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EXHIBIT 6.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into as of July
1, 1997 by and between NEUTRAL POSTURE ERGONOMICS, INC., a Texas corporation
(the "COMPANY"), and Xxxxx X. Xxxxxxxx (the "EXECUTIVE").
R E C I T A L S
The Company wishes to assure itself of the services of the Executive
for the period provided in this Agreement and the Executive wishes to enter in
the employ of the Company, on the terms and conditions hereinafter provided.
A G R E E M E N T
Based on the recitals set forth above and the mutual promises and
other good and valuable consideration, the Company and the Executive hereby
agree as follows:
ARTICLE 1
Employment
1.1 Employment. The Company hereby employs the Executive and the
Executive hereby accepts employment by the Company for the period and upon the
terms and conditions contained in this Agreement. The Executive hereby
represents and warrants to the Company that the execution of this Agreement by
the Executive and the Executive's performance of his duties hereunder will not
conflict with, cause a default under, or give any party a right to damages
under any other agreement to which the Executive is a party or is bound.
1.2 Office and Duties.
(a) Position. The Executive shall serve the Company as
President, effective from the date hereof. The Executive shall have
the responsibility and authority to carry out the duties normally
assigned to a President and to perform such other duties or hold such
other offices as may be authorized and directed from time to time by
the Company in the sole discretion of the Board of Directors.
(b) Commitment. Throughout the Term (as hereinafter defined)
of this Agreement, the Executive shall devote substantially all of the
Executive's time, energy, skill and efforts to the performance of the
Executive's duties hereunder in a manner that will faithfully and
diligently further the business and interests of the Company and its
affiliates (the "AFFILIATES"). The Executive further agrees that,
during his employment under this Agreement he will not engage in, or
be otherwise interested in, directly or indirectly, any
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other business or activity that is in conflict or competition with the
business of the Company or the Affiliates.
1.3 Term. The "TERM" (herein so called) of this Agreement shall
commence on the date hereof and shall end on July 1, 2000, unless earlier
terminated in accordance with the terms of this Agreement or unless extended
pursuant to this Section 1.3. After July 1, 2000, this Agreement shall be
automatically renewed each July 1 for one-year terms, unless either the Company
or the Executive provides written notice of election not to renew, at least
ninety (90) days before the applicable July 1.
1.4 Compensation.
(a) Base Salary. The Company shall pay the Executive as
compensation, in accordance with the Company's ordinary payroll and
withholding practices, an aggregate salary ("BASE SALARY") of $135,000
per year during the Term, or such greater amount as shall be approved
by the Company's Board of Directors.
(b) Bonus. The Company shall pay the Executive an annual
bonus for each year during the term of this Agreement. Such bonus
shall be paid by September 30 of each year (with the first bonus
payable by September 30, 1998, relating to the first year of the Term)
during the term of this Agreement, and on or before the September 30
immediately following termination of this Agreement under Section 1.3
above. Such annual bonus shall be determined in accordance with the
Company's policies as determined from time to time by the Compensation
Committee of the Board of Directors.
(c) Payment and Reimbursement of Expenses. During the Term,
the Company shall pay or reimburse the Executive for all reasonable
travel and other expenses incurred by the Executive in performing the
Executive's obligations under this Agreement in accordance with the
policies and procedures of the Company for its officers, provided that
the Executive properly accounts therefor in accordance with the
regular policies of the Company.
(d) Fringe Benefits and Perquisites. During the Term, the
Executive shall be entitled to participate in or receive benefits
under any plan or arrangement generally made available by the Company
to its officers and employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans
and arrangements.
(e) Vacations. During the Term and in accordance with
the regular policies of the Company, the Executive shall be entitled
to the number of paid vacation days in each calendar year determined
by the Company from time to
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time for its officers generally, but not fewer than four (4) weeks in
any calendar year (prorated in any calendar year in which the
Executive is employed hereunder for less than the entire year in
accordance with the number of days in such calendar year during which
the Executive is so employed). Unused vacation days shall be forfeited
or otherwise disposed of pursuant to the Company's policy as in effect
from time to time.
(f) Automobile. During the Term, the Company shall pay the
Executive $700 per month as an automobile allowance.
1.5 Termination.
(a) By the Company.
