EXHIBIT 10.3
HK SYSTEMS, INC.
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment and Noncompetition Agreement is entered into as of
this 1st day of July, 1997, by and among HK SYSTEMS, INC. (the
"Company") and Xxxxx X. Xxxxxxx.
R E C I T A L S:
WHEREAS, the Company desires to continue to employ the Employee and
to set forth the terms and conditions of the Employee's employment and the
Employee desires to continue to be employed by the Company on the terms
and conditions set forth in this Agreement; and
WHEREAS, during the course of employment, the Employee has learned
and will learn the identities of the Company's customers, their purchasing
needs and habits and the names of the personnel charged with purchasing
responsibilities and the Company's methods of doing business; and
WHEREAS, the Company's list of customers has been compiled by the
Company and the Company's methods of doing business have been developed by
the Company at considerable expense over a number of years; and
WHEREAS, but for his employment at the Company, Employee would not be
able to easily duplicate the Company's customer list or be thoroughly
familiar with its methods of doing business; and
WHEREAS, the Company's customer list and methods of doing business
are of considerable economic value to the Company; and
WHEREAS, THE EMPLOYEE HAS REVIEWED THE MATTERS RECITED IN THE FIVE
PARAGRAPHS ABOVE AND CONFIRMS THAT HE AGREES WITH THOSE RECITALS.
NOW, THEREFORE,
In consideration of the Recitals and of the mutual promises and
covenants set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is hereby
agreed as follows:
1. Definitions. When used in this Agreement, the following terms shall
have the meanings specified:
a. Agreement. "Agreement" shall mean this Employment and
Noncompetition Agreement, as the same shall be amended from time
to time in accordance with the terms hereof.
b. Cause. The following actions on the part of the Employee shall
be considered as "Cause":
(1) Personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, willful violation
of any law, rule, or regulation (other than traffic
violations or similar offenses), or habitual use of alcohol
or drugs: (A) which materially impairs the Employee's
ability to carry out his duties; and (B) as to which the
Company makes a good faith determination that such conduct
has occurred and that such conduct meets the standard set
forth in Section 1(d)(1)(A) of this Agreement;
(2) Rendering any assistance to any Person in that Person's
competitive efforts with the Company;
(3) Use of the Company's proprietary information or customer
lists for the Employee's own benefit or in a way adverse to
the Company's interests; or
(4) A good faith determination by the Company, after a notice
to the Employee and an opportunity to meet with the Company
concerning such matter, that the Employee has breached any
material provision of this Agreement.
c. Company. "Company" shall mean HK Systems, Inc., a Wisconsin
corporation.
d. Competitive Product. "Competitive Product" shall mean a product
or service, made or provided by a Competitor, which is the same
as or is directly competitive with one with respect to which the
Employee acquired confidential information relating to the
Company, or its business, products or services by reason of the
Employee's work with the Company.
e. Competitor. "Competitor" shall mean any Person engaged in, or
about to become engaged in, the production or sale, or both, of
any product or service in any part of the United States of
America which is directly competitive with one with respect to
which the Employee acquired confidential information relating to
the Company, or its business, products or services by reason of
the Employee's work with the Company.
f. Creations. "Creations" shall mean all manuscripts, programs,
writings, pictorial materials, and other creations created by
the Employee, either individually or jointly, during the
Employee's employment by the Company, and which relate to the
business of the Company.
g. Disability. "Disability" shall mean that the Employee has been
declared mentally incompetent by a Wisconsin court or shall have
been disabled for a consecutive period of 120 days so that the
Employee is unable to perform the Employee's duties as an
employee of the Company under this Agreement. Any dispute as to
the existence of a Disability or its duration shall be submitted
to a licensed physician agreed upon by the Employee and the
Company or, failing such agreement, to one appointed by the
President of the Medical Society of Wisconsin at the request of
either the Employee or the Company. The Employee shall
cooperate in such determination and the determination of such
physician shall be binding and conclusive upon the parties.
h. Employee. "Employee" shall mean Xxxxx X. Xxxxxxx.
i. Good Reason. "Good Reason" shall mean that the Company has
breached any provision of this Agreement.
j. Inventions. "Inventions" shall mean all inventions,
discoveries, developments, improvements, works, ideas, and other
contributions, whether or not patented or patentable or
otherwise protectable in law, which are conceived, made,
developed or acquired by the Employee, either individually or
jointly, during the employment of the Employee by the Company
and which relate in any manner to the Employee's work, the
research or business of the Company, or fields to which the
business of the Company may reasonably extend.
k. Person. "Person" shall mean and include an individual,
partnership, corporation, trust, incorporated organization and a
government or any department or agency thereof.
l. Representative. "Representative" shall mean, after the
Employee's death, the duly appointed and qualified executor or
personal representative of the estate of the Employee.
m. Restricted Area. "Restricted Area" shall mean anywhere within a
twenty-five (25) miles radius of any location in any U.S. city
in which the Company had, at any time while the Employee was
employed by the Company, a place of business or customers.
2. Employment. The Company hereby agrees to continue the employment of
the Employee and the Employee hereby accepts continued employment
with the Company in accordance with the terms and conditions set
forth in this Agreement. Except for illness, vacation periods and
reasonable leaves of absence approved by the Board of Directors of
the Company, the Employee agrees to devote the Employee's full-time,
skill, knowledge, and attention to the business of the Company and
the performance of the duties of the Employee under this Agreement.
During the term of employment, it shall not be a violation of this
Agreement for the Employee to do one or more of the following, so
long as such activities do not interfere with the performance of the
Employee's responsibilities as an employee of the Company in
accordance with this Agreement: (a) serve on corporate, civic, trade
or charitable boards or committees; (b) deliver lectures or fulfill
speaking engagements; and (c) manage personal investments.
3. Term. This Agreement shall commence on the date first above written
and continue indefinitely until effective notice of termination is
given by the Employee or the Company to the other. THE EMPLOYEE'S
EMPLOYMENT WITH THE COMPANY IS ON AN AT-WILL BASIS. Either the
Employee or the Company may terminate the Employee's employment with
the Company at any time and for any reason or no reason at all,
subject only to the parties' obligations as described in Section 8 of
this Agreement.
4. Duties. The Employee shall be employed as the Senior Vice President-
Integrated Systems of the Company or in such other executive position
with the Company as may be mutually agreed to between the Company and
the Employee. The Employee shall perform such services and duties as
are usually and customarily required of a Person holding such position
with a business corporation. The services to be performed by the
Employee shall be principally rendered in or about New Berlin,
Wisconsin, or such other place at which the Company makes its corporate
headquarters, together with such business travel as may be necessary
for the Employee to satisfactorily perform the duties required under
this Agreement.
5. Compensation. The Company shall pay to the Employee, a base annual
salary of $140,000, which salary shall be reviewed annually by
the Board of Directors of the Company for possible adjustment and
shall be paid in approximately equal installments at the usual and
customary times established by the Company. The Company shall deduct
from all payments made to the Employee under this Agreement any
federal, state or local withholding or other taxes or charges which
the Company is required to deduct under applicable law. The Company
shall have the right to rely upon a written opinion of counsel if any
questions arise as to any deductions.
6. Additional Benefits. The Employee shall be entitled to the following
additional benefits:
a. Vacations/Holidays. The Employee shall be entitled to paid
vacations and holidays as provided to other senior executive
employees of the Company.
b. Expense Reimbursement. The Company shall pay, upon submission
of appropriate vouchers and supporting documentation, all
expenses of the Employee incurred in connection with the
rendering of services to the Company.
c. Bonus Program. The Employee will be eligible to participate in
an executive bonus program to be established by the Board of
Directors of the Company, pursuant to which the Employee may
earn up to 40% of the Employee's base salary in any year. The
bonus program will include a combination of annual performance
benchmarks and long-term benchmarks for both the Employee and
the Company.
d. Company Automobile
e. Miscellaneous. The Employee shall be entitled to other fringe
benefits generally provided to senior management of the Company,
including health insurance, disability insurance, term life
insurance, pension and profit sharing and other programs
established by the the Company.
