Exhibit 10(j)
EMPLOYMENT AGREEMENT
This Agreement, dated as of July 24, 1997, between Xxxxxx International,
Inc., a Delaware corporation (hereinafter referred to as the "Company"), and
Xxxx X. Xxxxx (hereinafter referred to as the "Employee").
RECITALS
The Employee has been employed by the Company for a substantial period of
time and currently serves as its President and Chief Operating Officer and as
a member of its board of directors. Because of the Employee's extensive
experience and his familiarity with the affairs of the Company, the Company
wishes to assure that, in the event of a "Change in Control," as hereinafter
defined, it will continue to have the Employee available to perform duties
substantially similar to those currently being performed by him and to
continue to contribute to the Company's growth and success as he has in the
past. The Employee is willing to commit to continue in the performance of
his services for the Company upon the terms and conditions set forth herein.
COVENANTS
NOW, THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees that, effective upon a "Change in
Control" and provided that Employee is still serving as an employee of the
Company at that time, it will continue to employ Employee as the President
and Chief Operating Officer of the Company to perform the duties described
herein, and Employee hereby accepts such employment on the terms and
conditions stated herein. It is understood that prior to such "Change in
Control," this Agreement shall confer no rights of employment or other
benefits (or obligations) whatsoever upon Employee, and that Employee shall
remain subject to termination at will.
2. TERM OF EMPLOYMENT. Subject to provisions for termination set forth
herein, the term of Employee's employment hereunder shall continence on the
date of a "Change in Control" (if any) and shall extend until three years
after the date of such "Change in Control." For purposes of this Agreement
a "Change in Control" shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934;
provided that, without limitation, such a Change in Control shall be deemed
to have occur-red if during any period of two consecutive years individuals
who at the beginning of such period constitute members of the board of
directors cease for any reason to constitute at least a majority thereof,
unless the nomination or election of each director who was not a director
at the beginning of the period was approved by a vote of a majority of the
directors still in office at the time of such nomination or election who
were directors at the beginning of the period.
3. DUTIES OF EMPLOYEE. Employee shall be the President and Chief Operating
Officer of the Company and shall perform such duties and responsibilities
for the Company as may be assigned to him by the board of directors of the
Company and which are not unreasonably inconsistent with the duties of the
President and Chief Operating Officer, including such duties as are
currently being performed by the Employee. During the term of his
employment, Employee shall devote substantially all of his business time,
attention and energy, and his reasonable best efforts, to the interests and
business of the Company and to the performance
of his duties and responsibilities on behalf of the Company. During the
term of Employee's employment hereunder, the Company will use its best
efforts to cause the Employee to be elected a director of the Company and
will cause the Employee to be included as a nominee for director in any
proxy solicitation by management.
4. COMPENSATION. Throughout the term of Employee's employment hereunder, the
Company shall pay Employee, for services to be rendered by him hereunder, a
guaranteed minimum salary at an annual rate equal to that being paid on the
date the term of employment hereunder commences, less all applicable
federal and state income tax withholding, FICA taxes and other payroll
taxes. The guaranteed minimum salary shall be reviewed by the Company on a
yearly basis to ascertain if any upward adjustment in the annual rate is in
order, and if any increase is made, the new annual rate shall become the
guaranteed minimum salary under this Section 4. Such compensation shall be
payable semi-monthly.
5. WORKING FACILITIES AND FRINGE BENEFITS. The Employee shall be furnished
with office space, secretarial assistance and such other facilities and
services as are appropriate to his position and adequate for the
performance of his duties. The Company also shall provide to Employee
during the term of employment fringe benefits and perquisites at least
equal to those provided to Employee immediately prior to the date. thereof,
and the Company shall not discriminate against Employee with respect to any
vacation or holiday plan, medical, hospital, life and disability insurance
programs, pension programs and other similar welfare benefit programs from
time to time made available to the Company's officers and key employees.
6. EXPENSES. The Company shall pay or reimburse Employee for all reasonable
expenses actually incurred or paid by him in the performance of services
rendered by him pursuant to this Agreement. Such expenses shall be
supported by the documentary evidence required to substantiate them as
income tax deductions.
7. COVENANT RESTRICTING COMPETITION; NONDISCLOSURE OF CONFIDENTIAL INFORMATION
a) Employee acknowledges that his services are special and unique, and of
an unusual and extraordinary character which gives them peculiar
value, the loss of which cannot adequately be compensated in damages.
