EXHIBIT 10-AO EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement",) is made
and entered into of the 1st day of January, 1995, by and between
DDL ELECTRONICS, INC., a Delaware corporation (the "Company"),
and XXXXXXX X. XXXX ("Xxxx").
BACKGROUND
A. The Company has employed Xxxx as its Chief Executive
Officer.
B. Pursuant to a Resolution of the Board of Directors of
the Company dated December 30, 1994, the Company is authorized
and instructed to enter into this Agreement to set forth the
terms and conditions of such continuing employment.
X. Xxxx agrees to be employed by the Company pursuant to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
I.
EMPLOYMENT
1.1 Position. The Company hereby engages and employs Xxxx
in the capacity of Chief Executive Officer. The Company's Board
of Directors (the "Board") may provide such additional
designations of title to Xxxx as the Board, in its discretion,
may deem appropriate. Xxxx shall report directly to the Board
and shall perform the executive duties and functions of Chief
Executive Officer, subject to the reasonable limitations of
authority set forth from time to time in the resolutions of the
Board and applicable law. Xxxx shall not be required without his
consent to undertake responsibilities not commensurate with his
position as Chief Executive Officer, nor shall the Company
unreasonably limit or restrict his authority or responsibility in
the performance of those duties.
1.2 Duties. Xxxx'x duties will include all of those
generally associated with the position of Chief Executive
Officer, subject to the direction of the Board. Such duties will
include the full time corporate management of all of the
Company's operations, with Xxxx'x primary duties being to focus
his efforts toward the objective of making the Company
profitable, of seeking additional financing (as required), and
developing and implementing a growth strategy for the Company
through internal operations and acquisition alternatives.
II.
COMPENSATION AND BENEFITS
2.1 Base Salary. Xxxx'x base salary shall be at the rate
of One-Hundred Sixty-Five Thousand Dollars ($165,000) per year.
This base salary will be reviewed at least annually by the
Compensation Committee of the Board (the "Compensation
Committee"), but shall not be adjusted down without Xxxx'x prior
written consent.
2.2 Bonus. Xxxx shall be eligible to participate in the
Company's bonus plans as the same may be adopted from time to
time.
2.3 Other Benefits. Xxxx shall be entitled to four (4)
weeks per year of vacation time. The Company shall furnish Xxxx
with an automobile or a car allowance of $600 per month. In
addition, the Company shall provide Xxxx with the medical
benefits that are made available at any given time to the other
executives of the Company, and shall provide Xxxx with an annual
paid medical examination. The Company shall also furnish Xxxx
with a life insurance policy in the amount of two (2) times
Xxxx'x base salary with an optional additional amount of one (1)
time base salary paid for by Xxxx.
2.4 Expense Reimbursement. Xxxx shall be reimbursed for
reasonable out-of-pocket expenses in accordance with the
Company's established policies applicable to all officers.
III.
TERMINATION AND SEVERANCE PAY
3.1 At Will. Xxxx and the Company acknowledge and agree
that Xxxx'x employment with the Company is expressly "at will"
both during and after the term of this Agreement. This means
that either party may terminate Xxxx'x employment with or without
cause. Any termination of Xxxx'x employment is, however, subject
to the terms and provisions of this Agreement as to severance pay
and other obligations.
3.2 Voluntary Resignation. In the event that Xxxx'x
employment with the Company terminates as a result of his
voluntary resignation, Xxxx shall be entitled to no severance
pay. For purposes of this Agreement, the term "voluntary
resignation" shall not include a resignation that is tendered by
Xxxx pursuant to a direct request of the Board. A resignation
tendered by Xxxx pursuant to a direct request of the Board shall,
for purposes of this Agreement, be treated as an involuntary
termination, and Xxxx'x entitlement to severance pay and
additional benefits in accordance with the provisions of Sections
3.3(a) and 3.3(b) below shall depend upon whether the Board's
request was based on Cause (as defined in Section 3.3(c) below).
3.3 Involuntary Termination.
(a) Severance Pay. In the event that Xxxx'x
employment with the Company is terminated by the Company for
Cause (as defined in Section 3.3(c) below), Xxxx shall be
entitled to no severance pay. In the event that Xxxx'x
employment with the Company is terminated other than for Cause,
Xxxx shall be entitled to severance pay in the form of a lump-sum
cash payment equal to the sum of (i) Xxxx'x highest annual base
salary rate with the Company within the three-year period ending
on the date of Xxxx'x termination, plus (ii) a "Bonus Increment.
" The Bonus Increment shall equal the annualized average of all
bonus and incentive compensation payments paid to Xxxx pursuant
to Section 2.2 above during the two-year period immediately
before the date of Xxxx'x termination. Xxxx shall not be required
or obligated to obtain other employment to mitigate the payments
due him hereunder, and no compensation received by Xxxx from such
other employment shall be an offset against the payments to be
made by the Company.
