EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of
November 4, 2002 (the "Effective Date") by Continental Global Group, Inc., a
Delaware corporation (the "Employer"), and Xxxxxx Xxxx, an individual resident
in Brookfield, Wisconsin (the "Executive").
Recitals
A. Employer is a holding company headquartered at 000 Xxxxxxxxxx
Xx., Xxxxxxxx, Xxxxxxx 00000 (the "Headquarters"). Through its subsidiaries,
Employer is primarily engaged in the worldwide manufacture and distribution of
bulk material handling equipment, conveyors and replacement equipment, primarily
for use in the mining industry (the "Business").
B. The Executive has the knowledge and experience necessary to
fulfill the duties and responsibilities of the position of President and Chief
Executive Officer ("CEO") of Employer.
C. The Executive will report directly to the Board of Directors of
Employer and to the Chairman of the Board. The Presidents and General Managers
of the Employer's subsidiaries in the Xxxxxx Xxxxxx, Xxxxxxxxx, xxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx and elsewhere will report directly to the Executive.
D. The Employer wishes to employ the Executive as President
and CEO and the Executive wishes to be employed by the Employer in such
capacity and according to the terms and conditions stated herein.
Agreement
The parties, in consideration of the mutual promises and covenants
contained herein, hereby agree as follows:
1.1 DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1.
"Agreement" -- this Employment Agreement, as amended from time to
time.
"Basic Compensation" -- consists of Salary and Phantom Stock as
provided in 3(a) and 3(h).
"Benefits" -- as defined in Section 3(b).
"Board of Directors" -- the board of directors of the Employer.
"Business" - as defined in the Recitals, paragraph A.
"CEO" -- as defined in the Recitals, paragraph B.
"Confidential Information" -- any and all:
(a) trade secrets concerning the business and affairs of the Employer,
product specifications, data, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas,
past, current, and planned research and development, current and planned
manufacturing or distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies, business plans,
computer software and programs (including object code and source code), computer
software and database technologies, systems, structures, and architectures (and
related formulae, compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information), and
any other information, however documented, that may constitute a trade secret
under applicable law;
(b) information concerning the business and affairs of the Employer (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials however documented); and
(c) notes, analysis, compilations, studies, summaries, and other material
prepared by or for the Employer containing or based, in whole or in part, on any
information included in the foregoing.
"disability" -- as defined in Section 4.2.
"Effective Date" -- the date stated in the first paragraph of the
Agreement.
"Employee Invention" -- any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial design
(whether registerable or not), and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed by
the Executive, either solely or in conjunction with others, during the
Employment Period, or a period that includes a portion of the Employment Period,
that relates in any way to, or is useful in any manner in, the business then
being conducted or proposed to be conducted by the Employer, and any such item
created by the Executive, either solely or in conjunction with others, following
termination of the Executive's employment with the Employer, that is based upon
or uses Confidential Information.
"Employer" --as defined in the preamble hereof.
"Employment Period" -- the term of the Executive's employment under this
Agreement beginning on the Effective Date and ending upon the occurrence of an
event of termination as provided in Section 4.1.
"Executive" -- as defined in the preamble hereof.
"Fiscal Year" -- the Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
"for cause"-- as defined in Section 4.3.
"for good reason" -- as defined in Section 4.4.
"Initial Term" -as defined in Section 2.1.
"Liquidity Event" -- means one of the following events: (A) a sale by the
Employer of all or substantially all of its assets, or (B) any merger or sale
of the outstanding shares of the Employer in any transaction which results any
holder of the outstanding voting shares of the surviving entity immediately
thereafter owning a greater portion of the voting securities of the surviving
entity than do the holders who were holders of the Employer's voting shares
immediately prior to such merger or sale.
"Net Proceeds" -- as defined in Exhibit A.
"person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.
"Phantom Stock" means phantom stock units awarded under the Employer's
2002 Phantom Stock Plan.
"Post-Employment Period" -- as defined in Section 6.2.
"Proprietary Items" -- as defined in Section 5.2(a)(iv).
"Salary" -- as defined in Section 3(a).
"Term" - as defined in Section 2.1.
