EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment and Noncompetition Agreement (this "Agreement") is made
this 28th day of August, 1995 between Xxxxxx Canada Inc., a New Brunswick
corporation (the "Corporation"), and Xxxxxx Xxxxx (the "Executive").
WHEREAS, the Executive is currently serving as the President of X.X.
Xxxxxx, Inc. (the "Seller"), a Quebec corporation engaged in the business of the
design, manufacture and sale of automated packaging equipment at its facilities,
headquartered in Xxxxxxxx, Xxxxxx, Xxxxxx, for use in the pharmaceutical
industry and a variety of other industries throughout the world (the "Business")
and has demonstrated experience and knowledge relating to the Business;
WHEREAS, on the date hereof the Corporation has acquired the Business and
substantially all the assets of the Seller pursuant to the Asset Purchase
Agreement, dated August 28, 1995, between the Corporation and the Seller (the
"Purchase Agreement");
WHEREAS, in connection with the transactions consummated pursuant to the
Purchase Agreement, the Corporation desires to retain the services of the
Executive as an employee of the Corporation in the capacity of President upon
the terms and conditions set forth herein;
WHEREAS, the Corporation also desires to secure the Executive's agreement
not to compete with the Corporation and its Affiliates and to keep confidential
and secret all information the Executive has regarding the operations of the
Corporation and its Affiliates all upon the terms and conditions set forth
herein;
WHEREAS, the Executive understands the necessity of keeping the
aforementioned information confidential and secret and recognizes the
proprietary nature of such information; and
WHEREAS, the Corporation is willing to compensate the Executive for his
services in the capacity of President of the Corporation, together with his
noncompetition and nondisclosure covenants, all upon the terms, covenants and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants, agreements and
promises hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Definitions.
a. "Affiliate" means, with respect to any Person, any Person now or
hereafter controlling, controlled by, or under common control with such Person,
including its Subsidiaries.
b. "Ordinary Course of Business" means the conduct of the business
and affairs of the Corporation in the usual and ordinary course and in a manner
which advances the purposes, and is in the best interest, of the Corporation.
c. "Person" means any individual, corporation, firm, partnership or
other business entity.
d. "Proprietary Information" means all information or data with
respect to the conduct or details of the businesses of the Corporation and its
Affiliates including, without limitation, methods of operation, customers and
customer lists, products, proposed products, former products, proposed, pending
or completed acquisitions of any company, division, product line or other
business unit, prices, fees, costs, plans, designs, technology, inventions,
trade secrets, know-how, software, marketing methods, policies, plans,
personnel, suppliers, competitors, markets or other specialized information or
proprietary matters of the Corporation or any of its Affiliates.
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e. "Subsidiary" means any corporation or other entity of which the
Corporation directly or indirectly owns beneficially or of record fifty percent
(50%) or more of (i) the outstanding shares of capital stock if such entity is a
corporation or (ii) the outstanding ownership interests if such entity is not a
corporation.
2. a. Employment and Duties. The Corporation hereby agrees to employ
the Executive and the Executive accepts such employment on and subject to the
terms and conditions set forth in this Agreement. The Executive agrees to devote
all of his business time, efforts and attention to the business of the
Corporation and its Affiliates. The Executive shall not accept any business
commitments other than with the Corporation and its Affiliates, other than
supervision of the Executive's personal investments, without the advance written
consent of the Corporation's board of directors.
b. Position. The Executive will have a position as President of the
Corporation and report to the Corporation's Chairman, who will also be the chief
executive officer of DT Industries, Inc. ("DTI"). The Executive shall, at all
times, act in a fiduciary capacity for the benefit of the Corporation. The
Executive will also have senior executive management responsibility for
Affiliates of the Corporation engaged in businesses complementary to the
Business, including the Xxxxxx and Xxxxxxx-Xxxxx divisions of Pharma Group, Inc.
c. Right to Change Duties and Title. The Corporation shall have the
right from time to time to change the nature and scope of the Executive's duties
and title ; provided that during the term of his employment with the
Corporation, the Executive shall report directly to the chief executive officer
of DTI.
3. Term of Employment. The term of employment hereunder shall commence
on the date hereof.
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4. Salary. As compensation for services to be rendered by the
Executive hereunder, the Executive shall receive a base salary at the rate of
CND$245,000 per annum. Payment of the salary will be made each month in
accordance with the payroll policies of the Corporation in effect from time to
time. The Executive shall be entitled to have a salary review in accordance with
the policies and established practices of the Corporation in effect from time to
time.