(i) Nonperformance due to Disability. The Company
may terminate this Agreement for Nonperformance due to
Disability. "NONPERFORMANCE DUE TO DISABILITY" shall exist if
because of ill health, physical or mental disability, or any
other reason beyond the Executive's control, and
notwithstanding reasonable accommodations made by the
Company, the Executive shall have been unable, unwilling or
shall have failed to perform the essential functions of the
Executive's job, as determined in good faith by the Company's
Board of Directors, for a period of 180 days in any 365-day
period, irrespective of whether or not such days are
consecutive.
(ii) Cause. The Company may terminate the
Executive's employment for Cause. Termination for "CAUSE"
shall mean termination because of the Executive's:
(A) conviction of, or a plea of nolo
contendere to, (x) a felony relating to the
Company's or any Affiliate's assets, activities,
operations or employees or (y) a felony or a
misdemeanor involving moral turpitude that causes
harm to the Company or any Affiliate or that, in the
good faith judgment of the Company has damaged or
interfered with the Company's or any Affiliate's
relationships with its customers, suppliers,
employees or other agents;
(B) substance abuse or illegal use of drugs
that impairs the Executive's performance, that
causes harm to the Company or that, in the
reasonable judgment of the Company, has damaged or
interfered with the Company's or any Affiliate's
relationships with its customers, suppliers,
employees or other agents;
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(C) frequent or habitual tardiness,
absenteeism, failure to meet performance standards
that the President, Chief Executive Officer or Board
of Directors of the Company in good faith believes
to be either reasonable in light of the Executive's
experience and training or consistent with past
practices, insubordination, material violation of
Company policy or material breach by the Executive
of this Agreement, other than a breach of Section
2.2 (Confidential Information) or Section 2.3
(Noncompetition); provided, however, that the
foregoing clause (C) shall not constitute Cause
unless (x) the Company first notifies the Executive
in writing of his inadequate performance, specifying
in reasonable detail the basis therefor and stating
that it is grounds for termination for Cause and (y)
the Executive then fails to finally cure such matter
within thirty (30) business days after such notice
is sent or given under this Agreement;
(D) commission of an act of fraud,
illegality, theft or dishonesty in the course of the
Executive's employment with the Company and relating
to the Company's or any Affiliate's assets,
activities, operations or employees; or
(E) breach by the Executive of Section 2.2
(Confidential Information) or Section 2.3
(Noncompetition) of this Agreement; provided,
however, that the foregoing clause (E) shall not
constitute Cause unless (x) the Company first
notifies the Executive in writing of his breach or
alleged breach of Section 2.2 or Section 2.3,
specifying in reasonable detail the basis therefor
and stating that it is grounds for termination for
Cause and (y) the Executive then fails promptly (but
in any event not later than the earlier of the tenth
business day after such notice is given or the third
business day after such notice is received) to cease
the actions or inactions that constitute the basis
for the breach or alleged breach of Section 2.2 or
2.3.
The Company may terminate the Executive's employment Without
Cause, subject to the provisions of Section 1.6(c)
(Termination by the Company Without Cause or by the Executive
for Company Breach). Termination "WITHOUT CAUSE" shall mean
termination of the Executive's employment by the Company
other than termination for Cause or for Nonperformance due to
Disability.
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(b) By the Executive.
(i) Company Breach. The Executive may terminate the
Executive's employment hereunder for Company Breach. For
purposes of this Agreement "COMPANY BREACH" shall mean:
(A) any material breach of this Agreement
by the Company; provided, however, that a material
breach hereof by the Company shall not constitute
Company Breach unless (i) the Executive notifies the
Company in writing of the breach, specifying in
reasonable detail the nature of the breach and
stating that such breach constitutes grounds for
Company Breach and (ii) the Company fails to cure
such breach within thirty (30) business days after
such notice is sent or given hereunder; or
(B) the assignment to the Executive of any
duties materially inconsistent with his position,
duties, responsibilities and status with the
Company.
(ii) Without Good Reason. During the Term, the
Executive may terminate the Executive's employment Without
Good Reason. Termination "WITHOUT GOOD REASON" shall mean
termination of the Executive's employment by the Executive
other than termination for Company Breach.
(c) Explanation of Termination of Employment. In addition to
any notice required by Sections 1.5(a)(ii) or 1.5(b)(i) any party
terminating this Agreement shall give prompt written notice ("NOTICE
OF TERMINATION") to the other party hereto advising such other party
of the termination hereof. Within thirty (30) business days after the
Notice of Termination is sent, the terminating party shall deliver to
the other party hereto a written explanation, which shall state in
reasonable detail the basis for such termination and shall indicate
whether termination is being made for Cause, Without Cause or for
Nonperformance due to Disability (if the Company has terminated the
Agreement) or for Company Breach or Without Good Reason (if the
Executive has terminated the Agreement).
