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EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective the 1st day of September, 1998, and is between
Xxxx X. Xxxxxx ("XXXXXX") and Xxxxxxx Manufacturing Co., a Delaware corporation
("LINDSAY").
WHEREAS, XXXXXX, as President, is a key employee of LINDSAY and his
talents and services to LINDSAY are of a special, unique, unusual and
extraordinary character and are of particular and peculiar benefit and
importance to LINDSAY; and
WHEREAS, LINDSAY desires to obtain assurances that XXXXXX will remain an
employee of LINDSAY and devote his best efforts to such employment; and
WHEREAS, XXXXXX desires to obtain assurances of continued employment and
compensation; and
WHEREAS, the parties heretofore entered into a written Employment
Agreement (hereinafter referred to as the "Former Agreement"), which agreement
is still in full force and effect; and
WHEREAS, pursuant to Paragraph 18B of the Former Agreement, the parties
now wish to modify and amend said Former Agreement and restating it as
hereinafter set forth; and
WHEREAS, each party is willing, in consideration of XXXXXX'x continued
employment with LINDSAY, and LINDSAY's specific commitments, to provide the
other with the desired assurances, and each is willing to enter into and carry
out this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. Employment. Upon the terms set out in this Agreement, LINDSAY agrees
to employ XXXXXX, and XXXXXX agrees to be so employed by LINDSAY.
2. TERM.
A. Initial Term. The Initial Term of XXXXXX'x employment with
LINDSAY under this Agreement shall be for five (5) years,
commencing September 1, 1998, and expiring on August 31, 2003.
This Initial Term includes five Fiscal Years; The First Fiscal
Year, which shall be from September 1, 1998, to August 31, 1999;
the Second Fiscal Year, which shall be from September 1, 1999, to
August 31, 2000; the Third Fiscal Year, which shall be from
September 1, 2000, to August 31, 2001; the Fourth Fiscal Year,
which shall be from September 1, 2001, to August 31, 2002, and
the Fifth Fiscal Year, which shall be from September 1, 2002, to
August 31, 2003.
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B. Subsequent Term. Prior to the Fifth Fiscal Year, the parties are
expected to negotiate and agree regarding XXXXXX'X employment
with LINDSAY for the period after the Fifth Fiscal Year. Failing
such negotiations and/or agreement, this Agreement will
automatically renew for two additional years, commencing
September 1, 2003, and ending on August 31, 2005, unless written
notice of intent not to renew is provided by one party to the
other party at least six (6) months prior to the end of the Fifth
Fiscal Year.
C. Failure to Renew.
(i) If notice not to renew is given by XXXXXX to XXXXXXX, then
XXXXXX'x employment shall terminate on August 31, 2003, and
XXXXXX shall be entitled to stock options and benefits covered
under Other Agreements, plus salary, Supplemental Compensation,
Bonus or Long Term Incentive earned or awarded for the Fiscal
Year ending August 31, 2003, or prior.
(ii) If notice not to renew is given by LINDSAY to XXXXXX, then
XXXXXX'x employment shall terminate on August 31, 2003, and
XXXXXX shall then be entitled to salary through August 31, 2003,
benefits provided for in Paragraph 3F, Bonus awarded or earned as
provided for in Paragraph 3B, Supplemental Compensation awarded
or earned as provided for in Xxxxxxxxx 0X and Long Term Incentive
awarded or earned as provided for in Paragraph 3G, and shall
receive, additional compensation equal to two and one-half (2
1/2) times his average gross compensation. Gross compensation
shall mean his annual salary plus Bonuses, Supplemental
Compensation and Long Term Incentive awarded or earned for the
most recent Five (5) Fiscal Years divided by five (5). In
addition, XXXXXX shall receive Supplemental Compensation equal to
the Bonus which he received in Fiscal Year Five.
3. Compensation. As compensation for services to be rendered by XXXXXX,
XXXXXXX agrees to provide XXXXXX with the following:
A. Salary. For each Fiscal Year, XXXXXX, shall receive Salary at the
annual rate of $367,047, which amount shall be reviewed annually
by the Board of Directors of LINDSAY, and which amount may be
increased at the sole discretion of the Board.
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B. Bonuses. For each Fiscal Year, XXXXXX shall receive:
(i) A Bonus equal to 2% of the pretax earnings provided pretax
earnings are greater than 15% of LINDSAY's Average Equity during the
Fiscal Year.
(ii) In no event shall Bonus exceed $200,000 in any Fiscal Year.
