Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT [the "Agreement"] is made as of February 24,
2006, between Ranor, Inc., a Delaware corporation [the "Company"], and Xxxxxxx
Xxxxx [the "Employee"].
RECITALS
On August 17, 2005, Ranor Acquisition LLC, as Purchaser, Green Mountain
Partners III, L.P., Phoenix Life Insurance Company, Xxx Xxxx, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxxx, Xxxxxxx Xxxx and Xxxxxxx Xxxxx as Sellers, entered into a
Stock Purchase Agreement ["Stock Purchase Agreement"].
Simultaneously, with the execution of this Employment Agreement, the
parties closed on the transaction described in the Stock Purchase Agreement.
The Company desires to employ the Employee in the capacity and on the
terms and conditions set forth herein, and the Employee desires to be employed
by the Company on the terms and conditions set forth herein.
In consideration of the premises hereof and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Employment. The Company agrees to employ the Employee during the
Term specified in Paragraph 2 hereof and the Employee agrees to accept such
employment, upon the terms and conditions hereinafter set forth.
2. Term. Subject to the terms and conditions of this Agreement, the
Employee's employment by the Company shall be for a term commencing on the date
hereof and expiring on the close of business on the January 31, 2009 [the
"Initial Term"].
3. Duties and Responsibilities.
a. Employee shall initially serve as Chief Executive Officer
["CEO"] of the Company.
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b. Subject to the authority of the Board of Directors of the
Company ["Board"] to modify the duties and responsibilities of
Employee, Employee's powers, duties and responsibilities shall
initially consist of such powers, duties and responsibilities as were
being performed by Employee for the Company immediately prior to the
execution of this Agreement or as are customary to the office of the
Chief Executive Officer of a company similar in size and stature of the
Company. The Employee shall report to the Board of the Company and
others at the direction of the Board at such time and in such detail as
the Board shall reasonably require. Notwithstanding anything contained
herein to the contrary, the Employee shall not be required to perform
any act which would constitute or require the violation of any federal,
state or local law, rule, regulation, ordinance or the like. Any
substantial change in Employee's duties or title, without Employee's
consent, shall be construed as termination without cause pursuant to
paragraph 6[b] below.
c. The Employee shall devote not less than an average of forty
[40] hours per week to carrying out his duties hereunder and to the
business of the Company, and during the Term the Employee agrees that
he will [i] devote his best efforts and all his skill and ability to
the performance of his duties hereunder; [ii] carry out his duties in a
competent and professional manner; and [iii] generally promote the
interests of the Company. During the Term it shall not be a violation
of this Agreement for the Employee to serve on civic or charitable
boards or committees, to perform speaking engagements, or to manage his
personal passive investments, so long as such activities [individually
or collectively] do not interfere with the performance of the
Employee's responsibilities as an employee of the Company.
4. Compensation; Bonus; Stock Options.
a. As compensation for services hereunder and in consideration
of his agreement not to compete as set forth in paragraph 8 hereof, the
Company shall pay the Employee a base salary at the annual rate of Two
Hundred Thousand Dollars [$200,000.00]. Such base salary shall be paid
in equal installments in accordance with the normal payroll policies of
the Company, but no less frequently than bi-weekly.
b. Employee's base salary as set forth in Paragraph 4[a] above
may be increased by order of the Board.
c. Employee shall be eligible for an annual cash performance
bonus based upon the Company's financial performance as set forth in a
resolution of the Board within the first three months of each year
hereunder and based upon the Company's Business Plan.
d. Employee shall be eligible for any Stock Option Plan, as
the Board shall in its sole discretion institute.
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5. Expenses; Fringe Benefits.
a. The Company agrees to pay or to reimburse the Employee
during the Term for all reasonable, ordinary and necessary business
expenses incurred in the performance of his services hereunder in
accordance with the policies of the Company as are from time to time in
effect. The Employee, as a condition to obtaining such payment or
reimbursement, shall provide to the Company any and all statements,
bills or receipts evidencing the travel or out-of-pocket expenses for
which the Employee seeks payment or reimbursement, and any other
information or materials required by such Company policy or as the
Company may otherwise from time to time reasonably require.
b. During the Term the Employee and, to the extent eligible,
his dependents, shall be entitled to participate in and receive all
benefits under any welfare benefit plans and programs provided by the
Company [including without limitation, medical, dental, disability,
group life [including accidental death and dismemberment] and business
travel insurance plans and programs] applicable generally to the
employees of the Company, subject, however, to the generally applicable
eligibility and other provisions of the various plans and programs in
effect from time to time.
c. During the Term the Employee shall be entitled to
participate in all retirement plans and programs [including without
limitation any profit sharing/401[k] plan] applicable generally to the
employees of the Company, subject, however, to generally applicable
eligibility and other provisions of the various plans and programs in
effect from time to time. In addition, during the Term the Employee
shall be entitled to receive fringe benefits and perquisites in
accordance with the plans, practices, programs and policies of the
Company from time to time in effect, available generally to the
executive officers of the Company and consistent with the generally
applicable guidelines determined by the Board.
d. The Employee shall be entitled to four [4] weeks vacation
per year and to holidays; sick days and personal days as are in
accordance with the Company's policy then in effect for its employees
generally, upon such terms as may be provided of general application to
all employees of the Company.
