Exhibit 10.20
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This Employment Agreement (this "Agreement") is effective as of the 1/st/
day of June, 2001, between GEO Specialty Chemicals, Inc., an Ohio corporation
(the "Company"), and Xxxxx X. Xxxxxx, a resident of the State of Ohio
("Employee").
The Company desires to employ Employee and Employee desires to be employed
by the Company upon the terms provided in this Agreement.
In consideration of the mutual covenants contained in this Agreement and
other good and valuable consideration and intending to be legally bound, the
parties agree as follows:
1. Employment. Subject to the terms and conditions contained in this
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Agreement, the Company agrees to employ Employee, and Employee agrees to be
employed by the Company, as Senior Vice President--Electronic Chemicals
Business, reporting to the Chief Executive Officer of the Company (the "CEO"),
with responsibility for the performance of such services and duties as shall be
assigned to and requested of him by, and subject to the direction and
supervision of, the CEO. In such position, Employee agrees to devote his full
time, energy and ability to his duties and the business and affairs of the
Company; provided that with the prior approval of the CEO, Employee may serve on
the board of directors of other companies or organizations so long as such
participation does not conflict with the interests or business of the Company.
The Company may, at any time, reassign Employee to another position of
equivalent responsibility and authority with the Company or any of its
subsidiaries. In connection therewith, the Company may change the position title
or job responsibilities of Employee, but shall not demote Employee. Employee
acknowledges that the Company may through acquisition, reorganization or
otherwise appoint other individuals to positions in the Company that are senior
to Employee's position hereunder. Such appointments shall not be deemed a
demotion of Employee if Employee is retained at his then existing level of
seniority and with a level of salary and benefits no less favorable than he
receives at such time. References in this Agreement to the CEO shall, in his
absence, include reference to the Board of Directors of the Company (the
"Board").
2. Term. Subject to the provisions of Section 15, Employee shall be
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employed by the Company for an initial term of one (1) year (the "Initial
Term"). Subject also to Section 15, commencing on the first anniversary of the
effective date of this Agreement and on each subsequent anniversary thereafter,
the term of this Agreement shall be automatically extended for additional one
(1) year periods, on the same terms and conditions as contained herein (such
terms, if any, "Additional Terms" and together with the Initial Term, the
"Employment Period").
3. Compensation. In consideration of the full, prompt and faithful
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performance of the services and duties to be rendered by Employee during the
Employment Period, the Company shall compensate Employee as follows:
(a) Base Salary. During the first year of this Agreement, the Company
shall pay Employee an annual base salary of $160,000 ("Base Salary") in
installments of at least once a month. For the remainder of the Employment
Period, such salary shall be subject to an annual review, and adjusted, but
not reduced, at the sole discretion of the CEO.
(b) Bonus. During the Employment Period, Employee shall be eligible
to participate in the Company's Senior Executive Incentive Plan ("XXXX"),
or any other discretionary incentive program that may replace it in
subsequent years, provided that maximum bonus (as a percentage of salary)
for which Employee is eligible thereunder shall not be reduced from year to
year. Under the XXXX, Employee will be eligible for a bonus of up to 50% of
his base salary, subject to the achievement of certain business and
individual performance goals. A copy of the XXXX is attached hereto as
Exhibit A. In the event that the Employment Period is terminated before the
end of any fiscal year of the Company, the bonus for that fiscal year, if
any, shall be reduced pro rata in the same proportion that the number of
days remaining in such fiscal year bears to the total number of days in
such fiscal year. Notwithstanding any provision of this Agreement to the
contrary, Employee shall not be entitled to receive a bonus for any fiscal
year in which Employee's employment hereunder terminates and Employee has
been employed by the Company for less than three months during such fiscal
year. In addition, Employee shall not be entitled to a bonus if he is
terminated for Cause (as defined in Section 14).
(c) Stay Bonus. In the event that Employee is still employed by the
Company on the second anniversary of the effective date of this Agreement,
and provided no written notice of termination of this Agreement has been
served by either party in accordance with Section 15, the Company shall pay
Employee a "stay bonus" equal to $20,000.
(d) Special Deferred Compensation Plan. Employee shall be a
participant in the Special Deferred Compensation Plan of the Company, the
terms of which appear in Exhibit B attached hereto.
(e) Benefits. During the Employment Period, Employee shall be
entitled to participate in any employee benefit plans which are maintained
or established by the Company for its senior level employees generally,
subject, however, to all of the terms and conditions thereof, including any
eligibility requirements therefor. In any event, the Company agrees to
provide medical and dental insurance coverage equal to that provided for
other senior employees of the Company and participation in the
Company's 401(k) plan or other standard retirement plan maintained by the
Company.