2. EMPLOYMENT TERM AND DUTIES
2.1 EMPLOYMENT TERM
Subject to the terms and conditions set forth in this Agreement, the Employer
agrees to employ Executive, and Executive agrees to be employed by the Employer,
for the three-year period commencing on the Effective Date. This Agreement shall
have an initial term ending three years after the Effective Date (the "Initial
Term"). Thereafter, this Agreement shall renew from year-to-year (the Initial
Term and as so extended, the "Term"), unless Executive or the Employer gives
written notice at least 30 days prior to the expiration of the Term.
2.2 DUTIES
The Executive will have such duties as are assigned or delegated to the
Executive by the Board of Directors, and will serve as President and CEO of the
Employer. The Executive shall maintain his principal office at the Headquarters.
The Executive shall be required to travel outside that area to the extent
reasonably necessary in the good faith judgment of the Board of Directors or the
Chairman of the Board to advance the interests of the Business. The Executive
will devote his entire business time, attention, skill, and energy exclusively
to the business of the Employer, will use his best efforts to promote the
success of the Employer's business, and will cooperate fully with the Board of
Directors in the advancement of the best interests of the Employer. If the
Executive is elected as a director of the Employer or as a director or officer
of any of its affiliates, the Executive will fulfill his duties as such director
or officer without additional compensation.
3. COMPENSATION
(a) Salary. The Executive will be paid a base salary of $38,200 per
month (the "Salary"). The Salary shall be payable in equal periodic installments
according to the Employer's customary payroll practices and policies and shall
be subject to such withholdings as required by law or as otherwise permissible
under such practices or policies.
(b) Retirement and Health Benefits. The Executive will, during the
Employment Period, be permitted to participate in such defined contribution
pension plan, and 401K, hospitalization, and major medical plans of the Employer
that may be in effect from time to time, to the extent the Executive is eligible
under the terms of those plans (collectively, the "Benefits"). Notwithstanding
the foregoing, any waiting period applicable to the Employee shall be waived so
that the Employee shall be eligible to participate and will be vested in
benefits accruing under the Employer's defined contribution pension plan at the
Effective Date. In addition, the Executive shall be credited with five years of
service under the Employer's defined contribution pension plan because of his
prior industry experience.
(c) Bonuses. The Employer shall pay bonuses to Executive in the
amount, and subject to the terms and conditions set forth in Schedule A attached
hereto.
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(d) [intentionally left blank]
(e) Life Insurance. During the Executive's employment, the Employee
shall be eligible to participate in the Employer's term or group life insurance
benefit plan and to the extent the Employee meets applicable underwriting
criteria, at the expense of the Employer, shall have death benefit coverage of
$1.0 million for which the Employee may designate a beneficiary.
(f) Vacation. During his first full year of employment, the Executive
shall be entitled to two weeks vacation in accordance with the Employer's then
applicable vacation policy. Following his first year of employment, the
Executive shall be entitled to four weeks of vacation in accordance with the
Employer's then applicable vacation policy.
(g) Relocation. The Employer shall pay reasonable relocation and moving
expenses for your and your immediate family's personal and household goods.
Prior to incurring any such expenses, you shall obtain three competitive bids
for any relocation or moving services and submit such bids for approval by the
Employer. From the Effective Date and until your residence in Milwaukee,
Wisconsin is sold (but in no event for a period that exceeds 120 days), upon
submission of appropriate receipts in accordance with the Employer's expense
reimbursement policy, the Employer shall reimburse you for the reasonable costs
of lawn care and snow removal for your present residence in Milwaukee,
Wisconsin. Upon sale of such residence, the Employer shall reimburse the
Executive for real estate commissions and customary closing costs actually
incurred by the Executive. In addition, the Employer will reimburse your
reasonable travel expenses, including airfare and lodging, for the cost of up to
three round trips from Milwaukee, Wisconsin to Winfield, Alabama. The Executive
shall permanently reside in the Winfield, Alabama area by no later than January
15, 2003.
(h) Phantom Stock. On each annual anniversary of the Effective Date,
the Executive shall be awarded 1.25 units of Phantom Stock that shall vest
ratably throughout the following year. The Phantom Stock shall be awarded
subject to the terms of the Employer's 2002 Phantom Stock Plan.
