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EXHIBIT 10(iii)(A)(3)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between The Company
International, Inc., a Illinois corporation ("Titan" and/or "the Company") and
its successor (s), and Xxxx X. Xxxxxxxxx ("Executive") (hereinafter, as amended
or modified and in effect called "Agreement"). The effective date of this
Agreement (the "Effective Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. Titan agrees to employ Executive and Executive
agrees to accept employment as Vice President of Finance and Treasurer of the
Titan pursuant to the terms of this Agreement. Executive will perform such
services in the capacity of Vice President and Treasurer as may be assigned to
him by the By-laws and, from time to time by the Board of Directors of the Titan
during the Employment Term and, if applicable, during the Extended Employment
Term, (as such terms are defined in Section 2). Executive will devote such of
his business skill, time and effort to his employment hereunder as shall be
reasonably necessary to discharge his obligations hereunder.
2. Employment Term. Executive's term of employment by Titan
under this Agreement will begin on the Effective Date and will terminate on the
date five years after the Effective Date (the "Employment Term"), unless
terminated earlier as provided in Sections 5 and 6 hereof.
Subject to the provisions of Sections 5 and 6 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by President.
3. Direct Compensation. For his service hereunder during the
Employment Term and, if applicable, during the Extended Employment Term,
Executive will receive a base salary payable at an annual rate of $ 150,000.00
(the "Base Salary"), to be paid in accordance with the normal practices for
remunerating Titan executive management. Nothing in this
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Agreement will be deemed to prohibit an increase at any time in the Base Salary
if the Titan's Board of Directors approves. (The Base Salary, if so adjusted, is
herein called the "Adjusted Base Salary"). In addition to salary, each calendar
year, the Executive shall be entitled to receive a minimum bonus of twenty five
percent (25%) up to a maximum of seventy five percent (75%) of his salary based
on performance with specified criteria. The Board of Directors will establish
the bonus and performance standards at the beginning of each year. The Executive
shall receive stock options of up to a minimum of fifty percent (50%) of his
base salary in shares of Titan stock under Titan Stock Incentive Plan that shall
vest and become exercisable as prescribed by the Plan. The Executive during the
Employment term shall be entitled to three weeks of vacation plus Titan
designated holidays in each year and shall, during such periods, be entitled to
remuneration as hereinbefore provided and car allowance.
4. Standard Executive Benefits. In addition to the benefits described
in Sections 4, 6 and 7, Executive and, as applicable, Executive's family, shall
be entitled to participate during the Employment Term, and if applicable, during
the Extended Employment Term in all of the Titan's then prevailing Executive
benefit plans and programs which are generally available to Titan executive
management, including without limitation, any group life, hospitalization,
surgical, major medical and accidental death and dismemberment insurance plans
and/or benefits, dental, 401k and any pension or other capital accumulation
plans (collectively, the "Standard Executive Benefits").
5. Death or Disability. In the event of Executive's death or
disability (as hereafter defined) during the Employment Term, or, if applicable,
during the Extended Employment Term, Titan shall pay Executive, his designated
beneficiary or estate, in addition to all payments due under Section 4, 5 and 6,
the Supplemental Death or Disability Benefits, as the case may be, as described
below.
5.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, the Titan shall pay Executive's estate a lump sum equal to all
earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as at
such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination Date), and thereafter during the remainder of the Employment Term,
or, if applicable, the Extended Employment Term, fifty percent (50%) of
Executive's Base Salary. In addition, Titan shall continue to provide
Executive's family with the Standard Executive Benefits from the date of
Executive's death until the later of (1) the expiration of the Employment Term
or, if applicable, the Extended Employment Term or (2) six months.
5.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of Titan's Board
of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in his regular occupation as
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a senior executive officer of a corporation generally comparable to Titan at a
level of compensation commensurate with his education, training and experience
for a substantially continue period which has extended or will foreseeable
extend beyond six months in duration as a result of sickness, bodily injury, or
mental or emotional disease or disorder of any type, excluding attempted suicide
or intentionally self-inflicted injury. Upon termination of the employment of
Executive by reason of Disability, the liabilities of Titan will be as follows:
a. During the periods referred to in (i) and (ii) below, Titan
shall continue to provide the Executive with the following direct compensation:
(i) commencing with the first day of the month next succeeding the Disability
Termination Date, a lump sum equal to all earned yet unpaid Base Salary or
Adjusted Base Salary, if any, in effect as of such Disability Termination Date
plus a monthly amount which shall be equal to one-twelfth of Executive's Base
Salary or Adjusted Base Salary, in effect as at such Disability Termination
Date, for a period of 24 months following such Disability Termination Date (the
"Disability Benefit Continuation Period"); and (ii) for the period, if any, of
Disability that extends beyond the Disability Benefit Continuation Period
referred to in (i) above, and until the date the Executive attains age 60 or, if
sooner, his death, a monthly amount which shall be equal to one-twelfth of fifty
percent (50%) of Executive's Base Salary; provided, however, that the monthly
amounts payable under (i) and (ii) above shall be reduced by an amount equal to
the sum of the amount of monthly benefits then actually received by Executive
pursuant to (A) any long-term disability insurance plan then generally provided
to executive management by Titan, and (B) any supplemental disability insurance
program then provided to the Executive by Titan.
