EMPLOYMENT AGREEMENT
XXXXXXX'X METAL, INC., a Missouri corporation (the "Corporation"), and
XXXXXX X. XXXX ("Employee") hereby agree as follows:
1. Employment. The Corporation hereby employs Employee, and Employee
accepts employment from the Corporation, upon the terms and conditions
hereinafter set forth. Any and all employment agreements heretofore entered into
between the Corporation and Employee are hereby terminated and cancelled, and
each of the parties hereto mutually releases and discharges the other from any
and all obligations and liabilities heretofore or now existing under or by
virtue of any such employment agreements, it being the intention of the parties
hereto that this Agreement, effective immediately, shall supersede and be in
lieu of any and all prior employment agreements between them.
2. Term of Employment. The initial term of Employee's employment under
this Agreement shall commence as of January 1, 1998 and shall continue for a two
(2) year period terminating December 31, 1999; provided, however, that this
Agreement shall be automatically extended for additional terms of one year each
unless not later than October 31 of any year beginning in 1999, either party has
given written notice to the other party of its or his intention not to extend
the term of this Agreement; and provided, further, that the term of employment
may be terminated upon the earlier occurrence of any of the following events:
(a) Upon the termination of the business or corporate
existence of the Corporation;
(b) Upon the death of the Employee;
(c) At the Corporation's option if Employee shall suffer a
permanent disability; (For purpose of this Agreement "permanent
disability" shall be defined as Employee's inability, through physical
or mental illness or other cause, to perform the essential functions of
Employee's usual duties, with or without a reasonable accommodation
that would not cause an undue hardship to the Corporation, for a period
of 12 months or more. The Corporation's option in this regard shall be
exercised in writing and mailed or delivered to Employee or Employee's
personal representative, and shall be effective on the date of mailing
or delivery of the option as exercised.) or
(d) At the Corporation's option upon ten (10) days written
notice to Employee in the event of any breach or default by Employee of
any of the terms of this Agreement or of any of Employee's duties or
obligations hereunder, or in the event the Corporation determines that
Employee is not performing the duties required of him hereunder to the
satisfaction of the corporation.
Upon termination of employment for any reason, Employee shall be entitled to
receive only the Base Salary (as that term is hereinafter defined) accrued but
unpaid as of the date of termination and shall not be entitled to additional
compensation except as expressly provided in this Agreement.
3. Compensation.
(A) During the term of this Agreement the Corporation shall
compensate Employee for Employee's services rendered hereunder by paying to
Employee an annual salary (the "Base Salary") as follows:
(i) One Hundred Five Thousand Dollars ($105,000.00)
payable in equal monthly installments during the calendar year 1998;
and
(ii) One Hundred Fifteen Thousand Dollars
($115,000.00) payable in equal monthly installments during the calendar
year 1999.
(B) With respect to each complete fiscal year of the
Corporation during which (i) the Employee is employed under the terms of this
Agreement as of the last day of such fiscal year, and (ii) the Corporation's
"Annual Net Income" (as that term is hereinafter defined) is more than Five
Million Dollars ($5,000,000.00), the Corporation shall pay to Employee, in
addition to the Base Salary, an annual "Performance Bonus". The amount of the
annual Performance Bonus (if any) shall be equal to one percent (1%) of the
Corporation's Annual Net Income that is between Five Million Dollars
($5,000,000.00) and Twelve Million Dollars ($12,000,000.00), inclusive. In the
event the Corporation's Annual Net Income for any given fiscal year is Five
Million Dollars ($5,000,000.00) or less, the Employee shall not be entitled to a
Performance Bonus with respect to such fiscal year. Notwithstanding anything
contained herein to the contrary, in the event the sum of the Employee's
Performance Bonus with respect to a fiscal year plus the Employee's benefit
under all performance/production incentive programs of the Corporation in which
the Employee is entitled to a bonus ("Incentive Benefit") for such fiscal year
exceeds Seventy Thousand Dollars ($70,000.00), the amount of the Employee's
Performance Bonus for such year shall be reduced so that the sum of the
Performance Bonus and the Incentive Benefit equals Seventy Thousand Dollars
($70,000.00).
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For purposes of the calculation of the Performance Bonus, the Corporation's
"Annual Net Income" means the consolidated net profit of the Corporation and its
subsidiaries, for a given fiscal year, as determined by the firm of independent
certified public accountants providing auditing services to the Corporation,
using generally accepted accounting principles consistently applied, and
calculated without regard to (a) any bonuses paid to the Corporation's Chairman
of the Board, President and any Vice-President; (b) federal and state income
tax; and (c) any income or loss attributable to any other corporation or entity
(including the assets of a corporation or entity that constitute an operating
business) acquired by or merged into the Corporation subsequent to the effective
date of this Agreement. If during the term of this Agreement outstanding debt of
the Corporation is repaid through the proceeds of the sale of the Corporation's
stock by the Corporation, the interest that otherwise would have been payable on
such repaid debt shall be deemed to have been paid by the Corporation for
purposes of calculating the Corporation's "Annual Net Income", as if such
repayment of debt had not occurred.
