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Exhibit 10.11
EMPLOYMENT AGREEMENT
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THIS Employment Agreement (the "Agreement") is made as of the 26th day of
April, 1994 by and between Applied Extrusion Technologies, Inc., a Delaware
corporation (the "Company" or "Employer"), and Xxxxxx X. Xxxxxxxx (the
"Executive").
RECITALS
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1. The Executive is currently employed by the Company as its Chief
Executive Officer, President and Chief Operating Officer.
2. The Employer desires to continue to employ the Executive and to make
secure for itself the experience, abilities and services of the Executive and to
prevent the loss of such experience, services and abilities.
3. The Executive has submitted to a physical examination by a physician
approved by the Company, and the Company has received the results of such
examination.
4. In consideration of the employment to be provided hereby and the amounts
to be paid as provided herein, the Executive desires to be employed by the
Employer and to agree with the Employer as further provided herein.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Employer shall employ the Executive, and the Executive shall
perform services for and continue in the employment of the Employer, for a
period of five (5) years commencing on the date hereof (the "Employment
Period"), which Employment Period shall be extended after the fifth anniversary
of the date hereof from day to day, provided that this Agreement shall expire on
or after the fifth anniversary hereof upon thirty (30) days notice from either
the Company or the Executive, which notice may first be given on April 25, 1999
and thereafter on the last business day of any month subsequent thereto (such
date of expiration referred to hereinafter as the "Expiration Date"), unless
such employment shall have been sooner terminated as hereinafter set forth.
2. Capacity.
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(a) POSITION AND DUTIES. The Executive shall serve on a full-time basis in
the capacity of the Chief Executive Officer and in such other senior executive
position as the Chairman of the Board of the Company or the Board of Directors
of the Company
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may designate from time to time, shall report to the Chairman of the Board of
the Company, shall be accountable to, and shall have such other powers, duties
and responsibilities, consistent with his position and experience, as may from
time to time be prescribed by the Chairman of the Board or the Board of
Directors. The Executive shall perform and discharge, faithfully, diligently and
to the best of his ability, such duties and responsibilities. The Executive
shall devote substantially all of his working time and efforts to the business
and affairs of the Company. The Executive shall carry out the aforementioned
duties and responsibilities primarily from AET's Salem, Massachusetts facility
and will not, during the Employment Period, be required to relocate from
the greater Boston area without his consent.
(b) BOARD MEMBERSHIP. The Company agrees to propose to the shareholders of
the Company at each appropriate Annual Meeting of such shareholders during the
Employment Term the reelection of the Executive as a member of the Board of
Directors of the Company, provided that the Executive is employed hereunder and
is otherwise eligible for such election; PROVIDED, HOWEVER, that should
Executive's employment hereunder terminate for any reason while Executive is
serving as a member of the Company's Board of Directors, Executive agrees to
resign from the Board of Directors upon such termination.
3. Compensation.
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(a) SALARY. During each year of the Employment Period, the Executive shall
receive an annual salary (the "Salary") of $360,000, subject to annual increases
at the discretion of the Board of Directors. The Salary shall be payable in
accordance with the Company's current payroll practices for its executive
employees generally.
(b) INCENTIVE BONUS. During each year of the Employment Period, the
Executive shall be eligible to receive an incentive bonus of up to 50% of salary
(the "Bonus") as determined by the Board of Directors of the Company in its sole
discretion.
(c) EXPENSES. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable business expenses incurred by
him on behalf of the Employer.
(d) FRINGE BENEFITS. During the Employment Period, the Executive shall be
entitled to participate in or receive benefits under any disability insurance,
health, pension, retirement and accident plans or arrangements made generally
available by the Company 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 with such
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modifications as the Company deems reasonably necessary in light of the results
of the physical examination referred to in recital (3) above. Without limiting
the foregoing, Executive shall also be entitled to receive, at the Company's
expense, a complete physical examination by a physician of his choice. In
accordance with the Company policy, the Executive shall also be entitled to four
weeks paid vacation in any fiscal year during the Employment Period as well as
all paid holidays given by the Company to its employees.
