Exhibit 10.21
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 22nd day of February, 2001, by and between Xxxxx
Xxxxxxx, a person residing at 000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxx, X.X. (the
"Employee") and Sipex Corporation, a Massachusetts corporation with a principal
place of business in Billerica, Massachusetts (the "Company").
WHEREAS, the Employee's senior managerial position requires that he be
trusted with extensive confidential information and trade secrets of the Company
and that he develop a thorough and comprehensive knowledge of all details of the
Company's business, including, but not limited to, information relating to
research, development, inventions, manufacturing, purchasing, accounting,
engineering, marketing, distribution and licensing of the Company's products and
services;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
covenants and obligations herein contained, the parties hereto agree as follows:
1. Position and Responsibilities. During the term of this Agreement, the
Employee agrees to serve as President and Chief Operating Officer of the Company
or in such other positions as may be assigned. The Employee shall at all times
report to, and his activities shall at all times be subject to the direction and
control of the Chief Executive Officer of the Company or to his designee, and
the Employee shall exercise such powers and comply with and perform, faithfully
and to the best of his ability, such directions and duties in relation to the
business and affairs of the Company as may from time to time be vested in or
requested of him. If Employee shall be elected to other offices of the Company
or any of its affiliates, he shall serve in such positions without further
compensation than provided for in this Agreement. The Employee agrees to follow
all rules, policies and directives of the Company as may be promulgated or
modified from time to time. The Employee shall perform his services under this
Agreement at such locations as may be required by the Company.
2. Compensation: Salary, Bonuses and Other Benefits. During the term of
this Agreement, the Company shall pay the Employee the following compensation:
(A) Salary. In consideration of the services to be rendered by the
Employee to the Company, the Company will pay to the Employee a monthly
salary of $22,916.67 (the Employee's "Base Rate") during the term of
this Agreement. Employee's Base Rate may be adjusted by the Company's
Board of Directors in its sole discretion from time to time; provided,
however, that under no circumstances shall such Base Rate be reduced.
Such salary shall be payable in conformity with the Company's customary
practices for executive compensation, as such practices shall be
established or modified from time to time.
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(B) Fringe Benefits.
(1) The Employee will be entitled to participate on the same general
basis and subject to the same rules and regulations as other Company
executive employees in the Company's standard benefit plans as such
benefits or plans may be modified or amended from time to time.
(2) The Company will maintain supplemental life insurance on the life of
the Employee so that the aggregate total death benefit payable to the
Employee from all Company life insurance policies will total Five Hundred
Thousands Dollars ($500,000.00).
(3) At the request of the Employee, the Company will maintain
supplemental disability insurance for the Employee so that the aggregate
total disability benefits payable to the Employee from all Company
disability insurance policies will total sixty-six and two-thirds percent
(66 2/3%) of Employee's salary.
(4) The Company shall pay or reimburse the Employee for all reasonable
business expenses incurred or paid by the Employee in the performance of
his duties and responsibilities hereunder, provided the Employee provides
reasonable substantiation and documentation of these expenses. The
Company agrees to provide reimbursement within a reasonable time after
receipt of such documentation.
(C) Performance Based Bonus. At the sole discretion of the Board of
Directors, the Employee may also be eligible to receive a discretionary annual
bonus after the end of the Company's calendar year, provided that the Employee
continues to be employed by the Company at such year end. The amount of this
bonus, if any, shall be determined by the Board of Directors based on objective
or subjective goals set by the Board of Directors in its sole discretion. In the
event that the Employee's employment with the Company is terminated by the
Company without Cause or is terminated by the Employee for Good Reason other
than at calendar year end, the Employee's bonus shall be prorated for such
partial year. No bonus shall be payable to Employee with respect to any calendar
year of the Company during which Employee's employment is terminated for Cause
or Employee terminates his employment without Good Reason.
(D) Taxes. All payments in this Section 2 shall be subject to all applicable
federal, state and local withholding, payroll and other taxes.
3. Termination. The Employee's employment under this Agreement may be
terminated as follows:
(A) By the Employee Without Good Reason. The Employee may terminate his
employment without Good Reason (as defined in Section 3(B)(2) below)
provided that the Employee gives the Company a written notice of intent
to terminate at least thirty (30) days'
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prior to the effective date of such termination. In the event of a termination
by the Employee without Good Reason, the Company may accelerate the Employee's
departure date and will have no obligation to pay Employee after his actual
departure date. In the event of termination by the Employee without Good Reason,
the Employee shall be entitled to no severance or other termination benefits.