(d) Date of Termination. "DATE OF TERMINATION" shall mean the
date on which Notice of Termination is sent or given under this
Agreement or the date of the Executive's death.
1.6 Compensation Upon Termination.
(a) Termination by the Company for Nonperformance due to
Disability. If the Company shall terminate the Executive's employment
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Without Cause or for Nonperformance due to Disability then the
Company's obligation to pay salary and benefits pursuant to Section
1.4 (Compensation) shall terminate, except that the Company shall pay
the Executive and, if applicable, the Executive's heirs (i) accrued
but unpaid salary and benefits pursuant to Sections 1.4(a) (Base
Salary), 1.4(b) (Discretionary Bonus) and 1.4(c) (Payment and
Reimbursement of Expenses) through the Date of Termination, (ii)
payment for untaken vacation accrued pursuant to Section 1.4(e)
(Vacations) through the Date of Termination, (iii) the benefits set
forth in Section 1.6(d) (Severance Benefits) below for twelve (12)
months, as if the Executive remained in the employment of the Company,
and (iv) an amount equal to (x) the Base Salary for the last year of
this Agreement (including both the initial term and all renewal terms)
plus (y) fifty percent (50%) of the Executive's bonus relating to the
last year of this Agreement (including both the initial term and all
renewal terms) (provided that, if such termination occurs prior to the
payment of the first annual bonus hereunder, such annual bonus shall
be presumed to be fifty percent (50%) of the Executive's current Base
Salary).
(b) Termination by the Company for Cause or by the Executive
Without Good Reason. If the Company shall terminate the Executive's
employment for Cause or if the Executive shall terminate the
Executive's employment Without Good Reason, then the Company's
obligation to pay salary and benefits pursuant to Section 1.4
(Compensation) shall terminate, except that the Company shall pay the
Executive's accrued but unpaid salary and benefits pursuant to
Sections 1.4(a) (Base Salary) and 1.4(c) (Payment and Reimbursement of
Expenses) through the Date of Termination.
(c) Termination by the Company Without Cause or by the
Executive for Company Breach. If the Company shall terminate the
Executive's employment Without Cause or if the Executive shall
terminate his employment for Company Breach, then the Company shall
pay the Executive and, if applicable, the Executive's heirs (i)
accrued but unpaid salary and benefits pursuant to Sections 1.4(a)
(Base Salary), 1.4(b) (Discretionary Bonus) and 1.4(c) (Payment and
Reimbursement of Expenses) through the Date of Termination, (ii)
payment for untaken vacation accrued pursuant to Section 1.4(e)
(Vacations), (iii) the benefits set forth in Section 1.6(d) (Severance
Benefits) for twelve (12) months, as if the Executive remained in the
employment of the Company, and (iv) in lieu of any further salary
payments for periods subsequent to the Date of Termination, an amount
equal to (x) the Base Salary for the last year of this Agreement
(including both the initial term and all renewal terms) plus (y) fifty
percent (50%) of the Executive's bonus relating to the last year of
this Agreement (including both the initial term and all renewal terms)
(provided that, if such termination occurs prior to the payment of the
first annual bonus hereunder, such annual bonus shall be presumed to
be fifty percent (50%) of the Executive's current Base Salary).
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(d) Severance Benefits. Upon termination of the Executive's
employment during the Term by the Company for Nonperformance due to
Disability, by the Company Without Cause or by the Executive for
Company Breach, the Company shall permit the Executive and, if
applicable, the Executive's heirs, to continue to participate in the
Company's employee benefit plans, to the extent required by law and
subject to the terms and conditions of such employee benefit plans.
(e) No Mitigation. The Executive shall not be required to
mitigate the amount of any payment provided for in this Section 1.6
(Compensation Upon Termination) by seeking other employment or
otherwise.
