Exhibit 10.K
EMPLOYMENT AGREEMENT
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Agreement made as of August, 1997 by and between UNOVA, Inc,. a Delaware
corporation ("UNOVA"), and XXXXXXX X. XXXXXXXX, an individual residing at 000
Xxxxxxxxxx Xxxxx, Xxx. X00X, Xxxxxxx, Xxxxxxxx 00000 ("Executive").
Executive is presently employed by Western Atlas Inc. ("Western Atlas")
with the title Corporate Senior Vice President and Group Executive of Western
Atlas' Manufacturing Systems Operations. Western Atlas has formed UNOVA, a
wholly owned subsidiary, and adopted a plan to distribute 100% of the common
stock of UNOVA to the shareholders of Western Atlas, resulting in UNOVA being a
company separate from Western Atlas (the "Distribution"). The Industrial
Automation Systems Group will be included in UNOVA.
Executive has agreed to accept employment with UNOVA for the period
commencing on the effective date of the Distribution and ending on December 31,
1998 unless further extended by the parties, with the initial title of Corporate
Senior Vice President and Group Executive of the Industrial Automation Systems
Group (the "Group").
NOW, THEREFORE, in consideration of the premises and the mutual promises
made in this Agreement, intending to be legally bound, UNOVA and Executive do
hereby covenant, agree and understand as follows:
1. EMPLOYMENT. UNOVA hereby employs Executive, and Executive hereby
accepts such employment, and agrees to perform his duties and responsibilities
hereunder, in accordance with the terms and conditions hereinafter set forth.
1.1 EMPLOYMENT TERM. The employment term of this Agreement (the
"Employment Term") shall commence on the effective date of the Distribution, and
shall continue until and expire on December 31, 1998, unless terminated earlier
in accordance with Section 4 hereof, in which event the Employment Term shall
expire on such earlier termination date.
1.2 DUTIES AND RESPONSIBILITIES.
(a). During the Employment Term, Executive shall serve initially as
Corporate Senior Vice President of UNOVA and as Group Executive of the Group and
shall perform all duties and accept all responsibilities incidental to such
position as may be assigned to him by the Chief Executive Officer of UNOVA (the
"CEO") and the Board of Directors of UNOVA (the "Board"), and he shall cooperate
fully with the Board and the CEO.
(b). As Group Executive of the Group, Executive shall have general
supervision over and control of the ordinary course of the business of the
Group's operations and activities, subject in all cases to the supervision and
control by the Board and the CEO.
(c). Executive represents to UNOVA that he is not currently subject
or a party to, and agrees that he will not after the effective date hereof
become subject or a party to, any employment agreement, noncompetition covenant,
nondisclosure agreement or other agreement, covenant, understanding or
restriction which would prohibit Executive from executing this Agreement or
performing fully his duties and responsibilities hereunder, or which would in
any
manner, directly or indirectly, limit or affect the duties and responsibilities
which may now or in the future be assigned to Executive by UNOVA.
1.3 EXTENT OF SERVICE. During the Employment Term, Executive shall use
his best efforts in the business of UNOVA, and he shall devote substantially his
full business time, attention and energy to the business of UNOVA and to the
performance of his services and the discharge of his duties and responsibilities
hereunder. Except as provided in the Intellectual Property Agreement and the
Restrictive Covenant, referred to in Section 3 hereof, the foregoing shall not
be construed as preventing Executive from making investments in other businesses
or enterprises, provided that Executive agrees not to become engaged in any
other business activity or investment which may interfere with his ability to
discharge, or which may conflict with, his duties and responsibilities hereunder
to UNOVA. Executive further agrees not to work on either a part-time or
independent contractor basis for any other business or enterprise during the
Employment Term without the prior written approval of the Board or the CEO.
1.4 BASE COMPENSATION.
(a). For all the services rendered and to be rendered by Executive
hereunder, UNOVA shall pay Executive an annual salary at the rate of $280,000,
less such withholding and other deductions as may be required by law or any
employee benefit plan in which Executive participates, payable in installments
at such times as the Group customarily pays its executive officers.
