EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of this 31st day of
December, 1997 by and between Xxxxxxxx Xxxxx, a resident of the Commonwealth of
Pennsylvania (the "Employee"), and DMS Store Fixtures Corp., a corporation
formerly known as DMS Acquisition Corporation and organized and existing under
the laws of the Commonwealth of Pennsylvania (the "Company").
WHEREAS, the Company is engaged in the business of designing,
producing and marketing store fixtures and displays (the "Business").
WHEREAS, the Company desires to employ Employee and Employee
desires to be employed by the Company for a period of time in the future upon
the terms and conditions hereinafter set forth.
WHEREAS, Employee possesses significant knowledge of the
Business, which knowledge the Company and Employee both desire to be available
to the Company for a period of time in the future upon the terms and conditions
hereinafter set forth.
WHEREAS, the execution and delivery of this Agreement by
Employee in connection with the consummation of the acquisition by the Company
of DMS Store Fixtures, L.P. is a material inducement to the Company's agreement
to consummate such acquisition.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:
I. Employment and Term. The Company hereby employs Employee and Employee hereby
accepts employment with the Company, as President and Chief Operating Officer
(such position, Employee's "Position") for a period commencing on the date
hereof and continuing for a period of five (5) years, subject to the provisions
of Section 9 hereof (the "Term").
I. Duties. During the term of his employment, Employee shall serve the Company
faithfully and to the best of his ability and shall devote his full time,
attention, skill and efforts to the performance of the duties required by or
appropriate for his Position. Employee agrees to assume such duties and
responsibilities commensurate with his position and consistent with Employee's
historic duties. Employee shall report to the Chief Executive Officer of the
Company.
I. Other Business Activities. During the Term, Employee will not, without the
prior written consent of the Company, directly or indirectly engage in any other
business activities or pursuits whatsoever, except activities in connection with
any charitable or civic activities, personal investments and serving as an
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executor, trustee or in other similar fiduciary capacity; provided, however,
that such activities do not interfere with his performance of his
responsibilities and obligations pursuant to this Agreement.
I. Compensation. The Company shall pay Employee, and Employee hereby agrees to
accept, as compensation for all services rendered hereunder and for Employee's
covenant not to compete as provided for in Section 8 hereof, an initial base
salary at the annual rate of Two Hundred Fifty Thousand Dollars ($250,000) (as
the same may hereafter be increased, the "Base Salary"). The Base Salary shall
be inclusive of all applicable income, social security and other taxes and
charges which are required by law to be withheld by the Company or which are
requested to be withheld by Employee, and which shall be withheld and paid in
accordance with the Company's normal payroll practice for its similarly situated
employees from time to time in effect. In addition to the Base Salary, the
Company shall pay Employee a bonus (the "Bonus") as set forth on Schedule A.
I. Benefits. Employee shall be entitled to those employee benefits which the
Company from time to time generally makes available to its employees
("Benefits").
