EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of November
3, 1998, between PMC International, Inc., a Colorado corporation (the
"Company"), and Xxxxx X. XxxXxxxxx ("Employee").
RECITALS
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A. The Company has entered into an Agreement and Plan of Merger of even
date herewith (the "Merger Agreement"), pursuant to which the Company will be
the surviving corporation of a merger (the "Merger") with a wholly owned
subsidiary of The Xxxxxxx Companies, Inc., a Wisconsin corporation ("Xxxxxxx").
B. Employee is current President of the Company and Xxxxxxx desires
Employee to continue his affiliation with the Company in such capacity.
Therefore, the Company has offered, and Employee has accepted, employment with
the Company. This Agreement sets forth the terms on which the Company employs
Employee.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
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following meanings:
"Base Salary" has the meaning set forth in Section 3(a).
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"Company" means PMC International, Inc., a Colorado corporation, its
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successors and assigns, and any of its present or future subsidiaries.
"Competitive Advisory Business" means services, products or software in the
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wrap-fee or privately managed account business (whether using mutual funds or
separate accounts) and/or services, products or software in the performance
reporting business to the extent such services, products or software are
provided to or through financial intermediaries, including, but not limited to,
investment advisors, broker-dealers, banks, insurance companies, accounting
firms and financial planners for use in providing services to the retail and
small institutional accounts (often under $30 million in assets) of such
financial intermediaries. The term "Competitive Advisory Business" includes the
offering of any of the following products or services through financial
intermediaries, either alone or in combination, whether or not such products or
services are generally or customarily understood to be included in the term
"wrap-fee" or "privately managed account" business, and whether or not such
products or services are offered for a single fee or are charged for separately:
(1) investment recommendations or portfolio management services based on or
tailored to the specific investment needs and/or risk tolerance of the client
whose assets are being managed; (2) access to the asset management services of
separate account managers; (3) automated trading services that involve the
exercise of discretionary authority, a limited power of attorney or similar
authorization granted by an asset management client; and (4) the preparation of
reports or statements that show the securities transactions in a client account
and/or calculate, display or analyze the performance or investments held in a
client account. The term "Competitive Advisory Business" does not include
personally providing investment advisory products or services directly to
clients through a financial planning, investment management or investment
consulting firm, as long as either (1) at least 75% of the clients of such firm
have assets under management or under advisement by such firm in excess of $30
million, or (2) such clients are not primarily secured by such firm through
referrals or solicitations by individuals not employed by such firm who derive a
fee or other compensation for such referrals or solicitations. The term
"Competitive Advisory Business" specifically includes, but is not limited to,
any investment advisory services or products provided to financial
intermediaries by Xxxxxxxx Financial Services, Inc.; Xxxxxxxxxx Xxxxx Xxxxx
Advisory Services; Advisory Consulting Group; SEI Investments; Xxxxxxx Capital;
Meridian Investment Management; Xxxxx Xxxxxxx Company; and Xxxxxx Associates,
Inc. The term "Competitive Advisory Business" also includes "turn key asset
management programs."
"Employee" has the meaning set forth in the preamble to this Agreement.
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"Expiration Date" has the meaning set forth in Section 4.
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"Inventions" means inventions, discoveries, trade secrets, products,
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processes, devices, methods, designs, formulas, techniques, programs, computer
software as well as improvements thereof, in each case whether or not
patentable, that are (a) based on or comprising Proprietary Information, (b)
made or conceived by Employee, whether or not during the hours of his engagement
with the Company or with the use or assistance of the Company's facilities,
materials or personnel, either solely or jointly with others, (c) related to or
arising out of Employee's employment by the Company, and (d) during the term of
this Agreement or any extension hereof. Notwithstanding the foregoing,
Inventions does not include inventions of Employee that Employee establishes, by
competent proof, are neither derived from or made in connection with Proprietary
Information nor developed for the Company.
"Participate In" means directly or indirectly, individually or with or
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through any other person or entity, own, manage, operate, control, lend money to
or participate in the ownership, management, operation or control of, or be
connected to as a director, officer, employee, partner, consultant, agent,
independent contractor or otherwise, or acquiesce in the use of Employee's name
in such above actions. Notwithstanding the foregoing, Employee will not be
deemed to Participate In a business merely because he owns 5% or less of the
outstanding common stock of a corporation if, at the time of his acquisition
thereof, such stock is listed on a national securities exchange or is quoted on
NASDAQ.
