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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 4th day of June, 1997, by and between
CENTRUM ACQUISITION CORPORATION, a Tennessee corporation (hereinafter called
"Corporation") whose principal place of business is located at 0000 Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, and XXXXXX X. XXXXXXXX (hereinafter called
"Employee") an individual residing at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx
00000.
WITNESSETH:
WHEREAS, CORPORATION, CENTRUM INDUSTRIES, INC., a Delaware corporation
("Centrum"), Employee, XXXXXX FORGE INTERNATIONAL, INC., a Tennessee
corporation ("Xxxxxx") and other stockholders of Xxxxxx are parties to an Asset
Purchase Agreement (hereafter referred to as the "Acquisition Agreement"),
dated April 29, 1997, as amended May 14, 1997, pursuant to which the
Corporation acquired substantially all of the assets of Xxxxxx; and
WHEREAS, Employee indirectly owns a portion of the outstanding capital
stock of Xxxxxx and will receive direct financial benefits from the
consummation of the transactions set forth in the Acquisition Agreement; and
WHEREAS, as a material and significant inducement to the Corporation
and Centrum to enter into and consummate the transactions set forth in the
Acquisition Agreement, Employee has agreed to be employed by the Corporation
and assist Centrum in matters relating to the change of ownership contemplated
by the Acquisition Agreement; and
WHEREAS, Employee has extensive experience and abilities which are
valuable to Centrum in assisting in the operation of the Corporation; and
WHEREAS, Centrum is desirous of having Employee employed with the
Corporation upon the terms and conditions of this Agreement, which terms and
conditions are agreeable to Employee.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound thereby, the parties agree as
follows:
1. EMPLOYMENT. For a term of one (1) year commencing June 4,
1997 and ending on June 4, 1998, the Corporation agrees to employ Employee, and
Employee agrees to serve the Corporation. During the term of his employment,
Employee shall, on a fulltime basis, devote all of his time, attention and
energies to the business of the Corporation; shall render efficient,
industrious and loyal services; and shall assume and perform such
responsibilities and duties in connection therewith as may be assigned to him
from time to time by the President of the Corporation, as more particularly
described in Paragraph 2 hereof. Termination of Employee's employment for
cause, as provided in Paragraph 7 of this Agreement, or an involuntary
termination by Employee, shall constitute a failure of Employee to comply with
the terms of this paragraph.
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2. DUTIES. Employee shall initially serve as Vice
President-Operations of the Corporation and shall render such services as are
necessary to carry out the duties of said position and such additional duties
as may be assigned to him from time to time by the President.
3. COMPENSATION. During Employee's employment under this
Agreement, the Corporation agrees to pay Employee compensation of an annual
salary equal to the sum of One Hundred Thousand Dollars ($100,000.00).
4. EXPENSES.
(a) During the term of this Agreement, Employee shall be
entitled to continue to use at no additional expense the company car currently
driven by Employee or a similar replacement vehicle at the expiration of the
current car lease, consistent with the Corporation's practices in effect from
time to time. Employee shall be reimbursed for all reasonable expenses
incurred in the operation and maintenance of such car consistent with the
Corporation reimbursement procedures and practices in effect from time to time.
(b) The Corporation will reimburse Employee for all
reasonable and necessary expenses, including without limiting the foregoing,
travel, entertainment, and promotional expenses, incurred by Employee in
carrying out his duties under this Agreement upon the presentation to the
Corporation by Employee from time to time of an itemized account of such
expenses in such form as may be required by the Corporation.
5. FRINGE BENEFITS. During the period of his employment,
Employee shall be afforded the right to participate in any and all group
insurance, medical and health care plans and other employee benefit plans as
are generally made available to other employees of the Corporation and the
right to participate in the profitsharing plans and stock option plans of
Centrum consistent with executives of other Centrum companies; provided,
however, in no event shall Employee's group life insurance benefits and long
term disability income benefit be less than that previously provided to
Employee by Xxxxxx. Employee shall be entitled to three (3) weeks of paid
vacation leave during the term of this Agreement, the scheduling of which shall
be subject to the approval of the President of the Corporation.
