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Exhibit 10.6
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made effective as
of December 9, 1996 (the "Effective Date"), between Fiberite, Inc., a Delaware
corporation, hereinafter referred to as "Fiberite", and Xxxxx X. Xxxxxx
hereinafter referred to as "Employee." This Amended and Restated Executive
Employment Agreement was approved and made effective by the Board of Directors
of Fiberite on January 29, 1997.
In consideration of the promises and of the mutual covenants contained
herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
1. Employment. Fiberite hereby affirms its employment of Employee, and
Employee hereby affirms such employment, upon the terms and conditions set forth
above.
2. Duties. Employee is engaged in the position of Chief Executive
Officer of Fiberite. Employee shall faithfully and diligently perform the duties
customarily performed by persons in the position for which Employee is engaged,
together with such other duties the Board of Directors of Fiberite (the "Board")
shall designate from time to time. As part of Employee's duties, Employee
acknowledges and understands that: (a) Employee will devote utmost knowledge and
best skill to the performance of his duties; (b) Employee shall devote his full
business time to the rendition of such services, subject to absences for
customary vacations and for temporary illness; and (c) Employee will not engage
in any other gainful occupation which requires his personal attention without
prior consent of the Board with the exception that Employee may personally trade
in publicly traded stocks, bonds, commodities or real estate investments for his
own benefit.
3. Compensation.
3.1 Salary. As compensation for the proper and satisfactory
performance of all duties to be performed by Employee hereunder, Fiberite shall
pay Employee a salary of $200,000 per year plus an annual target bonus of 75% of
the base salary during the employment term (as defined in Section 4 below) of
this agreement. The actual bonus paid will be a multiple of the target bonus
amount, with the multiple range from 0.0 to 2.0 as described in the Fiberite,
Inc. Management Incentive Compensation Plan.
3.2 Salary Increase and Bonus Plan. The Board shall develop and
implement a plan under which it, or a committee thereof, will evaluate
Employee's performance on not less than an annual basis and, if warranted, grant
Employee increases in Base Salary and/or additional bonus compensation based on
such evaluations. Any such increases shall automatically be incorporated by
reference into this Agreement.
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3.3 Customary Fringe Benefits. Employee shall be entitled to such
fringe benefits as Fiberite customarily makes available to executive employees
of Fiberite ("Fringe Benefits"). Such Fringe Benefits may include vacation
leave, sick leave, and health insurance coverage.
4. Term. The employment term pursuant to this Agreement shall commence
on the Effective Date set forth above, and shall remain in effect until
Employee's employment is terminated in accordance with the provisions of Section
0 below. It is understood that Employee serves at the will of the Board of
Directors of the Company and that he shall be considered an "at will" Employee.
5. Termination. This Agreement and the employment of Employee shall
terminate under the following conditions:
5.1 Death. The death of Employee.
5.2 Disability. The permanent disability of Employee (permanent
disability shall exist when Employee suffers from a condition of mind or body
that indefinitely prevents Employee from satisfactory further performance of his
duties, even with reasonable accommodation, for a cumulative period of 120
business days in any consecutive 12-month period following the commencement of
employment).
5.3 Termination for Good Cause. Upon receipt by Employee of written
notice from Fiberite that Employee's employment is being terminated for "good
cause." Fiberite has "good cause" to terminate Employee's employment if Employee
has engaged in one or more of the following:
5.3.1 Commission of a felony which results in conviction.
5.3.2 Breach of the provisions of Section 8 hereof or of any
material provision of the Employee Inventions and Proprietary Rights
Assignment Agreement entered into between the Company and Employee
("Proprietary Rights Agreement").
5.3.3 Cause material loss, damage or injury to or otherwise
materially endangered the property, reputation or employees of Fiberite.
5.4 Resignation. At any time during the term of this Agreement,
Employee may provide notice of his intent to resign. Employee is required to
provide two (2) months advance notice of his resignation. Fiberite may require
that Employee work for some or all of that notice period, but Fiberite must pay
Employee for the time he actually continues in the employment of Fiberite.
