EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") dated March 25, 1998, between
Constant Power Manufacturing Company, Inc., a Texas corporation ("Company"), and
R. Xxxxxx Xxxxx, a Texas resident ("Employee"), evidences that, in consideration
of the mutual covenants and agreements contained herein, the Company hereby
employs Employee and Employee hereby accepts such employment and agrees to
perform the services specified herein upon the terms and conditions set forth in
this Agreement.
1. DUTIES AND RESPONSIBILITIES. During the Term of Employment (as defined
in Section 2), Employee shall:
(a) serve as the _SALES MANAGER___ of the Company promoting the products
and services offered by the Company for sale, subject in all events to the
direction and control of the board of directors of the Company;
(b) serve in such other capacities, perform such other services and have
such duties and responsibilities with the Company and its affiliates and
subsidiaries as are assigned to Employee, subject in all events to the direction
and control of the board of directors of the Company;
(c) be a full-time employee of the Company and devote Employee's full
business time, attention, efforts and energy to the affairs of the Company,
subject to Employee's right to vacations as provided herein, and subject to
absences on account of temporary illness;
(d) faithfully, diligently, competently and to the best of Employee's
ability perform all duties incident to Employee's employment hereunder;
(e) use Employee's best efforts to promote the interests of the Company;
and
2. TERM OF EMPLOYMENT. The "Term of Employment" as used in this Agreement shall
mean the two year period commencing on March __, 1998 ("Effective Date"). The
Term of Employment shall be earlier terminated as follows:
(a) Should Employee die, the Term of Employment shall be terminated upon
Employee's death.
(b) Should Employee become disabled, as defined in Section 3 hereof, the
Term of Employment may, at the option of the Company, be terminated by the
Company upon ten days written notice to Employee.
(c) Should Employee (i) violate any of the terms and provisions of this
Agreement or otherwise fail to satisfactorily perform any obligation due to the
Company hereunder or otherwise, (ii) engage in misrepresentation, dishonesty,
embezzlement, fraud or disloyalty in matters affecting the Company or the
employment relationship or usurpation of a benefit that rightfully belongs to
the Company, (iii) be negligent with respect to matters involving or affecting
the Company or the duties and responsibilities of Employee to the Company, or
(iv) engage in any crime (other than minor traffic violations), the Term of
Employment, at the option of the Company, may be terminated by the Company
immediately upon written notice to Employee. Any such termination by virtue of
this Section 2(c) shall be deemed "for cause" and shall not prejudice any remedy
that the Company may have at law, in equity, or under this Agreement for breach
hereof by Employee.
3. DISABILITY. If, because of illness or otherwise, Employee should become
physically or mentally disabled and is therefore unable to perform Employee's
duties hereunder, Employee shall be entitled to such paid temporary leaves of
absence as may be in the Company's policies and procedure. Should the duration
of any such disability exceed the Company's period of paid leave, Employee shall
be entitled to unpaid leave of up to twelve work weeks during any twelve month
period. Should Employee's disability
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exceed the period of paid leave plus twelve unpaid work weeks during any twelve
month period, Employee may be subject to termination at the sole discretion of
Company.
4. COMPENSATION. As compensation ("Compensation") for Employee's services,
during the Term of Employment, the Company shall pay the following compensation
or provide the following benefits, as the case may be, to Employee:
(a) Salary at the rate of $5,000 per month ("Salary") payable no less
frequently than in equal semi-monthly installments, less deductions for all
required federal and state income and social security taxes.
(b) Coverage for Employee under group medical, life, accidental death,
long-term disability, and dental insurance policies provided by the Company, if
any, all on such terms as the Company extends to its employees from time to
time. Employee shall not be entitled to be paid any additional cash Compensation
for accrued, unused sick leave, if any.
(c) Paid vacation in conformity with the Company's policies and
procedures, subject to written approval by the Company, and such other holidays
as the Company extends to its employees from time to time. Employee shall not be
entitled to be paid any additional cash Compensation for accrued, unused
vacation days or holidays.
