XXXXXXXX CORPORATION
EMPLOYMENT AGREEMENT
--------------------
This agreement ("Agreement") has been entered into as of the 5th
day of November, 1999, by and between Xxxxxxxx Corporation, a Missouri
corporation ("Xxxxxxxx"), and Xxxxxx X. Xxxx, an individual
("Employee").
WHEREAS, Xxxxxxxx currently employs Employee as Vice President of
Marketing of Angelica's Textile Services Business Segment and Xxxxxxxx
and Employee wish to more specifically define the terms and conditions
of Employee's employment with Xxxxxxxx in this Agreement.
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
SECTION 1: DEFINITIONS. For purposes of this Agreement, the following
words and phrases, whether or not capitalized, shall have the meanings
specified below, unless the context plainly requires a different
meaning.
(a) "ANNUAL BASE SALARY" means the base salary set forth in
Section 3.3 of this Agreement, as it shall be increased from
time to time in the discretion of Xxxxxxxx.
(b) "BOARD" means the Board of Directors of Xxxxxxxx.
(c) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act") of ownership of 20% or more of either
(a) the then outstanding shares of common stock
of Xxxxxxxx (the "Outstanding Xxxxxxxx Common
Stock") or (b) the combined voting power of the
then outstanding voting securities of Xxxxxxxx
entitled to vote generally in the election of
directors (the "Outstanding Xxxxxxxx Voting
Securities"); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
any individual becoming a director subsequent to
the date hereof whose election, or nomination
for election by Angelica's stockholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are
used in Rule l4a-11 of Regulation l4A
promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than
the Board; or
(iii) Approval by the stockholders of Xxxxxxxx of a
reorganization, merger or consolidation, in each
case, unless, following such reorganization,
merger or
consolidation, (a) more than 50% of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation and
the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially
owned, directly or indirectly, by all or
substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Xxxxxxxx Common
Stock and Outstanding Xxxxxxxx Voting Securities
immediately prior to such reorganization, merger
or consolidation in substantially the same
proportions as their ownership, immediately
prior to such reorganization, merger or
consolidation, of the Outstanding Xxxxxxxx
Common Stock and Outstanding Xxxxxxxx Voting
Securities, as the case may be, (b) no Person
beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding
shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of
the then outstanding voting securities of such
corporation, entitled to vote generally in the
election of directors and (c) at least a
majority of the members of the board of
directors of the corporation resulting from such
reorganization, merger or consolidation were
members of the Incumbent Board at the time of
the execution of the initial agreement providing
for such reorganization, merger or
consolidation; or
(iv) Approval by the stockholders of Xxxxxxxx of
(a) a complete liquidation or dissolution of
Xxxxxxxx or (b) the sale or other disposition of
all or substantially all of the assets of
Xxxxxxxx, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than 50% of, respectively,
the then outstanding shares of common stock of
such corporation and the combined voting power
of the then outstanding voting securities of
such corporation entitled to vote generally in
the election of directors is then beneficially
owned, directly or indirectly, by all or
substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Xxxxxxxx Common
Stock and Outstanding Xxxxxxxx Voting Securities
immediately prior to such sale or other
disposition in substantially the same proportion
as their ownership, immediately prior to such
sale or other disposition, of the Outstanding
Xxxxxxxx Common Stock and Outstanding Xxxxxxxx
Voting Securities, as the case may be, (2) no
Person beneficially owns, directly or
indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of such
corporation and the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors and (3) at least a
majority of the members of the board of
directors of such corporation were members of
the Incumbent Board at the time of the execution
of the initial agreement or action of the Board
providing for such sale or other disposition of
assets of Xxxxxxxx.
(d) "DATE OF TERMINATION" means a date that a Notice of
Termination is received by the party to whom such notice is
being given, unless the party giving the Notice of
Termination specifies another date in the Notice of
Termination (which date shall not be more than 30 days after
giving of such Notice of Termination) or, alternatively, the
last
-2-
day of any Term in the event that a Notice of Non-Renewal is
delivered by either party in accordance with Section 2.1 of
this Agreement.