(e) AUTOMOBILE. Without limiting the generality of the foregoing, during
the Employment Period, the Executive shall be furnished with an automobile
either owned or leased by the Company or an automobile allowance, at the
discretion of the Company.
(f) COUNTRY CLUB MEMBERSHIP. During the Employment Period, the Company
shall either pay the Executive's membership expenses (including fees, dues and
related expenses) or otherwise make available to the Executive at no cost to the
Executive, membership at one (1) country club to be agreed upon by the Executive
and the Company.
4. Termination and Compensation Thereon.
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(a) TERMINATION DATE. The term "Termination Date" shall mean the earlier of
(i) the Expiration Date or (ii) if the Executive's employment is terminated (A)
by his death, the date of his death, or (B) for any other reason, the date on
which such termination is to be effective pursuant to the notice of termination
given by the party terminating the employment relationship.
(b) DEATH. The Executive's employment hereunder shall terminate upon his
death. In such event, the Company shall pay to such person as the Executive
shall have designated in a notice filed with the Company (the "Designee"), or,
if no such person shall have been designated, to his estate (the "Estate"), an
amount equal to any unpaid Salary, together with any prorated Bonus and benefits
accrued through the Termination Date. Additionally, subject to the results of
annual physical examinations, the Company will maintain insurance protection
over Executive's life providing death benefits of $1,500,000 payable to the
Designee or Estate, as the case may be.
(c) INCAPACITY. If in the reasonable judgment of the Board of Directors of
the Company, as a result of the Executive's incapacity due to physical or mental
illness, the Executive shall for at least six consecutive months during the term
of this Agreement have been unable to perform his duties under this Agreement on
a full-time basis, the Company may terminate the Executive's employment
hereunder by notice to the Executive. In
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such event, and to the extent not otherwise covered by the long-term disability
insurance referred to below, the Employer shall continue to pay the Executive
his Salary (at the rate in effect as of the Termination Date), together with any
prorated Bonus and (to the extent legally practicable) extend to him the
applicable fringe benefits referred to in Section 3(d) hereof for a period of
six (6) months subsequent to the Termination Date. The Company's obligation to
pay the Executive his Salary, together with any prorated Bonus and extend to him
such benefits shall terminate if the Executive subsequently takes other
employment to the extent of the Executive's salary and benefits from such other
employment. Without limiting the foregoing, the Company shall provide Executive
with long-term disability insurance protection on terms mutually agreed upon by
the Company and the Executive. Any dispute between the Board of Directors of the
Company and the Executive with respect to the Executive's incapacity shall be
settled by reference to a competent medical authority mutually agreed to by the
Board of Directors and the Executive, whose decision shall be binding on all
parties.
(d) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment hereunder for "cause". For purposes of this Agreement,
"cause" shall mean (A) other than by reason of Executive's incapacity under
Section 4(C) above, the Executive's willful and material failure or refusal or
his substantial and material neglect to perform and discharge his duties and
responsibilities hereunder (including duties prescribed by the Board of
Directors pursuant to Section 2), other material breach of Sections 5 or 6
hereof, or breach of his fiduciary duties as an officer or member of the Board
of Directors of the Company or any subsidiary or affiliate thereof, as
applicable, (B) other than by reason of Executive's incapacity under Section
4(C) above, other willful conduct by Executive that is materially harmful to the
business or interests of the Company or (C) a felony conviction or a conviction
for any crime involving the Executive's personal dishonesty or moral turpitude.
If the Executive's employment is terminated pursuant to this Section 4(d), the
Employer shall have no further obligations to the Executive hereunder after the
Termination Date, except for unpaid Salary, together with any prorated Bonus and
benefits accrued through the Termination Date. For purposes of this Section
4(d), no act, or failure to act, on Executive's part shall be considered
"willful" unless done, or omitted to be done, by him knowing and with the intent
that such action or inaction would not be in the best interests of the Company
or otherwise was done or omitted to be done in bad faith or with reckless
disregard for the best interests of the Company.
