EXHIBIT 10.23(b)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this Agreement) is
entered into as of January 1, 1996, by and between:
Quadrax Corporation, a Delaware corporation (Quadrax), as the employer; and
Xxxxx X. Xxxxxxx, an individual (Xx. Xxxxxxx), as the employee.
Recital
A. Quadrax is a publicly owned corporation whose shares of
common stock are traded in The NASDAQ SmallCap Stock Market, Inc.
B. Quadrax manufactures, distributes and sells thermoplastic
composite materials and goods manufactured out of its materials
throughout the United States and abroad.
B. Xx. Xxxxxxx currently serves as President and Chief
Executive Officer of Quadrax pursuant to a Key Employee
Agreement, dated August 9, 1994 (the Original Agreement).
C. On or about February 15, 1995, Xx. Xxxxxxx assumed the
additional responsibilities of Chairman of the Board of
Directors, and was officially elected as Chairman on April 17,
1995.
D. In recognition of these additional contributions to the
success of the company, Quadrax now desires to terminate the
Original Agreement and to replace it with this Agreement.
Provisions
1. Termination of the Original Agreement. Quadrax and Xx. Xxxxxxx
hereby agree to terminate the Original Agreement, which is
superseded in its entirety by this Agreement.
2. Authorities and Responsibilities. Quadrax hereby employs Xx.
Xxxxxxx and Xx. Xxxxxxx hereby accepts employment with Quadrax
and agrees to provide his full-time exclusive services to Quadrax
as Chairman of the Board of Directors and Chief Executive
Officer. In that capacity, Xx. Xxxxxxx agrees to perform the
functions and duties incident to the positios of Chairman and
Chief Executive Officer. Furthermore, Xx. Xxxxxxx shall have all
the authority and responsibility commonly associated with those
titles, and in particular, shall have full authority:
2.1 to employ (and to terminate), on behalf of the corporation,
any and all such Vice Presidents of Quadrax, Presidents of any
subsidiaries of Quadrax, General Managers, Managers, Supervisors
and other employees as Xx. Xxxxxxx shall deem necessary or
appropriate to the conduct of the business of the corporation; to
delegate to such employees such authority as he shall determine;
and to determine the compensation to be paid to any such
employee, all consistent with the employee policies and
procedures as promulgated by the Board of Directors of Quadrax;
and
2.2 to authorize expenditures by and to contract liabilities for
the corporation in the ordinary course of business in amounts up
to $50,000 without special Board approval.
3. Term. The term of this Agreement commenced on January 1, 1996,
and shall continue for a term ending on December 31, 1998.
4. Restrictive Covenants.
4.1 Covenant Not To Compete. Xx. Xxxxxxx agrees that for the
term of this Employment Agreement (the Restrictive Period), he
will not engage, participate, or have any interest or be involved
in any capacity, whether as an owner, agent, stockholder
(excluding ownership of not more than 5% of the outstanding
shares of a publicly held corporation if such ownership does not
involve, and neither Xx. Xxxxxxx or any of his respective
affiliates otherwise has, any managerial or operational
responsibility in respect thereof), officer, director, manager,
partner, joint venturer, employee, consultant, advisor, agent or
otherwise, in any business enterprise which is, or shall at any
time during the Restrictive Period be, directly or indirectly
engaged in activities which are competitive with the business of
Quadrax as conducted on the date of this Employment Agreement, or
during Xx. Xxxxxxx'x tenure with Quadrax, in the United States
and in any other countries or territories where Quadrax sells its
services and products.
4.2 Non-Disclosure of Confidential Information.
a. Xx. Xxxxxxx acknowledges that it is the policy of
Quadrax to maintain as secret and confidential all valuable and
unique information heretofore or hereafter acquired, developed or
used by Quadrax relating to the business, operations, employees
and customers of Quadrax, which information gives Quadrax a
competitive advantage in its industry, and which information
includes technical knowledge, know-how or trade secrets and
information concerning the operations, sales, personnel,
suppliers, customers, costs, profits, markets, pricing policies,
Confidential Materials (as hereinafter defined), and the results
of any investigations or experiments of Quadrax (such information
is hereinafter referred to as Confidential Information,
provided, that Confidential Information shall not include any of
the foregoing items which are in the public domain or which are
available from third-party sources without any violation of this
Agreement). Xx. Xxxxxxx recognizes that the services to be
performed by Xx. Xxxxxxx are special and unique, and that by
reason of his duties he will acquire Confidential Information.
