Exhibit 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
October 1, 1999, by and between XXXXXXX & XXXXXX PRODUCTS CO., a Delaware
corporation (the "Company"), and XXXXXX X. XXXXXXX ("Employee").
W I T N E S S E T H
WHEREAS, Employee is currently employed by the Company; and
WHEREAS, the Company wishes to retain Employee's services by providing
Employee the compensation and benefits set forth in this Agreement.
NOW, THEREFORE, in consideration of Employee's continued employment and the
mutual agreements contained herein, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ Employee, and
Employee hereby accepts employment, for a period of three (3) years, commencing
October 1, 1999 and ending September 30, 2002, subject to the terms and
conditions of this Agreement. At the end of such initial three year term,
unless the Company shall have given Employee 60 days prior written notice of its
intention to terminate this Agreement at the end of the initial term hereof, the
term of this Agreement shall automatically be extended by an additional one year
period. Thereafter, unless the Company shall have given Employee 60 days prior
written notice of its intention to terminate this Agreement at the end of the
term then in effect, the term of this Agreement shall automatically be extended
by an additional one year period.
2. Position and Location of Employment. During the term of this
Agreement, Employee shall be employed in the position of Senior Vice President,
Secretary and General Counsel of Xxxxxxx & Xxxxxx Corporation, the Company and
the affiliates thereof, and shall perform such services for the Company and its
affiliates as may be assigned to him from time to time by the Chairman or the
Board of Directors of the Company. Employee shall devote his full time and
attention to the affairs of the Company and his duties in such position. The
location for Employee's position shall be the Company's Worldwide Headquarters
in Troy, Michigan upon the opening of the Company's Worldwide Headquarters or by
January 1, 2000, whichever is later. Employee shall relocate to the Troy,
Michigan area with his wife and any minor children as soon as practicable after
the conclusion of the 1999-2000 academic year, but no later than August 1, 2000.
3. Compensation.
(a) Base Salary. The Company shall pay to Employee base salary at an
annual rate of not less than $215,000 during the term of his employment
hereunder. Such amount shall be reviewed annually by the Board of Directors of
the Company or an appropriate committee thereof (the Company's Board of
Directors or such committee being referred to herein as the "Compensation
Board") and may be increased in the sole discretion of the Compensation Board.
(b) Bonus Plan. During the term of Employee's employment hereunder,
Employee shall be eligible to participate in the Company's annual Executive
Incentive Compensation Plan (the "EIC Plan") in accordance with the applicable
provisions of the EIC Plan. The standard bonus for Employee under the EIC Plan
initially shall be forty percent (40%) of Employee's base salary and shall be
reviewed by the Compensation Board from time-to-time during the term of
Employee's employment hereunder. Notwithstanding the foregoing, Employee's 1999
bonus shall be calculated as follows: (i) one-half ( 1/2) of the 1999 bonus
shall be based on Employee's base salary and standard bonus in effect
immediately preceding October 1, 1999 and (ii) one-half ( 1/2) of the 1999 bonus
shall be based on Employee's base salary and standard bonus as set forth in this
Agreement.
(c) Stock Options. Employee is a participant in the Xxxxxxx & Xxxxxx
Corporation 1994 Employee Stock Option Plan (the "Option Plan") and shall be
granted the option to purchase up to an additional 40,000 shares of the Common
Stock of Xxxxxxx & Xxxxxx Corporation, in accordance with the applicable terms
and conditions of the Option Plan and an Option Agreement between Xxxxxxx &
Xxxxxx Corporation and Employee to be entered into, dated and effective as of
October 14, 1999. The option price for all such shares shall be the closing
price of Xxxxxxx & Xxxxxx Corporation shares on the New York Stock Exchange as
of October 14, 1999. Subject to the terms and conditions of the Option Plan and
the Option Agreement, the option of Employee to purchase up to the 40,000 shares
shall vest as follows:
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VESTING DATE TOTAL NUMBER OF PERCENTAGE VESTED
SHARES VESTED
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October 1, 2000 13,334 33%
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October 1, 2001 26,667 66%
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October 1, 2002 40,000 100%
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4. Benefits and Perquisites.
(a) General. Employee shall be entitled to such fringe benefits and
perquisites, and to participate in such pension, profit sharing and benefit
plans as are generally made available to executives of the Company during the
term hereof, including major medical, extended medical and disability insurance,
supplemental retirement income plan, group term life insurance and appropriate
annual holidays, sick days and vacation time. Included in such benefits to
Employee, the Company shall furnish the use of an automobile subject to
applicable Company policies and practice and shall reimburse Employee for normal
gasoline and maintenance charges, subject to proper allocation of personal use
for income tax purposes. The Company also shall pay the monthly dues at a
country club in the Troy, Michigan area of Employee's choice. The Company shall
not be liable for the initiation fee or any other charges or fees payable by
Employee to such club.
