Exhibit Number 10.5
Employment Agreement between Stant and X.X. Xxxxxx
E-9
Conformed Copy
EMPLOYMENT AGREEMENT (this "Agreement")
dated as of January 21, 1997, between STANT
CORPORATION, a Delaware corporation (the "Company"),
and XXXX X. XXXXXX, an individual residing at 000
Xxxx Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
("Executive").
WHEREAS the Company desires to retain the services of Executive as its
President and Chief Executive Officer, and Executive has indicated his
willingness to provide his services in such position on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the covenants and the agreements
herein contained, the parties agree as follows:
1. Services, Authority and Place of Employment. During the
Term of Employment (as defined in Section 3(a)), the Company shall employ
Executive as its President and Chief Executive Officer, and Executive hereby
accepts such employment. In his capacity as the Company's President and Chief
Executive Officer, Executive shall devote substantially all his business time,
attention, skill and efforts to the faithful performance of his duties hereunder
and shall have the usual powers and duties vested in the office of President and
Chief Executive Officer of a corporation of the size, stature and nature of the
Company, responsible only to the Board of Directors of the Company (the "Board")
and its stockholders. Executive shall have sufficient authority to accomplish
the objectives and goals set for him by the Board of Directors. Upon
commencement of the Term of Employment, the Executive shall be appointed to fill
a vacancy on the Board. The Executive shall at all times conduct himself in
conformity with the policies of the Company.
The principal place of employment shall be the Greater Chicago
Area which is defined as that area which is with fifty (50) miles of the main
post office of Chicago. Executive may move the executive offices of the Company
from Richmond, Indiana, to a location in the Greater Chicago Area selected by
Executive and approved by the Board.
2. Compensation. For all services to be rendered by Executive
in any capacity hereunder, during the Term of Employment the Company shall pay
or provide to Executive the following amounts and benefits:
(a) Base Salary. The Company shall pay to Executive in cash in
accordance with its regular payroll practices (but not less frequently than
monthly) a base salary (the "Base Salary") at the initial annual rate of
$500,000, which rate shall be reviewed by the Compensation Committee of the
Board (the "Committee") on or about January 1, 1998, and annually thereafter.
Such salary may be increased, but not decreased, from time-to-time at the
discretion of the Committee to reflect both merit and cost of living increases,
and upon any such increase in the annual rate of Executive's base salary, such
increased amount shall become the "Base Salary".
(b) Incentive Compensation. Executive shall participate in an
annual incentive compensation plan for executives to be adopted by the Committee
whereby Executive shall have the opportunity each year to earn a cash bonus in
an amount of up to 100% of the Base Salary for such year, based upon the
attainment of the Company's budgeted results which are realistically obtainable
and other agreed objectives. Executive acknowledges that such compensation will
be intended to qualify as performance-based compensation under Section 162
(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the "Tax Code"). The
cash bonus provided for in this Section 2(b) shall be paid on or before the 30th
day following the date of the auditor's opinion on the financial statements of
the Company for the year to which the bonus relates and in no event later than
six (6) months after the close of the fiscal year to which they relate. If
Executive does not achieve his assigned objectives or fails to meet or exceed
high job performance expectations, no payment (or a reduced payment) shall be
made for this bonus component.
By January 31 of each year during the Term of Employment,
Executive may irrevocably elect, by notice in writing to the Company, to receive
all or a stated percentage of his incentive compensation, if any, for such
fiscal year in the form of stock options to be issued by the Company pursuant to
a plan to be established by the Board. The exercise price, vesting and
exercisability conditions and valuation of such options shall be as set forth in
the Company's Stock Option Plan for Directors (1993).