(f) Severance. In the event that Employee's employment with the
Company is terminated for any reason by either party, other than a
discharge by the Company without Cause (as defined in Section 14(a) or
(b)), prior to expiration of the Employment Period, such salary shall only
be payable for the remainder of the month in which such termination occurs
and thereafter such salary shall end and cease to be payable. In the event
Employee is discharged without Cause (as defined in Section 14(a) or (b)),
Employee shall receive as severance pay his current Base Salary and
benefits, as such benefits are described in Sections 3(a), (b), (c), (d)
and, subject to the terms thereof and to applicable law, (e), for a period
of time, including any notice period under Section 15, of twelve (12)
months after the date of notice of termination.
(g) Voluntary Termination. Employee shall have the right to
voluntarily resign with the same benefits as noted in Section 3(f) for
discharge without Cause in the event that the Company breaches the
provisions of Sections 1 or 3 of this Agreement, provided, however, that
the Company is given prior written notice of such breach by Employee and a
right to cure such breach within five (5) days of such written notice.
Voluntary termination under this section shall not cause loss of
entitlement to the Special Deferred Compensation Plan of Section 3(d) as
noted in Exhibit B, Section (D).
4. Expenses. The Company shall reimburse Employee for reasonable
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expenses incurred by him on behalf of the Company in the performance of his
duties during the Employment Period. Employee shall furnish the Company with
such documentation as is requested by the Company in order for it to comply with
the Internal Revenue Code and regulations thereunder in connection with the
proper deduction of such expenses.
5. Vacations. During the Employment Period, Employee shall be entitled
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to four (4) weeks of paid vacation in each calendar year, to be taken at such
times as may be reasonably agreed with the Company. Employee shall provide
reasonable notice to the CEO of any proposed vacation. All vacation shall be
accrued by Employee in accordance with the vacation schedule in the Company's
employee handbook or as otherwise agreed with the CEO.
6. Additional Obligations of Employee. Employee will manage the
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Company's business from Cleveland, Ohio, or such other location as may be agreed
between the Company and Employee. Employee acknowledges and agrees that the
performance of his duties will require frequent international (including Europe
and Australia) and domestic travel. Employee will fulfill any reasonable and
appropriate duty or task in the manner directed by the CEO. Employee agrees
that he will provide the CEO with a written monthly business report. The form,
content and time for delivery of this monthly business report shall be
determined by the CEO. Employee also agrees that he
will inform the CEO and obtain concurrence prior to implementing any decision or
action likely to have a material impact upon the profitability or strategic
goals of the Company. Employee also agrees that he will use his best efforts to
implement the business goals identified by the CEO or contained in any operating
or strategic plan for the Electronic Chemicals Business consistent with the core
values of the Company.
7. Nondisclosure. Except for information which is already in the public
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domain, or which is publicly disclosed, directly or indirectly, by persons other
than Employee, or which is required by law to be disclosed, Employee shall at
all times during and after his employment with the Company hold in strictest
confidence any and all confidential information within his knowledge (whether
acquired prior to or during his employment with the Company) concerning the
products, processes, services, business, suppliers and customers of the Company,
all to the extent that such information is not intended by the Company for
public dissemination.
8. Non-Solicitation; Non-Competition. Commencing as of the effective
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date hereof and continuing through the date which is one (1) year after
termination of the Employment Period, Employee shall not, directly or
indirectly, without the prior written consent of the Company: (a) solicit
business from or compete with the Company for the business of any customer of
the Company as reflected on the books of the Company as of the effective date
hereof, during the Employment Period, or as of the date of Employee's
termination of employment under this Agreement; or (b) operate or perform any
advisory or consulting services for, invest in (other than stock in a publicly-
held corporation which is traded on a recognized securities exchange or over-
the-counter, provided that the ownership of such equity interest does not give
Employee the right to control or materially influence the policy or operational
decisions of such corporation), or otherwise become associated with in any
capacity (including as employee), any company, partnership, organization,
proprietorship or other entity which competes with the Company, including any
such entity which extracts, purifies, sells or distributes gallium or
substitutes therefor in competition with the Company, within the geographical
area serviced by the Company as of the effective date hereof, during the
Employment Period, or as of the date of Employee's termination of employment
under this Agreement.
9. Noninterference. Employee shall not, at any time during or within two
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(2) years after his employment is terminated with the Company, without the
prior written consent of the Company, directly or indirectly, induce or attempt
to induce any employee, agent or other representative or associate of the
Company to terminate its relationship with the Company, or in any way directly
or indirectly interfere with such a relationship or any relationship between the
Company and any of its employees, agents, suppliers or customers.
