to compete with the Company in any territory in which the Company
sells its products or provides its services, either on behalf of the
Employee, or as a representative, agent, employee, officer, director,
trustee, stockholder, or creditor of, or partner, joint venturer, or
investor with or in, any other Person, during his employment with the
Company.
13. Noncompetition After Termination of Employment.
a. Scope of Noncompetition. The Employee agrees that for one (1)
year after the termination of the Employee's employment with the
Company, regardless of the reason for such termination, the
Employee will not:
(1) Render services, either directly or indirectly, to any
Competitor in connection with the development, manufacture,
sale, merchandising or promotion of any Competitive
Product; or
(2) Engage, either directly or indirectly, within the
Restricted Area, for the Employee or as an investor, in the
development, manufacture, purchase or sale of any
Competitive Product.
b. Exceptions to Scope of Noncompetition.
(1) Nothing in Section 13(a) of this Agreement shall prohibit
the Employee from owning or acquiring securities of
Systems, the Company or of any corporation or other
business enterprise that may be engaged in activities
described in Section 13(a), provided that: (A) the
Employee is not an officer, director or employee of, or
consultant to, such corporation or business enterprise; (B)
such securities are held by the Employee for investment
purposes and represent less than five percent (5%) of the
total equity interests of such corporation or business
enterprise; and (C) such securities are listed on a
national securities exchange or are regularly quoted in the
over the counter market by one or more members of the
National Association of Securities Dealers.
(2) It shall not be deemed a violation of Section 13(a) if the
Employee accepts employment with a business entity which is
diversified and made up of separate divisions and which, as
to parts of its business, is not a Competitor, provided the
Company shall be furnished prior to such employment
definite written assurances satisfactory to it, separately
from the Employee and such business entity, that the
Employee will not be expected, required or permitted to and
in fact does not render services directly or indirectly to
a division or a part of such business entity which division
or part is a Competitor.
c. Notification to the Company. During the period of time that the
Employee is subject to the provisions of Section 13(a) of this
Agreement, the Employee shall notify the Board of Directors of
the Company of any occupation or employment which the Employee
proposes to take up after termination of employment with the
Company and shall furnish to the Company such written or oral
information as it may reasonably request concerning such
proposed occupation or employment. Upon request of the
Employee, the Company agrees to notify the Employee promptly,
and in any event within thirty (30) days after receipt of the
requested information, whether or not the Company considers such
occupation, based on the information so furnished or derived
from its independent investigation, to come within the
provisions of Section 13(a) and, if the Company considers such
occupation to come within the provisions of Section 13(a),
whether the Company will waive any of the provisions thereof.
14. Puts of and Calls on Employee's Stock.
a. Employee's Puts.
(1) Purchase of Employee's Stock at Death. Upon the death of
the Employee, the Representative may require Systems to
purchase the Stock owned by the Employee at the time of
death in accordance with the provisions of this Section 14
of this Agreement. The Representative may exercise such
option by notice to Systems given within six (6) months
after the date of death of the Employee. Upon the giving
of such notice, the Representative shall be obligated to
sell and Systems shall be obligated to purchase the Stock
at Fair Market Value per share. Systems shall pay to the
Representative by cash an amount equal to the lesser of the
Purchase Price or the Life Insurance Proceeds at the
closing of any such purchase. Any remaining balance shall
be payable by Systems giving the Representative a
promissory note payable in equal monthly installments over
the course of 36 months at an interest rate equal to the
publicly announced prime rate of interest of M&I Xxxxxxxx &
Ilsley Bank, changing on each day such prime rate changes.
(2) Purchase of Employee's Stock Upon Termination Without Cause
or for Disability. Upon the termination of the employment
of the Employee by the Company without Cause or for
Disability, the Employee may require Systems to purchase
all but not less than all of the Stock owned by the
Employee in accordance with the provisions of this Section
14 of this Agreement. The Employee may exercise such
option by notice to Systems given within six (6) months
after the termination. Upon the giving of such notice,
Systems shall be obligated to purchase and the Employee
shall be obligated to sell the Stock at Fair Market Value
per share. Systems shall pay the amount due by giving the
Employee a promissory note payable in equal monthly
installments over the course of 36 months at an interest
rate equal to the publicly announced prime rate of interest
of M&I Xxxxxxxx & Xxxxxx Bank, changing on each day such
prime rate changes.
b. Systems' Calls.
(1) Purchase of Employee's Stock Upon Death, Upon Termination
Without Cause or for Disability. Upon the Employee's
death, or termination of the Employee's employment by the
Company without Cause, or for Disability, Systems may
require the Employee to sell all but not less than all of
the Stock owned by the Employee in accordance with the
provisions of this Section 14 of this Agreement. Systems
may exercise such option by notice to the Employee given
within six (6) months after the termination. Upon the
giving of such notice, Systems shall be obligated to
purchase and the Employee shall be obligated to sell the
Stock at Fair Market Value per share.
