EXHIBIT 10(m)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into to be
effective as of February 4, 2002 (the "Effective Date"), between PEERLESS MFG.
CO. ("Employer"), and XXXXXXX X. XXXXXX, XX. ("Employee").
SECTION 1. EMPLOYMENT.
1.1 Employment and Term. Subject to the terms and conditions of this
Agreement, Employer agrees to employ Employee as Chief Financial Officer and
Vice President-Administration pursuant to this Agreement. Employee will be
employed under this Agreement for a term beginning on the Effective Date and
ending on the third anniversary date of the Effective Date, unless Employee's
employment is terminated earlier as provided in Section 4 below. Sections 2, 3,
and 5 of this Agreement shall survive any termination of Employee's employment
with Employer.
1.2 Duties. At all times during the course of Employee's employment
with Employer, Employee agrees to perform the duties associated with such
position diligently and to devote all of his business time, attention and
efforts to the business of Employer. Employee agrees to comply with the
policies, procedures and guidelines established by Employer from time to time.
Employee agrees to perform his duties faithfully and loyally and to the best of
his abilities, and shall use his best efforts to promote the business of
Employer.
1.3 Supervision. Employee shall perform the duties of employment under
the direction and supervision of Employer's Chief Executive Officer.
SECTION 2. NON-COMPETITION.
2.1 Non Competition.
(a) Employee agrees that during the term of his employment and
for a period of one (1) year following termination of his employment
(regardless of whether Employee is terminated without Cause (as defined
in Section 4.1(c) below), for Cause, voluntarily resigns or otherwise),
neither Employee nor any person or entity directly or indirectly
controlling, controlled by or under common control with Employee, shall
directly or indirectly, on his own behalf or as an employee or other
agent of or an investor in another person:
(i) engage in any business currently conducted by
Employer (collectively, the "Business");
(ii) influence or attempt to influence any customer
or supplier of Employer or any affiliate of Employer to
purchase goods or services related to the Business from any
person other than Employer or such affiliate; or
(iii) employ or attempt to employ any individuals who
are employees of Employer or any affiliate of Employer, or
influence or seek to influence any such employees to leave
Employer's or such affiliate's employment.
(b) Employee specifically acknowledges that Employer's
products are sold in a world market and that Employee has been engaged
with regard to Employer's products and Employer's customers throughout
the world without geographic limitation, and accordingly that the
restrictive covenant regarding competition contained in this Section
2.1 shall apply without geographic limitation.
(c) Employee acknowledges that his obligations under this
Section 2.1 are a material inducement and condition to Employer's
entering into this Agreement and the Related Agreement (as defined in
Section 5.10 below). Employee acknowledges and agrees that the
restrictions set forth in this Section 2.1 are reasonable as to time,
geographic area and scope of activity and do not impose a greater
restraint than is necessary to protect the goodwill and other business
interests of Employer, and Employee agrees that Employer is justified
in believing the foregoing.
(d) If any provision of this Section 2.1 should be found by
any court of competent jurisdiction to be unenforceable by reason of
its being too broad as to the period of time, territory, and/or scope,
then, and in that event, such provision shall nevertheless remain valid
and fully effective, but shall be considered to be amended so that the
period of time, territory, and/or scope set forth shall be changed to
be the maximum period of time, the largest territory, and/or the
broadest scope, as the case may be, which would be found enforceable by
such court
(e) Employee acknowledges that Employee's violation or
attempted violation of this Section 2.1 will cause irreparable damage
to Employer or its affiliates, and Employee therefore agrees that
Employer shall be entitled as a matter of right to an injunction, out
of any court of competent jurisdiction, restraining any violation or
further violation of such agreements by Employee or others acting on
his behalf. Employer's right to injunctive relief will be cumulative
and in addition to any other remedies provided by law or equity.
SECTION 3. CONFIDENTIALITY; NONDISPARAGEMENT; CONFLICT OF INTEREST.
3.1 Confidentiality.
(a) In the course of his employment with Employer, Employee
may receive or have access in the future to commercially valuable,
confidential or proprietary information ("Confidential Information").
Confidential Information means all information, whether oral or
written, previously or hereafter developed, acquired or used by
Employer and relating to the business of Employer that is not generally
known to others in Employer's area of business, including without
limitation (i) any trade secrets, work product, processes, analyses or
know-how of Employer; (ii) Employer's advertising, product development,
strategic and business plans and information, including customer and
prospect
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lists; (iii) the prices at which Employer has sold or offered to sell
its products or services; and (iv) Employer's financial statements and
other financial information.
(b) Employee acknowledges and agrees that the Confidential
Information is and shall be the sole and exclusive property of
Employer. Employee shall not use any Confidential Information for his
own benefit or disclose any Confidential Information to any third party
(except in the course of performing his authorized duties for Employer
under this Agreement), either during or subsequent to his employment
with Employer.
