1
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as of
May 1, 1996 by and between O. I. Corporation, an Oklahoma corporation
("Company"), and Xxxxxxx X. Xxxxx ("Employee").
WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.
2. Term of Employment. Subject to the provisions for earlier
termination provided in the Agreement, the term of this Agreement ("Term") shall
commence on the effective date of this Agreement as stated above and shall
terminate on December 31, 1998; provided, however, commencing on January 1, 1997
and on each January 1 thereafter, the Term shall automatically be extended one
additional year unless, not later than September 30 of the preceding year, the
Board of Directors of the Company ("Board") shall give written notice to
Employee that the Term shall cease to be so extended. In no event, however,
shall the Term extend beyond the end of the calendar month in which Employee's
65th birthday occurs.
3. Employee's Duties. During the Term, Employee shall serve as the
President and Chief Executive Officer of the Company, with such customary duties
and
2
responsibilities as may from time to time be assigned to him by the Board,
provided that such duties are at all times consistent with the duties of such
position.
Employee agrees to devote his full attention and time during normal
business hours to the business and affairs of the Company and, to the extent
necessary to discharge the duties and responsibilities assigned to Employee
hereunder, to use reasonable best efforts to perform faithfully and efficiently
such duties and responsibilities and shall not, either directly or indirectly,
enter into any business or employment with or for any person, firm, association
or corporation other than with the Company during the Term; provided however,
that Employee shall not be prohibited form making financial investments in any
other company or business or from serving on the board of directors of any other
company. Employee shall at all times observe and comply with all lawful
directions and instructions of the Board.
4. Base Compensation. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base Compensation")
of $123,250 per annum payable in accordance with the Company's customary payroll
practice for its executive officers. The amount of Base Compensation shall be
reviewed by the Board on an annual basis as of the close of each fiscal year of
the Company and may be increased as the Board may deem appropriate. Employee's
Base Compensation, as increased from time to time, may not thereafter be
decreased unless agreed to by Employee.
5. Additional Benefits. In addition to the Base Compensation provided
for in Section 4 herein, Employee shall be entitled to the following:
(a) Expenses. The Company shall, in accordance with any rules and
policies that it may establish from time to time for executive officers,
reimburse Employee for
-2-
3
business expenses reasonably incurred in the performance of his duties. It
is understood that Employee is authorized to incur reasonable business
expenses for promoting the business of the Company, including reasonable
expenditures for travel, lodging, meals and client or business associate
entertainment. Requests for reimbursement for such expense must be
accompanied by appropriate documentation.
(b) Life Insurance.
(i) The Company has purchased and will maintain, for the
duration of this Agreement, an insurance policy in the amount of
$750,000 on the life of Employee. Employee will own and benefit from
such insurance, and the Company will have no interest whatsoever in
such policy (unless otherwise mutually determined by Employee and the
Board).
(ii) The Company may, in its discretion, apply for and procure
as owner and for its own benefit, insurance on the life of Employee, in
such amounts and in such form or forms as the Company may choose.
Employee shall have no interest whatsoever in any such policy or
policies (unless otherwise determined by the Board), but he shall, at
the request of the Company, submit to such medical examinations, supply
such information and execute such documents as may be required by the
insurance company or companies to whom the Company has applied for such
insurance.
(c) Automobile Allowance. Employee shall be entitled to the use of an
automobile provided by the Company, or alternatively, at Employee's
discretion, to receive monthly an automobile allowance payable on the first
of each month during the
-3-
4
Term, which will fully reimburse Employee for the cost of leasing or
purchasing of an automobile for Employee's business use. The Company shall
apply for and procure for Employee's benefit, insurance on the automobile,
in such amounts and in such form or forms as the Company may choose. The
Company shall reimburse Employee for gasoline expenditures related to
business use, repairs and other maintenance expenses incurred, provided the
requests for reimbursement are accompanied by appropriate documentation.
(d) General Benefits. Employee shall be entitled to receive all fringe
benefits customarily offered by the Company to its executive officers,
including without limitation participation in any incentive plans offered to
key employees, the various employee benefit plans or programs provided to
the employees of the Company in general, subject to the eligibility
requirements with respect to each of such benefit plans or programs, and
such other benefits or perquisites as may be approved by the Board during
the Term of this Agreement. Nothing in this paragraph shall be deemed to
prohibit the Company from making any changes in any of the plans, programs
or benefits described in this Section 5, provided the change similarly
affects all executives of the Company similarly situated.
6. Confidential Information. During the Term, Employee will have access
to and become familiar with confidential information, secrets and proprietary
information concerning the business and affairs of the Company. As to such
confidential information, Employee agrees as follows:
-4-
5
(a) During the term and thereafter, Employee will not, either directly
or indirectly, disclose to any third party without the written permission of
the Company, nor use in any way, except as required in the course of his
employment with the Company or as required by law, any confidential
information, secret or proprietary information of the Company.
(b) Upon termination of Employee's employment, for whatever reason,
Employee shall surrender to the Company any documents, manuals,
correspondence, reports, records and similar items then or thereafter coming
into the possession of Employee which contain any confidential, secret or
proprietary information of the Company.