(c) Insurance; Pension Benefits. Executive shall participate
in all insurance (including life, travel and accident, medical and dental
insurance), pension, pension restoration, deferred compensation, disability,
profit-sharing, retirement and other employee welfare and benefit plans
maintained from time to time by the Company for its executives or salaried
employees, to the extent that such executives or salaried employees participate,
in accordance with their respective terms, except as may otherwise be provided
herein, and provided Executive satisfies any applicable eligibility requirements
therefor. The Company reserves the right to change any such welfare or benefit
plan in the future, but no such change shall be applied retroactively or
adversely affect benefits already accrued. Executive further acknowledges that
the Company may wish to maintain insurance on his life for its benefit and
agrees to submit to any physical examination which may be required in order to
obtain such insurance.
(d) Fringe benefits: Vacation. Executive shall participate in
the Company's automobile program and all other fringe benefits to the same
extent as other senior executives of the Company. Executive shall be entitled to
a number of paid vacation days each year as allowed under the Company's vacation
policy as currently in effect which shall be no less than four (4) weeks.
(e) Business Travel and Other Expenses. The Company shall pay
or reimburse Executive for all reasonable business travel and other business
expenses incurred by Executive in the course of performing his duties under this
Agreement, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the Board from time
to time.
(f) Disability. The Company shall provide Executive with a
disability arrangement (the "Disability Arrangement") that will provide
Executive, in the event he becomes disabled, with payments to be made in equal
monthly installments of not less than 60% of the Executive's average total
salary compensation (Base Salary and incentive compensation) actually earned for
the three calendar years preceding the date of disability (assuming, to the
extent relevant, that Executive's total salary compensation for each of calendar
years 1994, 1995 and 1996 was $1,000,000); such payments to commence on the date
disability is determined and end on the date of which Executive recovers from
the disability, dies or attains age sixty-five (65), whichever first occurs.
Such payments shall be offset by any other disability payments received by
Executive under the Company's regular short-term disability program, regular
long-term disability program and the Social Security Disability benefits
program.
(g) Signing Bonus. The Company shall pay to Executive a
signing bonus of $1,200,000, such amount to be paid in amounts, on dates and in
a manner to be agreed between the Company and Executive, and any amount thereof
not paid within thirty (30) days after commencement of employment shall bear
interest at the rate of eight percent (8%); provided, however, that such amount
shall be paid in full no later than twelve (12) months after Executive's
termination of employment hereunder and shall be structured in a manner that to
the greatest extent possible the payment is tax deductible to the Company.
(h) Stock Options. On the date of execution of this Agreement,
the Company shall grant to Executive under the Company's 1993 Stock Option Plan
for Key Employees, as amended from time to time (as so amended, the "1993 Stock
Option Plan"), non-qualified options covering 300,000 shares of common stock of
the Company. Such options shall vest in equal installments on the first, second
and third anniversaries of the date of grant and shall be exercisable for 10
years, subject in all cases to the terms of the 1993 Stock Option Plan. Each
such option shall have a "Fair Market Value" (determined in accordance with the
1993 Stock Option Plan) as of January 21, 1997. The Company shall not announce
publicly that it is entering into this contract with Executive until after the
close of trading of the stock of the Company on January 21, 1997.
(i) Deferred Benefits. Upon commencement of the Term of
Employment, the Company shall credit $250,000 to an account established on
Executive's behalf (the "Account"). The Account shall be hypothetically invested
in a mutual fund or funds to be designated in writing by Executive (the "Funds")
until the Termination Date (as defined in Section 3(a)), and credited or debited
with the income, gains or losses of the Fund before the Termination Date. As
soon as reasonably practicable after the Termination Date, Executive shall
receive a lump sum, cash distribution of the amount credited to the Account as
of the Termination Date. Executive shall have no right to receive any amount
credited to the Account until the Termination Date and shall be an unsecured
creditor of the Company with respect to any amount credited to the Account on
his behalf.
3. Term of Employment and Termination. (a) Term of Employment.
The Term of Employment shall be the period of time which begins on January 22,
1997, or ninety (90) days thereafter if the current employer of Executive does
not waive its ninety (90) day termination clause, and ends on the date (the
"Termination Date") that is the earliest of (i) the date of Executive's death,
(ii) January 31, 2000 (provided that such date shall automatically be extended
for successive one year periods unless at least 60 days prior to January 31,
2000, or any successive January 31, the Company or Executive gives written
notice to the other of its or his desire that the Term of Employment expire on
such January 31), and (iii) the effective date of any termination of the Term of
Employment as provided for in this Agreement.