(iii) "Average Equity" shall be computed by adding the equity at the
beginning of the Fiscal Year to the equity at the end of each of the
four quarters of the Fiscal Year, and dividing that number by five
(5).
C. Supplemental Compensation. As long as XXXXXX is still employed by
LINDSAY or as, otherwise provided in this Agreement, he shall be
entitled to the following plus interest on unpaid balance:
(i) in Fiscal Year One, Supplemental Compensation equal to the Bonus
earned in previous Fiscal Year; and
(ii) in Fiscal Year Two, Supplemental Compensation equal to the Bonus
earned in Fiscal Year One; and
(iii) in Fiscal Year Three, Supplemental Compensation equal to the
Bonus earned in Fiscal Year Two; and
(iv) in Fiscal Year Four, Supplemental Compensation equal to the Bonus
earned in Fiscal Year Three; and
(v) in Fiscal Year Five, Supplemental Compensation equal to the Bonus
earned in Fiscal Year Four; and
(vi) for each year of renewal of this Agreement, Supplemental
Compensation equal to the Bonus earned one year prior to such year.
(vii) Any unpaid Supplemental Compensation will accrue interest at the
highest one-year C.D. rate as published by the First National Bank of
Omaha the next business day following August 31st of that Fiscal Year,
and said interest will accrue from September 1st until payment is
made.
D. Anything herein to the contrary notwithstanding, in no event shall the
aggregate of Bonus paid and Supplemental Compensation awarded to
XXXXXX, exceed $400,000 for any single Fiscal Year.
E. Stock Options. XXXXXX shall be entitled to stock options in the amount
and upon the terms and conditions as shall be granted by the
Compensation Committee of the Board of Directors. XXXXXX understands
that, as of
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the date of signing this Agreement, there is no assurance that
LINDSAY will have stock which is available for a stock option
program, or that stock options, if any, would have any value.
F. Other Benefits. XXXXXX shall also be entitled to receive other
fringe benefits and applicable employee benefit programs as
XXXXXXX xxx establish from time to time, which currently include
the following:
- Vacation
- Life Insurance
- Long Term Disability Insurance
- Club Dues
- Company Automobile, or $10,000 increase in annual base
salary
- Annual Physical and Medical Check Up
- Medical Insurance
- Financial and accounting assistance up to $5,000
annually
- Profit Sharing
- Salaried severance program
- Directors and Officers Liability Insurance
- Supplemental Retirement
G. Long Term Incentive. Each year the company obtains at least a
20% pretax return on beginning equity, 50,625 shares of Restricted
Stock and associated S.I.R.'s will be awarded to XXXXXX. The
Restricted Stock will be at no charge, but must be held by XXXXXX
for a minimum of two years, unless Directors authorize and allow
sale earlier.
4. Termination.
A. For Cause.
1. Defined. XXXXXX may be terminated by LINDSAY for cause if:
a. he commits a breach of his fiduciary duty of loyalty to
LINDSAY; or
b. he commits acts or omissions regarding LINDSAY's business
and which are not in good faith or which involve intentional
misconduct, dishonesty, or a knowing violation of the law; or
c. he engages in any transaction involving LINDSAY from which
he gains an improper personal benefit, which is not agreed to
by the Board of Directors of LINDSAY in advance of the
transaction; or
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d. he refuses to perform or neglects any of the material
duties assigned to him; or
e. he breaches the provisions of this Agreement.
2. Procedure. Prior to such termination for cause, LINDSAY
shall notify XXXXXX in writing of its intent to terminate
employment for cause, shall state effective date of
termination, shall state the reason and give grounds
therefore and shall give XXXXXX five (5) working days after
receipt of such notice to explain his conduct to LINDSAY's
reasonable satisfaction, the termination for cause shall be
final.
3. If XXXXXX is terminated for cause, he shall not be entitled
to any further compensation, or any Bonus payment past the
Fiscal Year termination takes place, but shall be entitled
to salary, Bonus, Supplemental Compensation, or Incentive
Compensation earned or awarded as of the date of
termination.