(2) Purchase of Employee's Stock Upon Resignation or
Termination with Cause. Upon Employee's resignation of his
employment with the Company for any reason, including Good
Reason, or upon termination by the Company of the
Employee's employment for Cause, Systems may require the
Employee to sell all but not less than all of the Stock
owned by the Employee in accordance with the provisions of
this Section 14 of this Agreement. Systems may exercise
such option by notice to the Employee given within six (6)
months after the termination or resignation. Upon the
giving of such notice, Systems shall be obligated to
purchase and the Employee shall be obligated to sell the
Stock at the greater of its Book Value or the actual
purchase price paid by the Employee for such Stock.
c. Purchase of Employee's Stock. The Employee may, if the Employee
terminates his employment with the Company for any reason on or
after November 1, 1998, request the Board of Directors of
Systems to consider a purchase of the Stock owned by the
Employee at Fair Market Value per share. The Board of Directors
of Systems shall reasonably consider such request, taking into
account the Employee's reasons for the request, the personal
health and financial situation of the Employee at that time and
the financial condition of Systems at that time. If the Board
of Directors of Systems agrees to such request, the
noncompetition provisions contained in Section 13(a) of this
Agreement shall be extended to five (5) years from and after the
date of termination of employment. The Board of Directors of
Systems can only grant such request upon an 80% vote of the
entire Board of Directors of Systems.
d. Determination of Fair Market Value. In the event that a notice
which requires Systems to purchase the Stock is given pursuant
to Section 14(a)(1), Section 14(a)(2), Section 14(b)(1), Section
14(b)(2) or Section 14(c) of this Agreement, Systems and the
Employee (or the Representative, if applicable) shall attempt to
reach agreement on the Fair Market Value. If Systems and the
Employee (or the Representative, if applicable) cannot agree on
the Fair Market Value within sixty (60) calendar days after the
date the relevant notice was given, then Systems or the Employee
(or the Representative, if applicable) may notify the other that
an Appraiser shall be selected and the Fair Market Value shall
be determined by the Appraiser.
e. Closing of Sale.
(1) The Employee or the Representative, if applicable, shall
sell the relevant Stock at a closing to be held at the
principal place of business of Systems on a date which is
ninety (90) calendar days after the date any notice
exercising an option described in this Section 14 is given.
At such Closing: (A) Systems shall deliver to the Employee
(or the Representative, if applicable) a bank cashier's or
certified check, and Systems' promissory note, in the full
amount of the purchase price; and (ii) the Employee or the
Representative, if applicable, shall deliver to Systems
certificates representing the relevant Stock duly endorsed
in blank.
(2) Notwithstanding anything to the contrary in this Section 14
of this Agreement, Systems shall not be required to
purchase Stock while, and to the extent, such purchase
would result in a violation of applicable law or of any
contract to which Systems or the Company is a party
(including, without limitation, a violation of any covenant
which may be contained in any loan agreement in effect from
time to time); provided, however, that Systems or the
Company will use reasonable efforts to cure or avoid such
violation in order to permit such repurchase.
15. Remedies. In addition to other remedies provided by law or equity,
upon a breach by the Employee of any of the covenants contained
herein, Systems and the Company shall be entitled to have a court of
competent jurisdiction enter an injunction against the Employee
prohibiting any further breach of the covenants contained herein.
The parties further agree that the services to be performed by the
Employee hereunder are of a unique, special, and extraordinary
character. Therefore, in the event of any controversy concerning
rights or obligations under this Agreement, such rights or
obligations shall be enforceable in a court of competent jurisdiction
at law or equity by a decree of specific performance or, if Systems
or the Company elects, by obtaining damages or such other relief as
Systems or the Company may elect to pursue. Such remedies, however,
shall be cumulative and nonexclusive and shall be in addition to any
other remedies which Systems or the Company may have.
16. Assignment. This Agreement and the respective rights, duties, and
obligations of the Employee hereunder may not be assigned or
delegated by the Employee.
17. Notice. Any notice (including notice of change of address) permitted
or required to be given pursuant to the provisions of this Agreement
shall be in writing and sent by registered or certified mail, return
receipt requested, or by hand delivery to the parties at the
following addresses:
If to Systems or Harnischfeger Engineers, Inc.
the Company: Attention: President
00000 Xxxxxxx Xxxx
Xxxxxxxxxx XX 00000
with a copy to:
Xxxxxxx & Xxxxx
Attention: Xxxxxxx X. Xxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Employee: __________________________
__________________________
__________________________
Notice properly given by mail shall be deemed effective one (1)
business day after mailing.
18. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between Systems, the Company and the Employee
concerning the Employee's employment by the Company, and supersedes
the letter agreement dated August 31, 1993 between Systems and the
Employee and any and all other previous agreements or understandings,
whether written or oral, among Systems, the Employee and the Company
concerning such employment. This Agreement may not be modified
orally.
19. Waiver. The waiver by any party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a
waiver of any subsequent breach by any party.
20. Invalidity of any Provision. The provisions of this Agreement are
severable, it being the intention of the parties that should any
provision hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining
provisions hereof, but the same shall remain in full force and effect
as if such invalid or unenforceable provision were omitted.
21. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.
22. Headings. Headings in this Agreement are for informational purposes
only and shall not be used to construe the intent of this Agreement.
23. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same agreement.
24. Expenses. If any legal proceeding is necessary by the Employee,
Systems or the Company to enforce or interpret the terms of this
Agreement or to recover damages for the breach of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys
fees and necessary costs and expenses incurred in such litigation
from the losing party in addition to any other relief to which the
prevailing party may otherwise be entitled.
25. Reasonableness of Restrictions. THE EMPLOYEE HAS READ THIS AGREEMENT
AND AGREES THAT THE CONSIDERATION PROVIDED BY THE COMPANY IS FAIR AND
REASONABLE AND FURTHER AGREES THAT GIVEN THE IMPORTANCE TO THE
COMPANY OF THE CUSTOMER LIST AND THE COMPANY'S PARTICULAR METHODS OF
DOING BUSINESS, THE POST-EMPLOYMENT RESTRICTIONS ON THE EMPLOYEE'S
ACTIVITIES ARE LIKEWISE FAIR AND REASONABLE.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
and Noncompetition Agreement as of the date first above written.
HARNISCHFEGER ENGINEERS, INC.
By:________________________________
Xxxx X. Xxxxxx, President
HEI SYSTEMS, INC.
By:________________________________
Xxxx X. Xxxxxx, President
______________________________(SEAL)
____________________