1.7 Death of Executive. If the Executive dies prior to the expiration
of the Term hereof, then the Executive's employment and other obligations
hereunder shall automatically terminate and the Company's obligation to pay
salary and benefits pursuant to Section 1.4 (Compensation) shall terminate,
except that (a) the Company shall pay the Executive's estate the accrued but
unpaid salary and benefits pursuant to Section 1.4(a) (Base Salary), 1.4(b)
(Discretionary Bonus) and 1.4(c) (Payment and Reimbursement of Expenses)
through the end of the month in which the Executive's death occurs and (b) the
Executive's heirs will be eligible to receive the benefits set forth in Section
1.6(d) (Severance Benefits) above for twelve (12) months, as if the Executive
remained in the employment of the Company.
1.8 Company Successors. The Company will require and cause any
successor to all or substantially all of the business or assets of the Company
(whether direct or indirect by purchase, merger, consolidation, reorganization,
liquidation or otherwise), by written agreement, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
1.9 Tax Withholding. The Company shall deduct or withhold from any
amounts paid to Executive hereunder all federal, state and local income tax,
Social Security, FICA, FUTA and other amounts that the Company determines are
required by law to be withheld.
ARTICLE 2
Confidentiality and Noncompetition
2.1 Acknowledgments by the Executive. The Executive acknowledges that
(a) he has occupied a position of trust and confidence with the Company and the
Affiliates prior to the date hereof and has, or has had the opportunity to,
become familiar with the following, any and all of which constitute
confidential information of the Company or the Affiliates, (collectively, the
"CONFIDENTIAL INFORMATION"):
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(i) any and all trade secrets and proprietary technology concerning the
business and affairs of the Company or the Affiliates, product pricing, data,
know-how, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current and planned
product development, supplier lists, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer
software and database technologies, systems, structures and architectures (and
related processes, formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information) of
the Company or the Affiliates and any other information, whether or not
documented in any manner, of the Company or the Affiliates that is a trade
secret within the meaning of applicable trade secret law; (ii) any and all
information concerning the businesses and affairs of the Company and the
Affiliates (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, new product development information, the names and
backgrounds of key personnel, personnel training and techniques and materials),
however documented; and (iii) any and all notes, analyses, compilations,
studies, summaries, and other material prepared by or for the Company or the
Affiliates containing or based, in whole or in part, on any information
included in the foregoing; (b) the businesses of the Company and the Affiliates
is national in scope; (c) their products and services are marketed throughout
the United States; (d) the Company and the Affiliates compete with other
businesses that are or could be located in any part of the United States; (e)
the provisions of Sections 2.2 (Confidential Information) and 2.3
(Noncompetition) of this Agreement are reasonable and necessary to protect and
preserve the businesses of its Company and the Affiliates, and (g) the Company
and the Affiliates would be irreparably damaged if Executive were to breach the
covenants set forth in Sections 2.2 and 2.3 of this Agreement.
2.2 Confidential Information. The Executive acknowledges and agrees
that all Confidential Information known or obtained by the Executive, whether
before or after the date hereof, is the property of the Company or the
Affiliates. Therefore, the Executive agrees that he shall not, at any time,
disclose to any unauthorized individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, governmental or
quasi-governmental authority of any nature, or other entity (collectively, a
"PERSON") or use for his own account or for the benefit of any third party any
Confidential Information, whether the Executive has such information in his
memory or embodied in writing or other physical form, without the Company's
prior written consent, unless and to the extent that the Confidential
Information is or becomes generally known to and available for use by the
public other than as a result of Executive's actions or the actions of any
other Person bound by a duty of confidentiality to the Company or the
Affiliates. If the Executive becomes legally compelled by deposition, subpoena
or other court or governmental action to disclose any of the Confidential
Information, then the
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Executive will give the Company prompt notice to that effect, and will
cooperate with the Company if the Company seeks to obtain a protective order
concerning the Confidential Information. The Executive will disclose only such
Confidential Information as his counsel shall advise is legally required. The
Executive agrees to deliver to the Company, at any time the Company may
request, all documents, memoranda, notes, plans, records, reports, and other
documentation, models, components, devices, or computer software, whether
embodied in a disk or in other form (and all copies of all of the foregoing),
relating to the businesses, operations, or affairs of the Company and the
Affiliates and any other Confidential Information that the Executive may then
possess or have under his control.
2.3 Noncompetition.
(a) During the Term of this Agreement, the Company agrees to
provide the Executive with continued access to Confidential
Information, including Confidential Information regarding refinements
in the Company's proprietary technologies and strategic planning for
new products and refinements to existing products and attendance at
the training programs conducted by the Company regarding sales and
marketing and underwriting and purchasing of new and existing
products.
