EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into to be effective as of April 25,
2011 (the “Effective Date”), between PEERLESS MFG. CO. (“Employer”), and XXXXXX X.
XxXXXXXXX (“Employee”).
Section 1. Employment.
1.1 Employment and Term. Subject to the terms and conditions of this Agreement,
Employer agrees to employ Employee as the Vice President & Chief Financial Officer of the Employer
pursuant to this Agreement for a term beginning on the Effective Date and ending on the second
anniversary of this agreement, (the “Term”) unless Employee’s employment is terminated earlier as
provided in Section 4 below. Sections 2, 3, and 5 of this
Agreement shall survive any termination of Employee’s employment with Employer.
1.2 Duties. At all times during the course of Employee’s employment with Employer,
Employee agrees to perform the duties associated with his position diligently and to devote all of
his business time, attention and efforts to the business of Employer. Employee agrees to comply
with the policies, procedures and guidelines established by Employer from time to time. Employee
agrees to perform his duties faithfully and loyally and to the best of his abilities, and shall use
his best efforts to promote the business of Employer. Employee understands and agrees that both
the business and personal standards and ethics of Employer’s employees must at all times be above
reproach. Employee agrees to act at all times so as to reflect this high standard. Employee
further agrees to abide by all rules, policies, or procedures established by Employer from time to
time.
1.3 Supervision. Employee shall perform the duties of employment under the direction
and supervision of Employer’s Chief Executive Officer
1.4 Compensation. During Employee’s employment, Employer will pay Employee a base
annualized salary of $310,000 (“Base Salary”), less all applicable withholding as required by law
and/or voluntarily elected by Employee, to be paid in installments in accordance with Employer’s
standard payroll practice and schedule. The Employer may adjust the Employee’s annualized salary
from time to time at its sole discretion, but Employee’s Base Salary shall never be reduced below
$310,000 without his consent. Employer will provide Employee with Employee benefits generally made
available by Employer to other similarly situated employees, as per company policy. During
Employee’s employment, Employer shall reimburse Employee for all reasonable and necessary expenses
incurred by Employee in furtherance of Employer’s business interests upon appropriate documentation
of such expenditures in accordance with Employer’s general policy.
1.5 Bonus. Employee shall be eligible to participate in and receive bonuses according
to such bonus structure and plan as may be established or modified from time to time by the
Employer on the same basis as other similarly situated officers of the Employer.
1.6 Long Term Incentive. Subject to the discretion and approval of the Board,
Employee may be awarded stock awards in the form of options and/or restricted stock on an
annual basis subject to the terms of the applicable incentive plan as such may be established
or modified by the Board from time to time.
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Section 2. Non-Competition.
2.1 Non Competition.
(a) In consideration of his employment under this Agreement and Employer’s agreement to
provide Employee with Confidential Information under Section 3 below, Employee agrees that
during the term of his employment and for a period of two (2) years following termination of
his employment (regardless of whether Employee is terminated without Cause, for Cause (as
defined in Section 4.1(c) below), voluntarily resigns or otherwise), neither
Employee nor any person or entity directly or indirectly controlling, controlled by or under
common control with Employee, shall directly or indirectly, on his own behalf or as an
employee or other agent of or an investor in another person:
(i) engage in any business conducted by Employer during Employee’s term of
employment with Employer (collectively, the “Business”);
(ii) influence or attempt to influence any customer or supplier of Employer or
any affiliate of Employer to purchase goods or services related to the Business from
any person other than Employer or such affiliate; or
(iii) employ or attempt to employ any individuals who are then or have been
employees of Employer or any affiliate of Employer during the preceding 12 months,
or influence or seek to influence any such employees to leave Employer’s or such
affiliate’s employment.
(b) Employee specifically acknowledges that Employer’s products are sold in a world
market and that Employee has been engaged with regard to Employer’s products and Employer’s
customers throughout the world without geographic limitation, and accordingly that the
restrictive covenant regarding competition contained in this Section 2.1 shall apply
without geographic limitation.