Xx. Xxxxxxx recognizes that all such Confidential Information is
the sole and exclusive property of Quadrax. In consideration of
Quadrax entering into this Agreement, Xx. Xxxxxxx agrees that:
(i) he shall never for so long as such information is
valuable and unique (but in no case for longer than three years
following the termination of Xx. Xxxxxxx'x employment by
Quadrax), directly or indirectly, use, publish, disseminate or
otherwise disclose any Confidential Information obtained during
his employment by Quadrax without the prior written consent of
the Quadrax Board of Directors, it being understood that this
subparagraph shall survive the term of this Agreement;
(ii) the parties hereto agree that Xx. Xxxxxxx, during
the course of his employment, may be directed to perform services
for the benefit of a customer of Quadrax, in which case such
customer shall be deemed a third party beneficiary of the
provisions of this Agreement and, in addition to the
proscriptions contained in subparagraph (i) above, shall not
disclose any Confidential Information which relates to the
customer (defined with respect to such customer in the same
manner as for Quadrax) to any person, firm or enterprise without
the prior written consent of Quadrax and such customer;
(iii) during the term of his employment by Quadrax, he
shall exercise all due and diligent precautions to protect the
integrity of Quadrax customer lists, mailing lists and sources
thereof, statistical data and compilations, agreements,
contracts, manuals or other documents and any and all other
materials embodying any Confidential Information (the
Confidential Materials) and, upon termination of his employment
hereunder, or such earlier time as Quadrax may so request, he
shall immediately return to Quadrax all such Confidential
Materials (and copies thereof) then in his possession or control;
(iv) Xx. Xxxxxxx agrees that he will at all times
comply with all security regulations (a) in effect from time to
time at Quadrax or its customers premises and (b) in effect for
materials belonging to Quadrax or its customers; and
(v) Xx. Xxxxxxx agrees that the provisions of this
subsection (a) are reasonably necessary to protect the
proprietary rights of Quadrax in the Confidential Information and
its trade secrets, good will and reputation.
b. Xx. Xxxxxxx acknowledges that any breach of the provisions
of this Section 4 can cause irreparable harm to Quadrax for which
Quadrax would have no adequate remedy at law. In the event of a
breach or threatened breach by Xx. Xxxxxxx of any of such
provisions, in addition to any and all other rights and remedies
it may have under this Agreement or otherwise, Quadrax may
immediately seek any judicial action deemed necessary, including,
without limitation, temporary and preliminary injunctive relief.
5. Salary. In consideration of, and in exchange for, the services
to be provided by Xx. Xxxxxxx to Quadrax, Quadrax shall pay to
Xx. Xxxxxxx the following compensation:
5.1 Base Salary. During the continuance of this Agreement,
Quadrax shall pay to Xx. Xxxxxxx a minimum base salary of
$250,000 per year. Quadrax shall pay such salary in
bi-weekly installments on Quadrax's regular pay days.
Regular installments of base salary shall be paid less
all applicable taxes, social security payments and other
items that Quadrax is required by law to withhold or
deduct therefrom.
a. Automatic Annual Raises. During the continuance of this
Agreement, Xx. Xxxxxxx'x base salary shall be increased,
effective as of each anniversary of the date of this Agreement,
by a percentage amount equal to the Providence area COLA as
reported by the U.S. Department of Labor.
b. Merit Raises. The Board of Directors of Quadrax may, in its
absolute and sole discretion, increase the salary payable to Xx.
Xxxxxxx for merit.
5.2 Performance Bonuses. During the continuance of this
Agreement, Quadrax shall award Xx. Xxxxxxx performance
bonuses as described herein. All cash bonuses shall be
less all applicable taxes, social security payments and
other items that Quadrax is required by law to withhold
or deduct therefrom. No stock bonuses shall be reduced
for income taxes, social security payments and other
items, except to the extent that Quadrax is specifically
required by law to withhold or deduct such items. Xx.
