EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of February 9, 1996 by and
between Xxxxx Xxxx ("Xxxx") and Total Control Products, Inc., an Illinois
corporation (the "Company").
R E C I T A L S:
A. The Company desires to employ Wood as an executive officer of the
Company and Wood desires to be so employed by the Company, all on the terms and
subject to the conditions set forth herein.
B. The Company desires to bind Wood to certain restrictive covenants and
Wood agrees to be so bound, all on the terms and subject to the conditions set
forth herein.
A G R E E M E N T :
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. TERM. Subject to the terms and conditions set forth herein and unless
sooner terminated as hereinafter provided, the Company shall employ Wood and
Wood agrees to serve as an employee of the Company from the date hereof to and
including February 9, 1997 (the "Employment Term"). After the expiration of the
Employment Term, Wood's employment hereunder shall automatically renew for
successive one year periods (each, a "Renewal Term") unless either party hereto
delivers written notice to the other party hereto, at least ninety (90) days
prior to the expiration of the Employment Term or any Renewal Term thereof, as
the case may be, of his or its desire to terminate Wood's employment with the
Company. The Employment Term and any Renewal Term thereof are collectively
referred to herein as the "Term".
2. EMPLOYMENT DUTIES. During the Term, Wood shall serve as the Senior
Vice President of Marketing and Product Development of the Company. Wood shall
report directly to the President of the Company and shall be responsible for all
aspects of the Company's Marketing and Engineering operations. Wood shall
faithfully, diligently and competently perform such duties and responsibilities
and shall perform such other duties and responsibilities as may from time to
time be assigned to him by the President or the Board of Directors of the
Company (the "Board").
3. COMPENSATION. As compensation for the services to be performed and
the duties and responsibilities to be assumed by Wood during the Term, the
Company shall pay to Wood the following compensation:
(a) A salary (the "Salary") in an amount equal to $110,000 per annum.
The Company shall review the Salary payable to Wood after the expiration of
each six month period during the Term beginning on the date hereof and any
increases in Salary shall be made at the sole discretion of the Company.
The Salary shall be payable to Wood in accordance with the Company's
ordinary payment practices for salaried employees.
(b) Wood shall be entitled to participate in the Company's
executive bonus plan (the "Bonus") on the same terms as the participation
of other executives of TCP; provided, however, that, during the Term, Wood
shall receive a Bonus of not less than $4,000 per quarter. In no event
shall any Bonus be paid to Wood for any fiscal year of the Company unless
Wood is employed throughout the entire fiscal year. The Bonus shall be
determined from the Company's internal accounting records, which shall be
finally approved by the Board or any compensation committee thereof. The
Bonus awarded to Wood in respect of any particular fiscal year shall be
paid at the same time as bonuses are paid to other executives of the
Company.
4. BENEFITS.
(a) During the Term, Wood shall be entitled to participate in such
employee benefit plans and programs as are maintained by the Company, to
the extent that his position, tenure, compensation, age, health and other
qualifications make him eligible to participate. The Company does not
promise the adoption or continuance of any particular plan or program
during the Term, and Wood's (and his dependents') participation in any such
plan or program shall be subject to the provisions, rules, regulations and
laws applicable thereto.
(b) During the Term, Wood shall be entitled to such other fringe
benefits as are provided to employees of the Company with comparable
positions, tenure and compensation as Wood.
5. REIMBURSEMENT OF EXPENSES. During the Term, Wood shall be entitled to
prompt reimbursement for ordinary, necessary and reasonable out-of-pocket trade
or business expenses which Wood incurs in connection with performing his duties
under this Agreement. The reimbursement of all such expenses shall be made upon
presentation of evidence reasonably satisfactory to the Company of the amounts
and nature of such expenses and shall be subject to the reasonable approval of
the Board. Additionally, Wood shall be entitled to (a) an immediate payment of
$6,000 to defray a portion of Wood's indirect moving costs; and (b)
reimbursement for all reasonable and normal moving expenses incurred by Wood to
relocate to the Chicago area.
