Exhibit 10.34
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), including the attached Exhibit
A, is entered into between LOWRANCE ELECTRONICS, INC., a Delaware corporation
having offices at 00000 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000 ("Employer" or
"Company"), and Xxxxx X. Xxxxxxxx, an individual currently residing at 0000
Xxxxx 000 Xxxx, Xxxxx, Xxxxxxxx 00000 ("Employee"), to be effective as of March
27, 2000 (the "Effective Date").
WITNESSETH:
WHEREAS, Employer is desirous of employing Employee pursuant to the
terms and conditions and for the consideration set forth in this Agreement, and
Employee is desirous of entering the employ of Employer pursuant to such terms
and conditions and for such consideration;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, Employer and Employee agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1 Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning as of the Effective Date and continuing until
the expiration of the Term (as defined in Exhibit A), subject to the terms and
conditions of this Agreement.
1.2 Employee shall be employed in the position set forth on Exhibit A.
1.3 Employee shall, during the period of Employee's employment by
Employer, devote the principal part of Employee's business time and energy, and
Employee's best efforts, to the business and affairs of Employer. Employee may
not engage, directly or indirectly, in any other business, investment, or
activity that interferes with Employee's performance of Employee's duties
hereunder, or is contrary to the interests of Employer or Employer's Affiliates
(as defined below in Section 1.7), or requires any significant portion of
Employer's business time.
1.4 Employee acknowledges and agrees that, at all times during the
employment relationship, Employee owes fiduciary duties to Employer, including
but not limited to the fiduciary duties of the highest loyalty, fidelity and
allegiance to act at all times in the best interests of the Employer, to make
full disclosure to Employer of all information that pertains to Employer's
business and interests, to do no act which would injure Employer's business, its
interests, or its reputation, and to refrain from using for Employee's own
benefit or for the benefit of others any information or opportunities pertaining
to Employer's business or interests that are entrusted to Employee or that he
learned while employed by Employer that could reasonably be considered to have a
detrimental effect on the Employer's business. Employee acknowledges and agrees
that during and upon termination of the employment relationship,
Employee shall continue to refrain from using for his own benefit or the benefit
of others, or from disclosing to others, any information or opportunities
pertaining to Employer's business or interests that were entrusted to Employee
during the employment relationship or that he learned while employed by Employer
that could reasonably be considered to have a detrimental effect on the
Employer's business.
1.5 It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Employer or any of
its Affiliates, involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer or any of its Affiliates, Employee
agrees that during the employment relationship Employee shall not knowingly
become involved in a conflict of interest with Employer or its Affiliates, or
upon discovery thereof, allow such a conflict to continue. Moreover, Employee
agrees that Employee shall disclose to the audit committee of Employer's board
of directors ("Employer's Board") any facts, which might involve such a conflict
of interest that has not been approved by such committee or by Employer's Board
as a whole.
1.6 For purposes of this Agreement, "Affiliate" or "Affiliated" means,
with respect to any person or entity, (i) any person or entity that, directly or
indirectly, controls, is controlled by, or is under common control with, such
person or entity in question, (ii) any officer, director or stockholder of such
person or entity in question; and (iii) any person or entity that, directly or
indirectly, controls, is controlled by, or is under common control with, any
officer, director or stockholder of such person or entity in question. For the
purposes of this definition, "control" (including, with correlative meaning, the
terms "controlled by" and "under common control with") as used with respect to
any person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such person or
entity, whether through the ownership of voting securities or by contract or
otherwise.
ARTICLE 2: COMPENSATION AND BENEFITS
2.1 Employee's monthly base salary during the Term and shall be not
less than the amount set forth under the heading "Monthly Base Salary" on
Exhibit A, subject to increase at the sole discretion of the Employer, which
shall be paid in installments in accordance with Employer's standard payroll
practice. Any calculation to be made under this Agreement, with respect to
Employee's Monthly Base Salary, shall be made using the then current Monthly
Base Salary in effect at the time of the event for which such calculation is
made.
