EXHIBIT 10.32
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement) is entered into
as of January 1, 1996, by and between:
Quadrax Corporation, a Delaware corporation (Quadrax), as the
employer; and
Xxxxxx X. Xxxxxxxxxxx, an individual (Xx. Xxxxxxxxxxx), as the
employee.
Recital
A. Quadrax is a publicly owned corporation whose shares of
common stock are traded in The NASDAQ SmallCap Stock Market, Inc.
B. Quadrax manufactures, distributes and sells thermoplastic
composite materials and goods manufactured out of its materials
throughout the United States and abroad.
B. Xx. Xxxxxxxxxxx currently serves as Senior Vice President
and Chief Financial Officer of Quadrax.
C. Quadrax desires to obtain the benefit of Xx. Xxxxxxxxxxx'x
expertise and Xx. Xxxxxxxxxxx desires to put his expertise to use
for the benefit of Quadrax for the term and otherwise in
accordance with the provisions of this Agreement.
Provisions
1. Authorities and Responsibilities. Quadrax hereby employs Xx.
Xxxxxxxxxxx and Xx. Xxxxxxxxxxx hereby accepts employment with
Quadrax and agrees to provide his full-time exclusive services to
Quadrax as Senior Vice President and Chief Financial Officer.
In that capacity, Xx. Xxxxxxxxxxx agrees to perform the functions
and duties incident to the positions of Senior Vice President and
Chief Financial Officer. Furthermore, Xx. Xxxxxxxxxxx shall have
all the authority and responsibility commonly associated with
those titles, and in particular, shall:
1.1 report directly to the Chairman and Chief Executive Officer,
or as he may direct, and shall be required to achieve all
reasonable objectives related to the administration of Quadrax's
business as the said Chairman and Chief Executive Officer, or has
designee, shall determine.
2. Term. The term of this Agreement commenced on January 1, 1996,
and shall continue until December 31, 1998.
3. Restrictive Covenants.
3.1 Covenant Not To Compete. Xx. Xxxxxxxxxxx agrees that for
the term of this Employment Agreement (the Restrictive Period),
he will not engage, participate, or have any interest or be
involved in any capacity, whether as an owner, agent, stockholder
(excluding ownership of not more than 5% of the outstanding
shares of a publicly held corporation if such ownership does not
involve, and neither Xx. Xxxxxxxxxxx nor any of his respective
affiliates otherwise has, any managerial or operational
responsibility in respect thereof), officer, director, manager,
partner, joint venturer, employee, consultant, advisor, agent or
otherwise, in any business enterprise which is, or shall at any
time during the Restrictive Period be, directly or indirectly
engaged in activities which are competitive with the business of
Quadrax as conducted on the date of this Employment Agreement, or
during Xx. Xxxxxxxxxxx'x tenure with Quadrax, in the United
States and in any other countries or territories where Quadrax
sells its services and products.
3.2 Non-Disclosure of Confidential Information.
a. Xx. Xxxxxxxxxxx acknowledges that it is the policy of
Quadrax to maintain as secret and confidential all valuable and
unique information heretofore or hereafter acquired, developed or
used by Quadrax relating to the business, operations, employees
and customers of Quadrax, which information gives Quadrax a
competitive advantage in its industry, and which information
includes technical knowledge, know-how or trade secrets and
information concerning the operations, sales, personnel,
suppliers, customers, costs, profits, markets, pricing policies,
Confidential Materials (as hereinafter defined), and the results
of any investigations or experiments of Quadrax (such information
is hereinafter referred to as Confidential Information,
provided, that Confidential Information shall not include any of
the foregoing items which are in the public domain or which are
available from third-party sources without any violation of this
Agreement). Xx. Xxxxxxxxxxx recognizes that the services to be
performed by Xx. Xxxxxxxxxxx are special and unique, and that by
reason of his duties he will acquire Confidential Information.
