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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
as of the 3rd day of December, 1998, by and between Superior Modular Products
Incorporated, a Delaware corporation (the "Company") and a wholly owned
subsidiary of Preformed Line Products Company, and XXXXXXX X. XXXXXXXX, XX.,
("Employee"),
W I T N E S S E T H :
WHEREAS, Employee has for the past six years been employed as
President of the Company;
WHEREAS, the Company desires to continue to employ Employee and
Employee desires to accept employment from the Company on the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the covenants herein contained
(the mutuality, adequacy, receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
1. Employment
The Company hereby employs Employee, and Employee hereby
accepts and agrees to be employed, as the President and Chief Executive Officer
of the Company.
2. Term
Employee shall be employed for a term of five (5) years,
commencing on the date hereof and terminating on December 2, 2003, unless sooner
terminated pursuant to the terms contained herein (the "Employment Term").
3. Responsibilities and Duties
Employee shall perform such duties and carry out such
responsibilities as are reasonable and customary for employees in similar
positions in companies of similar size and scope, as designated or directed by
the President or Chairman of Preformed Line Products Company, an Ohio
corporation ("Preformed").
4. Employment Performance Standards
Except as provided in Paragraph 5(b), Employee agrees that
during the Employment Term he will devote all of his business time, attention,
efforts and skills to the performance of his duties for and on behalf of the
Company in accordance with Section 3 hereof.
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5. Covenant Not to Compete
(a) Except as otherwise provided in Paragraph 17, Employee agrees
that he will not during the term hereof and for a period of two years following
termination of employment, engage, directly or indirectly, whether on his own
account or as a shareholder, partner, joint venturer or agent of any person,
firm, corporation or other entity or otherwise, directly or indirectly, in any
or all of the following activities without specific written consent of the
Company in North America or Europe.
(1) enter into or engage in any business which competes
with the business of the Company or Preformed;
(2) solicit customers or business patronage which results
in competition with the business of the Company or Preformed; or
(3) promote or assist, financially or otherwise, any person,
firm, association, corporation or other entity engaged in any
business which competes with the business of the Company or
Preformed (except investments in 5% or less of the capital stock of
any corporation subject to the Securities Exchange Act of 1934, as
amended).
6. Covenant Against Disclosure.
Employee hereby covenants that during the Employment Term and after
the expiration or termination thereof he will keep secret all inventions,
improvements, discoveries, secret processes, research, design and development
projects, special operating techniques, marketing systems, sales methods,
customers and confidential business and manufacturing "know-how" imparted or
made known to him by the Company or Preformed or any of the Company's or
Preformed's employees or agents, or made, learned, discovered, or acquired by
Employee in connection with his employment hereunder from and after the date of
this Agreement; that he will not reveal, disclose or make known, in any manner
whatsoever, any of the same, or anything relating to the same, to any person,
firm, or corporation; and that he will not use or practice any of the same
except when authorized to do so by writing, signed by a duly authorized officer
or agent of the Company or Preformed, or until after the same shall be or become
in the public domain through no fault of the undersigned.
7. Covenant Against Hiring. Employee hereby understands that in the
Company's view it is essential to the successful operation of its business that
the Company retain substantially unimpaired (to an extent determined by the
Company in its sole discretion) the Company's operating organization. Employee
shall not, in a business other than the Company whether directly or indirectly
through any subsidiary or affiliate, employ, whether as an employee, officer,
agent, consultant or independent contractor, or enter into any partnership,
corporation, joint venture or other business association; with any person who
was at any time during the twelve (12) months preceding the date of this
Agreement an employee, representative or officer of the Company, for a period of
twelve (12) months after such person ceases or has ceased, for any reason, to be
an employee, representative or officer of the Company.
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8. Intended Beneficiaries. Employee does hereby acknowledge and
agree that this Agreement is intended for the benefit of, and may be enforced
by, the Company and Preformed, each such entity being an intended beneficiary
of this Agreement.
9. Injunctive Relief. Employee hereby acknowledges and agrees
that the Company's or Preformed's remedy at law for any breach of any of
Employee's respective obligations under Sections 5, 6 or 7 hereof would be
inadequate, and agrees and consents that temporary and permanent injunctive
relief may be granted in a proceeding which may be brought to enforce any
provision of Sections 5, 6 or 7 without the necessity of proof of actual damage.
10. Representation and Warranty of Employee
Employee represents and warrants to the Company that he is
free to continue employment with the Company as contemplated herein, and that he
has not and will not hereafter incur any employment or business obligations or
commitments of any kind which would in any way hinder or interfere with his
acceptance or performance of his obligations hereunder.
11. Compensation
During the Employment Term, the Company shall pay to Employee
as compensation ("Compensation") a base salary payable in accordance with the
Company's usual practices (and in any event no less frequently than monthly) of
no less than $190,000 per annum.
12. Bonus
In addition to the Compensation, Employee shall receive a
bonus ("Bonus") for each fiscal year of the Company, prorated on a per diem
basis for partial years, during the Employment Term determined and calculated as
a 60% participant in accordance with the SMPI Bonus Plan set forth on Exhibit A
attached hereto and made a part hereof.
13. Office, Equipment
The Company shall provide to the Employee, at the Company's
expense, a private office, secretarial assistance, office equipment, normal and
customary business supplies, and such other facilities and services as are
suitable to the Employee's position and adequate for the performance of his
duties hereunder.
14. Reimbursement of Expenses
The Company shall reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the fulfillment of
his obligations hereunder in accordance with the policies in effect from time to
time by the Company.
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15. Hospitalization and Related Benefits
During the Employment Term, Employee shall receive
hospitalization, health, medical and other benefits commensurate with, and on
the same terms and conditions, as the benefits made available to other employees
of the Company.