6. RESTRICTIVE COVENANTS. Wood acknowledges and agrees that (a) through
his continuing services to the Company, he will learn valuable trade secrets and
other proprietary information relating to the Company's business; (b) Wood's
services to the Company are unique in nature; (c) the Company's business is
national in scope; and (d) the Company would be irreparably damaged if Wood was
to provide services to any person or entity in violation of the restrictions
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contained in this Agreement. Accordingly, as an inducement to the Company to
enter into this Agreement, if the Company terminates Wood for any reason other
than for cause or Wood terminates this Agreement for any reason, Wood agrees
that during the Term and for one year thereafter (such period being referred to
herein as the "Restricted Period"), Wood shall not, directly or indirectly,
either for himself or for any other person or entity, without the prior written
consent of the Company:
(a) anywhere in the United States, engage or participate in, or
assist, advise or be connected with (including as an employee, owner,
partner, shareholder, officer, director, advisor, consultant, agent or
(without limitation by the specific enumeration of the foregoing)
otherwise), or permit his name to be used by or render services for, any
person or entity engaged in, or making plans to engage in, a business
capacity that directly competes with the business conducted by, or proposed
to be conducted by, the Company (a "Competing Business");
(b) take any action which might divert from the Company or any of its
Affiliates (as defined herein) any opportunity (each, an "Opportunity")
which would be within the scope of the Company's or such Affiliate's then
business and shall offer each Opportunity to the Company, which the Company
may, in its sole discretion, decide to pursue or not;
(c) solicit, attempt to solicit, aid in the solicitation of or accept
any orders from any person or entity who is or has been a customer of the
Company or its Affiliates, at any time during the period beginning one year
prior to the date hereof through the Restrictive Period, to purchase
products or services from any person or entity which products or services
could have been supplied or performed, as the case may be, by the Company
or its Affiliates (other than from the Company or its Affiliates);
(d) solicit, attempt to solicit or aid in the solicitation of any
person or entity who is or has been a customer, supplier, licensor,
licensee or person or entity having any other business relationship with
the Company or any of its Affiliates, at any time during the period
beginning one year prior to the date hereof through the Restrictive Period,
to cease doing business with or alter its business relationship with the
Company or its Affiliates; or
(e) solicit or hire any person or entity who is a director, officer,
employee, independent contractor or agent of the Company or any of its
Affiliates to perform services for any person or entity other than the
Company or its Affiliates or to terminate his or her employment with the
Company or its Affiliates.
As used herein, an "Affiliate" shall mean and include any person or entity
which controls a party, which such party controls or which is under common
control with such party. "Control" means the power, direct or indirect, to
direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
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7. DISCLOSURE OF CONFIDENTIAL INFORMATION. Wood recognizes that he will
occupy a position of trust and confidence with the Company as to Confidential
Information (as herein defined) pertaining to the Company and its Affiliates.
As an inducement for the Company to enter into this Agreement, Wood therefore
agrees that:
(a) for the longest period permitted by law from the date of this
Agreement, Wood and each Affiliate of Wood shall hold in the strictest
confidence and shall not, other than as required by law, without the prior
written consent of the Company, use for his own benefit or that of any
third party or disclose to any person, firm or corporation (except the
Company, an Affiliate of the Company or employees of the Company and its
Affiliates) any Confidential Information. For purposes of this Agreement,
intending that the term shall be broadly construed to include anything
protectible as a trade secret under applicable law, "Confidential
Information" shall mean all information, and all documents and other
tangible items which record information relating to or useful in connection
with the Company's business (including the business of any of the Company's
Affiliates), which at the time or times concerned is protectible as a trade
secret under applicable law, and which has been or is from time to time
disclosed to or known by Wood.
(b) Wood and each Affiliate of Wood (and if deceased, their personal
representatives) shall promptly following a request therefor from the
Company return to the Company, without retaining copies, all tangible items
which are or which contain Confidential Information. Wood shall also
surrender all computer print-outs, laboratory books, floppy disks and other
such media for storing software and information, work papers, files, client
lists, telephone and/or address books, rolodex cards, internal memoranda,
appointment books, calendars, keys and other tangible things entrusted to
Wood by the Company or authored in whole or in part by Wood within the
scope of his duties to the Company even if such things do not contain
Confidential Information; and
(c) at the request of the Company made at any time or from time to
time hereafter, Wood and each Affiliate of Wood (and if deceased, their
personal representatives) shall make, execute and deliver all applications,
papers, assignments, conveyances, instruments or other documents and shall
perform or cause to be performed such other lawful acts as the Company may
reasonably deem necessary or desirable to implement any of the provisions
of this Agreement, and shall give testimony and cooperate with the Company,
its Affiliates or their respective representatives in any controversy or
legal proceedings involving the Company, its Affiliates or their respective
representatives with respect to any Confidential Information.