The Corporation shall pay to Employee any Performance Bonus due the
Employee hereunder not later than fifteen (15) days after the receipt by the
Corporation of its annual audited financial statements, which the Corporation
expects to receive within ninety (90) days after the end of each fiscal year of
the Corporation.
(C) In addition to the Base salary and Performance Bonus (if
any) Employee shall be entitled to receive such bonus compensation as the Board
of Directors of the Corporation may authorize from time to time.
4. Duties of Employee.
(A) Employee shall serve as General Manager of the LMI
Finishing, Inc. plant located in Tulsa, Oklahoma (a subsidiary of the
Corporation) or in such other positions as may be determined by the Board of
Directors of the Corporation, and Employee shall perform such duties on behalf
of the Corporation and its subsidiaries by such means and in such manner as may
be specified from time to time by the officers or Board of Directors of the
Corporation.
(B) Employee agrees to abide by and conform to all rules
established by the Corporation applicable to its employees.
(C) Employee acknowledges that he is being employed as a
full-time employee, and Employee agrees to devote so much of Employee's entire
time, attention and energies to the business of the Corporation as is necessary
for the successful operation of the Corporation and shall endeavor at all times
to improve the business of the Corporation.
5. Expenses. During the period of Employee's employment, except as
otherwise specifically provided in this Agreement, the Corporation will pay
directly, or reimburse Employee for, all items of reasonable and necessary
business expenses approved in advance by the Corporation if such expenses are
incurred by Employee in the interest of the business of the Corporation. The
Corporation shall also reimburse Employee for automobile expenses incurred by
Employee in the performance of Employee's duties hereunder. The amount of such
reimbursement shall be in accordance with the automobile expense reimbursement
policy adopted (and as it may be modified from time to time) by the
Corporation's Board of Directors. All such expenses paid by Employee will be
reimbursed by the Corporation upon presentation by Employee, from time to time
(but not less than quarterly), of an itemized account of such expenditures in
accordance with the Corporation's policy for verifying such expenditures.
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6. Fringe Benefits.
(A) Employee shall be entitled to participate in any health,
accident and life insurance program and other benefits which have been or may be
established by the Corporation for other employees of the Corporation performing
duties similar to those of Employee.
(B) Employee shall be entitled to an annual vacation without
loss of compensation for such period as may be determined by the Board of
Directors of the Corporation.
(C) The Corporation shall furnish to the Employee during the
term of his employment an automobile comparable to the automobiles furnished by
the Corporation to other executives performing duties similar to those performed
by Employee, to aid the Employee in the performance of his duties.
7. Covenants of Employee.
(A) During the term of Employee's employment with the
Corporation and for all time thereafter Employee covenants and agrees that
Employee will not in any manner directly or indirectly, except as required in
Employee's duties to the Corporation, disclose or divulge to any person, entity,
firm or company whatsoever, or use for Employee's own benefit or the benefit of
any other person, entity, firm or company, directly or indirectly, any
knowledge, devices, information, techniques, customer lists, business plans or
other data belonging to the Corporation or developed by Employee on behalf of
the Corporation during his employment with the Corporation, without regard to
whether all of the foregoing matters will be deemed confidential, material or
important, the parties hereto stipulating, as between them, that the same are
important, material, confidential and the property of the Corporation, that
disclosure of the same to or use of the same by third parties would greatly
affect the effective and successful conduct of the business of the Corporation
and the goodwill of the Corporation, and that any breach of the terms of this
subparagraph (A) shall be a material breach of this Agreement.
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(B) During the term of Employee's employment with the
Corporation and for a period of two (2) years (the "Covenant Term") after
cessation for whatever reason of such employment (except as hereinafter provided
in subparagraph (C) of this paragraph 7), Employee covenants and agrees that
Employee will not in any manner directly or indirectly:
(i) solicit, divert, take away or interfere with
any of the customers (or their respective affiliates or
successors) of the Corporation;
(ii) engage directly or indirectly, either personally
or as an employee, partner, associate partner, officer, manager, agent,
advisor, consultant or otherwise, or by means of any corporate or other
entity or device, in any business which is competitive with the
business of the Corporation. For purposes of this covenant a business
will be deemed competitive if it is conducted in whole or in part
within any geographic area wherein the Corporation is engaged in
marketing its products, and if it involves the manufacture of component
parts for commercial aircraft or any other business which is in any
manner competitive, as of the date of cessation of Employee's
employment, with any business then being conducted by the Corporation
or as to which the Corporation has then formulated definitive plans to
enter;
(iii) induce any salesman, distributor, supplier,
manufacturer, representative, agent, jobber or other person transacting
business with the Corporation to terminate their relationship with the
Corporation, or to represent, distribute or sell products in
competition with products of the Corporation; or
(iv) induce or cause any employee of the Corporation
to leave the employ of the Corporation.