B. Without Cause. XXXXXXX xxx terminate XXXXXX'x employment at
anytime, without cause upon at least two (2) weeks advance
written notice. If LINDSAY does so, then LINDSAY shall continue
to provide and pay XXXXXX within thirty (30) days of such
termination, an amount equal to:
(i) the balance of the salary and vacation due until the end of
the term of this Agreement, plus
(ii) the Bonus for the Fiscal Year which may have been earned in
which the termination occurs, plus
(iii) all Supplemental Compensation, Bonus and Long Term
Incentive as provided for in Paragraph 3 for all remaining years
which would be unpaid
(iv) or in lieu of (i), (ii) and (iii), a payment by LINDSAY to
XXXXXX as provided for in 2C (ii) whichever shall be greater when
LINDSAY would terminate XXXXXX'x employment
(v) such payments as stated in (i), (ii), (iii) or (iv) whichever
shall be greater, shall be made within 30 days of termination and
also be a complete and liquidated payment for damages or claims,
if any, XXXXXX may have against LINDSAY due to LINDSAY's
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termination of XXXXXX'x employment prior to the end of the
Agreement. Any payments or benefits due XXXXXX shall be made
regardless of other income or benefits XXXXXX may be able to
obtain by virtue of the termination.
(vi) In the event total payments to XXXXXX under 2C(ii), 4B or 16
are determined to be an "excess parachute payment(s)" subject to
any type or form of excise tax, a cash payment will be made by
LINDSAY to XXXXXX to insure that any amount retained by XXXXXX
after payment of any such taxes will be equal to the amount that
XXXXXX was entitled to receive before application of said excise
taxes and LINDSAY will hold XXXXXX harmless from the effects of
any such excess tax on payments or entitlements due him.
X. XXXXXX Voluntary termination. If XXXXXX breaches this Agreement
and terminates his employment with LINDSAY, prior to the end of
this Agreement other than due to Death or Disability (Paragraph
4D), or as provided for and allowed under a "Change in Control"
(Paragraph 16), XXXXXX shall be subject to Paragraph 11 and shall
not be entitled to, and shall not receive, any further
compensation or Bonus not yet paid or earned.
D. Death or Disability.
(i) If XXXXXX should die or become disabled and unable to perform
his duties, XXXXXX'x employment shall terminate. In such an
event, XXXXXX will be covered by the death and disability
policies LINDSAY shall then have in effect, and XXXXXX (or his
estate) shall receive the Bonus equal to the Bonus he would have
received had he worked for the entire Fiscal Year, apportioned to
the time he ceased employment, plus all awarded Long Term
Incentive and unpaid Supplemental Compensation as set forth in
Paragraph 3. For purposes of this Agreement disabled shall mean
XXXXXX is unable to carry out the requirements and duties of his
current position, and would qualify for full payment under
LINDSAY's Long Term Disability policy of Life Insurance policy,
and
(ii) In such event, payments from LINDSAY due XXXXXX shall be
made within 30 days of death or disability.
5. Best Efforts, Other Employment, Conflict of Interest of XXXXXX
X. XXXXXX agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and
talents, perform all of the duties that
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may be required or requested of and from him pursuant to the
express and implicit terms hereof, to the reasonable satisfaction
of LINDSAY. Such duties shall be rendered at Lindsay, Nebraska,
and at such other place or places agreeable to Xxxxxx within or
without the State of Nebraska, as LINDSAY shall in good faith
require or as the interest, needs, business or opportunities of
LINDSAY shall require.
X. XXXXXX shall devote his normal and regular business time,
attention, knowledge and skill to the business and interests of
LINDSAY, and LINDSAY shall be entitled to all of the benefits,
profits or other issues arising from or incident to all work,
services and advice of XXXXXX performed for LINDSAY.
X. XXXXXX shall have the right to devote such amounts of his time
which are not required for the full and faithful performance of
his duties hereunder to any outside activities and businesses
which are not then being engaged in by LINDSAY and which shall
not otherwise interfere with the performance of his duties
hereunder.
D. Absent prior approval from the Board of Directors, XXXXXX
(i) shall not knowingly make investments in businesses which do
business with or which are competitive with LINDSAY, and
(ii) shall not knowingly engage in any activity which constitutes
a conflict of interest with his employment at LINDSAY.
6. Business Opportunities. XXXXXX will make full and prompt written
disclosure to LINDSAY of any business opportunity of which he becomes
aware and which relates to the business of LINDSAY or any of its
subsidiaries or affiliates.
7. Inventions.
A. An "Invention" means any new or useful art, discovery,
contribution, finding, or improvement whether or not patentable,
and all related know-how;
B. "Copyright Works" are materials for which copyright protection
may be obtained, including but not limited to: literary works,
computer programs, artistic works, (including designs, graphs,
drawings, blueprints and other works), recordings, photographs,
slides, motion pictures, and audio-visual works;
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C. Upon conception, all inventions and Copyright Works shall become
the property of LINDSAY whether or not patent or copyright
applications are filed on the subject matter of the conception.
