Employment Agreement
Exhibit 10.5
This
Employment Agreement (the “Agreement”) is entered into this
13th day of November,
2006 by and between Globe Specialty Metals, Inc. (the “Company”) and Xxxxx Xxxx
(“Executive”).
WHEREAS, the Company desires to employ Executive on the terms and conditions set forth herein;
and
WHEREAS, Executive has agreed to perform services for the Company as set forth below.
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the parties
agree as follows:
1. Position. Executive shall serve as the Company’s Chief Operating Officer (“COO”)
reporting to the Company’s Chief Executive Officer (“CEO”). Executive shall perform such
responsibilities that are normally associated with the COO position and as otherwise may be
assigned to Executive from time to time by the CEO. Executive’s position shall commence on
the date this Agreement is executed (the “Commencement Date”).
2. Term. Executive’s employment will be for a term of three (3) years from the
Commencement Date, with automatic one (1) year renewal terms thereafter (collectively, the
“Term”) unless Executive or the Company give written notice to the other at least ninety (90)
days prior to the expiration of any Term of such party’s election not to further extend this
Agreement. Any termination of Executive’s employment will be governed by the terms set forth
in this Agreement. Termination of this Agreement shall be effectuated in writing, and notice of
which shall be provided at least thirty (30) days prior to the effective date of such termination.
3. Compensation and Benefits.
(a) Executive’s base pay shall be at an annual rate of $400,000.00, which shall be
payable in accordance with the Company’s customary payroll practices, minus customary
deductions for federal and state taxes and the like (the “Base Pay”). Executive’s Base Pay
shall be subject to annual adjustments at the discretion of the Company based on merit.
(b) Bonuses shall be awarded at the discretion of the Company.
(c) The Company shall award Executive a stock option to purchase 500,000 shares of
the Company’s common stock (the “Option”) at the following strike prices: 1/3 of the Option
shall be priced at $6.25 (the “First Tranche”); 1/3 of the Option shall be priced at $8.50
(the “Second Tranche”); and the final 1/3 of the Option shall be priced at $10.00 (the “Third
Tranche”). Provided Executive continues to be employed by the Company on each of the
following vesting dates, the First Tranche shall vest on the first anniversary of the
Commencement Date, the Second Tranche shall vest on the second anniversary of the
Commencement Date, and the Third Tranche shall vest on the third anniversary of the
Commencement Date. The Option shall be governed by a stock option plan to be adopted by the
Company, except to the extent such plan is inconsistent with any of the terms set forth in this
Agreement.
(d) Executive shall be offered the various benefits currently offered by the Company
generally to its employees including, without limitation, life and health insurance. Any such
benefits may be modified or changed from time to time at the sole discretion of the Company.
Where a particular benefit is subject to a formal plan (for example, medical insurance),
eligibility
to participate in and receive any particular benefit is governed solely by the applicable
formal
plan document. Executive shall be fully reimbursed for all reasonable and necessary business
expenses upon presentation of adequate documentation to the Compare demonstrating same.
(e) Executive
will be granted twenty (20) paid time off days (“PTO” days) for
Executive’s use for vacation, personal or sick leave. Executive’s accrued but unused PTO days
shall not be paid to Executive upon termination of employment.
4. Severance.
(a) In the event Executive is terminated without “Cause” as such term is defined
below, or in the event that Executive resigns “For Good Reason” as such term is defined
below,
Executive shall be entitled to severance in the amount of one year of his Base Pay, to be paid
on
a payroll basis, provided Executive first executes a release in a form reasonably satisfactory
to
the Company. In addition, Executive shall be entitled to continued health insurance coverage
for
a one-year period at the Company’s expense (collectively, the “Severance Pay and Benefits”).
The Severance Pay and Benefits are conditioned upon Executive’s compliance with Section 6
below.
(b) For purposes of this Agreement, “Cause” shall mean termination for:
(i) Executive’s
conviction or entry of nolo contendere to any felony or crime involving moral
turpitude, material fraud or embezzlement of the Company’s property or a charge or
indictment of any other felony; or
(ii) Executive’s breach of any of the material terms of this Agreement, including the
confidentiality obligations set forth herein.
(c) For purposes of this Agreement, “For Good Reason” shall mean Executive’s
resignation following:
(i) a material breach by the Company of its obligations hereunder, provided Executive has first
given notice to the Company of such alleged breach and the Company has failed to cure same within
ten (10) days of receipt of such notice; or
(ii) Executive’s compensation and benefits are materially reduced.
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(d) Severance Pay shall not be required under this Agreement if (i) Executive
terminates employment voluntarily, other than For Good Reason; or (ii) Executive is terminated
for Cause; or (iii) this Agreement terminates because of Executive’s death.
(e) Notwithstanding any other provision with respect to the timing of payments under
this Section, if, at the time of Executive’s termination, Executive is deemed to be a
“specified
employee” of the Company within the meaning of Code Section 409A, then limited only to the
extent necessary to comply with the requirements of Code Section 409A, any payments to which
Executive may become entitled under Section 4 which are subject to Code Section 409A (and
not otherwise exempt from its application) will be withheld until the first (1st) business day
of the seventh (7th) month following Executive’s termination of employment, at which time
Executive shall be paid an aggregate amount equal to the accumulated, but unpaid, payments
otherwise due to Executive under the terms of Section 4(a).
