EXHIBIT 10.9
E M P L O Y M E N T A G R E E M E N T
THIS AGREEMENT is made and entered into this 30th day of June, 1997
effective for the term provided herein, by and between CTI Industries
Corporation., an Illinois corporation (the "Company") and Xxxxxx X. Xxxxxx
(hereinafter referred to as the "Executive").
WHEREAS, the Executive is presently, and for some time has been,
employed as an executive officer of the Company and has been instrumental in the
operation and management of the Company;
WHEREAS, the Company desires to be assured of the continued association
and services of Executive and Executive desires to continue in the employment of
the Company on the terms provided herein.
NOW, THEREFORE, in consideration of the premises and of the terms,
covenants and conditions hereinafter contained, the parties hereto agree as
follows:
1. Employment, Duties and Authority.
1.1 The Company hereby employs Executive and Executive hereby
accepts employment by the Company on the terms, covenants and
conditions herein contained.
1.2 The Executive is hereby employed by the Company as
President. The Executive shall have such duties, responsibilities and
authority as the by-laws of the Company shall from time to time provide
and as the Board of Directors of the Company shall from time to time
prescribe in writing.
1.3 During the term of Executive's employment hereunder, and
subject to the other provisions hereof, Executive shall devote his full
energies, interest, abilities and productive time to the performance of
his duties and responsibilities hereunder and will perform such duties
and responsibilities faithfully and with reasonable care for the
welfare of the Company. During the term of his employment hereunder,
Executive shall not perform any services for compensation for any
person, firm, partnership, company or corporation other than the
Company without the express written consent of the Board of Directors
of the Company.
2. Compensation and Benefits.
2.1 Basic Salary.
2.1.1 The Company shall pay to Executive during the
initial term of employment hereunder and each renewal term a
basic salary at an annual rate to be
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determined by the Board of Directors of the Company but not
less than the amount of $135,000. Such basic salary shall be
paid by the Company to Executive each month, less amounts
which the Company may be required to withhold from such
payments by applicable federal, state or local laws or
regulations.
2.1.2 If the Executive shall be absent from work on
account of personal injuries or sickness, he shall continue to
receive the payments provided for in paragraph 2.1.1 hereof;
provided, however, that any such payment may, at the Company's
option, be reduced by the amount which the Executive may
receive, for the period covered by any such payments, in
disability payments (i) pursuant to any disability insurance
which the Company, in its sole discretion, may maintain, or
(ii) under any governmental program for disability
compensation.
2.1.3 The Company agrees that the rate of the basic
salary of the Executive hereunder shall be reviewed annually
by the Board of Directors or such committee of the Board of
Directors designated by it to review such matters and that the
rate of the basic salary shall be determined and adjusted for
each year during the term of Executive's employment hereunder
by the Board of Directors or such committee commensurate with
(i) the performance of Executive, (ii) the net income of the
Company during the preceding fiscal year and as projected for
the fiscal year for which the basic salary determination is
made, (iii) comparable rates of compensation for executives
and (iv) such other factors as the Board of Directors or such
committee may deem relevant to the determination.
2.2 Benefits; Expense Reimbursement.
2.2.1 The Executive shall be entitled to, and shall
receive, all other benefits of employment available to other
executives of the Company generally, including, without
limitation, participation in any hospital, surgical, medical
or other group health plans or accident benefits, life
insurance benefits, pension or profit-sharing plans, bonus
plans or vacation plans as shall be instituted by the Company,
in its sole discretion.
2.2.2 During the term hereof, the Company shall
reimburse Executive for all reasonable and necessary expenses
incurred by Executive in the performance of his duties
hereunder, including without limitation, travel, meals,
lodging, office supplies or equipment subject to such
reasonable limitations, restrictions and reporting standards
as the Board of Directors of the Company may from time to time
establish. Executive shall provide to the Company promptly
after incurring any such expenses a detailed report thereof
and such information relating thereto as the Company shall
from time to time require. Such information shall be
sufficient to support the deductibility of all such expenses
by the Company for federal income tax purposes.
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2.2.3 The Company shall provide to Executive the use
of an automobile.
