EXHIBIT 10.13
EMPLOYMENT AGREEMENT
AGREEMENT made and effective the 30th day of October, 1996 ("Effective
Date"), by and between ADVANCED TEXTILES, INC., a Texas corporation
("Employer"), and XXXXX X. XXXXXX ("Employee").
1. Employment. The Employer hereby employs the Employee and the
Employee hereby accepts the employment upon the terms and conditions hereinafter
set forth.
2. Term. The term of employment shall be for a period of two (2) years
commencing with the Effective Date, subject to earlier termination as
hereinafter provided. The word "Term" shall refer to the entire period of
employment whether for the entire period provided above or whether terminated
earlier.
3. Duties. The Employee shall, subject to the terms hereof, serve as
and shall perform the duties of president of the Employer as described by the
Board of Directors faithfully and to the best of his ability under the direction
of the President of Brunswick Technologies, Inc. ("BTI"), devoting his entire
time, energy and skill during regular business hours to such employment. In the
event that the Employer is merged into BTI, Employee will perform the duties of
the president of the Advanced Fibers Division of BTI.
4. Compensation. For Employee's services rendered hereunder, Employer
shall pay Employee as follows:
(a) Base Salary. The base salary of Employee shall be at the
rate of One Hundred Twenty-Five Thousand Dollars ($125,000.00) per
annum payable in equal monthly or other installments in accordance with
the general practice of the Employer.
(b) First Year Bonus. As compensation in addition to the base
salary, Employer will pay Employee on the first anniversary of the
Effective Date, up to a maximum of $40,000 as a performance bonus in
consideration of his performance in the successful integration of
Employer and BTI, such determination of Employee's performance and the
successful integration to be in the sole judgment of the Compensation
Committee of the Board of Directors of BTI.
(c) Second Year Bonus Plan. As compensation in addition to
the base salary, Employer will pay Employee on the second anniversary
of the Effective Date, up to a maximum of $40,000 as a performance
bonus in consideration of
(i)Employee's submission to the senior management of BTI of a business
plan for the Advanced Fibers Division of BTI for the second year of the
Term on or before October 31, 1997 (or if Employer and BTI have merged,
the Advanced Fibers Division of BTI), which plan is then approved by
the Board of Directors of BTI, (ii)
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Employee's continued contribution to the successful integration of BTI
and Employer, and (iii) Employee's performance in the successful
execution of such plan, such determination of Employee's performance
and the successful execution of the plan to be in the sole judgment of
the Compensation Committee of the Board of Directors of BTI.
(d) BTI Stock. The Board of Directors of BTI has approved,
subject to the approval by the stockholders of BTI, the following
described bonus. In the event that this Agreement has not been
terminated prior to the second anniversary of the Effective Date, other
than due to a termination as described in Section 7(e) below, BTI shall
issue to Employee 118 shares of BTI's common stock (the "Additional
Shares;" such number to be adjusted in the event of a stock split or
reverse stock split). The Board of Directors has approved the calling
of a stockholders' meeting relative to the Additional Shares, and BTI
agrees that such meeting will be called and held no later than November
30, 1996. In the event that the stockholders of BTI do not approve the
issuance of the Additional Shares, BTI and Employee agree to work in
good faith to provide Employee with a benefit reasonably equivalent to
the Additional Shares.
(e) BTI Stock Options. The Board of Directors of BTI has
approved, subject to approval by the stockholders of BTI the grant of
an option to Employee to purchase 300 shares of BTI common stock (the
"1996 Option") under the terms of its 1994 Stock Option Plan or any new
stock option plan (such number to be adjusted in the event of a stock
split or reverse stock split), such shares to be purchasable at an
exercise price per share equal to the price at which common stock of
BTI is offered to the public in BTI's initial public offering, or in
the event that such offering does not occur on or before December 31,
1996, $455.00 per share (such price to be adjusted in the event of a
stock split or reverse stock split). The 1996 Option will vest on the
second anniversary of the Effective Date and will be exercisable prior
to the tenth anniversary of the vesting date. The Board of Directors
has approved the calling of a stockholders' meeting relative to the
1996 Option, and BTI agrees that such meeting will be called and held
no later than November 30, 1996. In the event that the stockholders of
BTI do not approve the 1996 Option, BTI and Employee agree to work in
good faith to provide Employee with a benefit reasonably equivalent to
the 1996 Option. During the year beginning with the second anniversary
of the Effective Date, Employee shall be eligible for a further grant
under the 1994 Stock Option Plan or any new stock option plan, such
grant, if any, to be determined by the Compensation Committee of the
Board of Directors of Employer.
