Exhibit 10.1
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EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 26th day of March, 1999 by and
between TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC., a Delaware
corporation with its principal place of business at 0 Xxxxxxxxxxxx
Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 ("TASA") and XXXXXX XXXXXXX, an
individual residing at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000
("Employee").
W I T N E S S E T H:
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WHEREAS, the Corporation recognizes that the current business
environment makes it difficult to attract and retain highly
qualified employees unless a certain degree of security can be
offered to such individuals against personnel changes; and
WHEREAS, the Corporation desires to assure fair treatment of
such qualified employees and thereby increasing their willingness
to remain with the Corporation; and
WHEREAS, The Board of Directors (the "Board") of the
Corporation believes it is essential to provide Employee with such
degree of security and secure the services of Employee for the
Corporation, and, in order to accomplish these objectives, the
Board has caused the Corporation to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements set forth herein, the parties hereto, intending
to be legally bound, agree as follows:
1. Employment and Term. Subject to the terms and conditions
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of this Agreement, the Corporation agrees to employ Employee, and
Employee hereby accepts employment by the Corporation, for a term
beginning as of the date four weeks after notice of termination of
her present employment is given, and not later than May 3, 1999
(the "Effective Date") and, unless sooner terminated as provided
elsewhere herein, ending on the first anniversary of the Effective
Date; provided, however, that commencing on the date one year after
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the Effective Date, and on each annual anniversary of such date
(such date and each annual anniversary thereof is hereafter
referred to as the "Renewal Date"), the term of this Agreement
shall be automatically extended so as to terminate one year from
such Renewal Date, unless at least 90 days prior to the Renewal
Date either the Corporation or Employee shall give written notice
to the other that the term of the Agreement shall not be so
extended.
2. Certain Definitions.
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(a) A reference herein to a section of the Internal
Revenue Code of 1986, as amended (the "Code") or a subdivision
thereof shall be construed to incorporate reference to any section
or subdivision of the Code enacted as a successor thereto, any
applicable proposed, temporary or final regulations promulgated
pursuant to such sections and any applicable interpretation thereof
by the Internal Revenue Service.
(b) A reference herein to a section of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any rule
or regulation promulgated thereunder shall be construed to
incorporate reference to any section of the Exchange Act or any
rule or regulation enacted or promulgated as a successor thereto.
(c) "Subsidiary(ies)" means a company 50% or more of the
voting securities of which are owned by the Corporation or a
subsidiary of the Corporation.
(d) "Employee Benefit Plan" means any written plan
providing benefits for employees of the Corporation or any
Subsidiary.
3. Duties. During the Employment Term, Employee shall serve
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the Corporation in a capacity as its Chief Financial Officer, or in
such other related capacity or capacities as may be determined by
the Board. Employee shall perform such services as are customary
for the Chief Financial Officer of a publicly traded corporation,
including, but not limited to financial analysis, presentation and
reporting, and financial management, administration and compliance,
and such other services as may be required or requested by the
Board or the President in connection with the operation of the
Corporation and its Subsidiaries. Employee shall report directly
to the President of the Corporation and shall render her services
at the present location of the Corporation or any office or
location of the Corporation as the Board or the President shall
request. During the Employment Term, and excluding any periods of
vacation and sick leave, Employee agrees to devote full time, best
efforts to the business and affairs of the Corporation to discharge
the responsibilities assigned to Employee hereunder, and to perform
faithfully and efficiently such responsibilities. During the
Employment Term it shall not be a violation of this Agreement for
Employee to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal
investments, so long as Employee's duties in connection therewith
do not unreasonably interfere with Employee's duties under this
Agreement. Activities of Employee consistent with this Section 3
shall not permit the Corporation to terminate Employee's employment
for "Cause", as defined below.
4. Compensation.
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(a) BASE SALARY. During the Employment Term, the
Corporation shall pay to Employee, in equal installments no less
frequently than twice per month (or at such other intervals as are
in effect from time to time for other officers of the Corporation),
an annual base salary (the "Base Salary") of One Hundred Thousand
($100,000.00) Dollars. Base Salary to be paid by the Corporation
to Employee shall be reviewed by the Board of Directors at least
once annually prior to each anniversary of the Effective Date in
conjunction with a performance review of Employee.
(b) INCENTIVE, SAVINGS, WELFARE BENEFIT PLANS AND
RETIREMENT PLANS. In addition to Base Salary, Employee shall be
eligible to participate in or benefit from, such medical insurance,
life insurance, disability insurance, pension, bonus, profit-
sharing, stock option, stock purchase and any other fringe benefit
plans, practices, programs or policies provided by the Corporation
to Employee in accordance with the terms of such plans, practices,
programs and policies, as amended from time to time.