3. Term.
The employment of Executive hereunder shall be for a term commencing on
January 1, 1997 and expiring on June 30, 2002. Upon the expiration of the
initial term or any renewal term of Executive's employment hereunder, the term
of such employment automatically shall be renewed for an additional term of one
year commencing on July 1 and expiring on the succeeding June 30 unless
Executive or the Company shall give notice of the termination of Executive's
employment and this Agreement by written notice to the other more than 120 days
prior to the date of expiration of the initial or any renewal term. In the event
that such notice of termination shall be given timely, this Agreement shall
terminate on the date of expiration of such initial or renewal term.
4. Termination.
4.1 The Company shall be entitled to terminate this Agreement
prior to the expiration of its term or any renewal term on the
occurrence of either:
4.1.1 an event of default with respect to Executive
as provided herein, or
4.1.2 the permanent mental or physical disability of
Executive as provided herein occurring during the term or any
renewal term of Executive's employment hereunder.
4.2 For purposes of this Agreement, an event of default
with respect to Executive shall include:
4.2.1 Any failure by Executive to perform his duties,
responsibilities or obligations hereunder in a faithful and
diligent manner or with reasonable care and (if such failure
can be cured) the failure by Executive to cure such failure
within 10 days after written notice thereof shall have been
given to Executive by the Company; or
4.2.2 Commission by Executive of any material act of
dishonesty as an employee of the Company or of disloyalty to
the Company, or any wrongful or unauthorized appropriation,
taking or misuse of funds, property or business opportunities
of the Company.
4.3 Permanent mental or physical disability of Executive shall
be deemed to have occurred hereunder when Executive shall have failed
or been unable to perform his duties hereunder on a full-time basis for
an aggregate of 180 days in any one period of 210 consecutive days and
with a certification from a licensed physician in the State of Missouri
that Executive is permanently disabled from performing his duties
hereunder.
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4.4 Executive shall be entitled to terminate his employment
with the Company under this Agreement prior to the expiration of its
term upon the occurrence of an event of default with respect to the
Company.
4.5 For purposes of this Agreement an event of default
with respect to the Company shall include:
4.5.1 Any failure by the Company to perform its
obligations to Executive under this Agreement and (if such
failure can be cured) the failure by the Company to cure such
failure within 10 days after written notice thereof shall have
been given to the Company by Executive;
4.5.2 The Company shall:
(a) admit in writing its inability to pay
its debts generally as they become due,
(b) file a petition for relief under any
chapter of Title 11 of the United States Code or a
petition to take advantage of any insolvency under
the laws of the United States of America or any state
thereof,
(c) make an assignment for the benefit of
its creditors,
(d) consent to the appointment of a receiver
of itself or of the whole or any substantial part of
its property,
(e) suffer the entry of an order for relief
under any chapter of Title 11 of the United Sates
Code, or
(f) file a petition or answer seeking
reorganization under the Federal Bankruptcy Laws or
any other applicable law or statute of the United
States of America or any state thereof.
4.6 In the event of termination of this Agreement and
Executive's employment hereunder by the Company pursuant to paragraph
4.1 hereof, all rights and obligations of the Company and Executive
hereunder shall terminate on the date of such termination, subject to
the following:
4.6.1 Executive shall be entitled to receive (subject
to any rights of set off or counterclaim by the Company) all
salary, additional compensation and benefits, which shall have
accrued prior to the date of such termination and the
obligation of the Company for the payment of salary,
additional compensation or benefits shall terminate as at the
date of such termination;
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4.6.2 All rights of the Company or Executive which
shall have accrued hereunder prior to the date of such
termination, and all provisions of this Agreement provided
herein to survive termination of employment of Executive
hereunder, shall survive such termination and the Company and
Executive shall continue to be bound by such provisions in
accordance with the terms thereof;
4.7 In the event of termination of the Agreement by Executive
in accordance with paragraph 4.4 hereof, all rights and obligations of
the Company and Executive hereunder shall terminate on the date of such
termination, subject to the following:
4.7.1 Executive shall be entitled to receive all
salary, additional compensation and benefits which shall have
accrued prior to the date of such termination and the
Company's obligation for the payment of salary, additional
compensation and benefits shall terminate as of the date of
such termination;
4.7.2 All rights of the Company or Executive which
shall have accrued hereunder prior to the date of such
termination and the obligations of Executive pursuant to
paragraphs 5, 6 and 7 provided herein to survive termination
of employment of Executive hereunder shall survive such
termination and the Executive shall continue to be bound by
such provisions in accordance with their terms.