4. TERMINATION
4.1 EVENTS OF TERMINATION
The Employment Period, the Executive's Basic Compensation, and any and all other
rights of the Executive under this Agreement or otherwise as an employee of the
Employer will terminate (except as otherwise provided in this Section 4):
(a) upon the death of the Executive;
(b) upon the disability of the Executive (as defined in Section
4.2) immediately upon notice from either party to the other;
(c) for cause (as defined in Section 4.3), immediately upon
notice from the Employer to the Executive, or at such later time as such notice
may specify; or
(d) for good reason (as defined in Section 4.4) immediately upon notice
from the Executive to the Employer or upon such later time as such notice may
specify; or
(e) upon not less than thirty (30) days' prior notice by either
party to the other.
4.2 DEFINITION OF DISABILITY
For purposes of Section 4.1, the Executive will be deemed to have a "disability"
if, for physical or mental reasons, the Executive is unable to perform the
essential functions of the Executive's duties under this Agreement for 60
consecutive days, or 120 days during any twelve month period, as determined in
accordance with this Section 4.2. The disability of the Executive will be
determined by a medical doctor selected by the Employer upon fifteen days'
advance written notice to the Executive. The Executive must submit to a
reasonable number of examinations by the medical doctor making the determination
of disability under this Section 4.2, and the Executive hereby authorizes the
disclosure and release to the Employer of such determination and all supporting
medical records. If the Executive is not legally competent, the Executive's
legal guardian or duly authorized attorney-in-fact will act in the Executive's
stead, under this Section 4.2, for the purposes of submitting the Executive to
the examinations, and providing the authorization of disclosure, required under
this Section 4.2. If the Executive refuses to submit to examination by the
medical doctor selected by the Employer within fifteen days of receipt by the
Executive of written notice from the Employer, the Employer may terminate the
Executive for cause pursuant to Section 4.1 and 4.3 hereof. The determination of
the medical doctor selected under this Section 4.2 will be binding on both
parties.
4.3 DEFINITION OF "FOR CAUSE"
For purposes of this Agreement, the phrase "for cause" means: (a) the
Executive's material breach of this Agreement; (b) the Executive's failure to
adhere to any written Employer policy if the Executive has been given a
reasonable opportunity to comply with such policy or cure his failure to comply
(which reasonable opportunity must be granted during the ten-day period
preceding termination of this Agreement); (c) the appropriation (or attempted
appropriation) of a business opportunity of the Employer, including attempting
to secure or securing any personal profit in connection with any transaction
entered into on behalf of the Employer; (d) the misappropriation (or attempted
misappropriation) of any of the Employer's funds or property; (e) the conviction
of, the indictment for (or its procedural equivalent), or the entering of a
guilty plea or plea of no contest with respect to, a felony, the equivalent
thereof, or any other crime with respect to which imprisonment is the
punishment; or (f) the Executive's failure to obey a written directive of the
Board of Directors or Chairman of the Board.
4.4 DEFINITION OF "FOR GOOD REASON"
For purposes of Section 4.1, the phrase "for good reason" means any of the
following: (a) the Employer's material breach of this Agreement; (b) the
relocation of the Headquarters outside the United State; or (c) the requirement
by the Employer that the Executive be based anywhere other than the Employer's
principal executive offices without the Executive's consent.
4.5 TERMINATION PAY
Effective upon the termination of this Agreement, the Employer will be obligated
to pay the Executive (or, in the event of his death, his designated beneficiary
as defined below) only such compensation as is provided in this Section 4.5, and
in lieu of all other amounts and in settlement and complete release of all
claims the Executive may have against the Employer. For purposes of this Section
4.5, the Executive's designated beneficiary will be such individual beneficiary
or trust, located at such address, as the Executive may designate by notice to
the Employer from time to time or, if the Executive fails to give notice to the
Employer of such a beneficiary, the Executive's estate. Notwithstanding the
preceding sentence, the Employer will have no duty, in any circumstances, to
attempt to open an estate on behalf of the Executive, to determine whether any
beneficiary designated by the Executive is alive or to ascertain the address of
any such beneficiary, to determine the existence of any trust, to determine
whether any person or entity purporting to act as the Executive's personal
representative (or the trustee of a trust established by the Executive) is duly
authorized to act in that capacity, or to locate or attempt to locate any
beneficiary, personal representative, or trustee.