Xx. Xxxxxxxxxxx recognizes that all such Confidential Information
is the sole and exclusive property of Quadrax. In consideration
of Quadrax entering into this Agreement, Xx. Xxxxxxxxxxx agrees
that:
(i) he shall never for so long as such information is
valuable and unique (but in no case for longer than three years
following the termination of Mr. Stoltenbergs employment by
Quadrax), directly or indirectly, use, publish, disseminate or
otherwise disclose any Confidential Information obtained during
his employment by Quadrax without the prior written consent of
the Quadrax' Board of Directors, it being understood that this
subparagraph shall survive the term of this Agreement;
(ii) the parties hereto agree that Xx. Xxxxxxxxxxx,
during the course of his employment, may be directed to perform
services for the benefit of a customer of Quadrax, in which case
such customer shall be deemed a third party beneficiary of the
provisions of this Agreement and, in addition to the
proscriptions contained in subparagraph (i) above, shall not
disclose any Confidential Information which relates to the
customer (defined with respect to such customer in the same
manner as for Quadrax) to any person, firm or enterprise without
the prior written consent of Quadrax and such customer;
(iii) during the term of his employment by Quadrax, he
shall exercise all due and diligent precautions to protect the
integrity of Quadrax customer lists, mailing lists and sources
thereof, statistical data and compilations, agreements,
contracts, manuals or other documents and any and all other
materials embodying any Confidential Information (the
Confidential Materials) and, upon termination of his employment
hereunder, or such earlier time as Quadrax may so request, he
shall immediately return to Quadrax all such Confidential
Materials (and copies thereof) then in his possession or control;
(iv) Xx. Xxxxxxxxxxx agrees that he will at all times
comply with all security regulations (a) in effect from time to
time at Quadrax' or its customers' premises and (b) in effect for
materials belonging to Quadrax or its customers; and
(v) Xx. Xxxxxxxxxxx agrees that the provisions of this
subsection (a) are reasonably necessary to protect the
proprietary rights of Quadrax in the Confidential Information and
its trade secrets, good will and reputation.
b. Xx. Xxxxxxxxxxx acknowledges that any breach of the
provisions of this Section 3 can cause irreparable harm to
Quadrax for which Quadrax would have no adequate remedy at law.
In the event of a breach or threatened breach by Xx. Xxxxxxxxxxx
of any of such provisions, in addition to any and all other
rights and remedies it may have under this Agreement or
otherwise, Quadrax may immediately seek any judicial action
deemed necessary, including, without limitation, temporary and
preliminary injunctive relief.
4. Salary. In consideration of, and in exchange for, the services
to be provided by Xx. Xxxxxxxxxxx to Quadrax, Quadrax shall pay
to Xx. Xxxxxxxxxxx the following compensation:
4.1 Base Salary. During the continuance of this Agreement,
Quadrax shall pay to Xx. Xxxxxxxxxxx a minimum base
salary of $120,000 per year. Quadrax shall pay such
salary in bi-weekly installments on Quadrax's regular pay
days. Regular installments of base salary shall be paid
less all applicable taxes, social security payments and
other items that Quadrax is required by law to withhold
or deduct therefrom.
a. Automatic Annual Raises. During the continuance of this
Agreement, Xx. Xxxxxxxxxxx'x base salary shall be increased,
effective as of each anniversary of the date of this Agreement,
by a percentage amount equal to the Providence area COLA as
reported by the U.S. Department of Labor.
b. Merit Raise and Discretionary Bonuses. The Board of
Directors of Quadrax may, in its absolute and sole discretion,
increase the salary payable to Xx. Xxxxxxxxxxx for merit, and may
award bonuses of cash, stock or options in addition to those
provided for in Section 4.2.
4.2 Performance Bonuses. During the continuance of this
Agreement, Quadrax shall award Xx. Xxxxxxxxxxx
performance bonuses as described herein. No stock
bonuses shall be reduced for income taxes, social
security payments and other items, except to the extent
that Quadrax is specifically required by law to withhold
or deduct such items. Xx. Xxxxxxxxxxx will receive a
performance bonus in each year of this Employment
Agreement as follows:
1. If Quadrax achieves net revenue of at least $10
million and net income of at least $zero in fiscal
1996, a bonus of fully vested options to purchase
15,000 shares of the common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market
value of the common stock on December 31, 1996,
exercisable for a period of five years from vesting.
2. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1996 equals or exceeds $2.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 15,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1996, exercisable for a period
of five years from vesting.
3. If Quadrax achieves net revenue of at least $20 million
and net income of at least $1.5 million in fiscal 1997, a bonus
of fully vested options to purchase 15,000 shares of common stock
of Quadrax under the 1993 Stock Option Plan exercisable at the
fair market value of the common stock on December 31, 1997,
exercisable for a period of five years from vesting.
4. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1997 equals or exceeds $4.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 15,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1997, exercisable for a period
of five years from vesting.
5. If Quadrax achieves net revenue of at least $40 million
and net income of at least $3.0 million in fiscal 1998, a bonus
of fully vested options to purchase 15,000 shares of common stock
of Quadrax under the 1993 Stock Option Plan exercisable at the
fair market value of the common stock on December 31, 1998,
exercisable for a period of five years from vesting.
6. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1998 equals or exceeds $8.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 15,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1998, exercisable for a period
of five years from vesting.
