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Exhibit 10(u)
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT OF EMPLOYMENT made and entered into as of February 12,
1998 by and between Sun Television and Appliances, Inc., an Ohio corporation
having its principal office at 0000 Xxxx Xxxx, Xxxxxxxxx, Xxxx 00000 (the
"Company") and Xxxx X. Xxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Company and the Employee mutually desire that Employee
became the Chief Financial Officer of the Company; and
WHEREAS, the Company and Employee wish to enter into this Agreement to
set forth their mutual understanding as to the terms and conditions of
Employee's continued employment by the Company.
It is therefore agreed between the parties as follows:
I. DEFINITIONS.
For purposes of this Agreement, the capitalized terms shall have the
following definitions:
A. "Good Cause" shall mean one or more of the following
grounds:
(1) commission of an act of dishonesty,
including, but not limited to,
misappropriation of funds or any property of
the Company;
(2) engagement in activities or conduct
injurious to the best interests or
reputation of the Company;
(3) refusal to perform assigned duties and
responsibilities;
(4) the clear violation of any terms or
conditions of any written agreement or
agreements the Employee may from time to
time have with the Company;
(5) commission of a crime which is a felony, or
a misdemeanor committed in connection with
his employment by the Company which causes
the Company a detriment.
B. "Severance Benefit" shall mean a certain number of
months of Base Salary that will be paid to Employee based on the base
rate of compensation
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of Employee on the day immediately prior to the (i) Triggering Event in
the case of a payment pursuant to Section VI B. or (ii) the termination
of employment in the event of a payment pursuant to Section VI C.
C. "Triggering Event" shall mean:
(1) the Company shall sell all or substantially
all of the assets of the Company;
(2) the Company shall participate in a merger,
reorganization, consolidation or similar
business combination with a "person" (as
such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as
amended) or affiliate thereof, other than a
merger, consolidation of business
combination which would result in the
outstanding common stock of the Company
immediately prior thereto continuing to
represent either by remaining outstanding or
by being converted in the common stock of
the surviving entity or a parent or an
affiliate thereof, at least 50% of the
outstanding common stock of the Company or
such surviving entity or parent or affiliate
thereof outstanding immediately after such
merger, consolidation, or business
combination;
(3) a plan of complete liquidation of the
Company;
(4) an order for relief shall be filed with
respect to the Company under Title 11 United
States Code (the Bankruptcy code"); a
receiver, custodian or trustee shall be
appointed for the Company under any
insolvency laws of any state.
(5) a case under the Bankruptcy code shall be
initiated against the Company or an
application for the appointment of a
receiver, custodian, or trustee shall be
sought with respect to the Company, and in
any such instance such proceeding shall not
be timely contested, or if timely contested,
remains unstayed or undismissed for a period
of 60 days; or
(6) the occurrence of any other event or
circumstance which is not covered by (A),
(B),(C),(D) or (E) above which the Board
determines effects the control of the
business of the Company and, in order to
implement the purposes of this agreement as
set forth above, adopts a resolution that
such event or circumstance constitutes a
Triggering Event for purposes of this
Agreement.
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II. EMPLOYMENT. The Company agrees to employ the Employee as the
Company's Chief Financial Officer, and the Employee, in consideration of such
employment, hereby accepts such employment. During the term of her employment,
the Employee shall use her best efforts to do all things necessary and incident
to her position and the dispatch of her responsibilities. Unless otherwise
approved in advance by the Company's Board of Directors, Employee shall devote
her full business time and energy exclusively to the business and affairs of the
Company and in no event shall Employee engage in any outside activities which
would be reasonably expected to affect the Company adversely.
III. TERM. This Agreement shall be effective as of February 23,
1998, (the "Commencement Date") and shall continue until terminated as provided
in Section VI hereof.
IV. COMPENSATION AND BENEFITS. Except as otherwise provided upon a
termination of Employee's employment, the Company shall compensate Employee and
provide the benefits as set forth in this Section IV. In addition, the Company
shall reimburse Employee or pay directly for reasonable business expenses
incurred by her during her employment term.
A. Base Salary. The Company shall pay Employee a minimum
$140,000 annual base salary (the "Base Salary"). Employee will be
eligible for Base Salary review by the Compensation and Stock Options
Committee (the "Committee") of the Company's Board of Directors
annually.
