Exhibit 99(c)(5)
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (hereafter "Agreement") is made as of the
23rd day of February, 1999, and is effective as of the Effective Date set forth
below, by and between Control Devices, Inc., an Indiana publicly traded limited
liability company (hereafter "Employer" or "Company") and Xx. Xxxxx X. Xxxxxxxx
(hereafter "Employee"), a resident of the State of Maine.
RECITALS
--------
Whereas, Employee is currently an employee of Employer serving in the
role as President and Chief Executive Officer of Employer at its headquarters
location in Standish, Maine, and
Whereas, First Technology PLC ("FTPLC") is a publicly traded limited
liability company, incorporated under the laws of England and Wales, which
desires to acquire, directly or indirectly, all of the voting securities of
Employer, and thereafter desires to assure a smooth transition and the continued
employment of Employee by Employer following FTPLC's acquisition of Employer,
and
Whereas, Employee and Employer each desire to set forth in full the
terms and conditions of employment by Employer which would apply to Employee
following the Effective Date.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the parties agree, as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby
accepts employment as the President and Chief Executive Officer of Employer
effective as of the Effective Date. Employee shall also serve as a member of the
Board of Directors of the Employer and in such other capacities as the Board of
Directors of Employer may reasonably designate from time to time consistent with
the position and title set forth above.
2. DUTIES. Employee shall have the full authority and responsibility as
the President and Chief Executive Officer of the Employer for the day-to-day
management and operations of the Company. Employee shall report directly and
solely to the Chairman of the Board of the Employer, who shall be appointed by
FTPLC and under normal circumstances will be the Chairman of the Board of FTPLC.
Employee shall devote his full business time and efforts to the performance of
his duties for Employer. Employee's services to Employer shall be rendered to
the best of his ability and with loyalty to the Employer. Employee shall not
during the term of this Agreement render services to any person, firm or
corporation other than Employer, either within or outside of business hours;
provided, that the Employee may serve on the board of directors of two companies
acceptable to Employer, and may devote reasonable personal time to charity,
industry groups and investment matters. Employee shall not have any interest,
direct or indirect, in any business that is competitive with the business of
Employer, other than ownership of not more than five percent of the outstanding
stock of any corporation whose stock is held of record by more than 500
stockholders and is actively traded on a public exchange.
1
3. TERM OF EMPLOYMENT. Subject to the provisions for termination as
hereinafter provided, the term of this Agreement shall be for a period of two
(2) years, commencing on the Effective Date and terminating two (2) years from
the Effective Date (the"Initial Term"), unless terminated as provided herein.
After the Initial Term this Agreement shall be renewed automatically for
succeeding periods of one (1) year each on the same terms and conditions as
contained herein ("Extension Term"), unless either party notifies the other in
writing at least forty-five days prior to the expiration of an Extension Term of
its intent not to renew this Agreement, or unless terminated as provided herein.
4. COMPENSATION AND BENEFITS.
(a) SALARY. Employer shall pay Employee a base salary of $264,600 per
year payable in bi-weekly installments. The Board of Directors of Employer shall
review Employee's base salary annually for potential increase only taking into
account corporate and individual performance, increases in the cost of living
and compensation of similarly situated executives working for companies in
similar industries; provided, however, that the amount of increase, if any,
shall be discretionary with the Board of Directors.
(b) BONUS. Employer shall pay Employee a bonus on or before the end of
the twelfth week following the close of the FTPLC's fiscal year ("Bonus Date")
on April 30, 2000. The amount of the bonus for the 16-month period from January
3, 1999 shall not be less than $168,000. Thereafter, the Employer shall pay
Employee a bonus on or before the Bonus Date calculated in accordance with the
executive bonus program adopted by the Board of Directors of the Company for
senior executives of the Company. Employee's bonus opportunity under such
executive bonus program shall be equivalent to the annual bonus opportunity
available to similarly situated executives of FTPLC.
(c) BENEFITS. Employee shall be entitled to all fringe benefits of the
Company normally made available to senior executives of the Company, including,
but not limited to, participation in the Company's qualified medical, dental,
life and disability insurance programs, holiday program, 401(k) program, and
executive vacation (4 weeks per year). In addition thereto, the Employee shall
be entitled to the following benefits:
(i) Use of a Company car, including reimbursement for all
normal operating, service and insurance expense related thereto.
