EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made, entered into, and is effective as of
this day of , 199__ (hereinafter referred to as the "Effective Date"), by
and between ZERO Corporation, a Delaware corporation (hereinafter referred to as
the "Company") having its principal offices in Los Angeles, California, and
_____________________ (hereinafter referred to as the "Executive").
WHEREAS, the Executive is presently employed by the Company in the capacity
of ______________ of the Company;
WHEREAS, the Executive possesses considerable experience and an intimate
knowledge of the business and affairs of the Company, its policies, methods,
personnel, and operations; and
WHEREAS, the Company recognizes that the Executive's contribution has been
substantial and meritorious and, as such, the Executive has demonstrated unique
qualifications to act in an executive capacity for the Company; and
WHEREAS, the Company is desirous of assuring the continued employment of
the Executive in the above stated capacity, and Executive is desirous of having
such assurance.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
SECTION 1. TERM OF EMPLOYMENT
The Company hereby agrees to employ the Executive and the Executive hereby
agrees to continue to serve the Company, in accordance with the terms and
conditions set forth herein, for a period of ______ (__) year[s], commencing as
of the Effective Date of this Agreement, as indicated above (the "original
Employment Term"); subject, however, to earlier termination as expressly
provided in Section 6 herein.
This Agreement, along with all corresponding rights, duties, and covenants,
shall automatically expire at the end of the Employment Term, with the exception
of the Executive's obligations contained in Section 7 and the payment provisions
in Section 6 herein (each of which shall survive such expiration).
SECTION 2. POSITION AND RESPONSIBILITIES
During the term of this Agreement, the Executive agrees to serve as
________________ of the Company. In his capacity as __________________ of the
Company, the Executive shall report directly to
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the ________________, and shall maintain the level of duties and
responsibilities as in effect as of the Effective Date, or such higher level of
duties and responsibilities as he may be assigned during the term of this
Agreement. The Executive shall have the same status, privileges, and
responsibilities normally inherent in such capacities in companies of similar
size and character.
SECTION 3. STANDARD OF CARE
During the term of this Agreement, the Executive agrees to devote
substantially all of his/her business time, attention, and energies to the
Company's business and shall not be engaged in any other business activity,
whether or not such business activity is pursued for gain, profit, or other
pecuniary advantage; provided, however, subject to Section 7 herein, the
Executive may serve as a director of other companies so long as such service is
not injurious to the Company. The Executive covenants, warrants, and represents
that he/she shall devote his/her best efforts to the fulfillment of his/her
employment obligations.
Notwithstanding the foregoing, this Section 3 shall not be construed as
preventing the Executive from engaging in outside activities, such as
involvement with trade associations, business and professional organizations and
activities, and charitable and other community activities, which do not
substantially interfere with the fulfillment of his employment obligations under
Section 2. In addition, subject to Section 7 hereof, this Section 3 shall not be
construed as preventing the Executive from investing assets in such form or
manner as will not require his services in the daily operations of the affairs
of the companies in which such investments are made.
SECTION 4. COMPENSATION
As remuneration for all services to be rendered by the Executive during the
term of this Agreement, and as consideration for complying with the covenants
herein, the Company will pay and provide to the Executive the following:
4.1 BASE SALARY. The Company will pay the Executive an annual base salary
in an amount which shall be established from time to time by the Board of
Directors of the Company or the Board's designee; provided, however, that such
base salary will not be less than $_________ per year. This base salary will be
paid to the Executive in equal semi-monthly installments throughout the year,
consistent with the normal payroll practices of the Company.
The annual base salary will be reviewed annually in March following the
Effective Date of this Agreement, while this Agreement is in force, to ascertain
whether, in the judgment of the Board or the Board's designee, such base salary
should be increased, based primarily on the performance of the Executive
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during the year, consideration of competitive levels of pay for similar
executives, and the then current rate of inflation. If so increased, the base
salary as stated above will, likewise, be increased for all purposes of this
Agreement (such base salary, with any such increases, shall be the "Base
Salary"). Adjustments to Base Salary will become effective on April 1st of each
year.
4.2 ANNUAL BONUS. The Company will provide the Executive with the
opportunity to earn an annual cash bonus on the basis of the executive bonus
plan in effect on the Effective Date.
4.3 LONG-TERM INCENTIVES. The Company will provide the Executive the
opportunity to earn a long-term incentives on the basis of the Company's Stock
Option Plan effective on the Effective Date.