(c) Employee acknowledges that his obligations under this Section 2.1 are a
material inducement and condition to Employer’s entering into this Agreement and a material
inducement and condition to Employee receiving or having access to Confidential Information
(as defined in Section 3.1). Employee acknowledges and agrees that the terms and
provisions of this Agreement (including the severance provisions of Section 4.1) and
Employee’s receipt and access to Confidential Information are sufficient consideration for
the restrictions set forth in this Section 2.1. Employee acknowledges and agrees
further that such restrictions are reasonable as to time, geographic area and scope of
activity and do not impose a greater restraint than is necessary to protect the goodwill and
other business interests of Employer, and Employee agrees that Employer is justified in
believing the foregoing.
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(d) If any provision of this Section 2.1 should be found by any court of
competent jurisdiction to be unenforceable by reason of its being too broad as to the
period of time, territory, and/or scope, then, and in that event, such provision shall
nevertheless remain valid and fully effective, but shall be considered to be amended so that
the period of time, territory, and/or scope set forth shall be changed to be the maximum
period of time, the largest territory, and/or the broadest scope, as the case may be, which
would be found enforceable by such court
(e) Employee acknowledges that Employee’s violation or attempted violation of this
Section 2.1 will cause irreparable damage to Employer or its affiliates, and
Employee therefore agrees that Employer shall be entitled as a matter of right to an
injunction, out of any court of competent jurisdiction, restraining any violation or further
violation of such agreements by Employee or others acting on his behalf. Employer’s right
to injunctive relief will be cumulative and in addition to any other remedies provided by
law or equity.
(f) Employee shall not be subject to the provisions of this Section 2 if Employer fails
to pay any uncontested amounts due to Employee under Section 4 and such failure is not cured
within thirty (30) days after written notice to Employer.
Section 3. Confidentiality; Nondisparagement; Conflict of Interest.
3.1 Confidentiality.
(a) In the course of his employment with Employer, Employer shall provide Employee with
access to commercially valuable, confidential or proprietary information of the Employer
(“Confidential Information”). Confidential Information means all information, whether oral
or written, previously or hereafter developed, acquired or used by Employer and relating to
the business of Employer that is not generally known to the public or others in Employer’s
area of business, including without limitation (i) any trade secrets, work product,
processes, analyses or know-how of Employer; (ii) Employer’s advertising, product
development, strategic and business plans and information, including customer and prospect
lists; (iii) the prices at which Employer has sold or offered to sell its products or
services; and (iv) Employer’s internal financial statements, budgets, cost information,
pricing information and other financial information.
(b) Employee acknowledges and agrees that the Confidential Information is and shall be
the sole and exclusive property of Employer. Employee shall not use any Confidential
Information for his own benefit or disclose any Confidential Information to any third party
(except in the course of performing his authorized duties for Employer under this
Agreement), either during or subsequent to his employment with Employer.
(c) Specifically, Employee agrees that, except as expressly authorized in writing by
Employer, or as may be required by law or court order, Employee shall (i) not disclose
Confidential Information to any third party, (ii) not copy Confidential Information for any
reason, and (iii) not remove Confidential Information from Employer’s premises. Upon
termination of his employment with Employer, Employee shall promptly deliver to the Employer
all Confidential Information, including documents, computer disks and other computer storage
devices and other papers and
materials (including all copies thereof in whatever form) containing or incorporating
any Confidential Information or otherwise relating in any way to the Employer’s business
that are in his possession or under his control.
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(d) Employee acknowledges that Employee’s violation or attempted violation of this
Section 3.1 will cause irreparable damage to Employer or its affiliates, and
Employee therefore agrees that Employer shall be entitled as a matter of right to an
injunction, out of any court of competent jurisdiction, restraining any violation or further
violation of such agreements by Employee or others acting on his behalf. Employer’s right
to injunctive relief will be cumulative and in addition to any other remedies provided by
law or equity.