5. Benefits.
(a) Vacation. Employee shall be entitled to a vacation each
year during the Term. The length and the time of taking such a vacation
shall be as set forth in the BTI personnel handbook with the Employee's
seniority with Employer before
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and after the Effective Date being recognized for purposes of
determining the amount of vacation earned.
(b) Insurance. Employer shall continue to provide for
Employee, at Employer's expense, participation in medical, accident and
health, disability, income continuation and life insurance benefits
equivalent to the benefits provided at the Effective Date. Such
coverage shall take effect as of the Effective Date and shall continue
throughout the Term.
(c) Automobile. During the Term, Employer shall provide
Employee an automobile at Employer's expense and for Employee's sole
use. Employer shall pay all operating expenses relating to the business
of ATI but Employee shall be responsible for any operating expenses
relating to personal use of the automobile.
(d) Business Expenses. Employee shall be entitled to
reimbursement by Employer for any and all ordinary and necessary
business expenses incurred by Employee in the performance of Employee's
duties and in acting for Employer during the Term, provide an adequate
accounting is made therefor.
(e) Board of Directors. During the Term, and unless and until
Employer merges with BTI, Employee shall serve on the Board of
Directors of ATI, and BTI agrees to vote its shares of ATI capital
stock in favor of such election.
(f) Other. Employee shall be entitled to such other benefits
as may from time to time be extended to Employee in the sole discretion
of the Board of Directors of Employer.
6. Disability. If Employee becomes mentally or physically ill or
incapacitated during his employment, whether due to illness, accident or other
disability, he shall receive full compensation during any such period. However,
should it appear that such illness or incapacity would prevent Employee from
rendering services, as required hereunder, to Employer for a period of six (6)
consecutive months, Employee shall be considered disabled, and in such event,
Employer shall have the right to terminate Employee if after giving thirty (30)
days' notice of its intention to terminate, Employee does not return to his
duties and satisfactorily perform such duties on a full-time basis for at least
two (2) consecutive months. No bonus payment as provided for in paragraph 4(b)
hereof shall be payable with respect to any period in which Employee is mentally
or physically ill or incapacitated for other than a temporary period of time.
7. Termination. Employee's employment under this Agreement shall
terminate immediately upon the occurrence of any one of the following events:
(a) Death. The death of Employee.
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(b) Termination for Cause. The Board of Directors, acting
without Employee as a member for this purpose, shall determine that one
of the following events shall have occurred, and shall terminate
Employee's employment as a consequence thereof (a "Termination for
Cause"):
(i) Employee fails or refused to faithfully or
diligently perform the provisions of this Agreement or
neglects his duties or devotes time or attention to other
interests.
(ii) Employee's employment is terminated in
accordance with Paragraph 6 herein.
(iii) Employee commits an act of fraud,
misappropriation, embezzlement or similar action.
(iv) Employee is adjudicated a bankrupt or is
convicted of a crime punishable by imprisonment.
(v) Employee engages in any activity that would in
the opinion of the Board of Directors constitute a conflict of
interest with the Employer.
(vi) Employee engages in any activity which
materially adversely affects Employer's reputation in the
community or market place or which evidences the lack of
Employee's fitness or ability to perform Employee's duties.
(c) Sale of Business. The business of Employer is sold to a
third party, and Employee is offered a management position with the
successor company at substantially the same compensation for a period
corresponding to the remaining term of the Agreement, and refuses to
continue in his employment.
(d) Voluntary Quit. Employee voluntarily terminates his
employment hereunder other than in the circumstances set forth in
subparagraph 7(c) above.
(e) Termination at Will. Employer terminates this Agreement
for any reason other than a Termination for Cause.
8. Consequences of Termination of Employment.
(a) In the event employment of Employee is terminated
hereunder under the circumstances described in subparagraphs 7(a),
7(b), 7(c) or 7(d) above, all obligations of the Employer hereunder
shall cease, and Employee shall continue to be bound by his obligations
under paragraphs 9 and 10 herein.
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(b) In the event that employment by Employee is terminated by
Employer under subparagraph 7(e), or if, in the event of a sale of
Employer in which Employee is not offered a management position with
the successor company at substantially the same compensation for a
period corresponding to the remaining term hereunder, Employer shall
continue to pay the Base Salary for the remaining term of this
Agreement, and Employee shall be bound by his obligations under
subparagraphs 9 and 10 herein.
