EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of April, 1999, by and between
Xxxxxx X. Xxxxxxx ("Executive"), currently residing at 0000 Xxxxx Xxxxxx Xxxx,
Xxxxxxx Xxxx, Xxx Xxxx 00000, and Perfect Fit Glove Co., Inc., f/k/a Bacou USA
Acquisition Corp., a corporation organized under the laws of Delaware (the
"Company"), with its principal offices at 00 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX
00000.
W I T N E S S E T H :
WHEREAS, Company wishes to secure the services of Executive as the
President of the Company and as President of SCHAS Industries, Inc., an
affiliate of the Company, for the period provided in this Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. Employment. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as the
President of the Company and as President of SCHAS Industries, Inc., reporting
to the Chairman, President and CEO of Bacou USA Safety, Inc. Executive agrees to
faithfully perform the duties assigned to him to the best of his ability and,
except for vacations and periods of temporary illness, to devote his full time
and attention to the business of Company. Ancillary employment such as writing,
teaching or lecturing, as well as the acceptance of honorific titles may be
undertaken by the Executive only with the approval of the Chief Executive
Officer of Bacou USA, Inc. ("Bacou") or his designee ("Chairman"). Executive
also agrees that he will not engage in any other business activities without the
prior approval of the Chairman. Executive may only serve as an officer,
director, trustee or committee member, or in any similar position, of a
reasonable number (maximum two) of trade associations and religious, charitable,
educational, civic or other non-business organizations, subject to the approval
of the Chairman. The Executive represents and warrants to Company that he is now
under no contract or agreement nor will he execute any contract or agreement
that will in any manner interfere, conflict with or prevent him from performing
his duties under the terms and conditions of this Agreement, recognizing that
his performance hereunder will require the devotion of his full time and
attention during and beyond regular business hours during the Term (as
hereinafter defined), including extensive travel.
2. Period of Employment. The Executive's employment under this Agreement
shall initially cover the period beginning April 1, 1999 to December 31, 2004
(the "Initial Term"). On January 1, 2004, and at the end of each year
thereafter, the period of employment shall be automatically extended, without
further action by either party, for successive one year periods (each a "Renewal
Term") unless at least six months prior to the end of any Term either party
shall have served written notice on the other of its election to allow this
Agreement to terminate at the end of such Term. The Initial Term and any Renewal
Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment pursuant to the provisions of the preceding paragraph,
Company may, at its option, decide that the Executive shall take a
leave-of-absence for part or all of the remaining time of his employment,
continuing to receive all compensation as if actively working.
Notwithstanding anything to the contrary in this Section 2, Executive may,
at his option, terminate the period of his employment under this Agreement by
providing a one-time notice to the Company on or before June 30, 2000 that his
Initial Term of employment shall end as of December 31, 2000. If such notice is
duly provided by Executive, then his period of employment under this Agreement
shall terminate as of such time and all obligations of the parties hereunder,
except for those set forth in Sections 6, 7 and 8 hereof, shall no longer be in
effect.
3. Termination. The period of employment shall be terminated upon the first
to occur of the following:
(i) The expiration of the period of employment pursuant to
Section 2 of this agreement.
(ii) The Executive's death.
(iii) The Executive becoming permanently disabled. Permanent
disability shall mean physical or mental incapacity of a
nature which prevents Executive from performing his duties
under this Agreement for a period of more than six months in
any twelve month period.
(iv) The Executive's employment being terminated by Company for
cause. Termination for cause shall mean termination by
action of the Board of Directors of Company because of any
of the following: (a) the willful failure of Executive to
perform his duties and obligations under this Agreement; (b)
the failure to abide by, or to execute in a reasonable and
responsible manner, the policies and procedures of the
Company as in effect from time to time; (c) gross negligence
in the performance of his duties under this Agreement; (d)
the commission by Executive of a felony; (e) engaging in any
activity that is competitive with the business of the
Company; or (f) engaging in fraudulent, unethical or
dishonest activities.
4. Compensation and Benefits.
(a) The Executive shall receive regular compensation (the "Base
Salary") at the initial rate of One Hundred Fifty Thousand Dollars ($150,000.00)
per annum during the Initial Term. The Base Salary shall be payable in arrears
less the usual payroll deductions at the same times and in the same manner as
salaries paid to other employees of the Company. The Executive shall participate
in any wage increases applicable generally to salaried employees of Company. The
Base Salary prevailing at any time shall be reviewed annually for a possible
increase beginning in January 2000.