Therefore, Employee agrees that he will not, except with the written
consent of the Company, for a continuous period of eighteen (18)
months commencing immediately following termination of Employee's
employment hereunder, directly or indirectly engage or become
interested in, as a partner, director, officer, principal, agent or
employee, any business which competes with products produced, marketed
or in development by the Company at the time of such termination.
b) Employee acknowledges that in his employment he is or will be making
use of, acquiring or adding to, confidential information of the
Company, and is or will be familiar with the Company's business,
activities, employees, customers and suppliers. Therefore, in order
to protect the Company's confidential information and to protect other
employees who depend upon the Company for regular employment, Employee
agrees that, except in connection with his employment by the Company,
or with the consent of the Company, he will not during or after the
term of his employment hereunder in any way utilize any of said
confidential information and he will not copy, reproduce, or take with
him the original or any copies of said confidential information and
will not disclose any of said confidential information to anyone.
In the event of a breach of the covenants contained in this Section 7, the
Company shall be entitled to an injunction restraining such breach in
addition to any other remedies provided by law.
If any provision of this Section 7 is adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other provision of this
Section 7 or any other part of this Agreement, the application of such
provision in any other circumstances or the 'validity or enforceability of
this Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.
8. TERMINATION BY COMPANY.
a) DISABILITY. The Company may terminate the active employment of the
Employee if, in the reasonable judgment of the board of directors of
the Company, he becomes unable to satisfactorily perform his duties
and responsibilities hereunder during the term of his employment
because of mental or physical disability. Upon such termination, the
Employee shall be relieved of all further obligations hereunder except
obligations pursuant to Section 7. In the event of such termination,
the Company shall continue to pay to the Employee, until the end of
the term of his employment hereunder, a salary at a rate equal to the
annual rate in effect on the date of such termination (as set forth in
Section 4). Notwithstanding the foregoing, the amounts so payable
shall be reduced by any amounts payable to the Employee during the
term of his employment hereunder pursuant to any disability benefit or
wage continuation plan of the Company in effect.
b) DEATH. In the event of the death of the Employee during the term, the
Company shall make, until the end of the term of employment hereunder,
payments at a rate equal to the annual rate in effect on the date of
death. The payments to be made under this Section 8(b) shall not be
reduced by reason of any insurance proceeds payable directly to the
Employee's beneficiaries or estate pursuant to insurance carried or
provided by the Company, and shall be made to such beneficiary as the
Employee may designate for that purpose by written notice given to the
Secretary of the Company prior to his death, or if the Employee has
not so designated, then to the personal representative of his Estate.
c) TERMINATION FOR CAUSE. In the event fraud, defalcation, or other
similar dishonesty of the Employee involving the operations, funds or
other assets of the Company is established, or Employee is convicted
of a crime involving moral turpitude, or Employee breaches the terms
of this Agreement in any material respect, then the Company may
terminate this Agreement upon giving written notice to the Employee
and thereafter, neither the Employee, his surviving spouse or his
estate shall be entitled to any further salary or compensation from
the Company pursuant to this Agreement, but the Employee's obligations
under Section 7 shall remain in effect. The parties agree that the
provisions of this Section 8(c) shall not be utilized in any manner by
the Company to avoid, negate or frustrate application of the
provisions of Section 9 of this Agreement.
9. TERMINATION BY EMPLOYEE.
a) IF LOCATION OF OFFICE CHANGES. In the event that, at. any time during
the term of employment, the Company, without Employee's consent,
changes the location of the Company's offices at which Employee works
to a city more than 150 miles from its present location, the Employee
may
terminate his employment with the Company by giving to the
Secretary of the Company notice in writing within three, months after
this right to termination arises.
b) IF POSITION CHANGES. It is the intention of the parties that the
Employee will be the President and Chief Operating Officer of the
Company during the entire term of employment hereunder. In the event
that, at any time during the term hereunder, Employee, without his
consent, does not hold the position of President and Chief Operating
Officer of the Company and have the duties and responsibilities that
would normally be expected of the President and Chief Operating
Officer of the Company (except by reason of termination under Section
8), Employee may terminate his employment with the Company hereunder
by giving to the Secretary of the Company written notice of such
termination within three months after this right to terminate arises.
