EXHIBIT 10-D
EMPLOYMENT AGREEMENT
THIS AGREEMENT is dated August 10, 1995 ("Agreement"), by and
between GUARDSMAN PRODUCTS, INC., a Michigan corporation, of 0000 Xxxxxxx
Xxxxx Xxxxx, X.X., Xxxxx 000, Post Office Xxx 0000, Xxxxx Xxxxxx, Xxxxxxxx
00000 ("Guardsman"), and XXXXXXXX X. XXXXXX of 000 Xxxxxxxx, Xxxx Xxxxx,
Xxxxx Xxxxxxxx 00000 ("Executive"), and the parties agree as follows:
R E C I T A L S :
A. Executive is currently employed with Guardsman pursuant to an
Employment Agreement between Guardsman and Executive dated May 14, 1992.
B. The parties desire to modify the above-referenced Employment
Agreement in order to specifically provide for and accommodate Executive's
plans for retirement.
C. The parties intend this Employment Agreement to entirely
supersede and replace any previous Employment Agreement.
AGREEMENT
THEREFORE, for and in consideration of the terms and conditions
herein, the parties agree as follows:
1. EMPLOYMENT. The parties agree that Guardsman shall continue to
employ Executive, and Executive shall continue employment with Guardsman,
upon the terms and conditions set forth in this Agreement. The Employment
Agreement dated May 14, 1992, is hereby terminated, and the parties intend
that it shall be entirely replaced and superseded by this Agreement.
2. TERM OF AGREEMENT. The term of this Agreement shall continue
through December 31, 1997, and shall thereupon terminate unless earlier
terminated as provided herein.
3. COMPENSATION. During Executive's employment with Guardsman, he
shall be paid an annual salary, annual bonuses, and other fringe benefits,
as determined from time to time by the Board of Directors of Guardsman
("Board"), subject to the following:
A. SALARY. Executive shall continue to be paid his
current salary of One Hundred Fifty Thousand Dollars ($150,000)
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through December 31, 1995. Thereafter, he shall receive an
annual salary of One Hundred Thousand Dollars ($100,000). Salary
shall be paid monthly.
B. BONUS. Executive will not participate in any new
Performance Award Plan beginning after December 31, 1995.
Executive will, however, continue as a participant in the
existing Performance Award Plans in accordance with the terms and
conditions of those plans. These plans are three (3) year
rolling plans, based on profitability objectives for three (3)
years. There are three (3) existing plans, ending at the end of
calendar years 1995, 1996, and 1997, respectively. Executive
shall be entitled to receive payment under the terms of these
plans, it being understood that the payment of the last plan, if
any, will be made in 1998.
Executive shall also participate in the Annual Bonus
Plan for 1995. No other bonuses shall be paid unless authorized
by the Board.
C. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Executive
shall remain in the Guardsman Supplemental Executive Retirement
Plan ("SERP") (dated January 1, 1990) for the term of this
Agreement. For purposes of eligibility for benefit and payment
of benefit under the SERP, Executive shall be deemed to have
completed fifteen (15) years (180 months) as an officer,
divisional officer, or other key employee as of December 31,
1997. Termination prior to December 31, 1997, would result in
the appropriate reduction in the amount of benefit as described
in the SERP.
D. INSURANCE. Guardsman will continue to provide health
insurance for Executive and his dependents under such group or
other health plans as obtained by Guardsman, comparable to such
insurance as is provided to Guardsman employees holding positions
comparable to that of Executive. This insurance will be
maintained up to Executive's sixty-fifth (65th) birthday (even if
Executive retires from the company prior to that time) so long as
Executive is not in breach of this Agreement. Executive shall
pay the contribution for such insurance as is required by
employees at the level of responsibility Executive is then
working or, if retired, was working at the time of retirement.
E. BUSINESS EXPENSES. Executive will be reimbursed for
his normal ongoing business expenses, including any club dues and
fees that are currently being reimbursed by Guardsman, in the
same manner as other key executives of Guardsman holding
positions comparable to that of Executive, for the term of this
Agreement.
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F. STOCK OPTIONS. Executive's existing stock options will
remain in effect for the term of this Agreement according to the
terms of said options. Any new grants of stock options during
the term of this Agreement will be given at a level commensurate
with other such grants to persons at the level of responsibility
at Guardsman which Executive is then working, as determined by
the Board in its sole discretion.
G. VACATION. Executive shall be entitled to vacation time
consistent with the vacation policy of Guardsman as in effect
from time to time.
H. OTHER. Any other compensation or benefits shall be at
the sole discretion of the Board.
4. DUTIES. Executive will be available on an "as needed" basis to
assist Guardsman in the transition of new personnel to his present
position, in anticipation of Executive's retirement, and will further be
available as an advisor to the sales force and the customer base of the
wood-coatings group of Guardsman. This Agreement anticipates that
Executive may be reducing his actual work hours, but Executive shall spend
at least fifty percent (50%) of the time previously devoted to business in
the business and affairs of Guardsman. Executive agrees that he will not
be employed by anyone other than Guardsman for the term of this Agreement.
