Exhibit 10.22
EMPLOYMENT AGREEMENT
This AGREEMENT is made as of January 1, 2002, by and between NN, Inc., a
Delaware corporation, having its principal place of business located at 0000
Xxxxxx Xxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxx 00000 (the "Company" or "NN") and
Xxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company's Board of Directors (the "Board") has determined that
it is in the best interest of the Company and its shareholders to employ the
Executive as Vice President General Manager Delta Rubber, and the Executive
desires to serve in that capacity;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto,
intending to be legally bound, agree as follows:
1. Employment. The Company agrees to continue to employ the Executive and
the Executive hereby agrees to continue to be employed for the period of time
set forth in Paragraph 2, subject to the terms and conditions set forth herein.
2. Term. Subject to the terms hereof, Company agrees to employ the
Executive for a period of two years commencing upon January 1, 2002 and expiring
on the second anniversary from that date (the "Employment Term") (unless sooner
terminated as provided herein). The Employment Term shall be extended
automatically from time to time, on a rolling basis, for additional one year
periods, unless either party gives written notice of termination to the other at
least six (6) months prior to the date that the Employment Term is scheduled to
expire.
3. Position and Responsibilities. The Executive shall serve as Vice
President General Manager Delta Rubber, reporting only to the Chairman of the
Board and Chief Executive Officer of the Company (the "Chairman") or such other
individual as the Chairman may designate (his "Designee"), and shall have
supervision and control over, and responsibility for all aspects of Delta
Rubber. The Executive shall also have such other powers and duties as may from
time to time be prescribed by the Chairman and Chief Executive Officer;
provided, however, that such duties shall be consistent with the Executive's
position as the officer in charge of Delta Rubber.
4. Diligence. Executive agrees to serve in the position referred to in
Paragraph 3 and to perform diligently the duties and services appertaining to
such office, as well as such additional duties and services appropriate to such
office which the parties mutually may agree upon from time to time.
5. Time. Executive agrees to devote his entire working time and efforts
to the business and affairs of the Company and its affiliates and not to engage,
directly or indirectly, in any other business or businesses, whether or not
similar to that of the Company, except with the consent of the Chairman and
Chief Executive Officer and the Board. The foregoing notwithstanding, the
parties recognize and agree that Executive (i) may engage in personal
investments, subject to any restrictions set forth in the Non-Competition and
Confidentiality
provisions addressed in Paragraphs 7 through 10 below and (ii) subject to the
prior consent of the Chairman of the Board and Chief Executive Officer, may
serve on the board of directors of other companies, provided such service does
not conflict with the business and affairs of the Company or interfere with
Executive's performance of his duties hereunder.
6. Compensation.
(a) Salary. During the Employment Term, the Executive shall receive
an annual Salary of $140,000 per year, which annual salary shall be subject to
such increases as the Chairman or his Designee, in their sole discretion may
from time to time determine (the "Annual Salary"). The Annual Salary shall be
payable by the Company in accordance with its regular compensation policies and
practices for paying executives.
(b) Expenses. During the term of his employment hereunder, the
Executive shall be entitled to be reimbursed for all reasonable business
expenses incurred by him in connection with his services hereunder, including
but not limited to expenses for entertainment and travel, in accordance with the
policies and procedures from time to time in effect for the Company's senior
executives. The Company retains the right to establish limits on the types or
amounts of business expenses that the Executive may incur.
(c) Employee Benefit Programs. The Executive shall be entitled to
participate in all of the Company's employee benefit plans and programs
(including life, disability, and health insurance plans and programs and savings
plans and programs) to the extent his position, tenure, salary, age, health and
other qualifications make him eligible to participate, subject to the rules and
regulations applicable thereto. The Company retains the right to abolish or
alter the terms of any employee benefit programs, plans or policies that it may
establish, provided such abolition or amendment shall be applicable to the
senior executives of the Company generally.
