EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of March 15, 1997,
between PolyVision Corporation, a New York corporation (the "Company"), and
Xxxxx X. Xxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the future growth and success of the
Company is expected to be substantial;
WHEREAS, the Board has determined that an employment agreement will
reinforce and encourage the continued attention and dedication of the Executive
to the Company and its shareholders, and the Executive is willing to commit
himself to serve the Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set forth
below.
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, on the terms and conditions
set forth herein.
2. TERM. The employment of the Executive by the Company hereunder and as
provided in Section 1 will commence as of the date hereof (the "Commencement
Date") and will continue in effect until the third anniversary of the
Commencement Date, unless terminated as provided in Sections 7(a), (b), (c) or
(d).
3. POSITION AND DUTIES. The Executive shall serve as Chief Executive
Officer of the Company with such responsibilities, duties and authority as are
customary for such a position and office and as may from time to time be
assigned to the Executive by the Company's Board, provided that the same is
consistent with the Executive's office as Chief Executive Officer. The
Executive shall devote all of his working time and efforts to the business and
affairs of the Company, provided that the Executive may be involved in
charitable and trade association activities and make passive investments that do
not materially detract from the discharge of his responsibilities hereunder.
4. DIRECTOR. The Company shall cause the Executive to be elected a
member of the Board of Directors of the Company, for so long as the Executive
remains the Company's Chief Executive Officer.
5. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. During the term of the Executive's employment
hereunder, the Company shall pay to the Executive an annual base salary of
$175,000, such salary to be paid in substantially equal periodic installments in
accordance with the normal payroll practice of the Company. The Executive's
base salary shall be increased on each anniversary date of the Commencement Date
during the employment term by the percentage increase in the Consumer Price
Index for the New York City Metropolitan Area, as published by the U.S.
Department of Commerce, for the year ended December 31 prior to each such
anniversary date.
(b) INCENTIVE COMPENSATION. The Company will pay the Executive an
annual bonus (the "Annual Bonus") within sixty (60) days following the last day
of the Company's fiscal year in an amount, if any, of up to 40% of the
Executive's annual base salary then in effect, as determined by the Board of
Directors and further provided the Company achieves its targeted corporate
objectives for such year based upon that year's operating or incentive program
(as approved by the Company's Board of Directors, as described below), it being
understood that the Company, at its sole election, may pay the Executive his
Annual Bonus in the form of restricted stock grants; PROVIDED, that with respect
to any bonus payable in respect of the fiscal year ending April 30, 1998, such
bonus, if any, shall be increased by 12.5% to reflect an additional 1.5 months
caused by the March 15, 1997 Commencement Date of this Agreement. The Executive
will be responsible for developing a senior management cash and equity incentive
program for review and approval by the Board of Directors of the Company. Such
program will give consideration to financial criteria such as return on capital
employed, earnings growth and other relevant criteria. Upon Board of Director
approval of such program, the Executive will participate in such program.
(c) LOAN. In the event that the Company pays the Annual Bonus, if
any, to the Executive in the form of restricted stock grants, the Company will
loan the Executive an amount equal to the full cost of any tax liability
(including the tax liability arising out of payments pursuant hereto) that
arises out of restricted stock grants made to the Executive under this
Section 5(b). Any such loan made to the Executive, evidenced by a promissory
note executed by the Executive, shall bear interest at the minimum imputed rate
of interest set by the Internal Revenue Service and shall be repaid to the
Company promptly upon the earlier of the sale of all or any portion of such
stock (on a pro rata basis) or the fifth anniversary of the date of such loan.
(d) STOCK OPTIONS. The Executive shall be entitled to receive
incentive stock options (the "Stock Options") to purchase 150,000 shares of
Common Stock, par value $.001 per share, of the Company (the "Company Stock") at
an exercise price equal to 110% of the average of the high and low price of the
Company Stock on the American Stock Exchange on the trading day immediately
prior to the Commencement Date, vesting in three (3) equal installments on the
first, second and third annual anniversary of the Commencement Date. The Stock
Options will be granted within thirty (30) days of the Commencement Date
following the meeting of the Board's Compensation Committee.
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In the event of termination of employment (i) by the Executive under
Section 7(e)(ii) or without Good Reason, on or prior to the third anniversary of
the Commencement Date or (ii) pursuant to Section 7(c), all Stock Options not
theretofore exercisable will lapse and be forfeited. In the event the
Executive's employment is terminated for any other reason on or prior to the
third anniversary of the Commencement Date, all Stock Options not theretofore
exercisable will thereupon become exercisable. Except as otherwise provided
herein or in Section 9, each Stock Option will expire 10 years after it is
granted.