Executive shall be reasonably available to Guardsman's North
Carolina facility. So long as Executive is reasonably available to the
North Carolina facility, Executive shall not be required to relocate or
spend any substantial amount of time outside of the North Carolina area,
except for travel not substantially in excess of Executive's present
business travel obligations.
5. LOYALTY AND CONFIDENTIALITY. Executive agrees that during his
employment with Guardsman he will not, without the prior approval of the
Board, either for himself or on behalf of any other person, firm, or
corporation, directly or indirectly divert or attempt to divert from
Guardsman any business opportunity or business whatsoever, or attempt to
negatively influence any Guardsman customers or potential Guardsman
customers with whom Executive may have dealings. Executive shall be loyal
to Guardsman during his employment and shall forever hold in strictest
confidence and shall not use or disclose any information, technique,
process, development, or experimental work, trade secret, customer lists,
or other secret and confidential matter relating to the products, services,
sales, employees, or business of Guardsman, except as such disclosure or
use may be required in connection with Executive's work for Guardsman.
Upon termination of his employment with Guardsman, Executive shall deliver
to Guardsman any and all materials relating to Guardsman's business
including, without limitation, all customer lists, keys, financial
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information, business notes, business plans, credit cards, memoranda,
specifications, and documents. Executive shall not retain any photocopies
or other facsimiles of such materials.
6. TERMINATION. Executive's employment and this Agreement may be
terminated prior to the end of the term hereof (Paragraph 2) as follows:
A. DEATH. If Executive, while in the employ of Guardsman,
shall die prior to the expiration of this term of employment,
this Agreement shall terminate upon Executive's death which, for
purposes of this Agreement, shall be deemed to have occurred on
the last day of the month in which his death occurs. Guardsman
shall continue to pay salary at the rate set forth in Paragraph
3, above, for a period of three (3) months following the date of
death, but not beyond the term of this Agreement.
If Executive should die while any amount would still be
payable to him hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of
this Agreement to the beneficiary designated by Executive in a
writing delivered to Guardsman or, if there be no such designated
beneficiary, to his estate.
B. DISABILITY. If Executive shall be unable to
substantially perform the duties described in Paragraph 4 above
for a period of nine (9) successive months by reason of illness
or other similar incapacity or disability, this Agreement may be
terminated as of the end of any calendar month following such
nine (9) months by Guardsman, based upon a determination that
Executive is disabled and by notice in writing to that effect to
Executive. Executive can terminate this Agreement in the same
circumstances by presenting his resignation in writing to
Guardsman. Any determination as to whether Executive is disabled
shall be made by a licensed physician selected by agreement of
Guardsman and Executive or, if they cannot agree upon a
physician, then by a majority of a panel of three (3) licensed
physicians, one selected by Guardsman, one selected by Executive,
and the third selected by the first two. If this Agreement is
terminated by Guardsman pursuant to this Subparagraph 6(B), the
compensation provided in Paragraph 3 of this Agreement shall
continue for such period as the Board shall in its sole
discretion deems appropriate but not beyond the term of this
Agreement. If this Agreement is terminated by Executive pursuant
to this Subparagraph 6(B), the compensation provided in Paragraph
3 of this Agreement shall continue for such period as the Board
deems appropriate, but not less than the period provided in
Guardsman's employee disability policy in effect at the time of
the termination.
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C. TERMINATION FOR CAUSE. Guardsman shall have the right
to terminate Executive's employment for "Cause." For purposes of
this Agreement, "Cause" shall be limited to:
(i) the willful and continued failure by Executive to
substantially perform assigned duties consistent with
Paragraph 4 above (other than any failure resulting from an
illness or other similar incapacity or disability), after a
demand for substantial performance is delivered to Executive
on behalf of the Board which specifically identifies the
manner in which it is alleged that Executive has not
substantially performed his duties; or
(ii) the willful engaging by Executive in misconduct
which is materially injurious to Guardsman, monetarily or
otherwise.
For purposes of this Subparagraph C, no act or failure to act on
Executive's part shall be considered "willful" unless done, or
omitted to be done, by Executive not in good faith and without
reasonable belief that his action or omission was in the best
interests of Guardsman. Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and
until: there shall have been delivered to him a copy of a notice
of termination on behalf of the Board; and after reasonable
notice to him and an opportunity for him, together with his
counsel (at his own expense), to be heard before the Board, at
least two-thirds of the Board finds, in their reasonable
opinions, that Executive was guilty of conduct set forth above in
Clause (i) or (ii) and specifying the particulars thereof in
detail.
D. TERMINATION BY EXECUTIVE. Executive shall have the
right to terminate his employment with Guardsman by providing
written notice of the termination to Guardsman, if Guardsman
shall materially breach its obligations under this Agreement.
