Exhibit 10.2
EMPLOYMENT AND RETIREMENT BENEFIT AGREEMENT
THIS EMPLOYMENT AND RETIREMENT BENEFIT AGREEMENT (this "Agreement") is
made August 21, 1996, by and between XXXXXXXX ADHESIVES, INC., a Virginia
corporation ("Employer"), and XXXXXX X. XXXXXXXX, a Virginia resident
("Employee").
RECITALS:
A. Employer is engaged in the business of developing,
manufacturing and marketing specialty thermosetting resins and formaldehyde for
the forest products, building products and furniture industries.
B. Employee is the founder, immediate past Chairman of the Board,
and immediate past chief executive officer of Employer. At the request of
Employee, the Board of Directors of Employer has relieved Employee of the duties
of such offices. Employer desires to retain the services of Employee as an
employee for three additional years and desires to employ Employee as Vice
President for Product Development.
C. In recognition of Employee's service, loyalty, and
capabilities, and to induce Employee to continue his employment with Employer,
Employer also desires to provide Employee with certain retirement benefits, all
pursuant to the terms and conditions set forth herein.
TERMS AND CONDITIONS:
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement and other good and valuable consideration, the
parties agree as follows:
1. Employment and Duties. Employer hereby employs Employee,
and Employee hereby agrees to serve, as Vice President for Product Development.
Employee further agrees to serve as a member of the Board of Directors of
Employer and as a member of the Board of Directors of Employer's parent
corporation without additional compensation during the term of this Agreement,
if nominated for either or both such positions and duly elected. While employed
by Employer, Employee shall use his best efforts on Employer's behalf and shall
comply with all policies and procedures adopted by Employer. In addition,
Employee shall perform such other duties assigned from time to time by Employer
and shall devote such time to Employer's business as Employer deems reasonable.
Employee shall not undertake employment with any other employer without the
express written consent of Employer's chief executive officer.
2. Term of Employment. Employee's employment pursuant to this
Agreement shall commence on September 1, 1996 and expire on August 31, 1999,
unless sooner terminated as hereinafter set forth. Thereafter, employment shall
continue only upon written agreement of Employee and Employer.
3. Compensation and Expenses. For all services rendered by
Employee under this Agreement, Employee shall receive:
(a) a salary at the rate of $180,000 per year, payable
periodically in accordance with Employer's policies. Such salary may be
increased from time to time by Employer's Board of Directors or its authorized
representative;
(b) such additional or special compensation, including
incentive bonuses, as the Board, in its discretion, may determine from time to
time; and
(c) reimbursement of expenses in accordance with policies
of Employer in effect from time to time.
4. Vacation and Benefits. Employee shall be entitled to paid
vacation in accordance with Employer policies. In addition, Employee shall be
entitled to participate in all present or future benefit plans provided by
Employer to its employees and for which Employee may qualify or in which
Employee elects to participate.
5. Termination.
(a) Employee's employment with Employer shall be
terminated (i) by reason of Employee's death or permanent disability, as
determined by a physician satisfactory to Employer, (ii) by Employee upon 30
days notice in writing, or (iii) for cause. For purposes of this section,
"cause" shall be deemed to exist if, and only if,
(i) Employee willfully refuses to perform
services hereunder;
(ii) Employee materially breaches paragraph
7, 8 or 9 of this Agreement;
(iii) Employee engages in acts of dishonesty
or fraud in connection with his service hereunder; or
(iv) Employee engages in other serious
misconduct of such a nature that the continued employment of
Employee may reasonably be expected to adversely affect the
business of Employer.
(b) If Employee's employment with Employer terminates
for cause, or due to death, permanent disability, or voluntary termination, any
portion of his fixed salary, pursuant to paragraph 3(a) which is earned but
unpaid as of the date of such termination, shall be paid to Employee or to his
designated beneficiary in the event of death.