(d) Vacation and Other Absences. The Executive shall be entitled to
the number of paid vacation days in each calendar year determined by the Company
from time to time for its senior executives generally. The Executive shall also
be entitled to all paid absences for holidays or illnesses in accordance with
the Company's plans, policies or provisions applicable to senior executive
employees.
7. Non-Competition. As a material inducement to the Company entering into
this Agreement and in consideration for the Executive's continued employment,
Executive hereby reconfirms and agrees to continue to be bound in all respects
by the following Non-Competition and Confidentiality terms.
(a) Restriction on Competition. The Executive agrees that during the
Term of Employment, and for a period of 2 years following the Term of Employment
or termination of this Agreement under Section 12, the Executive will not
compete with the business of Delta Rubber Company or its successors or assigns.
This agreement not to compete means that the Executive agrees he will not in any
capacity, including, but not limited to, as an employee, owner, officer,
director, consultant, stockholder or partner of a competitive enterprise, (1)
solicit orders for any product or service that is competitive with the product
or services provided by NN, or (2) accept
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employment with a business that sells products or services competitive with the
products or services of NN.
(b) Judicial Modification. The restriction on competition in this
paragraph extends to all geographic areas serviced by NN, during the Executive's
employment. NN, Inc. and the Executive have attempted to limit the Executive's
right to compete only to the extent permitted by applicable law and necessary to
protect NN from unfair competition. If a Court should determine that the
restriction contained in this section 7 is of too long a duration or too broad
in geographic scope to be reasonable and enforceable, then such a provision
shall be amended only so much as shall be necessary for the restrictions
contained herein to be enforceable.
8. Non-Disclosure and Return of Confidential Information.
(a) Definitions. The following definitions are established for the
purposes of this agreement:
A. "Trade Secret" means any information, including, but not
limited to, formulas, patterns, compilations, programs, devices,
methods, techniques or processes that NN considers confidential and
valuable and provides a competitive advantage because it is not
generally known and not readily ascertainable by proper means;
B. "Confidential Information" is defined as information
(whether or not in writing) which is related to NN's business and is
maintained as confidential. Confidential Information includes, but is
not limited to, Trade Secrets, customer data and account information;
sales records and invoices; information pertaining to manufacturing
processes, apparatus, formulas, systems and other confidential
technical data; personnel and related human resources information; the
existence and contents of agreements; marketing plans, strategies and
related information; information regarding economic condition,
determination of prices, sales, net income, indebtedness and related
financial information.
(b) Acknowledgments. The Executive acknowledges that: (i) NN's
business is both highly specialized and competitive, and (ii) documents and
information regarding NN's customers, clients, services, methods of operation,
sales as well as the specialized business needs of NN's customers and clients,
constitute Confidential Information and Trade Secrets that are not generally
known to, or readily ascertainable by, the public or NN's competitors. The
Executive further acknowledges that during the Term of Employment he will have
access to Confidential Information and Trade Secrets belonging to NN, agrees
that such Confidential Information and Trade Secrets shall remain the exclusive
property of NN, and understands that the misappropriation or unauthorized
disclosure of such Confidential Information or Trade Secrets is prohibited and
will cause NN irreparable injury.
(c) Non-Disclosure. During the Employment Term, and at all times
following the Employment Term or the termination of this Agreement under section
12, the Executive shall not disclose Confidential Information or Trade Secrets
to anyone other than
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NN's officers orauthorized employees and shall not use such information for any
unauthorized purpose without the prior written consent of NN.
(d) Non-Removal. The Executive shall not, either during the Term of
Employment or at anytime thereafter or at any time following a termination of
this agreement under Section 12, directly or indirectly, copy, take or remove
from NN's premises any of NN's books, records, files, customer lists, documents
or materials, including any Confidential Information or Trade Secrets, or copies
of any of the foregoing, without the prior written consent of NN.
