EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 22, 1998, between Xxxxx Company, a
California corporation (the "Company"), and Xxxxxx X. Xxxxxx, Xx. (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is a principal executive officer and a
principal shareholder in Monsey Products Co., a Pennsylvania corporation
("Monsey");
WHEREAS, concurrently with the execution of this Agreement, Company
(the "Buyer") is purchasing from the Executive and the other shareholders of
Monsey all of Monsey's issued and outstanding capital stock, purchase to a
Stock Purchase Agreement dated February 27, 1998 (the "Stock Purchase
Agreement"); and
WHEREAS, it is a condition to consummation of the Stock Purchase
Agreement that the Company and Executive execute this Employment Agreement;
WHEREAS, the Company desires to retain the Executive's continued
employment in an executive capacity and the Executive desires to accept such
continued employment upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT. Pursuant to the terms and conditions set forth in
this Agreement, the Company hereby employs the Executive, and the Executive
hereby accepts such employment, as the Vice Chairman of Xxxxx Company. The
Executive shall report to the Chairman of the Xxxxx Group of Companies or his
authorized designee, and shall have such powers and duties consistent with
the duties and office of a Vice Chairman as shall from time to time be
assigned to him by the Board of Directors of the Company. The Executive
agrees to use his best efforts to promote the interests of the Company and
its subsidiaries and to devote his full business time and energies during
normal business hours to the business and affairs of the Company during the
Employment Period (as hereinafter defined); it being understood that the
level of business activity engaged in by Executive over the last twelve (12)
months shall be deemed to constitute "full business time". The Executive
will not engage in any other business or professional activity, with or
without compensation, if such business or professional activity may in any
way hinder the Executive's ability, or infringe on the time necessary, to
perform his duties hereunder.
2. TERM OF EMPLOYMENT. The employment hereunder will be for a two
(2) year period commencing on April 22, 1998 and will end on the second
anniversary of such date,
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unless earlier terminated pursuant to the provisions of Section 5 hereof (the
term of such employment hereunder, the "Employment Period").
3. REPRESENTATIONS OF EXECUTIVE. The Executive hereby represents
to the Company that (i) he is not subject to any restrictions on his ability
to enter into this Agreement, including but not limited to any applicable
covenant not to compete or similar agreement entered into in connection with
any previous employment, and (ii) he will not disclose or make use of any
confidential information that is the property of any third party (including,
without limitation, any trade secrets) in connection with his employment by
the Company pursuant to this Agreement.
4. COMPENSATION.
(a) BASE SALARY. As compensation for services hereunder
during the Employment Period, the Company will pay the Executive an annual
salary of Three Hundred Fifty Thousand Dollars ($350,000) ("Base Salary"),
payable in appropriate bi-weekly installments to conform to the regular
payroll dates for the Company's salaried personnel. The Executive's salary
level shall be reviewed annually, but in no event less than the Base Salary
stated herein.
(b) BENEFITS. Executive will receive the benefits he
currently receives pursuant to his employment with Monsey, subject to the
same terms and conditions of those benefits.
5. TERMINATION.
(a) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause. For the purposes of this Agreement,
termination for Cause shall mean:
(i) The Executive's willful failure or refusal, after
written notice thereof, to perform specific directives of the Chairman
of the Xxxxx Group of Companies or his authorized designee, when such
directives are reasonable and consistent with the scope and nature of
the Executive's duties and responsibilities as determined by the Board
of Directors of the Company;
(ii) Dishonesty of the Executive affecting the Company, its
subsidiaries or affiliates;
(iii) Drunkenness or use of drugs which interferes with the
performance of the Executive's obligations under this Agreement, or
puts the Company, its subsidiaries or affiliates at risk of any
potential liability;
(iv) The Executive's conviction of, or the entering of a
guilty plea or plea of no contest with respect to, a felony or of any
crime involving moral turpitude or fraud;
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(v) Any gross or willful misconduct of the Executive
resulting in substantial damage to the Company's reputation or theft
or defalcation from the Company or its subsidiaries; and
(vi) Any material breach (not covered by any of the clauses
(i) through (v)) of any of the provisions of this Agreement entered
into on the date hereof between Xxxxx Company and the Executive if
such breach is not cured within 15 days after written notice thereof
to the Executive by the Company.
