EXHIBIT 10.21
EMPLOYMENT AND NONCOMPETITION AGREEMENT
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THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement"), dated as of
the 22nd day of September, 1995, by and between MK HOLDINGS, INC., an Illinois
corporation ("Holdings"), and XXXX XXXXX, an individual ("Executive");
W I T N E S S E T H:
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WHEREAS, Executive has been actively involved in the business of Xxxxxx-Xxxxx
Industries, Inc., Mercury Industries, Inc. and Elmco Industries, Inc. (the
"Companies"), as an employee and officer of the Companies;
WHEREAS, Holdings has agreed to purchase all of the issued and outstanding
shares of the capital stock of the Companies (the "Shares") pursuant to an
Agreement for Purchase and Sale of Stock dated May 26, 1995, by and among
Holdings and the stockholders of the Companies, as amended (the "Purchase
Aqreement");
WHEREAS, the continued involvement by Executive in a business in competition
with the Companies would diminish the value of the Shares to be purchased by
Holdings;
WHEREAS, as an inducement to Holdings to consummate its purchase of the
Shares, Executive has agreed to be employed and not to compete with Holdings to
the extent set forth below; and
WHEREAS, Holdings desires to retain the services of Executive and Executive
desires to be retained by Holdings;
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained herein, as inducement to Holdings to consummate its acquisition of the
Shares, and in consideration of the payments by Holdings to Executive required
below. the parties hereto agree as follows:
1. Employment. Subject to the termination provisions of Section 4, Holdings
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shall employ Executive as the President and Chief Operating Officer of Holdings
for a period of three years from the date of execution of this Agreement.
Executive shall be responsible for the day-to-day management of the general
affairs of Holdings and shall report only to the Chief Executive Officer of
Holdings. Executive shall diligently, faithfully and competently perform all
duties of the offices of President and Chief Operating Officer and shall devote
his full professional time and abilities to the performance of such duties.
2. Compensation. While Executive is employed as President and Chief Operating
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Officer of Holdings, Holdings will pay Executive base compensation at a rate of
Two Hundred Thousand Dollars ($200,000) per annum, payable in substantially
equal biweekly installments. In addition, while Executive is employed as
President and Chief Operating Officer of Holdings, Executive will be eligible to
receive an annual bonus from Holdings of up to $200,000, such bonus to be based
on a formula reflecting annual increases in Holdings' profitability.
3. Benefits; Business Expenses. While Executive is employed as President and
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Chief Operating Officer of Holdings, Holdings will provide for Executive's
participation in benefit programs on the same basis as other executive officers
of Holdings and the Companies. Such benefits shall include, without limitation
(i) the use of a Company automobile (leased or owned) comparable in cost and
quality to the automobile now used by the Executive (an Acura Legend), with
reasonable operating and maintenance expenses to be paid by Holdings or the
Companies, (ii) reimbursement of monthly dues for Itasca Country Club (currently
$270.00) and other incidental annual club fees, such as locker rental, (iii)
payment of annual life insurance premium on Prudential Life Insurance policy NO>
00-000-000 on Executive's life, a copy of which is attached hereto, and (iv)
participation in a disability income protection plan with benefits and costs
comparable to a similar plan maintained for Executives of Jordan Industries,
Inc. Holdings or the Companies shall reimburse Executive for all reasonable and
substantiated business expenses incurred by Executive in performing his duties
under this Agreement. Such expense reimbursements shall be made in accordance
with policies and procedures established by the Board of Directors of Holdings
from time to time.
