Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS Employment Agreement (the "Agreement") is made as of the 1st day of
April, 2002 by and between Applied Extrusion Technologies, Inc., a Delaware
corporation (the "Employer"), and Xxxx X. Xxxxxx (the "Executive").
RECITALS
1. The Executive is currently employed by the Employer as the Chairman (the
"Chairman") of its Board of Directors (the "Board") pursuant to an Employment
Agreement dated as of April 1, 1999, as in effect on the date hereof (the "Prior
Employment Agreement").
2. The Prior Employment Agreement provides that, on or after March 31,
2003, the Prior Employment Agreement continues in effect from year to year
unless either the Executive or the Employer gives notice to the other that such
continuation should not occur.
3. The Employer desires to continue to employ the Executive and to make
secure for itself the experience, abilities and services of the Executive and to
prevent the loss of such experience, services and abilities.
4. In consideration of the employment to be provided hereby and the amounts
to be paid as provided herein, the Executive desires to continue to be employed
by the Employer and to agree with the Employer as further provided herein.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Employment. The Employer shall continue to employ the Executive, and the
Executive shall continue to perform services for and continue in the employment
of the Employer, for the period (the "Employment Period") beginning on the date
hereof and ending on March 31, 2007, subject to extension as set forth herein
(such date, as from time to time in effect, being referred to herein as the
"Expiration Date"); provided, however, that, unless either the Employer or the
Executive shall give notice to the other (which notice may be given in the sole
discretion of either party hereto) no later than 90 days prior to the
then-current Expiration Date (the "Current Expiration Date") that such party
does not wish to have the Employment Period extended for another year past the
Current Expiration Date, then, at the close of business on such date which is 90
days prior to the Current Expiration Date, the Expiration Date shall
automatically become the date which is exactly one year after the Current
Expiration Date; and provided, further, that the employment of the
Executive by the Employer may be terminated prior to the Expiration Date in
accordance with all of the terms and conditions hereof.
2. Capacity. During such time as the Executive is employed by the Employer
hereunder:
(a) Position and Duties. The Executive shall serve as the Chairman of the
Board, shall report and be accountable to the Board, and shall have such other
powers, duties and responsibilities, consistent with his position and
experience, and consistent in time required, scope and place of performance,
with those services rendered by the Executive pursuant to the prior Employment
Agreement. The Executive shall devote his business judgment, skill and knowledge
to the discharge of his duties and responsibilities hereunder. The Executive
shall be required to devote only so much time as the Executive determines is
reasonably necessary to discharge his duties as the Chairman, and, subject to
the provisions of Sections 5 and 6, may engage in other business activities
during the Employment Period.
(b) Board Membership. The Employer agrees to propose to the shareholders of
the Employer at each appropriate Annual Meeting of such shareholders the
reelection of the Executive as a member of the Board, provided that the
Executive is otherwise eligible for such election; provided, however, that
should Executive's employment hereunder terminate for any reason, Executive
agrees to resign from the Board, and from the board of directors of each
subsidiary or affiliate of the Employer, immediately upon the receipt of a
request for such resignation from the Board, if the Employer has paid all
amounts owed to the Executive by virtue of the termination of his employment and
is not otherwise then in default hereunder.
3. Compensation.
(a) Salary. During each year of the Employment Period, the Executive shall
receive an annual salary (the "Salary") of $543,000; provided, however, that
effective April 1, 2003, and on each April 1 thereafter, the Salary then in
effect shall be increased by the greater of (i) such increase as the Board may
specify in its sole discretion or (ii) an amount equal to the then-current
Salary multiplied by the percentage increase (if any) in the Consumer Price
Index for All Urban Consumers (CPI-U) - U.S. City Average during the immediately
preceding calendar year.
(b) Incentive Bonus. During each year of the Employment Period, the
Executive shall be eligible to receive an incentive bonus (the "Bonus") based
upon criteria that are defined annually by the Employer and will be targeted at
50% of Salary, with a maximum payout potential of 100% of Salary.
(c) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable business expenses incurred by
him on behalf of the Employer consistent with past practices.
