EXHIBIT 10.2
EMPLOYMENT CONTRACT
AGREEMENT dated this 9th day if July, 1998, by and between PUROFLOW
INCORPORATED, a Delaware corporation qualified to do business in the State of
California with principal offices at 00000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx
00000 (hereinafter called "The Company") and XXXXXXX X. XXXXXX, residing at
00000 Xxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
the "Executive").
WITNESSETH:
WHEREAS, the Executive has been employed by the Company since
December 1988 and was under a written renewable contract with the Company which
expired March 1, 1998.
WHEREAS, the Company and the Executive desire to enter into a new
contract effective July 9, 1998 under the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual promises of the
parties to each other, it is agreed as follows:
1. EMPLOYMENT. The Company hereby employs and the Executive hereby
accepts employment upon the terms and conditions hereinafter set forth. The
Company, as used throughout this agreement, shall mean and include the Company
and any subsidiaries thereof.
2. TERM. The term of this agreement shall begin on July 9, 1998 and
shall continue thereafter until July 9, 2003.
3. COMPENSATION. For all services rendered by the Executive under
this agreement, the Company shall pay the Executive a salary of $165,000 per
year, payable semi-monthly. The compensation provided for in this paragraph
shall be in addition to any pension or retirement benefits, bonuses, directors'
fees, stock options or salary increases to which the Executive may become
entitled in the future at the discretion of the Company and the existence of
this agreement shall not be deemed in any way to preclude the Executive from
receiving any such additional benefits nor to oblige the Company to provide any
such additional benefits.
The Executive shall also receive the sum of $550.00 monthly from the
Company for use of the Executive's automobile.
The Company shall provide and maintain a term life insurance policy
for Executive on his life in an amount equal to two times his annual salary, and
which policy shall be owned by Executive.
4. DUTIES. The Executive is engaged as an Executive of the Company,
namely, its President and CEO and he will serve in such capacity during the term
of this agreement. The Executive was elected as director or officer of any
subsidiary of the Company, and the Executive will serve in such a capacity
without further compensation.
5. EXTENT OF SERVICES. The Executive shall not, during the term of
this agreement, during normal business hours be engaged in any business activity
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage; but this shall not be construed as preventing the Executive
from investing his personal assets in business which do not compete with the
Company in such form or manner as will not require any services on the part of
the Executive in the operation of the affairs of the Companies in which such
investments are made and in which his participation is solely that of an
investor.
6. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. The Executive
recognizes and acknowledges that the Company's trade secrets and customers lists
as they may exist from time to time are valuable, special and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Executive's duties hereunder. The Executive will not, during
or after the term of his employment, in whole or in part, disclose such secrets,
or processes to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever, nor shall the Executive make use of any such
property for his own purposes or for the benefit of any person, firm,
corporation or other entity (except the Company) under any circumstances during
or after the term of his employment. For a period of two (2) years from and
after the end of this employment agreement and in any area in which the Company
is engaged in business at and of such date, the Executive shall not directly or
indirectly compete with the Company, its subsidiaries or with any successor or
assignees thereof, in the business in which the Company is engaged at and as of
such date, whether such competition shall be as an officer, director, owner,
employee, partner or other participant in any business so competing. In the
event of a breach or threatened breach by the Executive of the provisions of
this paragraph, the Company shall be entitled to an injunction restraining the
Executive from such breach. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies available to the Company for such
breach or threatened breach.
The nature of the Company's business is both national and
international in concept and al parties to this agreement fully understand and
accept the necessity for the restrictive covenant which is to be strictly
construed against the Executive.
7. VACATIONS. The Executive shall be entitled to reasonable
vacations during each year of his employment hereunder which shall be such time
or and times as may be consistent with the business needs of the Company.
8. INSURANCE. The Company may, at its election and for its benefit,
insure the Executive against accidental loss or death and Executive shall submit
to such physical examination and supply such information as may be required in
connection therewith.
