1
EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This agreement ("Agreement") is made effective as of the 6th day of
September, 1996 ("Effective Date"), by and among Synthetic Industries,
Inc. (the "Corporation") and XXXXX XXXXXXXX.
WITNESSETH:
WHEREAS, the Corporation has, since JUNE 20, 1977 employed Executive
as CORPORATE CONTROLLER; and
WHEREAS, both the Corporation and Executive (the "Parties") desire to
state certain terms and conditions of Executive's employment;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Parties agree as follows:
1. Employment.
The Corporation agrees to continue to employ Executive and
Executive agrees to continue to serve the Corporation upon the terms and
conditions hereinafter set forth.
2. Term.
Except as otherwise provided in Section 7 below, the term of
employment under this Agreement shall continue from the Effective Date for a
period that ends on the date that is the third anniversary of the Effective
Date.
3. Duties and Extent of Services.
During the term set forth in Section 2, above, the Corporation
shall employ Executive and Executive shall serve the Corporation as CORPORATE
CONTROLLER of the Corporation. During
1
2
the period of his employment Executive shall devote his full business time and
attention to the business and affairs of the Corporation.
4. Compensation.
(a) Basic Salary. During the term set forth in Section 2,
above, the Corporation shall pay Executive a base salary of EIGHTY THOUSAND
FIVE HUNDRED FORTY-FIVE DOLLARS per annum, payable in accordance with the
Corporation's standard payroll practices, as follows: $80,545.00 per annum for
the period from the Effective Date through September 30, 1996 and $83,365.00
per annum, thereafter.
(b) Annual Incentive. During the term set forth in Section 2,
above, Executive shall be eligible to participate in the Executive Incentive
Plan, or in such successor plan as may be adopted for the provision of annual
incentive compensation for senior executive (the "Annual Incentive Plan").
Executive shall be entitled to an incentive payment applicable under the Annual
Incentive Plan if the Corporation meets its business plan for the year ("Making
Plan").
(c) Stock Options. Executive shall have such rights to stock
options under either the Synthetic Industries, Inc. 1994 Stock Option Plan, the
Synthetic Industries, Inc. 1996 Stock Option Plan, or any successor stock
option plan, or any combination of such plans (collectively the "Option Plan")
as shall be set forth in any applicable stock option agreement.
5. Benefits.
During the term set forth in Section 2, above, and otherwise
as provided in this Agreement, Executive shall be eligible to participate in
all group life insurance, health
2
3
insurance, disability insurance, survivor income insurance and similar programs
maintained by the Corporation and covering executive employees. Participation
in any retirement plans maintained by the Corporation shall be as determined
under the provisions of such plans.
6. Reimbursement for Expenses.
The Corporation shall reimburse Executive for all reasonable
business expenses incurred by him on behalf of the Corporation in the
performance of his duties hereunder, provided Executive shall account therefore
in accordance with the Corporation's business expense policies and procedures.
3
4
7. Termination.
Executive's employment may be terminated prior to the end of
the term described in Section 2 only as provided in this Section 7.
(a) Termination for Disability. If the Executive becomes
unable to substantially perform his duties due to permanent physical or mental
disability, as determined by a physician agreed upon by the Corporation and the
Executive, his employment pursuant to this Agreement shall terminate. In the
event Executive's employment is terminated on account of disability under this
Section 7(a), Executive's rights of compensation and benefits shall be as
follows:
(i) Executive (or in the event of his death, his
estate) shall be paid his basic salary at the rate in effect on the date of
termination of employment until the earlier of (A) the date six months
following termination of employment, or (B) the date of commencement of long
term disability payments under the Corporation's long term disability plan as
then in effect.
(ii) Executive shall be entitled to any unpaid
amount previously fully accrued under the Annual Incentive Plan.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreement.
(iv) Executive shall be entitled to participate in
any and all benefit programs described in Section 5, above, during the period
Executive is continuing to receive salary pursuant to Clause (i), above.