6. ILLNESS, OTHER MEDICAL DISABILITY OR DEATH. If Employee
should be prevented from performing his duties by reason of illness, incapacity
or other medical disability for a period of six (6) months or more, service and
compensation (other than that which shall have accrued and remains unpaid)
under this Agreement will cease. When such illness, incapacity or other medical
disability has ended, Employee shall resume his duties under this Agreement and
again become entitled to receive compensation hereunder. Such illness or other
medical disability shall not extend the terms of this Agreement. If Employee
should be prevented from performing his duties by reason of death, the
Corporation shall pay any salary or disability payment due for the month of
Employee's death to Employee's designated beneficiary or surviving spouse, in
the order named, or
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if none to the personal representative of Employee's estate, as the case may
be, and this Agreement shall be terminated and of no further force and effect
upon such payment.
7. TERMINATION FOR CAUSE. Corporation may discharge Employee at
any time for:
(a) an act of theft; embezzlement or felony related to
his employment duties with the Corporation;
(b) criminal conduct (whether or not related to
Employee's employment) or any other act or omission resulting or intended to
result directly or indirectly in gain to, or personal enrichment of, Employee
at the Corporation's expense;
(c) conviction of a crime of moral turpitude or
dishonesty;
(d) habitual intoxication or drug addiction;
(e) any violation of any express direction or any
reasonable rule or regulation established by the Corporation from time to time
regarding the conduct of its business or any act or omission constituting gross
misconduct which is or is intended to be injurious to the Corporation;
(f) the willful failure of Employee to perform his duties
hereunder; or
(g) any violation by Employee of the terms and conditions
of this Agreement or any other agreement between the Corporation and Employee,
in which event the Corporation shall have no further obligations or liabilities
hereunder after the date of such discharge.
8. SEVERANCE PAYMENTS. Upon the concurrence of a "Severance
Event" as hereafter defined, the Corporation shall continue to pay to Employee
for the Severance Period the monthly base salary Employee was receiving from
the Corporation immediately prior to the occurrence of such Severance Event;
provided, however, such severance payments to Employee shall be reduced by any
salary or consulting income received by Employee from any source during the
Severance Period. In the event Employee breaches any provision of this
Agreement, all obligations of the Corporation to make severance payments to
Employee pursuant to this Agreement shall cease. For purposes of this
Agreement, a "Severance Event" shall mean: (i) the termination of Employee's
employment with the Corporation by the Corporation other than a termination for
cause as provided for in paragraph 7 hereof. The "Severance Period" shall mean
a period of time equal to the remaining term of this Agreement following a
Severance Event.
9. NONCOMPETITION, TRADE SECRETS, ETC. As an inducement to the
Corporation to execute this Agreement,
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(a) Employee covenants and agrees with the Corporation
that at all times during the term of his employment hereunder, including
extensions thereof, and for a term equal to one (1) year following his
termination of employment with the Corporation or any of its subsidiaries (the
"Restrictive Period"), within the area where the Corporation, Centrum's wholly
owned subsidiary XxXxxxx Steel Company, a Pennsylvania corporation ("XxXxxxx")
or any of its subsidiaries presently do business (including, without
limitation, the United States, the Canadian provinces of Ontario and Quebec,
Mexico and Southeast Asia [including but not limited to China, Japan, South
Korea and North Korea]), and where the Corporation does business at the time of
termination of Employee (the "Restrictive Area"), he shall not directly or
indirectly:
(i) solicit, induce or encourage any employee of the
Corporation, XxXxxxx or any of its subsidiaries to terminate his or her
relationship with the Corporation, XxXxxxx or any of its subsidiaries; or
(ii) employ or establish a business relationship
which is competitive with the Corporation, XxXxxxx or any of its subsidiaries
with any individual who was employed by Xxxxxx, the Corporation, XxXxxxx or any
of its subsidiaries during the preceding twelve (12) month period; or
(iii) encourage or assist any individual or entity
in a business which is competitive with the Corporation, XxXxxxx or any of its
subsidiaries to employ or establish a business relationship with any individual
who was employed by Xxxxxx, the Corporation, XxXxxxx, or any of its
subsidiaries during the preceding twelve (12) month period; or
(iv) solicit, induce or encourage any suppliers,
customers or prospective customers to terminate or reduce in scope their
relationship with the Corporation, XxXxxxx or any of its subsidiaries; or
(v) solicit or assist any individual or entity in the
solicitation of business from, or performance of work for, any customers or
prospective customers of the Corporation, XxXxxxx or any of its subsidiaries;
or
(vi) engage in (as a principal, agent, consultant,
partner, director, officer, employee, stockholder, investor or otherwise),
alone or in association with any person or entity, or be financially interested
in, any business which is competitive with the Corporation, XxXxxxx or any of
its subsidiaries. Notwithstanding the foregoing, Employee shall be entitled to
hold shares of a publiclytraded company so long as such shares do not represent
more than one percent (1%) of the outstanding capital of such company.
