EXHIBIT 10.3
EMPLOYMENT AGREEMENT
AGREEMENT made this 10th day of November, 1997, by and between
Xxxxxxx-Xxxxxx GmbH (the Company), and Xxxxxxx X. Xxxxxxxx (the
"Executive").
The Executive is presently employed as Chief Financial Officer and as
Member of the Group Management Committee of the XXXXXXX TOLEDO Group
("XXXXXXX TOLEDO").
The Board of Directors of the ultimate parent company (the "Board")
recognizes the Executive's contribution to the success of XXXXXXX TOLEDO.
The Board desires to provide for the continued employment of the Executive
and to set up an employment arrangement with the Company which the Board
has determined will reinforce and encourage the continued attention and
dedication to XXXXXXX TOLEDO of the Executive as a member of XXXXXXX
TOLEDO's management, in the best interest of XXXXXXX TOLEDO and its
shareholders. The Executive is willing to commit himself to continue to
serve XXXXXXX TOLEDO, on the terms and conditions herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth
below. Accordingly, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT.
The Company hereby agrees to continue to employ the Executive, and the
Executive hereby agrees to continue to serve XXXXXXX TOLEDO, on the terms
and conditions set forth herein.
SECTION 2. TERM.
This Agreement enters into force as of November 10, 1997. It is of
unlimited duration.
SECTION 3. POSITION AND DUTIES.
During the Term, the Executive shall serve as Chief Financial Officer and
as Member of the Group Management Committee of XXXXXXX TOLEDO and shall
have such responsibilities, duties and authority as he may have as of the
date hereof and as may from time to time be assigned to the Executive by
the Board that are consistent with such responsibilities, duties and
authority.
SECTION 4. PLACE OF PERFORMANCE.
In connection with the Executive's employment by the Company, the Executive
shall be based at the principal executive offices of XXXXXXX TOLEDO in
Greifensee, Switzerland, except for required travel on XXXXXXX TOLEDO's
business to an extent substantially consistent with present business travel
obligations.
SECTION 5. COMPENSATION AND RELATED MATTERS.
(a) SALARY.
During the Term, the Company shall pay to the Executive an annual base
salary at a rate of CHF 240'000 -- or such higher rate as may from time to
time be determined by the Board, such salary to be paid in substantially
equal installments in accordance with the Company's payroll practices for
its senior executives. This salary may be increased from time to time in
accordance with normal business practices of the Company. Compensation of
the Executive by salary payments shall not be deemed exclusive and shall
not prevent the Executive from participating in any other compensation or
benefit plan of the Company. The salary payments (including any increased
salary payments) hereunder, shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
payment hereunder shall in any way limit or reduce the obligation of the
Company to pay the Executive's salary hereunder.
(b) BONUS.
During the Term, the Executive shall be entitled to earn annual incentive
compensation in accordance with the POBS Plus Plan for Senior Management,
as attached hereto as Exhibit A.
(c) EXPENSES.
(i) Expenses shall be reimbursed according to the Company expense
regulations as amended from time to time.
(ii) In addition the Executive is entitled to flat compensation for minor
expenses according to the Group Management Committee Supplement to the
expense regulations, as amended from time to time, as attached hereto as
Exhibit B.
(d) OTHER BENEFITS.
(i) The Company shall maintain in full force and effect, and the Executive
shall be entitled to continue to participate in, all of the Company's
insurance benefit plans and arrangements in effect on the date hereof in
which the Executive participates or plans or arrangements providing the
Executive with at least equivalent benefits thereunder (including, without
limitation, the Xxxxxxx-Xxxxxx Fonds pension scheme for senior management,
and the Company's accident plan and disability plan), provided that the
Company shall not make any changes in such plans or arrangements that would
adversely affect the Executive's rights or benefits thereunder; provided,
however, that such a change may be made, including termination of such
plans or arrangements if it occurs pursuant to a program applicable to all
executives of the Company and does not result in a proportionately greater
reduction in the rights of or benefits to the Executive as compared with
any other executive of the Company. The Executive shall be entitled to
participate in or receive benefits under any employee benefit plan or
arrangement made available by the Company in the future to its executives
and key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and
arrangements. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be
in lieu of the salary payable to the Executive pursuant to paragraph (a) of
this Section.
(ii) The Executive shall be entitled to participation in the (x)
Xxxxxxx-Xxxxxx Group Management Committee Stock Purchase Plan, and (y) the
Xxxxxxx-Xxxxxx Management Share Option Plan, each as may be amended from
time to time.
(iii) Any payments or benefits payable to the Executive under this
Agreement in respect of any calendar year during which the Executive is
employed by the Company for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of full and partial months in such calendar year
during which he is so employed.
(e) VACATIONS.