(c) KEY MAN INSURANCE. Employee agrees that the
Corporation may obtain key man life insurance with respect to
Employee, and in connection therewith, agrees to submit to all
reasonable and customary examinations by the provider of such life
insurance.
(d) EXPENSES. Employee shall be entitled to
reimbursement for all normal and reasonable travel, entertainment
and other expenses necessarily incurred by her in the performance
of her duties hereunder in accordance with the policies, practices
and procedures of the Corporation as amended from time to time.
(e) DISABILITY. Except as hereinafter provided, the
Corporation shall pay Employee for any period, up to a maximum of
three months, during the Employment Term in which she is unable
fully to perform her duties because of physical or mental
disability or incapacity, an amount equal to the Base Salary due
her for such period pursuant to Section 4(a), less the aggregate
amount of all income disability benefits which for such period she
may receive by reason of (i) any group health insurance plan, or
disability insurance plan paid for by the Corporation, in each case
which is intended to function as a salary replacement plan, (ii)
any applicable compulsory state disability law, (iii) the Federal
Social Security Act, (iv) any applicable workmen's compensation law
or similar law and (v) any plan towards which the Corporation or
any subsidiary or affiliate of the Corporation (including any
predecessor of any thereof) has contributed or for which it has
made payroll deductions, such as group accident or health policies,
other than those which reimburse for actual medical expenses.
(f) VACATION. During the Employment Term, Employee
shall be entitled to paid vacation in accordance with the plans,
practices, policies and programs of the Corporation as amended from
time to time.
5. Stock Options.
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(a) As part of the consideration to be paid to Employee
for her services hereunder, Employee shall be eligible to
participate in any stock incentive plan adopted by the Corporation
(the "Plan") for which an executive level employee may participate.
(b) The Corporation hereby agrees that it shall cause to
be filed with the Securities and Exchange Commission a registration
statement on Form S-8 (or equivalent form as may be in effect at
such time) with respect to all options theretofore granted to
Employee under the Plan. The Corporation covenants that it will
keep such registration statement current until Employee is no
longer employed by the Corporation. The Corporation hereby agrees
that, for so long as either the Corporation does not have an
effective registration statement on Form S-8 or the Corporation has
an effective registration statement on Form S-8 but Employee is
restricted in her ability to resell shares acquired pursuant to the
exercise of options because of the provisions of General
Instruction C.2(b) to Form S-8, Employee shall have "piggyback"
registration rights with respect to the options granted to Employee
under the Plan and the shares underlying such options.
(c) As an incentive to enter into this Agreement, the
Corporation, immediately upon the Effective Date of this Agreement,
shall deliver to Employee a Stock Option Agreement pursuant to its
Amended and Restated 1991 Stock Option Incentive Plan, granting to
Employee ten (10) year options for 15,000 shares of the common
stock of the Corporation at fair market value as of the Effective
Date, exercisable one year after the anniversary of the date of the
grant.
6. Rights of Termination.
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(a) CAUSE. During the Employment Term, the Corporation
shall have the right, at any time effective upon notice to
Employee, to terminate Employee's employment for "Cause" (as
hereinafter defined). For purposes of this Agreement, "Cause"
shall mean (i) an act or acts of personal dishonesty engaged in by
Employee, (ii) violations by Employee of Employee's obligations
under Section 3 of this Agreement which are not remedied within
thirty (30) days after receipt of written notice from the
Corporation; (iii) commission by Employee of a felony or any act of
embezzlement or misappropriation of funds, (iv) material breach of
any representation or warranty hereunder or fraud or negligence in
the performance of her duties hereunder, and (v) an inability in
the reasonable opinion of the President of the Corporation, to work
cohesively with other key personnel if not remedied within thirty
(30) days after written notice from the Corporation.
(b) DISABILITY; DEATH. In the event that Employee, due
to physical or mental disability or incapacity, is unable to
substantially perform her duties hereunder for a period of three or
more successive months, the Corporation or Employee shall have the
right to terminate this Agreement and Employee's employment
hereunder upon 30 days' prior written notice and termination shall
be effective on the 30th day after receipt of such notice by the
Employee (the "Disability effective date"). In the event that
Employee is able to and recommences rendering services and
substantially performing her duties hereunder within such 30-day
notice period, Employee shall be reinstated and such notice shall
be without further force or effect. If Employee dies during the
Term, this Agreement shall terminate immediately upon her death.