(b) Termination by the Company for Good Cause. The Company may
terminate the Term of Employment at any time for Good Cause (as defined in
Section 3(c)). The Company shall notify (the "Good Cause Notice") Executive in
writing at least 30 days in advance of any proposed termination for Good Cause
(which Good Cause Notice shall state the Good Cause for which Executive is
proposed to be dismissed in such detail as to permit a reasonable assessment by
Executive of the bona fides thereof). During such notice period Executive shall
have the opportunity to cure any breach if the same is capable of being cured.
(c) Definition of Good Cause. For purposes of this Agreement,
the term "Good Cause" shall mean:
(i) a material breach by Executive of his obligations under
this Agreement,
(ii) material misconduct by Executive in respect of such
obligations,
(iii) Executive's engaging in conduct that is immoral or
illegal or that brings Executive or the Company or any of its direct or
indirect subsidiaries (collectively, the "Stant Group") into disrepute
or otherwise damages the business of the Stant Group (as determined in
the good faith judgment of the Board of Directors), or
(iv) Executive's commission of an act of dishonesty or a felony,
which in any event is not cured by Executive prior to the effective date of the
termination of the Term of Employment referred to in the Good Cause Notice;
provided, however, that Good Cause shall not include (a) bad judgment or
negligence, (b) any act or failure to act by Executive believed in good faith by
him to have been in or not opposed to the interests of the Stant Group, and (c)
any act or failure to act by Executive in respect of which a determination could
properly be made that Executive met the applicable standard of conduct described
for indemnification or reimbursement or payment of expenses under the Delaware
Corporation Law, or the By-laws or Restated Certificate of Incorporation of the
Company, or the Company's directors' and officers' liability insurance.
(d) Termination by the Company for Convenience. Subject to the
Company's obligations to pay or provide certain amounts and benefits pursuant to
Section 4(b), the Company may terminate the Term of Employment at any time for
its convenience by written notice to Executive.
(e) Termination by Executive for Convenience. Executive may
terminate the Term of Employment at any time for Executive's convenience,
including his election to retire at any time, upon a minimum of 90 days' prior
written notice to the Company. The Company shall have the option of waiving all
or part of Executive's services during all or part of such notice period;
provided, however, that until the end of such notice period (i) the Company
shall continue to pay or provide to Executive the amounts and benefits described
in Section 2 and (ii) Executive shall continue to be an "employee" of the
Company or one of its subsidiaries and shall not commence active employment with
another employer.
In the event a purported termination of the Term of Employment
by Executive because of an Event of Termination is, for any reason, found to be
invalid, erroneous or incorrect, such termination shall be treated as a
termination by Executive for Executive's convenience pursuant to this Section
3(e).
(f) Termination for Disability. In the event of Executive's
Disability (as defined below), his employment with the Company shall be deemed
terminated for purposes of this Agreement as of the end of the calendar month in
which such Disability occurs. For purposes of this Agreement, "Disability" shall
be deemed to have occurred if (i) Executive shall be unable to perform his
duties on an active full-time basis by reason of disability or impairment of
health for a period of at least 180 consecutive calendar days or (ii) the
Company shall have received a certificate from a physician reasonably acceptable
to both the Company and the Executive (or his representative) to the effect that
the Executive is incapable of reasonably performing services under this
Agreement in accordance with past practices.
(g) Termination by Executive for Good Reason. Executive may
terminate his employment under this Agreement for Good Reason, in which event
the Company shall still have the same obligations to Executive under this
Agreement as provided for in Section 4(b).
