Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 8, 1999, between SYRATECH
CORPORATION, a Delaware corporation (the "Company"), and XXX X. XXXXXXX (the
"Executive").
The Executive has been acting as a Vice President, the
Treasurer and the Chief Financial Officer of the Company, since February 1, 1998
(the "Initial Employment Date"). The Board of Directors of the Company (the
"Board") has requested that the Executive enter into this Agreement so that the
Company may (i) be assured of the services of the Executive on a full-time basis
for a period of not less than three years from the Initial Employment Date, and
(ii) have the benefit of the Executive's services as an advisor, and the
Executive's covenant not to compete with the Company, for a period (determined
as hereinafter provided) following the Executive's term of full-time employment.
In consideration of the covenants and agreements herein
contained, the parties agree as follows:
1. EMPLOYMENT AND ACCEPTANCE; TERM.
1.1 The Company hereby employs the Executive, and the
Executive hereby accepts employment from the Company, for a term of service
(including a term of full-time employment and a term of advisory service)
determined in accordance with this Agreement.
1.2 The Executive's term of full-time employment
pursuant to this Agreement shall be deemed to have commenced on the Initial
Employment Date and,
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unless otherwise terminated pursuant to Section 4 of this Agreement, shall
continue until the later of (i) the third anniversary of the Initial Employment
Date, or (ii) the thirtieth (30th) day following receipt of a written notice of
termination, given either by the Company to the Executive or by the Executive to
the Company, which notice shall state that it is being given pursuant to Section
1.2 of this Agreement. The Executive's term of advisory service (the "Advisory
Period") shall begin on the day next following the last day of the Executive's
term of full-time employment in accordance with this Agreement (the "Full Time
Ending Date") and shall end on the earliest to occur of (a) the third
anniversary of the Full Time Ending Date, (b) that date which shall follow the
Full Time Ending Date by a number of days equal to the product obtained by
multiplying 183 by the number of full years ("year" being defined as a period of
365 calendar days) of the Executive's full-time employment elapsed between the
Initial Employment Date and the Full Time Ending Date, and (c) that date which
shall be the 183rd day following the giving of notice to the Executive by the
Company (which notice may be given at any time during the final 183 days of the
Executive's term of full-time employment or at any time thereafter) that it
elects to terminate the Executive's Advisory Period. The earliest to occur of
such dates is hereinafter called the "Advisory Period Termination Date."
2. DUTIES AND AUTHORITY.
2.1 DUTIES DURING TERM OF FULL-TIME EMPLOYMENT.
During the Executive's term of full-time employment the Executive shall devote
his full working time and energies to the business and affairs of the Company.
The Executive agrees during such term to use his best efforts, skill and
abilities to promote the Company's interests; to
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serve as a director and officer of the Company if elected by the
stockholders or Board; to serve as a director and officer of any corporation
which is a subsidiary of the Company if elected by the stockholders or board
of directors of such subsidiary corporation ; and to perform such duties
(consistent with his status as set forth below in this Section 2) as may be
assigned to him by the Board or by the Chief Executive Officer of the Company
(the "CEO") or his designee. During his term of full-time employment, the
Executive shall not, directly or indirectly, without the prior consent of the
members of the Board, acting unanimously, render any services to any other
person, or acquire any interests of any type in any other person, in conflict
with his full-time, exclusive position as Chief Financial Officer of the
Company; provided, however, that the foregoing shall not be deemed to
prohibit the Executive from (a) acquiring, solely as an investment and
through market purchases, securities of any entity which are registered under
Section 12 of the Securities Exchange Act of 1934 and which are publicly
traded so long as he is not part of any control group of such entity, (b)
acquiring, solely as an investment, any securities of, or interests in, any
other entity so long as he remains a passive investor in such entity and does
not become part of any control group thereof and so long as such entity has
no material business connection with the Company or any of its subsidiaries,
(c) serving as a director of any other entity that is not in competition with
the Company or any of its subsidiaries and which has no material business
connection with the Company or any of its subsidiaries including any
connection as supplier or customer; or (d) devoting such time and energy as
the Executive deems appropriate consistent with his duties hereunder to the
work of eleemosynary institutions of the Executive's choosing.
