EMPLOYMENT AGREEMENT
Exhibit 99.2
THIS EMPLOYMENT AGREEMENT (the “Agreement”), made as of this 12th day of February, 2007, is
entered into by EDAC Technologies Corporation, a Wisconsin corporation with its principal place of
business in Farmington, Connecticut (the “Company”), and Xxxxx X. Purple, residing at 000
Xxxxxxxxxx Xxxxxx, Xxxx, Xxxxxxxxxxx 00000 (the “Employee”).
The Company desires to employ the Employee, and the Employee desires to be employed by the
Company. In consideration of the mutual covenants and promises contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged
by the parties to this Agreement, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ the Employee, and the
Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement,
for the period commencing on the first day of the Company’s 2007 fiscal year (the “Commencement
Date”) and ending on the last day of the Company’s 2007 fiscal year (such initial employment
period, and as it may be extended pursuant to the next sentence, the “Employment Period”), unless
sooner terminated in accordance with the provisions of Section 4. The term of the Employee’s
Employment Period will automatically be extended for successive periods of 12 months (equal to the
next fiscal year period) unless either party, pursuant to Section 4.5, notifies the other in
writing to the contrary at least 90 days prior to the end of the then current term of this
Agreement.
2. Title; Capacity. The Employee shall serve as Vice President — Finance, Chief
Financial Officer, and Secretary or in such other reasonably comparable position as the Company or
its Board of Directors (the “Board”) may determine from time to time. The Employee shall be based
at the Company’s facilities in Farmington, Connecticut, or such place or places as the Board shall
determine. The Employee shall be subject to the supervision of, and shall have such authority as
is delegated to the Employee by, the Board or such officer of the Company as may be designated by
the Board.
The Employee hereby accepts such employment and agrees to undertake the duties and
responsibilities inherent in such position and such other duties and responsibilities as the Board
or its designee shall from time to time reasonably assign to the Employee. The Employee agrees to
devote his entire business time, attention and energies to the business and interests of the
Company during the Employment Period. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company.
3. Compensation and Benefits.
3.1 Salary. The Company shall pay the Employee, in periodic installments in
accordance with the Company’s customary payroll practices, an annual base salary of $141,000 for
the twelve-month period commencing on the Commencement Date until the expiration of the Employment
Period. Such salary shall be subject to adjustment thereafter as determined by the Board.
3.2 Bonus; Fringe Benefits. The Employee shall be entitled to participate in all
bonus and benefit programs that the Company establishes and makes available to its employees, if
any, to the extent that Employee’s position, tenure, salary, age, health and/or other
qualifications, if any, make him eligible to participate. The Employee shall be eligible to
participate in any short-term or long-term incentive programs as may be approved by the Board from
time to time; provided, however, that the Employee agrees that the Board may modify or discontinue
such short-term or long-term incentive programs at any time in the Board’s sole and absolute
discretion. The Employee shall be entitled to four weeks paid vacation per calendar year, to be
taken at such times during such calendar year as may be approved by the Board or its designee. Any
vacation days that have not been used by the Employee by the end of the calendar year to which such
days relate shall be forfeited by the Employee and the Employee shall not have the right to carry
over to subsequent calendar years any unused vacation time.
3.3 Reimbursement of Expenses. The Company shall reimburse the Employee for all
reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties, responsibilities or services under this
Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the
Company from time to time.
3.4 Withholding. All salary, bonus and other compensation payable to the Employee
shall be subject to applicable withholding taxes.
3.5 Directors’ and Officers’ Insurance. The Employee will be covered as an insured
under the Company’s policies of directors’ and officers’ liability insurance in such a manner as to
provide the Employee with the same rights and benefits thereunder as are accorded to the Company’s
other executive officers and directors.
