12
EMPLOYMENT AGREEMENT
This Agreement ("Agreement"), dated the 1st day of June, 1998, is
between ANTRUM INTERFACE 725 LTD. ("Company"), an Ontario corporation, THE JPM
COMPANY ("JPM"), a Pennsylvania corporation, and XXXXXXX X. XxXXXXXX
("Employee").
RECITALS
1. Employee was previously employed by Antrum Interface 725 Ltd. ("Antrum") and
was a principal stockholder of Antrum;
2. The JPM Company has acquired the entire business and assets of Antrum,
which business shall be conducted as an separate subsidiary corporation of The
JPM Company;
3. Employee was a key executive in Antrum with expertise in Antrum's business
operations and the Company desires to assure continuance of Employee's service
in connection with such business;
4. The Company desires to employ Employee, and Employee desires to perform
services for the Company in a position which will allow Employee access to
various trade secrets and confidential information belonging to the Company and
which will require Employee to perform services of a unique and special nature;
and
5. The parties agree that covenants against competition, disclosure of
confidential information, solicitation of employees, and solicitation of
customers is essential to the growth and stability of the business of Antrum
during the first year after its acquisition by JPM and to the continuing
viability of such business whenever the employment to which this Agreement
relates is terminated;
NOW THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Employment. The Company hereby employs Employee and the Employee hereby
accepts upon the terms and conditions contained in this Agreemen
2. Term. The term of this Agreement shall be from the date of closing until
September 30, 2000 and subject to the terms and conditions hereof.
3. Duties. During the employment period, the Employee will devote his full
working time and best efforts to the Company in fulfilling the duties of
his position, which shall include such duties as may from time to time be
assigned by the Company. The Employee shall retain the position of
President of the Company until the Board of Directors of the Company decide
otherwise. The Employee shall also be designated a Vice President of JPM
unless and until otherwise determined by its Board of Directors.
4. Compensation.
4.1. Salary. The Employee's base salary shall be one hundred seventy-five
thousand dollars ($175,000.00) (Canadian) per year payable in monthly
installments, subject to increase by the Board of Directors, which
shall review the salary periodically.
4.2. Benefits. Employee will be eligible to participate, to the extent it is
legal and permitted by the benefit contracts, in all benefit programs
as set forth in this Agreement of the Company which are in effect for
its executive personnel from time to time. Employee shall be entitled
each year to vacation for a period not inconsistent with the normal
policy of the Company in effect from time to time, but no less than
five (5) weeks per year together with the regular holidays applicable
to all Antrum employees, during which period Employee's compensation
shall be paid in full. If any modifications of the benefit package
result in a net reduction in compensation to the Employee, the Company
will pay Employee a cash bonus to make up the difference.
4.3. Special Benefits.
4.3.1. Car. Employee shall receive a car allowance in the amount of seven
thousand five hundred dollars ($7,500.00) per year.
4.3.2. Stock Options. Employee shall receive 40,000 stock options pursuant
to Employee Stock Option Plan of 1995.
4.3.2.1. Employee and JPM had agreed that Employee would receive 20,000
stock options as part of the sale of Antrum and employment
agreement. In order to give the Employee the option bargained
for during the period of this Agreement and to comply with the
Employee Stock Option Plan of 1995, it is necessary for JPM to
grant an option for more than the 20,000 shares bargained for,
subject to Employee's agreement to return or forfeit the
additional shares. Accordingly, the Employee agrees that he
will only exercise the option to purchase no more than 20,000
shares unless JPM otherwise agrees. Employee further agrees
that this limitation shall be binding upon him, his heirs and
assigns.
5. Acknowledgement. Employee acknowledges that the Company's business and
services are highly specialized, that the identity and particular needs of
the Company's customers and suppliers are not generally known and that the
documents and information regarding the Company's customers, suppliers,
services and methods of operation, sales, pricing and costs are highly
confidential and constitute trade secrets. Employee further acknowledges
that the services rendered to the Company by Employee have been or will be
of a special and unusual character which have unique value to the Company
and that Employee has had or will have access to trade secrets and
confidential information belonging to the Company, the loss of which cannot
adequately be compensated by damages in an action at law.