7. Termination. This Agreement may be terminated prior to end of its
Term as set forth below:
(a) Resignation (other than for Good Reason). Employee may resign,
including by reason of retirement, his position at any time. In the event of
such resignation, except in the case of resignation for Good Reason (as
defined below), this Agreement shall terminate and Employee shall not be
entitled to further compensation pursuant to this Agreement other than the
payment of any unpaid Base Compensation accrued hereunder at the date of
Employee's resignation.
(b) Death. If Employee's employment is terminated due to his death,
this Agreement shall terminate and the Company shall have no obligations to
Employee or his legal representatives with respect to this Agreement other
than the payment of any unpaid Base Compensation accrued hereunder at the
date of Employee's death.
-5-
6
(c) Discharge.
(i) The Company may terminate Employee's employment for any
reason deemed sufficient by the Company upon no less than 10 business
days advance notice given as provided in Section 9. However, in the
event that Employee's employment is terminated during the Term by the
Company for any reason other than his Misconduct or Disability (both as
defined below), then: (A) for the period of the Term then remaining
(the "Remaining Term") the Company shall (i) continue to pay Employee,
at the regular payroll periods, Employee's Base Compensation as in
effect immediately prior to the Notice of Termination, plus an amount
equal to the Company's maximum contribution it would have made on
behalf of Employee to the Company's qualified 401(k) plan assuming
Employee had continued his active participation in such plan at the
maximum participant contribution level permitted under such Plan, and
(ii) the Company, at its cost, shall provide or arrange to provide
Employee (and Employee's eligible dependents) with life, disability,
accident and group health insurance benefits substantially similar to
those which Employee (and Employee's dependents) were receiving
immediately prior to the Notice of Termination; however, the welfare
benefits otherwise receivable by Employee pursuant to this clause (ii)
shall be reduced to the extent comparable welfare benefits are actually
received by Employee (and/or Employee's dependents) during such period
under any other employer's welfare plan(s) or program(s), and any such
welfare benefits actually received shall be reported to the Company by
Employee; however, in no event
-6-
7
shall Employee's COBRA continuation period begin prior to the end of
the Remaining Term, and (B) if Employee is being provided a Company
automobile at the date of termination, the Company shall transfer title
of such automobile to Employee, free of any liens thereon.
(ii) Notwithstanding the foregoing provisions of this Section
7, in the event Employee is terminated because of Misconduct, the
Company shall have no obligations pursuant to this Agreement after the
Date of Termination. As used herein, "Misconduct" means (a) the willful
and continued failure by Employee to substantially perform his duties
with the Company (other than any such failure resulting from Employee's
incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination by
Employee for Good Reason), after a written demand for substantial
performance is delivered to Employee by the Board, which demand
specifically identifies the manner in which the Board believes that
Employee has not substantially performed his duties, or (b) the willful
engaging by Employee in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise (other than such
conduct resulting from Employee's incapacity due to physical or mental
illness or any such actual or anticipated conduct after the issuance of
a Notice of Termination by Employee for Good Reason), after a written
demand for substantial change in conduct is delivered to Employee by
the Board which demand specifically identifies the manner in which the
Board believes that employee has engaged in injurious conduct. For
purposes hereof, no act, or
-7-
8
failure to act, on Employee's part shall be deemed "willful" unless
done, or omitted to be done, by Employee not in good faith and without
reasonable belief that Employee's action or omission was in the best
interest of the Company. Notwithstanding the foregoing, Employee shall
not be deemed to have been terminated for Misconduct unless and until
there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable advance written notice to
Employee of not less than 10 business days and an opportunity for
Employee, together with Employee's counsel, to be heard before the
Board before the Board votes on such matter), finding that in the good
faith opinion of the Board Employees were guilty of conduct set forth
above and specifying the particulars thereof in detail.
(d) Disability. If Employee shall have been absent from the full-time
performance of Employee's duties with the Company for six consecutive months
as a result of Employee's incapacity due to physical or mental illness, as
determined by Employee's physician, and within 30 days after written Notice
of Termination is given by the Company Employees shall not have returned to
the full-time performance of Employee's duties, Employee's employment may be
terminated by the Company for "Disability" and Employee shall not be
entitled to further compensation pursuant to this Agreement.