(d) Fringe Benefits. During the Employment Period, (i) the Executive shall
be entitled to participate in or receive benefits under each disability
insurance, health, pension, retirement and accident plan or arrangement made
generally available by the Employer to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, (ii) the Executive shall
also be entitled to payments pursuant to a supplemental executive retirement
plan having terms no less favorable to the Executive than those currently in
effect (the "SERP), and (iii) the Employer shall provide to the Executive, or at
Executive's election reimburse the Executive on an after tax basis for the cost
of, (A) disability insurance providing not less than 65% Salary replacement
until age 65, and (B) insurance protection over the Executive's life providing
death benefits of not less than $2,500,000 payable to such person as the
Executive shall have designated in a notice filed with the Employer (the
"Designee"), or, if no such person shall have been designated, to his estate
(the "Estate"), in each case consistent with the Employer's past practices
regarding such insurance for executives.
(e) Change of control. If a "Change of control" (as such term is defined
and set forth in Exhibit A hereto) shall occur, then (i) Section 1 hereof shall
be amended by replacing the date "March 31, 2007" with the date which is exactly
five years after the date of the Change of control, (ii) all stock options
previously granted to the Executive which, by their terms, have not yet vested,
shall immediately vest and become exercisable, and shall remain exercisable
until the earlier of the Expiration Date, or the expiration date of the related
stock option grant, regardless of employment status, (iii) one year from the
date of the Change of control, Executive may elect to terminate his employment
hereunder, upon giving at least six (6) months advanced written notice to the
Employer, with such termination having the same effect and related compensation
as if Executive terminated his employment for Good Reason in accordance with
Section 4(f), (iv) with respect to the SERP previously granted to the Executive,
(A) all benefits associated with such SERP which, by their terms, have not yet
vested, shall immediately vest, and (B) the Executive shall be entitled to the
maximum potential retirement benefit available pursuant to the SERP,
irrespective of any performance criteria, and (v) the Executive shall be
entitled to carry out Executive's duties and responsibilities hereunder
primarily from Executive's then current primary place of business and will not
be required to locate his primary place of business outside such area without
his consent (which may be given or withheld in his sole discretion).
4. Termination and Compensation Thereon.
(a) Termination Date. As used herein, the term (i) "Termination Date" shall
mean the earlier of (A) the Expiration Date or (B) if the Executive's employment
is terminated (1) by his death, the date of his death, or (2) for any other
reason, the date on which such termination is to be effective pursuant to the
notice of termination given by the party terminating the employment
relationship, and (ii) "Benefits Termination Date" shall mean the later of (A)
the Expiration Date or (B) the date which is exactly two years after the
Termination Date. The Employment Period shall terminate on the Termination Date;
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provided, however, that, unless the Executive's employment is terminated
pursuant to Section 4(d) or 4(g) hereof, the Expiration Date shall not be
changed to the Termination Date if the Executive's employment hereunder
terminates on a date other than the Expiration Date, and, if the Executive's
employment is terminated pursuant to Section 4(d) or 4(g) hereof, the Expiration
Date shall automatically be changed and shall become the Termination Date.
(b) Death. The Executive's employment hereunder shall terminate upon his
death. In such event, the Employer shall pay to the Designee or, if no such
person shall have been designated, the Estate, as applicable, (i) as promptly as
practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, together with an amount
equal to the Average Bonus (pro rated for the period from the beginning of the
fiscal year through the Termination Date) for the fiscal year in which the
Executive's death occurs, and (ii) the Executive shall be deemed for all vesting
requirements contained in any of the Employer's benefit plans, programs and
offerings in which the Executive is participating on the Termination Date
(including without limitation any SERP or other benefits) to have been employed
by the Employer until the Expiration Date, with any vested stock options
remaining exercisable until such date, provided they do not expire. For purposes
of this Agreement, the "Average Bonus" shall mean, with respect to any fiscal
year of the Company, the greater of (A) the Bonus accrued by the Employer as
payable to the Executive with respect to the fiscal year immediately preceding
the Termination Date or (B) 25% of the Salary payable in such fiscal year.
(c) Incapacity. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall for at least six consecutive
months during the term of this Agreement have been unable to perform his duties
under this Agreement on a full-time basis, the Employer, by action of the Board,
may terminate the Executive's employment hereunder by notice to the Executive.