9. Assignment of Intellectual Property.
(a) Any and all inventions, writings, analyses, improvements,
procedures, discoveries, processes and/or techniques ("Intellectual Property")
that the Executive may make, conceive, discover or develop, either solely or
jointly with any other person or persons, at any time during his employment with
NN, whether during working hours or at any other time, and whether at the
request or upon the suggestion of NN or otherwise, which relate to or are useful
in connection with any business carried on or contemplated by NN, shall be the
sole and exclusive property of NN. The Executive shall make full disclosure to
NN of all such Intellectual Property, and the Executive shall do everything
necessary to vest the absolute title thereto in NN. The Executive agrees that he
shall not be entitled to any additional or special compensation or reimbursement
in connection with any and all such Intellectual Property.
(b) The Executive shall assist NN at anytime during or after his
employment, in obtaining patents on all such Intellectual Property deemed
patentable by NN and shall execute all documents and do all things necessary to
obtain letters patent, vest NN with full and exclusive title thereto, and
protect the same against infringement by others. If such assistance takes place
after his employment is terminated the Executive shall be paid by NN at a
reasonable rate for any time actually spent in rendering such assistance at the
request of NN.
10. Non-Solicitation.
(a) Acknowledgments. The Executive acknowledges that NN's
relationships with its customers, clients, employees, and other business
associations are among NN's most important assets, and that developing,
maintaining and continuing these relationships is one of NN's highest
priorities. The Executive further understands that he will be relied upon to
develop and maintain the goodwill of these relationships on behalf of NN
throughout the course of his employment with NN.
(b) Non-Solicitation of Employees. The Executive, therefore agrees
that during the Term of Employment, and for a period of 2 years following the
Term of Employment or a termination of this Agreement under Section 12, he will
not directly or indirectly recruit, solicit, or induce, or attempt to recruit,
solicit, or induce, any employees of NN to terminate their employment with, or
otherwise cease a relationship with, NN.
(c) Non-Solicitation of Customers. In addition, the Executive agrees
that during the Term of Employment and for a period of 2 years following the
Term of Employment or a termination of the Agreement under Section 12, he will
not directly or indirectly solicit,
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divert or take away, or attempt to solicit, divert, or take away the business or
patronage of any of the clients, customers or accounts, or prospective clients,
customers or accounts, of NN.
11. Legal and Equitable Relief. The restrictions contained in Sections
7-10 are necessary for the protection of the legitimate business interests and
goodwill of NN, and are considered by the Executive to be reasonable for such
purposes. The Executive agrees that any breach of Sections 7-10 will cause NN
substantial and irrevocable damage. In the event of any such breach, in addition
to such other remedies that may be available, including the recovery of damages
from the Executive, NN shall have the right to injunctive relief to restrain or
to enjoin any actual or threatened breach of the provisions of Sections 7-10.
12. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Term. The Company
shall be entitled to terminate the Executive's employment because of the
Executive's disability during the Employment Term if, as a result of the
Executive's incapacity due to physical or mental illness (hereinafter
"Disability"), the Executive shall have been absent from his duties hereunder
for one hundred and twenty (120) days during any three hundred and sixty (360)
day period.
(b) Termination by Company for Cause. (i) The Company may terminate
the Executive's employment during the Employment Term for Cause. "Cause" means:
A. the failure of the Executive to perform the Executive's
material duties under this Agreement (other than as a result of
physical or mental illness or injury), which failure, provided it does
not constitute willful misconduct or gross negligence described in
Subsection B below, remains uncorrected for 60 days following written
notice to Executive by the Chairman, his Designee or the Board of such
breach;
B. willful misconduct or gross negligence by the Executive, in
either case that results in material damage to the business or
reputation of the Company,
C. a material breach by Executive of either this Agreement or
that certain Non-Competition and Confidentiality Agreement referenced
in Paragraph 8 which, if correctable, remains uncorrected for 60 days
following written notice to Executive by the Board of such breach; or
D. the Executive is convicted of a felony or any other crime
involving moral turpitude (whether or not in connection with the
performance by Executive of his duties under this Agreement).
