Exhibit 10(L)
EMPLOYMENT AGREEMENT
AGREEMENT, made as of October 11, 1996, by and between AEP INDUSTRIES
INC., a Delaware corporation (the "Company") and Xxxx X. Xxxxxx ("Executive").
RECITALS
In order to induce Executive to serve as Executive Vice
President--Finance of the Company, the Company desires to provide Executive with
compensation and other benefits on the terms and conditions set forth in this
Agreement.
Executive is willing to accept such employment and perform services
for the Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. EMPLOYMENT
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the term hereof as its Executive Vice
President --Finance.
1.2 Subject to the terms and conditions of this Agreement, Executive
hereby accepts employment as Executive Vice President--Finance of the Company
and agrees to devote his full working time and efforts, to the best of his
ability, experience and talent, to the performance of services, duties and
responsibilities in connection therewith.
2
2. TERM OF EMPLOYMENT. Executive's term of employment under this
Agreement shall commence on the Closing Date (as such term is used in the
Purchase agreement dated as of June (___), 1996) and, subject to the terms
hereof, shall terminate on the earlier of (i) the fifth anniversary of the
Closing Date (the "Termination Date") or (ii) termination of Executive's
employment pursuant to this agreement (such term of employment being known
herein as the "Term"): PROVIDED, HOWEVER, that any termination of employment by
Executive (other than for death or Permanent Disability) may only be made upon
30 days prior written notice to the Company.
3. COMPENSATION.
3.1 SALARY. During the Term, the Company shall pay Executive a base
salary at the rate of $240,000 per annum, increased on each anniversary of the
Closing Date by a percentage equal to the percentage increase, if any, in the
Consumer Price Index for all Urban Consumers for the New York--Northeastern New
Jersey Metropolitan Area (or any successor Consumer Price Index), based on data
published by the Bureau of Labor Statistics of the United States Department of
Labor for the twelve-month period that ends on the last day on the month
immediately preceding such anniversary ("Base Salary"). Base Salary shall be
payable in accordance with the ordinary payroll practices of the Company, but no
less frequently than semi-monthly. Any additional increase in Base Salary shall
be in the reasonable discretion of the Company and, as so increased, shall
constitute "Base Salary" hereunder.
3
3.2 ANNUAL BONUS. In addition to his Base Salary, Executive shall be
paid an annual bonus (the "Bonus") during the term of his employment hereunder
as follows: for fiscal year 1996, the Bonus shall be $85,000; for fiscal years
1997 and beyond, the Bonus shall be based upon performance criteria determined
by the Compensation Committee of the Board of Directors of the Company in its
reasonable discretion.
3.3 COMPENSATION PLANS AND PROGRAMS. Executive shall be eligible to
participate in any compensation plan or program maintained by the Company in
which other senior executives of the Company participate on terms comparable to
those applicable to such other senior executives.
4. EMPLOYEE BENEFITS.
4.1 EMPLOYEE BENEFIT PROGRAM, PLANS AND PRACTICES. The Company shall
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
(commensurate with his positions in the Company and to the extent permitted
under any employee benefit plan) in accordance with the terms thereof, which the
Company makes available to its senior executives.
4.2 VACATION AND FRINGE BENEFITS. Executive shall be entitled to
paid vacation in accordance with existing company policies and past practice;
PROVIDED, HOWEVER, that such paid vacation shall be taken at such times as are
consistent with Executive's responsibilities hereunder. Unless otherwise
approved by the Company, any vacation days not taken in any calendar year shall
be forfeited without payment therefore;
4
PROVIDED, HOWEVER, that no such vacation days shall be forfeited to the extent
that such vacation days are not taken at the request of the Company. In
addition, Executive shall be entitled to the perquisites and other fringe
benefits (including, but not limited to, car allowances, club memberships and
business entertainment expenses made available to senior executives of the
Company, in accordance with existing company policies and past practice.