(b) During the Disability Benefit Continuation Period, Titan
shall continue to provide Executive with full participation in the benefits
described in Sections 4, 5.1. and 5.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for this purpose by the parties or their representatives
or, failing Agreement by the parties within twenty (20) business days of the
request by either party to the other, by a panel of three impartial reputable
physicians to be selected within twenty (20) business day of request by either
party to the other, one by Executive and one by Titan, respectively, and one by
the two physicians so selected. If the physician selected by Titan and Executive
should fail to select the third physician within ten (10) business days of their
appointment, or if either Titan or Executive should fail to select a physician,
the remaining member(s) of the panel shall be appointed by Director of Mayo
Clinic of Rochester, MN. The opinion of the majority of the panel as to the
matter in dispute shall be final and binding on the parties. Executive shall
submit to such examination(s) as may be necessary for the purposes herein.
6. Termination. Executive's employment under this Agreement may
be terminated by Titan upon the occurrence of any of the following events:
6.1 Termination for Cause. Titan's Board of Directors may by a
majority
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vote at any time terminate Executive's employment for cause. For this purpose,
"Termination for Cause" shall mean (i) termination of the Executive's employment
for willful or gross neglect of duties hereunder, or willful or gross misconduct
in the performance of such duties, so as to cause material harm to Titan and its
subsidiaries considered as a whole, determined in good faith by its Board of
Directors, (ii) termination following a judicial determination that Executive
has committed fraud, misappropriation or embezzlement agains Titan or (iii)
termination due to Executive's having committed any felony for which he is
convicted and which, as determined in good faith by the Board of Directors and
results in material harm to Titan and its subsidiaries considered as a whole.
Upon the occurrence of a Termination for Cause, Titan's obligations under this
Agreement shall terminate, except that in the event of Termination for Cause
pursuant to clause (i) of the first sentence of this Section 6.1, Titan shall
remain obligated to pay Executive fifty percent (50%) of his Base Salary and to
continue for Executive and/or his family the full benefits described in Section
4 during the Employment Term.
6.2 Termination Without Cause. Titan's Board of Directors may
at any time terminate Executive's employment by majority vote and thereupon,
unless such termination shall be pursuant to Section 5 or 6.1, such termination
shall, in all cases, constitute "Termination Without Cause" with effect from the
date of action by the Titan's Board of Directors. Any demotion from the position
of Vice President set forth in Section 1, or any material reduction in the
authorities inherent to such position, in each instance unless made with
Executive's prior written consent, or upon a termination pursuant to Sections 5
or 6.1, or any non-payment or reduction in the Base Salary or Adjusted Base
Salary then in effect or any other breach by Titan of this Agreement shall be
deemed to constitute Termination Without Cause. In the event of Executive's
Termination Without Cause, Titan shall remain obligated to pay Executive 100% of
his Base Salary or Adjusted Base Salary then in effect for three (3) years from
the effective date of the Termination Without Cause, but in no event beyond the
Employment Term or, if applicable, the Extended Employment Term, and 50% of his
Base Salary or Adjusted Base Salary then in effect for the balance of the
Employment Term remaining beyond the three year period, if any, plus all
benefits described in Sections 4, 5 and 6 during the Employment Term.