"Good Reason" shall mean:
(a) Without Executive's express written consent, the
assignment to Executive of any duties inconsistent
with his positions, duties, responsibilities and
status with the Company set forth in this Agreement,
or a change in his reporting responsibilities, title
or offices set forth in this Agreement, or any
removal of Executive from or any failure to re-elect
him to any of such positions, except in connection
with the termination of his employment;
(b) A reduction in Executive's Base Salary or
material reduction in benefits or a material breach
of the Company's obligations undertaken in this
Agreement (after the Company has received written
notice of such breach and a reasonable opportunity to
cure);
(c) In the event of the occurrence of a Change in
Control, upon the occurrence thereafter of one or
more of the following events:
(i) Any termination by the Company for
convenience of the employment of Executive pursuant
to Section 3(d) within three (3) years after a Change
in Control; or
(ii) The occurrence of any of the following
events within three (3) years after a Change in
Control:
(A) Failure to elect or re-elect Executive,
or removal of Executive , as a Director of the
Company (or any successor thereto),
(B) A significant adverse change in the
nature or scope of the authorities, powers,
functions, responsibilities or duties attached to the
position with the Company which Executive had
immediately prior to the Change in Control, a
reduction in the aggregate of Executive's Base Pay
and Incentive Pay received from the Company, or the
termination of Executive's rights to any Executive
Benefits to which he was entitled immediately prior
to the Change in Control or a reduction in scope or
value thereof without the prior written consent of
Executive, any of which is not remedied within ten
(10) calendar days after receipt by the Company of
written notice from Executive of such change,
reduction or termination, as the case may be;
(C) A determination by Executive made in
good faith that as a result of a Change in Control
and a change in circumstances thereafter
significantly affecting his position, he has been
rendered substantially unable to carry out, or has
been substantially hindered in the performance of,
any of the authorities, powers, functions,
responsibilities or duties attached to his position
immediately prior to the Change of Control, which
situation is not remedied within ten (10) calendar
days after receipt by the Company of written notice
from Executive of such determination; or
(D) The liquidation, dissolution, merger,
consolidation or reorganization of the Company or
transfer of all or a significant portion of its
business and/or assets unless the successor or
successors (by liquidation, merger, consolidation,
reorganization or otherwise) to which all or a
significant portion of its business and/or assets
have been transferred directly or by operation of
law) shall have assumed all duties and obligations of
the Company under this agreement; or
(d) Subsequent to a Change in Control of the Company,
the failure by the Company to obtain the assumption
of the obligation to perform the Agreement by any
successor as contemplated herein or otherwise.
Change in Control. For purposes of this Agreement, a "Change in
Control" shall have occurred if at any time during the term of Executive's
employment hereunder, any of the following events shall occur:
(i) The Company is merged, or consolidated, or reorganized
into or with another corporation or other legal person, and as a result
of such merger, consolidation or reorganization less than 51% of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such transaction are held in
the aggregate by the holders of voting securities of the Company
immediately prior to such transaction;
(ii) Company sells all or substantially all of its assets or
any other corporation or other legal person and thereafter, less than
51% of the combined voting power of the then-outstanding voting
securities of the acquiring or consolidated entity are held in the
aggregate by the holders of voting securities of the Company
immediately prior to such sale;
(iii) There is a report filed after the date of this Agreement
on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or
report), each as promulgated pursuant to the Securities Exchange Act of
1934 (the "Exchange Act") disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act), other than Bessemer Capital Partners L.P. ("BCP") or any
person affiliated with BCP (BCP and all such persons being,
collectively, "Bessemer"), has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) representing both (a)
30% or more of the combined voting power of the then-outstanding voting
securities of the Company and (b) a greater percentage of the combined
voting power of the then outstanding voting securities of the Company
held by Bessemer;
(iv) The Company shall file a report or proxy statement with
the Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to item 1 of Form 8-K thereunder (or any
successor schedule, form or report or item therein) that the change in
control of the Company has or may have occurred or will or may occur in
the future pursuant to any then-existing contract or transaction; or
(v) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of the
Company cease for any reason to constitute at least a majority thereof
unless the election to the nomination for election by the Company's
shareholders of each director of the company first elected during such
period was approved by a vote of at least two-thirds of the directors
of the Company then still in office who were directors of the Company
at the beginning of such period.