(B) By the Employee with Good Reason or by the Company without Cause.
(1) The Company may terminate the Employee's employment without Cause
(as defined in Section 3(C)) at any time. The Employee may terminate
his employment for Good Reason (as defined in Subsection (2) of this
Section 3(B)) after giving the Company a written notice of intent to
terminate at least thirty (30) days prior to the effective date of
such termination.
(2) For purposes of this Agreement, termination by the Employee for
"Good Reason" shall mean the termination of employment by the
Employee: (i) as a result of a material breach of this Agreement by
the Company; (ii) as a result of a material reduction in the
Employee's title or reporting responsibilities as they exist on the
date hereof without the Employee's written consent; (iii) as a result
of the failure of the Company to pay the Employee's salary or bonus,
if any, in the time and manner contemplated by this Agreement; or (iv)
as a result of the Company requiring the Employee to relocate more
than 50 miles from Milpitas, California (unless such relocation is to
another facility of the Company); provided, however, that an event
described in this Section shall not constitute Good Reason unless it
is communicated by the Employee to the Company in writing and is not
corrected by the Company to the Employee's reasonable satisfaction
within 30 days of the date of the Employee's delivery of such written
notice to the Company. Notwithstanding Section 3(B)(2)(iv), in the
event a Successor To The Business (as defined in Section 10 hereof)
assumes this Agreement, Section 3(B)(2)(iv) shall be modified to read
as follows: "(iv) as a result of the Company requiring the Employee to
relocate more than 50 miles from Milpitas, CA to any other location
(including without limitation any facility of the Company or the
Successor To The Business)."
(3) In the event that the Company exercises its right to terminate
the Employee without Cause or the Employee terminates his employment
for Good Reason and the Employee signs a comprehensive release in the
form, and of a scope, acceptable to the Company, the Company agrees
to:
(i) pay the Employee a lump sum payment equal to eighteen (18)
months' base salary at the Employee's then current Base Rate;
(ii) pay the Employee an amount equal to the highest annual bonus
paid or payable by the Company to the Employee with respect to
any
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calendar year during the three (3) calendar years prior to Employee's
termination of employment;
(iii) allow the Employee to participate to the same extent as active
executive employees (including dependent coverage) in the life, accident,
disability, health and dental insurance plans of the Company (including the
supplemental insurance set forth in Section 2(B)(2) and 2(B)(3) of this
Agreement) or to provide benefits equivalent to those of active executive
employees, at no cost to the Employee for a period of twenty four (24) months
commencing on the date of termination of employment;
(iv) allow the Employee the option to buy the Company automobile leased for the
Employee for a price equal to the buyout amount of the automobile at the end of
the lease. The Employee hereby authorizes the Company to deduct any tax
withholdings applicable to such transfer from any payments to be made by the
Company hereinafter. All risk of damage or loss with respect to such automobile
shall rest with the Employee. The automobile will be transferred to the Employee
"as is," with no representations or warranties, express or implied, being made
to the Employee (including warranties of merchantability and fitness for a
particular purpose) and, without limiting the generality of the foregoing in any
way, in no event shall the Company be liable for any consequential, special,
punitive or other damages in connection with the automobile transfer. If this
option is not exercised, the automobile will be returned to the Company;
(v) In the event of termination hereunder, each outstanding option held by
the Employee pursuant to any stock option plan of the Company shall, without
further action by the Company, accelerate and become immediately exercisable in
full; provided that other than such acceleration(s), such outstanding option(s)
shall continue to be governed by the terms of any such Stock Option Plan and
related Stock Option Agreement(s);
(vi) In the event that any of the payments to be made to the Employee, or the
compensation received or deemed to be received by the Employee, pursuant to or
by reason of the provisions of Section 3(B)(3) of this Agreement result in the
imposition of an excise tax on the Employee pursuant to Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any similar provision
of state, local or foreign tax law (the "Parachute Tax"), the Company shall pay
an additional amount to the Employee (the "Gross-Up Payment"). The Gross-Up
Payment shall be calculated by the Company and shall equal an amount necessary
to yield the Employee, on an after-tax basis, an amount equal to the Parachute
Tax imposed on the Employee (including any Parachute Tax
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imposed with respect to the Gross-Up Payment). The Gross-Up Payment
with respect to any Parachute Tax shall be payable by the Company to
the Employee no later than the last day of the fiscal year in which
such Parachute Tax is imposed.