4. Termination of Employment Period. The employment of the Employee by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the following:
4.1 Expiration of the Employment Period (which includes any automatic extension thereof);
4.2 At the election of the Company, for Cause (as defined below), immediately upon written
notice by the Company to the Employee, which notice shall identify the Cause upon which the
termination is based. For the purposes of this Section 4.2, “Cause” shall mean (a) a good faith
finding by the Company that (i) the Employee has failed to perform in any material respect his
assigned duties for the Company (other than any such failure resulting from incapacity due to
physical or mental illness) and, if capable of being remedied, (A) has failed to take appropriate
action to remedy such failure within 10 business days following written notice from the Company to
the Employee notifying him of such failure, and (B) has failed to remedy such failure within 30
days following such written notice, or (ii) the Employee has engaged in fraud, gross negligence or
gross misconduct, which in each case is materially and demonstrably injurious to the Company, or
(b) the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by
the Employee to, any crime involving moral turpitude or any felony;
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4.3 At the election of the Employee, for Good Reason (as defined below), immediately upon
written notice by the Employee to the Company, which notice shall identify the Good Reason upon
which the termination is based. For the purposes of this Section 4.3, “Good Reason” for
termination shall mean (i) a material reduction in the Employee’s authority, duties or compensation
without the prior written consent of the Employee, (ii) a material breach by the Company of the
terms of this Agreement, which breach, if capable of being remedied, (A) the Company has not taken
appropriate action to remedy within 10 business days following written notice from the Employee to
the Company notifying it of such breach, and (B) is not remedied by the Company within 30 days
following such written notice, or (iii) the relocation of the Employee’s place of work more than 30
miles from the Company’s current facilities in Farmington, Connecticut.
4.4 Upon the death or disability of the Employee. As used in this Agreement, the term
“disability” shall mean the inability of the Employee, due to a physical or mental disability, for
a period of 90 days, whether or not consecutive, during any 360-day period to perform the services
contemplated under this Agreement, with or without reasonable accommodation as that term is defined
under state or federal law. A determination of disability shall be made by a physician
satisfactory to both the Employee and the Company, provided that if the Employee
and the Company do not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties;
4.5 At the election of either party, upon not less than 90 days’ prior written notice of
termination.
5. Effect of Termination.
5.1 At-Will Employment. If an Employment Period expires pursuant to Section 1 hereof
after appropriate non-renewal notice has been given, then the Employee shall continue his
employment on an at-will basis following the expiration of the Employment Period. Such at-will
employment relationship may be terminated by either party at any time and shall not be governed by
the terms of this Agreement.
5.2 Payment Upon Termination.
(a) In the event the Employee’s employment is terminated pursuant to Section 4.1, Section
4.2, Section 4.4 or by the Employee pursuant to Section 4.5, the Company shall pay to the Employee
the compensation, bonus, and benefits otherwise payable to him under Section 3 through the last
day of his actual employment by the Company.
(b) In the event the Employee’s employment is terminated by the Employee pursuant to Section
4.3 or by the Company pursuant to Section 4.5, the Company shall continue to pay to the Employee
his salary as in effect on the date of termination and the amount of the annual bonus paid to him
for the fiscal year immediately preceding the date of termination (payable in annualized monthly
installments), any incentive compensation earned by the Employee through the date of termination
(payable to him at the customary time) and continue to provide to the Employee the other benefits
owed to him under Section 3.2 (including health and
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dental insurance) (to the extent such benefits can be provided to non-employees, or to the
extent such benefits cannot be provided to non-employees, then the cash equivalent thereof) until
the expiration of twelve months following the date the Employee’s employment is terminated. The
payment to the Employee of the amounts payable under this Section 5.2(b) (i) shall be contingent
upon the execution by the Employee of a release in a form reasonably acceptable to the Company and
(ii) shall constitute the sole remedy of the Employee in the event of a termination of the
Employee’s employment in the circumstances set forth in this Section 5.2(b).
5.3 Survival. The provisions of Sections 5.2(b), 6 and 7 shall survive the
termination of this Agreement.
