EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment and Noncompetition Agreement (this "Agreement") is made
this 26 day of February, 1997, between DT Industries, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx, an individual residing in
the State of Ohio (the "Executive").
RECITALS
WHEREAS, the Executive desires employment with the Company and the Company
desires to retain the benefit of the Executive's services to facilitate the
conduct of the business and also desires to (i) keep confidential and secret all
information regarding its operations and (ii) secure the Executive's agreement
not to compete with the Company under the certain circumstances and for certain
time periods described in this Agreement; and
WHEREAS, the Executive understands the necessity of keeping the
aforementioned information confidential and secret, recognizes the proprietary
nature of such information, agrees not to compete with the Company under the
certain circumstances and for the certain time periods specified in this
Agreement and desires to be retained by the Company subject to the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual covenants, agreements and
promises hereinafter set forth, and other good and valuable consideration the
receipt of which is hereby agreed and acknowledged, the parties hereto agree as
follows:
1. Definitions.
The following terms when used in this Agreement have the meanings set forth
below.
a. "Affiliate" means any Person (as hereinafter defined) now or here-
after controlling, controlled by, or under common control with another Person.
b. "Area" means the State of Missouri, the State of Ohio, the states
adjacent thereto, elsewhere in the United States, North America, the Western
Hemisphere, Europe, Asia and the world.
c. "Benefits" means Company paid healthcare benefits applicable to
the Executive in accordance with the policies of the Company in effect from time
to time.
d. "Business" means any businesses or operations engaged in or
proposed to be engaged in by the Company, Subsidiaries or any of their
Affiliates throughout the Area.
e. "Cause" means (i) the Executive breaches his fiduciary duties to
the Company or the Subsidiaries, (ii) the Executive commits an act constituting
intentional financial dishonesty against the Company, Subsidiaries, or any of
their Affiliates, (iii) the Executive is convicted of a crime, (iv) the
Executive engages in misconduct causing material harm to the Company,
Subsidiaries, or any of their Affiliates, or (v) the Executive engages in any
other act which would otherwise constitute "cause" under the laws of the State
of Missouri.
f. "Person" means any individual, corporation, firm, partnership or
other business entity.
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g. "Proprietary Information" means all information with respect to
the conduct or details of the business and operations of the Company or its
Subsidiaries including, without limitation, methods of operation, customers and
customer lists, details of contracts with customers, consultants, suppliers or
employees, products, proposed products, former products, proposed, pending or
complete acquisitions of any company, division, product line or other business
unit, prices and pricing policies, 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 Company or its Subsidiaries.
h. "Subsidiary" means any corporation or other entity of which the
Company 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. Employment.
The Executive shall serve in such executive or managerial capacities as may
be determined from time to time by the Board of Directors of the Company. The
Company shall pay to the Executive, and the Executive shall accept from the
Company in full payment for the Executive's services rendered to the Company
hereunder an annual base compensation of $200,000. The Executive shall also be
eligible to participate in bonus plans sponsored by the Company applicable to
senior executives of the Company.
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3. Nondisclosure.
a. The Executive covenants and agrees that, at all times from and
after the date hereof, except as required by law or by order of any court or
government agency, he shall keep completely confidential and retain in strictest
confidence and shall not, except with the express prior written consent of the
Company, directly or indirectly disclose, communicate or divulge to any Person,
or use for the benefit of any Person, any Proprietary Information. The
restriction 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 a source other than the Executive, or (iii) is later lawfully
acquired by the Executive from sources other than the Company.
b. All data, designs, drawings, blueprints, tracings, sketches,
plans, layouts, specifications, models, programs, cards, tapes, disks,
printouts, writings, manuals, guides, notes and any an all other memoranda,
including without limitation any and all written information which may be or has
been furnished to the Executive which may be produced, prepared or designed by
the Executive in connection with his employment with the Company, shall be,
become and remain the exclusive property of the Company. Upon the termination of
the Executive's employment with the Company, all originals, copies and reprints
in the Executive's possession, custody, or control shall be promptly surrendered
and/or delivered to the Company, 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, provided that the Executive shall not be
obligated to deliver to the Company
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or prohibited from using such written information as a matter of public
knowledge on or prior to the date of the termination of his employment with the
Company.