(e) EXPENSES. During the term of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt reimbursement for
all reasonable and customary expenses incurred by the Executive in performing
services hereunder, including (i) all expenses of travel and living expenses
while away from home or business or at the request of and in the service of the
Company and (ii) an automobile allowance of $1,250 per month to cover all
expenses of parking, maintaining, insuring and operating an automobile, provided
that all such expenses are accounted for in accordance with the policies and
procedures established by the Company.
(f) OTHER BENEFITS. The Executive shall be entitled to participate
in all of the fringe benefit plans and arrangements of the Company (including,
without limitation, each group life insurance and accident plan, medical and
dental insurance plans, disability plan, and "first dollar" medical/dental
reimbursement program) as are provided to other senior executives of the
Company. The Company shall also pay the premium for a "split dollar" life
insurance policy of $500,000 for the Executive.
(g) ANNUAL PHYSICAL EXAMINATION. During the term of this Agreement,
the Company shall reimburse the Executive for the reasonable expenses incurred
by the Executive in undergoing an annual physical examination by a licensed
physician.
(h) TAX AND FINANCIAL PLANNING. During the term of this Agreement,
the Company shall reimburse the Executive for the reasonable expenses incurred
by the Executive in connection with obtaining professional tax and financial
planning advice.
6. ADDITIONAL OFFICES. Subject to Section 3, the Executive agrees to
serve without additional compensation, if elected or appointed thereto, as a
director of the Company and/or any of its subsidiaries and in one or more
executive offices of any of the Company's subsidiaries, provided that the
Executive is indemnified (to the same extent as indemnified by the Company) for
serving in any and all such capacities.
7. TERMINATION. The Executive's employment hereunder may be terminated
without any breach of this Agreement only under the following circumstances:
(a) DEATH. The Executive's employment hereunder shall terminate upon
his death.
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(b) DISABILITY. The Company may terminate the Executive's employment
hereunder 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 120 days during any eight (8) month period.
(c) CAUSE. The Company may terminate the Executive's employment
hereunder at any time for "Cause." For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder upon (i)
the conviction of a crime involving a felony, or fraud, embezzlement or other
defalcation or (ii) wilful or material breach of the Executive's obligations
(e.g., intentional and repeated failure to discharge responsibilities consistent
with the Executive's office and established corporate policies, direct or
indirect employment with or active financial interest in a third party or
violation of appropriate non-compete or confidentiality covenants), provided
that the Executive shall be entitled to be engaged in personal or charitable
interests that do not distract from his full-time commitment to the Company.
For purposes of this Section 7(c), the Executive's disability will not be a
basis for failure to perform required obligations. In addition, for purposes of
this Section 7(c), an act, or failure to act, on the part of the Executive shall
not be considered willful if done, or omitted to be done, by the Executive with
the good faith reasonable belief (as determined by what a reasonable senior
executive officer in similar circumstances would reasonably believe) that such
action or omission was in the best interests of the Company.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate his employment hereunder for "Good Reason." For purposes of this
Agreement, "Good Reason" shall mean:
(i) a failure by the Company to comply with any material
provision of this Agreement which has not been cured within thirty (30) days
after notice of such noncompliance has been given by the Executive to the
Company;
(ii) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirement of Section 7(f) hereof (and for purposes of this Agreement no such
purported termination shall be effective); and
(iii) the assignment to the Executive of any duties materially
inconsistent with his status as Chief Executive Officer of the Company, it being
understood that this would include the event of a merger or acquisition of the
Company which results in the Executive reporting to other than the Board of
Directors of the Company or other publicly-held corporation.
(e) TERMINATION ELECTION.
(i) A notice to Executive by the Company will constitute an
election by the Company to terminate the Executive's employment (A) without
Cause thirty (30) days
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following the date of delivery of the notice and (B) with Cause fifteen (15)
days following the date of delivery of the notice; PROVIDED, that in the event
the Company terminates the Executive's employment with Cause as a result of the
willful or material breach of the Executive's obligations as construed by
Section 7(c)(ii), the Executive will be entitled to a one-time 30 day
opportunity to cure provided that the Executive commences such cure within 15
days.