6. Non-Competition and Non-Solicitation.
6.1 Restricted Activities. While the Employee is employed by the Company and, if the
Employee is terminated for Cause pursuant to Section 4.2 for an additional period of one year after
the termination of such employment, the Employee will not directly or indirectly:
(a) Engage in any business or enterprise (whether as owner, partner, officer, director,
employee, consultant, investor, lender or otherwise, except as the holder of not more than 1% of
the outstanding stock of a publicly-held company) that is competitive with the Company’s business
as conducted as of the termination date, including but not limited to any business or enterprise
that develops, manufactures, markets, or sells any product or service that competes with any
product or service developed, manufactured, marketed, sold or provided, or planned to be developed,
manufactured, marketed, sold or provided, by the Company or any of its subsidiaries while the
Employee was employed by the Company; or
(b) Either alone or in association with others (i) solicit, or permit any organization
directly or indirectly controlled by the Employee to solicit, any employee of the Company to leave
the employ of the Company, or (ii) solicit for employment, hire or engage as an independent
contractor, or permit any organization directly or indirectly controlled by the Employee to solicit
for employment, hire or engage as an independent contractor, any person who was employed by the
Company at any time during the twelve-month period preceding the date of termination of the
Employee’s employment with the Company.
6.2 Interpretation. If any restriction set forth in Section 6.1 is found by any court
of competent jurisdiction to be unenforceable because it extends for too long a period of time or
over too great a range of activities or in too broad a geographic area, it shall be interpreted to
extend only over the maximum period of time, range of activities or geographic area as to which it
may be enforceable.
6.3 Equitable Remedies. The restrictions contained in this Section 6 are necessary
for the protection of the business and goodwill of the Company and are considered by the Employee
to be reasonable for such purpose. The Employee agrees that any breach of this Section 6 may cause
the Company substantial and irrevocable damage which may be difficult to measure. Therefore, in
the event of any such breach or threatened breach, the Employee agrees that the Company, in
addition to such other remedies which may be available, shall be entitled to
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seek an injunction from a court restraining such a breach or threatened breach and the right
to specific performance of the provisions of this Section 6.
7. Proprietary Information and Developments.
7.1 Proprietary Information.
(a) The Employee agrees that all information, whether or not in writing, of a private, secret
or confidential nature concerning the Company’s business, business relationships or financial
affairs (collectively, “Proprietary Information”) is and shall be the exclusive property of the
Company. By way of illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects,
developments, plans, research data, clinical data, financial data, personnel data, computer
programs, customer and supplier lists, and contacts at or knowledge of customers or prospective
customers of the Company. Therefore, the Employee agrees that during the Employment Period, and
for a period ending on the earlier of (a) two years after the termination of his employment with
the Company or (b) the date on which the Proprietary Information becomes publicly known through no
fault of the Employee, the Employee will not disclose any Proprietary Information to any person or
entity other than employees of the Company or use the same for any purposes (other than in the
performance of his duties as an employee of the Company) without written approval by the Chief
Executive Officer or Chairman of the Company.
(b) The Employee agrees that all files, letters, memoranda, reports, records, data, sketches,
drawings, laboratory notebooks, program listings, or other written, photographic, or other tangible
material containing Proprietary Information, whether created by the Employee or others, which shall
come into his custody or possession, shall be and are the exclusive property of the Company to be
used by the Employee only in the performance of his duties for the Company. All such materials or
copies thereof and all tangible property of the Company in the custody or possession of the
Employee shall be delivered to the Company, upon the earlier of (i) a request by the Company or
(ii) termination of his employment. After such delivery, the Employee shall not retain any such
materials or copies thereof or any such tangible property.
(c) The Employee agrees that his obligation not to disclose or to use information and
materials of the types set forth in paragraphs (a) and (b) above, and his obligation to return
materials and tangible property, set forth in paragraph (b) above, also extends to such types of
information, materials and tangible property of customers of the Company or suppliers to the
Company or other third parties who may have disclosed or entrusted the same to the Company or to
the Employee.
7.2 Developments.
(a) The Employee will make full and prompt disclosure to the Company of all inventions,
improvements, discoveries, methods, developments, software, and works of authorship, whether
patentable or not, which are created, made, conceived or reduced to practice by him or under his
direction or jointly with others during his employment by the Company,
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whether or not during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as “Developments”).