8. INVENTIONS. Wood acknowledges that in his capacity as an executive
officer of the Company, he will be involved in (i) the conception or making of
improvements, discoveries, inventions or the like (whether patentable or
unpatentable and whether or not reduced to practice), (ii) the authorship of
copyrightable works or (iii) the development of trade secrets relating to the
Company. Wood acknowledges that all such intellectual property is the exclusive
property of the Company. Wood hereby waives any rights he may have in or to
such intellectual
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property, and Wood hereby assigns to the Company all right, title and
interest in and to such intellectual property. At the Company's request and
at no expense to Wood, Wood shall execute and deliver all such papers,
including, without limitation, any assignment documents, and shall provide
such cooperation as may be necessary or desirable, or as the Company may
reasonably request, in order to enable the Company to secure and exercise its
rights to such intellectual property.
9. SPECIFIC PERFORMANCE. Wood agrees that any violation by him of
Sections 6, 7 or 8 of this Agreement would be highly injurious to the Company
and its Affiliates and would cause irreparable harm to the Company and its
Affiliates. By reason of the foregoing, Wood consents and agrees that if he
violates any provision of Sections 6, 7 or 8 of this Agreement, the Company and
its Affiliates shall be entitled, in addition to any other rights and remedies
that it may have, to apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any continuing violation of, the provisions of such section. In the event Wood
breaches a covenant contained in this Agreement, the Restricted Period
applicable to Wood with respect to such breached covenant shall be extended for
the period of such breach. Wood also recognizes that the territorial, time and
scope limitations set forth in Sections 6 and 7 are reasonable and are properly
required for the protection of the Company and its Affiliates and in the event
that any such territorial, time or scope limitation is deemed to be unreasonable
by a court of competent jurisdiction, the Company and Wood agree, and Wood
submits, to the reduction of any or all of said territorial, time or scope
limitations to such an area, period or scope as said court shall deem reasonable
under the circumstances. Wood represents, warrants and acknowledges that he has
available to him sufficient other means of support so that observance of the
covenants contained in Sections 6, 7 and 8 shall not deprive him of his ability
to earn a livelihood or support his dependents.
10. TERMINATION FOR CAUSE. During the Term, Wood's employment with the
Company may be terminated by the Board "for cause", which shall include (a)
Wood's failure to relocate to the Chicago area within six months from the date
hereof; (b) Wood's conviction for, or plea of nolo contendere to, a felony or a
crime involving moral turpitude; (c) Wood's commission of an act which the
Board, in its reasonable discretion, determines involved personal dishonesty or
fraud involving personal profit in connection with Wood's employment with the
Company; (d) Wood's commission of an act which the Board shall have found to
have involved willful misconduct or gross negligence on the part of Wood in the
conduct of his duties hereunder; or (e) Wood's breach of any material provision
of this Agreement. In the event of termination under this Section 10, the
Company's obligations under this Agreement shall cease and Wood shall forfeit
all his rights to receive any compensation or benefits under this Agreement,
except that Wood shall be entitled to his Salary and benefits for services
already performed as of the date of termination of Wood's employment hereunder.
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11. DEATH OR DISABILITY.
(a) This Agreement shall terminate upon Wood's death.
(b) If Wood becomes permanently disabled (determined as provided
below) during the Term, his employment with the Company shall terminate as
of the date such permanent disability is determined. Wood shall be
considered to be permanently disabled for purposes of this Agreement if he
is unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company and is
(i) not expected to recover from his disability within a period of six (6)
months from the commencement of the disability; or (ii) not expected to be
able to perform his material duties of his regular position with the
Company for a period of six (6) months in any consecutive twelve (12) month
period as a result of the same disability. If at any time Wood claims or
is claimed to be permanently disabled, a physician acceptable to both Wood,
or his personal representative, and the Company (which acceptances shall
not be unreasonably withheld) shall be retained by the Company and shall
examine Wood. Wood shall cooperate fully with the physician. If the
physician determines that Wood is permanently disabled, the physician shall
deliver to the Company a certificate certifying both that Wood is
permanently disabled and the date upon which the condition of permanent
disability commenced. The determination of the physician shall be
conclusive.