(a) Termination by the Executive for Good Reason. If the Executive
terminates this Agreement for good reason, the Employer will pay the Executive
the Executive's Basic Compensation and Benefits for the remainder of the Term.
Notwithstanding the preceding sentence, if the Executive obtains other
employment prior to the end of the six months following the month in which the
termination is effective, he must promptly give notice thereof to the Employer,
and the Basic Compensation and Benefits payments under this Agreement for any
period after the Executive obtains other employment will be reduced by the
amount of compensation received and to be received by the Executive from the
Executive's other employment for services performed during such period.
(b) Termination by the Employer for Cause. If the Employer terminates this
Agreement for cause, the Executive will be entitled to receive his Basic
Compensation and Benefits only through the date such termination is effective.
(c) Termination upon Disability. If this Agreement is terminated by either
party as a result of the Executive's disability, as determined under Section
4.2, the Employer will pay the Executive his Salary through the remainder of the
calendar month during which such termination is effective and for the lesser of
twelve consecutive months thereafter or the period until disability insurance
benefits commence under any disability insurance coverage furnished by the
Employer to the Executive.
(d) Termination upon Death. If this Agreement is terminated because of the
Executive's death, the Executive will be entitled to receive his Basic
Compensation and Benefits through the end of the calendar month in which his
death occurs.
(e) Termination by Notice by the Executive. If this Agreement is
terminated by Executive upon the provision of thirty (30) days' notice thereof
in accordance with Section 4.2(e), the Executive will be entitled to receive his
Basic Compensation and Benefits only through the date such termination is
effective. In addition, in the event that the Executive terminates his
employment (other than a termination of this Agreement for Good Reason in
accordance with Section 4.2(a)), the Starting Bonus and any Phantom Stock
granted to the Executive during or with respect to that year shall be pro-rated
to the date of termination of the Executive's employment.
(f) Termination by Notice by the Employer. If this Agreement is terminated
by Employer upon the provision of thirty (30) days' notice thereof in accordance
with Section 4.2(e), the Employer will pay the Executive his Basic Compensation
and Benefits through the remainder of the Term; provided, however, if this
Agreement is terminated by the Employer prior to the end of the Initial Term,
the Executive shall be entitled to at least one year Basic Compensation and
Benefits.
(g) Benefits. The Executive's accrual of, or participation in plans
providing for, the Benefits and all other benefits will cease at the effective
date of the termination of this Agreement, and the Executive will be entitled to
accrued Benefits pursuant to such plans only as provided in such plans. The
Executive will not receive, as part of his termination pay pursuant to this
Section 4, any payment or other compensation for any vacation, holiday, sick
leave, or other leave unused on the date the notice of termination is given
under this Agreement.
5. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
5.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that: (a) during the Employment Period and as a part
of his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; (c) because the Executive
will possesses substantial technical expertise and skill with respect to the
Business, the Employer desires to obtain exclusive ownership of each Employee
Invention, and the Employer will be at a substantial competitive disadvantage if
it fails to acquire exclusive ownership of each Employee Invention; and (d) the
provisions of this Section 5 are reasonable and necessary to prevent the
improper use or disclosure of Confidential Information and to provide the
Employer with exclusive ownership of all Employee Inventions.
5.2 AGREEMENTS OF THE EXECUTIVE
In consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer under this Agreement, the Executive covenants as
follows:
(a) Confidentiality.
(i) During and following the Employment Period, the
Executive will hold in confidence the Confidential
Information and will not disclose it to any person
except with the specific prior written consent of the
Employer or except as otherwise expressly permitted
by the terms of this Agreement.
(ii) Any trade secrets of the Employer will be entitled to
all of the protections and benefits under any
applicable law. If any information that the Employer
deems to be a trade secret is found by a court of
competent jurisdiction not to be a trade secret for
purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information
for purposes of this Agreement. The Executive hereby
waives any requirement that the Employer submit proof
of the economic value of any trade secret or post a
bond or other security.
