Exhibit 99(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 27th day of February, 1998, by and between
Xxxxxx Xxxxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000 ("Executive") and Bacou
USA Safety, Inc., a corporation organized under the laws of Delaware (the
"Company").
W I T N E S S E T H :
WHEREAS, on this date the Company has acquired substantially all of the
assets and liabilities of Xxxxxx X. Xxxxxx & Associates, Inc., d/b/a/ Xxxxxx
Xxxxxx Industries ("Seller") and, until the closing of that transaction (the
"Transaction"), Executive served as Vice President Finance and Administration
and Chief Financial Officer of Seller; and
WHEREAS, Company wishes to secure the services of Executive as Vice
President - Finance and Administration of Company's Xxxxxx Xxxxxx Industries
Division for the period provided in this Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. Employment. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as
Vice President - Finance and Administration of the Xxxxxx Xxxxxx Industries
Division of Company. Executive agrees to faithfully perform the duties assigned
to him to the best of his ability, comply with the written Policies and
Procedures of Bacou USA, Inc. as then applicable to its subsidiaries and, except
for vacations and periods of temporary illness, to devote his full time and
attention to the business of Company. Ancillary employment such as writing,
teaching or lecturing, as well as the acceptance of honorific titles may be
undertaken by the Executive only with the approval of the Chief Executive
Officer of Bacou USA, Inc. or his designee (together referred to as the "CEO").
Executive also agrees that he will not engage in any other business activities
without the prior approval of the CEO. Executive may only serve as an officer,
director, trustee or committee member, or in any similar position, of a
reasonable number (maximum two) of trade associations and religious, charitable,
educational, civic or other non-business organizations, subject to the approval
of the CEO. The Executive represents and warrants to Company that he is now
under no contract or agreement nor will he execute any contract or agreement
that will in any manner interfere, conflict with or prevent him from performing
his duties under the terms and conditions of this Agreement, recognizing that
his performance hereunder will require the devotion of his full time and
attention during and beyond regular business hours during the Term (as
hereinafter defined), including extensive travel. Nothing in this Agreement
shall be construed as prohibiting Executive from owning an interest in Xxxxxx
Xxxxxx Enterprises or serving as a director of that corporation.
2. Period of Employment. This Agreement shall become effective upon the
closing of the Transaction and continue until December 31, 1999 (the "Initial
Term"). On December 31, 1999, and at the end of each year thereafter, the period
of employment shall be automatically extended, without further action by either
party, for successive one-year periods (each a "Renewal Term") unless at least
six months prior to the end of the Initial Term or any Renewal Term either party
shall have served written notice on the other of its election to allow this
Agreement to terminate at the end of such Term. The Initial Term and any Renewal
Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment, Company may, at its option, decide that the Executive
shall utilize any unused vacation and/or take a leave-of-absence for part or all
of the remaining time of his employment, continuing to receive all compensation
as if actively working.
3. Termination. The period of employment shall be terminated upon the first
to occur of the following:
(i) The expiration of the period of employment pursuant to Section 2
of this Agreement.
(ii) The Executive's death.
(iii)The Executive becoming permanently disabled. Permanent
disability shall mean physical or mental incapacity of a nature
which prevents Executive from performing his duties under this
Agreement for a period of more than six months in any twelve
month period.
(iv) The Executive's employment being terminated by Company for cause.
Termination for cause shall mean termination by action of the
Board of Directors of Company because of the willful failure of
Executive to perform his duties and obligations under this
Agreement or failure to execute in a reasonable and responsible
manner the written policies and procedures of Company or gross
negligence in the performance of his duties under this Agreement
or the commission by Executive of a felony which the Company
reasonably determines would adversely affect the Company or the
conduct of its business.
4. Compensation and Benefits.
(a) The Executive shall receive regular compensation (the "Base Salary") at
the initial rate per annum of One Hundred Twenty-Five Thousand Dollars
($125,000.00) for the Initial Term. The Base Salary shall be payable in arrears
less the usual payroll deductions at the same times and in the same manner as
salaries paid to other employees of the Company. The Base Salary shall be
reviewed annually during each January of the Term for possible increase
including participation in any wage increases applicable generally to salaried
employees of the Company; provided, however, that the Base Salary shall increase
by a minimum of five percent (5%) in January 1999.