2.2 While employed by Employer, subject to the sole approval and
discretion of Employer's Board, Employee may be allowed to participate in the
Employer's employee benefit plans and programs so approved. Employee shall not
be entitled to participate in any benefit plans and programs not expressly so
approved. Employer may change any benefit plan and program in which Employee
participates at any time and from time to time. Notwithstanding anything to the
contrary herein, should Employee participate in any benefit plans, upon
termination of Employee's employment with Employer for any reason, Employee (or
his heirs, administrators or legatees) shall be entitled to receive benefits
accrued with respect to
2
Employee's service prior to such termination of employment according to the
provisions of such benefit plans and programs.
2.3 Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH
TERMINATION:
3.1 Notwithstanding any other provisions of this Agreement, Employer
shall have the right to terminate Employee's employment under this Agreement at
any time prior to the expiration of the Term for any of the following reasons:
a. For "cause" upon the good faith determination by Employer's
Board that "cause" exists for the termination of the employment relationship. As
used in this Section 3.1.a, the term "cause" shall mean (i) Employee's gross
negligence or willful misconduct in the performance of the duties and services
required of Employee pursuant to this Agreement, (ii) Employee's final
conviction of a felony, (iii) Employee's involvement in a conflict of interest
as referenced in Sections 1.4-1.5 for which Employer makes a determination to
terminate the employment of Employee which remains uncorrected for thirty (30)
days following written notice to Employee by Employer, or (iv) Employee's
material breach of any provision of this Agreement which remains uncorrected for
thirty (30) days following written notice to Employee by Employer of such
breach. It is expressly acknowledged and agreed that the decision as to whether
"cause" exists for termination of the employment by Employer is delegated solely
to Employer's Board for determination as to whether a reasonable basis for cause
exists;
b. for any other reason whatsoever, including termination
without cause, in the sole discretion of Employer, on ninety (90) days prior
written notice to Employee, subject to Employer's compliance with Section 3.5
hereof. Any material failure to comply with Section 3.5 shall be considered a
breach of this Agreement;
c. upon Employee's death; or
d. upon Employee's becoming disabled as to entitle Employee to
benefits under Employer's long-term disability plan or, if Employee is not
eligible to participate in such plan or if such plan is not available, then
Employee is permanently and totally unable to perform Employee's duties for
Employer as a result of any medically determinable physical or mental impairment
as supported by a written medical opinion to the foregoing effect by a physician
selected by Employer.
The termination of Employee's employment by Employer prior to the
expiration of the Term shall constitute a "Termination for Cause" if made
pursuant to Section 3.1.a, and the effect of such termination is specified in
Section 3.4. The termination of Employee's employment by Employer prior to the
expiration of the Term shall constitute an "Involuntary Termination" if
3
made pursuant to Section 3.1.b, and the effect of such termination is specified
in Section 3.5. The effect of the employment relationship being terminated
pursuant to Section 3.1.c as a result of Employee's death is specified in
Section 3.7. The effect of the employment relationship being terminated pursuant
to Section 3.1.d as a result of the Employee becoming disabled is specified in
Section 3.8.
3.2 Employee shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term for any other reason whatsoever, in the sole discretion of Employee, on
ninety (90) days prior written notice to Employer. The termination of Employee's
employment by Employee prior to the expiration of the Term shall constitute a
"Voluntary Termination" if made pursuant to Section 3.2; the effect of such
termination is specified in Section 3.3.
3.3 Upon a Voluntary Termination of the employment relationship by
Employee prior to expiration of the Term, all future compensation to which
Employee is entitled and all future benefits for which Employee is eligible,
with the exception of any and all statutory rights and benefits, shall cease and
terminate as of the date of termination. Employee shall be entitled to pro rata
salary through the date of such termination, but Employee shall not be entitled
to any bonuses, if applicable, not yet paid at the date of such termination.
3.4 Upon a Termination for Cause of the employment relationship by
Employer prior to expiration of the Term, all future compensation to which
Employee is entitled and all future benefits for which Employee is eligible,
with the exception of any and all statutory rights and benefits, shall cease and
terminate as of the date of termination. Employee shall be entitled to pro rata
salary through the date of such termination, but Employee shall not be entitled
to any other bonuses, if applicable, not yet paid at the date of such
termination.
