Document:

Exhibit 10.2

 

NON-COMPETITION, NON-SOLICITATION

AND NON-DISCLOSURE AGREEMENT

This Non-Competition, Non-Solicitation and Non-Disclosure Agreement (this "Agreement") is made this 24th day of February, 2017, by and among LSI Industries Inc., an Ohio corporation ("LSI") and Dennis W. Wells  ("Executive").

WITNESSETH:

WHEREAS, LSI and its affiliates and subsidiaries are engaged in the business of designing, engineering, manufacturing and marketing a broad array of lighting and graphics products for commercial/industrial lighting applications and corporate visual image programs (the "Business")

WHEREAS, Executive was initially employed as LSI's Chief Operating Officer and subsequently promoted to Chief Executive Officer on October 22, 2014 and LSI's President on October 29, 2014;

WHEREAS, the parties entered into an Employment Agreement as of October 1, 2014, which is being modified by an Amended and Restated Employment Agreement (the "Amended Employment Agreement") contemporaneously with this Agreement providing for, among other things, increased compensation and severance benefits, and in return, LSI seeks a renewal and restatement of Executive's commitment to LSI as described herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt of which is hereby acknowledged, LSI and the Executive hereby agree, as follows:

1. Restrictions on Use and Disclosure of Information.

(a) General Restrictions.  Executive hereby acknowledges that, as a result of his relationship with the Company, including, but not limited to his beneficial interest in LSI and roles in the management and operation of the Business, Executive has acquired trade secrets, proprietary data and confidential information related to the Business.  Executive agrees that he will not, without the express written consent of LSI, at any time, directly or indirectly, communicate, disclose or divulge to, any person, nor use for his own benefit or the benefit of any person, any of the trade secrets, proprietary data or confidential information related to the Business.  Executive agrees that such trade secrets, proprietary data and confidential information include, but are not limited to, the following:  existing and contemplated projects; joint ventures; research and development programs; work product, business, accounting and financial information and data (except that Executive may provide such information and data to his financial and legal advisors in connection with the filing of tax returns); marketing plans; pricing, methods and processes involved in developing, manufacturing, distributing and selling products and services; lists and/or identities of customers, distributors, suppliers and prospective clients; information relating to inventions, modifications, discoveries, designs, developments, improvements, enhancements, processes, formulas, data, techniques, computer programs, frameworks, methodology, analytical approaches, works of authorship, know-how, trade secrets, other intellectual property or licensing arrangements; and the identity of any persons or entities associated with or engaged as partners, employees, consultants, advisers and/or agents of LSI (collectively, the "Restricted Information").

(b) Disclosure in Proceedings.  Notwithstanding the foregoing, Executive may disclose Restricted Information only to the extent that disclosure thereof is required by a court or other governmental agency of competent jurisdiction, provided that Executive promptly notifies LSI of any such demand, order or threat (and in any event prior to any such disclosure) and reasonably cooperates with LSI in obtaining any available protective order or the equivalent prior to the disclosure of such Restricted Information.  LSI agrees to indemnify and hold Executive harmless from and against his refusal to submit to a demand to disclose such Restricted Information and all fees, costs, or expenses incurred by him (including reasonable attorneys fees and disbursements) in responding to or contesting such demand or cooperating with LSI in obtaining such protective order or equivalent, or in refusing to furnish such Restricted Information.

2. Non-Solicitation.  During the period of Executive's employment with LSI and for a period of twelve (12) months after employment with LSI ends for any reason, Executive shall not, directly or indirectly: (a) intentionally or knowingly solicit, divert, take away, accept or attempt to divert or take away any business in which LSI was engaged immediately prior to the date hereof, from any customer of LSI or any active prospective customer of LSI with whom Executive became aware or with whom Executive had contact while employed by or a beneficial owner of the Company; or (b) intentionally recruit, solicit, induce or encourage, or attempt to recruit, solicit, induce or encourage any former, current or future employee of LSI, or any person, independent contractor, agent, consultant or supplier of LSI to terminate such person's employment or other relationship with, or otherwise cease to provide or reduce such person's supply of goods and/or services.