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2.2 AUTHORITY. Subject to the direction and control
of the Board, during the Executive's term of full-time employment the Executive
shall be a Vice President and the Chief Financial Officer of the Company and, as
such, shall have the power and authority now provided for in Sections 5.8 and
5.10 of Article 5 of the Bylaws of the Company. The Executive will perform his
services subject only to the direction and control of the Board and the CEO or
the CEO's designee and will report to the CEO or his designee and, if requested
to do so, to the Board.
2.3 DUTIES DURING ADVISORY PERIOD. During the
Executive's Advisory Period (as determined in accordance with Section 1.2), the
Executive will provide such advisory services concerning the business, affairs
and management of the Company as may be reasonably requested by the Board and
the CEO or his designee but shall not be required to devote more than the
equivalent of 40 full working days each year to such services, which shall be
performed at a time and place selected by the Company that is reasonably
convenient to the Executive. The Executive may, subject to the restrictions of
Sections 7 and 8, engage in other employment during the Advisory Period, and the
Company shall use its best efforts to require his advisory services under this
Agreement at times and places compatible with his other employment or with his
private activities. If requested by the Board and elected, the Executive shall
serve, without additional compensation, as a member of the Board and/or
Executive Committee and other committees of the Board during the Advisory
Period. During the Advisory Period the Company shall supply the Executive with
such secretarial and other services (including
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transportation and the use of office facilities) as shall be necessary to the
performance of his duties under this Section.
3. COMPENSATION.
3.1 BASE SALARY DURING TERM OF FULL-TIME EMPLOYMENT.
The Company shall pay or cause to be paid to the Executive during the term of
full-time employment a base salary of not less than Three Hundred Twenty-Five
Thousand Dollars ($325,000) per annum, payable in monthly or more frequent
installments in accordance with the Company's regular payroll practices for
senior executives. It is expressly contemplated that the Company may, in its
discretion but without any obligation, increase the Executive's base salary for
one or more specified and limited periods during the term of full-time
employment.
3.2 BASE SALARY DURING ADVISORY PERIOD. The Company
shall pay or cause to be paid to the Executive during the Advisory Period annual
compensation in an amount equal to 25% of the Executive's base salary. As used
in this Section 3.2, the term "base salary" shall mean the average annual base
salary paid by the Company to the Executive during the Executive's term of
full-time employment. Such compensation shall be paid in monthly or more
frequent installments in accordance with the Company's regular payroll practices
for senior executives. Amounts paid to the Executive pursuant to this Section
3.2 shall not diminish or otherwise adversely affect any retirement benefits to
which the Executive might otherwise be entitled.
3.3 OTHER BENEFITS.
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3.3.1 During the term of full-time
employment the Executive shall remain eligible to participate and shall be
entitled to participate in any pension, profit-sharing, bonus, stock award,
stock option or similar plan or program of the Company now existing or
established hereafter, to the extent that he is eligible under the general
provisions thereof. The retirement benefits accorded to certain key executives
pursuant to individual contracts shall not be deemed to be a pension plan for
purposes of this Section 3.3.1.
3.3.2 During the Executive's term of
full-time employment and during the Advisory Period, the Executive shall also
be entitled to participate on the same basis as other senior executives or
retired senior executives of the Company, as applicable, in any group
insurance, hospitalization, medical, health and accident, disability, or
similar plans and programs (collectively, "Insurance Plans") of the Company
now existing or hereafter established to the extent that he is eligible under
the general provisions thereof; provided, however, that in the event the
Advisory Period commences prior to the 65th anniversary of then Executive's
date of birth, the Company, at its expense, shall cause the Executive's
coverage under all such Insurance Plans that were in effect at the
termination of the Executive's term of full-time employment to continue until
the 65th anniversary of the Executive's date of birth or, if earlier, the
termination of the Advisory Period, as if the Executive had remained a
full-time employee of the Company until such date.