9. TERMINATION. (a) The Company shall be required to send a written
notice of renewal or non-renewal of employment to the Executive at least six (6)
months prior to the expiration date of this employment contract by certified
mail, return receipt requested, to the Executive at his home address. The
Executive shall respond to the notice from the Company within thirty (30) days
after receipt of such notice. Failure of the Company to send such written notice
shall be deemed a non-renewal of employment.
(b) In the event the Company decides not to enter into an employment
contract for a minimum of one (1) year, the Company shall pay to the Executive a
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severance payment equal to one (1) year salary based upon the annual salary then
in effect at the expiration of this contract. Payment by the Company to the
Executive shall be made in a lump sum on the expiration date of this contract,
or such other method of payment elected by the Executive on such expiration
date.
(c) In the event the Executive elects not to enter into an
employment contract on July 9, 1998, the Company shall pay to the Executive a
severance payment of one (1) year salary based upon the annual salary then in
effect. Payment by the Company to the Executive shall be made on a semi-monthly
basis for a period of fifty-two weeks, or such other terms as is mutually
agreeable.
(d) In the event the Company terminates the contract at any time
during the term hereof, the Company shall pay to the Executive the salary from
the date of termination to the expiration date of this contract.
(e) In the event the Executive is totally disabled and unable to
carry out his duties, the Company shall continue to pay the Executive his
semi-monthly salary during such disability. The Company's obligation for such
payments shall not exceed two (2) year's salary. All sums received by the
Executive under disability or insurance benefits shall be reimbursed to the
company until the expiration of the two (2) year period referred to above. The
Company shall provide and maintain a disability policy on Executive providing
for monthly benefits of $4,000.00 per month until the age of 65, which payments
shall enure to the benefits of Executive and subject to the reimbursement
provision immediately above. Executive's disability under this section shall be
as defined by said policy.
(f) This agreement and the employment relationship hereunder shall
automatically terminate upon the death of the Executive and upon such
termination, the Company shall pay, to any of his heirs, executors or legal
representatives, any amount of unpaid compensation to date of death, based upon
the annual salary then in effect on the date of death, plus death benefits equal
to ONE YEAR of such annual salary, payable semi-monthly. The obligation of the
Company to pay the one year of death benefits shall be absolute whether death
occurs at any time during the term of the employment contract or on the
expiration date thereof. Upon the payment of amounts as above set forth, the
Company shall have no further liability hereunder to the heirs, executors or
legal representatives of such deceased Executive.
10. NOTICES. Any notice required or permitted to be given under this
agreement shall be sufficient if in writing and it sent by certified mail,
return receipt requested to this residence in the case of the Executive, or in
the case of the Company to the address of its principal business office.
11. WAIVER OF BREACH. The waiver by the Company of a breach of any
provision of this agreement by the Executive shall not operate or be construed
as a waiver of any subsequent breach by the Executive.
12. ASSIGNMENT. The rights and obligations of the Company under this
agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. This agreement is no assignable by the Executive.
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13. ENTIRE AGREEMENT. This instrument contains the entire agreement
of the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
14. APPLICABLE LAW. This agreement shall be construed in accordance
with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this agreement, as of
the date first above written.
PUROFLOW INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, Chairman of the Board
ATTEST: By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, President and CEO
/s/ Xxxxx Xxxxxxxxx
-------------------
Secretary
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PUROFLOW INCORPORATED
00000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
January 7, 2003
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Xx. Xxxxxxx X. Xxxxxx
00000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Notice of Renewal of Employment
Dear Xx. Xxxxxx:
Reference is hereby made to that certain Employment Contract dated
the 9th day of July, 1998 (the "Agreement") by and between Puroflow
Incorporated, a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx.
Pursuant to Section 9(a) of the Agreement, the Company hereby provides you with
written notice of the renewal of your employment with the Company for a period
of one (1) year until July 9, 2004, pursuant to the terms and conditions of the
Agreement.
If you have any questions, please do not hesitate to contact me.
Very truly yours,
/s/ Xxxxxx Xxxxxxxx
-------------------
Xxxxxx Xxxxxxxx
Chairman of the Board