16. Location
Without the Employee's consent, the Company's operations shall
not be moved from the Asheville, North Carolina area.
17. Termination
A. By the Company. Employee's employment with the Company
hereunder may be terminated with or without Cause (as hereinafter defined) by
the Company by giving notice of such termination to Employee, effective
immediately upon the giving of such notice except that four weeks advance
written notice and opportunity for cure shall be given for termination under
(ii) below. If Employee's employment is terminated by the Company for Cause,
then Employee's Compensation shall terminate on the effective date of his
termination. For purposes of this Section 17, "Cause" shall mean (i) fraud or
embezzlement, (ii) material failure to comply with Employee's obligations under
this Agreement, including, without limitation, material misconduct in the
performance or nonperformance of the responsibilities or duties designated in
accordance with Section 3 of this Agreement, or (iii) failure to perform his
duties as provided herein as a result of his death or Permanent Disability. For
purposes of this Section 17, "Permanent Disability" shall be deemed to occur if
Employee does not perform his usual services to the Company by reason of mental
or physical disability due to illness or injury and such nonperformance exists
for a period of 120 consecutive days in a twelve-month period. If the Company
terminates Employee's employment without Cause during the Employment Term, the
Company shall continue to pay to Employee, as severance pay, compensation,
hospitalization and other benefits (but not a Bonus) for the remainder of the
five-year Employment Term, payable in regular installments, at the same interval
as the payment of Compensation hereunder, and the non-competition provisions of
Paragraph 5 through 7 shall remain in effect only for the same period.
B. By the Employee. Without limiting any other legal remedy,
the Employee may terminate this agreement upon four weeks advance written notice
to the Company if (i) the Company materially breaches this agreement and fails
to cure such breach within four weeks after notice thereof, or (ii) if
substantially all the assets of the Company or 51% or more of the stock of the
Company are sold to a third party. In such event of breach as described in (i)
hereof, the non-competition provisions of this Agreement shall be null and void;
in the event of sale or transfer as described in (ii) hereof, the
non-competition provisions of this agreement shall remain in full force and
effect.
C. As the Result of an Acquisition. If substantially all of
the assets or 51% or more of the stock of the Company is sold to a third party
in a transaction which closes on or before December 2, 2003, and a) the
Employee's employment is terminated as a result, or b) the
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Employee suffers a material reduction in salary or benefits other than such
reductions applicable to management level employees as a whole, the Company
shall pay to the Employee monthly, during the period commencing on the Closing
Date of such acquisition, and terminating on December 2, 2003, the amount by
which the Employee's monthly salary hereunder exceeds all compensation paid to
the Employee by the purchaser or any other employer during such period.
18. Review of Records
The Employee shall have the right, either personally or
through an accountant retained and paid by him, to examine the books and
accounts of the Company at times mutually convenient to the Company and the
Employee and upon reasonable notice.
19. Indemnification
The Company shall indemnify the Employee for all liabilities
and costs paid by the Employee in consequence of, or in any way relating to, the
faithful discharge of his duties as an employee of the Company in compliance
with the terms and conditions of this Agreement.
20. Assignment of Employee Inventions and Patents
Employee acknowledges that on December 3, 1993 he executed an
"Employee Patent and Confidential Information Agreement" in favor of the Company
and that said Agreement is still in full force and effect.
21. Severability
All provisions of this Agreement are intended to be severable.
In the event any provision or restriction contained herein is held to be invalid
or unenforceable in any respect, in whole or in part, such finding shall in no
way affect the validity or enforceability of any other provisions of this
Agreement. The parties hereto further agree that any such invalid or
unenforceable provision shall be deemed modified so that it shall be enforced to
the greatest extent permissible under law, and to the extent that any court of
competent jurisdiction determines any restriction herein to be overly broad or
unenforceable, such court is hereby empowered and authorized to limit such
restriction so that it is enforceable for the longest duration of time and
largest geographical area possible.
22. Non-Waiver
No failure or delay by either party in exercising such party's
rights hereunder shall operate as a waiver thereof and no single or partial
exercise thereof shall preclude any further exercise of any right, power, or
privilege by such party.
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23. Notices
Any notice, request, instruction or other document required to
be delivered hereunder by any party hereto shall be in writing and shall be
deemed to have been given and made (a) seven days after deposit if mailed by
certified mail, or (b) one day after deposit for delivery by any express mail
service, as follows:
If to the Company: SUPERIOR MODULAR PRODUCTS
INCORPORATED
00 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
with a copy to: PREFORMED LINE PRODUCTS COMPANY
X.X. Xxx 00000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
XXXXX & XXXXXXXXX LLP
3200 National City Center
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000-0000
(000) 000-0000
Attention: J. Xxxxxxx Xxxxxxxx
If to Employee: Xx. Xxxxxxx X. Xxxxxxxx, Xx.
P. O. Xxx 000
Xxxxxx, XX 00000
Any party may designate such other address for notice hereunder by
notifying the other parties hereto in writing of such address.
24. Miscellaneous
(a) This Agreement is for personal services to be provided by
Employee and may not be assigned or transferred by Employee, or the
obligations or Employee performed by any other party. All of the
rights and obligations of the Company under this Agreement are fully
assignable, transferable and delegable, in whole or in part, by the
Company, provided that the Company shall remain liable thereon.
(b) This Agreement contains the entire agreement between the
parties hereto regarding the subject matter hereof and supersedes
all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written.
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(c) Titles and captions of or in this Agreement are inserted
as a matter of convenience and reference and in no way are intended
to affect the intent or scope of this Agreement.
(d) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of North Carolina, U.S.A.
(e) The recitals hereto are an integral part of this Agreement
and are incorporated herein by reference.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
SUPERIOR MODULAR PRODUCTS
INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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Title: President
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EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
