EXHBIT 10.2
E M P L O Y M E N T A G R E E M E N T
THIS AGREEMENT, made and entered into this 29th day of April, 1996
effective for the term provided herein, by and between CTI Industries
Corporation, a Delaware corporation (the "Company") and John C. Davis
(hereinafter referred to as the "Executive").
WHEREAS, the Executive is a founder of the Company and is, and since
the inception of the Company has been, an executive officer of the Company;
WHEREAS, the Company desires to be assured of the continued association
and services of the Executive and the Executive is willing to provide such
continued services as Executive Vice President- Sales of the Company on the
terms provided herein;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Employment, Duties and Authority.
1.1 The Company agrees to continue Executive in its employ,
and Executive agrees to remain in the employ of the Company, for the
period stated in paragraph 3 hereof and upon the other terms and
conditions herein provided.
1.2 During the period of his employment hereunder, Executive
agrees to serve as Executive Vice President-Sales, and to be
responsible for the marketing and sale of the Company's products,
reporting directly to the President of the Company.
1.3 During the term of Executive's employment hereunder,
Executive shall devote his full energies, interest, abilities and
productive time to the performance of his duties and responsibilities
hereunder and will perform such duties and responsibilities faithfully
and with reasonable care for the welfare of the Company.
2. Compensation and Benefits.
2.1 Salary. The Company shall pay to Executive during the
initial term of employment hereunder a salary at an annual rate of
$150,000. The salary shall be paid by the Company to Executive in 26
equal bi-weekly installments, less amounts which the Company may be
required to withhold from such payments by applicable federal, state or
local laws or regulations. The annual rate of salary shall be subject
to review and adjustment by the Board of Directors from time to time
but, during the initial term shall not be less than $150,000.
2.2 Benefits; Expense Reimbursement.
2.2.1 The Executive shall be entitled to, and shall
receive, all other benefits of employment available
to other executives of the Company generally,
including, without limitation, participation in any
hospital, surgical, medical or other group health
plans or accident benefits, life insurance benefits,
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pension or profit-sharing plans, bonus plans or
vacation plans as shall be instituted by the Company,
in its sole discretion.
2.2.2 During the term hereof, the Company shall
reimburse Executive for all reasonable and necessary expenses
incurred by Executive in the performance of his duties
hereunder, including without limitation, travel (including all
automobile expenses), meals, lodging, office supplies or
equipment subject to such reasonable limitations, restrictions
and reporting standards as the Board of Directors of the
Company may from time to time establish. Executive shall
provide to the Company promptly after incurring any such
expenses a detailed report thereof and such information
relating thereto as the Company shall from time to time
require. Such information shall be sufficient to support the
deductibility of all such expenses by the Company for federal
income tax purposes.
3. Term.
The employment of Executive hereunder shall be for a term commencing on
February 1, 1996 and expiring on January 31, 1998. Upon the expiration of the
initial term or any renewal term of Executive's employment hereunder, the term
of such employment automatically shall be renewed for an additional term of one
year commencing on February 1 and expiring on the succeeding January 31 unless
Executive or the Company shall give notice of the termination of Executive's
employment and this Agreement by written notice to the other more than 60 days
prior to the date of expiration of the initial or any renewal term. In the event
that such notice of termination shall be given timely this Agreement shall
terminate on the date of expiration of such initial or renewal term.
4. Termination.
4.1 The Company shall be entitled to terminate this Agreement
prior to the expiration of its term or any renewal term on the
occurrence of an event of default with respect to Executive as provided
herein.
4.2 For purposes of this Agreement, an event of default with
respect to Executive shall include:
4.2.1 Any failure by Executive to perform his duties,
responsibilities or obligations hereunder in a faithful and
diligent manner or with reasonable care and (if such failure
can be cured) the failure by Executive to cure such failure
within 10 days after written notice thereof shall have been
given to Executive by the Company; or
4.2.2 Commission by Executive of any material act of
dishonesty as an employee of the Company or of disloyalty to
the Company, or any wrongful or unauthorized appropriation,
taking or misuse of funds, property or business opportunities
of the Company.