(e) TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. On or after April 26,
1999, the Company may terminate the Executive's employment hereunder other than
for cause in accordance with the terms and provisions of Section 1 hereof. In
the event of such
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termination, then until the earliest of (i) the date the Executive commences
other full-time comparable employment and (ii) twenty-four (24) months from the
Termination Date, the Company shall continue to pay the Executive the Salary,
together with any prorated Bonus and, subject to any employee contribution
applicable to the Executive on the Termination Date, shall continue to provide
to the Executive the benefits provided for in Sections 3(d) and 3(e) hereof,
provided that, as applicable, the Executive is entitled to continue such
participation under applicable law and benefit plan terms. The Executive
expressly agrees to use his reasonable best efforts to find other comparable
employment under clause (i) above.
(f) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate his employment hereunder for Good Reason (as defined below), upon
notice to the Company setting forth in reasonable detail the nature of such Good
Reason. The following shall constitute "Good Reason" for termination by the
Executive:
(i) Failure of the Company to continue the Executive in the position
of Chief Executive Officer;
(ii) Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority other than as is materially
consistent with the Executive's assignment to another senior executive
position in accordance with Section 2(a) hereof; provided, however, that
(i) the Company's failure to continue the Executive's appointment or
election as a member of the Board of Directors and (ii) any diminution of
the business of the Company, including without limitation the sale or
transfer of any or all of the assets of the Company, shall not constitute
Good Reason; or
(iii) any other material breach by the Company of Sections 2, 3(a),
3(b) or 3(d) hereof.
In event of termination in accordance with this Section 4(f), then until
the earliest of (i) the date the Executive commences other full-time employment
and (ii) twenty-four (24) months from the Termination Date, the Company shall
continue to pay the Executive the Salary, together with any Bonus, and, subject
to any employee contribution applicable to the Executive on the Termination
Date, shall continue to provide to the Executive the benefits provided for in
Sections 3(d) and 3(e) hereof, provided that, as applicable, the Executive is
entitled to continue such participation under applicable law and benefit plan
terms. The Executive expressly agrees to use his reasonable best efforts to find
comparable employment under clause (i) above.
(g) TERMINATION BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. On or after
April 26, 1999, the Executive may terminate
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his employment hereunder other than for Good Reason in accordance with the terms
and provisions of Section 1 hereof. In the event of termination of the
Executive's employment pursuant to this Section 4(g), the Employer shall have no
further obligations to the Executive hereunder after the Termination Date,
except for unpaid Salary, together with any prorated Bonus and benefits accrued
through the Termination Date.
(h) EFFECT OF TERMINATION. Payment in full by the Company of the amount
that it may be required to pay Executive pursuant to this Section 4 upon
termination of his employment hereunder shall constitute the entire obligation
of the Company to Executive, and performance by the Company shall constitute
full settlement of any claim that Executive might otherwise assert against the
Company or any of those connected with it on account of such termination. The
provisions of Sections 4(e), 4(f), 4(g), 4(h), 5, 6, 7, 8 and 10 shall survive
termination.
5. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Executive shall not
disclose to any other person (except as required by applicable law or in
connection with the performance of his duties and responsibilities hereunder),
or use for his own benefit or gain, any Confidential Information (as defined
below) relating to the business conducted by the Company. Executive understands
that this restriction shall continue to apply after Executive's employment
terminates, regardless of the reason for such termination. "Confidential
Information" includes without limitation such information relating to (i) the
development, research, testing, manufacturing and marketing activities of the
Company, (ii) the products manufactured, sold or distributed by the Company,
(iii) the costs, sources of supply and strategic plans of the Company, (iv) the
identity and special needs of the customers of the Company, (v) the financial
arrangements and capital structure of the Company, (vi) the management and
operation of the Company and (vii) people and organizations with whom the
Company has business relationships and those relationships. Confidential
Information also includes comparable information that the Company may receive or
has received belonging to customers or others who do business with the Company.
