EXHIBIT 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of the
19th day of July, 1996, between Drypers Corporation, a Delaware corporation (the
"Employer"), and Xxxxx X. Xxxxx (the "Employee"),
W I T N E S S E T H:
WHEREAS, the Employer desires to obtain the services of the
Employee, and the Employee desires to be employed by the Employer upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the agreements
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions hereinafter set
forth, the Employer hereby agrees to employ the Employee, and the Employee
hereby agrees to serve the Employer, in the capacity and for the Term of
Employment specified herein.
2. SCOPE OF EMPLOYMENT. During the Term of Employment hereunder, the
Employee will serve as Vice President, Marketing in accordance with the
provisions of the By-Laws of the Employer. In that connection, the Employee
will:
(a) devote his full time, attention, and energies to the business
of the Employer and will diligently and to the best of his ability
perform all duties incident to his employment hereunder;
(b) use his best efforts to promote the interests and goodwill of
the Employer; and
(c) perform such other duties commensurate with his office as the
Board of Directors or any of the Co-Chief Executive Officers of the
Employer may from time-to-time assign to him.
The foregoing shall not be construed as preventing the Employee from making
investments in other businesses or enterprises provided such investments do not
require the provision of substantial services by the Employee to the operations
or the affairs of such businesses or enterprises such that the provision thereof
would interfere in any respect with the performance of the Employee's duties
hereunder.
3. VACATION. During the Term of Employment the Employee shall be
entitled to sick leave, holidays, and an annual vacation, all in accordance with
the regular policy of the Employer for officers of the Employer, during which
time his compensation shall be paid in full. Each such vacation shall be taken
by the Employee at such times as may be mutually agreed upon by the Employee and
Employer.
4. COMPENSATION. As compensation for his services hereunder and in
consideration of his agreement not to compete as set forth in Section 9, the
Employer
shall:
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(a) during the Term of Employment pay the Employee, subject to
the terms and conditions of this Agreement, a base salary at the rate of not
less than $115,000.00 per year, payable in accordance with the normal payroll
practices of the Employer but in no less than equal bi-weekly installments; and
(b) during the Term of Employment as additional compensation for
services hereunder during the term of this Agreement, the Employee shall
be entitled to an annual bonus in amounts as shall be determined by the
Co-Chief Executive Officer and President of Drypers North America of the
Employer for each of the Company's fiscal years ending after the date
hereof.
5. TERM.
(a) The "Term of Employment", as used herein, shall mean a period
commencing on the date hereof and ending on the first anniversary of the
date of this Agreement. The Term of Employment may be renewed for an
additional term or terms as determined between the Employer and the
Employee on or prior to the first anniversary of the date of this
Agreement; PROVIDED HOWEVER that the occurrence of any of the following
events set forth in this Section 5(a) prior to the end of the Term of
Employment shall result in the immediate termination of the Term of
Employment, but shall not result in the termination of this Agreement:
(i) the commission by the Employee of an act constituting a
dishonest or other act of material misconduct, or a fraudulent
act or a felony under the laws of any state or of the United
States to which the Employer or Employee is subject, and such act
results (or is intended to result directly or indirectly) in the
Employee's substantial gain or personal enrichment to the
detriment of the Employer;
or
(ii) the death of the Employee;
or
(iii) the inability of the Employee to perform his duties
hereunder, whether by reason of injury (physical or mental),
illness or otherwise, incapacitating him for a continuous period
exceeding three months, excluding any leaves of absence approved
by the Employer;
or
(iv) the Employee resigns at any time other than after a Change
in Control (as defined in Section 6(d)) without Good Cause ("Good
Cause" being defined below).
