EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 23rd day of
February, 1996, is entered into by and between The G & C Foundry Company, an
Ohio corporation with its principal place of business at 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxx 00000 (the "Company"), and Xxxxxxx X. Xxxxxxx, 000
00xx Xxxxxx, Xxxxxxxx, Xxxx 00000 (the "Employee").
In consideration of the mutual covenants and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties agree as
follows:
1. TERM OF EMPLOYMENT.
The Company hereby agrees to employ the Employee, and the Employee
hereby accepts employment with the Company, upon the terms set forth in this
Agreement, for the period commencing on February 23, 1996 (the "Commencement
Date") and ending on February 23, 2001 (the "Employment Period"), unless
sooner terminated in accordance with the provisions of Section 4 of this
Agreement.
2. TITLE; CAPACITY.
The Employee shall serve as President of the Company or in such
other position, and shall have such other responsibilities, as the Company
may determine from time to time. The Employee shall be based at the
Company's headquarters in Sandusky, Ohio. The Employee shall be subject to
the supervision of, and shall have such authority as is delegated to him by,
the Board of Directors of the Company.
The Employee hereby accepts such employment and agrees to undertake
the duties and responsibilities inherent in such position and such other duties
and responsibilities as the Company shall from time to time reasonably assign to
him. The Employee agrees to devote his entire business time, attention and
energies to the business and interests of the Company during the Employment
Period; PROVIDED that Employee may belong to or participate in industry and
trade associations, community service organizations and any other
not-for-profit organizations, so long as such activities do not unreasonably
interfere with Employee's duties under this Agreement. The Employee agrees to
abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein which may be adopted from
time to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Employee, in bi-monthly
installments, an annual base salary of $105,000 commencing on the
Commencement Date. Such salary shall be subject to adjustment thereafter as
determined by the Board of Directors of the Company; provided, however, that
in no event shall such salary be less than $100,000 per one-year period.
3.2 BONUS. Employee shall be entitled to an annual bonus of
between 15% and 30% of Employee's annual base salary for that fiscal year
based on earnings before interest, taxes and amortization of intangibles
("EBITA") set by the Company's Board of Directors annually. If the EBITA
target for the fiscal year is reached, Employee shall receive 100% of his
annual bonus. A minimum level of EBITA shall also be set by the Company's
Board of Directors, below which no annual bonus will be paid. If EBITA is
above the minimum threshold and below the EBITA target, the bonus shall be
pro-rated based on the relation of actual EBITA to the EBITA target and
minimum threshold. The bonus for each fiscal year during the Employment
Period shall be calculated after the completion of the audit of the Company
and shall be paid by the Company to Employee no later than one month after
the completion of the audit of the Company; provided, however, that the bonus
otherwise payable with respect to Employee's period of employment ending June
30, 1996 shall be prorated for the period from inception of this Agreement
until the fiscal year-end. Each audit will be performed by the Company's
independent auditors and will be completed within 90 days of the Company's
fiscal year-end.
3.3 FRINGE BENEFITS. The Employee shall be entitled to participate
in all benefit programs (other than bonuses) that the Company establishes and
makes generally available to its employees, if any, to the extent that
Employee's position, tenure, salary, age, health and other qualifications
make him eligible to participate. In addition, the Company shall provide:
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(a) Salary continuation during the time the Employee is unable to
perform the essential functions of his position, with or without a reasonable
accommodation, due to a mental or physical condition or illness, for up to
twenty-six (26) weeks; and provided, however, that such salary continuation
shall not affect the Company's right to terminate this Agreement or offer the
Employee another position, in accordance with Section 4 of this Agreement;
and
(b) The insurance policy for any permanent "disability" of Employee
(as defined by such policy), covering Employee immediately prior to the
execution of this Agreement.
3.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment and other expenses incurred
or paid by the Employee in connection with, or related to, the performance of
his duties, responsibilities or services under this Agreement, upon
presentation by the Employee of documentation, expense statements, vouchers
and/or such other supporting information as the Company may request.
3.5 VACATION. Employee shall be entitled to vacation each year in
accordance with the Company's vacation policy, during which time Employee's
compensation shall continue to be paid and accrue according to the provisions
of Section 3 of this Agreement.
4. EMPLOYMENT TERMINATION.
Unless otherwise prohibited by law, the employment of the Employee
by the Company pursuant to this Agreement shall terminate upon the occurrence
of any of the following:
4.1 At the election of any party, for cause; or
4.2 Immediately upon the death or disability of the Employee. As
used in this Agreement, the term "disability" shall mean the permanent inability
of the Employee, due to a permanent physical or mental illness or condition, to
perform the services contemplated under this Agreement. A determination of
"disability" shall be made by a physician satisfactory to the Company. A
physical or mental illness or condition that is not permanent shall not be cause
for termination; provided, HOWEVER, if the Employee is unable to perform the
services contemplated under this Agreement due to an illness or condition, the
Company, in its sole
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discretion, may offer to the Employee another position (such position may be
a position with reduced status, compensation and benefits than the position
currently held by Employee) with the Company. Employee may either accept
such a position or terminate this Agreement in accordance with Section 5.2
hereof.
