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EXHIBIT 10
EMPLOYMENT AGREEMENT
This Agreement, dated as of the 9th day of November, 1998, by and among NEWCOR,
INC., a Delaware corporation (the "Company"), and XXXXX XXXX ("Employee")
W I T N E S S E T H:
WHEREAS, the Company desires to engage the services of Employee, and Employee is
willing to accept such employment, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual undertakings set
forth herein the parties hereto agree as follows:
1. Employment and Duties; Board Appointment. In accordance with
actions taken and authorized by the Board of Directors of the
Company (the "Company Board"), effective upon the arrival of
Employee at the principal offices of the Company on November 9,
1998 prepared to commence his duties hereunder, Employee shall
become employed and appointed as the President and Chief Executive
Officer of the Company and shall have the duties and
responsibilities commensurate with such titles and offices,
including, without limitation, all such duties and
responsibilities as now are or hereafter may be set forth with
respect to such offices in the by-laws of the Company. The Board
has also taken the appropriate action to appoint Employee as a
director of the Company effective November 9, 1998. The Employee
shall continue to serve as a director as long as elected by the
shareholders of the Company, except that upon termination for any
reason of the Employee and upon request by the Board, Employee
agrees to resign as a director. During the period of his
employment hereunder, Employee also shall serve as an officer of
such other affiliates of the Company and in such other capacities
as he may be reasonably requested by the Company Board and shall
assume such additional duties and responsibilities as from time to
time may be reasonably assigned to him by the Company Board, all
without additional compensation therefor. Throughout the period of
his employment hereunder, Employee shall devote his business time,
attention, and energy on a full-time basis (subject to up to four
weeks of vacation to be taken at reasonable intervals during the
year) exclusively to the affairs of the Company and its
affiliates.
2. Term of Employment. The employment of Employee hereunder shall
become effective on November 9, 1998 and shall continue unless
terminated as hereinafter provided in Section 10 of this
Agreement.
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3. Cash Compensation. As full cash compensation for all services to
be performed by Employee hereunder, the Company shall pay to
Employee the following:
(a) salary at the rate of $275,000 per year (to be reviewed
annually by the Company Board), payable at the intervals at which
other executive officers of the Company are paid;
(b) eligibility for an additional incentive bonus (if earned) of
up to 100% base pay. Such bonus shall be payable after the fiscal
year-end in accordance with Company policy in an amount determined
based on performance criteria to be developed by the Compensation
Committee of the Board.
4. Certain Fringe Benefits. During the period of his employment
hereunder, the Company will:
(a) provide Employee with the use of a new American-made
automobile of Employee's choice (and replace such automobile every
two years or 50,000 miles, whichever first occurs), maintained,
insured, and equipped at the Company's expense (subject to a
$50.00 per month charge to Employee for personal use of the
automobile)
(b) subject to Employee's insurability, provide a minimum of
$800,000 of term life insurance benefits on the Employee's life.
5. Other Employee Benefits. During the period of his employment
hereunder, Employee also shall be entitled to participate in such
Company employee benefit plans as from time to time are
maintained, sponsored, or made available by the Company to its
employees or its executive employees generally (including but not
limited to the Company's pension plan, 401(k) plan, and medical
plan), in each case on the same terms and subject to the same
conditions and limitations generally applicable to other executive
officers of the Company with respect to participation therein.
6. Certain Expenses. The Company shall pay or reimburse Employee for
the reasonable travel, entertainment and other incidental expenses
(including the cost of business publications and professional
associations) incurred on business of the Company with the
approval of the Chairman of the Company, and in accordance with
the Company's practices as in effect during the term of this
Agreement as applied to executive officers.
7. Stock Options. As evidenced by that certain Stock Option Agreement
to between Employee and the Company (the "Option Agreement"),
Employee shall be granted under the Company's 1996 Employee
Incentive Stock Plan so-called non-qualified stock options to
purchase an aggregate of 50,000 shares of the common stock of the
Company (which options shall vest with respect to 12,500 shares
per year commencing one year from the date of the Option
Agreement) on the terms and subject to the conditions specified in
the Option Agreement, including a condition that
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Employee commence employment hereunder by November 9, 1998. An
additional option of 50,000 shares of Newcor, Inc. common stock
shall be granted following the conclusion of calendar year 1999
predicated upon the average of the bid and the asked price of
Newcor common stock traded on NASDAQ during the last five business
days of 1999 being a minimum of $6.00 per share.
8. Other Insurance. The Company shall have the right to purchase
disability and group life insurance policies (in addition to the
policy referred to in Section 4 above) on Employee whenever during
the period of his employment hereunder the Company deems it
reasonable to acquire such insurance. Employee agrees to cooperate
in the acquisition of such insurance and to perform all acts
necessary and proper in connection therewith, including submission
to such medical examinations as may be required. Any policy owned
by the Company may be dealt with in such manner as the Company
deems appropriate.
9. Certain Continuing Obligations of Employee. Throughout the period
of his employment hereunder and for a two (2) year period
thereafter, Employee agrees to keep confidential all trade
secrets, customer lists, business strategies, financial and
marketing information, and other data concerning the private
affairs of the Company or any of its affiliates made known to or
developed by Employee during the course of his employment
hereunder ("Confidential Information"), not to use any
Confidential Information or supply Confidential Information to
others other than in furtherance of the Company's business, and to
return to the Company upon termination of his employment all
copies, in whatever form, of all Confidential Information and all
other documents relating to the business of the Company or any of
its affiliates which may then be in the possession or under the
control of Employee. The obligation hereunder of Employee to
retain in confidence Confidential Information shall not apply to
information (i) which at the time of disclosure or subsequent
thereto becomes part of the public domain without action or fault
of the Employee, (ii) which is previously known to the Employee
from sources other than the Company, (iii) which is provided by
the Company to third parties without restriction, or (iv) which is
subject to disclosure pursuant to compulsory legal process.