3. Non-Disparagement.  Executive shall not disparage or make negative statements (or induce or encourage others to disparage or make negative statements) about LSI or any of its present or past equity holders, directors, officers, members, partners, employees or agents.

4. Non-Competition.  During the period of Executive's employment with LSI and for a period of six (6) months following Executive's employment if Executive's employment is terminated by LSI for "Cause", Executive shall not, directly or indirectly, whether as principal, agent, employee, director, consultant, stockholder, partner, member or in any other capacity, run, own, manage, operate, control, be employed by, provide consulting services to, be an officer or director of, participate in, lend his name to, invest or have any financial or other interest in or be connected in any manner with the management, ownership, operation or control of any business, venture or activity anywhere in North America and any additional geographic territories where LSI operates that is competitive with the Business; provided, however, that this provision shall not prohibit Executive from acquiring, solely as a passive investment, securities of any entity listed on a national securities exchange or regularly traded in the over-the-counter market if Executive does not own, collectively, five percent (5%) or more of any class of securities of such entity.

For purposes of this Agreement, the term "Cause" shall mean any of the following: (i) indictment for, conviction of, or plea of guilty or no contest by the Executive to a felony, or of any criminal act; (ii) the unreasonable deliberate and material failure or refusal by the Executive to perform, consistent with the terms of this Agreement, his employment duties hereunder (other than as a result of PTO, sickness, disability, illness or injury), and the failure to rectify the same within thirty (30) days after the Company shall have given notice to the Executive identifying such failure or refusal and demanding that it be rectified; (iii) the Executive's commission of any act of fraud, embezzlement, dishonesty or other willful misconduct that has caused, or would reasonably be expected to cause, material injury or economic harm to the Company; (iv) an act of gross negligence on the part of the Executive that has caused, or would reasonably be expected to cause, material injury  or economic harm to the Company; (v) a deliberate or material violation of a written material Company policy; or (vi) a material breach of this Agreement (or any successor thereto or amendment thereof) which (and only if the same shall be curable) Executive fails to cure within thirty (30) days after the Company shall have given notice to the Executive identifying such breach and demanding that it be cured.

5. Remedies and Enforceability.  In addition to any other rights or remedies that may be available, LSI shall be entitled to immediate injunctive relief (including the issuance of a temporary restraining order, preliminary and permanent injunction, if applicable) or other appropriate equitable relief in any court of competent jurisdiction, upon the occurrence of a breach by Executive of any of the terms of this Agreement.  Executive acknowledges and agrees that a violation of the restrictive covenants set forth in this Agreement will cause irreparable harm to LSI, that the remedy at law for the same would be inadequate, and that damages would be difficult to determine, and Executive therefore consents to the imposition of equitable remedies, including injunctive relief without the requirement of a bond, if LSI seeks equitable relief as a remedy as set forth in this Agreement.

6. Enforceability.  If a court of competent jurisdiction determines that any of the provisions or restrictions of this Agreement are invalid or unenforceable by reason of being unreasonably vague or unreasonable as to the scope of coverage, length of time or geographical area, or for any other reason, then and in each such case, the remaining restrictions herein contained shall, nevertheless, remain effective, and this Agreement, or any portion hereof, shall be considered to be amended so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas described above to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable, and in such event, the covenants shall be enforced to the extent so permitted.

7. Severability.  If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

8. Entire Agreement and Amendments.  This Agreement shall constitute the entire agreement between the parties and supersedes all existing agreements between them, whether oral or written, with respect to the subject matter hereof.

9. Successors and Assigns.  This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs and legal representatives.

10. Waiver.  No waiver of any party hereto of a breach of any provision of this Agreement by any other party shall operate or be construed as a waiver of any subsequent breach by such other party.  The failure of any party hereto to take any action by reason of such breach shall not deprive such party of the right to take action at any time while such breach continues.

11. Governing Law.  This Agreement shall be construed in accordance with, and the rights of the parties shall be governed by, the laws of the State of Ohio.

12. Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and when taken together shall constitute one agreement.