Xxxxxxx will receive a performance bonus in each year of
this Employment Agreement as follows:
1. If Quadrax achieves net revenue of at least $10
million and net income of at least $zero in fiscal
1996, a bonus of $50,000 cash plus fully vested options
to purchase 125,000 shares of the common stock of
Quadrax under the 1993 Stock Option Plan exercisable at
the fair market value of the common stock on December
31, 1996, exercisable for a period of five years from
vesting.
2. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1996 equals or exceeds $2.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 75,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1996, exercisable for a period
of five years from vesting.
3. If Quadrax achieves net revenue of at least $20 million
and net income of at least $1.5 million in fiscal 1997, a bonus
of $50,000 cash plus fully vested options to purchase 125,000
shares of common stock of Quadrax under the 1993 Stock Option
Plan exercisable at the fair market value of the common stock on
December 31, 1997, exercisable for a period of five years from
vesting.
4. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1997 equals or exceeds $4.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 75,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1997, exercisable for a period
of five years from vesting.
5. If Quadrax achieves net revenue of at least $40 million
and net income of at least $3.0 million in fiscal 1998, a bonus
of $50,000 cash plus fully vested options to purchase 125,000
shares of common stock of Quadrax under the 1993 Stock Option
Plan exercisable at the fair market value of the common stock on
December 31, 1998, exercisable for a period of five years from
vesting.
6. If the average of the closing bid prices of the common
stock of Quadrax for any ten consecutive trading day period in
December 1998 equals or exceeds $8.00 per share, a further bonus,
independent of the revenue-based bonus, of fully vested options
to purchase 75,000 shares of common stock of Quadrax under the
1993 Stock Option Plan exercisable at the fair market value of
the common stock on December 31, 1998, exercisable for a period
of five years from vesting.
5.3 Annual Stock Option Bonus. In addition to, and not in lieu of,
the above bonuses, Xx. Xxxxxxx shall also be granted options to
purchase 100,000 shares of the common stock of Quadrax under the
1993 Stock Option Plan at January 1, 1996, 1997 and 1998,
respectively, with an exercise price of their fair market value
on such date each year, fully vested, with an exercise period of
five years from the date of the grant.
6. Benefits. In addition to the compensation described in Paragraph
4, above, Xx. Xxxxxxx shall be entitled to participate in or
receive all other benefits normally provided to Quadrax's
executive-level employees. These benefits will include, but not
be limited to:
group health, life and disability insurance;
participation in any Quadrax sponsored retirement savings or
pension plan;
participation in all stock or stock option plans;
use of a company car;
business expense allowance as permitted by the Internal Revenue
Code
paid vacation accruing at the rate of six weeks per year;
paid sick leave accruing at the rate of 10 days per year; and
paid religious and other holidays to the extent provided under
Quadrax's holiday and personal leave policies.
6.1 Employer's Deductibility. Any expense items which are to be
paid or reimbursed by Quadrax must be allowable as business
expense deductions on Quadrax's federal income tax returns,
except for medical and life insurance premiums and any portion of
otherwise allowable entertainment expenses which are not
deductible under applicable provisions of law.
a. Documentation. Xx. Xxxxxxx agrees to furnish Quadrax
with all supporting documents necessary to substantiate any
expenses which are to be reimbursed or paid by Quadrax, including
time, place, business purposes and individuals included in the
expenditure, when appropriate.
6.2 Life Insurance. In addition to the benefits hereinabove
provided for, Quadrax shall purchase and maintain in full force
and effect one or more policies of insurance on the life of Xx.
Xxxxxxx, with benefits payable as Xx. Xxxxxxx may direct in the
aggregate amount of not less than $1.5 Million.
7. Severance. Notwithstanding any other term or provision
contained in this Agreement, this Agreement and the employment of
Xx. Xxxxxxx may be terminated under the following circumstances:
7.1 Termination By Quadrax for Cause. Quadrax may terminate
this Agreement at any time, without notice, for just cause shown.