(b) Additional Benefits. In the event that Xxxx'x
employment with the Company is terminated by the Company other
than for Cause (as defined in Section 3.3(c) below), Xxxx shall
be entitled to continue to participate in the Company's employee
benefit programs (including without limitation the car or car
allowance) that had been made available to Xxxx pursuant to
Section 2.3 above. These programs shall be continued at no cost
to Xxxx, except to the extent that tax rules require the
inclusion of the value of such benefits in Xxxx'x income. The
programs shall continue for the benefit of Xxxx for a period of
one (1) year after the date of Xxxx'x termination, in the same
way and at the same level as immediately prior to Xxxx'x
termination. In addition, in the event that Xxxx'x employment is
terminated with the Company other than for Cause, the Company
shall transfer to Xxxx ownership and possession (free and clear
of all liens and encumbrances) of the personal computer,
computerized day calendar (including all related personal
information manager software), and cellular telephone in Xxxx'x
possession, custody or control immediately prior to Xxxx'x
termination.
(c) Cause. For purposes of this Agreement, "Cause"
shall mean (i) the willful and deliberate refusal of Xxxx to
comply with a lawful, written instruction of the Board, which
refusal is not remedied by Xxxx within a reasonable period of
time after his receipt of written notice from the Company
identifying the refusal, so long as the instruction is consistent
with the scope and responsibilities of Xxxx'x designated
capacity; (ii) an act or acts of personal dishonesty by Xxxx that
were intended to result in substantial personal enrichment of
Xxxx at the expense of the Company; (iii) Xxxx'x conviction of
any felony involving an act of moral turpitude; or (iv) Xxxx'x
material breach of any representation or covenant contained in
Section 5, 6 or 7 of this Agreement.
(d) Constructive Termination. Xxxx'x employment with
the Company shall be deemed to have been involuntarily terminated
by the Company in the event of a "Constructive Termination" (as
defined below). Xxxx shall be entitled to the severance pay and
additional benefits set forth in Sections 3.3(a) and 3.3(b) above
if (i) Xxxx gives written notice of his resignation within thirty
(30) days of such Constructive Termination and advises, as part
of such resignation, that he is resigning because of the
Constructive Termination, and (ii) the Constructive Termination
was other than for Cause.
For purposes of this Agreement, "Constructive
Termination" shall mean (i) the material reduction or material
adverse modification of Xxxx'x authority or duties without his
prior written consent (i.e., the substantial diminution or
adverse modification in Xxxx'x title, status, overall position,
responsibilities, rporting relationship or general working
environment); (ii) failure of Xxxx to be reelected as a Director
of the Company (unless Xxxx advises that he does not desire to be
nominated); (iii) failure by the Company to provide
indemnification to Xxxx when permitted by the Company's charter
documents or indemnity agreement with Xxxx, as the same may be
amended or revised from time to time; or (iv) the purchase by one
person or entity, or two or more persons or entities acting in
concert, of equity securities of the Company representing more
than fifty percent (50%) of the aggregate voting power of all
outstanding securities of the Company.
3.4 Death. In the event of Xxxx'x death, this Agreement
shall automatically terminate and shall be of no further force
and effect. Termination of Xxxx'x employment as a result of his
death shall not result in any obligation by the Company to pay
severance pay or other benefits to Xxxx'x estate or heirs.
3.5 Disability. In the event of Xxxx'x Disability (as
defined below) during the term of this Agreement for any period
of at least three (3) consecutive months, the Company shall have
the right, which may be exercised in its sole discretion, to
terminate this Agreement. In the event the Company does elect to
terminate this Agreement, Xxxx shall not be entitled to any
severance pay at any time but shall be entitled to normal
disability benefits in accordance with the policies established
from time to time by the Company. For purposes of this
Agreement, "Disability" shall mean the inability of Xxxx to
perform his employment services hereunder by reason of physical
or mental illness or incapacity as determined by a physician
chosen by the Company and reasonably satisfactory to Xxxx or his
legal representative.
IV.
TERM
This Agreement shall be effective as of the date hereof and
shall terminate one year after the date of Xxxx'x employment
termination.
V.
NONDISCLOSURE OF INFORMATION
AND NON-SOLICITATION OF EMPLOYEES
5.1 Nondisclosure of Confidential Information. Except in
the performance of his duties hereunder, Xxxx shall not disclose
to any person or entity or use for his own direct or indirect
benefit any Confidential Information (as defined below)
pertaining to the Company obtained by Xxxx in the course of his
employment with the Company. For purposes of this Agreement,
"Confidential Information" shall include the Company's products,
services, processes, suppliers, customers, customers' account
executives, financial, sales and distribution information, price
lists, identity and list of actual and potential customers, trade
secrets, technical information, business plans and strategies to
the extent that such information has not been publicly
disseminated by the Company, other than through a breach hereof.