(b) Relocation Expenses. The Company shall reimburse Employee for the
reasonable expenses incurred by Employee in connection with the relocation of
Employee and his wife and any minor children from Charlotte, North Carolina to
the Troy, Michigan area, in accordance with the relocation policy of the
Company. In lieu of the $6,000 relocation allowance payable to
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Employee under such relocation policy, the Company shall pay Employee a one-time
relocation allowance of $50,000, payable in a lump sum payment upon completion
of the purchase of a principal residence by Employee in the Troy, Michigan area.
In addition to the payment of the relocation allowance as provided in this
Paragraph 4(b), the Company shall pay Employee an additional amount such that
after all applicable federal, state and local income, employment and other taxes
on Employee's relocation allowance and on any additional amount payable in
accordance with this sentence, Employee has received the entire $50,000
relocation allowance on an after-tax basis.
5. Reimbursement of Expenses. The Company shall reimburse Employee for
all reasonable travel, entertainment and other reasonable business expenses
reasonably incurred by Employee in connection with the performance of his duties
hereunder, provided that Employee furnishes to the Company adequate records or
other evidence respecting such expenditures.
6. Termination of Employment. Employee's employment under this
Agreement may be terminated:
(a) by the Company for Cause, which means: (i) fraud or
misappropriation with respect to the business of the Company or intentional
material damage to the property or business of the Company, (ii) willful
failure by Employee to perform his duties and responsibilities and to carry
out his authority, (iii) willful malfeasance or misfeasance or breach of
fiduciary duty or representation to the Company or its stockholders, (iv)
willful failure to act in accordance with any specific lawful instructions
of a majority of the Board of Directors of the Company, or (v) conviction
of Employee of a felony (which shall be referred to as a "For Cause
Termination");
(b) by the Company for any reason other than a For Cause Termination
(which shall be referred to as a "No Cause Termination");
(c) by Employee for any reason other than a "Constructive
Termination" (as defined below) at any time (which shall be referred to as
a "Voluntary Termination"); or
(d) by Employee within 30 days after the occurrence of one or more of
the following: (i) a material reduction in Employee's total compensation
and benefits package, (ii) an adverse change (in the judgment of Employee)
in Employee's responsibilities, position (including status, office, title,
reporting relationships or working conditions), authority or duties, or
(iii) the Company's giving notice of the non-renewal of this Agreement at
the end of the term then in effect pursuant to Paragraph 1 hereof (which
shall be referred to as a "Constructive Termination"); provided, however,
no event or circumstance described in clause (i) or (ii) shall give rise to
a "Constructive Termination" for purposes of this Agreement unless Employee
shall have given notice to the Company of Employee's determination of the
occurrence of an event or circumstance described in clause (i) or (ii) and
such event or circumstance shall be continuing as of the end of 45 days
after the giving of such notice.
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7. Benefits Upon Termination.
(a) Termination as a Result of Voluntary Termination or For Cause
Termination. If Employee's employment under this Agreement is terminated as
a result of a Voluntary Termination or a For Cause Termination, the Company
shall pay Employee (i) his unpaid base salary under Paragraph 3(a) accrued
to the date on which his employment terminates (the "Termination Date"),
(ii) any accrued but unused vacation and (iii) all benefits earned by
Employee under any employee benefit plans and programs sponsored by the
Company in which Employee participates.
(b) Termination as a Result of No Cause Termination or Constructive
Termination. If Employee's employment under this Agreement is terminated
as a result of a No Cause Termination or a Constructive Termination, the
Company shall pay to Employee the following benefits:
(i) Employee's unpaid base salary accrued to the Termination
Date and any accrued but unused vacation;
(ii) One (1) times Employee's standard bonus based on the
standard bonus in effect immediately preceding the Termination Date;
and
(iii) Employee's base salary for the greater of (A) twelve (12)
months or (B) the remaining term of this Agreement, based on the rate
of base salary in effect immediately preceding the Termination Date.
The amount due to Employee pursuant to 7(b)(iii) above shall be paid, at
the sole discretion of the Compensation Board, either in a lump sum or on a
periodic basis in accordance with the Company's normal pay practice.
In addition, all outstanding stock options granted to Employee under
the Option Plan will immediately vest upon a No Cause Termination or a
Constructive Termination prior to the expiration of the term of this
Agreement and will continue to be fully exercisable until the earlier of
ninety (90) days after the Termination Date or the original expiration date
of said options. The Company shall also cause Employee to receive all
benefits earned by Employee under all employee benefit plans and programs
sponsored by the Company in which Employee participates.
