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Exhibit 10.16
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 20th day of May 1996 by and between W. Xxxxxx
Xxxxxxx residing at 00 Xxxxx Xxxxxx Xxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000
("Employee"), and National Sanitary Supply Company, a Delaware corporation (the
"Company").
WHEREAS, the Company has employed Employee and desires to continue to
employ Employee as an Executive Vice President and General Manager of its
Century Papers subsidiary and Employee desires to work for the Company in such
capacity on the terms and conditions hereinafter provided;
WHEREAS, this Agreement replaces the Employment Agreement of October
31, 1994 between Company and Employee;
WHEREAS, Employee is a key senior executive of the Company with major
responsibilities for planning, directing, coordinating and controlling various
corporate operations;
WHEREAS, in such capacity Employee will develop or have access to all
or substantially all of the business methods and confidential information
relating to the Company, including but not limited to, its financial performance
and results, its product formulae, its manufacturing organization and methods,
its product research and development policies and programs, its service
techniques, its purchasing organization and methods, its sales organization and
methods, its pricing of products, its market development and expansion plans,
its personnel policies
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and training and development programs, and its customer and supplier
relationships.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 POSITIONS AND DUTIES. The Company agrees to employ Employee and
Employee agrees to work for the Company as an executive employee. Employee shall
have such duties and authority as are normally associated with an executive.
Employee will also serve in such other senior management capacities as may be
mutually agreed upon from time to time. While employed hereunder, Employee shall
devote his full time, effort, skill and attention to the affairs of the Company.
During the term of his employment hereunder, Employee shall not render any
services to any other person that might be in competition with the Company or
any of its subsidiaries or affiliates or in conflict with his position as a
senior executive of the Company or his duty of undivided loyalty to the Company.
1.2 TERM. Unless sooner terminated in accordance with the provisions
hereof, the term of employment hereunder shall commence on May 21, 1996 and
shall continue until May 31, 1999.
2. COMPENSATION
2.1 BASE SALARY. While employed hereunder the Company shall pay
Employee a base salary of $140,000 per annum or
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such higher amount or amounts as the Board of Directors may from time to time
approve. The base salary shall be due and payable at the same times and
intervals at which salary payments are made to other senior executives.
2.2 INCENTIVE COMPENSATION. Employee will be entitled to participate
in all incentive compensation and bonus plans as such have been maintained by
the Company for its senior executives generally. The Employee's annual incentive
compensation will be payable, with respect to each calendar year, on or before
February 10 in the following year.
2.3 EMPLOYEE BENEFITS. Employee shall be entitled to participate in
and receive rights and benefits under those "fringe" benefit plans which the
Company provides for its executives generally, which at the present time
include:
Life and Accidental Death & Dismemberment Plan
Major Medical Plan
Dental Plan
Employee Spending Account (Medical & Dependent Care)
Voluntary Short Term Disabililty
Long Term Disability Plan
Business Travel Accident Plan
Employee Assistance Program
Employee's participation in such plans will be in accordance with
and subject to the terms and provisions thereof.
2.4 PENSION. Employee will continue to participate in the Company's
Thrift and Profit Sharing Plan and Chemed ESOP II in accordance with and subject
to their respective provisions.
2.5 MISCELLANEOUS.
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(a) Company will pay or reimburse Employee for his
reasonable business expenses in accordance with Company policies.
(b) Employee will be entitled to paid vacation in
accordance with current Company policy.
(c) Subject to 1.1 of this Agreement, compliance with
applicable laws relating to interlocking directorships, the Company's policies
on conflicts of interest and improper payments and accounting records contained
in a statement entitled "Policies on Business Ethics" and to any other current
applicable Company policy, during the term of Employee's employment hereunder,
Employee will be permitted to accept election, and to serve as, a director of
other entities. Employee will be permitted to retain all fees and other benefits
resulting from his service as a director of any such entity.
