EXHIBIT 10.17
EMPLOYMENT AGREEMENT
AGREEMENT, made July 23, 1997, by and between XXXXXXX-XXXXXXX
HOLDINGS, INC., a Delaware corporation (the "Company"), and XXXX X. XXXXXXX
("Executive").
RECITALS
In connection with the sale (the "Sale") of Executive's
equity interest in Container Management Services, Inc., a South Carolina
corporation ("CMS"), to a subsidiary of the Company, and in order to induce
Executive to serve as the Executive Vice President of the Company and to
continue to serve as the President of CMS, the Company desires to provide
Executive with compensation and other benefits on the terms and conditions set
forth in this Agreement.
Executive is willing to accept such employment and perform
services for the Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as
follows:
I Employment.
1.1 Subject to the terms and conditions of this Agreement,
the Company agrees to employ Executive during the term hereof as its Executive
Vice President and as President of CMS. In his capacity as Executive Vice
President, Executive shall report to the Company's Chief Executive Officer and,
in his capacity as President of CMS, Executive shall report to the Board of
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Directors of CMS (the "CMS Board"). As President of CMS, Executive shall have
the customary powers, responsibilities and authorities of presidents of
corporations of the size, type and nature of CMS, as it exists from time to
time, and as are assigned by the CMS Board.
1.2 Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as the Company's Executive Vice President
and as President of CMS commencing, for both positions, on the date of the
closing (the "Closing Date") of the transaction contemplated in the Stock
Purchase Agreement, dated as of July 1, 1997 by and among the Executive, R.E.
Xxxxxxx, Xxxx X. Xxxxxxx Irrevocable Family Trust, R.E. Xxxxxxx Irrevocable
Family Trust and the Company (the "Stock Purchase Agreement"), and agrees to
devote his full working time and efforts, to the best of his ability, experience
and talent, to the performance of services, duties and responsibilities in
connection therewith. Executive shall perform such duties and exercise such
powers, commensurate with his position, as the Executive Vice President of the
Company as the Company's Chief Executive Officer shall from time to time
delegate to him on such terms and conditions and subject to such restrictions as
such Chief Executive Officer may reasonably from time to time impose. Executive
shall also perform such duties and exercise such powers, commensurate with his
position, as the President of CMS as the CMS Board shall from time to time
delegate to him on such terms and conditions and subject to such restrictions as
such CMS Board may reasonably from time to time impose. Notwithstanding the
foregoing, the Company agrees that the Executive shall be employed within 50
miles of Greenville, South Carolina and may transfer the Executive to a location
more than 50 miles away from Greenville, South Carolina only with the
Executive's prior written consent. The refusal of the Executive to relocate the
place of his employment more than 50 miles from Greenville, South Carolina shall
not be deemed as an action allowing the Company to discharge the Executive for
Cause.
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1.3 Nothing in this Agreement shall preclude Executive from
engaging, so long as in the reasonable determination of the Company's Board of
Directors (the "Board") such activities do not materially interfere with his
duties and responsibilities hereunder, in charitable and community affairs or
from managing any passive investment made by him.
1.4 The Company shall cause the Executive to be elected to
the CMS Board and Vestar Capital Partners III, L.P. shall vote its stock of the
Company in favor of electing Executive to the Board, in each case so long as
Executive is the President of CMS. Executive agrees that he shall accept such
elections and shall receive $25,000 per annum, in the aggregate, for his service
on such boards.
II Term of Employment.
Executive's term of employment under this Agreement shall
commence on the Closing Date and, subject to the terms hereof, shall terminate
on the earlier of (i) the third anniversary of the Closing Date (the
"Termination Date") or (ii) the termination of Executive's employment pursuant
to this Agreement; provided, however, that any termination of employment by
Executive (other than for death or Permanent Disability) may only be made upon
90 days prior written notice to the Company; provided, further, that this
Agreement will be automatically renewed and the term extended for additional
one-year periods commencing on the third anniversary of the Closing Date, and on
each anniversary date thereafter, unless the Company or Executive provides 60
days' prior written notice in accordance with Section 9 before the end of such
initial term or any such one-year renewal term (any reference to the "Term" of
this Agreement will include the initial term and any renewal thereof).
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III Compensation.
3.1 Salary. The Company shall pay Executive a base salary
("Base Salary") at the rate of $225,000 per annum for the period commencing on
the beginning of Executive's term of employment hereunder and ending on the
Termination Date. The Base Salary shall be payable in accordance with the
ordinary payroll practices of the Company or CMS. Any increase in Base Salary
shall be in the discretion of the Board and, as so increased, shall constitute
"Base Salary" hereunder. Base Salary may not be reduced below $225,000 except in
connection with a general salary reduction program affecting senior executives
of the Company.
3.2 Annual Bonus. In addition to his Base Salary, Executive
shall be paid an annual bonus (the "Bonus") during the term of his employment
hereunder with a target amount equal to 50% of Base Salary (the "Target Bonus")
based on performance criteria determined by the Board in its sole discretion on
a basis consistent with the methadology used for other members of senior
management.
