EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 30th day of July 1998, effective as of the
close of business on July 31, 1998, by and among Ruco Polymer Corporation, a
New York Corporation, Ruco Polymer Company of Georgia, LLC (collectively
"Corporation"), Sybron Chemicals Inc., a Delaware corporation (hereinafter
called "Sybron") and Xxxxxxx X. Xxxxxxxx (hereinafter called "Executive").
W I T N E S S E T H:
Corporation is an indirect wholly owned subsidiary of Sybron. Executive
has been employed as Corporation's President under an Employment Agreement
dated December 20, 1989, extended from time to time by agreement of
Corporation and Executive, and which continues to remain in force and effect
(the "Existing Agreement"). On the effective date hereof, Sybron has acquired
all of the outstanding equity interests in Corporation. Corporation wishes to
continue to employ Executive as President of Corporation and Executive wishes
to remain in that capacity on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and intending to be legally bound, Corporation and Executive agree
as follows:
1. Employment. The parties hereby agree to terminate the Existing
Agreement upon the effective date hereof. Upon the effective date this
Agreement, Corporation shall employ Executive and Executive shall accept
employment by Corporation for the period and upon the terms and
conditions contained in this Agreement.
2. Office and Duties.
(a) Executive shall serve as President of Corporation,
carrying out all of the responsibilities set forth in the "Job Description"
attached hereto as Exhibit "A". As part of those responsibilities, Executive
shall serve as a member of Sybron's Management Committee and present to
Sybron's Board of Directors on a quarterly basis a report on Corporation's
operations. Executive also shall report to, and carry out the policies from
time to time established by, the Chief Executive Officer of Sybron and the
Board of Directors of Corporation. In addition, Executive shall have such
authority and such additional responsibilities as Corporation reasonably may
determine from time to time.
(b) Subject to vacation, illness and disability, throughout
the term of this Agreement, it is expected that Executive shall devote his
entire working time, energy, skill and best efforts to the performance of his
duties hereunder in a manner which will faithfully and diligently further the
business and interests of Corporation. Without limiting the foregoing,
Executive shall be permitted to spend a reasonable amount of time, on an as
needed basis only, to assist in protecting the Sellers' rights under that
Capital Stock and Membership Interest Agreement of even date herewith entered
into in connection with Sybron's acquisition of Corporation.
3. Term. Executive, Corporation and Sybron intend that Executive
remain in the employ of Corporation for a minimum period of two years,
commencing on the date hereof and ending on the second anniversary of the
date hereof, unless sooner terminated as hereinafter provided.
Notwithstanding the foregoing, this Agreement shall continue in full
force and effect until terminated by either party at any time and for any
reason by
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written notice to the other party no less than six months prior to the
effective date of termination.
4. Compensation. For all of the service rendered by Executive to
Corporation, Executive shall receive the following compensation:
(a) An annual base salary of $200,000, subject to
discretionary annual increases as determined by the Corporation's Board of
Directors, payable in periodic installments and in accordance with
Corporation's regular payroll practices in effect from time to time.
(b) An option to purchase 25,000 shares of Sybron's Common
Stock (the "Stock"), in accordance with the Stock Option attached hereto as
Exhibit "B". The price of such options shall be the Stock's closing price at
the end of business on the day immediately preceding the effective date
hereof.
(c) Incentive compensation pursuant to a performance-based
incentive program to be established for Executive by Sybron. Such incentive
compensation program is attached hereto as Exhibit "C". Bonuses due under this
subparagraph shall be payable no later than 90 days after the end of the year
to which the bonus relates. In accordance with all applicable terms and
conditions of Sybron's existing Executive Bonus Plan attached hereto as
Exhibit "D", the first $50,000 in incentive bonus earned under this
subparagraph shall be paid in Stock.
(d) Except in the event the Executive's employment shall be
terminated by the Corporation with "Cause," as such term is defined in
Paragraph 6, the Corporation shall continue to provide at no expense to
Executive the health care benefits to be provided under Paragraph 4(e) hereof
until the earlier of Executive's 65th birthday or his death.