(c) Termination By Company Without Cause. The Company may terminate
the employment of Executive under this Agreement for any reason at any time.
(d) Termination by Executive for Good Reason. (i) The Executive may
terminate employment for Good Reason. "Good Reason" means:
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A. assignment to the Executive of any duties inconsistent with
Executive's position, duties, responsibilities, title or office, or
any other action by the Company that results in a material diminution
in the Executive's position, authority, duties or responsibilities,
excluding in each case any assignment or action that is remedied by
the Company within 60 days after receipt of notice thereof from the
Executive; or
B. any material failure by the Company to comply with this
Agreement, other than a failure that is remedied by the Company within
60 days after receipt of notice thereof from the Executive.
(e) Voluntary Termination by Executive Without Good Reason. Executive
may at any time terminate his employment under this Agreement without Good
Reason.
(f) Notice of Termination. If Company or Executive desires to
terminate Executive's employment hereunder at any time, it or he shall do so by
giving written notice to the other party (following the expiration of any
applicable cure periods) that it or he has elected to terminate Executive's
employment hereunder and stating the effective date and reason for such
termination. Any termination by Executive of his employment without Good Reason
shall be made on not less than 14 days' notice.
13. Effect of Termination.
(a) Voluntary Termination by Executive; Termination for Cause; Death,
or Disability. In the event that Executives employment is
terminated pursuant to Paragraphs 12(a), 12(b) or 12(e), on the
date of termination, the Company shall be liable to Executive as
follows:
(i) Executive shall be entitled to receive the Annual
Salary due to him through the date of termination of his
employment.
(ii) Any vested rights of Executive shall be paid to
Executive in accordance with the Company's plans, programs or
policies. Without limiting the foregoing, in the event of the
termination of Executive's employment due to death or disability
(Paragraph 12(a)), the rights and benefits of Executive (or his
designated beneficiary or representatives, as applicable) under
any Company life, health and long-term disability plans and
policies shall be determined in accordance with the terms and
provisions of such plans and policies.
(iii)The Company shall promptly reimburse Executive for any
and all reimbursable business expenses (to the extent not already
reimbursed) upon Executive's properly accounting for the same.
(b) Termination Without Cause; Termination by Executive for Good
Reason. In the event that the Company terminates Executive's employment without
Cause pursuant to Paragraph 12(c) or Executive terminates his employment with
the Company pursuant to Paragraph 12(d), the Company shall be liable as follows:
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(i) Executive shall be entitled to receive the Annual Salary due
to him through the date of termination of his Employment. In addition,
Executive shall be entitled to receive continued monthly payments of
his Annual Salary, based on the Annual Salary in effect, on the date
of termination, until the first anniversary of the date of
termination. The Executive shall also be entitled to receive a bonus
upon the anniversary of his date of termination that is equal to the
average bonus paid Executive for the 3 years immediately preceding the
date of his termination.
(ii) Any vested rights of Executive shall be paid to Executive in
accordance with the Company's plans, programs or policies.
(iii)The Company shall promptly reimburse Executive for any and
all reimbursable business expenses (to the extent not already
reimbursed) upon Executive's properly accounting for the same.
(iv) Executive and/or Executive's family shall be entitled to
receive health benefits (as contemplated by Paragraph 7(c) hereof)
until the first anniversary of the date of termination at least equal
to those which would have been provided to them in accordance with
this Agreement if Executive's employment had not been terminated
provided that the Company's obligation to provide such benefits shall
be reduced by any comparable benefits (or amounts received by
Executive in respect thereof) received by Executive under the terms of
new employment undertaken by Executive after termination and prior to
the first anniversary of the date of termination; and provided
further, that the terms of the Company's health insurance plans shall
be subject to amendment during such period, to the extent that such
amendments are applicable to the executive officers of the Company
generally.
(c) Limit on Company Liability. Except as expressly set forth in this
Paragraph 13, the Company shall have no obligation to Executive under this
Agreement following a termination of Executive's employment with the Company.