The parties have caused this Agreement to be executed by the undersigned duly authorized persons as of the day and year first stated above.

 

	 	 	
LSI INDUSTRIES INC.

	 	 	 
	 	 	
By: /s/ Ronald S. Stowell

	 	 	
Ronald S. Stowell

	 	 	
Vice President, Chief Financial Officer

	 	 	 
	 	 	 /s/ Dennis W. Wells
	 	 	
Dennis W. Wells

	 	 	Chief Executive Officerrsimatempagmt

EMPLOYMENT AGREEMENT This Employment Agreement (this "Agreement") is entered into as of January I, 2017, by and between Nautilus Inc. , a Washington corporation (the "Company" or "Employer"), and Ryan Simat ("Employee"). In consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Company and Employee hereby agree as follows: 1. Employment. Employee is being hired the position of Vice President/General Manager, Commercial and Specialty effective January 1, 2017. Employee shall ( a) devote his professional entire time, attention, and energies to his position, (b) use his best efforts to promote the interests of Employer; (c) perform faithfully and efficiently his responsibilities and duties, and (d) refrain from any endeavor outside of employment which interferes with his ability to perform his obligations hereunder. Employee shall report to the Chief Operating Officer, and perform his job duties subject to his general supervision, orders, advice and direction. Employee shall perform the duties normally associated with the position and/or such duties as delegated and assigned by the Company. Employee additionally agrees to abide by any pre-employment hiring procedures, general employment guidelines or policies adopted by Employer such as those detailed in an employer's handbook, as such guidelines or policies may be implemented and/or amended from time to time. 2. Salary. As compensation for services to be rendered hereunder, the Company shall pay Employee an initial annual salary in the gross amount of Two hundred fifteen thousand dollars ($215,000). Said salary will be paid in accordance with the Company's existing payroll policies, and shall be subject to nonnal and/or authorized deductions and withholdings. Employee will be eligible to receive an annual bonus targeted at fifty-percent (50%) of Employee's base salary earned in the applicable year in accordance with the Short Term Incentive Plan. The amount of such bonus (if any) is determined at the discretion of the Company and the Board of Directors based on the accomplislunent of corporate and individual performance goals. 3. Restricted Share Units and Stock Options. Pursuant to the Company's current 2015 Long Term Incentive Plan (the "Plan"), Employee will receive an initial grant of 5,000 Restricted Stock Units. The terms of the option grant shall be governed by the Plan and a Stock Grant Agreement (the "Grant Agreement"). Employee will be eligible for additional annual grants on the same basis as other members of the executive team. 5. Expenses. The Company will reimburse Employee for all necessary and reasonable travel, entertainment and other business expenses incurred by him in the performance of his duties hereunder, upon receipt of signed itemized lists of such expenditures with appropriate back-up documentation, and/or in accordance with such other reasonable procedures as the Company may adopt generally from time to time. 6. Health and Welfare Benefits. Upon satisfaction of eligibility criteria, the Employee shall be eligible to receive employee benefits, if any, generally provided to its employees by Employer, including, if provided, medical, dental, and life insurance and Paid-Time Off. Such benefits may be amended or discontinued by Employer at any time. Employee shall also be entitled to five (5) weeks of Paid Time Off in accordance with the Company's policies. Exhibit 10.35

 

