Exhibit 10.1
EMPLOYMENTAGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 13thday of November,2025,byandbetweenStrattecSecurityCorporation,aWisconsincorporation(the“Company”), and James Denis (the “Employee”).
RECITAL
TheCompanydesirestoemploytheEmployeeandtheEmployeeiswillingtomaketheEmployee’s services available to the Company on the terms and conditions set forth below.
AGREEMENTS
In consideration of the premises and the mutual agreements which follow, the parties agree as follows:
1.
Employment.The Company hereby employs the Employee and the Employee hereby accepts employment with the Company on the terms and conditions set forth in this Agreement.
2.
Term.The Employee shall be employed by the Company for a period beginning on December 1, 2025 (the “Effective Date”) and ending on the day before the first year anniversary of the Effective Date, subject to the terms and conditions set forth in this Agreement; provided, however, that beginning on the first year anniversary of the Effective Date and on each anniversary thereafter, the term ofemploymentunderthisAgreementshallautomaticallyrenewandbeextendedforanadditionalone-year period, unless either the Company or the Employee gives written notice of nonrenewal to the other party notlessthan60dayspriortotheendofthethen-currentterm.Theinitialterm,plusanyextensionthereof, shall hereinafter be referred to as the “Employment Period.”
3.
Positionand Duties.
(a)
During the Employment Period, the Employee shall serve as the Vice President, General Counsel, and Secretary of the Company.In such capacity, the Employee shall have the powers, duties, responsibilities, and authority customarily held by a person holding such position or its equivalent of an organization of a similar size and nature as the Company, as well as such other powers, duties, responsibilities, and authority as may be determined from time to time by the Company’s President and Chief Executive Officer (the “President and CEO”).The Employee shall also perform such other duties and hold such other positions related to the business of the Company and its Affiliates (as defined below) as may from time to time be reasonably requested by the President and CEO.The Employee shall report directlytothePresidentandCEO.ForpurposesofthisAgreement,an“Affiliate”meansanycorporation, general or limited partnership, limited liability company, joint venture, trust, association or organization which is, directly or indirectly, controlled by, or under common control with, the Company.
(b)
The Employee agrees to devote the Employee’s entire business time, effort, skill andattentiontotheproperdischargeoftheEmployee’sdutieshereunderandinfurtheranceofthebusiness andinterestsoftheCompanyanditsAffiliates.However,theEmployeewillnotbeprecludedfrom
(i)managingtheEmployee’spassivepersonalinvestments,or(ii)subjecttothepriorwrittenconsentofthe Company, participation in community, civic, charitable or other similar activities which do not unreasonably interfere with the Employee’s responsibilities hereunder or create a business or fiduciary conflict.
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Exhibit 10.1
(c)
The Employee understands and agrees that the Employee’s principal place of employment will bein the Milwaukee,Wisconsinarea.TheEmployeewillensure aneffectiveamountof physicalpresenceinCompanyoffices,andtheEmployeeacknowledgesandagreesthattheEmployeemay be required to travel for business in the course of performing the Employee’s duties for the Company and its Affiliates.
(d)
Upon termination of the Employee’s employment hereunder for any reason, the Employee shall cease to hold any position as an officer or director (or any other similar position) of the Company or any Affiliate and shall resign from all positions as an officer or director (or any other similar position) in all corporations, partnerships, limited liability companies or other entities for which the Employeeisserving,attheCompany’srequest,asanofficerordirector(orinsuchothersimilarposition).
4.
Compensation.
(a)
Base Salary.During the Employment Period, the Employee shall receive a base salaryatarateof$385,000perannum,subjecttoapplicabletaxesandwithholdings,payableinaccordance with the regular payroll practices of the Company, but not less frequently than monthly.The Employee’s base salary shall be subject to adjustment as may be determined from time to time in the Company’s sole discretion;provided,however,thatanydecreaseintheEmployee’sbasesalarycanonlybeproportionately made in connection with Company-wide reductions in the salary rates for senior management of the Company(“SeniorManagement”)asdeterminedbytheBoardofDirectorsoftheCompany(the“Board”) ortheCompensationCommitteeoftheBoard (the“CompensationCommittee”).Thebasesalaryineffect from time to time is referred to herein as the “Base Salary.”
(b)
Annual Bonus.Commencing with fiscal year 2026, during the Employment Period, the Employee will be eligible to participate in and receive an annual bonus award (the “Annual Bonus”) under an annual incentive program established or maintained by the Company for its Senior Management, subject to the approval and discretion of the Compensation Committee.The initial target value of the Employee’s Annual Bonus shall be 60% of the Employee's Base Salary (the “Target Annual BonusAmount”).TheAnnualBonusshallbeearnedandaccruedasofthelastdayoftheapplicableannual performanceperiodandpaidinalumpsumnolaterthanthe15thdayofthethirdmonthfollowingtheend of thetaxable year ofthe Company orthe taxable year of the Employee, whichever islater, in which such Annual Bonus is earned.For purposes of clarity, the Annual Bonus earned for fiscal year 2026 will be subject to pro-ration for the period of the Employee’s service during fiscal year 2026. The Annual Bonus shallbesubjecttothetermsandconditionsoftheannualincentiveprogram,asmaybeamendedfromtime to time.