(b) The term "Good Cause" shall mean the occurrence of any of the
following events:
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(i) the assignment by the Employer to the Employee of duties that
are materially inconsistent with the Employee's office with
Employer at the time of such assignment, or the removal by the
Employer from the Employee of a material portion of those duties
usually appertaining to the Employee's office with the Employer
at the time of such removal;
or
(ii) a material change by the Employer, without the Employee's
prior written consent, in the Employee's responsibilities to the
Employer, as such responsibilities are ordinarily and customarily
required from time to time of a vice president of a corporation
engaged in the Employer's business;
or
(iii) any removal of the Employee from, or any failure to reelect
or to reappoint the Employee to, the office stated in Section 2;
or
(iv) the Employer's direction that the Employee discontinue
service (or not seek reelection or reappointment) as a director,
officer or member of any corporation or association of which the
Employee is a director, officer, or member at the date of this
Agreement;
or
(v) a reduction by the Employer in the amount of the Employee's
base salary as determined under this Agreement (or as
subsequently increased), or the failure of the Employer to pay
such base salary to the Employee at the time and in the manner
specified in Section 4;
or
(vi) other than with respect to the annual performance bonus
specified in Section 4(b) or, as made with the Employee's prior
written consent, the discontinuance (without comparable
replacement) or material reduction by the Employer of the
Employee's participation in any bonus or other employee benefit
arrangement (including, without limitation, any profit-sharing,
thrift, life insurance, medical, dental, hospitalization, stock
option or retirement plan or arrangement) in which the Employee
is a participant under the terms of this Agreement, as in effect
on the date hereof or as may be improved from time to time
hereafter;
or
(vii) the moving by the Employer of the Employee's principal
office space, related facilities, or support personnel, from the
Employer's principal operating offices or the Employer's
requiring the Employee to perform a
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majority of his duties outside the Employer's principal operating
offices for a period of more than 30 consecutive days;
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or
(viii) the relocation, without the Employee's prior written
consent, of the Employer's principal operating offices to a
location outside the county in which such offices are located at
the time of the signing of this Agreement;
or
(ix) in the event the Employer requires the Employee to reside at
a location more than 25 miles from the Employer's principal
operating offices, except for occasional travel in connection
with the Employer's business to an extent and in a manner which
is substantially consistent with the Employee's current business
travel obligations;
or
(x) in the event the Employee consents to a relocation of the
Employer's principal operating offices, the failure of the
Employer to (A) pay or reimburse the Employee on an after-tax
basis for all reasonable moving expenses incurred by the Employee
in connection with such relocation or (B) indemnify the Employee
on an after-tax basis against any loss realized by the Employee
on the sale of his principal residence in connection with such
relocation;
or
(xi) the failure of the Employer to provide the Employee with the
benefits specified under Section 8;
or
(xii) the failure of the Employer to continue to provide the
Employee with office space, related facilities and support
personnel (including, without limitation, administrative and
secretarial assistance) that are commensurate with the Employee's
responsibilities to and position with the Employer;
or
(xiii) the failure by the Employer to promptly reimburse the
Employee for the reasonable business expenses incurred by the
Employee in the performance of his duties for the Employer, as
set forth in Section 7.
6. ADJUSTMENTS UPON TERMINATION BY EMPLOYER.
(a) Subject to the provisions of paragraph (b) of this Section 6,
in the event of termination of the Term of Employment for any reason
specified in Section 5(a) above, the Employer shall no longer be
obligated to make the
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payments specified under Section 4 or to provide the benefits under
Section 8; PROVIDED, HOWEVER, any payments payable under Section 4 which
shall have been earned but not yet paid shall be paid by the Employer to
the Employee, and the Employee shall pay any amount or amounts then owed
by the Employee to the Employer.
(b) In the event of the termination of the Term of Employment for
any reason other than pursuant to an event specified in Section 5(a)
above, the Employer shall, until the first anniversary of the date of
such termination continue to be obligated to (i) make the payments
specified under Section 4, (ii) provide the benefits specified under
Section 8(b), and (iii) maintain the Employee as a participant in, or
provide benefits comparable to those of, the health insurance benefit
plan specified under Section 8(a). In the event of such termination, the
Employee may elect, upon 30 days prior written notice of such election
delivered to the Employer to have the remaining amounts payable to him
pursuant to this Section 6(b) paid in a lump sum amount, which amount
shall be computed by discounting to present value such remaining amounts
payable to the Employee at a rate of 8% per annum for each payment
otherwise owed to the Employee through the remaining months in such Term
of Employment.
(c) Under no circumstances shall the Employee be required to
mitigate the amount of payment specified in Section 4 which is payable
during the Term of Employment specified in paragraph (b) of this Section
6.