(b) For purposes of paragraph 9, "customers" shall mean
those customers for whom Xxxxxx, the Corporation, XxXxxxx or any of its
subsidiaries supplied products to or performed services during the twelve (12)
months preceding the date in question, and "prospective customers" shall mean
persons or entities whose business was solicited by Xxxxxx, the Corporation,
XxXxxxx or any of its subsidiaries during the twelve (12) months preceding the
date in question.
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(c) Employee shall not use for his personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of any person, firm, association or company,
(i) any information regarding the business methods,
business policies, business strategies, marketing plans, survey procedures,
statistical techniques, research or development projects or results, trade
secrets or other confidential knowledge or processes of, or developed by,
Xxxxxx, the Corporation, XxXxxxx or any of its subsidiaries, or
(ii) any confidential data on or relating to past,
present or prospective customers of Xxxxxx, the Corporation, XxXxxxx or any of
its subsidiaries, or
(iii) budgets, forecasts, pricing information or
unpublished financial information or any other confidential information
relating to or dealing with the business operations or activities of Xxxxxx,
the Corporation, XxXxxxx or any of its subsidiaries.
(d) Employee acknowledges and agrees that:
(i) the covenants set forth herein are essential
elements of the transactions contemplated by the Acquisition Agreement, that
Employee is receiving adequate consideration hereunder, that Employee possesses
special facts above and beyond ordinary competition that would give him an
unfair advantage should he desire to compete with the Corporation and that such
covenants are reasonable and necessary in order to protect the legitimate
interests of the Corporation;
(ii) the Corporation will not have any adequate
remedy at law if Employee violates the terms hereof or fails to perform any of
his obligations hereunder; and
(iii) the Corporation shall have the right, in
addition to any other rights either may have under applicable law, to obtain
from any court of competent jurisdiction preliminary and permanent injunctive
relief to restrain any breach or threatened breach of, or otherwise to
specifically enforce any such covenant or any other obligations of Employee
under this Agreement, as well as to obtain damages and an equitable accounting
of all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Corporation may be entitled.
(e) If the Restrictive Period or the Restrictive Area set
forth in paragraph 9(a) should be adjudged unreasonable in any proceeding, then
the Restrictive Period shall be reduced by such number of months or the
Restrictive Area shall be reduced by the elimination of such unreasonable
portion thereof, or both, so that such restrictions may be enforceable for such
time and in the manner adjudged to be reasonable. If Employee violates any of
the restrictions contained in paragraph 9(a), then the Restrictive Period shall
not run in favor of Employee from the time of the commencement of any such
violation until such time as such violation shall be cured by Employee.
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10. INFORMATION REGARDING AGREEMENT. During the term of this
Agreement and during the Restrictive Period, Employee shall not make the terms
and conditions of this Agreement known to any business, entity, or persons
engaged in activities competitive with the Corporation's business with which he
becomes associated subsequent to the termination of his employment with the
Corporation prior to his association with any such business, entity or persons.