(d) The Company shall promptly pay upon demand any
reasonable legal fees incurred by Employee in connection with any enforcement of
his rights under this Agreement.
3. TERMINATION
3.1 TERMINATION OF EMPLOYMENT. The employment of Employee shall
terminate prior to the expiration of the term specified in 1.2 upon the
occurrence of any of the following:
(a) The death of Employee;
(b) The termination by the Company Employee's
employment for Cause pursuant to 3.2.
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The termination by the Company of Employee's employment hereunder
for any reason other than those specified in paragraphs (a) and (b) above shall
hereinafter be referred to as a termination "Without Cause". Any disability of
Employee shall not be grounds for termination.
3.2 FOR CAUSE. The Company may, at any time by written notice to the
Employee, terminate his services hereunder for Cause. Such notice shall specify
the event or events and the actions or failure to act constituting Cause. The
term "Cause", as used herein, shall mean and be limited to the occurrence of one
or more of the following events:
(a) His conviction, by a court of competent jurisdiction,
of a felony, which through lapse of time or otherwise is not subject to appeal;
(b) His commission of an act of fraud upon, or an act
evidencing material dishonesty toward, the Company; or
(c) Any willful failure by him to observe or perform his
material agreements herein contained.
If the basis for discharge is pursuant to paragraph (c) above,
Employee shall have thirty (30) days from his receipt of the notice of
termination for Cause to cure the actions or failure to act specified in such
notice and, in the event of any such cure within such period, such conduct shall
not constitute Cause hereunder.
3.3 CONSEQUENCES OF TERMINATION.
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(a) If Employee's employment hereunder shall terminate
pursuant to any of the provisions of this Article 3, his base salary and
incentive compensation referred to in sections 2.1 and 2.2 shall cease to accrue
forthwith.
(b) If the Company shall terminate Employee's employment
hereunder Without Cause, the Company shall pay Employee monthly severance
payments at an annual rate equal to 150 percent of the sum of: (i)the Employee's
then current base salary plus (ii) the amount of the annual incentive bonus most
recently paid or approved to be paid to Employee in respect of the previous
year, plus (iii) the fair market value of all shares of National Sanitary Supply
Company common stock subject to stock awards granted to Employee under one or
more stock incentive plans which have vested during the 12 months prior to
Employee's termination, such fair market value to be determined as of the date
of vesting of any such shares. Such monthly severance payments shall be made for
a period equal to the balance of the term of employment provided for in 1.2.
(c) In the event that Employee's employment hereunder shall
terminate pursuant to any of the provisions of this Article 3, the rights of
Employee under any incentive compensation plan referred to in 2.2, under the
employee benefit plans or arrangements referred to in 2.3 and 2.4 or otherwise,
shall be determined in accordance with the terms and provisions of such plans,
arrangements and options applicable to an employee whose employment has
terminated in the manner that occurred,
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except that a termination Without Cause shall be treated as a retirement under a
retirement plan of the Company for the purposes of the Company stock incentive
plans.
4. OTHER COVENANTS OF EMPLOYEE.
4.1 Employee shall have no right, title or interest in any reports,
studies, memoranda, correspondence, manuals, records, plans, or other written,
printed or otherwise recorded materials of any kind belonging to or in the
possession of the Company or its subsidiaries, or in any copies, pictures,
duplicates, facsimiles or other reproductions, recordings, abstracts or
summaries thereof and Employee will promptly surrender to the Company any such
materials (other than materials which have been published or otherwise have
lawfully been made available to the public generally) in his possession upon the
termination of his employment or any time prior thereto upon request of the
Company.