4.3 Executive shall be entitled to terminate his employment
with the Company under this Agreement prior to the expiration of its
term upon the occurrence of an event of default with respect to the
Company.
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4.4 For purposes of this Agreement an event of default with
respect to the Company shall include:
4.4.1 Any failure by the Company to perform its
obligations to Executive under this Agreement and (if such
failure can be cured) the failure by the Company to cure such
failure within 10 days after written notice thereof shall have
been given to the Company by Executive;
4.4.2 The Company shall:
(a) admit in writing its inability to pay
its debts generally as they become
due,
(b) file a petition for relief under any
chapter of Title 11 of the United States Code or a
petition to take advantage of any insolvency
provision under the laws of the United States of
America or any state thereof,
(c) make a assignment for the benefit of its
creditors,
(d) consent to the appointment of a receiver
of itself or of the whole or any substantial part of
its property,
(e) suffer the entry of an order for relief
under any chapter of Title 11 of the United Sates
Code, or
(f) file a petition or answer seeking
reorganization under the Federal Bankruptcy Laws or
any other applicable law or statute of the United
States of America or any state thereof.
4.5 In the event of termination of this Agreement and
Executive's employment hereunder by the Company pursuant to paragraph
4.1 hereof, all rights and obligations of the Company and Executive
hereunder shall terminate on the date of such termination, subject to
the following:
4.5.1 Executive shall be entitled to receive (subject
to any rights of setoff or counterclaim by the Company) all
salary and benefits which shall have accrued prior to the date
of such termination and the obligation of the Company for the
payment of salary or benefits shall terminate as at the date
of such termination;
4.5.2 All rights of the Company or Executive which
shall have accrued hereunder prior to the date of such
termination, and all provisions of this Agreement provided
herein to survive termination of employment of Executive
hereunder, shall survive such termination and the Company and
Executive shall continue to be bound by such provisions in
accordance with the terms thereof;
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4.6 In the event of termination of the Agreement by Executive
in accordance with paragraph 4.3 hereof, all rights and obligations of
the Company and Executive hereunder shall terminate on the date of such
termination, subject to the following:
4.6.1 Executive shall be entitled to receive all
salary and benefits which shall have accrued prior to the date
of such termination and the Company's obligation for the
payment of salary and benefits shall terminate as of the date
of such termination;
4.6.2 All rights of the Company or Executive which
shall have accrued hereunder prior to the date of such
termination and the obligations of Executive pursuant to
paragraphs 5, 6 and 7 provided herein to survive termination
of employment of Executive hereunder shall survive such
termination and the Executive shall continue to be bound by
such provisions in accordance with their terms.
4.7 In the event of the death of Executive during the term or
any renewal term hereof, all rights and obligations of the Company and
Executive hereunder shall terminate on the date of such termination,
subject to the following:
4.7.1 Executive's personal representative, shall be
entitled to receive all salary and benefits which shall have
accrued prior to the date of such termination and the
Company's obligations for the payment of salary and benefits
shall terminate as of the date of such termination;
4.7.2 All rights of the Company or Executive which
shall have accrued hereunder prior to the date of such
termination and the obligations of Executive pursuant to
paragraphs 5, 6 and 7 provided herein to survive termination
of employment of Executive hereunder shall survive such
termination and the Executive shall continue to be bound by
such provisions in accordance with their terms. The
obligations of paragraphs 5, 6 and 7 shall be binding upon the
heirs, legatees or personal or legal representatives of
Executive.
