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HomeMy WebLinkAbout01-06499 I - ~ ,i.,J;...... '"'~'" '.'..' "'c-'" ',,' ,~, .. f . f MAUELL CORPORATION, Petitioner IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL V ANlA v. NO. 6\ - ~q99 Go:l '--r~ FRANK A. ULRICH, Respondent ORDER AND NOW this ~ day of ~200l, upon review of the within Petition to Confirm Arbitration Award, it is hereby; ORDERED, DIRECTED and DECREED that Mauell Corporation's Petition to Confirm Arbitration Award is GRANTED and Judgment is hereby entered in favor of Mauell Corporation and against Frank A. Ulrich in the amount of$209, 271.23 plus interest and costs. t~1 J. ./ By the CotP:t / , ( \ ~ c .~' -.." "- <-:'.s 1;$ ['.'1' ~V''-!')2('; Pl:j lJ: i5 ~' f~'U J ", "-.' \ I. ("U:~.,1~)'i",I'i\:D C()UI~lY ...., ~~,..,_"Lf PENNSYLVf.\j\)i!\ ~ ~A b ~ ~ E \) .:::r t~~ 4 .. , " I I I I f'~' _~,1~Jf: Jl;f,rJjflN!!lllflM'l~i'J;I.~~~!!i!ft,jlill",>Kr,~':Wl?~r;:-jP"~I2"';i-,,!t-';N"g",,";'H";!~~;:-;~'hli-;:;,R,~E1;;';ffiitH:-W<'i'-1l1!il\TIf~~~~fiJt<!1j!jW0i>,~~~~( " ,~,~ """'-' '. ~~..,.. ~'. J '-, "'niif u' (W" 'lilili:ci~6:; " . , < , Todd J, Shill, Esquire Attorney I.D. No. 69225 RHOADS & SINON LLP One Sonth Market Sqnare, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Petitioner MAUELL CORPORATION, Petitioner v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01 - ~l.{q9 Cs.c.>L y~ FRANK A. ULRICH, Respondent MAUELL CORPORATION'S PETITION TO CONFIRM ARBITRATION AWARD NOW COMES, Petitioner, Mauell Corporation ("Mauell"), by its attorneys, Rhoads & Sinon LLP, and files the within Petition to Confirm Arbitration Award as follows: 1. Mauell is a business corporation that manufactures and sells control room technology and power control systems, and has its principal U.S.A. offices at 31 Old Cabin Hollow Road, Dillsburg, Pennsylvania, 17019. 2. Respondent Frank A. Ulrich ("Ulrich") was employed by Mauell as its President and Chief Operating Officer pursuant to the terms and conditions of an Employment Agreement dated November 27, 1990 ("Agreement"). A true and correct copy of the Agreement is attached hereto as Exhibit "A." 40837L1 ~~'" r- ,I -,~" ;~ ..: , ,J., "'-,_ ,..1. ..'._;l,. ~ L".L~' ' r.ili1!i:il~~~:; ( , 3. Ulrich's Agreement with MaueH, provided, in pertinent part: AH disputes. differences. and controversies arising under or in connection with this agreement shall be settled and finaHv determined bv arbitration in Harrisburg, P A under the then existing rules of the American Arbitration Association. See Exhibit "A," Paragraph 13 (emphasis added). 4. Ulrich was terminated by MaueH on May 24, 2000. 5. Pursuant to Paragraph 13 of the Agreement (quoted above), Ulrich filed a Demand for Arbitration with the American Arbitration Association ("AM") on September 6, 2000, seeking damages from MaueH for breach of contract, wrongful termination, and breach of MaueH's duty to act in good faith and fair dealing. A true and correct copy of Ulrich's Demand for Arbitration is attached hereto as Exhibit "B." 6. MaueH filed a timely Answering Statement and Counterclaim, seeking damages from Ulrich for breach of contract, fraud, misrepresentation, breach of fiduciary duties, and unjust enrichment. A true and correct copy of MaueH' s Answering Statement and Counterclaim is attached hereto as Exhibit "C." 7. Following a two day arbitration hearing on July 2-3, 2001, the AM Arbitrator denied Ulrich's claims against Mauell and awarded Mauell $209,271.23 on its counterclaims. A true and correct copy of the Award of the Arbitrator is attached hereto as Exhibit "D." 8. The AM faxed the foregoing Award, as weH as the Arbitrator's Opinion and Findings, to Mauell and Ulrich on October 16,2001. - 2- _ l .~ - J . ""~ . - " ,- --,',' ";'~, '~ ':ill(~h"!iir''''\il~; J . , 9. Ulrich did not seek a clarification or modification of the Award. 10. Ulrich did not appeal the Award. 11. Pursuant to 42 Pa.C.S. g7313, Mauell files the instant Petition to confirm the above-referenced Award of $209,271.23 and to request that this Court enter an Order reducing the Award, plus interests and costs, to a judgment against Ulrich. WHEREFORE, Petitioner Mauell Corporation respectfully requests that this Court grant the instant Petition and enter an Order consistent therewith. Respectfully submitted, By: SINON LLP Todd J. hill One So Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Petitioner Date: November 14, 2001 - 3 - ~"'7. - I~ I.'. - l~,;.~: ,"',_ .^ ;--'1 ,J",~__,..<" 0 ~~"'lI<li:l%i' I CERTIFICATE OF SERVICE I hereby certify that on this 14th day of November, 2001, a true and correct copy of the foregoing "MaueIl Corporation's Petition to Confirm Arbitration Award" was served by means of United States mail, first class, postage prepaid, upon the following: Glenn R. Davis, Esquire LatshaDavis & Yohe, P.C. P. O. Box 825 Harrisburg, P A 17108-0825 ~~.~ ;,'f:j I~ , J ~L .C ., '''.'','''' ,",'-'" , <,I ",~ . ,"~ <<. " ----~,(',:JiIrti EXHIBIT" A" k,; -'--- ~ ;- ~ " ~, " I "'''""''' ., ~'~"","~.,jJ,cit I "" ""''''" , ,j =: mau,ell MAU:ll CORPORATION . 