(b) As an inducement for the Company's agreement in Section
2.3(a) and in exchange for the other consideration provided by the
Company under this Agreement, for a period of twelve (12) months from
the last day of the Term:
(i) the Executive shall not, directly or indirectly,
engage or invest in, own, manage, operate, finance, control,
or participate in the ownership, management, operation,
financing, or control of, be employed by, associated with, or
in any manner connected with, lend his name or any similar
name to, lend his credit to, or render services or advice to,
(A) any business that is involved in the design,
manufacturing, marketing, distribution or sale of ergonomic
chairs and other office products (the "BUSINESS") in any
foreign country or state in the United States where (as of
the end of the Term) the Company or any Affiliate is engaged
in the Business, or where the Executive has been involved in
strategic planning on behalf of the Company or any Affiliate
to do the Business; provided, however, in each case, that the
Executive may purchase or otherwise acquire up to (but not
more than) five percent of any class of securities of any
enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed
on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act
of 1934. The Executive agrees that this covenant is
reasonable with respect to its duration, geographical area,
and scope and that his skills and experience
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will allow him to earn a substantial income while still
abiding by the restrictions contained in this Agreement;
(ii) the Executive shall not, directly or
indirectly, either for himself or any other Person; (A)
induce or attempt to induce any employee of the Company or
any Affiliate to leave the employ of the Company or any
Affiliate; (B) in any such way interfere with the
relationship between the Company or any Affiliate and any
employee thereof; (C) employ, or otherwise engage as an
employee, independent contractor, or otherwise, in any
business engaged in the Business, any employee of the Company
or any Affiliate; or (D) induce or attempt to induce any
customer, supplier, licensee, or business relation of the
Company or any Affiliate to cease doing business with the
Company or any Affiliate, or in any way interfere with the
relationship between any customer, supplier, licensee, or
business relation of the Company or any Affiliate; and
(iii) the Executive shall not, directly or
indirectly, either for himself or any other Person, solicit
the business of any Person known to the Executive to be a
customer or potential customer of the Company (meaning a
Person with which the Company has contacted or has developed
plans to contact regarding establishing a customer
relationship) or any Affiliate, whether or not the Executive
had personal contact with such Person, with respect to
products, services or other business activities which compete
in whole or in part with the products, services or other
business activities of the Company or any Affiliate of the
Company; and
(c) the Executive shall not, at any time during or after the
Term, disparage the Company or any Affiliate, or any of their
respective partners, shareholders, directors, officers, employees, or
agents.
2.4 Remedies. If the Executive breaches the covenants set forth in
Sections 2.2 (Confidential Information) or 2.3 (Noncompetition) of this
Agreement, then the Company or any Affiliate shall be entitled to the following
remedies:
(a) damages from the Executive;
(b) in addition to its right to damages and any other rights
it may have, to obtain injunctive or other equitable relief to
restrain any breach or threatened breach or otherwise to specifically
enforce the provisions of Sections 2.2 and 2.3 of this Agreement, it
being agreed that money damages alone would be inadequate to
compensate the Company and would be an inadequate remedy for such
breach.
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The rights and remedies of the parties to this Agreement are cumulative and not
alternative.
ARTICLE 3
Miscellaneous
3.1 Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Executive's spouse,
heirs, assigns, executors or personal or legal representatives (collectively,
the "EXECUTIVE REPRESENTATIVES") against the Company or any Company
Representative (defined below) after the expiration of two (2) years from the
date of accrual of such cause of action, and any claim or cause of action of
the Executive or any Executive Representative shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period.
3.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
3.3 Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.
3.4 Executive's Sole Remedy. The Executive's and the Executive
Representatives' sole remedy shall be against the Company (or any assignee or
successor to all or substantially all the assets of the Company or any
transferee in receipt of material assets of the Company transferred in fraud of
creditors (collectively, "ASSIGNS")) for any Executive Claim (defined below).
The Executive and the Executive Representatives shall have no claim or right of
any nature whatsoever against any of the Company's or its Affiliates'
directors, officers, employees, direct or indirect stockholders, owners,
trustees, beneficiaries or agents, irrespective of when any such person held
such status (collectively, the "COMPANY REPRESENTATIVES") (other than Assigns)
arising out of any Executive Claim. The Executive, on his own behalf and on
behalf of the Executive Representatives, hereby releases and covenants not to
xxx any person other than the Company or its Assigns over any Executive Claim.