8. Representations and Covenants of Employee.
(a) Conduct. Employee will at all times refrain from taking any
action or making any statements, written or oral, which are intended to and
do disparage the goodwill or reputation of the Company or any of its
subsidiaries or affiliates or any directors or officers thereof or which
could adversely affect the morale of employees of the Company or its
subsidiaries.
(b) Performance of Duties. In consideration of the payments to be
made hereunder, Employee agrees that during the term of his employment
under this Agreement, he shall devote
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his entire business time and attention to the performance of his duties
hereunder and serve the Company diligently and to the best of his
abilities.
(c) Company Information. Employee agrees that so long as he is
employed by the Company and following any termination of his employment
Employee will keep confidential all confidential information and trade
secrets of the Company and any of its subsidiaries or affiliates and will
not disclose such information to any person without the prior approval of
the Board of Directors of the Company or use such information for any
purpose other than in the course of fulfilling his duties of employment
with the Company pursuant to this Agreement. It is understood that for
purposes of this Agreement the term "confidential information" is to be
construed broadly to include all material nonpublic or proprietary
information.
9. Release. In consideration of the compensation continuance
available in certain events pursuant to this Agreement, Employee unconditionally
releases and covenants not to xxx the Company and its subsidiaries and
affiliates and directors, officers, employees and stockholders thereof, from any
and all claims, liabilities and obligations of any nature pertaining to
termination of employment other than those explicitly provided for by this
Agreement including, without limitation, any claims arising out of alleged legal
restrictions on the Company's rights to terminate its employees, such as any
implied contract of employment or termination contrary to public policy.
10. Governing Law. The validity, interpretation and performance of
this Agreement shall be governed by the laws of Michigan, regardless of the laws
that might be applied under applicable principles of conflicts of laws.
11. Amendment of CIC Agreement; Entire Agreement and Survivorship.
(a) Employee and Xxxxxxx & Xxxxxx Corporation hereby agree that
Sections 2(c) and 2(d) of that certain Change in Control Agreement between
Employee and Xxxxxxx & Xxxxxx Corporation dated March 17, 1998 (the "CIC
Agreement") are amended effective as of the date hereof to read as follows:
"(c) twenty-four (24) months of base salary based on the monthly
rate of base salary in effect immediately preceding the Change in
Control Period, or if greater, the rate of Base Salary in effect
immediately preceding the Date of Termination; and
(d) two (2) times Executive's target annual bonus in effect
immediately preceding the Change in Control Period."
(b) This Agreement and the CIC Agreement (as amended by Paragraph
11(a) above) and all other agreements and plans referred to in this Agreement
constitute the entire agreement and understanding between the parties hereto
with respect to the matters referred to herein and therein and supersede all
prior agreements and understandings between the parties hereto with respect to
the matters referred to herein and therein. The representations, warranties and
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covenants of Employee contained in parts (a) and (c) of Paragraph 8, and the
release contained in Paragraph 9 shall survive the expiration or termination of
this Agreement by either party.
12. Notice. Any written notice required to be given by one party to
the other party hereunder shall be deemed effective if mailed by certified or
registered mail:
To the Company: Xxxxxxx & Xxxxxx Products Co.
000 XxXxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Sunday
To Employee: Xxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
or such other address as may be stated in notice given under this Paragraph 12.
13. Severability. The invalidity, illegality or enforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement or
such provision in any other jurisdiction, it being the intent of the parties
hereto that all rights and obligations of the parties hereto under this
Agreement shall be enforceable to the fullest extent permitted by law.
14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their personal representatives,
and, in the case of the Company, its successors and assigns, and Paragraph 9
shall also inure to the benefit of the other persons and entities identified
therein; provided, however, that Employee shall not, without the prior written
consent of the Company, transfer, assign, convey, pledge or encumber this
Agreement or any interest under this Agreement. Employee understands that the
assignment of this Agreement or any benefits hereof or obligations hereunder by
the Company to any of its subsidiaries or affiliates or to any purchaser of all
or a substantial portion of the assets of the Company or of any affiliated
company then employing Employee, and the employment of Employee by such
subsidiary or affiliate or by any such purchaser or by any successor of the
Company in a merger or consolidation, shall not be deemed a termination of
Employee's employment for purposes of Paragraphs 6 and 7 or otherwise.
15. Amendment. This Agreement may be amended or canceled only by an
instrument in writing duly executed and delivered by each party to this
Agreement.
16. Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state and local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
17. Headings. Headings contained in this Agreement are for or
convenience only and shall not limit this Agreement or affect the interpretation
thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
XXXXXXX & XXXXXX PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Xxxxxxx & Xxxxxx Corporation has joined in the execution of this
Agreement for purposes of Paragraphs 2, 3(c) and 11 above.
XXXXXXX & XXXXXX CORPORATION
By:
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Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
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