3' Oid Cobin Hollow Rood . P,Q_ 60x 339 . Dilisburg, Pennsylvonia 17019-C339 Telephone (717) 432-8686 . FAX, [717) 432-8688 EMPLOYMENT CONTRACT AGREEMENT made on this twenty seventh day of November, 1990 between MAUELL COR~ORATION (hereinafter called the .Corpora~ion"), a Corporation organized and existing under the laws of the State of Pennsylvania, having its principal office at 31 Old Cabin Hollow Road, Dillsburg, Pennsylvania, and Frank A. Ulrich (hereinafter referred to as .Ulrich"), residing at 427 East Ridge Road, Dillsburg, PA 17019. WITNESSETH: In consideration of the mutual covenants and conditions hereinafter set forth, the parties agree as follows: 1. The Corporation hereby employes Ulrich and Ulrich hereby accepts employment upon the terms and conditions hereinafter set forth. 2. Subject to the provisions for termination as hereinafter provided, the term of this agreement shall begin January 1, 1991. The agreement can be terminated provided that at least six (6) months notice shall be given by either party to the other and that in no event the agreement shall be terminated other than on the 31st of December. 3. For all services rendered by Ulrich under this agreement, the Corporation shall pay a salary of $60,000.00 for the first year of this contract. 4. Starting with the 1st of January, 1991, Ulrich will be entitled to a bonus. This bonus will be based on the gross income minus the deferred income, calculated at a rate of 3% on the amount exceeding $1,000,000.00, as well as 5% of the gross profit before federal and state taxes. For the purposes of this agreement, the determination whether the Corporation has made a profit shall be made conclusively by the regular accountant for the 'Corporation in accordance with generally accepted accounting procedures. d",,~ . ~ ..I....... ~ , '~" " ~~~~~,t4, If ~y settin; ~~ or Dur=~asing of add1tional produ=t lines an esse~tia1 increase in sa~es will be accomolished. the oarties have to agree to a new base ~or ~he calcu~ation of this var'iable i~come. In case the Em~loyment Agreement is termir.ated during a calenjar year, the bonus shall be paid proportionally. Jlrich is authorized to incur reaso~able expenses for oromoting the business of the Corporation. The Corporation will reimburse Ulrich for all such expenses uoon presentation by Ulrich from time to time, of an itemized account of such expenditures. c The Corporation shall also furnish Ulrich with a suitable automobile for use in conduct of its business as well as such other reasonable use as Ulrich may desire. 6. UlriCh will be entitled each year to a vacation of four (4) weeks, during which time his compensation shall be paid in full. The time of the taking of such vacation shall be determined by mutual consent of Ulrich and the Corporation. i. In the event that Ulrich is unable to perform his services by reason of'illness or incapacity, the compensation regularly payable to him shall continue to be So paid for a period of 90 days from the date of his first absence from work. 8. Subject to the control of the Soard of Directors, Ulrich's principal area of responsibility shall be that of general manager and chief executive officer. The Corporation agrees that the duties assisned to Ulrich shall not be inconsistent therewith, and that Ulrich shall have such executive powers and authority as shall reasonably be required to enable him to discharge such duties in an efficient manner. Ulrich shall also ser~e as director and officer of the Corporation, if elected, by the Soard of Directors or stockholders, without further compensation. Page 2 ~.J~ J"~ ~ ,~ - I _I :1.... --,', '""''''l!~~,.t:i': Ulrich shall devote his entire time, attention, and energies to the business of the Corporation, and shall net during the term of thi~ agreement be engaged in ary other business activity whether or not such business activity is pursued for gain, profit, or other pecuniary advantage. 10. Ulrich recognizes and acknowledges that the list of the Corporation's customers and its trade secrets are valuable, special and unique assets of the Corooration. Ulrich will not, during or after the term of his employment, disclose same, or any part thereof, to any person, firm, corporation, association or other entity for any reasons or purpose whatsoever. In the event of a breach or threatened breach by Ulrich of the provisions of this paragraph, the Corporation shall be entitled to an injunction in restraining Ulrich from disclosing same, in whole or in part, or from rendering any person, firm, corporation, association or other entity to whom same have been disclosed or are threatened to be disclosed. Nothing herein shall be construed as prohibiting the Corporation from pursuing any other remedies availabie to the Corporation for any such breach or threatened breach, inClUding the recovery of damages from Ulrich. 