(ii) A notice to the Company by the Executive will constitute
an election by the Executive to terminate Executive's employment sixty (60) days
following the date of delivery of the notice.
(iii) In no event, however, shall the term of the Executive's
employment hereunder extend beyond the end of the month in which the Executive's
sixty-fifth (65th) birthday occurs.
(f) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive (other than termination pursuant
to subsection (a) hereof) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 14 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean only a notice which is
based upon, and shall indicate, the specific termination provision in this
Agreement relied upon and, except for a termination under Section 7(d) hereof,
shall set 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.
(g) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death,(ii) if
the Executive's employment is terminated pursuant to Section 7(b) above, upon
the giving by the Company of Notice of Termination,(iii) if the Executive's
employment is terminated pursuant to Section 7(c) above, the date specified in
the Notice of Termination,(iv) if the Executive's employment is terminated by
either of the elections pursuant to Section 7(e) above, the applicable date of
termination determined under Section 7(e) above, and (v) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given; PROVIDED, HOWEVER, that, if within thirty (30) days after
any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
8. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), the Executive shall continue to receive, or receive the
benefit of (as the case may be), all items described in
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Section 5 hereinabove at the rate then in effect for such period until his
employment is terminated pursuant to Section 7(b) hereof, provided that payments
so made to the Executive during the first 120 days of the disability period
shall be reduced by the sum of the amounts, if any, payable to the Executive at
or prior to the time of any such payment under disability benefit plans of the
Company or under the Social Security disability insurance program, and which
amounts were not previously applied to reduce any such payment.
(b) The Company shall maintain in full force and effect, for the
continued benefit of the Executive for the remainder of the month following the
Date of Termination due to Disability, all employee welfare benefit plans and
programs in which the Executive was entitled to participate immediately prior to
the Date of Termination provided that the Executive's continued participation is
possible under the general terms and provisions of such plans and programs.
(c) If the Executive's employment is terminated by his death, the
Company shall pay any amounts due to, or for the benefit of, or which would
otherwise have been paid to the Executive under Section 5 hereof for the
remainder of the month after the date of his death.
(d) If the Executive's employment shall be terminated by the Company
for Cause, the Company shall pay all amounts under Section 5 hereof due to, or
for the benefit of, the Executive 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.
(e) (i) If the Executive's employment is terminated by the Company
under Section 7(e)(i)(A) hereof on or prior to the 180th day following the
Commencement Date, the Company shall pay to the Executive as severance an amount
equal to three times the monthly base salary in effect immediately prior to
termination, plus an amount due or estimated to be due in respect of payments to
be made under Section 5(b);
(ii) If the Executive's employment is terminated by the Company
under Section 7(e)(i) hereof after the 180th day following the Commencement
Date, the Company shall pay to the Executive as severance an amount equal to one
times the annual base salary in effect immediately prior to termination plus an
amount due or estimated to be due in respect of payments to be made under
Section 5(b); and
(iii) The amounts payable to Executive as described in Sections
8(e)(i) and (ii) shall be paid to Executive in a lump sum on the Date of
Termination.
(f) If the Executive shall terminate his employment for Good Reason,
then
(i) The Company shall pay all amounts due to, or for the benefit
of, the Executive under Section 5 through the Date of Termination at the rate in
effect at the time
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Notice of Termination is given and all other unpaid amounts, if any, to which
the Executive is entitled as of the Date of Termination under Section 5(d) or
any compensation plan or program of the Company at the time such payments are
due;
(ii) In lieu of any further salary or bonus payments to the
Executive for periods subsequent to the Date of the Termination, the Company
shall pay as severance pay to the Executive a salary and bonus severance payment
under the same terms as if the Executive were terminated under Section
7(e)(i)(A); and
(iii)The Company shall maintain, for the continued benefit of the
Executive, all employee welfare benefit plans and programs in which the
Executive was entitled to participate immediately prior to the Date of
Termination to the same extent as if the Executive's employment had been
terminated without Cause, provided that the Executive's continued participation
is possible under the general terms and provisions of such plans and programs.
9. TERMINATION/UNEXERCISED STOCK OPTIONS. In the event of the
termination of the employment of the Executive for any reason, all unexercised
and exercisable stock options granted to him hereunder must be exercised by him,
or his estate (or heir(s)), as the case may be, before the 90th day following
the termination of his employment, except that, in the event the Executive's
employment is terminated with Cause, before the 30th day following the
termination of his employment.
