EXHIBIT D
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
WITH XXXXXX X. XXXXX
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"), made and
entered into as of the 3rd day of June, 1996, by and between AMERICAN UNITED
GLOBAL, INC., a Delaware corporation (the "Company"), having its principal
office at 00 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxx Xxxx 00000; and XXXXXX X. XXXXX,
an individual (the "Employee"), residing at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxx
Xxxxx, Xxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Employee has been elected by the Board of Directors to serve as
the Chairman of the Board of the Company and its subsidiaries, including,
without limitation, Western Power & Equipment Corp. ("Western"), a Delaware
corporation, AEI California, Inc. ("AEI"), a California corporation, AUG
California, Inc. ("AUG"), a California corporation, and the subsidiaries of AUG,
namely, American United Products, Inc. ("AUP"), a California corporation, as
well as the subsidiary of Western Power & Equipment Corp., an Oregon corporation
("WPE"), and American United Seal, Inc. ("AUS"), a California corporation; the
Company, Western, AEI, AUG, AUP, AUS all presently existing and hereinafter
created or acquired direct or indirect consolidated subsidiaries of the Company
are hereinafter collectively referred to as the "Corporations"; and
WHEREAS, insofar as the Company is engaged in a program of making
acquisitions of operating entities with the proceeds of the sale of its former
manufacturing business, and the Company desires to retain the services of the
Employee to serve as the Chairman of the Board of the Corporations during this
important transitional period for a period extending beyond the July 31, 1997
termination date of his current Employment Agreement; and
WHEREAS, the Employee is willing to serve as the Chairman of the Board of
the Corporations, all upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises, and the mutual covenants
herein contained, the parties hereby agree as follows:
PART A. EMPLOYMENT.
1. Throughout the term of this Agreement, the Company shall employ the
Employee and the Employee shall render services to the Corporations in the
capacity and with the title of Chairman of the Board of the Corporations. In
such capacity, the Employee, subject at all times to the direction of the Board
of Directors of the Company, shall be the Chief Executive Officer of the Company
and shall have the primary responsibility for the management and establishment
of general policies of and planning for the Company (including, without
limitation, financings, acquisitions and new product development), with such
general powers and duties in respect of the other Corporations as are usually
vested in the Chairman of the Board of a corporation.
2. Throughout the period of his employment hereunder, the Employee shall
devote such portion of his business time, attention, knowledge and skills as
shall be reasonably required to faithfully, diligently and to the best of his
abilities perform his duties hereunder; PROVIDED, that it is understood that the
Employee will continue to devote a substantial amount of his business time,
attention, knowledge and skills to other business activities, unrelated to the
activities of the Corporations.
3. Throughout the period of his employment hereunder, the Employee shall
have the right (but not the obligation), if elected by the requisite majority of
the stockholders of the relevant Corporation(s), to
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serve, without any further or additional compensation or remuneration (other
than as set forth herein), as a member of the Board of Directors of any or all
of the Corporations.
PART B. TERM OF EMPLOYMENT; TERMINATION OF AGREEMENT.
1. Subject to the earlier termination of this Agreement in accordance with
the provisions hereof, the term of this Agreement shall commence, effective as
of August 1, 1996 (the "Effective Date") and shall continue through and
including July 31, 2001 (the "Termination Date"). Notwithstanding the foregoing,
as of the Effective Date of this Agreement, the fiscal year end of the Company
is July 31st. In the event that the fiscal year of the Company (or any parent of
the Company, the results of operations of which are consolidated for financial
reporting purposes with the Company and its consolidated subsidiaries) shall end
on any date OTHER than July 31st (hereinafter, referred to as a "Fiscal Year"),
the Termination Date of this Agreement shall be ninety (90) days after the end
of the Fiscal Year ending in 2001.
2. Anything contained in Section 1 of this PART B to the contrary
notwithstanding, this Agreement may be terminated at the option of the Board of
Directors of the Company for "Cause" (as herein defined), effective upon the
giving of written notice of termination to the Employee. As herein used, the
term for "Cause" shall mean and be limited to:
(a) any act committed by the Employee against the Company, its parent or
subsidiaries or divisions constituting: (A) fraud, (B) non-disclosed
self-dealing, (C) embezzlement of funds, (D) felony conviction for conduct
involving moral turpitude or felony conviction for other criminal conduct
concerning activities involving the Company, its parents, subsidiaries or
divisions, or (E) the continued disregard by the Employee of the reasonable
directions of the Board of Directors of the Company or any of the other
Corporations; or
(b) the breach or default by the Employee in the performance of any material
provision of this Agreement; or
(c) chronic alcoholism or any other form of addiction which impairs the
Employee's ability to perform his duties hereunder.