In such event, (i) the Employer shall pay the Executive as promptly as
practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, together with an amount
equal to the Average Bonus (pro rated for the period from the beginning of the
fiscal year through the Termination Date) for the fiscal year in which the
Termination Date occurs, (ii) during the period beginning on the Termination
Date and ending on the Benefits Termination Date, shall extend to Executive the
applicable fringe benefits referred to in Sections 3(d)(i), 3(d)(ii) and
3(d)(iii)(B) hereof (or the equivalent thereof in all material respects if
continuation of participation in benefit plans is not able to be continued under
applicable law or the terms of such benefit plans), and (iii) the Executive
shall be deemed for all vesting requirements contained in any of the Employer's
benefit plans, programs or offerings in which the Executive is participating on
the Termination Date (including without limitation any SERP or other benefits)
to have been employed by the Employer until the Expiration Date, with any vested
stock options remaining exercisable until such date, provided they do not
expire. Any dispute between the Board and the Executive with respect to the
Executive's incapacity shall be settled by reference to a competent medical
authority mutually agreed to by the Board and the Executive, whose decision
shall be binding on all parties.
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(d) Termination by the Employer for Cause. The Employer may terminate the
Executive's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean the Executive's conviction of, or entry into a consent decree
or substantially similar arrangement in connection with, a felony crime
involving fraud, dishonesty or other conduct which materially and adversely
affects the Employer. If the Executive's employment is terminated pursuant to
this Section 4(d), the Employer shall have no further obligations to the
Executive hereunder after the Termination Date, except for unpaid Salary, Bonus
and benefits accrued through the Termination Date.
(e) Termination by the Employer Other Than for Death, Incapacity or Cause.
The Employer may terminate the Executive's employment hereunder, other than
pursuant to Section 4(b) (relating to death), Section 4(c) (relating to
incapacity), or Section 4(d) (relating to Cause), at any time. In the event of
such termination, or if the Executive's employment hereunder shall terminate on
the Expiration Date because the Employer has given the notice contemplated by
the first proviso to Section 1 hereof, then the Employer (i) shall pay the
Executive (A) as promptly as practicable after the Termination Date, an amount
equal to any unpaid Salary, Bonus and benefits accrued through the Termination
Date, together with an amount equal to the Average Bonus (pro rated for the
period from the beginning of the fiscal year through the Termination Date) for
the fiscal year in which the Termination Date occurs, and (B) a lump sum
payment, within 60 days after the Termination Date, equal to the aggregate
amount of Salary and Average Bonus that would have been payable to the Executive
over the period from the Termination Date to the Benefits Termination Date if
the Executive had continued to be employed by the Employer through the Benefits
Termination Date and received Salary and Average Bonus for periods after the
Termination Date based upon the Salary he would have received under Section 3(a)
if this Agreement was extended through the Benefits Termination Date (but
excluding any cost of living or discretionary increases under clauses (i) or
(ii) of Section 3(a) that would have occurred after the Termination Date), and
(ii) during the period beginning on the Termination Date and ending on the
Benefits Termination Date, shall extend to Executive the applicable fringe
benefits referred to in Section 3(d) hereof on the terms referred to therein (or
the equivalent thereof in all material respects if continuation of participation
in benefit plans is not able to be continued under applicable law or the terms
of such benefit plans). In addition, the Executive shall be deemed for all
vesting requirements, contained in any of the Employer's benefit plans, programs
or offerings in which the Executive is participating on the Termination Date
(including without limitation any SERP or other benefits) to have been employed
by the Employer until the Expiration Date, with any vested stock options
remaining exercisable until such date, provided they do not expire.
(f) Termination by the Executive for Good Reason. The Executive may
terminate his employment hereunder for Good Reason upon notice to the Employer
setting forth in reasonable detail the nature of such Good Reason. The following
shall constitute "Good Reason" for termination by the Executive if the same has
not been cured within 30 days after written notice to the Employer by the
Executive:
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(i) Failure of the Employer to continue the Executive in the position of
Chairman of the Board;
(ii) Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure to pay Executive on a timely basis, or any other material
breach by the Employer of Section 2 or 3 hereof.