4.3 As used in this Agreement with respect to termination by the
Company, the term "cause" shall mean:
(a) the willful and unreasonable failure or refusal or the continued
and unreasonable failure or refusal (which need not be willful) by the
Employee to perform his duties hereunder or carry out reasonable
instructions of the Company not inconsistent with the provisions of this
Agreement (other than any such failure or refusal resulting from the
Employee's death or disability), which failure or refusal is not cured by
the Employee within 30 days after written notice thereof by the Company;
PROVIDED, that the parties do not intend mere personality differences or
trivial matters to constitute "cause" for purposes of this paragraph;
(b) the Employee's conviction of a felony by a court of competent
jurisdiction. At the Company's option, the Company may cease paying any
compensation or benefits under this Agreement rather than terminate this
Agreement pending any appeal;
(c) the theft, embezzlement or willful destruction or misappropriation
of property or funds of the Company by the Employee;
(d) the Employee engages in gross malfeasance; or
(e) the breach by the Employee of any provision of this Agreement,
which breach is not cured by the Employee within 30 days after written
notice thereof by the Company.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR CAUSE. In the event the Employee's employment is
terminated for cause pursuant to Section 4.1, the Company shall pay to the
Employee the compensation and benefits otherwise payable to him under Section 3
through the last day of his actual employment by the Company; provided, however,
that any
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such termination shall not waive any legal or equitable remedy that otherwise
may be available to the party that so terminates this Agreement against the
other party hereto.
5.2 TERMINATION FOR DEATH OR DISABILITY. If the Employee's
employment is terminated by death or because of disability pursuant to
Section 4.2, the Company shall pay to the estate of the Employee or to the
Employee, as the case may be, the compensation which would otherwise be
payable to the Employee up to the end of the month in which the termination
of his employment because of death or disability occurs.
5.3 TERMINATION OTHER THAN FOR CAUSE. In the event that the
Employee's employment is terminated by the Company other than for cause,
death or disability or the expiration of this Agreement, the Company shall
pay to the Employee the compensation and benefits otherwise payable to him
under Section 3 through the last day of his actual employment with the
Company plus the equivalent of six (6) months base salary as severance pay.
Such severance pay shall be payable on the first day of the month following
the date that Employee's employment is so terminated. Payments under this
section shall not be a bar to any other claims or rights the Employee may
have or pursue by virtue of this termination.
6. NON-COMPETE.
(a) For a period beginning on the Commencement Date and ending one
year after Employee's termination of employment with the Company or any
parent corporation of the Company or any majority-owned subsidiary of the
Company, the Employee will not directly or indirectly, in the State of Ohio.
(i) as an individual proprietor, partner, trustee,
stockholder, officer, employee, director, joint venturer, investor, lender,
or in any other capacity whatsoever (other than as the holder of not more
than five percent (5%) of the total outstanding stock of a publicly held
company), engage in the business of developing, producing, marketing or
selling products of the kind or type developed or being developed, produced,
marketed or sold by the Company while the Employee was employed by the
Company; or
(ii) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their
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employment with, or otherwise cease their relationship with, the Company; or
(iii) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the Company which
were contacted, solicited or served by the Employee while employed by the
Company.
(iv) This Section 6 is not intended to, and will not, prevent
Employee from seeking other employment in the foundry industry as long as his
activities in such employment do not breach the restrictions of subsections
(i)-(iii) herein above.
(b) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.
(c) The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and are considered
by the Employee to be reasonable for such purpose. The Employee agrees that
any breach of this Section 6 will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company shall
have the right to seek specific performance and injunctive relief, and if the
Company shall prevail in a legal proceeding to remedy a breach under this
Section 6, the Company shall be entitled to receive its reasonable attorney's
fees, expert witness fees, and out-of-pocket costs incurred in connection
with such proceeding, in addition to any other relief it may be granted.
7. PROPRIETARY INFORMATION AND DEVELOPMENTS.
7.1 PROPRIETARY INFORMATION.
(a) Employee agrees that all information and know-how, whether
or not in writing, of a private, secret or confidential nature concerning
the Company's business or financial affairs (collectively, "Proprietary
Information") is
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and shall be the exclusive property of the Company. By way of illustration,
but not limitation, Proprietary Information may include inventions,
products, processes, methods, techniques, formulas, compositions, compounds,
projects, developments, plans, research data, clinical data, financial data,
personnel data, computer programs, and customer and supplier lists.
Employee will not disclose any Proprietary Information to others outside the
Company or use the same for any unauthorized purposes without written
approval by an officer of the Company, either during or after his
employment, unless and until such Proprietary Information has become public
knowledge without fault by the Employee.