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(e) Throughout the term of this Agreement and as long as
they are kept in force by Corporation, Executive shall be entitled to
participate in and continue to receive the benefits of any benefit plans or
programs made available to other similarly situated employees of Corporation,
except that Executive, in light of the six months notice provision set forth
in Paragraph 3, shall not be entitled to participate in any such severance
plans or programs. It is understood that Sybron or Corporation reserves the
right to supplement, modify or terminate any such programs.
(f) Executive shall be entitled to take five weeks paid
vacation per year, to be taken consistent with his ability to discharge
effectively his duties and responsibilities to the Corporation.
5. Automobile and Expenses.
(a) Executive shall be reimbursed up to $650 per month for
the expenses associated with the leasing of a vehicle used primarily for
business purposes, plus the costs of fuel and maintenance. In addition,
Corporation shall pay for the costs of insurance associated with the leasing
of such vehicle.
(b) Corporation will reimburse Executive for all reasonable
and necessary expenses incurred by Executive in connection with the
performance of Executive's duties hereunder upon receipt of vouchers therefor
and in accordance with Corporation's regular reimbursement procedures and
practices in effect from time to time.
6. Discharge for Cause. Corporation may discharge Executive at any
time for (a) criminal conduct which may result in harm to Corporation or
any other act or omission resulting or intended to result directly or
indirectly in gain to, or personal enrichment of,
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Executive at the Corporation's expense, (b) habitual intoxication or drug
addiction, (c) any violation of any express direction or any reasonable
rule or regulation established by Corporation from time to time regarding
the conduct of its business, or any act or omission constituting gross
misconduct which is or is intended to be injurious to Corporation, (d)
the willful failure of Executive to perform his duties hereunder, which
failure continues uncured for 30 days after Executive receives notice
thereof from Corporation, or (e) any violation by Executive of the terms
and conditions of this Agreement.
6A. If Corporation terminates the services of the Executive for cause,
or in the event Executive terminates his employment with Corporation or
such employment terminates by reason of death or disability, Corporation
shall have no further obligations or liabilities to Executive after the
date of such discharge or termination, other than (i) the obligation to
pay any unpaid compensation and reimbursement for expenses through the
date of such discharge or termination; (ii) to fulfill its obligations
pursuant to Section 9 below and (iii) to continue health care benefits
pursuant to Section 4(d) unless termination arises under Section 6.
7. Corporation Property. All materials or data of any kind furnished
to Executive by Corporation or Sybron, or developed by Executive on
behalf of Corporation or Sybron, or at the direction of Corporation or
Sybron, or for the use of Corporation or Sybron, or otherwise in
connection with Executive's employment hereunder, are and shall remain
the sole and confidential property of Corporation or Sybron; if
Corporation or Sybron requests the return of such materials at any time
during, at or after the termination of Executive's employment, Executive
shall immediately deliver the same to Corporation or Sybron.
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8. Noncompetition, Trade Secrets, Etc.
(a) During the term of this Agreement and for a period equal to
the longer of (i) five years after the effective date hereof, and (ii)
eighteen months after the termination of such employment with Corporation for
any reason whatsoever, Executive shall not, directly or indirectly:
(i) solicit, induce or encourage any Executive of
Sybron or Corporation to terminate his or her relationship with Sybron or
Corporation; or
(ii) employ or establish a business relationship
with, or encourage or assist any individual or entity to employ or establish a
business relationship with, any individual who was employed by Sybron or
Corporation during the preceding twelve month period; or
(iii) solicit, induce or encourage any clients or
prospective clients, customers, prospective customers or suppliers of Sybron
or Corporation to terminate or reduce in scope their relationship with Sybron
or Corporation; or
(iv) solicit or assist any individual or entity in
the solicitation of business from, or performance of work for, any clients or
prospective clients of Sybron or Corporation; or
(v) engage in (as a principal, agent, consultant,
partner, director, officer, Executive, stockholder, investor or otherwise),
alone or in association with any person or entity, or be financially
interested in, any business which is competitive with Sybron or Corporation.