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"Performance Salary" has the meaning set forth in Section 3(b).
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"Proprietary Information" means information and materials disclosed to or
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known or developed by Employee about the Company's plans, strategies, prospects,
products, processes and services, including information and materials relating
to the Company's research, development, inventions, purchasing, accounting,
engineering, marketing, merchandising and selling, but excluding information
that Employee establishes, by competent proof, (i) was known, other than under
an obligation of confidentiality, to Employee prior to the initiation of his
engagement by the Company; (ii) has passed into the public domain prior to or
after its development by or for the Company other than through acts or omissions
attributable to Employee; or (iii) was subsequently obtained other than under an
obligation of confidentiality from a third party not acquiring the information
under an obligation of confidentiality from the disclosing party.
"Xxxxxxx" has the meaning set forth in the recitals to this Agreement.
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2. Employment; Capacity; Duties; Reporting Structure; Location. The
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Company will employ Employee as its President. During his employment by the
Company, Employee will perform the duties and bear the responsibilities
commensurate with his position and will serve the Company faithfully and to the
best of his ability. As President, which position constitutes the senior
executive position of the Company, the responsibilities of Employee will
include, by way of illustration and not limitation, the day-to-day management
and operations of the Company. Employee will devote his entire working time,
attention and energy to the business of the Company. Employee will not at any
time discredit the Company or any of its products or services. Except for his
involvement in personal investments, as long as such involvement does not
require any significant services on his part, Employee will not engage in any
other business activity that requires significant personal services by Employee
or that, in the Company's judgment, may conflict with the proper performance of
Employee's duties under this Agreement. Employee will report directly to the
Chairman and the Board of Directors of the Company. Employee will be based at
the Company's facilities in Denver, Colorado.
3. Base Salary; Performance Salary; Benefits; Sick Leave; Vacation;
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Expenses.
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(a) As compensation for all services provided by Employee, the Company
will pay Employee a base salary of $240,000 per year ("Base Salary"), prorated
for any portion of a year, payable in arrears in the same manner as the Company
customarily pays the salaries of its employees or as the parties hereto may
otherwise agree.
(b) Employee will be eligible for performance-based increases to this
Base Salary as established by the Company in its discretion.
(c) In addition to Base Salary and Performance Salary, the Company
will provide Employee with the benefits of such insurance plans, hospitalization
plans, pension or profit sharing plans and other employee fringe benefit plans
as are customarily provided to employees of the
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Company and for which Employee is eligible under the terms of such plans.
Nothing in this Agreement requires the Company to adopt or maintain any such
plan. During Employee's employment by the Company, Employee will be entitled to
four weeks of paid vacation, which will be reasonably used so as to avoid
disruption of the Company's operations.
(d) Except as set forth herein, nothing in this Agreement requires the
Company to establish an equity incentive program or confer on Employee any right
to receive any stock option or other equity incentive not awarded on or before
the date hereof.
(e) The Company will reimburse Employee for all reasonable out-of-
pocket expenses incurred by Employee at the request of the Company in the
performance of his duties under this Agreement and such other expenses as may be
approved by the Company in accordance with the Company's reimbursement policies
as in effect from time to time, in each case upon presentation to the Company of
an itemized accounting of such expenses with reasonable supporting data.
4. Term. Subject to Section 9(j), this Agreement will become effective
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on November 3, 1998 and, unless earlier terminated in accordance with Section 5,
will expire one year from such effective date (the "Expiration Date"). If this
Agreement expires or is terminated, this Agreement will forthwith become void
and there will be no liability or obligation on the part of the parties hereto,
except as otherwise provided herein and except that the provisions of this
Section 4 and Sections 5, 6, 7, 8 and 9 will remain in full force and effect and
survive any termination or expiration of this Agreement.
5. Termination.
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(a) In the event of the death of the Employee, except with respect to
any benefits that have accrued and have not been paid to the Employee under this
Agreement, the provisions of this Agreement will terminate immediately.
However, the Employee's estate will have the right to receive compensation due
to the Employee as of and to the date of his death and, furthermore, to receive
an additional amount equal to one-twelfth (1/12) of the employee's annual
compensation as specified in Section 3(a).