4.8 This Agreement and all rights and obligations of the
parties hereunder shall terminate immediately upon the death of
Executive except that the Company shall pay to the heirs, legatees or
personal representative of Executive (i) all compensation or benefits
hereunder accrued but not paid to the date of Executive's death and
(ii) an amount equal to the total compensation which would have been
payable to Executive hereunder, but for his death, for a period of six
months from the date of his death.
5. Confidential Information.
5.1 "Confidential Information" means information disclosed by
the Company to Executive, or developed or obtained by Executive during
his employment by the Company, either before the date or during the
term of this Agreement, or during the Consultation Period, provided
that such information is not generally known in the business and
industry in which the Company is or may subsequently become engaged,
relating to or concerning the business, projects, products, processes,
formulas, know-how, techniques, designs or methods of the Company,
whether relating to research, development, manufacture, purchasing,
accounting, engineering, marketing, merchandising, selling or
otherwise. Without limitation, Confidential Information shall include
all know-how, technical information, inventions, ideas, concepts,
processes and designs relating to products of the Company, whether now
existing or hereafter developed, and all prices, customer or
distributor names, customer or distributor lists, marketing and other
relationships, whether contractual or not, between the Company, its
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suppliers, customers, distributors, employees, agents, consultants and
independent contractors but shall exclude the names of customers or
distributors known to Executive prior to the effective date hereof.
5.2 Executive agrees that, during the term hereof or while
Executive shall receive compensation hereunder and after termination of
his employment with the Company for so long as the Confidential
Information shall not be generally known or generally disclosed (except
by Executive or by means of wrongful use or disclosure), Executive
shall not use any Confidential Information, except on behalf of the
Company, or disclose any Confidential Information to any person, firm,
partnership, company, corporation or other entity, except as authorized
by the President or the Board of Directors of the Company.
6. Inventions.
6.1 "Inventions" shall mean discoveries, concepts, ideas,
designs, methods, formulas, know-how, techniques or any improvements
thereon, whether patentable or not, made, conceived or developed, in
whole or in part, by Executive.
6.2 Executive covenants and agrees to communicate and fully
disclose to the Board of Directors of the Company any and all
Inventions made or conceived by him during the term hereof or while
receiving any compensation or payment from the Company and further
agrees that any and all such Inventions which he may conceive or make,
during the term hereof or while receiving any compensation or payments
from the Company, shall be at all times and for all purposes regarded
as acquired and held by him in a fiduciary capacity and solely for the
benefit of the Company and shall be the sole and exclusive property of
the Company. The provisions of this subparagraph shall not apply to an
invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on
the Executive's own time, unless (a) the invention relates (i) to the
business of the Company, or (ii) to the Company's actual or
demonstrably anticipated research or development, or (b) the invention
relates from any work performed by Executive for the Company.
6.3 Executive also covenants and agrees that he will assist
the Company in every proper way upon request to obtain for its benefit
patents for any and all inventions referred to in paragraph 6.2 hereof
in any and all countries. All such patents and patent applications are
to be, and remain, the exclusive property of the Company for the full
term thereof and to that end, the Executive covenants and agrees that
he will, whenever so requested by the Company or its duly authorized
agent, make, execute and deliver to the Company, its successors,
assigns or nominees, without charge to the Company, any all
applications, applications for divisions, renewals, reissues,
specifications, oaths, assignments and all other instruments which the
Company shall deem necessary or appropriate in order to apply for and
obtain patents of the United States or foreign countries for any and
all Inventions referred to in paragraph 6.2 hereof or in order to
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assign and convey to the Company, its successors, assigns or nominees,
the sole and exclusive right, title and interest in and to such
Inventions, applications or patents. Executive likewise covenants and
agrees that his obligations to execute any such instruments or papers
shall continue after the expiration or termination of this Agreement
with respect to any and all such Inventions, and such obligations shall
be binding upon his heirs, executors, assigns, administrators or other
legal representatives.
