EXHIBIT 10.23
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT is made to be effective as of
January 5, 2004, between X. X. Xxxxx Corporation, an Ohio corporation (the
"Company"), and Xxxxxxxxx Xxxxxx (the "Executive") under the following
circumstances:
A. Executive is presently employed by the Company in an executive
capacity;
B. The Company desires by this Agreement to provide for the
continued employment of Executive by the Company; and
C. Executive desires to continue his employment with the Company
upon the terms and conditions stated herein.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
COVENANTS CONTAINED XXXXX, THE COMPANY AND EXECUTIVE AGREE AS FOLLOWS:
SECTION 1. Employment. The Company hereby agrees to continue to
employ Executive, and Executive hereby agrees to continue in the employ of the
Company, on the terms and conditions set forth herein.
SECTION 2. Term of Employment. The term of employment of
Executive by the Company under this Agreement shall commence on the date of this
Agreement (the "Agreement Date") and end on May 31, 2006 (the "Term of
Employment"). The Consulting Period (as defined in Section 8) shall begin on
June 1, 2006 unless the Term of Employment ends prior to May 31, 2006 and the
Consulting Period begins thereafter in accordance with Section 8.
SECTION 3. Position and Duties.
(a) Position. During the Term of Employment, the Company shall
employ Executive and Executive shall serve as Executive Vice President -
Operations with his duties, authority and responsibilities to be of the same
character as those assigned to him as of the Agreement Date or in such other
capacity or capacities of at least equal standing and dignity connected with the
business of the Company as the Company shall from time to time determine,
provided that any change of capacity shall be subject to Executive's reasonable
approval.
(b) Duties. Executive shall devote his full-time efforts to the
business and affairs of the Company and shall perform his duties faithfully,
diligently, and to the best of his ability and in conformity with the policies
of the Company and under and subject to such reasonable directions and
instructions as the Board of Directors and the Chief Executive Officer of the
Company may issue from time to time.
SECTION 4. Compensation and Related Matters.
(a) Salary. The Company shall pay Executive a base salary of not
less than $258,000 per year payable in approximately equal installments in
accordance with the Company's normal pay schedule. In the event the Company
shall at any time or times after the Agreement Date increase Executive's base
salary, then Executive's base salary under this
Agreement for any period after any such increase shall be not less than the last
amount to which the Company increased the base salary of Executive (such base
salary including increases granted after the Agreement Date is hereinafter
referred to as "Basic Salary"). Compensation of Executive by Basic Salary
payments shall not be deemed exclusive and shall not prevent Executive from
participating in any other compensation or benefit plan of the Company.
(b) Expenses. During the Term of Employment, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in performing services hereunder, including all reasonable expenses of
travel and living expenses while away from home on business, or at the request
of and in the service of the Company, provided that such expenses are incurred
and accounted for in accordance with the policies and procedures established by
the Company from time to time.
(c) Other Benefits. During the Term of Employment:
(1) The Company, at its expense, shall provide and
maintain a policy of insurance on Executive's life providing for a death benefit
payable to Executive's beneficiaries or estate in an amount that is not less
than the amount of coverage provided by the life insurance policy on Executive's
life maintained by the Company for Executive's benefit on the Agreement Date;
(2) Executive shall be entitled to receive such
perquisites and fringe benefits historically provided by the Company to its
senior executives, including, without limitation, the exclusive use of an
automobile;
(3) Executive shall be entitled to participate in the
Company's Salaried Employees' Pension Plan (the "Pension Plan") and its
Supplemental Retirement Plan (the "Supplemental Plan"), as either of the same
may be amended from time to time, or any substitute or successor plans;
(4) Executive shall be entitled to participate in the
Company's Short-Term Incentive Plan (STIPS), as the same may be amended from
time to time, or any substitute or successor plan, at a maximum annual level
equal to 60% of his Basic Salary; and
(5) Executive shall be entitled to receive all other
employee benefits, including, without limitation, medical, dental, group life
and accidental death insurance benefits as are or in the future may be provided
by the Company to its senior executives.
SECTION 5. Termination.
(a) Termination of Employment Other Than by Executive. Executive's
employment hereunder may be terminated prior to the end of the Term of
Employment only under the following circumstances:
(1) Death. Executive's employment hereunder shall
terminate upon his death.
(2) Disability. If, as a result of Executive's incapacity
due to physical or mental illness, Executive shall have been absent from his
duties hereunder on a full-time basis for the entire period of four consecutive
months, and within thirty days after written notice of termination is given
(which may occur before or end of such four month period) shall not have
returned to the performance of his duties hereunder on a full-time basis, the
Company may terminate Executive's employment hereunder for Disability.