4. Termination of Employment for Cause.
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(a) Termination For Cause. Holdings may terminate all of Holdings' obligations
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under this Agreement, and Executives employment hereunder for "cause", by
written notice to the Executive, upon the occurrence of any one of the following
on the part of Executive (a) fraud, embezzlement, dishonesty, or conviction of a
felony; (b) failure to diligently, faithfully and competently perform his
duties, at the direction of Holdings' Board of Directors or Chief Executive
Officer in the same manner and to the same extent as performed by him in years
prior to the change in ownership of the Companies, all after receiving written
notice from Holdings of such failure and having a reasonable opportunity to cure
such failure to so perform; (c) breach of any of the terms or covenants Sections
5 or 6 of this Agreement; or (d) death or disability preventing Executive from
performing Executive's duties under the terms of this Agreement for a period of
more than three (3) months. In the event of termination of this Agreement for
"cause", or in the event of voluntary termination by Executive, no sums shall be
payable by Holdings after the effective termination
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date. In the event Executive voluntarily terminates employment, Executive will
not be liable to Holdings or the Companies for any damages which may be caused
by such termination. Sections 5, 6 and 7 of this Agreement shall nevertheless
remain in full force and effect.
(b) Termination Without Cause. If Holdings terminates Executive's employment
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hereunder for any reason not constituting cause as defined in section (a) above,
(including for no reason) then Holdings shall be liable to pay to Executive (i)
his annual base compensation until the expiration of the balance of the term
hereof and (ii) a pro rata (based on the number of days in the year during which
Executive was employed under this Agreement as compared to 365 days in the year)
portion of the annual bonus for the year in which termination occurs which bonus
Executive would have been entitled to receive under section 2 hereof except for
such termination. No other amounts or benefits due hereunder or otherwise shall
be due or paid to Executive from and after the date of termination. Sections 5,
6 and 7 of this Agreement shall nevertheless remain in full force and effect.
5. Restrictive Covenants. During Executive's employment with Holdings or the
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companies hereunder or otherwise and for a period equal to the greater of five
(5) years from the date hereof or three (3) years after Executive is no longer
employed by Holdings or the Companies, Executive shall not:
a. directly or indirectly, either individually or as a principal, partner,
agent, employee, employer, consultant, stockholder, joint venturer, or investor,
or as a director or officer of any corporation or association, or in any other
manner or capacity whatsoever, engage in, assist or have any active interest in
a business located anywhere in United States or any foreign country in which any
of the Companies have conducted business within the past three years that (i)
engages in the business of manufacturing or distribution of electric motors and
related products that competes with or is similar in concept, design, format, or
otherwise to the business conducted by Holdings or the Companies on the date
hereof or at any time during the term of this covenant, or (ii) sells to,
supplies, provides goods or services to, purchases from, or does business in any
manner with Holdings or the Companies if such engagement, assistance or interest
has a materially adverse effect on Holdings or the Companies. Notwithstanding
the above, this paragraph shall not be construed to prohibit Executive from
owning less than three percent (3%) of the outstanding securities of a
corporation which is publicly traded on a securities exchange or over-the-
counter.
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b. directly or indirectly, either individually, or as a principal, partner,
agent, employee, employer, consultant, stockholder, joint venturer, or investor,
or as a director or officer of any corporation or association, or in any other
manner or capacity whatsoever, (i) divert or attempt to divert from Holdings or
the Companies any business with any customer or account with which Executive had
any contact or association, which was under the supervision of Executive, or the
identity of which was learned by Executive as a result of Executive's employment
with Holdings or the Companies, or (ii) induce any salesperson, distributor,
supplier, vendor, manufacturer, representative, agent, jobber or other person
transacting business with Holdings or the Companies to terminate their
relationship or association with Holdings or the Companies, or to represent,
distribute or sell services or products in competition with services or products
of Holdings or the Companies, or (iii) induce or cause any employee of Holdings
or the Companies to leave the employ of Holdings or the Companies.