5. EXPENSES. Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of appropriately
itemized and approved (consistent with the Company's policy) accounts of such
expenditures.
6. TERMINATION OF EMPLOYMENT. The Company may terminate Executive's
employment at any time for any reason.
6.1 TERMINATION OTHER THAN FOR CAUSE; TERMINATION FOR GOOD REASON.
(a) If Executive's employment is terminated (i) by the Company other than for
Cause (as defined in this Section 6.1) or (ii) by executive for Good Reason (as
defined in this Section 6.1) prior to the Termination Date, Executive shall
receive a severance payment equal to two (2) times the sum of (i) the base
Salary in effect immediately prior to the event giving rise to such termination
and (ii) the Bonus earned, if any, for the
5
fiscal year immediately preceding the fiscal year in which the event giving rise
to such termination occurs. The severance payment shall be payable over a
period of two (2) years in accordance with the ordinary payroll practices of the
Company, but no less frequently than semi-monthly following such termination of
employment. In addition, the Company shall pay to Executive (i) any earned but
unpaid Bonus of Executive with respect to the fiscal year preceding this
termination and (ii) any earned but unpaid Bonus of Executive with respect to
the fiscal year in which his termination occurs, multiplied by a fraction, the
numerator of which is the number of days during such fiscal year that Executive
was employed by the Company, and the denominator of which is 365.
(b) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) Any material breach by the Company of any provision of this
Agreement, including a demotion by the Company in Executive's position or
the assignment to executive of duties or responsibilities which are
materially inconsistent with the Executive's position (except, in either
case, in connection with the termination of Executive's employment for
Cause, as a result of Permanent Disability, as a result of Executive's
death or by Executive other than for Good Reason); or
(ii) A reduction by the Company in Executive's Base Salary, other than
a reduction which is part of a general salary reduction program affecting
senior executives of the Company and which reduction is not, on average,
greater than the salary reduction (as a percentage of the sum of (A) Base
Salary and (B) any Bonus earned in the immediately preceding fiscal year)
of other senior executives of the Company.
(c) For purposes of this Agreement, "Cause" means any of the
following:
6
(i) material willful malfeasance or willful misconduct by Executive
in connection with his employment;
(ii) continuing refusal by executive to perform his duties hereunder
or any lawful direction of the Chief Executive Officer of the Company
("CEO"), within 10 days after notice of any such refusal to perform such
duties or direction was given to Executive;
(iii)any breach of the provisions of Section 12 of this Agreement by
Executive or any other material breach of this Agreement by Executive; or
(iv) the commission by Executive of (A) any felony or (B) a
misdemeanor involving moral turpitude.
(d) For purposes of this Agreement, "Permanent Disability" shall mean
a "Permanent and Total Disability" as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.
6.2 TERMINATION FOR CAUSE; TERMINATION OTHER THAN FOR GOOD REASON;
TERMINATION AS A RESULT OF DEATH OR PERMANENT DISABILITY. (a) In the event
that Executive's employment is terminated prior to the Termination Date (i) by
the Company for Cause; (ii) by executive other than for Good reason; or (iii) as
a result of the Executive's Permanent Disability or death, Executive shall only
be entitled to receive (i) any earned but unpaid Base Salary through the date of
the termination event, (ii) any earned but unpaid Bonus of Executive with
respect to the fiscal year preceding his termination and (iii) any earned but
unpaid Bonus of Executive with respect to the fiscal year in which his
termination occurs, multiplied by a fraction, the numerator of which is the
number of days during such fiscal year that Executive was employed by the
Company, and the denominator of which is 365. After the termination of
Executive's employment
7
under this Section 6.2 and payment of all amounts due to Executive pursuant to
this Section 6.2, the obligations of the Company under this agreement to make
any further payments, or provide any benefits specified herein (other than
benefits required to be provided by applicable law or under the terms of any
employee benefit of the Company in which the Executive was a participant), to
Executive shall thereupon cease and terminate. Termination of Executive
pursuant to this Section 6.2 shall be made by delivery to Executive of a notice
from the Board of Directors setting forth in reasonable detail the reasons for
such termination.
