EXHIBIT 10.34
[OMG LOGO]
OM GROUP
WORLD HEADQUARTERS
OM Group, Inc.
000 Xxxxxx Xxxxxx
0000 Xxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Tel. 000.000.0000
800.519.0083
Fax. 000.000.0000
xxx.xxxx.xxx
EMPLOYMENT AGREEMENT
This Agreement between OM Group, Inc. (the "Company"), a Delaware
Corporation, located at 000 Xxxxxx Xxxxxx, 0000 Xxx Xxxxx, Xxxxxxxxx, Xxxx 00000
and R. Xxxxx Xxxxxxxxxxxx ("Executive"), 0000 Xxxxxxxxx Xxxx, Xxxxx, XX 00000,
is entered into this 16th day of February, 2004.
WHEREAS, the Company seeks to enter into an Agreement to provide for
the Executive's employment with the Company;
WHEREAS, Executive desires to have executive responsibilities with
the Company;
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement and participation in the Company's bonus program, and intending
to be legally bound, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) "Products" means all products sold or offered for sale by the
Company as contained in its catalogs and sales literature, as amended from time
to time.
(b) "Product Information" means descriptions, specifications,
numbers, names, suppliers, characteristics, costs, prices, catalogs, sales
literature, instructional materials and other information relating to the
Products.
(c) "Account Information" means names, addresses, contact persons,
purchasing histories and preferences, prices, purchasing frequency, credit
standing and other information relating to the Company's customers or
prospective customers and their personnel.
(d) "Salesmen Information" means the names and addresses of, amounts
of commissions and other compensation paid to, sales performance information and
Account Information relating to, the Company's Executives.
(e) "Confidential Information" means Product Information, Account
Information, Salesmen Information and all other trade secrets and proprietary
information belonging to the Company, and excludes any information in the public
domain.
2. EMPLOYMENT AND TERM.
(a) The Company hereby employs or continues to employ Executive in
the position of Chief Financial Officer subject to the terms and conditions set
forth herein. Unless terminated as provided herein, the initial term of this
Agreement shall commence on the date hereof, and expire on February 15, 2005.
The term of this Agreement shall, contingent upon Executive's successful
achievement of performance expectations, be renewed for successive rolling
two-year periods commencing February 16, 2005. In the event either party elects
not to renew this Agreement, either party will provide the other party with
sixty (60) days written notice prior to the extension of the initial term or any
renewal term then in effect. All references to the "term of this Agreement"
shall be deemed to refer to the initial term as well as any renewal term then in
effect.
(b) During the term of this Agreement, Executive shall serve as
Chief Financial Officer of the Company after the transition period from the
previous Chief Financial Officer. Executive will be hired as Vice President of
Finance and assume the Chief Financial Officer duties no later than April 1,
2004, or an earlier mutually agreeable date, and have such powers and
responsibilities normally and customarily associated with a Chief Financial
Officer in a company of similar size and operating in a similar industry,
including such other functions and duties as may be assigned by the Chairman and
Chief Executive Officer of the Company and the Board of Directors of the
Company. Executive shall undertake to perform all his responsibilities and
exercise his powers on a full-time basis and in good faith and shall not engage
in any business activity that interferes with the performance of his duties
hereunder. Executive shall travel as necessary in connection with the
performance of his duties hereunder, however, the Executive shall perform his
duties and responsibilities primarily in the Cleveland, Ohio metropolitan area.
Executive shall report to the Chairman and Chief Executive Officer of the
Company and the Board of Directors of the Company. Consistent with his duties as
Chief Financial Officer, Executive agrees that in performance of his duties he
will act in accordance with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and
any regulations or rules promulgated thereunder, as the same may be amended from
time to time.