3. Anything contained in Section 1 of this PART B to the contrary
notwithstanding, this Agreement may be terminated by the Company: (i) upon the
death of the Employee, or, (ii) on thirty (30) days' prior written notice to the
Employee, in the event that the Employee shall be physically or mentally
disabled or impaired so as to prevent him from continuing the normal and proper
performance of his duties and responsibilities hereunder for a period of six (6)
consecutive months. The initial determination as to whether the Employee is
disabled or impaired shall be made by the physician regularly treating the
condition causing the disability. The Company shall have the right to require
the Employee to be examined by a physician duly licensed to practice medicine in
the state in which the Employee has his primary residence to determine such
physician's opinion as to the Employee's disability. If such physician's opinion
differs from that of the physician treating the Employee, or a physician
thereafter retained by the Employee, they shall forthwith select a third
physician so licensed whose opinion, after examination and review of available
information, shall be conclusive and binding upon all parties hereto. All costs
of the physician regularly treating or thereafter retained by the Employee shall
be paid by the Employee. All costs of the physician retained by the Company
shall be paid by the Company. If a third physician is required, then the costs
of that physician shall be paid by the Company.
4. Upon any termination of this Agreement by the Company for Cause pursuant
to Section 2 of this PART B above, neither the Company nor any parent,
subsidiary or division thereof shall be liable for or shall pay or cause to be
paid to the Employee any further remuneration, compensation or other benefits
hereunder.
5. If the Company terminates Employee for any reason, OTHER than: (a) for
"Cause", as provided in PART B, Section 2, or (b) as a result of the Employee's
voluntary resignation of his employment with the
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Company (not constituting a constructive discharge), the Company shall be
obligated to pay or shall cause to be paid to Employee the "Base Salary" (as
hereinafter defined) and the Incentive Compensation (as hereinafter defined) in
respect of each Fiscal Year in question for the remaining employment term
specified in Section 1 of this PART B, as, if and when the same would have
otherwise become due and payable hereunder, but for such termination of
employment of the Employee. In the event of the Employee's death or disability
as provided in PART B, Section 3, the Company shall be not obligated to pay or
shall cause to be paid to Employee the "Base Salary" (as hereinafter defined) or
the Incentive Compensation (as hereinafter defined) in respect of any Fiscal
Year, or portion thereof, remaining in the employment term specified in Section
1 of this PART B.
PART C. COMPENSATION; EXPENSES; FRINGE BENEFITS.
1. BASE SALARY. As compensation for his services rendered and to be rendered
hereunder, the Company shall pay or cause the Corporations to pay to the
Employee throughout the term of this Agreement, a salary (the "Base Salary"), to
be payable in monthly installments, as follows: (i) from August 1, 1996 through
July 31, 1997, at the rate of One Hundred Seventy-Five Thousand Dollars
($175,000.00) per annum; to be payable monthly at the rate of Fourteen Thousand
Five Hundred Eighty-Three and 33/100 Dollars ($14,583.33) per month; (ii) from
August 1, 1997 through July 31, 1998, Two Hundred Thousand Dollars ($200,000.00)
per annum to be payable monthly at the rate of Sixteen Thousand Six Hundred
Sixty-Six and 66/100 Dollars ($16,666.66) per month; (iii) from August 1, 1998
through July 31, 1999, Two Hundred Twenty-Five Thousand Dollars ($225,000.00)
per annum, to be payable monthly at the rate of Eighteen Thousand Seven Hundred
Fifty Dollars ($18,750.00) per month; and (iv) for each of the fiscal years
ended July 31, 2000 and July 31, 2001, the Employee's Base Salary shall be as
determined by the Compensation Committee of the Company's Board of Directors AND
ratified by a majority of the entire Board of Directors of the Company (other
than the Employee); PROVIDED, that the Employee's Base Salary in each of these
two fiscal years shall be NOT LESS than: (y) the annual Base Salary in effect in
the immediately preceding Fiscal Year; PLUS (z) an amount equal to the increase
in the annual cost of living as published by the Bureau of Labor Statistics of
the United States Department of Labor for wage earners in the New York
metropolitan area measured over the course of the immediately preceding fiscal
year. The Corporations are hereby authorized to make all necessary payroll
deductions, including FICA, from such amount, as are customarily made with
respect to the salaries of other senior executive officers of the Company. Any
Base Salary accrued from the Effective Date of this Agreement shall be paid by
the Corporations to the Employee on or before December 31, 1994.