Just cause shall include, and be limited to:
a. violation of Xx. Xxxxxxx'x conditions of service, as
specified in paragraph 2, above, including, without limitation,
operating another active business outside of Quadrax, aiding
competitors of Quadrax or revealing confidential or proprietary
information without the knowledge and consent of the Board of
Directors;
b. dishonesty, insobriety, abuse of alcohol or use of
illegal drugs; or
c. conviction or entering into a plea of nolo contendere
to:
(1) a crime involving moral turpitude; or
(2) any other crime materially
impairing or materially hindering Xx. Xxxxxxx'x
ability to perform his duties for Quadrax.
7.2 Voluntary Terminating By Xx. Xxxxxxx. Xx. Xxxxxxx may, at
any time upon two months prior written notice, terminate this
Agreement and his employment hereunder.
7.3 Termination on Death or Permanent Disability. This
Agreement shall terminate upon Xx. Xxxxxxx'x death or permanent
disability. For purposes of this Agreement, Xx. Xxxxxxx will be
considered to be permanently disabled when he is unable to
perform the principal duties that he has been hired to perform
for an aggregate of eight months in any nine month period.
8. Severance Benefits. Upon termination of this Agreement, Xx.
Xxxxxxx shall be entitled to receive the following termination
benefits, after receipt of which the rights and obligations of
the parties hereunder shall become void and of no further force
and effect; provided, however, that if Xx. Xxxxxxx is terminated
for cause by reason of breach of the confidentiality or
proprietary information provisions of Section 4 hereof, Quadrax
shall retain whatever rights it may have under law to seek and
obtain remedies for such breach.
8.1 Termination for Cause or Voluntary Termination by Xx.
Xxxxxxx. If this Agreement is terminated for cause by Quadrax or
voluntarily by Xx. Xxxxxxx, then the following severance benefits
shall be due.
a. Base Salary. Base salary shall be paid, on a pro-rated
basis, for a period of six months from the date of termination.
b. Bonus. Any bonus that may otherwise have become due
for the fiscal year in which this Agreement is terminated shall
be forfeited.
c. Benefits. Health and disability insurance shall
be continued for as long as Xx. Xxxxxxx is entitled to salary
continuation payments, as provided in (a), above. All other
benefits, including all life insurance policies maintained
pursuant to paragraph 5.2, above, may be terminated or canceled
by Quadrax at any time from and after the last day of employment.
8.2 Termination by Death or Disability. If this Agreement is
terminated by Quadrax upon the death or disability of Xx.
Xxxxxxx, then the following severance benefits shall be due.
a. Base Salary. Xx. Xxxxxxx (or his estate) shall be
entitled to continue receiving his base salary in regular
installments for 12 months following the date of termination, or,
at the election of Quadrax, an amount equal to 12 months base
salary paid in one lump-sum on the date of termination.
b. Bonus. Xx. Xxxxxxx (or his estate) shall be entitled
to receive a bonus for the fiscal year in which this Agreement is
terminated. Any such bonus shall be paid in cash to Xx. Xxxxxxx
as and when other bonuses are paid.
c. Benefits. All benefits shall continue for a period of
12 months from the date of termination. In the case of
termination by reason of the death of Xx. Xxxxxxx, then benefits
shall continue as aforesaid for the benefit of any dependents who
survive him.
d. Life Insurance. All policies of insurance on the life
of Xx. Xxxxxxx maintained by Quadrax pursuant to Paragraph 6.2,
above, shall (except in the case of termination by reason of Xx.
Xxxxxxx'x death) be assigned to Xx. Xxxxxxx, without charge,
effective on the last day of employment, and thereafter, Quadrax
shall have no further obligation to maintain those policies or to
pay additional premiums thereon.
9. Wrongful Discharge. If this Agreement is terminated by Quadrax
other than for just cause shown or by reason of death or
disability, then the following severance benefits shall be due.
9.1 Base Salary. Xx. Xxxxxxx shall be entitled to continue
receiving his base salary in regular installments for the balance
of the term of this Agreement, plus an additional 36 months, or,
at the option of Quadrax, a like amount paid in one lump-sum on
the date of termination.
