Exhibit 2.36
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") effective as of December 1, 1997, is
by and between Brimfield Precision, Inc., a Massachusetts corporation, with its
offices located at 68 Mill Lane Rd., Brimfield, Massachusetts 01010 (the
"Company"), and Daniel T. Hannify (the "Employee"), an individual whose
residence is 229 Guilford Street Extension, Brattleboro, VT 05301. When taken
with the Offering Letter dated November 10, shall constitute all guidelines for
the employment of said individual.
The Company acknowledges and recognizes the value of the Employee's experience
and ability and desires to provide for the employment and continuation of his
employment with the Company on the terms set forth herein.
1. Employment and Acceptance of Employment Terms: Upon and subject to the
terms and conditions set forth herein, the Company hereby employs the Employee
as its Vice President and General Manager or in such other management
position(s) as the Board of Directors of the Company (the "Board") may determine
from time to time, and the Employee hereby agrees to accept such employment, for
a period of one year (unless sooner terminated as hereinafter set forth)
commencing on the date hereof, or such other date as the Company and the
Employee may mutually agree to (the "Commencement Date") and ending one year
thereafter (the "Initial Term"). This Agreement shall be automatically extended
thereafter for successive three year terms commencing on the first anniversary
date of the Commencement Date unless the Employee or the Company give the other
party not less than three (3) months written notice prior to the first
anniversary date of the Commencement Date, or any anniversary of the
Commencement Date thereafter. It is expected that within the first term, the
Employee will succeed the current President as President and Chief Operating
officer (COO) of the Company with the accompanying Compensation changes.
2. Duties: The Employee agrees, during the Initial Term and any extension of
the Initial Term, to devote his entire business time, attention, and energies
exclusively to the business of the Company as shall be required to perform the
duties of the position specified in Section 1, and to conform to the rules,
regulations, instructions, personnel practices and policies of the Company, as
existing an amended from time to time by the Company.
3. Compensation.
(a) Salary: Bonus. In consideration of the Employee's performance of services
hereunder, the Company will pay to the Employee, during the initial Term of the
Employee's employment, and the Employee agrees to accept from the Company for
his services, a salary (the "Base Salary") of $175,000 per annum during the
initial Term, payable in accordance with the Company's normal payroll practices
applicable to its executive offices but not less often than monthly. In the
event that the Initial Term is extended, the Employee's Base Salary shall be
subject to annual review by the Board or the Company's Compensation Committee in
the event
one is then appointed (the "Committee") and may be increased (but not
decreased) in such amounts as the Board or Committee may determine. Upon
elevation to the position of President/COO the Employee shall be entitled to
an additional $25,000 in base salary for a total of $200,000.00. In the
event that the Board or Committee establishes a bonus pool to be distributed
to employees of the Company, the Employee shall be entitled to receive a
bonus in such amount as is reasonably determined by the Board or Committee.
(b) Benefits: Automobile Allowance: During the term of the Employee's
employment hereunder, the Employee shall be entitled to full health insurance in
accordance with the Plan currently in place at the Company and to participate in
any other medical, pension, bonus, profit-sharing or similar plan or program
that may be established by the Company and made available to its officers and
key employees generally; provided that the Company shall not be required to
implement or continue any such other employee benefit program. In addition, the
employee shall be entitled to a car allowance to be applied to the leasing and
maintenance of an automobile of appropriate age and condition in an amount not
to exceed $7.200 per annum payable monthly.
(c) Paid Vacations: The Employee shall be entitled to annual paid vacations of
three weeks in each year of the Initial Term and any extension of the Initial
Term, at such times and for such periods as may be mutually acceptable to the
Company and the Employee, in accordance with the Company's policies governing
vacations for officers and key employees. Unused vacation shall not accumulate.
(d) Paid Holidays: The Employee shall be entitled to paid holidays, in
accordance with the Company's policies governing holidays for officers and key
employees.
(e) Deductions: The Company shall have the right to deduct from the Base
Salary and all other cash amounts payable by the Company under the provisions of
this Agreement to the Employee or, if applicable, to his estate, legal
representatives or other beneficiary designated in writing by the Employee (a
"Designee") all social security taxes, all federal, state and municipal taxes
and all other charges and deductions which now or hereafter are imposed by law
as charges on the compensation of the Employee or charges on cash benefits
payable by the Company hereunder to his estate, legal representatives or
Designee.