6. Termination.
a. For Cause. The Company, shall have the right to terminate
the Employee's employment with the Company at any time for "Cause";
provided, that any termination by the Company for Cause shall be
communicated by the Company to the Employee in writing indicating the
basis for termination for Cause, and the employee shall have the
opportunity for a period of seven [7] days following such writing to
contest his termination before the Board. [The effective date of the
Employee's termination of employment with the Company, regardless of
the reason, is referred to as the "Date of Termination"]. For purposes
of this Agreement, the term "Cause" shall be limited to the following
grounds:
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i. The Employee's failure or refusal to perform his
material duties and responsibilities [other than any such
failure resulting from Employee's disability or death which
are governed by paragraph 7] or his repeated failure or
refusal to follow lawful and reasonable directives of the
Company;
ii. The willful misappropriation by Employee of the
funds or property of the Company;
iii. The commission by the Employee of any willful or
intentional act, which he should reasonably have anticipated
would reasonably be expected to have the effect of materially
injuring the reputation, business or business relationships of
the Company.
iv. Use of alcohol to excess or illegal drugs,
continuing after written warning;
v. Any breach by the Employee [not covered by any of
clauses [i] through [iv] and other than in connection with the
death or disability of Employee as set forth in paragraph 7]
of any material provision of this Agreement.
Upon the termination of the Employee's employment with the Company for Cause,
the Company shall pay the Employee, subject to appropriate offsets [as permitted
by applicable law] for debts or money due to the Company, including without
limitation personal loans to the Employee and travel advances ["Offset"], his
salary compensation only through, and any unpaid reimbursable expenses
outstanding as of, the Date of Termination. Any benefits to which Employee or
his beneficiaries may be entitled under the plans and programs described in
paragraphs 5[b] and [c] hereof as of his Date of Termination shall be determined
in accordance with the terms of such plans and programs. Except as provided in
this subparagraph, in connection with the Employee's termination by the Company
for Cause, the Company shall have no further liability to the Employee or the
Employee's heirs, beneficiaries or estate for damages, compensation, benefits,
indemnities or other amount of whatever nature.
b. Without Cause. The Company may terminate the Employee's
employment Without Cause at any time. In the event of a termination of
the Executive's employment during the Employment Period by the Company,
Without Cause the Company shall nonetheless pay to the Employee or his
estate, in a lump sum payment an amount equal to the Employee's base
salary for the remainder of the Term. Additionally, the Company shall
provide to the Executive, and his dependents, continued coverage for
one year thereafter under all health, life, disability and similar
employee benefit plans and programs of the Company on the same basis as
the Employee and his dependents were entitled to participate
immediately prior to such termination, provided that the Employee and
his dependent's continued participation is possible under the general
terms and provisions of such plans and programs.
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7. Disability; Death.
a. In the event the Employee shall be unable to perform the
essential functions of his duties hereunder by virtue of illness or
physical or mental incapacity or disability [from any cause or causes
whatsoever] in substantially the manner and to the extent performed
prior to the commencement of such disability [all such causes being
referred to as "disability"] and the Employee shall fail to perform
such duties for periods aggregating ninety [90] days [inclusive of
non-business days], whether or not continuous, in any continuous period
of one hundred and eighty [180] days, the Company shall have the right
to terminate the Employee's employment hereunder as at the end of any
calendar month during the continuance of such disability upon at least
ten [10] days prior written notice to him. In the event of termination
under this paragraph 7[a], the Employee shall be entitled to receive
when otherwise payable, subject to any Offsets, all salary compensation
earned but unpaid as of the Date of Termination and any unpaid
reimbursable expenses outstanding as of such date; and any benefits to
which the Employee or his beneficiaries may be entitled under the plans
and programs described in paragraphs 5[b] and [c] hereof as of such
Date of Termination shall be determined in accordance with the terms of
such plans and programs. Nothing contained herein is intended to
nullify or diminish the Employee's rights under, and this paragraph
7[a] is subject to, the Americans with Disabilities Act of 1990 and the
Family and Medical Leave Act of 1993, as such Acts may be amended from
time to time.