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5.5 Termination for Other Than Good Cause. Fiberite may terminate
Employee's employment at any time without good cause, upon written notice
delivered to Employee that Employee's employment is being terminated for "other
than good cause." It shall be deemed a termination by Fiberite without good
cause under this Section 5.5 if Employee (i) resigns within 30 days of the
date on which, without his consent, he no longer holds the positions of
Chairman and Chief Executive Officer of Fiberite, Inc., or (ii) resigns due
to his being required to relocate to a workplace outside Arizona.
6. Compensation Upon Termination.
6.1 Payment of Compensation Upon Termination for Good Cause. In the
event Employee is terminated for good cause, as set forth in Section 5.3, he
shall receive two weeks notice that his employment is terminated and Employee
shall be entitled only to the compensation set forth as Base Salary herein,
prorated through the date of said notice. When Employee is terminated for good
cause as defined in Section 5.3, Employee is entitled to no other severance
compensation arising out of this Agreement and out of his employment
relationship with Fiberite, and Employee shall permanently and absolutely
forfeit all rights to all other severance benefits otherwise accruing by reason
of Employee's employment by Fiberite.
6.2 Payment of Compensation Upon Termination Other Than for Good
Cause. In the event Employee's employment is terminated for other than good
cause, Employee shall receive severance compensation in an amount described
below, only if Employee executes a general release of claims, releasing any and
all claims Employee has against Fiberite arising out of his employment or the
termination of said employment. Employee is not entitled to any severance
compensation pursuant to this Section unless he signs the general release
described above. The severance compensation described in this Section shall be
six (6) monthly payments commencing one (1) month after the effective date of
the termination in the amount of $29,167. Except as provided in Section 6.3,
Employee is entitled to no other severance compensation when his employment is
terminated for other than good cause.
6.3 Payment Upon Change in Control. If within six (6) months of a
Change in Control, as that term is defined herein, Employee's employment is
terminated for other than good cause or Employee refuses to accept or
voluntarily resigns from a position other than a Qualified Position, as that
term is defined herein, Employee shall receive additional severance compensation
in an amount equal to two (2) years of his then current Base Salary plus
applicable target bonus. A "Change in Control" means the acquisition, directly
or indirectly of more than 40% of the outstanding shares of any class of voting
securities of Fiberite by any person or entity that is not an existing
shareholder as of the Effective Date, or a merger, consolidation or sale of all
or substantially all of the assets of Fiberite, such that the individuals
constituting the Board of Fiberite immediately prior to such period shall cease
to constitute a majority the Board, unless the election of each director who was
not a
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director prior thereto was approved by vote of at least two-thirds of the
directors then in office who were directors prior to such period.
Notwithstanding the foregoing, an acquisition of the requisite percentage of
voting securities in connection with a public offering of securities by Fiberite
for the primary purpose of providing capital resources to Fiberite shall not be
considered a "Change in Control" for purposes of this Section 6.3. A "Qualified
Position" is an executive officer position with the entity surviving the Change
in Control, with substantially the same responsibilities as those held by the
Chief Executive Officer of Fiberite as of the date of this Agreement, which
position reports directly, or through no more than one (1) individual, to the
Board of Directors of the "Ultimate Parent Entity," as that term is defined in
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, of the entity
surviving the Change in Control. Also notwithstanding the foregoing, if Fiberite
determines that the amounts payable to Employee under this Agreement, when
considered together with any other amounts payable to Employee as a result of a
Change in Control, cause such payments to be treated as excess parachute
payments within the meaning of Section 280G of the Internal Revenue Code,
Fiberite shall reduce the amount payable to Employee under this Section 6.3 to
an amount that will not subject Employee to the imposition of tax under Section
4999 of the Internal Revenue Code. For purposes of this Section 6.3, the term
"Fiberite" includes both Fiberite, Inc. and Fiberite Holdings, Inc., in that
Employee will receive the aforementioned additional severance compensation upon:
(1) a Change of Control of either Fiberite, Inc. or Fiberite Holdings, Inc. and
(2) the other conditions set forth herein are met.
6.4 Payment Upon Death or Disability. In the event this Agreement is
terminated pursuant to Sections 5.1 or 5.2, Employee (or his estate in the case
of death) shall be entitled to a lump-sum payment equal to two (2) months of
Employee's then current Base Salary.
