EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT is made as of the 1st of
March, 2005, by and between STRATTEC SECURITY CORPORATION, a Wisconsin
corporation (the "Company"), and Xxxxxx Xxxxxxxxxx (the
"Employee").
RECITAL
The Company
desires to employ the Employee and the Employee is willing to make his services
available to the Company on the terms and conditions set forth
below.
AGREEMENTS
In
consideration of the premises and the mutual agreements which follow, the
parties agree as follows:
1. Employment. The
Company hereby employs the Employee and the Employee hereby accepts employment
with the Company on the terms and conditions set forth in this
Agreement.
2. Term. The
term of the Employee's employment hereunder shall commence effective on March 1,
2005 and shall continue through June 30, 2005, and
shall thereafter be automatically renewed for successive fiscal year terms
unless either the Company or Employee gives notice of nonrenewal not less than
30 days prior to the end of the then current term (the "Employment
Period").
3. Duties. The
Employee shall serve as the Vice President- Marketing and Sales of the Company
and will, under the direction of Xxxxx Xxxxxxxx, faithfully and to the best of
Employee's ability, perform the duties of the Vice President - Marketing and
Sales. Xxxxxx Xxxxxxxxxx shall be one of the principal executive officers of the
Company and shall, subject to the control of Xxxxx Xxxxxxxx supervise the Sales
and Marketing functions of the Company. The Employee shall also perform such
additional duties and responsibilities which may from time to time be reasonably
assigned or delegated by Xxxxx Xxxxxxxx. The Employee agrees to devote
Employee's entire business time, effort, skill and attention to the proper
discharge of such duties while employed by the Company. However, the Employee
may engage in other business activities unrelated to, and not in conflict with,
the business of the Company if Xxxxx Xxxxxxxx consents in writing to such other
business activity.
4. Compensation. The
Employee shall receive a base salary of $181,000 per year,
payable in regular and semi-monthly installments (the "Base Salary"). Employee's
Base Salary shall be reviewed annually by the Board of Directors of the Company
to determine appropriate increases, if any, in such Base Salary.
5. Fringe
Benefits.
(a) Medical,
Health, Dental, Disability and Life Coverage. The
Employee shall be eligible to participate in any medical, health, dental,
disability and life insurance policy in effect for senior management of the
Company (collectively, the "Senior Management").
(b) Incentive
Bonus and Stock Ownership Plans. The
Employee shall be entitled to participate in any incentive bonus or other
incentive compensation plan developed generally for the Senior Management of the
Company, on a basis consistent with Employee's position and level of
compensation with the Company. The Employee shall also be entitled to
participate in any incentive stock option plan or other stock ownership plan
developed generally for the Senior Management of the Company, on a basis
consistent with Employee's position and level of compensation with the
Company.
(c) Reimbursement
for Reasonable Business Expenses. Subject
to the terms and conditions of the Company's expense reimbursement policy, the
Company shall pay or reimburse the Employee for reasonable expenses incurred by
Employee in connection with the performance of Employee's duties pursuant to
this Agreement, including, but not limited to, travel expenses, expenses in
connection with seminars, professional conventions or similar professional
functions and other reasonable business expenses.
6. Termination
of Employment.
(a) Termination
for Cause, Disability or Death. During
the term of this Agreement, the Company shall be entitled to terminate the
Employee's employment at any time upon the "Disability" of the Employee or for
"Cause" upon notice to the Employee. The Employee's employment hereunder shall
automatically terminate upon the death of the Employee. For purposes of this
Agreement, "Disability" shall mean a physical or mental sickness or any injury
which renders the Employee incapable of performing the essential functions of
Employee's job (with or without reasonable accommodations) and which does or may
be expected to continue for more than 4 months during any 12-month period. In
the event Employee shall be able to perform the essential functions of
Employee's job (with or without reasonable accommodations) following a period of
disability, and does so perform such duties, or such other duties as are
prescribed by the President of the Company, for a period of three continuous
months, any subsequent period of disability shall be regarded as a new period of
disability for purposes of this Agreement. The Company and the Employee shall
determine the existence of a Disability and the date upon which it occurred. In
the event of a dispute regarding whether or when a Disability occurred, the
matter shall be referred to a medical doctor selected by the Company and the
Employee. In the event of their failure to agree upon such a medical doctor, the
Company and the Employee shall each select a medical doctor who together shall
select a third medical doctor who shall make the determination. Such
determination shall be conclusive and binding upon the parties
hereto.
