EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT dated February 1, 1996 among Clinton Machinery
Corporation, a Delaware corporation and Clinton Management Corp., a Florida
corporation (collectively referred to as "Company" or the "Employer") and
Xxxxxxx Xxxx whose business address is 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxx ("Employee").
The Company desires to engage Employee to perform services as an executive
officer of the Company and Employee desires to perform such services, on the
terms and conditions hereinafter set forth.
Accordingly, the Company and Employee agree as follows:
1. TERM.
The Company agrees to employ Employee to perform services as an executive
officer for the period commencing with the date of this Agreement and ending on
December 31, 2000 or such shorter period as may be provided herein (the
"Employment Period").
2. NATURE OF SERVICES
During the Employment Period, Employee shall be employed as
Vice President of the Company and Employee hereby accepts such employment upon
the terms and conditions hereafter set forth. Employee's duties shall be
substantially equivalent to his duties conducted on behalf of the Company
immediately prior to the date hereof. In the performance of his duties,
Employee shall be subject to the policy direction of the Board of Directors of
the Company and the Chief Executive Officer of Xxxxxxx & Xxxxx, Inc.,
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or his designee, which policies shall be consistent with the requirements of the
Acquisition Documents (as hereinafter defined). For the purposes hereof,
"Acquisition Documents" shall mean the Agreement and Plan of Merger dated as of
December 15, 1995 by and among Xxxxx Xxxxxxxxxx, Xxxxxxx Xxxx, Xxxx Xxxxxx,
Xxxxxxx Management Corp., a Florida Corporation, Clinton Machinery Corporation,
a Delaware Corporation and WG, Inc. and the Stock Purchase Agreement dated as of
December 15, 1995, by and among Xxxxx Scannavinno, Xxxxxxx Xxxx, Xxxx Xxxxxx,
Xxxxxxx Management Corp., WG Apparel, Inc., and WG, Inc. (the "Stock Purchase
Agreement").
3. AGREEMENT TO SERVE
Employee agrees to his employment as described in Section 2, and agrees to
devote substantially all his business time and efforts (except immaterial time
and effort devoted to personal business affairs and investments) to the
performance of his duties under this Employment Contract. Employee agrees
that, in the course of his employment, he will faithfully observe and carry out
all of the duties and responsibilities customarily owed by an employee to his
employer. In no event shall the Company directly or indirectly require
Employee to relocate his principal residence outside of South Florida.
4. COMPENSATION
In consideration of his services hereunder, the Company shall pay Employee,
for the period in which he renders services pursuant to this Employment Contract
a salary at the rate of
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$150,000 per annum payable in equal installments no less frequently than
monthly.
5. EXPENSES, VACATIONS, FRINGE BENEFITS
Employee shall be entitled to: (i) reimbursement for all reasonable
expenses incurred in the performance of his duties hereunder upon submission and
approval of written statements in accordance with the Company's standard
policies as in effect from time to time; (ii) reasonable vacations in accordance
with the Company's then current regular procedures governing executives,
provided that Employee shall be entitled to a minimum of four weeks paid
vacation per year; and (iii) medical insurance benefits, group insurance
benefits and retirement and other group benefits comparable to those provided by
the Company immediately prior to the date of this Employment Contract.
6. NON-COMPETITION
(a) Employee agrees that he will not, directly or indirectly, whether in
the capacity of director, officer, employee, agent, advisor or otherwise,
individually or for, with or through any other person, firm or corporation, by
equity ownership or otherwise, compete with the Company or any subsidiary of the
Company, or any successors or assigns of their businesses (collectively the
"Protected Parties") with respect to the business conducted by the Protected
Parties (the "Prohibited Business") during the Covenant Term (hereinafter
defined) during the time period commencing with the date hereof and expiring on
the second anniversary date of the date Employee's employment with the Company,
is terminated (for any reason other than "For Cause" reasons under this
Agreement) or on the seventh (7th) anniversary date of the date hereof if the
Employee's employment with the company is terminated "For
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Cause" as defined in this Agreement (the "Covenant Term") (x) in the United
States and (y) in any area outside the United States where the Prohibited
Businesses are conducted during the Covenant Term.
