EMPLOYMENT CONTRACT
THE JPM COMPANY AND XXXX X. XXXXXXXXXXX
May 9, 2000
EMPLOYMENT AGREEMENT
This Employment Agreement is made by and between The JPM Company, a Pennsylvania
corporation (EMPLOYER), and Xxxx X. Xxxxxxxxxxx, the undersigned individual
(EMPLOYEE).
RECITALS
EMPLOYER is engaged in the business of manufacturing wire and cable assemblies,
being referred to as the "Business." The parties wish to provide for an
employment arrangement under the terms and conditions herein set forth.
I. Term of Employment. EMPLOYER hereby employs EMPLOYEE, and EMPLOYEE agrees
to be employed by EMPLOYER, under the terms and conditions set forth. The
term of EMPLOYEE's employment shall begin on the commencement date set
forth in Section XV, and shall continue until terminated as set forth in
Section IX.
II. Compensation. As full payment for all services rendered by EMPLOYEE under
this Agreement, EMPLOYEE agrees to accept, and shall, subject to the terms
and conditions set forth herein, receive compensation, as follows:
A. Direct Compensation. During the term of this Agreement, EMPLOYEE shall,
subject to the terms and conditions set forth herein, receive a base salary
in the amount of $250,000, payable in accordance with EMPLOYER's normal
payroll practice.
B. Fringe Benefits. EMPLOYEE will be entitled to participate in such fringe
benefit plans and financial incentive plans, in accordance with their
terms, as shall be made available from time to time by EMPLOYER in its
discretion to its EMPLOYEEs in EMPLOYEE's position.
C. Compensation Adjustment. The base salary, fringe benefits and any other
compensation are subject to review by EMPLOYER at any time in its
discretion, at which time EMPLOYER, in its sole discretion, may elect to
adjust or modify same.
III. Deductions. EMPLOYER is authorized to deduct from the compensation of the
EMPLOYEE such sums as may be required to be deducted or withheld under the
provisions of any law now in effect or hereafter put into effect during the
term of this Agreement, or which are authorized by EMPLOYEE, including, but
not limited to, social security and income tax withholding. IV. Duties. It
is understood and agreed that EMPLOYEE will faithfully and diligently serve
EMPLOYER to the best of EMPLOYEE's ability in the position set forth in
Section XV, and EMPLOYEE further agrees to perform such duties and to
assume such additional responsibilities as may be assigned from time to
time by EMPLOYER.
V. Leave. EMPLOYEE shall be entitled to time off, with or without pay, in
accordance with the standard practices of EMPLOYER for individuals in
EMPLOYEE's position, which are subject to change. Such absences shall not
be deemed to be a termination of this Agreement. EMPLOYEE will otherwise
devote full time, attention, loyalty and energies to the performance of the
duties as an EMPLOYEE of EMPLOYER.
VI. Proprietary Information. EMPLOYEE understands and acknowledges that in the
course of EMPLOYEE's employment with EMPLOYER, EMPLOYER will incur
substantial expenditures of time and money in providing EMPLOYEE with
specialized instruction and training, and will impart to EMPLOYEE, or
EMPLOYEE will have access to, certain proprietary and confidential
information and knowledge concerning EMPLOYER and its business
(collectively called "Proprietary Information"). As used herein,
"Proprietary Information" shall be deemed to include, without limitation,
EMPLOYER's sales and marketing information and techniques, business plans,
financial data, Trade Secrets, pricing lists, supplier lists and other
confidential supplier data, customer lists and other confidential customer
data, and any other information or knowledge concerning EMPLOYER and its
business, whether or not in tangible form, that is of a proprietary or
confidential nature, or has been heretofore or is hereafter treated as
secret by EMPLOYER. As used herein, "Trade Secret(s)" shall mean the whole
or any portion or phase of any technical information, hardware, software,
designs or specifications, drawings, sketches, processes, procedures,
formulae, data, reports, computer programs, charts, improvements and any
other technical information or knowledge relating to the development,
design and implementation of EMPLOYER's projects, products and services.
The parties agree that it is of great importance to the success of EMPLOYER
that Proprietary Information be treated with great care and that improper
disclosure or use be prevented. EMPLOYEE, during the course of employment
with EMPLOYER and after the termination of such employment, shall maintain
secrecy with regard to such information and shall not, directly or
indirectly, disclose, use or permit the disclosure or use of any
Proprietary Information received, acquired or obtained during the course of
employment, whether or not EMPLOYEE was the creator or originator thereof,
unless such disclosure or use is consented to in advance in writing by
EMPLOYER.