(ii) Reimbursement of reasonable and necessary business
expenses incurred in connection with travel and entertainment on behalf
of the Company.
5. TERMINATION AND TERMINATION BENEFITS. This Agreement may be
terminated by Employee or Employer and benefits shall be paid in accordance with
the provisions set forth below:
2
(a) TERMINATION BY EMPLOYEE. Employee shall have the right at any time
to terminate his employment with Employer WITH OR WITHOUT CAUSE by providing
written notice to Employer to that effect. The fifteenth (15th) day following
the date of Employee's notice shall be considered the effective date of
termination ("Termination Date") of the Employee's employment for purposes of
this Paragraph Five and Paragraph Six, unless Employer exercises its option to
accelerate the Termination Date to any day immediately following Employer's
receipt of such notice.
(b) TERMINATION BY EMPLOYER. Employer shall have the right at any time
to terminate the employment of Employee WITH OR WITHOUT CAUSE by providing
written notice to the Employee to that effect. Employer shall have the right to
designate in such notice the date which shall be the effective date of
termination, but shall exercise reasonable efforts to provide not less than
fifteen days advance notice. Such date shall be treated as the Termination Date
for purposes of this Paragraph Five and Paragraph Six.
(c) BENEFITS PAYABLE UPON TERMINATION.
(i) If this Agreement is terminated WITHOUT CAUSE BY THE
EMPLOYEE OR WITH CAUSE BY THE EMPLOYER, Employer shall pay the
Employee's salary in full and reimburse all normal business related
expenses incurred by the Employee through the Termination Date, and
thereafter Employer shall have no further obligation to the Employee;
(ii) If this Agreement is terminated WITHOUT CAUSE BY THE
COMPANY OR WITH CAUSE BY THE EMPLOYEE DURING THE TWENTY-FOUR MONTH
PERIOD FOLLOWING THE EFFECTIVE DATE, the Employer shall pay to the
Employee in full settlement of all of its obligations to the Employee
hereunder upon receipt of a fully executed, mutually acceptable general
release (such general release shall be promptly (normally within 60
days) negotiated between the parties) from the Employee the following
cash benefits:
-an amount of money equivalent to twice the
annualized salary of Employee then in effect at the
Termination Date, plus
-an amount of money equivalent to twice the average
annual bonus actually paid (or, if termination of employment
occurs after the completion of a fiscal year but before the
payment of the bonus for such fiscal year, and if such bonus
is reasonably determinable on or before the Termination Date,
the amount of such bonus as so determined) to the Employee for
the two preceding fiscal year periods, plus
-an amount of money equivalent to twice the average
amount actually paid by the Company for the Employee's
benefits (i.e. health insurance, life insurance and 401(k)
benefit) for the two preceding fiscal years;
3
(iii) If this Agreement is terminated WITHOUT CAUSE BY THE
COMPANY OR WITH CAUSE BY THE EMPLOYEE AT ANY TIME FOLLOWING THE
TWENTY-FOUR MONTH PERIOD FOLLOWING THE EFFECTIVE DATE, the Employer
shall pay to the Employee in full settlement of all of its obligations
to the Employee upon receipt of a fully executed general release from
the Employee one-half of the cash benefits specified in sub-paragraph
(c) (ii);
(iv) If the amount of money calculated in accordance with
sub-paragraph c) (ii) above is less than the Employee's total base
salary, bonus and benefits paid for the calendar year 1998 ("Base Line
Benefit"), the amount of money payable to the Employee pursuant to that
sub-paragraph shall be twice the Base Line Benefit, and the amount of
money payable to the Employee pursuant to sub-paragraph c) iii) above
shall be equal to the Base Line Benefit.
(d) CAUSE FOR THE EMPLOYER. For purposes of this Agreement, the
following actions by the Employee shall constitute "cause" for termination of
this Agreement by Employer:
(i) Material breach of any of the terms of this Agreement or
of the Company's policies and procedures applicable to employees and/or
directors;
(ii) Conviction of or plea of guilty or NOLO CONTENDERE to a
crime involving moral turpitude or involving any violation of
securities or commodities law or regulation, or the issuance of any
court or administrative order enjoining or prohibiting Employee from
violating any such law or regulation;
(iii) Repeated or habitual intoxication with alcohol or drugs
while on the premises of the Company or any of its affiliates or during
the performance by Employee of any of his duties hereunder;
(iv) Embezzlement of any property belonging or entrusted to
the Company or any of its affiliates;
(v) Repeated or protracted absence from work without medical
justification;
(vi) Gross misconduct or gross neglect of duties, or wilful
failure to act with respect to duties or actions previously
communicated to Employee in writing by the Chairman of the Board of the
Company.