4.4. RETIREMENT BENEFITS. The Company will provide the Executive with the
opportunity to participate in the Company's retirement benefits which the
Executive is receiving on the Effective Date, including the ZERO Corporation
Retirement Savings Plan, the ZERO Corporation Executive Deferred Compensation
Plan, [the Joint Life Insurance Plan], subject, in each case, to the eligibility
and participation requirements of such plans.
4.5. EMPLOYEE BENEFITS. The Company will provide the Executive with the
opportunity to participate in the Company's employee benefits which the
Executive is receiving on the Effective Date, including group term life
insurance, comprehensive health and major medical insurance, dental insurance,
short-term and long-term disability, and vacation, subject, in each case, to the
eligibility and participation requirements of such plans.
4.6. PERQUISITES. The Company will provide the Executive, at the cost of
the Company, the perquisites, including expense reimbursement, which the
Executive is receiving on the Effective Date.
4.7. ADDITIONAL COMPENSATION/RIGHT TO CHANGE PLANS AND/OR BENEFITS.
Nothing in Sections 4.1 to 4.6 herein to the contrary, the Company may provide
the Executive the opportunity to participate in such additional plans and
benefits as the Company deems appropriate. Nothing in Sections 4.2 to 4.6 to
the contrary, the Company may modify, amend or replace plans or benefits therein
described so long as such modifications, amendments or replacements provide the
Executive with benefits which are commensurate with the opportunity typically
offered to executives having the same or similar duties and responsibilities as
the executives at companies similar in size and in character to the Company.
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SECTION 5. EXPENSES
The Company will pay, or reimburse the Executive, for all ordinary and
necessary expenses, in a reasonable amount, which the Executive incurs in
performing his duties under this Agreement including, but not limited to,
travel, entertainment, professional dues and subscriptions, and all dues, fees,
and expenses associated with membership in various professional, business, club
memberships and civic associations and societies for which the Executive is
receiving reimbursement as of the Effective Date.
SECTION 6. EMPLOYMENT TERMINATIONS
6.1. EXECUTIVE TERMINATION DUE TO RETIREMENT. After the age of 55, the
Executive may terminate Executive's employment under this Agreement by reason of
retirement.
Upon such termination, the Company will pay and provide to the Executive
those amounts and benefits set forth in Section 6.8(a) herein.
6.2. EXECUTIVE TERMINATION DUE TO DEATH. Immediately upon the death of
the Executive, Executive's employment shall be deemed terminated.
Upon such termination, the Company will pay and provide to the beneficiary
of Executive, as designated by the Executive during the Executive's lifetime, or
to the Executive's estate, as appropriate, those amounts and benefits set forth
in Section 6.8(a) herein.
6.3 COMPANY TERMINATION OF EXECUTIVE DUE TO DISABILITY. Immediately upon
the date the Executive becomes "Disabled", as defined below, the Executive's
employment shall be deemed terminated.
Upon such termination, the Company will pay and provide to the Executive
those amounts and benefits set forth in Section 6.8(a) herein.
The term "Disability" shall mean the incapacity of the Executive, due to
injury, illness, disease, or bodily or mental infirmity to engage in the
performance of substantially all of the usual duties of employment with the
Company as contemplated by Section 2 herein for a period of more than ninety
(90) calendar days, in the aggregate, during any period of twelve (12)
consecutive months, or in the event of the Board's reasonable expectation that
the Executive's Disability will exist for more than a period of ninety (90)
calendar days, upon receipt and in reliance on competent written medical advice
from one or more individuals, selected by the Board, who are qualified to give
such professional medical advice. The date of the Executive's Disability shall
be a date specified in a notice from the Board,
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provided such notice is delivered to the Executive at least sixty (60) calendar
days prior to the effective date of such termination.
It is expressly understood that the Disability of the Executive will not
constitute a failure by Executive to perform Executive's duties hereunder and
will not be deemed a breach or default by the Executive hereunder.
6.4. EXECUTIVE'S VOLUNTARY TERMINATION. The Executive may terminate the
Executive's employment for any reason at any time by giving the Board of
Directors of the Company written notice of intent to terminate, delivered at
least ninety (90) calendar days prior to the effective date of such termination
(such period not to include vacation). The termination will automatically
become effective upon the expiration of the ninety (90) day notice period.
Upon such termination, the Company will pay and provide to the Executive
those amounts and benefits set forth in Paragraph 6.8(a) herein.