Employee acknowledges and agrees that any intellectual property of
any sort developed or invented by Employee while employed by the
Company (whether or not during work hours) shall be and remain the
sole and exclusive property of the Company, and Employee shall
have no interest therein.
Employee further agrees that, during the period of his employment
hereunder and for a two year period thereafter, he will make no
attempt whatsoever to induce or encourage any other employee of
the Company or any of its affiliates
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to leave such employment for employment with any other entity
engaged in any line of business competitive with the Company or
any of its affiliates.
At the request of the Company Board, whether or not made during
the period of his employment hereunder, Employee agrees to execute
such confidentiality agreements, assignments of intellectual
property rights, and other documents as hereafter may be
reasonably determined by the Company Board to be appropriate to
carry out the purposes of this Section.
10. Termination of Employment; Effect.
(a) Employee's employment hereunder will be terminated in any of
the following ways:
(i) Immediately upon the death of the Employee;
(ii) Immediately upon the Employee becoming permanently
disabled within the meaning of the Company's long term disability
policy as then in effect;
(iii) By the Employee providing 30 days' prior written
notice to the Company of his desire to terminate the contract,
effective as of the date specified in such notice;
(iv) By the Company, without or with Cause (as hereinafter
defined), providing 30 days' prior written notice to the Employee,
effective as of the date specified in such notice.
(b) Upon the termination of Employee's employment in any of the
ways provided in subsection (a), then this Agreement and all rights and
obligations of Employee and the Company hereunder (as opposed to rights and
obligations under the Option Agreement and under any Company employee benefit
plan in which Employee participated) shall terminate and cease immediately,
except for (i) Employee's rights to the payments provided in Section 11 below;
and (ii) the rights and obligations set forth in Section 9 above and Section 14
below.
11. Payments on Termination. Employee shall be entitled to the
following payments and benefits upon termination of his
Employment:
(a) If Employee's employment is terminated under Section 10(a)(i)
above, or if Employee's employment is terminated by Employee under Section
10(a)(iii) above, or if Employee's employment is terminated for Cause by the
Company under Section 10(a)(iv) above, then the cash compensation under Section
3(a) above, and the benefits to which Employee is entitled under Sections 4 and
5 above, shall cease on the date of termination of employment.
(b) If Employee's employment is terminated under Section 10(a)(ii)
above, or by the Company without Cause under Section 10(a)(iv) above, Employee
shall be entitled to the cash compensation payable under Section 3(a) above,
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continuation of the benefits referred to in Sections 4(a) and 5 above
(subject to the provisions below regarding the Company medical plan),
and continuation of the life insurance benefits referred to in Section
4(b) above, for a period of one year following the effectiveness of
such termination of employment; and provided, further, that the
benefits provided under Section 4(a) above shall continue for the
period determined as aforesaid but not after Employee shall be
effectively provided with substantially equivalent such benefits by
another employer. In the event termination of employment occurs under
Section 10(a)(ii) above, the payments made by the Company as aforesaid
shall be reduced by any payments made to Employee under the Company's
long-term disability policy. In addition, Employee shall be entitled to
receive any bonus earned by Employee under Section 3(b) above through
the date of termination of employment payable at such time as any like
bonuses are paid by the Company generally, and outplacement services
(including an office) with a firm designated by the Employee and
approved by the Company for a period not to exceed twelve months, and
Company medical plan benefits as contemplated in Section 5, above, for
a period not to exceed twenty-four months.
12. Definition. For purposes of this Agreement, "Cause" means any of
the following:
(a) Material breach of any of the terms of this Agreement or of
the Company's policies and procedures applicable to employees and/or
directors;
(b) Conviction of or plea of guilty or nolo contendere to a crime
involving moral turpitude or involving any violation of securities or
commodities law or regulation, or the issuance of any court or
administrative order enjoining or prohibiting Employee from violating
any such law or regulation;
(c) Repeated or habitual intoxication with alcohol or drugs while
on the premises of the Company or any of its affiliates or during the
performance by Employee of any of his duties hereunder;
(d) Embezzlement of any property belonging or entrusted to the
Company or any of its affiliates;
(e) Repeated or protracted absence from work without cause;
(f) Willful misconduct or gross neglect of duties, or failure to
act with respect to duties or actions previously communicated to
Employee in writing by the Company Board;
13. Integration; Amendment. This Agreement and the Option Agreement
contain the entire agreement of the parties relating to the
subject matter hereof and thereof, and together supersede and
replace in their entirety any prior agreements or understandings
concerning such subject matter. This Agreement may not be waived,
changed, modified, extended, or discharged orally, but only by
agreement in writing signed in the case of the Company by a duly
authorized non-employee member of the Company Board.
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14. Arbitration. Any controversy, dispute, or claim arising out of or
relating to Employee's employment or to this Agreement or breach
thereof shall be settled by arbitration in accordance with the
commercial rules of the American Arbitration Association at its
Southfield, Michigan offices. Judgment upon any award may be
entered in any circuit court or other court having jurisdiction
thereof, without notice to the opposite party or parties. Anything
contained herein to the contrary notwithstanding, this agreement
to arbitrate shall not be deemed to be a waiver of the Company's
right to secure equitable relief including injunction (whether as
part of or separate from the arbitration proceeding) if and when
otherwise appropriate.
15. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan applicable to
contracts made and to be performed within such State.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
NEWCOR, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Its Chairman of the Board
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/s/ Xxxxx Xxxx
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XXXXX XXXX