-8-
9
(e) Resignation for Good Reason. Employee shall be entitled to
terminate his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason he shall be entitled to the
compensation and benefits provided in Paragraph 7(c)(i) hereof. "Good
Reason" shall mean the occurrence of any of the following circumstances
without Employee's express written consent unless such breach or
circumstances are fully corrected prior to the Date of Termination specified
in the Notice of Termination given in respect thereof:
(i) the assignment to Employee of any duties inconsistent
with, or a material adverse change in the functions, duties or
responsibilities of the office of President and Chief Executive Officer
of the Company;
(ii) the failure by the Company to pay to Employee any
portion of Employee's compensation within seven days of the date such
compensation is due;
(iii) on or following a Corporate Change, the failure by the
Company to continue in effect any compensation or employee benefit plan
in which Employee participates that is material to Employee's total
compensation unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue Employee's
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of Employee's participation relative to
other participants, as existed at such time;
-9-
10
(iv) the Company shall amend, modify or repeal any provision
of its Articles of Incorporation or Bylaws, if such amendment,
modification or repeal would materially adversely affect Employee's
rights to indemnification by the Company;
(v) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 11 hereof;
(vi) any purported termination of Employee's employment that
is not effected pursuant to a Notice of Termination satisfying the
requirements of this Agreement, which purported termination shall not
be effective for purposes of this Agreement;
(vii) the relocation of the Company's principle executive
offices from Xxxxx/College Station, Texas or requiring Employee to
office anywhere other than at such principal executive offices; or
(viii) the material breach of any of the Company's material
obligations under this Agreement.
Employee's right to terminate his employment pursuant to this
subsection shall not be affected by his incapacity due to physical or mental
illness. Employee's continued employment shall not constitute consent to, or
constitute a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder.
A "Corporate Change" shall occur if (i) the Company shall not be the
surviving entity in any merger or consolidation (or survives only as a
subsidiary of another entity), (ii) the
-10-
11
Company sells all or substantially all of its assets to any other person or
entity (other than a wholly-owned subsidiary), (iii) any person or entity
(including a "group" as contemplated by Section 13(d)(3) of the 0000 Xxx)
acquires or gains ownership or control of (including, without limitation, power
to vote) more than 30% of the outstanding shares of common stock of the Company,
(iv) the Company is to be dissolved and liquidated, or (v) as a result of or in
connection with a contested election the members of the Board as of the date of
this Agreement shall cease to constitute a majority of the Board.
(f) Notice of Termination. Any purported termination of Employee's
employment by the Company or by Employee shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section 9 hereof.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which, if by the Company and is for Misconduct or Disability, shall set forth in
reasonable detail the reason for such termination of Employee's employment, or
in the case of resignation by Employee for Good Reason, said notice must specify
in reasonable detail the basis for such resignation. A Notice of Termination
given by Employee pursuant to Section 7(e)(3) shall be effective even if given
after the receipt by Employee of notice that the Board has set a meeting to
consider terminating Employee for Misconduct. No purported termination which is
not effected pursuant to this Section 7(f) shall be effective.
(g) Date of Termination, Etc. "Date of Termination" shall mean the date
specified in the Notice of Termination. Either party may, within 15 days after
any Notice of Termination is given, provide notice to the other party pursuant
to Section 9 hereof that a dispute exists concerning the termination.
Notwithstanding the pendency of any such dispute,
-11-
12
the Company will continue to pay Employee his full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited to,
Base Compensation) and continue Employee as a participant in all compensation,
benefit and insurance plans in which he was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved, but in no
event past the expiration date of this Agreement.
(h) No Mitigation. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 7 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Agreement be reduced by
any compensation earned by Employee as a result of employment by another
employer, by offset against any amount claimed to be owing by Employee to the
Company, or otherwise, except that any severance amounts payable to Employee
pursuant to the Company's severance plan or policy for employees in general
shall reduce the amount otherwise payable pursuant to Section 7(c)(i).
7. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Employee's continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by the Company or any of its affiliated
companies and for which Employee may qualify, nor shall anything herein limit or
otherwise adversely affect such rights as Employee may have under any stock
option or other agreements with the Company or any of its affiliated companies.
8. Assignability. The obligations of Employee hereunder are personal and may not
be assigned or delegated by him or transferred in any manner whatsoever, nor are
such obligations subject to involuntary alienation, assignment or transfer. The
Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder,
-12-
13
either in whole or in part, to any parent, affiliate, successor or subsidiary
organization or company of the Company.
9. Notice. For the purpose of this Agreement, 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 mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company at Employee's residence address on
the records of the Company 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.
10. 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.
11. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated
his
-13-
14
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used herein, the term "Company" shall
include any successor to its business and/or assets as aforesaid which
executes and delivers the Agreement provided for in this Section 11 or which
otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.
(b) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would be
payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to Employee's devisee, legatee, or other designee or, if
there be no such designee, to Employee's estate
12. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Employee and such officer as may be specifically
authorized by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement is an integration of the parties
agreement; no agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. THE
-14-
15
VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Arbitration. Employee shall be permitted (but not required) to
elect that any dispute or controversy arising under or in connection with this
Agreement be settled by arbitration in Houston, Texas, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
15. Prior Agreement. This Agreement shall supersede and replace that
Employment Agreement between the Company and Employee dated as of May 17, 1988.
IN WITNESS WHEREOF, the parties have executed this Agreement on
_______________ 1996, effective for all purposes as provided above.
O. I. Corporation
By: /s/ J. Xxxxxx Xxxxx
--------------------------------------
Name: J. Xxxxxx Xxxxx
Title: Chairman of the Compensation Committee
EMPLOYEE
/s/ X. X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
-15-
