AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
dated as of February 13, 2005, by and between EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Edac"), and Xxxxxxxx Xxxxxx ("Xx. Xxxxxx").
RECITAL
Edac and Xx. Xxxxxx are parties to an Amended and Restated Employment
Agreement dated as of February 13, 2004 (the "Employment Agreement");
Edac and Xx. Xxxxxx each desire to amend and restate the Employment
Agreement 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. Xxxxxx and Xx. Xxxxxx
hereby accepts employment with Edac on the terms and conditions set forth in
this Agreement.
2. Term. The initial term of Xx. Xxxxxx'x employment hereunder
shall commence on the date hereof and continue for a period ending on December
31, 2005, subject to earlier termination as set forth in this Agreement. The
term of Xx. Xxxxxx'x employment will automatically be extended for successive
periods of 90 days unless either party notifies the other in writing to the
contrary at least 30 days prior to any the end of the then current term of this
Agreement. The term of employment is referred to in this Agreement as the
"Employment Term."
3. Duties. Xx. Xxxxxx 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. Xxxxxx 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. Xxxxxx shall supervise the operations of Edac and perform those
duties normally associated with the offices of President and Chief Executive
Officer. Xx. Xxxxxx shall also perform such additional duties and
responsibilities which may from time to time be reasonably assigned or delegated
by the Board. It is understood and acknowledged that Xx. Xxxxxx will be employed
on less than a full time basis, but that he will devote a sufficient part of his
business time, effort, skill and attention to perform his duties while employed
by Edac.
4. Compensation.
(a) Base Salary. Xx. Xxxxxx shall receive a base salary
of $15,000 per month, payable in regular and equal installments in accordance
with Edac's payroll practices as in effect from time to time (the "Base
Salary").
(b) Directors' and Officers' Insurance. Xx. Xxxxxx will
be named as an insured under Edac's policies of directors' and officers'
liability insurance in such a manner as to provide Xx. Xxxxxx with the same
rights and benefits thereunder as are accorded to Edac's other executive
officers and directors.
5. Reimbursement for Reasonable Business Expenses. Edac shall pay
or reimburse Xx. Xxxxxx 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; Voluntary
Termination. Xx. Xxxxxx'x employment hereunder shall automatically terminate
upon his death. In addition, Edac shall be entitled to terminate Xx. Xxxxxx'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. Xxxxxx 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. Xxxxxx 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. Xxxxxx. If they fail to
agree upon such a medical doctor, Edac and Xx. Xxxxxx 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. Xxxxxx 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. Xxxxxx will not return to
full-time status.
Edac may also terminate Xx. Xxxxxx'x employment under this agreement
for "Cause," effective immediately upon delivery of notice to Xx. Xxxxxx.
"Cause" shall mean:
(i) the willful and continued failure of Xx. Xxxxxx
to perform substantially Xx. Xxxxxx'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.
Xxxxxx by the Board which specifically identifies the manner in which the Board
believes that Xx. Xxxxxx has not substantially performed his duties and after
Xx. Xxxxxx is given at least 10 days to rectify or eliminate such failure;
(ii) the willful engaging by Xx. Xxxxxx in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
Edac;
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(iii) the commission by Xx. Xxxxxx of fraud or
dishonesty with respect to Edac which is materially and demonstrably injurious
to Edac or a material misrepresentation by Xx. Xxxxxx to Edac's shareholders or
directors; or
(iv) a material breach of the terms of this
Agreement that is demonstratively injurious to Edac, which material breach is
not cured by Xx. Xxxxxx within 10 days of written notice by Edac to Xx. Xxxxxx
specifying the material breach in reasonable detail.
If Xx. Xxxxxx'x employment terminates due to his Disability or death,
or if Xx. Xxxxxx voluntarily terminates his employment (other than for Good
Reason) or if Xx. Xxxxxx is terminated by Edac for Cause, Xx. Xxxxxx shall be
entitled to receive his Base Salary and vested fringe benefits prorated to the
date of termination. If either Edac or Xx. Xxxxxx elects not to renew this
Agreement pursuant to Section 2 hereof, Xx. Xxxxxx shall be entitled to receive
his Base Salary and vested fringe benefits to the end of the then-current
Employment Term.
