EMPLOYMENT AGREEMENT
This Employment Agreement, by and between Stephen Gregory
Geane (Geane) and Burke Industries, Inc. (Burke), is made and entered into as
of the last date that this Agreement is executed by the parties.
RECITALS
WHEREAS, Burke is a California corporation, with offices
and business operations in the state of California; and
WHEREAS, Burke desires assurance of the continued
association and services of Geane in order to retain his experience,
abilities and knowledge, and is therefore is willing to engage the services
of Geane subject to the terms and conditions stated herein; and
WHEREAS, Geane desires to be employed by Burke subject to
the terms and conditions stated herein;
NOW THEREFORE, it is hereby agreed by and between the
parties as follows:
1. TERM: This Agreement shall have a term of one (1)
year beginning on March 2, 2000, and ending on March 1, 2001, subject to
annual extensions as hereinafter provided unless earlier terminated in
accordance with the provisions of this Agreement. After March 1, 2001, this
Agreement shall be extended for additional successive one-year terms unless
terminated by either party with not less than 90 days notice.
2. DUTIES OF GEANE:
A. Burke shall employ Geane as the Chief Financial Officer,
or in such other capacity or capacities as Burke may from time to time
prescribe. The scope of Geane's duties hereunder may be modified from time to
time at the discretion of the Chief Executive Officer of Burke. Geane shall
devote his exclusive and full-time services, energy and attention to the
business of Burke. Geane shall not, without Burke's prior written consent,
render to others services of any kind for compensation, or engage in any
other business activity that would materially interfere with the performance
of his duties under this Agreement. Geane represents to Burke that he has no
outstanding commitments inconsistent with any of the terms of this Agreement
or the services to be rendered hereunder.
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B. During the employment term, Geane shall not, directly or
indirectly, whether as partner, employee, creditor, shareholder or otherwise,
promote, participate or engage in any activity or other business competitive
with Burke's business.
3. COMPENSATION:
A. Burke shall pay to Geane a base salary of $158,000
annually. This base salary may be (but shall not be required to be) increased
by the Board of Directors of Burke if the Board of Directors of Burke
determines, in its sole and complete discretion, to provide for such
increase. Geane's salary shall be paid to him in installments on the dates
customarily set for the payment of executive salaries at Burke.
B. Geane may also receive an annual bonus of up to sixty
(60) percent of his base salary, which annual bonus, if awarded, shall be
based upon performance criteria established by the Board of Directors of
Burke in its sole discretion. Geane shall also participate in any performance
based or profit participation programs as may be established for all Burke
executives.
C. Geane shall also be selected by the Board of Directors
to receive options to acquire not less than one (1) percent of the stock of
Burke pursuant to the Burke Industries, Inc. 1997 Stock Option Plan ("The
Plan") that was approved by the shareholders of Burke, which options will be
exercisable within thirty (30) days after the termination of Geane's
employment in accordance with Section 5.10 of The Plan.
4. EMPLOYMENT BENEFITS: Geane shall also be entitled
to participate in any and all employee benefit plans or programs of any
nature or kind whatsoever now existing or that may hereafter be adopted by
Burke for its employees and executives when and as Geane becomes eligible for
such benefits, including, but not limited to, vacations, retirement plans,
thrift plans, medical plans, life insurance plans, disability insurance
plans, and any other employee benefit plans or programs. A copy of the
schedule of the current employee benefit plans is attached to this Agreement.
In addition to such plans, Burke will pay to Geane a monthly automobile
allowance in the amount of $1,200. Burke reserves the right to modify,
suspend or discontinue any and all of the above benefit plans, policies and
practices at any time without notice to or recourse by Geane, so long as such
action is taken generally with respect to other similarly situated persons.