2. INCENTIVE COMPENSATION.
(a) As compensation for his services rendered and to be rendered hereunder,
the Company shall pay or cause the Corporations to pay to the Employee for the
period commencing as of the Effective Date and ending on July 31, 1999,
compensation (the "Incentive Compensation") based on the audited consolidated
pre-tax net income of the Corporations and any other direct or indirectly owned
companies or entities which are subsidiaries of the Company on or after the date
hereof and whose financial statements are consolidated with those of the Company
for financial reporting purposes under generally accepted accounting principles
("GAAP"), excluding Western and WPE (the "Incentive Group"), as determined by
the independent auditors of the Company in accordance with consistently applied
GAAP by such auditors (the "Incentive Group's Net Income"), as follows: (i) the
Company shall pay or cause the Corporations to pay to the Employee no later than
November 1, 1997, Seventy-Five Thousand Dollars ($75,000) if the Incentive
Group's Net Income for the fiscal year ending July 31, 1997 is greater than or
equal to Two Million Dollars ($2,000,000); (ii) the Company shall pay or cause
the Corporations to pay to the Employee no later than November 1, 1998, One
Hundred Thousand Dollars ($100,000) if the Incentive Group's Net Income for the
fiscal year ending July 31, 1998 is greater than or equal to Two Million Five
Hundred Thousand Dollars ($2,500,000); (iii) the Company shall pay or cause the
Corporations to pay to the Employee no later than November 1, 1999 One Hundred
Twenty-Five Thousand Dollars ($125,000) if the
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Incentive Group's Net Income for the fiscal year ending July 31, 1999 is greater
than or equal to Three Million Dollars ($3,000,000). For each of the fiscal
years ending on July 31, 2000 and July 31, 2001, the Incentive Compensation, if
any, and the formula to be used for calculating same, shall be as determined by
the Compensation Committee of the Company's Board of Directors AND ratified by a
majority of the entire Board of Directors of the Company (other than the
Employee).
3. EXPENSES. In addition to the remuneration set forth above, throughout the
period of the Employee's employment hereunder, the Company shall also reimburse,
or cause to be reimbursed to the Employee, upon presentment by the Employee to
the Company, as applicable, of appropriate receipts and vouchers therefor, for
any reasonable business expenses, including air and other travel expenses,
incurred by the Employee in connection with the performance of his duties and
responsibilities hereunder.
4. FRINGE BENEFITS. The Company shall also make available, or cause to be
made available, to the Employee, throughout the period of his employment
hereunder, such benefits, including a monthly car allowance of $500.00, any
disability, hospitalization, medical benefit plan, pension plan or other
benefits or policy, as are put into effect by the Corporations for their other
executive employees; PROVIDED, that notwithstanding any other insurance policies
purchased for the benefit of Employee pursuant to this Section 4 of this PART C,
the Company shall purchase for the benefit of Employee life insurance policy in
the amount of $250,000, which benefits shall be payable to the beneficiary of
the Employee upon the death of the Employee.
PART D. CONFIDENTIALITY; NON-COMPETITION. As a material inducement to cause the
Company to enter into this Employment Agreement, the Employee hereby covenants
and agrees, as follows:
1. CONFIDENTIAL INFORMATION; PERSONAL RELATIONSHIPS. The Employee agrees
that for so long as he is employed by the Company (the "Restricted Period"), he
shall keep secret and retain in strictest confidence all confidential matters of
the Corporations, and the "know-how", trade secrets, confidential client lists,
details of client, subcontractor or consultant contracts, pricing policies,
operational methods, marketing plans or strategies, project development,
acquisition or bidding techniques or plans, business acquisition plans, new
personnel acquisition plans, technical processes, inventions and research
projects of the Corporations learned by the Employee heretofore and hereafter,
unless (i) such information is generally available to the public without
restriction, (ii) Employee obtains confidentiality agreements with respect to
such confidential information, (iii) Employee is requested by the Board of
Directors of the Company or a Committee thereof to disclose such confidential
information, (iv) such information is provided to a customer of the Corporations
pursuant to a request received from such customer in the ordinary course of
business, or (v) Employee is under compulsion of either a court order or a
governmental agency's or authority's inquiry, order or request to so disclose
such information.
2. PROPERTY OF THE CORPORATIONS.
(a) Except as otherwise provided herein, all lists, records and other
non-personal documents or papers (and all copies thereof), including such items
stored in computer memories, on microfiche or by any other means, made or
compiled by or on behalf of the Employee, or made available to the Employee
relating to the Corporations are and shall be the property of the Corporations,
shall be delivered to the Company, on the date of termination of this Agreement.
(b) All inventions, including any procedures, formulas, methods, processes,
uses, apparatuses, patterns, designs, drawings, devises or configurations of any
kind, any and all improvements to them which are developed, discovered, made, or
produced, trade secrets, or information used by any or all of the Corporations
shall be the exclusive property of the Corporations, and shall be delivered to
the Company as applicable, on the earlier of the expiration or the termination
of this Agreement.
