EXHIBIT 10.42
EMPLOYMENT AGREEMENT
This Employment Agreement, by and between Xxxxxxxx X. Xxxxx (Xxxxx) and
Xxxxx Industries, Inc. (Xxxxx) is made and entered into as of the last date
that this Agreement is executed by the parties.
RECITALS
WHEREAS, Xxxxx is a California corporation, with offices and business
operations in the state of California; and
WHEREAS, Xxxxx desires to employ and utilize the services of Xxxxx,
subject to the terms and conditions stated herein; and
WHEREAS, Xxxxx desires to be employed by Xxxxx subject to the terms and
conditions stated herein;
NOW THEREFORE, it is hereby agreed by and between the parties as follows:
1. TERM: This Agreement shall have a term of two (2) years beginning
on January 1, 2000, and ending on December 31, 2001, subject to annual
extensions as hereinafter provided unless earlier terminated in accordance
with the provisions of this Agreement. After December 31, 2001, this
Agreement shall be extended for additional successive one-year terms unless
terminated by either party with not less than 90 days notice.
2. DUTIES OF XXXXX: Xxxxx shall be employed as the President and Chief
Executive Officer of Xxxxx. Xxxxx shall assume such duties as are assigned
to him by the Board of Directors of Xxxxx, and shall devote his exclusive and
full-time services, energy and attention to the business of Xxxxx. The scope
of Xxxxx'x duties hereunder may be modified from time to time at the
discretion of the Board of Directors of Xxxxx, provided that such modified
duties shall be of the nature customarily performed by a chief executive
officer in a position similar to that held by Xxxxx. Xxxxx shall not be
required to perform the duties required of him under this Agreement at a
location more than fifty (50) miles from the current place of business of
Xxxxx located in Sante Fe Springs, California.
3. COMPENSATION:
X. Xxxxx shall pay Xxxxx a base salary of $300,000 annually. This
base salary may be increased by the Board of Directors of Xxxxx. This salary
shall be paid to Xxxxx in installments on the dates customarily set for the
payment of executive salaries at Xxxxx.
X. Xxxxx shall also receive an annual bonus of up to 100 percent of
his base salary, which annual bonus shall be based upon performance criteria
as agreed by the Board of Directors of Xxxxx and Xxxxx. Xxxxx shall also
participate in any performance based or profit participation programs as may
be established for Xxxxx executives.
X. Xxxxx shall also be selected by the Board of Directors to
receive options to acquire not less than four (4) percent of the stock of
Xxxxx pursuant to the Xxxxx Industries, Inc. 1997 Stock Option Plan ("The
Plan") that was approved by the shareholders of Xxxxx, which options will be
exercisable within thirty (30) days after the termination of Xxxxx'x
employment in accordance with Section 5.10 of The Plan.
4. EMPLOYMENT BENEFITS: Xxxxx shall also be entitled to participate in
any and all employee benefit plans or programs of any nature or kind
whatsoever now existing or that may hereafter be adopted by Xxxxx for its
employees and executives when and as Xxxxx becomes eligible for such
benefits, including, but not limited to, vacations, retirement plans, thrift
plans, medical plans, life insurance plans, disability insurance plans, and
any other employee benefit plans or programs. Notwithstanding the foregoing,
Xxxxx shall be eligible to participate in the medical and disability plan
benefits beginning on January 1, 2000. A copy of the schedule of the current
employee benefit plans is attached to this Agreement. In addition to such
plans, Xxxxx will pay to Xxxxx a monthly automobile allowance for an
automobile of his choosing.
5. COMPENSATION DURING DISABILITY: In the event that Xxxxx shall fail
or be unable to perform his services by reason of illness, or if he should
become incapacitated for a period of more than one (1) month, the
compensation payable to Xxxxx under this Agreement during such illness or
incapacity shall be suspended, this Agreement shall remain in effect and
Xxxxx shall be compensated in accordance with Xxxxx policies then in effect
for exempt employees who become disabled to the extent that Xxxxx has elected
to participate in the programs available under such policies. Full
compensation shall be restored to Xxxxx upon his return to full time
employment, and this Agreement shall not otherwise be affected by such
disability provided, however, that nothing in this Section shall affect
Xxxxx'x right to terminate this agreement in accordance with Section 9.B.