(e) "DISPOSITION OF AN OPERATING LINE OF BUSINESS" means:
(i) when used with reference to the stock or other
equity interests of an Operating Line of
Business that is or becomes a separate
corporation, limited liability company,
partnership or other business entity, the sale,
exchange, transfer, distribution or other
disposition of the ownership, either
beneficially or of record or both, by Xxxxxxxx
of more than 50% of either (a) the then
outstanding shares of common stock (or the
equivalent equity interests) of such Operating
Line of Business, or (b) the combined voting
power of the then outstanding voting securities
of such Operating Line of Business entitled to
vote generally in the election of the Board or
the equivalent governing body of the Operating
Line of Business;
(ii) when used with reference to the merger or
consolidation of an Operating Line of Business
that is or becomes a separate corporation,
limited liability company, partnership or other
business entity, any such transaction that
results in Xxxxxxxx owning, either beneficially
or of record or both, less than 50% of either
(a) the then outstanding shares of common stock
(or the equivalent equity interests) of such
Operating Line of Business, or (b) the combined
voting power of the then outstanding voting
securities of such Operating Line of Business
entitled to vote generally in the election of
the Board or the equivalent governing body of
the Operating Line of Business; or
(iii) when used with reference to the assets of an
Operating Line of Business, the sale, exchange,
transfer, liquidation, distribution or other
disposition of assets of such Operating Line of
Business (a) having a fair market value (as
determined by the Incumbent Board) aggregating
more than 50% of the aggregate fair market value
of all of the assets of such Operating Line of
Business as of the Triggering Transaction Date,
(b) accounting for more than 50% of the
aggregate book value (net of depreciation and
amortization) of all of the assets of such
Operating Line of Business, as would be shown on
a balance sheet for such Operating Line of
Business, prepared in accordance with generally
accepted accounting principles then in effect,
as of the Triggering Transaction Date; or (c)
accounting for more than 50% of the net income
of such Operating Line of Business, as would be
shown on an income statement, prepared in
accordance with generally accepted accounting
principles then in effect, for the 12 months
ending on the last day of the month immediately
preceding the month in which the Triggering
Transaction Date occurs.
(f) "EFFECTIVE DATE" means the date of this Agreement.
(g) "EMPLOYMENT PERIOD" means the period beginning on the
Effective Date and ending on the Date of Termination.
-3-
(h) "GOOD CAUSE" means, when used in connection with the
termination of Employee's employment with Xxxxxxxx by
Xxxxxxxx, a termination based upon (i) Employee's willful
and continued failure to substantially perform his duties
with Xxxxxxxx (other than as a result of incapacity due to
physical or mental condition), after a written demand for
substantial performance is delivered to Employee by
Xxxxxxxx, which specifically identifies the manner in which
Employee has not substantially performed his duties; (ii)
Employee's commission of an act constituting a criminal
offense involving moral turpitude, dishonesty or breach of
trust; or (iii) Employee's material breach of any provision
of this Agreement.
(i) "GOOD REASON" means, when used in connection with the
termination of Employee's employment with Xxxxxxxx by
Employee, a termination based upon the following reasons:
(i) the assignment to Employee of any duties
inconsistent in any respect with Employee's
position (including status, offices, titles and
reporting requirements), authority, duties and
responsibilities as contemplated by this
Agreement or any other action by Xxxxxxxx which
results in a material diminution in such
position, authority, duties or responsibilities,
excluding for this purpose any action not taken
in bad faith which is remedied by Xxxxxxxx
promptly after receipt of notice by Xxxxxxxx
thereof given by Employee;
(ii) (A) the failure by Xxxxxxxx to continue in
effect any benefit or compensation plan, stock
ownership plan, life insurance plan, health and
accident plan or disability plan to which
Employee is entitled, provided that Xxxxxxxx may
amend, modify or replace such plans as long as
the Employee is entitled to benefits under the
amended, modified or replaced plan or plans that
are substantially similar to those of the plan
or plans so amended, modified or replaced; (B)
the taking of any action by Xxxxxxxx which would
adversely affect Employee's participation in, or
materially reduce Employee's benefits under, any
plans in which Employee is then currently
participating; or (C) the failure of Xxxxxxxx to
provide Employee with paid vacation to which
Employee is entitled;
(iii) a material breach by Xxxxxxxx of any provision
of this Agreement;
(iv) a purported termination by Xxxxxxxx of
Employee's employment otherwise than
specifically permitted by this Agreement; or
(v) in connection with a Triggering Transaction (as
set forth in Section 4.2 of this Agreement), the
failure of a successor of Xxxxxxxx expressly to
assume and agree to perform this Agreement
pursuant to the provisions of Section 6.4 of
this Agreement prior to a Triggering
Transaction; provided, however, that a
termination of employment by Employee: (A)
subsequent to an express assumption and
agreement to perform this Agreement by such
successor on or after a Triggering Transaction
Date or (B) subsequent to a date that is two
years after a Triggering Transaction Date, shall
not be deemed to be for "Good Reason" under this
subsection.