I. Confidentiality. Employee recognizes and acknowledges that the Proprietary
Information (as hereinafter defined) is a valuable, special and unique asset of
the Business of the Company. As a result, both during the Term and thereafter,
Employee shall not, without the prior written consent of the Company, for any
reason either directly or indirectly divulge to any third-party or use for his
own benefit, or for any purpose other than the exclusive benefit of the Company,
any confidential, proprietary, business and technical information or trade
secrets of the Company or of any subsidiary or affiliate of the Company
("Proprietary Information") revealed, obtained or developed in the course of his
employment with the Company. Such Proprietary Information shall include, but
shall not be limited to, the intangible personal property described in Section
7(b) hereof, any information relating to methods of production and manufacture,
research, computer codes or instructions (including source and object code
listings, program logic algorithms, subroutines, modules or other subparts of
computer programs and related documentation, including program notation),
computer processing systems and techniques, concepts, layouts, flowcharts,
specifications, know-how, any associated user or service manuals or other like
textual materials (including any other data and materials used in performing the
Employee's duties), all computer inputs and outputs (regardless of the media on
which stored or located), hardware and software configurations, designs,
architecture, interfaces, plans, sketches, blueprints, and any other materials
prepared by the Employee in the course of, relating to or arising out of his
engagement by the Company, or prepared by any other Company employee or
contractor for the Company or its customers, costs, business studies, business
procedures, finances, marketing data, methods, plans and efforts, the identities
of customers, contractors and suppliers and prospective customers, contractors
and suppliers, the terms of contracts and agreements with customers, contractors
and suppliers, the Company's relationship with actual and prospective customers,
contractors and suppliers and the needs and requirements of, and the Company's
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course of dealing with, any such actual or prospective customers, contractors
and suppliers, personnel information, customer and vendor credit information,
and any other materials that have not been made available to the general public,
provided, that nothing herein contained shall restrict Employee's ability to
make such disclosures during the course of his employment as may be necessary or
appropriate to the effective and efficient discharge of the duties required by
or appropriate for his Position or as such disclosures may be required by law;
and further provided, that nothing herein contained shall restrict Employee from
divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of Employee's breach of this Section 6. Failure by the Company
to xxxx any of the Proprietary Information as confidential or proprietary shall
not affect its status as Proprietary Information under the terms of this
Agreement.
I. Property.
1. All right, title and interest in and to Proprietary Information shall be and
remain the sole and exclusive property of the Company. During the Term, Employee
shall not remove from the Company's offices or premises any documents, records,
notebooks, files, correspondence, reports, memoranda or similar materials of or
containing Proprietary Information, or other materials or property of any kind
belonging to the Company unless necessary or appropriate in accordance with the
duties and responsibilities required by or appropriate for his Position and, in
the event that such materials or property are removed, all of the foregoing
shall be returned to their proper files or places of safekeeping as promptly as
possible after the removal shall serve its specific purpose. Employee shall not
make, retain, remove and/or distribute any copies of any of the foregoing for
any reason whatsoever except as may be necessary in the discharge of his
assigned duties and shall not divulge to any third person the nature of and/or
contents of any of the foregoing or of any other oral or written information to
which he may have access or with which for any reason he may become familiar,
except as disclosure shall be necessary in the performance of his duties; and
upon the termination of his employment with the Company, he shall leave with or
return to the Company all originals and copies of the foregoing then in his
possession, whether prepared by Employee or by others.
a) Employee agrees that all right, title and interest in and to any innovations,
designs, systems, analyses, ideas for marketing programs, and all copyrights,
patents, trademarks and trade names, or similar intangible personal property
which have been or are developed or created in whole or in part by Employee (1)
at any time and at any place while the Employee is employed by Company and
which, in the case of any or all of the foregoing, are related to and used in
connection with the Business of the Company, (2) as a result of tasks assigned
to Employee by the Company, or (3) from the use of premises or personal property
(whether tangible or intangible) owned, leased or contracted for by the Company
(collectively, the "Intellectual Property"), shall be and remain forever the
sole and exclusive property of the Company. The Employee shall promptly disclose
to the Company all Intellectual Property, and the Employee shall have no claim
for additional compensation for the Intellectual Property.
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a) The Employee acknowledges that all the Intellectual Property that is
copyrightable shall be considered a work made for hire under United States
Copyright Law. To the extent that any copyrightable Intellectual Property may
not be considered a work made for hire under the applicable provisions of the
United States Copyright Law, or to the extent that, notwithstanding the
foregoing provisions, the Employee may retain an interest in any Intellectual
Property that is not copyrightable, the Employee hereby irrevocably assigns and
transfers to the Company any and all right, title, or interest that the Employee
may have in the Intellectual Property under copyright, patent, trade secret and
trademark law, in perpetuity or for the longest period otherwise permitted by
law, without the necessity of further consideration. The Company shall be
entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, and trademarks with respect thereto.