(b). During the Employment Term, Executive shall also be: (i)
entitled to three (3) weeks of paid vacation and to paid sick leave, as provided
for by the Group to senior executives, in each calendar year of the Employment
Term; (ii) provided the use of a new Chevrolet Caprice, Ford Crown Victoria, or
Chrysler LHS automobile, as selected by Executive, and reimbursement of all
reasonable expenses related thereto (but only one automobile for the Employment
Term); and (iii) permitted to participate in such life insurance, disability,
medical and other fringe benefit programs of the Group as may exist from time to
time for which Executive is eligible and subject to the terms of such programs.;
provided, however, that Executive hereby acknowledges that he will not be
eligible to participate in any Supplemental Executive Retirement Plan and in any
Supplemental Medical Plan of UNOVA unless specifically nominated by the CEO and
designated by the Compensation Committee of the Board of Directors of UNOVA (the
"Compensation Committee") for participation, which nomination is not expected.
1.5 INCENTIVE COMPENSATION.
(a). In addition to the base compensation described in Section 1.4(a)
above, for each calendar year included within the Employment Term, Executive
shall be entitled to participate in the UNOVA Bonus Plan, as the same may be
amended, modified, supplemented or replaced from time to time during the
Employment Term, for an annual maximum aggregate bonus under such Plans of up to
125% of base compensation and subject to the satisfaction of any performance
goals applicable to Executive recommended by the CEO and thereafter established
by the Compensation Committee for the relevant periods. To the extent that the
Employment Term ends before the end of a calendar year, Executive shall be paid,
upon determination of the annual bonus amount, a pro rata portion of the annual
bonus which would have been payable to Executive had the Employment Term not
ended prior to the end of the calendar year pursuant to
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such Plans for such calendar year determined by multiplying such annual bonus
amount by a fraction, the numerator of which is the number of full calendar
months in such calendar year ending on or prior to the date of termination and
the denominator of which is 12; and provided, however, that Executive shall not
be entitled to any further payments of any such incentive or performance bonus
in the event Executive's employment is terminated for "cause" pursuant to
Section 4.3.
2. EXPENSES.
(a). The Group will reimburse Executive for all ordinary and
necessary out-of-pocket business expenses incurred by him in connection with the
discharge of his duties and responsibilities hereunder during the Employment
Term in accordance with the Group's expense approval procedures then in effect,
and upon presentation to the Group of an itemized account and written proof of
such expenses. Extraordinary expenses, such as country club or other social
club memberships, shall be subject to the prior approval of the CEO.
3. PROPRIETARY AND INTELLECTUAL PROPERTY. Executive covenants to execute
the Employee Intellectual Property Agreement, in the form of Exhibit I attached
hereto (the "Intellectual Property Agreement") promptly upon the execution of
this Agreement by Executive. The parties each acknowledge that the Intellectual
Property Agreement as so executed is and shall be incorporated in this
Agreement, and is and shall be integrated with and form a part of this
Agreement, as if set forth herein. In addition to the covenants included in the
Intellectual Property Agreement, Executive covenants and agrees (the
"Restrictive Covenant") that, for the period of five (5) years following the
later of termination of the Employment Term or termination of Executive's
employment by UNOVA, Executive shall not: (1) interfere with any business
relationship between UNOVA, or any of its subsidiaries or affiliates, and any
customer, vendor, person or other firm; and (ii) directly or indirectly, own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit his name to be used in connection with, any
business or enterprise engaged in the business of the Group, as the same may be
constituted during the period of Executive's employment by UNOVA in any part of
the world where the Group conducts business during that period; provided,
however, that, notwithstanding the foregoing: (i) this provision shall not be
construed to prohibit the passive ownership by Executive of not more than one
percent (1%) of the capital stock of any corporation which is engaged in a
business competitive with the Group having a class of securities registered
pursuant to the Securities Exchange Act of 1934. In the event that the
provisions of the Restrictive Covenant should ever be adjudicated to exceed the
time, geographic, product or other limitations permitted by applicable law in
any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, product or other limitations
permitted by applicable law. Executive irrevocably and unconditionally agrees
that, in the event of any violation of the Intellectual Property Agreement or
the Restrictive Covenant, UNOVA shall be irreparably harmed and money damages
shall not be an adequate remedy and, thus, that UNOVA shall be entitled to
preliminary and permanent injunctive relief and other equitable relief as
determined by the arbitrator referred to in Section 8 of this Agreement, which
may be enforced in any federal or state court of competent jurisdiction.
Executive agrees that effective service of process may be made upon him by mail
under the notice provisions contained in Section 6 hereof, and that all
pleadings, notices and other papers may be served upon him in the same manner.
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4. TERMINATION.