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The Company may
terminate the Employee's employment under this Agreement
for "Cause," effective immediately upon delivery of notice to the Employee.
Cause shall be deemed to exist if the Employee shall have (1) materially
breached the terms of this Agreement; (2) willfully failed to substantially
perform his duties, other than a failure resulting from incapacity due to
physical or mental illness; or (3) serious misconduct which is demonstrably
and substantially injurious to the Company. No act or failure to act will be
considered "cause" if such act or failure is done in good faith and with a
reasonable belief that it is in the best interests of the Company.
In the event of
termination for Disability or death, payments of the Employee's Base Salary
shall be made to the Employee, his designated beneficiary or Employee's estate
for a period of six months after the date of the termination (even if this
period would extend beyond the Employment Period); provided, however that the
foregoing payments in the event of a Disability shall be reduced by the amount,
if any, that is paid to Employee pursuant to a disability plan or policy
maintained by the Company. During this period, the Company shall also reimburse
the Employee for amounts paid, if any, to continue medical, dental and health
coverage pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act. During this period, the Company will also continue
Employee's life insurance and disability coverage, to the extent permitted under
applicable policies, and will pay to the Employee the fringe benefits pursuant
to section 5 which have accrued prior to the date of termination. Termination of
this Agreement for a Disability shall not change Employee's rights to receive
benefits, if any, pursuant to any disability plan or policy then maintained by
the Company.
(b) Termination
Without Cause. If the
Employee's employment is terminated by the Company for any reason other than for
Cause, Disability or death, or if this Agreement is terminated by the Company
for what the Company believes is Cause or Disability, and it is ultimately
determined that the Employee was wrongfully terminated, Employee shall, as
damages for such a termination, receive Employee's Base Salary, for the
remainder of the Employment Period or six months, if longer. During this period,
the Company shall also reimburse the Employee for amounts paid, if any, to
continue medical, dental and health coverage pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act. During this period, the Company
will also continue Employee's life insurance and disability coverage, to the
extent permitted under applicable policies, and will pay to the Employee the
fringe benefits pursuant to section 5 which have accrued prior to the date
of termination. The Company's termination of the Employee's employment under
this section 6(b) shall immediately relieve the Employee of all obligations
under this Agreement (except as provided in sections 7 and 8) and, except as
provided below, shall not be construed to require the application of any
compensation which the Employee may earn in any such other employment to reduce
the Company's obligation to provide severance benefits and liquidated damages
under this section 6(b).
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(c) Effect
of Termination. The
termination of the Employee's employment pursuant to section 6 shall not
affect the Employee's obligations as described in sections 7
and 8.
7. Noncompetition. The
parties agree that the Company's customer contacts and relations are established
and maintained at great expense and by virtue of the Employee's employment with
the Company, the Employee will have unique and extensive exposure to and
personal contact with the Company's customers, and that Employee will be able to
establish a unique relationship with those individuals and entities that will
enable Employee, both during and after employment, to unfairly compete with the
Company. Further, the parties agree that the terms and conditions of the
following restrictive covenants are reasonable and necessary for the protection
of the Company's business, trade secrets and confidential information and to
prevent great damage or loss to the Company as a result of action taken by the
Employee. The Employee acknowledges that the noncompete restrictions and
nondisclosure of confidential information restrictions contained in this
Agreement are reasonable and the consideration provided for herein is sufficient
to fully and adequately compensate the Employee for agreeing to such
restrictions. The Employee acknowledges that Employee could continue to actively
pursue Employee's career and earn sufficient compensation in the same or similar
business without breaching any of the restrictions contained in this
Agreement.