3.2. Covenant of Nondisparagement. In consideration of this Agreement, Employee
agrees and promises that, during the Term and at all times after the termination of this Agreement
(regardless of whether Employee is terminated without Cause, for Cause, voluntarily resigns or
otherwise), not to make any libelous, disparaging or otherwise injurious statements about or
concerning Employer or any of its affiliates, their officers, employees or representatives. Such
prohibited statements include any statement that is injurious to the business or business
reputation of any of Employer, its affiliates or their employees or representatives, but does not
include reasonable statements of disagreement that Employee makes for the purpose of protecting or
enforcing any of his rights or interests hereunder or defending against any claim or claims of
Employer, so long as such statements are not slanderous or libelous and are delivered in terms as
would ordinarily be considered customary and appropriate.
3.3. Conflict of Interest. Employee agrees that during the Term, without the prior
approval of the Board, Employee shall not engage, either directly or indirectly, in any activity
which may involve a conflict of interest with Employer or its affiliates (a “Conflict of
Interest”), including ownership in any supplier, contractor, subcontractor, customer or other
entity with which Employer does business (other than as a shareholder of less than one percent of a
publicly traded class of securities) or accept any material payment, service, loan, gift, trip,
entertainment or other favor from a supplier, contractor, subcontractor, customer or other entity
with which Employer does business and that Employee shall promptly inform the Board as to each
offer received by Employee to engage in any such activity. Employee further agrees to disclose to
Employer any other facts of which Employee becomes aware which might involve or give rise to a
Conflict of Interest or potential Conflict of Interest.
Section 4. Termination.
4.1 Termination by Employer.
(a) Employer may terminate Employee’s employment without Cause upon no less than 30
days prior notice of termination to Employee. Employer shall pay the Severance Compensation
(as defined in Section 5.1(h)) to Employee after the effective date of such termination,
except as otherwise provided by the terms of any stock option or restricted stock agreement
entered into with Employee during the Term.
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(b) Employer may discharge Employee for Cause at any time without prior notice. In the
event of any such termination for Cause, Employer’s obligations to pay any base salary,
incentive compensation or bonus or provide for any benefits to Employee shall terminate
immediately upon the effective date of such termination, except as otherwise provided by the
terms of any stock option or restricted stock agreement entered into with Employee during
the Term.
(c) As used herein, “Cause” shall mean any of the following:
(i) the conviction of Employee by a court of competent jurisdiction of any
felony or crime involving moral turpitude;
(ii) commission by Employee of an act of fraud, dishonesty, slander, or other
act reflecting unfavorably upon the public image of Employer as reasonably
determined by Chief Executive Officer;
(iii) the failure by Employee to substantially perform his duties hereunder, or
any wrongdoing by Employee resulting in injury to Employer, in each case as
reasonably determined by Chief Executive Officer;
(iv) the failure by Employee to follow a directive of the Chief Executive
Officer or Board; or
(v) violation of any policies or procedures of Employer, including without
limitation, any human relations policy.
4.2 Termination by Employee. Employee may resign from Employee’s employment hereunder
(whether for voluntary retirement or otherwise) upon no less than 30 days prior notice of
resignation to Employer, unless such prior notice is otherwise waived by Employer in its absolute
and sole discretion. The effective date of Employee’s resignation shall be as stated in Employee’s
notice of resignation or at the sole option of Employer, such earlier date as determined by
Employer in its sole discretion. If Employee voluntarily resigns from his employment with Employer
during the term hereof (whether for voluntary retirement or otherwise), Employer’s obligations to
pay any base salary, incentive compensation or bonus or provide for any benefits shall terminate
immediately upon the effective date of such resignation. Upon retirement, Employee shall be
entitled to all benefits (if any) provided by Employer in the ordinary course to other executive
officers of Employer at comparable retirement age.