(C) The parties agree that the Covenant Term provided for in
the preceding subparagraph (B) shall be:
(i) reduced to six (6) months in the event all of
the operating assets or all of the common stock of the Corporation is
sold to any entity or individuals unaffiliated with the Corporation,
its successors or assigns; or
(ii) eliminated if the business currently operated
by the Corporation is terminated and the assets of the Corporation are
liquidated.
(D) All the covenants of Employee contained in this paragraph
7 shall be construed as agreements independent of any other provision of this
Agreement, and the existence of any claim or cause of action against the
Corporation, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Corporation of these covenants.
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(E) It is the intention of the parties to restrict the
activities of Employee under this paragraph 7 only to the extent necessary for
the protection of legitimate business interests of the Corporation, and the
parties specifically covenant and agree that should any of the provisions set
forth therein, under any set of circumstances not now foreseen by the parties,
be deemed too broad for such purpose, said provisions will nevertheless be valid
and enforceable to the extent necessary for such protection.
8. Documents. Upon cessation of Employee's employment with the
Corporation, for whatever reason, all documents, records (including without
limitation, customer records), notebooks, invoices, statements or
correspondence, including copies thereof, relating to the business of the
Corporation then in Employee's possession, whether prepared by Employee or
others, will be delivered to and left with the Corporation, and Employee agrees
not to retain copies of the foregoing documents without the written consent of
the Corporation.
9. Remedies. In the event of the breach by Employee of any of the terms
of this Agreement, notwithstanding anything to the contrary contained in this
Agreement, the Corporation may terminate the employment of Employee by written
notice thereof to Employee and with payment of the Base Salary to Employee only
to the date of such termination. It is further agreed that any breach or evasion
of any of the terms of this Agreement by Employee will result in immediate and
irreparable injury to the Corporation and will authorize recourse to injunction
and/or specific performance as well as to other legal or equitable remedies to
which the Corporation may be entitled. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy and each and every remedy given hereunder or now or hereafter existing at
law or in equity by statute or otherwise. The election of any one or more
remedies by the Corporation shall not constitute a waiver of the right to pursue
other available remedies. In the event it becomes necessary for the Corporation
to institute a suit at law or in equity for the purpose of enforcing any of the
provisions of this Agreement, the Corporation shall be entitled to recover from
Employee the Corporation's reasonable attorneys' fees plus court costs and
expenses.
10. Severability. All agreements and covenants contained herein are
severable, and in the event any of them shall be held to be invalid by any court
of competent jurisdiction, this Agreement, subject to subparagraph 7(E) hereof,
shall continue in full force and effect and shall be interpreted as if such
invalid agreements or covenants were not contained herein.
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11. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein shall be valid unless in
writing and duly executed by the party to be charged therewith, and no evidence
of any waiver or modification shall be offered or received in evidence in any
proceeding, arbitration or litigation between the parties hereto arising out of
or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this Paragraph
may not be waived except as herein set forth. Failure of the Corporation to
exercise or otherwise act with respect to any of its rights hereunder in the
event of a breach of any of the terms or conditions hereof by Employee shall not
be construed as a waiver of such breach nor prevent the Corporation from
thereafter enforcing strict compliance with any and all of the terms and
conditions hereof.
12. Assignability. The services to be performed by Employee hereunder
are personal in nature and, therefore, Employee shall not assign Employee's
rights or delegate Employee's obligations under this Agreement, and any
attempted or purported assignment or delegation not herein permitted shall be
null and void.
13. Successors. Subject to the provisions of paragraph 12, this
Agreement shall be binding upon and shall inure to the benefit of the
Corporation and Employee and their respective heirs, executors, administrators,
legal administrators, successors and assigns.
14. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered personally or mailed by certified or registered mail, return receipt
requested, if to the Corporation, to:
Xxxxxx X. Xxxx, President
Xxxxxxx'x Metal, Inc.
X.X. Xxx 000
Xx. Xxxxxxx, XX 00000-0000
and, if to Employee, to:
Xx. Xxxxxx X. Xxxx
___________________________
___________________________
or to such other address as may be specified by either of the parties in the
manner provided under this paragraph 14.
15. Construction. This Agreement shall be deemed for all purposes to
have been made in the State of Missouri and shall be governed by and construed
in accordance with the laws of the State of Missouri, notwithstanding either the
place of execution hereof, nor the performance of any acts in connection
herewith or hereunder in any other jurisdiction.
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16. Venue. The parties hereto agree that any suit filed arising out of
or in connection with this Agreement shall be brought only in the Federal Court
for the Eastern District of Missouri, unless said Court shall lack jurisdiction,
in which case such action shall be brought only in the circuit Court in the
County of St. Louis, Missouri.
The parties have executed this Agreement as of January 1, 1998.
XXXXXXX'X METAL, INC.
("Corporation")
By: __________________________
Xxxxxx X. Xxxx, President
--------------------------------
Xxxxxx X. Xxxx
("Employee")
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