(b) Notwithstanding the foregoing, during the Covenant Term Employee shall
be permitted to own not in excess of three percent (3%) of any class of
securities of any public company which is engaged in the Prohibited Business.
(c) During the Covenant Term the Employee agrees not to induce any person
who is an employee or officer of the Protected Parties to terminate said
relationship, except where such action is taken in the course of carrying out
Employee's duties for the Company;
(d) During the Covenant Term the Employee agrees not to disclose or use,
in any manner in competition with or contrary to the interests of the Protected
Parties, the customer lists, business methods, product research, or other trade
secrets of the Protected Parties relating to the Prohibited Business, it being
acknowledged that all such information regarding the Prohibited Businesses, is
confidential information and the exclusive property of the Protected Parties;
provided, however, that the foregoing restrictions shall not restrict the use or
disclosure of such confidential information (i) to any government entity to the
extent required by law or (ii) which is or becomes publicly known and available
through no wrongful act of Employee.
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(e) It is the intention of the parties that if any of the restrictions or
covenants contained herein is held to cover a geographic area or to be for a
length of time which is not permitted by applicable law, or in any way
construed to be too broad or to any extent invalid, such provision shall not be
construed to be null, void and of no effect, but to the extent such provision
would be valid or enforceable under applicable law, a court of competent
jurisdiction shall construe and interpret or reform this Section 6 to provide
for a covenant having the maximum enforceable geographic area, time period and
other provisions (not greater than those contained herein) as shall be valid
and enforceable under such applicable law. Employee acknowledges that any
breach of the terms, conditions or covenants set forth in this Section 6 shall
be competitively unfair and may cause irreparable damage to the Protected
Parties because of the special, unique, unusual and extraordinary and character
of their business and the Protected Parties recovery of damages at law will not
be an adequate remedy. Accordingly, Employee agrees that for any breach of the
terms, covenants or agreements of this Section 6 a restraining order or an
injunction or both may be issued against such person, in addition to any other
rights or remedies the Protected Parties may have.
7. PATENTS, INVENTIONS
All of Employee's interest in patents, patent applications, inventions,
technological innovations, copyrights, developments and processes developed by
Employee during the Employment Period relating to the business of the Company or
any subsidiary of
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either of them shall belong to the Company, and without further compensation,
but at the Company's expense, forthwith upon request of the Company, Employee
shall execute any and all such assignments and other documents and take any and
all such other action as the Company may reasonably request in order to vest in
the Company all Employee's right, title and interest in and to such patents,
patent applications, inventions, technological innovations, copyrights,
developments or processes, free and clear of any liens, charges and encumbrances
originated by Employee.
8. TERMINATION
(a) The employment and benefits of Employee under this Employment Contract
may be terminated only as follows: (i) If Employee shall, during the Employment
Period, (a) die or (b) become physically or mentally incapacitated or disabled
for a period of six consecutive months (the "Disability Period"), then the
Company shall have the right to give immediate notice of termination of
Employee's services hereunder; (ii) If, during the Employment Period, Employee
shall materially breach any of the terms hereof then the Company shall have the
right to give notice of termination of Employee's services hereunder as of a
date (not earlier than 30 days from such notice) to be specified in such notice;
provided, however, that Employee shall have the right during such 30-day period
to correct such breach (if capable of being corrected) or pay compensation
deemed reasonable by the Company which does not exceed the Company's reasonable
estimate of its aggregate loss, damage, deficiency or expense attributable
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to such breach (if not capable of being corrected) and thereby avoid
termination; (iii) If Employee is convicted of a felony or any other such
serious crime involving dishonesty and directly related to the performance by
Employee of the duties of his position, then the Company shall have the right to
give immediate notice of termination of Employee's services hereunder; (iv) If
Employee commits acts of fraud or dishonesty not directly related to the
performance by Employee of the duties of his position, but the affect of which
materially and adversely impair his ability to perform the duties of his
position, then the Company shall have the right to give immediate notice of
termination of Employee's services hereunder. The parties agree and acknowledge
that a termination "for cause" for purposes hereunder and under the Stock
Purchase Agreement shall only consist of a termination pursuant to Section 8(a)
(ii), (iii) or (iv), effective only after applicable required notice has been
given to Employee to the extent as provided in Section 8(a)(ii) and only to the
extent not cured within any applicable cure period, if any, provided hereunder.