6. BUSINESS EXPENSES: Xxxxx shall be authorized to incur reasonable
and customary business expenses, including expenses for entertainment and
travel, in accordance with Xxxxx policies. Xxxxx shall be reimbursed for
itemized accounts of business expenditures presented in accordance with Xxxxx
policies and procedures.
7. SALE, MERGER OR DISSOLUTION: For the purposes of this agreement, a
"Change in Control" of Xxxxx, shall be defined as follows:
A. Any event by which an individual, entity, or group (a "Person"),
other than X.X. Xxxxxx Group which now owns 65% of all shares of Xxxxx,
acquires direct or indirect ownership or control of at least a majority of
the combined voting power of the then outstanding voting shares of Xxxxx; or
B. The consummation of a reorganization, merger or consolidation,
or such other disposition or transfer of a majority of the assets of Xxxxx,
whether in one or more separate transactions, to any Person or Persons not
controlled by X.X. Xxxxxx & Company.
This Agreement shall not be terminated by a Change in Control or by the
voluntary or involuntary dissolution of Xxxxx. In the event of any such
Change in Control or dissolution, the provisions of this Agreement shall be
binding on and inure to the benefit of the surviving or
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purchasing business, entity or Person to which such assets or voting
securities shall be transferred.
8. CONFIDENTIAL INFORMATION: Xxxxx agrees not to use or disclose,
either directly or indirectly, any confidential information of Xxxxx, except
as required in the course of his employment with Xxxxx. For the purposes of
this Section 8, the term "Confidential Information" includes information
relating to the processes, products, manufacturing techniques, methodology,
practices, policies, technical plans, computer programs, reports, customer or
employee lists, marketing plans, distribution channels and financial
information which may have been developed by, derived from or obtained in the
course of the business of Xxxxx.
9. TERMINATION:
A. TERMINATION FOR CAUSE: This Agreement may be terminated by
Xxxxx for cause if Xxxxx willfully breaches, grossly neglects, fails or
refuses to perform the duties that he is required to perform hereunder, or
willfully and knowingly discloses confidential information, or fails to
perform the material covenants of this Agreement.
B. TERMINATION ON DISABILITY: If Xxxxx is unable to perform the
essential functions of his position with reasonable accommodation due to any
mental or physical disability, then Xxxxx shall have the right to declare
this Agreement terminated if such disability continues for six (6)
consecutive full calendar months following the expiration of any sick leave
and medical leave available pursuant to any Xxxxx policy.
10. COMPENSATION UPON TERMINATION:
A. TERMINATION FOR CAUSE: If Xxxxx'x employment is terminated for
cause, Xxxxx shall pay to Xxxxx his full base salary through the date of
termination at the rate in effect at the time of the termination, and any
unpaid expenses, and any unused earned vacation to the extent required by
law, as well as any life insurance, disability payments or other benefits
then owed to Xxxxx under any benefit plans or programs then maintained by
Xxxxx (the "Accrued Benefits"). Xxxxx shall, thereafter, have no further
obligations to Xxxxx under this Agreement.
B. TERMINATION UPON DEATH OR DISABILITY: If Xxxxx'x employment is
terminated by Xxxxx'x death or disability (as defined above), Xxxxx shall
(i) continue coverage of Xxxxx'x dependents (if any) under all benefit plans
or programs under Section 4 hereof for a period of six (6) months, and (ii) pay
to Xxxxx'x estate the accrued portion of any salary and bonus through the
date of termination. Xxxxx shall, thereafter, have no further obligations to
Xxxxx under this Agreement.