(b) In addition to the Base Salary, the Executive shall be entitled to
receive annual incentive compensation payments ("Incentive Compensation") for
1999 based on a formula set forth on Exhibit A hereto. For years thereafter, the
Executive shall be entitled to receive Incentive Compensation at such times and
in such amounts as may be determined pursuant to the Bonus Plan for Executives
of subsidiaries of Bacou USA, Inc., as in effect for the applicable year (the
"Company Plan"; a copy of the Company Plan for 1999 is attached to this
Agreement as Exhibit B). Executive acknowledges that, by agreeing to participate
in the Company Plan for the years 2000 and beyond, he thereby waives any rights
to participate in any other incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for each fiscal
year within ten (10) days after a decision is made by the Board of Directors of
Company as to the amount of such Incentive Compensation, but in any event no
later than the earlier of the annual meeting of the Board of Directors of the
Company or February 28 following the fiscal year for which the Incentive
Compensation is paid.
(d) The Executive shall be entitled to participate in any stock option
plan which Bacou USA, Inc. may adopt for Company at levels to be determined by
the Board of Directors of Company in its sole discretion. It is anticipated that
contingent upon the closing of the Perfect Fit Glove transaction, you will be
granted options to purchase 10,000 shares of the Company's Common Stock pursuant
to the Company's 1996 Stock Incentive Plan at the closing price of the stock on
that day.
(e) The Executive shall be entitled to participate in all savings,
thrift, retirement or pension, short term and long term disability, health and
accident, Blue Cross/Blue Shield, Major Medical or other hospitalization,
holiday, vacation, and other fringe benefit programs generally available to
senior executives of Company in accordance with and subject to the terms and
conditions of such programs.
(f) In addition, the Executive shall be entitled to receive the
following benefits:
(i) The Executive shall have the use of a company car, subject to
the Automobile Policy of Bacou USA, Inc., a copy of which is attached to this
Agreement as Exhibit C. To the extent that you have a leased or owned vehicle in
place at the beginning of the Initial Term, we shall pay you the standard amount
payable pursuant to the Company's Automobile Policy until such time as the lease
expires on such vehicle or you are ready or purchase another vehicle.
(ii) The Executive shall be entitled to vacation pursuant to the
Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a time
convenient for both the Executive and Company. To the extent the Executive does
not take all vacation days the remaining days will be carried forward for an
unlimited period or be paid to the Executive at the level of his Base Salary
valid for the fiscal year in which vacation days are not taken.
(iii) When traveling on Company business, the Executive will be
provided coach-class airfare on domestic trips; business class airfare will be
provided on international trips.
(iv) The Executive is authorized to incur reasonable expenses in
connection with and for the promotion of the business of Company, including
expenses for meals and lodging (regular hotel room, no suites), entertainment,
and similar items as required from time to time by the Executive's duties.
Company shall reimburse the Executive for all such expenses upon the
presentation of an account therefor, together with appropriate supporting
documentation.
5. Limitations on Authority. Except as otherwise provided herein, approval
by the Chairman must be obtained prior to the Executive taking any of the
following actions on behalf of the Company:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real property.
(b) Making unplanned capital expenditures or any commitment therefor
in an amount greater than $10,000 for any individual expenditure
and $50,000 in the aggregate in any fiscal year;
(c) Borrowing or guaranteeing any borrowings from or on behalf of any
party, or altering the terms of any loan agreements for such
borrowings except for any such loans or borrowings as shall be
agreed upon by the Board of Directors of Company;
(d) Hiring, terminating, promoting or demoting executive personnel
with annual salary in excess of $50,000 or granting unbudgeted
raises, bonuses or other compensatory payments to any employee of
the Company;
(e) Promoting or hiring anyone to a position above the Manager level
(i.e. to Director or above);
(f) Granting retirement benefits or other non-earned income to any
person;
(g) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(h) Acquiring the assets or shares of any business;
(i) Acquiring or disposing of the assets or shares of the Company or
selling any fixed asset of the Company below book value or
writing off inventory of the Company with an aggregate book value
exceeding $50,000 in any fiscal year;
(j) Entering into or terminating agreements of any kind or nature
with a monthly financial obligation in excess of U.S. $5,000 for
more than six (6) months except purchase orders for materials
required for the manufacture of products for sale in the ordinary
course of business;
(k) Making basic changes in the administration, organization,
production, and distribution of Company or any of its affiliates,
as well as closing or curtailing the functions of Company or any
of its affiliates;
(l) Filing any lawsuit;
(m) Making cash or non-cash corporate contributions above the
annually budgeted amount;
(n) When there is a large volume of sales, the making of decisions
requiring both extraordinary risks and extraordinary
expenditures;
(o) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(p) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the Chairman be unavailable, if an emergency arises
which requires the Executive to take immediate action in which approval as set
forth in this Section would otherwise be required, the Executive is no longer
bound by the limitations described above and is authorized to make a decision in
the best interests of Company. The Executive will immediately inform the
Chairman of any such decisions made by him.
