EXHIBIT 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made
effective as of October 31, 1997, between XxXXXXXXX CORPORATION, a Delaware
corporation, with its principal office located at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Corporation"), and XXXXXXX X. XXXX, residing at
00 Xxxx Xxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, effective May 1, 1992, the Corporation and the Executive, among
others, entered into an employment agreement pursuant to which the Executive
agreed to serve the Corporation as Executive Vice President and Chief Financial
Officer; and such agreement was amended August 31, 1992 (the "1992 Agreement");
WHEREAS, the Corporation desires to continue to employ Executive, and
Executive desires to continue to be so employed by the Corporation, on the terms
and conditions herein set forth:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereby agree as follows:
1. Employment; Term. The Corporation agrees to employ Executive, and
Executive agrees to furnish his services, on the terms and conditions herein set
forth, for a term of three (3) years commencing as of October 31, 1997 and
ending on October 31, 2000, unless sooner terminated as herein provided. The
term of Executive's employment hereunder may be extended for additional one (1)
year periods by the mutual written consent of both parties hereto, given at
least ninety (90) days prior to the then scheduled termination of the
Executive's employment hereunder.
2. Office and Duties. During the term of this Agreement, Executive agrees
to serve the Corporation as the Executive Vice President and Chief Financial
Officer of the Corporation and shall exercise such responsibilities and perform
such duties, consistent with his position and title, as shall be assigned to him
from time to time by the Company's Board of Directors or senior management. The
Executive's job functions shall relate primarily to finance and administration.
The Executive shall report to the Company's President/Chief Executive Officer.
Executive shall also perform such other duties and shall exercise such other
powers for the Corporation and for any of its divisions, operations,
subsidiaries, or affiliated companies as from time to time may be assigned to
him by the Chief Executive Officer or the Board of Directors without further
compensation other than that for which provision is made in this Agreement;
provided that any such other duties shall be consistent with Executive's
position as Executive Vice President and Chief Financial Officer of the
Corporation.
3. Extent of Services; Other Business Activities. Executive agrees that he
shall devote his best efforts, energies, and skills to the discharge of his
duties and responsibilities hereunder. To this end, Executive agrees that he
shall devote his full business time and attention to the business and affairs of
the Corporation and its divisions, operations, subsidiaries, and affiliated
companies and shall not, without the consent of the Corporation, directly or
indirectly, engage or participate in, or become an officer or director of, or
become employed by, or render advisory or other services in connection with, any
other business enterprise. Notwithstanding the foregoing, during the term of
this Agreement, Executive shall have the right to invest personally in any
corporation, partnership, or other entity or enterprise, engage in appropriate
civic, charitable, and religious activities, and devote a reasonable amount of
time to private investments, provided that (i) any such investment or other
activity shall not interfere with the execution of Executive's duties hereunder
or otherwise violate any provision of this Agreement, (ii) any such corporation,
partnership, or other entity or enterprise does not compete with the
Corporation, and (iii) notwithstanding the foregoing, Executive may purchase an
aggregate of one percent (1%) of any security publicly traded on an established
securities market.
4. Compensation.
(a) In consideration of the services to be rendered by Executive hereunder,
the Corporation agrees to pay to Executive, and Executive agrees to accept, a
salary for each Employment Year (as hereinafter defined) during the term of this
Agreement at the rate of $325,000 per Employment Year, commencing effective as
of October 31, 1997 and ending upon the termination of this Agreement (the
"Salary"). The Salary shall be payable in accordance with the regular payroll
practices of the Corporation. During the term of this Agreement, the Corporation
agrees to review Executive's compensation prior to each anniversary date of the
date hereof, but any increase in compensation offered to Executive under this
Paragraph 4 resulting from such review shall be in the sole discretion of the
Board of Directors of the Corporation.
(b) In addition to the Salary, the Corporation agrees to pay Executive, as
further compensation, the sum of $100,000, in a single payment, on or before
December 31, 1997 and an additional $100,000 in a single payment, on or before
June 30, 1998.
(c) For the purposes of this Paragraph 4, the following terms shall mean:
(i) "Base Amount": The sum of (x) $43,639,753; plus (y) an amount
equal to the interest that would accumulate if interest was accrued from
February 1, 1990 at a cumulative annual rate equal to the Prime Rate as
announced from time to time by the Bankers Trust Company on the sum of
$43,639,753, as said sum may be reduced (but not below zero) from time to time
by any proceeds received (in respect of its ownership of stock of the
Corporation) by the Partnership after the date of this Agreement.
