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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This AGREEMENT is made as of August 1, 1997, by and between
NN Ball & Roller, Inc., a Delaware corporation, having its principal place of
business located at 000 Xxxxxxxxx Xxxx, Xxxxx, Xxxxxxxxx 00000 (the "Company")
and Xxxxxxxx X. Xxxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company's Board of Directors (the "Board") has
determined that it is in the best interest of the Company and its shareholders
to employ the Executive as President and Chief Executive Officer of the Company
and the Executive desires to serve in that capacity;
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. Employment. The Company agrees to continue to employ the
Executive and the Executive hereby agrees to continue to be employed for the
period of time set forth in Paragraph 2, subject to the terms and conditions
set forth herein.
2. Term. Subject to the terms hereof, Company agrees to
employ the Executive for a period of two years commencing upon August 1, 1997
and expiring on July 31, 1999 (the "Employment Term") (unless sooner terminated
as provided herein). The Employment Term shall be extended automatically from
time to time, on a rolling basis, for additional one year periods, unless
either party gives written notice of termination to the other at least six (6)
months prior to the date that the Employment Term is scheduled to expire.
3. Position and Responsibilities. The Executive shall serve
as the President and Chief Executive Officer of the Company, reporting only to
the Board, and shall have supervision and control over, and responsibility for,
the general management and operation of the Company. The Executive shall also
have such other powers and duties as may from time to time be prescribed by the
Board; provided, however, that such duties shall be consistent with the
Executive's position as the senior executive officer in charge of the general
management of the Company.
4. Diligence. Executive agrees to serve in the respective
positions referred to in Paragraph 3 and to perform diligently the duties and
services appertaining to each such office, as well as such additional duties
and services appropriate to each such office which the parties mutually may
agree upon from time to time.
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5. Time. Executive agrees to devote his entire working time
and efforts to the business and affairs of the Company and its affiliates and
not to engage, directly or indirectly, in any other business or businesses,
whether or not similar to that of the Company, except with the consent of the
Board. The foregoing notwithstanding, the parties recognize and agree that
Executive (i) may engage in personal investments, subject to any restrictions
set forth in the Non-Competition and Confidentiality Agreement referenced in
Paragraph 8 and (ii) subject to the prior consent of the Board, may serve on
the board of directors of other companies, provided such service does not
conflict with the business and affairs of the Company or interfere with
Executive's performance of his duties hereunder.
7. Compensation.
(a) Salary. During the Employment Term, the
Executive shall receive an annual salary of $200,000 per year, which annual
salary shall be subject to such increases as the Board in its sole discretion
may from time to time determine (the "Annual Salary"). The Annual Salary shall
be payable by the Company in accordance with its regular compensation policies
and practices for paying executives.
(b) Expenses. During the term of his employment
hereunder, the Executive shall be entitled to be reimbursed for all reasonable
business expenses incurred by him in connection with his services hereunder,
including but not limited to expenses for entertainment and travel, in
accordance with the policies and procedures from time to time in effect for the
Company's senior executive officers. The Company retains the right to establish
limits on the types or amounts of business expenses that the Executive may
incur.
(c) Employee Benefit Programs. The Executive shall
be entitled to participate in all of the Company's employee benefit plans and
programs (including life, disability, and health insurance plans and programs
and savings plans and programs) to the extent his position, tenure, salary,
age, health and other qualifications make him eligible to participate, subject
to the rules and regulations applicable thereto. The Company retains the right
to abolish or alter the terms of any employee benefit programs, plans or
policies that it may establish, provided such abolition or amendment shall be
applicable to the senior officers of the Company generally.
(d) Vacation and Other Absences. The Executive shall
be entitled to the number of paid vacation days in each calendar year
determined by the Company from time to time for its senior executive officers
generally. The Executive shall also be entitled to all paid absences for
holidays or illnesses in accordance with the Company's plans, policies or
provisions applicable to senior executive employees.
8. Confidentiality and Non-Competition. As a material
inducement to the Company entering into this Agreement, Executive hereby
reconfirms and agrees to continue to be bound in all respects by the terms of
that certain Non-Competition and Confidentiality
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Agreement, dated December 5, 1995, between Executive and the Company, a copy of
which is attached hereto as Exhibit A.