4. Disclosure.
a. The Executive agrees to disclose in writing to the Company
promptly and fully all works and property, 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 prepared by the
Executive during, or related in any manner whatsoever to, his employment with
the Company or which result from or are suggested by any work the Executive may
do in connection with his employment with the Company, 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."
b. If the Executive includes in any written disclosure required by
Section 4(a) a request that ownership of any Works and Property be transferred
to him, the Company 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 Company 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
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by the Company 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 Company
in writing any Works and Property, the Company shall retain complete right,
title and interest in Works and Property as specified in Section 5(a).
5. Ownership of Works and Property.
The Executive hereby agrees that:
a. Except as provided in Section 4, all Works and Property shall
unconditionally be, become and remain the sole and exclusive property of the
Company forever;
b. Pursuant to Sections 101 and 201 of the United States Copyright
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 Company and
its successors and assigns forever, and the Company and its successors and
assigns may make any use or non-use of such Works and Property throughout the
world without any further obligations to the Executive;
c. All Works and Property shall belong entirely and exclusively to
the Company and its successors and assigns forever, and the Executive hereby
grants and assigns forever to the Company all rights whatsoever that the
Executive might have therein, and the Company may make any use or non-use of
such Works and Property throughout the world without any further obligation to
the Executive;
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d. The Executive will promptly execute, acknowledge and deliver all
applications, oaths, declarations, and further documents and will provide such
additional assistance as the Company or its counsel may deem necessary or
desirable to evidence the Company's title to such Works and Property; and
e. In performing duties or services for the Company 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.
6. Covenants Not to Compete.
a. The Executive covenants and agrees that he will not at any time
during his employment with the Company and thereafter for the applicable
Post-Employment Restriction Period (as defined below in Section 7), except with
the express prior written consent of the President of the Company, directly or
indirectly, whether as employee, owner, partner, agent, director, officer,
consultant, shareholder (except as the holder of not more than one percent (1%)
of the outstanding shares of a corporation whose stock is listed on any national
or regional securities exchange or reported by the Nasdaq Stock Market or any
successor thereto) either (i) establish any Person that competes with the
Company or the Subsidiaries, or (ii) be affiliated in any manner with any Person
which engages in, the Business or proposes to engage in the Business within the
Area (a "Competitor") in a manner which is competitive in any of his
responsibilities, duties or activities with the Business. The parties further
agree that if the Executive becomes affiliated or connected with any Competitor
during either his employment with the Company or the Post-Employment Restriction
Period, the Executive shall be obliged to
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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 Business. The parties hereto agree that the
covenant contained in clause (ii) of this Section 6(a) shall be construed as a
series of separate covenants, one for each state or subdivision included in the
Area 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 his employment with the Company and for a period of three (3) years
thereafter, except with the express prior written consent of the President of
the Company, directly or indirectly: (i) solicit, divert or accept competitive
business from or otherwise take away or interfere with any Person for whom the
Company or any Subsidiary performed any services or to whom the Company or any
Subsidiary sold products or whose business was being pursued by the Company or
any Subsidiary during his employment with the Company or any Subsidiary and for
the Post-Employment Restriction Period; (ii) solicit for employment or any
similar arrangement any Person who is at such time an employee or independent
contractor of the Company or any Subsidiary; or (iii) induce or attempt to
induce any Person that is a supplier to the Company or any Subsidiary or, any
distributor or seller of products for the Company or any Subsidiary to terminate
or otherwise adversely change or cancel any written or oral agreement with such
entity.
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 President of the Company,
directly or indirectly, accept employment, be employed by or be a principal of
any business or enterprise operating within the United States
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which then employs or has as a principal or holder of any interest therein
(except as the holder of not more than one percent (1%) of the outstanding
shares of a corporation whose stock is listed on any national or regional
securities exchange or reported by the Nasdaq Stock Market or any successor
thereto) any individual who was previously employed in a managerial or executive
position with the Company, Subsidiaries or any of their Affiliates, provided
however, that this prohibition shall not be applicable if (i) such business or
enterprise does not compete with the Company, Subsidiaries or any of their
Affiliates, or (ii) (x) such business or enterprise engages in activities which
do compete and other activities which do not compete with the Company,
Subsidiaries or any of their Affiliates, (y) the Executive and the other
individual who was previously employed by the Company, Subsidiaries or any of
their Affiliates are employed by such business or enterprise in connection with
activities which in no way compete with the Company, Subsidiaries or any of
their Affiliates and (z) neither the Executive nor the other individual who was
previously employed by the Company, Subsidiaries or any of their Affiliates is
or proposes to be a principal of such business or enterprise.