4.3 Annual Stock Option Bonus. In addition to, and not in lieu of,
the above bonuses, Xx. Xxxxxxxxxxx shall also be granted options
to purchase 30,000 shares of the common stock of Quadrax under
the 1993 Stock Option Plan at January 1, 1996, 1997 and 1998,
respectively, with an exercise price of their fair market value
on such date each year, fully vested, with an exercise period of
five years from the date of the grant.
5. Benefits. In addition to the compensation described in Section
4, above, Xx. Xxxxxxxxxxx shall be entitled to participate in or
receive all other benefits normally provided to Quadrax's
executive-level employees. These benefits will include, but not
be limited to:
group health, life and disability insurance;
participation in any Quadrax sponsored retirement savings or
pension plan;
participation in all stock or stock option plans;
use of a company car;
business expense allowance as permitted by the Internal Revenue
Code
paid vacation accruing at the rate of six weeks per year;
paid sick leave accruing at the rate of 10 days per year; and
paid religious and other holidays to the extent provided under
Quadrax's holiday and personal leave policies.
and personal leave policies.
customer (defined with respect to such customer in the same
manner as for Quadrax) to any person, firm or enterprise without
the prior written consent of Quadrax and such customer;
(iii) during the term of his employment by Quadrax, he
shall exercise all due and diligent precautions to protect the
integrity of Quadrax customer lists, mailing lists and sources
thereof, statistical data and compilations, agreements,
contracts, manuals or other documents and any and all other
imbursed or paid by Quadrax,
including time, place, business purposes and individuals included
in the expenditure, when appropriate.
6. Severance. Notwithstanding any other term or provision contained
in this Agreement, this Agreement and the employment of Xx.
Xxxxxxxxxxx may be terminated under the following circumstances:
6.1 Termination By Quadrax for Cause. Quadrax may terminate
this Agreement at any time, without notice, for just cause shown.
Just cause shall include, and be limited to:
a. violation of Xx. Xxxxxxxxxxx'x conditions of service,
as specified in paragraph 1, above, including, without
limitation, operating another active business outside of Quadrax,
aiding competitors of Quadrax or revealing confidential or
proprietary information without the knowledge and consent of the
Board of Directors;
b. dishonesty, insobriety, abuse of alcohol or use of
illegal drugs; or
c. conviction or entering into a plea of nolo contendere
to:
(1) a crime involving moral turpitude; or
(2) any other crime materially
impairing or materially hindering Xx.
Xxxxxxxxxxx'x ability to perform his duties for
Quadrax.
6.2 Voluntary Termination By Xx. Xxxxxxxxxxx. Xx. Xxxxxxxxxxx
may, at any time upon two months prior written notice, terminate
this Agreement and his employment hereunder.
6.3 Termination on Death or Permanent Disability. This
Agreement shall terminate upon Xx. Xxxxxxxxxxx'x death or
permanent disability. For purposes of this Agreement, Xx.
Xxxxxxxxxxx will be considered to be permanently disabled when he
is unable to perform the principal duties that he has been hired
to perform for an aggregate of eight months in any nine month
period.
7. Severance Benefits. Upon termination of this Agreement, Xx.
Xxxxxxxxxxx shall be entitled to receive the following
termination benefits, after receipt of which the rights and
obligations of the parties hereunder except under Section 3.2
hereof shall become void and of no further force and effect;
provided, however, that if Xx. Xxxxxxxxxxx is terminated for
cause by reason of breach of the confidentiality or proprietary
information provisions of Section 3 hereof, Quadrax shall retain
whatever rights it may have under law to seek and obtain remedies
for such breach.
7.1 Termination for Cause or Voluntary Termination by Xx.
Xxxxxxxxxxx. If this Agreement is terminated for cause by
Quadrax or voluntarily by Xx. Xxxxxxxxxxx, then the following
severance benefits shall be due.
a. Base Salary. Base salary shall be paid, on a pro-rated
basis, for a period of six months from the date of termination.
b. Bonus. Any bonus that may otherwise have become due
for the fiscal year in which this Agreement is terminated shall
be forfeited.
c. Benefits. Health and disability insurance shall
be continued for as long as Xx. Xxxxxxxxxxx is entitled to salary
continuation payments, as provided in (a), above. All other
benefits may be terminated or canceled by Quadrax at any time
from and after the last day of employment.
7.2 Termination by Death or Disability. If this Agreement is
terminated by Quadrax upon the death or disability of Xx.