The Corporation shall have the right to make the terms of this Agreement known
to third persons.
11. RETURN OF COMPANY PROPERTY. At the time of Employee's
termination of employment with the Corporation or upon demand by the
Corporation, whichever is sooner, Employee shall promptly turn over to the
Corporation all files, documents, business records and any other records,
documents, writings of any kind whatsoever, and all assets of any kind
whatsoever, that belong to the Corporation. Employee shall not copy or record
in any manner whatsoever the information contained in the foregoing materials
and shall turn over any copies or recordings of any kind whatsoever containing
information derived directly or indirectly from the aforestated materials.
12. SURVIVAL OF COVENANTS. The covenants in Sections 9, 10 and 11
and acknowledgments of the Employee set forth in this Agreement shall survive
the termination of this Agreement, regardless of the cause therefor.
13. REMEDIES. In the event of any violation of any of the
covenants contained in Sections 9, 10 or 11, the Corporation shall be
authorized to obtain preliminary and permanent injunctive relief as well as an
equitable accounting of any profits or benefits arising out of such violation,
which rights and remedies shall be cumulative and in addition to any other
rights or remedies to which the Corporation may be entitled. In the event of
the violation of any of the restrictions contained in Sections 9, 10 or 11, the
period, if any, therein specified shall xxxxx during the time of violation
thereof and that portion remaining at the time of commencement of any violation
shall not begin to run until such violation has been fully and finally cured.
14. WAIVER. The waiver by the Corporation of the breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by it. No waiver by the Corporation shall be
legally operative unless reduced to writing and executed by the Corporation.
15. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered personally or by recognized
overnight courier service or by facsimile to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
(i) If to EMPLOYEE:
Xxxxxx X. Xxxxxxxx
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0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
with a COPY, given in the manner prescribed above, to:
Xxxxxxx X. Xxxxxx, Esq.
Black, Bobango & Xxxxxx
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
(ii) If to CORPORATION:
Centrum Acquisition Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Fax No.: (000) 0000000
and
Centrum Industries, Inc.
c/o McInnes Steel Company
000 X. Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Chief
Financial Officer
Fax No.: (000) 000-0000
with a COPY, given in the manner prescribed above, to:
Xxxx X. Xxxxxxx XX, Esq.
Xxxxxx & Xxxxx P.L.L.
Xxx XxxXxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxx, Xxxx 000000000
Fax No.: (000) 0000000
16. ENTIRE AGREEMENT; AMENDMENT OR TERMINATION; WAIVER. This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof. This Agreement may not be amended or
terminated except by a written instrument, signed by each of the parties
hereto, expressing such amendment or termination. No failure on the part of any
party to exercise and no delay in exercising any right, power or remedy
hereunder shall operate as a
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waiver thereof; nor shall any single or partial exercise of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
17. GENERAL TERMS. This Agreement is personal in nature and
(a) neither of the parties hereto shall assign or
transfer this Agreement without the written consent of the other, except that
the Corporation may assign or transfer this Agreement,
(i) to any successor corporation in the event of
merger, consolidation or transfer or sale of the business of the Corporation in
which Employee is engaged; or
(ii) to a parent or subsidiary corporation which may
be organized to conduct the business of the Corporation, in which Employee is
engaged.
(b) In any of the aforesaid events, Employee shall remain
liable to the Corporation, or its successor and assignees.
18. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee; provided,
however, that if any provision of this Agreement shall be deemed invalid or
unenforceable under the laws of the State of Tennessee, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of Ohio.
20. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Corporation has caused its appropriate officer
to sign this Agreement, and Employee has signed this Agreement.
CENTRUM ACQUISITION CORPORATION
TO BE KNOWN AS XXXXXX FORGE
COMPANY
By /s/ Xxxxxxx X. Xxxxxx
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EMPLOYEE
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Witness:
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxx
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