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EXHIBIT 10(iii)(A)(2)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between Titan
International, Inc., a Illinois corporation ("Titan" "the Company") and its
successor (s), and Xxxxxxx Xxxxx ("Executive") (hereinafter, as amended or
modified and in effect called "Agreement"). The effective date of this Agreement
(the "Effective Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. Titan agrees to employ Executive and Executive
agrees to accept employment as President of Titan Europe Ltd. pursuant to the
terms of this Agreement. Executive will perform such services in the capacity of
President of Titan Europe as may be assigned to him by the By-laws and, from
time to time by the President of Titan during the Employment Term and, if
applicable, during the Extended Employment Term, (as such terms are defined in
Section 2). Executive will devote such of his business skill, time and effort to
his employment hereunder as shall be reasonably necessary to discharge his
obligations hereunder.
2. Employment Term. Executive's term of employment by Titan under
this Agreement will begin on the Effective Date and will terminate on the date
five years after the Effective Date (the "Employment Term"), unless terminated
earlier as provided in Sections 5 and 6 hereof.
Subject to the provisions of Sections 5 and 6 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by President.
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3. Direct Compensation. For his service hereunder during the
Employment Term and, if applicable, during the Extended Employment Term,
Executive will receive a base salary payable at an annual rate of $ 207,500.00
(the "Base Salary"), to be paid in accordance with the normal practices for
remunerating Titan executive management. Nothing in this Agreement will be
deemed to prohibit an increase at any time in the Base Salary if Titan's Board
of Directors approves. (The Base Salary, if so adjusted, is herein called the
"Adjusted Base Salary"). In addition to salary, each calendar year, the
Executive shall be entitled to receive a minimum bonus of twenty five percent
(25%) up to a maximum of one hundred percent (100%) of his salary based on
performance with specified criteria. The Board of Directors will establish the
bonus and performance standards at the beginning of each year. The Executive
shall receive stock options of up to a minimum of fifty percent (50%) of his
base salary in shares of the Company stock under the Company Stock Incentive
Plan that shall vest and become exercisable as prescribed by the Plan. The
Executive during the Employment term shall be entitled to three weeks of
vacation plus Titan designated holidays in each year and shall, during such
periods, be entitled to remuneration as hereinbefore provided. The Executive
shall continue to receive any benefit he currently receives in addition to
benefits described in Section 4, 5 and 6.
4. Standard Executive Benefits. In addition to the benefits
described in Sections 4, 5 and 6, Executive and, as applicable, Executive's
family, shall be entitled to participate during the Employment Term, and if
applicable, during the Extended Employment Term in all of Titan's then
prevailing Executive benefit plans and programs which are generally available to
Titan executive management, including without limitation, any group life,
hospitalization, surgical, major medical and accidental death and dismemberment
insurance plans and/or benefits, dental, and any pension or other capital
accumulation plans (collectively, the "Standard Executive Benefits").
5. Death or Disability. In the event of Executive's death or
disability hereinafter defined) during the Employment Term, or, if applicable,
during the Extended Employment Term, Titan shall pay Executive, his designated
beneficiary or estate, in addition to all payments due under Section 4, 5 and 6,
the Supplemental Death or Disability Benefits, as the case may be, as described
below.
5.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, Titan shall pay Executive's estate a lump sum equal to all
earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as at
such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination Date), and thereafter during the remainder of the Employment Term,
or, if applicable, the Extended Employment Term, fifty percent
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(50%) of Executive's Base Salary. In addition, Titan shall continue to provide
Executive's family with the Standard Executive Benefits from the date of
Executive's death until the later of (1) the expiration of the Employment Term
or, if applicable, the Extended Employment Term or (2) six months.
5.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of Titan's Board
of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in his regular occupation as a senior executive officer of a corporation
generally comparable to Titan at a level of compensation commensurate with his
education, training and experience for a substantially continue period which has
extended or will foreseeable extend beyond six months in duration as a result of
sickness, bodily injury, or mental or emotional disease or disorder of any type,
excluding attempted suicide or intentionally self-inflicted injury. Upon
termination of the employment of Executive by reason of Disability, the
liabilities of Titan will be as follows:
(a) During the periods referred to in (i) and (ii) below,
Titan shall continue to provide the Executive with the following direct
compensation: (i) commencing with the first day of the month next succeeding the
Disability Termination Date, a lump sum equal to all earned yet unpaid Base
Salary or Adjusted Base Salary, if any, in effect as of such Disability
Termination Date plus a monthly amount which shall be equal to one-twelfth of
Executive's Base Salary or Adjusted Base Salary, in effect as at such Disability
Termination Date, for a period of 24 months following such Disability
Termination Date (the "Disability Benefit Continuation Period"); and (ii) for
the period, if any, of Disability that extends beyond the Disability Benefit
Continuation Period referred to in (i) above, and until the date the Executive
attains age 60 or, if sooner, his death, a monthly amount which shall be equal
to one-twelfth of fifty percent (50%) of Executive's Base Salary; provided,
however, that the monthly amounts payable under (i) and (ii) above shall be
reduced by an amount equal to the sum of the amount of monthly benefits then
actually received by Executive pursuant to (A) any long-term disability
insurance plan then generally provided to executive management by Titan, and (B)
any supplemental disability insurance program then provided to Executive by
Titan.