4. TERMINATION OF SERVICE.
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4.1 DISCHARGE FOR CAUSE. The Board may discharge the
Executive for cause at any time and thereby terminate the Executive's term of
service. Such discharge shall be effected by written notice (the "Discharge
Notice") to the Executive which shall specify the reasons for the Executive's
discharge and the effective date thereof. As used herein, the term "for cause"
shall mean (i) criminal conduct (evidenced by a conviction other than a
conviction for a traffic violation or other minor offense), (ii) willful
violation of any material policy of the Company (including, for example, the
Company's Securities Trading Policy or its Sexual Harassment Policy) or (iii)
willful violation of written directions from the Board or the CEO or his
designee (which directions must not be materially inconsistent with the
provisions of this Agreement). Upon termination pursuant to this Section 4.1,
this Agreement and all benefits hereunder shall terminate, except (a) that such
discharge and termination shall not affect any vested rights that the Executive
may have at the time of discharge and termination pursuant to any insurance or
other death benefit (excluding the death benefit provided for in Section 4.3),
bonus, retirement, severance pay or stock award plans or arrangements of the
Company or any subsidiary, or any stock option plan or any options granted
thereunder, which rights shall continue to be governed by the provisions of such
plans and arrangements, and (b) as otherwise provided in Sections 6, 7 and 8.
4.2 DISABILITY. The Executive's term of full-time
employment may be terminated by the Company if the Executive becomes disabled
during his employment hereunder so that he is unable substantially to perform
his services hereunder for six consecutive months. Such termination shall be
determined by resolution of the
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Board after the expiration of said six months, said termination to be
operative on the effective date determined in such resolution, which such
effective date shall not be sooner than thirty days after written notice to
the Executive of the adoption of such resolution. The Company shall pay the
Executive his full compensation through such effective date. Amounts paid to
the Executive pursuant to this Section 4.2 shall not (i) diminish or
otherwise adversely affect the retirement benefits, if any, to which the
Executive might otherwise be entitled, or (ii) affect any rights which the
Executive may have at the time of termination pursuant to any insurance or
other death benefit, bonus, retirement, severance pay or stock award plans or
arrangements of the Company or any subsidiary, or any stock option plan or
any options granted thereunder, which rights shall continue to be governed by
the provisions of such plans and arrangements. No Advisory Period shall
follow a termination of the Executive's employment pursuant to this Section
4.2.
4.3 DEATH. If the Executive shall die during t he
term of this Agreement, this Agreement and all benefits hereunder shall
terminate except that (i) if death occurs during the term of full-time
employment, the Executive's Estate shall be entitled to receive the Executive's
final base salary as defined in Section 3.2 to the last day of the sixth month
next following the month in which his death occurs; (ii) if death occurs during
the Advisory Period, the Executive's Estate shall be entitled to receive the
compensation being paid to him under Section 3.2 immediately before his death to
the last day of the sixth month next following the month in which his death
occurs or, if earlier, the month in which the Advisory Period otherwise would
have ended pursuant to Section 1.2; (iii) such termination shall not affect any
vested rights which the Executive
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may have at the time of his death pursuant to any insurance or other death
benefit, bonus, retirement, or stock award plans or arrangements of the
Company or any subsidiary, or any stock option plan or any vested options
granted thereunder, which rights shall continue to be governed by the
provisions of such plans and arrangements.
4.4 DISCHARGE WITHOUT CAUSE; DIMINUTION OF DUTIES AND
RESPONSIBILITIES. The Company retains the right to discharge the Executive
without cause at any time by written notice of termination of full-time
employment given to the Executive, which notice shall become effective no sooner
than 30 days after receipt thereof. Notwithstanding the failure of the Company
to give such notice, if, following a change of control of the Company, the
Executive shall not be continued during the term of his full-time employment
hereunder as a Vice President and Chief Financial Officer of the Company with
the responsibilities, powers and authority provided in Section 2.2, the
Executive shall have the right to terminate his term of full-time employment
under this Agreement by giving written notice to the Company at any time within
ninety days after such event. The Executive's term of full-time employment shall
terminate on the effective date specified in such notice which effective date
shall be no sooner than thirty days following the date on which such notice is
given. If the Company discharges the Executive without cause, or, if the
Executive terminates his term of full-time employment pursuant to this Section,
the Executive shall continue to receive, as severance compensation, all of the
compensation provided in Section 3.1 hereof, and shall be entitled to all of the
benefits which he would otherwise be entitled to receive (including, but not
limited to, the benefits referred to in Section 3.3 hereof), for and during the
period ending
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on the third anniversary of the Initial Employment Date; and, moreover, from
and after the date when such payments cease, the Executive shall be relieved
of his obligations under Section 8 of this Agreement. For the purpose of
determining the other benefits which the Executive would otherwise have
received under Section 3.3 during each year of the term of full-time
employment had such termination not occurred, it shall be assumed that the
Executive would have received benefits (including executive bonuses but
excluding stock awards, stock options and other similar incentive
compensation) equal to those that he received with respect to the last fiscal
year of the Company ended during the term of his full-time employment. In
addition, the Company shall at its expense cause the Executive's coverage
under all of the Company's Insurance Plans which were in effect at the
termination of the Executive's term of full-time employment to continue until
his 65th birthday or, if earlier, the third anniversary of the Initial
Employment Date, as if he had remained a full-time employee of the Company
until such date.