(c) Compensation
i. ANNUAL SALARY. The Company shall compensate Executive
for his services in accordance with the compensation
policies of the Company, as amended from time to time,
including the Company's bonus program. The base annual
salary during the initial term will be Three Hundred
Fifty Thousand Dollars ($350,000), less applicable taxes
and withholdings as required by law. Thereafter, the
annual base salary will be Three Hundred Fifty Thousand
Dollars ($350,000). That base salary may be reviewed
annually and increased at the discretion of the Board of
Directors and/or the Chief Executive Office or any
committee of the Board of Directors authorized to take
such action.
ii. BONUS. Executive shall be entitled to participate in the
Company's performance based bonus program, with a target
bonus of Sixty Percent (60%) of Executive's annual base
salary. The bonus, if any, shall be determined and paid
pursuant to the terms and conditions of the
2
Company's executive bonus program on the same basis as
for the other executive officer participants. The bonus
targets for Executive for calendar year shall be
established by the Chairman and the Executive within
three weeks after the date hereof.
iii. STOCK OPTIONS. Upon hire, Executive shall be eligible
to participate in the Non-Incentive Stock Option Plan in
accordance with the 1998 Long-Term Incentive
Compensation Plan. The aggregate number of shares of
Common Stock purchasable by Executive is 15,000. The
option rights shall be exercised pursuant to the
Company's 1998 Long-Term Incentive Compensation Plan
Participation Agreement.
(d) Benefits
1. HEALTH & WELFARE. Executive shall be eligible to
participate in employee benefit plans, programs,
and policies maintained by the Company in
accordance with the terms and conditions to
participate in such plans, programs and policies
as in effect from time to time and for as long as
the Company sponsors such plans, programs and
policies. A copy of the Company's benefit summary
is attached hereto as Exhibit A.
2. PROFIT SHARING & RETIREMENT SAVINGS. Executive
shall be eligible to participate in the Company's
Profit Sharing and Retirement Savings Plan.
Executive will also be eligible to participate in
the Company's Benefit Restoration Plan, a
non-qualified deferred compensation plan.
3. VACATION. Executive shall be entitled to four
weeks (20 days) of vacation and five (5) personal
days during each year of the contract, which
vacation time shall be taken at such time or times
in each such one year period so as not to
materially and adversely interfere with the
performance of his responsibilities under this
Agreement. Executive in addition shall have the
right to the same holidays as other employees of
the Company.
4. VEHICLE. Executive shall be eligible to
participate in the Company's standard policy on
executive vehicles in accordance with the terms
and conditions of that policy that may be revised
from time to time.
5. CLUBS/ORGANIZATIONS. The Company agrees to pay
membership dues for membership in a country club
of Executive's choosing:
3. GOOD FAITH EFFORTS; DUTY OF LOYALTY.
(a) The Executive shall use his good faith efforts to carry out his
responsibilities on behalf of the Company and shall devote his entire working
time to the performance of those responsibilities during normal business hours.
Executive acknowledges that he owes the Company a duty of undivided loyalty in
the performance of his employment responsibilities. Per mutual agreement,
Executive will be permitted to participate in his current community service
projects and outside Board of Director activity.
3
(b) Executive shall not during his employment by the Company engage,
either directly or indirectly, as an Executive, officer, director, shareholder,
partner or in any other capacity in any business which is competitive with the
business of the Company.
4. CONSIDERATION. Executive acknowledges that he has received full
and adequate consideration for entering into this Agreement.
5. CONFIDENTIAL INFORMATION. Executive acknowledges that during the
course of his employment with the Company he will have access to Confidential
Information. Executive acknowledges that the Confidential Information has been
maintained as confidential by the Company, is highly valuable and proprietary to
the Company and that disclosure of it to third parties or unauthorized use of it
by Executive would cause the company serious competitive harm.
6. DISCLOSURE OF PRIOR AGREEMENTS; NON-USE OF THIRD-PARTY TRADE
SECRETS.
(a) Executive represents that he has disclosed to the Company any
employment agreements or any other agreement, still in effect, which imposes any
restrictions on Executive. Executive represents that except for those
restrictions, if any, specifically disclosed on Exhibit B to this Agreement, he
is not subject to any restrictions arising from his previous employment.
(b) Executive further represents that he has not disclosed and will
not disclose to the Company and has not used and will not use on the Company's
behalf any trade secrets or other confidential and proprietary information
belonging to a third party, without consent from that third party.
7. TERMINATION. During the term of this Agreement, the Company shall
have the right to terminate Executive's employment at any time for any reason
upon 60 days written notice to Executive and Executive shall also have the right
to resign at any time for any reason upon sixty (60) days written notice to the
Company.