VII. Non-Competition. During the term of EMPLOYEE's employment with the EMPLOYER
and for a period of two (2) years from the voluntary or involuntary
termination of EMPLOYEE's agreement with the EMPLOYER for any reason
whatsoever, EMPLOYEE will not directly or indirectly, own, manage, operate,
control, be employed by, perform services for, consult with, solicit
business for, participate in, or be connected with the ownership,
management, operation, or control of any business which performs the
services materially similar to or competitive with those provided by the
EMPLOYER in any location where the EMPLOYER has had an office or has sold
products or provided services to customers during the period EMPLOYEE is
employed by the EMPLOYER. During the term of EMPLOYEE's employment with the
EMPLOYER for a period of two (2) years from the voluntary or involuntary
termination of EMPLOYEE's employment with the EMPLOYER for any reason
whatsoever, EMPLOYEE shall not either on his own account or for any person,
firm, partnership, corporation, or other entity solicit, interfere with, or
endeavor to cause any EMPLOYEE of the EMPLOYER to leave his or her
employment, or induce or attempt to induce, any such EMPLOYEE to breach his
or her employment agreement with the EMPLOYER.
VIII.Remedies. It is recognized that damages in the event of breach of Sections
VI and VII of this Agreement by EMPLOYEE would be difficult, if not
impossible, to ascertain, and it is therefore agreed that in the event of a
breach or threatened breach of Sections VI or VII, EMPLOYER shall be
entitled to an injunction against such breach, without prejudice to any
other remedies available to EMPLOYER. The provisions set forth in the
paragraphs under Section VI and VII are intended by the parties to be
separate and divisible. If any covenant or provision in this paragraph is
found by a court of competent jurisdiction to be unreasonable in duration,
geographical scope or character of restrictions, the covenant or agreement
shall not be rendered unenforceable thereby, but rather the duration,
geographical scope or character of restrictions of such covenant or
agreement shall be deemed reduced or modified with retroactive effect to
render such covenant or agreement reasonable and such covenant shall be
enforced as thus modified. If the court having jurisdiction will not review
the covenant or agreement, then the parties shall mutually agree to a
revision having an effect as close as permitted by law to the provisions
declared unenforceable. EMPLOYEE further agrees that in the event a court
having jurisdiction determines, despite the express intent of the EMPLOYEE,
that any portion of the restrictive covenants in this Section VI and VII
are not enforceable, the remaining provisions shall be valid and
enforceable.
IX. Termination. This Agreement shall terminate in the event Section IX becomes
operative:
A. Death or disability. Upon the death or disability of EMPLOYEE, this
Agreement shall terminate. For purpose of this Agreement, the term
"disability" shall mean the determination by Employer that Employee is
unable to perform substantially all of the duties that were being performed
for Employer prior to such determination, and the continuation of such
inability for a consecutive period in excess of three (3) months following
such determination (unbroken by return to work for an aggregate period in
excess of thirty (30) days).
B. Involuntary Termination. EMPLOYER may terminate this Agreement without
cause.
C. Compensation Payable upon Termination. In the event of termination of this
Agreement by EMPLOYER pursuant to paragraph IV or paragraphs IX(A) or
IX(B), EMPLOYEE shall be entitled to receive termination pay equal to three
months of the annual salary then in effect, payable in six monthly
installments, PROVIDED, however, that any salary paid during a period of
disability preceding termination shall be credited toward the payments due
hereunder. EMPLOYEE's termination pay shall be increased with the length of
his employment, on the following schedule:
1. During the first six months of employment: Three months severance pay.
2. Upon moving his residence to the Lewisburg vicinity, or upon the expiration
of six months of employment: Six months severance pay.
3. Upon the expiration of twelve months of employment: Nine months severance
pay.
4. Upon the expiration of eighteen months of employment and thereafter: One
year severance pay.
D. Resignation as full-time EMPLOYEE. EMPLOYEE, at any time, may choose to
resign as a full-time EMPLOYEE.
E. Termination for Cause. EMPLOYER may terminate this Agreement immediately
for cause, including without limitation, fraud, material misrepresentation,
theft or embezzlement of the Company's assets, intentional violations of
law, intentional material violations of company policies, or a material
breach of this Agreement. In the event of termination for cause, no
severance pay shall be due EMPLOYEE.
F. Return of Documents. Upon termination of employment for any reason, all
documents, writings, or any other such material produced or received in the
course of employment shall be returned to EMPLOYER.
X. Corporate Policies. EMPLOYEE shall be subject to EMPLOYER's corporate
policies applicable to EMPLOYEE's generally, as amended from time to time,
except to the extent that any provision of this Agreement is expressly
contrary thereto.
XI. Termination upon Change in Control. EMPLOYEE shall be entitled to
severance payments, as set forth herein, in the event of a Change in
Control of EMPLOYER and the Employee is terminated without cause by the
Purchaser/Successor EMPLOYER.