(b) Termination on Executive's Death. In the event of
termination of employment by reason of death of Executive,
4
5
payment of compensation and benefits shall be as set forth below. Payment
shall be made to the executor or administrator of executive's estate, or, in
the case of a payment made under a written plan, to the person or persons who
have been designated pursuant to the terms of the plan to receive such
payments.
(i) Executive's basic salary at the rate in
effect on the date of Executive's death shall be paid for a period of six
months. Such salary may, in the Corporation's discretion, be paid in lump-sum
promptly following date of Executive's death.
(ii) Executive shall be entitled to any unpaid
amount previously fully accrued under the Annual Incentive Plan. In addition,
Executive shall be entitled to an incentive payment, in lieu of an incentive
payment under the Annual Incentive Plan for the plan year in which his
employment terminates, in an amount equal to the payment otherwise determined
under the Annual Incentive Plan, as if the Executive were employed by the
Corporation to the end of the year of his termination, multiplied by a fraction
the numerator of which is the number of weeks Executive was employed during
such year, and the denominator of which is 52.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreement.
(iv) Executive's rights under the benefit programs
described in Section 5, above, including the rights of Executive's dependents
to participate in such programs, if any, shall be as determined under such
programs.
(c) Termination for Cause. The Corporation shall have
5
6
the right to terminate Executive's employment for "Cause". In the event
Executive's employment is terminated for Cause, Executive's rights to
compensation and benefits shall be as follows:
(i) Executive shall be paid his basic salary
accrued through the date of termination of employment.
(ii) Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreement.
(iii) Executive's rights to participate in benefit
programs described in Section 5, above, if any, shall be as determined under
such programs.
For purposes of this Subsection, "Cause" shall mean (1) Executive's
fraud, felonious conduct, dishonesty or willful misconduct in the performance
of his duties hereunder; provided, however, bona fide disagreements or
disputes as to expense reimbursements shall not be deemed fraud or felonious
conduct; (2) willful neglect, failure or refusal of the Executive to carry out
his duties hereunder, which results in harm to the business, reputation,
prospects or financial condition of the Corporation; or (3) Executive's
material breach of any provision of this Employment Agreement.
Termination on account of disability, as provided in Section 7(a),
above, shall not be considered a termination for Cause under this Section 7(c).
(d) Termination Without Cause.
(1) The Corporation shall have the right to
terminate Executive's employment without Cause as defined in Section 7(c),
above. In the event of a termination by the
6
7
Corporation without Cause, other than (A) following a Change in Control, as
defined in Section 7(e), below, or (B) as described in Subsection (2) below,
Executive's rights to compensation and benefits shall be as follows:
(i) Executive shall be paid his basic salary at the
rate in effect on the date of termination of employment for the remainder of
the contract term.
(ii) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan. In addition,
Executive shall be entitled to an incentive payment, in lieu of an incentive
payment under the Annual Incentive Plan for the plan year in which his
employment terminates, in an amount equal to the payment otherwise determined
under the Annual Incentive Plan, as if the Executive were employed by the
Corporation to the end of the year of his termination, multiplied by a fraction
the numerator of which is the number of weeks Executive was employed during
such year, and the denominator of which is 52. In addition, in lieu of future
payments under the Annual Incentive Plan, Executive shall be entitled to a
payment that equals the average of the incentive payments received by Executive
(or fully accrued by him) under the Annual Incentive Plan for the three full
plan years immediately preceding his termination of employment.
(iii)Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreement.
(iv) Termination on account of disability, as
provided in Section 7(a), above, shall not be considered a termination without
Cause under this Section 7(d).