11. As Further consideration for this agreement, Ulrich hereby transfers and assigns and agrees to transfer and assign to the Corporation the entire right, title and interest in and to all investments, improvements ideas, and suggestions, whether patentable or not, and copyrightable material made or conceived by him solely or jointly, during the period or arising out of his employment, which relate to the methods, apparatus, products or components thereof pertaining to the then existing or contemplated business of the Corporation. Ulrich agrees promptly to disclose all such developments to the Corporation and on request, promptly to execute and deliver, without further consideration, formal transfers, and assignment of all such developments, as we 11 as all other documents and papers., and to do all other reasonable acts required to enable the Corporation to apply for and secure letters patent and copyright therefor in the United States and foreign countries. Page 3 #< ~"",-,--"~. . I ,.~' .,,1:" "''', ,<, ",",''';';'',J, ,-,,',';~ " ',. _, ',J .;;;;.- ." ., --,., ' ;."'--~::: ",;",: ,-" ,:; 12. Notwithstanding any thin; herein contained tc the contrary, the Corporation may terminate this agreemen: upon the haopening of the death of Ulrich, tne substantial disability of Ulrich from carrying out his duties for a continuous period of nine (9) months or continued neglect or willful misconduct by Ulrich in connection with the performance of his duties. i3. All disoutes! differen~es, and controversies arisin2- under of in connection with this agreement shall be settled and finally determined by arbitration in Harrisburg, PA under the then existing rules of the American Arbitration Association. r'. , 14. It is understood and agreed that all matters relating to the execution, validity, interpretation and performance of this agreement shall be construed and determined in accordance with the laws of the state of Pennsylvania, regard1ess of the forum in which an action may be brought. 15. ~ny and all notices, consents, offers, acceptances, or any other communication provided for herein shall be given in writing by registered or certified mail which shall be addressed in the case of the Corporation to its then principal office and in case of Ulrich, to his residence or to such other address as may be designated by him. 16. The waiver by the Corporation of a breach of any provision of this agreement by Ulrich shall not operated or be construed as a waiver of any subsequent breach by Ulrich. 17. The rights and Obligations of the Corporation under th's agreement shall inure to the benefit and shall be binding upon the successors and assigns of the Corporation. Page 4 ~j',~,.j~ ~ ,I....' ",~ , "'~;"';;;-",!i1~..,,*- 18. This agreemen": contains the entire agr'eement of the parties. I~ may only be chan~ed, altered, m~dified. 0: discharged by a similar writing signed by all of the parties her'e~c. IN WITNESS WHEREOF, the parties have signed and sealed this ~greement on the date first hereinabove set forth. BY: Page 5 ~ ",,-' ~~~lw','^ ';c', ~- I.:c', ,..,' "' ~ , EXHIBIT "B" " ~'''; - : ~Ll'~ifliil~:~i j;@; I 'ffi.'I~'h.~ ~~ ~~ ......-~ ~" ".~'~~ "~ i ~ J_J' -=L '" ".'" ~, i!:~,i;il~>>. <-'~-- American Arbitrati'on Association CommercIal Arbitration Rules To institute proce,.dings, please send three copies of this demand and the arbitration agreement, ",-ith the filing fee as provided in thle rules, to the AAA Send the original demand to the respondent. DEMAND FOR ARBITRATION TO: Name Address Mauell Corporation 31 01d Cabin Hollow Road DATE' September 6, 2000 (Df lhe Party on Wham the Demand 15 Made) Pennsylvania ZIP Cod", 17019 Fax (717) 432-8688 Todd J. Shill, Esq. P.O. Box 1146 (ilKnown) Representative's Addre!" Name of Finn (if Applicable) Rhoads & Sinon LLP CityandState Harrisburg, PA ZIP Code 17108-1146 Telephone (717) 231-6665 Fax (717) 231-6637 The named claimant, a party to an arbitration agreement contained in a wrillen contract, daten 11/27/90 and providing for arbitration under the Commercial Arbitration Rules of the American Arbitration Assoc:iation, hereby demands arbitration thereunder. . THE NATURE OP THE Disl'UTE: See attached. Dillsburg, 432-8686 THE CLAIM OR REI.IEF SOUGHT (the Amount, if Any): See attached. DoES THIS DISPUU ARISl; OUT OP AN EMPLOYMENT RELATIONSHIP? TyPES OF BUSINESS; Claimant Employee of Respondent HEARING LocALE REQUESTED: Harris burg,. Pennsylvania UYes ONo Respondent Electronics manufacturer D (Cily .nd Stale) You are hereby notified that copies of .our axbitr!ltion agreement and this demand are being filed with the American Arbitration Association at its Phl.ladelphl.a office, with a request that it commence administration of the arbitration. Und.er the rules, you may file an answering statement within ten days after notice from the administrator. ~ \ Signed C'~. ..;::x~ Title AH3~. (May Ilo Signed by a !