(c)
Equity-BasedCompensation.DuringtheEmploymentPeriod,theEmployeewill beeligibletoparticipateinanyequity-basedcompensationplansestablishedormaintainedbytheCompany for its Senior Management.The target value of Employee’s fiscal year 2027 equity-based awards will be 60%oftheEmployee’sBaseSalary.Anygrantsorawardsundersuchplansshallbesubjecttotheapproval and discretion of the Compensation Committee and subject to the terms and conditions of the Company’s organizational documents, any applicable plan documents, and any individual award agreements, as such documents may be amended from time to time.
5.
BenefitsandReimbursements.
(a)
Benefits.During the Employment Period, the Employee shall be eligible to participate in and receive benefits under the Company’s employee benefit plans, policies and programs applicable generally to other Senior Management, subject to the Employee’s satisfaction of all applicable eligibility conditions of such plans, policies, and programs.Notwithstanding anything in this Agreement
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Exhibit 10.1
to the contrary, the Company may amend, modify, discontinue or terminate at any time any employee benefit plan, policy, or program described in this Section 5(a), now existing or hereafter adopted, to the extent permitted by the terms of such plan, policy, or program and will not be required to compensate the Employee for such amendment, modification, discontinuance or termination.To the extent there is any conflictbetweenthetermsofthisAgreementandtheapplicableemployeebenefitplan,policy,orprogram document, the terms of the applicable employee benefit plan, policy, or program document shall govern.
(b)
Reasonable Business Expenses.Subject to the terms and conditions of the Company’s expense reimbursement policy, during the Employment Period, the Company shall pay or reimburse the Employee for reasonable expenses incurred by the Employee in connection with the performance of the Employee’s duties pursuant to this Agreement, including, but not limited to, travel expenses,expensesinconnectionwithseminars,professionalconventionsorsimilarprofessionalfunctions and other reasonable business expenses.
6.
TerminationofEmployment.
(a)
Termination due to Death.The Employment Period and the Employee’s employmentwiththeCompanyshallautomaticallyterminateuponthedeathoftheEmployee.Intheevent the Employee’s employment terminates due to the Employee’s death, the Employee’s beneficiary (as designated by the Employee in writing with the Company prior to the Employee’s death) shall be entitled to the Accrued Benefits. For purposes of this Agreement, “Accrued Benefits” means: (i)any Base Salary that is accrued but unpaid as of the date of the Employee’s termination of employment; (ii) any accrued, but unpaid, Annual Bonus for any fiscal year that ended on or prior to the date of the Employee’s termination of employment; (iii) any business expenses that are unreimbursed as of the date of the Employee’s termination of employment; and (iv) any rights and benefits (if any) provided under the employee benefit plans, policies, and programs of the Company, determined in accordance with the applicabletermsandconditionsofsuchplans, policies,andprograms.Anyamountsdueunderclauses(i) and(iii)ofthisSection6(a)shallbepaidinalumpsumwithin30daysfollowingthedateoftheEmployee’s termination of employment and any amounts due under clause (ii) of this Section 6(a) shall be paid as promptly as practicable in accordance with the terms of the applicable annual incentive program.In the absence of a beneficiary designation by the Employee, or if the Employee’s beneficiary does not survive the Employee, payments and benefits described in this Section 6(a) will be paid to the Employee’s estate.
(b)
TerminationduetoDisability.
(i)
The Company shall be entitled to terminate the Employment Period and the Employee’s employment with the Company at any time due to the Employee’s Disability (as defined below).In the event the Employee’s employment terminates due to the Employee’s Disability, the Employee shall be entitled to payment of the Accrued Benefits as described in Section 6(a).
(ii)
For purposes of this Agreement, “Disability” means a physical or mental sickness or any injury which renders the Employee incapable of performing the essential functions of the Employee’s job (with or without reasonable accommodations) and which does or may be expected to continue for more than four months during any 12-month period, as determined by a physician who is selected by the agreement of the Employee and the Company.In the event of their failure to agree upon such a physician, the Company andthe Employee shalleach select a physician who together shallselect a third physician who shall make the determination.Such determination shall be conclusive and binding upon the parties hereto.In the event the Employee shall be able to perform the essential functions of Employee’s job (with or without reasonable accommodations) following a period of Disability, and does so perform such duties, or such other duties as are prescribed by the President and CEO, for a period of threecontinuousmonths,anysubsequentperiodofDisabilityshallberegardedasanewperiodofDisability
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Exhibit 10.1
for purposesofthis Agreement.Termination ofthe EmploymentPeriodandtheEmployee’semployment hereunder due to the Employee’s Disability shall not change the Employee’s rights to receive benefits, if any, pursuant to any disability plan or policy then maintained by the Company.
(c)
TerminationforCause.
(i)
TheCompanymayterminatetheEmploymentPeriodandtheEmployee’s employmentwiththeCompanyforCause(asdefinedbelow)uponnoticeatanytimetotheEmployee.In the event that the Company terminates the Employee’s employment for Cause, the Employee will be entitled to payment of the Accrued Benefits as described in Section 6(a); provided, however, that, subject to any applicable law, the Company shall have the right to set off any damages it incurs as a result of the Employee’sactionswhichconstituteCausefromanyamountsduetotheEmployee.Forpurposesofclarity, the Employeeshall not beentitled to anybonus, including any Annual Bonus, thathas not been paidas of the date of the Employee’s termination of employment for Cause.