7
8
(2) If Executive's employment is terminated by the
Corporation without Cause, as defined in Subsection (c) above, prior to the
occurrence of a Change in Control of the Corporation (as defined below), and if
it can be shown that Executive's termination (i) was at the direction or
request of a third party that had taken steps reasonably calculated to effect
the Change in Control of the Corporation thereafter, or (ii) otherwise occurred
in connection with, or in anticipation of, the Change in Control of the
Corporation, then Executive shall have the rights described in Section 7(e)
below, as if a Change in Control of the Corporation had occurred on the date
immediately preceding such termination.
(e) Termination Following a Change in Control.
(1) Definitions.
(A) "Act" means the Securities Exchange Act of 1934, as
amended.
(B) "Affiliate of any specified persons" means any other
person that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with such specified person. For the purposes of this definition, "control"
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
(C) "Annual Compensation" means the sum of:
(i) Executive"s annual salary at the rate in effect
on the date of a termination of employment (or, in the
8
9
event of a termination for Good Reason below, the annual salary as in effect
immediately before the actions giving rise to Good Reason); plus
(ii) the greatest of the incentive payments under the
Annual Incentive Plan either paid or accrued in either the Year of the Change
in Control or the immediately preceding Year.
(D) "Base Amount" means an amount equal to Executive's
Annualized Includable Compensation for the Base Period as defined in Section
280G(d)(1) and (2) of the Code (as hereinafter defined).
(E) "Change in Control" of the Corporation means a Change
in Control of a nature that would be required to be reported in response to
Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Act or any
successor thereto, provided that without limiting the foregoing, a Change in
Control of the Corporation also shall be deemed to have occurred if:
(i) any "person" (as defined under Section 3(a)(9)
of the Act) or "group" of persons (as provided under Rule 13d-3 of the Act) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 or otherwise under
the Act), directly or indirectly (including as provided in Rule 13d-3(d)(1) of
the Act), of capital stock of the Corporation the holders of which are entitled
to vote for the election of directors ("voting stock") representing that
percentage of the Corporation's then outstanding voting stock (giving effect to
the deemed ownership of securities by such person or group, as provided in Rule
13d-3(d)(1) of the Act, but not giving effect to any such deemed ownership of
securities by another person or group) equal to or greater than thirty-five
percent (35%) of all such voting stock;
9
10
10
11
(ii) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof. Any person becoming a director subsequent to such date whose
election, or nomination for election, is, at any time, approved by a vote of at
least a majority of the directors comprising the Incumbent Board shall be
considered as though he were a member of the Incumbent Board;
(iii)the Corporation combines with another person or
entity, whether through a merger, asset sale, reorganization or otherwise, and
(a) any person or group of persons holds at any time after such combination,
voting stock equal to or greater than thirty-five percent (35%) determined by
reference to the voting securities of the surviving entity, or (b) the
Corporation's directors, as of the date immediately before such combination,
constitute less than a majority of the Board of Directors of the combined
entity.
(F) "Code" means the Internal Revenue Code of 1986,
including any amendments thereto.
(G) "Good Reason" means:
(i) any breach of this Agreement by the Corporation,
including without limitation (a) any reduction during the employment period in
the amount of Executive's base salary or aggregate benefits as in effect from
time to time, (b) failure to provide Executive with the same fringe benefits
that were provided to Executive immediately prior to a Change in Control of the
Corporation, or with a package of fringe benefits (including paid vacations)
that, though one or more of such benefits may vary from those in effect
immediately prior to such a Change in Control, is substantially comparable in
all material
10
12
respects to such fringe benefits taken as a whole, or (c) any other breach by
the Corporation of its obligations to pay compensation under this Agreement;
(ii) without Executive's express written consent, the
assignment to Executive of any duties which are materially inconsistent with
Executive's positions, duties, responsibilities and status immediately prior to
the Change in Control of the Corporation, a material change in Executive's
reporting responsibilities, titles or offices as an employee and as in effect
immediately prior to the Change in Control, or a significant reduction in
Executive's title, duties or responsibilities, or in the level of his support
services;
(iii)the relocation of Executive's principal place of
employment, without Executive's written consent, to a location outside the same
metropolitan area in which Executive was employed at the time of such Change in
Control, or the imposition of any requirement that Executive spend more than 90
business days per year at a location other than such principal place of
employment;
(iv) any purported termination of Executive's
employment for Cause, Disability or Retirement which is not effected pursuant
to a Notice of Termination satisfying the requirements defined below;
Upon the occurrence of any of the events described in
(i), (ii), (iii), or (iv) above, Executive shall give the Corporation written
notice that such event constitutes Good Reason, and the Corporation shall
thereafter have 30 days in which to cure. If the Corporation has not cured in
that time, the event shall constitute Good Reason.
