EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 24th
day of March, 2004, by and between ERICO International Corporation, an Ohio
corporation (the "Company") and Xxxxxxx X. Xxxxxxxxxxx (the "Employee"), a
resident of Bentleyville, Ohio, U.S.A. Except with respect to Exhibit A, this
Agreement amends and restates the previous employment agreement entered into
between the Company and the Employee dated August 19, 2002. This Agreement does
not in any way limit the at will nature of the Employee's employment with the
Company.
In consideration of the employment of the Employee hereinafter by the
Company, the compensation to be paid to the Employee in connection with such
employment, the Employee's increased employment responsibilities (if
applicable), and the Employee's employment bonus, the parties hereto hereby
agree as follows:
1. Duties. During the period of employment with the Company, the
Employee shall devote his best efforts and entire working time to the
furtherance of the interests of the Company and the performance of his assigned
duties hereunder. The Employee shall not, directly or indirectly, engage in or
have any interest in, any business or activity that is in competition with any
aspect of the Company's business or interferes in any way with the rendering of
the Employee's services to the Company.
2. Compensation. Employee shall receive an annual base salary beginning
for the year 2004 of $217,308, which will be paid bi-monthly on the 15th and the
last day of the month. Employee shall be eligible to receive an annual
discretionary bonus up to a maximum amount of 100% of annual base salary
pursuant to the terms of the bonus plan for senior managers of the
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Company adopted by the Board of Directors. For the year 2004, Employee is
guaranteed to make a minimum of $300,000 in total cash compensation. All
guarantees are assuming continuous active employment through the end of each
designated year.
3. Other Benefits. Employee shall receive the same benefit package as
is provided to the other principal officers of the Company. There will be no
elimination or reduction of Employee's participation in any benefit, benefit
plan or corporate bonus plan generally available to executive employees of the
Company, unless the Company continues to offer benefits or plans substantially
similar to those made available by such benefit or plan; provided, however, that
changes to a plan in which executive employees of the Company generally
participate, including termination of any such plan, are permitted if such
changes (i) do not result in a proportionately greater reduction in the rights
of or benefits to the Employee as compared with the other executive employees of
the Company, (ii) are required by law, or (iii) are merely technical changes.
Employee will receive a monthly car allowance of $525. Employee will be entitled
to four (4) weeks of vacation per year.
4. Change of Control. For purposes of this Agreement, a "Change of
Control" will occur (i) upon the sale or other disposition to a person, entity
or group (as such term is used in Rule 13d-5 promulgated under the Securities
Exchange Act of 1934, as amended) (such a person, entity or group being referred
to as an "Outside Party") of 50% or more of the consolidated assets of the
Company taken as a whole, or (ii) upon the acquisition of shares representing a
majority of the voting power of the Company (including its parent company) by an
Outside Party comprised of persons other than the holders of the capital stock
of the Company and their permitted transferees ("Existing Shareholders") as of
the date of the closing of the contemplated transaction, or (iii) if the
Existing Shareholders and affiliates, including Xxxxxxx X. Xxx, XXXX
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and affiliates, no longer collectively have the ability to elect a majority of
the Board of Directors of the Company or any successor to the Company.
If a Change of Control occurs that results in adverse action for the
Employee, such as (i) diminution in Employee's position, duties,
responsibilities, authority or compensation, (ii) failure for any successor to
the Company to assume the Company's obligations under this Agreement, or (iii)
required relocation within one year of the Change of Control, Employee may
terminate his employment with the Company and upon termination be entitled to
receive severance equal to his prior year's total W-2 wages. Employee will not
be entitled to this severance payment if at the time he terminates his
employment with the Company because of an adverse action due to a Change of
Control the value of stock Employee holds in the Company exceeds $1,000,000 and
Employee had in that transaction the availability to sell those stock holdings
and realize that value in cash at the time of that transaction or termination.
