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EXHIBIT 10.43
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of November 20, 1998, by
and between EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation ("Edac"), and
XXXXXX X. XXXXXXXX ("Xx. XxXxxxxx").
RECITAL
Edac desires to employ Xx. XxXxxxxx and Xx. XxXxxxxx is
willing to make his services available to Edac on the terms and conditions set
forth below.
AGREEMENTS
In consideration of the premises and the mutual agreements
which follow, the parties agree as follows:
1. Employment. Edac hereby employs Xx. XxXxxxxx and
Xx. XxXxxxxx hereby accepts employment with Edac on the terms and conditions set
forth in this Agreement.
2. Term. The initial term of Xx. XxXxxxxx'x employment
hereunder shall commence on the date hereof and continue for a period of three
years, subject to earlier termination as set forth in this Agreement. The term
of Xx. XxXxxxxx'x employment will automatically be extended one year on each
anniversary of the date of this Agreement unless either party notifies the other
to the contrary at least 90 days prior to any such anniversary. The term of
employment is referred to in this Agreement as the "Employment Term."
3. Duties. Xx. XxXxxxxx shall serve as the President and
Chief Executive Officer of Edac and will, under the direction of the Board of
Directors (the "Board"), faithfully and to the best of his ability, perform the
duties of such positions as determined by the Board from time to time. As the
President and Chief Executive Officer, Xx. XxXxxxxx shall be responsible for
managing the business and affairs of Edac in a professional manner with the
primary objective of enhancing shareholder value and ensuring that Edac's
customers, employees and suppliers are treated in a manner consistent with
Edac's Corporate Mission Statement. Without limiting the generality of the
foregoing, Xx. XxXxxxxx shall supervise the operations of Edac and perform those
duties normally associated with the offices of President and Chief Executive
Officer. Xx. XxXxxxxx shall also perform such additional duties and
responsibilities which may from time to time be reasonably assigned or delegated
by the Board. Xx. XxXxxxxx agrees to devote his entire business time, effort,
skill and attention to the proper discharge of such duties while employed by
Edac.
4. Compensation.
(a) Base Salary. Xx. XxXxxxxx shall receive a base
salary of $195,000 per year, payable in regular and equal installments in
accordance with Edac's payroll practices as in effect from time to time (the
"Base Salary"). Xx. XxXxxxxx'x Base Salary shall be reviewed annually by the
Compensation Committee of the Board (the "Compensation Committee") to determine
appropriate increases, if any, in the Base Salary, but the Base Salary shall not
be reduced below the amount stated above without Xx. XxXxxxxx'x written consent.
(b) Bonus. For each of Edac's fiscal years during
the Employment Term, Xx. XxXxxxxx shall be eligible to receive a cash bonus (the
"Cash Bonus"). The amount of the Cash Bonus for each fiscal year shall be
determined by the Compensation Committee by evaluating Xx. XxXxxxxx'x
achievements in meeting the mutually agreed upon objectives during the fiscal
year. The Cash Bonus shall be paid to Xx. XxXxxxxx, subject to appropriate tax
withholding, as soon as practicable after the close of the fiscal year but, in
any event, no later than March 15.
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(c) Stock Options. The Board strongly endorses the
concept that it is in the best interests of Edac and its shareholders to have
executives whose financial interests are closely-aligned with those of Edac's
shareholders. An effective method of achieving this objective is to reward
selected executives with stock options based on their contributions in meeting
long-term (two to five years) and short-term objectives which improve
shareholder value. The objectives and options to be awarded Xx. XxXxxxxx shall
be established by the Compensation Committee and management.
5. Fringe Benefits. During the Employment Term,
Xx. XxXxxxxx shall receive all normal benefits available to every Edac employee,
plus the following fringe benefits:
(a) Vacation. Xx. XxXxxxxx shall be entitled to
four weeks of paid vacation annually.
