EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is dated as of October 31, 1997, and is
between ELTRAX SYSTEMS, INC., a Minnesota corporation having its principal
place of business in Southfield, Michigan ("Eltrax"), together with its
subsidiaries (Eltrax and its subsidiaries collectively being the "Company")
and XXXX X. GOOD, an individual residing in the State of Ohio ("Employee").
The parties agree as follows:
ARTICLE
1.
EMPLOYMENT, DUTIES AND TERM
1.1. EMPLOYMENT; POSITION. Upon the terms and conditions set forth in this
Agreement, the Company hereby employs Employee as President of DataComm
Associates, Inc. and Midwest Telecom Associates, Inc, and Employee
accepts such employment.
1.2. DUTIES.
(a) Employee shall devote his full-business time and give his best
efforts to the Company and to fulfilling the duties of his
position which shall include such duties with respect to the
Company as may from time to time be assigned to him by the CEO of
the Company, commensurate with Employee's position, experience
and/or skills or expertise.
(b) Employee shall perform his duties in the best interests of the
Company and its shareholders.
(c) Employee shall comply with the Company's policies and procedures
to the extent they are not inconsistent with this Agreement in
which case the provisions of this Agreement prevail. In
addition, Employee shall comply with the Company's lawful
policies on employee conduct and business ethics.
1.3. TERM. The term of this Agreement shall commence October 30, 1997 and
shall terminate on October 31, 2000 (the "Base Term"), unless earlier
terminated pursuant to Article 3 of this Agreement. Commencing November
1, 2000 and on each November 1st thereafter, the term of Employee's
employment hereunder shall be automatically extended for one (1)
additional year unless at least thirty (30) days before the end of the
Base Term or any extension, either party gives written notice to the
other of the cessation of further extensions.
ARTICLE
2.
BASE COMPENSATION, EXPENSES, AND BENEFITS
2.1. BASE SALARY. For all services rendered under this Agreement during the
term of Employee's employment, the Company shall pay Employee, in
accordance with Eltrax's usual pay practices (which is currently every
two weeks), a base salary, exclusive of benefits and bonuses, at an
annual rate of One Hundred Thirty Thousand Dollars ($130,000) (the "Base
Salary"). The Base Salary may be increased annually in an amount
determined by the Compensation Committee of the Eltrax Board of
Directors, in its sole discretion.
2.2. BONUS. At any time during the term of this Agreement, the Company may
pay Employee a discretionary bonus as additional compensation, which
shall be determined by the Compensation Committee of the Eltrax Board of
Directors, in its sole discretion (the "Bonus").
2.3. BENEFITS. In addition to other compensation, Employee shall be entitled
to participate in all benefit plans currently maintained or hereafter
established by the Company for the benefit of its executive officers
generally, in accordance with the terms and conditions of such plans
(each a "Benefit Plan"). Employee shall be entitled to four (4) weeks
vacation. The current Benefit Plans of the Company are set forth in
Exhibit A attached to this Agreement.
2.4. INCENTIVE STOCK OPTIONS. Employee shall receive incentive stock options
to acquire 50,000 shares of Eltrax common stock at the market price of
such shares as of October 31, 1997 (the "Options") pursuant to the terms
and conditions of the Eltrax 1997 Stock Incentive Plan, which shall vest
during Employee's employment subject to Article 3 according to the
following schedule: 14,000 on October 31, 1997, 14,000 on January 1,
1998, 14,000 on January 1, 1999 and 8,000 on January 1, 2000.
2.5. EXPENSES. The Company shall reimburse Employee for all expenses
reasonably and necessarily incurred by Employee during the course and in
furtherance of his employment, subject to and made in accordance with
such reasonable and nondiscriminatory policies and procedures as may be
established by the Company as applicable to its executive officers.