(b) Intentionally left blank.
(c) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company
may terminate the Executive's employment hereunder for any reason or no
reason at any time by giving a Notice of Termination (as defined below) to
the Executive.
(d) TERMINATION BY THE EXECUTIVE. The Executive may
terminate his employment hereunder for any reason by giving a Notice of
Termination (as defined below) to the Company.
(e) DEATH. The Executive's employment hereunder shall
terminate upon his death.
(f) DISABILITY. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties hereunder on a full-time basis for one hundred eighty
(180) consecutive days, and, within thirty (30) days after a Notice of
Termination is given by the Company, the Executive shall not have returned to
the performance of his duties hereunder on a full-time basis, the Company may
terminate the Executive's employment hereunder. The Company may provide such
Notice of Termination on or after the date on which the Executive has been
absent for one hundred fifty (150) consecutive days.
(g) NOTICE OF TERMINATION. Any termination by the Company
pursuant to subparagraphs (a), (c) or (f) above or by the Executive pursuant
to subparagraph (d) above shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice indicating the specific
termination provision in this Agreement relied upon and setting forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
(h) DATE OF TERMINATION. Date of Termination shall mean (i)
if the Executive's employment is terminated by his death, the day after his
death; (ii) if the Executive's employment is terminated pursuant to
subparagraph (c) or (f) above, thirty (30) days after Notice of Termination
is given (provided that, in the case of termination under subparagraph (f),
the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty day period); (iii) if the Executive's
employment is terminated pursuant to subparagraph (d)
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above, thirty (30) days after Notice of Termination is given; and (iv) if the
Executive's employment is terminated pursuant to subparagraph (a) above, the
date specified in the Notice of Termination.
6. COMPENSATION UPON TERMINATION.
(a) TERMINATION FOR CAUSE. If the Executive's employment is
terminated for Cause, the Company shall pay the Executive his full Base
Salary, Bonus and benefits through the Date of Termination at the rate in
effect at the time Notice of Termination is given, and the Company shall have
no further obligations to the Executive under this Agreement.
(c) TERMINATION BY THE COMPANY WITHOUT CAUSE. If the
Executive's employment is terminated without cause pursuant to Section 5(c)
of this Agreement, the Company shall continue to pay the Executive's Base
Salary as provided in this Agreement, and shall continue to provide the
benefits provided for in Section 4(c) of this Agreement, for the lesser of
(i) the remaining term of the Employment Period; provided, however, that at
least one (1) year of health benefits shall be provided, or (ii) the date the
Executive enters into an employment, consulting, advisory or similar
relationship with another company or business.
(d) VOLUNTARY TERMINATION. If the Executive terminates his
employment hereunder pursuant to Section 5(d) hereof, the Company will pay
the Executive, through the Date of Termination, his full Base Salary, Bonus
and benefits at the rate in effect at the time Notice of Termination is
given, and the Company will have no further obligations to the Executive
under this Agreement.
(e) TERMINATION UPON DEATH. If this Agreement terminates as
a result of the Executive's death, the Company's obligations to the Executive
will cease, including the obligation to pay any Base Salary, Bonus and
benefits (other than health benefits for Executive's spouse, which shall
continue for one (1) year after Executive's death), on the Date of
Termination.
(f) TERMINATION UPON DISABILITY. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due
to physical or mental illness, the Executive shall continue to be paid his
Base Salary, Bonus and benefits, except that after termination of employment
pursuant to Section 5(f) hereto, the Company's obligations to the Executive
shall cease, including the obligation to pay Base Salary, Bonus and benefits.