4.2 Without the prior written consent of the Company, Employee shall
not at any time (whether during or after his employment with the Company) use
for his own benefit or purposes or for the benefit or purposes of any other
person, firm, partnership, association, corporation or business organization,
entity or enterprise, or disclose (except in the performance of his duties
hereunder) in any manner to any person, firm, partnership, association,
corporation or business organization, entity or enterprise, any trade secret, or
other confidential or proprietary information, data, know-how or
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knowledge (including, but not limited to, that relating to financial policies,
product composition, manufacturing organization and methods, research and
development policies and programs, service techniques, purchasing organization
and methods, sales organization and methods, product pricing, market development
and expansion plans, personnel policies and training and development programs
and customer and supplier relationships) belonging to, or relating to the
affairs of, the Company or its subsidiaries.
4.3 Employee shall promptly disclose to the Company (and to no one
else) all improvements, discoveries and inventions that may be of significance
to the Company or its subsidiaries made or conceived alone or in conjunction
with others (whether or not patentable, whether or not made or conceived at the
request of or upon the suggestion of the Company during or out of his usual
hours of work or in or about the premises of the Company or elsewhere) while in
the employ of the Company, or made or conceived within six months after the
termination of his employment by the Company, if resulting from, suggested by or
relating to such employment. All such improvements, discoveries and inventions
shall, to the extent that they are patentable, be the sole and exclusive
property of the Company and are hereby assigned to the Company. At the request
of the Company and at its cost and without liability to Employee, Employee shall
assist the Company, or any person or persons from time to time designated by it,
in obtaining
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the grant of patents in the United States and/or in such other country or
countries as may be designated by the Company covering such improvements,
discoveries and inventions and shall in connection therewith execute such
applications, statements or other documents, furnish such information and data
and take all such other action (including, but not limited to, the giving of
testimony) as the Company may from time to time request.
4.4 During the continuance of Employee's employment and for a period
of two years after Employee has ceased to be an employee of Company, or of any
subsidiary or affiliate of Company, whether or not pursuant to this agreement,
the Employee shall not without the prior written consent of Company:
a. directly or indirectly engage in, or
b. assist or have an active interest in whether as proprietor,
partner, investor, shareholder, officer, director or any type of principal
whatever, or
c. enter the employment of or act as an agent for or advisor or
consultant to any person, firm, partnership, association, corporation or
business organization, entity or enterprise that is, or is about to become,
directly or indirectly engaged in
any business in any area described in Exhibit A to this
agreement whether in operation or in the planning or development stage, that
competes with or is substantially similar to any business that Company or any
subsidiary or affiliate of Company has operated, or had in the planning or
development
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stage, during the 120-day period immediately prior to the Employee's
ceasing to be an employee of or consultant to Company or any subsidiary or
affiliate of Company, provided that the restrictions contained in this Section
4.4 shall not apply to any area described in Exhibit A to this agreement that
does not meet the following requirements:
(1) Company or a subsidiary or affiliate of Company shall have
operated such business in such area, or had such business in the planning or
development stage therein, during the 120-day period immediately prior to the
Employee's ceasing to be an active employee of, or consultant to, Company or any
subsidiary or affiliate of Company, and
(2) the Employee, during such 120-day period, shall have had
substantial planning, development, administrative or operational
responsibilities for such business of Company or any subsidiary or affiliate of
Company in such area.
If the scope of any restriction contained in this Section 4.4 is too
broad to permit enforcement by such restriction to its full extent, then such
restriction shall be enforced to the maximum extent permitted by law, and the
Employee hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
4.5 The obligations of Employee set forth in this Article 4 are in
addition to and not in limitation of any obligations which would otherwise exist
as a matter of law. The
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provisions of this Article 4 shall survive the termination of Employee's
employment hereunder.