(vii) The payments in this Section 3(B)(3) shall be subject to all
applicable federal, state and local withholding, payroll and
other taxes.
If Employee breaches his obligations under the Noncompetition,
Nondisclosure and Developments Agreement executed herewith between
Employee and the Company, the Company may immediately cease payment of
all severance and/or benefits described in this Agreement. This
cessation of severance and/or benefits shall be in addition to, and
not as an alternative to, any other remedies in law or in equity
available to the Company, including the right to seek specific
performance or an injunction. Except as expressly set forth in this
Section 3(B), Employee acknowledges that the Company shall not have
any further obligations to the Employee in the event of Employee's
termination under this Section 3(B), except such further obligations
as may be imposed by law.
(C) At the election of the Company for Cause. The Company may,
immediately and unilaterally, terminate the Employee's employment hereunder for
"Cause" at any time during the term of this Agreement by giving to the
Employee written notice of such termination ten (10) days prior to the
effective date of termination. The Company may pay Employee for this ten (10)
day period in lieu of such notice. Termination of the Employee's employment by
the Company shall constitute a termination for "Cause" if such termination is
for one or more of the following causes:
(1) the substantial and continuing failure of the Employee to render
services to the Company substantially in accordance with his assigned
duties or obligations under this Agreement, which materially and
adversely affects or could materially and adversely affect the
business, prospects, financial condition, operations, property or
affairs of the Company, which is not cured by the Employee to the
satisfaction of the Company within thirty (30) days notice to the
Employee by the Company of the failure;
(2) dishonesty, deliberate disregard of the rules or policies of the
Company, material breach of the terms of this Agreement, which is not
cured by the Employee to the satisfaction of the Company within thirty
(30) days notice to the Employee by the Company;
(3) the commission by the Employee of an act of fraud, embezzlement
or breach of fiduciary duty;
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(4) acts of moral turpitude by the Employee which materially adversely
affect the Employee's ability to perform his duties hereunder and
represent the Company;
(5) the conviction by the Employee of a felony; or
(6) the commission of an act which constitutes unfair competition with
the Company or which induces any customer of the Company to breach a
contract with the Company.
In the event of a termination for "Cause" pursuant to the provisions
of clauses (1) through (6) above, inclusive, the Employee shall be
entitled to no severance or other termination benefits.
(D) Benefits if Agreement Terminated Due to Death or Disability. The
Company shall have the right to terminate Employee's employment if Employee
dies or suffers physical incapacity or mental incompetence. In the event
Employee's employment shall terminate due to the physical incapacity or
mental incompetence of the Employee, the Company shall pay the Employee an
amount equal to: (i) twenty-four (24) months salary at the then current
Base Rate, less (ii) any amounts recovered by the Employee under any health
and disability insurance programs available through the Company. For the
purposes of this Agreement, the Employee shall be deemed to have suffered
physical incapacity or mental incompetence if the Employee is unable to
perform the essential functions of his job with reasonable accommodation.
Any accommodation will not be deemed reasonable if it imposes an undue
hardship on the Company. If this Agreement terminates due to the death of
Employee, Employee will not be entitled to any payments after the date of
his death.
4. Survival of Certain Provisions. Provisions of this Agreement shall
survive any termination of employment or of this Agreement if so provided herein
or if necessary or desirable to fully accomplish the purposes of such provision.
Without limiting the foregoing, the obligations of the Employee under Sections
3, 4, 5, 8 and 10 hereof and the Employee Noncompetition, Nondisclosure and
Developments Agreement of even date herewith by and between Employee and the
Company expressly survive any termination of employment or termination of this
Agreement. The obligation of the Company to make payments to or on behalf of the
Employee under Section 3(B) hereof is expressly conditioned upon Employee's
continued full performance of the obligations under the terms of Section 5 and
the Noncompetition, Nondisclosure and Developments Agreement executed herewith
between Employee and the Company.
5. Noncompetition, Nondisclosure and Developments Agreement. In connection
with his employment by the Company pursuant to the terms of this Agreement, the
Employee shall execute, prior to the execution hereof by the Company, the
Noncompetition, Nondisclosure and Developments Agreement attached hereto as
Exhibit A.
6. CONSENT AND WAIVER BY THIRD PARTIES. The Employee hereby represents and
warrants that he has obtained all waivers and/or consents from third parties
which are necessary to enable him to enjoy employment with the Company on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligation or understanding
with any such third party. The Employee represents that he is not bound by any
agreement or any other existing or previous business relationship which
conflicts with, or may conflict with, the performance of his obligations
hereunder or prevent the full performance of his duties and obligations
hereunder.