10. Disclosure of Proprietary Information. Employee will promptly
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disclose in writing to the Company each improvement, discovery, idea and
invention relating to the business of the Company made or conceived by Employee,
either alone or in conjunction with others, while employed by the Company or
within two (2) years after termination of
employment with the Company, if such improvement, discovery, idea or invention
relates to, results from or was suggested by such employment. Employee will not
disclose any such improvement, discovery, idea or invention to any person,
except to the Company. Each such improvement, discovery, idea or invention shall
be the sole and exclusive property of, and is hereby assigned to, the Company
and at the request of the Company, Employee will assist and cooperate with the
Company and any person or persons from time to time designated by the Company to
obtain for the Company the grant of any letters patent in the United States
and/or any foreign country, covering any such improvement, discovery, idea or
invention, and will in conjunction therewith execute such applications,
statements, assignments or other documents, furnish such information and data
and take all such other action (including without limitation the giving of
testimony) as the Company may from time to time reasonably request. Should
Employee not be an employee of the Company at the time such cooperation and
assistance is rendered he shall be reimbursed for all reasonable and related
out-of-pocket expenses incurred by him.
11. Remedies. Employee acknowledges that Sections 7, 8, 9 and 10 hereof
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were negotiated at arms' length with the advice of counsel and are required for
the fair and reasonable protection of the Company. In the event of an alleged
breach by Employee of his obligations under Sections 7, 8, 9 and 10 the Company
shall give Employee thirty (30) days' written notice thereof, and Employee shall
have the opportunity to cease such activities to the satisfaction of the Company
prior to the filing of any legal action pursuant to this Section 11. Employee
and the Company further acknowledge and agree that a breach of any of those
obligations and agreements will result in irreparable and continuing damage to
the Company for which there will be no adequate remedy at law, and therefore,
Employee and the Company agree that in the event of any breach of said
obligations and agreements the Company, and its successors and assigns, shall be
entitled to injunctive relief and such other and further relief, including
monetary damages, as is proper in the circumstances. It is further agreed that
the running of the time periods provided above in Sections 8, 9 and 10,
respectively, shall be tolled during any period during which Employee shall be
adjudged to have been in violation of any of his obligations under such
Sections.
12. Reformation of Agreement; Severability. In the event that any of
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Sections 7, 8, 9 or 10 shall be found by a court of competent jurisdiction to be
invalid or unenforceable as against public policy, such court shall exercise its
discretion in reforming such provision to the end that Employee shall be subject
to such restrictions and obligations as are reasonable under the circumstances
and enforceable by the Company. In the event that any other provision or term
of this Agreement is found to be void or unenforceable to any extent for any
reason, it is the agreed upon intent of the parties hereto that all remaining
provisions or terms of the Agreement shall remain in full force and effect to
the maximum extent permitted and that the Agreement shall be enforceable as if
such void or unenforceable provision or term had never been a part hereof.
13. Conflicting Agreements. Employee represents, warrants and agrees that
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(a) the execution of this Agreement and the performance of his duties and
obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party and by which he is bound; (b) except as set forth on Exhibit C, he is
not now subject to any covenants against competition or similar covenants which
would affect the performance of his duties hereunder; (c) he has not made and
will not make any agreements in conflict with this Agreement; and (d) he will
not disclose to the Company, or use for the Company's benefit, any trade secrets
or confidential information that is the property of any other party now or
hereafter in his possession.
14. Definitions of "Cause" and "Change of Control". In this Agreement
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(including the Exhibits) the following defined terms shall have the meanings set
forth below:
(a) After a Change of Control "Cause" means:
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(i) Employee has been convicted of, or entered a plea of
nolo contendere to, a felony;
(ii) Employee has stolen or embezzled from the Company or
any other business entity controlling, controlled by
or under common control with the Company (an
"Affiliate") or has committed any other crime
against the Company or any of its Affiliates or act
of dishonesty in connection with the Company or any
of its Affiliates;
(iii) gross negligence or corporate waste to the Company
or any of its Affiliates by Employee that continues
after notice thereof to Employee; or
(iv) Employee has engaged in the illegal use of drugs or
suffers from drug dependence or habitual insobriety.
(b) Prior to a Change of Control "Cause" means a determination
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by the CEO pursuant to the proper exercise of business
judgment that any of the matters referenced in sub-sections
(a)(i) through (iv) above has occurred or any following
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events has occurred:
(i) there has been dishonesty or misconduct by Employee,
whether or not in relation to the business of the
Company, which is detrimental to the interests of
the Company;
(ii) Employee has engaged in insubordination or
disloyalty to the Company or any of its officers;
(iii) Employee has made derogatory comments about the
Company or its officers to other employees of the
Company or to third parties, such as financial
institutions and partners of the Company, provided
that the Employee is entitled to privately express
disagreements or reservations to the CEO or the
Board;
(iv) Employee has failed, after notice, to fulfill his
obligations under this Agreement; or
(v) Employee, for himself or any other person, firm,
corporation or other entity (A) solicits business
from customers of the Company or any of its
Affiliates, (B) diverts or attempts to divert any
business from the Company or any of its Affiliates,
or otherwise interferes with the business or
employment relationship between the Company or any
of its Affiliates and their respective customers,
employee or sales representative, or (C) discloses
or furnishes to any competitor or any person, firm,
corporation or other entity, or uses on his own
behalf, any confidential or secret information or
data of or relating to the Company or any of its
Affiliates.