A. Change in Control Definition. Change in Control shall mean any of the
following events
1. The sale or other disposition by EMPLOYER of all or substantially all of
its assets to a single purchaser or to a group of purchasers, other than to
a corporation with respect to which, following such sale or disposition,
more than eighty percent (80%) of the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors is then
owned beneficially, directly or indirectly, by all or substantially all of
the individuals who were the beneficial owners of the outstanding shares of
EMPLOYER's common stock and voting securities immediately prior to such
sale or disposition; or
2. The acquisition in one or more transactions by any person or group,
directly or indirectly, of beneficial ownership of twenty-five percent
(25%) or more of the outstanding shares of the combined voting power of the
then outstanding voting securities of EMPLOYER entitled to vote generally
in the election of directors, Provided, however, that for this purpose
acquisition of such a share by an employee benefit plan of EMPLOYER or a
subsidiary or affiliate of EMPLOYER or a present significant shareholder
(i.e., shareholder whose current holdings exceed 5% of the outstanding
stock) of EMPLOYER shall not constitute a Change of Control; or
3. EMPLOYER's termination of its business and liquidation of its assets; or
4. The reorganization, merger or consolidation of EMPLOYER into or with
another person or entity, by which reorganization, merger or consolidation
the shareholders of EMPLOYER receive less than fifty percent (50%) of the
outstanding voting shares of the new or continuing corporation.
5. For the purpose of paragraph __ and its subparts, merger, sale or
acquisition of EMPLOYER by or with any other company controlled by EMPLOYER
or any of its subsidiaries shall not constitute Change of Control.
X. Xxxxxxxxx Payments and Noncompetition Restrictions. In the event of change
of control and termination, Employee shall be entitled to severance pay of
twelve months, payable in twelve monthly installments. In such event, the
restrictions of paragraphs VII and paragraph VIII shall be reduced to one
year.
XII. Special Conditions. In addition to the conditions set forth above, the
following special conditions shall apply to EMPLOYEE:
A. Deferred Compensation. EMPLOYEE will be eligible to participate in the
EMPLOYER's Non-qualified Deferred Compensation Plan, subject to
modifications from time-to-time consistent with EMPLOYER's policies for
similarly situate employees. Under the plan in effect at the date of
employment, EMPLOYER deposits an amount equal to ten percent (10%) of
EMPLOYEE's salary into such plan, subject to certain vesting requirements,
timing eligibility and investment criteria. EMPLOYEE is eligible to defer
up to an additional twenty-five percent (25%) of his salary into the plan.
B. Bonus. EMPLOYEE will be eligible for participation in EMPLOYER's
Performance Sharing Plan, as in effect during the period of EMPLOYEE's
employment, together with such additional bonus eligibility as will create
a bonus target of 50% of base salary.
C. Life Insurance. EMPLOYEE shall be eligible for participation in EMPLOYER's
life insurance coverage, as then in effect pursuant to EMPLOYER's policies.
At the current time, that coverage provides life insurance in an amount up
to 1-1/2 times EMPLOYEE's annual salary, to a maximum of $100,000.
D. Stock Options. EMPLOYEE shall receive 50,000 stock options from the 1995
Employee Stock Option Plan, subject to the terms thereof.
E. Auto Allowance. EMPLOYEE shall receive an annual auto allowance, or an
automobile in lieu thereof, in the amount of $12,000, together with an
initial payment of $1800.
F. Relocation Allowance. EMPLOYEE shall receive a relocation allowance
consistent with the policies and practices of the EMPLOYER.
XIII.Miscellaneous. The waiver by either party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either party. The obligations undertaken by
EMPLOYEE shall not be assigned or delegated except as may be specifically
provided herein. The rights and obligations of the EMPLOYER hereunder shall
be binding upon, and inure to the benefit of, its successors and assigns.
The laws of the Commonwealth of Pennsylvania shall apply and bind the
parties in any and all questions arising hereunder. The provisions of
Sections VI and VII shall survive any termination of this Agreement.
XXX.Xxxxx Expression of Agreement. This writing represents the entire agreements
and understandings of the EMPLOYEE and EMPLOYER with respect to subject
matter hereof and supersedes all prior agreements and understandings of the
EMPLOYEE and EMPLOYER in connection therewith; except as otherwise provided
herein, it may not be altered or amended except by mutual agreement
evidenced by a writing signed by both EMPLOYEE and EMPLOYER and
specifically identified as an amendment to this Agreement. EMPLOYEE
EXPRESSLY ACKNOWLEDGES THAT EMPLOYEE HAS BEEN GIVEN THE OPPORTUNITY PRIOR
TO ENTERING THIS AGREEMENT TO CONSULT WITH EMPLOYEE'S OWN COUNSEL REGARDING
EMPLOYEE'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THIS AGREEMENT AND THAT
EMPLOYEE EITHER HAS DONE SO OR HAS ELECTED NOT TO CONSULT WITH SUCH
COUNSEL.
XV. Specific Data. Full name of EMPLOYEE: Xxxx X. Xxxxxxxxxxx Position:
President and Chief Operating Officer Commencement Date: March 10, 2000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed this 9th day of May, 2000.
The JPM Company
/s/ Xxxxx X. Xxxxxxxxx By:/s/ Xxxx X. Xxxxxxxxxxx
---------------------- -----------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title:President and Chief Operating
Officer