<ep......"6ve) U Name of Claimant Frank A. Ulrich Address (iD aeuscd in Connec'ion..ilhThis Case) 427 East Ridge Road City and State Dillsburg, Pennsylvania ZIP Code 17109 Telephone (717) 432-3490 Fax (717) 432-8785 Name of Representative Glenn R. Davis, Esq. Latsha Davis & Yohe, P.C. Name of Finn (ifAppllc:ablol Representative's Address P.O. Box 825 City and State Harrisburg, Pennsyl vania ZIP Code 17108-0825 Telephone (717) 761-1880 Fax (717) 761-2286 MEDIATION i. a nonbinding prot.ss. TIle mediator a..i,ts !he parties in working out a solution 'ba' is ac,eptable In !hem. II you wish for the AAAto contact !he other partie. to a.c.rtain whether they wish to mediate this maUer, pl.... check this boa (there is rio additional administrative fee for thi& service); Fom>CO.8I\l1 _'____'___'_'n_ ,,~~~j~- -, I...J .:~~~ ," ,< ~ ,~" , . ~ "" .'" , ";:"""di.-C,-;,.; ,." H,';<ti:~ EXHIBIT "e" .1'11 .~>""'-" -....- ~ -= " .1_ , ',', '"""l~':"",,~_:, I~ _' ~L"",,_ , , " MAUE,LL CORPORATION'S ANSWERING STATEMENT AND COUNTERCLAIM A. Answering Statement. Frank A. Ulrich ("Mr. Ulrich") was employed by Mauell Corporation ("Mauell") as its President and Chief Operating Officer pursuant to the terms and conditions of an Employment Contract dated November 27,1990. A true and correct copy of said Employment Contract is attached hereto as Exhibit "A." Among other things, Mr. Ulrich's Employment Contract with Mauen provided that Mauell could unilaterally terminate Mr. Ulrich's employment for "continued neglect or willful misconduct" in the performance of his duties and responsibilities. See Exhibit "A," ~12. On May 24,2000, Mauell terminated Mr. Ulrich's employment. Specifically, Mr. Ulrich was terminated by Maue1I's Board of Directors for the following reasons: (1) Inaccurate and manipulative reporting of the results ofMauell in its financial statements; (2) Unauthorized disclosure of confidential Mauell information and trade secrets to third parties; (3) Breach of fiduciary duties; (4) Engaging in personal transactions amounting to conflicts of interest; (5) Incurrence of bank debt on behalf of Mauell without proper authority from the Board of Directors; (6) Withholding and concealing material information from the Board of Directors; and (7) Disparagement ofMauell to its employees and third parties. _..-.",,~, .~~ =.~_"m~~ L ~ J," "".0"'_ .' ,-', ~"""~" In addition to the foregoing reasons, all of which amounted to Mr. Ulrich's "continued neglect or willful misconduct" in the performance of his duties and responsibilities to Mauell and constituted valid grounds for tennination under ~12 of Mr. Ulrich's Employment Contract, Mr. Ulrich was terminated by the Mauell Board of Directors for violating additional provisions of his Employment Contract including, but not limited to, ~9 (wherein Mr. Ulrich agreed to "devote his entire time, attention, and energies to the business ofthe Corporation" and to not "be engaged in any other business activity") and ~10 (wherein Mr. Ulrich agreed to keep MaueH's trade secrets confidential). At the time of his termination, Mr. Ulrich was paid $28,532.09, representing all earned compensation, bonuses, vacation pay, and reimbursable expenses as of that date. Despite Mr. Ulrich's contentions to the contrary, the above amount was calculated properly in accordance with Mr. Ulrich's Employment Contract with MaueH and in accordance with Mauell's corporate practice (as implemented by Mr. Ulrich as President and Chief Operating Officer), and he is therefore not entitled to any additional monies from Mauell. B. Counterclaim. At the arbitration of this matter, MaueH intends to present witness testimony and documentary evidence to prove that Mr. Ulrich's inaccurate and manipulative reporting of the results ofMauell in its financial statements amounted to breach of contract, fraud, misrepresentation, breach of fiduciary duties, and unjust enrichment, and resulted in Mr. Ulrich's receipt of an inflated bonus and additional damages to MaueH such as overpayment of taxes, to which Mauell seeks reimbursement. .d~r.,"l ,- '" - ., 1.... ".,i"'_~"^{~ '" """''.J :" eo "',~" :f;{.a MaueIl also intends to prove that Mr. Ulrich's failure to "devote his entire time, attention, and energies" to MaueIl's business, and his failure to refrain from engaging in "any other business activity" during the term of his Employment Contract, amounted to breach of contract, fraud, misrepresentation, breach of fiduciary duties, and unjust enrichment, and resulted in Mr. Ulrich's receipt of compensation to which he was not otherwise entitled" and to which MaueIl seeks reimbursement. rs ^", '~f / .,.., , ,.,-'", ",~~ ',"~ ,A"',c ""'-""Ql';',':; EXHIBIT "A" ,,"-' :ilJii-~ .~ '" 1 ~ i, ...... 1 ",-"",J- ~",', ~,','" ,~- ,,~c' ',',.,,1" 'i~ii:!,dl!.i~; / . ' llii ma II .. I .......ue M.l\Uoll CORPOK.l\TION . 3, Oid Cabin !'bllow Raad . P.O. Bax 339 . Dilisburg, Pennsylvania 17019.0339 Tele;:>hone (717)432.8686 . FAX,{?l?) 432.8658 EMPLOYMENT CONTRACT , ' , '. AGREEMENT made on ~his ~wenty seventh day of November, 1990 betweenMAUELL COR~ORATION (hereinaf~er called the "Corpora:ion"), a Corporation organized and exis~ing under the laws of the State of Pennsylvania, having its principal office at 31 Old Cabin Hollow Road, Dillsburg, Pennsylvania, and Frank A. Ulrich (hereinafter referred to as "Ulrich"), residing at 427 East Ridge Road, Dillsburg, PA 17019. WITNESSETH: In consideration of the mutual covenants and conditions herl~inafter set forth, the parties agree as follows: 1. The Corporation hereby employes Ulrich and Ulrich hereby accepts employment upon the terms and conditions hereinafter set forth. 