EMPLOYMENT AGREEMENT
AGREEMENT dated as of October 1, 1998 by and between CSL LIGHTING
MANUFACTURING, INC., a Delaware corporation ("CSL" or the "Company") and SKEGIN
residing at 0000 X. Xxxxx Xx., #000 Xxxx Xxxxxxxxx, XX 00000 ("Skegin").
WHEREAS, Skegin is currently the President and sole shareholder of Ortek
Corporation ("Ortek"); and
WHEREAS, simultaneously herewith the Company is acquiring substantially
all of the assets of Ortek pursuant to an Asset Purchase Agreement of even date
herewith; and
WHEREAS, the Company desires to assure itself of the benefit of Skegin's
services and experience for a period of time; and
WHEREAS, Skegin is willing to enter into an agreement to that end with the
Company upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Employment. CSL hereby employs Skegin as President -- Ortek Division
and Skegin hereby accepts such employment and agrees to perform his duties and
responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
2. Duties and Responsibilities. Skegin shall be the President -- Ortek
Division during the Employment Term (as defined below). Skegin shall report to
and be subject to the direction of the Chief Executive Officer and/or the
President of CSL and Skegin shall perform such duties as may be assigned to him
from time to time by the Chief Executive Officer and/or President of CSL;
provided, that such duties shall be of a nature consistent with the dignity and
authority of the positions of President -- Ortek Division. During the Employment
Term Skegin shall, subject to the Company's vacation policy, devote
substantially all of his normal business time and attention to the businesses of
CSL and its subsidiaries and affiliates and shall perform such duties in a
diligent, trustworthy, loyal, businesslike and efficient manner, all for the
purpose of advancing the business of CSL and its subsidiaries and affiliates.
Nothing contained in this Agreement shall be deemed to prohibit Skegin from
devoting a nominal amount of his time to his (and his family's) personal
investments, provided, however, that, in case of conflict, the performance of
Skegin's duties under this Agreement shall take precedence over his activities
with respect to such investments.
3. Term. The Term of this Agreement shall commence on the date hereof and
shall continue until September 30, 2003, unless terminated prior thereto in
accordance with the terms and provisions hereof (the "Employment Term").
4. Compensation. CSL shall pay to Skegin a salary at the rate of
$80,000.00 per year, payable in such manner as CSL shall determine, but in no
event any less often than monthly, less withholding required by law and other
deductions agreed to by Skegin. Skegin's annual salary may be increased during
the Employment Term in the sole discretion of the Board.
5. Bonus. In addition to the compensation provided for in Paragraph 4 of
this Agreement, Skegin shall during the Employment Term be eligible to
participate in the Company's then existing and effective profit sharing and
bonus plans. Furthermore Skegin shall receive such other bonuses as determined
in the sole discretion of the Board of Directors.
6. Expenses and Benefits.
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(a) CSL shall, consistent with CSL's policy of reporting and
reimbursement of business expenses, reimburse Skegin for such other ordinary and
necessary entertainment and business related expenses as shall be incurred by
Skegin in the course of the performance of his duties under this Agreement.
(b) Skegin shall be entitled to participate, to the extent he
qualifies, in such life insurance, hospitalization, disability and other medical
insurance plans or programs as are generally made available to employees of CSL.
7. Skegin's Representation and Warranties. Skegin represents and warrants
that he has the full right and authority to enter into this Agreement and fully
perform his obligations hereunder, that he is not subject to any non-competition
agreement other than with the Company, and that his past, present and
anticipated future activities have not and will not infringe on the proprietary
rights of others. Skegin further represents and warrants that he is not
obligated under any contract (including, but not limited to, licenses, covenants
or commitments of any nature) or other agreement or subject to any judgment,
decree or order of any court or administrative agency which would conflict with
his obligation to use his best efforts to perform his duties hereunder or which
would conflict with the Company's business and operations as presently conducted
or proposed to be conducted. Neither the execution nor delivery of this
Agreement, nor the carrying on of the Company's business as officer and employee
by Skegin will conflict with or result in a breach of the terms, conditions or
provisions of or constitute a default under any contract, covenant or instrument
to which Skegin is currently a party.
8. Termination.
(a) CSL shall have the right to terminate this Agreement for
disability in the event Skegin suffers any illness or incapacity of such
character as to substantially disable him from performing his duties hereunder
for a period of more than ninety (90) consecutive days in any one calendar year
upon CSL giving at least fifteen (15) days written
notice of its intention to so
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terminate. If Skegin shall resume his duties hereunder within fifteen (15) days
following the receipt of such notice and shall perform such duties for forty
(40) days of the next sixty (60) consecutive days thereafter, the Employment
Term shall continue without interruption and such notice of intention to
terminate shall have no further force or validity.
(b) This Agreement shall terminate automatically upon the death of
Skegin, except that Skegin's salary through the date of his death and any cash
payments due him, if any, through the date of this death shall be paid to his
estate within thirty (30) days of his death.
(c) CSL may terminate this Agreement at any time with Reasonable
Cause upon five (5) days written notice to Skegin. "Reasonable Cause" means (i)
conviction of a crime involving moral turpitude; (ii) Skegin having engaged in
any activity in competition with CSL, without CSL's consent; (iii) Skegin having
divulged any secret or confidential information of a material nature belonging
to CSL, without CSL's consent, except as required by law; (iv) Skegin's
dishonesty or misconduct that is damaging or detrimental to CSL in any material
respect; or (v) Skegin's breach of any material term of this Agreement;
provided, however, that termination under this provision shall not be effective
unless Skegin shall have first received written notice from CSL of the specific
acts or omissions alleged to constitute a breach of any material term of this
Agreement, and such breach continues unremedied for a period of fifteen (15)
days after such notice.