XXXXXX will communicate to LINDSAY promptly and fully all
inventions, or suggestions (whether or not patentable), and all
Copyright Works made or conceived by XXXXXX (whether made or
conceived solely by XXXXXX or jointly with others) during the
period of XXXXXX'x employment with LINDSAY or in the two years
following cessation of employment: (a) which correspond to the
business, work or investigations of LINDSAY at the time of
conception, or (b) which result from or are suggested by any work
which XXXXXX has done or may do for or on behalf of LINDSAY, or
(c) which are developed, tested, improved or investigated either
in part or entirely on time for which XXXXXX was paid by LINDSAY
or using any resources of LINDSAY.
D. Assign Rights. XXXXXX will assign to LINDSAY his entire right,
title and interest in all inventions and Copyright Works: (a)
which relate in any way to the actual or anticipated business of
LINDSAY, or (b) which relate in any way to the actual or
anticipated research or development of LINDSAY, or (c) which is
suggested by or results from any task assigned to XXXXXX on
behalf of LINDSAY. XXXXXX also will execute at any time during or
after his employment as assignment for each such invention or
Copyright Work as XXXXXXX xxx request and on such documents as
XXXXXXX xxx provide. XXXXXX will promptly and fully assist
LINDSAY during and subsequent to XXXXXX'x employment in every
lawful way without reimbursement other than his normal
compensation as an employee of LINDSAY and other than a
reasonable payment for time involved in the event employment with
LINDSAY has terminated, but at the expense of LINDSAY, to obtain
for the benefit of LINDSAY patents, copyrights, mask work
protection for other proprietary rights for inventions or
Copyright Works.
8. Confidentiality.
X. XXXXXX will not at any time during or after his employment by
LINDSAY, directly or indirectly, divulge, disclose or communicate
to any person, firm or corporation in any manner whatsoever,
other than in the normal course of performing his duties for
LINDSAY, any Confidential Information. While engaged by LINDSAY,
XXXXXX may only use Confidential Information for a purpose which
is necessary to the carrying out of XXXXXX'x duties as an
employee or director of LINDSAY,
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and XXXXXX may not make use of any Confidential Information of
LINDSAY after he is no longer an employee or director of LINDSAY.
X. XXXXXX agrees that the following shall be considered Confidential
Information: all non-public and internal information, whether
written or otherwise, regarding LINDSAY's business (or business
of any subsidiary or affiliate of LINDSAY), including but not
limited to, information regarding customers, customer lists,
employees, employee salaries, costs, prices, earnings, and any
financial or cost accounting reports, products, services,
formulae, compositions, machines, equipment, apparatus, systems,
manufacturing procedures, operations, potential acquisitions, new
location plans, prospective and executed contracts and other
business arrangements, and sources of supply.
X. XXXXXX agrees that all such information is a trade secret owned
exclusively by LINDSAY which shall at all times be kept
confidential.
X. XXXXXX further agrees that he will, upon termination of his
employment with LINDSAY, return to LINDSAY all books, records,
lists, and other written, typed or printed materials, whether
furnished by LINDSAY or prepared by XXXXXX, which contain any
Confidential Information and XXXXXX agrees that he will neither
make nor retain any copies of such materials after termination of
employment.
9. Solicitation of Employees. For a period of two (2) years after he is
no longer employed by LINDSAY, XXXXXX will not, directly, or
indirectly, either as an individual, proprietor, stockholder, partner,
officer, director, employee or otherwise, solicit any officer,
director, employee or other individual:
A. to leave his or her employment or position with XXXXXXX
X. to compete with the business of LINDSAY,
C. or to violate the terms of any employment, non-competition or
similar agreement with LINDSAY.
10. Non-Competition. For a period of two (2) years after termination of
employment with LINDSAY, XXXXXX will not engage in, work for (directly
or indirectly) or contribute his knowledge to any person or entity,
company or work which is directly competitive in the irrigation
business with the products, processes or business of LINDSAY.
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11. Remedies.
A. In the event XXXXXX'x employment shall end with XXXXXXX xxxxx to
the termination date provided herein, or in the event XXXXXX
shall breach Paragraph 9 or 10 of this Agreement or otherwise
breach this Agreement, XXXXXX shall be subject to any and all of
the penalties contained in, or legal and equitable remedies
available to LINDSAY resulting from, this Agreement.
B. In the event XXXXXX is required to enforce any of the rights
granted under this Agreement through litigation or legal action
LINDSAY will pay the costs and all expenses of legal council
selected by XXXXXX.