5. COMPENSATION DURING DISABILITY: In the event that
Geane shall fail or be unable to perform his services by reason of illness,
or if he should become incapacitated for a period of more than one (1) month,
the compensation payable to Geane under this Agreement shall be suspended
during such illness or incapacity, this Agreement shall remain in effect and
Geane shall be compensated in accordance with Burke policies, if any, then in
effect for similarly situated employees who become disabled to the extent
that Geane has elected to participate in the programs available under such
policies. Full compensation shall be restored to Geane upon his return to
full time employment, following any period of leave as required or provided
by applicable law or then existing Burke polices, and this Agreement shall
not otherwise be affected by such disability
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provided, however, that nothing in this Section shall affect Burke's right to
terminate this Agreement in accordance with Section 9.B.
6. BUSINESS EXPENSES: Geane shall be authorized to
incur reasonable and customary business expenses, including expenses for
entertainment and travel, in accordance with Burke policies. Geane shall be
reimbursed for itemized accounts of business expenditures presented in
accordance with Burke policies and procedures.
7. CONFIDENTIAL INFORMATION: Geane agrees not to use
or disclose, either directly or indirectly, any confidential information of
Burke, except as required in the course of his employment with Burke. For the
purposes of this Section 7, the term "Confidential Information" includes
information relating to the processes, products, manufacturing techniques,
methodology, practices, policies, technical plans, computer programs,
reports, customer or employee lists, marketing plans, distribution channels
and financial information that may have been developed by, derived from or
obtained in the course of the business of Burke.
8. TERMINATION:
A. TERMINATION FOR CAUSE: Burke shall have the right to
terminate this Agreement at any time without notice if Geane commits any of
the following acts (each of which is referred to herein as "cause"):
(i) breach of any provision of this Agreement and
Geane's failure to cure such breach within ten
(10) days of receipt of notice of such breach;
(ii) any act of fraud, dishonesty or sexual
harassment with respect to any aspect of the
business of Burke;
(iii) drug or alcohol abuse or behavior that impedes
Geane's job performance or does or could bring
Geane or Burke into disrepute;
(iv) disclosure of confidential information of
Burke;
(v) misappropriation of funds of any corporate
opportunity of Burke;
(vi) conviction of Geane of a crime of moral
turpitude, or a plea of NOLO CONTENDERE
thereto;
(vii) conduct by Geane attempting to secure or
securing any personal profit not fully
disclosed to and approved by the President or
Chief Executive Officer in connection with any
transaction entered into on behalf of or
involving Burke;
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(viii) gross, wilful or wanton carelessness or
misconduct that constitutes a breach of any
fiduciary duty owed to Burke;
(ix) unjustifiably neglecting , failing or refusing
to perform the duties that he is required to
perform hereunder; or,
(x) conduct, even if not in connection with the
performance of his duties contemplated under
this Agreement, that would result in serious
prejudice to the interests of Burke and his
failure to cease such conduct with fifteen
(15) days of his receipt of notice to cease
such conduct.
B. TERMINATION ON DISABILITY: If Geane is unable to
perform the essential functions of his position due to any mental or physical
illness or disability for four (4) consecutive full calendar months, or if he
is unable to so perform for 80 percent of more of the normal working days or
hours during such four (4) consecutive calendar months, then Burke shall have
the right to declare this Agreement terminated if such disability continues
following the expiration of any sick leave, medical leave or other leave
available pursuant to any Burke policy applicable to Geane.
9. COMPENSATION UPON TERMINATION:
A. TERMINATION FOR CAUSE: If Geane's employment is
terminated for cause, Burke shall pay to Geane his full base salary through
the date of termination at the rate in effect at the time of the termination,
and any unpaid expenses, and any unused earned vacation to the extent
required by law, as well as any life insurance, disability payments or other
benefits then owed to Geane under any benefit plans or programs then
maintained by Burke (the "Accrued Benefits"). Burke shall, thereafter, have
no further obligations to Geane under this Agreement.
B. TERMINATION UPON DEATH OR DISABILITY: If Geane's
employment is terminated by Geane's death or disability (as defined above),
Burke shall pay to Geane's estate the accrued portion of any salary and bonus
through the date of termination. Burke shall, thereafter, have no further
obligations to Geane under this Agreement.