(3) Cause. The Company may terminate Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have Cause to terminate Executive's employment hereunder only upon:
(i) The willful and continued refusal by the
Executive to perform his duties with the Company (other than any such refusal
resulting from his incapacity due to physical or mental illness), after a demand
for substantial performance is delivered to Executive by the Company which
specifically identifies the manner in which it is believed that Executive has
refused substantially to perform his duties;
(ii) Conviction of a felony; or
(iii) Willful and gross misconduct materially and
demonstrably injurious to the Company.
(4) Without Cause. Executive's employment may be
terminated by the Company without Cause so long as the Company pays to Executive
the severance compensation provided in Section 6(d).
(b) Termination of Employment by Executive. Executive may
terminate his employment hereunder for Good Reason. As used herein, "Good
Reason" means any of the following:
(1) The assignment of Executive, without his consent, of
any duties materially inconsistent with his position, duties, responsibilities
and status with the Company on the Agreement Date, or a change in Executive's
responsibilities as in effect on the Agreement Date which materially diminishes
Executive's responsibilities with the Company when considered as a whole;
provided, however, that the foregoing shall not constitute Good Reason if done
in connection with the termination of Executive's employment because of
Disability or for Cause.
(2) A reduction by the Company in Executive's Basic
Salary.
(3) Failure by the Company to comply with the provisions
of Section 4(c).
(4) The Company's requiring Executive, without consent,
to be based anywhere other than the location where Executive is based on the
Agreement Date, if the same requires Executive to relocate his principal
residence; or, in the event Executive consents to being based anywhere other
than such location, the failure by the Company to pay (or reimburse Executive
for) all reasonable moving expenses incurred by Executive relating to a change
of Executive's principal residence in connection with such relation.
(5) Executive no longer reports directly to the Company's
Chief Executive Officer.
(6) The failure of the Company to obtain the assumption
of this Agreement by any successor as provided in Section 9.
(c) Notice of Termination. Any termination of
Executive's employment by the Company or by Executive other than termination
pursuant to Section 5(a) (1) shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a Notice of
Termination shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
(d) Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated by his death, the date of
his death, (ii) if Executive's employment is terminated pursuant to Section
5(a)(2), thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period), (iii) if Executive's
employment is terminated by the Company for Cause, the date on which the Notice
of Termination is given, (iv) if Executive's employment is terminated by the
Company without Cause, a date which is at least three (3) months after the date
on which the Notice of Termination is given, (v) if Executive's employment is
terminated by Executive without Good Reason and the termination is to occur
prior to December 31, 2005, a date which is at least three (3) months after the
date on which the Notice of Termination is given by Executive, (vi) if
Executive's employment is terminated by Executive without Good Reason and the
termination is to occur on or after December 31, 2005, a date which is at least
one (1) month after the date on which the Notice of Termination is given and
(vii) if Executive's employment is terminated by Executive for Good Reason, the
date on which the Notice of Termination is given.
SECTION 6. Compensation Upon Termination or During Disability.
(a) Disability. During any period that Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness ("Disability Period"), Executive shall continue to receive his
Basic Salary at the rate then in effect for such period until his employment is
terminated pursuant to Section 5(a)(2), provided that payment of Basic Salary so
made to Executive shall be reduced by the sum of the amounts, if any, payable to
Executive at or prior to the time of any such salary payment under disability
benefit plans of the Company and which were not previously applied to reduce any
payment of Basic Salary.
(b) Death. If Executive's employment is
terminated by his death, the Company shall pay to Executive's estate his full
Basic Salary through the Date of Termination at the rate in effect on the date
of death and shall thereafter have no further obligations to Executive under
this Agreement.
(c) Termination for Cause. If Executive's
employment shall be terminated for Cause, the Company shall pay Executive his
full Basic Salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given and the Company shall have no further
obligations to Executive under this Agreement.
(d) Termination for Good Reason or Without
Cause. In the event Executive terminates his employment with the Company for
Good Reason or the Company terminates Executive's Employment for any reason
other than for Cause or Disability, in either case at any time prior to the
expiration of the Term of Employment, Executive shall be entitled to the
following payments and benefits:
(1) The Company shall pay to the
Executive, not later than 30 days following the Date of Termination, the
Executive's accrued but unpaid Basic Salary through the Date of Termination plus
compensation for current and carried-over unused vacation and compensation days
in accordance with the applicable personnel policy.
(2) In lieu of any further payments of
salary or bonus to the Executive after the Date of Termination, the Company
shall pay to the Executive, not later than ten (10) days following the Date of
Termination, a lump sum cash severance payment (the "Severance Payment") equal
to the total compensation (including bonus) paid to or accrued for the benefit
of the Executive by the Company for services rendered during the twelve-month
period immediately preceding the Date of Termination.