11
13
(H) "Notice of Termination" means a notice which shall
indicate the specific termination provision relied upon in this Agreement and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision
so indicated.
(I) "Person or Group" means a "person" or "group", as
defined in the definition of "Change in Control" above.
(J) "Year" means a calendar year unless otherwise
specifically provided.
(2) Payments for Termination Following Change in Control.
If, following a Change in Control, Executive's employment with the Corporation
is terminated by the Corporation other than for Cause, or by Executive for Good
Reason, then:
(A) Executive shall be entitled to all compensation and
benefits accrued through the date of termination of employment;
(B) Executive shall receive from the Corporation, no less
than ten days following termination of his employment, a lump sum payment (the
"Termination Payment") equal to two times Executive's Annual Compensation;
(C) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan. In addition, in lieu
of future payments under the Annual Incentive Plan, Executive shall be entitled
to a payment that equals the average of the incentive payments received by
Executive (or fully accrued by him) under the Annual Incentive Plan for the
three plan years immediately preceding his termination of employment.
(D) Executive's rights, if any, to supplemental pension
shall be fully vested; and
12
14
(E) Executive shall continue to be covered at the expense
of the Corporation by the same or equivalent hospital, medical, dental,
accident, disability and life insurance coverage as in effect for Executive
immediately prior to termination of his employment, until the earlier of (i) 18
months following termination of employment, or (ii) the date Executive has
commenced new employment and has thereby become eligible for comparable
benefits.
(3) Vesting of Options upon Change in Control. In the
event of a Change in Control, whether or not Executive's employment continues
with the Corporation, all options under the Option Plan shall immediately vest
on the date of the Change in Control.
(4) Certain Supplemental Payments by the Corporation.
(A) In the event Executive's employment is terminated
pursuant to this Subsection, and if in connection therewith it is determined
that (i) part or all of the compensation and benefits to be paid to Executive
constitute "parachute payments" under Section 280G of the Code, and (ii) the
payment thereof will cause Executive to incur excise tax under Section 4999 of
the Code, the Corporation, on or before the date for payment of such excise
tax, shall pay Executive, in lump sum, an amount (the "Gross-Up Amount") such
that, after payment of all federal, state and local income tax and any
additional excise tax under Section 4999 of the Code in respect of the Gross-Up
Amount payment, Executive will be fully reimbursed for the amount of such
excise tax.
(B) The determination of the Parachute Amount, the Base
Amount and the Gross-Up Amount, as well as any other calculations necessary to
implement this Subsection shall be made
13
15
by a nationally recognized accounting or benefits consulting firm
("Consultant") selected by Executive and reasonably satisfactory to the
Corporation and which has not performed services, other than minor indirect or
incidental services, for either the Corporation or Executive for three years
prior to the date the Consultant is retained for this purpose. The
Consultant's fee shall be paid by the Corporation.
(C) As promptly as practicable following such
determination and the elections hereunder, the Corporation shall pay to or
distribute to or for the benefit of the Executive such amounts as are then due
to Executive under this Agreement and shall promptly pay to or distribute for
the benefit of Executive in the future such amounts as become due to Executive
under this Agreement.