6. Covenant Against Competition. During the term of Employee's employment
with the Company and for a period of three (3) years
from the voluntary or involuntary termination of Employee's agreement with
the Company for any reason whatsoever,
Employee will not directly or indirectly, own, manage, operate, control, be
employed by, perform services for, consult with, solicit business for,
participate in, or be connected with the ownership, management, operation, or
control of any business which performs the services and/or manufactures products
materially similar to or competitive with those provided by the Company in any
location where the Company has had an office or has sold products or provided
services to customers during the period Employee is employed by the Company,
provided, however, Employee may own shares of stock in such companies so long as
such shareholding constitutes less than five percent (5%) of the outstanding
shares of any such company and so long as Employee's role is that of passive
investor. In addition, Company may waive any restrictions hereunder, which
waiver shall not be unreasonably withheld.
7. Covenant Against Disclosure of
Confidential Information. During the term of Employee's employment with the
Company and for
--------------------------------------------------
a period of three (3) years after the termination of Employee's employment
with the Company for any reason whatsoever, Employee shall not use for any
purpose or disclose to any person or entity any confidential information
acquired during the course of employment with the Company. Employee shall not,
directly or indirectly, copy, take, or remove from the Company's premises any of
the Company's books, records, customer lists, or any other documents or
materials. The term "confidential information" as used in this Agreement
includes, but is not limited to, records, lists, and knowledge of the Company's
current and former customers, suppliers, methods of operation, processes, trade
secrets, methods of determination of the prices, financial consideration,
profits, sales, net income, and indebtedness.
8. Non-Solicitation of Employees. During the term of Employee's employment
with the Company for a period of three (3) years from the voluntary or
involuntary termination of Employee's employment with the Company for any
reason whatsoever, Employee shall not either on his own account or for any
person, firm, partnership, corporation, or other entity solicit, interfere
with, or endeavor to cause any employee of the Company to leave his or her
employment, or induce or attempt to induce, any such employee to breach his
or her employment agreement with the Company.
9. Non-Solicitation of Customers. During the term of Employee's employment
with the Company and for a period of three (3) years from the termination
of Employee's employment with the Company for any reason whatsoever,
Employee shall not solicit, induce, or attempt to induce, any past or
current customer of the Company to cease doing business in whole or in part
through the Company, or to do business with any other person, firm,
partnership, corporation, or other entity which performs services and/or
manufactures products materially similar to or competitive with those
provided by the Company. Company may waive any restrictions hereunder,
which waiver shall not be unreasonably withheld
10. Reasonableness of Restrictions. Employee has carefully read and considered
the provisions hereof, and having done so, agrees that the restrictions set
forth in Paragraphs 6 through 9 of this Agreement, including, but not
limited to, the time periods of restriction in each of such paragraphs and
the geographical area of restrictions set forth in Paragraphs 6, are fair
and reasonable and are reasonably required for the protection of the
interests of the Company.
11. Release of Covenants. Company and The JPM Company agree to automatically
release Employee from the covenants set forth in paragraphs 6, 8, and 9
upon any material breach by JPM or Company under this agreement, which
breach shall not have been cured by the Company or JPM within 30 days of
the Company or JPM's receipt from the Employee of written notice specifying
in reasonable detail the nature of Company's or JPM's breach; or Company or
The JPM Company files for voluntary bankruptcy or reorganization; or upon
involuntary bankruptcy petition against Company or JPM, unless dismissed
within sixty (60) days of filing.
12. Compensation During Disability and Upon Death.
12.1. Compensation During Initial Disability Period. If at any time during
the term of this Agreement, Employee becomes disabled or incapacitated
or is unable for any reason to perform substantially his duties under
this Agreement and he has not breached any of the provisions of this
Agreement as set forth in paragraph 13.1.1, the Company shall continue
to compensate Employee as provided in Paragraph 4, but only as to the
first six months of Employee's disability or incapacitation ("the
Initial Disability Period"). To the extent any disability insurance
paid by the Company or The JPM Company satisfies all or a portion of
this obligation, Company shall receive credit against salary due
hereunder.