(b) Life Insurance. Edac shall pay the premiums on
Xx. XxXxxxxx'x whole life insurance policy with Pacific Life Insurance Co.
(c) Automobile. Edac shall provide Xx. XxXxxxxx
with the use of a Company-owned or leased automobile. In addition, Edac shall
pay, or reimburse Xx. XxXxxxxx for his payment of, the ordinary and reasonable
expenses incurred in the normal operation of such automobile.
(d) Country Club. Pursuant to Edac's policy of
paying all dues and assessments of one country or social club membership for
certain of its key executive officers, Edac shall, during the Employment Term,
pay all dues and assessments associated with a family membership for Xx.
XxXxxxxx in the Farmington C. Club. Edac shall also reimburse Xx. XxXxxxxx for
all expenses incurred at such club on behalf of Edac.
(e) Reimbursement for Reasonable Business Expenses.
Edac shall pay or reimburse Xx. XxXxxxxx for reasonable expenses incurred by him
in connection with the performance of his duties pursuant to this Agreement,
including, but not limited to, travel expenses, expenses in connection with
trade shows, seminars, professional conventions or similar professional
functions and other reasonable business expenses.
6. Termination of Employment.
(a) Termination for Death, Disability or Cause.
Xx. XxXxxxxx'x employment hereunder shall automatically terminate upon his
death. In addition, Edac shall be entitled to terminate Xx. XxXxxxxx'x
employment at any time upon his "Disability." For purposes of this Agreement,
"Disability" shall mean a physical or mental sickness or injury which renders
Xx. XxXxxxxx incapable of performing the services required of him as an employee
of Edac and which does or may be expected to continue for more than three months
during any twelve-month period. Edac and Xx. XxXxxxxx shall determine the
existence of a Disability and the date upon which it occurred. In the event of a
dispute regarding whether or when a Disability occurred, the matter shall be
referred to a medical doctor selected by Edac and Xx. XxXxxxxx. If they fail to
agree upon such a medical doctor, Edac and Xx. XxXxxxxx shall each select a
medical doctor and the two doctors so selected shall together select a third
medical doctor who shall make the determination. The determination by the
selected medical doctor shall be conclusive and binding upon the parties hereto.
If it becomes apparent that the Disability
renders Xx. XxXxxxxx unable to discharge his responsibilities and is supported
by medical evidence that his return cannot be determined, Edac may, in its
discretion, terminate or modify this Agreement once it is established that Xx.
XxXxxxxx will not return to full-time status.
Edac may also terminate Xx. XxXxxxxx'x
employment under this agreement for "Cause," effective immediately upon delivery
of notice to Xx. XxXxxxxx. "Cause" shall mean:
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(i) the willful and continued failure of
Xx. XxXxxxxx to perform substantially Xx. XxXxxxxx'x duties with Edac or its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to Xx. XxXxxxxx by the Board which specifically identifies the
manner in which the Board believes that Xx. XxXxxxxx has not substantially
performed his duties and after Xx. XxXxxxxx is given a reasonable period of time
to rectify or eliminate such failure;
(ii) the willful engaging by Xx. XxXxxxxx in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to Edac; or
(iii) the commission by Xx. XxXxxxxx of
fraud or dishonesty with respect to Edac or a material misrepresentation by Xx.
XxXxxxxx to Edac's shareholders or directors.
Notwithstanding anything herein to the contrary, no act or failure to act, on
the part of Xx. XxXxxxxx, shall be considered "willful" unless it is done, or
omitted to be done, by Xx. XxXxxxxx in bad faith or without reasonable belief
that Xx. XxXxxxxx'x action or omission was in the best interests of Edac. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of a more senior officer of Edac
or based upon the advice of counsel for Edac shall be conclusively presumed to
be done, or omitted to be done, by Xx. XxXxxxxx in good faith and in the best
interests of Edac. The cessation of employment of Xx. XxXxxxxx shall not be
deemed to be for Cause unless and until there shall have been delivered to Xx.