(D) Notwithstanding anything herein to the contrary, in
the event that any payment received or to be received by Executive in
connection with a Change in Control of the Corporation or the termination of
Executive's employment (whether payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement) (all such payment being referred
to in the aggregate as "Total Payment") would not be deductible (in whole or in
part) as a result of Section 280G of the Code, the payments otherwise due to
Executive pursuant to Section 7(e)(2) above ("Severance Payments") shall be
reduced until no portion of the Total Payments is not deductible as a result of
Section 280G of the Code, or the Severance Payments are reduced to zero. For
purposes of this limitation (i) no portion of the Total Payments, the receipt
or enjoyment of which Executive shall have effectively waived in writing prior
to the date of payment
14
16
of the Severance Payments, shall be taken into account, (ii) no portion of the
Total Payments shall be taken into account which, in the opinion of tax counsel
selected by the Corporation's independent auditors and reasonably acceptable to
Executive ("Tax Counsel"), does not constitute a "parachute payment" within the
meaning of Section 280G (b)(2) of the Code shall be taken into account, (iii)
the Severance Payments shall be reduced only to the extent necessary so that
the Total Payments (other than those referred to in clause (i) or (ii)) in
their entirety constitute reasonable compensation for services actually
rendered within the meaning of Section 280G (b)(4) of the Code, in the opinion
of Tax Counsel, and (iv) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Corporation's independent auditors in accordance with the principles of
Sections 280G (d)(3) and (4) of the Code.
(5) Expenses and Interest. If, after a Change in Control
of the Corporation, a good faith dispute arises with respect to the enforcement
of the Executive's rights under this Agreement, or if any legal or arbitration
proceeding shall be brought in good faith to enforce or interpret any provision
contained herein, or to recover damages for breach hereof, Executive shall
recover from the Corporation any reasonable attorney's fees and necessary costs
and disbursements incurred as a result of such dispute, and prejudgment
interest on any money judgment or arbitration award obtained by Executive
calculated at the legal rate of interest from the date that payments to him
should have been made under this Agreement.
(f) Voluntary Termination. Executive may terminate
15
17
his employment voluntarily at any time. In the event Executive terminates his
employment voluntarily, other than for Good Reason following a Change in
Control as provided in Section 7(e), above, Executive's rights to compensation
and benefits shall be as follows:
(i) Executive shall be paid salary accrued through
the date of termination of employment.
(ii) Executive's rights to annual incentive, if any,
shall be as determined under the Annual Incentive Plan.
(iii)Executive's rights with respect to stock
options, if any, shall be determined under the Option Plan and any applicable
stock option agreement.
(iv) Executive's rights to participate in any and all
benefit programs described in Section 5, above, if any, shall be as determined
under such programs.
8. Payment Obligations Absolute.
The Corporation's obligation to pay the Executive the
compensation and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, any setoff, counterclaim, recoupment, defense or other
right which the Corporation may have against him or anyone else. All amounts
payable by the Corporation hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Corporation shall be final and the
Corporation will not seek to recover all or any part of such payment from the
Executive or from whomsoever may be entitled thereto, for any reason whatever
provided that if the Executive is convicted of, or pleads guilty or nolo
contendere to, a felony or misdemeanor involving acts or
16
18
omissions of the Executive in connection with his employment by the
Corporation, the Corporation shall be allowed to recover any actual damages it
has incurred from such action or omission out of amounts paid or owing him
hereunder.
9. Further Obligations of Executive.
During and following Executive's employment by the
Corporation, Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Corporation, except to the extent authorized by the
Board of Directors of the Corporation or required by any court or
administrative agency, other than to an employee of the Corporation or a person
to whom disclosure is reasonably necessary or appropriate in connection with
the performance by Executive of duties as an executive of the Corporation.
Confidential information shall not include any information known generally to
the public or any information of a type not otherwise considered confidential
by persons engaged in the same business or a business similar to that of the
Corporation. All records, files, documents and materials or copies thereof,
relating to the Corporation's business which the Executive shall prepare, or
use, or come into contact with, shall be and remain the sole property of the
Corporation and shall be promptly returned to the Corporation upon termination
of employment with the Corporation.