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(b) For purposes of subparagraph (a) above, "customers" shall mean
those customers to whom Sybron or Corporation sold products or for whom it
performed services during the twelve months preceding the date in question,
and "prospective customers" shall mean persons or entities whose business was
solicited by Sybron or Corporation during the twelve months preceding the date
in question.
(c) Executive shall not use for his personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company, (i) any information regarding the
business methods, business policies, business strategies, marketing plans,
survey procedures, statistical techniques, research or development projects or
results, trade secrets or other confidential knowledge or processes of, or
developed by, Corporation or Sybron, or (ii) any confidential data on or
relating to past, present or prospective customers of Corporation or Sybron,
or (iii) budgets, forecasts, pricing information or unpublished financial
information or any other confidential information relating to or dealing with
the business operations or activities of Corporation or Sybron. The
obligations of Executive under this Paragraph shall not relate to information:
(x) that is now or hereafter becomes generally known to the public (A) through
sources independent of Executive and neither directly nor indirectly through
any fault of Executive, or (B) through others entitled to disclose it; or (y)
which must be disclosed pursuant to a court order or otherwise as required by
law, provided, however, that Executive gives prior written notice of such
anticipated disclosure to Corporation or Sybron.
(d) Any and all writings, inventions, software, improvements,
processes, procedures and/or techniques which Executive may make, conceive,
discover or develop, either solely or
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jointly with any other person or persons, at any time during the term of this
Agreement, whether during working hours or at any other time and whether at
the request or upon the suggestion of Corporation or Sybron or otherwise,
which relate to or are useful in connection with any business now or hereafter
carried on or contemplated by Corporation, including developments or
expansions of its present fields of operations, shall be the sole and
exclusive property of Corporation. Executive shall make full disclosure to
Corporation of all such writings, inventions, improvements, processes,
procedures and techniques, and shall do everything necessary or desirable to
vest the absolute title thereto in Corporation. Executive shall not be
entitled to any additional or special compensation or reimbursement regarding
any and all such writings, inventions, improvements, processes, procedures and
techniques.
(e) Executive acknowledges and agrees that (i) the covenants set
forth herein are reasonable and necessary in order to protect the legitimate
interests of Corporation and that he is receiving adequate consideration
hereunder; (ii) Corporation will not have any adequate remedy at law if
Executive violates the terms hereof or fails to perform any of his obligations
hereunder; and (iii) Corporation shall have the right, in addition to any
other rights either may have under applicable law, to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief to restrain
any breach or threatened breach of, or otherwise to specifically enforce any
such covenant or any other obligations of Executive under, this Agreement, as
well as to obtain damages and an equitable accounting of all earnings, profits
and other benefits arising from such violation, which rights shall be
cumulative and in addition to any other rights or remedies to which
Corporation may be entitled.
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(f) If the period of time or scope of any restriction set forth in
subparagraph (a) above should be adjudged unreasonable in any proceeding, then
the period of time shall be reduced by such number of months or the scope of
the restriction shall be reduced by the elimination of such unreasonable
portion thereof, or both, so that such restrictions may be enforceable for
such time and in the manner adjudged to be reasonable. If Executive violates
any of the restrictions contained in subparagraph (a) above, then the
restrictive period shall not run in favor of Executive from the time of the
commencement of any such violation until such time as such violation shall be
cured by Executive.
(g) Executive may, prior to entering upon any activity which could be
deemed in violation of this Section 8, submit to the Corporation and Sybron a
written description of the proposed activity accompanied by a request that the
Corporation and Sybron review such request and indicate whether the proposed
activity will be deemed violative of this Section 8. The Corporation and
Sybron shall use their reasonable efforts to respond to such request in
writing within 30 days after receipt thereof. If they indicate in writing that
they have no objection, the Executive may rely upon such non-objection in
entering upon the proposed activity.