(c) NOTICE OF TERMINATION. Any termination of
Employee's employment by the Corporation or by Employee shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 16 of this Agreement.
(d) DATE OF TERMINATION. "Date of Termination" means
the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be; provided, however, that if
Employee's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
Employee or the Disability effective date, as the case may be.
7. Effects of Termination. In the event that Employee's
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employment is terminated pursuant to Section 6 hereof, Employee's
employment hereunder shall terminate without further obligations to
Employee, other than those obligations accrued or earned and vested
(if applicable) by Employee through the Date of Termination,
including for this purpose all "Accrued Obligations", defined as
those obligations accrued or earned and vested (if applicable) by
Employee as of the Date of Termination, including, for this purpose
(i) Employee's pro rata Base Salary accrued but unpaid as of the
Date of Termination, (ii) any compensation previously deferred by
Employee (together with any accrued earning thereon) and not yet
paid by the Corporation and any accrued vacation pay not yet paid
by the Company and (iii) if applicable, all amounts payable to the
estate or designated beneficiaries of Employee under any pension,
savings, life insurance or other plans, practices, policies and
programs of the Corporation, and/or all other amounts payable
pursuant to Section 4 hereof. In addition:
(i) the Corporation shall pay to Employee all
Accrued Obligations such that the Accrued Obligations specified in
Section 4 hereof, shall be paid to Employee in a lump sum in cash
within 30 days of the Date of Termination, and the other Accrued
Obligations shall be paid in accordance with Employee's specific
elections pursuant to, and otherwise in accordance with the terms
of, any plan, practice, policy or program providing benefits
forming a part of the Accrued Obligations;
(ii) all then non-exercisable options shall
immediately and automatically terminate, and
(iii) any registration rights theretofore
granted which have not been invoked with respect to shares of
Common Stock of the Corporation either acquired by Employee
pursuant to the exercise of stock options or underlying vested
options shall immediately and automatically terminate.
8. Confidentiality.
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(a) Employee understands and acknowledges that as a
result of Employee's employment with the Corporation, and
involvement with the business of the Corporation, she is or shall
necessarily become informed of, and have access to, confidential
information of the Corporation including, without limitation,
inventions, patents, patent applications, trade secrets, technical
information, know-how, plans, specifications, financial information
and business strategy, marketing plans and information, pricing
information, identity of customers and prospective customers and
identity of suppliers, and that such information, even though it
may have been or may be developed or otherwise acquired by
Employee, is the exclusive property of the Corporation to be held
by Employee in trust and solely for the Corporation's benefit.
Employee shall not at any time, either during or subsequent to her
employment hereunder, reveal, report, publish, transfer or
otherwise disclose to any person, corporation or other entity, or
use, any of the Corporation's confidential information, without the
written consent of the Board, except for use on behalf of the
Corporation in connection with the Corporation's business, and
except for such information which legally and legitimately is or
becomes of general public knowledge from authorized sources other
than Employee.
(b) Upon the termination of her employment with the
Corporation for any reason, Employee shall promptly deliver to the
Corporation all drawings, manuals, letters, notes, notebooks,
reports and copies thereof and all other materials, including,
without limitation, those of a secret or confidential nature,
relating to the Corporation's business which are in Employee's
possession or control.
(c) For purposes of this Section 8 and Section 9, the
term "Corporation" includes the Corporation and any other
predecessor corporation, and affiliates (including, without
limitation, distributors, licensees, franchisees, Subsidiaries and
joint ventures).
(d) Employee represents and warrants to the Corporation
that the execution and delivery of this Agreement shall not
conflict with, or violate the terms of, or constitute a breach of
any other agreement or document to which she is a party, including,
but not limited to any employment, consulting, non-competition,
restrictive covenant or other form of confidentiality agreement.
9. Non-Competition. Employee agrees that, for a period
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commencing on the date hereof and ending one year after the
termination of her employment with the Corporation for any reason,
she shall not, anywhere in the United States (or for such lesser
area or such lesser period as may be determined by a court of
competent jurisdiction to be a reasonable limitation on the
competitive activity of Employee) directly or indirectly:
(a) solicit or attempt to solicit business of any
customers of the Corporation or any of its Subsidiaries (including
prospective customers solicited by the Corporation or any of its
Subsidiaries during the term of her employment) for products or
services the same or similar to those offered, sold, produced or
under development by the Corporation or any of its Subsidiaries
during the term of her employment therewith or dealt in by Employee
during her employment with the Corporation;
(b) solicit or attempt to solicit for any business
endeavor any employee of the Corporation or any of its
Subsidiaries;
(c) interfere with any business relationship between the
Corporation or any of its Subsidiaries and any other person or
entity;
(d) use the name of the Corporation or any of its
Subsidiaries or a name similar thereto; or
(e) render any services as an officer, director,
employee, partner, consultant or otherwise to, or have any interest
as a stockholder, partner, lender or otherwise in, any entity which
is engaged in activities which, if performed by Employee would
violate this Section 9.