3.3 Compensation Plans and Programs. Executive shall be
eligible to participate in any compensation plan or program maintained by the
Company in which other senior executives of the Company participate on terms
comparable to those applicable to such other senior executives.
IV Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. The
Company shall provide Executive during the term of his employment hereunder with
coverage under all employee pension and welfare benefit programs, plans and
practices (commensurate with his positions in the Company and to the extent
permitted under any employee benefit plan) in accordance with the terms thereof,
which the Company makes available to its senior executives.
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4.2 Vacation and Fringe Benefits. Executive shall be entitled
to vacation time commensurate with that which the Company makes available to
other similarly situated senior executives. In addition, Executive shall be
entitled to: a) the lease of a Chevrolet Suburban or equivalent automobile and
the expenses associated with driving and maintaining the vehicle, including
insurance and a cellular telephone, will be covered by the Company's automobile
policy, and b) annual dues and expenses (together not to exceed $12,000.00)
relating to Executive's membership at the Greenville Country Club. Executive
shall also be entitled to the other perquisites and fringe benefits made
available to senior executives of the Company, commensurate with his position
with the Company.
V Expenses.
Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive from time to time of appropriately itemized and
approved (consistent with the Company's policy) accounts of such expenditures.
VI Termination of Employment.
6.1 (a) Termination Not for Cause. The Company may terminate
Executive's employment at any time for any reason. If Executive's employment is
terminated by the Company other than for Cause (as defined in Section 6.4
hereof) or as a result of Executive's death or Permanent Disability (as defined
in Section 6.2 hereof) prior to the Termination Date, Executive shall receive
such payments, if any, under applicable plans or programs, including but not
limited to those referred to in Section 3.3 hereof, to which he is entitled
pursuant to the terms of such plans or programs. In addition, Executive shall be
entitled to receive an amount (the
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"Termination Amount") in lieu of any Bonus in respect of all or any portion of
the fiscal year in which such termination occurs and any other cash compensation
(other than the Compensation Payment referred to below), which Termination
Amount shall be payable in twelve monthly installments at the beginning of each
month following such termination of employment. The Termination Amount shall
consist of the sum of: a) one-year's Base Salary (at its then current rate), and
b) the product of (i) Executive's Bonus for the fiscal year ended prior to
Executive's termination of employment, multiplied by (ii) a fraction, the
numerator of which is the number of days passed in the current fiscal year prior
to Executive's termination and the denominator of which is 365. In addition,
Executive shall be entitled to receive a cash lump sum payment in respect of
compensation earned but not yet paid (including any deferred Bonus payments)
(the "Compensation Payment"), and to continued coverage for 12 months under any
employee medical, disability and life insurance plans in accordance with the
respective terms thereof.
(b) The Compensation Payment shall be paid by the Company to
Executive within 30 days after the termination of Executive's employment by
check payable to the order of Executive or by wire transfer to an account
specified by Executive.
6.2 Permanent Disability. If the Executive becomes totally
and permanently disabled (as defined in the Company's Long-Term Disability
Benefit Plan applicable to executive officers as in effect on the date hereof)
("Permanent Disability"), the Company or Executive may terminate Executive's
employment on written notice thereof, and Executive shall receive or commence
receiving, as soon as practicable:
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(i) amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company maintains during the
term hereof;
(ii) the Target Bonus in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until termination and the denominator of which
is 365;
(iii) the Compensation Payment; and
(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.3 hereof, to which
he is entitled pursuant to the terms of such plans or programs.
6.3 Death. In the event of Executive's death during the term
of his employment hereunder, Executive's estate or designated beneficiaries
shall receive or commence receiving, as soon as practicable:
(i) the Target Bonus in respect of the fiscal year in which
his death occurs, prorated by a fraction, the numerator of which is the number
of days of the fiscal year until his death and the denominator of which is 365;
(ii) any death benefits provided under the employee benefit
programs, plans and practices referred to in Section 4.1 hereof, in accordance
with their terms;
(iii) the Compensation Payment; and
(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.3 hereof, to which
Executive's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs.
6.4 Voluntary Termination by Executive; Discharge for Cause.
(a) The Company shall have the right to terminate the employment of Executive
for Cause. In the event that Executive's employment is terminated by the Company
for Cause, as hereinafter defined, or by Executive other than as a result of the
Executive's Permanent Disability or death, prior to the Termination Date,
Executive shall only be entitled to receive the Compensation Payment. Executive
shall not be entitled, among other things, to the payment of any Bonus in
respect of all or any portion of the fiscal year in which such termination
occurs. After the termination of Executive's employment under this Section 6.4,
the obligations of the Company under this Agreement to make any further
payments, or provide any benefits specified herein, to Executive
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shall thereupon cease and terminate.
(b) As used herein, the term "Cause" shall be limited to (i)
willful malfeasance or willful misconduct by Executive in connection with his
employment, (ii) continuing refusal by Executive to perform his duties hereunder
or any lawful direction of the Board of Directors of the Company as required
under Section 1.2, after notice of any such refusal to perform such duties or
direction was given to Executive, (iii) any breach of the provisions of Section
13 of this Agreement by Executive or any other material breach of this Agreement
by Executive or (iv) the commission by Executive of (a) any felony or (b) a
misdemeanor involving moral turpitude. Termination of Executive pursuant to this
Section 6.4 shall be made by delivery to Executive of a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the
Directors at a meeting of the Board of Directors of the Company called and held
for the purpose (after 30 days prior written notice to Executive and reasonable
opportunity for Executive to be heard before the Board prior to such vote),
finding that in the reasonable judgment of such Board, Executive was guilty of
conduct set forth in any of clauses (i) through (iv) above and specifying the
particulars thereof.