(a) Termination Without Cause. If the Company terminates Executive's
employment without Cause, the Company shall continue to pay Executive his annual
salary in equal monthly payments. In addition, Executive shall have accelerated
the vesting and exercisability of any options that would become exercisable
within the (12) months following such termination. These payments shall continue
until the end of the term specified in the Executive's Agreement, that is twelve
(12) months or twenty-four (24) months, depending on when the termination
occurs, during or after Executive's first year of employment with the Company,
with a minimum of six (6) months pay. In addition, the Company will pay, when
actually determined, the Executive's prorated earned bonus for the year of
termination. For the purposes of this Agreement, earned bonus shall mean the
bonus, determined based on the actual performance of the Company for the full
year in which Executive's employment terminates, that Executive would have
earned for the year in which his employment terminates had he remained employed
for the entire year, prorated based on the ratio of the number of days during
such year that Executive was employed. In the event Executive voluntarily
terminates his employment. Executive shall be entitled only to any salary
earned, together with any prorated unused vacation or personal days, up to the
date of termination.
4
(b) Termination for Cause. If the Company terminates Executive's
employment for Cause, the Company's only obligation to Executive shall be to pay
Executive his earned but unpaid base salary, if any, up to the date Executive's
employment terminates and Executive shall forfeit his right to any unvested
benefits described in Section 2(c) and (d) hereof. The Company shall only be
obligated to make such payments and provide such benefits under any employee
benefit plan, program or policy in which Executive was a participant as are
explicitly required program or policy following the date on which Executive's
employment terminates.
For purposes of this Agreement, "Cause" shall mean (i) Executive's fraud,
embezzlement or misappropriation of funds, in each case involving or against the
Company or any of its subsidiaries or affiliates; (ii) Executive's indictment
for or conviction of any crime which involves dishonesty or a breach of trust or
conviction of any felony; (iii) Executive's willful misconduct with respect to
the Company or any of its subsidiaries or affiliates which causes material
detriment to the Company or any of its subsidiaries or affiliates; or (iv)
Executive engages in any material breath of the terms of this Agreement or fails
to fulfill his responsibilities hereunder and such breach or failure, as the
case may be, is not cured, or is not capable of being cured, within thirty (30)
days after written notice thereof is given to the Executive by the Company.
8. COVENANTS.
(a) Records and Company Property. Executive shall maintain and keep
a general record of his work on behalf of the Company in the manner reasonably
directed by the Company or, in the absence of specific direction, in a manner
sufficient to document his activities on behalf of the Company. All records and
data recorded or generated by Executive during the course of his employment
shall remain the property of the Company. Upon the termination of Executive's
employment for any reason or, if earlier, upon the Company's request, Executive
shall promptly return all Property which had been entrusted to Executive by the
Company. Property means all records, files, memoranda reports, price lists,
customer lists, drawings, plans, sketches, keys, codes, computer hardware and
software and other property of the Company of any kind or description prepared,
used or possessed by Executive during Executive's employment by the Company (and
any duplicates of any such Property) together with any and all information,
ideas, concepts, discoveries and inventions and the like conceived, made,
developed or acquired at any time by Executive individually or, with others
during Executive's employment which relate to the Company or its products or
services.
(b) Trade Secrets. Executive agrees that Executive shall hold in a
fiduciary capacity for the benefit of the Company and its affiliates and shall
not directly or indirectly use or disclose any Trade Secret that Executive may
have acquired during the term of Executive's employment by the Company for so
long as such information remains a Trade Secret. Trade Secret means information,
including, but not limited to, technical or non-technical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing or
a process that (1) derives economic value, actual or potential, from not being
generally known to, and not being generally readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or use
and (2) is the subject of reasonable efforts by the Company and any of its
affiliates to maintain its secrecy. This Section is intended to provide rights
to the Company and its subsidiaries or affiliates that are in addition to, not
in lieu of, those
5
rights the Company and its affiliates have under the common law or applicable
statutes for the protection of trade secrets.