(d) A "Change in Control" shall be deemed to have occurred at any
time after the date of this Agreement that (i) any person (other than
those persons who own more than 10% of the combined voting power of the
Employer's outstanding voting securities on the date hereof) becomes the
beneficial owner, directly or indirectly, of 30% or more of the combined
voting power of the Employer's then outstanding voting securities, or
(ii) the individuals who at the beginning of any period of two
consecutive years constitute the Employer's Board of Directors cease for
any reason to constitute a majority of such Board of Directors at any
time during such two-year period.
7. EXPENSES. The Employer agrees that during the Term of Employment it
will reimburse the Employee for out-of-pocket expenses reasonably incurred by
him in connection with the performance of his service hereunder in accordance
with the Employer's expense reimbursement policy for officers of the Employer
upon the presentation by the Employee of an itemized accounting of such
expenditures, including receipts where required for federal income tax
regulations.
8. EMPLOYEE BENEFITS. During the Term of Employment, Employee shall,
upon satisfaction of any eligibility requirements with respect thereto, be
entitled to participate in all employee benefit plans of Employer, including
without limitation those health, dental, accidental death and dismemberment, and
long term disability plans of Employer now or hereafter in effect that are made
available to officers of the Employer; and
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9. NON-COMPETITION.
(a) Employee acknowledges that he shall receive special training
and knowledge from Employer. Employee acknowledges that included in the
special knowledge received is the confidential information identified in
Paragraph 10 below. Employee acknowledges that this confidential
information is valuable to Employer and, therefore, its protection and
maintenance constitutes a legitimate interest to be protected by
Employer by this covenant not to compete. Therefore, Employee agrees
that for the period (the "Noncompetition Period") (i) during the Term of
Employment and (ii) in the event of a termination of the Term of
Employment upon the occurrence of an event set forth in Section 5(a)
hereof, commencing upon the occurrence of such event set forth in
Section 5(a) and ending upon the third anniversary thereof, in each case
unless otherwise extended pursuant to the terms hereof, Employee will
not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage
or participate in any business that is engaged in the manufacture or
marketing of disposable baby diapers, disposable training pants or
pre-moistened wipes within the United States of America or within any
other geographic area of the world where the Employer engages or
proposes at the time of the termination of the Term of Employment to
engage in business. Employee represents to Employer that the enforcement
of the restriction contained in this Section 9 would not be unduly
burdensome to Employee and that in order to induce the Employer to
provide for the Term of Employment as set forth in Section 5 hereof,
Employee further represents and acknowledges that Employee has entered
into this agreement not to compete and is willing and able to compete in
other geographical areas not prohibited by this Section 9.
(b) Employee agrees that a breach or violation of this covenant
not to compete by such Employee shall entitle the Employer, as a matter
of right, to an injunction issued by any court of competent
jurisdiction, restraining any further or continued breach or violation
of this covenant. Such right to an injunction shall be cumulative and in
addition to, and not in lieu of, any other remedies to which the
Employer may show itself justly entitled. Further, during any period in
which Employee is in breach of this covenant not to compete, the time
period of this covenant shall be extended for an amount of time that
Employee is in breach hereof.
(c) In addition to the restrictions set forth in paragraph (a) of
this Section 9, Employee shall not for the Noncompetition Period, either
directly or indirectly, (i) make known to any person, firm or
corporation that is engaged in the manufacture or marketing of
disposable baby diapers, disposable training pants or pre-moistened
wipes, the names and addresses of any of the customers of the Employer
or contacts of the Employer or any other information pertaining to such
persons or (ii) call on, solicit, or take away, or attempt to call on,
solicit or take away any of the customers of the Employer on whom
Employee called or with whom Employee became acquainted during
Employee's association with the Employer, whether for Employee or for
any other person, firm or corporation.
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(d) The representation and covenants contained in this Section 9
on the part of Employee will be construed as ancillary to and
independent of any other provision of this Agreement, and the existence
of any claim or cause of action of Employee against Employer or any
officer, director, or shareholder of Employer, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the
enforcement by Employer of the covenants of the Employee contained in
this Section 9. In addition, the provisions of this Section 9 shall
continue to be binding upon Employee in accordance with its terms,
notwithstanding the termination of Employee's employment for any reason.