(ii) "Employment Year": Provided that during each such period
Executive remains employed by the Corporation in accordance with the terms of
this Agreement, each complete one-year period commencing on February 1, 1990.
The parties acknowledge that as of the date of this Agreement the Executive has
completed seven (7) Employment Years.
(iii) "Partnership": Rose Partners, L.P.
(iv) "Recognition Event": A distribution of any assets, whether in
cash or in any other form, by the Corporation to the Partnership in respect of
the stock owned by the Partnership, or the realization by the Partnership of any
amount upon the sale or transfer of its ownership interest in the stock of the
Corporation.
(v) "Final Recognition Event": The sale by the Partnership of all of
its stock of the Corporation or the complete liquidation of the Corporation by
the Partnership.
(vi) "Event": Any of a Recognition Event or a Final Recognition Event.
(vii) "Recognition Proceeds": To the extent that it exceeds the Base
Amount, the aggregate amount of all proceeds received by the Partnership from
and after the date of this Agreement, in respect of its ownership of stock of
the Corporation, whether such proceeds are in the form of a dividend or other
distribution, liquidating or non-liquidating, or in consideration for the sale
or other disposition of such stock.
(d) Subject to the qualifications and limitations set forth below,
Executive shall be entitled to be paid additional compensation (the "Additional
Compensation") upon the occurrence of each Event. The Additional Compensation
payable at each Event shall be the sum of : (i) six (6%) percent of the
Recognition Proceeds, less (ii) the cumulative amount of Additional Compensation
paid to the Executive prior to that particular Event; provided, however, that
the six (6%) percent stated in (i) above may be reduced (but not below zero) as
provided for in Paragraph 4(g) below.
(e) Notwithstanding the provisions of Paragraph 4(d), the minimum amount
payable to the Executive as Additional Compensation upon the occurrence of the
Final Recognition Event shall be the sum of: (i) $1,000,000; less (ii) the
cumulative amount of all Additional Compensation paid to the Executive prior to
the Final Recognition Event.
(f) Notwithstanding anything contained in Paragraph 4(d) or 4(e) to the
contrary, the Executive shall not be entitled to any further payments of
Additional Compensation from and after any of the following events: (i) the
Executive's termination of employment for "cause" (as set forth in Paragraph
10); and (ii) if Executive resigns his employment prior to the end of the term
of this Agreement or any extended term of this Agreement.
(g) In measuring the six (6%) percent set forth in Paragraph 4(d)(i) above,
the six (6%) percent shall be reduced by one (1) full percentage point for each
full twelve (12) months following any of the following events: (i) the
Executive's death; (ii) the Executive becomes disabled (as provided in Paragraph
8); and (iii) the date the Executive's employment is terminated by the
Corporation for a reason other than "cause".
(h) Upon the occurrence of each Event, the Corporation shall calculate the
amount payable, if any, to the Executive under this Paragraph 4 and shall pay
such amount to the Executive within thirty (30) days after the Event.
5. Executive Benefits.
(a) Executive shall be entitled to participate, on the same basis and
subject to the same qualifications, in all employee benefit plans (the "Plans"),
including, but not limited to, pension and profit-sharing plans, supplemental
retirement benefit plans, and life, health, disability, and similar plans, and
fringe benefits (the "Benefits") which during the term hereof shall be in effect
from time to time and be applicable to the Corporation's employees of senior
executives generally.
(b) If Executive's employment hereunder is terminated by the Corporation
prior to the scheduled termination of the term of Executive's employment
hereunder (other than a termination for "cause" [as hereinafter defined] or as a
result of Executive's voluntary resignation from his employment by the
Corporation), the Corporation shall either (i) continue through the scheduled
termination date of the term of Executive's employment hereunder Executive's
participation in the Plans and entitlement to the Benefits to which Executive
would have been entitled had he remained employed through the term of this
Agreement, or (ii) provide equivalent benefits (taking into account the tax
consequences of any benefits described in clause (i)) to Executive at no
additional cost to Executive, but only to the extent that essentially equivalent
and no less favorable benefits are not provided by a subsequent employer or
otherwise received by Executive. If the terms of any such Plans or Benefits do
not permit continued participation by Executive, the Corporation shall arrange
to provide to Executive benefits substantially similar to, and no less favorable
than, the benefits he was entitled to receive up until the end of the period of
coverage. Executive shall have the option to have assigned to him at no cost and
with no apportionment of prepaid premiums, any assignable insurance policy owned
by the Corporation and relating specifically to Executive.