(ii)
ForpurposesofthisAgreement,“Cause”means:
(A)
(I)theEmployee’scontinuedfailuresubstantiallytoperformingoodfaith the Employee’s assigned duties in any material respect (other than as a result of total or partial incapacity due to physical or mental illness), or (II) a material breach or default of any term of this Agreement, in eachcase which continued failure, breach or default is not substantially cured in all material respects within 30 days after the Company providesthe Employeewithwrittennoticethereofinsufficientdetaildescribingsuchfailureormaterial breach or default;
(B)
the Employee’s engagement in (I) fraud, embezzlement, theft or dishonesty in the course of the Employee’s employment with the Company, or (II) other conduct that results or could reasonably be expected to result in material harm to the businessor reputationof the Companyor any of its Affiliates as determinedingood faith by the Company;
(C)
the Employee’s indictment for, charge with, arrest for, conviction of, or plea of guilty or nolo contendere to, (I) a felony or (II) a crime other than a felony which involvesmoralturpitudeorabreachoftrustorfiduciarydutyowedtotheCompanyorany of its Affiliates;
(D)
the Employee’s disclosure of trade secrets or confidential information of the Company or any of its Affiliates that results or could reasonably be expected to result in material harm to the business or reputation of the Company or any of its Affiliates as determined in good faith by the Company; or
(E)
theEmployee’smaterialviolationofanypolicyoftheCompanyoranyof its Affiliates that applies to the Employee which violation is not substantially cured in all material respects within 30 days after the Company provides the Employee with written notice thereof in sufficient detail describing such violation.
(d)
TerminationbytheCompanyWithoutCauseorbytheEmployeeforGoodReason.
(i)
TheCompanymayterminatetheEmploymentPeriodandtheEmployee’s employment with the Company for any reason upon 30 days’ prior written notice to the Employee.The EmployeemayresignandterminatetheEmploymentPeriodandtheEmployee’semploymentwiththe
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Exhibit 10.1
Company for Good Reason (as defined below).If the Employee’s employment is terminated by the CompanyforanyreasonotherthanthereasonssetforthinSections6(a),(b)or(c)ortheEmployeeresigns and terminates the Employee’s employment for Good Reason, the Employee will be entitled to the following payments and benefits:
(A)
paymentoftheAccruedBenefitsasdescribedinSection6(a);
(B)
a single lump sum payment equal to one year of the Employee’s Base SalaryineffectonthedateoftheEmployee’sterminationofemployment.Suchpayment shall be made on the first business day following the date that is 60 days after the date of the Employee’s termination of employment; and
(C)
if the Employee timely elects COBRA continuation coverage under the Company’s group medical, dental and vision plans, the Company shall pay directly or reimbursethe Employeefor a portionofsuch COBRApremiums (on amonthly, after-tax basis) equal to the employer portion of the premium for active Company employees until the earlier of (I) 12 months following the date of the Employee’s termination of employment or (II) the date the Employee becomes eligible for coverage under the group health plan of another employer.
(ii)
ForpurposesofthisAgreement,thefollowingshallconstitute“Good Reason,” unless the Employee shall have consented otherwise in writing:
(A)
a material diminution in the Employee’s Base Salary or Target Annual BonusAmount,otherthanageneralreductioninsalaryratesortargetannualbonusesthat
(I) affect all Senior Management insubstantiallythesameproportions as approvedbythe BoardortheCompensationCommittee,and(II)isnogreaterthan15% oftheEmployee’s then-current Base Salary and Target Annual Bonus in the aggregate;
(B)
any material breach by the Company or any of its Affiliates of this Agreement;
(C)
a material diminution in the Employee’s authority, duties or responsibilities as set forth in Section 3 of this Agreement, provided that it is understood thatachangeintitlealoneshallnotconstituteamaterialdiminutioninauthority,duties,or responsibilities; or
(D)
achangeintheEmployee’sprincipalofficetoalocationthatismorethan 50 miles from the Employee’s principal office on the Effective Date.
Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless (x) the Employee gives theCompanywrittennoticewithin90daysaftertheEmployeefirsthasknowledgeoftheoccurrenceofthe event which the Employee believes constitutes the basis for Good Reason, specifying the particular act or failuretoactwhichtheEmployeebelievesconstitutesthebasisforGoodReason,(y)theCompanyfailsto cure such act or failure to act within 60 days after receipt of such notice, and (z) the Employee terminates the Employee’s employment within 60 days after the end of the period specified in clause (y).
(e)
Termination by the Employee without Good Reason.The Employee may resign and terminate the Employment Period and the Employee’s employment with the Company without Good Reason upon providing the Company at least 30 days’ prior written notice.In such event, the Employee shallbeentitledtotheAccruedBenefitsasdescribedinSection6(a).Forpurposesofclarity,theEmployee
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Exhibit 10.1
shallnotbeentitledtoanybonus,includinganyAnnualBonus,thathasnotbeenpaidasofthedateofthe Employee’s termination of employment.
(f)
ChangeofControl.