6. Retirement Benefit. The parties acknowledge that Employee
has provided more than 24 years of faithful service to Employer and that
Employee is not eligible to receive any qualified or other non-qualified
retirement benefits from Employer. Upon Employee's retirement from employment
with the Employer at or after August 31, 1999 or death or permanent disability
prior to such date, Employer shall for five (5) years pay to Employee, or in the
event of Employee's death, Xxxxxx X. Xxxxxxxx, his wife, if she survives him, a
retirement benefit equal to $150,000 per year. The payment of such benefit shall
commence promptly after Employee's retirement, death or disability, and shall be
made in such installments as the parties shall mutually determine. Payment shall
cease upon the death of both Employee and Xxxxxx X. Xxxxxxxx. Neither Employee
nor Xxxxxx X. Xxxxxxxx shall be entitled to any retirement or death benefit
hereunder in the event Employee voluntarily terminates his employment with
Employer prior to August 31, 1999 without "good reason." Good reason shall be
deemed to exist if, and only if:
(a) Employer fails to timely pay the amounts or provide
the benefits to which Employee is entitled hereunder, other than an isolated
failure not occurring in bad faith and which is remedied within 15 days after
receipt of written notice thereof given by Employee, or any other material
violation by Employer of the terms of this Agreement which is not remedied
within 30 days of written notice;
(b) the assignment to Employee by Employer of duties
materially inconsistent with and inferior to Employee's position, duties,
responsibilities and status as a Vice President of Employer, except in
connection with the termination of Employee's employment for Cause; or
(c) the transfer of Employee's place of employment
further than 30 miles beyond the city limits of Petersburg, Virginia, without
his prior consent.
7. Trade Secrets and Confidential Information. During the term
of this Agreement, Employee will continue to have access to various trade
secrets and confidential information of Employer. Employee acknowledges that
such confidential information and trade secrets are owned and shall continue to
be owned solely by Employer. During the term of his employment and for five (5)
years after such employment terminates, Employee agrees not to use such
information for any purpose whatsoever or to divulge such information to any
person other than Employer or persons to whom Employer has given its written
consent unless Employee is compelled to disclose it by governmental or legal
process or by any provision of law or court order. In the event that Employee is
compelled to divulge such information as described in the previous sentence,
Employee shall give Employer at least five (5) days written notice prior to
divulging the information, unless such notification is prohibited by law.
8. Documents. Under no circumstances shall Employee remove
from Employer's office with intention to retain any of Employer's books,
records, documents, or customer lists, or any copies of such documents, without
the written permission of Employer; nor shall Employee make any copies of such
books, records, documents, or customer lists for use and retention outside of
Employer's office except as specifically authorized in writing by Employer.
9. Non-Competition. Employee agrees that during his employment
with Employer and for as long as he is receiving retirement benefits, he will
not directly or indirectly, either as principal, agent, manager, employee,
partner, shareholder, director, officer, consultant or otherwise, become
associated with, employed by, or otherwise interested in, whether financially or
in any other capacity, any business operation directly competing with Employer
in any state east of the Mississippi River. This restriction shall not preclude
Employee from becoming the holder of any publicly traded stock provided Employee
does not acquire stock interest in excess of one percent (1%).
10. Non-solicitation. Employee agrees that for a period of twelve
(12) months after his employment has terminated for any reason:
(a) Employee will not directly or indirectly solicit or
sell any of the products or services sold by Employer to any person, company,
firm, or corporation or entity who is or was a customer of Employer within five
years prior to the termination of Employee's employment; and
(b) Employee will not solicit such customers on behalf of
himself or any other person, firm, company, or corporation.
11. Ability to Earn Livelihood. Employee further acknowledges
that (i) in the event his employment with Employer terminates for any reason, he
will be able to earn a livelihood without violating the foregoing restrictions;
and (ii) that his ability to earn a livelihood without violating such
restrictions is a material condition to his employment with Employer.
12. Remedies. Employee acknowledges that (i) compliance with
Sections 7, 8, 9, and 10 is necessary to protect the business and good-will of
Employer and (ii) a breach of those sections will irreparably and continually
damage Employer, for which money damages may not be adequate. Therefore, the
parties agree that in the event of such breach, Employer may seek any and all
legal or equitable relief available to it, specifically including but not
limited to injunctive relief, without the necessity of bond, and may hold
Employee liable for all damages, including actual and consequential damages,
costs and expenses, as well as legal costs and reasonable attorneys' fees
incurred by Employer as a result of such breach.
13. Duration of Injunction. If Employee violates any of the
terms of Sections 7, 8, 9, or 10 and Employer consequently seeks injunctive
relief from a court, such injunctive relief may be applied prospectively to
include the duration of the covenant unexpired at the time of the first breach,
notwithstanding that the covenant may have otherwise expired at the time a
lawsuit is filed and/or at the time relief is granted.
14. Judicial Modification; Severability. The parties have
attempted to limit Employee's right to compete only to the extent necessary to
protect Employer from unfair competition. The parties recognize, however, that
reasonable people may differ in making such a determination. Consequently, the
parties hereby agree that, if the scope or enforceability of a restrictive
covenant set forth in Section 7, 8, 9 or 10 is in any way disputed at any time,
a court or other trier of fact may modify and reform such provision to
substitute such other terms as are reasonable to protect Employer's legitimate
business interests. If any provision, paragraph, or subparagraph of this
Agreement is adjudged by any court to be void or unenforceable in whole or in
part, such adjudication shall not affect the validity of the remainder of this
Agreement, including any other provision, paragraph, or subparagraph. Each
provision, paragraph, and subparagraph of this Agreement is separable from every
other provision, paragraph, and subparagraph, and constitutes a separate and
distinct covenant.