6.3 Termination by Executive The executive shall have
sufficient reason to terminate this Agreement if: (i) there is a change of
control of Titan (as defined below); (ii) there is a failure by Titan to comply
with any material provision of this Agreement and such failure has continued for
a period of ten days after notice of such failure has been given by the
executive to Titan; or (iii) there is a purported termination of the executive's
employment which is not effected pursuant to the provisions of this Agreement
relating to termination of the executive's employment by Titan;
For the purposes of this Agreement, a "change of control of Titan"
means
(i) any Person (meaning individual, corporation, general
partnership, limited partnership, syndicate or other
group of persons) or two or more Persons acting in
concert shall have acquired after the date hereof
beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934),
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directly or indirectly of securities of Titan (or
other securities convertible into such securities)
representing 20% or more of the combined voting power
of securities of Titan entitled to vote in the
election of directors; or
(ii) any Person or two or more Persons acting in concert
shall have acquired after the date hereof by contract
or otherwise, or shall have entered into a contract
or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will result
in its or their acquisition of control over
securities of Titan (or other securities convertible
into such securities) representing 20% or more of the
combined voting power of all securities of Titan
entitled to vote in the election of directors; or
(iii) consummation of any merger or consolidation with
respect to which Titan or any Parent is a constituent
corporation (other than a transaction for the purpose
of changing Titan's corporate domicile) any
liquidation or dissolution of Titan or any sale of
substantially all of the assets of Titan to another
corporation;
(a) In the event of a change of control (as defined above) at the
Executive's election made during the sixty (60) days period thereafter, may
terminate this Agreement and his employment hereunder by giving thirty (30) days
notice to Titan. In the event of the Executive's termination of this Agreement
under 6.3(a), Titan and/or successor shall pay the Executive 100% of his Base
Salary or Adjusted Base Salary for the remaining Employment term;
(b) If the Executive terminates this Agreement because of a change
of control of the Company, Titan agrees to provide fully vested supplemental
retirement benefits ("Supplemental Retirement Benefit Payments") to Executive
pursuant to the following terms: (i) commencing on the first day of the calendar
month which next succeeds or coincides with Executive's having attained 60 and
on the first of each calendar month thereafter for and during his natural life,
Titan shall pay to Executive the sum of $6,000.00 per month (the "Normal
Supplemental Retirement Benefit Payments"); (ii) alternatively, and in lieu of
the Normal Supplemental Retirement Benefits Payments, Executive, at any time
after attaining the age of 55, shall be entitled, at his election, to receive an
early supplemental retirement benefit, payable monthly, commencing on the first
day of the month following such election and on the first day of each month
thereafter during his lifetime, equal to the actuarial equivalent of the Normal
Supplemental Retirement Benefit Payments as determined at the time of such
election (the "Early Supplemental Retirement Benefits Payment"); (iii) if
Executive is married on the date of his benefit payment commence hereunder, he
may elect by notice to Titan and as an alternative to either the Normal
Supplemental Retirement Benefit Payments or Early Supplemental Retirement
Benefit Payments, a reduced pension benefit at age 60 or at such earlier date
after obtaining the age of 55 in the form of a standard joint and survivor
annuity based on the life expectancies of Executive and his spouse to be paid to
Executive and his spouse during their natural lifetimes; and (iv) at the
Executive's election, the Supplemental Retirement Benefits Payments, as elected
by Executive pursuant to (i) through (iii) above, may be made at any time in the
form of a single life annuity of which Executive is the annuitant and owner;
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(c) If the Executive terminates this Agreement because of a change
of control of Titan, Titan agrees to provide for and during their natural
lifetimes of the Executive and his spouse and dependents which live in the
household shall receive, at not cost and expense to them, fully vested group
medical (including hospitalization, surgical, and major medical) and dental
insurance benefits provided or furnished or made available under Titan's Plan
(at Executive, or in the event of Executive death, at Executive's spouse's
election with respect to which plan) then prevailing Executive benefit plans to
the then employed highest level executive officers' of either of them from time
to time. Titan shall pay the full premiums for all such benefits furnished
through group insurance plans as well as all other charges and expenses for
providing such benefits;
(d) In the event of a change of control of Titan, all outstanding
stock options and the Employer match under Titan's 401k Plan for the Executive
shall vest 100% immediately; and
(e) In the event of a change of control of Titan, Titan shall
provide, as a condition of such sale, that the acquiring party shall assume this
Agreement and become obligated to perform all of the terms and conditions
hereof.
7. Successors and Assigns This Agreement shall be binding upon
any successor or assigns of Titan and a successor or assigns shall be any
surviving entity under which it might be merged or consolidated or the purchaser
of substantially all of the assets of Titan.
8. Termination. This Agreement shall terminate upon the death of
both Executive and his spouse or earlier if mutually agreed upon by the
Executive and Titan.
9. Expenses. Titan will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, without limitation expenses for entertainment, travel (including
automobile operating expenses), meals, hotel accomodations and other ordinary
and necessary activities incurred on behalf of Titan, subject to reasonable
documentation of such expenses by Executive.
10. Inventions and Improvements. Any invention or development of
any kind related to the Titan's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by Titan
pursuant to this Agreement shall be promptly disclosed by Executive to Titan and
shall be the sole property of Titan. Executive shall execute an assignment to
Titan, or to another designated by it, of his entire claim to and interest in
each such invention or development. Executive undertakes to sign all lawful
papers and, at Titan's expense, to assist it in every lawful way to obtain and
sustain patents or copyrights for its benefit in any such inventions or
developments when requested by the Titan. Executive shall not be entitled to
compensation beyond his Base Salary or Adjusted Base Salary for the performance
of any such acts.
11. Confidential Information. Executive acknowledges that by
reason of his employment with Titan he has and will hereafter, from time to time
during his Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or
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become knowledgeable about proposals, plans, inventions, practices, systems,
programs, formulas, customer lists, and other forms of business information
which are not known to Titan's competitors and which are not recognized as being
encompassed within standard business management practices and which are kept
secret and confidential by Executive (the "Confidential Information"). Executive
therefore agrees that at no time during or after the period of his employment by
Titan will he disclose or use the Confidential Information except as may be
required in the prudent course of business for the benefit of Titan, provided,
that no payment required to be made by Titan under the terms of this Agreement
including the Exhibits hereto after termination of the employment of Executive
shall be subject to any right of set-off, counterclaim, defense, abatement,
suspension, deferment or reduction by reason of any claim against Executive
based upon breach of the covenant in this Section 12 other than execution of an
unsatisfied final judgment rendered by a court of competent jurisdiction.
12. Competition. Executive hereby agrees that until the
termination of his employment under this Agreement, and for a period of one (1)
years thereafter, he will not, unless authorized in writing to do so by Titan,
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or otherwise
connected in any substantial manner with any business which directly competes to
a material extent with line of business of Titan or its subsidiaries that is
material to the businesses, financial condition or prospects of Titan and its
subsidiaries considered as a whole; provided that nothing in this paragraph
shall prohibit Executive from acquiring up to 5% of any class of outstanding
equity securities of any corporation whose equity securities are regularly
traded on a national securities exchange or in the "over-the-counter market".
13. Relocation. Executive shall not be required to relocate his
residence during the Employment Term or, if applicable, during the Extended
Employment Term, without his consent. If the Board of Directors approves or
requires relocation of its executive from Hannibal, Missouri and if such
relocation reasonably would require Executive to move and thereby sell his
present residence and purchase a different one and if Executive consents to
relocate his residence to such new location, then Titan shall pay all reasonably
requested moving and relocation expenses including but not limited to real
estate commissions, legal fees and costs, appraisals, title insurance, surveys
and inspections directly related to such sale and closing and financing costs
directly related to the purchase or construction of a new residence. In
addition, Titan will indemnify Executive for any net loss (measured by the
difference between (a) the average of two current appraisals by recognized
appraisers mutually agreed upon by the parties, and (b) the actual selling price
of the residence) arising from the sale of his residence (caused by such
required relocation): provided, however, that Titan shall alternatively have a
right of first refusal to acquire the residence at the average appraisal price
giving rise to such loss. Notwithstanding the foregoing, Executive shall have
the right to relocate his residence and perform his services hereunder at a
location other than Titan's Quincy, Illinois facility or the successor location
thereto, so long as such relocation and performance of services does not prevent
the fulfillment of his duties and obligations hereunder.
14. Arbitration. Any controversy or claim arising out of or
relating to this
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Agreement, or any breach thereof, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association and judgment upon such
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Illinois unless another
location shall be mutually agreed to by the parties at the time of the
arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, Titan shall pay all legal fees
incurred by Executive in connection with the dispute over such claim(s). If more
than one is involved in any dispute and if Executive is sustained as to one or
more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. Titan will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
15. Binding Effect: Amendments. Executive's undertakings hereunder
will be binding regardless of (i) the duration of his employment with Titan; or
(ii) the reasons for or manner of termination of his employment. This Agreement
will bind and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, will supersede any prior understanding
between the parties relating to the same subject matter and may be modified and
varied only in writing signed by the parties hereto.
16. Notices. All notices hereunder shall be given in writing by
personal delivery or by registered mail or facimile addressed to Titan at is
principal place of business and to Executive at his residence address as then
listed in Titan's records.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and jurisdiction
of the State of Illinois.
18. Miscellaneous. (a) the failure of a party to insist on any
occasion upon strict adherence to any term of this Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing signed by the party waiving any right; (b) the
underlined captions in this Agreement at the beginning of Sections are for
reference only and shall not be deemed to define or limit the provisions hereof
or to affect their construction and application; (c) the parties agree that this
Agreement may be executed in any number of counterparts, and in the event, each
counterpart shall be deemed a complete original and be enforceable without
reference to any other counterpart.
19. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve Titan
and/or its successor (s) from their obligations hereunder. All of Sections 5 and
6 and shall survive the termination of this Agreement and shall not relieve the
Company and/or successor from their obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATIONAL, INC
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx., President
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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