4. Payments upon Termination of Term of Employment. When the
Term of Employment terminates, Executive shall be entitled to the amounts and
benefits provided in this Section 4 and no others:
(a) Termination by Company for Good Cause or by Executive for
His Convenience or Expiration. If the Term of Employment is terminated by the
Company for Good Cause pursuant to Section 3(b) or by Executive for his
convenience pursuant to Section 3(f) or if the Term of Employment expires
pursuant to Section 3(a)(ii), the Company shall:
(i) continue to pay or provide to Executive the amounts and
benefits described in Section 2 until the Termination Date;
(ii) not later than the fifth business day following the
Termination Date, pay Executive in cash an amount equal to any accrued
but unpaid vacation pay;
(iii) as soon as such amount can be computed and, in any
event, not later than the 60th business day following the Termination
Date, pay Executive in cash an amount equal to any earned but unpaid
compensation under any incentive compensation plan in which Executive
participated during the Term of Employment for all calendar years ended
during the Term of Employment;
(iv) provide any rights or benefits to which Executive may be
entitled under COBRA; and
(v) provide, in accordance with the terms of any such plan,
any rights or benefits to which Executive may be entitled under any tax
qualified or non-tax qualified welfare or retirement plan of the Stant
Group, including the Company's Pension Restoration Plan.
(b) Termination by Company for Its Convenience or by Executive
for Good Reason. If the Term of Employment is terminated by the Company for its
convenience pursuant to Section 3(e) or by Executive for Good Reason pursuant to
Section 3(g), the Company shall:
(i) continue to pay or provide to Executive the amounts and
benefits described in Section 2 until the Termination Date;
(ii) not later than the fifth business day following the
Termination Date, pay Executive in cash an amount equal to any accrued
and unpaid vacation pay;
(iii) as soon as such amount can be computed and, in any
event, not later than the 60th business day following the Termination
Date, pay Executive in cash an amount equal to any earned but unpaid
compensation under any incentive compensation plan in which Executive
participated during the Term of Employment for all calendar years ended
during the Term of Employment;
(iv) provide any rights or benefits to which Executive may be
entitled under COBRA;
(v) provide, in accordance with the terms of any such plan,
any rights or benefits to which Executive may be entitled under any
tax-qualified or nontax-qualified welfare or retirement plan of the
Stant Group, including the Company's Pension Restoration Plan; and
vi) pay Executive the Base Salary in effect at the Termination
Date (payable not less frequently than monthly) from the Termination
Date through the last day of the 24th complete calendar month following
the Termination Date (the "Twenty-Four Month Benefit Termination
Date"); provided, however, that the amount payable pursuant to this
clause (vi) shall be subject to dollar-for-dollar reduction for base
salary earned from any other employer (Executive being under no
obligation to mitigate these payments).
(c) Limitation of Amounts/Benefits. The amounts and benefits
to be paid or provided to Executive pursuant to Section 4(b) (the "Severance
Benefit") shall be reduced as described below if the Company would, by reason of
Section 280G of the Tax Code, not be entitled to deduct for federal income tax
purposes any part of the Severance Benefit or any part of any other payment or
benefit to which Executive is entitled under any plan or program. For the
purposes of this Agreement, the Company's independent auditors shall determine
the value of any deferred payments or benefits in accordance with the principles
of Section 280G of the Tax Code, and tax counsel selected by the Company's
independent auditors and acceptable to the Company shall determine the
deductibility of payments and benefits to which Executive is entitled. The
Severance Benefit shall be reduced only to the extent required, in the opinion
of such tax counsel, to prevent such nondeductibility for Federal income tax
purposes of any part of the remaining Severance Benefit and other payments and
benefits to which Executive is entitled. The Company shall determine which
elements of the Severance Benefit shall be reduced to conform to the provisions
of this Section 4(c). Any determination made by the Company's independent
auditors or by tax counsel pursuant to this Section 4(c) shall be conclusive and
binding on Executive. Notwithstanding the foregoing, there shall be no reduction
in the Severance Benefit except to the extent that the Company determines (based
upon advice of independent auditors or tax counsel, and after consultation with
and concurrence by Executive) that such reduction shall increase the after-tax
amount of the Severance Benefit to Executive.