(b) Employee agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings,
or other written, photographic, or other tangible material containing
Proprietary Information, whether created by the Employee or others, which
shall come into his custody or possession, shall be and are the exclusive
property of the Company to be used by the Employee only in the performance
of his duties for the Company. Employee agrees to return to the Company
all of the Company's property containing any Proprietary Information upon
the termination of Employee's employment with the Company for any reason.
(c) Employee agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in Paragraphs (a)
and (b) above, also extends to such type of information, know-how, records
and tangible property of customers of the Company or suppliers to the
Company or other third parties who may have disclosed or entrusted the same
to the Company or to the Employee in the course of the Company's business.
7.2 DEVELOPMENTS.
(a) Employee will make full and prompt disclosure to the Company
of all inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which are
created, made, conceived or reduced to practice by the Employee or under
his direction or jointly with others during his employment by the Company,
whether or not during normal working hours or on the premises
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of the Company (all of which are collectively referred to in this Agreement
as "Developments"). The Company shall be solely responsible for all
expenses associated with registration of its rights to the Developments,
except as otherwise required by law.
(b) Employee agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company) all his right,
title and interest in and to all Developments and all related patents,
patent applications, copyrights and copyright applications. However, this
Section 7.2(b) shall not apply to Developments which do not relate to the
present or planned business or research and development of the Company and
which are made and conceived by the Employee not during normal working
hours, not on the Company's premises and not using the Company's tools,
devices, equipment or Proprietary Information.
(c) Employee agrees to cooperate fully with the Company, both
during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights and patents (both in
the United States and foreign countries) relating to Developments.
Employee shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments,
assignment of proprietary rights, and powers of attorney, which the Company
may deem necessary or desirable in order to protect its rights and
interests in any Development.
7.3 COMPANY'S RIGHT TO NOTIFY SUBSEQUENT EMPLOYERS. The Company may
do all permissible things, and take all permissible action, necessary or
advisable, in the Company's discretion, to protect its rights under this Section
7, including without limitation notifying any subsequent employer of the
Employee of the existence of (and furnishing to any such employer) the
provisions of this Agreement.
8. CHANGE OF CONTROL BENEFITS.
(a) In the event that a Change of Control (defined below) occurs
during the term of this Agreement, the Company shall pay to the Employee,
or to the Estate of the Employee, as the case may be, Six Hundred Thousand
Dollars ($600,000) in
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three equal annual payments of Two Hundred Thousand Dollars ($200,000)
commencing on the date 90 days after the consummation of the Change of
Control whether or not the Employee shall continue in the employment of
the Company after such Change of Control. Employee agrees that this
provision provides for payments pursuant to this section for the first
Change of Control to occur after the execution of this Agreement and not
for any subsequent Change of Control during the term of this Agreement.
In the event the Employee is not employed by the Company immediately prior
to the Change of Control, the payments pursuant to this Section 8 shall not
be due and owing.
(b) A "Change of Control" shall be deemed to have occurred at any of
the following times:
(i) Upon the acquisition (other than from the Company) by any
person, entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")
(excluding, for this purpose, the Company or its affiliates, or any
employee benefit plan of the Company or its affiliates which acquires
beneficial ownership of voting securities of the Company) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either the then outstanding
shares of common stock of the Company or the Combined Voting Power of
the Company's then outstanding voting securities. "Combined Voting
Power" means the combined voting power of the Company's then
outstanding voting securities generally entitled to vote in the
election of directors; or
(ii) Upon the approval by the shareholders of the Company of a
reorganization, merger, consolidation (in each case, with respect to
which persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the Combined Voting Power
of the reorganized, merged or consolidated company's then outstanding
voting securities).
(c) WITHHOLDING. Salary, bonus, payments made pursuant to this
Section 8 and any other items of income shall be
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subject to withholding as required by Federal, State, and local laws.
(d) SUCCESSOR TO COMPANY. The Company shall require any successor
pursuant to a Change of Control, expressly and unconditionally to assume
and agree to perform the Company's obligations under this Agreement, in the
same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. In such event, the term
"Company," as used in this Agreement, shall mean the Company as hereinafter
defined and any successor pursuant to a Change of Control, which by reason
hereof becomes bound by the terms and provisions of this Agreement.
(e) It is specifically understood and agreed that payments in
accordance with this Section 8 shall be totally independent of any other
payments or benefits in this Agreement; that such payments shall be made
whether or not Employee continues in the employment of the Company once the
obligation arises; and that any such payments will not be considered or
calculated in determining any bonus or benefits which the Employee may
otherwise be entitled.
9. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or
upon deposit in the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the other party at the address shown
above, or at such other address or addresses as either party shall designate
to the other in accordance with this Section 9.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
11. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by the Company and the Employee.
12. NO ASSIGNMENT. This Agreement is not assignable by the Employee.
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13. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Ohio.
14. SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
THE G & C FOUNDRY COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President-Sales
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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