The Affiliates shall be third-party beneficiaries of this Agreement for
purposes of enforcing the terms of this Section 3.4 (Executive's Sole Remedy)
against the Executive and the Executive Representatives. Except as set forth in
the immediately-preceding sentence, nothing herein, express or implied, is
intended to confer upon any party, other than the parties hereto and the
Company's Assigns, any
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rights, remedies, obligations or liabilities under or by reason hereof and no
person who is not a party hereto may rely on the terms hereof.
Upon termination of the Executive's employment, the sole claim of the
Executive and the Executive Representatives against the Company and its Assigns
for Executive Claims will be for the amounts described in Section 1.6
(Compensation Upon Termination), Section 1.7 (Death of Executive) and Section
3.9 (Governing Law) and the Executive and the Executive Representatives shall
have no claim against the Company or its Assigns for any Executive Claim, other
than those set forth in Sections 1.6, 1.7 and 3.9, or against any Company
Representative (other than Assigns) for Executive Claims, including without
limitation any claim for damages of any nature, be they actual, direct,
indirect, special, punitive or consequential. The Executive, on his own behalf
and on behalf of the Executive Representatives, hereby releases and covenants
not to xxx for, collect or otherwise recover any amount against the Company or
its Assigns for any Executive Claim, other than the amounts set forth in
Sections 1.6, 1.7 and 3.9, or against any Company Representative (other than
Assigns) for any Executive Claim. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT
THE LIMITATIONS ON THE EXECUTIVE'S REMEDIES EXPRESSED IN THIS SECTION 2.4
(EXECUTIVE'S SOLE REMEDY) APPLY WITHOUT LIMITATION TO EXECUTIVE CLAIMS RELATING
TO NEGLIGENCE.
"EXECUTIVE CLAIM" shall mean any claim, liability or obligation of any
nature whatsoever arising out of this Agreement or an alleged breach of this
Agreement or for any other claim arising out of the Executive's employment by
the Company or the termination thereof; provided, however, that the term
"Executive Claim" shall not include (a) claims arising in favor of creditors of
the Company generally, including claims arising out of any fraudulent
conveyance or other transfer of assets in fraud of creditors or (b) any claim
against any insurance carrier for worker's compensation benefits.
3.5 Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by certified or
registered mail, postage prepaid with return receipt requested, telecopy (with
hardcopy delivered by overnight courier service), or delivered by hand,
messenger or overnight courier service, and shall be deemed given when received
at the addresses of the parties set forth below, or at such other address
furnished in writing to the other parties hereto.
If to Executive: Xxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
(000) 000-0000 (fax)
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If to Company: NEUTRAL POSTURE ERGONOMICS, INC.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Attn: Chief Executive Officer
(000) 000-0000 (fax)
3.6 Provisions Separable. The provisions hereof are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part. If any
provision of this Agreement, or the application thereof to any situation or
circumstance, shall be invalid or unenforceable in whole or in part, then the
parties shall seek in good faith to replace any such legally invalid provision
or portion thereof with a valid provision that, in effect, will most nearly
effectuate the parties' intentions in entering into this Agreement. If the
parties are not able to agree on a substitute provision within thirty (30) days
after the provision initially is determined to be invalid or unenforceable,
then the parties agree that the invalid or unenforceable provision or portion
thereof shall be reformed pursuant to Section 3.10 (Dispute Resolution) and the
new provision shall be one that, in effect, will most nearly effectuate the
parties' intentions in entering into this Agreement.
3.7 Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to employment, compensation and
benefits of the Executive, and supersede all other prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written, between the Executive or any of their respective Affiliates
relating to the subject matter of this Agreement, which other prior and
contemporaneous agreements and understandings, inducements or conditions shall
be deemed terminated effective immediately. The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof.
3.8 Headings; Index. The headings of paragraphs and Sections herein
are included solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions hereof. The words "herein,"
"hereof," "hereto" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision.
3.9 Governing Law; Attorneys' Fees. This Agreement shall be governed
by and construed, interpreted and applied in accordance with the laws of the
State of Texas, excluding any choice-of-law rules that would refer the matter
to the laws of another jurisdiction.
Subject to Section 3.10 (Dispute Resolution), each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of Texas and, if such court does not have
jurisdiction, of the
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courts of the State of Texas in Dallas County, for the purposes of any action
arising out of this Agreement or the subject matter hereof brought by any other
party.