7. INTELLECTUAL PROPERTY; CONFIDENTIALITY.
(a) INTELLECTUAL PROPERTY. The Executive expressly agrees
that during the Employment Period, to the extent the Executive discovers or
creates any inventions, formulas, techniques, processes, improvements or
other rights constituting a trade secret (cumulatively, a "Trade Secret"),
all such Trade Secrets and any patent, copyright or licensing relating
thereto or arising therefrom shall be the sole and exclusive rights of the
Company.
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(b) CONFIDENTIALITY. The Executive agrees that he will not,
during the Employment Period or subsequent thereto, divulge to anyone (other
than the Company or any persons employed or designated by the Company) any
knowledge or information of any type whatsoever of a confidential nature
relating to the business of the Company or any of its subsidiaries or
affiliates, including, without limitation, all types of trade secrets (unless
readily ascertainable from public or published information or trade sources
other than as a result of a disclosure by the Executive). The Executive
further agrees that he will not, during the Employment Period or subsequent
thereto, disclose, publish or make use of any such knowledge or information
of a confidential nature without the prior written consent of the Company.
8. NON-COMPETE AGREEMENT
(a) ACKNOWLEDGMENTS BY THE EXECUTIVE. The Executive
acknowledges that: (a) the services to be performed by him under this
Agreement are of a special, unique, unusual, extraordinary, and intellectual
character; (b) the Company's business is international in scope and its
products are marketed throughout the United States and Canada; (c) The
Company competes with other businesses that are or could be located in any
part of the United States or Canada; (d) the Buyer has required that the
Executive make the covenants set forth in this Section 8 as a condition to
the Buyer's purchase of the Executive's stock in the Company; and (e) the
provisions of this Section 8 are reasonable and necessary to protect the
Company's business.
(b) COVENANTS OF THE EXECUTIVE. In consideration of the
acknowledgments by the Executive, and in consideration of the compensation
and benefits to be paid or provided to the Executive by the Company, the
Executive covenants that he will not, directly or indirectly:
(i) during the Period (as defined), except in the course of
his employment hereunder, engage or invest in, own, manage, operate,
finance, control, or participate in the ownership, management,
operation, financing, or control of, be employed by, associated with,
or lend the Executive's name or any similar name to, or render
services or advice to, any business whose products or activities
compete in whole or in part with (a) the products or activities of the
Company anywhere within the United States or Canada (the "Company
Business") or (b) the manufacture and sale of building envelope
systems and related products, roofing membranes (modified bitumen and
other related roofing products), asphalt or wax based industrial
emulsions, roof and driveway coatings and cement, and paving sealers
(the "Monsey Business"); PROVIDED, HOWEVER, that the Executive may
purchase or otherwise acquire up to (but not more than) one percent of
any class of securities of any such enterprise (but without otherwise
participating in the activities of such enterprise) if such securities
are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of
1934; and provided further, that Executive may, with the prior written
consent of the Company (which consent shall not be unreasonably
withheld), provide financing and advice only to members of his
immediate family (which shall mean his sons, daughters and
sons-in-law) to activities not directly competitive with the Company
or
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Monsey business. For the purposes of the immediately prior clause,
the parties agree that a non-directly competitive business shall mean
the retailing and wholesaling of building materials generally, so long
as the business does not primarily involve the sale of products of the
type sold by the Company or Monsey;
(ii) whether for the Executive's own account or for the
account of any other person, at any time during the Period, solicit
business of the same or similar type being carried on by the Company
or Monsey from any person known by the Executive to be a customer of
the Company or Monsey, whether or not the Executive had personal
contact with such person during and by reason of the Executive's
employment with the Company or Monsey;
(iii) whether for the Executive's own account or the account
of any other person at any time during the Period, (a) solicit,
employ, or otherwise engage as an employee, independent contractor, or
otherwise, any person who is an employee of the Company or Monsey at
any time during the Period or in any manner induce or attempt to
induce any employee of the Company or Monsey to terminate his
employment with the Company or Monsey; or (b) interfere with the
Company's relationship with any person, including any person who at
any time during the Period was an employee, contractor, supplier, or
customer of the Company; or
(iv) at any time during or after the Period, disparage the
Company or its shareholders or affiliates, directors, officers,
employees, or agents.
