EXHIBIT B-3
EXECUTIVE EMPLOYMENT AGREEMENT
Executive Employment Agreement effective as of the 21st day of February,
1995, between Syntro Corporation, a Delaware corporation ("Syntro"), and
Xxxxxxx X. Xxxxxx, a resident of Leawood, Kansas (the "Executive").
Witnesseth:
Whereas, the Executive has been serving as an officer of Syntro and, in
certain instances, of SyntroVet Incorporated ("SyntroVet"), a wholly-owned
subsidiary of Syntro (collectively the "Offices"), which are listed on Schedule
A attached hereto and incorporated herein by this reference;
Whereas, the Board of Directors of Syntro has determined that the retention
of the executive staff of Syntro is important to the continued long-term
viability of Syntro; and
Whereas, Syntro desires to continue the services of the Executive in the
Offices, and the Executive is willing to continue in the Offices on the terms
and conditions hereinafter set forth; and
Now, Therefore, in consideration of the mutual promises and conditions
contained herein, the parties hereby agree as follows:
1. DEFINITION OF SYNTRO. For the purposes of this Agreement, unless the
context otherwise requires, all reference to Syntro herein shall include both
Syntro and SyntroVet.
2. ENGAGEMENT. Syntro hereby continues the engagement of the Executive in the
Offices, and the Executive hereby accepts said engagement upon the terms and
conditions hereinafter set forth.
3. TERM. Subject to the provisions for termination hereinafter set forth, the
term of this Agreement began as of the date first above written, and shall
expire on the expiration dated indicated on Schedule A.
4. COMPENSATION.
(a) Salary. As base compensation for the services to be rendered hereunder,
Syntro shall pay the Executive the annual salary set forth on Schedule A,
payable in equal semi-monthly installments (payable on the 15th and the last
day of each month). Said salary may be increased by Syntro to take into account
the nature of the contributions to Syntro by the Executive and any other
factors that may be deemed relevant by the Compensation Committee of the Board
of Directors of Syntro (the "Compensation Committee").
(b) Compensation Plans. The Executive shall be entitled to participate in any
stock option plan(s), employees' stock purchase plan(s), 401(k) savings plan,
retirement plans, profit sharing plans, bonus programs and deferred
compensation plan(s) as Syntro may from time to time adopt upon the terms and
conditions established by the Compensation Committee or the Board of Directors
of Syntro.
(c) Bonus Compensation. The Executive shall be entitled to cash bonuses
during the term of his (her) employment based upon the success of Syntro and/or
the Executive in reaching certain goals and objectives as determined by the
Executive, the President of Syntro and the Compensation Committee, and
reflected in the minutes of the Board of Directors as approved thereby.
5. EMPLOYMENT BENEFITS. Syntro shall maintain such policies of health,
hospitalization, disability and life insurance covering the Executive as Syntro
shall reasonably determine to be
1
comparable to policies covering other senior executive officers of Syntro. The
Executive shall be entitled to ten (10) days of sick leave, with full pay, per
calendar year. Accrued and unused sick leave will expire in accordance with the
Company policy then in effect.
6. VACATIONS. The Executive shall be entitled to the number of business days
of vacation time as shall be indicated on Schedule A, at full salary, each
calendar year, commencing retroactively to the Effective Date of Vacation
Accrual set forth on Schedule A. In the event that, at the end of any calendar
year during the term of this Agreement, there shall be any vacation time of the
Executive remaining unused (including vacation time accrued from prior calendar
years), such accrued and unused vacation time shall be accumulated with
previously accrued but unused vacation time and carried forward into the
succeeding and future calendar years. Notwithstanding the accumulation of
accrued and unused vacation time, the Executive shall not be entitled to use
more than thirty (30) business days of vacation time in any calendar year
without the prior consent of the President of Syntro. Vacation time shall be
deemed to be used in the reverse chronological order in which it has accrued so
that current year vacation time is used before accrued but unused vacation time
is used. The Executive shall be entitled to such additional vacation time,
without pay, as he (she) and the President of Syntro shall from time to time
agree. Accrued and unused vacation time, not to exceed sixty (60) days in
total, shall be paid to the Executive on the last day of his (her) employment.