3.5 Upon an Involuntary Termination of the employment relationship by
Employer prior to expiration of the Term, Employee shall be entitled, after such
termination, to receive his Monthly Base Salary through the remainder of the
Term, or for a period of 12 months commencing with the month following the month
of termination, whichever is longer, payable in installments in accordance with
Employer's standard payroll practices. All other future compensation to which
Employee is entitled and all future benefits for which Employee is eligible,
with the exception of any and all statutory rights and benefits, shall cease and
terminate as of the date of termination. Employee's rights under this Section
3.5 are Employee's sole and exclusive rights against Employer or its Affiliates,
and Employer's sole and exclusive liability to Employee under this Agreement, in
contract, tort, or otherwise, for any Involuntary Termination of the employment
relationship. Employee covenants not to xxx or lodge any claim, demand or cause
of action against Employer for any sums for Involuntary Termination other than
those sums referred to in this Section 3.5. If Employee breaches this covenant,
Employer shall be entitled to recover from Employee all sums expended by
Employer (including costs and attorneys fees) in connection with such suit,
claim, demand or cause of action.
3.6. Upon a Change of Control Termination prior to the expiration of
the Term, Employee shall be entitled in consideration of Employee's continuing
obligations hereunder after
4
such termination to receive a single lump sum payment in an amount equal to
Employee's annualized Monthly Base Salary multiplied by 24 ("Change of Control
Termination Payment"). "Change of Control" shall have the meaning ascribed to
such term in Section 5.1 below. For purposes of this Agreement, "Change of
Control Termination" shall mean termination of Employee's employment
relationship during the Term and after the occurrence of a Change of Control for
any of the following reasons:
a) by Employee for "Good Reason" which shall mean
that (i) the Employee's Monthly Base Salary is reduced to an amount
less than the Monthly Base Salary in effect for such Employee
immediately prior to consummation of a Change of Control transaction,
(ii) the benefits that Employee is entitled to receive immediately
after a Change of Control are not substantially similar, in the
aggregate, to the benefits that Employer is required to provide to
Employee under this Agreement, or (iii) due to a Change of Control
transaction, the Employee is required to relocate to a different
metropolitan area; or
b) Employer terminates Employee's employment without
cause.
3.7 Upon termination of the employment relationship as a result of
Employee's death, Employee's heirs, administrators, or legatees shall be
entitled to Employee's pro rata salary through the date of such termination.
3.8 Upon termination of the employment relationship as a result of
Employee's disability, Employee shall be entitled to his pro rata salary through
the date of such termination.
3.9 In all cases, the compensation and benefits payable to Employee
under this Agreement upon termination of the employment relationship shall be
offset against any amounts to which Employee may otherwise be entitled under any
and all severance plans (including, without limitation, any severance plans with
a change of control feature), and policies of Employer or its Affiliates.
ARTICLE 4: CONTINUATION OF EMPLOYMENT BEYOND THE TERM; TERMINATION AND EFFECTS
OF TERMINATION:
4.1 Should Employee remain employed by Employer beyond the expiration
of the Term, such employment shall convert to a month-to-month relationship
terminable at any time by either Employer or Employee for any reason whatsoever,
with or without cause. Upon such termination of the employment relationship by
either Employer or Employee for any reason whatsoever, all future compensation
to which Employee is entitled and all future benefits for which Employee is
eligible shall cease and terminate. Upon the expiration of the Term, Employer
shall have no obligation to offer Employee a new employment agreement.