15. Waiver of Rights. If in one or more instances either party
fails to insist that the other party performs any of the terms of this
Agreement, such failure shall not be construed as waiver by such party of any
past, present, or future right granted under this Agreement and the obligations
of both parties under this Agreement shall continue in full force and effect.
16. Survival. The obligations contained in Sections 7, 8, 9,
and 10 shall survive the termination of Employee's employment. In addition, the
termination of employment shall not affect any of the rights or obligations of
either party arising prior to or at the time of the termination of employment,
or which may arise by any event causing the termination of employment.
17. Successors. This Agreement shall be binding upon and shall
inure to the benefit of Employee, and, to the extent applicable, Employee's
heirs, assigns, executors, and personal representative, and upon Employer, its
successors and assigns, including without limitation, any person, partnership or
corporation that may acquire all or substantially all of Employer's assets and
business, or with or into which Employer may be consolidated or merged.
18. Complete Understanding. This Agreement constitutes the
complete understanding between the parties regarding terms and conditions of
employment, all prior representations or agreements having been superseded.
19. Modification. No alteration or modification of any of the
provisions of this Agreement shall be valid unless made in writing and signed by
both parties.
20. Governing Law. This Agreement shall be subject to and
governed by the laws of the Commonwealth of Virginia. The parties agree that any
cause of action arising from the terms of this Agreement shall be brought only
in the Circuit Court of the City of Richmond, Virginia. The parties agree that
such court shall be the exclusive and sole venue for the adjudication of any
disputes hereunder.
XXXXXXXX ADHESIVES, INC.
By: /s/ H. Xxxxxx Xxxxxxxx, Xx.
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Name: H. Xxxxxx Xxxxxxxx, Xx.
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Office: Executive Vice President
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EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
FIRST AMENDMENT
TO
EMPLOYMENT AND RETIREMENT
BENEFIT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AND RETIREMENT BENEFIT AGREEMENT
(this "First Amendment") is made as of February 24, 1997, by and between
Xxxxxxxx Adhesives, Inc., a Virginia corporation (the "Employer"), and Xxxxxx X.
Xxxxxxxx, a Virginia resident ("Employee"). It is the first amendment to the
original Employment and Retirement Benefit Agreement dated August 21, 1996
between the parties (the "Agreement").
Unless otherwise indicated, all capitalized terms used herein shall
have the meaning ascribed to them in the Agreement.
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained in this First Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereby agree as follows:
1. Amendment to Agreement. The Agreement is hereby amended as
follows:
The second sentence of paragraph 6., Retirement Benefit., of
the Agreement is hereby replaced in its entirety by the following:
Upon Employee's retirement from employment with the Employer
at or after August 31, 1999 or death or permanent disability prior to
such date, Employer shall for (5) years pay Employee, or in the event
of Employee's death, Xxxxxx X. Xxxxxxxx, his wife, if she survives him,
a retirement benefit equal to $100,000 per year.
2. Ratification of Agreement. The terms and conditions of the
Agreement as amended by this First Amendment are hereby adopted, ratified, and
affirmed by the parties hereto. If any provisions of this First Amendment shall
be materially different from or inconsistent with any provisions of the
Agreement, the provisions of this First Amendment shall control, and the
provisions of the Agreement shall, to the extent of such difference or
inconsistency, be deemed modified. This First Amendment and the Agreement, as
amended and modified and as approved and adopted, shall constitute a single
agreement.
3. Modifications. No provision of this First Amendment,
including the provisions of this section, may be modified, deleted or amended in
any manner except by an agreement in writing executed by all of the parties
hereto.
4. Binding Effect; Benefit. This First Amendment shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
5. Governing Law. This First Amendment shall be interpreted,
governed and enforced according to the laws of the Commonwealth of Virginia,
without reference to the choice of law principles thereof or any other
jurisdiction.
6. Counterparts. This First Amendment may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, this First Amendment has been duly executed and
delivered by the undersigned as of the date first set forth above.
XXXXXXXX ADHESIVES, INC.
By: /s/ H. Xxxxxx Xxxxxxxx, Xx.
-----------------------------------
Name: H. Xxxxxx Xxxxxxxx, Xx.
-----------------------------
Office: Executive Vice President
-----------------------------
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxx
