EXHIBIT 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
dated as of February 13, 2003, by and between EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Edac"), and Xxxxxxxx Xxxxxx ("Xx. Xxxxxx").
RECITAL
Edac and Xx. Xxxxxx are parties to an Employment Agreement dated as of
August 13, 2002 (the "Employment Agreement");
Edac and Xx. Xxxxxx each desire to amend and restate the Employment
Agreement on the terms and conditions set forth below.
AGREEMENTS
In consideration of the premises and the mutual agreements which
follow, the parties agree as follows:
1. Employment. Edac hereby employs Xx. Xxxxxx and Xx. Xxxxxx hereby
accepts employment with Edac on the terms and conditions set forth in this
Agreement.
2. Term. The initial term of Xx. Xxxxxx'x employment hereunder shall
commence on the date hereof and continue for a period of twelve months, subject
to earlier termination as set forth in this Agreement. The term of Xx. Xxxxxx'x
employment will automatically be extended for successive periods of 90 days
unless either party notifies the other in writing to the contrary at least 30
days prior to any the end of the then current term of this Agreement. The term
of employment is referred to in this Agreement as the "Employment Term."
3. Duties. Xx. Xxxxxx shall serve as the President and Chief Executive
Officer of Edac and will, under the direction of the Board of Directors (the
"Board"), faithfully and to the best of his ability, perform the duties of such
positions as determined by the Board from time to time. As the President and
Chief Executive Officer, Xx. Xxxxxx shall be responsible for managing the
business and affairs of Edac in a professional manner with the primary objective
of enhancing shareholder value and ensuring that Edac's customers, employees and
suppliers are treated in a manner consistent with Edac's Corporate Mission
Statement. Without limiting the generality of the foregoing, Xx. Xxxxxx shall
supervise the operations of Edac and perform those duties normally associated
with the offices of President and Chief Executive Officer. Xx. Xxxxxx shall also
perform such additional duties and responsibilities which may from time to time
be reasonably assigned or delegated by the Board. It is understood and
acknowledged that Xx. Xxxxxx will be employed on less than a full time basis,
but that he will devote a sufficient part of his business time, effort, skill
and attention to perform his duties while employed by Edac.
4. Compensation.
(a) Base Salary. Xx. Xxxxxx shall receive a base salary of
$15,000 per month, payable in regular and equal installments in accordance with
Edac's payroll practices as in effect from time to time (the "Base Salary").
(b) Stock Options. Pursuant to Edac's 2000-B Employee Stock
Option Plan (the "Plan"), and as set forth in the Employment Agreement, Edac
granted to Xx. Xxxxxx options to purchase 140,000 shares of Edac's common stock.
Of such options, 56,000 vest on the date hereof, 42,000 vest on August 13, 2003,
and 42,000 vest on February 13, 2004. Xx. Xxxxxx and Edac shall enter into an
Amended and Restated Granting Agreement, in the form of Exhibit A hereto, such
that the 84,000 options which have not yet vested shall vest on the date hereof.
(c) Directors' and Officers' Insurance. Xx. Xxxxxx will be
named as an insured under Edac's policies of directors' and officers' liability
insurance in such a manner as to provide Xx. Xxxxxx with the same rights and
benefits thereunder as are accorded to Edac's other executive officers and
directors.
5. Reimbursement for Reasonable Business Expenses. Edac shall pay or
reimburse Xx. Xxxxxx for reasonable expenses incurred by him in connection with
the performance of his duties pursuant to this Agreement, including, but not
limited to, travel expenses, expenses in connection with trade shows, seminars,
professional conventions or similar professional functions and other reasonable
business expenses.
6. Termination of Employment.
(a) Termination for Death, Disability, Voluntary Termination
or Cause. Xx. Xxxxxx'x employment hereunder shall automatically terminate upon
his death. In addition, Edac shall be entitled to terminate Xx. Xxxxxx'x
employment at any time upon his "Disability." For purposes of this Agreement,
"Disability" shall mean a physical or mental sickness or injury which renders
Xx. Xxxxxx incapable of performing the services required of him as an employee
of Edac and which does or may be expected to continue for more than three months
during any twelve-month period. Edac and Xx. Xxxxxx shall determine the
existence of a Disability and the date upon which it occurred. In the event of a
dispute regarding whether or when a Disability occurred, the matter shall be
referred to a medical doctor selected by Edac and Xx. Xxxxxx. If they fail to
agree upon such a medical doctor, Edac and Xx. Xxxxxx shall each select a
medical doctor and the two doctors so selected shall together select a third
medical doctor who shall make the determination. The determination by the
selected medical doctor shall be conclusive and binding upon the parties hereto.
If it becomes apparent that the Disability renders Xx. Xxxxxx unable to
discharge his responsibilities and is supported by medical evidence that his
return cannot be determined, Edac may, in its discretion, terminate or modify
this Agreement once it is established that Xx. Xxxxxx will not return to
full-time status.
Edac may also terminate Xx. Xxxxxx'x employment under this agreement
for "Cause," effective immediately upon delivery of notice to Xx. Xxxxxx.
"Cause" shall mean:
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(i) the willful and continued failure of Xx. Xxxxxx
to perform substantially Xx. Xxxxxx'x duties with Edac or its affiliates (other
than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to Xx.
Xxxxxx by the Board which specifically identifies the manner in which the Board
believes that Xx. Xxxxxx has not substantially performed his duties and after
Xx. Xxxxxx is given at least 10 days to rectify or eliminate such failure;
(ii) the willful engaging by Xx. Xxxxxx in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
Edac;
(iii) the commission by Xx. Xxxxxx of fraud or
dishonesty with respect to Edac which is materially and demonstrably injurious
to Edac or a material misrepresentation by Xx. Xxxxxx to Edac's shareholders or
directors; or
(iv) a material breach of the terms of this Agreement
that is demonstratively injurious to Edac, which material breach is not cured by
Xx. Xxxxxx within 10 days of written notice by Edac to Xx. Xxxxxx specifying the
material breach in reasonable detail.
If Xx. Xxxxxx'x employment terminates due to his Disability or death,
or if Xx. Xxxxxx voluntarily terminates his employment or is terminated by Edac
for Cause, Xx. Xxxxxx shall be entitled to receive his Base Salary and vested
fringe benefits prorated to the date of termination. If either Edac or Xx.
Xxxxxx elects not to renew this Agreement pursuant to Section 2 hereof, Xx.
Xxxxxx shall be entitled to receive his Base Salary and vested fringe benefits
to the end of the then-current Employment Term.
In the event of termination for Cause, Xx. Xxxxxx shall forfeit any
stock options that he may have at such time. If Xx. Xxxxxx'x employment
terminates for any other reason, Xx. Xxxxxx'x stock options shall lapse in
accordance with section 4 of the Plan.
(b) Termination Without Cause. Notwithstanding anything in
this Agreement to the contrary, if Xx. Xxxxxx'x employment is terminated by Edac
for any reason other than for Cause, Disability or death, or if this Agreement
is terminated by Edac for what Edac believes is Cause or Disability, and it is
ultimately determined that Xx. Xxxxxx was wrongfully terminated, Xx. Xxxxxx
shall, as full and liquidated damages for such termination, receive a severance
payment equal to his Base Salary for the then remaining Employment Term of this
Agreement (excluding any additional renewals thereof) (the "Severance"). The
Company shall pay the Severance in a single installment payable within 30 days
following the termination of Xx. Xxxxxx'x employment.
7. Noncompetition. The parties agree that Edac's supplier, customer,
vendor and employee contacts and relations are established and maintained at
great expense and, by virtue of Xx. Xxxxxx'x employment with Edac, Xx. Xxxxxx
will have unique and extensive exposure to and personal contact with Edac's
suppliers, customers, vendors and employees and that he will be able to
establish a unique relationship with those individuals and entities that will
enable him, both during and after employment, to unfairly compete with Edac.
Further, the parties agree that the terms and conditions of the following
restrictive covenants are reasonable and necessary for the protection of Edac's
business, trade secrets and confidential information and to prevent great
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damage or loss to Edac as a result of action taken by Xx. Xxxxxx. Xx. Xxxxxx
acknowledges that the noncompete restrictions and nondisclosure of confidential
information restrictions contained in this Agreement are reasonable and the
consideration provided for herein is sufficient to fully and adequately
compensate Xx. Xxxxxx for agreeing to such restrictions. Xx. Xxxxxx acknowledges
that he could continue to actively pursue his career and earn sufficient
compensation in the same or similar business without breaching any of the
restrictions contained in this Agreement. For purposes of this section 7 and
section 8 below, "Edac" shall refer to each of Edac Technologies Corporation and
each of its subsidiaries.
(a) During Term of Employment. Xx. Xxxxxx covenants and agrees
that, during his employment with Edac, he shall not, directly or indirectly,
either individually or as an employee, principal, agent, partner, shareholder,
owner, trustee, beneficiary, co-venturer, distributor, consultant or in any
other capacity, participate in, become associated with, provide assistance to,
engage in or have a financial or other interest in any business, activity or
enterprise which is competitive with Edac. The ownership of less than a one
percent interest in a corporation whose shares are traded in a recognized stock
exchange or traded in the over-the-counter market, even though that corporation
may be a competitor of Edac, shall not be deemed financial participation in a
competitor.