5
ARTICLE 5: MISCELLANEOUS:
5.1 For purposes of this Agreement the term "Change of Control" means
(i) the Company merges or consolidates with any other entity and is not the
surviving entity (or survives only as the subsidiary of another entity), (ii)
the Company sells all or substantially all of its assets to any other person or
entity, (iii) the Company is dissolved, (iv) if any third person or entity
together with its Affiliates shall become, directly or indirectly, the
beneficial owner of more than 50% of the Voting Stock (as defined below) of the
Company, or (v) if, during such time as the Company has a class of Voting Stock
registered under the Securities Exchange Act of 1934, the individuals who
constituted the members of the Company's board of directors ("Incumbent Board")
upon the effective date of such registration cease for any reason to constitute
at least a majority thereof, provided that any person becoming a director whose
election or nomination for election by Company shareholders was approved by a
vote of at least eighty percent (80%) of the directors comprising the Incumbent
Board (either by the specific vote or approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such a nomination) shall be, for purposes of this clause (v),
considered as though such person were a member of the Incumbent Board. "Voting
Stock" means all the outstanding shares of capital stock of Company entitled to
vote generally in elections for directors, considered as one class; provided,
however, that if Company has shares of Voting Stock entitled to more or less
than one vote for any such share, each reference to a proportion of shares of
Voting Stock shall be deemed to refer to such proportion of the votes entitled
to be cast by such shares.
5.2 Employer and Employee shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing
any oral or written statements about the other party (which in the case of
Employer includes any of its subsidiaries or Affiliates, or any of such
entities' officers, employees, shareholders, agents or representatives) that are
slanderous, libelous, or defamatory; or that disclose private or confidential
information about the other party (which in the case of Employer includes any of
its subsidiaries or Affiliates, or any of such entities' business affairs,
officers, employees, shareholders, agents, or representatives); or that
constitute an intrusion into the seclusion or private lives of the other party
(which in the case of Employer includes any of its subsidiaries or Affiliates,
or such entities' officers, employees, shareholders, agents, or
representatives); or that place the other party (which in the case of Employer
includes any of its subsidiaries or Affiliates, or any of such entities' or its
officers, employees, shareholders, agents, or representatives) in a false light
before the public; or that constitute a misappropriation of the name or likeness
of the other party (which in the case of Employer includes any of its
subsidiaries or Affiliates, or any of such entities' or its officers, employees,
shareholders, agents, or representatives). The courts may enjoin a violation or
threatened violation of this prohibition. The rights afforded the parties under
this provision are in addition to any and all rights and remedies otherwise
afforded by law.
5.3 For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
6
If to Employer, to:
Lowrance Electronics, Inc.
00000 Xxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Secretary
With a copy to:
Xxxxx Liddell & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
If to Employee, to the address shown on the first page hereof.
With a copy to:
Xxxxxxxxx, Xxxxxxxx and Xxxxxx
000 X. 0xx Xx.
P. O. Xxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Either Employer or Employee may furnish a change of address to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.
5.4 This Agreement shall be governed in all respects by the laws of the
State of Oklahoma, excluding any conflict-of-law rule or principle that might
refer to the construction of the Agreement to the laws of another State or
country.
5.5 No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
5.6 If a dispute arises out of or related to this Agreement, other than
a dispute regarding Employee's obligations under Section 1.4, Section 1.5, or
Section 5.2, and if the dispute cannot be settled through direct discussions,
then Employer and Employee agree to first endeavor to settle the dispute in an
amicable manner by mediation, before having recourse to any other proceeding or
forum.
7
5.7 During the Term of this Agreement, the Employer will be a resident
of the State of Oklahoma, and Employee will be a resident of the State of
Oklahoma. Employer's principal place of business is in Tulsa, Tulsa County,
Oklahoma. This Agreement shall be performed in Tulsa, Oklahoma. Any litigation
that may be brought by either Employer or Employee involving the enforcement of
this Agreement or the rights, duties, or obligations of this Agreement, shall be
brought exclusively in the State or federal courts sitting in Tulsa, Tulsa
County, Oklahoma. In the event of litigation between the parties regarding this
Agreement, the prevailing party shall, in addition to any sums recovered in the
litigation, be entitled to recover all sums expended by that party (including
reasonable costs and reasonable attorneys' fees) in connection with that
litigation.
5.8 It is a desire and intent of the parties that the terms,
provisions, covenants and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant, or remedy of this Agreement or the application thereof to any person,
association, or entity or circumstances shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement or the application
thereof to any person, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.