6. Non-Disclosure of Information. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
secure confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed by Company for a period of seven (7) years except in respect of
any information or knowledge disclosed to the public, other than through an
unauthorized disclosure by the Executive.
7. Trade Secrets. The Executive covenants that he shall, while employed by
Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. Non-Competition. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to five years thereafter,
should the Executive's contract be terminated or not be renewed, Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of Company or any
of its affiliates. In the event that Company chooses to exercise its option to
prevent Executive from competing with Company following termination or
non-renewal of his employment, Company shall notify Executive in writing either
(i) at the time of Executive's last day of employment or (ii) at the time
Company provides notice to Executive of its decision that Executive shall take a
leave-of-absence, or, if Executive provides written notice to Company of his
decision to terminate his employment with Company, Company shall notify
Executive in writing within two (2) weeks thereafter, in any case specifying the
period of up to five years following termination, resignation, or non-renewal of
employment during which such competitive activity shall be prohibited. In the
event Company exercises its option, Company shall pay Executive an amount equal
to his annual Base Salary at the time of termination, resignation or
non-renewal. Notwithstanding the foregoing, the Executive (as hereinbefore
described in Section 2(d)) may own five (5%) percent of the securities of any
business in competition with the business of Company or any of its affiliates,
which securities are regularly traded on a public exchange, provided that any
such ownership shall not result in the Executive becoming a record or beneficial
owner at any time of more than five (5%) percent of equity securities of said
business entity.
(b) The Executive shall not during the term of his Employment under
this Agreement or any renewal thereof, and for a period of five (5) years
thereafter, employ, retain or arrange to have any other person or entity employ
or retain any person who was employed by Company or any of its affiliated
companies having an annual compensation of at least U.S. $50,000 per annum
during the term of this Agreement or any renewal thereof.
(c) If any provision of this Section is held to be unenforceable
because of the scope, duration or area of its applicability or otherwise, the
legal entity making that determination will have the power to modify the scope,
duration or area, or all of them, and the provision will then apply in its
modified form.
9. Property. All letters, memoranda, documents, business notes (including
all copies thereof) and other information contained on any other computer media
including computer disks and hard drives of the Executive in any manner relating
to the duties of Executive under this agreement are the property of Company.
10. Notices. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
c/o Bacou USA, Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
(b) If to the Executive, to him at:
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
Telephone No.: ( )
Telecopier No.: ( )
Either party may change its address for receiving notice by written notice given
to the other names above in the manner provided above.
11. Full and Complete Agreement; Amendment. This Agreement (together with
the Exhibits attached hereto) constitutes the full and complete understanding
and agreement of the parties and supersedes all prior understandings and
agreements. This Agreement may be modified only by a written instrument executed
by both parties (except Exhibits B and C which are subject to modification from
time to time by Bacou USA, Inc.)
12. Construction. This Agreement shall be construed under the laws of the
State of Rhode Island.
13. Arbitration. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Providence, Rhode Island and any award shall be deemed to be a
Providence, Rhode Island award. There shall be a single arbitrator who shall be
admitted to practice law in Rhode Island, with no less than ten (10) years
experience in the handling of commercial or corporate matters or disputes. The
arbitrator shall render a written decision stating his reasons therefor, and
shall render an award within six (6) months of the request for arbitration, and
such award shall be final and binding upon both parties. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement, as the law of
such jurisdiction may require or allow. The substantive law to be applied to any
case determined pursuant to this Section 13 is that of Rhode Island. The expense
of arbitration shall be borne by the respective parties except to the extent
that the arbitrators shall determine that the entire expense shall be borne by a
single party.
14. Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
PERFECT FIT GLOVE CO., INC. EXECUTIVE
By: /s/ Xxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxx
----------------------- --------------------------
Name: Xxxxxx Xxxxxx Xxxxxx X. Xxxxxxx
Title: Chairman
By: /s/ Xxxxxx X. Xxxx
------------------------
Name: Xxxxxx X. Xxxx
Title: Vice Chairman
EXHIBIT A
1999 INCENTIVE COMPENSATION
The Target amount shall be as set forth in Exhibit 5.05 to the Asset
Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group
and affiliates of Bacou USA, Inc.
|-----------------------------------------------|------------------------------|
| Cash Flow Achievement | Bonus Amount |
|-----------------------------------------------|------------------------------|
|Below 90% of Target | $0 |
|-----------------------------------------------|------------------------------|
|At least 90% of Target, but less than 100% | 10% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 100% of Target, but less than 110% | 15% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 110% of Target, or above | 20% of 1999 Salary |
|-----------------------------------------------|------------------------------|
The Target amount shall be as set forth in Exhibit 5.05 to the Asset
Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group
and affiliates of Bacou USA, Inc.
Agreed: Xxxxxx Xxxxxx
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Xxxxxx X. Xxxx
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Xxxxx X. Xxxxxx
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