4. Reimbursement of Certain Expenses: The Company shall reimburse the
Employee, upon production of accounts and vouchers or other reasonable evidence
of payment by the Employee, all in accordance with the Company's regular
procedures in effect, from time to time and in form suitable to establish the
validity and deductibility of such expenses for tax purposes, all reasonable,
ordinary and necessary travel, automobile and other expenses as shall have been
incurred by him in the performance of his duties hereunder.
5. Non-Competition
(a) Non-Competition: During the term of the Employee's employment with the
Company and the three year period immediately following the date on which the
Employee's employment with the Company terminates (the "Termination Date"), the
Employee will not, directly or indirectly, engage in the business of, or own or
control an interest in (except as a passive investor
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owning less than one (1%) percent of the equity securities of a publicly
owned company), or act as director, officer or employee of, or consultant to,
any individual, partnership, joint venture, corporation or other business
entity directly or indirectly engaged anywhere in the United States in any
Business (as hereinafter defined) competing with the business then being
carried on by the Company. Notwithstanding the foregoing, in the event that
the employee's employment with the Company is terminated pursuant to Section
9(c) or 10, the non-competition period shall be equal to the period during
which the Employee receives severance payments thereunder. The time period
during which the restrictions set forth in this Section 5(a) apply shall be
extended by the length of time during which it is judicially determined that
the Employee has violated these restrictions in any respect. In the event of
any provisions of this Section 5(a) are unenforceable by law, then the
restrictions shall be for such period and such geographic area as a court
shall find is necessary to protect the goodwill and business of Company. The
provisions of this Section 5(a) shall no longer be enforceable in the event
the Company either files for bankruptcy or other protection from creditors or
ceases to operate as an ongoing business entity.
(b) Business: The term "Business" as used in this Section 5 shall mean (i)
healthcare product contract manufacturing, (ii) any other business in which the
Company or any affiliate is engaged on the Termination Date, and (iii) any other
business in which the Company or any affiliate is actively planning to become
engaged on the Termination Date, and in connection with the planning of which
the employee has had significant involvement.
(c) Employee Representation: The Employee represents that he is not now
subject to any employment agreement nor has he previously, at any time, entered
into any written agreement with any person, firm or corporation which would or
could preclude or prevent him from entering into this Agreement or which
requires the consent of any other party. The Employee agrees to indemnify the
Company and each of its officers, directors, and controlling persons against any
loss, liability or expense (including reasonable counsel fees) incurred by the
Company or its officers, directors and controlling persons arising out of or in
connection with any knowing misrepresentation made by the Employee hereunder.
6. Confidentiality: The Employee acknowledges that his employment by the
Company brings him into close contact with many confidential affairs of the
Company and its collaborators, consultants and clients, including, without
limitation, information about costs, profits, markets, sales, key personnel,
pricing policies, operational methods, concepts, and other business affairs and
methods of the Company and its collaborators, consultants and clients and other
information not readily available to the public, as well as plans for future
developments (collectively referred to hereinafter as "Proprietary
Information"). The Employee further acknowledges that the relationships between
the Company and its officers, employees, agents, consultants and clients
constitute a valuable asset of the Company. In recognition of the foregoing,
the Employee covenants and agrees:
(a) That all Proprietary Information shall be the exclusive property of the
Company and that he will keep secret all Proprietary Information and will not
use it for his own benefit or disclose it to, or use it for the benefit of,
anyone outside of the Company, either during or after his employment by the
Company, either during or after his employment by the Company, and (b) that he
will deliver promptly to the Company on termination of his employment by the
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Company, or at an time the Board may so request, all memoranda, notes,
documentation, data listing, records, reports and other tangible manifestations
of the Proprietary Information (and all copies thereof), that he may then
possess or have under his control.
7. Non-Solicitation: The Employee hereby covenants and agrees that, for a
period of three (3) years after the termination of his employment hereunder, he
will not induce or attempt to induce any officer, employee, agent, consultant,
or client of the Company to discontinue such affiliation with the Company or to
refrain from entering into new business relationships with the Company. the
time period during which the prohibitions set forth above apply shall be
extended by the length of time during which it is judicially determined that the
Employee has violated any such prohibition in any respect.
8. Specific Performance: Without intending to limit the remedies available to
the Company, the Employee agrees that damages at law will be an insufficient
remedy to the Company in the event that the Employee violates the terms of
Section 5, 6 or 7 of this Agreement and that the Company may apply for and
obtain immediate injunctive relief in any court of competent jurisdiction or
restrain the breach or threatened breach of, or otherwise to specifically
enforce, any of the agreements and covenants contained in such Sections. The
parties hereto understand that each of the agreements and covenants of the
Employee contained in Sections 5, 6 and 7 of this Agreement is an essential
element of this Agreement and agree that the obligations of the Employee
thereunder will survive the termination of this Agreement.