B. Annual Incentive. Employee shall participate in an
annual incentive compensation program as same may be amended from time
to time. The incentive compensation amount shall be earned based on the
full fiscal year results of the Company with the first incentive
compensation grant based on the 1999 fiscal year of the Company. Until
such time as Employee and the Committee provide otherwise, the
performance goals and incentive compensation will be as follows: (i)
satisfaction of agreed upon non-earnings based benchmarks -- incentive
compensation of $40,000 and (ii) achievement of earnings targets --
incentive compensation of up to $70,000. The foregoing incentive
compensation is not cumulative. The Employee must be employed by the
Company on the last day of the fiscal year of the Company to earn the
incentive compensation.
C. Employee shall receive and enjoy such paid vacation,
health care insurance, retirement plan participation and other fringe
benefits comparable in scope and amount to those enjoyed by other
senior executives of the Company.
V. STOCK OPTIONS. Upon the execution of this Agreement, the
Company shall grant to Employee a non-qualified stock option to acquire 100,000
shares of the Company's common stock subject to the terms of a stock option
agreement between the Company and Employee to be effective February 23, 1998.
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VI. TERMINATION.
A. Death. This Agreement shall be terminated on the
death of the Employee effective as of the date of her death. Employee's
spouse or estate, as the case may be, shall be entitled to retain the
Employee's salary installment for the month in which she dies and shall
be entitled to all incentive payments earned by but not yet paid to
Employee prior to her death.
B. Change in Control or Bankruptcy Filing. In the event
that (i) Employee's employment is terminated by Company, or (ii)
Employee terminates her employment at the request of the Company, in
either event other than for Good Cause and within 120 days following a
Triggering Event, the Company shall pay Employee the Severance Benefit
in the manner described below.
(1) Except to the extent provided below in
paragraph (2), the Severance Benefit shall be equal to nine
months Base Salary of Employee and paid to Employee in nine
equal monthly payments due on the first day of the month
beginning with the month following the termination of
Employee's employment and continuing for the next eight
consecutive months.
(2) In the event Employee obtains employment
with another employer within the nine months period during
which the Severance Benefit is being paid, the benefits
provided under this Agreement shall cease on the date that
such employment commences; provided, however, that in no event
will the payments provided pursuant to this agreement cease
prior to the payment to Employee of six monthly payments
(two-thirds of the Severance Benefit).
(3) Employee agrees to voluntarily resign her
employment with the Company at the request of Company upon the
happening of a Triggering Event and provide for an orderly
transfer of duties and programs.
C. Without Cause. The Company may terminate Employee's
employment at any time. In the event Employee's employment is
terminated, and if subsection B above (Change in Control or Bankruptcy
Filing) shall not be applicable, and the employment is terminated other
than for Good Cause, the Severance Benefit shall be six months Base
Salary and shall be paid to Employee in six equal monthly payments due
on the first day of the month beginning with the month following the
termination of Employee's employment and continuing the next five
consecutive months.
D. For Cause. The Company may terminate Employee's
employment at any time for Good Cause effective upon written notice to
Employee. In such event, Employee shall receive her salary through the
effective date of termination but will receive no further payments.
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E. Acknowledgement. Employee acknowledges that the
benefits described in this Agreement include benefits to which she is
not otherwise entitled to receive by virtue of her employment with
Company, and in consideration of receiving these benefits, employee
agrees to waive any claim which she may have to any other benefits to
which she would be otherwise entitled to receive by virtue of
employment except claims for:
(i) benefits under COBRA;
(ii) dental, medical, life insurance and
retirement benefits to the extent
that entitlement to such benefits
survives employee's termination of
employment; and
(iii) unemployment benefits.
VII. MISCELLANEOUS
A. Binding Effect. This Agreement shall be binding upon
the parties hereto, the beneficiaries, heirs, executors, administrators
and successors of the Employee and the successors and assigns of the
Company.
B. Counterparts. This Agreement may be executed in two
or more counterparts, any one of which shall constitute an original
without reference to the others.
C. Severability of Clauses. Each of the paragraphs of
this Agreement shall stand dependently and severally, and the
invalidity of any one paragraph or portion thereof shall not affect the
validity of any other provision. In the event any provision shall be
construed to be invalid, no other provision of this Agreement shall be
affected thereby. Furthermore, it is agreed that any period of
restriction or covenant hereinabove stated shall not include any period
of violation or period of time required for litigation or arbitration
to enforce such restrictions or covenants.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first above written.
SUN TELEVISION AND APPLIANCES, INC.
Attest:
/s/ XXXXXXX XXXXXXX By /s/ XXXXXX XXX
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"EMPLOYEE"
/s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
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