7. Termination.
a. Termination Without Cause or for Good Reason. As stated in
Section 3 of this Agreement, the Employee's employment may be
terminated by the Company or by the Employee at any time and for
any reason or for no reason at all. However, if the Employee's
employment with the Company is terminated by the Company without
Cause, or by the Employee for Good Reason, or as the result of
the Employee's Disability, the Employee shall receive the
Employee's then current base salary for a one (1) year period
after such termination, plus the continuation in the health,
disability and term life insurance programs of the Company
during such one year period at the Company's expense. The
severance pay shall be paid to the Employee at the same times as
the Company generally pays management employees. If the
Employee's employment is terminated as the result of Disability,
any severance payments shall be reduced by any gross insurance
proceeds actually received by the Employee from the Company
sponsored disability insurance. The severance payments shall
not be reduced by any other compensation received by the
Employee during the severance period unless such compensation is
received from Competitors. The Employee shall have no
obligation to seek other employment or otherwise mitigate
damages hereunder.
b. Termination for Cause or Without Good Reason. In the event that
the Employee's employment with the Company is terminated by the
Company for Cause or by the Employee without Good Reason, the
Employee shall be paid compensation only through the date of
such termination and all other financial obligations of the
Company to the Employee under this Agreement and all benefits
under this Agreement shall cease as of the date of such
termination.
c. Return of the Company's Materials. Upon termination for any
reason, the Employee shall immediately return to the Company all
files, credit cards, keys, computers, instruments, equipment,
vehicles, and other materials owned or provided by the Company.
8. Confidential Information. The Employee acknowledges that through the
services to be performed for the Company, the Employee will obtain
confidential information regarding the Company's business affairs,
including such matters as computer programs, research, customer
lists, customer development, planning, purchasing, finance,
marketing, customer relations, and other information of a similar
nature not available to the public. This information may be oral or
written and may be that which the Employee originates as well as that
which otherwise comes into the possession or knowledge of the
Employee. The Employee agrees to treat all matters relating to the
business activities of the Company as confidential and not to divulge
or disclose any information gained in connection with the employment
of the Employee by the Company to any other Person except upon the
written request or instruction of the Company or in the normal course
of the duties of the Employee as an employee of the Company. The
Employee agrees not to use or disclose, for purposes of marketing or
otherwise, any of the customer information the Employee receives
while working at the Company (including, but not limited to,
customers' identity, financial status and holdings), either on behalf
of the Employee or as a representative, agent, employee, officer,
director, trustee, stockholder, or creditor of, or partner, joint
venturer, or investor with or in any Competitor, except for any
information which is or becomes generally available to the public, or
otherwise comes into possession of the Competitor, other than as a
result of disclosure by the Employee. This Section 8 is intended to
protect confidential information and customer relationships, both
during and after the period of the Employee's employment with the
Company, and not to limit the Employee's right to seek and obtain
employment in competition with the Company after termination of the
Employee's employment with the Company, which is covered by Section
12 of this Agreement.
9. Relationship with Others. The parties agree that the profitability
and goodwill of the Company depend on continued amicable relations
with its suppliers and customers, and the Employee: (a) except on
behalf of the Company, will not approach for any reason, nor solicit
any business of any kind from, any former, present or future customer
of the Company; or (b) cause, request or advise any suppliers or
customers of the Company to curtail or cancel their business with the
Company. Nothing in Section 9(a) shall, after termination of the
Employee's employment with the Company for any reason, prevent the
employment of the Employee by a customer or supplier of the Company
unless such employment violates Section 12(a) of this Agreement.