5. EXPENSES.
Upon submission of proper vouchers, which shall be subject to
review by the CEO or his designee, the Company will pay or reimburse the
Executive for all transportation, hotel and living expenses incurred by the
Executive on business trips taken with the approval of the CEO or his designee
outside the metropolitan Boston area, and for all other business and
entertainment expenses reasonably incurred by him in connection with the
business of the Company and its subsidiaries during the term of his service
hereunder (including his term of full-time employment and the Advisory Period),
all in
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accordance with Company policies in effect on the date hereof and/or hereafter
from time to time during the term of this Agreement.
6. INDEMNIFICATION.
The Company will indemnify the Executive and his legal
representatives to the extent permitted by the laws of the State of Delaware and
the existing By-laws of the Company or any other applicable laws or the
provisions of any other corporate document of the Company, and the Executive
shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its directors and officers,
against all costs, charges and expenses whatsoever incurred or sustained by him
or his legal representatives in connection with any action, suit or proceeding
to which he or his legal representatives may be made a party by reason of his
being or having been a director or officer of the Company or any of its
subsidiaries, or action taken purportedly on behalf of the Company or any of its
subsidiaries. The Company will, upon request by the Executive, promptly advance
or pay any amounts for costs, charges or expenses (including but not limited to
legal fees and expenses incurred by counsel retained by the Executive) in
respect of his right to indemnification hereunder, subject to later
determination as to the Executive's ultimate right to receive such advances. The
provisions of this Section 6 will survive any termination of this Agreement.
7. PROTECTION OF CONFIDENTIAL INFORMATION.
7.1 COVENANT. The Executive acknowledges that his
employment by the Company will, throughout the term of this Agreement, bring him
into close contact with many confidential affairs of the Company, including
information about
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costs, profits, markets, sales, products, key personnel, pricing policies,
operational methods, technical processes and other business affairs and
methods, plans for future development and other information not readily
available to the public. The Executive further acknowledges that the services
to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. The Executive further acknowledges
that the business of the Company is international in scope, and that the
nature of the Executive's services, position and expertise are such that he
is capable of competing with the Company from nearly any location in the
Western Hemisphere. In recognition of the foregoing, the Executive covenants
and agrees that he will keep secret all material confidential matters of the
Company that are not otherwise in the public domain and will not (otherwise
than in the ordinary course of the Company's business) intentionally disclose
them to any Competitive Business (as defined in Section 8.3) either during or
after the term of this Agreement except with the Company's prior written
consent.
7.2 SPECIFIC REMEDY. If the Executive commits a
material breach of any of the provisions of Section 7.1, the Company shall have,
in addition to the other remedies provided by law, the right and remedy to have
such provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company.
7.3 The provisions of this Section 7 shall survive
any termination of this Agreement.
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8. NON-COMPETITION.
8.1 COVENANT. (a) In recognition of the
considerations described in Section 7.1 and in the preamble to this Agreement,
the Executive agrees that he shall not, without the written permission of the
Company or unless relieved of his obligations hereunder in accordance with
Section 4.4, (i) enter into the employ of or render any services to any person,
firm, corporation or other entity engaged in any "Competitive Business" (as
defined in Section 8.3), (ii) engage in any Competitive Business for his own
account or (iii) become interested in any Competitive Business as an individual,
partner, shareholder, creditor, director, officer, principal, agent, employee,
trustee, consultant, advisor or in any other relationship or capacity; provided,
however, that nothing contained in this Section 8.1 shall be deemed to prohibit
the Executive from acquiring, solely as an investment through market purchases,
up to five percent (5%) of the voting securities of any entity which are
registered under Section 12 of the Securities Exchange Act of 1934 and which are
publicly traded so long as he is not, and does not become, part of any control
group of such corporation.