(b) The Employee agrees to assign and does hereby assign to the Company (or any person or
entity designated by the Company) all his right, title and interest in and to all Developments and
all related patents, patent applications, copyrights and copyright applications. However, this
paragraph (b) shall not apply to Developments which do not relate to the present or planned
business or research and development of the Company or, if not so related, which are made and
conceived by the Employee not during normal working hours, not on the Company’s premises and not
using the Company’s tools, devices, equipment or Proprietary Information. The Employee understands
that, to the extent this Agreement shall be construed in accordance with the laws of any state
which precludes a requirement in an employee agreement to assign certain classes of inventions made
by an employee, this paragraph (b) shall be interpreted not to apply to any invention which a court
rules and/or the Company agrees falls within such classes. The Employee also hereby waives all
claims to moral rights in any Developments.
(c) The Employee agrees to reasonably cooperate fully with the Company, both during and after
his employment with the Company, with respect to the procurement, maintenance and enforcement of
copyrights, patents and other intellectual property rights (both in the United States and foreign
countries) relating to Developments. The Employee shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths, formal assignments,
assignments of priority rights, and powers of attorney, which the Company may deem necessary or
desirable in order to protect its rights and interests in any Development.
7.3 United States Government Obligations. The Employee acknowledges that the Company
from time to time may have agreements with other parties or with the United States Government, or
agencies thereof, which impose obligations or restrictions on the Company regarding inventions made
during the course of work under such agreements or regarding the confidential nature of such work.
The Employee agrees to be bound by all such obligations and restrictions which are made known to
the Employee in writing and to take all appropriate action necessary to discharge the obligations
of the Company under such agreements.
7.4 Equitable Remedies. The restrictions contained in this Section 7 are necessary
for the protection of the business and goodwill of the Company and are considered by the Employee
to be reasonable for such purpose. The Employee agrees that any breach of this Section 7 may cause
the Company substantial and irrevocable damage which may be difficult to measure. Therefore, in
the event of any such breach or threatened breach, the Employee agrees that the Company, in
addition to such other remedies which may be available, shall be entitled to seek an injunction
from a court restraining such a breach or threatened breach and the right to specific performance
of the provisions of this Section 7.
8. Other Agreements. The Employee represents that his performance of all the terms of
this Agreement and the performance of his duties as an employee of the Company do not and will not
breach any agreement with any prior employer or other party to which the Employee is a party
(including without limitation any nondisclosure or non-competition agreement). Any agreement
(other than an agreement with the Company) to which the
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Employee is a party relating to nondisclosure, non-competition or non-solicitation of
employees or customers is listed on Schedule A attached hereto.
9. Miscellaneous.
9.1 Notices. Any notices delivered under this Agreement shall be deemed duly
delivered four business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent for next-business day delivery via
a reputable nationwide overnight courier service, in each case to the address of the recipient set
forth in the introductory paragraph hereto. Either party may change the address to which notices
are to be delivered by giving notice of such change to the other party in the manner set forth in
this Section 9.1.
9.2 Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
9.3 Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement; provided, however, that this Agreement shall not supersede
any agreements relating to non-competition, non-solicitation, and/or proprietary information and
development to the extent they are more favorable to the Company.
9.4 Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Employee.
9.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut (without reference to the conflicts of laws provisions
thereof). Any action, suit or other legal proceeding arising under or relating to any provision of
this Agreement shall be commenced only in a court of the State of Connecticut (or, if appropriate,
a federal court located within Connecticut), and the Company and the Employee each consents to the
jurisdiction of such a court. The Company and the Employee each hereby irrevocably waive any right
to a trial by jury in any action, suit or other legal proceeding arising under or relating to any
provision of this Agreement.
9.6 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including, without limitation,
any corporation with which, or into which, the Company may be merged, or by which the Company may
be acquired, or which may succeed to the Company’s assets or business, provided, however, that the
obligations of the Employee are personal and shall not be assigned by him.
9.7 Waivers. No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or consent
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given by the Company on any one occasion shall be effective only in that instance and shall
not be construed as a bar or waiver of any right on any other occasion.
9.8 Captions. The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of any section of this
Agreement.
9.9 Severability. In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.
THE EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES
TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set
forth above.
| EDAC Technologies Corporation | ||||||
| By: | /s/ Xxxxxxxx X. Xxxxxx | |||||
| Name: Xxxxxxxx X. Xxxxxx | ||||||
| Title: President & CEO | ||||||
| Xxxxx X. Purple | ||||||
| /s/ Xxxxx X. Purple | ||||||
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Schedule A
None.