5.2 Non-Solicitation. Xxxx agrees that, so long as he is
employed by the Company and for a period of one (1) year after
termination of his employment for any reason except involuntary
termination without Cause, he shall not (a) directly or
indirectly solicit, induce or attempt to solicit or induce any
Company employee to discontinue his or her employment with the
Company, (b) usurp any opportunity of the Company that Xxxx
became aware of during his tenure at the Company or which is made
available to him on the basis of the belief that Xxxx is still
employed by the Company, or (c) directly or indirectly solicit or
induce or attempt to influence any person or business that is an
account, customer or client of the Company to restrict or cancel
the business of any such account, customer or client with the
Company.
VI.
NON-COMPETITION
So long as Xxxx is employed by the Company and for a
period of one (1) year after termination of his employment for
any reason except involuntary termination without Cause, Xxxx
shall not, without the prior written consent of the Company's
President, either directly or indirectly, including without
limitation through a partnership, joint venture, corporation or
other entity or as a consultant, director or employee, engage in
the business engaged in by the Company as of the date hereof
within those geographical areas in which the Company currently
conducts active business operations.
The parties hereto agree that both the scope and nature
of the covenant and the duration and area for which the covenant
not to compete set forth in this Article VI is to be effective
are reasonable in light of all facts and circumstances. In the
event that any provision of this Agreement, including without
limitation any provision of this Article VI, shall to any extent
be held invalid, unreasonable or unenforceable, in any
circumstances, the parties hereto agree that the remainder of
this Agreement and the application of such provision of this
Agreement to other circumstances shall be valid and enforceable
to the fullest extent permitted by law. If any provision, or any
part thereof, is held to be unenforceable because of the scope or
duration of or the area covered by such provision, the parties
hereto agree that the court making such determination shall have
the power, and is hereby asked by the parties, to reduce the
scope, duration and/or area of such provisions (and to substitute
appropriate provisions for any such unenforceable provisions) in
order to make such provisions enforceable to the fullest extent
permitted by law, and/or to delete specific words and phrases,
and such modified provisions shall then be enforceable and shall
be enforced.
VII.
REPRESENTATIONS AND COVENANTS OF XXXX
7.1 Best Efforts. In consideration of the payments to be
made hereunder, Xxxx agrees to devote substantially his entire
business time and attention to the performance of his duties
hereunder, and to serve the Company diligently and to the best of
his abilities. Notwithstanding the foregoing, Xxxx shall have
the continuing right to (a) make passive investments in the
securities of any publicly-owned corporation, (b) make any other
passive investments with respect to which he is not obligated or
required to, and does not in fact, devote any substantial
managerial efforts that interfere with his fulfillment of his
duties, and (c) upon the prior approval of the disinterested
Directors of the Company's Board, serve as a director or
consultant for other companies or entities.
7.2 No Restrictions. Xxxx represents that he is under no
actual or alleged restriction, limitation or other prohibition
(whether as a result of his prior employment or otherwise) to
perform his duties as described herein.
VIII.
MISCELLANEOUS
8.1 No Waiver. The waiver by either party of a breach of
any provision of this Agreement shall not operate as or be
construed as a waiver of any subsequent breach thereof.
8.2 Notices. Any and all notices referred to herein shall
be sufficiently furnished if in writing, and sent by registered
or certified mail, postage prepaid, to the respective parties at
the following addresses or such other address as either party may
from time to time designate in writing:
To the Company: DDL Electronics, Inc.
0000 XX Xxxxxxxx Xxxx Xxxxx 000
Xxxxxx, Xxxxxx 00000-0000
Attention: Secretary
To Xxxx: Xx. Xxxxxxx X. Xxxx
00000 XX Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxx 00000-0000
8.3 Assignment. This Agreement may not be assigned by
Xxxx. This Agreement shall be binding upon the Company's
successors and assigns.
8.4 Entire Agreement. This Agreement supersedes any and
all prior written or oral agreements between Xxxx and the
Company, and contains the entire understanding of the parties
hereto with respect to the terms and conditions of Xxxx'x
employment with the Company. Nothing herein shall modify or
amend that certain General Nonstatutory Stock Option Agreement,
effective as of December 3, 1991, between the Company and Xxxx.
8.5 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws and decisions of the State
of Delaware.
8.6 Expenses. The Company agrees to pay all fees and
expenses incurred by it in connection with the preparation of
this Agreement. In addition, the Company shall pay all of Xxxx'x
fees, costs and expenses (including reasonable attorney's fees)
incurred in connection with entering into this Agreement and
enforcing his rights hereunder.
8.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to constitute an
original, but all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement as of the day and year first above
written.
The "Company":
DDL ELECTRONICS, INC., a Delaware corporation
By:________________________________________
Its. Chief Financial Officer And Secretary
"Xxxx":
___________________________________________
Xxxxxxx X. Xxxx