5. "Trade Secret" and "Invention" Defined. For purposes of this
Agreement, "trade secret" shall be defined to mean business or technical
information, including but not limited to, a formula, pattern, program, device,
compilation of information, method, technique, process, drawing, cost data, or
customer list that (1) derives independent actual or potential commercial value
from not being generally known or readily ascertainable through independent
development or reverse engineering by persons who can obtain economic value from
its disclosure or use; and (2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
For purposes of this Agreement, "invention" shall mean any new
machines, manufactures, methods, processes, uses, apparatuses, compositions of
matter, designs, or configurations of any kind, discovered, conceived,
developed, made, or produced, or any
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improvements to them, and shall not be limited to the definition of an invention
contained in the United States patent laws.
6. Secrecy Agreement. The Employee recognizes that during his
employment, he may receive, develop, or otherwise acquire trade secrets of the
Company that are of a secret or confidential nature. The Employee acknowledges
that the trade secrets of the Company are secret, confidential, unique, and
valuable, were developed by the Company, including any of its parents,
subsidiaries or predecessors, at great cost and over a long period of time, and
that disclosure of any of the trade secrets to anyone other than the Company's
officers, agents, or authorized employees will cause the Company irreparable
injury. The Employee will regard and preserve as secret and confidential all
trade secrets pertaining to the Company's business that have been or may be
obtained by him by reason of employment.
The Employee shall not, without prior express written authorization
from an officer of the Company to do so, use for his own benefit or purposes,
nor disclose to others for their benefit or purposes, either during his
employment with the Company or thereafter, except as may be required in the
regular course of his employment with the Company, any trade secret or other
confidential or proprietary information connected with the business or
developments of the Company. Further, upon termination of employment for any
reason, the Employee agrees not to take or retain or copy any trade secret or
other confidential or proprietary information connected with the business or
developments of the Company, including but not limited to, the Company's
formulas, patterns, programs, devices, compilations of information, methods,
techniques, processes, drawings, cost data, or customer lists.
Should the Company currently be a party to or at any time in the future
enter into, an agreement with another company (the "Outside Company") for the
purpose of research and
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development or any other purpose which might cause the Outside Company to make
known to the Company or the Employee information, data, developments, or trade
secrets which the Outside Company regards as valuable and of a confidential
nature, the Employee agrees that such information and any inventions which
pertain to or stem from knowledge of such information are subject to all terms
and conditions of this Agreement.
It is the intent of the parties hereto that the Employee's agreement to
not disclose or use any confidential or secret information made known by the
Outside Company is for the benefit of the Outside Company, as well as, the
Company, and the Outside Company may use whatever remedy is available to it for
the enforcement of this provision.
7. Invention Assignment. All inventions in or reasonably related to the
business of the Company conceived or made by the Employee, either alone or with
others, during the period of his employment with the Company and up to and
including a period of two (2) years after termination of such employment,
whether or not conceived of or made during his regular working hours, are the
sole property of the Company. The Employee hereby assigns and agrees to assign
all his right, title, and interest in and to those inventions which relate to
the business of the Company, and the Employee agrees not to disclose any of
these inventions to others, without prior express written authorization from an
officer of the Company, except as may be required in the regular course of his
employment with the Company.
8. Prompt Disclosure. The Employee will disclose promptly and in
writing to the officials designated by the Company to receive such disclosures,
all inventions, whether he considers them patentable or not, which he alone or
with others, conceive or make, within the scope of this Agreement.
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9. Assistance. The Employee will, at any time during his employment
with the Company, and after termination of such employment, on request of the
Company, execute specific assignments in favor of the Company or its nominee of
any of the inventions covered by this Agreement, as well as execute all papers
and perform all lawful acts the Company considers necessary or advisable for the
preparation, prosecution, issuance, procurement, and maintenance of patent
applications and patents of the United States and foreign countries for these
inventions, and for the transfer of any interest he may have, and will execute
any and all papers and lawful documents required or necessary to vest title in
the Company or its nominee in the above inventions, patent applications,
patents, and interests. The Employee will execute all documents and assist at
the Company expense in the preservation of all of the Company interests arising
under this Agreement.