(d) A cash bonus equal to one percent (1.0%) of the gross collections from
sales arising from operations of the Company for each twelve month period
measured by the annual anniversary date of this Agreement in which Employee was
a full time employee for the entire year. Any bonus payable hereunder shall be
paid within thirty days following the end of each of employee's twelve
consecutive months of employment ending on each annual anniversary date of this
Agreement, provided that the Company, in its sole discretion, may estimate such
bonus and prepay all or portions of the bonus during the fiscal year. Employee
shall promptly repay any overpayment upon demand.
5. TERMINATION PAYMENTS. In the event of termination of the Term of
Employment, whether by action of the Company, Employee or by mutual agreement,
voluntary or involuntary, the Company shall no longer be obligated to make any
payments of any kind to Employee, except for salary and bonus, if any, earned
prior to the date of termination but not paid, and reimbursable expenses not yet
reimbursed, which payments shall be paid upon such termination or as soon
thereafter as is practicable (and the parties shall act in good faith to make
such payment within sixty days after termination). Upon any termination,
Employee shall pay the Company any amounts owed by Employee to the Company by
reason of the breach hereof or otherwise and the Company shall be entitled to
offset against any amounts owed to Employee any amounts owed by Employee to the
Company or any of its subsidiaries or affiliates, whether under this Agreement
or otherwise, without prejudice to any other rights or remedies of the Company
or its subsidiaries or affiliates available at law or equity.
6. NON-COMPETITION COVENANT. Employee represents that Employee is subject
to no obligation to any third party that would restrict or interfere with
Employee's ability to perform hereunder. Employee agrees that from the date
hereof and for the one year period following the termination of the Term of
Employment ("Covenant Trigger"), whether by action of the Company, Employee, or
by mutual agreement, voluntary or involuntary, Employee will not, directly or
indirectly, (i) own, manage, operate, join, control, or participate in the
ownership, management, operation or control of, or be employed by, or otherwise
engage in or become interested in or be connected in any manner with any
business located in the United States of America which offers goods or services
of the type offered by the Company ("Competing Business"), (ii) solicit, on
behalf of Employee or any business in the same or similar business as that
engaged in by the Company ("Competing Business"), any person or entity that has
been a customer of the Company, either directly or indirectly through a broker
or otherwise, at any time during the two year period preceding the Covenant
Trigger ("Company Customer"), to purchase or otherwise acquire or use any
products or services of the same or similar nature as products or services
offered by the Company, (iii) solicit any person who, at any time within the two
year period preceding the Covenant Trigger, has been an employee of the Company
("Company Employee"), except a Company Employee who was terminated by the
Company, to become an employee of Employee or any Competing Business. Employee
shall not be deemed to be so competing solely
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by reason of purchasing stock of companies listed on the New York Stock
Exchange, the American Stock Exchange, or quoted on the National Association of
Securities Dealers Automatic Quotation System (NASDAQ), provided that Employee's
direct and beneficial ownership of any class of securities in any of such
entities is less than 5% of the aggregate number of outstanding units, interests
or shares of such class of securities. The term "solicit" as used herein shall
refer, in addition to its common usages, to communications or transactions
whether initiated by Employee or a third party. All parties acknowledge that the
restrictions and restraints contained in this covenant are reasonable. Should
any court of competent jurisdiction determine that, consistent with the
established precedent of the forum jurisdiction, the public policy of such
jurisdiction requires a more limited restriction, duration, nature of restricted
activity, or any combination thereof, it would be in furtherance of the
intentions of the parties hereto for the court to so interpret and construe the
terms of this Section 6 to apply only to the extent of such limited restriction.