2. Subject to the provisions for termination as hereinafter provided, the term of this agreement shall begin January 1, 1991. The agreement can be terminated provided that at least six (6) months notice shall be given by either party to the other and that in no event the agreement shall be terminated other than on the 31st of December. - 3. For all services rendered by Ulrich under this agreement, the Corporation shall pay a salary of $60,000.00 for the firs~ year of this contract. 4. Starting with the 1st of January, 1991, Ulrich will be entitled to a bonus. This bonus will be based on the gross income minus the deferred income, calculated at a rate of 3% on the amount exceeding $1,000,000.00, as well as 5% of the gross profit before federal and state taxes. For the purposes of this agreement, the determination whether the Corporation has made a profit shall be made conclusively by the regular accountant for the 'Corporat ion in accordance wi th genera 11 y accepted accounting procedures. . ~" I: ~~- j , ;,"J1,,',~:: "*--,,',, ,,"' ')<,; '-",~-- ,~""" ""]}i'ii If ~y settin; ~o or our:~asing of add1tional oroju:~ lines an esse~tial increase in sa~es will be ;ccomDlished. ~he oarties have tc a~ree to a new ~ase ~he calcu~atio~ of ~h15 variable i~come. .:(""!,.. , ~, In case the :m=1oyment Agreement is termir.ated dur1n; a calendar year. ~he bonus shall be paid prop~rtionally. ~:r~ch ;s auth~rized to incur reaso~able expenses f~r ~rom~~ing the business of the Corporation. The C~rporation will reimburse Ulrich 70r all such exoenses ~pon presentation by Ulrich from time to time. of an itemized account of such expenditures. . " '-. 'ihe Corporation shall also furnish Ulrich with a suitable automobile for use in conduct of its business as well as such other reasonable use as Ulrich may desire. 6. Ulrich will be entitled each year to a vacation of four (4) weeks, during which time his compensation shall be paid in full. The time of the taking of such vacation shall be determined by mutual consent of Ulrich and the Corporation. i. !n the event that Ulrich is unable to perform his services by reason of'illness or incapacity, the comoensation regularly payable to him shall continue to be so paid for a period of 90 days from the date of his first absence from work. 8. Subject to the control of the Board of Directors, Ulrich's principal area of resoonsibility shall be that' of general manager and chief executive officer. The Corporation agrees that the duties ass1gned to Ulri~h shall not be inconsistent therewith, and that Ulrich shall have such executive powers and authority as shall reasonably be required to enable him to discharge such duties in an efficient manner. Ulrich shall also serve as director and officer of the Corporation, if elected, by the Board of Directors or stockholders, without. further compensation. Page 2 ,,<. "",l "_~".<<_~~ .~ ;L~ "'- ""'.'~'!;.-jr.,,-?c.,, "-"c';o0,' ,'-,' ',,-'," ,J'",s..";;'S-','k':' . Ulrich shall devote his entire time, attention, and energies to the business of the Corporation, and shall not during the term of this agreement be engaged in ary other business activity whether or not such business act~vity is p~rsued for gait"~ profit, or other pecuniary advantage, 10. Ulrich recogni:es and acknowledges that the list of the Corooration's customers and its trade secrets are valuable, special and unique assets of the Corooration. Ulrich will not, during or after the term of his employment, disclose same, or any part thereof, to any person, firm, corporation, association or other entity for any reasons or purpose whatsoever. In the event of a breach or threatened breach, by Ulrich of the provisions of this paragraph, the Corporation shall be entitled to an injunction in restraining Ulrich from disclosing same, in whole or in part, or from rendering any person, firm, corporation, association or other entity to whom same have been disclosed or are threatened to be disclosed. ,Nothing herein shall be construed as prohibiting the Corporation from pursuing any other remedies availabie to the Corporation for any such breach or threatened breach, inclUding the recovery of damages from Ulrich. ,; '1, As Further consideration for this agreement, Ulrich hereby transTers and assigns and agrees to transfer and assign to the Corporation the entire right, title and interest in and to all investments, improvements ideas, and suggestions, whether patentable or not, and copyrightable material made or conceived by him solely or jointly, during the periOd or arising out of his employment, which relate to the methods, apparatus, products or components thereof pertaining to the then existing or,contemplated business of the Corporation. Ulrich agrees promptly to disclose all such developments to the Corporation and on request, promptly to execute and deliver, without further consideration, formal transfers, and assignment