4.3 Termination on Death of Employee. This Agreement shall terminate automatically
upon the death of Employee and all rights of Employee, his heirs, executors and administrators to
salary, bonus, incentive compensation or benefits shall terminate immediately, except as otherwise
provided in Employer’s benefit plans in effect at such time.
4.4 Termination by Disability. Employer may terminate Employee’s employment hereunder
upon Employee becoming Disabled (as defined below). Upon such termination, Employer shall pay
Employee an amount equal to his then current monthly base salary for a period of six months, which
payment amounts will be reduced by any disability payments Employee receives during such period
from the disability insurance provided through Employer, if any. Employee shall be entitled to all other disability benefits then in effect
| Employment Agreement | Page 5 of 12 |
(if any)
provided by Employer to other similarly situated executive officers of Employer. In the event of
termination due to Employee being Disabled, except as aforesaid or as otherwise agreed to in
writing by Employee and Employer, Employer shall have no other obligation to pay any base salary,
incentive compensation or bonus or provide for any benefits to Employee after the effective date of
termination. For purposes of this Section, “Disabled” means any mental or physical impairment
lasting (or that will last) more than 180 consecutive or non-consecutive calendar days that
prevents Employee from performing the essential functions of his position with or without
reasonable accommodation as determined by a competent physician chosen by Employer and consented to
by Employee or his legal representatives, which consent will not be unreasonably withheld or
delayed. Employee agrees to submit to appropriate medical examinations and authorize his
physicians to release medical information necessary to determine whether Employee is Disabled for
purposes of this Agreement.
Section 5. Termination Following a Change in Control
5.1 Definitions. For Purposes of this Section 5, the following definitions apply.
| (a) | Acquiring Person. An “Acquiring Person” shall mean any person that,
together with all Affiliates and Associates of such person, is the beneficial owner of
50.1% or more of the outstanding Common Stock of the Employer or its parent. The term
“Acquiring Person” shall not include the Employer, its parent, any subsidiary of the
Employer, any employee benefit plan of the Employer (or trust with respect thereto) or
subsidiary of the Employer, or any person holding Common Stock of the Employer for or
pursuant to the terms of any such plan. |
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| (b) | Affiliate and Associate. “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
in effect on the date of this Agreement. |
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| (c) | Cause. For “Cause” shall have the meaning set forth in Section 4.1(c) above. |
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| (d) | Change in Control. A “Change in Control” of the Employer or PMFG,
Inc., shall have occurred if at any time during the Term any of the following events
shall occur: |
| (i) | The Employer or PMFG, Inc., is merged, consolidated or
reorganized into or with another corporation or other legal person and as a
result of such merger, consolidation or reorganization less than 50.1% of the
combined voting power to elect Directors of the then outstanding securities of
the remaining corporation or legal person or its ultimate parent immediately
after such transaction is available to be received by all stockholders on a pro
rata basis and is actually received in respect of or exchange for voting
securities of the Employer or PMFG, Inc. pursuant to such transaction; |
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| (ii) | The Employer or PMFG, Inc. sells all or substantially all of
its assets to any other corporation or other legal person not controlled by or
under common control with the Employer or PMFG, Inc.; |
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| (iii) | Any person or group (including any “person” as such term is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act has become the
beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities which when added to any securities already owned by such person
would represent in the aggregate 50% or more of the then outstanding securities
of the Employer or PMFG, Inc., which are entitled to vote to elect Directors;
provided that Employee acknowledges and agrees that neither Xxxxx Advisory
Holdings, Inc. (“Xxxxx Advisory”) or NSB Advisors, LLC (“NSB”) will be deemed
to beneficially own more than 50.1% of the securities of Employer and the
holdings of Employer by Xxxxx Advisory or NSB will not be deemed a Change in
Control of the Company except as determined by the Continuing Directors in its
sole discretion; |
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| (iv) | If at any time, the Continuing Directors then serving on the
Board, cease for any reason to constitute at least a majority thereof; |
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| (v) | Any occurrence that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A or any successor rule
or regulation promulgated under the Exchange Act; or |
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| (vi) | Such other events that cause a change in control of the
Employer, as determined by the Board in its sole discretion; |
provided, however, a Change in Control of the Employer or PMFG, Inc.