9. Termination of Employment.
(a) Death or Disability. The Executive's employment
shall terminate automatically upon the Executive's death during the Employment
Term. The Company shall be entitled to terminate the Executive's employment
because of the Executive's disability during the Employment Term if, as a
result of the Executive's incapacity due to physical or mental illness
(hereinafter "Disability"), the Executive shall have been absent from his
duties hereunder for one hundred and twenty (120) days during any three hundred
and sixty (360) day period.
(b) Termination by Company for Cause. (i) The
Company may terminate the Executive's employment during the Employment Term for
Cause. "Cause" means:
A. the failure of the Executive to perform the
Executive's duties under this Agreement (other than as a
result of physical or mental illness or injury), which
failure, if correctable, and provided it does not
constitute willful misconduct or gross negligence described
in Subsection B below, remains uncorrected for 10 days
following written notice to Executive by the Board of such
breach;
B. willful misconduct or gross negligence by the
Executive, in either case that results in material damage
to the business or reputation of the Company;
C. a material breach by Executive of either this
Agreement or that certain Non-Competition and
Confidentiality Agreement referenced in Paragraph 8 which,
if correctable, remains uncorrected for 10 days following
written notice to Executive by the Board of such breach; or
D. the Executive is convicted of a felony or any
other crime involving moral turpitude (whether or not in
connection with the performance by Executive of his duties
under this Agreement).
(c) Termination By Company Without Cause. The
Company may terminate the employment of Executive under this Agreement for any
reason at any time.
(d) Termination by Executive for Good Reason. (i)
The Executive may terminate employment for Good Reason. "Good Reason" means:
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A. assignment to the Executive of any duties
inconsistent with Executive's position, duties,
responsibilities, title or office, or any other action by
the Company that results in a material diminution in the
Executive's position, authority, duties or
responsibilities, excluding in each case any assignment or
action that is remedied by the Company within 10 days after
receipt of notice thereof from the Executive; or
B. any material failure by the Company to comply
with this Agreement, other than a failure that is remedied
by the Company within 10 days after receipt of notice
thereof from then Executive.
(e) Voluntary Termination by Executive Without Good
Reason. Executive may at any time terminate his employment under this Agreement
without Good Reason.
(f) Notice of Termination. If Company or Executive
desires to terminate Executive's employment hereunder at any time, it or he
shall do so by giving written notice to the other party (following the
expiration of any applicable cure periods) that it or he has elected to
terminate Executive's employment hereunder and stating the effective date and
reason for such termination. Any termination by Executive of his employment
without Good Reason shall be made on not less than 14 days' notice.
10. Effect of Termination.
(a) Voluntary Termination by Executive; Termination
for Cause; Death or Disability. In the event that Executive's employment is
terminated pursuant to Paragraphs 9(a), 9(b) or 9(e), on the date of
termination, the Company shall be liable to Executive as follows:
(i) Executive shall be entitled to receive the
Annual Salary due to him through the date of termination of
his employment.
(ii) Any vested rights of Executive shall be paid
to Executive in accordance with the Company's plans,
programs or policies. Without limiting the foregoing, in
the event of the termination of Executive's employment due
to death or disability (Paragraph 9(a)), the rights and
benefits of Executive (or his designated beneficiary or
representatives, as applicable) under any Company life,
health and long-term disability plans and policies shall be
determined in accordance with the terms and provisions of
such plans and policies.
(iii) The Company shall promptly reimburse
Executive for any and all reimbursable business expenses
(to the extent not already reimbursed) upon Executive's
properly accounting for the same.
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(b) Termination Without Cause; Termination by Executive for
Good Reason. In the event that the Company terminates Executive's employment
without Cause pursuant to Paragraph 9(c) or Executive terminates his employment
with the Company pursuant to Paragraph 9(d), the Company shall be liable as
follows:
(i) Executive shall be entitled to receive the Annual
Salary due to him through the date of termination of his Employment. In
addition, Executive shall be entitled to receive continued monthly payments of
his a Annual Salary, based on the Annual Salary in effect, on the date of
termination, until the first anniversary of the date of termination.
(ii) Any vested rights of Executive shall be paid to
Executive in accordance with the Company's plans, programs or policies.