C. TERMINATION UPON NOTICE OR CHANGE IN CONTROL: If
Geane's employment is terminated after March 1, 2001 pursuant to notice given
by Burke in accordance with Section 1, or is terminated as a result of a
Change in Control as defined by Section 19, then Burke shall pay to Geane the
salary, expenses and benefits due to him pursuant to this Agreement through
the date of termination, and shall also pay to Geane only his then applicable
base salary in accordance with Section 3.A. for the nine (9) months
immediately following the date of termination.
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10. RIGHTS AND OBLIGATIONS AFTER NOTICE OF
TERMINATION: If Geane gives notice of termination of this Agreement, or if it
becomes known that this Agreement will otherwise terminate in accordance with
its provisions, Burke may, in its sole discretion and subject to its other
obligations under this Agreement, relieve Geane of his duties under this
Agreement and assign Geane other duties and responsibilities to be performed
until the termination becomes effective.
11. INJUNCTIVE RELIEF: Geane acknowledges that the
breach of any of the agreements contained herein, including, without
limitation, any of the non-competition covenants specified in Section 13,
will give rise to irreparable injury to Burke, which injury is inadequately
compensable in damages. Accordingly, Burke shall be entitled to injunctive
relief to prevent or cure breaches or threatened breaches of the provisions
of this Agreement and to enforce specific performance of the terms hereof in
any court of competent jurisdiction, in addition to any other legal or
equitable remedies that may be available to Burke. Geane further acknowledges
and agrees that in the event of the termination of this Agreement, his
experience and capabilities are such that he can obtain employment in
business activities that are of a different or noncompeting nature with his
activities pursuant to this Agreement; and that the enforcement of a remedy
hereunder by way of injunction shall not prevent Geane from earning a
reasonable livelihood. Geane further acknowledges and agrees that the
covenants contained herein are necessary for the protection of Burke's
legitimate business interests and are reasonable in scope and content.
12. BURKE'S OWNERSHIP OF INTANGIBLES: All processes,
inventions, patents, copyrights, trademarks, and other intangible rights that
may be conceived or developed by Geane either alone or with others during the
term of his employment, whether or not conceived or developed during Geane's
working hours, and with respect to which the equipment, supplies, facilities,
or trade secret information of Burke was used, or that relate at the time of
conception or reduction to practice of the invention to the business of the
Burke or to Burke's actual or demonstrably anticipated research and
development, or that result from ANY work performed by Geane for Burke shall
be the sole property of Burke. Geane shall disclose to Burke all inventions
conceived during the term of employment, and for one year thereafter,
regardless of whether such inventions may be the property of Burke under the
terms of the preceding sentence, provided that such disclosure shall be
received by Burke in confidence. Geane shall execute all documents, including
patent applications and assignments, required by Burke to establish Burke's
rights under this section.
13. UNFAIR COMPETITION, SOLICITATION OF EMPLOYEES AND
DISCLOSURE OF CONFIDENTIAL INFORMATION:
A. Because of his employment by Burke, Geane will
have access to trade secrets and confidential information about Burke, its
products, its customers and its methods of doing business. In consideration
of his access to this information, Geane agrees that for a period of five
years after termination of his employment, he will not, directly or
indirectly, compete with Burke in the field of manufacturing silicone and
organic rubber products for the aerospace, automotive and
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flooring industries within the state of California. Geane understands and
agrees that direct competition means the design, development, production,
promotion or sale of products or services competitive with those of Burke.
Indirect competition means employment by any competitor or third party
providing products that compete with Burke's products, for whom Geane will
perform the same or similar functions as he performed for Burke pursuant to
this Agreement.
B. In the course of his employment, Geane will have
access to confidential records and data pertaining to Burke's customers. Such
information is considered secret and is disclosed to Geane in confidence.