(c) "Change of Control" means there is a change of control of the Company
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such that Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx (together, the
"Founders"): (i) cease to be the beneficial owners, directly or
indirectly, of at least ten percent (10%) in the aggregate of the
total voting power of the Company whether as a result of the issuance
of securities of the Company, any merger, consolidation, liquidation
or otherwise, and (ii) cease to be members of the Board and senior
executive officers of the Company.
15. Termination. This Agreement shall terminate and, except for the
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obligations of the Company set forth in Section 3(f) and the obligations of
Employee set forth in Sections 7, 8, 9 and 10, which shall survive such
termination, all rights and obligations of the Company and Employee hereunder
shall be completely void and shall terminate upon the earliest to occur of the
following:
(a) expiration of ninety (90) days following receipt of written
notice of termination of employment from the Company to Employee;
(b) expiration of ninety (90) days following receipt of written
notice of voluntary termination of employment from Employee to the Company;
(c) discharge of Employee by the Company with Cause;
(d) the death of Employee; and
(e) at the election of the Company, the disability of Employee,
which, for purposes hereof, shall mean the inability of Employee for a
continuous period of six (6) months to perform the essential functions of
his position hereunder on an active full time basis, with or without
reasonable accommodations, by reason of disability or impairment of health.
A certificate from a physician reasonably nominated by the Company to the
effect that Employee is or has been disabled and
incapable of performing the essential functions of his position with or
without reasonable accommodations for the Company as previously performed
shall be conclusive of the fact that Employee is incapable of performing
such reasonable services and is, or has been disabled for the purposes of
this Agreement. Employee agrees to submit to any medical examination
required to enable such certificate to be given by the physician.
The Company reserves the right: (i) to make a payment equal in value to ninety
(90) days of salary and benefits hereunder in lieu of the written notice of the
Company referenced in Section 15(a); and (ii) to waive the ninety (90) day
period of notice referred to in Section 15(b), in which event the notice served
by Employee shall be deemed immediately effective.
16. Assignment. This Agreement shall inure to the benefit of, and shall
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be binding upon, the Company, its successors and assigns. Employee shall not
assign this Agreement without the prior written consent of the Company, but this
Agreement shall be binding upon Employee and his heirs, estate and personal
representatives.
17. Notices. Notices under this Agreement shall be in writing and will be
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effective immediately upon delivery if delivered in person (or by facsimile with
confirmation of receipt) to Employee (in the case of notices to Employee) or in
person (or by facsimile with confirmation of receipt) to the individual
indicated below (in the case of notices to the Company) or three (3) days after
mailing if deposited in the United States mail, postage prepaid, and addressed:
If to the Company:
GEO Specialty Chemicals, Inc.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 216.765.1307
With a copy to:
Xxxxxxxx Xxxx LLP
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Facsimile: 216.566.5800
If to Employee:
Xx. Xxxxx X. Xxxxxx
000 Xxxx Xxx Xxx
Xxxxxxx Xxxxx, XX 00000
or to such other address as any party may from time to time designate for
himself or itself by notice in writing given to the other party hereto.
18. Waivers. No term or condition of this Agreement shall be deemed to
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have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed to be a
continuing waiver unless specifically stated therein.
19. Entire Agreement. This Agreement, together with the Exhibits hereto,
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constitutes the entire understanding of the parties hereto with respect to
Employee's employment with the Company. This Agreement supersedes any prior
agreement or arrangement concerning Employee's employment with the Company. No
modifications of any provisions of this Agreement shall be made unless made in
writing and signed by the parties hereto.
20. Governing Law. This Agreement shall be governed by the laws of the
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State of Ohio, and both parties consent to venue and personal jurisdiction over
them in the courts of that state, including the federal courts, for purposes of
construction and enforcement of this Agreement.
21. Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. Confidentiality. The terms of this Agreement are confidential and
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shall not be disclosed by Employee to any third party, except as required by
law, during the Employment Period. Each of such persons to whom Employee
discloses the terms of this Agreement shall be advised by Employee to maintain
the confidentiality of same.
23. Headings. The headings of sections and paragraphs herein are included
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solely for convenience of reference and shall not effect the meaning or
construction of any of the provisions hereof.
The parties hereto, or their duly authorized representatives have signed
and delivered this Agreement effective as of the day and year stated above.
GEO SPECIALTY CHEMICALS, INC. XXXXX X. XXXXXX
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