of all such developments, as well as all other documents and papers, and to do all other reasonable acts required to enable the Corporation to apply for and secure letters patent and copyright therefor in the United States and foreign countries. Page 3 '<<;i ~1:IiP'~ ^'~ 0" ~L^ , 'I " ,~,; -. '0". ""," , _"", 'Ji".:, 12. Notwithstanding any thin; herein contained tc the contrary, the Corporation may terminate this asreemen~ upon the happening of the death of Ulrich, tne substantial disability of Ulrich from carrying out his duties for a continuous period of nine (9) months or continued neglect or willful misconduct by Ulrich in connection wi~h the perf~rrnance of his dutiesa .. /3. A1' dis~utes. differen=es. anc controversies arisin~ under of in connection with this agreement shall be~ settled and finally determined by arbitration in Harrisburg, PA under the then existing rules of the American Arbitration Association. I'-~' 14. It is understood and agreed that all matters relating to the execution, validity, interpretation and performance of this agreement shall be construed and determined in accordance with the laws of the state of Pennsylvania, regardless of the forum in which an action may be brought. 15. Any and all notices, consents, offers, acceptances, or anv other communication provided for herein shall be given in writing by registered or certified mail which shall be addressed in the case of the Corporation to i~s then principal office and in case of Ulrich, to his residence or to such other address as may be designated by him. 15. The waiver by the Corporation cf a breach of any provision of this agreement by Ulrich shall not operated or be construed as a waiver of any subsequent breach by Ulrich. 17. The rights and obligations of the Corporation under this agreement shall inure to the benefit and shall be binding upon the successors and assigns of the Corporation. Page 4 ~=~t"'"- ~oO:" .:..1 .'l "i";,--" '>;""-"'~j>'."',,', """llii!ti~,i, IS. This agreemen~ contains the entire agreement of the par:ies. r: m=y only be chan~ed, altered, modified. 0, discharged Sy a similar writing signed by all of the parties here~c. IN WITNESS WHEREOF, the parties have signed and sealed this agreement on :he date first hereinabove set forth. " BY: Page 5 'T ~~ ~ ~ ~ "'~ "',~" , '''< " ",:'1 '-..., I ,-- ", ", - AMERICAN ARBITRATION ASSOCIATION " - CHECKLIST FOR CONFLICTS Re: 14 160 00376 00 MES FR}.NK A. ULRICH and " M~UELL CORPORATION In ord,.r to avoid the possibility that pot,ential arbitrators will have conflilcts of interest' with the parties in this matter,' you are requested, to list: the names .of all persons,", including witnesses, firms, companiea, or ,oth1er entiti.es that'may be involved in this'case." :In order to 'avoid conflil~ts of interest, parties are requested to also list subsidiary and other':eelated entities.' , ' " , NAME AFFILIATION ADDRESS '< ' ,- Ulrich Mauen Mauen Corporation Am Jagdhaus 37, D-42113, Wupperta1 (Germany) Peter Wetzel Mauen Corporation ' 129 Ridge Road Carlisle, PA 17013 Kathleen Wetzel Mauen Corporaiton 129 Ridge Road Carlisle, PA 17013 LudolfKahlenborn Mauen Corporation Willow Glenn Road Dillsburg, P A 17019 Helmut Mauen MaueI1 Corporation Ansembourganee 23, D-42553 Velbert (Germany) - , \\ \\"1-\0>0 DATE . SIGNATURE, :'65549.1 "~~--=-b,;~",.........v.c_ ~ ~~. ~, ( \ _.~" __oj. ,,1 " 1, _ "', ~ _ . 0 ., LIST OF ARBItRATORS AGREED. TO BY THE PARTIES ~ ' , .. 1. Judith E. Harris, Esq. 2. Thomas D. Rees, Esq. 3. Charles T. Joyce, Esq. 4. George P. Wood, Esq. 5. Carol F. Laskin, Esq. 6. Kathleen A. Davis, Esq. "' """';.', I~Jil!lii~Mij(~~ 'Ji "'~ ,I , "~ ",'I ,,'0'- ;';,"",,;,,:' EXHIBIT "D" ",,~~, J2lj; _I_,~ ~ ~ A,,,,::" "' "-c , ,,~'tr ~". -1",,- . ',,'-' . , . AMERICAN ARBITRATION ASSOCIATION, ADMINISTRATOR EMPLOYMENT DISPUTE RESOLUTION TRIBUNAL 111 tlte Matter of the Arbitration between: FRANK A. ULRICH, Claimant and MAUELL CORPORATION., Respondent Case No, 14 1600037600 ENH AWARD OF THE ARBITRATOR I, THE UNDERSIGNED ARBITRATOR having been designated in accordance with the arbitration agreement entered into by FRANK A. ULRICH, hereinafter referred to as CLAIMANT, and MAUELL CORPORATION, hereinafter referred to as , RESPONDENT, and dated November 27, 1990, and having duly heard the proofs and allegations of the parties, AWARD as follows: 1, The claim of CLAIMANT against RESPONDENT is denied. 2. RESPONDENT is awarded $209,271.23 on its counterclaim. The award is based on the following: $80,885, the amount of the overpayment of CLAIMANT'S bonus for 1999; $23,454.56. the amount of travel expenses for RESPONDENT from May 25, 2000 through December 13, 2000; $69,791.67, the amount of the salary reimbursement from May 20, 2000 through December 13, 2000 for RESPONDENT (reduced by the $35,208.33 savings resulting from RESPONDENT'S not having to pay CLAIMANT a salary from May 25, 2000 through December 31, 2000); $5,140 for accounting services and $30,000 for legal services. 3. Each party is to bear its own costs and attorneys fees for this arbitration. 