XxXxxxxx a copy of a resolution duly adopted by the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
Xx. XxXxxxxx and Xx. XxXxxxxx is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, Xx. XxXxxxxx is guilty of the conduct described in subparagraph (i), (ii)
or (iii) above, and specifying the particulars thereof in detail.
If Xx. XxXxxxxx'x employment terminates due to
his Disability or death, or Xx. XxXxxxxx voluntarily terminates his employment
or is terminated by Edac for Cause, Xx. XxXxxxxx shall be entitled to receive
his Base Salary and vested fringe benefits prorated to the date of termination.
In addition, in the event of a termination due to Xx. XxXxxxxx'x death or
Disability, Xx. XxXxxxxx shall also receive a prorated Cash Bonus for the year
of termination. The amount of the prorated Cash Bonus shall be determined by the
Compensation Committee and paid as soon as possible after such determination.
(b) Termination Without Cause. Notwithstanding
anything in this Agreement to the contrary, if Xx. XxXxxxxx'x employment is
terminated by Edac for any reason other than for Cause, Disability or death, or
if this Agreement is terminated by Edac for what Edac believes is Cause or
Disability, and it is ultimately determined that Xx. XxXxxxxx was wrongfully
terminated, Xx. XxXxxxxx shall, as full and liquidated damages for such
termination, receive a severance payment equal to 24 months of Base Salary plus
two times the average of the three highest annual bonus payments Xx. XxXxxxxx
received during the five fiscal years prior to the termination or, if he was
employed less than five fiscal years at the time of termination, the average of
the annual bonuses paid to Xx. XxXxxxxx during his employment.
7. Noncompetition. The parties agree that Edac's supplier,
customer, vendor and employee contacts and relations are established and
maintained at great expense and, by virtue of Xx. XxXxxxxx'x employment with
Edac, Xx. XxXxxxxx will have unique and extensive exposure to and personal
contact with Edac's suppliers, customers, vendors and employees and that he will
be able to establish a unique relationship with those individuals and entities
that will enable him, both during and after employment, to unfairly compete with
Edac. Further, the parties agree that the terms and conditions of the following
restrictive covenants are reasonable and necessary for the protection of Edac's
business, trade secrets and confidential information and to prevent great damage
or loss to Edac as a result of action taken by Xx. XxXxxxxx. Xx. XxXxxxxx
acknowledges that the noncompete restrictions and nondisclosure of confidential
information restrictions contained in this Agreement are reasonable and the
consideration provided for herein is sufficient to fully and adequately
compensate Xx. XxXxxxxx for agreeing to such restrictions. Xx. XxXxxxxx
acknowledges that he could continue to actively pursue his career and earn
sufficient compensation in the same or similar business without breaching any of
the restrictions contained
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in this Agreement. For purposes of this section 7 and section 8 below, "Edac"
shall refer to each of Edac Technologies Corporation and each of its
subsidiaries.
(a) During Term of Employment. Xx. XxXxxxxx
covenants and agrees that, during his employment with Edac, he shall not,
directly or indirectly, either individually or as an employee, principal, agent,
partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor,
consultant or in any other capacity, participate in, become associated with,
provide assistance to, engage in or have a financial or other interest in any
business, activity or enterprise which is competitive with Edac or any successor
or assign of Edac. The ownership of less than a one percent interest in a
corporation whose shares are traded in a recognized stock exchange or traded in
the over-the-counter market, even though that corporation may be a competitor of
Edac, shall not be deemed financial participation in a competitor.
(b) Upon Termination of Employment. Xx. XxXxxxxx
agrees that for a two-year period after Xx. XxXxxxxx'x employment with Edac
terminates for any reason, he will not, directly or indirectly, either
individually or as an employee, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant or in any other capacity:
(i) Request or advise any of the customers,
vendors, suppliers, or other business contacts of Edac who currently have or
have had business relationships with Edac within two years preceding the date of
such action, to withdraw, curtail or cancel any of their business or relations
with Edac.