(i)
In the event that, during the Employment Period, a Change of Control of the Company occurs and, within three months prior to or within 24 months following such Change of Control,theEmploymentPeriodandtheEmployee’semploymentwiththeCompanyisterminatedwithout CauseoristerminatedbytheEmployeeforGoodReason,ineachcaseasdescribedinSection6(d)ofthis Agreement,then,inlieuofanypaymentorbenefitthatmightbeprovidedunderSection6(d),theEmployee will be entitled to the following payments and benefits:
(A)
paymentoftheAccruedBenefitsasdescribedinSection6(a);
(B)
asinglelumpsumpaymentequaltooneandone-halftimesthesumof
(I)the Employee’s Base Salary in effect on the date of the Employee’s termination of employment, plus (II) an amount equal to the average of the Annual Bonuses paid to the Employee for the two completed fiscal years immediately preceding the date of the Employee's termination of employment or, if less than two completed fiscal years have occurred during the Employment Period, the current target Annual Bonus amount.Such paymentshallbemadeonthefirstbusinessdayfollowingthedatethatis60daysafterthe date of the Employee’s termination of employment;
(C)
if the Employee timely elects COBRA continuation coverage under the Company’s group medical, dental and vision plans, the Company shall pay directly or reimbursethe Employeefor a portionofsuch COBRApremiums (on amonthly, after-tax basis) equal to the employer portion of the premium for active Company employees for a period of 18 months immediately following the date of the Employee’s termination of employment; and
(D)
reimbursement of up to $10,000 for reasonable executive outplacement service expenses incurred by the Employee within one year following the date of the Employee’s termination of employment, provided that such services are provided by a nationally recognized executive outplacement firm and are at a level appropriate for the most senior officers.
(ii)
For purposes of this Agreement, a “Change of Control” means the occurrence of any of the following events:
(A)
the acquisition by any individual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”))(a“Person”)ofbeneficialownership(withinthemeaningofRule 13d-3 promulgated under the Exchange Act) of 50% or more of either (I) the then outstanding sharesofcommonstockoftheCompany(the“OutstandingCompanyCommonStock”)or
(II)the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control:(i)any acquisition directly from the Company, (ii) any acquisition by the Company, (iii)any acquisition by any employee benefit plan (or related trust) sponsoredor maintainedby theCompanyor any corporationcontrolledbytheCompany,
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Exhibit 10.1
or (iv)any acquisition by any corporation pursuant to a transaction which complies with clauses (I), (II) and (III) of subsection (C) of this Section 6(f)(ii); or
(B)
individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(C)
the consummation by the Company of a reorganization, merger or consolidation (a “Business Combination”), in each case, unless, following such Business Combination, (I)all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and OutstandingCompanyVotingSecuritiesimmediatelypriortosuchBusinessCombination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction ownsthe Company throughoneormoresubsidiaries)insubstantiallythesameproportionsastheirownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (II) no Person (excludinganyemployeebenefitplan(orrelatedtrust)oftheCompanyorsuchcorporation resultingfrom such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extentthat such ownership existed prior to the Business Combination and (III) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(D)
the consummation of (I) a complete liquidation or dissolution of the Company or (II) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (a)more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company CommonStockandoutstandingCompanyVotingSecuritiesimmediatelypriortosuchsale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (b) less than 20% of, respectively, the then outstanding shares of common stock of such corporation and the combinedvotingpowerofthethenoutstandingvotingsecuritiesofsuchcorporation
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Exhibit 10.1
entitledtovotegenerallyintheelectionofdirectorsisthenbeneficiallyowned,directlyor indirectly, by any Person (excluding any employee benefit plan (or related trust) of the Company or such corporation), except to the extent that such Person owned 20%or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities prior to the sale or disposition, and (c) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the executionoftheinitialagreement,oroftheactionoftheBoard,providingforsuchsaleor otherdispositionofassetsoftheCompanyorwereelected,appointedornominatedbythe Board.
Allreferencesinthis Section6(f)(ii)tocommonstockshallinclude,totheextentapplicable,referencesto equityinterests, and allreferencesinthis Section6(f)(ii) to directors or boardofdirectors shallinclude,to the extent applicable, references to any other applicable management body of a person.
(g)
Non-Renewal of the Employment Period.The Employee’s employment shall terminate automatically upon expiration of the Employment Period if either party gives written notice of non-renewalassetforthinSection2.Forpurposesofclarity,(i) anoticeofnon-renewalbytheCompany shall be considered a termination by the Company without Cause under Section 6(d), and (ii)] a notice of non-renewal by the Employee shall be considered a termination by the Employee without Good Reason under Section 6(e).
(h)
Release.Allpaymentsandbenefits,otherthantheAccruedBenefits,thatmaybe payableorprovidedtotheEmployeeunderthisSection6(the“ConditionedBenefits”)aresubjectto(i) the Employee’s(or,totheextentapplicable,theEmployee’sestate’s)executionandnon-revocationofarelease ofclaims,inaformtobeprovidedbytheCompany(the“Release”),and(ii)theexpirationofanyrevocation period contained in the Release, in each case, within 60 days following the date of the Employee’s termination of employment.To the extent that any of the Conditioned Benefits constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any payment or provision of such Conditioned Benefits otherwise scheduled to occur prior to the 60thday following the date of the Employee’s termination of employment, but for the condition on executing the Release set forth herein, shall not be made until the first regularly scheduled payroll date following such 60thday (regardless of when the Release is delivered), after which any remaining ConditionedBenefitsshallthereafterbeprovidedtotheEmployeeaccordingtotheapplicablescheduleset forth herein.