4. The administrative fees of the American Arbitration Association totaling $9,500,00 shall be borne as incurred by the parties and paid as directed by the Association. 5. The compensation and expenses of the arbitrator totaling $6,149.13 shall be borne equally by the parties and paid as directed by the Association. Therefore, CLAIMANT shall pay to the Association the sum of$l,0245.56 for the balance of his share of the arbitrator's fees and expenses still due the Association, and RESPONDENT shall pay to the Association the sum of $24.56 for the balance of its share of the arbitrator's fees and expenses still due the Association. 6. This award is in full settlement 0 all claims and counterclaims submitted to this arbitration. DATED: October 16, 2001 _~~",hJ' _= ....i., L , ,'" - , =it\;" "," ,) <- American Arbitration Association In the matter of Arbitration between FRANK A. ULRICH, Claimant, and AAA Case No. 14 160 0376 00 ENH MAUELL CORPORATION, Respondent. OPINION AND FINDINGS This matter was heard by the undersigned arbitrator on July 2 and July 3, 2001. Claimant was represented by Glenn R. Davis, Esquire, and Respondent was represented by Todd J. Shill, Esquire. The matter was considered fully submitted upon receipt of the post hearing briefs on July 16, 2001. Thereafter, on August 3, 2001, the matter was reopened to receive additional submissions by the parties on the issue of "willful misconduct". Both parties made additional submissions, and the matter was closed on September 4, 2001. Claimant and Respondent had the opportunity to present their respective cases through oral testimony and documents. Nature of the Claims Claimant and Respondent entered into an employment contract ("agreement"), dated as of November 7, 1990, for Claimant's employment as President and General Manager of Respondent. In accordance with the agreement, Plaintiff was to be paid a salary and a bonus with two components, one component calculated on the basis of gross income and the other component calculated on the basis of gross profits before federal and state taxes. Claimant was terminated by Respondent on May 24, 2000. The reasons for his termination were set forth in a letter to Claimant dated May 26, 2000. According to the May 26th letter, Claimant's termination was based on "continued neglect" and "willful misconduct". Claimant contends that there was no basis for the termination, and accordingly, under the agreement he is entitled to six months notice of the termination of the agreement and to be paid his salary and bonus through December 31, 2000. In addition, Claimant seeks the difference between bonus payments made on the basis of "net sales" between 1996 and 1999 and bonus payments he claims for that same period based on "gross sales", as provided in the agreement. Respondent contends that since the Claimant was terminated for "willful misconduct" and "continued neglect" he is entitled to his salary as of the date of termination and a bonus pro-rated as of the date oftermination, as provided by the agreement. Respondent WJ ,.,........, .. ,1....1 " -'?oi.: ,'"," ..~ ~~ , ~...!~ t,_". )0 . ," . contends that the Claimant has received all payments to which he is entitled under the agreement. Respondent has asserted a counterclaim for damages incurred as a result of Claimant's alleged "willful misconduct" and "continued neglect". Specifically, Respondent contends it is entitled to damages for the overpayment of a sales bonus to the Claimant for the year 1999, the overpayment of bonuses to other employees for the year 1999, reimbursement for the salary and travel expenses of Ulrich Mauell for the period May 28, 2000 to July 6, 200 I and disbursements for legal and accounting services incurred as a result of Claimant's breach of the agreement. Finally, Respondent seeks a percentage of the compensation paid to claimant for his failure to devote his "entire time, attention, and energies to the business of the Corporation, ... as required by the agreement. Findings 1. Claimant has met his burden of showing that he had an agreement with Respondent, and that the agreement was tenninable by either party, provided either party gave six (6) mont11 s notice, in which event the agreement would tenninate on the December 31 following the giving of the notice. 2. Claimant has established that he was tenninated, without the requisite six (6) months notice, on May 24, 2000. 3. The agreement contains the following provisions: Ulrich shall devote his entire time, attention, and energies to the business of the Corporation, and shall not during the tenn ofthis agreement be engaged in any other business activity whether or not such business activity is pursued for gain, profit, or other pecuniary advantage. (paragraph 9) Ulrich recognizes and acknowledges that the list ofthe Corporation's customers and its trade secrets are valuable, special and unique assets of the Corporation. Ulrich will not, during or after the tenn of his employment, disclose same, or any part thereof, to any person, finn, corporation, association or other entity for any reasons or purpose whatsoever... (Paragraph 10) Notwithstanding anything contained to the contrary, the Corporation may tenninate this agreement upon the happening of ... continued neglect' or willful misconduct by Ulrich in connection with the performance of his duties. (Paragraph 12) 4. Respondent has the burden of showing that it tenninated Ulrich for "continued neglect" or "willful misconduct". 