C. TERMINATION UPON NOTICE: If Xxxxx'x employment is terminated
after December 31, 2001 pursuant to 90 days notice in accordance with
Section 1, Xxxxx shall pay to Xxxxx the salary, expenses and benefits due to
him pursuant to this Agreement through the end of the then current one-year
term, and shall also pay to Xxxxx his full base salary for an additional
twelve (12) months thereafter at the rate in effect at the time of
termination.
11. CONSTRUCTION: This Agreement shall be construed in accordance with
the laws of the State of California. If any provision of this Agreement is
held invalid or unenforceable, the
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remainder of this Agreement shall remain in full force and-effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances. This Agreement shall also be construed according to its
fair meaning and not for or against Xxxxx or Xxxxx regardless of who is
responsible for its preparation in whole or in part.
12. INTEGRATED COMPLETE AGREEMENT: This agreement integrates and
supersedes all other prior and contemporaneous written and oral agreements
and understandings of every character between Xxxxx and Xxxxx and comprises
the entire agreement between Xxxxx and Xxxxx regarding the terms of Xxxxx'x
employment. This Agreement may be amended only by a further express written
agreement between Xxxxx and Xxxxx and cannot be amended by informal
discussions or written communications from either party to the other. No
waiver of any rights or obligations under this Agreement shall be deemed to
have occurred unless made in writing signed by the party against whom such
waiver is asserted, and no waiver shall be deemed a waiver of any other or
subsequent rights or obligations. Nothing in this Agreement shall be
construed to limit any amount that Xxxxx is entitled to receive under any
applicable federal or state law or any other written agreement, policy,
program or plan.
13. ARBITRATION: Any controversy or claim arising out of or relating
to this Agreement, or the breach, termination or invalidity thereof, and all
other related claims shall be exclusively and finally settled by arbitration
in accordance with the Labor Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
rendered in any court having jurisdiction thereof. Such arbitration shall be
held in Los Angeles or the principal city of the federal judicial district in
which Xxxxx resides as of the date of termination.
14. NOTICES: Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses set forth
below, but each party may change his address by written notice in accordance
with this paragraph. Notices delivered personally shall be deemed
communicated as of actual receipt. Mailed notices shall be deemed
communicated as of three (3) days after mailing, as follows:
If to Xxxxx: Xxxxx Industries, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Xxxxx: Xxxxxxxx X. Xxxxx
000 Xxx Xxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
15. ATTORNEYS' FEES AND COSTS: If any arbitration proceeding or action
at law or in equity is instituted in order to enforce or interpret the terms
of this Agreement or any dispute with respect thereto, then the prevailing
party shall be entitled to an award of reasonable attorneys' fees, costs and
disbursements in addition to any other costs to which he might otherwise be
entitled. An arbitrator shall have the authority to determine the
appropriate amount of attorneys' fees and costs for all arbitration
proceedings.
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16. ASSIGNMENT: The rights and obligations of Xxxxx under this
Agreement shall inure to the benefit of, and shall be binding upon, its
successors and assigns. Any successor or assignee of Xxxxx shall be deemed
substituted for Xxxxx under the terms of this Agreement for all purposes.
Successors and assigns shall include, but not be limited to, any Person
acquiring Xxxxx or its assets in a Change in Control. Xxxxx warrants and
represents that any Change in Control to which it is a party shall be
conditioned upon and will not be executed without an agreement by the Person
acquiring Xxxxx or its assets to assume its obligations under this Agreement
and that Xxxxx will use its best efforts to assure that any agreement
involving a Change in Control to which Xxxxx is not a party shall also be so
conditioned.
17. COUNTERPARTS: This agreement may be signed in one or more
counterparts, each of which shall be deemed to be an original.
EXECUTED and made effective this 16th day of September, 1999 at
Glendale, California.
Xxxxxxxx X. Xxxxx Xxxxx Industries, Inc.
/s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxx
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Its: Chairman
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H.R. Committee
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