10. Arbitration.
Any controversy or claim arising under, out of or relating to
this Agreement, or the breach thereof, shall be determined and settled by
arbitration at the American Arbitration Association in Atlanta, Georgia, in
accordance with the rules of
17
19
procedure of the Association. Any award rendered shall be final and binding on
the parties hereto, and judgment may be entered in any court having
jurisdiction thereof.
11. Withholding.
Payments required to be made by the Corporation to Executive,
his spouse, his estate or beneficiaries, will be subject to withholding of such
amounts relating to taxes as the Corporation may reasonably determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Corporation may, in its sole discretion,
accept other provision for payment of taxes as required by law, provided it is
satisfied that all requirements of law affecting its responsibilities to
withhold such taxes have been satisfied.
12. Assignability; Binding Nature.
This Agreement is binding upon, and will inure to the benefit
of, the parties and their respective successors, heirs, administrators,
executors and assigns. No rights or obligations of Executive hereunder may be
assigned or transferred by Executive except that (a) rights to compensation and
benefits hereunder, which rights will remain subject to the limitations
hereunder, may be transferred by will or operation of law, and (b) rights under
employee benefit plans or programs described in Section 5, above, may be
assigned or transferred in accordance with such plans, programs or regular
practices thereunder. No rights or obligations of the Corporation under this
Agreement may be assigned or transferred except that rights or obligations may
be assigned or transferred by operation of law in the event of a merger or
consolidation in which the Corporation is not the
18
20
continuing entity, or the sale or liquidation of all or substantially all of
the assets of the Corporation, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Corporation and such
assignee or transferee assumes the liabilities, obligations and duties of the
Corporation, as contained in this Agreement, either contractually or as a
matter of law.
13. Entire Agreement.
This Agreement supersedes any prior agreements and, together
with such plans and programs as are specifically referred to herein, contains
the entire agreement between the parties concerning the subject matter hereof.
14. Amendments and Waivers.
This Agreement may not be modified or amended, except by a
writing signed by both parties. A party may waive compliance by the other
party with any term or provision of this Agreement, or any part thereof,
provided that the term or provision, or part thereof, is for the benefit of the
waiving party. Any waiver will be limited to the facts or circumstances giving
rise to the non-compliance and will not be deemed either a general waiver or
modification with respect to the term or provision, or part thereof, being
waived, or as to any other term or provision of this Agreement, nor will it be
deemed a waiver of compliance with respect to any other facts or circumstances
then or thereafter occurring.
15. Notices.
Any notice given hereunder will be in writing and will be
deemed given when delivered personally or by courier, or five days after being
mailed, certified or registered mail, duly
19
21
addressed to the party concerned at the address indicated below or at such
other address as such party may subsequently provide, in accordance with the
notice and delivery provisions of this Section:
To the Corporation: Attn. Corporate Secretary
Synthetic Industries, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
To Executive: _______________________________
_______________________________
_______________________________
_______________________________
16. Severability.
In the event that any provision or portion of this Agreement
will be determined to be invalid or unenforceable for any reason the remaining
provisions or portions of this Agreement will be unaffected thereby and will
remain in full force and effect to the fullest extent permitted by law.
17. Survivorship.
The respective rights and obligations of the parties hereunder
will survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. References.
In the event of Executive's death or a judicial determination
of his incompetence, reference in this Agreement to Executive will be deemed,
where appropriate, to refer to his legal representative or, where appropriate,
to his beneficiary or beneficiaries.
20
22
19. Headings.
The headings of paragraphs contained in this Agreement are for
convenience only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SYNTHETIC INDUSTRIES, INC.
__________________________
Xxxxx Xxxxxxxx
By: ________________________________
Title: _____________________________
21