(ii) Induce or attempt to induce any
employee, sales representative, supplier, consultant or personnel of Edac to
terminate his or her relationship or breach his or her agreements with Edac.
(iii) Participate in, become associated
with, provide assistance to, engage in or have a financial or other interest in
any business, activity or enterprise which is competitive with the business of
Edac or any successor or assign of Edac and which conducts such competitive
business within the United States; provided, however, that the ownership of less
than 1% of the stock of a corporation whose shares are traded in a recognized
stock exchange or traded in the over-the-counter market, even though that
corporation may be a competitor of Edac, shall not be deemed financial
participation in a competitor.
8. Confidential Information. The parties agree that Edac's
customers, business connections, customer lists, procedures, operations,
techniques, customer profiles and other aspects of its business are established
at great expense and protected as confidential information and provide Edac with
a substantial competitive advantage in conducting its business. The parties
further agree that, by virtue of Xx. XxXxxxxx'x employment with Edac, he will
have access to, and be entrusted with, secret, confidential and proprietary
information, and that Edac would suffer great loss and injury if Xx. XxXxxxxx
would disclose this information or use it to compete with Edac. Therefore, Xx.
XxXxxxxx agrees that during the term of his employment, and for a period ending
on the earlier of (a) two years after the termination of his employment with
Edac or (b) the date on which the information referred to in this section
becomes publicly known through no fault of Xx. XxXxxxxx, he will not, directly
or indirectly, either individually or as an employee, agent, partner,
shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant
or in any other capacity, use or disclose, or cause to be used or disclosed, any
secret, confidential or proprietary information acquired by Xx. XxXxxxxx during
his employment with Edac whether owned by Edac prior to or discovered and
developed by Edac subsequent to Xx. XxXxxxxx'x employment, and regardless of the
fact that Xx. XxXxxxxx may have participated in the discovery and the
development of that information.
9. Law of Torts and Trade Secrets. The parties agree that
nothing in this Agreement shall be construed to limit or negate the statutory or
common law of torts or trade secrets where it provides Edac with broader
protection than that provided herein.
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10. Waiver. The failure of either party to insist, in any
one or more instances, upon performance of the terms or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right
granted hereunder or of the future performance of any such term, covenant or
condition.
11. Notices. Any notice to be given hereunder shall be
deemed sufficient if addressed in writing, and delivered by registered or
certified mail or delivered personally, in the case of Edac, to its principal
business office, and in the case of Xx. XxXxxxxx, to his address appearing on
the records of Edac, or to such other address as he may designate in writing to
Edac.
12. Severability. If any provision of this Agreement is
held to be invalid or unenforceable for any reason whatsoever, it is agreed such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and any court of competent jurisdiction may so
modify the objectionable provision as to make it valid, reasonable and
enforceable. Furthermore, the parties specifically acknowledge that the
provisions of sections 7(a), 7(b)(i), 7(b)(ii) and 7(b)(iii) are each separate
and independent agreements.
13. Amendment. This Agreement may only be amended by an
agreement in writing signed by all of the parties hereto.
14. Benefit. This Agreement shall be binding upon and inure
to the benefit of and shall be enforceable by and against Edac, its successors
and assigns and Xx. XxXxxxxx, his heirs, beneficiaries and legal
representatives. It is agreed that the rights and obligations of Xx. XxXxxxxx
may not be delegated or assigned.
15. Entire Agreement. Except for the Change of Control
Agreement between Xx. XxXxxxxx and Edac, if any, the provisions of which will
control in the event of a conflict with the provisions of this Agreement, this
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
The parties have executed or caused this Agreement to be
executed as of the day, month and year first above written.
EDAC TECHNOLOGIES CORPORATION
BY/s/Xxxxxx Xxxxxxxxx
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Its Compensation Committee Chairman
/s/Xxxxxx X. XxXxxxxx
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Xxxxxx X. XxXxxxxx
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