b. The employment of the Employee with the Company shall
terminate on the date of the Employee's death and in such event the
Employee's estate shall be entitled to receive when otherwise payable,
subject to any Offsets, all salary compensation earned but unpaid as of
the date of his death and any unpaid reimbursable expenses outstanding
as of such date. In the event of the Employee's death, any benefits to
which the Employee or his beneficiaries may be entitled under the plans
and programs described in paragraphs 5[b] and [c] hereof shall be
determined in accordance with the terms of such plans and programs.
c. Except as provided in paragraphs 7[a] and [b] hereof,
in the event of the Employee's termination due to disability or death,
the Company shall have no further liability to the Employee or the
Employee's heirs, beneficiaries or estate for damages, compensation,
benefits, indemnities or other amounts of whatever nature.
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8. Non-Competition and Protection of Confidential Information.
a. The Employee agrees that his services to the Company are of
a special, unique, extraordinary and intellectual character and his
position with the Company places him in a position of confidence and
trust with the employees and customers of the Company and its
affiliates. Consequently, the Employee agrees that it is reasonable and
necessary for the protection of the goodwill, intellectual property,
trade secrets, designs, proprietary information and business of the
Company that the Employee make the covenants contained herein.
Accordingly, the Employee agrees that, during the period of the
Employee's employment hereunder and for the period of one [1] year
immediately following the termination of his employment hereunder, he
shall not, directly or indirectly:
i. own, operate, manage or be employed by or
affiliated with any person or entity headquartered within or
with a management office in the United States that engages in
any business then being engaged or planned to be engaged in by
the Company or its subsidiaries or affiliates.
ii. attempt in any manner to solicit from any
customer or supplier business of the type performed for or by
The Company or persuade any customer or supplier of The
Company to cease to do business or to reduce the amount of
business which any such customer or supplier has customarily
done or contemplates doing with The Company, whether or not
the relationship between The Company and such customer or
supplier was originally established in whole or in part
through his efforts; or
iii. employ as an employee or retain as a consultant,
or persuade or attempt to persuade any person who is at the
Date of Termination or at any time during the preceding year
was, or in the six [6] months following such termination
becomes, an employee of or exclusive consultant to the Company
to leave the Company or to become employed as an employee or
retained as a consultant by anyone other than the Company.
iv. As used in this paragraph 8, the term: "customer"
and "supplier" shall mean any person or entity that is a
customer or supplier of the Company at the Date of
Termination, or at any time during the preceding year was, or
in the six [6] months following such termination becomes, a
customer or supplier of The Company, or if the Employee's
employment shall not have terminated, at the time of the
alleged prohibited conduct.
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b. The Employee agrees that he will not at any time [whether
during the Term or after termination of this Agreement for any reason],
disclose to anyone, any confidential information or trade secret of or
utilize such confidential information or trade secret for his own
benefit, or for the benefit of third parties, and all memoranda or
other documents compiled by him or made available to him during the
Term pertaining to the business of The Company shall be the property of
The Company and shall be delivered to The Company on the Date of
Termination or at any other time, as reasonable, upon request. The term
"confidential information or trade secret" does not include any
information which [i] becomes generally available to the public other
than by breach of this provision or [ii] is required to be disclosed by
law or legal process.
c. If the Employee commits a breach or threatens to commit a
breach of any of the provisions of paragraphs 8[a] or [b] hereof, the
Company shall have the right to have the provisions of this Agreement
specifically enforced by any court having jurisdiction without being
required to post bond or other security and without having to prove the
inadequacy of any other available remedies, it being acknowledged and
agreed that any such breach will cause irreparable injury to The
Company and that money damages will not provide an adequate remedy to
the Company or The Company. In addition, the Company may take all such
other actions and seek such other remedies available to it in law or in
equity and shall be entitled to such damages as it can show it has
sustained by reason of such breach.
d. The parties acknowledge that the type and periods of
restriction imposed in the provisions of paragraphs 8[a] and [b] hereof
are fair and reasonable and are reasonably required for the protection
of The Company and the goodwill associated with the business of The
Company; and that the time, scope, geographic area and other provisions
of this paragraph 8 have been specifically negotiated by sophisticated
parties and accordingly it is reasonable that the restrictive covenants
set forth herein are not limited by narrow geographic area. If any of
the covenants in paragraphs 8[a] or [b] hereof, or any part thereof, is
hereafter construed to be invalid or unenforceable, it is the intention
of the parties that the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard
to the invalid portions. If any of the covenants contained in
paragraphs 8[a] or [b], or any part thereof, is held to be
unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such
determination should reduce the duration and/or areas of such provision
such that, in its reduced form, said provision shall then be
enforceable. The parties intend to and hereby confer jurisdiction to
enforce the covenants contained in paragraphs 8[a] and [b] upon the
courts of any jurisdiction within the geographical scope of such
covenants. In the event that the courts of any one or more of such
jurisdictions shall hold such covenants wholly unenforceable by reason
of the breadth of such time, scope or geographic area, it is the
intention of the parties hereto that such determination not bar or in
any way affect the Company's right to the relief provided above in the
courts of any other jurisdiction within the geographical scope of such
covenants, as to breaches of such covenants in such other respective
jurisdictions, the above covenants as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent
covenants.