9. Non-Competition Agreement. Employee expressly agrees, as further
consideration hereof and in consideration of the purchase by BTI of his shares
of capital stock in Employer, and as a condition to the performance by Employer
of its obligations hereunder, that, while employed by Employer, and for the
periods hereinafter described, he will not directly or indirectly render
advisory services to, or become employed by, or participate or engage in, any
business materially competitive with any of the businesses of Employer or BTI
(Employee hereby acknowledging that he has had access in his executive capacity
to material information about Employer's and BTI's businesses) without the
written consent of Employer first had and obtained. Prior to the first
anniversary of the date hereof, if Employee is terminated for any reason
described in Section 8 (a) or 8 (b) hereof, the foregoing agreement of Employee
in this Section 9 shall terminate on the second anniversary of the date hereof,
provided in the event of a termination as described in Section 8 (b) hereof,
Employer continues to pay Employee the Base Salary as described therein. In the
event that Employee is terminated after the first anniversary hereof for any
reason described in Section 8(a) hereof, the foregoing agreement of Employee in
this Section 9 shall terminate twelve months from the effective date of
termination. In the event of a termination as described in Section 8 (b) hereof,
the foregoing agreement of Employee shall continue until the second anniversary
hereof, provided that Employer continues to pay Employee the Base Salary as
described therein.
10. Confidentiality. Employee agrees that, both during and after his
employment hereunder, he will not disclose to any person unless authorized to do
so by Employer or BTI, any of the Employer's or BTI's trade secrets or other
information which is confidential or secret. Trade secrets or confidential
information shall mean information which has not been made available by Employer
or BTI to the public, including, but not limited to, business plans, product or
market development studies, plans or surveys; designs and patterns; inventions,
secret processes and developments; any cost data, including labor costs,
material costs, and any data on raw material, fibers, machinery, equipment and
other manufacturing supplies; technical improvements, designs, procedures and
methods developed by Employer or BTI; any data pertaining to sales volume by
location or by product category; customer lists; production methods other than
those licensed by outside companies; compensation practices; and profitability,
margins, asset values, or other information relating to financial statements.
Employee acknowledges that the disclosure of Employer's or BTI's trade
secrets or confidential information to unauthorized persons would constitute a
clear threat to the business of Employer or BTI, and that the failure of
Employee to abide by the terms of
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paragraphs 9 and 10 will entitle Employee to exercise any and all remedies
available to it in law or equity, including, without limitation, an injunction
prohibiting a breach of these provisions.
12. General Provisions.
(a) Applicable Law. This Agreement shall be construed and
regulated under and by the laws of the State of Maine.
(b) Invalid Provisions. The invalidity or unenforceability of
a particular provision of this Agreement shall not affect the other
provisions hereof and the Agreement shall be construed in all respects
as if all invalid or unenforceable provisions were omitted.
(c) Entire Agreement. This instrument contains the entire
agreement of the parties. It supersedes all prior understandings and
agreements, written or oral, and can be modified only in writing signed
by both Employer and Employee, and supersedes all prior agreements,
representations, warranties and understanding, written or oral with
respect thereto, including without limitation that certain Employment
Agreement between Employer and Employee dated as of May 1, 1996, which
the parties agree is terminated effective with their execution hereof.
(d) Benefit of Agreement. This Agreement and the rights and
obligations hereunder shall be binding upon and inure to the benefit of
the parties hereto and
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their respective legal representatives, successors and assigns,
including Employer's successors in interest by merger, consolidation,
or sale.
(e) Assignment. Except to any successor in interest or
assignee of the Employer, neither this Agreement nor any rights,
benefits or obligations hereunder may be assigned by either party
hereto. If the Employer does assign this Agreement to a successor in
interest, prior to such assignment the Employer shall obtain from its
successor the assumption in writing of Employer's obligations
hereunder. Employee shall have the right to terminate this Agreement in
the event of any such assignment by Employer to its successor in
interest.
(f) Notices. Any notice, request, demand or other
communication required or permitted hereunder shall be deemed to be
properly given when personally served in writing, when sent by United
States Mail, postage prepaid, or when sent by overnight courier, with
receipt obtained, in each case addressed to the party at the address
shown at the end of this Agreement. A copy of any such notice shall be
sent to Xxxxxx X. Xxxxxxxx, Xxxxxx & Hannah, 000 Xxxxxx Xxxxxx, Xxxxxx,
XX 00000.
EXECUTED the day and year first above written.
EMPLOYER:
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Advanced Textiles, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
By: __________________________________
Xxxxxxx X. Xxxxx
Title:
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EMPLOYEE:
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Xxxxx X. XxXxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Brunswick Technologies, Inc. joins in this Agreement for purposes of its
agreements set forth in Sections 4 and 5 hereof.
By:
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Xxxxxxx X. Xxxxx,
President
00 Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