9. Termination.
(a) Termination by the Company for Cause: The Company may terminate this
Agreement and its obligations to the Employee hereunder at any time for "Cause,"
which shall mean only (i) the willful or reckless failure by the Employee to
perform his duties hereunder (other than a failure resulting from the Employee's
incapacity due to physical or mental illness), which failure shall not have been
cured within fifteen (15) days after the receipt by the Employee of written
notice thereof from the Board specifying with reasonable particularity such
alleged failure; (ii) the willful or reckless violation by the Employee of
Sections 5, 6 or 7 hereof, which violation shall not have been cured within
fifteen (15) days after the receipt by the Employee of written notice thereof
from the Board specifying with reasonable particularity such alleged violation;
(iii) the commission by the Employee of an act of fraud or theft against the
Company or any of its subsidiaries, or the Employee's willful misfeasance or
willful malfeasance in the performance of his duties to the Company; or (iv) the
conviction of the Employee of (or the plea by the Employee of nolo contendere
to) any felony.
(b) Termination upon Death or Disability of Employee: This Agreement shall
terminate upon the disability (resulting from the Employee's inability, due to
physical or mental illness, to perform his duties hereunder on a full-time basis
for three consecutive months or an aggregate of 90 days within a one-year
period) or death of the Employee, which event the Employee or his estate, legal
representatives or designee shall be entitled to receive, in full satisfaction
of all obligations due to the Employee by the Company hereunder:
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(i) Within the first six months of employment the Employee is not
entitled to any compensation.
(ii) After the first six months but before the end of the first term, the
Company shall continue to pay the Employee the Employee's Base Salary for a
period equal to the number of months then employed.
(iii) In any term subsequent to the first term, the Company shall continue
to pay the Employee the Employee's Base Salary for a period equal to one year.
(c) Termination by the Company Without Cause: In the event the Company
terminates this Agreement without Cause (except as provided in Section 10
herein), the Employee shall be entitled to the following benefits:
(i) Within the first six months of employment the Employee is not
entitled to any compensation.
(ii) After the first six months but before the end of the first term, the
Company shall continue to pay the Employee the Employee's Base Salary for a
period equal to the number of months then employed.
(iii) In any term subsequent to the first term, the Company shall continue
to pay the Employee the Employee's Base Salary for a period equal to one year.
(iv) The Company shall maintain in effect for the Employee, at its sole
expense and on terms of participation substantially the same as those in effect
prior to such termination, and in the same manner and requirement as (i), (ii)
and (iii) above, all group insurance and all other employee benefit plans,
programs or arrangements, in which the Employee was participating immediately
prior to such termination except for any revenue sharing programs based on
corporate performance.
(d) Termination by the Employee Without Cause: Nothwithstanding the provisions
of Section 1, the Employee may resign from the Company at any time upon ninety
(90) days prior written notice to the Company. In the event of resignation by
the Employee under this Section 9(d), the Board may elect to waive the period of
notice, or any portion thereof, and, in such event, the Company will pay the
Employee's salary for the notice period (or for any remaining portion of the
period). From and after the effective date of such termination by the Employee
of his employment hereunder, the Company shall have no further liability to the
Employee for salary or other compensation (or benefits, except as provided
pursuant to the terms of any compensation or benefit plan of the Company in
which the Employee is a participant).
(e) Termination by the Employee for Cause: The Employee may terminate his
employment hereunder for cause. Only the following shall constitute "cause" for
such termination: (i) failure of the Company to continue the Employee in his
then current position during the term of this Agreement; (ii) a material change
by the Company in the nature or scope of the Employee's responsibilities, title,
authorities, powers, functions or duties from the responsibilities, title,
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authorities, powers, functions or duties normally exercised by an executive in
the then current position in the Company, or (iii) a material breach by the
Company of Section 3 hereof or of any other provision of this Agreement, which
breach continues for more than ten (10) days following written notice given by
the Employee to the Company, such written notice to set forth in reasonable
detail the nature of such breach, or (iv) any constructive discharge situation.
In such event the Employee shall have no further obligations to the Company
except his obligations under Section 6 hereof and shall be entitled to the
termination benefits set forth in Section 9c.
10: Change of Control.