Confidential Information shall not include information which (a) is publicly
known, or becomes publicly known through no fault of Executive or {b) is
generally known or readily obtainable by the public.
6. RESTRICTED ACTIVITIES. Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information (as defined in Section 5) and other
legitimate interests of the Company. While Executive is employed by the Company
and for one (1) year after such employment is terminated for any reason,
Executive shall not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, co-venturer or
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otherwise, engage in any activity that is competitive or potentially competitive
with the business of the Company as conducted at any time during Executive's
employment without the Company's written consent, which consent shall not be
unreasonably withheld; PROVIDED, HOWEVER, that notwithstanding the preceding
clause, Executive shall not, while employed by the Company and for two (2) years
after such employment is terminated for any reason, directly or indirectly,
whether as owner, partner, investor, consultant, agent, employee, co-venturer or
otherwise, engage in any activity that is competitive or potentially competitive
with the PACKAGING FILMS or NETTING businesses of the Company, as conducted at
any time during Executive's employment without the Company's written consent,
which consent shall not be unreasonably withheld.
7. DOCUMENTS AND MATERIAL. Upon termination of Executive's employment with the
Company or at any other time upon the Company's request, Executive will promptly
deliver to the Company, without retaining any copies, all documents and other
materials furnished to Executive by the Company, prepared by Executive for the
Company or otherwise relating to the Company's business, including without
limitation all written and tangible material in his possession incorporating
any Confidential Information (as defined in Section 5).
8. RELIEF, INTERPRETATION. Executive agrees that the Company shall, in addition
to any other remedies available to it, be entitled to preliminary and permanent
injunctive relief against any breach by him of the covenants and agreements
contained in Sections 5, 6 and 7 without having to post bond. In the event that
any provision of Sections 5, 6 and 7 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of
activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be enforceable.
For purposes of Sections 5, 6 and 7 the term "Company" shall mean the Company
and any of its subsidiaries and affiliates to the extent that such enterprises
are, during the term of Executive's employment by the Company, engaged in the
same line of business as the Company.
9. CONFLICTING AGREEMENTS. Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder. Executive will not disclose to or use on behalf of the
Company any proprietary information of a third party without such party's
consent. Executive will not enter
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into any agreement, whether written or oral, conflicting with the provisions of
this Agreement.
10. ARBITRATION. Any dispute, controversy or claim between the parties arising
out of or related to any term or condition of the Executive's employment or the
termination of his employment shall be settled by arbitration conducted in
Boston, Massachusetts in accordance with the Commercial Rules of the American
Arbitration Association then in force (the "Rules") and the laws of The
Commonwealth of Massachusetts. In the event that a party requests arbitration,
it shall serve upon the other party (the "Non-Requesting Party") a written
demand for arbitration stating the substance of the controversy, dispute or
claim, the contention of the party requesting arbitration and the name and
address of the arbitrator appointed by it. The Non-Requesting Party, within
twenty (20) days of such demand, shall accept the arbitrator or appoint a second
arbitrator and notify the other party of the name and address of this second
arbitrator so selected, in which case the two arbitrators shall appoint a third.