9. Indemnification.
(a) The Executive shall be entitled to indemnification by the
Corporation and Sybron, and to inclusion in such directors and officers
liability insurance as the Corporation and/or Sybron may from time to time
maintain, on terms no less favorable to the Executive than those applying to
any senior officer of the Corporation and/or Sybron.
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(b) Nothing contained in (a) above shall reduce, waive, limit or
otherwise adversely affect the obligations of the Executive as a "Holder", or
the rights of Sybron as the "Buyer" under the Capital Stock and Membership
Interest Purchase Agreement entered into effective at the close of business on
July 31, 1998.
10. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the part
of the Corporation to exercise any right, remedy, power or privilege under
this Agreement (a "Right") shall operate as a waiver thereof, nor shall any
single or partial exercise of any Right preclude any other or further exercise
of the same or of any other Right, nor shall any waiver of any Right with
respect to any occurrence be construed as a waiver of such Right with respect
to any other occurrence. No waiver shall be effective against the Corporation
unless it is in writing and is signed by the Corporation.
(b) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or by
courier service or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice, except
that notices of changes of address shall be effective upon receipt):
(i) If to Executive:
Xxxxxxx X. Xxxxxxxx
0 00xx Xxxxxx
Xxx Xxxxx, XX 00000
Fax #: 0 (000) 000-0000
with a copy, given in the manner prescribed
above, to:
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Xxxx X. Xxxxxxxx, Esquire
Xxxxxxxx, Xxxxxxxxxxx & Xxxxxx LLP
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 0 000-000-0000
(ii) If to Corporation or Sybron:
Sybron Chemicals Inc.
Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Fax #: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, President
with a copy, given in the manner prescribed
above, to:
Xxxxx Xxxxxx, Esquire
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
Twelfth Floor, Packard Building
15th and Chestnut Sts.
Xxxxxxxxxxxx, XX 00000
(c) Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(e) Consent to Jurisdiction. Executive hereby irrevocably submits to
the jurisdiction of any New York State or Federal court in any action or
proceeding arising out of or relating to this Agreement, and Executive hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State or Federal court. Executive
hereby irrevocably waives, to the fullest extent he may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
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(f) Binding Nature of Agreement. This Agreement shall inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be binding upon the Corporation, Sybron, Executive and their respective
successors, heirs and legal representatives.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date first above written.
RUCO POLYMER CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
RUCO POLYMER COMPANY OF GEORGIA, LLC
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
SYBRON CHEMICALS INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
/s/ Xxxxxxx X. Xxxxxxxx (SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxxxxx
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EXHIBIT C TO XXXXXXXX EMPLOYMENT AGREEMENT
Incentive Bonus
1. For the period August 1, 1998 through December 31, 1998, bonus
shall be paid based on the Variable Profit generated between July 1, 1998 and
December 31, 1998 at the following rates:
(a) 1% of the Variable Profit between $11.6 million and
$12.6 million.
(b) 2.7% of the Variable Profit in excess of $12.6 million.
2. For the year 1999, bonus shall be paid based on the Variable
Profit in excess of $25.2 million.
3. "Variable Profit" shall be Ruco's "variable margin" minus agents'
commissions not otherwise included in variable margin. All numbers to be
verified by SCI accounting department, whose determination shall be final.
Variable Profit generated by reversing reserves taken prior to 7/1/98 shall
not be included.
4. Variable profit from any acquisition relating to this segment,
calculated as defined above, shall be added on a proforma basis to the above
target numbers. For example, if an acquisition is made on November 1, 1998
that had $3 million in variable profit the preceding 12 months, $0.5 million
would be added to each of the 1998 target numbers and $3 million added to the
1999 target. Targets and percentages for future years shall be set prior to
each year based on the business status and objectives at the time.