(b) If the Employee is prevented by illness, accident, or other
incapacity from properly performing his duties under this Agreement (and, if
required by the Company, upon the furnishing of evidence reasonably satisfactory
to the Company of such disability), the Company will, during the continuance of
his disability, but only for the remaining term of this Agreement, pay the
Employee his compensation payable under the provisions of Section 3 (less the
amount of any benefits paid to the Employee under any disability insurance
provided by the Company) and continue to provide the Employee all other benefits
provided under this Agreement. As used herein, the term "disability" means the
complete and total inability of the Employee, due to illness, physical or
comprehensive mental impairment to substantially perform all of his duties as
described in this Agreement for a consecutive period of 30 days or more.
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(c) The Company may terminate this Agreement at any time, with or
without cause, by giving written notice of termination to Employee. If Employee
is terminated by the Company, then the Employee retains the right to receive and
the Company shall pay Base Salary, Performance Salary, and benefits through the
Expiration Date; provided, however, that Employee's right to receive and the
Company's obligation to pay Base Salary, Performance Salary and benefits for the
remaining term of this Agreement shall immediately terminate if the Employee
Participates In or obtains employment with a Competitive Advisory Business.
(d) The Employee may terminate this Agreement at any time, for any
reason, by giving written notice of termination to the Company. If Employee
terminates the Agreement, then the Employee releases all rights to receive Base
Salary, Performance Salary, and benefits, other than those which have accrued
prior to the date on which the Employee terminated the Agreement or those which
are required by law and agrees to provide a written release of any age or other
discrimination claims as part of the termination notice.
(e) Upon the termination of this Agreement, for any reason whatsoever,
until December 1, 1999, Employee shall not, directly or indirectly, solicit the
business of Ernst & Young LLP, or act in any other way reasonably intended to
interfere with the relationship between Ernst & Young LLP and the Company.
6. Non-Disclosure of Information.
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(a) Except as specifically permitted by the Company in writing or as
required for Employee to perform his services and duties hereunder, during the
period beginning on the date of this Agreement and ending on the date that is
two years after the expiration or termination of this Agreement (the "Non-
Disclosure Period"), Employee will not disclose any Proprietary Information to
any person or entity for any purpose or use. This Section 6 is not intended to
prevent Employee from obtaining employment in the Company's industry and,
accordingly, the disclosure of the fact of Employee's employment or engagement
in the Company's industry or the use of Employee's industry knowledge or of
information or knowledge which has passed into the public domain other than
through acts or omissions attributable to Employee, shall not be deemed the
disclosure of Proprietary Information.
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(b) Upon the termination or expiration of this Agreement, Employee
will deliver to the Company or with the Company's permission cause to be
destroyed all notes, letters, prints, records, forms, contracts, studies,
reports, appraisals, financial data, lists of names or other customer data, and
any other articles or papers, software, computer tapes and materials that have
come into his possession by reason of his engagement by the Company, whether or
not prepared by him, and he will not retain any memoranda, summaries, or copies
of any of those items.
(c) Employee acknowledges that Proprietary Information of the Company
is a unique and valuable asset of the Company, the loss or unauthorized
disclosure or use of which would cause the Company irreparable harm.
7. Inventions.
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(a) Employee hereby assigns and agrees to assign to the Company, or to
any person or entity designated by the Company, without royalty or other
consideration to Employee therefor other than the compensation set forth in this
Agreement, all of his right, title and interest in and to all (i) Inventions,
(ii) applications for United States of America and foreign letters patent, (iii)
United States of America and foreign letters patent granted upon Inventions, and
(iv) material related to any of the foregoing subject to copyright. Employee
further acknowledges that all copyrightable materials developed or produced by
Employee within the scope of his engagement by the Company constitute works made
for hire. Notwithstanding anything to the contrary in this Section 7(a),
Employee's obligations under this Section 7(a) will only apply to the extent the
items set forth in clauses (i) through (iv) hereof relate to or arise out of
Employee's employment by the Company.
(b) Employee will communicate promptly and disclose to the Company, in
such form as the Company may reasonably request, all information, details and
data pertaining to any of the items described in Section 7(a).
(c) At the request of the Company, Employee will do all acts necessary
or appropriate to secure for the Company the full benefits of each item
described in Section 7(a), and otherwise to carry into full force and effect the
assignment contained in Section 7(a). Such acts may include giving testimony in
support of Employee's inventorship and promptly executing and delivering to the
Company such papers, instruments and documents, without expense to Employee, as
may be appropriate in the Company's opinion to apply for, secure, maintain,
reissue, extend or defend the Company's worldwide rights in any item described
in Section 7(a).