7. Arbitration/Sole Remedy for Breach of Agreement. In the event of any
dispute between Fiberite and Employee concerning any aspect of the employment
relationship, including any disputes upon termination, all such disputes shall
be resolved by binding arbitration before a single neutral arbitrator. The
arbitrator shall be selected from the American Arbitration Association. The
arbitrator is bound to rule only on whether or not there has been a violation of
the terms of this Agreement and to render an award, if any, that is consistent
with the terms of this Agreement. Neither party to this Agreement is entitled to
any legal recourse or rights or remedies other than those provided within this
Agreement. The Employee's sole remedies for claims arising out of his
employment, with the exception of workers' compensation remedies, are those set
forth in this Agreement. In the event of a termination of employment, the
arbitrator is limited to a determination of whether or not the discharge was for
good cause or for other than good cause. If an arbitration is brought for
something other than a termination of employment, the arbitrator is limited to
award contract damages. Fiberite shall bear the costs of the arbitration,
including arbitrator's fees and the reasonable fees of one counsel for Employee.
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8. Covenant Not to Compete. Employee agrees that, during Employee's
employment, and during any period with respect to which payments to Employee are
made pursuant to Section 5.4, Employee will not directly or indirectly compete
with Fiberite in any way, or prepare to compete or assist any other person or
entity to compete with Fiberite in any way, and that Employee will not act as an
officer, director, employee, consultant, more than one-percent shareholder,
significant lender, or agent of any other entity which is engaged in any
business of the same nature as, or in competition with, the business in which
Fiberite is now engaged or in which Fiberite becomes engaged during the term of
Employee's employment.
9. General Provisions.
9.1 Payments. All payments due pursuant to the terms of this
Agreement shall be delivered in person, or by first-class mail, postage prepaid
to the last known address of the other party. Payments may be in lawful money of
the United States, or may be made by check, draft or warrant of the paying
entity. Any payments made pursuant to Section 5.4 or Section 6 hereof shall be
made by certified or cashier's check and shall be delivered pursuant to the
terms of Section 9.2.
9.2 Notices and Delivery. Any notices to be given hereunder by
either party to the other may be effected by either personal delivery in
writing, or by mail, registered or certified, postage prepaid with a return
receipt requested. Mailed notices shall be addressed to the other party to the
address appearing beneath the party's signature on this Agreement, but each
party may change its address by written notice in accordance with this
paragraph. Notices shall be deemed communicated as of the date of delivery.
9.3 Complete Agreement. Employee acknowledges receipt of this
Agreement and agrees that this Agreement, along with the Proprietary Rights
Agreement, represents the entire Agreement with Employer concerning the subject
matter hereof. This Agreement supersedes any and all other Agreements, either
oral or in writing, between the parties hereto with respect to the matters
discussed herein of Employee and contains all of the covenants and agreements
between the parties with respect to the terms and conditions of Employee's
employment. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by
any party or anyone acting on behalf of any party which are not embodied herein.
9.4 Severability. If any provision of this agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
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9.5 Other Benefits. Any amounts payable under this Agreement, other
than Base Salary, shall not be deemed salary or other compensation for the
purpose of computing benefits under any pension plan or other arrangement of
Fiberite for the benefit of its employees.
9.6 No Waiver. Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
or prevent that party from thereafter enforcing each and every other provision,
or prevent that party from thereafter enforcing each and every other provision
of this Agreement.
9.7 Successors and Assigns. The rights and obligations of Fiberite
under this Agreement shall enure to the benefit of and shall be binding upon the
successors and assigns of Fiberite. Employee shall not be entitled to assign any
of his rights or obligations under this Agreement.
9.8 Applicable Law. This Agreement shall be interpreted, construed,
governed and enforced in accordance with the laws of the State of Delaware.
9.9 Amendments. No amendment or modification of the terms or conditions
of this Agreement shall be valid unless in subsequent writing and signed by the
parties thereto.
IN WITNESS WHEREOF, the parties hereto execute this Agreement,
effective as of the date first above written.
EMPLOYEE: FIBERITE, INC.
a Delaware corporation
/s/ Xxxxx Xxxxxx By: /s/ Xxxx Xxxxx
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Xxxxx X. Xxxxxx Xxxx X. Xxxxx, President
Address: 0000 X. Xxxxxxxxxx Xxxx Address: 0000 X.Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000 Xxxxx, XX 00000
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