(a) During
Term of Employment. The
Employee hereby covenants and agrees that, during Employee's employment with the
Company, Employee shall not, directly or indirectly, either individually or as
an employee, principal, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant or in any other capacity,
participate in, become associated with, provide assistance to, engage in or have
a financial or other interest in any business, activity or enterprise which is
competitive with or a supplier to the Company or any successor or assign of the
Company. The ownership of less than a one percent interest in a corporation
whose shares are traded in a recognized stock exchange or traded in the
over-the-counter market, even though that corporation may be a competitor of the
Company, shall not be deemed financial participation in a
competitor.
(b) Upon
Termination of Employment. The
Employee agrees that during a period after termination of Employee's employment
with the Company equal to the shorter of one year or the duration of Employee's
employment with the Company, Employee will not, directly or indirectly, either
individually or as an employee, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant or in any other
capacity:
(i) Canvass,
solicit or accept from any person or entity who is a customer of the Company
(any such person or entity is hereinafter referred to individually as a
"Customer" and collectively as the "Customers") any business in competition with
the business of the Company or the successors or assigns of the Company,
including the canvassing, soliciting or accepting of business from any
individual or entity which is or was a Customer of the Company within the
two-year period preceding the date on which the canvassing, soliciting or
accepting of business begins.
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(ii) Request
or advise any of the Customers, suppliers, or other business contacts of the
Company who currently have or have had business relationships with the Company
within two years preceding the date hereof or within two years preceding the
date of such action, to withdraw, curtail or cancel any of their business or
relations with the Company.
(iii) Induce or
attempt to induce any employee, sales representative, consultant or other
personnel of the Company to terminate his or her relationship or breach his or
her agreements with the Company.
(iv) Use,
disclose, divulge or transmit or cause to be used by or disclosed, divulged or
transmitted to any third party, any information acquired by the Employee during
the Employment Period which relates to the trade secrets and confidential
information of the Company, except as may be required by law.
(v) Participate
in, become associated with, provide assistance to, engage in or have a financial
or other interest in any business, activity or enterprise which is competitive
with the business of the Company or any successor or assign of the Company to
the extent such activities relate to products or services which are competitive
with the products and services of the Company; provided, however, that the
ownership of less than 1% of the stock of a corporation whose shares are traded
in a recognized stock exchange or traded in the over-the-counter market, even
though that corporation may be a competitor of the Company, shall not be deemed
financial participation in a competitor.
For purposes of this section 7, a
competitive business is defined as a business which is involved in designing,
developing, manufacturing or marketing mechanical, electro-mechanical and/or
electronic security and access control products in the global motor vehicle
industry.
8. Confidential
Information. The
parties agree that the Company's customers, business connections, suppliers,
customer lists, procedures, operations, techniques, and other aspects of its
business are established at great expense and protected as confidential
information and provide the Company with a substantial competitive advantage in
conducting its business. The parties further agree that by virtue of the
Employee's employment with the Company, Employee will have access to, and be
entrusted with, secret, confidential and proprietary information, and that the
Company would suffer great loss and injury if the Employee would disclose this
information or use it to compete with the Company. Therefore, the Employee
agrees that during the term of Employee's employment, and for a period of two
years after the termination of his employment with the Company, Employee will
not, directly or indirectly, either individually or as an employee, agent,
partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor,
consultant or in any other capacity, use or disclose, or cause to be used or
disclosed, any secret, confidential or proprietary information acquired by the
Employee during Employee's employment with the Company whether owned by the
Company prior to or discovered and developed by the Company subsequent to the
Employee's employment, and regardless of the fact that the Employee may have
participated in the discovery and the development of that information. Employee
also agrees and acknowledges that Employee will comply with all applicable laws
regarding xxxxxxx xxxxxxx or the use of material nonpublic information in
connection with the trading of securities.