Without limiting the generality of the provision of the foregoing sentence, the
Company shall not, following a termination of Executive's employment with the
Company, have any obligation to provide any further benefit to Executive or make
any further contribution for Executive's benefit except as provided in this
Paragraph 10.
14. Company Proprietary Rights.
(a) Company to Retain Rights. Executive agrees that all right, title
and interest of every kind and nature whatsoever in and to copyrights, patents,
ideas, business or strategic plans and concepts, studies, presentations,
creations, inventions, writings, properties, discoveries and all other
intellectual property conceived by executive during the term of this Agreement
and pertaining to or useful in or to (directly or indirectly) the activities of
the
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Company (collectively, "Company Intellectual Property") shall become and remain
the exclusive property of the Company, and Executive shall have no interest
therein.
(b) Further Assurances. At the request of the Company, Executive
shall, at the Company's expense but without additional consideration, execute
such documents and perform such other acts as the Company may deem necessary or
appropriate to vest in the Company or its designee such title as Executive may
have to all Company Intellectual Property in which Executive may be able to
claim any rights by virtue of his employment under this Agreement.
(c) Return of Material. Upon the termination of the Employment Term,
including any termination of employment described in Paragraph 12, the Executive
will promptly return to the Company all copies of information protected by the
terms of this agreement which are in his possession, custody or control, whether
prepared by him or others, and the Executive agrees that he shall not retain any
of same.
15. Representation and Warranty of Executive. Executive represents and
warrants to the Company that he is not now under any obligation, of a
contractual nature or otherwise, to any person, partnership, company or
corporation that is inconsistent or in conflict with this Agreement or which
would prevent, limit or impair in any way the performance by him of his
obligations hereunder.
16. Assignment. This Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party; provided,
however, that Company may assign this Agreement in connection with a merger or
consolidation involving Company or a sale of substantially all its assets to the
surviving corporation or purchaser, as the case may be, so long as such assignee
assumes Company's obligations hereunder.
17. Withholding. Payment of Executive's Annual Salary and payment or
provision of other compensation to Executive pursuant hereto shall be subject to
such reporting and withholding for applicable taxes as is required by law.
18. Certain Expenses. Company, on or before the date hereof, shall pay
directly or reimburse Executive (at Executive's discretion) for the actual legal
fees and other costs and expenses, if any, incurred by Executive in connection
with the preparation, finalizing and execution of this Letter.
19. Severability. In the event that any provision or portion of this
Agreement is determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement will be unaffected
thereby and will remain in full force and effect to the fullest extent permitted
by law.
20. Notices. For all purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given, in the case of a notice to the Company, when delivered to
the Company at the following
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address, and in the case of a notice to Executive, when received by Executive,
and in both cases addressed as follows:
If to Company, to: NN, Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx X, Xxxxx 00
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Attention: CEO
If to Executive, to: Xxxx Xxxxxxx
21. Modifications and Waivers. No provision of this Agreement may be
modified or discharged unless such modification or discharge is authorized by
the Board and is agreed to in writing, signed by the Executive and by an officer
of the Company duly authorized by the Board. No waiver by either party hereto of
any breach by the other party hereto of any condition or provision of this
Agreement to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at the time or at any prior or subsequent
time.
22. Entire Agreement. This Agreement constitutes the entire understanding
of the parties hereto with respect to their subject matter. This Agreement
supersedes all prior agreements between the parties hereto with respect to their
subject matter.
23. Governing Law. This Agreement will be governed by the laws of the
State of Tennessee without regard for its conflict of law rules.
24. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which will be deemed to be an original but all of
which together will constitute one and the same instrument.
25. Headings, Etc. The section headings contained in this Agreement are
for convenience of reference only and will not be deemed to control or affect
the meaning or construction of any provision of this Agreement. Reference to
Paragraphs are to Paragraphs in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NN, INC.
By: /s/ Xxxxxxxx X. Xxxx
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EXECUTIVE
By: /s/ Xxxx X. Xxxxxxx
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