(iii) None of the foregoing obligations and restrictions
applies to any part of the Confidential Information
that the Executive demonstrates was or became
generally available to the public other than as a
result of a disclosure by the Executive.
(iv) The Executive will not remove from the Employer's
premises (except to the extent such removal is for
purposes of the performance of the Executive's duties
at home or while traveling, or except as otherwise
specifically authorized by the Employer) any
document, record, notebook, plan, model, component,
device, or computer software or code, whether
embodied in a disk or in any other form
(collectively, the "Proprietary Items"). The
Executive recognizes that, as between the Employer
and the Executive, all of the Proprietary Items,
whether or not developed by the Executive, are the
exclusive property of the Employer. Upon termination
of this Agreement by either party, or upon the
request of the Employer during the Employment Period,
the Executive will return to the Employer all of the
Proprietary Items in the Executive's possession or
subject to the Executive's control, and the Executive
shall not retain any copies, abstracts, sketches, or
other physical embodiment of any of the Proprietary
Items.
(b) Employee Inventions. Each Employee Invention will belong exclusively
to the Employer. The Executive acknowledges that all of the Executive's writing,
works of authorship, specially commissioned works and other Employee Inventions
are works made for hire and the property of the Employer, including any
copyrights, patents, semiconductor mask protection or other intellectual
property rights pertaining thereto. If it is determined that any such works are
not works made for hire, the Executive hereby assigns to the Employer all of the
Executive's right, title, and interest, including all rights of copyright,
patent, and other intellectual property rights, to or in such Employee
Inventions. The Executive covenants that he will promptly:
(i) disclose to the Employer in writing any Employee
Invention;
(ii) assign to the Employer or to a party designated by
the Employer, at the Employer's request and without
additional compensation, all of the Executive's right
to the Employee Invention for the United States and
all foreign jurisdictions;
(iii) execute and deliver to the Employer such
applications, assignments, and other documents as the
Employer may request in order to apply for and obtain
patents or other registrations with respect to any
Employee Invention in the United States and any
foreign jurisdictions;
(iv) sign all other papers necessary to carry out the
above obligations; and
(v) give testimony and render any other assistance but
without expense to the Executive in support of the
Employer's rights to any Employee Invention.
5.3 DISPUTES OR CONTROVERSIES
The Executive recognizes that should a dispute or controversy arising from or
relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information may be jeopardized. All pleadings, documents,
testimony, and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection by the Employer, the Executive, and
their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited, by them in writing.
6. NON-COMPETITION AND NON-INTERFERENCE
6.1 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 Employer's business is international in scope
and its products are or will be marketed throughout the world; (c) the Employer
competes with other businesses that are or could be located in any part of the
United States; and (d) the provisions of this Section 6 are reasonable and
necessary to protect the Business.
6.2 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
Employer, the Executive covenants that he will not, directly or indirectly:
(a) during the Employment Period, except in the course of his employment
hereunder, and during the Post-Employment Period, 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 in any
manner connected with, lend the Executive's name or any similar name to, lend
the Executive's credit to or render services or advice to, any business whose
products or activities compete in whole or in part with the products or
activities of the Employer any where in the world; 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 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;
(b) whether for the Executive's own account or for the account of any
other person, at any time during the Employment Period and the Post-Employment
Period, solicit business of the same or similar type being carried on by the
Employer, from any person known by the Executive to be a customer of the
Employer, whether or not the Executive had personal contact with such person
during and by reason of the Executive's employment with the Employer;
(c) whether for the Executive's own account or the account of any other
person (i) at any time during the Employment Period and the Post-Employment
Period, solicit, employ, or otherwise engage as an employee, independent
contractor, or otherwise, any person who is or was an employee of the Employer
at any time during the Employment Period or in any manner induce or attempt to
induce any employee of the Employer to terminate his employment with the
Employer; or (ii) at any time during the Employment Period and for three years
thereafter, interfere with the Employer's relationship with any person,
including any person who at any time during the Employment Period was an
employee, contractor, supplier, or customer of the Employer; or
(d) at any time during or after the Employment Period, disparage
the Employer or any of its shareholders, directors, officers, employees, or
agents.