(e) CAUSE FOR THE EMPLOYEE. For purposes of this Agreement, the
following actions by the Employer shall constitute "cause" for termination of
this Agreement by Employee:
(i) Material breach of any of the terms of this Agreement;
(ii) Reduction in base salary, change in employment location,
material diminution in the Employee's position (including status,
office, title, authority, duties or responsibilites), or change in
reporting relationship directly and solely to the Chairman of the Board
of the FTPLC;
4
(iii) Change in the organizational structure of the Employer
without the consent of the Employee, which such consent shall not be
unreasonably withheld.
(iv) Failure of the Employer or alternatively FTPLC to adopt a
long term incentive plan for key employees of Employer on or before
December 31, 1999 which is reasonably comparable to Employer's
terminated 1996 and 1997 Stock Option Plans. It is understood that any
such plan would need to obtain FTPLC shareholder approval and comply
with relevant law;
(v) Delivery by Employer to Employee of a notice of Employer's
intent not to renew this Agreement as desribed in Section 3 above.
6) NON-SOLICITATION AND NON-COMPETITION. For a period of two years
following termination of Employee's employment with Employer, Employee shall
not, directly or indirectly, either as an equity owner (except for the ownership
of stock in any corporation whose stock is listed on a public stock exchange),
employee, salesperson, consultant, director, lender, or in any other capacity,
engage in or be interested in any business which sells or participates in the
sale, design or manufacture, for its own use or resale,
(i) any products which the Employer manufactures or sells, or
is actively considering manufacturing or selling, or is competitive
with such products during Employee's employment by Employer,or
(ii) any products manufactured, sold, competitive with or
actively being developed by any affiliate of the Employer if the
Employee was directly or indirectly involved therewith during his
employment by Employer,
provided that Employee shall not be prevented from working for any person whose
business involving manufacture or sale of such products is DE MINIMIS so long as
Employee has no direct or indirect involvement with such business. Employee
shall also not take any action that will in any way interfere with or cause the
termination of the business relationship between Employer and any customer of
Employer. Employee shall also not solicit for employment any person employed in
the business of Employer.
7. CONFIDENTIAL INFORMATION. During or subsequent to Employee's
employment with Employer, Employee agrees that he will not directly or
indirectly communicate, use, disseminate, disclose, lecture upon or publish
articles concerning any confidential information of Employer or FTPLC without
the prior written consent of Employer or FTPLC, except as required in the
ordinary course of performing employment duties for Employer or may be required
by law or order of a court or government agency. Furthermore, Employee agrees
that he will not utilize or make available any such confidential information of
Employer or FTPLC, either directly or indirectly, in connection with the
solicitation of Employee or the acceptance of future employment with any other
organization. Employee acknowledges and agrees that any intellectual property of
any sort developed or invented by Employee while employed by the Company
(whether or not during work hours) shall be and remain the sole and exclusive
property of the Company, and Employee shall have no interest therein. Employee
shall execute any instrument Employer deems necessary or desirable to transfer
and perfect Company's unencumbered interest in any intellecutal property
Employee invents or develops during the term of this Agreement.
5
8. PROPERTY OF EMPLOYER. All documents, contact lists, mailing lists,
interview reports, reports and presentation materials, keys, equipment and
supplies given to Employee or developed by Employee during the term of this
Agreement, including computer diskettes and other storage medium in any tangible
form containing information generated in the course of employment are the sole
and exclusive property of Employer. Upon termination, for any reason, Employee
will deliver to Employer all such documents and tangible things, including,
without limitation, credit cards, diaries, phone lists, documents containing
customer lists, and customer information.
9. EMPLOYEE CLAIMS. All claims initiated by the Employee against the
Employer must be commenced within six months from the Effective Date of
termination.