6. Non-Disclosure. Executive shall not at any time or in any manner, directly
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or indirectly, use or disclose to any party other than Holdings or the Companies
any trade secrets or other Confidential Information (as defined below) learned
or obtained by him while a stockholder, officer or director of Holdings or the
Companies. As used herein, the term "Confidential Information" means information
disclosed to or known by Executive as a consequence of his position with
Holdings or the Companies and not generally known in the industry in which
Holdings or the Companies is engaged and that in any way relates to the
Companies' or Holdings' products, processes, services, inventions (whether
patentable or not), formulas, techniques or know-how, including, but not limited
to, information relating to distribution systems and methods, research,
development, manufacturing, purchasing, accounting, engineering, marketing,
merchandising and selling.
7. Specific Performance. The parties hereto agree that their rights hereunder
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are special and unique and that any violation thereof would not be adequately
compensated by money damages, and each grants the other the right to
specifically enforce (including injunctive relief where appropriate) the terms
of this Agreement.
8. Notices. Any notice, request, consent or communication (collectively a
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"Notice") under this Agreement shall be effective only if it is in writing and
(i) personally delivered, (ii) sent by certified or registered mail, return
receipt requested, postage prepaid, or (iii) sent by a nationally recognized
overnight delivery service, with delivery confirmed, addressed as follows:
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a. If to Executive:
Xxxx Xxxxx
000 Xxxxx Xxxxxxx
Xxxxx Xxxxxxxx, XX 00000
Telephone No. (000)000-0000
with a copy to:
Xxxx Xxxxxx, Esq.
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone No. (000)000-0000
b. If to Holdings to:
Xxxxxx X. Xxxxx
c/o Jordan Industries, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
with a copy to:
G. Xxxxxx Xxxxxx, Esq.
Xxxxx Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
or such other persons or addresses as shall be furnished in writing by any party
to the other party. A Notice shall be deemed to have been given as of the date
when (i) personally delivered, (ii) five (5) days after the date when deposited
with the United States mail properly addressed, or (iii) when receipt of a
Notice sent by an overnight delivery service is confirmed by such overnight
delivery service, as the case may be, unless the sending party has actual
knowledge that a Notice was not received by the intended recipient.
9. Assignment. This Agreement and all of the provisions hereof shall be
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binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by Executive.
10. Governing Law. This Agreement shall be governed by the law of the State of
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Illinois as to all matters, including, but not limited to, matters of validity,
construction, effect and
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performance, except that no doctrine of choice of law shall be used to apply any
law other than that of Illinois.
11. Severability. Holdings and Executive believe the covenants against
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competition contained in this Agreement are reasonable and fair in all respects,
and are necessary to protect the interests of Holdings. However, in case any one
or more of the provisions or parts of a provision contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement or
any other jurisdiction, but this Agreement shall be reformed and construed in
any such jurisdiction as if such invalid or illegal or unenforceable provision
or part of a provision had never been contained herein and such provision or
part shall be reformed so that it would be valid, legal and enforceable to the
maximum extent permitted in such jurisdiction. Without limiting the foregoing,
the parties intend that the covenants and agreements contained in part a. of
Section 5 shall be deemed to be a series of separate covenants and agreements,
one for each of The United States of America and one for each of the foreign
countries in which any of the Companies have conducted business within the past
three years. If, in any judicial proceeding, a court shall refuse to enforce all
the separate covenants and agreements deemed to be included in part a. of
Section 5, it is the intention of the parties hereto that the covenants and
agreements which, if eliminated, would permit the remaining separate covenants
and agreements to be enforced in such proceeding shall, for the purpose of such
proceeding, be deemed eliminated from the provisions of part a. of Section 5.
12. Neutra1 Interpretation. This Agreement constitutes the product of the
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negotiation of the parties hereto and the enforcement hereof shall be
interpreted in a neutral manner, and not more strongly for or against any party
based upon the source of the draftsmanship hereof.
13. Miscellaneous. This Agreement may be executed in two or more counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and may not be modified orally, but only by a writing
subscribed by the party charged therewith. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings (whether oral or written) between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
HOLDINGS
MK HOLDINGS, INC.
By: /s/
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Title: Vice President
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EXECUTIVE:
/s/
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Xxxx Xxxxx
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