6.5. COMPANY TERMINATION FOR CAUSE. The Board may terminate the
Executive's employment at any time for "Cause", as defined below, by giving the
Executive written notice of the Company's intent to terminate Executive's
employment for Cause, provided the Board delivers such notice to the Executive.
Upon such termination, the Company will pay and provide to the Executive
the amounts and benefits set forth in Section 6.8(a) herein.
"Cause" shall be determined by the Board in the exercise of good faith and
reasonable judgment; and shall mean the willful, illegal or gross misconduct,
fraud, conviction of a felony, consistent gross neglect of duties, or wanton
negligence by the Executive in the performance of his duties hereunder which is
materially and demonstrably injurious to the Company, or the material breach by
the Executive of this Agreement. The Company's Board of Directors, by majority
vote, shall make the determination of whether Cause exists, after providing the
Executive with notice of the reasons the Board believes Cause may exist and the
underlying facts and circumstances, and after giving the Executive the
opportunity to respond to the Board regarding the allegation that Cause exists.
6.6. COMPANY INVOLUNTARY TERMINATION WITHOUT CAUSE. The Board may
terminate the Executive's employment at any time by giving the Executive written
notice of the Company's intent to terminate Executive's employment without
cause, provided the Board delivers such notice to the Executive at least one
hundred eighty (180) calendar days prior to the effective date of such
termination.
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Upon the effective date of such termination, the Company will pay and
provide to Executive those amounts and benefits set forth in Section 6.8(b)
herein.
6.7. EXECUTIVE TERMINATION FOR GOOD REASON. The Executive may terminate
Executive's employment under this Agreement at any time for "Good Reason", as
defined below, by giving the Board written notice of Executive's intent to
terminate Executive's employment for Good Reason, provided the Executive
delivers such notice to the Board.
Upon the effective date of such termination, the Company will pay and
provide to Executive those amounts and benefits set forth in Section 6.8(b)
herein.
"Good Reason" shall mean the occurrence of any one or more of the following
without the Executive's express written consent:
(a) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and status
(including offices, titles, and reporting requirements) as an officer of
the Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities in each case from
those in effect at the effective date;
(b) The Company's requiring the Executive to be based at a location
which is at least twenty-five (25) miles further from the Executive's
current primary residence than is such residence from the Company's current
headquarters, except for required travel on the Company's business to an
extent substantially consistent with the Executive's business obligations
prior to the Effective Date; or
(c) A reduction by the Company in the Executive's Base Salary as
provided in Section 4.1 herein.
The Executive's right to terminate employment for Good Reason will not be
affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment will not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason herein.
6.8 PAYMENTS UPON TERMINATION.
(a) Upon termination of Executive's employment under Sections 6.1,
6.2, 6.3, 6.4 or 6.5 herein, the Company will pay to the Executive the
following:
(i) Base Salary, at the rate in effect immediately prior to such
termination, as calculated in Section 4.1 herein, to and including the
date of termination, and
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(ii) A cash bonus payment, as calculated in Section 4.2 herein,
pro rated to and including the date of termination.
In addition, the Company will provide to the Executive all other benefits
to which the Executive has a vested right under Sections 4.3, 4.4, 4.5 and
4.6 herein.
With the exception of the Company's obligations under this Section
6.8(a) herein (which will survive such termination), the Company and the
Executive will thereafter have no further obligations under this Agreement.
(b) Upon termination of Executive's employment under Paragraphs 6.6
or 6.7 herein, the Company will pay to the Executive the following:
(i) Base Salary, at the rate in effect immediately prior to such
termination, as calculated in Section 4.1 herein, to and including the
original Employment Term, and
(ii) A cash bonus payment based upon the annual cash bonus award
made to the Executive in the 12 months preceding the Effective Date
pro rated for the original Employment Term.
In addition, the Company will provide to the Executive, to and including
for the original Employment Term, a continuation of the Executive's
benefits under Sections 4.3, 4.4 and 4.5 herein and thereafter will provide
the Executive all other benefits to which the Executive has a vested right
under Sections 4.3, 4.4, 4.5 and 4.6 herein.
With the exception of the Executive's covenants contained in Section 7
herein and the Company's obligations under this Section 6.8(b) herein (each
of which will survive such termination), the Company and the Executive will
thereafter have no further obligations under this Agreement.