(c) Specifically, Employee agrees that, except as expressly
authorized in writing by Employer, or as may be required by law or
court order, Employee shall (i) not disclose Confidential Information
to any third party, (ii) not copy Confidential Information for any
reason, and (iii) not remove Confidential Information from Employer's
premises. Upon termination of his employment with Employer, Employee
shall promptly deliver to the Employer all Confidential Information,
including documents, computer disks and other computer storage devices
and other papers and materials (including all copies thereof in
whatever form) containing or incorporating any Confidential Information
or otherwise relating in any way to the Employer's business that are in
his possession or under his control.
(d) Employee acknowledges that Employee's violation or
attempted violation of this Section 3.1 will cause irreparable damage
to Employer or its affiliates, and Employee therefore agrees that
Employer shall be entitled as a matter of right to an injunction, out
of any court of competent jurisdiction, restraining any violation or
further violation of such agreements by Employee or others acting on
his behalf. Employer's right to injunctive relief will be cumulative
and in addition to any other remedies provided by law or equity.
3.2. Covenant of Nondisparagement. In consideration of this Agreement
and the Related Agreement, both party agree and promise that, during the term of
and at all times after the termination of this Agreement (regardless of whether
Employee is terminated without Cause, for Cause, voluntarily resigns or
otherwise), not to make any libelous, disparaging or otherwise injurious
statements about or concerning each other or any of the employer's affiliates,
their officers, employees or representatives. Such prohibited statements include
any statement that is injurious to the business or business reputation of any of
Employer, its affiliates or their employees or representatives, but does not
include reasonable statements of disagreement that Employee makes for the
purpose of protecting or enforcing any of his rights or interests hereunder or
defending against any claim or claims of Employer, so long as such statements
are not slanderous or libelous and are delivered in terms as would ordinarily be
considered customary and appropriate.
3.3. Conflict of Interest. Employee agrees that during the term of this
Agreement without the prior approval of the Board of Directors of Employer,
Employee shall not engage, either directly or indirectly, in any activity which
may involve a conflict of interest with Employer or its affiliates (a "Conflict
of Interest"), including ownership in any supplier, contractor, subcontractor,
customer or other entity with which Employer does business (other than as a
shareholder of less than one percent of a publicly traded class of securities)
or accept
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any material payment, service, loan, gift, trip, entertainment or other favor
from a supplier, contractor, subcontractor, customer or other entity with which
Employer does business and that Employee shall promptly inform the Chief
Executive Officer or the Board of Directors of Employer as to each offer
received by Employee to engage in any such activity. Employee further agrees to
disclose to Employer any other facts of which Employee becomes aware which might
involve or give rise to a Conflict of Interest or potential Conflict of
Interest.
SECTION 4. TERMINATION.
4.1 Termination by Employer.
(a) Employer may terminate Employee's employment without Cause
upon no less than sixty (60) days prior written notice of termination
to Employee. In the event of any such termination without Cause,
Employer shall pay Employee as severance compensation, a lump sum
payment in an amount equal to one hundred percent (100%) of Employee's
then current base salary annualized. In the event of any such
termination without Cause, except as aforesaid, Employer shall have no
other obligations to pay any base salary, incentive compensation or
bonus or provide for any benefits to Employee after the effective date
of such termination. As used herein, "base salary" excludes any bonus
or incentive compensation.
(b) Employer may discharge Employee for Cause at any time
without prior notice. In the event of any such termination for Cause,
Employer's obligations to pay any base salary, incentive compensation
or bonus or provide for any benefits to Employee shall terminate
immediately upon the effective date of such termination.
(c) As used herein, "Cause" shall mean any of the following:
(i) the conviction of Employee by a court of
competent jurisdiction of any felony or crime involving moral
turpitude;
(ii) commission by Employee of an intentional
material act of fraud to his pecuniary benefit in connection
with his duties or in the course of his employment with
Employer, as reasonably determined by Employer's Board of
Directors; or
(iii) the intentional and continued failure by
Employee to substantially perform his duties hereunder, or the
intentional wrongdoing by Employee resulting in material
injury to Employer. No act, or failure to act, on the part of
Employee shall be deemed "intentional" unless done, or omitted
to be done, by Employee not in good faith and without
reasonable belief that his action or omission was in the best
interests of Employer.
4.2 Termination by Employee. Employee may resign from Employee's
employment hereunder (whether for voluntary retirement or otherwise) upon no
less than sixty (60) days prior written notice of resignation to Employer. If
Employee voluntarily resigns from his employment with Employer during the term
hereof (whether for voluntary retirement or otherwise),
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Employer's obligations to pay any base salary, incentive compensation or bonus
or provide for any benefits shall terminate immediately upon the effective date
of such resignation. Upon retirement, Employee shall be entitled to all benefits
(if any) provided by Employer in the ordinary course to other executive officers
of Employer at comparable retirement age.
4.3 Termination on Death of Employee. This Agreement shall terminate
automatically upon the death of Employee and all rights of Employee, his heirs,
executors and administrators to salary, bonus, incentive compensation or
benefits shall terminate immediately, except as otherwise provided in Employer's
benefits plans in effect at such time.