7. DUTIES, UNDERSTANDINGS AND EXPECTATIONS. The Executive shall devote his
(her) full and exclusive business time, attention, energies and best efforts to
the performance of his duties hereunder, in such manner and at such times as
may be determined by the President or the Board of Directors from time to time,
in accordance with the usual standards of ethics and the usual customs and
procedures applicable to the commercial businesses in which Syntro is engaged.
During the term of this Agreement, or any extension hereof, the Executive shall
neither directly nor indirectly be employed by any other person, firm or
corporation, in any capacity whatsoever except (a) as a director or the like of
any business or charitable entity or organization provided such entity or
organization is not engaged in activity competitive with Syntro or its
affiliates, and (b) as an officer and/or director of any corporation or manager
of any limited liability company as requested by Syntro. It is expressly
understood that the Executive's primary mission is to enhance the growth and
value of Syntro through sound management of its assets, including, without
limitation, its personnel, facilities, technologies, and capital for product-
related research, development, registration, manufacturing and marketing.
8. WORKING FACILITIES. The Executive shall be furnished, at the cost of
Syntro, with office space, clerical help and such other facilities, supplies
and services as are deemed appropriate by Syntro as suitable to the Executive's
position and adequate for the performance of his duties hereunder.
9. EXPENSES. Syntro shall reimburse the Executive for all reasonable and
necessary costs and expenses incurred by him (her) in connection with the
performance of his (her) duties hereunder upon the presentation by the
Executive from time to time of itemized accounts of such expenditures. Syntro
shall reimburse the Executive for all business-related travel and entertainment
expenses incurred by him (her).
10. EXECUTIVE COVENANTS. To induce Syntro to execute, deliver and perform
this Agreement, and for $10.00 in hand paid, Executive hereby covenants and
agrees:
(a) Nondisclosure of Information--The Executive acknowledges that Syntro's
business and financial records, customer and client lists, trade secrets and
confidential planning or policy matters, and any secret or confidential
operational, research, product development, management, financial, accounting,
control, system, marketing or tax information relating to the business of
Syntro and other confidential methods of operations or plans, as they may exist
from time to time ("confidential information") are valuable and unique assets
of Syntro, access to and knowledge of which are essential to performance of his
(her) duties hereunder, and therefore he (she) agrees he (she) will not, during
his
2
(her) employment and for a period of five (5) years thereafter, disclose such
confidential information to any person or other entity who is or will be a
direct competitor of Syntro conducting business in the "territory" (hereinafter
defined in Paragraph 10(b) below), nor during said period of time shall the
Executive make use of any such confidential information for his (her) own
purposes or benefit in the territory or for the benefit of any person or other
entity (except for Syntro, or any affiliate thereof) who is or will be a direct
competition of Syntro conducting business in the territory. The foregoing is in
addition to and not in replacement for the Confidentiality Agreement executed
and delivered by the Executive upon commencing employment with Syntro, which
Confidentiality Agreement is hereby ratified and confirmed.