7. Post-Employment Restriction Period; Additional Compensation.
For the purposes of this Agreement, the applicable "Post-Employment
Restriction Period" shall be determined as follows:
a. If the Executive's employment with the Company or the Subsidiaries
is terminated for Cause, the Post-Employment Restriction Period shall be a
period of one (1) year commencing on the date of termination of such employment.
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b. If the Executive's employment with the Company or the Subsidiaries
is terminated due to a Permanent Disability, the Post-Employment Restriction
Period shall be a period of one (1) year commencing on the date of termination
of such employment. For the purpose of this Section 7, the Executive has
suffered a "Permanent Disability" if the Board of Directors of the Company or
their designee reasonably determines that the Executive has been or will be
unable, as a result of physical or mental illness or incapacity, to perform his
duties to the Company or the Subsidiaries for a period of four (4) consecutive
months or for an aggregate of more than six (6) months in any twelve-month
period.
c. If the Executive's employment with the Company or its Subsidiaries
shall be terminated by the Company or such Subsidiary without Cause, or if the
Executive terminates his employment within sixty (60) days after a substantial
reduction in his duties, responsibilities or compensation, the Post-Employment
Restriction Period shall be a period of one (1) year commencing on the date of
termination of such employment; provided, that (i) during the Post-Employment
Restriction Period the Company or the Subsidiary shall make monthly payments to
the Executive and (ii) during the Benefits Period the Company or the Subsidiary
shall provide to the Executive, the Benefits, as in effect on the date of
termination of such employment, or the reasonable equivalent thereof, as
determined by the Board of Directors of the Company in its sole discretion and
business judgment. For the purposes of this section 7, "Benefits Period" means a
period, commencing on the date that the Executive's employment with the Company
and the Subsidiaries terminates and ending on the earlier of (a) the end of the
initial Post-Employment Restriction Period and (b) the date that the Executive
commences other employment or any consulting arrangement. The amount of the
monthly payments shall be equal
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to one-twelfth (1/12) of the Executive's annual base compensation as in effect
(i) on the date of his termination or (ii), in the case where the Executive has
terminated his employment after a substantial reduction in his duties,
responsibilities or compensation, immediately prior to his reduction of
compensation, as the case may be, during the Benefits Period and 50% of such
amount thereafter until the end of the initial Post-Employment Restriction
Period determined by this Section 7.
d. If the Executive terminates his employment with the Company and
the Subsidiaries for any reason other than the Company substantially reducing
his duties, responsibilities or compensation, within thirty (30) days of the
date of such termination the Company shall have the option to designate an
initial Post-Employment Restriction Period of six (6) months commencing on the
date of termination which option is exercisable by notice given within thirty
(30) days after the date on which the Company receives notice of the Executive's
termination of his employment. Thereafter, the Company shall have three (3)
additional options to extend the Post-Employment Restriction Period for
additional consecutive periods of six (6) months each, which options shall be
exercisable at the times and in the manner set forth in this Section. If the
initial Post-Employment Restriction Period is determined by subparagraphs (a),
(b) or (c) above, at the end of the initial Post-Employment Restriction Period
the Company shall have two (2) options to extend the Post-Employment Restriction
Period for additional consecutive periods of six (6) months each. The Company
may exercise its additional options under this Section 7(d) by giving notice to
the Executive of each such election at any time which is not less than thirty
(30) days prior to the expiration of the Post-Employment Restriction Period (as
may have then been extended by prior exercise of an option pursuant to this
Section 7).
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During any such extension of the Post-Employment Restriction Period, the Company
shall make monthly payments to the Executive in an amount equal to one twelfth
(1/12th) of the Executive's annual base compensation as in effect on the date of
termination of his employment until the first full month in which the Executive
has obtained other employment or any consulting arrangement and 50% of such
amount thereafter. Notwithstanding any provision of this Section 7 to the
contrary, the Post-Employment Restriction Period shall not be extended beyond a
period of two (2) years without the consent of the Executive.
e. During the Post-Employment Restriction Period (including any
extensions thereof) the Executive shall give written notice to the Company
within five (5) days of any change in his employment or in his duties,
responsibilities or activities pursuant thereto. If the Executive voluntarily
terminates his employment with the Company and the Subsidiaries, the Executive
shall give written notice to the Company of any employment which the Executive
at that time expects to be engaged in within the six-month period following his
termination.
f. Notwithstanding any other provision of this Section 7 to the
contrary, the provisions of this Section 7 do not, and are not intended to,
waive, disclaim or otherwise extinguish any rights of the Executive as an
employee under any applicable federal, state or local statute or ordinance.