5. Bonus. The Executive shall be eligible to participate in all of the
executive bonus plans applicable to the executives of the Corporation, including
a performance-based bonus calculated as a percentage of his annual base salary.
Such bonus shall be calculated on specific financial and operational objectives
set out at the beginning of each year and is payable on or about the first
quarter of the following year.
6. Benefits. The Executive shall be a participant in the Corporation's
benefit and pension plans according to the rules applicable thereto.
7. Automobile. The Executive shall be entitled to the use of a leased
Corporation automobile in accordance with the Corporation's automobile policy in
effect from time to time.
8. Other Corporation Policies. The Executive agrees to comply with all
policies of the Corporation in effect from time to time.
9. Agreement Not To Disclose.
The Executive agrees that:
a. He will not, during the period of his employment with the Corpora-
tion or its Affiliates or at any time thereafter, except with the express prior
written consent of the Corporation, directly or indirectly disclose, communicate
or divulge to any Person other than the Corporation, its Affiliates, and their
employees, officers, and agents, or use for the benefit of any Person other than
the Corporation and its Affiliates, any Proprietary Information. The restriction
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contained in the preceding sentence shall not apply to any Proprietary
Information that (i) is a matter of public knowledge on the date of this
Agreement, (ii) becomes a matter of public knowledge after the date of this
Agreement from another source which is, to the Executive's knowledge, under no
obligation of confidentiality to the Corporation or its Affiliates, or (iii) is
furnished in the Ordinary Course of Business to Persons which sell, provide or
propose to sell or provide goods or services to the Corporation or its
Affiliates or which purchase, obtain or propose to purchase or obtain goods or
services from the Corporation or its Affiliates.
b. All data, designs, drawings, blueprints, tracings, sketches,
plans, layouts, specifications, models, programs, cards, tapes, disks,
printouts, writings, manuals, guides, notes and any and all other memoranda,
including without limitation any and all written information which may be or has
been furnished to the Executive or which may be produced, prepared or designed
by the Executive in connection with his employment with the Corporation, shall
be, become and remain the exclusive property of the Corporation. Upon the
termination of the Executive's employment with the Corporation, all originals,
copies and reprints in the Executive's possession, custody, or control shall be
promptly surrendered and/or delivered to the Corporation, and the Executive
shall thereafter make no further use, either directly or indirectly, of any such
data, designs, drawings, blueprints, tracings, sketches, plans, layouts,
specifications, models, programs, cards, tapes, disks, printouts, writings,
manuals, guides, notes or other memoranda or written information.
10. Agreement to Disclose.
a. The Executive agrees to disclose in writing to the Corporation
or its designee promptly and fully all works and property related to the
Business, including but not limited to all intellectual properties, ideas,
inventions, discoveries, concepts, computer systems or programs, works,
techniques, programs or any components or associated products thereof and all
hardware and software inventions, products, improvements, innovations,
discoveries and writings which are made, conceived, reduced to practice,
developed, written, contributed to or
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prepared by the Executive during, or related in any manner whatsoever to, his
employment with the Corporation or any of its Affiliates or which result from or
are suggested by any work the Executive may do in connection with his employment
with the Corporation or any of its Affiliates, whether or not patentable or
copyrightable and whether made solely by the Executive or jointly with others,
all of such works and property being hereinafter referred to in this Agreement
as "Works and Property." The Executive acknowledges that he does not claim any
interest in Works and Property (defined for the purposes of this sentence to
include matters arising at any time during his employment with the Seller or
with the Corporation.
b. If the Executive includes in any written disclosure required by
Section 10(a) a request that ownership of any Works and Property be transferred
to him, the Corporation or the relevant Affiliate shall promptly determine, in
its sole discretion, whether it elects to transfer its ownership of such Works
and Property to the Executive and the terms and conditions, if any, of such
transfer. If the Corporation or the relevant Affiliate elects in writing to
transfer its ownership of any such Works and Property to the Executive and if
the Executive complies with any terms and conditions specified by the
Corporation or the relevant Affiliate in connection with such transfer, the
Executive shall thereafter have all right, title and interest to such
transferred Works and Property.
c. In the event that the Executive fails to disclose to the Corpora-
tion or the relevant Affiliate in writing any Works and Property in accordance
with Section 10(a), the Corporation or the relevant Affiliate shall retain
complete right, title and interest in Works and Property as specified in Section
11(a).