(b) During the Disability Benefit Continuation Period, Titan
shall continue to provide Executive with full participation in the benefits
described in Sections 4, 5.1 and 5.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for this purpose by
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the parties or their representatives or, failing Agreement by the parties within
twenty (20) business days of the request by either party to the other, by a
panel of three impartial reputable physicians to be selected within twenty (20)
business day of request by either party to the other, one by Executive and one
by Titan, respectively, and one by the two physicians so selected. If the
physician selected by Titan and Executive should fail to select the third
physician within ten (10) business days of their appointment, or if either Titan
or Executive should fail to select a physician, the remaining member(s) of the
panel shall be appointed by Director of Mayo Clinic of Rochester, MN. The
opinion of the majority of the panel as to the matter in dispute shall be final
and binding on the parties. Executive shall submit to such examination(s) as may
be necessary for the purposes herein.
6. Termination. Executive's employment under this Agreement may
be terminated by Titan upon the occurrence of any of the following events:
6.1 Termination for Cause. If Titan terminates the Executive's
employment for cause, for this purpose, "Termination for Cause" shall mean (i)
termination of the Executive's employment for willful or gross neglect of duties
hereunder, or willful or gross misconduct in the performance of such duties, so
as to cause material harm to Titan and its subsidiaries considered as a whole,
determined in good faith by the President, (ii) termination following a judicial
determination that Executive has committed fraud, misappropriation or
embezzlement against Titan or (iii) termination due to Executive's having
committed any felony for which he is convicted and which, as determined in good
faith by the President and results in material harm to Titan and its
subsidiaries considered as a whole. Upon the occurrence of a Termination for
Cause, Titan's obligations under this Agreement shall terminate, except that in
the event of Termination for Cause pursuant to clause (i) of the first sentence
of this Section 6.1, Titan shall remain obligated to pay Executive fifty percent
(50%) of his Base Salary and to continue for Executive and/or his family the
full benefits described in Section 4 during the Employment Term.
6.2 Termination Without Cause. If Titan terminates the
Executive's employment and unless such termination shall be pursuant to Section
5 or 6.1, such termination shall, in all cases, constitute "Termination Without
Cause" with effect from the date of action by Titan. Any demotion from the
position of President of Titan Europe Ltd., set forth in Section 1, or any
material reduction in the authorities inherent to such position, in each
instance unless made with Executive's prior written consent, or upon a
termination pursuant to Sections 5 or 6.1, or any non-payment or reduction in
the Base Salary or Adjusted Base Salary then in effect or any other breach by
Titan of this Agreement shall be deemed to constitute Termination Without Cause:
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(a) In the event of Executive's Termination Without Cause,
Titan shall remain obligated to pay Executive 100% of his Base Salary or
Adjusted Base Salary then in effect for three (3) years from the effective date
of the Termination Without Cause, but in no event beyond the Employment Term or,
if applicable, the Extended Employment Term, and 50% of his Base Salary or
Adjusted Base Salary then in effect for the balance of the Employment Term
remaining beyond the three year period, if any, plus all benefits described in
Sections 4, 5 and 6 during the Employment Term;
(b) In the event of Executive's Termination Without Cause,
Titan agrees to provide for of the Executive and his spouse and dependents which
live in the household shall receive, at not cost and expense to them for the
remaining Employment term, group medical (including hospitalization, surgical,
and major medical) and dental insurance benefits provided or furnished or made
available under Titan's Plan (at Executive, or in the event of Executive death,
at Executive's spouse's election with respect to which plan) then prevailing
Executive benefit plans to the then employed highest level executive officers'
of either of them from time to time. Titan shall pay the full premiums for all
such benefits furnished through group insurance plans as well as all other
charges and expenses for providing such benefits;
(c) In the event of Executive's Termination Without Cause,
Titan agrees all outstanding stock options and the Employer match under Titan's
401k Plan for the Executive shall vest 100% immediately; and
(d) In the event of Executive's Termination Without Cause,
Titan shall provide, as a condition of any such sale, that the acquiring
corporation and successor shall assume this Agreement and become obligated to
perform all of the terms and conditions hereof.
7. Successors and Assigns. This Agreement shall be binding upon
any successor or assigns of Titan and a successor or assigns shall be any
surviving corporation under which it might be merged or consolidated or the
purchaser of substantially all of the assets of Titan.
8. Termination. This Agreement shall terminate upon the death of
both Executive and his spouse or earlier if mutually agreed upon by the
Executive and Titan.
9. Expenses. Titan will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, without. limitation expenses for entertainment, travel (including
automobile operating expenses), meals, hotel accommodations and other ordinary
and necessary activities incurred on behalf of the company, subject to
reasonable documentation of such expenses by Executive.