12.2. Compensation After Initial Disability Period. Effective after
expiration of the Initial Disability Period, the Company may, if
employee is still disabled or incapacitated, at its sole option, elect
to:
12.2.1. Continue payment of Employee's salary and benefits until he is able
to return to work;
12.2.2. Continue payment of Employee's salary and benefits for such period
greater than six months as the Company elects; or
12.2.3. Terminate this Agreement.
12.3. Death of Employee. If Employee should die during the term of this
Agreement, Employee's employment and the Company's
obligations hereunder shall terminate as of the date of the Employee's
death, subject to the right of his executors, successors and assigns to
exercise vested option rights to which he was entitled under the
Employees' Stock Option Plan of 1995.
13. Termination.
13.1. Conditions of Termination. This agreement may be terminated as
follows prior to the expiration of its stated term:
13.1.1. The Company may terminate this Agreement immediately for cause,
including without limitation, fraud, misrepresentation, theft or embezzlement of
the Company's assets, intentional violations of law or company policies, or a
breach of this
Agreement;
13.1.2. Either the Company or the Employee may terminate this Agreement
without cause upon ninety (90) days notice to the other
party;
13.1.3. This agreement shall terminate in the event of death or disability
of the Employee. Disability shall be the inability of the Employee
to perform his duties under this agreement because of illness or
incapacity for a period of six months.
13.2. Compensation Upon Termination. Upon termination of employment pursuant
to this Paragraph 13, Employee shall be entitled to receive all
compensation accrued and unpaid as of the date of termination. and
shall further be subject to the right of his executors, successors and
assigns to exercise vested option rights to which he was entitled under
the Employees' Stock Option Plan of 1995.
14. Change of Control. The Employee shall be entitled to severance payments, as
set forth herein, in the event of a Change in Control of the Employer or
JPM and the Employee is terminated without cause by the Purchaser/Successor
Employer.
14.1. Change in Control Definition. Change in Control shall mean any of the
following events:
14.1.1. The sale or other disposition by the Company or JPM of all or
substantially all of its assets to a single purchaser or to a
group of purchasers, other than to a corporation with respect to
which, following such sale or disposition, more than eighty
percent (80%) of the then outstanding shares of common stock and
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals who were the beneficial
owners of the outstanding Company, or JPM, common stock and voting
securities immediately prior to such sale or disposition; or
14.1.2. The acquisition in one or more transactions by any person or
group, directly or indirectly, of beneficial ownership of
twenty-five percent (25%) or more of the outstanding shares of the
combined voting power of the then outstanding voting securities of
the Company or JPM entitled to vote generally in the election of
directors, Provided, however, that for this purpose acquisition of
such a share by an employee benefit plan of the Company or JPM or
a subsidiary or affiliate of the Company or JPM or a present
significant shareholder (i.e., shareholder whose current holdings
exceed 5% of the outstanding stock) of the Company or JPM shall
not constitute a Change of Control.
14.1.3. The Company's or JPM's termination of its business and liquidation
of its assets; or
14.1.4. The reorganization, merger or consolidation of the Company or JPM
into or with another person or entity, by which reorganization,
merger or consolidation the shareholders of the Company or JPM
receive less than fifty percent (50%) of the outstanding voting
shares of the new or continuing corporation; or
14.1.5. For the purpose of paragraph 14 and its subparts, merger, sale or
acquisition of either Company or JPM by or with any other company
controlled by JPM or any of its subsidiaries shall not constitute
Change of Control.
14.2. Severance Payments Upon Change of Control and Termination. In the event
Employee is terminated without cause by the purchaser/successor after
the Change of Control, he shall receive as severance payments:
14.2.1. One years' salary, in a lump sum within 30 days of severance, if
such Change of Control occurs on or before September 1,
1999;
14.2.2. In the event the Change of Control occurs after September 1, 1999,
the Employee shall receive the salary to which he would have been
entitled for the period from Change of Control to September 1,
2000, which salary shall be paid in a lump sum within 30 days of
severance.