(d) Death. In the event of termination of Executive's
employment by reason of Executive's death, and in addition to its obligations
under any plan or program offered to Executive that provides for payments or
benefits after his death, the Company shall:
(i) continue to pay the Base Salary through the last day of
the second month following the month in which Executive's death occurs
(the "Second Month Benefit Termination Date");
(ii) as soon as such amount can be computed and, in any event,
not later than the 60th business day after the Termination Date, pay
any earned but unpaid incentive compensation under any plan for all
calendar years ended during the Term of Employment plus earned but
unpaid compensation under such plan for the year in which Executive's
death occurs;
(iii) continue to provide to the members of the immediate
family of the deceased Executive medical and dental insurance coverage
on the same basis that such coverage was provided immediately prior to
the Executive's death until the Second Month Benefit Termination Date;
and
(iv) provide any rights or benefits to which members of
Executive's immediate family may be entitled under COBRA, it being the
intent of the parties to this Agreement that any such rights and
benefits shall relate to the period of time immediately subsequent to
the Second Month Benefit Termination Date.
The payments to be made under this Section 4(d) shall be made
to the person or persons last designated as recipients of such payments by
Executive in written notice filed with the Company or, absent such designation,
to Executive's estate.
(e) Disability. In the event of termination of Executive's
employment by reason of Disability, Executive shall be entitled to continuation
of the Base Salary until the earlier of (i) the date six months following the
date Executive became disabled and (ii) the date benefits to Executive commence
under the Company's Long Term Disability Plan (or would have commenced if
Executive had elected to participate in such plan). In addition to the
foregoing, Executive shall also receive under this Section 4(e) his prorated
annual bonus through the date Disability is determined.
(f) Death During Separation Period. In the event Executive
dies while receiving or entitled to any amount or benefit under Section 4(a) or
4(b), all payments thereunder shall immediately cease.
(g) No Duty to Seek Employment. Executive shall not be under
any duty or obligation to seek or accept employment at any time subsequent to
the Termination Date, and except as specifically provided under Section 4(b), no
such other employment, if obtained, or compensation or benefits payable in
connection therewith, shall reduce any amounts or benefits to which Executive is
entitled hereunder.
(h) Notice of New Employment. If Executive commences full time
employment any employer other then a member of the Stant Group prior to the
Twenty-Four Month Benefit Termination Date, then Executive shall provide the
Company with written notice of such employment no later than the first day of
the calendar month immediately following the date on which Executive commences
such employment.
5. No Other Severance; General Release of the Stant Group.
In consideration for the amounts and benefits due Executive under Section 4,
and as a condition of receiving any such amounts or benefits, Executive shall:
(a) not be entitled to any payments or benefits under any
severance policy of general application to executives or salaried employees of
the Company; and
(b) deliver to the Company a general release (the "General
Release") releasing each member of the Stant Group and the present and former
directors, officers, employees and assigns of any such person (collectively the
"Releasees") from any and all liability which the Releasees or any one or more
of them had or have or may in the future have to Executive or Executive's
successors, heirs, executors and administrators with respect to any and all
actions, suits, contracts, agreements, damages and claims of any kind
whatsoever, in law or in equity, including any and all claims arising out of or
relating in any way whatsoever to the employment of Executive by any of the
Releasees; provided, however, that the General Releases shall not release the
Company from any of its obligations under this Agreement. The General Release
shall be in such different or other form as the Company in its reasonable
discretion shall consider necessary or appropriate to ensure the full
enforceability of the General Release under applicable Federal, state and local
laws.