For purposes of this Section 6.2, the term "Post-Employment Period" means the
two-year period beginning on the date of termination of the Executive's
employment with the Employer. If any covenant in this Section 6.2 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 6.2
will be extended by the duration of any violation by the Executive of such
covenant. The Executive will, while the covenant under this Section 6.2 is in
effect, give notice to the Employer, within ten (10) days after accepting any
other employment, of the identity of the Executive's employer. The Employer may
notify such employer that the Executive is bound by this Agreement and, at the
Employer's election, furnish such employer with a copy of this Agreement or
relevant portions thereof.
7. GENERAL PROVISIONS
7.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of this Agreement would be
irreparable and that an award of monetary damages to the Employer for such a
breach would be an inadequate remedy. Consequently, the Employer will have the
right, in addition to any other rights it may have, to obtain injunctive relief
to restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement, and the Employer will not be obligated to post
bond or other security in seeking such relief. Without limiting the Employer's
rights under this Section 7 or any other remedies of the Employer, if the
Executive breaches any of the provisions of Section 5 or 6, the Employer will
have the right to cease making any payments otherwise due to the Executive under
this Agreement.
7.2 COVENANTS OF SECTIONS 5 AND 6 ARE ESSENTIAL AND
INDEPENDENT COVENANTS
The covenants by the Executive in Sections 5 and 6 are essential elements of
this Agreement, and without the Executive's agreement to comply with such
covenants, the Employer would not have entered into this Agreement or employed
the Executive. The Employer and the Executive have independently consulted their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer. The Executive's covenants in
Sections 5 and 6 are independent covenants and the existence of any claim by the
Executive against the Employer under this Agreement or otherwise will not excuse
the Executive's breach of any covenant in Section 5 or 6. If the Executive's
employment hereunder expires or is terminated, this Agreement will continue in
full force and effect as is necessary or appropriate to enforce the covenants
and agreements of the Executive in Sections 5 and 6.
7.3 REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE
The Executive represents and warrants to the Employer that the execution and
delivery by the Executive of this Agreement do not, and the performance by the
Executive of the Executive's obligations hereunder will not, with or without the
giving of notice or the passage of time, or both: (a) violate any judgment,
writ, injunction, or order of any court, arbitrator, or governmental agency
applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound.
7.4 OBLIGATIONS CONTINGENT ON PERFORMANCE
The obligations of the Employer hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.
7.5 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by either party in exercising any
right, power, or privilege under this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement can be discharged by one party, in whole or in part, by a
waiver or renunciation of the claim or right unless in writing signed by the
other party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice to or
demand on one party will be deemed to be a waiver of any obligation of such
party or of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement.
7.6 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
7.7 NOTICES
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to the Employer: Continental Global Group, Inc.
000 Xxxxxxxxxx Xx.
Xxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
With a copy to: Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
If to the Executive: Xxxxxx Xxxx
00000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
This Agreement and any documents executed in connection herewith, contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, between
the parties hereto with respect to the subject matter hereof. This Agreement may
not be amended orally, but only by an agreement in writing signed by the parties
hereto.
7.8 ARBITRATION
This Agreement shall be governed by and construed in accordance with the laws of
the State of Alabama, without regard to principles of conflicts of laws. All
disputes under this Agreement, except for claims for injunctive relief, shall be
settled by arbitration in Birmingham, Alabama, before a single arbitrator
pursuant to the Rules of Commercial Arbitration of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereover. Arbitration may be commenced
at any time by any party hereto giving written notice to each other party to a
dispute that such dispute has been referred to arbitration under this Section
7.8. The arbitrator shall be selected by the joint agreement of the Executive
and the Employer, but if they do not so agree within 20 days after the date of
the notice referred to above, the selection shall be made pursuant to the rules
of such Association from the panels of arbitrators maintained by such
Association. Any award rendered by the arbitrator shall be conclusive and
binding upon the parties hereto. This provision for arbitration shall be
specifically enforceable by the parties and the decision of the arbitrator in
accordance herewith shall be final and binding and there shall be no right of
appeal therefrom, each party shall pay its own expenses of arbitration and the
expenses of the arbitrator shall be equally shared, provided, however, that if
in the opinion of the arbitrator any claim for indemnification or any defense or
objection thereto or the failure to make any payment due hereunder was
unreasonable, the arbitrator may assess, as part of his award, all or any part
of the arbitration expenses of the other party (including reasonable attorneys
fees) and of the arbitrator against the party raising such unreasonable claim,
defense or objection.