11. Ownership of Works and Property.
The Executive hereby agrees that:
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a. Except as provided in Section 10, all Works and Property shall
unconditionally be, become and remain the sole and exclusive property of the
Corporation or the relevant Affiliate forever;
b. Pursuant to Sections 101 and 201 of the United States Copyright
Law, and any similar provisions of Canadian law, all Works and Property shall be
"works made for hire," and all rights in such Works and Property shall belong
entirely and exclusively to the Corporation or the relevant Affiliate and their
successors and assigns forever, and the Corporation or the relevant Affiliate
and their successors and assigns may make any use or nonuse of such Works and
Property throughout the world without any further obligation to the Executive;
c. The Executive will promptly execute, acknowledge and deliver all
applications, oaths, declarations, and further documents and will provide such
additional assistance as the Corporation or the relevant Affiliate or their
counsel may deem necessary or desirable to evidence the Corporation's or the
relevant Affiliate's title to such Works and Property; and
d. In performing duties or services for the Corporation or the
relevant Affiliate regarding Works and Property, the Executive will not
knowingly infringe upon the rights, including but not limited to patent,
copyright, trade secret or other proprietary rights, of any third party
whatsoever.
12. Covenants Not to Compete.
a. The Executive covenants and agrees that he will not, at any time
during the period of his employment with the Corporation and for a period of
three (3) years after the termination of such employment, except with the
express prior written consent of the Corporation as evidenced by a resolution of
its Board of Directors, directly or indirectly, whether as employee, owner,
partner, agent, director, officer, consultant, shareholder (except as the holder
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of not more than 1% of the outstanding shares of a corporation whose stock is
listed on any national or regional securities exchange or reported by the
National Association of Securities Dealers Automated Quotations System or any
successor thereto) either (i) establish any Person that competes with the
Corporation or any of its Affiliates or (ii) be affiliated or associated with
any Person that engages in a business or proposes to engage in a business which
competes with the business of the Corporation or any of its Affiliates within
the provinces of Quebec and Ontario, the provinces contiguous thereto, elsewhere
in Canada, the states of Illinois, Massachusetts, Michigan, Missouri, New
Jersey, Pennsylvania, Connecticut, the states contiguous thereto, elsewhere in
the United States, North America, South America, Europe, Asia and the Middle
East and elsewhere in the world (the "Area") in a position which is competitive
in any of its duties, responsibilities or activities with the Corporation or any
of its Affiliates. The parties further agree that if the Executive becomes
affiliated or associated with any Person described in clause (ii) of this
Section 12(a), the Executive shall be obliged to show by clear and convincing
evidence that none of his duties, responsibilities or activities entail
employment in a capacity which has been, is or is likely to become, competitive
with the Corporation or any of its Affiliates. The parties hereto agree that the
covenant contained in clause (ii) of this Section 12(a) shall be construed as a
series of separate covenants, one for each province, state or geographic area
specified in such clause (ii) and, except for geographic coverage, each separate
covenant shall be deemed identical.
b. The Executive covenants and agrees that he will not, at any time
during the period of his employment with the Corporation and for a period of
three (3) years after the termination of such employment, except with the
express prior written consent of the Corporation as evidenced by a resolution of
its Board of Directors, directly or indirectly solicit, divert or accept
competitive business from or otherwise take away or interfere with any customer
of the Corporation or any of its Affiliates, including without limitation any
Person who: (i) was a customer of, or whose business was being pursued by the
Corporation or the Seller within the period of the Executive's employment with
the Corporation or the Seller; or (ii) was known by
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the Executive to be a customer of, or a Person whose business was being pursued
by the Seller, Corporation or any of its Affiliates within the period of the
Executive's employment with the Corporation or the Seller or one year after the
termination of such employment, including without limitation all customers
produced or generated by the Executive.
c. The Executive further covenants and agrees that he will not, for a
period of three (3) years after the termination of his employment hereunder,
except with the express prior written consent of the Corporation, as evidenced
by a resolution of its Board of Directors, directly or indirectly, accept
employment, be employed by or be a principal of any business or enterprise
operating within the Area which then employs or has as a principal or holder of
any interest therein (except as the holder of not more than 1% of the
outstanding shares of a corporation whose shares are publicly traded) any
individual who was previously employed in a managerial or executive position
with the Corporation or any of its Affiliates; provided, however, that this
prohibition shall not be applicable if (i) such business or enterprise does not
compete with the Corporation or its Affiliates, or (ii) (x) if such business or
enterprise engages in activities which do compete and other activities which do
not compete with the Corporation or its Affiliates (y) the Executive and/or the
other individual who was previously employed by the Corporation or any of its
Affiliates are employed by such business or enterprise in connection with
activities which in no way compete with the Corporation or its Affiliates and
(z) neither the Executive nor the other individual who was previously employed
by the Corporation or its Affiliates is or proposes to be a principal of such
business or enterprise.