In event of termination in accordance with this Section 4(f), then the Employer
(i) shall pay the Executive (A) as promptly as practicable after the Termination
Date, an amount equal to any unpaid Salary, Bonus and benefits accrued through
the Termination Date, together with an amount equal to the Average Bonus (pro
rated for the period from the beginning of the fiscal year through the
Termination Date) for the fiscal year in which the Termination Date occurs, and
(B) a lump sum payment, within 60 days after the Termination Date, equal to the
aggregate amount of Salary and Average Bonus that would have been payable to the
Executive over the period from the Termination Date to the Benefits Termination
Date if the Executive had continued to be employed by the Employer through the
Benefits Termination Date and received Salary and Average Bonus for periods
after the Termination Date based upon the Salary he would have received under
Section 3(a) if this Agreement was extended through the Benefits Termination
Date (but excluding any cost of living or discretionary increases under clauses
(i) or (ii) of Section 3(a) that would have occurred after the Termination
Date), and (ii) during the period beginning on the Termination Date and ending
on the Benefits Termination Date, shall extend to Executive the applicable
fringe benefits referred to in Section 3(d) hereof on the terms referred to
therein (or the equivalent thereof in all material respects if continuation of
participation in benefit plans is not able to be continued under applicable law
or the terms of such benefit plans). In addition, the Executive shall be deemed
for all vesting requirements contained in any of the Employer's benefit plans,
programs or offerings in which the Executive is participating on the Termination
Date (including without limitation any SERP or other benefits) to have been
employed by the Employer until the Expiration Date, with any vested stock
options remaining exercisable until such date, provided they do not expire.
(g) Termination by the Executive Other Than for Good Reason. The Executive
may terminate his employment hereunder other than for Good Reason. In the event
of termination of the Executive's employment pursuant to this Section 4(g), or
if the Executive's employment hereunder shall terminate on the Expiration Date
because the Executive has given the notice contemplated by the first proviso to
Section 1 hereof, the Employer shall have no further obligations to the
Executive hereunder after the Termination Date, except for an amount equal to
any unpaid Salary, Bonus and benefits accrued through the Termination Date.
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(h) Effect of Termination. This Section 4 sets forth all obligations of the
Employer to the Executive upon termination of his employment hereunder;
provided, however, that the benefits provided hereunder shall be in addition to,
and not in lieu of, any benefits provided to the Executive by the Employer under
any plan in which the Executive participates, including without limitation any
stock option or SERP or benefit, including that benefit referenced in Exhibit A
of this Agreement but excluding any severance plans or policies administered by
the Employer. The provisions of this Section 4 and of Sections 5, 6, 7, 8, 10,
and 12 hereof shall survive the Termination Date.
(i) Consulting Services. Following termination of his employment hereunder
pursuant to the provisions of Section 4(e) or 4(f) hereof, and in partial
consideration for the payments provided pursuant thereto, during the period from
the Termination Date until the Benefits Termination Date, Executive shall
provide to Employer up to one day per month of consulting services as reasonably
requested by Employer. Such consulting services shall be provided from locations
and at times reasonably acceptable to Executive in his sole discretion.
Executive shall be entitled to receive prompt reimbursement for all reasonable
business expenses incurred by him in connection with the provision of consulting
services to Employer.
5. Nondisclosure and Nonuse of Confidential Information. Executive shall not
disclose to any other person (except as required by applicable law or in
connection with the performance of his duties and responsibilities hereunder),
or use for his own benefit or gain, any Confidential Information (as defined
below) relating to the business conducted by the Employer. Executive understands
that this restriction shall continue to apply after Executive's employment
terminates, regardless of the reason for such termination, and after the
expiration or other termination of this Agreement. "Confidential Information"
means all confidential, proprietary or other information relating to the
Employer and its subsidiaries and affiliates and their businesses, and includes
without limitation all such information relating to (i) the development,
research, testing, manufacturing and marketing activities of the Employer, (ii)
the products manufactured, sold or distributed by the Employer, (iii) the costs,
sources of supply and strategic plans of the Employer, (iv) the identity and
special needs of the customers of the Employer, (v) the financial arrangements
and capital structure of the Employer, (vi) the management and operation of the
Employer and (vii) people and organizations with whom the Employer has business
relationships and those relationships. Confidential Information also includes
comparable information that the Employer may receive or has received belonging
to customers or others who do business with the Employer. Confidential
Information shall not include information which (A) is publicly known, or
becomes publicly known through no fault of Executive or (B) is generally known
or readily obtainable by the public.
6. Restricted Activities. Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Employer. While Executive is employed by the Employer and for two (2) years
after the Benefits Termination Date (or, in the event the Executive's employment
is terminated pursuant to Section 4(d), 4(g), or if the Executive's
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employment hereunder shall terminate on the Expiration Date because the
Executive has given the notice contemplated by the first proviso to Section 1
hereof, for two (2) years after the Termination Date), Executive shall not,
directly or indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, engage in any activity that is competitive
or potentially competitive with the business of the Employer as conducted at any
time during Executive's employment without the Employer's written consent, which
consent shall not be unreasonably withheld. Executive understands that these
restrictions shall continue to apply even if this Agreement expires or otherwise
terminates. The foregoing restriction shall not prevent Executive from owing 5%
or less of the equity securities of any publicly traded company or from
accepting employment from or providing consulting services to any person who
does not compete with the Employer.