For purposes of this Section 8(b), the term "Period" means five (5)
years from the date hereof with respect to the Company's Business and ten
(10) years from the date hereof with respect to Monsey Business.
If any covenant in this Section 8(b) is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.
The period of time applicable to any covenant in this Section 8(b)
will be extended by the duration of any violation by the Executive of such
covenant.
9. REMEDIES If Executive breaches the terms of this Agreement
(including the covenants set forth in Sections 7 and 8), the Company will
be entitled to the following remedies:
(1) Damages from Executive;
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(2) In addition to its right to damages and any other rights it may
have, to obtain injunctive or other equitable relief to restrain any breach
or threatened breach or otherwise to specifically enforce the provisions of
this Agreement (including Sections 7 and 8, which are independent covenants
and essential elements of this Agreement), it being agreed that money damages
alone would be inadequate to compensate the Company and would be an
inadequate remedy for such breach; and
(3) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
10. ASSIGNMENT; SUCCESSORS AND ASSIGNS. Executive agrees that he
will not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or
obligations under this Agreement, nor shall the Executive's rights be subject
to encumbrance or the claims of creditors and any purported assignment,
transfer or delegation shall be null and void. Nothing in this Agreement
shall prevent the consolidation of the Company with, or its merger into, any
other corporation, or the sale by the Company of all or substantially all of
its properties or assets or the assignment of this Agreement by the Company
and the performance of its obligations hereunder to any successor in interest
or any affiliated company. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns. In the event of any
attempted assignment or transfer of rights hereunder by the Executive
contrary to the provisions hereof, the Company shall have no further
liability for payments hereunder.
11. GOVERNING LAW; CAPTIONS. This Agreement shall be governed by
the laws of the State of Pennsylvania. This Agreement may not be changed
orally, but only by agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement. Paragraph headings are for convenience of reference only and
shall not be considered a part of this Agreement.
12. COMPLETE AGREEMENT. This Agreement terminated all prior
agreements between the parties relating to the subject matter herein
addressed and constitutes the entire agreement between the parties as to the
employment relation between the parties. In the event of termination of
employment under any of the circumstances described herein, the arrangements
provided for by this Agreement will constitute the entire obligation of the
Company to the Executive and performance thereof by the Company will
constitute full settlement of any claim that the Executive might otherwise
assert against the Company or its affiliates for breach of this Agreement.
13. NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing and will be deemed effective when
delivered in person (in the Company's case, to the President of the Xxxxx
Group of Companies and in the Executive's case,
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to Xxxxxx X. Xxxxxx, Xx. or, if mailed, on the date of deposit in the mail,
postage prepaid, addressed as follows:
If to the Company:
The Xxxxx Group of Companies
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxx, XX 00000
If to Executive:
Xx. Xxxxxx X. Xxxxxx, Xx.
P. O. Xxx 000
Xxxxxxxxx, XX 00000
or to such other address as shall have been specified in writing by any party
to the other parties.
14. ARBITRATION OF DISPUTES. Any dispute over the interpretation
or enforcement of any provision of this Agreement or any controversy or claim
arising out of or relating to this Agreement or the Executive's employment
with the Company, including statutory claims, shall be settled by arbitration
administered by the American Arbitration Association. The parties expressly
waive all rights to a jury trial.
The arbitration shall be conducted before a single arbitrator and
shall occur in the Commonwealth of Pennsylvania. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction. The Arbitrator shall have the authority to determine who
should bear the costs and expenses (including attorneys' fees) of
arbitration.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but together shall
constitute one and the same document.
IN WITNESS WHEREOF, the Company has by its appropriate officer
signed this Agreement and the Executive has signed this Agreement, as of the
day and year first above written.
XXXXX COMPANY
/s/ Xxxxxxx X. Xxxxxxxxx
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By: Xxxxxxx X. Xxxxxxxxx
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Its: President
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/s/ Xxxxxx Xxxxxx, Xx.
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XXXXXX X. XXXXXX, XX.
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