a) Employee further agrees to reveal promptly all information relating to the
same to an appropriate officer of the Company and to cooperate with the Company
and execute such documents as may be necessary or appropriate (1) in the event
that the Company desires to seek copyright, patent or trademark protection, or
other analogous protection, thereafter relating to the Intellectual Property,
and when such protection is obtained, to renew and restore the same, or (2) to
defend any opposition proceedings in respect of obtaining and maintaining such
copyright, patent or trademark protection, or other analogous protection.
a) In the event the Company is unable after reasonable effort to secure
Employee's signature on any of the documents referenced in Section 7(b)(iii)
hereof, whether because of Employee's physical or mental incapacity or for any
other reason whatsoever, Employee hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Employee's agent and
attorney-in-fact, to act for and in his behalf and stead to execute and file any
such documents and to do all other lawfully permitted acts to further the
prosecution and issuance of any such copyright, patent or trademark protection,
or other analogous protection, with the same legal force and effect as if
executed by Employee.
I. Covenant not to Compete. The Employee shall not, during the Term and for a
period of two (2) years thereafter or, if longer, for a period of five (5) years
following the date hereof (such period the "Restricted Period"), do any of the
following directly or indirectly without the prior written consent of the
Company:
1. engage or participate in any business activity competitive with the Company's
Business, or the fixture, display or custom exhibit business of any of the
Company's subsidiaries or affiliates, as same are conducted during the Term with
respect to any period during the Term, or upon the termination of Employee's
employment hereunder;
1. become interested in (as owner, stockholder, lender, partner, co-venturer,
director, officer, employee, agent, consultant or otherwise) any person, firm,
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corporation, association or other entity engaged in any business that is
competitive with the Business of the Company or the fixture, display or custom
exhibit business of any subsidiary or affiliate of the Company as conducted
during the Term with respect to any period during the Term, or upon the
termination of Employee's employment hereunder with respect to any period
thereafter, or become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
portion of the business of any person, firm, corporation, association or other
entity where such portion of such business is competitive with the business of
the Company or the fixture, display or custom exhibit business of any subsidiary
or affiliate of the Company as conducted during the Term with respect to any
period during the Term, or upon termination of Employee's employment hereunder
with respect to any period thereafter. Notwithstanding the foregoing, Employee
may hold not more than one percent (1%) of the outstanding securities of any
class of any publicly-traded securities of a company that is engaged in
activities referenced in Section 8(a) hereof;
1. solicit or call on, either directly or indirectly, any (i) customer with whom
the Company shall have dealt at any time during the two (2) year period
immediately preceding the termination of Employee's employment hereunder; or
(ii) any supplier with whom the Company shall have dealt at any time during the
two (2) year period immediately preceding the termination of Employee's
employment hereunder;
1. influence or attempt to influence any supplier, customer or potential
customer of the Company to terminate or modify any written or oral agreement or
course of dealing with the Company; or
1. except in his capacity as an employee of the Company, influence or attempt to
influence any person to either (i) terminate or modify his employment,
consulting, agency, distributorship or other arrangement with the Company, or
(ii) employ or retain, or arrange to have any other person or entity employ or
retain, any person who has been employed or retained by the Company as an
employee, consultant, agent or distributor of the Company at any time during the
two (2) year period immediately preceding the termination of Employee's
employment hereunder.
Notwithstanding the foregoing, in the event that, at the end of the five (5)
year employment period initially contemplated hereby, the Company does not offer
Employee a position with the Company at a comparable compensation package, the
Restricted Period shall be reduced to a period of one (1) year following the
Term.
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I. Termination. Employee's employment hereunder may be terminated during the
Term upon the occurrence of any one of the events described in this Section 9.
Upon termination, Employee shall be entitled only to such compensation and
benefits as described in this Section 9.
A. Termination for Absenteeism.
1. Regular attendance at work or conducting work is an essential element of the
job for which Employee has been hired. Without limiting the Company's right to
terminate Employee pursuant to Section 9.1 or 9.3 hereof, in the event that
Employee is absent from work for 60 consecutive days (other than for medical
reasons where Employee is reasonably expected to return to work within 120 days
in which case such period shall be extended to 120 consecutive days), Employee's
employment hereunder may be terminated by the Company.