(c) Wood's right to his compensation and benefits under this
Agreement shall cease upon his death or disability, except that Wood (or
his estate or heirs) shall be entitled to his (i) Salary and a pro rata
portion of his Bonus and benefits for services already performed as of the
date of his death or disability; and (ii) in the case of termination for
disability, his Salary for a period of eighteen months from the date of the
determination of such disability in accordance with the Company's ordinary
payment practices for salaried employees and shall continue Wood's medical
insurance benefits during such eighteen month period to the extent Wood is
not entitled to receive similar benefits from a subsequent employer.
12. EFFECT OF TERMINATION. If the Company terminates Wood's employment
hereunder for any reason other than death, disability or cause, but including
upon the decision of the Company not to renew the term of Wood's employment
hereunder pursuant to Section 1 of this Agreement, the Company shall pay Wood
his Salary for a period of one year from the date of termination in accordance
with the Company's ordinary payment practices for salaried employees and shall
continue Wood's medical insurance benefits during such one year period to the
extent Wood is not entitled to receive similar benefits from a subsequent
employer. If Wood terminates his employment with the Company for any reason
whatsoever, the Company's obligations under this Agreement shall cease and Wood
shall forfeit all his rights to receive any compensation or benefits under this
Agreement, except that Wood shall be entitled to his Salary and benefits for
services already performed as of the date of termination of this Agreement.
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13. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be
in writing and shall be deemed given (i) when delivered in person at the
time of such delivery or by telecopy with receipt of transmission
indicating the date and time (provided, however, that notice delivered by
telecopy shall only be effective if such notice is also delivered by hand
or deposited in the United States mail, postage prepaid, registered or
certified mail, on or before two (2) business days after its delivery by
telecopy), (ii) when received if given by a nationally recognized overnight
courier service or (iii) two (2) business days after being deposited in the
United States mail, postage prepaid, registered or certified mail,
addressed as follows:
if to Wood:
Xxxxx Xxxx
00 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Fax:
with a copy to:
-----------------
-----------------
-----------------
Attn:
Fax:
If to the Company:
Total Control Products, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Nic Gihl, President
Fax: (000) 000-0000
with a copy to:
X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
and/or to such other address or addressees as may be designated by notice
given in accordance with the provisions hereof.
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(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors and permitted
assigns. As to Wood, this Agreement is a personal service contract and
shall not be assignable by Wood, but all obligations and agreements of Wood
hereunder shall be binding upon and enforceable against Wood and Wood's
personal representatives, heirs, legatees and devices.
(c) The parties adopt the Recitals to this Agreement and agree and
affirm that construction of this Agreement shall be guided thereby; this
Agreement contains all of the agreements between the parties with respect
to the subject matter hereof; and this Agreement supersedes all other
agreements, oral or written, between the parties hereto with respect to the
subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing
and signed by the waiving party. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall,
for any reason, be invalid or unenforceable, such provisions (or portions
thereof) shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions of this Agreement (or
portions thereof) shall nevertheless be valid, enforceable and of full
force and effect.
(f) The section or paragraph headings or titles herein are for
convenience of reference only and shall not be deemed a part of this
Agreement.
(g) This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which taken together
shall constitute a single instrument.
(h) Notwithstanding anything to the contrary contained herein, Wood's
rights and obligations under Sections 6, 7, 8 and 9 shall survive the
expiration or termination of this Agreement.
(i) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects
by the laws of the State of Illinois applicable to contracts made in that
State (other than any conflict of laws rule which might result in the
application of the laws of any other jurisdiction).
(j) Wood hereby expressly submits and consents in advance to the
jurisdiction of the federal and state courts of the State of Illinois for
all purposes in connection with any action or proceeding arising out of or
relating to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
/s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx
THE COMPANY:
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Xxxxxxxx Xxxx
----------------------------
Nic Gihl, President
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