6. Trade Secrets. Executive recognizes that, by reason of his
employment hereunder, he may have acquired or shall in the future acquire
confidential information which belongs to or concerns one or more members of the
Stant Group ("Confidential Information"). Accordingly, Executive agrees that he
shall not, directly or indirectly, except to the extent required by law or after
obtaining the written consent of the Board, disclose, or use for his own
benefit, any Confidential Information that Executive has learned by reason of
his association with the Stant Group or use any such information to the
detriment of the Stant Group. For purposes of this Section 6, the term
"Confidential Information" shall include all information not publicly available
relating to the activities, operations, finances, products and services of the
Stant Group, including plans, processes, research, programs, ideas, marketing
and sale of product information, customer information, costs, pricing, trade
secrets and other intellectual property. Executive shall deliver to the Company
at the termination of the Term of Employment, or at any other time the Company
may request, all memoranda, notes, plans, records, financial data and
projections, reports and other documents (and copies thereof) relating to the
business of the Stant Group which he may then possess or have under his control.
The agreement of Executive as set forth in this Section 6 shall survive the
termination of this Agreement.
7. Inventions. (a) Assignment of Inventions. Executive
will assign and hereby does assign to the Company his entire right, title and
interest in the following inventions and developments, whether patentable or
unpatentable, which Executive makes or conceives or reduces to practice,
solely or jointly with others:
(i) inventions and developments made or conceived or reduced
to practice at any time during Executive's employment by any member of
the Stant Group, whether during working hours or not, which relate in
any way to products manufactured or business conducted by any member of
the Stant Group at any time during the period of Executive's employment
or which in any other way relate to any subject matter with which
Executive's work for any member of the Stant Group is concerned;
(ii) inventions and developments made or conceived or reduced
to practice at any time during, before or after Executive's employment
by any member of the Stant Group that were made or conceived or reduced
to practice with the use of the time, materials or facilities of any
member of the Stant Group; and
(iii) inventions and developments made or conceived or reduced
to practice by Executive during the six month period following the
Termination Date and that directly or indirectly result from work
initiated, conducted, observed or contemplated during Executive's
employment by any member of the Stant Group.
(b) Disclosure of Inventions. Executive will promptly disclose
in writing to the Company each invention and development of the type set forth
in Section 7(a).
(c) Assistance. Both during and after Executive's employment
by the Stant Group, and without charge to the Stant Group but at the Stant
Group's expense, Executive shall do all such acts and execute, acknowledge and
deliver all papers considered by the Stant Group to be reasonably necessary or
advisable for obtaining patents in the United States and any other country for
inventions and developments of the type described in Section 8(a) and for
vesting or evidencing title to such inventions and developments and to such
patents in the Company or its nominee. Executive shall also give all reasonable
assistance to the Stant Group in any litigation or controversy involving such
inventions; provided, however, that should such services be rendered after the
Term of Employment, reasonable compensation shall be paid to Executive upon a
per diem basis.
8. Noncompete. If the Term of Employment is terminated by the
Executive pursuant to Section 3(e) or by the Company pursuant to Section 3(b),
for a period of six (6) months after the Termination Date, Executive shall not:
(i) directly or indirectly engage in any business substantially similar to the
business conducted by the Stant Group in any geographical area in which the
Stant Group conducts such business; (ii) participate in the sale to any customer
of the Stant Group of products which are substantially similar to those sold to
such customer by the Stant Group; (iii) have any significant interest, directly
or indirectly, in any such business; provided, however, that nothing herein will
prevent Executive from owning in the aggregate not more than 5% of the
outstanding stock of any class of a corporation that is publicly traded, so long
as Executive has no participation in the management of such corporation; or (iv)
directly or indirectly solicit or induce any employee of the Stant Group to
terminate his or her employment with the Stant Group or otherwise interfere with
such employee's employment relationship with the Stant Group.