The Executive shall be entitled to no less than 30 paid vacation days in
each calendar year. The Executive shall also be entitled to all paid
holidays and personal days given by the Company to its executives.
(f) HOUSING ALLOWANCE.
The Company will contribute to the cost of housing in Switzerland by paying
a special allowance of CHF 36'000 -- per year (paid out in 12 monthly
installments of CHF 3'000).
(g) SCHOOLING FOR CHILDREN.
The Company will reimburse the Executive for the schooling fees for his
children should they go to an international school.
(h) HOME LEAVE.
The Company pays for economy air fares to the US and back to Switzerland
for the Executive, his wife and children once in a calendar year.
(i) SIGN ON BONUS.
The Company has paid to the Executive a one time sign on bonus in the
amount of USD 75'000 -- to compensate for the loss of incentive and stock
options with his previous employer. This bonus becomes partially refundable
if the Executive leaves the Company earlier than 3 years after the starting
date, which has been April 1, 1997 (USD 50'000 -- after year one, USD
25'000 -- after year two).
SECTION 6. OFFICES.
Subject to Sections 3 and 4, the Executive agrees to serve without
additional compensation, if elected or appointed thereto, as a director of
any of XXXXXXX TOLEDO's group companies, and in one or more executive
offices of any of XXXXXXX TOLEDO's group companies.
SECTION 7. TERMINATION.
a) This Agreement may be terminated by either party with or without cause
giving twelve (12) months notice to the end of a calendar month,
subject, however, to the provisions allowing for immediate termination
according to Article 337 of the Swiss Code of Obligations (Article
337).
b) The Executive may terminate his employment under Article 337 in case
of failure by the Company to comply with any material provision of
this Agreement.
SECTION 8. COMPENSATION UPON TERMINATION.
During the notice period, the Executive is entitled to full compensation as
defined in Section 5 of this Agreement and in the annexes/exhibits therein
referred to.
SECTION 9. NO MITIGATION OR OFFSET/NONCOMPETITION.
During notice periods, the Company may waive the services of the Executive.
If the Company so decides, the Executive shall have no duty to mitigate
damages by seeking another employment or otherwise, nor shall the amount of
any payment or benefit due under Section 5 be reduced by any compensation
earned by the Executive as the result of an employment by another employer,
by retirement benefits (other than as paid by the Company or under Company
benefits schemes) or by offset against any amount claimed to be owed by the
Executive to the Company. While the Executive is employed by the Company
hereunder and for a period of twelve (12) months after the termination of
the Executive's employment, the Executive shall not knowingly engage in or
be employed by any business anywhere in the world which competes with the
principal businesses of the Company or its affiliates as conducted at the
date of such employment termination.
SECTION 10. 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, by agreement in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in same manner and to the some extent that the
Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company
in the same amount and on the some terms as he would be entitled to under
Sections 7 and 8 hereof if the Company had terminated his employment under
Section 7 (a) hereof. As used in this Agreement, "Company" shall mean the
Company as herein before defined and 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 the terms and
provisions of this Agreement by operation of low.
(b) If the Executive should die after the giving of notice pursuant to
Section 7 but while any amounts would still 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 the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate. If the Executive should die before the
giving of such notice under Section 7 and while he is employed pursuant to
this Agreement, the Company shall continue to pay to the Executive's estate
his salary for the period of six months from the date at such death and a
pro rata portion of the bonus, if any, payable for the year in which the
Executive died.
SECTION 11. NOTICE.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by US or Swiss certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Xx. Xxxxxxx X. Xxxxxxxx
Alte Xxxxxxxxxxxxxx 00X
0000 Xxxxxxxx
Xxxxxxxxxxx
If to the Company:
Xxxxxxx-Xxxxxx XxxX
Xx Xxxxxxxxx
0000 Xxxxxxxxxx
Xxxxxxxxxxx
Attn.: Chief Executive Officer
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
SECTION 12. MISCELLANEOUS.
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or 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 some or at any prior or subsequent time. No agreements 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. Insofar as this Agreement does not
stipulate anything else to the contrary, the General Rules of Employment
("Allgemeine Arbeitsvertragliche Bestimmungen/AVB") of the Company shall be
applicable. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of Switzerland.
SECTION 13. VALIDITY.
The invalidity or unenforceability of any provision or provisions 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.
SECTION 14. 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 some instrument.
SECTION 15. DISPUTES.
All disputes between the Executive and the Company concerning the terms and
conditions of this Agreement shall be brought before the ordinary courts in
the Canton of Zurich, Switzerland.
SECTION 16. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto; and any prior agreement of
the parties hereto in respect of the subject matter contained herein is
hereby terminated and canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Xxxxxxx-Xxxxxx GmbH,
by: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
by: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
by: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