(c) Recognizing that Executive will be required to do a considerable amount
of driving in connection with his duties as Executive Vice President, Chief
Financial Officer, the Corporation shall either: (i) provide to Executive a
Cadillac, Lincoln, or equivalent American automobile of Executive's choice; or
(ii) provide a monthly car allowance in an amount to be agreed upon by the
Executive and the Chairman of the Board of Directors; and, in either case, the
Corporation will pay all reasonable costs relating to the operation of such
automobile in connection with such duties, including gas, maintenance, and
insurance (including covering any deductible).
6. Expenses. It is contemplated that, in connection with his employment
hereunder, Executive may be required to incur reasonable travel, entertainment,
and other business expenses. To the extent not otherwise reimbursed under
paragraph 5(c), the Corporation agrees to pay, or reimburse Executive for, all
reasonable and necessary travel, entertainment, and other business expenses
incurred or expended by him incident to the performance of his duties and
responsibilities hereunder, upon submission by Executive to the Corporation of
vouchers or expense statements evidencing the expenses for which reimbursement
is sought.
7. Vacations. Executive shall be entitled to vacations in accordance with
the Corporation's normal vacation policies for senior executives, which
vacations shall be taken at times consistent with the effective discharge of
Executive's duties.
8. Disability. In the event that Executive shall be incapacitated by reason
of mental or physical disability or otherwise during the term of employment so
that he is prevented from substantially performing his duties and services
hereunder for a period of 180 days during any twelve (12) month period, the
Corporation shall have the right to terminate Executive's employment under this
Agreement by sending written notice of such termination to Executive, and
thereupon his employment hereunder shall terminate. Upon such termination,
Executive shall be entitled, subject to the limitations provided herein, to
receive the compensation provided for in paragraph 4 hereof and the benefits
provided for in paragraph 5 hereof for one (1) year following the date of
termination, and shall continue to be entitled to any benefits in which he
otherwise is vested pursuant to this Agreement; provided that if Executive is
receiving payments through a disability policy maintained by the Corporation
(other than a group policy maintained in behalf of all executives), such
payments shall be deducted from the amounts to be paid by the Corporation to
Executive during such period. Executive shall accept such payment in full
discharge and release of the Corporation of and from any further obligations
under this Agreement.
9. Death. In the event of Executive's death during the term of this
Agreement, Executive's designated beneficiary or, if no such beneficiary shall
have been designated by Executive, the personal representative of Executive
shall be entitled to receive and shall be paid by the Corporation, the
compensation provided for in Paragraph 4 hereof, subject to the limits set forth
therein, and the benefits provided for in Paragraph 5 hereof for one (1) year
following the date of Executive's death, and shall continue to be entitled to
any benefits in which he otherwise is vested pursuant to this Agreement;
provided that if
Executive is receiving or is entitled to receive payments through a death
benefit insurance policy maintained by the Corporation (other than a group
policy maintained in behalf of all executives) such payments shall be deducted
from the amounts to be paid by the Corporation to Executive during such period.
Executive's designated beneficiary or personal representative, as the case may
be, shall accept such payment in full discharge and release of the Corporation
of and from any further obligations under this Agreement.
10. Termination for Cause.
(a) The Corporation shall have the right to terminate the employment of
Executive hereunder for cause at any time if:
(i) Executive shall be convicted, by a court of competent and final
jurisdiction, of any crime (whether or not involving the Corporation or any of
its divisions, operations, subsidiaries or affiliated companies) which
constitutes a felony in the jurisdiction involved; or
(ii) Executive shall commit any act of fraud against or shall breach a
fiduciary obligation to the Corporation or any of its divisions, operations,
subsidiaries, or affiliated companies, provided that any such act (or failure to
act) shall be determined in good faith by the Board of Directors to be material
in respect of Executive's duties or functions hereunder; or
(iii) Executive shall fail or refuse to perform any of his duties and
responsibilities as required by, or shall otherwise breach, this Agreement,
provided that termination of Executive's employment pursuant to this
subparagraph 10(a)(iii) shall not constitute valid termination for cause unless
Executive shall first have received written notice from the Board of Directors
or the Chief Executive Officer of the Corporation stating with specificity the
nature of such failure or refusal and affording Executive at least fifteen (15)
days to correct the act or omission complained of.