1. In the event of a termination of Employee's employment hereunder pursuant to
Section 9.1(a), Employee will be entitled to receive all accrued and unpaid (as
of the date of such termination) Base Salary and Benefits and other forms of
compensation and benefits payable or provided in accordance with the terms of
any then existing compensation or benefit plan or arrangement ("Other
Compensation"), including payment prescribed under and disability of life
insurance plan or arrangement in which he is a participant or to which he is a
party as an employee of the Company. Except as specifically set forth in this
Section 9.1(b), the Company shall have no liability or obligation to Employee
for compensation or benefits hereunder by reason of such termination.
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A. Termination by Death. In the event that Employee dies during the Term,
Employee's employment hereunder shall be terminated thereby and the Company
shall pay to Employee's executors, legal representatives or administrators an
amount equal to the accrued and unpaid portion of his Base Salary and Other
Compensation for the month in which he dies. Except as specifically set forth in
this Section 9.2, the Company shall have no liability or obligation hereunder to
Employee's executors, legal representatives, administrators, heirs or assigns or
any other person claiming under or through him by reason of Employee's death,
except that Employee's executors, legal representatives or administrators will
be entitled to receive the payment prescribed under any death or disability
benefits plan in which he is a participant as an employee of the Company, and to
exercise any rights afforded under any compensation or benefit plan then in
effect.
A. Termination for Cause.
1. The Company may terminate Employee's employment hereunder at any time for
"cause" upon written notice to Employee. For purposes of this Agreement, "cause"
shall mean: (i) any breach by Employee of any of his obligations under Sections
6, 7 or 8 of this Agreement, (ii) material breach by Employee of Sections 2 or 3
of this Agreement which breach is not cured by Employee within thirty (30) days
after receipt of written notice thereof from the Company, or (iii) other conduct
of Employee involving any type of disloyalty to the Company or willful
misconduct with respect to the Company, including without limitation fraud,
embezzlement, theft or proven dishonesty in the course of his employment or
conviction of a felony.
1. In the event of a termination of Employee's employment hereunder pursuant to
Section 9.3(a), Employee shall be entitled to receive all accrued but unpaid (as
of the effective date of such termination) Base Salary and Benefits. All Base
Salary, Benefits and Other Compensation shall cease at the time of such
termination, subject to the terms of any benefit or compensation plan then in
force and applicable to Employee. Except as specifically set forth in this
Section 9.3, the Company shall have no liability or obligation hereunder by
reason of such termination.
I. Other Agreements. Employee represents and warrants to the Company that:
1. There are no restrictions, agreements or understandings whatsoever to which
Employee is a party which would prevent or make unlawful Employee's execution of
this Agreement or Employee's employment hereunder, or which is or would be
inconsistent or in conflict with this Agreement or Employee's employment
hereunder, or would prevent, limit or impair in any way the performance by
Employee of his obligations hereunder,
1. That Employee's execution of this Agreement and Employee's employment
hereunder shall not constitute a breach of any contract, agreement or
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understanding, oral or written, to which Employee is a party or by which
Employee is bound, and
1. That Employee is free to execute this Agreement and to enter into the employ
of the Company pursuant to the provisions set forth herein.
1. That Employee shall disclose the existence and terms of the restrictive
covenants set forth in this Agreement to any employer that the Employee may work
for during the term of this Agreement (which employment is not hereby
authorized) or after the termination of the Employee's employment at the
Company.
I. Survival of Provisions. The provisions of this Agreement set forth in
Sections 6, 7, 8 and 20 hereof shall survive the termination of Employee's
employment hereunder.
I. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and Employee and their respective successors,
executors, administrators, heirs and/or permitted assigns; provided, however,
that neither Employee nor the Company may make any assignments of this Agreement
or any interest herein, by operation of law or otherwise, without the prior
written consent of the other parties hereto, except that, without such consent,
the Company may assign this Agreement to any successor to all or substantially
all of its assets and business by means of liquidation, dissolution, merger,
consolidation, transfer of assets, or otherwise, provided that such successor
assumes in writing all of the obligations of the Company under this Agreement.
I. Notice. Any notice or communication required or permitted under this
Agreement shall be made in writing and sent by certified or registered mail,
return receipt requested, addressed as follows:
If to Employee:
Xxxxxxxx Xxxxx
000 Xxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
If to Company:
DMS Store Fixtures Corp.
000 Xxxx Xxxxx Xxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
with a required copy to:
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Marlton Technologies, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, President
or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.
I. Entire Agreement; Amendments. This Agreement contains the entire agreement
and understanding of the parties hereto relating to the subject matter hereof,
and merges and supersedes all prior and contemporaneous discussions, agreements
and understandings of every nature between the parties hereto relating to the
employment of Employee with the Company. This Agreement may not be changed or
modified, except by an Agreement in writing signed by each of the parties
hereto.
I. Waiver. The waiver of the breach of any term or provision of this Agreement
shall not operate as or be construed to be a waiver of any other or subsequent
breach of this Agreement.
I. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania.
I. Invalidity. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the validity of any other provision of this Agreement, and such provision(s)
shall be deemed modified to the extent necessary to make it enforceable.
I. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
I. Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and legal
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or day which is a holiday in the Commonwealth of Pennsylvania,
then such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.
I. Specific Enforcement; Extension of Period.
1. Employee acknowledges that the restrictions contained in Sections 6, 7, and 8
hereof are reasonable and necessary to protect the legitimate interests of the
Company and its affiliates and that the Company would not have entered into this
Agreement in the absence of such restrictions. Employee also acknowledges that
any breach by him of Sections 6, 7, or 8 hereof will cause continuing and
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irreparable injury to the Company for which monetary damages would not be an
adequate remedy. The Employee shall not, in any action or proceeding to enforce
any of the provisions of this Agreement, assert the claim or defense that an
adequate remedy at law exists. In the event of such breach by Employee, the
Company shall have the right to enforce the provisions of Sections 6, 7, and 8
of this Agreement by seeking injunctive or other relief in any court, and this
Agreement shall not in any way limit remedies of law or in equity otherwise
available to the Company. If an action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover, in addition to any other relief, reasonable attorneys'
fees, costs and disbursements. In the event that the provisions of Sections 6,
7, or 8 hereof should ever be adjudicated to exceed the time, geographic, or
other limitations permitted by applicable law in any applicable jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, or other limitations permitted by applicable law.
1. In the event that Employee shall be in breach of any of the restrictions
contained in Section 8 hereof, then the Restricted Period shall be extended for
a period of time equal to the period of time that Employee is in breach of such
restriction.
I. Consent to Suit. Any legal proceeding arising out of or relating to this
Agreement shall be instituted in any federal or state court of general
jurisdiction in Pennsylvania, and the Employee hereby consents to the personal
and exclusive jurisdiction of such court and hereby waives any objection that
the Employee may have to the laying of venue of any such proceeding and any
claim or defense of inconvenient forum.
I. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed the day and year first written above.
ATTEST: DMS STORE FIXTURES CORP.
By:___________________ By:_____________________________
Title: Title:
--------------------------------
Xxxxxxxx Xxxxx
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SCHEDULE A
BONUS
Pre-Tax Profit Bonus Plan
Pre-Tax Profit
After Bonus Bonus
-------------- -----
$120,000 $10,000
$240,000 $20,952
$360,000 $32,856
$480,000 $45,712
$600,000 $59,521
$720,000 $74,282
$840,000 $89,996
$960,000 $106,662
$1,080,000 $124,280
$1,200,000 $142,850
$1,320,000 $162,373
$1,440,000 $182,848
$1,560,000 $204,276
$1,680,000 $226,656
$1,800,000 $250,000
Bonus is capped at $250,000.
A-1