13. Acknowledgments of the Executive; Injunctive Relief. The Executive
acknowledges the confidential and secret nature of the Proprietary Information.
The Executive also acknowledges that the Corporation and its Affiliates have
devoted considerable time, expense and other resources to the development or
acquisition of the Proprietary Information. In light of this expenditure of
time, money and resources by the Corporation and its Affiliates, the Executive
further acknowledges (i) that all of the Proprietary Information has great
economic value and is proprietary to the Corporation and its Affiliates, (ii)
that his violation of this
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Agreement would cause the Corporation and its Affiliates to suffer irreparable
damage and (iii) that the character, periods and scope of restrictions on the
Executive's activities following the termination of his employment by the
Corporation are fair and reasonably required for the protection of the
Corporation and its Affiliates. Therefore, in addition to any other remedies
which the Corporation may have under this Agreement or otherwise and subject to
Section 17(b) of this Agreement, the Corporation and each of its Affiliates
shall be entitled to apply to any court of competent jurisdiction for an
injunction restraining the Executive from committing or continuing any violation
of Sections 9 or 12 of this Agreement, and, provided that the Corporation or
such Affiliate has complied with all procedural requirements with respect to
such application, the Executive shall not object to such application except to
litigate whether, in fact, he has violated Sections 9 or 12 of this Agreement.
The Corporation agrees that in the event that the Corporation or any of its
Affiliates obtains a temporary restraining order or preliminary injunction
restraining the activities of the Executive, which restraining order or
injunction is subsequently held to have been improperly issued, the Executive
shall be entitled to apply to any court of competent jurisdiction for an award
of his damages and costs incurred in defense of such restraining order or
injunction.
14. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Barrowgate House
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx
If to the Corporation:
c/o DT Industries, Inc.
000 Xxxx Xxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 U.S.A. Attn: Chairman
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or to such other address as either party may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
15. Invalid or Unenforceable Provisions. In the event that any part of
this Agreement shall be held to be unenforceable or invalid, the remaining parts
hereof shall nevertheless continue to be valid and enforceable as though the
invalid portions were not a part hereof. In the event that any of the provisions
of this Agreement relating to the character, period of time or geographic scope
of restriction shall be deemed to exceed the character of restriction, period of
time or geographic scope which a court of competent jurisdiction would deem
enforceable, the character of the restriction, period of time and geographic
scope shall, for purposes of this Agreement, be deemed to be the character of
the restriction and maximum time period and geographic scope which a court of
competent jurisdiction would deem valid and enforceable in any state or province
in which such court of competent jurisdiction shall be convened.
16. Benefit and Burden. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective legatees,
distributees, estates, executors, administrators, personal representatives,
heirs, successors and assigns, and other legal representatives.
17. Miscellaneous.
a. No change or modification of this Agreement shall be valid unless
the same is in writing and signed by each of the parties hereto. No waiver of
any provision of this Agreement shall be valid unless in writing and signed by
the party against whom it is sought to be enforced. The failure of any party at
any time to insist upon strict performance of any condition, promise, agreement
or understanding set forth herein shall not be construed as a
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waiver or relinquishment of the right to insist upon strict performance of the
same or other conditions, promises, agreements or understandings at a future
time.
b. This Agreement shall be governed by, and construed in accordance
with the laws of Quebec and the laws of Canada applicable therein without regard
to such jurisdiction's conflicts of laws principles. Any action or proceeding
arising out of or relating to this Agreement, including the interpretation or
enforcement hereof, shall be brought in a court of competent jurisdiction
sitting in Montreal, Quebec, and each of the parties hereto hereby irrevocably
waives, to the fullest extent it or he may effectively do so, any objection it
or he may have to such venue and any defense of an inconvenient forum to the
maintenance of such action or proceeding.
c. The headings and other captions in this Agreement are for
convenience and reference only and shall not be used in interpreting, construing
or enforcing any of the provisions of this Agreement.
d. Unless indicated otherwise, each reference to currency in this
Agreement is a reference to Canadian currency and all payments and remittances
hereunder shall be made in Canadian Dollars.
e. The parties hereto acknowledge that they have requested that this
Agreement and the documents relating hereto be drawn up in English; les parties
aux presentes reconnaissent qu'elles ont exige que ce contrat et tous les
documents y afferents soient rediges en anglais.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EXECUTIVE XXXXXX CANADA INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------------- -------------------------------------
Xxxxxx Xxxxx Xxxxx X. Xxxxx
Vice President