E. TERMINATION BY NOTICE. Guardsman and Executive shall
each have the right to terminate their employment relationship
for reasons other than those provided in this Paragraph 6 by
giving thirty (30) days' written notice to the other party
specifying the date of termination.
F. RETIREMENT. Executive shall have the option to retire
on his sixty-second (62nd) birthday and terminate this Agreement.
Upon such termination, salary payments shall cease, but Executive
shall continue to participate in the bonus [Paragraph 3(B)
herein] and shall continue to receive health insurance [Paragraph
3(D) herein] and all other benefits provided under this Agreement
pursuant to the terms of this Agreement.
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7. SEVERANCE PAY.
A. If Executive's employment shall be terminated by
Guardsman by the provision of thirty (30) days' written notice
pursuant to Subparagraph 6(E) of this Agreement, or if
Executive's employment is terminated by Executive under
Subparagraph 6(D) of this Agreement, Executive shall be entitled
to receive severance pay for the remainder of the period of
employment provided in this Agreement in the amount and upon the
terms of the compensation under Paragraph 3 herein, which would
have been paid if the employment had not been terminated, so long
as Executive is not in competition with Guardsman as defined in
Paragraph 8.
B. MITIGATION OF SEVERANCE PAY. Executive shall not be
required to mitigate the amount of any payments of severance
benefits provided in this Paragraph 7 by seeking other employment
or otherwise, nor shall the amount of any payment provided in
this Paragraph 7 be reduced by any compensation earned by
Executive as a result of his employment with another employer
after termination, or otherwise.
8. COVENANT NOT TO COMPETE. Recognizing that his skill, experience,
and knowledge are unique and are a material inducement to Guardsman to
enter into this Agreement, Executive agrees that during his employment
pursuant to this Agreement, Executive will not participate directly or
indirectly, in the ownership, management, financing, operation, or control
of any business which is the same as or similar to the present or future
businesses of Guardsman or its subsidiaries. Executive shall also not
provide consulting services or serve as an employee, officer, or director
for any such business during his employment pursuant to this Agreement.
Executive is not prohibited by this paragraph, however, from owning an
insignificant amount of stock of any corporation whose shares are publicly
traded on any national or regional stock exchange or over the counter, so
long as that ownership is in no case more than five percent (5%) of the
outstanding shares of the corporation.
9. EXECUTIVE LIABILITY INSURANCE COVERAGE AND INDEMNIFICATION.
Nothing in this Agreement shall deprive Executive, both during and
subsequent to the termination of his employment pursuant to this Agreement,
of the benefits of Guardsman's existing or hereafter obtained executive
liability insurance coverage, subject to the terms and conditions of such
coverage, nor of any right to indemnification under Guardsman's Restated
Certificate of Incorporation and Bylaws or under any indemnification
agreement between Guardsman and Executive, subject to the limitations on
indemnification set forth therein.
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10. SUCCESSORS. This Agreement shall be binding on and shall inure
to the benefit of the successors, heirs, representatives, and assigns of
the parties. Nothing in this Agreement, however, shall be construed to
allow Executive to assign this Agreement.
11. NOTICE. Notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed to Executive at the
address set forth on the first page of this Agreement, or to Guardsman at
its principal executive offices to the attention of the President of
Guardsman with a copy to the Secretary of Guardsman, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
12. MODIFICATION OR WAIVER. No provisions of this Agreement may be
amended, modified, waived, or discharged except by writing signed by the
parties. No waiver by either party of any breach by the other party of any
condition or provision of this Agreement shall be deemed a waiver of
similar or dissimilar provisions. Failure to insist upon strict compliance
with any of the terms, covenants, or conditions of this Agreement shall not
be deemed a waiver of such term, covenant, or condition, nor shall any
waiver or relinquishment of any right or power hereunder at any one or more
times be deemed waiver or relinquishment of such right or power at any
other time.
13. GOVERNING LAW. This Agreement was entered into in the State of
Michigan and shall be construed and interpreted in accordance with the laws
of the State of Michigan.
14. CONSTRUCTION. Each party has read and understands this
Agreement, and has had the opportunity to receive independent legal advice
from its attorneys with respect to the advisability of entering into this
Agreement. Any ambiguity in this Agreement shall not be construed against
the drafter, but rather the terms hereof shall be given a reasonable
interpretation as if each party had in fact drafted the Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
16. ENTIRE AGREEMENT. This Agreement constitutes an integration of
the entire agreement of the parties, and supersedes and replaces any prior
agreement, written or oral. Any representation, warranty, promise, or
condition, whether written or oral, not specifically incorporated herein
shall not be binding upon the parties.
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IN WITNESS WHEREOF, Guardsman has caused this Agreement to be
executed by a duly authorized corporate officer and Executive has executed
this Agreement as of the date and year first above written.
GUARDSMAN PRODUCTS, INC.
By /S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
President and CEO
/S/ XXXXXXXX X. XXXXXX
Xxxxxxxx X. Xxxxxx - Executive
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