10. Remedies and Survival. Because the Corporation does not
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have an adequate remedy at law to protect its interest in its trade
secrets, privileged, proprietary or confidential information and
similar commercial assets, or its business from Employee's
competition, the Corporation shall be entitled to injunctive
relief, in addition to such other remedies and relief that would,
in the event of a breach of the provisions of Sections 8 or 9, be
available to the Corporation. The provisions of Sections 8 and 9
and this Section 10 shall survive any termination of Employee's
employment with the Corporation for any reason whatsoever.
11. Set-off. The payments and performance by the Corporation
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as provided for in this Agreement shall be subject to any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Corporation may have against Employee.
12. Non-exclusivity of Rights. Except as specifically
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provided in this Agreement, it is intended that Employee's present
and future participation in any benefit, bonus, incentive or other
plans, practices, policies or programs provided by the Corporation
and for which Employee or Employee's family may otherwise qualify
and be eligible be limited or unavailable. Nothing contained in
this Agreement, however, shall limit or otherwise affect such
rights as Employee may have under any stock option agreements with
the Corporation. Amounts which are vested benefits or which
Employee is otherwise entitled to receive at or subsequent to the
Date of Termination shall be payable in accordance with the plan,
practice, policy or program of the Corporation under which Employee
has such entitlement, if any.
13. Entire Agreement. This Agreement sets forth the entire
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understanding of the parties hereto with respect to its subject
matter, merges and supersedes any prior or contemporaneous
agreements or understandings with respect to its subject matter,
and shall not be modified or terminated except by another agreement
in writing executed by the Corporation and Employee. Failure of a
party to enforce one or more of the provisions of this Agreement or
to require at any time performance of any of the obligations hereof
shall not be construed to be a waiver of such provisions by such
party nor to in any way affect the validity of this Agreement or
such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action
at any time which it would legally be entitled to take.
14. Severability. If any provision of this Agreement is held
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to be invalid or unenforceable by any court or tribunal of
competent jurisdiction, the remainder of this Agreement shall not
be affected by such judgement and such provision shall be carried
out as nearly as possible according to its original terms and
intent to eliminate such invalidity or unenforceability.
15. Successors and Assigns. This Agreement is personal to
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Employee and without the prior written consent of the Corporation
shall not be assignable by Employee. This Agreement shall inure to
the benefit of and be enforceable by Employee's legal
representatives or Successors in Interest. This Agreement shall
inure to the benefit of and be binding upon the Corporation and its
successors and assigns. As used in the Agreement, "Corporation"
shall mean the Corporation as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law or
otherwise.
16. Communications and Notices. All notices and other
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communications under this Agreement shall be in writing and shall
be deemed to have been duly given three (3) business days after
they are mailed in any United States post office enclosed in a
registered or certified postage-paid envelope and addressed as set
forth at the beginning of this Agreement, or to such other address
as any party may specify by notice to the other parties, or
delivered by Federal Express or a similar overnight courier to such
address with evidence of delivery; provided, however, that any
notice of change of address shall be effective only upon receipt.
17. Construction; Counterparts. The headings contained in
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this Agreement are for convenience only and shall in no way
restrict or otherwise affect the construction of the provisions
hereof. References in this Agreement to Sections are to the
sections of this Agreement. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all
of which together shall constitute one and the same instrument.
18. Validity. The invalidity or unenforceability of any
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provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
Employee's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such
provision. This Agreement contains the entire understanding of the
Corporation and Employee with respect to the subject matter hereof
but does not supersede or override the provisions of any stock
option, employee benefit or other plan, program, policy or practice
in which Employee is a participant or under which Employee is a
beneficiary.
19. Governing Law. This Agreement shall be governed by and
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construed under the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned parties have executed and
delivered this Agreement as of the date first above written.
TOUCHSTONE APPLIED SCIENCE
ASSOCIATES, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: President
EMPLOYEE:
/s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