In the event of a breach of this covenant the running of the non-competition
period herein provided shall be tolled for the duration of such breach. In the
event of any breach or attempted or threatened breach of this covenant any
aggrieved party shall have the right in addition to all other rights and
remedies at law and in equity, to obtain an injunction prohibiting such breach
or attempted or threatened breach and commanding compliance with this covenant
merely by proving the existence of such breach or threatened or attempted
breach, and without the necessity of proving irreparable harm or inadequacy of
legal remedies.
7. CONFIDENTIALITY OF INFORMATION. Employee acknowledges that Employee has
had and will have access to certain confidential information of the Company or
its subsidiaries or affiliates, including, without limitation, product designs,
employee lists, customer lists, supplier lists, manuals, forms, documentation,
data, trade secrets, specifications, methods, procedures, systems, plans,
techniques, know-how, plans, and computer programs ("Information") and that such
Information constitutes valuable, special and unique assets of the Company or
such other entities. Employee will cause the Information obtained by Employee to
be treated as strictly confidential. Employee shall not use or knowingly permit
others to use any such Information in a manner detrimental to the Company or its
subsidiaries or affiliates, or for Employee's own account and shall not directly
or indirectly disclose any such Information to any person, firm, corporation,
association or other entity for any reason or purpose, except to such parties to
whom such information is furnished in the normal course of business under
established policies approved by the Company, authorized representatives of the
Company, or upon the written consent of the Company, or as required by law, or
to a governmental agency pursuant to a valid subpoena or other order or pursuant
to applicable governmental regulations, rules or statutes. For purposes hereof,
authorized representatives of the Company shall be directors and officers of the
Company to which such Information is furnished in the normal course of business
under established policies approved by the Company. Employee further agrees
that, upon termination of the Term of Employment, Employee will not take with
Employee or retain, or disclose to others without written authorization from the
Company, any Information, papers, files or other documents or copies thereof of
any kind belonging to the Company or any of its subsidiaries or affiliates.
The obligations of this Section 7 shall continue as to each item of such
Information, both during and after termination of the Term of Employment, until
the Company's competitors have become cognizant of such item of Information from
published sources through no fault of or action by Employee.
8. PROPRIETARY DEVELOPMENTS. Employee agrees promptly to fully disclose
and assign and does hereby assign to the Company the entire right, title and
interest throughout the world in and to all product formulations, inventions,
improvements, discoveries, know-how, trade secrets, information, processes,
machines, manufactures, compositions, apparatus or products ("Proprietary
Information"), whether or not patentable, made or conceived or discovered or
developed or reduced to practice, solely or jointly, by Employee during the Term
of Employment:
(a) Regardless of whether or not during working time chargeable to the
Company, which relate in any manner to the Company's field of business interest
or are suggested by or to Employee or result from work performed by Employee for
the Company or are made by the use of the Company's materials or equipment, or
(b) While on the Company's time, regardless of the nature of the
Proprietary Information.
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It shall be presumed, subject to clear and convincing proof to the
contrary, that all Inventions, whether or not patentable, relating to the
Company's business and developed by Employee during the six month period
beginning on the date of termination of the Term of Employment were, for the
purposes of this Agreement, conceived prior to the termination of the Term of
Employment.
Employee will cooperate with the Company in all lawful ways in order to
carry into effect the provisions of this Section 8, including the execution of
any papers or documents deemed by the Company to be desirable or necessary to
enable the Company to apply for, secure and maintain patent or copyright
protection thereon in the United States of America and in foreign countries
including, but not limited to applications, assignments and other legal
instruments.
9. ENFORCEMENT. Employee acknowledges that the rights reserved to the
Company under Sections 6, 7, and 8 hereof are necessarily of a special, unique
and extraordinary nature and that the loss arising from a breach or threatened
breach thereof cannot reasonably and adequately be compensated by money damages
and will cause the Company to suffer irreparable harm and that a remedy at law
for any breach thereof will be inadequate. Accordingly, Employee hereby agrees
that the Company shall be entitled to injunctive or other extraordinary relief
in case of any such breach or threatened breach, and without the necessity of
proving irreparable harm or inadequacy of legal remedies, which shall, however,
in no way limit any other rights, including the recovery of damages, which the
Company may have at law or in equity. In addition, and without limitation of the
foregoing or any other rights the Company may have at law or in equity, if
Employee shall at any time before, during, or following the Term of Employment
violate Sections 6, 7, and 8 or use any Confidential Information or Proprietary
Information for Employee's personal benefit or the benefit of any third party,
Employee agrees to pay to the Company immediately without demand seventy five
percent of the gross receipts therefrom.