7. Termination. The parties acknowledge that Employee's employment with the Company is "at-will" and may be terminated by either party with or without cause. No one other than the President and Chief Executive Officer of the Company or the Board of Directors has the power to change the at-will character of the employment relationship. As discussed below, however, the various possible ways in which Employee' s employment with the Company may be terminated will detennine the payments that may be due to Employee under this Agreement. As used in this Agreement, the following tenns have the following meanings: (a) Cause. As used in this Agreement, Cause means (i) Employee's indictment or conviction in a court of law for any crime or offense that in Employer's reasonable judgment makes Employee unfit for continued employment, prevents Employee from perfonning Employee's duties or other obligations or adversely affects the reputation of Employer; (ii) dishonesty by Employee related to his employment; (iii) violation of a key Employer policy or this Agreement by Employee (including, but not limited to, acts of harassment or discrimination, use of unlawful drugs or drunkenness on Employer's premises during normal work hours); (iv) insubordination (i.e. conduct such as refusal to follow direct orders of the President or other individuals(s) to whom Employee reports); (v) dereliction of duty by Employee (e.g., failure to perfonn minimum duties after warning and reasonable opportunity to correct); (vi) Employee's competition with Employer, diversion of any corporate opportunity or other similarly serious conflict of interest or self-dealing incurring to Employee' s direct or indirect benefit and Employer' s detriment; (vii) intentional or grossly negligent conduct by Employee that is significantly injurious to Employer or its affiliates; (viii) Employee's failure to meet the minimum goals of his position if such are provided in writing to Employee, and as such goals may be amended from time to time; and (ix) Employee' s death or disability (i.e., Employee' s inability to perform the essential job functions of the position with or without a reasonable accommodation). (b) At-Will. At-will tennination shall mean a tennination by the Company where it does not seek to establish Cause or by Employee for any reason. If Employee exercises his right to tenninate his employment, the Employee agrees to provide the Company with 21 days ' prior written notice of the termination of his employment (Notice of Termination). After receiving such Notice from the Employee, the Company retains the right to accept Employee' s resignation, and hence, tenninate the employment relationship without the need for further payments, at an earlier date than provided in the Employee' s Notice of Termination. 8. Severance Upon Termination. (a) Upon termination of Employee' s employment under this Agreement by the Company without Cause, then, in lieu of any further salary, bonus, or other payments for periods subsequent to the Date of Termination, the Company shall pay to the Employee severance equal to four months average monthly annual base salary at the rate then in effect1• Such severance payment shall be made according to the Company's normal payroll process spread out equally over the severance period. Company will also continue, at its cost, the Company portion of the 1 The average annual monthly base salary shall be calculated using the average of the cash compensation received by Employee in the twelve months prior to the Date ofTe1mination. 2 

 

current medical and dental coverage elected by Employee as of the date of termination for the duration of the severance period. Employee will be required to timely sign up and elect COBRA benefits in order to be eligible for continued coverage under this Agreement and to pay any employee portion of the coverage. Violation of this Agreement or the Business Protection Agreement and/or failure to sign the Release and Waiver Agreement shall immediately relieve the Company from its payment obligation under this paragraph and entitle it to recover any amounts paid under this paragraph. This Section 8 shall be read in conjunction with Section 7, and entitles the Employee to a maximum of four months salary and benefits under this Agreement. (b) If the Company terminates the Employee's employment during the term of this Agreement for Cause or if the Employee terminates her employment for any reason, then the Company shall have no further payment obligations to Employee. (c) Except as it relates to the receipt of severance (which shall be solely granted under the tenns of this Agreement), this Agreement shall not affect any payments due to Employee under applicable law as a result of the termination of his employment (such as payment of earned wages). (d) The severance amounts in Section 8(a) will immediately cease in the event that Employee becomes employed at any time during the severance period at a monthly base salary rate equal to or greater than the monthly base salary rate paid by the Company as of the date of termination. ln the event the Employee is employed during that severance period at a monthly base salary rate less than the monthly base salary rate previously paid by the Company, Employee will be provided a maximum severance benefit in the amount of the difference between the 4 months average monthly annual base salary paid by the Company and the 4 months average monthly annual base salary paid, or to be paid, by the subsequent Employer over the severance period. In either event continued health care benefits will cease if Employee accepts employment during the severance period following termination with Company. Following tennination by the Company and during the severance period, Employee will exercise reasonable efforts to seek, obtain, and accept comparable employment. 9. Return of Documents. Employee understands and agrees that all equipment, records, files, manuals, forms, materials, supplies, computer programs, and other materials furnished to the Employee by Employer or used on Employer's behalf, or generated or obtained during the course of his/her employment shall remain the property of Employer. Upon termination of this employment or at any other time upon the Company's request, Employee agrees to return all documents and property belonging to the Company in his possession including, but not limited to, customer lists, contracts, agreements, licenses, business plans, equipment, software, software programs, products, work-in-progress, source code, object code, computer disks, Confidential Information, books, notes and all copies thereof, whether in written, electronic or other fonn. In addition, Employee shall certify to the Company in writing as of the effective date of tennination that none of the assets or business records belonging to the Company is in his/her possession, remain under his control, or have been transferred to any third person. 10. Confidential Information/Non-Competition. By virtue of his employment, Employee will have access to confidential, proprietary and trade secret information, the ownership and 3 