12. Remedies; Survival of XXXXXX'x Covenants.
A. Without limiting the rights of LINDSAY to pursue all other legal
and equitable rights available to them for any violation of the
covenants of XXXXXX herein, it is agreed that: (a) the services
to be rendered by XXXXXX under this Agreement are of a special,
unique, unusual and extraordinary character which gives them a
peculiar value, and the loss of such services can not be
reasonably and adequately compensated in damages in an action at
law, and (b) remedies other than injunctive relief can not fully
compensate LINDSAY for violation of Paragraphs 1, 6, 8, 9, 10
and 11 of this Agreement; accordingly, LINDSAY shall be entitled
to injunctive relief to prevent violations of such paragraphs or
continuing violations thereof.
B. All of XXXXXX'x covenants in and obligations under Paragraphs 7,
8, 9 and 10 of this Agreement shall continue in effect
notwithstanding any termination of XXXXXX'x employment, whether
by LINDSAY or by XXXXXX, upon expiration or otherwise, and
whether or not pursuant to the terms of this Agreement.
13. Life Insurance. LINDSAY shall have the right, at its own expense and
for its own benefit, to take out life insurance on XXXXXX in such
amount or amounts as it shall see fit, and XXXXXX agrees to
cooperate with LINDSAY in obtaining such insurance.
14. Designation of Beneficiary. XXXXXX may, by written instrument
delivered to LINDSAY, a beneficiary or beneficiaries to receive any
payments to which he may be entitled under LINDSAY fringe benefit
programs which become payable following his death, and at any time
or from time to time change such designated beneficiary by similar
written instrument, and LINDSAY shall be fully protected in making
any such payments to such designated beneficiary. In the
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event of XXXXXX'x death when no such beneficiary designation is in effect,
LINDSAY shall make payment of any amounts to which XXXXXX was entitled
following PARKERS's death to this personal representative, heirs, devises
or legatees.
15. XXXXXX Expenses. LINDSAY shall pay XXXXXX'x reasonable airline fare, hotel
bills, and other necessary and proper expenses when traveling on or
otherwise performing, LINDSAY's business, provided that XXXXXX furnishes
LINDSAY with appropriate supporting documentation of such expenses.
16. Successor and Assigns: Parties in Interest; Change in Control. This
Agreement shall be binding upon LINDSAY, its successors and assigns and
upon XXXXXX, his heirs, executors and administrators. However, if in the
opinion of Xxxxxx there is a "Change in Control" of LINDSAY through a
change in shareholder ownership, merger, Board of Directors, or other such
event, and in the opinion of Xxxxxx such event shall result in a material
negative change in the role, title, responsibility, benefits, or
compensation of XXXXXX, then XXXXXX shall have the option to terminate this
Agreement, and he shall be entitled to the same compensation as if LINDSAY
had terminated XXXXXX without cause, as set forth in Paragraph 4B (i),
(ii), and (iii), plus compensation to two and one-half (2 1/2) times his
average gross compensation for the most recent five (5) Fiscal Years.
17. Notices. Notices contemplated by this Agreement shall be in writing and
shall be deemed given when delivered in person or mailed registered first
class mail, postage prepaid, to LINDSAY at Xxxx Xxxxxxx 00, Xxxxxxx,
Xxxxxxxx, 00000, Attention: Chairman of the Compensation Committee, and to
XXXXXX at 0000 Xxxxx Xxxx Xxxx, Xxxxxxxx, XX, 00000, or to such other
address as the party so notifies to the other.
18. Integration, Amendment and Modification.
A. This Agreement contains the entire Agreement between the parties
hereto with respect to the employment contemplated herein, supersedes all
prior negotiations and Employment Agreements, both oral and written,
including the Former Agreement, between the parties relating to XXXXXX'x
employment with LINDSAY.
B. This Agreement can be amended, supplemented or modified by the
parties only by an instrument in writing signed by both parties.
C. If, in any action before any court or agency legally empowered to
enforce such covenants, any term, restriction, covenant or promise
contained herein is found to be unreasonable, unlawful or otherwise
invalid and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to
make it enforceable by such court or agency.
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19. Headings. The headings in this Agreement are inserted for convenience
or reference only and shall not affect the meaning or interpretation
of this Agreement.
20. Governing Law. This Agreement shall be construed, interpreted and
enforced according to the laws of the State of Nebraska.
IN WITNESS WHEREOF, this Agreement is entered into effective as of the
date set forth above.
XXXX X. XXXXXX LINDSAY MANUFACTURING CO.
/s/ XXXX X. XXXXXX /s/ XXXXXX X. XXXXXXX
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Xxxx X. Xxxxxx Chairman, Compensation
Committee
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