(b) Executive's Restrictive Covenants--As a paramount inducement to Syntro to
enter into this Executive Employment Agreement and to agree to pay to the
Executive his (her) regular compensation, bonuses and the other payments and
fringe benefits provided hereunder, and in view of the Executive's services and
his (her) access to the confidential information described above, the Executive
agrees that during the period of his (her) employment by Syntro and for a
period of 12 months after termination of his (her) employment, for any reason
whatsoever with Syntro, other than a Syntro Cause or by Syntro without
Executive Cause, or the balance of the time remaining of such original stated
period from the date of the entry by a court of competent jurisdiction of a
final non-appealable judgment or order enforcing the subject covenant, the
Executive will not, directly or indirectly, on his (her) own account, or as an
employee, consultant, adviser, partner, co-venturer, owner, member, manager,
officer, director or stockholder of any other person, firm, partnership,
limited liability company, or corporation:
(i) conduct, engage in, be connected with, or directly aid or assist as a
member of or consultant to management anyone else to engage in, a business
directly competitive with the vaccine product line of Syntro throughout the
United States of America, its territories, possessions, protectorates and
commonwealths; so long as and provided Syntro products are sold in the
territory described above during said applicable period of time (the
foregoing is not intended to preclude the Executive from pursuing other
opportunities in the animal health industry); nor
(ii) during such time, directly or indirectly, sell or solicit sales for
products competitive with those of Syntro, or to service, consult with,
divert, take away, transfer or interfere with any of the collaborative
partners or customers of Syntro; nor
(iii) during such time, directly or indirectly, for himself (herself) or
on behalf of any other person or entity in which he (she) shall have any
direct or indirect business or employment interest (collectively an
"affiliated entity"), induce or attempt to induce any present or future
management or other key employee of Syntro to leave the employ of Syntro
and/or to seek or accept employment with the Executive or any affiliated
entity, nor shall he (she) negotiate with any such employee in the employ
of Syntro with respect to such person's present or future employment
outside of Syntro.
However, nothing herein contained shall prevent the Executive during the time
indicated from purchasing and owning stock in any corporation listed on any
stock exchange or traded in the over-the-counter market provided such purchases
shall not result in the Executive owning in the aggregate directly or
beneficially, three percent (3%) or more of the equity securities of any
corporation or other entity engaged in a business which is competitive to that
of Syntro.
The Executive further agrees that, in view of the present scope of Syntro's
business activities, the time periods, territory and scope of activities
specified above describe the minimum reasonable time, area and scope of
activities necessary to protect Syntro and its successors and assigns, in the
use of the good will of the business to be conducted by Syntro, and therefore
he (she) agrees that Syntro, in case of violation of this Paragraph 10(b), may
have injunctive relief, without bond (but upon due notice) in addition to such
other relief as may appertain in equity or at law. No waiver of any violation
hereof shall be implied from Syntro's forbearance or failure to take action in
pursuance hereof. All covenants
3
and provisions of this Paragraph 10(b) constitute a series of separate
covenants, and if any particular portion of this Paragraph 10(b) is adjudicated
invalid or unenforceable, the same shall be deemed deleted without affecting
the validity and enforcement of the other provisions hereof, and if any
provision hereof is deemed unenforceable because of its scope in terms of area,
time or business activities, the parties agree that the same may be made
enforceable by reductions or limitations thereon so as to be enforceable to the
fullest extent permissible under the laws and public policies of any applicable
jurisdiction.
The provisions of this Paragraph 10 shall continue in full force and effect
notwithstanding the termination of this Employment Agreement.
11. TERMINATION.
(a) Events of Termination. This Agreement and the Executive's employment with
Syntro may be terminated:
(1) at any time by mutual consent of Syntro and the Executive; or
(2) by Syntro for Executive Cause (as hereinafter defined) upon written
notice to the Executive; or
(3) by Syntro without Executive Cause upon 30 days prior written notice
to the Executive;
(4) by the Executive for Syntro Cause (as hereinafter defined); or
(5) by the Executive without Syntro Cause upon not less than 30 days
prior written notice to Syntro.
(b) Definition of Executive Cause. For purposes of this Agreement,
termination of the Executive by Syntro shall be deemed to be for "Executive
Cause" if the Board of Directors of Syntro shall have determined in good faith
that the Executive has:
(1) willfully neglected his (her) normal and material duties hereunder;
(2) willfully breached any of the material covenants contained herein
including, without limitation, the covenants set forth in Section 10;
(3) wrongfully converted funds or property of Syntro;
(4) made any unauthorized disclosure of any trade secrets, patents,
trademarks, copyrights or other proprietary business information owned or
developed by or on behalf of Syntro, its successors or assigns; or
(5) been arrested and arraigned for a crime involving moral turpitude.