-4-
(j) "NOTICE OF TERMINATION" means a written notice by
either party of such party's desire to terminate Employee's
employment with Xxxxxxxx, which notice (i) indicates the
specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee's employment
under the provision so indicated, and (iii) if the Date of
Termination is other than the date of receipt of such
Notice, specifies the Date of Termination (which date shall
not be more than 30 days after the giving of such Notice).
The failure by Employee or Xxxxxxxx to set forth in the
Notice of Termination any fact or circumstance which
contributes to a showing of Good Cause or Good Reason shall
not waive any right of Employee or Xxxxxxxx hereunder or
preclude Employee or Xxxxxxxx from asserting such fact or
circumstance in enforcing Employee's or Angelica's rights
hereunder.
(k) "NOTICE OF NON-RENEWAL" means a written notice by
either party to this Agreement of such party's desire not to
allow the Term of the Agreement to automatically renew at
the end of the then-current Term for another Term, thus
having the effect of terminating the Agreement at the end of
the then-current Term.
(l) "OPERATING LINE OF BUSINESS" means Angelica's Textile
Services Business Segment which operates laundry plants,
either as a division or as a separate subsidiary or
subsidiaries, providing textile rental and laundry services
for health care institutions and general linen services in
selected geographic areas, principally to hotels, motels and
restaurants.
(m) "TERM" means, initially a one-year period commencing
on the Effective Date and ending on the date of the first
anniversary of the Effective Date, and, if renewed in
accordance with Section 2.1 of this Agreement, shall mean a
one-year period commencing on the particular anniversary
date of the Effective Date and ending on the date one year
after such commencing anniversary date.
(n) "TRIGGERING TRANSACTION" means (i) a Change in Control
of Xxxxxxxx, or (ii) a Disposition of the Operating Line of
Business.
(o) "TRIGGERING TRANSACTION DATE" shall mean the date that
the Triggering Transaction occurs.
SECTION 2: TERM OF AGREEMENT.
2.1 INITIAL TERM OF AGREEMENT; RENEWAL TERMS. The initial
Term of this Agreement shall be for one year commencing on the Effective
Date, subject to automatic renewal for a Term of an additional one year
commencing immediately upon the end of the initial Term or the then-
current renewal Term, as the case may be, unless either party to this
Agreement gives a Notice of Non-Renewal to the other party not later
than 30 days prior to the end of the initial Term or the then-current
renewal Term, as the case may be. In the event that such a Notice of
Non-Renewal is given as set forth in this Section 2.1, the Date of
Termination will be the last day of the initial Term or the then-current
Term, as the case may be.
-5-
2.2 TERMINATION OF THE EMPLOYMENT PERIOD PRIOR TO END OF
TERM. Notwithstanding Section 2.1 of this Agreement, either party to
this Agreement may terminate Employee's Employment Period (and
Employee's employment with Xxxxxxxx) at any time during the Term by
giving the other party a Notice of Termination to the other party,
without any liability except as specified in Section 4 of this
Agreement.
SECTION 3: TERMS AND CONDITIONS OF EMPLOYMENT.
3.1 PERIOD OF EMPLOYMENT. Employee shall remain in the
employ of Xxxxxxxx throughout the Employment Period in accordance with
the terms and provisions of this Agreement. This Agreement shall remain
in full force and effect notwithstanding subsequent changes in
Employee's compensation, location of employment, duties or authority or
any changes in the identity of the corporation to which Employee's
compensation is charged, provided that said corporation is a subsidiary
or affiliate of Xxxxxxxx and provided further that certain of such
changes may constitute Good Reason for purposes of this Agreement.
3.2 POSITIONS AND DUTIES. Xxxxxxxx hereby employs
Employee and Employee hereby accepts such employment as Vice President
of Marketing of Angelica's Textile Services Business Segment, subject to
the reasonable directions of the President of said Business Segment or
of the Chief Executive Officer of Xxxxxxxx and the Board. Employee
shall have such authority and shall perform such duties as are specified
by Xxxxxxxx for the position to which he has been appointed hereunder
and shall so serve, subject to the control exercised by the President of
Angelica's Textile Services Business Segment, the Chief Executive
Officer of Xxxxxxxx and the Board from time to time. Employee agrees to
devote such of his time, attention and energy to the business of
Xxxxxxxx as may be required to perform the duties and responsibilities
assigned to him to the best of his ability and with reasonable
diligence.