(b) In the event that the employment of Executive shall be terminated by
the Corporation for cause pursuant to subparagraph 10(a) hereof, Executive shall
be entitled to receive the salary provided for in Paragraph 4(a) hereof,
prorated through the end of the week in which such termination occurs and such
amounts as may be payable under the balance of the provisions in Paragraph 4, as
specifically limited thereunder and in accordance with the terms thereof.
Executive shall accept such payment in full discharge and release of the
Corporation of and from any other further obligations under this Agreement.
Nothing contained in this Paragraph 10 shall constitute a waiver or release by
the Corporation or any rights or claims it may have against Executive for
actions or omissions which may give rise to an event causing termination of this
Agreement pursuant to this Paragraph 10.
11. Confidentiality; Injunctive Relief.
(a) Executive recognizes and acknowledges that the knowledge, information,
and relationship with resources, suppliers, and customers of the Corporation,
and the knowledge of the Corporation's business methods, systems, plans, and
policies which he has heretofore and shall hereafter receive or obtain as an
employee of the Corporation, are valuable and unique assets of the business of
the Corporation. Accordingly, Executive agrees that he will not, during or after
the term of this Agreement, except if required in connection with his duties as
the Executive Vice President of the Corporation and Chief Financial Officer, and
for a period of three (3) years thereafter, disclose or use, without the prior
written consent of the Board of Directors of the Corporation, directly or
indirectly, any non-public information (whether written or unwritten) relating
to the Corporation or any of its divisions, operations, subsidiaries or
affiliated companies, or any of their respective management, financial
condition, subscription, mailing or customer lists, sources of supply, business,
personnel, policies, or prospects, to any individual or entity for any purpose
whatsoever. The provisions of this subparagraph 11(a) shall not apply to
information which is or shall become generally known to the public or the trade
(except by reason of Executive's breach of his obligations hereunder),
information which is or shall become available in trade or other publications,
or information which Executive is required to disclose by order of a court of
competent jurisdiction (but only to the extent specifically ordered by such
court and, when reasonably possible, if Executive shall give the Corporation
prior notice of such intended disclosure so that it has the opportunity to seek
a protective order if it deems appropriate).
(b) Executive acknowledges and agrees that all memoranda, notes, reports,
records, and other documents made or compiled by Executive, or made available to
Executive prior to or during the term of this Agreement, concerning the
Corporation's business, shall be the Corporation's property and shall be
delivered to the Corporation on the termination of Executive's employment
hereunder or at any other time on request by the Board of Directors of the
Corporation.
(c) The provisions of this Paragraph 11 shall survive the termination or
expiration of Executive's employment hereunder, irrespective of the reason
therefor, for a period of three (3) years.
12. No Raid; Non-Compete.
(a) Executive agrees that, for a period of three (3) years after the date
of the termination of Executive's employment under this Agreement, Executive
shall not, without the prior written approval of the Board of Directors of the
Corporation directly or indirectly through any other person, firm or
corporation, solicit, raid, entice, or induce any person who is, at the time of
such solicitation or was at any time during the eighteen (18) months immediately
preceding such solicitation, raid, enticement, or inducement, an employee of the
Corporation or any of its subsidiaries or affiliates, to become employed by such
person, firm, or corporation, and Executive shall not approach any such employee
for such purpose or authorize or knowingly approve the taking of such actions by
any other person.
(b) For a period of three (3) years after the date of termination of
Executive's employment under this Agreement, Executive will not, whether
individually or as a partner, owner, officer, director, stockholder, or
employee, own, manage, operate, or control or have a financial interest in, or
serve as a consultant to, any person, firm, corporation, or other entity which
is engaged in any business activity in competition with the business of the
Corporation in the markets in which the Corporation competes. The foregoing
restrictions shall not be deemed to include Executive's direct or indirect
ownership of any securities in a publicly-traded business entity which does not,
and will not with the passage of time, result in his obtaining, directly or
indirectly, more than two (2) percent of the securities of such entity.
Notwithstanding the foregoing, the restrictions imposed on Executive under this
paragraph 12(b) shall cease to apply as of the later of (x) the scheduled
termination (including any extension thereof) of Executive's employment under
paragraph 1 hereof, or (y) one (1) year after the occurrence of either of the
events described in the following clauses (i) and (ii) of this paragraph 12(b),
if either (i) Executive's employment with the Corporation (and any subsidiary or
affiliate thereof) shall be terminated by the Corporation other than for
"cause," or (ii) the Partnership shall have disposed of all or substantially all
of its interest in the Corporation and the aggregate amounts payable to
Executive under subparagraph 4(c) shall be no greater than $1,000,000.