(c) Definition of Syntro Cause. For purposes of this Agreement, termination
by the Executive shall be deemed for "Syntro Cause" if the Executive shall have
terminated his employment with Syntro due to:
(1) the assignment to the Executive of duties not consistent with that of
his (her) Offices or demanding additional, official work days per week;
(2) a reduction in salary or discontinuance of any bonus plan now in
effect in which the Executive may participate; or
(3) a change in the geographic location of where the Executive's position
is primarily based in excess of fifty (50) miles from the Syntro facility
at which the Executive predominantly performs his (her) duties as indicated
on Schedule A (the "Executive's Facility").
12. SEVERANCE BENEFITS FROM SYNTRO.
(a) Benefits/Accrual. To induce the Executive to continue to serve Syntro and
SyntroVet in his (her) present capacities, Syntro shall provide the Executive
with severance benefits as set forth below,
4
unless he (she) is terminated for Executive Cause. The Executive shall receive
the severance benefits as set forth in Section 12(c) ("Severance Benefits")
upon the following conditions:
(1) the termination of his (her) employment with Syntro pursuant to
Section 11(a)(1), (3) or (4); or
(2) Within one (1) year after there has occurred a "change in control"
(as hereinafter defined) the Executive has terminated his (her) employment
due to a Syntro Cause, or the Executive's employment is terminated by
Syntro or its successor in interest for any reason other than Executive
Cause.
(b) Definition of Change of Control. A "change of control" shall have
occurred if (i) any person (as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")) that presently owns 50%
or less of the outstanding shares of Syntro Common Stock becomes the beneficial
owner (as defined in Rule 13(d)-3 of the Exchange Act) of a total of more than
50% of the outstanding shares of Syntro's Common Stock, or (ii) Syntro shall
have sold all or substantially all of its assets.
(c) Description of Severance Benefits. Severance Benefits for the Executive
shall be as follows:
(1) a lump-sum payment of one (1) year's salary based on the total annual
rate of base compensation for the Executive in effect prior to the date of
termination or change of control;
(2) continued participation in all employee benefits for a period of one
(1) year. Should such participation not be possible due to terms of the
employee benefit plans, equivalent benefits shall be provided to the
Executive through alternative means. These benefits shall include, but not
be limited to, all health, accident, and disability plans, as well as any
life insurance plans, provided by or through Syntro; and
(3) a release and discharge of the covenants set forth in Section 10(b).
(d) Time of Paying Severance Benefits. The Severance Benefits described above
shall be payable by Syntro or its successor in interest to the Executive on the
last day of the Executive's employment. The Executive shall not be required to
mitigate the amount of severance benefit by seeking other employment and none
of these payments may be reduced by any future salary the Executive may earn.
13. DISABILITY AND DEATH.
(a) In the event of the Executive's "Disability" (as hereinafter defined),
Syntro or the Executive shall have the right to terminate the Executive's
employment hereunder. For purposes hereof, "Disability" shall mean the
Executive's inability to render services to Syntro customarily expected of him
(her) because of a medically determinable physical or mental illness, injury or
impairment expected to result either in death or to be of long, continued and
indefinite duration and for such reason, the Executive himself (herself) or the
Board of Directors of Syntro in good faith shall have determined to terminate
his (her) employment with Syntro provided, however, (i) neither the Executive
nor the Board shall have the right to terminate the Executive's employment on
the basis of a Disability unless such Disability shall have continued for a
period of one-hundred and twenty (120) calendar days and (ii) if either party
shall object to such determination of Disability, such Disability shall be
conclusively determined by an independent physician selected in good faith by
the Board for such purpose and whose determination shall be final and
conclusive on the parties hereto. Notwithstanding the foregoing, (1) the
Executive's absence from work because of any such illness, injury or impairment
for a continued period of 180 calendar days shall be deemed conclusive evidence
of such Disability and (2) a continuous period of Disability absence shall not
be deemed interrupted until the Executive returns to substantially full-time
work for a period of at least 22 successive business days.