(c) Non-Disclosure of Confidential Information. Executive shall not
during his employment disclose to any third parties, other than in carrying out
his duties hereunder, Confidential Information, and he shall confine use of
Confidential Information exclusively to carrying out his employment
responsibilities for the Company. Executive shall not after termination of his
employment disclose or use in any way for any purpose Confidential Information.
Executive shall, immediately upon termination of employment, return to the
Company all Confidential Information, as well as any copies of that information
and any other material, including handwritten notes, made or derived from that
information.
9. NON-COMPETITION. Executive shall not in the continental United
States for a period of two years following termination of employment engage,
either directly or indirectly, as an Executive, officer, director, shareholder,
partner or in any other capacity in a business which is competitive with the
business of the Company. Notwithstanding the preceding sentence, Executive will
not be prohibited from owning less than five (5%) percent of any publicly traded
corporation regardless of the business, in which such corporation is engaged.
If, at the time of enforcement of this provision, a court of competent
jurisdiction holds that the restrictions stated herein are unreasonable under
the circumstances then existing, the parties agree that the maximum period or
scope under the circumstances shall be substituted for the period or scope
stated herein.
10. NON-SOLICITATION OF CUSTOMERS OR EMPLOYEES. Executive agrees
that, during the term of this Agreement and for a period of two years
thereafter, he will not knowingly, directly for himself or for any other person
or entity, divert, call on, solicit, or take away or attempt to divert, call on,
solicit or take away present or actively solicited prospective employees or,
with respect to competitive products or services, any present or actively
solicited prospective suppliers or customers of the Company or any of its
subsidiaries or affiliates.
11. REASONABLENESS OF RESTRAINTS; IRREPARABLE HARM; BREACH OF
AGREEMENT: NO DEFENSE.
(a) Executive acknowledges that the covenants of paragraphs 8
through 10 of this Agreement are reasonably necessary to protect the goodwill,
trade secrets and other business interests of the Company and that they will
cause Executive no undue hardship.
(b) Executive acknowledges that any breach of these covenants will
cause the Company immediate irreparable harm for which injunctive relief would
be necessary. The non- prevailing party shall pay all reasonable expenses and
costs, including attorneys' fees, incurred by the other prevailing party hereto,
in any proceeding to enforce the covenants or any other provisions of this
Agreement.
(c) Executive acknowledges that the covenants of paragraphs 10
through 12 of this Agreement are of the essence of this Agreement. They shall be
construed as independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of these covenants.
6
12. NOTICES. Any notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or mailed, first
class mail, postage prepaid, return receipt requested, or by any other express
delivery technique calling for receipted delivery, as follows:
If to Executive:
R. Xxxxx Xxxxxxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxx 00000
If to the Company:
OM Group, Inc.
000 Xxxxxx Xxxxxx
0000 Xxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
or such other address or to the attention of such other person as the recipient
shall have specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered or
mailed.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to its subject matter and
supersedes all prior agreements and understandings, written or oral, with
respect to its subject matter.
14. SEVERANCE OF CLAUSES. If any provision of this Agreement is held
to be invalid or unenforceable by a court of competent jurisdiction, such
holding shall not invalidate any of the other provisions of the Agreement. The
parties intend that any such provision shall be severed from the Agreement and
that the Agreement shall be enforced to the full extent permitted by law.
15. ASSIGNEES. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, and administrators of Executive, and to the
successors and assigns of the Company.
16. AMENDMENTS. Any provision of this Agreement may be amended with
the prior written consent of Executive and the Company.
17. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Ohio, and both parties consent to venue and personal jurisdiction
over them in the courts of that state, including the federal courts, for
purposes of construction and enforcement of this Agreement.
7
18. EXECUTIVE HAS READ AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE HAS
READ AND UNDERSTANDS THE COMPLETE AGREEMENT.
IN WITNESS WHEREOF, the parties have hereunto set their hands in
CLEVELAND, ohio, as of the date first above written.
OM GROUP, INC. R. Xxxxx xxxxxxxxxxxx
By: /s/ R. Xxxxx Xxxxxxxxxxxx By: /s/ R. Xxxxx Xxxxxxxxxxxx
------------------------- -------------------------
Date: 2-16-04 Date: 2-16-2004
8