9. Tax Preparation and Legal Fees. The Company shall provide
Executive with tax preparation services annually and shall reimburse Executive
his reasonable legal fees for the negotiation and enforcement of this agreement.
10. Representations and Warranties.Executive hereby represents
and warrants that he is not prohibited from either entering into this Agreement
or fully performing any or all of his obligations hereunder.
11. Assignment and Delegation. Executive may not without the
Company's written consent thereto assign, transfer or convey his rights or
obligations under this Agreement. This Agreement and all the Company's rights
and obligations hereunder may be assigned or transferred by it, in whole but not
in part, to and shall be binding upon and inure to the benefit of any successor
of the Company, but such assignment by the Company shall not relieve it of any
of its obligations hereunder. As used herein, the term "successor" shall mean
any business entity that at any time by merger, consolidation or otherwise shall
have acquired all or substantially all the business and assets of the Stant
Group.
12. Amendments. No alteration, amendment, change or addition
hereto shall be binding or effective unless the same is set forth in a writing
that is signed by each party hereto.
13. Partial Invalidity. If the final judgment of a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such judgment may be perfected, that any term
or provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired and (b) the invalid or unenforceable term
or provision shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
14. Notices. All communications, notices and consents provided
for herein shall be in writing and be given in person or by means of facsimile
or other means of wire transmission (with request for assurance of receipt in a
manner typical with respect to communications of that type) or by mail or
overnight delivery service, and shall become effective (i) on delivery if given
to a person, (ii) on the date of transmission if sent by facsimile or other
means of wire transmission, or (iii) four business days after being deposited in
the United States mails, with proper postage and documentation, for first-class
registered or certified mail, prepaid. Notices shall be addressed as follows:
(a) if to Executive, to:
Xxxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Facsimile number: (000) 000-0000
(b) if to the Company, to:
Stant Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention of Xxxxxxx X. Xxxxxxxx, Vice President and
General Counsel, and Secretary
Facsimile number: (000) 000-0000
provided, however, that if any party shall have designated a different address
by notice given in accordance with this Section 13 to the other party to this
Agreement, then the last address so designated shall control.
15. Waivers. A waiver by either party of any breach of any
provision of this Agreement shall not be deemed to constitute a waiver of any
preceding or subsequent breach of the same or any other provision of this
Agreement.
16. Governing Law. All matters respecting this Agreement,
including the validity thereof, are to be governed by, and interpreted,
construed and enforced in accordance with, the internal (and not conflict) laws
of the State of Indiana.
17. Consent to Jurisdiction: Availability of Temporary
Restraining Orders and Injunctions. Executive hereby expressly and irrevocably
(i) agrees that the Company may bring any action, whether at law or in equity,
arising out of or based upon this Agreement in the State of Indiana or in any
Federal court therein, (ii) consents to personal jurisdiction in any such court
and to accept service of process in accordance with the provisions of the laws
of the State of Indiana, or of the State of Illinois and (iii) agrees that in
addition to any other remedy provided at law or in equity, the Company shall be
entitled to a temporary restraining order and both preliminary and permanent
injunctions restraining Executive from violating any of the provisions of
Section 6, 7 or 8.
18. Supersedes Prior Agreements: Entire Agreement. This
Agreement automatically terminates, supersedes and replaces any and all other
agreements, promises, understandings and arrangements, whether written or oral,
express or implied, between Executive and any member of the Stant Group relating
to Executive's employment or conditions of employment (except any pre-existing
contractual obligations of Executive concerning confidentiality or assignment of
patents, inventions, ideas or intellectual property). This instrument contains
the entire agreement between the parties with respect to the subject matter
hereof. This Agreement may not be changed orally but only by agreement in
writing signed on behalf of the Company by the President.
IN WITNESS WHEREOF, the parties hereto have executed this agreement, as
of the date and year first above written.
STANT CORPORATION
By Xxxx X. Xxxxx
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Chairman, Board of Directors
EXECUTIVE
Xxxx X. Xxxxxx
-----------------
Xxxx X. Xxxxxx