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10. Inventions and Improvements. Any invention or development of
any kind related to Titan's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by Titan
pursuant to this Agreement shall be promptly disclosed by Executive to Titan and
shall be the sole property of Titan. Executive shall execute an assignment to
Titan, or to another designated by it, of his entire claim to and interest in
each such invention or development. Executive undertakes to sign all lawful
papers and, at Titan's expense, to assist it in every lawful way to obtain and
sustain patents or copyrights for its benefit in any such inventions or
developments when requested by Titan. Executive shall not be entitled to
compensation beyond his Base Salary or Adjusted Base Salary for the performance
of any such acts.
11. Confidential Information.. Executive acknowledges that by
reason of his employment with Titan he has and will hereafter, from time to time
during his Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or become knowledgeable about proposals, plans,
inventions, practices, systems, programs, formulas, customer lists, and other
forms of business information which are not known to Titan's competitors and
which are not recognized as being encompassed within standard business
management practices and which are kept secret and confidential by Executive
(the "Confidential Information"). Executive therefore agrees that at no time
during or after the period of his employment by Titan will he disclose or use
the Confidential Information except as may be required in the prudent course of
business for the benefit of Titan, provided, that no payment required to be made
by Titan under the terms of this Agreement including the Exhibits hereto after
termination of the employment of Executive shall be subject to any right of
set-off, counterclaim, defense, abatement, suspension, deferment or reduction by
reason of any claim against Executive based upon breach of the covenant in this
Section 12 other than execution of an unsatisfied final judgment rendered by a
court of competent jurisdiction.
12. Competition. Executive hereby agrees that until the
termination of his employment under this Agreement, and for a period of three
(3) years thereafter, he will not, unless authorized in writing to do so by
Titan, directly or indirectly own, manage, operate, join, control or participate
in the ownership, management, operation or control of, or be employed or
otherwise connected in any substantial manner with any business which directly
competes to a material extent with line of business of Titan or its subsidiaries
that is material to the businesses, financial condition or prospects of Titan
and its subsidiaries considered as a whole; provided that nothing in this
paragraph shall prohibit Executive from acquiring up to 5% of any class of
outstanding equity securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the "over-the-counter
market".
13. Relocation. Executive shall not be required to relocate his
residence during the Employment Term or, if applicable, during the Extended
Employment Term,
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without his consent. If the Board of Directors of Titan approves or requires
relocation of its executive from England and if such relocation reasonably would
require Executive to move and thereby sell his present residence and purchase a
different one and if Executive consents to relocate his residence to such new
location, then Titan shall pay all reasonably requested moving and relocation
expenses including but not limited to real estate commissions, legal fees and
costs, appraisals, title insurance, surveys and inspections directly related to
such sale and closing and financing costs directly related to the purchase or
construction of a new residence. In addition, Titan will indemnify Executive for
any net loss (measured by the difference between (a) the average of two current
appraisals by recognized appraisers mutually agreed upon by the parties, and (b)
the actual selling price of the residence) arising from the sale of his
residence (caused by such required relocation): provided, however, that Titan
shall alternatively have a right of first refusal to acquire the residence at
the average appraisal price giving rise to such loss. Notwithstanding the
foregoing, Executive shall have the right to relocate his residence and perform
his services hereunder at a location other than Titan's England facility or the
successor location thereto, so long as such relocation and performance of
services does not prevent the fulfillment of his duties and obligations
hereunder.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
and judgment upon such award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The arbitration shall be held in Illinois
unless another location shall be mutually agreed to by the parties at the time
of the arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, Titan shall pay all legal fees
incurred by Executive in connection with the dispute over such claim(s). If more
than one is involved in any dispute and if Executive is sustained as to one or
more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. Titan will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
15. Binding Effect: Amendments. Executive's undertakings hereunder
will be binding regardless of (i) the duration of his employment with Titan; or
(ii) the reasons for or manner of termination of his employment. This Agreement
will bind and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, will supersede any prior understanding
between the parties relating to the same subject matter and may be modified and
varied only in writing signed by the parties hereto.
16. Notices. All notices hereunder shall be given in writing by
personal delivery or by registered mail addressed to Titan at is principal place
of business and to Executive at his residence address as then listed in Titan's
records.
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17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and jurisdiction
of the State of Illinois.
18. Miscellaneous. (a) the failure of a party to insist on any
occasion upon strict adherence to any term of this Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing signed by the party waiving any right; (b) the
underlined captions in this Agreement at the beginning of Sections are for
reference only and shall not be deemed to define or limit the provisions hereof
or to affect their construction and application; (c) the parties agree that this
Agreement may be executed in any number of counterparts, and in the event, each
counterpart shall be deemed a complete original and be enforceable without
reference to any other counterpart.
19. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve the
Company and/or its successor (s) from their obligations hereunder. All of
Sections 5 and 6 and shall survive the termination of this Agreement and shall
not relieve the Company and/or successor from their obligations under these
Sections.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATIONAL, INC
By: /s/ Xxxxxxx X. Xxxxxx, Xx.,
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Xxxxxxx X. Xxxxxx, Xx., President
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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