10. SURVIVAL. The following paragraphs of this Agreement shall survive
for a period of two years subsequent to the termination of this Agreement: 6, 7
and 9.
11. CHOICE OF LAW. This Agreement shall be governed and controlled in
all respects by the laws of the State of Maine, including as to interpretation,
enforceability, validity, and construction.
12. CHOICE OF FORUM. Except as provided in paragraph 22 below, any
dispute hereunder which is not amicably resolved by the parties through friendly
negotiations shall be referred to the American Arbitration Association in
Boston, Massachusetts for resolution. The panel shall consist of three
arbitrators. Each party shall appoint one arbitrator and the two arbitrators
shall appoint the third. The decision of the arbitrators shall be final and
binding. Each party shall share the costs of arbitration equally, and any
decision of the arbitrators shall be enforceable by either party through an
action brought in the United States Federal District Court in Boston,
Massachusetts.
13. NOTICE. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed given when
delivered personally or by registered or certified mail, return receipt
requested, addressed as follows (or any other address that is specified in
writing by either party):
IF TO EMPLOYER:
Control Devices, Inc.
Attn: Corporate Secretary
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx, 00000-0000
WITH A COPY TO:
First Technology PLC
Attn: Corporate Secretary
2 Cheapside Court,
Xxxxxxxxx Xxxx, Xxxxx,
Xxxxx, XX0 0XX,
Xxxxxx Xxxxxxx
6
IF TO EMPLOYEE:
Xx. Xxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxx, 00000
WITH A COPY TO:
Xxxxxxx Xxxxxxxxx
00 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx, 00000
14. WAIVER. Employer's failure to exercise a right or remedy shall not
operate as a waiver of any of Employer's rights or Employee's obligations under
this Agreement.
15. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a way as to be effective and valid under applicable
law. If a provision is prohibited by or invalid under applicable law, it shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
16. AMENDMENTS. The terms of this Agreement may not be varied or
modified in any manner, except in a subsequent writing executed by an authorized
representative of both parties.
17. DIRECTOR'S INSURANCE. Employer shall maintain directly or through
FTPLC a director's and officer's liability insurance policy benefiting corporate
officers and directors, including Employee, in an amount equivalent to the
coverage provided in the similar policy maintained by FTPLC, which presently is
(pound) 10.0 million.
18. REMEDIES CUMULATIVE. The remedies provided in this Agreement shall
be cumulative, and the assertion by Employer of any right or remedy shall not
preclude the assertion by Employer of any other rights or the seeking of any
other remedies.
19. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
Employee. Employer may assign this Agreement to an affiliated or subsidiary
company of Employer with or without the consent of Employee, subject to such
company entering into a written assumption of Employer's obligations hereunder,
in which event this Agreement shall be binding upon and inure to the benefit of
the such company.
20. EFFECTIVE DATE. This Agreement shall become effective simultaneous
with the completion of the acquisition by First Technology PLC of a controlling
interest in the voting securities of Control Devices, Inc.
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original agreement, but all of
which shall be considered one instrument.
7
22. INJUNCTIVE RELIEF. The Parties acknowledge that irreparable injury
will result from the failure of Employee to comply with the terms of this
Agreement. In the event of any actual or threatened default or breach of any of
the provisions of this Agreement, Employer shall have the right to specific
performance or injunctive relief, as well as monetary damage and any other
appropriate relief.
23. TERMINATION OF PRIOR AGREEMENTS. This Agreement, once effective,
shall constitutes the entire understanding between the parties with respect to
the subject matter hereof and supersedes any prior discussions, negotiations,
agreements and understandings between the parties relating to the terms and
conditions of employment of Employee.
24. TITLES. Titles and headings to articles, sections, or paragraphs in
this Agreement are inserted for convenience of reference only and are not
intended to affect the interpretation or construction of the Agreement.
25. ATTORNEY REVIEW. The parties represent that they have carefully
read this Agreement and have consulted with their attorney. The parties
affirmatively state that they understand the contents of this Agreement, and
sign this Agreement as their free act and deed.
IN WITNESS WHEREOF, this Agreement has been executed by the parties the
day and date heretofore stated.
WITNESS: XXXXX X. XXXXXXXX
---------------------
WITNESS: CONTROL DEVICES, INC.
---------------------