8. No Right to Continued Employment. The Executive agrees that no pro-
vision of this Agreement shall (i) give the Executive any right to be retained
in the employ of the Company or any Subsidiary, (ii) affect the right of the
Company or any Subsidiary to discharge
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the Executive at any time or (iii) affect the Executive's right to terminate his
employment at any time.
9. Acknowledgments. The Executive acknowledges that the term, the
geographical areas of this Agreement and the scope of the restraints imposed by
the Sections 3 and 6 of this Agreement are fair and reasonably required for the
protection of the Company. Therefore, in addition to any other remedies which
the Company may have under this Agreement or otherwise, the Company 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 3 and 6 of this Agreement, and the Executive shall not object to such
application except to litigate whether, in fact, he has violated Sections 3 and
6 of this Agreement.
10. Remedies. The parties agree that it is impossible to measure in money
the damages that will accrue to the Company by reason of the Executive's failure
to perform his respective obligations under this Agreement, that such failure to
perform will result in irreparable damage to the Company, and that specific
performance of the Executive's obligations may therefore be obtained by suit in
equity. Without limiting the generality of the foregoing sentence, the Company
shall be entitled to an injunction from any court of competent jurisdiction
restraining the Executive from committing or continuing any violations of
Sections 3 and/or 6. The Executive will neither assert any claim nor any defense
in any action or proceeding to enforce any provision hereof that the Company has
or had an adequate remedy at law.
11. 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
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when delivered or mailed by United States registered mail, return receipt
requests, postage prepaid, addressed as follows:
If to the Executive:
000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
If to the Company:
DT Industries, Inc.
Corporate Centre, Suite 2-300
0000 Xxxx Xxxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
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.
12. Invalid or Unenforceable Provisions. In the event that any part of
this Agreement shall be held to be unenforceable or invalid, the remaining parts
thereof 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 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 scope
which a court of competent jurisdiction would deem valid and enforceable in any
state in which such court of competent jurisdiction shall be convened.
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13. Benefit and Burden. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective personal or legal
representatives, successors and assigns.
14. Indemnification. The Executive agrees to save and hold the Company
harmless from and against any claim, loss or damage whatsoever (including
reasonable attorneys' fee) arising out of the breach by the Executive of his
obligations under this Agreement. The foregoing shall be in addition to, and not
in limitation of, any rights the Company may have against the Executive arising
in connection with this Agreement.
15. No Conflicts. The Executive represents that there is no conflict
between the duties that he is required to perform pursuant to this Agreement,
and the duties that he is required to perform pursuant to any other contract,
agreement, arrangement or understanding to which he is a party or to any rule,
regulation, directive, order or law to which he is subject.
16. Modifications. No change or modification of this Agreement shall be
valid unless the same is in writing and signed by all 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 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.
17. Entire Agreement. This Agreement contains all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with
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respect to the subject matter of this Agreement. This Agreement is, and is
intended by the parties to be, an integration of any and all prior agreements or
understandings, oral or written, with respect to the subject matter hereof and
supersedes and replaces in their entity any prior employment agreements between
the Executive and the Company.
18. Governing Law. This Agreement, including, without limitation, the
interpretation, construction, validity and enforceability thereof, shall be
construed and enforced in accordance with and governed by the laws of the State
of Missouri, without regard to such jurisdiction's conflict of laws principles.
19. Forum Selection And Consent to Jurisdiction. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
State of Missouri in Xxxxxx County or any United States Federal Court sitting in
the District of Missouri, and, by the execution and delivery of this Agreement,
the Company and the Executive hereby irrevocably accepts for himself or itself
and in respect of any of his or its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Company and the Executive further
irrevocably consent to the service of process out of any of the aforementioned
courts in any such action or proceeding by hand delivery or by registered or
certified mail, postage prepaid, to the Company or the Executive at the
addresses described in Section 11 of this Agreement, such service to become
effective ten (10) days after hand delivery or fifteen (15) days after such
mailing. The Company and the Executive hereby irrevocably waive to the fullest
extent they may effectively do so, any objection they may have to venue and the
defense of an inconvenient forum to the maintenance of such actions or
proceedings.
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20. Headings. 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.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument. Any such counterpart may
be executed by facsimile signature with only verbal confirmation, and when so
executed and delivered shall be deemed an original and such counterpart(s)
together shall constitute only one original.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
Company:
DT INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
Executive:
/s/ X. X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
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