This provision shall apply to any customers or suppliers of the
Company during the three (3) year period prior to the termination of
the Employee's employment or to Persons with an active proposal from
the Company on the date of the termination of the Employee's
employment. This provision shall apply for five (5) years after
termination of the Employee's employment with the company if the
termination is for Cause and for one (1) year if the termination is
for any other reason.
10. Inventions and Creations.
a. Inventions. The Employee agrees that all Inventions shall
belong to the Company. The Employee agrees to and does hereby
assign and transfer to the Company the entire right, title, and
interest of the Employee in and to all Inventions. The Employee
further agrees to promptly and fully disclose all Inventions to
the Company, in writing if requested by the Company, and to
execute and deliver any and all lawful applications,
assignments, and other documents which the Company requests for
protecting the Inventions in the United States or in any other
country. The Company shall have the full and sole power to
prosecute such applications and to take all other actions
concerning the Inventions, and the Employee agrees to cooperate
fully, at the expense of the Company, in the preparation and
prosecution of all such applications and in any legal actions
and proceedings concerning the Inventions.
b Creations. The Employee agrees to and does hereby assign,
convey, and transfer to the Company all Creations. The Company
shall have the full right to seek and procure copyrights on the
Creations, and the Employee shall cooperate fully, at the
expense of the Company, in securing copyrights and in any legal
actions and proceedings concerning the Creations.
c. Presumptions of Company Ownership. Without diminishing any
rights granted to the Company in Sections 10(a) and 10(b), if
any Invention is described in a patent application or is
disclosed to third parties by the Employee within two (2) years
after leaving the employ of the Company, or if a Creation is
published or is disclosed to third parties by the Employee
within two (2) years after leaving the employ of the Company,
the Employee agrees that it is to be rebuttably presumed that
the Invention or the Creation was conceived, made, developed,
acquired, or created by the Employee during the period of
employment of the Employee by the Company, and the Invention or
Creation will belong to the Company.
11. Noncompetition While Employed by the Company. The Employee agrees
not to compete with the Company in any territory in which the Company
sells its products or provides its services, either on behalf of the
Employee, or as a representative, agent, employee, officer, director,
trustee, stockholder, or creditor of, or partner, joint venturer, or
investor with or in, any other Person, during his employment with the
Company.
12. Noncompetition After Termination of Employment.
a. Scope of Noncompetition. The Employee agrees that for one (1)
year after the termination of the Employee's employment with the
Company, regardless of the reason for such termination, the
Employee will not:
(1) Render services, either directly or indirectly, to any
Competitor in connection with the development, manufacture,
sale, merchandising or promotion of any Competitive
Product; or
(2) Engage, either directly or indirectly, within the
Restricted Area, for the Employee or as an investor, in the
development, manufacture, purchase or sale of any
Competitive Product.
b. Exceptions to Scope of Noncompetition.
(1) Nothing in Section 12(a) of this Agreement shall prohibit
the Employee from owning or acquiring securities of the
Company or of any corporation or other business enterprise
that may be engaged in activities described in Section
12(a), provided that: (A) the Employee is not an officer,
director or employee of, or consultant to, such corporation
or business enterprise; (B) such securities are held by the
Employee for investment purposes and represent less than
five percent (5%) of the total equity interests of such
corporation or business enterprise; and (C) such securities
are listed on a national securities exchange or are
regularly quoted in the over-the-counter market by one or
more members of the National Association of Securities
Dealers.