7. Documents and Material. Upon termination of Executive's employment with the
Employer or at any other time upon the Employer's request, Executive will
promptly deliver to the Employer, without retaining any copies, all documents
and other materials furnished to Executive by the Employer, prepared by
Executive for the Employer or otherwise relating to the Employer's business, if
and to the extent that the information therein constitutes Confidential
Information.
8. Relief, Interpretation. Executive agrees that the Employer shall, in addition
to any other remedies available to it, be entitled to preliminary and permanent
injunctive relief against any breach by him of the covenants and agreements
contained in Sections 5, 6 and 7 hereof without having to post bond. In the
event that any provision of Sections 5, 6 and 7 hereof shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be enforceable.
For purposes of Sections 5, 6 and 7 hereof the term "Employer" shall mean the
Employer and any of its subsidiaries and affiliates to the extent that such
enterprises are, during the term of Executive's employment by the Employer,
engaged in the same line of business as the Employer.
9. Conflicting Agreements. Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder. Executive will not disclose to or use on behalf of the
Employer any proprietary information of a third party without such party's
consent. Executive will not enter into any agreement, whether written or oral,
conflicting with the provisions of this Agreement.
10. Legal Expenses. The Employer shall pay or reimburse Executive on an
after-tax basis for all costs and expenses (including, without limitation, court
costs and reasonable legal fees and expenses incurred by Executive) as a result
of any claim, action or proceeding (i) arising out of the termination of his
employment during the Employment Period, (ii)
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contesting, disputing or enforcing any right, benefits or obligations under this
Agreement, or (iii) arising out of or challenging the validity, advisability or
enforceability of this Agreement or any provision thereof. Such payments or
reimbursements shall be made promptly, but in no event later than five business
days following, receipt by the Employer of request by Executive for such payment
or reimbursement, including an invoice detailing any such legal fees and
expenses. Requests for payment or reimbursement hereunder may be delivered no
more frequently than monthly. Notwithstanding the foregoing, the Executive shall
reimburse the Employer for any fees or expenses previously paid or reimbursed by
Employer in connection with a dispute if the relevant trier-of-fact determines
that Executive's claim or position was frivolous and without reasonable
foundation.
11. Taxes. All payments made by the Employer under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Employer
under applicable law. Notwithstanding the immediately preceding sentence, in the
event that it is determined that any payment or benefit provided by the Employer
to or for the benefit of the Executive, either under any Section of this
Agreement, any stock option, any SERP or otherwise, will be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code or any successor
provision ("Section 4999"), the Employer will, prior to the date on which any
amount of the excise tax must be paid or withheld, make an additional lump-sum
payment (the "gross-up payment") to the Executive. The gross-up payment will be
sufficient, after giving effect to all federal, state and other taxes (including
any excise tax under Section 4999) and charges (including interest and
penalties, if any) with respect to the gross-up payment, to make the Executive
whole for all taxes (including withholding taxes) and any associated interest
and penalties, imposed under or as a result of Section 4999 with respect to all
payments and benefits provided by the Employer to or for the benefit of the
Executive under any Section of this Agreement, any stock option, any SERP or
otherwise. Determinations under this Section 11 will be made by the Employer's
independent auditors unless the Executive has reasonable objections to the use
of that firm, in which case the determinations will be made by a comparable firm
chosen by the Executive after consultation with the Employer (the firm making
the determinations to be referred to as the "Firm"). The determinations of the
Firm will be binding upon the Employer and the Executive except as the
determinations are established in resolution (including by settlement) of a
controversy with the Internal Revenue Service to have been incorrect. All fees
and expenses of the Firm will be paid by the Employer. If the Internal Revenue
Service asserts a claim that, if successful, would require the Employer to make
a gross-up payment or an additional gross-up payment, the Employer and the
Executive will cooperate fully in resolving the controversy with the Internal
Revenue Service. The Employer will make or advance such gross-up payments as are
necessary to prevent the Executive from having to bear the cost of payments made
to the Internal Revenue Service in the course of, or as a result of, the
controversy. The Firm will determine the amount of such gross-up payments or
advances and will determine after resolution of the controversy whether any
advances must be returned by the Executive to the Employer. The Employer will
bear all expenses of the controversy and will gross the Executive up for any
additional taxes that may be imposed upon the Executive as a result of its
payment of such expenses.