3.3 COMPENSATION. Employee's initial base salary under
this Agreement will be $156,700 per annum, payable in accordance with
Angelica's current payroll practices.
SECTION 4: BENEFITS UPON TERMINATION.
4.1 NOT IN CONNECTION WITH A TRIGGERING TRANSACTION. If
Employee's employment with Xxxxxxxx is terminated prior to the end of
the initial Term or prior to the end of any subsequent renewal Term, as
the case may be, (a) by Xxxxxxxx without Good Cause or (b) by Employee
for Good Reason, then upon the negotiation and execution of a mutually
acceptable settlement and release agreement by Xxxxxxxx and Employee, in
addition to any accrued salary and other payments owed to Employee under
Angelica's other benefit plans and policies, Xxxxxxxx shall pay Employee
an amount equal to 1/12th of the Employee's then-current Annual Base
Salary multiplied by the number of years of service of Employee with
Xxxxxxxx; provided, however, that said amount shall not, under any
circumstances, exceed Employee's then-current Annual Base Salary nor be
less than one-half of Employee's then-current Annual Base Salary. Said
amount shall be paid in equal, semi-monthly payments, less applicable
taxes, withholdings and standard deductions. In the case of a
termination of Employee's employment with Xxxxxxxx not in connection
with a Triggering Transaction for any reason other than as stated in
this Section 4.1 above, Employee shall be entitled only to accrued
salary and other payments owed to Employee under Angelica's other
benefit plans and policies.
4.2 IN CONNECTION WITH A TRIGGERING TRANSACTION. If (a) a
Triggering Transaction occurs during the Employment Period and within
one year after the Triggering Transaction Date (i) Xxxxxxxx shall
-6-
terminate Employee's employment with Xxxxxxxx without Good Cause, or
(ii) Employee shall terminate employment with Xxxxxxxx for Good Reason,
or, alternatively, (b) if one of the above-described terminations of
--
employment occurs within the six-month period prior to the earlier of
(i) a Triggering Transaction or (ii) the execution of a definitive
agreement or contract that eventually results in a Triggering
Transaction, then, in addition to any accrued salary and other payments
owed to Employee under Angelica's other benefit plans and policies,
Xxxxxxxx shall pay to Employee an amount equal to Employee's then-
current Annual Base Salary, in a lump-sum payment, after either (y) the
Date of Termination, in the case where the sequence of the requisite
events is as set forth in subsection (a) above or (z) the Triggering
Transaction Date, in the case where the sequence of the requisite events
occurred as set forth in subsection (b) above (the relevant date for
purposes of entitlement to the benefits set forth in this Section 4.2 is
hereinafter referred to as the "Entitlement Date"). In addition, at the
Entitlement Date, to the extent not otherwise provided for under the
terms of Angelica's stock option plans or Employee's stock option
agreements, all stock options held by Employee that have not expired in
accordance with their respective terms shall vest and become fully
exercisable. In the case of any termination of Employee's employment
with Xxxxxxxx in connection with a Triggering Transaction for any reason
other than as stated in this Section 4.2 above, Employee shall be
entitled only to accrued salary and other payments owed to Employee
under Angelica's other benefit plans and policies.
SECTION 5: CONFIDENTIALITY.