(iii) The Company shall promptly reimburse Executive for
any and all reimbursable business expenses (to the extent not already
reimbursed) upon Executive's properly accounting for the same.
(iv) Executive and/or the Executive's family shall be
entitled to receive health benefits (as contemplated by Paragraph 7(c) hereof)
until the first anniversary of the date of termination at least equal to those
which would have been provided to them in accordance with this Agreement if
Executive's employment had not been terminated provided that the Company's
obligation to provide such benefits shall be reduced by any comparable benefits
(or amounts received by Executive in respect thereof) received by Executive
under the terms of new employment undertaken by Executive after termination and
prior to the first anniversary of the date of termination; and provided further,
that the terms of the Company's health insurance plans shall be subject to
amendment during such period, to the extent that such amendments are applicable
to the executive officers of the Company generally.
(c) Limit on Company Liability. Except as expressly set forth
in this Paragraph 10, the Company shall have no obligation to Executive under
this Agreement following a termination of Executive's employment with the
Company. Without limiting the generality of the provision of the foregoing
sentence, the Company shall not, following a termination of Executive's
employment with the Company, have any obligation to provide any further benefit
to Executive or make any further contribution for Executive's benefit except as
provided in this Paragraph 10.
11. Company Proprietary Rights.
(a) Company to Retain Rights. Executive agrees that all right, title
and interest of every kind and nature whatsoever in and to copyrights, patents,
ideas, business or strategic plans and concepts, studies, presentations,
creations, inventions, writings,
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properties, discoveries and all other intellectual property conceived by
Executive during the term of this Agreement and pertaining to or useful in or
to (directly or indirectly) the activities of the Company (collectively,
"Company Intellectual Property") shall become and remain the exclusive property
of the Company, and Executive shall have no interest therein.
(b) Further Assurances. At the request of the Company,
Executive shall, at the Company's expense but without additional consideration,
execute such documents and perform such other acts as the Company may deem
necessary or appropriate to vest in the Company or its designee such title as
Executive may have to all Company Intellectual Property in which Executive may
be able to claim any rights by virtue of his employment under this Agreement.
(c) Return of Material. Upon the termination of the Employment Term,
including any termination of employment described in Paragraph 9, the Executive
will promptly return to the Company all copies of information protected by
Paragraph 11(a) hereof or by Paragraph 3(a) of the Non-Competition and
Confidentiality Agreement referenced in Paragraph 8, which are in his
possession, custody or control, whether prepared by him or others, and the
Executive agrees that he shall not retain any of same.
12. Representation and Warranty of Executive. Executive
represents and warrants to the Company that he is not now under any obligation,
of a contractual nature or otherwise, to any person, partnership, company or
corporation that is inconsistent or in conflict with this Agreement or which
would prevent, limit or impair in any way the performance by him of his
obligations hereunder.
13. Assignment. This Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement,
nor any right, benefit or obligation of either party hereto, shall be subject
to voluntary or involuntary assignment, alienation or transfer, whether by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that Company may assign this Agreement in connection
with a merger or consolidation involving Company or a sale of substantially all
its assets to the surviving corporation or purchaser, as the case may be, so
long as such assignee assumes Company's obligations hereunder.
14. Withholding. Payment of Executive's Annual Salary and
payment or provision of other compensation to Executive pursuant hereto shall
be subject to such reporting and withholding for applicable taxes as is
required by law.
15. Certain Expenses. Company, on or before the date hereof,
shall pay directly or reimburse Executive (at Executive's discretion) for the
actual legal fees and other costs and expenses, if any, incurred by Executive
in connection with the preparation, finalizing and execution of this Letter.
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16. Severability. In the event that any provision or portion
of this Agreement is determine to be invalid or unenforceable for any reason,
in whole or in part, the remaining provisions of this Agreement will be
unaffected thereby and will remain in full force and effect to the fullest
extent permitted by law.
17. Notices. For all purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be
deemed to have been duly given, in the case of a notice to the Company, when
delivered to the Company at the following address, and in the case of a notice
to Executive, when received by Executive, and in both cases addressed as
follows:
If to Company, to: NN Ball & Roller
000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Chairman of the Board
If to Executive, to: Xx. Xxxxxxxx X. Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
18. Modifications and Waivers. No provision of this Agreement
may be modified or discharged unless such modification or discharge is
authorized by the Board and is agreed to in writing, signed by the Executive
and by an officer of the Company duly authorized by the Board. No waiver by
either party hereto of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other party will be deemed
a waiver of similar or dissimilar provisions or conditions at the time or at
any prior or subsequent time.