shall not be deemed to have occurred as the result of any transaction having one or
more of the foregoing effects if such transaction is both (1) proposed by, and (2)
includes a significant equity participation of, executive officers of the Employer
or PMFG, Inc. as constituted immediately prior to the occurrence of such transaction
or any Employer employee stock ownership plan or pension plan. |
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| (e) | Code. The “Code” shall mean the Internal Revenue Code of 1986, as
amended. |
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| (f) | Continuing Director. A “Continuing Director” shall mean a member of
the Board who (i) is not an Acquiring Person, an Affiliate or Associate, a
representative of an Acquiring Person or nominated for election by an Acquiring Person,
and (ii) was a member of the Board, on the date of this Agreement or subsequently
became a member of the Board of PMFG, Inc., and whose initial election or initial
nomination for election by the PMFG, Inc.’s stockholders was approved by a majority of
the Continuing Directors then on the Board. |
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| (g) | Disabled. “Disabled” shall have the meaning defined in Section 4.4
above. |
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| (h) | Severance Compensation. The “Severance Compensation” shall be: |
| (i) | A lump sum amount equal to 50.0% of the Employee’s then current
annualized base salary in effect as of the date of the Termination; |
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| (ii) | in any year in which Employee has been provided a bonus target
under a bonus plan adopted by the Board of PMFG, Inc., a pro rated bonus amount
based upon the portion of the year served by Employee, provided, however, such
bonus amount shall be calculated and paid at the time such bonuses are usually
calculated by the Employer at year end; and |
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| (iii) | For a period of three (3) months, provide Employee with
benefits substantially similar to those which Employee was entitled to receive
immediately prior to the date of termination under all of the Employer’s
“employee welfare benefit plans” within the meaning of Section 3(1) of The
Employee Retirement Income Security Act of 1974, as amended. |
| (i) | Termination Date. The “Termination Date” shall be the effective date
upon which the Employer terminates the employment of Employee with the Employer within
one year following a Change in Control. |
5.2. Rights of Employee Upon Change in Control and Subsequent Termination.
| (a) | The Employer shall provide Employee, within ten days following the Termination
Date, Severance Compensation, but without affecting the rights of Employee or the
Employer at law or in equity, if, within one year following the occurrence of a Change
in Control, either of the following two events shall occur: |
| (1) | the Employer terminates Employee’s employment except for any of
the following reasons: |
| (i) | Employee dies; |
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| (ii) | Employee becomes Disabled; or |
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| (iii) | The Employer terminates the Employee for
Cause; or |
| (2) | Employee terminates his employment after such Change in Control
and the occurrence of at least one of the following events: |
| (i) | an material adverse change in the positions
held by Employee or a material diminution in the nature or scope of the
authorities, functions or duties attached to the positions with the
Employer that Employee had immediately prior to the Change in Control
(provided however, a material adverse change or material diminution
shall not be deemed to have occurred simply because the parent of the
Employer has sold all or a substantial part of its interest in
Employer, that Employer becomes a subsidiary of another entity, or that Employee ceases to be
|
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a Vice President of the
Employer (PMFG, Inc.,), any reduction in Employee’s base salary
(excluding bonus and incentive compensation) during the Term or a
material diminution in scope or value of the aggregate other base
benefits to which Employee was entitled from the Employer immediately
prior to the Change in Control, any of which is not remedied within
ten calendar days after receipt by the Employer of written notice
from Employee of such change, reduction, alteration or termination,
as the case may be; |
| (ii) | the relocation of the Employer’s principal
executive offices, or the requirement by the Employer that Employee
have as his principal location of work any location not within the