4.1 PARTIAL OR TOTAL DISABILITY. If, in the judgment of the Board or the
CEO, Executive is unable to perform his duties and responsibilities hereunder by
reason of illness, injury or incapacity for three consecutive months, or for
more than three months in the aggregate during any period of 12 calendar months,
during which time UNOVA shall continue to compensate Executive hereunder (with
such compensation to be reduced by the amount of any payments due Executive for
this time period under any applicable disability benefit programs, including
Social Security disability, workers' compensation and UNOVA-sponsored disability
benefits), the Employment Term may be terminated by UNOVA, in which event UNOVA
shall have no further liability or obligation to Executive except for: (i)
unpaid salary and benefits accrued to the date of his termination; (ii) any
additional disability or other benefits or payments (excluding any severance
benefits or payments) otherwise payable to Executive under any applicable formal
policy or plan of, or sponsored by, UNOVA which covers Executive at the time of
his termination; and (iii) a pro rata portion of the performance bonus, if any,
referred to in Section 1.5(a) hereof in respect of the period prior to the date
on which the Employment Term is terminated. Executive agrees, in the event of
any dispute under this Section 4.1 and if requested by UNOVA, to submit to a
physical examination by a licensed physician mutually agreed upon by UNOVA and
Executive, the cost of such examination to be paid by UNOVA.
4.2 DEATH. In the event that Executive dies during the Employment Term,
UNOVA shall pay to his executors, administrators or personal representatives, as
appropriate, an amount equal to the installment of his salary payable for the
month in which he dies. Thereafter, UNOVA shall have no further liability or
obligation to Executive's executors, administrators, personal representatives,
heirs, assigns or any other person claiming under or through him, except for:
(i) any benefits or other payments (excluding any severance benefits or
payments) otherwise payable to Executive under any applicable formal policy or
plan of, or sponsored by, UNOVA which covered Executive at the time of his
death; and (ii) a pro rata portion of the performance bonus, if any, referred to
in Section 1.5(a) hereof in respect of the period prior to the date on which
Executive died.
4.3 FOR CAUSE. Nothing in this Agreement shall be construed to prevent
the termination of the Employment Term by UNOVA at any time for "cause." For
purposes of this Agreement, "cause" shall mean: (i) the willful and continued
failure of Executive to perform substantially Executive's duties with UNOVA
(other than any such failure resulting from disability determined pursuant to
Section 4.1 above) after a written demand for substantial performance is
delivered to Executive by the Board or the CEO which specifically identifies the
manner in which the Board or the CEO believes that Executive has not
substantially performed Executive's duties; or (ii) the willful engaging by
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to UNOVA.
For purposes of this provision, no act or failure to act on the part of
Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of UNOVA. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the CEO or an officer of UNOVA superior to
Executive, or based upon the advice of counsel for UNOVA, shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of UNOVA. Upon termination of the Employment Term for cause,
UNOVA shall have no further liability or
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obligation to Executive, except for the payment of unpaid salary and benefits
(excluding any performance bonus) accrued to the date of his termination.
4.4 WITHOUT CAUSE. UNOVA, by action of the Board or the CEO, may
terminate the Employment Term at any time without any cause upon 30 days' prior
written notice to Executive, in which event UNOVA shall only be obligated: (i)
to pay Executive an amount which equals the salary payments called for by
Section 1.4(a) hereof for the balance of the Employment Term specified in
Section 1.1 hereof, the same as if such termination of the Employment Term had
not occurred; (ii) to pay a pro rata portion of the performance bonus, if any,
referred to in Section 1.5(a) hereof in respect of the period prior to and
including the date of termination (calculated by taking the amount otherwise
payable for the calendar year in question and multiplying that sum by a
fraction, the numerator of which would be the number of full calendar months in
such calendar year ending on or prior to the date of termination of the
Employment Term, and the denominator of which would be 12; and (iii) to pay any
severance benefits or payments otherwise payable to Executive under any
applicable formal policy or plan of the Group which covers Executive at the time
of this termination. The above amounts are agreed to be in lieu of any and all
other liabilities or obligations which may in fact or law be due to Executive as
a result of a termination of the Employment Term without cause before its normal
expiration, provided, however, that the obligations of UNOVA under (i) through
(iii) above are subject to Executive's compliance with his obligations under
Section 3, Proprietary and Intellectual Property, and the Intellectual Property
Agreement.
5. SURVIVAL. Notwithstanding the termination of the Employment Term for
any reason whatsoever, the obligations of Executive under the Intellectual
Property Agreement and the Restrictive Covenant shall survive and remain in full
force and effect to the extent and for the periods therein provided, and the
provisions for equitable relief provided in Section 3 shall continue in force.
