EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this
11/9/98, by and between Varlen Corporation ("Employer"), and Xxxxxxx X.
Xxxxxxxxxx ("Employee").
1. Employer shall employ Employee and the Employee shall render services to
Employer. Employee's employment shall be full-time and Employee shall perform
such duties as Employer shall from time to time request. Employee shall devote
all of Employee's time, skill, attention, knowledge, experience and effort to
such duties and faithfully and diligently perform such duties to the best of
Employee's abilities and for the benefit of Employer. Employee shall attend and
work at such places as Employer shall from time to time reasonably specify, and
shall obey all directions, policies, guidelines rules and regulations as may
from time to time be implemented by Employer.
2. This Agreement shall automatically terminate in the event of (i) Employee's
death; or (ii) Employee's permanent disability and Employee is therefore
eligible to collect social security benefits; or (iii) retirement pursuant to
one of the Employer's benefit plans. In addition, Employer may terminate this
Agreement immediately upon giving notice to Employee for "Cause." For the
purposes of this Agreement, "Cause" shall mean (i) Employee's breach of any
material provision of this Agreement and such breach shall not have been
remedied within thirty (30) days of written notice thereof; (ii) the
misappropriation by Employee of any funds or property from Employer; (iii)
Employee's violation of any law, rule or regulation (other than minor traffic
violations or similar offenses) or final cease-and-desist order; or (iv) any
action by Employee that may have, in Employer's sole discretion, a detrimental
effect on the reputation of Employer. For the purposes of this Agreement,
"Unreasonable Change" shall mean (i) Employee is assigned to a position bearing
a title of lower rank than a vice president; (ii) Employee's salary or target
bonus taken as a whole are reduced (recognizing the payment of a bonus is tied
to achievement of financial and personal performance); or (iii) Employee's place
of principal employment (not to be construed as limiting business travel) is
moved more than fifty (50) miles from LaGrange, Illinois. If employment is
terminated by Employer for any reason other than due to death, permanent
disability, retirement, or Cause or if Employee promptly terminates his
employment in the event of an Unreasonable Change without his consent, the
Employer shall continue to pay the Employee the following: A) his base
compensation for a period of one year from the date of such termination; B) a
bonus at a rate of 30% of base compensation level in lieu of any other claims to
a bonus payment during or after his employment paid at the expiration of such
one year period; C) provided Employee shall promptly notify Employer of
subsequent health care coverage, payment of the COBRA premium for a period
terminating on the earliest of the following: (i) one year from the date of
employment termination; or (ii) the effective date of health care coverage for
Employee at a substantially similar level or better; and D) use of the
Employer-provided car for a period of two months from the date of employment
termination. Such payment of base compensation and bonus will not be offset or
reduced by any income of Employee after the date of termination of employment
absent a breach of a provision of this Agreement by Employee.
3. A) Employee acknowledges that the transportation and petroleum instruments
businesses are specialized and that he will have access to the Employer's and
its subsidiaries' and affiliates' Confidential Information. "Confidential
Information" means any information, or data, in whatever form or medium,
concerning the business or affairs of Employer or any of its subsidiaries or
affiliates including any information entrusted to any of the foregoing,
including, without limitation, strategic plans, planned and potential
acquisitions, inventions, research, product plans, products, services, lists of
customers, records, computer software (including data and related
documentation), methods of operation, pricing or cost information, price and bid
strategies, technical data, financial information, financing plans, business or
marketing and manufacturing techniques, strategies or developments, product or
system ideas or designs, developments, processes, formulas, technology, designs,
drawings, application opportunities, or any other trade secret or information of
whatever nature not generally in the public domain. Employee acknowledges that
the documents and information regarding the Confidential Information are highly
confidential and constitute trade secrets. Employee further acknowledges that
the services rendered by Employee will be of a special character which have a
unique value to the Employer and its subsidiaries and affiliates.
B) Employee shall hold all Confidential Information in the strictest
confidence and shall not, during or subsequent to Employee's employment: (i)
disclose or make use of the Confidential Information for any purpose whatsoever
other than the performance of services to Employer, or (ii) disclose to any
person or entity or use for Employee's account or for the account of others,
directly or indirectly, any Confidential Information. Employee further agrees to
take all reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information. Upon the termination of this Agreement, or upon
Employer's earlier request, Employee shall cease use of and deliver to Employer
all of Employer's and its subsidiaries' and affiliates' property and
Confidential Information in tangible form that Employee may have in Employee's
possession or control.
C) Employee covenants and agrees that, except to the extent required to
perform services on behalf of Employer pursuant to this Agreement, during the
term of Employee's employment by Employer or its subsidiaries or affiliates and
until the date one (1) year after the termination of his employment, Employee
shall not, directly or indirectly, anywhere in the world: (i) engage in the
businesses of the Employer, its subsidiaries or its affiliates at the time of
his termination of employment for Employee's own account (in whole or in part);
or (ii) own, manage, operate, control, benefit from, be employed by, provide
services to, or participate in the management, ownership, operation or control
of, or be connected in any manner with, any entity engaged in the businesses of
the Employer, its subsidiaries or its affiliates at the time of his termination
of employment (in whole or in part) or any activity similar to or competitive
with such businesses (in whole or in part).
D) Employee covenants and agrees that during the term of Employee's
employment by Employer and until the date one (1) year after the termination of
his employment, Employee shall not, directly or indirectly: (i) solicit for
employment, employ or enter into any joint venture, independent contractor or
other business relationship with any employee of Employer or its affiliates;
(ii) persuade or attempt to persuade any such employee to terminate or modify
his or her relationship with Employer and/or its subsidiaries or affiliates or
otherwise interfere in any way with the employment relationship; (iii) solicit
for any entity other than Employer the business of any customer of Employer or
its subsidiaries or affiliates; or (iv) persuade or attempt to persuade any
customer, or any potential customer, of Employer or its subsidiaries or its
affiliates not to do business with Employer or its subsidiaries or affiliates.
E) Section 3 shall survive any termination of this Agreement.
4. If any provision of this Agreement is held by a court to be invalid, void, or
unenforceable and the court does not elect to reduce such provision, this
Agreement shall be deemed amended to delete such provision or portion
adjudicated to be invalid or unenforceable without in any way affecting the
remaining parts of this Agreement. If any court determines that this or any part
of this Agreement, is unenforceable because of the duration of such provision or
the area it covers, such court shall have the power to reduce the duration or
area of such provision and, in its reduced form, such provision shall then be
enforced.
5. Employer may assign this Agreement to any of its subsidiaries or affiliates
at any time. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
VARLEN CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Title: Vice President, General Sign Name: /s/ Xxxxxxx X. Xxxxxxxxxx
Counsel and Secretary -------------------------
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