greater Dallas, Texas metropolitan area or that he/she travel away from
his office in the course of discharging his duties hereunder
significantly more (in terms of either consecutive days or aggregate
days in any calendar year) than required of his prior to the Change in
Control; or |
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| (iii) | the Employer commits any material breach of
this Agreement, which is not cured within ten calendar days after
receipt by the Employer of written notice from Employee of such breach. |
| (b) | Upon written notice given by Employee to the Employer prior to the receipt of
Severance Compensation, Employee, at his sole option, may elect to have all or any part
of any such amount paid to them, without interest, on an installment basis selected by
them. |
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| (c) | The payment of Severance Compensation by the Employer to Employee shall not
affect any rights and benefits which Employee may have pursuant to any other agreement,
policy, plan, program or arrangement with the Employer prior to the Termination Date,
which rights shall be governed by the terms thereof, except that payments hereunder
after termination under this Section 5 shall reduce by an equal amount any sums payable
after termination of employment under Section 4.1(a) above, as may be amended, restated
or modified. |
5.3 No Mitigation Required. In the event that this Agreement or the employment of
Employee hereunder is terminated, Employee shall not be obligated to mitigate his damages nor the
amount of any payment provided for in this Agreement by seeking other employment or otherwise, and
the acceptance of employment elsewhere after termination shall in no way reduce the amount of
Severance Compensation payable under this Section 5.
Section 6. Miscellaneous.
6.1 Section 409A. For purposes of Section 4 or 5, whether a “termination of
employment” has occurred shall be determined as set forth in Proposed Regulation §1.409A-3(h)(1) or
any successor regulations. Notwithstanding the foregoing provisions of this Section 4 or 5, in the
event as of the date of termination of employment, Employee is a
“specified employee” as such term is defined
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under Section 409A of the Internal Revenue Code of 1986 (the
“Code”)(or any regulations or proposed regulations promulgated thereunder) each payment that would
have been due to be made to employee during the first six (6) months after such termination shall
be delayed to the extent required and all such delayed payments shall be made in a single lump sum
on the first business day after the six—month anniversary of such termination unless an exception
to such delay is otherwise applicable under the Code or regulations thereunder.
6.2 Notice. Except as set forth below in this Section 6.2, any notice under
this Agreement must be in writing and shall be deemed to have been given when delivered personally
or by overnight courier service or three days after being sent by mail, postage prepaid, at the
address indicated below or to such changed address as such person may subsequently give such notice
of:
if to Employer: |
Peerless Mfg. Co. | |
| 00000 Xxxxx Xxxxxx Xxxx | ||
| Xxxxxx, Xxxxx 00000 | ||
| Attn: Chairman, Board of Directors | ||
if to Employee:
|
Xxxxxx X. XxXxxxxxx | |
| 000 Xxx Xxxxxx Xxxxx | ||
| Xxxxxxxxx, Xxxxx 00000 |
Notwithstanding the foregoing, the party receiving notice may waive any provisions of this
Section 6.2 in its or his sole and absolute discretion.
6.3 Assignment. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, personal representatives, successors, and assigns.
Except as otherwise provided herein, this Agreement may not be assigned by Employee without the
prior written consent of the Employer and PMFG, Inc. Employer shall require any successor, and any
corporation or other person which is in control of such successor, to all or substantially all of
the business and/or assets of Employer (by purchase, merger, consolidation or otherwise), by
agreement in form and substance reasonably satisfactory to Employee, to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that Employer would be required
to perform it if no such succession had taken place. Failure of Employer to obtain such agreement
prior to the effectiveness of any such succession shall be a material breach of this Agreement by
Employer. As used in this Agreement, “Employer” shall mean Employer as herein before defined and
any successor to its business and/or all or part of its assets as aforesaid which executes and
delivers the assumption agreement provided for in this Section 6.3 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of law.