Notwithstanding the foregoing, in the event Executive's employment is terminated
by the Corporation other than for "cause" and the Corporation fails to satisfy
its obligation to pay Executive as required under this Agreement, the
restrictions imposed on Executive under this paragraph 12(b) shall cease to
apply one (1) year after such failure.
(c) The provisions of this Paragraph 12 shall survive the termination or
expiration of Executive's employment hereunder, irrespective of the reason
therefor.
13. Injunctive Relief.
(a) Executive acknowledges that the services to be rendered by him are of a
special, unique, and extraordinary character, and if he violates any of the
provisions of this Agreement with respect to confidentiality, non-competition,
or solicitation, the Corporation would sustain irreparable harm. Accordingly,
Executive consents and agrees that if he violates any of the provisions of
Paragraphs 12 or 13 hereof, in addition to any other remedies which the
Corporation may have under the Agreement or otherwise, the Corporation shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining Executive from committing or continuing any such violation of this
Agreement, and Executive shall not object to any such application. Nothing in
this Agreement shall be construed as prohibiting the Corporation from pursuing
any other remedy or remedies including, without limitation, recovery of damages.
(b) The provisions of this Paragraph 13 shall survive the termination or
expiration of Executive's employment hereunder, irrespective of the reason
therefor.
14. Deductions and Withholding. Executive agrees that the Corporation shall
withhold from any and all payments and compensation required to be made to
Executive pursuant to this Agreement all Federal, state, local, and/or other
taxes which the Corporation determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.
15. No Conflict. Executive represents and warrants that there is no
restriction, agreement or limitation on his right or ability to enter into and
perform the terms of this Agreement.
16. Miscellaneous.
(a) This Agreement cancels and supersedes any and all prior agreements and
understandings between the parties hereto respecting the employment of Executive
by the Corporation and constitutes the complete understanding between the
parties with respect to the employment of Executive hereunder. No statement,
representation, warranty, or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by each of the parties
hereto.
(b) Waiver by either party hereto of any breach of default by the other
party to any of the terms and provisions of this Agreement, shall not operate as
a waiver of any other breach or default, whether similar to or different from
the breach or default waived.
(c) All notices, consents, requests, demands, and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, first class postage
prepaid, to the other party hereto at its or his address as set forth in the
beginning of this Agreement. Either party may change the address to which
notices, requests, demands, and other communications hereunder shall be directed
by giving written notice of such change of address to the other party in the
manner above stated.
(d) This Agreement shall inure to the benefit of and shall be binding upon
the heirs, executors, administrators, successors, and legal representatives of
Executive and shall inure to the benefit of and be binding upon the Corporation
and its successors. This Agreement is personal as to Executive and Executive may
not assign, transfer, pledge, encumber, hypothecate, or otherwise dispose of
this Agreement or any of his rights hereunder and any such attempt of
assignment, transfer, pledge, encumbrance, hypothecation, or other disposition
shall be null and void and without effect. The Corporation shall be entitled to
assign this Agreement without the prior written consent of Executive in
connection with the merger or consolidation of the Corporation with another
corporation or the sale of all or substantially all of the assets and business
of the Corporation to another corporation, provided that:
(i) immediately after the consummation of such transaction, the
surviving or acquiring corporation shall have a net worth not less than the net
worth of the Corporation immediately prior to such transaction; and
(ii) the surviving or acquiring corporation shall agree in
writing to accept an assignment of this Agreement, thereby acquiring the
Corporation's rights and assuming the Corporation's obligations under this
Agreement.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
(f) The paragraph headings of this Agreement are for convenience of
reference only and shall not limit or define the text thereof.
(g) In the event that any one or more of the provisions of this Agreement
shall be invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained herein shall
not in any way be affected thereby.
(h) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which, when taken together shall be
deemed to constitute one and the same instrument.
(i) Any dispute regarding this Agreement shall be resolved exclusively by
arbitration in New Jersey in accordance with the rules of the American
Arbitration Association then in effect. The Corporation shall pay Executive's
reasonable legal expenses in connection with any such arbitration; provided,
however, that Executive shall reimburse the Corporation for such expenses if the
arbitrator(s) shall decide the material issues in favor of the Corporation.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the day and year first above written.
XxXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Xxxxxxx X. Xxxx