9.2 Bonus. Xx. Xxxxxxx shall be entitled to receive, within 30
days of the last date of employment, registered on Form S-8 or
otherwise, the stock options provided for in Paragraphs 5.2 and
5.3, above, (to the extent not previously earned and issued)
without regard to whether or not any of the conditions specified
therein have been achieved. Xx. Xxxxxxx shall also be entitled
to receive any cash bonus provided for in paragraph 5.2, above,
for the fiscal year in which this Agreement is terminated. Any
such bonus shall be paid in cash to Xx. Xxxxxxx as and when other
bonuses are paid.
9.3 Benefits. All benefits shall continue for the balance of
the term of this Agreement, plus an additional 36 months.
9.4 Life Insurance. Quadrax shall convert all policies of
insurance on the life of Xx. Xxxxxxx that are required to be
maintained by Quadrax pursuant to Paragraph 6.2, above, into
single-premium whole life policies; shall promptly pay in full
the premiums thus due; and shall assign such policies to Xx.
Xxxxxxx, without charge, effective on the last day of employment.
10. Changes in Control. Upon any Change in Control of the Company
resulting in Xx. Xxxxxxx'x termination or constructive
termination, all of the options in Section 5.2 and 5.3 of this
Employment Agreement shall be granted and vest immediately. For
the purposes of these minutes, a Change in Control is defined
as the sale, exchange or transfer of (i) 20% or more of the
outstanding common stock of the Company or (ii) substantially all
of the assets of the Company to any party who does not currently
hold at least 5% of the outstanding common stock of the Company.
11. Relationship Created. The relationship created by this Agreement
is that of employer and employee and nothing contained in this
Agreement shall be construed in any way as creating any
partnership, joint venture or other relationship between the
parties. Nothing contained in this Agreement shall be construed
as granting Xx. Xxxxxxx any right to bind or obligate Quadrax in
any manner not herein granted, without the express written
consent of Xxxxxxx.
00. Payment of Undisputed Amounts. If there is a dispute between the
parties with respect to any amount claimed to be due hereunder,
any portion that is not disputed shall be paid by the obligor to
the payee. Any such partial payment shall not, however,
constitute a waiver by the payee of any other rights.
13. Notices. All notices, requests, payments, demands or other
communication under this Agreement shall be in writing and shall
be deemed to have been given on the date of actual receipt.
14. Severability of Provisions. If any provision in this Agreement
is held to be invalid, void or unenforceable, the remaining
provisions shall continue in full force and effect.
15. Time. Time is of the essence of this Agreement.
16. Counterparts. This Agreement may be executed in two or more
counterparts, all of which, taken together, shall constitute one
and the same agreement.
17. Business Day. If any date on which action is to be taken under
this Agreement occurs, or if any period during which action is to
be taken under this Agreement ends, on a Saturday, Sunday or
holiday, the date or period shall be extended to the next
succeeding day which is not a Saturday, Sunday or holiday.
18. Jurisdiction. Each party hereby consents and submits itself to
the jurisdiction of the State of Rhode Island and agrees that the
parties to this Agreement shall be entitled to a judgment and
decree and enforcement by the Courts of the State of Rhode Island
for any amount which may be adjudged to be due, including, but
not limited to, attorney's fees, costs and damages.
19. Entire Agreement. This Agreement contains the entire
understanding between the parties concerning Xx. Xxxxxxx'x
employment with Quadrax and supersedes any prior understanding or
agreement between them. Thereof are no other representations,
agreements or understandings, oral or written, between the
parties relating to the subject of this Agreement. This
Agreement may be amended only by a writing signed by the party to
be charged.
IN WITNESS WHEREOF, Quadrax Corporation has caused this
Agreement to be signed and delivered by its duly authorized
representative and Xxxxx X. Xxxxxxx has signed and delivered this
Agreement, both as of the date first above written.
Quadrax Corporation
______________________________ /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
by:/s/ Sven Kraumanis
Sven Kraumanis
Director and Member of the
Compensation Committee of the
Board of Directors, duly authorized
By:/s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Director and Member of the
Compensation Committee of the
Board of Directors, duly authorized