6.4 Headings. The section headings used herein are for reference and convenience only
and shall not enter into the interpretation hereof.
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6.5 Counterparts. This Agreement may be executed in one or more counterparts for the
convenience of the parties hereto, all of which together shall constitute one and the same
instrument.
6.6 Amendment and Waiver. The provisions of this Agreement may be amended or waived
only by written agreement of Employer and Employee, and no course of conduct, failure or delay in
enforcing the provisions of this Agreement shall effect the validity, binding effect or
enforceability of this Agreement.
6.7 Severability. Any provision or portion of a provision of this Agreement that is
held to be invalid or unenforceable will be severable, and this Agreement will be construed and
enforced as if such provision, or portion thereof, did not comprise a part hereof, and the
remaining provisions or portions of provisions will remain in full force and effect. In lieu of
each invalid or unenforceable provision there will be added automatically as part of this Agreement
a provision as similar in terms to such invalid or unenforceable provision as may be possible and
be legal, valid, and enforceable.
6.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without giving effect to any conflicts of law rule or
principle that might require the application of the laws of another jurisdiction.
6.9 Indemnification. Employee shall be subject to, and entitled to the benefit of,
the indemnification provisions contained in the Employer’s Articles of Incorporation and Bylaws, as
amended, to the same extent and degree as other similarly situated officers and/or directors of
Employer.
6.10 Disputes. The parties to this Agreement agree that in the event there is a
dispute or controversy between them that cannot be settled through direct discussions, it is in the
best interests of all for such dispute or controversy to be resolved in the shortest time and with
the lowest cost of resolution as practicable. Consequently, any such dispute, controversy or claim
between the parties to this Agreement will not be litigated, but instead will be resolved by
arbitration in accordance with Title 9 of the U.S. Code (United States Arbitration Act) and the
Commercial Arbitration Rules of the American Arbitration Association (the “Rules”), and judgment
upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
The arbitration will be before one neutral arbitrator and will proceed under the Expedited
Procedures of said Rules. The arbitration will be held in Dallas, Texas, or such other place as
may be selected by mutual agreement. The arbitrator will have the discretion to order a prehearing
exchange of information by the parties, and to set limits for both the scope and time period of
such exchange. All issues regarding exchange requests will be decided by the arbitrator. Neither
party nor the arbitrator may disclose the existence, content or results of any arbitration
hereunder, unless required to do so by court or regulatory order, without the prior written consent
of both parties. Administrative fees and expenses of the arbitration itself will be borne by the
parties equally unless otherwise required by law, a court of competent jurisdiction or the Rules;
provided, that, in no event will Employee be required to pay in excess of $1,000 of such fees and
expenses. The arbitrator will also be authorized to award to the prevailing party all or that
fraction of its reasonable costs and fees as is deemed equitable. Costs of a party’s
representation by counsel or preparation costs for hearing are not considered administrative fees
and expenses for purposes hereof. This provision will not apply to any claim for injunctive
relief sought by the Employer or any of its affiliates under Section 2 or 3 of this Agreement.
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6.11 Entire Agreement. This Agreement embodies the complete agreement between
Employer and Employee regarding the subject matter hereof and supersedes all prior agreements or
understandings, whether oral, written or otherwise, between the parties hereto that may have
related in any way to the subject matter hereof.
| EMPLOYER: PEERLESS MFG. CO. |
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| /s/ Xxxxx Xxxxxxx | ||||
| Xxxxx X. Xxxxxxx, | ||||
| Chief Executive Officer | ||||
| EMPLOYEE: |
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| /s/ Xxxxxx XxXxxxxxx | ||||
| Xxxxxx X. XxXxxxxxx | ||||
| Chief Financial Officer | ||||
| Employment Agreement | Page 12 of 12 |