8. Injunctive Relief. Employee acknowledges that the breach or
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threatened breach by Employee of any of the provisions of Section 5(e), 6 or 7
would cause the Company irreparable harm. Upon the breach or threatened breach
of any provision of Section 5(e), 6 or 7, the Company will be entitled to any
injunction, without bond, restraining Employee from committing such breach. This
right will not be construed to limit the Company's ability to obtain any other
remedies available to it for such breach or threatened breach, including the
recovery of damages.
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9. General Provisions.
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(a) Remedies. Except as otherwise provided herein, any and all
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remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. No failure or delay on the part of any party
hereto in the exercise of any right hereunder will impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.
(b) Governing Law. This Agreement, its interpretation, and the legal
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relations between the parties hereto will be governed by and construed in
accordance with the laws of the State of Colorado, without regard to the
conflict of laws rules thereof.
(c) Severability. If any provision of this Agreement is held to be
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invalid, illegal or unenforceable in any jurisdiction by any court of competent
jurisdiction, then (i) such invalidity, illegality or unenforceability will not
affect such provision with respect to any other jurisdiction, (ii) such
invalidity, illegality or unenforceability will not affect any other provision
of this Agreement with respect to such jurisdiction, and (iii) such court may
modify such provision of this Agreement with respect to such jurisdiction, and
such provision will thereafter be enforced in its modified form in such
jurisdiction if the parties hereto agree that such modification will achieve, to
the extent possible, the economic, business and other purposes of such invalid,
illegal or unenforceable provision.
(d) Notices. All notices and other communications hereunder must be
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in writing and will be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail, return receipt
requested, or sent via facsimile, with confirmation of receipt, to the parties
hereto at the following address or at such other address for a party hereto as
specified by notice hereunder:
(i) if to the Company, to:
PMC International, Inc.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: 000-000-0000
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with copies to:
The Xxxxxxx Companies, Inc.
000 X. Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxx 00000-0000
Attention: S. Xxxxxxx X'Xxxxx, Esq.
Facsimile No.: 000-000-0000
and
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: 414-271-3552
(ii) if to Employee:
Xxxxx X. XxxXxxxxx
0000 X. Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
(e) Assignment: Binding Effect and Benefit. Except as otherwise
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provided in this Section 9(e), neither party hereto may assign its rights or
delegate its obligations under this Agreement without the prior written consent
of the other party. The Company may assign its rights and delegate its
obligations under this Agreement, without the prior written consent of Employee,
to any of its affiliates or to any person or entity that acquires all or
substantially all of the business of the Company whether through merger,
purchase of assets, or otherwise, provided that such assignment is for a
reasonable business purpose and not to avoid the terms and conditions hereunder.
This Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective legal representatives, heirs, and permitted
successors and assigns.
(f) Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, whether oral or written,
between the parties hereto with respect to the subject matter hereof, including,
without limitation, the Employment Agreement dated September 23, 1997 and the
Change in Control Agreement, dated May 15, 1998, which, except as provided
herein, shall be null and void.
(g) Amendment. This Agreement may not be amended except by an
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instrument in writing signed on behalf of each of the parties hereto.
(h) Headings: "Including". When a reference is made in this
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Agreement to a section such reference is to a section of this Agreement unless
otherwise indicated. The words
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"include," "includes" and "including" when used herein will be deemed in each
case to be followed by the words "without limitation." The section headings
contained in this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement. Whenever the context
may require, each pronoun includes the corresponding masculine, feminine and
neuter forms.
(i) Representation by Counsel. The parties hereto acknowledge that
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they have had the opportunity to consult with counsel and have done so to the
extend they deemed appropriate during the negotiation, preparation and execution
of this Agreement.
(j) Counterparts: Effective Date. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument. This Agreement will
become effective when one or more counterparts have been signed by each of the
parties hereto and delivered to the other parties hereto, it being understood
that all parties hereto need not sign the same counterpart.
(k) Enforcement Costs. In the event of any proceeding to enforce this
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Agreement, the prevailing party will be entitled to receive from the other party
all reasonable costs and expenses, including the reasonable fees of attorneys,
accountants and other experts, incurred by the prevailing party in investigating
and prosecuting (or defending) such action at trial or upon any appeal.
IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date first written above.
THE COMPANY
PMC INTERNATIONAL, INC.
/s/ X.X. Xxxxxx
By: _____________________________
CEO
Its: _____________________________
EMPLOYEE
/s/ Xxxxx X. XxxXxxxxx
___________________________________
Xxxxx X. XxxXxxxxx
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