7. MITIGATION OF DAMAGES. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise after the termination of his employment
hereunder, and no amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall reduce the amount of any Termination
Amount otherwise payable to him.
8. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
8
To the Company:
AEP Industries Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, XX 00000
Attn: General Counsel
with a copy to:
Bachner, Tally, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
To Executive:
Xxxx X. Xxxxxx
00 Xxxxxxx Xxxx Xxxxxxx
Xxxxx, XX 00000
9. SEVERABILITY; EXPENSES. If any provision of this Agreement shall
be declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of negotiating
or enforcing its respective rights under this Agreement.
10. ASSIGNMENT. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock,
9
assets or businesses of the Company, if such successor expressly agrees to
assume the obligations of the Company hereunder.
11. AMENDMENT. This Agreement may only be amended by written
agreement of the parties hereto.
12. NONDISCLOSURE OF CONFIDENTIAL INFORMATION; NON-COMPETITION. (a)
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information. For purposes of this Section 12(a), "Confidential Information"
shall mean non public information concerning the financial data, strategic
business plans, product development ( or other proprietary product data),
customer lists, marketing plans and other non-public, proprietary and
confidential information for the Company or its respective affiliates (the
"Restricted Group") or customers, that, in any case, is not otherwise available
to the public (other than by Executive's breach of the terms hereof).
(b) During the period of his employment hereunder and for twenty-four
(24) months thereafter, Executive agrees that,
10
without the prior written consent of the Company, (i) he will not, directly or
indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender of employee or in any other capacity,
carry on, be engaged in or have any financial interest in, any business which is
in competition with the business of the Company and (ii) he shall not, on his
own behalf or on behalf of any person, firm or company, directly or indirectly,
solicit or offer employment to any person who has been employed by the
Restricted Group at any time during the twenty-four (24) months immediately
preceding such solicitation.
(c) For purposes of this Section 12, a business shall be deemed to be
in competition with the Company if it is involved in the purchase, sale or other
dealing in any property or the rendering of any service purchased, sold, dealt
in or rendered by the Company as a material part of the business of the Company
within the same geographic area in which the Company effects such purchases,
sales or dealings or renders such services. Nothing in this Section 12 shall be
construed so as to preclude Executive from investing in any publicly or
privately held company, provided Executive's beneficial ownership of any class
of such company's securities does not exceed 5% of the outstanding securities of
such class.
(d) Executive and the Company agree that this covenant not to compete
is a reasonable covenant under the circumstances, and further agree that if in
the opinion of any court of competent jurisdiction such restraint is not
reasonable in any
11
respect, such court shall have the right, power and authority to excise or
modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
amended. Executive agrees that any breach of the covenants contained in this
Section 12 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this Agreement
and obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive.
13. BENEFICIARIES; REFERENCES. Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
14. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
12
The provisions of this Section 14 are in addition to the survivorship provisions
of any other section of this Agreement.
15. GOVERNING LAW. This Agreement shall be construed, interpreted
and governed in accordance with the laws of the State of New Jersey, without
reference to rules relating to conflicts of law.
16. EFFECT ON PRIOR AGREEMENTS. This Agreement contains the entire
understanding between the parties hereto and supersedes in all respects any
prior agreement or understanding between the Company or any affiliate of the
Company and Executive as to employment matters.
17. WITHHOLDING. The Company shall be entitled to withhold from
payment any amount of withholding required by law.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
19. DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
13
IN WITNESS WHEREOF, the parties have duly executed and entered into
this Agreement, as of the date first above written.
AEP INDUSTRIES INC.
By: /s/ J. Xxxxxxx Xxxxx
----------------------------------------
Name: J. Xxxxxxx Xxxxx
Title: President
/s/ Xxxx X. Xxxxxx
----------------------------------------
Executive