(e) After payment of the sums described in
subparagraphs (d)(1) and (d)(2) above, the Company shall have no further
obligations to Executive under this Agreement (other than pursuant to Section
8); provided that the Executive's right to receive payments under this Agreement
shall not decrease the amount of, or otherwise adversely affect, any other
benefits payable to the Executive under any other plan, agreement or arrangement
relating to employee benefits provided by the Company.
(f) Voluntary Termination by Executive Without
Good Reason. In the event Executive terminates his employment with the Company
without Good Reason, the Company shall pay to Executive his full Basic Salary
through the Date of Termination at the rate then in effect and the Company shall
have no further obligations to Executive under this Agreement. In the event
Executive terminates his employment with the Company without Good Reason,
Executive shall give the Company at least three (3) months advance notice of
such termination of employment if such termination is to occur prior to December
31, 2005 and at least one (1) month advance notice of such termination of
employment if such termination is to occur on or after December 31, 2005.
(g) Mitigation. Executive shall not be required
to mitigate the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for him in this Section 6 be reduced by any compensation earned by
Executive as the result of employment by another employer or by reason of
Executive's receipt of or right to receive any retirement or other benefits
after the date of termination of employment or otherwise. As a condition to
receiving the severance compensation provided for in Section 6(d), Executive
shall execute and deliver to the Company a release of claims (other than claims
arising under this Agreement) against the Company so long as the Company
executes and delivers to Executive a comparable release of claims against
Executive.
SECTION 7. Non-Competition; Confidentiality.
(a) Period. During the period Executive serves as an employee of
or consultant to the Company and for a period of one (1) year following any
termination of Executive's service as an employee of or consultant to the
Company (other than following a Hostile Change of Control (as defined below),
Executive shall not, as a shareholder, owner, member, employee, officer,
director, partner, consultant, agent or otherwise, engage directly or indirectly
in any business or enterprise which is in Competition with the Company (as
defined below).
(b) Competition with the Company. For purposes of this Agreement,
(i) the words "Competition with the Company" shall be deemed to include
competition with the Company or
any entity controlling, controlled by or under common control with the Company
(an "Affiliate"), or their respective successors or assigns, or the business of
any of them, and (ii) a business or enterprise shall be deemed to be in
Competition with the Company if it is engaged in any business activity which is
the same or comparable to any business activity of the Company or any Affiliate
from time to time during the Term of Employment in any geographic area (whether
within or outside the United States) in which the Company or any Affiliate
conducted such business. Notwithstanding the foregoing, nothing herein contained
shall prevent Executive from purchasing and holding for investment less than 3%
of the shares of any corporation the shares of which are regularly traded either
on a national securities exchange or in the over-the-counter market.
(c) Interpretation of Covenant. The parties hereto agree that the
duration and area for which the covenant not to compete set forth in this
Section 7 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and every county of each and every state of the United
States of America where the covenant not to compete is intended to be effective.
(d) Prohibition of Disclosure or Use. Executive shall at all times
keep and maintain Confidential Information (as defined below) confidential, and
Executive shall not, at any time, either during or subsequent to the Term of
Employment, either directly or indirectly, use any Confidential Information for
Executive's own benefit or divulge, disclose, or communicate any Confidential
Information to any person or entity in any manner whatsoever other than
employees or agents of the Company having a need to know such Confidential
Information, and then only to the extent necessary to perform their
responsibilities on behalf of the Company, and other than in the performance of
Executive's duties hereunder.
(e) Definition of Confidential Information. "Confidential
Information" shall mean any and all information (excluding information in the
public domain) related to the business of the Company or any Affiliate,
including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing
techniques; information concerning pricing and pricing policies; marketing
techniques; plans and forecasts; new product information; information concerning
suppliers; methods and manner of operations; and information relating to the
identity and location of all past, present, and prospective customers.
(f) Equitable Relief. Executive's obligations contained in this
Section 7 are of special and unique character which gives them a peculiar value
to the Company, and the Company cannot be reasonably or adequately compensated
in damages in an action at law in the event Executive breaches such obligations.
Executive therefore expressly agrees that, in addition to any other rights or
remedies which Company may possess, the Company shall be entitled to injunctive
and other equitable relief in the form of preliminary and permanent injunctions
without bond or other security in the event of any actual or threatened breach
of said obligations by Executive.