2.6 AUTOMOBILE. Employee shall retain and shall be entitled to the
exclusive use during the course of Employee's employment of the
automobile currently being used by the Employee and leased by the Company
as of the execution of this Agreement (the "Automobile"). The Company
shall retain the rights to use the Automobile pursuant to the current
lease. Upon the expiration of the current lease term for the Automobile,
the Company shall lease a new comparable automobile for Employee's
exclusive use during the course of Employee's employment.
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2.7 LOCATION. During Employee's employment, Employee's principal place of
employment shall be at 00000 Xxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxx (the
"Office"), or at such other address located within a reasonable distance
of the Office, as the Company may determine.
ARTICLE
3.
EARLY TERMINATION
3.1. TERMINATION FOR CAUSE. The Company may terminate this Agreement and
Employee's employment immediately for cause. For the purpose hereof,
"cause" means: (a) fraud; (b) theft or embezzlement of the Company's
assets; (c) willful violation of law constituting a felony; (d) a
material breach of the terms and conditions of this Agreement not cured
within thirty (30) days after written notice; or (e) the continued
failure by Employee to perform his duties as reasonably assigned to
Employee under this Agreement for a period of thirty (30) days after
written notice describing such failure. In the event of termination for
cause pursuant to this section, Employee shall be paid at the usual rate
of Employee's annual Base Salary through the date of termination
specified in any notice of termination (the "Termination Date") and any
amounts to which the Employee is entitled under any Benefit Plan. No
Options shall vest following the Termination Date.
3.2. TERMINATION WITHOUT CAUSE. Either Employee or the Company may terminate
this Agreement and Employee's employment without cause upon thirty (30)
days' advance written notice (the "Termination Notice"). In the event of
termination of this Agreement and of Employee's employment pursuant to
this section, compensation shall be paid as follows:
(a) If the termination is by Employee, Employee shall be paid his
Base Salary through the date specified in the Termination Notice
as well as the Bonus, if any, declared prior to the Termination
Notice. Employee's Options shall vest through the date of
termination specified in the Termination Notice.
(b) If the termination is by the Company, Employee shall be paid his
Base Salary through the Base Term or any applicable renewal term,
as well as the Bonus, if any, declared prior to the Termination
Notice. All of Employee's unvested Options shall vest on the
date of termination specified in the Termination Notice and all
benefits described in Section 2.3 shall continue through the end
of the Base Term or the applicable renewal term.
3.3. TERMINATION IN THE EVENT OF DEATH OR DISABILITY. This Agreement and
Employee's employment shall terminate in the event of death or Disability
of Employee. "Disability" shall mean Employee's inability, as reasonably
determined by the Company, to perform the essential functions of his
duties under this Agreement because of illness or incapacity for a
continuous period of six (6) months. In the event of Employee's death,
Base Salary shall be terminated as of the end of the month in which
Employee's death occurs. All of
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Employee's unvested Options shall vest at the end of the month in which
Employee's death occurs. Employee's estate shall receive any Bonus
declared prior to the end of such month and unpaid as of the date of
Employee's death. In the event of Disability, Base Salary shall be
terminated as of the end of the month in which the last day of the
six-month period of Employee's Disability occurs and all of Employee's
unvested Options shall vest on such date. Notwithstanding anything to the
contrary in this paragraph, the Company shall make reasonable accommodation
as required by the Americans with Disabilities Act or similar state law.
3.4. ENTIRE TERMINATION PAYMENT. The compensation provided in this Agreement
for early termination shall constitute Employee's sole compensation for
such termination, provided that such termination was not in violation of
applicable law.
ARTICLE
4.
CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT
4.1. CONFIDENTIALITY. Employee will not, during the term or after the
termination or expiration of this Agreement, publish, disclose, or
utilize in any manner any Confidential Information (as hereinafter
defined) obtained while employed by the Company. If Employee leaves the
employ of the Company, Employee will not, without its prior written
consent, retain or take away any drawing, writing or other record in any
form containing any Confidential Information. "Confidential Information"
means information or material which is not generally available to or used
by others, or the utility or value of which is not generally known or
recognized as standard practice, whether or not the underlying details
are in the public domain, including: (a) information or material relating
to the Company, and its businesses as conducted or anticipated to be
conducted, business plans, operations, past, current or anticipated
software, products or services, customers or prospective customers, or
research, engineering, development, manufacturing, purchasing,
accounting, or marketing activities; (b) information or material relating
to the Company's inventions, improvements, discoveries, "know-how,"
technological developments, or unpublished works, or to the materials,
apparatus, processes, formulae, plans or methods used in the development,
manufacture or marketing of the Company's software, products or services;
(c) any information marked "proprietary," "private," or "confidential";
(d) trade secrets; (e) software in any stage of development, including
source code and binary code, software designs, specifications,
programming aids (including subroutines and productivity tools),
programming languages, interfaces, visual displays, technical
documentation, user manuals, data files and databases; and (f) any
similar information of the type described above which the Company
obtained from another party and which the Company treats as or designates
as being proprietary, private or confidential, whether or not owned or
developed by the Company.
4.2. BUSINESS CONDUCT AND ETHICS. During the term of employment with the
Company, Employee will engage in no activity or employment which may
conflict with the interest
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of the Company, will dutifully comply with all reasonable,
nondiscriminatory Company policies and guidelines and will observe the
highest standard of ethical business conduct.
4.3. DISCLOSURE. Employee will disclose promptly in writing to an officer of
the Company all inventions, discoveries, software, writings and other
works of authorship which are conceived, made, discovered, or written
jointly or singly on business time during the term of the Agreement,
provided the invention, improvement, discovery, software, writing or
other work of authorship is capable of being used by the Company in the
normal course of business, and all such inventions, improvements,
discoveries, software, writings and other works of authorship shall
belong solely to the Company.
4.4. INSTRUMENTS OF ASSIGNMENT. Employee will sign and execute all
instruments of assignment and other papers to evidence the granting of
all entire right, title and interest in such inventions, improvements,
discoveries, software, writings or other works of authorship to the
Company, at the request and the expense of Company, and Employee will do
all acts, give any needed testimony and sign all instruments of
assignment and other papers Eltrax may reasonably request relating to
applications for patents, copyrights, and the enforcement and protection
thereof.
4.5. SURVIVAL. The obligations of this Article 4 shall survive the expiration
or termination of this Agreement.
ARTICLE
5.
NON-COMPETITION
5.1. NON-COMPETITION. Employee agrees that during the Base Term and any
extension thereof:
(a) Employee will not, directly or indirectly, alone or as a partner,
member, officer, director, shareholder or employee of any other
firm or entity, engage in any commercial activity in competition
with any part of the Company's business which was under
Employee's management or supervision at any time during the term
of this Agreement or any part of the Company's business with
respect to which Employee has Confidential Information. For
purposes of this section, "shareholder" shall not include
beneficial ownership of less than five percent (5%) of the
combined voting power of all issued and outstanding voting
securities of a publicly held corporation whose voting stock is
traded in a public market. Also for purposes of this section,
"the Company's business" shall include businesses conducted by
the Company, any subsidiary of the Company and any affiliate of
the Company and any partnership or joint venture;
(b) divert, or by aid to others, do anything which would tend to
divert, or may divert from the Company, any trade or business
with any customer, supplier or vendor with whom the Company has
had any contact or association; or
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(c) take any affirmative action to induce or attempt to induce any
person employed by the Company to leave the employment of the
Company.
5.2. EFFECT OF TERMINATION. Upon the termination of Employee's employment, no
additional compensation shall be paid for the non-competition obligation.
5.3. SURVIVAL. In the event termination occurs prior to completion of the
Base Term, the obligations of this Article 5 shall continue through
completion of the Base Term. In the event termination occurs following
the end of the Base Term: (a) if such termination is by the Company
under Sections 3.1 or 3.2(b) then the obligations of this Article 5 shall
continue through the end of any renewal term agreed to under Section 1.3,
and (b) if such termination is by the Employee under Section 3.2(a), then
the obligations of this Article 5 shall continue only through the date of
such termination.