(e) If Employee violates any covenant contained in this Section 9
and Employer brings legal action for injunctive or other relief, the
Employer shall not, as a result of the time involved in obtaining the
relief, be deprived of the benefit of the full period of any such
covenant. Accordingly, the covenants of Employee contained in this
Section 9 shall be deemed to have durations as specified above, which
periods shall commence upon the later of (i) the end of the Term of
Employment and (ii) the date of entry by a court of competent
jurisdiction of a final judgment enforcing the covenants of Employee in
this Section 9.
(f) The parties to this Agreement agree that the limitations
contained in this Section 9 with respect to geographic area, duration,
and scope of activity are reasonable. However, if any court shall
determine that the geographic area, duration, or scope of activity of
any restriction contained in this Section 9 is unenforceable, it is the
intention of the parties that such restrictive covenant set forth herein
shall not thereby be terminated but shall be deemed amended to the
extent required to render it valid and enforceable.
10. DISCLOSURE OF CONFIDENTIAL INFORMATION. During the Term of
Employment, the Employee will disclose to Employer all ideas and business plans
developed by him during such period which relate directly to the business of
Employer. The Employee recognizes and acknowledges that he may have access to
certain additional confidential information of Employer or of certain
corporations affiliated with Employer, and that all such information constitutes
valuable, special and unique property of Employer and its affiliates. The
Employee agrees that, during the Term of Employment and for a period of five
years after the termination of the Term of Employment, he will not, without the
prior written consent of Employer, disclose or authorize or permit anyone under
his direction to disclose to anyone not properly entitled thereto any of such
confidential information. For purposes of the immediately preceding sentence,
persons properly entitled to such information shall be (i) the Board of
Directors of Employer and such officers, employees and agents of Employer or any
affiliate thereof to whom such information is furnished in the normal course of
business under established policies approved by Employer and (ii) such outside
parties as are legally entitled to or are customarily furnished such
information, including banking, lending, collection, accounting, and data
processing institutions or agencies who or which are provided such information
in the normal course of business of Employer. The Employee further agrees that
upon termination of the Term of Employment he will not take with him or retain,
without the prior written authorization of Employer, any papers, procedural or
technical manuals, customer lists, customer account analyses (including, without
limitation, accounts receivable agings, customer payment histories and customer
account activity reports), price books, files or other documents or
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copies thereof belonging to Employer or to any affiliate of Employer, or any
materials, supplies, equipment or furnishings belonging to Employer or to any
affiliate of Employer, or any other confidential information of any kind
belonging to Employer or any affiliate of Employer. The Employee further agrees
that the existence and contents of this Agreement constitute confidential
information of the Employer and that such confidential information should only
be disclosed to or discussed with the Co-Chief Executive Officers or a member of
the Board of Directors of the Employer. In the event of a breach or threatened
breach by the Employee of the provisions of this Section 10, Employer and the
Employee agree that the remedy at law available to Employer and its affiliates
would be inadequate and that Employer and its affiliates shall be entitled to an
injunction, without the necessity of posting bond therefor, restraining the
Employee from disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting Employer and its affiliates
from pursuing any other remedies, in addition to the injunctive relief available
under this Section 10, for such breach or threatened breach, including the
recovery of damages from the Employee.
11. TRADE SECRETS. All patents, formulae, inventions, processes,
copyrights, proprietary information, trademarks or trade names, or future
improvements to patents, formulae, inventions, processes, copyrights,
proprietary information, trademarks or trade names, developed or completed by
the Employee during the Term of Employment (collectively, the "Items") shall be
promptly disclosed to Employer, and the Employee shall execute such instruments
of assignment of the Items to the Employer as Employer shall request. The
Employee acknowledges that a remedy at law for any breach by him of the
provisions of this Section 11 would be inadequate, and the Employee hereby
agrees that Employer shall be entitled to injunctive relief in case of any such
breach.