5.1 NON-COMPETE AGREEMENT. It is agreed that during the
period beginning on the Effective Date and ending one year after the
Date of Termination, regardless of whether such termination is by the
action of Employee or Xxxxxxxx or by mutual agreement, Employee shall
not, either for himself or on behalf of any person, firm or corporation
(whether for profit or otherwise) engage in any form of competition with
Xxxxxxxx, directly or indirectly, through any commercial venture, as a
partner, officer, director, stockholder, advisor, employee, consultant,
agent, salesman, venturer or otherwise, in the business conducted by
Xxxxxxxx in the United States, Canada or any other country in which
Xxxxxxxx does business. This requirement, however, will not limit
Employee's right to invest in the capital stock or other equity
securities of any corporation, the stock or securities of which are
publicly owned or are regularly traded on any public securities
exchange. In addition, notwithstanding this Section 5.1, if Employee is
terminated by Xxxxxxxx without Good Cause or if Employee terminates his
employment with Xxxxxxxx for Good Reason, then Employee will not be
subject to the restrictions of this Section 5.1
5.2 CONFIDENTIAL INFORMATION. Employee acknowledges that
during his employment with Xxxxxxxx, he may develop or be exposed to
confidential information concerning Angelica's inventions, processes,
methods and confidential affairs, property of a proprietary nature and
trade secrets of Xxxxxxxx or its licensors or customers. Employee
agrees that the maintenance of the proprietary character of such
information and property to the full extent feasible is important and
that for so long as any such confidential information and trade secrets
may remain confidential, secret or otherwise wholly or partially
protectable, either during or after Employee's Employment Period, shall
not use or divulge such confidential information or property except as
permitted or required by the duties of Employee's employment with
Xxxxxxxx. Employee shall not remove any property of a proprietary
nature from Angelica's premises except as required by the duties of
Employee's employment. Employee shall return to Xxxxxxxx upon
termination of his employment with Xxxxxxxx, all models, drawings,
photographs, writings, records, papers or other properties produced by
Employee or coming into his possession by or through his employment with
Xxxxxxxx.
-7-
5.3 NON-DIVERSION. During the Employment Period and for
one year after the Date of Termination, Employee shall not directly
or indirectly or by aid to others, do anything which could be expected
to divert from Xxxxxxxx any trade or business with any customer of
Xxxxxxxx with whom Employee had any contact or association during the
one year immediately preceding the Date of Termination.
5.4 REASONABLENESS OF RESTRICTIONS. Employee agrees that
the period and areas of restriction following the Date of Termination,
as set forth in this Section 5, are reasonably required for the
protection of Xxxxxxxx and its business, as well as the continued
protection of Angelica's employees. If any one or more of the
covenants, agreements or provisions contained herein shall be held to be
contrary to the policy of the specific law, though not expressly
prohibited, or against public policy, or shall for any other reason
whatsoever be held invalid, then such particular covenant, agreement or
provision shall be null and void and shall be deemed separable from the
remaining covenants, agreements and provisions hereof. The parties
hereto agree that in the event that either the length of time or the
geographic area set forth herein is deemed too restrictive in any court
proceeding, the court may reduce such restrictions to those which it
deems reasonable under the circumstances.
5.5 EQUITABLE RELIEF. Any action by Employee contrary to
the restrictive covenants contained in this Section 5 may as a matter
of course be restrained by equitable or injunctive process issued out
of any court of competent jurisdiction, in addition to any other remedies
provided in law. In the event of the breach of Employee's covenants as
set forth in this Section 5 and Angelica's obtaining of injunctive relief,
the period of restrictions set forth herein shall commence from the date
of the issuance of the order which enjoins such activity.
SECTION 6: MISCELLANEOUS.
6.1 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses as set forth
below; provided that all notices to Xxxxxxxx shall be directed to the
attention of the Chief Financial Officer of Xxxxxxxx, or to such other
address as one party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
Notice to Employee
------------------
Xxxxxx X. Xxxx
0000 Xxxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxx 00000
Notice to Xxxxxxxx
------------------
Xxxxxxxx Corporation
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
6.2 WAIVER. Employee's or Angelica's failure to insist
upon strict compliance with any provision of this Agreement or the
failure to assert any right Employee or Xxxxxxxx may have hereunder
-8-
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement and shall not operate or be
construed as a waiver of any subsequent breach of the same provision.
6.3 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
6.4 SUCCESSORS. This Agreement shall be binding upon and
inure to the benefit of any successor of Xxxxxxxx and any such successor
shall be deemed to be substituted for Xxxxxxxx under the terms of this
Agreement. Xxxxxxxx shall 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 Xxxxxxxx to assume
expressly and agree to perform the provisions of this Agreement as if no
such succession had taken place. As used in this Agreement, "Xxxxxxxx"
shall mean Xxxxxxxx as hereinbefore defined or any successor to
Angelica's business and/or assets which assumes and agrees to perform
this Agreement.
6.5 ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior written or oral agreements, understandings,
discussions or negotiations with respect thereto.
IN WITNESS WHEREOF, Employee and Xxxxxxxx have caused this
Agreement to be executed in its name on its behalf, all as of the day
and year first above written.
/s/ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
XXXXXXXX CORPORATION
By /s/ Xxx X. Xxxxxx
------------------------------------------
Name: Xxx X. Xxxxxx
---------------------------------------
-9-