(d) If, during the employment period, the Company terminates
Skegin's employment other than for Cause or Disability, the Company shall pay to
Skegin a cash payment equal to the "Base Amount" (as defined below). The Base
Amount shall mean the sum of (i) the annual base salary at the time of such
termination, and (ii) the amount of the highest aggregate annual bonus received
by Skegin from the Company in any year during the two (2) year period preceding
the date of such termination. Such sum shall be payable in an lump sum payment
within ninety (90) days of the date of such termination.
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9. Non-Competition. Skegin covenants and agrees that during his employment
hereunder and for a period of one year after his employment hereunder is
terminated, he will not, without the prior written consent of CSL, (a) compete
with the business of CSL or any of its subsidiaries or affiliates and, in
particular, he will not without such consent, directly or indirectly, own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or be connected as a director,
officer, employee, partner, consultant or agent with, any business in
competition with or similar to the business of CSL or any of its subsidiaries or
affiliates; provided, however, that Skegin may own up to two percent of the
capital stock of any publicly traded corporation in competition with the
business of CSL or any of its subsidiaries or affiliates if the fair market
value of such corporation's outstanding capital stock exceeds $100 million, and
(b) divert, take away, interfere with or attempt to take away any present or
former employee or customer of CSL or
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any of its subsidiaries or affiliates. In the event that the provisions of this
Section 9 should ever be deemed to exceed the time or geographic limitations or
any other limitations permitted by applicable law, then such provisions shall be
deemed reformed to the maximum permitted by applicable law. Skegin acknowledges
and agrees that the foregoing covenant is an essential element of this Agreement
and that, but for the agreement of Skegin to comply with the covenant, the
Company would not have entered into this Agreement, and that the remedy at law
for any breach of the covenant will be inadequate and the Company, in addition
to any other relief available to it, shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damage.
10. Confidential Information. Skegin recognizes and acknowledges that the
customer lists, patents, inventions, copyrights, methods of doing business,
trade secrets and proprietary information of CSL including, without limitation,
as the same may exist from time to time, are valuable, special and unique assets
of the business of CSL. Except in the ordinary course of business or as required
by law, Skegin shall not, during or after the Employment Term, disclose any such
list of customers or any part thereof, any such patents, inventions, copyrights,
methods of doing business, trade secrets or proprietary information which are
not otherwise in the public domain to any person, firm, corporation or other
entity for any reason whatsoever. In addition, Skegin specifically acknowledges
and agrees that the remedy at law for any breach of the foregoing shall be
inadequate and that the Company, in addition to any other relief available to
them, shall be entitled to temporary and permanent injunctive relief without the
necessity of proving actual damage.
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11. Opportunities. During his employment with CSL, Skegin shall not take
any action which might divert from CSL or any of its subsidiaries or affiliates
any opportunity which would be within the scope of any of the present or future
businesses of CSL or any of its subsidiaries or affiliates.
12. Contents of Agreement, Parties in Interest, Assignment, etc. This
Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Skegin hereunder which are of a
personal nature shall neither be assigned nor transferred in whole or in party
by Skegin. This Agreement shall not be amended except by a written instrument
duly executed by CSL and Skegin.
13. Severability. If any term or provision of this Agreement shall be held
to be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extend of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
14. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
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If to CSL
addressed to: CSL Lighting Manufacturing, Inc.,
00000 Xxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Chief Executive Officer
with a copy to: Morse, Zelnick, Rose & Lander, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
If to Skegin
addressed to: Xxxxx Skegin
0000 X. Xxxxx Xx., #000
Xxxx Xxxxxxxxx, XX 00000
or at such other address as the one party shall specify to the other party in
writing.
15. Counterparts and Headings. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument. All headings are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
16. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California.
17. Arbitration. Any disputes arising hereunder shall be submitted to
arbitration before a single arbitrator in Los Angeles, California under the
rules and regulations of the American Arbitration Association. Any award in such
arbitration proceeding may be enforced in any court of competent jurisdiction.
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THIS AGREEEMENT CONTAINS VERY IMPORTANT TERMS GOVERNING YOUR EMPLOYMENT. IN
PARTICULAR, PARAGRAPH 9 AFFECTS YOUR ABILITY TO TAKE CERTAIN ACTIONS FOLLOWING
THE TERMINATION OF THIS AGREEMENT. YOU SHOULD SEEK ADVICE FROM YOUR ATTORNEY
REGARDING ANY MATTER RELATING TO THIS AGREEMENT. BY EXECUTING THIS AGREEMENT,
YOU ARE AFFIRMING THAT YOU HAVE HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT AND
TO CONSULT WITH YOUR ATTORNEY IF YOU SO DESIRED, THAT YOU UNDERSTAND THE MEANING
AND SIGNIFICANCE OF ALL OF ITS PROVISIONS, THAT NO REPRESENTATIONS OR PROMISES
HAVE BEEN MADE TO YOU REGARDING YOUR EMPLOYMENT WHICH ARE NOT SET FORTH IN THIS
AGREEMENT, AND THAT YOU ARE FREELY SIGNING THIS AGREEMENT TO OBTAIN EMPLOYMENT
WITH THE COMPANY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
CSL LIGHTING MANUFACTURING, INC.
By:
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Xxxx X. Xxxxx
Chief Executive Officer
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XXXXX SKEGIN
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