 

protection of which is very important to the Company. Employee hereby agrees to enter into a Business Protection Agreement with the Company concurrent with his entry into this Agreement. 11. Release of Claims. As a precondition to receipt of the severance provided in Section 8 of this Agreement, Employee acknowledges and understands that he must sign a Waiver and Release of Claims Agreement. Such Agreement shall be substantially similar to the Agreement attached as Exhibit A. Employee understands that he will not be entitled to receive any payments under this Agreement until he executes and delivers the Waiver and Release of Claims Agreement, and the revocation period set forth in the Waiver and Release of Claims Agreement has run. 12. Assignment. This Agreement is personal, and is being entered into based upon the singular skill, qualifications and experience of Employee. Employee shall not assign this Agreement or any rights hereunder without the express written consent of Employer which may be withheld with or without reason. This Agreement will bind and benefit any successor of the Employer, whether by merger, sale of assets, reorganization or other form of business acquisition, disposition or business reorganization. 13. Notices. Any Notice of Tennination or notice of good reason shall be in writing and shall be deemed to have been given or submitted (i) upon actual receipt if delivered in person or by facsimile transmission with confirmation of transmission, (ii) upon the earlier of actual receipt or the expiration of two (2) business days after sending by express courier (such as U.P.S. or Federal Express), and (iii) upon the earlier of actual receipt or the expiration of seven (7) business days after mailing if sent by registered or certified mail, postage prepaid, to the parties at the following addresses: To the Company: With a Copy to: 4 Nautilus, Inc. 17750 SE 61h Way Vancouver, WA 98683 Attention: Senior Vice President Law and Human Resources Garvey, Schubert & Barer 1191 Second A venue, 18th Floor Seattle, WA 98101-2939 Attention: Peter Cancelmo 

 

To Employee: Employee: Ryan Simat At the last address and fax number Shown on the records of the Company Employee shall be responsible for providing the Company with a current address. Either party may change its address ( and facsimile number) for purposes of notices under this Agreement by providing notice to the other party in the manner set forth above within ten business days. 14. Effect of Waiver. The waiver by either pruty of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach hereof. No waiver shall be valid unless in writing. 15. Entire Agreement. This Agreement, along with the Business Protection Agreement, sets forth the entire agreement of the parties hereto and supersedes any and all prior agreements and understandings concerning Employee's employment by the Company. This Agreement may be changed only by a written document signed by Employee and the Company. 16. Employment Guidelines. Employee understands that while not constituting a contract, the Employer sets certain policies and standards that it expects employees to comply with as part of general expectations of employee behavior. Employee agrees to abide by any general employment guidelines or policies adopted by the Company such as those detailed in an employee handbook, as such guidelines may be implemented and amended from time to time. 17. Governing Law/JurisdictionNenue. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive and procedural laws of the State of Washington without regard to rules governing conflicts of law. For all disputes under this Agreement, the parties agree that any suit or action between them shall be instituted and commenced exclusively in the state courts in Clark County or King County Washington (U.S.A) or the United States District Court for the Western District of Washington, sitting in Seattle, Washington. Both parties waive the right to change such venue and hereby consent to the jurisdiction of such courts for all potential claims under this Agreement. 18. Acknowledgment. The Employee acknowledges that he has read and understands this Agreement, that he has had the opportunity to consult with an attorney regarding the terms and conditions hereof, and that he accepts and signs this Agreement as his own free act and in full and complete understanding of its present and future legal effect. 5 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. Employer: NAUTILUS, INC. -i../ 1~ l 1~ :::=- Date 1 7 6

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