19. Entire Agreement. This Agreement and the Non-Competition
and Confidentially Agreement constitute the entire understanding of the parties
hereto with respect to their subject matter. This Agreement and the
Non-Competition and Confidentiality Agreement supersede all prior agreements
between the parties hereto with respect to their subject matter. Without
limiting the foregoing, this Agreement completely and entirely supersedes the
Letter, dated June 30, 1997 from Executive to Xxxxx X. Xxxxxxxx, pursuant to
which Executive originally accepted employment with the Company, and the
Letter, dated June 30, 1995, from Xxxxx X. Xxxxxxxx to Executive, outlining the
terms of the Executive's employment.
20. Governing Law. This Agreement will be governed by the
laws of the State of Tennessee without regard for its conflict of laws rules.
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21. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which will be deemed to be
an original but all of which together will constitute one and the same
instrument.
22. Headings, Etc. The section headings contained in this
Agreement are for convenience of reference only and will not be deemed to
control or affect the meaning or construction of any provision of this
Agreement. Reference to Paragraphs are to Paragraphs in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NN BALL & ROLLER, INC.
By: /s/ Xxxxxxx X. Xxxxx
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XXXXXXXX X. XXXX
By: /s/ Xxxxxxxx X. Xxxx
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EXHIBIT A
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
THIS NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
("Agreement") is made as of December 5, 1995, by Xxxxxxxx X. Xxxx ("Employee")
in favor of NN Ball & Roller, Inc., a Delaware corporation (the "Company").
WITNESSETH
WHEREAS, the Company manufactures and supplies precision
steel balls and rollers to anti-friction bearing manufacturers, automotive
original equipment manufacturers and the automotive aftermarket, the gas and
mining industries, producers of drilling bits for oil, gas, and water xxxxx and
producers of stainless steel valves and pumps (the "Business"), and its
customers are located in more than 25 different countries;
WHEREAS, Employee is an employee "at will" with the Company
and currently holds a management or executive position with the Company;
WHEREAS, the Company is requiring that the Employee, as a
condition to and in consideration of his continued employment, enter into this
Agreement; and
WHEREAS, the Employee desires to enter into this Agreement in
order to maintain his employment with the Company.
NOW, THEREFORE, in consideration of the foregoing premises, the
continued employment of the Employee and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Employee
hereby agrees with the Company as follows:
1. TERM. For purposes of this Agreement, the "Term" shall mean the
period commencing on the date hereof and continuing through the second
anniversary of the date of the Employee's termination of employment with the
Company for any reason.
2. COVENANT NOT TO COMPETE.
2.1 EMPLOYEE'S KNOWLEDGE. Employee acknowledges and agrees that he
occupies a position of trust and confidence with Company and, in the course of
his engagement with the Company, has become and will continue to become
familiar with proprietary and confidential information concerning the Company.
Employee acknowledges and agrees that his services are of a special, unique and
extraordinary value to the Company and that the Company would be irreparably
damaged if Employee were to provide similar services to any person or entity in
violation of the provisions of this Agreement.
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2.2 NON-COMPETE. Employee hereby agrees that, during the Term, he
shall not, directly or indirectly, as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative capacity,
own, operate, manage, control, engage in, invest in or participate in any
manner in, act as a consultant or advisor to, render services for (alone or in
association with any person, firm, corporation or entity), or otherwise assist
any person or entity that engages in or owns, invests in, operates, manages or
controls any venture or enterprise that competes in the Business anywhere in
the world (the "Territory"); provided, however, that nothing contained herein
shall be construed to prevent Employee from investing in the stock of any
competing corporation listed on a national securities exchange or traded in the
over-the-counter market, but only if Employee is not involved in the business
of said corporation and if Employee does not own more than an aggregate of two
(2%) percent of the stock of such corporation.