(b) Upon Termination of Employment. Xx. Xxxxxx agrees that for
a one-year period after Xx. Xxxxxx'x employment with Edac terminates for any
reason, he will not, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer,
distributor, consultant or in any other capacity:
(i) Request or advise any of the customers, vendors,
suppliers, or other business contacts of Edac who currently have or have had
business relationships with Edac within two years preceding the date of such
action, to withdraw, curtail or cancel any of their business or relations with
Edac.
(ii) Induce or attempt to induce any employee, sales
representative, supplier, consultant or personnel of Edac to terminate his or
her relationship or breach his or her agreements with Edac.
(iii) Participate in, become associated with, provide
assistance to, engage in or have a financial or other interest in any business,
activity or enterprise located within the Territory (as defined below) which is
competitive with the business of Edac or any successor or assign of Edac and
which conducts such competitive business within the Territory; provided,
however, that the ownership of less than 1% of the stock of a corporation whose
shares are traded in a recognized stock exchange or traded in the
over-the-counter market, even though that corporation may be a competitor of
Edac, shall not be deemed financial participation in a competitor. For purposes
of this Agreement, the term "Territory" shall mean the United States of America.
The Board may, in its sole discretion and at any time prior to the termination
of Xx. Xxxxxx'x employment by Edac, expand the Territory to include those
countries in which the Company or any of its subsidiaries does business.
8. Confidential Information. The parties agree that Edac's customers,
business connections, customer lists, procedures, operations, techniques,
customer profiles and other
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aspects of its business are established at great expense and protected as
confidential information and provide Edac with a substantial competitive
advantage in conducting its business. The parties further agree that, by virtue
of Xx. Xxxxxx'x employment with Edac, he will have access to, and be entrusted
with, secret, confidential and proprietary information, and that Edac would
suffer great loss and injury if Xx. Xxxxxx would disclose this information or
use it to compete with Edac. Therefore, Xx. Xxxxxx agrees that during the term
of his employment, and for a period ending on the earlier of (a) two years after
the termination of his employment with Edac or (b) the date on which the
information referred to in this section becomes publicly known through no fault
of Xx. Xxxxxx, he will not, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer,
distributor, consultant or in any other capacity, use or disclose, or cause to
be used or disclosed, any secret, confidential or proprietary information
acquired by Xx. Xxxxxx during his employment with Edac whether owned by Edac
prior to or discovered and developed by Edac subsequent to Xx. Xxxxxx'x
employment, and regardless of the fact that Xx. Xxxxxx may have participated in
the discovery and the development of that information, except for any such
information disclosed to Xx. Xxxxxx by a third party who was not under any
obligation of confidence or secrecy to the Company at the time of such
disclosure.
9. Law of Torts and Trade Secrets. The parties agree that nothing in
this Agreement shall be construed to limit or negate the statutory or common law
of torts or trade secrets where it provides Edac with broader protection than
that provided herein.
10. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
11. Notices. Any notice to be given hereunder shall be deemed
sufficient if addressed in writing, and delivered by registered or certified
mail or delivered personally, in the case of Edac, to its principal business
office, and in the case of Xx. Xxxxxx, to his address appearing on the records
of Edac, or to such other address as he may designate in writing to Edac.
12. Severability. If any provision of this Agreement is held to be
invalid or unenforceable for any reason whatsoever, it is agreed such invalidity
or unenforceability shall not affect any other provision of this Agreement and
the remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
Furthermore, the parties specifically acknowledge that the provisions of
sections 7(a), 7(b)(i), 7(b)(ii) and 7(b)(iii) are each separate and independent
agreements.
13. Amendment. This Agreement may only be amended by an agreement in
writing signed by all of the parties hereto.
14. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against Edac, its successors and
assigns and Xx. Xxxxxx, his heirs, beneficiaries and legal representatives. It
is agreed that the rights and obligations of Xx. Xxxxxx may not be delegated or
assigned.
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15. Entire Agreement. Except as provided under Section 17 hereof, this
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings among the parties with respect to such subject matter (including,
without limitation, the Consulting Agreement, dated as of July 18, 2002, and the
Employment Agreement, dated as of August 13, 2002, each by and between Edac and
Xx. Xxxxxx).
16. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
17. Release. Xx. Xxxxxx and Edac are parties to a Mutual Release dated
as of August 13, 2002. Such Mutual Release remains in all respects in full force
and effect and is not, in any manner, superseded by this Agreement.
The parties have executed or caused this Agreement to be executed as of
the day, month and year first above written.
EDAC TECHNOLOGIES CORPORATION
BY /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its Chairman
/s/ Xxxxxxxx Xxxxxx
--------------------------
Xxxxxxxx Xxxxxx
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