During his employment by Burke and for a period of five years after
termination of such employment, Geane shall not directly or indirectly
disclose or use any such information except as required in the course of his
employment by Burke. In addition, during his employment and for five years
after termination of his employment, Geane shall not induce or solicit, or
attempt to induce or solicit any employee of Burke to discontinue employment
with Burke for the purpose of being employed by a competitor of Burke.
14. CONSTRUCTION: This Agreement shall be construed in
accordance with the laws of the State of California. If any provision of this
Agreement is held invalid or unenforceable, the remainder of this Agreement
shall remain in full force and effect. If any provision is held invalid or
unenforceable with respect to particular circumstances, it shall nevertheless
remain in full force and effect in all other circumstances. This Agreement
shall also be construed according to its fair meaning and not for or against
Geane or Burke regardless of who is responsible for its preparation in whole
or in part.
15. INTEGRATED COMPLETE AGREEMENT: This agreement
integrates and supersedes all other prior and contemporaneous written and
oral agreements and understandings of every character between Geane and Burke
and comprises the entire agreement between Geane and Burke regarding the
terms of Geane's employment. This Agreement may be amended only by a further
express, written agreement between Geane and Burke and cannot be amended by
informal discussions or written communications from either party to the
other. No waiver of any rights or obligations under this Agreement shall be
deemed to have occurred unless made in writing signed by the party against
whom such waiver is asserted, and no waiver shall be deemed a waiver of any
other or subsequent rights or obligations. Nothing in this Agreement shall be
construed to limit any amount that Geane is entitled to receive under any
applicable federal or state law or any other written agreement, policy,
program or plan.
16. ARBITRATION: Any controversy or claim arising out
of or relating to this Agreement, or the breach, termination or invalidity
thereof, and all other related claims shall be exclusively and finally
settled by arbitration in accordance with the Labor Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrator may be rendered in any court having jurisdiction thereof. Such
arbitration shall be held in Los Angeles County.
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17. NOTICES: Any notices to be given hereunder by
either party to the other may be effected either by personal delivery in
writing or by mail, registered or certified, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his address by written
notice in accordance with this paragraph. Notices delivered personally shall
be deemed communicated as of actual receipt. Mailed notices shall be deemed
communicated as of three (3) days after mailing, as follows:
If to Burke: Ted Clark, President
Burke Industries, Inc.
2250 South Tenth Street
San Jose, CA 95112
If to Geane: Stephen G. Geane
2980A Malaga Circle
Diamond Bar, CA 91765
18. ASSIGNMENT: The rights and obligations of Burke
under this Agreement shall inure to the benefit of, and shall be binding
upon, its successors and assigns in accordance with Section 19. Any successor
or assignee of Burke shall be deemed substituted for Burke under the terms of
this Agreement for all purposes.
19. SALE, MERGER OR DISSOLUTION:
A. For the purposes of this agreement, a "Change in
Control" of Burke, shall be defined as follows:
(i) Any event by which an individual,
entity, or group (a "Person"), other
than J.F. Lehman Group, acquires
direct or indirect ownership or
control of at least a majority of
the combined voting power of the
then outstanding voting shares of
Burke; or
(ii) The consummation of a
reorganization, merger or
consolidation, or such other
disposition or transfer of a
majority of the assets of Burke,
whether in one or more separate
transactions, to any Person or
Persons.
(iii) In the event of a Change in Control
in which Burke in not the surviving
entity, Burke may, at its sole
option, (1) assign this Agreement
and all rights and obligations under
it to any business entity that
succeeds to all or substantially all
of Burke's assets or business, or
(2) on at least 30 days prior
written notice to Geane, terminate
this Agreement effective on the date
of the Change in Control.
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20. COUNTERPARTS: This agreement may be signed in one
or more counterparts, each of which shall be deemed to be an original.
EXECUTED and made effective this 29th day of March 2000 at
Santa Fe Springs, California.
/s/ Stephen G. Geane Burke Industries, Inc.
- ----------------------
Stephen G. Geane
By: /s/ Ted Clark
Its: CEO
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