5.9 This Agreement shall be binding upon and inure to the benefit of
Employer and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of
Employer by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Employee's rights and obligations under Agreement
hereof are personal and such rights, benefits, and obligations of Employee shall
not be voluntarily or involuntarily assigned, alienated, or transferred, whether
by operation of law or otherwise, without the prior written consent of Employer.
Employer shall not assign this Agreement without the prior written consent of
Employee.
5.10 This Agreement replaces and merges previous agreements and
discussions pertaining to the following subject matters covered herein: the
nature of Employee's employment relationship with Employer and the term and
termination of such relationship. This Agreement constitutes the entire
agreement of the parties with regard to such subject matters, and contains all
of the covenants, promises, representations, warranties, and agreements between
the parties with respect to such subject matters; provided that Employee shall
also comply with all policies and procedures of Employer as established from
time to time. Each party to this Agreement acknowledges that no representation,
inducement, promise, or agreement, oral or written, has been made by either
party with respect to such subject matters, which is not embodied herein, and
that no agreement, statement, or promise relating to the employment of Employee
by Employer that is not contained in this Agreement shall be valid or binding.
Any modification of this Agreement will be effective only if it is in writing
and signed by each party whose rights hereunder are affected thereby, provided
that any such modification must be authorized or approved by the Employer's
Board.
8
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement in multiple originals to be effective on the date first signed above.
LOWRANCE ELECTRONICS, INC.
By:
------------------------------------------------
Title:
---------------------------------------------
This _____ day of _____________, 2000.
EMPLOYEE
---------------------------------------------------
This ______ day of ____________, 2000
9
EXHIBIT A TO
EMPLOYMENT AGREEMENT
BETWEEN LOWRANCE ELECTRONICS, INC.
AND XXXXX X. XXXXXXXX
Employee Name: Xxxxx X. Xxxxxxxx
0000 Xxxxx 000 Xxxx
Xxxxx, Xxxxxxxx 00000
Initial Term and
Renewal Term: The initial term of this Agreement shall be from the
Effective Date through the second anniversary of the
Effective Date (the "Initial Term"); provided,
however, that Employer and Employee agree that this
Agreement shall automatically be renewed upon
expiration of the Initial Term for a period of
twenty-four (24) months (the "Renewal Term"), unless
either party gives the other party written notice at
least ninety (90) days before the expiration of the
Initial Term that this Agreement will terminate upon
expiration of the Initial Term. For purposes of this
Agreement, "Term," shall mean the expiration of the
Initial Term unless this Agreement is automatically
renewed for the Renewal Term in which case such term
shall mean the expiration of the Renewal Term.
Position: Employee shall serve as Vice President of Marketing
during the Term. In addition, Employee shall at all
times during the Term perform such other executive
responsibilities as determined by the Employer's
Board.
Location: Lowrance Electronics, Inc., Tulsa, Oklahoma
Reporting Relationship: Employee shall report directly to the CEO and
President.
Monthly Base Salary: $12,500 per month
Automobile Allowance: $700 per month
Vacation Benefits: Four (4) weeks per year
A-1
Benefits: Medical insurance, paid in total by Employer; Life
insurance in an amount equal to at least 1-times
Employee's annual salary, paid by Employer;
Employee's right to participate in all other
Employer benefit and incentive programs as
established and permitted for its other Vice
Presidents subject to the terms thereof (i.e.,
dental plan, 401K plan, annual bonus programs,
etc.).
Employee shall be entitled to such additional
benefits to be determined from time to time in the
sole discretion of Employer's Board.
IN WITNESS WHEREOF, Employer and Employee have duly executed this Exhibit A
in multiple originals to be effective on the date first signed above.
Employee: Company:
LOWRANCE ELECTRONICS, INC.
By:
--------------------------------- ----------------------------------------
Name:
--------------------------------- --------------------------------------
Title:
--------------------------------- -------------------------------------
--------------------------------- -------------------------------------------
Date Signed Date Signed
A-2