(i)
Effect of Termination.The termination of the Employee’s employment pursuant toSections6(b),(c),(d),(e)or(f)shallnotaffecttheEmployee’sobligationsasdescribedinSections7,8, 9 and10.Therightsandduties ofthepartiesunder Sections6through 25ofthisAgreement shall survive the termination of this Agreement.
7.
Noncompetition.The parties agree that the Company’s customer contacts, customer relations,andgoodwillareestablishedandmaintainedatgreatexpense,andthatbyvirtueoftheEmployee’s employment with the Company, the Employee will have unique and extensive exposure to and personal contactwiththeCompany’scustomers,andthattheEmployeewillbeabletoestablishauniquerelationship withtheCompany’scustomersthatwillenabletheEmployee,bothduringandafteremployment,tounfairly compete with the Company.Further, the parties agree that the terms and conditions of the following restrictivecovenantsarereasonableandnecessaryfortheprotectionoftheCompany’slegitimatebusiness interests, trade secrets, and Confidential Information (as defined below) and to prevent great damage or loss to the Company as a result of action taken by the Employee.The Employee acknowledges that the noncompete restrictions and nondisclosure of Confidential Information restrictions contained in this Agreement are reasonable and that the consideration provided in this Agreement is sufficient to fully and
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Exhibit 10.1
adequately compensate theEmployee for agreeing to such restrictions.The Employee acknowledges that theEmployeecouldcontinuetoactivelypursuetheEmployee’scareerandearnsufficientcompensationin the same or similar business without breaching any of the restrictions contained in this Agreement.For purposes of this Section 7, the Company shall include any Affiliates.
(a)
During Term of Employment.The Employee hereby covenants and agrees that, duringtheEmployee’semploymentwiththeCompany,theEmployeeshallnot,directlyorindirectly,either individuallyorasanemployee,principal,agent,partner,shareholder,owner,trustee,beneficiary,co-venturer,distributor,consultant,orinanyothercapacity,participatein,becomeassociatedwith,provide assistance to, engage in, or have a financial or other interest in any business, activity, or enterprise which iscompetitivewithorasuppliertotheCompanyoranysuccessororassignoftheCompany.Theownership oflessthanaonepercent interest ina corporation whosesharesaretradedinarecognizedstockexchange ortradedintheover-the-countermarket,eventhoughthatcorporationmaybeacompetitoroftheCompany, shall not be deemed financial participation in a competitor.
(b)
Upon Termination of Employment.The Employee agrees that during a period aftertermination ofthe Employee’semploymentwiththe Company equal to theshorterofone year or the duration of the Employee’s employment with the Company, the Employee will not, directly or indirectly, eitherindividuallyorasanemployee,agent,partner,shareholder,owner,trustee,beneficiary,co-venturer, distributor, consultant or in any other capacity:
(i)
CanvassorsolicitfromanypersonorentitywhoisaCustomer(asdefined below)oftheCompanyanybusinessincompetitionwiththebusinessoftheCompanyorthesuccessorsor assignsoftheCompany,includingthecanvassingorsolicitingofCompetitiveBusiness(asdefinedbelow) fromanyindividualorentitywhichisorwasaCustomeroftheCompany.ForpurposesofthisAgreement:
(A)”Customer”meansanycustomeroftheCompanyoranyofitsAffiliateswithwhomtheEmployeehas had contact in connection with the performance of the Employee’s services under this Agreement in the fiveyear period preceding the effective date ofthe Employee’stermination of employment forany reason and who has purchased the products or services offered by the Company or its Affiliates during the 24-month period preceding the effective date of the Employee’s termination of employment for any reason; and (B) ”Competitive Business” means a business which is involved in designing, developing, manufacturing,ormarketingmechanical,electro-mechanical,and/orelectronicsecurityandaccesscontrol products in the global motor vehicle industry.
(ii)
RequestoradviseanyoftheCustomersorsuppliersoftheCompanywith whomtheEmployeehadcontactinconnectionwiththeperformanceoftheEmployee’sservicesinthefive year period preceding the effective date of the Employee’s termination for any reason and who currently have or have had business relationships with the Company within the 24-month period preceding the date of the Employee’s termination of employment for any reason, to withdraw, curtail, or cancel any of their business or relations with the Company.
(iii)
Induceorattempttoinduceanyexecutiveormanagementlevelemployee or other employee withaspecializedpositionthatcould be usedtounfairlycompeteagainsttheCompany asmaybeidentifiedinwritingtotheEmployeebytheCompanyfromtimetotime,toterminatehisorher relationshiporbreachhisorheragreementswiththeCompanyinordertoprovidecompetingservicestoa Competitive Business; provided, however, that publication of general solicitations not targeted (A)to an individual employee, sales representative, consultant or other personnel of the Company, or (B)primarily toemployees,salesrepresentatives,consultantsorotherpersonneloftheCompany(andanyhiringpursuant to such general solicitations) shall not constitute inducement for purposes of, or otherwise violate, this Section 7(b)(iii).