The decision or award of the single arbitrator or, in the case of three
arbitrators, the decision or award of any two arbitrators, shall be final and
binding upon the parties. In the event that the two arbitrators fail in any
instance to appoint a third arbitrator within twenty (20) days of the
appointment of the second arbitrator, either arbitrator or any party to the
arbitration may apply to the American Arbitration Association for appointment of
the third arbitrator in accordance with the Rules. Should the Non-Requesting
Party (upon whom a demand for arbitration has been served) fail or refuse to
accept the arbitrator appointed by the other party or to appoint an arbitrator
within twenty (20) days, the single arbitrator shall have the right to decide
alone, and such arbitrator's decision or award shall be final and binding upon
the parties. The decision of the arbitrator or arbitrators shall be in writing
and shall set forth the basis therefor. The parties shall abide by all awards
rendered in the arbitration proceedings, and all such awards may be enforced and
executed upon in any court having jurisdiction over the party against whom
enforcement of such award is sought. The parties involved in the dispute shall
divide equally the administrative charges, arbitrator's fees and related
expenses of the arbitration, but each party shall pay its own legal fees
incurred in connection with such arbitration.
11. WITHHOLDING. All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.
12. WAIVER. The waiver by the Company of a breach of any provision of this
Agreement by Executive will not operate or be construed as a waiver of any other
subsequent breach by Executive.
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13. AMENDMENTS. No amendment to this Agreement shall be effective unless it
shall be in writing and signed by each party hereto. No oral waiver, amendment
or modification will be effective under any circumstances whatsoever.
14. NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or three days after being
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Employer, to it at:
c/o BE Aerospace, Inc.
0000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
with copies to
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: C. Xxxx Xxxxxxxxx
(ii) if to the Executive, to him at:
Applied Extrusion Technologies, Inc.
00 Xxxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxxxxxx 00000
15. ASSIGNMENT. Neither the Company nor Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; PROVIDED, HOWEVER, that the
Company may assign its rights and obligations under this Agreement without the
consent of Executive in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into any other person or transfer all
or substantially all of its properties or assets to any other person. This
Agreement shall inure to the benefit of and be binding upon the Company and
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
16. MISCELLANEOUS. This Agreement constitutes the entire agreement between the
parties and supersedes all prior and contemporaneous communications, agreements,
representations, understandings and negotiations, whether oral or written, with
respect to the subject matter hereof. The invalidity or unenforceability of any
term or provision hereof shall not affect
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the validity or enforceability of any other term or provision hereof. The
headings in this Agreement are for convenience of reference only and shall not
alter or otherwise affect the meaning hereof. This Agreement may be executed in
any number of counterparts which together shall constitute one instrument and
shall be governed and construed in accordance with the laws (other than the
conflict of laws rules) of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
APPLIED EXTRUSION TECHNOLOGIES, INC.
BY:
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Xxxx X. Xxxxxx
Chairman of the Board
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Xxxxxx X. Xxxxxxxx
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July 3, 1996
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Dear Xxx:
On behalf of Applied Extrusion Technologies, Inc. (the "Company"), this
letter confirms our mutual understanding that, under the terms of the Employment
Agreement dated April 26, 1994 between you and the Company, (i) your employment
may not be terminated prior to April 26, 1999 except for cause, or by virtue of
disability or death, and (ii) the Company may terminate your employment for any
reason after April 26, 1999, by giving 30 days' notice. In the event that your
employment is terminated by the Company after April 26, 1999 other than for
cause (and other than by reason of your death or incapacity), you will be
entitled to, among other things, continued payment of your base salary in
accordance with the terms of said Employment Agreement until the earliest of (a)
twenty-four (24) months from the Termination Date, or (b) the date you commence
other full-time comparable employment.
In addition, this will confirm the agreement between you and the Company,
as approved by resolution of the Board of Directors dated May 8, 1996, providing
that in the event of a change of control of the Company (as "change of control"
is defined in Exhibit A to the Company's 1991 Stock Option Plan for Directors,
as of May 8, 1996) occurring at any time prior to May 9, 1996, (i) your
Employment Agreement will automatically be renewed for a period equal to its
original term, and (ii) all outstanding options held by you will vest (to the
extent not already vested) immediately upon such change of control.
Sincerely yours,
APPLIED EXTRUSION TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Chairman
Agreed and accepted this 8th day of July, 1996
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
cc: Xxxxxx X. Xxxxxx, XX, General Counsel