(b) In addition to the Base Salary, the Executive shall be entitled to
receive annual incentive compensation payments ("Incentive Compensation") at
such times and in such amounts as may be determined pursuant to the Bonus Plan
for Executives of subsidiaries of Bacou USA, Inc., as in effect for the
applicable year and applied with regard to the operating results of the Xxxxxx
Xxxxxx Industries division of the Company. There is attached to this Agreement a
copy of such Bonus Plan as applicable for fiscal years 1998 and 1999. The
maximum possible Incentive Compensation payable per annum under this Agreement
shall not exceed sixty percent (60%) of the amount of Base Salary paid to
Executive in the fiscal year for which such Incentive Compensation is
determined. Executive acknowledges that, by agreeing to participate in the Bonus
Plan for subsidiaries of Bacou USA, Inc., he thereby waives any rights to
participate in any other incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for the prior fiscal
year within ten (10) days after a decision is made by the Board of Directors of
Bacou USA, Inc. as to the amount of such Incentive Compensation, but in any
event no later than the earlier of the annual meeting of the Board of Directors
or March 31.
(d) The Executive shall be entitled to participate in any stock option plan
which Bacou USA, Inc. may adopt for Company at levels to be determined by the
Board of Directors of Bacou USA, Inc. in their sole discretion.
(e) In connection with the execution of this Agreement as a signing bonus
and subject to the execution of the Stock Option Notice and Agreement attached
hereto as Exhibit A, Executive shall receive $200,000 upon execution of this
Agreement and be granted option to purchase 5,000 shares of common stock of
Bacou USA, Inc. at $17 per share.
(f) The Executive shall be entitled to participate in all savings,
retirement or pension, short term and long term disability, health and accident,
Blue Cross/Blue Shield, Major Medical or other hospitalization, holiday,
vacation, and other fringe benefit programs generally available to executives of
Company in accordance with and subject to the terms and conditions of such
programs.
(g) In addition, the Executive shall be entitled to receive the following
benefits:
(i) The Executive shall have the use of a company car, subject to the
written Automobile Policy of Bacou USA, Inc.; provided, however,
that for any period of time Executive elects to continue using
his own automobile, the Company shall pay him a car allowance of
$550 per month plus the costs of gas, maintenance, repairs and
insurance.
(ii) The Executive shall be entitled to vacation pursuant to the
written Bacou USA, Inc. Executive Vacation Policy. Vacation days
will be taken at a time convenient for both the Executive and
Company. To the extent the Executive does not take all vacation
days the remaining days will be carried forward for an unlimited
period or be paid to the Executive at the level of his Base
Salary valid for the fiscal year in which vacation days are not
taken.
(iii)When traveling on Company business, the Executive will be
provided coach-class airfare on domestic trips; business class
airfare will be provided on international trips.
(iv) The Executive is authorized to incur reasonable expenses in
connection with and for the promotion of the business of Company,
including expenses for meals and lodging (regular hotel room, no
suites), entertainment, and similar items as required from time
to time by the Executive's duties. Company shall reimburse the
Executive for all such expenses upon the presentation of an
account therefor, together with appropriate supporting
documentation.
5. Limitations on Authority. Except as otherwise provided herein, approval
by the CEO must be obtained prior to the Executive taking any of the following
actions on behalf of the Company or any of its affiliates:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real property.
(b) Making unplanned capital expenditures or any commitment
therefore;
(c) Borrowing or guaranteeing any borrowings from or on behalf of any
party, or altering the terms of any loan agreements for such
borrowings except for any such loans or borrowings as shall be
agreed upon by the Board of Directors of Bacou USA, Inc.;
(d) Hiring or terminating executive personnel;
(e) Granting retirement benefits or other non-earned income to any
individual which is not available to all employees;
(f) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(g) Acquiring the assets or shares of another Company or partnership;
(h) Acquiring or disposing of the assets or shares of the Company, or
selling any fixed asset of the Company below book value;
(i) Entering into or terminating any employment, consulting, or other
service agreements of any kind or nature with a monthly financial
obligation in excess of U.S. $3,000 for more than six (6) months;
(j) Making basic changes in the administration, organization,
production, and distribution of Company or any of its affiliates,
as well as closing or curtailing the functions of Company or any
of its affiliates;
(k) Filing or settling any lawsuit;
(1) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(m) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the CEO be unavailable, if an emergency arises
which requires the Executive to take immediate action in which approval as set
forth in this Section would otherwise be required, the Executive is no longer
bound by the limitations described above and is authorized to make a decision in
the best interests of Company. The Executive will immediately inform the CEO in
writing of any such decisions made by him.