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9. Common
Law of Torts and Trade Secrets. The
parties agree that nothing in this Agreement shall be construed to limit or
negate the common law of torts or trade secrets where it provides the Company
with broader protection than that provided herein.
10. Specific
Performance. The
Employee acknowledges and agrees that irreparable injury to the Company may
result in the event the Employee breaches any covenant and agreement contained
in sections 7 and 8 and that the remedy at law for the breach of any
such covenant will be inadequate. Therefore, if the Employee engages in any act
in violation of the provisions of sections 7 and 8, the Employee
agrees that the Company shall be entitled, in addition to such other remedies
and damages as may be available to it by law or under this Agreement, to
injunctive relief to enforce the provisions of sections 7
and 8.
11. Waiver. The
failure of either party to insist, in any one or more instances, upon
performance of the terms or conditions of this Agreement shall not be construed
as a waiver or a relinquishment of any right granted hereunder or of the future
performance of any such term, covenant or condition.
12. Notices. Any
notice to be given hereunder shall be deemed sufficient if addressed in writing,
and delivered by registered or certified mail or delivered personally, in the
case of the Company, to its principal business office, and in the case of the
Employee, to his address appearing on the records of the Company, or to such
other address as he may designate in writing to the Company.
13. Severability. In
the event that any provision shall be held to be invalid or unenforceable for
any reason whatsoever, it is agreed such invalidity or unenforceability shall
not affect any other provision of this Agreement and the remaining covenants,
restrictions and provisions hereof shall remain in full force and effect and any
court of competent jurisdiction may so modify the objectionable provision as to
make it valid, reasonable and enforceable. Furthermore,
the parties specifically acknowledge the above covenant not to compete and
covenant not to disclose confidential information are separate and independent
agreements.
14. Amendment. This
Agreement may only be amended by an agreement in writing signed by all of the
parties hereto.
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15. Governing
Law. This
Agreement shall be governed by and construed exclusively in accordance with the
laws of the State of Wisconsin, regardless of choice of law requirements. The
parties hereby consent to the jurisdiction of the state courts of the State of
Wisconsin and of any federal court in the venue of Wisconsin for the purpose of
any suit, action or proceeding arising out of or related to this Agreement, and
expressly waive any and all objections they may have as to venue in any of such
courts.
16. Dispute
Resolution. The
parties hereto shall attempt to resolve disputes arising out of or relating to
this Agreement. Any dispute not resolved in writing within 21 days may be
referred by either party to mediation involving a mediator (a third party
neutral), trained and experienced in the mediation process and mutually agreed
to by the parties. The mediator shall ascribe to and follow the AAA/SPIDR or ABA
code of ethics for mediators in conduct and management of the mediation process.
Expenses for the mediation shall be shared equally by the parties unless
otherwise agreed during the mediation process. The parties may be accompanied in
the mediation process by legal counsel, and/or other persons mutually agreed to
by the parties and the mediator. All participants will openly and honestly
participate in the mediation. The mediation may be terminated at any time, for
any reason by the mediator or by either party. Any resolution reached by the
parties during the mediation shall be recorded in writing and agreed to by the
parties. Such resolution may be drafted and/or revised by the parties' legal
counsel and shall be legally binding on the parties.
17. Benefit. This
Agreement shall be binding upon and inure to the benefit of and shall be
enforceable by and against the Company, its successors and assigns and the
Employee, his heirs, beneficiaries and legal representatives. It is agreed that
the rights and obligations of the Employee may not be delegated or
assigned.
IN
WITNESS WHEREOF, the parties have executed or caused this Agreement to be
executed as of the day, month and year first above written.
EMPLOYEE STRATTEC
SECURITY CORPORATION
/s/
Xxxxxx X.
Xxxxxxxxxx BY /s/
Xxxxxx X. Xxxxxxxx
XX
Xxxxxx X.
Xxxxxxxxxx
Xxxxxx X.
Xxxxxxxx XX,
Chairman of the
Board
and Chief
Executive Officer
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