VII Stock Arrangements.
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Executive and the Company shall enter into a Non-Qualified
Option Agreement, substantially in the form attached hereto as Exhibit A.
VIII Mitigation of Damages.
Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise after the termination of his employment hereunder.
IX Notices.
All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
c/o Xxxxxxx-Xxxxxxx Corp.
000 Xxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Chief Executive Officer
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xx. Xxxx X. Xxxxxxx
c/o Container Management Services, Inc.
X.X. Xxx 0000
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
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with a copy to:
Xxxxxxx Few, Esq.
Xxxxxxxxxxx Xxxxxx Xxxx & Xxxx P.C.
000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 00
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after the
actual date of mailing shall constitute the time at which notice was given.
X Separability; Legal Fees.
If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement.
XI Assignment.
This contract shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and successors of
the Company, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company,
except that the Company may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder.
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XII Amendment.
This Agreement may only be amended by written agreement of
the parties hereto.
XIII Nondisclosure of Confidential Information;
Non-Competition.
(a) Executive shall not, without the prior written consent
of the Company, use, divulge, disclose or make accessible to any other person,
firm, partnership, corporation or other entity any Confidential Information
pertaining to the business of the Company or any of its affiliates, except (i)
while employed by the Company, in the business of and for the benefit of the
Company, or (ii) when required to do so by a court of competent jurisdiction, by
any governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with jurisdiction to order Executive to divulge, disclose or
make accessible such information. For purposes of this Section 13(a),
"Confidential Information" shall mean non-public information concerning the
financial data, strategic business plans, product development (or other
proprietary product data), customer lists, marketing plans and other non-public,
proprietary and confidential information of the Company, CMS and their
respective affiliates or customers, that, in any case, is not otherwise
available to the public (other than by Executive's breach of the terms hereof).
(b) Given Executive's role in the Sale, during the longer of
(i) the period of his employment hereunder and one year thereafter or (ii) 5
years from the date of this Agreement, Executive agrees that, without the prior
written consent of the Company, (A) he will not, directly or indirectly, either
as principal, manager, agent, consultant, officer, stockholder, partner,
investor, lender or employee or in any other capacity, carry on, be engaged in
or have any financial interest in, any business which is in competition with the
business of the Company, CMS, or any of their respective subsidiaries (the
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"Restricted Group") and (B) he shall not, on his own behalf or on behalf of any
person, firm or company, directly or indirectly, solicit or hire any person who
has been employed by the Restricted Group at any time during the 12 months
immediately preceding such solicitation.
(c) For purposes of this Section 13, a business shall be
deemed to be in competition with the Restricted Group if it is involved in the
purchase, sale, lease, management of or other dealing in any property or the
rendering of any service purchased, sold, leased, managed, dealt in or rendered
by any member of the Restricted Group as a part of the business of that member
of the Restricted Group. Nothing in this Section 13 shall be construed so as to
preclude Executive from investing in any company, provided Executive's
beneficial ownership of any class of such company's securities does not exceed
1% of the outstanding securities of such class (although the limitations in
Section 1.3 will still apply).
(d) Executive and the Company agree that this covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to modify such provision or provisions of this covenant to the extent the court
determines such restraint is not reasonable and to enforce the covenant as so
amended. Executive agrees that any breach of the covenants contained in this
Section 13 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this Agreement
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and obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive.
XIV Beneficiaries; References.
Executive shall be entitled to select (and change, to the
extent permitted under any applicable law) a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following Executive's
death, and may change such election, in either case by giving the Company
written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
XV Survivorship.
The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section 15 are in addition to the survivorship provisions of any other section
of this Agreement.
XVI Governing Law.
This Agreement shall be construed under and governed by the
laws of the State of New York applicable to contracts made and to be performed
therein.
XVII Effect on Prior Agreements.
This Agreement contains the entire understanding between the
parties hereto and supersedes in all respects any prior or other agreement or
understanding between the Company or any affiliate of the Company and Executive
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regarding the subject matter hereof other than the Non-Qualified Option
Agreement referred to in Section 7 hereof.
XVIII Withholding.
The Company shall be entitled to withhold from payment any
amount of withholding required by law.
XIX Counterparts.
This Agreement may be executed in two or more counterparts,
each of which will be deemed an original.
XXXXXXX-XXXXXXX HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President & CFO
/s/ Xxxx X. Xxxxxxx
XXXX X. XXXXXXX
With respect to Section 1.4 only, VESTAR CAPITAL PARTNERS III, L.P.
By: VESTAR ASSOCIATES III, L.P.
Its: General Partner
By: VESTAR ASSOCIATES CORPORATION III
Its: General Partner
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