6. NOTICES. All notices and other communications hereunder shall be in
writing and deemed to have been given when hand delivered, in person or by a
recognized courier or delivery service, when telexed to the recipient's telefax
number (with receipt confirmed), or when mailed by registered or certified mail,
return receipt requested, as follows (provided that notice of change of address
shall be deemed given only when received):
If to UNOVA, to:
UNOVA, Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
ATTENTION: General Counsel
or to telefax no. (000) 000-0000
If to Executive, to:
Xxxxxxx X. Xxxxxxxx
000 Xxxxxxxxxx Xxxxx, Xxx. X00X
Xxxxxxx, XX 00000
or to telefax no. (______) ______________
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or to such other name, address or telefax number as any designated recipient
shall specify by notice to the other designated recipients in the manner
specified in this Section 6. Any communication delivered in another manner
shall be deemed given only when actually received by the intended recipient.
7. GOVERNING LAW. This Agreement and the Intellectual Property Agreement
shall be governed by and interpreted under the laws of the State of Michigan
without giving effect to any conflict of laws provisions.
8. ARBITRATION. In recognition of the fact that differences may arise
between UNOVA and Executive that may or may not relate to Executive's employment
with UNOVA, and in recognition of the fact that resolution of any differences in
the courts is rarely timely or cost effective for either party, UNOVA and
Executive hereby agree to arbitration in order to establish and gain the
benefits of a speedy, impartial and cost-effective dispute resolution procedure.
Arbitration of differences between UNOVA and Executive shall be in accordance
with, and pursuant to the terms of the Mutual Agreement to Arbitrate Claims, in
the form of Exhibit II attached hereto, which Executive agrees to execute.
9. CONTENTS OF AGREEMENT; AMENDMENT AND ASSIGNMENT.
(a). This Agreement, the Intellectual Property Agreement, and the Mutual
Agreement to Arbitrate Claims set forth the entire understanding of the parties
with respect to the subject matter hereof and may not be changed, modified or
terminated except by a written amendment executed by UNOVA and by Executive.
Furthermore, and without limitation, nothing in this Agreement shall be
construed as giving Executive any right to be retained in the employ of UNOVA
beyond the expiration of the Employment Term, and if employed thereafter,
Executive specifically acknowledges that unless UNOVA and Executive have either
extended this Agreement by a written instrument or entered into a new, written
employment agreement, he shall be an employee-at-will and, thus, subject to
discharge with or without cause and, in such event, without further compensation
of any nature.
(b). All of the provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs, executors,
administrators, personal representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Executive hereunder are
of a personal nature and shall not be assignable or delegable in whole or in
part by Executive.
10. SEVERABILILY. If any provision of this Agreement or the application
thereof to anyone or any circumstance is held invalid or unenforceable in any
jurisdiction, the remainder of this Agreement and the application of such
provision to such person or entity or such circumstance in any other
jurisdiction or to other persons, entities or circumstances in any jurisdiction,
shall not be affected thereby, unless such invalidity or unforceability
substantially diminishes or substantially increases the rights and obligations
of a party, taken as a whole, and to this end the provisions of this Agreement
are severable.
11. REMEDIES CUMULATIVE; NO WAIVER. Except as provided for in Section 8
hereof, no remedy conferred upon any party by this Agreement is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and in addition to any other remedy
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given hereunder or now or hereafter existing at law or in equity. No single
waiver by any party of any right, remedy or power under any provision hereof, or
existing at law or in equity, with respect to any event or circumstance shall be
construed as a waiver of such provision or right as to any other event or
circumstance, and any such right, remedy or power may be exercised by such party
from time to time, and as often as may be deemed expedient or necessary by such
party in its or his sole discretion.
12. COUNSEL TO EXECUTIVE. Executive represents and acknowledges that: (i)
he has been advised by UNOVA to consult his own legal counsel in respect of this
Agreement; and (ii) he has, prior to execution of this Agreement, reviewed this
Agreement thoroughly with his counsel to the extent Executive considers such
review necessary and appropriate.
13. MISCELLANEOUS. This Agreement may be executed in several
counterparts, each of which shall be an original. It shall not be necessary in
making proof of this Agreement or any counterpart hereof to produce or account
for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
UNOVA, INC.
By: ________________________________
Title: _______________________________
____________________________________
Xxxxxxx X. Xxxxxxxx
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