3. EMPLOYEES OF THE CORPORATIONS. If the Company terminates Employee for any
reason: (i) provided in PART B, Section 2, (ii) provided in PART B, Section 3,
or (iii) as a result of the Employee's voluntary
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resignation of employment (not constituting a constructive discharge), the
Employee shall not, directly or indirectly, until the LATER to occur of: (A) the
course of his employment with the Corporations or (B) July 31, 1999, solicit any
employee of the Corporations other than Employee's personal secretary or
encourage any such employee to leave such employment without the prior written
approval of the Company as applicable.
4. NON-COMPETITION. For a period equal to the LATEST to occur of:
(a) such period as the Employee is employed by any of the Corporations
(whether under this Agreement or otherwise);
(b) one (1) year following the date of termination of the Agreement as a
result of the Employee's voluntary resignation of employment (not constituting a
constructive discharge), but under no circumstances later than ninety (90) days
after the end of the Fiscal Year of the Company and/or its Parent ending in
1999; or (c) one (1) year following the termination of this Agreement if the
Company terminates Employee for any reason provided in: (i) PART B, Section 2,
or (ii) PART B, Section 3 above; or
(d) such period with respect to which the Employee shall receive an amount
equal to Incentive Compensation under insurance policies purchased pursuant to
PART C, Section 4 above; or (e) such period as the Employee shall receive Base
Salary and Incentive Compensation from the Company or its assigns pursuant to
PART B, Section 6 above, the Employee shall not, directly or indirectly, whether
individually or as an employee, stockholder, partner, joint venturer, agent or
other representative of any other person firm or corporation, engage in any
business which is competitive with the businesses of the Corporations. As used
herein, the term "business which is competitive with the businesses of the
Corporations" shall only mean any person, firm or corporation located in the
Continental United States, ten (10%) or more of the net revenues of which are
derived from the manufacture, sale or distribution of seals and o-rings for
industrial, defense or commercial applications.
5. SEVERABILITY OF COVENANTS. The Employee acknowledges and agrees that the
provisions of this Article D (including Section 4 above) are reasonable and
valid in all respects. If any tribunal having jurisdiction determines that any
of the provisions of this Section 5 of this PART D or any part thereof, is
invalid or unenforceable because of the duration or geographic scope of such
provision, such tribunal shall have the power to reduce the duration or
geographic scope of such provision and in its reduced form, such provision shall
then be enforceable.
PART E. BINDING EFFECT.
All of the terms and conditions of this Agreement shall be binding upon and
inure to the benefit of the Employee and the Company and any
successor-in-interest to any of them.
PART F. NOTICES.
Except as herein provided, any notice, request, demand or other
communication required or permitted under this Agreement shall be in writing and
shall be deemed to have been given when delivered personally or when mailed by
certified mail, return receipt requested, addressed to a party at the address of
such party first set forth above, or at such other address as such party may
hereafter have designated by notice.
If to the Company at the address first above written with copies to:
Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
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or to any other address as shall be designated from time to time by the Company.
If to Employee at the address first above written, with copies to any attorney
designated by the Employee.
PART G. MISCELLANEOUS.
1. Neither this Agreement nor any of the terms or conditions hereof may be
waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith.
2. The captions and paragraph headings used in this Agreement are for
convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
3. This Agreement, and all matters or disputes relating to the validity,
construction, performance or enforcement hereof, shall be governed and construed
under the laws of the State of New York.
4. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original hereof, but all of which together shall
constitute one and the same instrument.
5. Any dispute involving the interpretation or application of this Agreement
shall be resolved by final
and binding arbitration before one or more arbitrators designated by the
American Arbitration Association in New York, New York, unless mutually agreed
to otherwise. The award of such arbitrator(s) may be enforced in any court of
competent jurisdiction in the State of New York.
6. This Agreement is intended for the sole and exclusive benefit of the
parties hereto and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns, and no other person or entity
shall have any right to rely on this Agreement or to claim or derive any benefit
herefrom absent the express written consent of the party to be charged with such
reliance or benefit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the date first set forth above, to be effective as of August 1, 1996.
ATTEST: AMERICAN UNITED GLOBAL, INC.
By: /s/ C. Xxxx XxXxxx
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C. Xxxx XxXxxx
EXECUTIVE VICE PRESIDENT
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, CHIEF EXECUTIVE OFFICER
COMPENSATION COMMITTEE
Xxxxxx X. Xxxxx Xxxxxxxx X. Xxxxxx C. Xxxx XxXxxx
CHAIRMAN & DIRECTOR DIRECTOR DIRECTOR
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxxx X. Xxxxxx /s/ C. Xxxx XxXxxx
----------------------------- ----------------------------- -----------------------------
Signature Date Signature Date Signature Date
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