5. Confidential Information.
5.1 "Confidential Information" means information disclosed by
the Company to Executive, or developed or obtained by Executive during
his employment by the Company, either before the date or during the
term of this Agreement, provided that such information is not generally
known in the business and industry in which the Company is or may
subsequently become engaged, relating to or concerning the business,
projects, products, processes, formulas, know-how, techniques, designs
or methods of the Company, whether relating to research, development,
manufacture, purchasing, accounting, engineering, marketing,
merchandising, selling or otherwise. Without limitation, Confidential
Information shall include all know-how, technical information,
inventions, ideas, concepts, processes and designs relating to products
of the Company, whether now existing or hereafter developed, and all
prices, customer names, customer lists, marketing and other
relationships, whether contractual or not, between the Company, its
suppliers, customers, employees, agents, consultants and independent
contractors.
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5.2 Executive agrees that, during the term hereof or while
Executive shall receive compensation hereunder and after termination of
his employment with the Company for so long as the Confidential
Information shall not be generally known or generally disclosed (except
by Executive or by means of wrongful use or disclosure), Executive
shall not use any Confidential Information, except on behalf of the
Company during the term hereof, or disclose any Confidential
Information to any person, firm, partnership, company, corporation or
other entity, except as authorized by the Board of Directors of the
Company.
6. Inventions.
6.1 "Inventions" shall mean discoveries, concepts, ideas,
designs, methods, formulas, know-how, techniques or any improvements
thereon, whether patentable or not, made, conceived or developed, in
whole or in part, by Executive.
6.2 Executive covenants and agrees to communicate and fully
disclose to the Board of Directors of the Company any and all
Inventions made or conceived by him during the term hereof or while
receiving any compensation or payment from the Company and further
agrees that any and all such Inventions which he may conceive or make,
during the term hereof or while receiving any compensation or payments
from the Company, shall be at all times and for all purposes regarded
as acquired and held by him in a fiduciary capacity and solely for the
benefit of the Company and shall be the sole and exclusive property of
the Company. The provisions of this subparagraph shall not apply to an
invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on
the Executive's own time, unless (a) the invention relates (i) to the
business of the Company, or (ii) to the Company's actual or
demonstrably anticipated research or development, or (b) the invention
relates from any work performed by Executive for the Company.
6.3 Executive also covenants and agrees that he will assist
the Company in every proper way upon request to obtain for its benefit
patents for any and all inventions referred to in paragraph 6.2 hereof
in any and all countries. All such patents and patent applications are
to be, and remain, the exclusive property of the Company for the full
term thereof and to that end, the Executive covenants and agrees that
he will, whenever so requested by the Company or its duly authorized
agent, make, execute and deliver to the Company, its successors,
assigns or nominees, without charge to the Company except for out of
pocket expenses, any all applications, applications for divisions,
renewals, reissues, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary or appropriate in
order to apply for and obtain patents of the United States or foreign
countries for any and all Inventions referred to in paragraph 6.2
hereof or in order to assign and convey to the Company, its successors,
assigns or nominees, the sole and exclusive right, title and interest
in and to such Inventions, applications or patents. Executive likewise
covenants and agrees that his obligations to execute any such
instruments or papers shall continue after the expiration or
termination of this Agreement with respect to any and all such
Inventions, and such obligations shall be binding upon his heirs,
executors, assigns, administrators or other legal representatives.
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7. Writings and Working Papers.
Executive covenants and agrees that any and all books, textbooks,
letters, pamphlets, drafts, memoranda or other writings of any kind written by
him for or on behalf of the Company or in the performance of Executive's duties
hereunder, Confidential Information referred to in paragraph 5 hereof and all
notes, records and drawings made or kept by him of work performed in connection
with his employment by the Company shall be and are the sole and exclusive
property of the Company and the Company shall be entitled to any and all
copyrights thereon or other rights relating thereto. Executive agrees to execute
any and all documents or papers of any nature which the Company or its
successors, assigns or nominees deem necessary or appropriate to acquire,
enhance, protect, perfect, assign, sell or transfer its rights under this
paragraph. Executive also agrees that upon request he will place all such notes,
records and drawings in the Company's possession and will not take with him
without the written consent of a duly authorized officer of the Company any
notes, records, drawings, blueprints or other reproductions relating or
pertaining to or connected with his employment of the business, books,
textbooks, pamphlets, documents work or investigations of the Company. The
obligations of this paragraph shall survive the term of employment hereunder or
the termination or expiration of the term or any renewal term hereof.