(a) Benefits Upon Termination: Notwithstanding the provisions of Section 9(c),
in the event that the Employee is terminated without Cause as a result of a
Change of Control (as hereinafter defined), the Employee shall be entitled to
the following benefits:
(i) For a period equal to the greater of (A) one year from the date of
such termination, or (B) the remainder of the term of this Agreement, the
Company shall continue to pay to the Employee, or to the Employee's designated
beneficiary (or to his estate if he fails to make such designation) the
Employee's salary at the rate of his last Salary in effect as of the date of
such termination, and
(ii) The Company shall maintain in effect for the Employee for a period
equal to the grater of (A) one year from the date of such termination, or (B)
the remainder of the term of this Agreement, at its sole expense and on terms of
participation substantially the same as those in effect prior to such
termination, all group insurance and all other employee benefit plans, programs
or arrangement, in which the Employee was participating immediately prior to
such termination except for any revenue sharing programs based on corporate
performance.
(b) Definition of Change of Control: For purposes hereof, a "Change of
Control" shall mean the merger or consolidation of the Company with any person,
the sale or other disposition of all or substantially all of the Company's
assets to any person or the transfer of any voting securities of the Company in
one transaction or in a series of related transactions, in each case, as a
consequence of which those persons who held all of the voting securities of the
Company immediately prior to such transaction do not hold at least a majority of
the voting securities of the surviving or resulting entity.
11. Indemnification: To the fullest extent permitted by law and in addition to
any other rights permitted or granted under the Company's articles of
incorporation, by-laws, or any agreement or policy of insurance, or by law, the
Company shall indemnify the Employee if the Employee is made a party, or
threatened to be made a party, to any threatened, pending or contemplated
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the Employee is or was an employee,
officer or director of the Company or any subsidiary of the Company, in which
capacity the Employee is or was serving at the Company's request, against any
and all costs, losses, damages, judgments, liabilities and expenses (including
reasonable attorneys' fees) which may be suffered or incurred by him in
connection with any such action, suit or proceeding provided, however that,
there shall be no indemnification in relation to matters as to which the
Employee is adjudged to have been guilty
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of fraud, bad faith or gross negligence or as a result of the Employee's
material breach of this Agreement.
12. Entire Agreement and Waiver: This Agreement is the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings. There are no oral promises, conditions, representations,
understandings, interpretation or terms of any kind as conditions or inducements
to the execution hereof or in effect among the parties. No custom or trade
usage, nor course of conduct among the parties, shall be relied upon to vary the
terms hereof. This Agreement may not be amended, and no provision hereof shall
be waived, except by writing signed by all the parties to this Agreement, which
states that it is intended to amend or waive a provision of this Agreement. Any
waiver of rights or failure to act in a specific instance shall relate only to
such instance and shall not be construed as an agreement to waive any rights or
fail to act in any other instance, whether or not similar.
13. Severity: Should any provision of this Agreement be unenforceable or
prohibited by any applicable law, this Agreement shall be considered divisible
as to such provision which shall be inoperative, and the remainder of this
Agreement shall be valid and binding as though such provision were not included
herein.
14. Counterparts: This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original. It shall not be necessary when
making proof of this Agreement to account for more than one counterpart.
15. Headings: All headings in this Agreement are for convenience only and
shall not affect the meaning of any provision hereof.
16. Successors and Assigns: This Agreement shall inure to the benefit of, and
be binding upon, the Company and any corporation with which the Company merges
or consolidates or to which the Company sells all or substantially all of its
assets, and upon the Employee and his executors, administrators, heirs and legal
representatives. This Agreement may not be assigned by the Employee.
17. Governing Law: This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts, without reference
to the conflict of laws principles thereof.
18. Notices: All notices hereunder shall be in writing and shall be sent to
the parties at the following address:
If to the Employee, to:
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If to the Company, to:
William G. Lyons III
c/o Brimfield Precision Incorporated
68 Mill Lane Road
P. O. Box 460
Brimfield, Massachusetts 01010
If to the Employee:
/s/ Daniel T. Hannify
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All notices shall be delivered in person or given by registered or certified
mail, postage prepaid, and shall be deemed to have been given when delivered in
person or deposited in the United States mail. Either party may designate any
other address to which notice shall be given, by giving notice to the other of
such change of address in the manner herein provided.
IN WITNESS WHEREOF, the Employee has executed this Agreement and the Company has
caused this Agreement to be executed by a duly authorized officer as of the day
and year first above written.
BRIMFIELD PRECISION INC.
By: /s/ William G. Lyons
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Name:
Title:
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