10. MITIGATION. In the event that the Executive receives benefits from
other employment after the Date of Termination, the benefits to be provided by
the Company under the provisions of Section 8(b) shall be correspondingly
reduced.
11. ANTI-DILUTION/RECAPITALIZATION OF THE COMPANY. In the event of any
change in the number of issued shares of Company Stock resulting from a
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend, or other increase or decrease in such shares, then
appropriate adjustments shall be made by the Company with respect to outstanding
unexercised Stock Options and/or the aggregate number of shares of Company Stock
of the Company in respect of which Stock Options may be exercised
12. NONCOMPETITION.
(a) The Executive agrees that he will not, either directly or
indirectly, use or divulge to any person, firm, corporation, partnership or
other legal entity, either during the term of this Agreement or thereafter, or
make known to any person, firm, corporation, partnership or other legal entity,
any Confidential Information (as hereinafter defined) of the Company. Executive
shall keep secret and confidential all matters entrusted to Executive and shall
not use or attempt to use any such Confidential Information in any manner which
may injure or cause loss or may be calculated to injure or cause loss, whether
directly or indirectly, to the Company. For purposes of this Agreement,
"Confidential Information" shall mean and include, without
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limitation, any patents, patent applications, copyrights, trademarks, trade
names, service marks, service names, "know-how," trade secrets, technology,
custom computer hardware or software, customer or client lists, details of
client contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, procurement and sales
activities, promotion and pricing techniques, credit and financial data
concerning customers or suppliers, business acquisition plans or any portion or
phase of any scientific or technical information, ideas, discoveries, designs,
computer programs, processes, procedures, formulas or improvements of the
Company, whether or not in written or tangible form, and whether or not
registered, and including all memoranda, notes, plans, reports, records,
documents and other evidence thereof. The term "Confidential Information," as
used herein, does not include information which is or becomes generally
available to the public other than as a result of disclosure by the Executive or
others acting on his behalf or which is generally known in the information
display technology business.
(b) The Executive further agrees that he will not, at any time during
the term of this Agreement or within two (2) years after the termination of his
employment hereunder, however caused, solicit, interfere with or endeavor to
entice away from the Company any customer or employee of the Company.
(c) The Executive agrees that during the term of this Agreement and
for a period of two (2) years after the termination of his employment with the
Company, however caused, he will not within the United States of America,
directly or indirectly, engage in any business or own or control any interest
in, or act as a shareholder, director, officer, partner, trustee, employee,
independent contractor, consultant or other agent of any person, firm,
corporation, partnership or other legal entity, directly or indirectly engaged
in the business conducted by the Company. The Executive acknowledges that the
business of the Company extends beyond the geographic area of the State of New
York (and is intended to extend nationwide) and that, accordingly, it is
reasonable that the restrictive covenants set forth above are not limited by
specific geographic areas but throughout the United States of America.
(d) The Executive acknowledges that the foregoing provisions are an
essential part of such transaction, and Executive agrees to be bound by the
provisions hereof to the maximum extent permitted by law, it being the intent
and spirit of the parties that the foregoing shall be enforceable. If any court
of competent jurisdiction should determine that the duration, reach and/or scope
(geographic or otherwise) of the agreements contained herein are unreasonable,
then to the fullest extent permitted by law, the court may prescribe a
reasonable duration, reach and/or scope (geographic or otherwise).
13. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to the Executive, to expressly assume
and agree to perform this Agreement in the same manner and
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to the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption
and agreement prior to or concurrently with the effectiveness of any such
succession shall be a breach of the Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in the Agreement, "Company" shall mean the Company as previously defined
and any successor to its business and/or assets as aforesaid which executes and
delivers the Agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would
still be payable to him hereunder if he had continued to live, all such amounts
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or, if
there be no such designee, to the Executive's estate.
14. NOTICES. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Xx. Xxxxx X. Xxxx
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
If to the Company: PolyVision Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chairman of the Board
Facsimile: (000) 000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer of the Company as may be
specifically designed by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or
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compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions as the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the laws of New York, without regard to its conflicts of law principles.
16. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
POLYVISION CORPORATION
By:/s/ Bragi X. Xxxxx
--------------------------------
Bragi X. Xxxxx
Chairman, Compensation Committee
/s/ Xxxxx X. Xxxx
-----------------------------------
Xxxxx X. Xxxx
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