(g) Definition of Change of Control. A "Hostile Change of Control"
shall be deemed to have occurred if (i) any "person" (as that term is used in
Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on the Agreement Date), including any "group" as
such term is used in Section 13(d)(3) of the Exchange Act on the
Agreement Date (an "Acquiring Person"), shall hereafter acquire (or disclose the
previous acquisition of) beneficial ownership (as that term is defined in
Section 13(d) of the Exchange Act and the rules thereunder on the Agreement
Date) of shares of the outstanding stock of any class or classes of the Company
which results in such person or group possessing more than 50.1% of the total
voting power of the Company's outstanding voting securities ordinarily having
the right to vote for the election of directors of the Company (a "Control
Acquisition"); or (ii) as the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
("Transaction"), the persons who were directors of the Company immediately
before the completion of the Transaction shall cease to constitute a majority of
the Board of Directors of the Company or any successor to the Company. Anything
contained in this paragraph (g) to the contrary notwithstanding, a "Hostile
Change of Control" shall not be deemed to have occurred if the Control
Acquisition or the Transaction is approved by a majority of the directors of the
Company who were directors of the Company before the completion of the Control
Acquisition or the Transaction.
(h) Survival. The provisions of this Section 7 shall survive any
termination of this Agreement.
SECTION 8. Consulting Agreement.
(a) So long as Executive is employed by the Company on the last
day of the Term of Employment, the Company agrees to engage Executive as a
consultant to the Company on the terms provided in Section 8(b) for a period of
two years beginning on June 1, 2006 . Executive shall have no obligation to
provide Consulting Services (as defined below) pursuant to this Section 8,
except that Executive shall give the Company notice that he does not wish to
provide such Consulting Services at least thirty (30) days prior to the end of
the Term of Employment and if he begins to provide such Consulting Services and
decides to terminate such services he shall give the Company at least thirty
(30) days advanced notice of his decision to terminate such services. As used
herein, the term "Consulting Period" refers to any period that Executive is
actually engaged by the Company to provide Consulting Services pursuant to this
Section 8.
(b) During the Consulting Period, Executive shall consult with the
officers and senior executives of the Company concerning matters related to the
operations of the Company in respect of which he has experience and expertise
(the "Consulting Services"). The particular amount of time Executive may spend
in fulfilling his consulting obligations shall be determined by mutual agreement
of Executive and the Company except that Executive agrees to make himself
available by telephone to provide Consulting Services at least ten (10) hours a
month and will use his best efforts to be prepared and available by telephone at
times requested by the Company. Executive will not be required to travel in
order to provide the Consulting Services. The Company shall pay Executive for
all reasonable out-of-pocket expenses incurred in his performance of the
Consulting Services. During the Consulting Period, the Company shall pay to
Executive a monthly consulting payment of $10,750. The Company and Executive
agree that the Consulting Services shall be provided by Executive as an
independent contractor and not as an employee, and with respect thereto,
Executive will not be entitled to the benefits provided by the Company to its
employees.
SECTION 9. Waiver. The failure of either party to this Agreement
to insist, in any one or more instances, upon the performance of any of the
terms, covenants or conditions of this Agreement by the other party hereto,
shall not be construed as a waiver or as a relinquishment of any right granted
hereunder to the party failing to insist on such performance, or as a waiver of
the future performance of any such term, covenant or condition, but the
obligations hereunder of both parties hereto shall remain unimpaired and shall
continue in full force and effect.
SECTION 10. Successors; Binding Agreement.
(a) The Company 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 the Company and its
subsidiaries to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation in the same amount
and on the same terms as he would be entitled hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as defined above and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
9 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(b) This Agreement shall insure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his devisee,
legatee or other designee or, if there be no such designee, to his estate.
SECTION 11. Arbitration. Any dispute or controversy arising out
of or relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. The award of the arbitrator shall be final, conclusive, and
nonappealable and judgment upon such award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall be an
arbitrator qualified to serve in accordance with the rules of the American
Arbitration Association and one who is approved by both the Company and
Executive. In the absence of such approval, each party shall designate a person
qualified to serve as an arbitrator in accordance with the rules of the American
Arbitration Association and the two persons so designated shall select the
arbitrator from among those persons qualified to serve in accordance with the
rules of the American Arbitration Association. The arbitration shall be held in
Columbus, Ohio or such other place as may be agreed upon at the time by the
parties to the arbitration.
SECTION 12. Notices. For the 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 United
States registered mail, return receipt requested, postage prepaid, addressed in
the case of Executive, to
Xxxxxxxxx Xxxxxx
0000 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
and in the case of the Company, to the principal executive offices of the
Company, provided that all notices to the Company shall be directed to the
attention of the Company's Chief Executive
Officer with copies to the Secretary of the Corporation and to its Board of
Directors, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
SECTION 13. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by Executive and a duly authorized officer of the
Company. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio. This
Agreement supercedes and replaces the Executive Employment Agreement dated as of
January 4, 1998 between the Company and Executive.
SECTION 14. Validity. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year above written.
X.X. XXXXX CORPORATION
/s/ Xxxxxx Xxxxx
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By: Xxxxxx Xxxxx
Title: Chief Executive Officer
/s/ Xxxxxxxxx Xxxxxx
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Xxxxxxxxx Xxxxxx