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Exhibit 10.1
8.
Confidential Information.For purposes of this Agreement, “Confidential Information” means proprietary non-public information that is possessed by or developed for the Company and that relates to the Company’s business or technology, including but not limited to inventions and other intellectual property (to the extent not a trade secret as described in Section 9), computer program object andsourcecodes,businessplansandstrategies,existingorproposedbids,technicaldevelopments,existing or proposed research projects, financial or business projections, investments, marketing plans and strategies, pricing and cost information, negotiations strategies, sales strategies, training information and materials, employee compensation and other confidential personnel information, customer or potential customer lists, customer purchasing history, and information generated for customer engagements. Confidential Information also includes information received by the Company from others which the Company has an obligation to treat as confidential, including information obtained in connection with customerengagements.ConfidentialInformationshallnotincludeinformationthatisorbecomesavailable tothepublicthroughnowrongful act oromission oftheEmployee.ThepartiesagreethattheCompany’s Confidential Information was established at great expense and protected as confidential information and provides the Company with a substantial competitive advantage in conducting its business.The parties further agree that by virtue of the Employee’s employment with the Company, the Employee will have access to, and be entrusted with, Confidential Information and that the Company would suffer great loss and injury if the Employee would disclose this information or use it to compete with the Company. Therefore,the Employee agrees that,duringthe termof the Employee’semployment, and untilthefirstto occur of (a) such time as the Confidential Information becomes generally available to the public through nofaultoftheEmployee,(b) suchtimeastheConfidentialInformationnolongerprovidesabenefittothe Company,or(c)thesecondanniversaryofthedateoftheEmployee’sterminationofemploymentwiththe Company,theEmployeewillnot,directlyorindirectly,inanycapacity,useordisclose,orcausetobeused or disclosed, any Confidential Information in any geographic area in which such use or disclosure could harm the Company’s business interests.This provision does not prohibit the Employee’s use of general skills acquired prior to or during employment by the Company, as long as such use does not involve the use or disclosure of Confidential Information or trade secrets.The restrictions contained in this Section 8 apply to Confidential Information regardless of the fact that the Employee may have participated in the discovery andthedevelopment ofthat information.The Employee alsoagreesand acknowledgesthat the Employee will comply with all applicable laws regarding insider trading or the use of material nonpublic informationinconnectionwiththetradingofsecurities.ForpurposesofthisSection 8,theCompanyshall include any Affiliates.
9.
CommonLawofTortsandTradeSecrets.ThepartiesagreethatnothinginthisAgreement shallbeconstruedtolimitornegatethecommonlawoftortsortradesecretswhereitprovidestheCompany withbroaderprotectionthanthatprovidedherein.DuringtheEmployee’semploymentwiththeCompany, theEmployeeshalldowhatisreasonablynecessarytopreventmisappropriationorunauthorizeddisclosure oftheCompany’stradesecrets.AfterterminationoftheEmployee’semployment,theEmployeeshallnot use or disclose the Company’s trade secrets for as long as they remain trade secrets.
10.
Non-Disparagement.TheEmployeeagreesthat,duringtheEmployee’semploymentwith the Company and following the Employee’s termination of employment, the Employee shall not make, publish, or communicate any public statements which disparage or defame the Company or any Affiliate oranyoftheirrespectivedirectors,officers,oremployees.Nothingintheforegoingisintendedtoprohibit theEmployeefrommakingtruthfulstatementsorprovidinginformationwhenrequiredbylaw,regulation, or order of a court, governmental body, or regulatory body having appropriate jurisdiction, provided that such compliance does not exceed that required by the law, regulation, or order.
11.
SpecificPerformanceandInjunctiveRelief.TheEmployeeacknowledgesandagreesthat irreparable injury to the Company may result in the event the Employee breaches any covenant and agreementcontainedinSections7,8,9,and10andthattheremedyatlawforthebreachofanysuch
10
Exhibit 10.1
covenant will be inadequate.Therefore, if the Employee engages in any act in violation of the provisions of Section 7, 8, 9, or 10, the Employee agrees that the Company shall be entitled, in addition to specific performanceandsuchotherremediesanddamagesasmaybeavailabletoitbylaworunderthisAgreement, to injunctive relief to enforce the provisions of Sections 7, 8, 9, and 10.
12.
Defend Trade Secrets Act Notice.The Employee is hereby advised that, pursuant to the federalDefendTradeSecretsAct,anindividualwillnotbeheldcriminallyorcivillyliableunderanyfederal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law, or (b) is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.Further, an individual who files a lawsuit alleging retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding if the individual (1) files any document containing the trade secret under seal and (2) does not otherwise disclose the trade secret, except pursuant to court order.The Employee understands that any disclosurebytheEmployeeoftheCompany’stradesecretsnotdoneingoodfaithconsistentwiththeabove may subject the Employee to substantial damages, including punitive damages and attorney’s fees.
13.