2 ""~, "~L~,; , , J "__'"~,,, ,,""",,;, "-",,,,;.. ,,-, ,C OC+_:""";"';';\i . . ., > 5. Respondent has established that: a. Claimant became involved in UBR LLC to pursue his own business activities. UBR LLC was incorporated in August 1999, while Claimant was employed by Respondent; b. Claimant accounted for ''works in progress" in such a manner as to improperly increase his bonus for the year 1999; c. Claimant did not include sales expenses known by him to have been incurred by an employee in 1999, thereby understating the Respondent's 1999 expenses and overstating Respondent's profits, to increase his bonus for the year 1999; d. Claimant disclosed to a third party( confidential information regarding a meter project which Respondent had under consideration; e. Notwithstanding Respondent's directions to Claimant to cease activity on the meter project, Claimant continued such activity, and in addition, created a proposal in which he and a third party submitted to another party, a business plan to go forward with the meter project. 6. Claimant's actions set forth in findings Sa through Se above were actions taken by him solely for his own benefit, were not for the benefit of Respondent, and were hannful to the Respondent's interest. As such, they violated paragraph 9 of the agreement. In addition, Claimant's actions set forth in findings Sd and Se violated paragraph 10 ofthe agreement. 7. Claimant's actions set forth in findings Sb, Sc, Sd and Se breached his duty ofloyalty to the Respondent. An employee's duty ofloyalty to an employer is an implied condition of the employment relationship. Paragraphs 9 and 10 of the agreement contain the contractual recognition of that duty. 8. The agreement does not defme "willful misconduct". 9. The definition of the term "willful" is "deliberate and intentional". The definition of "misconduct" is a "deliberate violation of a standard of conduct". (Webster's New Collegiate Dictionary) 10. Claimant's actions set forth in findings Sa through Se were a deliberate and intentional violation of paragraphs 9 and 10 of the agreement, which articulated the standard of conduct Respondent expected from the Claimant. As such, Claimant's violation of that standard of conduct amounted to "willful misconduct", and Respondent had the right to terminate him under paragraph 12 of the agreement. 11. Respondent has established that, upon its May 24, 2000 termination of Claimant, it made payment to Claimant of all amounts due to him under the agreement. 3 ~,,~,..J. ...... - ~.~ I.....~L , :.J -'" ,J:., -,' ..',,< '~" ' , ", -, "'fr";,l .. ~ .. 11 'JI.' , 12. Claimant has failed to establish that he is entitled to any additional bonus payments for the years 1996 through 1999. 13. Respondent has established that it overpaid the amount of the bonus due to Claimant for the year 1999. 14. Respondent has established that it is entitled to recover salary and travel expenses for Ulrich Mauel!. Although Respondent seeks such expenses for the period May 20, 2000 through July 6,2001, the undersigned finds that the expenses are reasonable only for the period from May 25, 2000, the day following Claimant's May 24 termination, through December 13, 2000, a period of approximately six and one half (6.5) months, after which it is reasonable to expect that Respondent would have secured a permanent replacement for Claimant. The undersigned also finds that the amount ofthe salary for that period should be offset by the savings resulting from Respondent's not having to pay Claimant's salary from May 25,2000 through December 31, 2000. 15. Respondent has established that it is entitled to recover its expenses for accounting and legal services. ," Opinion Claimant is denied any award on his claim. Respondent is awarded $209,271.23 on its Counterclaim. The award is based on the following: $80,885, the amount of the overpayment ofClaimartt's bonus for 1999; $23,454.56, the amount of the travel expenses for Ulrich Martell from May 25,2000 through December 13, 2000; $69,791.67, the amount of the salary reimbursement from May 20,2000 through December 13,2000 for Ulrich Mauel1 (reducedby the $35,208.33 savings resulting from Respondent's not having to pay Claimant a salary from May 25,2000 through December 31, 2000); $5,140 for accounting services and $30,000 for legal services. Each party is to bear its own costs and attorneys fees for this arbitration. Dated: October 16, 2001 4 i)i~~~~~~.$~~~~~~~i"1r~",~',m;'''',:-'~,;''-'<'"'''''''~'~~,_",:,,:, ,'~'tlii"~. ': -j"- - '-- ',.,,;.i. "h _"_"_ !!!!!!!!." 'k,...kdk,,~L.~,_ :1i"~Ii' '"_tt"r'J" ,;'''" '~".'-'_.o.'n'-""<<:' """ , , . . ' , ".. 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