(2) It shall not be deemed a violation of Section 12(a) if the
Employee accepts employment with a business entity which is
diversified and made up of separate divisions and which, as
to parts of its business, is not a Competitor, provided the
Company shall be furnished prior to such employment
definite written assurances satisfactory to it, separately
from the Employee and such business entity, that the
Employee will not be expected, required or permitted to and
in fact does not render services directly or indirectly to
a division or a part of such business entity which division
or part is a Competitor.
c. Notification to the Company. During the period of time that the
Employee is subject to the provisions of Section 12(a) of this
Agreement, the Employee shall notify the Company of any
occupation or employment which the Employee proposes to take up
after termination of employment with the Company and shall
furnish to the Company such written or oral information as it
may reasonably request concerning such proposed occupation or
employment. Upon request of the Employee, the Company agrees to
notify the Employee promptly, and in any event within thirty
(30) days after receipt of the requested information, whether or
not the Company considers such occupation, based on the
information so furnished or derived from its independent
investigation, to come within the provisions of Section 12(a)
and, if the Company considers such occupation to come within the
provisions of Section 12(a), whether the Company will waive any
of the provisions thereof.
13. Remedies. In addition to other remedies provided by law or equity,
upon a breach by the Employee of any of the covenants contained
herein, the Company shall be entitled to have a court of competent
jurisdiction enter an injunction against the Employee prohibiting any
further breach of the covenants contained herein. The parties
further agree that the services to be performed by the Employee
hereunder are of a unique, special, and extraordinary character.
Therefore, in the event of any controversy concerning rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of competent jurisdiction at law or equity by
a decree of specific performance or the Company elects, by obtaining
damages or such other relief as the Company may elect to pursue.
Such remedies, however, shall be cumulative and nonexclusive and
shall be in addition to any other remedies which the Company may
have.
14. Assignment. This Agreement and the respective rights, duties, and
obligations of the Employee hereunder may not be assigned or
delegated by the Employee.
15. Notice. Any notice (including notice of change of address) permitted
or required to be given pursuant to the provisions of this Agreement
shall be in writing and sent by registered mail or certified mail,
return receipt requested, or by hand delivery to the parties at the
following address:
If to the Company: HK Systems, Inc.
Attention: Xxxx X. Xxxxxx
0000 X. Xxxxx Xxxxx
Xxx Xxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxxxxxx, Xx.
Vice President and General Counsel
0000 X. Xxxxx Xxxxx
Xxx Xxxxxx, XX 00000
If to the Employee: Xxxxx X. Xxxxxxx
Personal & Confidential
c/o HK Systems, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxxx, XX 00000
Notice properly given by mail shall be deemed effective one (1)
business day after mailing.
16. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Company and the Employee concerning the
Employee's employment by the Company, and supersedes any and all
other previous agreements or understandings, whether written or oral,
among the Employee and the Company concerning such employment. This
Agreement may not be modified orally.
17. Waiver. The waiver by any party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a
waiver of any subsequent breach by any party.
18. Invalidity of any Provision. The provisions of this Agreement are
severable, it being the intention of the parties that should any
provision hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining
provisions hereof, but the same shall remain in full force and effect
as if such invalid or unenforceable provision were omitted.
19. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.
20. Headings. Headings in this Agreement are for informational purposes
only and shall not be used to construe the intent of this Agreement.
21. Counterparts. This Agreement shall be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same agreement.
22. Expenses. If any legal proceeding is necessary by the Employee or
the Company to enforce or interpret the terms of this Agreement or to
recover damages for the breach of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys fees and
necessary costs and expenses incurred in such litigation from the
losing party in addition to any other relief to which the prevailing
party may otherwise be entitled.
23. Reasonableness of Restrictions. THE EMPLOYEE HAS READ THIS AGREEMENT
AND AGREES THAT THE CONSIDERATION PROVIDED BY THE COMPANY IS FAIR AND
REASONABLE AND FURTHER AGREES THAT GIVEN THE IMPORTANCE TO THE
COMPANY OF THE CUSTOMER LIST AND THE COMPANY'S PARTICULAR METHODS OF
DOING BUSINESS, THE POST-EMPLOYMENT RESTRICTIONS ON THE EMPLOYEE'S
ACTIVITIES ARE LIKEWISE FAIR AND REASONABLE.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
and Noncompetition Agreement as of the date first above written.
HK SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx, President
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Employee