5
During the first 120 calendar days of such Disability, the Executive's
compensation hereunder shall be continued. After such 120 calendar days of
Disability, if the Executive's employment continues but the Executive is unable
to render the type or quality of services to Syntro customarily expected of him
(her) before any such Disability, no further regular compensation need be paid
by Syntro, except as otherwise mutually agreed to between the parties for any
services that the Executive may be capable of actually rendering. If, during
any such period of Disability, the Executive shall be entitled to receive
disability payments under the terms of any disability insurance program
maintained by Syntro or under any federal or state mandated disability
insurance program, the salary otherwise payable by Syntro shall be reduced, but
not below zero, by the amounts that the Executive is entitled to receive under
such disability insurance programs or laws for any of the periods during which
the Executive's Salary is to be continued pursuant to the foregoing provisions
of this Paragraph.
(b) The death of the Executive shall terminate this Agreement.
14. ARBITRATION. Except as otherwise specifically provided herein, any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration in the City in which there is
located the Executive's Facility as set forth on Schedule A, in accordance with
the rules of the American Arbitration Association then obtaining, and judgment
upon any award so rendered may be entered in any court having jurisdiction
thereof.
15. NOTICES. Any notice or other communication required or permitted to be
transmitted under this Agreement shall be in writing and personally delivered
(by commercial courier or otherwise) or mailed, return receipt requested,
postage prepaid, addressed to the parties hereto at their addresses indicated
below, or at such other addresses as may be hereafter designated by a party by
notice delivered in accordance herewith. Any notice delivered personally shall
be effective on the day of delivery; any notice mailed, as aforesaid, shall be
effective on the second day following posting.
16. WAIVER OF BREACH. The waiver by either party of a breach of any provision
of this Agreement by the other shall not operate or be construed as a waiver of
any subsequent breach.
17. ASSIGNMENT. The rights and obligations of Syntro under this Agreement
shall inure to the benefit of, and shall be binding upon, Syntro and its
successors and assigns.
18. CAPTIONS. Captions are used herein for purposes of convenience only and
shall not be used for purposes of interpreting the meaning of any provision.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
all of which shall be deemed originals and together shall constitute one and
the same instrument.
20. SEVERABILITY. The invalidity, illegality or unenforceability of any
provision hereof shall not in any way affect, impair, invalidate or render
unenforceable this Agreement or any other provision hereof.
21. TAXES. Syntro shall be entitled to deduct or withhold all applicable
payroll and social security taxes where required on all applicable compensation
paid to the Executive or any successor in interest.
22. RETURN OF DOCUMENTS. Upon termination of his (her) employment with Syntro
for any reason, the Executive shall forthwith deliver to Syntro and return, and
shall not retain, any originals or copies of any confidential information or
other books, papers, price or premium lists, client or customer contracts,
customer or client lists, files, books of account, notes and other documents
and data or other writings, tapes or records of the Executive (all of the same
are hereby agreed to be the exclusive property of Syntro).
23. ENTIRE AGREEMENT. This instrument contains the entire agreement between
the parties. It supersedes any and all other agreements and understandings of
or by the parties with respect to the
6
subject matter hereof. It may not be changed orally, but only by agreement in
writing and signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
24. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the State of residence of the Executive as of the date hereof.
In Witness Whereof, this Agreement is effective as of the day and year first
above written.
Syntro:
Syntro Corporation
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
/s/ J. Xxxxxx Xxxx
By: _________________________________
J. Xxxxxx Xxxx
President and Chief Executive
Officer
Executive:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Address:13121 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
7
SCHEDULE A
TO
EXECUTIVE EMPLOYMENT AGREEMENT
BY AND BETWEEN
SYNTRO CORPORATION AND
----------------
Offices at Syntro:Vice President, Animal Health
Offices at SyntroVet:President
Initial Annual Salary:$114,400.00
No. of Business Days of
Vacation Time Per Calendar Year: 20
Effective Date of Vacation Accrual: January 1, 1995
Expiration Date of Agreement: February 20, 1997
Executive's Facility: Syntro Headquarters; Lenexa, KS
8