(b) Termination Without Cause or for Good Reason.
Notwithstanding anything in this Agreement to the contrary, (i) if Xx. Xxxxxx'x
employment is terminated by Edac for any reason other than for Cause, Disability
or death, or (ii) if this Agreement is terminated by Edac for what Edac believes
is Cause or Disability, and it is ultimately determined that Xx. Xxxxxx was
wrongfully terminated, or (iii) if this Agreement is terminated by Xx. Xxxxxx
for Good Reason, Xx. Xxxxxx shall, as full and liquidated damages for such
termination, receive a severance payment equal to his Base Salary for the then
remaining Employment Term of this Agreement (excluding any additional renewals
thereof) (the "Severance"). The Company shall pay the Severance in a single
installment payable within 30 days following the termination of Xx. Xxxxxx'x
employment.
For purposes of this Agreement, Xx. Xxxxxx shall have "Good Reason" to
terminate this Agreement (a) if, during the initial term of this Agreement
ending on December 31, 2005, any of the present directors of the Company do not
continue to be a director of the Company for any reason, other than death,
disability or vote by shareholders and a new director is elected or appointed to
fill such vacancy; (b) if, during the initial term of this Agreement ending on
December 31, 2005, the size of the Board is increased by the Board, except as a
result of shareholder action, and a new director (or directors) is (are)
appointed by the Board to fill the vacancy or vacancies created by such
increase; or (c) if the ability of Xx. Xxxxxx to carry out his duties and
responsibilities as President and Chief Executive Officer of Edac as set forth
in this Agreement is circumvented or undermined by the actions of the Board in
communicating directly with employees of Edac (other than any such
communications contemplated by applicable law, regulation or stock market rule,
or by any of Edac's policies or procedures established by the Board in
connection with the same).
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. Xxxxxx'x employment with Edac,
Xx. Xxxxxx 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. Xxxxxx. Xx. Xxxxxx
acknowledges that
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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. Xxxxxx
for agreeing to such restrictions. Xx. Xxxxxx 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 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. Xxxxxx 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. 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. Xxxxxx agrees that
for a one-year period after Xx. Xxxxxx'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 located within the Territory (as defined below) which is
competitive with the business of Edac or any successor or assign of Edac and
which conducts such competitive business within the Territory; 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. For purposes
of this Agreement, the term "Territory" shall mean the United States of America.
The Board may, in its sole discretion and at any time prior to the termination
of Xx. Xxxxxx'x employment by Edac, expand the Territory to include those
countries in which the Company or any of its subsidiaries does business.
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. Xxxxxx'x employment with Edac, he will have
access
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to, and be entrusted with, secret, confidential and proprietary information, and
that Edac would suffer great loss and injury if Xx. Xxxxxx would disclose this
information or use it to compete with Edac. Therefore, Xx. Xxxxxx 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. Xxxxxx, 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. Xxxxxx during his employment with Edac whether owned
by Edac prior to or discovered and developed by Edac subsequent to Xx. Xxxxxx'x
employment, and regardless of the fact that Xx. Xxxxxx may have participated in
the discovery and the development of that information, except for any such
information disclosed to Xx. Xxxxxx by a third party who was not under any
obligation of confidence or secrecy to the Company at the time of such
disclosure.
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.
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. Xxxxxx, 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. Xxxxxx, his heirs, beneficiaries and legal representatives. It
is agreed that the rights and obligations of Xx. Xxxxxx may not be delegated or
assigned.
15. Entire Agreement. Except as provided under Section 17 hereof,
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 (including,
without limitation, the Consulting Agreement, dated as of July 18,
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2002, the Employment Agreement, dated as of August 13, 2002, the Amended and
Restated Employment Agreement, dated as of February 13, 2003, and the Amended
and Restated Employment Agreement, dated as of February 13, 2004, each by and
between Edac and Xx. Xxxxxx).
16. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
17. Release. Xx. Xxxxxx and Edac are parties to a Mutual Release
dated as of August 13, 2002. Such Mutual Release remains in all respects in full
force and effect and is not, in any manner, superseded by this Agreement.
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 X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
Its Chairman
/s/ Xxxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx Xxxxxx
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