7. Writings and Working Papers.
Executive covenants and agrees that any and all books, textbooks,
letters, pamphlets, drafts, memoranda or other writings of any kind written by
him for or on behalf of the Company or in the performance of Executive's duties
hereunder, Confidential Information referred to in paragraph 7.1 hereof and all
notes, records and drawings made or kept by him of work performed in connection
with his employment by the Company shall be and are the sole and exclusive
property of the Company and the Company shall be entitled to any and all
copyrights thereon or other rights relating thereto. Executive agrees to execute
any and all documents or papers of any nature which the Company or its
successors, assigns or nominees deem necessary or appropriate to acquire,
enhance, protect, perfect, assign, sell or transfer its rights under this
paragraph. Executive also agrees that upon request he will place all such notes,
records and drawings in the Company's possession and will not take with him
without the written consent of a duly authorized officer of the Company any
notes, records, drawings, blueprints or other reproductions relating or
pertaining to or connected with his employment of the business, books,
textbooks, pamphlets, documents work or investigations of the Company. The
obligations of this paragraph shall survive the term of employment hereunder or
the termination or expiration of the term or any renewal term hereof or the term
or termination of the Consultation Period.
8. Covenant Not to Compete.
8.1 For purposes of this paragraph:
8.1.1 "Conflicting Organization" means any person,
firm, company, partnership, business, corporation or other
entity engaged in, or intending to engage in, research,
development, production, marketing or selling a Conflicting
Product.
8.1.2 "Conflicting Product" means any product,
process, service or design which competes with, or is
reasonably interchangeable as a substitute for, any product,
process, service or design developed, planned, under
development, produced marketed or sold by the Company or any
Affiliate during the term of the covenant in this paragraph 8.
Without limitation, Conflicting Product includes any balloon
product, including without limitation, latex or mylar balloon
product and any printed or laminated film product.
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8.1.3 "Territory" means the geographic area within
which the Company or any Affiliate or any distributor or
representative of the Company or any Affiliate is actively
engaged in the sale of, or efforts to sell, the products of
the Company or any Affiliate at any time during the term of
this Agreement.
8.1.4 "Affiliate" shall mean any corporation of which
the Company, or any Affiliate, shall own majority of the
capital stock.
8.2 Executive acknowledges and agrees as follows:
8.2.1 That the Company and its Affiliates have
developed, and are developing and establishing, a valuable and
extensive trade in its services and products, including
without limitation, latex and mylar balloons and printed and
laminated films and that they have developed, and are
developing, operations and distributors to sell such products
and services throughout the United States and in foreign
countries.
8.2.2 That the Company and its Affiliates have
developed, and are developing, at great expense, technical
information concerning their products and methods of marketing
and sale which are kept and protected as Confidential
Information and trade secrets and are of great value to the
Company and its Affiliates.
8.2.3 That, during the course of his employment with
the Company or an Affiliate and during the term of this
Agreement, Executive has participated, and will participate,
in such matters and has acquired and will acquire, possession
of Confidential Information, and that Executive has had
significant responsibility for the development activities of
the Company and the development of unique products, methods
and techniques of the Company and its Affiliates.
8.2.4 That, for Executive to utilize Confidential
Information of the Company and its Affiliates, or unique
skills, techniques or information developed by him while an
employee of the Company or its Affiliates or during the term
of this Agreement for a Conflicting Organization within the
area or time provided herein would result in material and
irreparable injury to the Company.
8.2.5 That the area and conduct covered by the
restrictive covenant in this paragraph includes only a
percentage of the total number of organizations and
individuals who are customers or distributors or potential
customer or distributors for products, processes or services
with respect to which Executive has knowledge or expertise,
that Executive would be able to utilize his knowledge,
experience and expertise for an employer while fully complying
with the terms of this paragraph and that the terms and
conditions of this paragraph are reasonable and necessary for
the protection of the Company's business and assets.