c) FOLLOWING CHANGE IN CONTROL. Employee may terminate his employment
under this Agreement in the event of a Change in Control, as defined
in Section 2 hereof, by giving written notice of such termination to
the Secretary of the Company not less than six months nor more than
twelve months following such Change in Control. Without limiting the
generality of the definition of Change in Control as set forth in
Section 2, the failure of the Employee to be reelected a director of
the Company shall be deemed a Change in Control unless such failure is
due to the Employee's voluntary act or the Employee's employment has
been terminated by the Company for Cause.
d) LUMP SUM PAYMENT. In the event of termination pursuant to subsection
(a), (b) or (c) of this Section 9, the Company shall pay to the
Employee, in a lump sum and within 30 days of such termination, an
amount equal to the aggregate balance (based on the annual rate in
effect at the time of such termination) which would have been payable
to the Employee during the remaining portion of the term hereunder had
such termination not occurred, including any benefits payable to
Employee.
e) REIMBURSEMENT. If a tax is imposed pursuant to Section 4999 of the
Internal Revenue Code, or successor provision of like import, upon
payments due under this Agreement or upon other payments to the
Employee by the Company, the Employee shall be paid an additional
amount calculated so as to provide the Employee, after he has paid the
tax (including any related interest and/or penalty) imposed by Section
4999 of the Code, with the same compensation he, would have received
had no tax (including any related interest and/or penalty) been
imposed by Section 4999. For purposes of this subsection (e), the
term "Company" shall include any parent, subsidiary, affiliate,
assignee, or successor in interest of the Company or of such assignee
or successor in interest.
10. ASSIGNMENT. This Agreement is binding upon and shall be for the benefit of
the successors and assigns of the Company, including any corporation or any
other form of business organization with which the Company may merge or
consolidate, or to which it may transfer substantially all of its assets.
Employee shall not assign his interest in this Agreement or any part
thereof.
11. CONSENT OF THE COMPANY. Any act, request, approval, consent or opinion of
the Company under this Agreement must be in writing and may be authorized,
given or expressed only by resolution of the board of directors of the
Company, or by such other person as the board of directors of the Company
may designate.
12. NOTICES. Any notice required hereunder to be given shall be in writing and
if-
a) by the Company to Employee shall be directed to him at his address set
forth below, or to such other address as he shall have furnished in
writing to the Company; or
b) by Employee to the Company shall be directed to Xxxxxx International,
Inc., 000 Xxxxxx Xxxx., Xxxxxxxxxx, Xxxxxxxx 00000, Attn: Secretary,
or to such designee or other address as the board of directors shall
name and have furnished in writing to Employee.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to contracts
made and to be performed therein.
14. ENFORCEMENT EXPENSES AND ARTITRATION. The Company agrees to reimburse the
Employee for all costs and expenses incurred by him (including the
reasonable fees of his counsel) in successfully enforcing any of his rights
under this Agreement or any claim arising out of the breach thereof. In
addition, the parties acknowledge the relative economic power of the
Company versus the Employee, and the ability of the. Company to resist the
conclusion of litigation should the Employee institute legal proceedings to
enforce this Agreement or to recover damages for the breach thereof. In
recognition of this, any controversy or claim arising out of or relating to
this Agreement, including any dispute over or interpretation of the
occurrence of a "Change in Control," as previously defined, shall be
settled by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, at the sole election of the
Employee; provided, however, that an action by the Company to enforce its
rights under Section 7 hereof shall be excluded from the arbitration
provisions of this Section.
15. Any such election by Employee shall be made by written notice given to the
Company any time after such controversy or claim arises, and in the event
Employee IS served with process relating to any court proceeding concerning
any such claim or controversy commenced by the Company, such election, to
be effective, shall be made by written notice within 15 days of the time
Employee is served with such process. Commencement of court proceedings by
Employee shall be deemed. an election not to arbitrate. In the event the
Company commences court proceedings (other than an action by the Company
solely to enforce its rights under Section 7 hereof) and is given notice of
the election to arbitrate by the Employee within the time period set forth
above, the Company agrees to promptly dismiss such court proceedings and
submit to arbitration. In the event of such arbitration, judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
XXXXXX INTERNATIONAL, INC.
By: /s/ Xxxx X'Xxxxxxx
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Title: Chairman and Chief Executive Officer
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