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e. If the non-competition provision of the Stock Purchase
Agreement among Ranor Acquisition LLC and Employee and others is
broader or of longer duration than the provisions of this Paragraph 8,
such broader and/or longer provisions shall govern.
9. Intellectual Property. During the Term, the Employee will disclose
to the Company all ideas, inventions, advertising campaigns, designs, logos,
slogans, processes, operations, products or improvements which may be patentable
or copyrightable or subject to any trade or service xxxx or name, and business
plans developed by him during such period, either individually or in
collaboration with others, which relate to the business of the Company
["Intellectual Property"]. The Employee agrees that such Intellectual Property
will be the sole property of the Company and that he will at the Company's
request and cost do whatever is reasonably necessary to secure the rights
thereto by patent, copyright, trademark or otherwise to the Company.
10. Enforceability. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same, nor shall it affect any
other party's right to enforce the same, or to enforce any of the other
provisions in this Agreement; nor shall the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent breach
of such provision or as a waiver of the provision itself.
11. Assignment. This Agreement is binding on and is for the benefit of
the parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be sold, transferred, assigned, pledged or
hypothecated by either party hereto without the prior written consent of the
other party; provided, the Company may assign its rights and obligations under
the Agreement without written consent in connection with the sale or other
transfer of all or substantially all of the Company's business [whether by way
of sale of stock, assets, merger or otherwise.
12. Severability. In the event any provision of this Agreement is found
to be void and unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall nevertheless be binding upon the parties with
the same effect as though the void or unenforceable part had been severed and
deleted.
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13. Life Insurance. The Employee agrees that the Company shall have the
right to obtain life insurance on the Employee's life, at the Company's sole
expense and with the Company as the sole beneficiary thereof to that end, the
Employee shall [a] cooperate fully with the Company in obtaining such life
insurance, [b] sign any necessary consents, applications and other related forms
or documents and [c] take any reasonably required medical examinations.
14. Notice. Any notice, request, instrument or other document to be
given under this Agreement by either party hereto to the other shall be in
writing and shall be deemed effective [a] upon personal delivery, if delivered
by hand, [b] three [3] days after the date of deposit in the mails, postage
prepaid, if mailed by certified or registered mail, or [c] on the next business
day, if sent by a prepaid overnight courier service, and in each case addressed
as follows:
If to the Employee: Xx. Xxxxxxx Xxxxx
0 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
If to the Company: Xx. Xxxxx X. Xxxxxx, Chairman
Ranor, Inc.
Xxxxx Xxxxx - X.X. Xxx 000
Xxxxxxxxxxx, XX 00000
Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.
15. No Conflict. The Employee represents and warrants that he is not
subject to any agreement, instrument, order, judgment or decree of any kind, or
any other restrictive agreement of any character, which would prevent him from
entering into this Agreement or which would be breached by the Employee upon the
performance of his duties pursuant to this Agreement.
16. Miscellaneous.
a. The headings contained in this Agreement are for reference
purposes only, and shall not affect the meaning or interpretation of
this Agreement.
b. The Company may withhold from any amount payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to applicable law or regulation.
c. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts conflict of law
principles thereof. Any action arising out of the breach or threatened
breach of this Agreement shall be commenced in a state court of the
State of Delaware of the parties hereby submits to the jurisdiction of
such courts for the purpose of enforcing this Agreement.
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d. This Agreement, represents the entire agreement between the
Company and the Employee with respect to the subject matter hereof, and
all prior agreements relating to the employment of the Employee,
written or oral, are nullified and superseded hereby.
e. This Agreement may not be orally canceled, changed,
modified or amended, and no cancellation, change, modification or
amendment shall be effective or binding, unless in writing and signed
by both parties to this Agreement, and any provision hereof may be
waived only by an instrument in writing signed by the party or parties
against whom or which enforcement of such waiver is sought.
f. As used in this Agreement, any gender includes a reference
to all other genders and the singular includes a reference to the
plural and vice versa.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY: EMPLOYEE:
RANOR, INC.
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
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Xxxxx X. Xxxxxx, Chairman Xxxxxxx Xxxxx
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