(b) The provisions of paragraph (a) of this
Section shall apply for and during the term of the Executive's service
(including the term of full-time employment and the Advisory Period, if any)
hereunder and, following termination of the Executive's full-time employment
(including, without limitation, termination of the Executive's full-time
employment pursuant to Section 4.1) or the end of the Advisory Period, if any,
for an additional period of eighteen months or such lesser number of days as
shall be equal to the number of days that shall have elapsed between the Initial
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Employment Date and the Executive's last day of full-time employment, provided,
however, that if the Executive's term of full time employment shall be
terminated pursuant to Section 4.4, the Executive's obligations under Section 8
shall be limited as provided in Section 4.4.
8.2 SPECIFIC REMEDY. In the event of a breach or
threatened breach by the Executive of Section 8.1, the Company shall, in
addition to the other remedies provided by law, have the right and remedy to
have such provisions specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any breach or threatened
breach of Section 8.1 will cause irreparable injury to the Company and that
money damages will not provide an adequate remedy to the Company.
Notwithstanding anything to the contrary contained in this Agreement, all
options and other incentive awards granted to the Executive and all
retirement, insurance and other benefits to which the Executive is entitled
under any plan or agreement of the Company shall continue to be governed by
the provisions of such plan or agreement upon the occurrence of any of the
events referred to in Section 8.1.
8.3 "COMPETITIVE BUSINESS". The phrase "Competitive
Business" as used in this Agreement shall mean any line of business that is
substantially the same as any line of any operating business engaged in or
conducted by the Company and which, during, or at the expiration of, the term of
the Executive's full-time employment, the Company was engaged in or conducting,
or had, to the knowledge of the Executive, definitively planned to engage in or
conduct, and which during the fiscal year of the Company next preceding the date
as of which the determination of competitive stature
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needs to be made constituted at least 3% of the gross sales of the Company
and its subsidiaries. The Executive may, without being deemed in violation of
Section 8.1, become a partner or employee of, or otherwise acquire an
interest in, a stock or business brokerage firm, a consulting or advisory
firm, an investment banking firm, or a similar organization (whether in
partnership, corporate or other form) which, as part of its business, trades
or invests in securities of Competitive Businesses or which represents or
acts as agent or advisor for Competitive Businesses, but only on the
condition that the Executive shall not personally render any services in
connection with any such Competitive Business, either directly to such
Competitive Business or other persons or to his firm in connection therewith.
9. NOTICES.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage prepaid, by registered or certified
mail, as follows (or to such other or additional address as either party
shall designate by notice in writing to the other in accordance herewith):
9.1 If to the Company:
Syratech Corporation
000 XxXxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
(with a copy, similarly addressed
but Attention: Legal Department)
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9.2 If to the Executive, to him at his address on the
personnel records of the Company.
10. GENERAL.
10.1 GOVERNING LAW. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts applicable to agreements made and to be performed entirely in
Massachusetts, except that the provisions of Section 6 shall be governed by the
laws of the State of Delaware.
10.2 CAPTIONS. The Section headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.3 ENTIRE AGREEMENT. This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, between the parties.
10.4 NO OTHER REPRESENTATIONS. No representation,
promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
10.5 ASSIGNABILITY. This Agreement, and the
Executive's rights and obligations hereunder, may not be assigned by the
Executive. The Company may assign its rights, together with its obligations,
hereunder in connection with any sale,
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transfer or other disposition of all or substantially all of its business and
assets; and such rights and obligations shall inure to, and be binding upon, any
successor to the business or substantially all of the assets of the Company,
whether by merger, purchase of stock or assets or otherwise, which shall
expressly assume such obligations.
10.6 AMENDMENTS; WAIVERS. This Agreement may be
amended, modified, superseded, canceled, renewed or extended and the terms or
covenants hereof may be waived, only by a written instrument executed by both of
the parties hereto, or in the case of a waiver, by the party waiving compliance.
The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other term or
covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SYRATECH CORPORATION
By: /s/Xxxxx X. Xxxxxxx
Director
/s/Xxx X. Xxxxxxx