8. Specific Enforcement.
Executive is obligated under this Agreement to render service of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value so that the loss of such service or
violation by Executive of this Agreement could not reasonably or adequately be
compensated in damages in an action at law. Therefore, in addition to other
remedies provided by law, the Company shall have the right during the term or
any renewal term of this Agreement (or thereafter with respect to obligations
continuing after the expiration or termination of this Agreement) to compel
specific performance hereof by Executive or to obtain injunctive relief against
violations hereof by Executive, and if the Company prevails in any proceeding
therefor, it will also be entitled to recover all costs and expenses incurred by
the Company in connection therewith, including attorneys' fees.
9. Assignment.
The rights and duties of a party hereunder shall not be assignable by
that party, except that the Company may assign this Agreement and all rights and
obligations hereunder to, and may require the assumption thereof by, any
corporation or any other business entity which succeeds to all or substantially
all the business of the Company through merger, consolidation or corporate
reorganization or by acquisition of all or substantially all of the assets of
the Company.
10. Binding Effect.
This Agreement shall be binding upon the parties hereto and their
respective successors in interest, heirs and personal representatives and, to
the extent permitted herein, the assigns of the Company.
11. Severability.
If any provision of this Agreement or any part hereof or application
hereof to any person or circumstance shall be finally determined by a court of
competent jurisdiction to be invalid or
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unenforceable to any extent, the remainder of this Agreement, or the remainder
of such provision or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall not be affected thereby and each provision of this
Agreement shall remain in full force and effect to the fullest extent permitted
by law. The parties also agree that, if any portion of this Agreement, or any
part hereof or application hereof, to any person or circumstance shall be
finally determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, any court may so modify the objectionable provision
so as to make it valid, reasonable and enforceable.
12. Notices.
All notices, or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered personally or mailed,
certified mail, return receipt requested, postage prepaid, to the parties as
follows:
If to the Company: CTI Industries Corporation
22160 N. Pepper Road
Barrington, Illinois 60010
If to Executive: John C. Davis
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Any notice mailed in accordance with the terms hereof shall be deemed received
on the third day following the date of mailing. Either party may change the
address to which notices to such party may be given hereunder by serving a
proper notice of such change of address to the other party.
13. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
written or oral negotiations, representations, agreements, commitments,
contracts or understandings with respect thereto. No modification, alteration or
amendment to this Agreement may be made unless the same shall be in writing and
signed by both of the parties hereto.
14. Waivers.
No failure by either party to exercise any of such party's rights
hereunder or to insist upon strict compliance with respect to any obligation
hereunder, and no custom or practice of the parties at variance with the terms
hereof, shall constitute a waiver by either party to demand exact compliance
with the terms hereof. Waiver by either party of any particular default by the
other party shall not affect or impair such party's rights in respect to any
subsequent default of the same or a different nature, nor shall any delay or
omission of either party to exercise any rights arising from any default by the
other party affect or impair such party's rights as to such default or any
subsequent default.
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15. Governing Law; Jurisdiction.
15.1 For purposes of construction, interpretation and
enforcement, this Agreement shall be deemed to have been entered into
under the laws of the State of Illinois and its validity, effect,
performance, interpretation, construction and enforcement shall be
governed by and subject to the laws of the State of Illinois.
15.2 Any and all suits for any and every breach of this
Agreement may be instituted and maintained in any court of competent
jurisdiction in the State of Illinois and the parties hereto consent to
the jurisdiction and venue in such court and the service of process by
certified mail to the addresses for the parties provided for notices
herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CTI INDUSTRIES CORPORATION
By: s/s Stephen M. Merrick
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Authorized Officer
Attest:
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Secretary
EXECUTIVE:
/s/ John C. Davis
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