2.3 NON-SOLICITATION. Without limiting the generality of the
provisions of Section 2.2 above, Employee hereby agrees that during the Term he
will not, directly or indirectly, solicit (or participate as employee, agent,
consultant, stockholder, director, partner or in any other individual or
representative capacity in any business which solicits), business from any
person, firm, corporation or other entity that is a customer of the Company at
the time of such solicitation, or from any successor in interest to any such
person, firm, corporation or other entity, for the purpose of securing business
or contracts relating to the Business.
2.4 INTERFERENCE WITH RELATIONSHIPS. During the Term, Employee shall
not, directly or indirectly, as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative capacity: (a)
employ or engage, or solicit for employment or engagement, any person employed
or engaged by the Company, or otherwise seek to influence or alter any such
person's relationship with the Company, or (b) solicit or encourage any
customer of the Company to terminate or otherwise alter his, her or its
relationship with the Company.
3. CONFIDENTIAL INFORMATION. (a) During the Term and at all times
thereafter, Employee shall keep secret and retain in strictest confidence, and
shall not, without the prior written consent of the Company, furnish, make
available or disclose to any third party or use for the benefit of himself or
any third party, any "Confidential Information." As used in this Agreement,
Confidential Information shall mean any information held in confidence by the
Company and not freely available to the public which gives the Company an
advantage over competitors in the Business, including, without limitation,
sales or earnings figures, personnel matters, supplier and customer data and
information relating to the Company's manufacturing processes, equipment and
customer servicing methods; provided, however, that Confidential Information
shall not include any information which otherwise is in the public domain or
becomes known in the ball and roller industry through no wrongful act on the
part of Employee. Employee acknowledges that the Confidential Information is
vital, sensitive, confidential and proprietary to the Company.
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(b) Employee hereby represents and warrants to the Company
that at all times prior to the date hereof he has kept secret and retained in
strictest confidence, and has not furnished, made available or disclosed to any
third party or used for the benefit of himself or any third party, any
Confidential Information.
4. JUDICIAL MODIFICATION. If any court of competent jurisdiction shall
at any time deem the Term or any covenant contained herein too lengthy, or the
Territory too extensive, the other provisions of this Agreement shall
nevertheless stand, the Term shall be deemed to be the longest period
permissible by law under the circumstances and the Territory shall be deemed to
comprise the largest territory permissible by law under the circumstances. The
court in each case shall reduce the time period and/or Territory to permissible
duration or size.
5. REMEDIES. Employee acknowledges and agrees that the covenants set
forth in the Agreement are reasonable and necessary for the protection of the
Company's business interests, that irreparable injury will result to the
Company if Employee breaches any of the terms of said covenants, and that in
the event of Employee's actual or threatened breach of any such covenant, the
Company will have no adequate remedy at law. Employee accordingly agrees that
in the event of any actual or threatened breach by him of any of the covenants
contained herein, the Company shall be entitled to immediate temporary
injunctive and other equitable relief, without bond and without the necessity
of showing actual monetary damages, subject to hearing as soon thereafter as
possible. Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able to
prove.
6. CONDITION OF EMPLOYMENT. The Company shall have no obligation to
retain the Employee in its employ as a result of this Agreement, there shall be
no inference as to the length of employment implied hereby, and the Company
reserves the same rights to terminate the employment of the Employee as existed
prior to the date hereof.
7. MISCELLANEOUS. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes any other agreements between the parties, written or oral,
relating to the subject matter hereof. No amendment or modification of this
Agreement and no waiver by any party of the breach of any covenant contained
herein shall be binding unless executed in writing by the party against whom
enforcement of such amendment, modification or waiver is sought. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original without production of the others. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee, without
regard to its choice of law provisions. In the event any provision or portion
of any provision of this Agreement is held invalid or unenforceable by a court
of competent jurisdiction as applied to any fact or circumstance, the remaining
provisions and portions of this Agreement and the same
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provision as applied to any other fact or circumstance shall not be affected or
impaired thereby, and shall remain valid and enforceable. The terms "he", "his"
and "him" are used herein generically for convenience only, and may, as
appropriate, be considered to represent the terms "she", "hers" and "her".
IN WITNESS WHEREOF, the Employee has caused this agreement to be duly
executed in favor of the Company on the day and year first above written.
By: /s/ Xxxxxxxx X. Xxxx
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Employee
ACKNOWLEDGED
NN BALL & ROLLER, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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