10. NOTICES. All notices, requests, demands and other communications under
this Agreement or any instrument contemplated hereby shall be in writing and
shall be personally delivered or mailed by United States registered or certified
mail, first class, postage prepaid, return receipt requested, to the address of
the respective parties hereto as shown under their names on the signature page
hereof and shall be deemed given on the earlier of actual receipt (as evidenced
by return receipt if mailed) or the date five days after mailing. Any party
hereto may change his or its address for such notices by giving notice of such
change pursuant to this Section 10.
11. BINDING EFFECT. This Agreement shall inure to the benefit of and shall
be binding upon the Company and its successors and assigns and upon Employee and
Employee's personal representatives and heirs. The provisions of Sections 5
through 18 hereof shall survive any termination of this Agreement. If the
Company has or adopts an employee manual or policies of a similar nature that
conflict with this Agreement the terms and provisions of this Agreement shall
control.
12. WAIVER. No failure to insist upon strict compliance with any
provision hereof shall be deemed a waiver of such provision or any other
provision hereof. No failure to exercise and no delay in exercising, on the part
of the Company, any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law or in any other agreement.
13. GOVERNING LAW: VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (EXCEPT THOSE
RELATING TO THE CONFLICT OF LAWS) AND SHALL BE PERFORMABLE IN XXXXXX COUNTY.
EACH PARTY HERETO SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS AND THE FEDERAL COURTS IN AND FOR THE SOUTHERN DISTRICT OF TEXAS IN
CONNECTION WITH ANY DISPUTE ARISING UNDER THIS AGREEMENT OR ANY DOCUMENT OR
INSTRUMENT ENTERED INTO IN CONNECTION HEREWITH. ALL ACTIONS HEREUNDER MUST BE
BROUGHT IN THE STATE COURTS OF XXXXXX COUNTY, TEXAS OR THE FEDERAL COURTS IN AND
FOR THE SOUTHERN DISTRICT OF TEXAS.
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14. SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person or circumstance, is for any reason or to any extent,
invalid or unenforceable, the remainder of the Agreement and the application of
such provision to the other persons or circumstances shall not be affected
thereby, but rather is to be enforced to the greatest extent permitted by law.
15. ASSIGNMENT. The rights and interest of Employee under this Agreement
including Employee's right to receive Employee's Compensation hereunder, may not
be assigned, sold, transferred, pledged or hypothecated, nor may the duties and
obligations of Employee hereunder be delegated. The rights and interests of the
Company hereunder are freely assignable and delegable by the Company upon notice
given to Employee.
16. PRIOR AGREEMENTS SUPERSEDED. This Agreement constitutes the sole
agreement of the parties hereto concerning the within subject matter and
supersedes any prior understandings or written or oral agreements between the
parties respecting the within subject matter.
17. CAPTIONS. The captions used in this Agreement are for convenience only
and are not to be construed in interpreting this Agreement.
18. AMENDMENT. This Agreement may be amended only by a
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written instrument signed by each party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
Company: Constant Power Manufacturing, Inc.
By:___/s/ XXXXXXX X. COSKEY______
Name: Xxxxxxx X. Xxxxxx
Title:____PRESIDENT______________
Address: 000 Xxxxxxx Xxxxx, Xxxx. 000
Xxxxxxx, Xxxxx 00000
Employee: __/s/ X. XXXXXX SMITH_____________
Name:R. Xxxxxx Xxxxx
Address:_________________________
_________________________________
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