4.4 Termination by Disability. Employer may terminate Employee's
employment hereunder upon Employee becoming Disabled (as defined below). Upon
such termination, Employer shall pay Employee a lump sum payment in an amount
equal to fifty percent (50%) of Employee's then current base salary annualized,
and Employee shall be entitled to all other disability benefits then in effect
(if any) provided by Employer to all other executive officers of Employer. For
purposes of this Agreement, "Disabled" means any mental or physical impairment
lasting more than 180 consecutive or non-consecutive calendar days that prevents
Employee from performing the essential functions of his position with or without
reasonable accommodation as determined by a physician mutually agreeable to
Employee and Employer. Employee agrees to submit to appropriate medical
examinations and authorize his physicians to release medical information
necessary to determine whether Employee is Disabled for purposes of this
Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Notice. Any notice required or permitted under this Agreement must
be in writing and shall be deemed to have been given when delivered personally
or by overnight courier service or three days after being sent by mail, postage
prepaid, at the address indicated below or to such changed address as such
person may subsequently give such notice of:
if to Employer:
Peerless Mfg. Co.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Chairman, Board of Directors
if to Employee:
Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
5.2 Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, successors, and assigns. Except as otherwise provided herein,
this Agreement may not be assigned by any party hereto without the prior written
consent of the other party hereto. Employer shall require any successor, and any
corporation or other person which is in control of such successor, to all or
substantially all of the business and/or assets of Employer (by purchase,
merger, consolidation or otherwise),
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by agreement in form and substance reasonably satisfactory to Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no such
succession had taken place. Failure of Employer to obtain such agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement by Employer. As used in this Agreement, "Employer" shall mean Employer
as herein before defined and any successor to its business and/or all or part of
its assets as aforesaid which executes and delivers the assumption agreement
provided for in this Section 5.2 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
5.3 Tax Treatment. In the event that the total compensation paid to
Employee, taking into account all cash payments under the Related Agreement or
otherwise, shares of stock, accelerated vesting of stock options, and bonuses,
if any, is found to constitute "an excess parachute payment" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended, then Employer
shall pay to Employee, in addition to the total compensation paid to Employee,
but without duplication, an additional amount which, after reduction for income
taxes and excise taxes on such additional amount, is sufficient to provide for
the payment of any excise tax that may be due by Employee on the total
compensation paid by Employer to Employee.
5.4 Headings. The section headings used herein are for reference and
convenience only and shall not enter into the interpretation hereof.
5.5 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which together
shall constitute one and the same instrument.
5.6 Amendment and Waiver. The provisions of this Agreement may be
amended or waived only by written agreement of Employer and Employee, and no
course of conduct, failure or delay in enforcing the provisions of this
Agreement shall effect the validity, binding effect or enforceability of this
Agreement.
5.7 Severability. Any provision or portion of a provision of this
Agreement that is held to be invalid or unenforceable will be severable, and
this Agreement will be construed and enforced as if such provision, or portion
thereof, did not comprise a part hereof, and the remaining provisions or
portions of provisions will remain in full force and effect. In lieu of each
invalid or unenforceable provision there will be added automatically as part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be legal, valid, and enforceable.
5.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to any
conflicts of law rule or principle that might require the application of the
laws of another jurisdiction.
5.9 Disputes. The parties to this Agreement agree that in the event
there is a dispute or controversy between them that cannot be settled through
direct discussions, it is in the best interests of all for such dispute or
controversy to be resolved in the shortest time and with the lowest cost of
resolution as practicable. Consequently, any such dispute, controversy or claim
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between the parties to this Agreement will not be litigated, but instead will be
resolved by arbitration in accordance with Title 9 of the U.S. Code (United
States Arbitration Act) and the Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"), and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration will be before one neutral arbitrator and will proceed under the
Expedited Procedures of said Rules. The arbitration will be held in Dallas,
Texas, or such other place as may be selected by mutual agreement. The
arbitrator will have the discretion to order a prehearing exchange of
information by the parties, and to set limits for both the scope and time period
of such exchange. All issues regarding exchange requests will be decided by the
arbitrator. Neither party nor the arbitrator may disclose the existence, content
or results of any arbitration hereunder, unless required to do so by court or
regulatory order, without the prior written consent of both parties. Fees and
expenses of the arbitration itself will be borne by the parties equally;
provided, however, the arbitrator will also be authorized to award to the
prevailing party all or that fraction of its reasonable costs and fees as is
deemed equitable. This provision will not apply to any injunctive relief sought
by the Company or any of its affiliate under Section 2 or 3 of this Agreement.
5.10 Entire Agreement. This Agreement and that certain Agreement, of
even date herewith, between Employer and Employee regarding certain agreements
effective upon a "Change-in-Control" (the "Related Agreement") embody the
complete agreement between Employer and Employee regarding the subject matter
hereof and the same supersede all prior agreements or understandings, whether
oral, written or otherwise, between the parties hereto that may have related in
any way to the subject matter hereof.
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EMPLOYER:
PEERLESS MFG. CO.
/s/ Xxxxxxxx Xxxxx
------------------------------
Xxxxxxxx Xxxxx,
Chairman of the Board and
Chief Executive Officer
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
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