Subject to Section 3.10 (Dispute Resolution), to the extent permitted
by applicable law, Executive hereby waives and agrees not to assert, by way of
motion, as a defense or otherwise in any such action, any claim (a) that it is
not subject to the jurisdiction of the above-named courts, (b) that the action
is brought in an inconvenient forum, (c) that it is immune from any legal
process with respect to itself or its property, (d) that the venue of the suit,
action or proceeding is improper, or (e) that this Agreement or the subject
matter hereof may not be enforced in or by such courts.
The prevailing party in any action or proceeding relating to this
Agreement shall be entitled to recover reasonable attorneys' fees and other
costs from the non-prevailing parties, in addition to any other relief to which
such prevailing party may be entitled.
3.10 Dispute Resolution.
(a) Arbitration. All disputes and controversies of every kind
and nature between the parties hereto arising out of or in connection
with this Agreement or the transactions described herein as to the
construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation or breach, shall be settled
exclusively by arbitration, conducted before a single arbitrator named
by the American Arbitration Association, in Dallas, Texas, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association and applying the substantive laws of the State
of Texas (excluding conflict of laws provisions). Judgment may be
entered on the arbitrator's aware in any court having jurisdiction;
provided, however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent jurisdiction
to prevent any violation of Article 2 hereof, and the Executive hereby
consents that such restraining order or injunction may be granted
without the necessity of the Company posting any bond.
Except as set forth in Section 3.10(b) (Emergency Relief), the parties
stipulate that the provisions of this Section shall be a complete
defense to any suit, action or proceeding instituted in any federal,
state or local court or before any administrative tribunal with
respect to any controversy or dispute arising out of this Agreement or
the transactions described herein. The arbitration provisions hereof
shall, with respect to such controversy or dispute, survive the
termination or expiration hereof.
Neither any party hereto nor the arbitrators may disclose the
existence or results of any arbitration hereunder without the prior
written consent of the
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other party; nor will any party hereto disclose to any third party any
confidential information disclosed by any other party hereto in the
course of an arbitration hereunder without the prior written consent
of such other party.
(b) Emergency Relief. Notwithstanding anything in this
Section 3.10 (Dispute Resolution) to the contrary and subject to the
provisions of Sections 3.9 (Governing Law; Attorneys' Fees), either
party may seek from a court any provisional remedy that may be
necessary to protect any rights or property of such party pending the
establishment of the arbitral tribunal or its determination of the
merits of the controversy.
3.11 Indemnification. The Company shall indemnify and hold harmless to
the maximum extent permitted by law against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees incurred by the
Executive, in connection with the defense of, or as a result of any action or
proceeding (or any appeal from any action or proceeding) in which the Executive
is made or is threatened to be made a party by reason of the fact that he is or
was an officer of the Company, regardless of whether such action or proceeding
is one brought by or in the right of the Company, to procure a judgment in its
favor (or other than by or in the right of the Company).
3.12 Survival. The covenants and agreements of the parties set forth
in this Article 2 (Confidentiality and Noncompetition) and Article 3
(Miscellaneous) are of a continuing nature and shall survive the expiration,
termination or cancellation hereof, regardless of the reason therefor.
3.13 Binding Effect, Etc. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and the
Company's successors and assigns, including any direct or indirect successor by
purchase, merger, consolidation, reorganization, liquidation, or otherwise to
all or substantially all of the business or assets of the Company, and the
Executive's spouses, heirs, and personal and legal representatives.
3.14 Assignment. The Executive's obligations hereunder are personal
and may not be assigned (whether voluntarily, involuntarily or by operation of
law) without the prior written consent of the Company. Any such attempted
assignment shall be null and void.
3.15 Amendment. This Agreement may be amended or modified only by
written instrument duly executed by the Company and the Executive.
3.16 Voluntary Agreement. The Executive acknowledges that he has had
sufficient time and opportunity to read and understand this Agreement and to
consult with his legal counsel and other advisors regarding the terms and
conditions set forth in this Agreement.
* * * * *
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This Agreement has been executed and delivered as of the date first
written above.
NEUTRAL POSTURE ERGONOMICS, INC.
By: /s/ XXXXXXX XXXXXXX
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Name: Xxxxxxx Xxxxxxx
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Title: Chief Executive Officer
---------------------------------
/s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
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