Return of Property.The Employee agrees that, upon the Employee’s termination of employment, the Employee shall promptly return to the Company any keys, credit cards, passes, confidential documents or material, or other property belonging to the Company or any Affiliate, and the Employee shall also return all writings, files, records, correspondence, notebooks, notes and other documentsandthings(includinganycopiesthereof)containingConfidentialInformationorrelatingtothe businessorproposedbusinessoftheCompanyoranyAffiliateorcontaininganyConfidentialInformation relatingtotheCompanyofanyAffiliate,exceptanypersonaldiaries,calendars,rolodexesorpersonalnotes or correspondence.
14.
Cooperation.The Employee agrees that during the Employee’s employment with the Company and following the Employee’s termination of employment, the Employee shall be reasonably available to testify truthfully on behalf of the Company or any Affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Company, or any Affiliate, in all reasonable respects in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board, or its representatives or counsel, or representatives or counsel to the Company or any Affiliate, as requested; provided, however, that the same does not materially interfere with Employee’s then-current professional activities.
15.
Representations of the Employee; Obligations to Former Employers.As a material term of this Agreement, the Employee represents that the Employee has disclosed to the Company all agreements, restrictions, or obligations that: (i) purport to impose on the Employee any post-employment obligations with respect to a current or former employer; (ii)may affect the Employee’s ability to assume employment with the Company; (iii)may affect the Employee’s ability to perform the duties of Vice President, General Counsel, and Secretary of the Company; or (iv)may result in forfeiture or recoupment of any compensation (whether in the form of cash or equity) paid or payable by a current or former employer.As a material term of this Agreement, the Employee represents that the Employee is in compliancewith,andwillcontinuetocomplywith,thetermsofalllawful,enforceable,andongoingpost-employmentrestrictionsfromtheEmployee’scurrentorprioremploymentwithrespectto(I)nondisclosure of confidential informationand trade secrets, (II) noncompetition, and (III) non-solicitation of employees, customers,andsuppliers.TheEmployeeunderstandsandagreesthattheCompanydoesnotwishtoreceive, and the Employee shall not provide to the Company, any confidential, proprietary or trade secret informationthatisownedbyathirdparty,includinganyformeremployeroftheEmployee,thatthe
11
Exhibit 10.1
Employee is contractually or otherwise legally prohibited from providing tothe Company or any of itsAffiliates.
16.
Waiver.The failure of either party to insist, in any one or more instances, upon performance of the terms or conditions of this Agreement shall not be construed as a waiver or a relinquishment of any right granted hereunder or of the future performance of any such term, covenant or condition.
17.
Notices.Any notice to be given hereunder shall be deemed sufficient if addressed in writing, and delivered by registered or certified mail or delivered personally, in the case of the Company, totheChiefPeopleOfficerattheCompany’sprincipalbusinessoffice,andinthecaseoftheEmployee,to theEmployee’saddressappearingontherecordsoftheCompany,ortosuchotheraddressastheEmployee may designate in writing to the Company.
18.
Severability.In the event that any provision shall be held to be invalid or unenforceable for any reason whatsoever, it is agreed such invalidity or unenforceability shall not affect any other provision of this Agreement and the remaining covenants, restrictions and provisions hereof shall remain in full force and effect andany court ofcompetent jurisdiction may so modify theobjectionable provision as to make it valid, reasonable and enforceable.Furthermore, the parties specifically acknowledge theabove covenant not to compete in Section7 and covenant not to disclose Confidential Information inSection 8 are separate and independent agreements.
19.
Entire Agreement; Amendment.This instrument contains the entire agreement of the parties relating to the subject matter hereof, and the parties have made no agreement, representations, or warranties relating to the subject matter of this Agreement that are not set forth herein.This Agreement maybeamendedonlybymutualwrittenagreementoftheparties.ThisAgreementmaybeexecutedinone or more counterparts.
20.
Governing Law.This Agreement shall be governed by and construed exclusively in accordance withthelaws of the State of Wisconsin,regardless ofchoice oflawrequirements.The parties hereby consent to the jurisdiction of the state courts of the State of Wisconsin and of any federal court in the venue of Wisconsin for the purpose of any suit, action or proceeding arising out of or related to this Agreement, and expressly waive any and all objections they may have as to venue in any of such courts.
21.
Dispute Resolution.The parties hereto shall attempt in good faith to resolve disputes arisingoutoforrelatingtothisAgreementasprovidedinthisSection21.Subjecttoaparty’srighttoseek equitable remedies, including but not limited to specific performance and injunctive relief, as provided by Section 11 above, any dispute not resolved in writing within 21 days may be referred by either party to mediation involving a mediator (a third party neutral), trained and experienced in the mediation process and mutually agreed to by the parties.The mediator shall ascribe to and follow the commercial rules for theAmerican Arbitration Association then in effect unless the parties mutually agree in writing to waive thisprovisionformediatorsinconductingandmanagingthemediationprocess.Expensesforthemediation shall be shared equally by the parties unless otherwise agreed during the mediation process.The parties maybeaccompaniedinthemediationprocessbylegalcounseland/orotherpersonsmutuallyagreedtoby the parties and the mediator.All participants will openly, honestly, and in good faith participate in the mediation.The mediation may be terminated at any time, for any reason, by the mediator or by either party.Any resolution reached by the parties during the mediation shall be recorded in writing and agreed to by the parties.Such resolution may be drafted and/or revised by the parties’ legal counsel and shall be legallybindingontheparties.Eachpartyshallbeartheirowncostsfortheirlegalcounselunlessotherwise agreed during the mediation process.