12. LEGAL FEES AND EXPENSES. In the event that either of the parties to
this Agreement contests the validity or enforceability of any of the provisions
of Sections 9, 10 or 11 hereof, then such contesting party hereby agrees to pay
in a timely and prompt manner any and all legal fees and expenses incurred by
the other party from time to time as a result of such contesting party's
contesting of the validity or enforceability of any provision of Sections 9, 10,
or 11 hereof this Agreement; PROVIDED, HOWEVER, nothing contained in this
Section 12 shall obligate the Employer to pay any legal fees or expenses
incurred by the Employee in connection with any litigation by the Employer
against the Employee to enforce the terms of this Agreement against the
Employee.
13. ASSIGNMENT. This Agreement is a personal employment contract and the
rights and interests of the Employee hereunder may not be sold, transferred,
assigned, pledged, or hypothecated, directly or indirectly, or by operation of
law or otherwise.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Employer and its successors and assigns and upon the Employee
and his legal representatives.
15. ENTIRE AGREEMENT. This Agreement, which contains the entire
contractual understanding between the parties, may not be changed orally but
only by a written instrument signed by the Employee and the Chairman of the
Board of Directors of the Employer.
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16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and Employee agrees to subject
himself to the jurisdiction of the Southern District of Texas.
17. WAIVER. The waiver of any breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any other breach of
the same or any other term or condition.
18. ENFORCEABILITY. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not affect the enforceability or validity of any other
provision contained in this Agreement.
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19. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent by registered mail, postage
prepaid, and
(a) if to the Employee, addressed to him at 0000 X.X. 000xx,
Xxxxxxxxx, Xxxxxxxxxx 00000 and
(b) if to the Employer, addressed to it at 0000 Xxxx Xxxx Xxxxx,
Xxxxxxx, Xxxxx 00000 (Attention: Chairman of the Board of Directors), or
such other address as the party to whom or to which such notice or other
communication is to be given shall have specified in writing to the
other party, and any such notice or communication shall be deemed to
have been given as of the date so mailed.
20. ARBITRATION. Employer and Employee agree to submit to final and
binding arbitration any and all disputes, claims (whether in tort, contract,
statutory, or otherwise) and disagreements concerning the interpretation or
application of this Agreement and Employee's employment by Employer and the
termination of this Agreement and Employee's employment by Employer; PROVIDED,
HOWEVER, notwithstanding the foregoing, in no event shall any dispute, claim or
disagreement arising under Section 9 of this Agreement be submitted to
arbitration pursuant to this Section 18 or otherwise. Any such dispute, claim
and disagreement subject to arbitration pursuant to the terms of this Section 18
shall be resolved by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA"). Arbitration under
this provision must be initiated within 30 days of the action, inaction, or
occurrence about which the party initiating the arbitration is complaining.
Within ten days of the initiation of an arbitration hereunder, each party will
designate an arbitrator pursuant to Rule 14 of the AAA Rules. The appointed
arbitrators will appoint a neutral arbitrator from the panel in the manner
prescribed in Rule 13 of the AAA Rules. Employee and Employer agree that the
decision of the arbitrators selected hereunder will be final and binding on both
parties. This arbitration provision is expressly made pursuant to and shall be
governed by the Federal Arbitration Act, 9 U.S.C. Sections 1 - 14. The parties
hereto agree that pursuant to Section 9 of the Act that a judgment of the United
States District Court for the Southern District of Texas, shall be entered upon
the award made pursuant to the arbitration.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed by its duly authorized officer, and the Employee has executed this
Agreement as of the date first above written.
DRYPERS CORPORATION
By /s/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx
Co-Chief Executive Officer
EMPLOYEE
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
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EXHIBIT A
HEALTH AND WELFARE BENEFITS SUMMARY
o Group comprehensive medical, dental, and term life insurance. Eighty
percent of the premiums for Employee and his dependents are paid by
Employer.
o Participation in the Company's 401k plan.
OTHER EMPLOYEE PERQUISITES
o Use of a car not more than (30 months old, with monthly lease payment
not to exceed $650), such car to be equipped with a cellular phone, as
well as all costs and expenses incurred in operating such car, including
gas, service and maintenance charges, parts, fees for inspection and
license plates, parking and tolls, and cellular phone equipment,
installation and use charges.
o Health and country club monthly family membership dues and reasonable
expenses in accordance with the Employer's policies.
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