10. Return of Company Materials Upon Termination of Employment. Upon
termination of the Employee's employment with the Company for any reason, he
will promptly return to the Company all the Company materials that are in his
possession or control, including but not limited to, all records, drawings,
specifications, or reproductions thereof in any form relating to all trade
secrets, other proprietary or confidential information, or inventions referred
to in this Agreement. Furthermore, the Employee agrees that during and after his
employment with the Company, the Employee will not publish, release or otherwise
make available to any third parties any information describing any the Company
trade secrets, other proprietary or confidential information, or inventions
referred to in this Agreement without prior express written authorization from
an officer of the Company.
11. Employment. It is agreed that this contract for employment shall be
terminable at will by either party without requirement of notice by either
party. The Employee further agrees
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that he shall not rely on any representations which are contrary to at will
employment and that the Company shall not adhere to or enforce any promise of
permanent employment or specific-term employment made to an employee by any
person, except where this Agreement has been modified, in writing, pursuant to
paragraph 14 below.
12. Enforcement of Agreement. The Employee hereby acknowledges and
agrees that in the event of any violation or threatened violation of this
Agreement, the Company shall be authorized and entitled to obtain from any court
of competent jurisdiction preliminary and permanent injunctive relief, as well
as equitable accounting of all 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 Company may be entitled.
The provisions of this Agreement shall inure to the benefit and are
binding on the Employee's heirs, personal representatives, successors, and
assigns, and the heirs, personal representatives, successors, subsidiaries,
affiliates, and assignees of the Company
13. Governing Law. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Ohio.
14. Miscellaneous. No provisions of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by the Employee and an officer of the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto, or compliance with any condition or provision of this Agreement to be
performed by such other party, shall be deemed a waiver of other provisions or
conditions at any time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement.
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15. Severability. The invalidity or unenforceability of a provision of
this Agreement shall not affect the validity of any other provision hereof,
which shall otherwise remain in full force and effect.
16. Exhibits. Any applicable exhibits to this Agreement will be
attached hereto and separately executed by the Employee and the Company. Each
such exhibit is incorporated as though fully set forth herein. The following
exhibits are attached hereto:
Noncompetition Agreement, dated August 19, 2002, attached as Exhibit A.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first above written.
ERICO INTERNATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxx
-----------------------------------
Name: Xxxxxxx X. Xxx
Title: Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxxxxx
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EXHIBIT A
NONCOMPETITION AGREEMENT
The Employee agrees that for a period of two (2) years following the
termination of his employment with ERICO, Inc., (the "Company") whether
voluntary or involuntary and whether initiated by the Company or the Employee,
the Employee shall not directly or indirectly, personally or with other
employees, agents, or otherwise, or on behalf of any other person, firm or
corporation, do or suffer any of the following:
(i) Engage in any competition with the Company, or any of
its subsidiaries or affiliates, in the business of the
manufacture, design, engineering, or sale of products of
whatever kind now or hereafter manufactured or sold by the
Company, including, without limitation, fastening and hanging
connectors, electrical support systems, facility electrical
protection devices, grounding connector devices, mechanical
rebar splicing devices, concrete reinforcement splices and
anchorages and rail bonds. In the event of an actual or
threatened breach of this provision, the Company shall be
entitled to an injunction restraining the Employee from such
action and shall constitute a breach of such provision, and
the Company shall not be prohibited in obtaining such
equitable relief from pursuing any other available remedies
for such breach or threatened breach, including recovery of
damages from the Employee.
(ii) Employ, assist in employing, or otherwise associate
in business with any present, former or future employee,
officer or agent of the Company or any of the Company's
affiliates or subsidiaries.
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(iii) Induce any person who is an employee, officer, agent
or customer of the Company or any of the Company's affiliates
or subsidiaries to terminate their relationship with the
Company or any of the Company's affiliates or subsidiaries.
This Noncompetition Agreement supersedes any prior noncompetition
agreement, whether written or oral, between the parties.
IN WITNESS WHEREOF, the parties have caused this Noncompetition
Agreement, consideration for which is hereby acknowledged, to be executed with
the attached Employment Agreement this 19th day of August, 2002.
ERICO, Inc.
By: /s/ Xxxxxxx X. Xxx
--------------------------------
(OFFICER)
/s/Xxxxxxx X. Xxxxxxxxxxx
--------------------------------
(SIGNATURE OF EMPLOYEE)
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