7. GOVERNING LAW. This Agreement, the employment relationship contemplated
herein and any claim arising from such relationship, whether or not arising
under this Agreement, shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts, without giving effect to the
principles of choice of law or conflicts of laws of such Commonwealth and this
Agreement shall be deemed to be performable in Massachusetts. Any claims or
legal actions by one party against the other arising out of the relationship
between the parties contemplated herein (whether or not arising under this
Agreement) shall be commenced or maintained in any state or federal court
located in Massachusetts, and Employee hereby submits to the jurisdiction and
venue of any such court.
8. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement or the other agreements executed in connection with the
transactions contemplated hereby for any reason shall be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or such
other agreements, but this Agreement or such other agreements, as the case may
be, shall be construed and reformed to the maximum extent permitted by law.
9. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and the
rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 9. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement sets forth all of the terms of the understandings
between the parties with reference to the subject matter set forth herein and
may not be waived, changed, discharged or terminated orally or by any course of
dealing between the parties, but only by an instrument in writing signed by the
party against whom any waiver, change, discharge or termination is sought. No
modification or waiver by the Company shall be effective without the consent of
at least a majority of the members of the Board of Directors excluding the
Employee to the extent the Employee is a member of the Board of Directors at the
time of such modification or waiver.
10. ASSIGNMENT. The Employee acknowledges that the services to be rendered
by him hereunder are unique and personal in nature. Accordingly, the Employee
may not assign any of his rights or delegate any of his duties or obligations
under this Agreement. The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company. To that end, the Company will require any
successor (a "Successor To The Business") to all or substantially all of the
business and/or
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assets of the Company (whether direct or indirect, by purchase, merger,
consolidation or otherwise), expressly to assume and agree, by agreement in form
and substance satisfactory to the Employee, to perform this Agreement in the
same manner and to the same extent that Company would be required to perform it
if no such transaction had taken place. Failure of the Company to obtain such
agreement prior to the effective date of such transaction shall be a breach of
this Agreement and shall entitle the Employee to compensation and benefits from
the Company in the same amount and on the same terms as the Employee would be
entitled hereunder if he were to terminate his employment pursuant to Section
3(b) of this Agreement. In the event the Company fails to obtain a successor's
agreement to assume this Agreement under this Section 10, the date upon which
any such transaction becomes effective shall be deemed the termination date and
Employee's employment with the Company will end on that date.
11. Acknowledgments. The Employee hereby acknowledges and recognizes that
the enforcement of any of the provisions in this Agreement and the
Noncompetition, Nondisclosure and Developments Agreement executed herewith may
potentially interfere with the Employee's ability to pursue a proper livelihood.
The Employee represents that he is knowledgeable about the business of the
Company and further represents that he is capable of pursuing a career in other
industries to earn a proper livelihood. The Employee recognizes and agrees that
the enforcement of the Noncompetition, Nondisclosure and Developments Agreement
is necessary to ensure the preservation, protection and continuity of the
business, trade secrets and goodwill of the Company. The Employee agrees that,
due to the proprietary nature of the Company's business, the restrictions set
forth in the Noncompetition, Nondisclosure and Developments Agreement are
reasonable as to time and scope.
12. Entire Agreement. This Agreement and the Noncompetition, Nondisclosure
and Developments Agreement executed herewith constitutes the entire
understanding of the parties relating to the subject matter hereof and
supersedes and cancels all agreements, written or oral, made prior to the date
hereof between the Employee and the Company relating to employment, salary,
bonus, or other compensation of any description, equity participation, pension,
post-retirement benefits, severance or other remuneration, except for the
Company stock option plan(s) and the stock option agreement(s) between the
Company and the Employee which shall remain in full force and effect in
accordance with their respective terms (except as modified by this Agreement).
13. Notices. All notices hereunder shall be in writing and shall be
delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:
If to the Company, to: Sipex Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
If to the Employee, at the Employee's address set forth on the signature
page hereto.
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14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
15. Section Headings. The descriptive section headings herein have been
inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first above written as instrument under seal.
SIPEX CORPORATION: EMPLOYEE:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxx
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Signature
Title: C.E.O. 000 XXXXXXXX XX
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Street Address
XXXXXXX XXXXX, XX 00000
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City State Zip Code