ARTICLE
6.
GENERAL PROVISIONS
6.1. NO ADEQUATE REMEDY. The parties acknowledge it is impossible to measure
in money the damages which will accrue to either party by reason of a
failure to perform any of the obligations under this Agreement.
Therefore, in the event of a claim for equitable relief, each party
hereby waives the claim or defense that the other has an adequate remedy
at law.
6.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. This Agreement shall not be
assignable by the Employee, but its economic terms shall inure to the
benefit of the Employee's heirs and beneficiaries.
6.3. NOTICES. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and be
delivered or mailed to any such party at its address which:
(a) In the case of the Company shall be:
Eltrax Systems, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Clunet X. Xxxxx
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With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Jaffe, Raitt, Heuer & Xxxxx, P.C.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(b) In the case of Employee shall be:
Xxxx X. Good
00000 Xxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
With a copy to:
Xxxxx Xxxxxx, Esq.
Berick, Xxxxxxxx & Xxxxx Co., L.P.A.
1350 Xxxxx Center, 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Any notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed sent on the registered date or that
stamped on the certified mail receipt, and shall be deemed received on
the second business day thereafter.
6.4. CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of
this Agreement.
6.5. GOVERNING LAW. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Michigan without
giving effect to the conflict of laws principles thereof.
6.6. CONSTRUCTION. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited
or invalid, all remaining clauses shall remain fully enforceable.
6.7. WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any partial exercise of any right or remedy
hereunder preclude any exercise of that or any other right or remedy
granted hereby by law.
6.8. MODIFICATION. This Agreement may not be and shall not be modified or
amended except by written instrument signed by all parties.
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6.9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters
herein agreed upon and supersedes all prior or contemporaneous
agreements, understandings and negotiations with respect to the subject
matter hereof.
6.10. ARBITRATION. With the sole exception of injunctive relief as
contemplated by Section 7.1 of this Agreement, any controversy or claim
arising out of any aspect of the relationship of the parties hereto,
will be settled by binding arbitration in Southfield, Michigan by a
panel of three arbitrators in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.
Judgment upon any arbitration award may be entered in any court having
jurisdiction thereof and the parties consent to the jurisdiction of the
courts of the State of Michigan for this purpose.
6.11. ATTORNEYS' FEES. In the event there is litigation or other proceedings
between the parties hereto with respect to their rights and obligations
under this Agreement, the prevailing party in any such litigation shall
be entitled to recover from the opposing party all reasonable
attorneys' fees and expenses (including fees of accountants) incurred
by the prevailing party in connection with such proceeding.
6.12. VENUE; JURISDICTION. The parties agree that all actions or proceedings
arising in connection with this Agreement and the instruments,
agreements and documents executed pursuant to the terms of this
Agreement shall be tried, litigated and arbitrated only in the courts
of the United States located in the Eastern District of Michigan, the
Michigan state courts or the offices of the American Arbitration
Association located nearest Southfield, Michigan. The Employee
irrevocably accepts for himself and in respect of his property,
generally and unconditionally, the jurisdiction of such courts.
The Employee irrevocably consents to the service of process out of any
such courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to him, at
his address as set forth in the records of the Company, such service to
become effective ten (10) days after such mailing. Nothing in this
Section 7.12 shall affect the right of any party to serve process in
any other manner permitted by law. Employee irrevocably waives any
right he may have to assert the doctrine of FORUM NON CONVENIENS or to
object to venue to the extent any proceeding is brought in accordance
with this Section 7.12.
6.13. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
EMPLOYEE ELTRAX SYSTEMS, INC., together with
its subsidiaries
By:
--------------------- ----------------------------------
Xxxx X. Good Clunet X. Xxxxx, Secretary
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