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Exhibit 10.1
22.
AssignmentandSurvivorshipofBenefits.ThisAgreementshallbebindinguponandinure to the benefit of and shall be enforceable by and against the Company and its successors and assigns and theEmployeeandtheEmployee’sheirs,beneficiariesandlegalrepresentatives.Itisagreedthattherights and obligations of the Employee may not be delegated or assigned.
23.
Clawback Policy.The Employee acknowledges and agrees that any compensation or benefitsreceivedunderthisAgreementshallbesubjecttotheCompany’sclawbackpolicy,asamendedor modified from time to time, and compliance with any rules and regulations relating to recovery of erroneouslyawardedcompensation,andthattheEmployeeshalltakeallactionnecessaryorappropriateto complywithsuchpolicy(including,withoutlimitation,enteringintoanyfurtheragreements,amendments or policies necessary or appropriate to implement and/or enforce such policy).
24.
CertainTaxMatters.
(a)
Taxes.NotwithstandinganythinginthisAgreement tothecontrary,all payments and benefits required to be made or provided to the Employee under this Agreement will be subject to withholding of such amounts relating to taxes as the Company may reasonably determine that it should withhold pursuant to any applicable laws or regulations.
(b)
ExciseTaxes.NotwithstandinganythingtothecontraryinthisAgreement,tothe extent that the payment and benefits to be provided under this Agreement and any payments and benefits provided to the Employee or for the Employee’s benefit under any other Company plan or agreement (collectively,the“EmploymentPayments”)wouldbesubjecttotheexcisetaximposedunderSection4999 oftheCode(the“ExciseTax”),theEmploymentPaymentsshallbereducedtotheextentnecessarysothat noportionthereofshallbesubjecttotheExciseTax,butonlyif,byreasonofsuchreduction,thenetafter-tax benefit (taking all income, employment and excise taxes into account) received by the Employee shall exceed the net after-tax benefit that would be received by the Employee if no such reduction was made. Any reduction pursuant to this Section 24(b) shall be applied consistent with the requirements of Section 409A of the Code.
(c)
Section409AoftheCode.
(i)
To the extent applicable, it is intended that this Agreement and any payments and benefits made or provided hereunder shall comply with the requirements of Section 409A of the Code or any exemption or exclusion therefrom, and any related regulations or other guidance promulgated with respect to such section by the Internal Revenue Service, and shall in all respects be administered in accordance with Section 409A of the Code. Any provision that would cause this Agreement or any payment or benefit hereunder to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code in the least restrictive manner necessary and without any diminution in the value of the payments to the Employee, which amendment may be retroactive to the extent permitted by Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute “nonqualified deferred compensation” under Section 409A of the Code would otherwise be payable or distributable hereunder by reason of the Employee’s termination of employment, such amount or benefit will not be payable or distributable to the Employee by reason of such circumstance unless (i) the circumstances giving rise to such termination of employment meet any description or definition of “separation from service” in Section 409A of the Code or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a compliant “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, each individual
13
Exhibit 10.1
payment payable under the Agreement shall be deemed to be a “separate payment” within the meaning of Section 409A of the Code.
(ii)
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation and where applicable, that (A) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (B) in no event shall reimbursements by the Company under this Agreement be made later than the last day of the Employee’s taxable year next following the taxable year in which the applicable fees and expenses were incurred, (C) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year of the Employee may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Employee; and (D) the Employee’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit.
(iii)
To the extent the Employee is a “specified employee,” as defined in Section 409A of the Code and any elections made by the Company in accordance therewith, notwithstanding the timing of payment provided in any other section of this Agreement, no payment, distribution or benefit under this Agreement that constitutes a distribution of nonqualified deferred compensation (within the meaning of Treasury Regulation Section 1.409A-1(b)) upon the Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would otherwise be payable during the six-month period after the Employee’s separation from service, will be made during such six-month period, and any such payment, distribution or benefit will instead be paid on the first business day after such six-month period (the “Delayed Payment Date”); provided, however, that if the Employee dies following a separation from service but before the Delayed Payment Date, such amounts shall be paid to the personal representative of the Employee’s estate within 30 days following the Employee’s death.
(iv)
Nothing herein shall be construed as the guarantee of any particular tax treatment to the Employee, and none of the Company, the Board or any of the Affiliates shall have any liability with respect to any failure to comply with the requirements of Section 409A of the Code.
25.
Opportunity to Review; No Presumption. The Employee represents that the Employee has been provided with an opportunity to review the terms of this Agreement with legal counsel. The parties agree that this Agreement is the product of negotiations between parties represented by legal counsel and that the presumption of interpreting ambiguities against the drafter of this Agreement shall not apply.
[Remainder of page intentionally left blank; signature page follows]
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Exhibit 10.1
INWITNESSWHEREOF,thepartieshaveexecutedorcausedthisAgreementtobeexecutedas of the day, month and year first above written.
EMPLOYEE
/s/ James Denis
JamesDenis
StrattecSecurityCorporation
By: /s/ Jennifer L. Slater
Jennifer L. Slater
PresidentandChiefExecutiveOfficer
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