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8.3 Executive agrees that, during the term of this Agreement,
during the term of the Consultation Period, for so long as Executive
shall be receiving compensation hereunder, and for a period of 36
months from and after the date of termination of this Agreement (other
than by Executive pursuant to paragraph 4.4 hereof), he will not,
anywhere within the Territory, directly or indirectly, whether as an
employee, agent, officer, consultant, partner, owner, shareholder or
otherwise:
8.3.1 solicit for the sale of, or participate with,
provide services to, or be employed by any person, company,
partnership, business or corporation which shall solicit for
the sale of, any Conflicting Product by a Conflicting
Organization;
8.3.2 engage or participate in, purchase or own any
stock or other equity interest in, be employed by, or provide
services or assistance to, any Conflicting Organization;
9. Specific Enforcement.
Executive is obligated under this Agreement to render service of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value so that the loss of such service or
violation by Executive of this Agreement could not reasonably or adequately be
compensated in damages in an action at law. Therefore, in addition to other
remedies provided by law, the Company shall have the right during the term or
any renewal term of this Agreement (or thereafter with respect o obligations
continuing after the expiration or termination of this Agreement) to compel
specific performance hereof by Executive or to obtain injunctive relief against
violations hereof by Executive, and if the Company prevails in any proceeding
therefor, it will also be entitled to recover all costs and expenses incurred by
the Company in connection therewith, including attorneys' fees.
10. Assignment.
The rights and duties of a party hereunder shall not be assignable by
that party, except that the Company may assign this Agreement and all rights and
obligations hereunder to, and may require the assumption thereof by, any
corporation or any other business entity which succeeds to all or substantially
all the business of the Company through merger, consolidation or corporate
reorganization or by acquisition of all or substantially all of the assets of
the Company.
11. Binding Effect.
This Agreement shall be binding upon the parties hereto and their
respective successors in interest, heirs and personal representatives and, to
the extent permitted herein, the assigns of the Company.
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12. Severability.
If any provision of this Agreement or any part hereof or application
hereof to any person or circumstance shall be finally determined by a court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the remainder of such provision or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, shall not be affected thereby
and each provision of this Agreement shall remain in full force and effect to
the fullest extent permitted by law. The parties also agree that, if any portion
of this Agreement, or any part hereof or application hereof, to any person or
circumstance shall be finally determined by a court of competent jurisdiction to
be invalid or unenforceable to any extent, any court may so modify the
objectionable provision so as to make it valid, reasonable and enforceable.
13. Notices.
All notices, or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered personally or mailed,
certified mail, return receipt requested, postage prepaid, to the parties as
follows:
If to the Company: Xxxxxxx X. Xxxxxxx
CTI Industries Corporation
00000 X. Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to Executive: Xxxxxx X. Xxxxxx
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Any notice mailed in accordance with the terms hereof shall be deemed received
on the third day following the date of mailing. Either party may change the
address to which notices to such party may be given hereunder by serving a
proper notice of such change of address to the other party.
14. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
written or oral negotiations, representations, agreements, commitments,
contracts or understandings with respect thereto and no modification, alteration
or amendment to this Agreement may be made unless the same shall be in writing
and signed by both of the parties hereto.
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15. Waivers.
No failure by either party to exercise any of such party's rights
hereunder or to insist upon strict compliance with respect to any obligation
hereunder, and no custom or practice of the parties at variance with the terms
hereof, shall constitute a waiver by either party to demand exact compliance
with the terms hereof. Waiver by either party of any particular default by the
other party shall not affect or impair such party's rights in respect to any
subsequent default of the same or a different nature, nor shall any delay or
omission of either party to exercise any rights arising from any default by the
other party affect or impair such party's rights as to such default or any
subsequent default.
16. Governing Law; Jurisdiction.
16.1 For purposes of construction, interpretation and
enforcement, this Agreement shall be deemed to have been entered into
under the laws of the State of Missouri and its validity, effect,
performance, interpretation, construction and enforcement shall be
governed by and subject to the laws of the State of Illinois.
16.2 Any and all suits for any and every breach of this
Agreement may be instituted and maintained in any court of competent
jurisdiction in the State of Illinois and the parties hereto consent to
the jurisdiction and venue in such court and the service of process by
certified mail to the addresses for the parties provided for notices
herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CTI INDUSTRIES CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
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Authorized Officer
Attest:
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Secretary
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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