7.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Section or Sections of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
7.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
7.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
7.12 WAIVER OF JURY TRIAL
THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO
THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the date above first written above.
EMPLOYER: EXECUTIVE:
CONTINENTAL GLOBAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx Xxxx
------------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, Chairman Xxxxxx Xxxx
Exhibit A
BONUSES
Starting Bonus - The Employer will pay to the Executive, on January 15, 2003, a
starting bonus with respect to his first year of employment of $250,000.
Annual Bonuses - The Executive shall be entitled to the payment of an annual
bonus of up to 30% of Basic Compensation upon the achievement of certain pre-tax
profit targets established by the Board of Directors in connection with approval
of the Employer's annual business plan. If earned by the Executive, such annual
bonus shall be paid within 90 days of the date that the Employer's audited
financial statements have been approved by the Board of Directors for the
previous fiscal year; provided, however, the Executive shall not be entitled to
any bonus payment unless the Executive is employed by the Employer at the time
such bonus payment becomes due. If the Executive is terminated during any year
in which an annual bonus would have become payable had the Executive remained
employed with the Employer, the Executive shall be entitled to a pro-rated
annual bonus based upon actual results through his date of termination as
reasonably determined by the Board of Directors. The bonus due and payable to
the Executive for any Fiscal Year shall be calculated in accordance with the
table below:
Achievement of
Bonus Percentage Pre-Tax Profit Target
30% 100%
0% 75%
Notwithstanding the foregoing, if the percentage of target achieved is greater
than 75%, but less than 100%, of the annual pre-tax profit target established by
the Board of Directors, than the Executive's annual bonus shall be determined by
on a pro-rata basis for each percentage point of pre-tax profit achieved that is
greater than 75% of target. If the percentage of target achieved is greater than
100%, of the annual pre-tax profit target established by the Board of Directors,
than the Executive's annual bonus percentage shall be 30% plus an additional 1%
for each percentage point of pre-tax profit achieved that is greater than 100%
of target. If a change in accounting practice results in a material increase or
decrease of the Employer's pre-tax profit for any fiscal year, than the Board of
Directors may determine in good faith whether any adjustment in the pre-tax
profit goal and bonus calculation will be made. Pre-tax profit shall be
determined in accordance with the Employer's annual audited financial statements
without giving effect to any extraordinary transaction, such as a repurchase of
securities or a sale or purchase of a business unit. The Board of Directors
determination of any applicable bonus amount and of whether a pre-tax profit
target has been achieved shall be final and binding upon the Executive.
Liquidity Event Bonus - If a Liquidity Event occurs during the Term and, in
connection therewith all other obligations of the Employer and its subsidiaries
are either assumed by the purchaser or satisfied from the proceeds of the
Liquidity Event, then the Executive shall be entitled to a Liquidity Event Bonus
of up to $1 million from the cash proceeds remaining after taxes (the "Net
Proceeds") for distribution on account of the outstanding equity of Employer or
to the former equity holders of Employer. If the cash Net Proceeds available to
the shareholders of Employer as a result of a Liquidity Event exceed $20
million, then the Executive shall be entitled to an additional Liquidity Event
Bonus equal to 10% of the amount by which the cash Net Proceeds available to
such shareholders exceed $20 million. The Executive shall be entitled to a
Liquidity Event Bonus only if he is employed directly by Employer at the time of
consummation of the Liquidation Event. Nothing in this paragraph shall limit the
right of the Employer or any shareholder to sell any portion of the assets or
equity of the Employer or entitle the Executive to any bonus in the event of any
such sale that does not constitute a Liquidation Event. Nothing in this
paragraph or elsewhere in this Agreement shall create in the Executive an
entitlement to employment with the Employer or otherwise create any relationship
between the Executive and the Employer other than an employment-at-will
employment relationship.