Xxxxxxxxxxx, then the following severance benefits shall be due.
a. Base Salary. Xx. Xxxxxxxxxxx (or his estate) shall be
entitled to continue receiving his base salary in regular
installments for 12 months following the date of termination, or,
at the election of Quadrax, an amount equal to 12 months base
salary paid in one lump-sum on the date of termination.
b. Bonus. Xx. Xxxxxxxxxxx (or his estate) shall be
entitled to receive a bonus for the fiscal year in which this
Agreement is terminated. Any such bonus shall be paid in cash to
Xx. Xxxxxxxxxxx as and when other bonuses are paid.
c. Benefits. All benefits shall continue for a period of
12 months from the date of termination. In the case of
termination by reason of the death of Xx. Xxxxxxxxxxx, then
benefits shall continue as aforesaid for the benefit of any
dependents who survive him.
8. Wrongful Discharge. If this Agreement is terminated by Quadrax
other than for just cause shown or by reason of death or
disability, then the following severance benefits shall be due.
8.1 Base Salary. Xx. Xxxxxxxxxxx shall be entitled to continue
receiving his base salary in regular installments for the balance
of the term of this Agreement, plus an additional 36 months, or,
at the option of Quadrax, a like amount paid in one lump-sum on
the date of termination.
8.2 Bonus. Xx. Xxxxxxxxxxx shall be entitled to receive, within
30 days of the last date of employment, registered on Form S-8 or
otherwise, the stock options provided for in Paragraphs 4.2 and
4.3, above, (to the extent not previously earned and issued)
without regard to whether or not any of the conditions specified
therein have been achieved. Xx. Xxxxxxxxxxx shall also be
entitled to receive any cash bonus provided for in paragraph 4.2,
above, for the fiscal year in which this Agreement is terminated.
Any such bonus shall be paid in cash to Xx. Xxxxxxxxxxx as and
when other bonuses are paid.
8.3 Benefits. All benefits shall continue for the balance of
the term of this Agreement, plus an additional 36 months.
9. Changes in Control. Upon any Change in Control of the Company
resulting in Xx. Xxxxxxxxxxx'x termination or constructive
termination, all of the options in Section 4.2 and 4.3 of this
Employment Agreement shall be granted and vest immediately. For
the purposes of this Agreement, a Change in Control is defined
as the sale, exchange or transfer of (i) 20% or more of the
outstanding common stock of the Company or (ii) substantially all
of the assets of the Company to any party who does not currently
hold at least 5% of the outstanding common stock of the Company.
10. Relationship Created. The relationship created by this Agreement
is that of employer and employee and nothing contained in this
Agreement shall be construed in any way as creating any
partnership, joint venture or other relationship between the
parties. Nothing contained in this Agreement shall be construed
as granting Xx. Xxxxxxxxxxx any right to bind or obligate Quadrax
in any manner not herein granted, without the express written
consent of Xxxxxxx.
00. Payment of Undisputed Amounts. If there is a dispute between the
parties with respect to any amount claimed to be due hereunder,
any portion that is not disputed shall be paid by the obligor to
the payee. Any such partial payment shall not, however,
constitute a waiver by the payee of any other rights.
12. Notices. All notices, requests, payments, demands or other
communication under this Agreement shall be in writing and shall
be deemed to have been given on the date of actual receipt.
13. Severability of Provisions. If any provision in this Agreement
is held to be invalid, void or unenforceable, the remaining
provisions shall continue in full force and effect.
14. Time. Time is of the essence of this Agreement.
15. Counterparts. This Agreement may be executed in two or more
counterparts, all of which, taken together, shall constitute one
and the same agreement.
16. Business Day. If any date on which action is to be taken under
this Agreement occurs, or if any period during which action is to
be taken under this Agreement ends, on a Saturday, Sunday or
holiday, the date or period shall be extended to the next
succeeding day which is not a Saturday, Sunday or holiday.
17. Jurisdiction. Each party hereby consents and submits itself to
the jurisdiction of the State of Rhode Island and agrees that the
parties to this Agreement shall be entitled to a judgment and
decree and enforcement by the Courts of the State of Rhode Island
for any amount which may be adjudged to be due, including, but
not limited to, attorney's fees, costs and damages.
18. Entire Agreement. This Agreement contains the entire
understanding between the parties concerning Xx. Xxxxxxxxxxx'x
employment with Quadrax and supersedes any prior understanding or
agreement between them. Thereof are no other representations,
agreements or understandings, oral or written, between the
parties relating to the subject of this Agreement. This
Agreement may be amended only by a writing signed by the party to
be charged.
IN WITNESS WHEREOF, Quadrax Corporation has caused this
Agreement to be signed and delivered by its duly authorized
representative and Xxxxxx X. Xxxxxxxxxxx has signed and delivered
this Agreement, both as of the date first above written.
Quadrax Corporation /s/Xxxxxx X. Xxxxxxxxxxx
______________________________
Xxxxxx X. Xxxxxxxxxxx
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Chief Executive Officer