14.3. Termination of Employment Prior to Change of Control. If the
Employee's employment with the Employer is terminated prior to
the date on which a Change of Control occurs either
14.3.1. By the Company other than for Cause; and
14.3.2. It is reasonably demonstrated that termination of employment
14.3.2.1. Was at the request of the then existing Employer management
team or by an Unrelated Third Party who has taken steps
reasonably calculated to effect a Change of Control; or
14.3.2.2. Otherwise arose in connection with or anticipation of the Change
of Control, then
14.3.3. Such a termination shall be deemed to have occurred specifically
upon a Change of Control and the Employee shall be entitled to
Severance Pay as provided in paragraph 14.2.
15. Rights and Remedies.
15.1. Both parties recognize that the services to be rendered under this
Agreement by Employee are special, unique and are of extraordinary
character. Upon breach of any provision of this Agreement, either may,
at its option, terminate this Agreement or elect to institute and
prosecute proceedings in any court of competent jurisdiction, either in
law or equity, to obtain damages, to enforce specific performance of
the Agreement, to enjoin the other party as appropriate, and to recover
reasonable attorney's fees and the costs of prosecuting such action.
15.2. Subject to paragraph 11, termination for any cause shall not constitute
a waiver of the Company's rights under Paragraphs 6 through 9 of this
Agreement (covenants against non-competition, disclosure of
confidential information, and solicitation of employees and customers)
nor a release of Employee from his obligation hereunder. The rights and
remedies of the parties shall be cumulative and in addition to any
other rights and remedies provided by law or otherwise. A party's
failure to exercise its right to terminate this Agreement or to enforce
any provision of this Agreement for default or violation by the other
party shall not prejudice such party's right of termination or
enforcement for any further or other default or violation.
16. Miscellaneous.
16.1. Governing Law. In any action by or against The JPM Company, it is
understood and agreed that the construction and interpretation of this
Agreement shall at all times and in all respects be governed by the
laws of the Commonwealth of Pennsylvania, without giving effect to the
conflict of laws provision thereof. Venue of any action brought to
enforce this Agreement or relating to this Agreement shall be brought
exclusively in a Pennsylvania Court of Common Pleas or the U. S.
District Court for the Middle District of Pennsylvania. In any action
solely between Company and Employee, such action may be brought in the
Province of Ontario.
16.2. Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the Company, JPM, and Employee, and their respective
successors and assigns. The Company shall have the right to assign its
rights hereunder to any successor or interest, whether by merger,
consolidation, sale of assets, or otherwise, with the consent of
Employee, which consent cannot be unreasonably withheld. Employee may
not assign any of its rights or delegate any of its obligations under
this Agreement without first obtaining written consent from the
Company.
16.3. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of Employee, and there
are no representations, warranties or commitments, except as set forth
in this Agreement. This Agreement may be amended only by a writing
executed by the parties of this Agreement. No valid waiver of any
provisions of this Agreement at any time shall be deemed a waiver of
any other provision of this Agreement.
16.4. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any of the
provisions hereof shall not affect the validity or enforceability of
any other provision of this Agreement.
16.5. Notices. Any notice, request, demand or other communication made under
this Agreement shall be in writing and shall be deemed to be duly given
when personally delivered to an officer of the Company or to Employee,
as the case may be, or when delivered by mail at the following
addresses:
If to the Company: If to the Employee:
Antrum Interface 725 Ltd. 0000 Xxxxx Xxxx
0000 Xxxxxxx Xxxxx Xxxx Xxxxxxxxx, Xxxxxxx LIX 1W5
Pickering, Ontario LIW 3T9
16.6. Effective Date. The effective date of this Agreement shall be the 1st
day of June, 1998.
IN WITNESS WHEREOF, the Company, Employee and The JPM Company have duly
executed this Agreement as of the 1st day of June, 1998.
Antrum Interface 725 Ltd.
Attest:
/s/ Xxxxxxx X. XxXxxxxx
/s/ Xxxxxxx x. XxXxxxxx
(Corporate Seal)
The JPM Company
Attest:
/s/ Xxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
(Corporate Seal)
Witness: Employee:
/s/ Xxxxxxx X. Xxx /s/ Xxxxxxx X. XxXxxxxx
Xxxxxxx XxXxxxxx
Xxxxxxx XxXxxxxx