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12. Indemnification. To the maximum extent permitted under the laws of The
Commonwealth of Massachusetts, as from time to time in effect, the Employer
hereby agrees to indemnify Executive and hold him harmless from, against and in
respect of any and all damages, deficiencies, actions, suits, proceedings,
demands, assessments, judgements, claims, losses, costs, expenses, obligations
and liabilities arising from or related to the performance of this Agreement by
Executive, other than for gross negligence, willful misconduct or willful
violation of this Agreement.
13. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other party will not operate or be construed as a waiver of any
other subsequent breach by the other party.
14. Amendments. No amendment to this Agreement shall be effective unless it
shall be in writing and signed by each party hereto. No oral waiver, amendment
or modification will be effective under any circumstances whatsoever.
15. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or three days after being
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Employer, to it at:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
(ii) if to the Executive, to him at:
c/o BE Aerospace, Inc.
0000 Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
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16. Assignment. Neither the Employer nor Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; provided, however, that the
Employer may assign its rights and obligations under this Agreement without the
consent of Executive in the event that the Employer shall hereafter effect a
reorganization, consolidate with, or merge into any other person or transfer all
or substantially all of its properties or assets to any other person. This
Agreement shall inure to the benefit of and be binding upon the Employer and
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
17. Miscellaneous. The Prior Employment Agreement is hereby terminated with
respect to the employment of the Executive by the Employer on and after the date
hereof, and shall be of no further force or effect with respect to such
employment; provided, however, that the Prior Employment Agreement shall
continue to govern the terms of the Executive's employment by the Employer with
respect to all periods ending on or prior to the date hereof. This Agreement
constitutes the entire agreement between the parties and supersedes all prior
and contemporaneous communications, agreements, representations, understandings
and negotiations, whether oral or written, with respect to the subject matter
hereof. The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
The headings in this Agreement are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof. This Agreement may be executed
in any number of counterparts which together shall constitute one instrument and
shall be governed and construed in accordance with the domestic substantive laws
of The Commonwealth of Massachusetts without regard to any choice or conflicts
of laws rules or principles that would cause the application of the domestic
substantive laws of any jurisdiction other than The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
APPLIED EXTRUSION TECHNOLOGIES, INC.
By:
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Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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Xxxx X. Xxxxxx
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EXHIBIT A
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Definition of Change of Control
A Change of Control will occur for purposes of this Plan if (i) any individual,
corporation, partnership, company or other entity (including a "group" of the
type referred to in Rule 13d-5 under the Securities Exchange Act of 1934, as
amended (the "Act"), (a "Person") becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act) of securities of the Company representing more than
30% of the combined voting power of the Company's then-outstanding securities
(other than as a result of acquisitions of such securities from the Company),
(ii) there is a change of control of the Company of a kind which would be
required to be reported under Item 6(e) of Schedule 14A of Regulation l4A
promulgated under the Act (or a similar item in a similar schedule or form),
whether or not the company is then subject to such reporting requirement, (iii)
the Company is a party to, or the stockholders approve, a merger, consolidation,
or other reorganization (other than a merger, consolidation or other
reorganization which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent, either by
remaining outstanding or by being converted into voting securities of the
surviving entity, more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger, consolidation, or other reorganization), a sale of all or
substantially all assets, or a plan of liquidation, or (iv) individuals who, at
the date hereof, constitute the Board cease for any reason to constitute a
majority thereof; provided, however, that any director who is not in office at
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the date hereof but whose election by the Board or whose nomination for election
by the Company's shareholders was approved by a vote of at least a majority of
the directors then still in office who either were directors at the date hereof
or whose election or nomination for election was previously so approved (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are used in Rule
14a-ll of Regulation 14A promulgated under the Act) shall be deemed to have been
in office at the date hereof for purposes of this definition.
Notwithstanding the foregoing provisions of this Exhibit A, a "Change of
Control" will not be deemed to have occurred solely because of the acquisition
of securities of the Company (or any reporting requirements under the Act
relating thereto) by an employment benefit plan maintained by the Company for
its employees.
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