5. CERTAIN REMEDIES
5.1 BREACH BY THE COMPANY. In the event that the Company shall fail,
in any material respect, to observe and perform its obligations hereunder, the
Employee may give written notice to the Company specifying the nature of such
failure. If within thirty (30) days after its receipt of such notice the Company
shall not have remedied such failure, the Employee shall have the right and
option to treat such failure as termination of his employment by the Company
Without Cause, to cease rendering services hereunder and thereafter to receive
the severance benefits and have the other rights and obligations provided for in
Article 3 hereof in the case of a termination by the Company Without Cause. The
parties agree that a material breach by the Company for purposes of this 5.1
shall include, but not be limited to, a material reduction in Employee's title,
authority or responsibilities from those he was exercising on the date of
execution of this Agreement. The remedy provided for in this 5.1 shall be in
addition to and not in limitation of any other remedies which would otherwise
exist as a matter of law.
5.2 BREACH BY THE EMPLOYEE. Employee acknowledges and agrees that
the Company's remedy at law for any breach of any of Employee's obligations
under 1.1, 4.1, 4.2, 4.3 and 4.4 would be inadequate, and agrees and consents
that temporary and permanent injunctive relief may be granted in any proceeding
that
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may be brought to enforce any provision of any such sections, without the
necessity of proof of actual damage.
6. GENERAL PROVISIONS
6.1 REPRESENTATIONS AND WARRANTIES. Employee represents and warrants
to the Company that he is free to enter into the Agreement and that he has no
prior or other obligations or commitments of any kind to anyone that would in
any way hinder or interfere with his acceptance of, or the full, uninhibited and
faithful performance of, his employment hereunder or the exercise of his best
efforts as an employee of the Company.
6.2 UNDERSTANDINGS; AMENDMENTS. Except as otherwise provided herein,
this Agreement sets forth the entire agreement and understanding of the parties
concerning the subject matter hereof and supersedes all prior agreements,
arrangements and understandings between Employee and the Company concerning such
subject matter. No representation, promise, inducement or statement of intention
has been made by or on behalf of either party hereto that is not set forth in
this Agreement or the documents referred to herein. This Agreement may not be
amended or modified except by a written instrument specifically referring to
this Agreement executed by the parties hereto.
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6.3 NOTICES.
(a) Any notice or other communication required or permitted to be
given hereunder shall be in writing and may either be delivered personally to
the addressee or be mailed, registered mail, postage prepaid, as follows:
If to the Company:
National Sanitary Supply Company
2900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
with a copy to:
Secretary
National Sanitary Supply Company
2600 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to Employee:
00 Xxxxx Xxxxxx Xxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
(b) Either party may change the address to which any such notices or
communications are to be directed to it by giving written notice to the other
party in the manner provided in the preceding paragraph (a).
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6.4 ASSIGNMENTS; BINDING EFFECT.
(a) Employee acknowledges that the services to be rendered by him
are unique and personal. Accordingly, Employee may not assign any of his rights
or delegate any of his duties or obligations under this Agreement. This
Agreement shall be binding upon, and to the extent herein permitted shall inure
to the benefit of, Employee's heirs, legatees and legal representatives.
(b) The Company may not assign this Agreement or its rights
hereunder except to a successor of all or substantially all of the business and
assets of the Company. This Agreement shall be binding upon, and shall inure to
the benefit of, the Company's successors and permitted assigns.
6.5 WAIVERS. The failure of either party hereto at any time or from
time to time to require performance of any of the other party's obligations
under this Agreement shall in no manner affect the right to enforce any
provision of this Agreement at a subsequent time, and the waiver of any rights
arising out of any breach shall not be construed as a waiver of any rights
arising out of any subsequent breach.
6.6 SEVERANCE PLANS. Amounts paid hereunder are in addition to any
amounts payable under the Company severance plans, without offset or reduction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written hereinabove.
NATIONAL SANITARY SUPPLY COMPANY
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By: /s/ P. C. VOET
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EMPLOYEE
/s/ W. XXXXXX XXXXXXX
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W. Xxxxxx Xxxxxxx
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT
The States of Arizona, California, Colorado, Indiana, Kansas, Louisiana,
Michigan, Missouri, Mississippi, Nevada, New Mexico, Ohio, Oklahoma, Oregon,
Tennessee, Texas, Utah and Washington.