6. Non-Disclosure of Information. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
secure confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed by Company for a period of three (3) years except in respect of
any information or knowledge disclosed to the public, other than through an
unauthorized disclosure by the Executive.
7. Trade Secrets. The Executive covenants that he shall, while employed by
Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. Non-Competition. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to one year thereafter,
should the Executive's contract be terminated or not be renewed, the Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of Company or any
of its affiliates. In the event that Company chooses to exercise its option to
prevent the Executive from competing with Company following termination or
non-renewal of his employment, Company shall notify the Executive in writing
within two (2) weeks following his last day of employment or within two (2)
weeks of notice by Company of its decision that the Executive shall take a
leave-of-absence, in either case specifying the period of up to one year
following termination, resignation, or non-renewal of employment during which
such competitive activity shall be prohibited. In the event Company exercises
its option, Company shall continue to pay Executive his Base Salary at the rate
applicable at the time of termination, resignation or non-renewal for the period
during which the Executive is prohibited from competition with Company, plus an
amount equal to the Incentive Compensation paid to him for the prior fiscal
year, pro-rated for the period during which the Executive is prohibited from
competition with the Company (if less than a full year); provided, however, that
the Company shall not be obligated to make any such payments (and shall be
entitled to a refund of any payments actually made) to the extent that Executive
violates his obligation of non-competition or invalidates such obligation
through legal action. Notwithstanding the foregoing, the Executive (as
hereinbefore described in Section 2(d)) may own five (5%) percent of the
securities of any business in competition with the business of Company or any of
its affiliates, which securities are regularly traded on a public exchange,
provided that any such ownership shall not result in the Executive becoming a
record or beneficial owner at any time of more than five (5%) percent of equity
securities of said business entity.
(b) The Executive shall not during the term of his Employment under this
Agreement or any renewal thereof, and for a period of one (1) year thereafter,
solicit or arrange to have any other person or entity solicit any person who was
employed by the Company or any of its affiliated companies having an annual
compensation of at least U.S. $50,000 per annum for other employment or
otherwise induce such employees to terminate their employment with the Company
or such affiliates.
(c) If any provision of this Section is held to be unenforceable because of
the scope, duration or area of its applicability or otherwise, the legal entity
making that determination will have the power to modify the scope, duration or
area, or all of them, and the provision will then apply in its modified form.
9. Property. All letters, memoranda, documents, business notes (including
all copies thereof) and other information contained on any other computer media
including computer disks' and hard drives of the Executive in any manner
relating to the duties of Executive under this agreement are the property of
Company.
10. Notices. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (1)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
Bacou USA Safety, Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
(b) If to the Executive, to him at:
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Tel. No.: 000-000-0000
Any party may change its address for receiving notice or add persons to receive
copies of notices by written notice given to the other names above in the manner
provided above.
11. Full and Complete Agreement; Amendment. This Agreement constitutes the
full and complete understanding and agreement of the parties and supersedes all
prior understandings and agreements, whether written or oral, express or
implied, pertaining in any manner to the employment of Executive. This Agreement
may be modified only by a written instrument executed by both parties.
12. Construction. This Agreement shall be construed under the laws of the
State of California without reference to its conflicts of laws provisions.
13. Arbitration. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Los Angeles, California and any award shall be deemed to be a Los
Angeles, California award. There shall be a single arbitrator who shall be
admitted to practice law in California, with no less than ten (10) years
experience in the handling of commercial or corporate matters or disputes. The
arbitrator shall render a written decision stating his reasons therefor, and
shall render an award within six (6) months of the request for arbitration, and
such award shall be final and binding upon both parties. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement, as the law of
such jurisdiction may require or allow. The substantive law to be applied to any
case determined pursuant to this Section 13 is that of the State of California.
The expense of arbitration shall be borne by the respective parties except to
the extent that the arbitrators shall determine that the entire expense shall be
borne by a single party.
14. Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
BACOU USA SAFETY, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
By: /s/ Xxxxxx X. Xxxx, Xx.
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Name: Xxxxxx X. Xxxx, Xx.
Title: Vice Chairman, Secretary and
Treasurer
EXECUTIVE:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