(f) The Company does not guarantee the tax treatment or tax consequences
associated with any payment or benefit set forth in this Agreement, including but not limited
to consequences related to Code Section 409A. Executive and the Company agree to both
negotiate in good faith and jointly execute an amendment to modify this Agreement to the
extent necessary to comply with the requirements of Code Section 409A; provided that no such
amendment shall increase the total financial obligation of the Company under this Agreement.
In the event that the Company determines in good faith that it is required to withhold taxes
from any payment or benefit already provided to Executive, Executive agree to pay on demand the
amount the Company has determined to the Company.
5. Indemnity. The Company shall indemnify Executive and hold Executive harmless from
any and all claims arising from or relating to Executive’s performance of Executive’s duties
hereunder to the fullest extent permitted by law and/or the Company’s Directors and Officers
Liability Insurance or applicable certificate of incorporation or bylaws or other applicable
document.
6. Confidentiality, Non-Competition and Non-Solicitation.
(a) Definition: “Confidential Information” means all Company proprietary information,
technical data, trade secrets, know-how and any idea in whatever form, tangible or intangible,
including without limitation, research, product plans, customer and client lists,
developments,
inventions, processes, technology, designs, drawings, marketing and other plans, business
strategies and financial data and information. “Confidential Information” shall also mean
information received by the Company from customers or clients or other third parties subject
to a
duty to keep confidential.
(b) Duty Not to Disclose: Executive will be exposed to and have access to the
Company’s Confidential Information. Executive agree to hold all Confidential Information in
strict confidence and trust for the sole benefit of the Company and he will not disclose, use,
copy, publish, summarize, or remove any Confidential Information from the Company’s
premises, except as specifically authorized in writing by the Company or in connection with
the
usual course of Executive’s employment.
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(c) Documents and Materials: Executive further agrees that Executive will return all
Confidential Information, including all copies and versions of such Confidential Information
(including but not limited to information maintained on paper, disk, CD-ROM, network server,
or any other retention device whatsoever) and other property of the Company, to the Company
immediately upon cessation of Executive’s employment with the Company. These terms are in
addition to any statutory or common law obligations that Executive may have relating to the
protection of the Company’s Confidential Information or its property. These restrictions
shall
survive the termination of employment.
(d) Noncompetition and Nonsolicitation.
(i) During the Term and for a period of twelve (12) months after the termination of
Executive’s employment for any reason, Executive will not, directly or indirectly, whether as an
employee, consultant or other affiliate, engage in a business competitive with that of the Company
in the geographic area in which the Company does business.
(ii) During the Term and for a period of twelve (12) months after the termination of
Executive’s employment for any reason, Executive will not, directly or indirectly, recruit, solicit
or induce, or attempt to recruit, solicit or induce any employee or employees of the Company to
terminate their employment with, or otherwise cease their relationship with, the Company.
(iii) During the Term and for a period of twelve (12) months after termination of
Executive’s employment for any reason, Executive will not, directly or indirectly, solicit, divert
or take away, or attempt to solicit, divert or take away, the business or patronage of any of the
clients, customers or accounts, or prospective clients, customers or accounts, of the Company.
(e) If any restriction set forth in this Section is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it shall be interpreted to extend
only over the maximum period of time, range of activities or geographic area as to which it may be
enforceable.
(f) The restrictions contained in this Section are necessary for the protection of the
business and goodwill of the Company and are considered by Executive to be reasonable for
such purpose. Executive agrees that any breach of this Section will cause the Company
substantial and irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the right to seek specific
performance and injunctive relief.
(g) Executive represents that his performance of all the terms of this Agreement as an
employee of the Company does not and will not breach any (i) agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or in trust prior to
his employment with the Company or (ii) agreement to refrain from competing, directly or
indirectly, with the business of any previous employer or any other party.
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7. Notices. All notices required or permitted under this Agreement shall be in writing and
shall be deemed effective upon (a) the date of receipt, if sent by personal delivery (including
delivery by reputable overnight courier), or (b) the date of receipt or refusal, if deposited in
the
United States Post Office, by registered or certified mail, postage prepaid and return receipt
requested, or (c) by facsimile transmission at the address of record of Executive or the Company,
or at such other place as may from time to time be designated by either party in writing.
8. Assignment. This Agreement is not assignable by Executive but may be assigned by the
Company without Executive’s prior consent.
9. Merger Clause/Governing Law/Jury Waiver. This Agreement constitutes the entire
agreement regarding the terms and conditions of Executive’s employment with the Company.
This Agreement supersedes any prior agreements, or other promises or statements (whether oral
or written) regarding the terms of employment. This Agreement may only be amended in a
writing that is executed by both Executive and the Company. This Agreement shall be governed
by the law of the State of Delaware without regard to conflicts of laws. Executive hereby waives
trial by jury with respect to any action arising out of or relating to this Agreement or
Executive’s
employment by the Company.
Globe Specialty Metals, Inc. |
||||
| By: | /s/ Xxxx Xxxxxxxxxx | |||
| Its: | ||||
| /s/ Xxxxx Xxxx | ||||
| Xxxxx Xxxx | ||||
| Date executed | ||||
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