Employee shall continue to be entitled to receive his full salary and benefits
during the Disability Period and thereafter; provided, however, that Company's
obligation to pay salary to Employee after the Disability Period shall be
released to the extent that disability insurance maintained for Employee's
benefit begins making required payments to Employee.
(b) In the event of termination pursuant to Section 8(a), Employee (or his
estate) shall be entitled to receive his salary
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at the rate provided in Section 4 to the end of the calendar month in which
termination occurs.
(c) If any legal action or other proceeding is brought for the enforcement
of this Employment Contract or because of a dispute regarding an alleged breach,
default or misrepresentation in connection herewith, the prevailing party in
such action or other proceeding shall be entitled to recover reasonable
attorneys' fees and other litigation costs (including cost of appeal) and all
reasonable related costs and expenses thereby incurred, in addition to any other
relief to which such prevailing party may be entitled.
(d) In the event that Employee's employment is terminated for any reason
whatsoever, and Employee holds a position as an officer and/or director of the
Company, Employee will have effectively resigned his position as an officer
and/or director upon said termination and will send a writing acknowledging same
upon the Company's request.
9. ENTIRE AGREEMENT
This Employment Contract sets forth the entire understanding of the parties
with respect to the subject matter herein and may be modified only by a written
instrument duly executed by each party.
10. NOTICES
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by registered mail, return
receipt requested, or delivered against receipt to the party to which it is to
be given at the address of
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such party first above set forth or to such other address as the party shall
have furnished in writing in accordance with the provisions of this Section 10.
Any notice or other communication mailed by registered mail shall be deemed
given at the time of mailing or transmission thereof.
11. ASSIGNMENT
In the event of a future disposition of (or including) the properties and
business of the Company, substantially as an entirety, by merger, consolidation,
sale of stock or assets or otherwise, then the Company may elect to assign the
Employment Contract and all of its rights and obligations hereunder to the
acquiring or surviving corporation (which shall acquire such obligations subject
to any claims or defenses of Employee), provided that such corporation shall
assume in writing all of the obligations of the Company hereunder and provided
further that the Company and any guarantor shall remain liable for the
performance of its obligations hereunder.
12. BINDING EFFECT, INUREMENT
This Employment Contract shall be binding upon and inure to the benefit of
the Company and (in each case) its successors and those who are its assigns
under Section 11. The obligations of Clinton Management Corporation and Clinton
Machinery Corporation hereunder shall be joint and several.
13. GOVERNING LAW
This Employment Contract shall be governed by and construed in accordance
with the laws of the State of New Jersey, without giving effect to conflict of
laws. Any and all suits, legal
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actions or proceedings arising out of this Agreement shall be brought in any
United States Federal Court sitting in New Jersey or if such court shall not
have jurisdiction, any other court of appropriate jurisdiction in New Jersey.
14. SEVERABILITY. The provisions of this Employment Contract shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If
any provision of this Employment Contract, or the application thereof to any
person or entity or any circumstance, is found to be invalid or unenforceable in
any jurisdiction, (a) a suitable and equitable provision shall be substituted
therefore in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability.
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IN WITNESS WHEREOF, the parties have duly executed this Employment Contract
as of the date first above written.
EMPLOYER:
Clinton Machinery Corporation
/s/ XXXX X. XXXXXXX
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By: Xxxx X. Xxxxxxx
Title: Vice President
Clinton Management Corporation
/s/ XXXX X. XXXXXXX
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By: Xxxx X. Xxxxxxx
Title: Vice President
EMPLOYEE:
/s/ XXXXXXX XXXX
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Xxxxxxx Xxxx
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Xxxxxxx & Xxxxx, Inc., unconditionally guarantees the
prompt payment and performance of all obligations of Clinton Machinery
Corporation and Clinton Management Corporation under this Employment Agreement.
Xxxxxxx & Xxxxx, Inc.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Chief Executive Officer