SECTION 7. NONCOMPETITION
7.1. PROHIBITION ON COMPETITION. Without the prior written consent of the
Company, during the term of this Agreement or any period during which Base
Salary and annual cash bonus amounts are paid hereunder, the Executive will not,
as an employee or an officer, engage directly or indirectly in any business or
enterprise which is "in competition" with the Company or its successors or
assigns.
However, the Executive will be allowed to purchase and hold for investment
less than three percent (3%) of the shares of any
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corporation whose shares are regularly traded on a national securities exchange
or in the over-the-counter market which are "in competition" with the Company.
7.2. DISCLOSURE OF INFORMATION. The Executive recognizes that Executive
has access to and knowledge of certain confidential and proprietary information
of the Company which is essential to the performance of Executive's duties under
this Agreement. The Executive will not, during the periods described in Section
7.1 hereof, in whole or in part, disclose such information to any person, firm,
corporation, association, or other entity for any reason or purpose whatsoever,
nor will he make use of any such information for his own purposes unless
compelled to do so by legal process.
7.3. COVENANTS REGARDING OTHER EMPLOYEES. During the period described in
Section 7.1 hereof, the Executive agrees not to induce or attempt to induce any
employee of the Company to terminate his or her employment with the Company,
accept employment with any competitor of the Company, or to interfere in a
similar manner with the business of the Company.
SECTION 8. INDEMNIFICATION
The Company hereby covenants and agrees to indemnify and hold harmless the
Executive fully, completely, and absolutely against and in respect to any and
all actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including attorney's fees), losses, and damages resulting from the Executive's
good faith performance of Executive's duties and obligations under the terms of
this Agreement.
SECTION 9. ASSIGNMENT
9.1. ASSIGNMENT BY COMPANY. This Agreement shall be deemed assigned or
transferred to, and will be binding upon and will inure to the benefit of, any
successor of the Company, and any such entity will be deemed substituted for all
obligations of the "Company" under the terms of this Agreement. Additionally,
the Company agrees that the ultimate parent of the Company will agree in writing
to unconditionally guaranty the performance of the Company or such successor.
Notwithstanding such assignment, the Company will remain, with such successor,
jointly and severally liable for all its obligations hereunder.
As used in this Agreement, the term "successor" shall mean any person,
firm, corporation, or business entity which at any time, whether by merger,
purchase of stock, or otherwise, acquires all or substantially all of the assets
or business of the Company or any affiliate thereof. As used in this Agreement,
the terms "parent" and "affiliate" shall have the meanings ascribed thereto in
Rule 405 of the Securities Act of 1933.
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Except as herein provided, this Agreement may not otherwise be assigned by
the Company, and any such purported assignment is void.
9.2. ASSIGNMENT BY EXECUTIVE. This Agreement is not assignable by
Executive and any attempt to assign by Executive is void. However, the payment
provisions of this Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, and
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive should die while any amounts payable to the Executive hereunder remain
outstanding, all such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, in the absence of such designee, to the Executive's
estate.
SECTION 10. DISPUTE RESOLUTION AND NOTICE
10.1. DISPUTE RESOLUTION. The Executive shall have the right and option
to elect to have any good faith dispute or controversy arising under or in
connection with this Agreement settled by litigation or by arbitration.
If arbitration is selected, such proceeding will be conducted before a
panel of three (3) arbitrators sitting in a location selected by the Executive
within fifteen (15) miles from the location of his principal place of
employment, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the award of the arbitrator in any
court having jurisdiction.
All expenses of such litigation or arbitration, including the reasonable
fees and expenses of the legal representative for the Executive, and necessary
costs and disbursements incurred as a result of such dispute or legal
proceeding, and any prejudgment interest, will be borne by the Company.
10.2. NOTICE. Any notices, requests, demands, or other communications
provided for by this Agreement will be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, at its principal
offices.
SECTION 11. MISCELLANEOUS
11.1. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto or between the
Executive and the Company with respect to the subject matter hereof and
constitutes the entire Agreement of the parties with respect thereto.
11.2. MODIFICATION. This Agreement will not be varied, altered, modified,
canceled, changed, or in any way amended except
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by mutual agreement of the parties in a written instrument executed by each of
the parties hereto or their legal representatives.
11.3. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.
11.4. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
11.5. TAX WITHHOLDING. The Company may withhold from any benefits payable
under this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
11.6. BENEFICIARIES. The Executive may designate one or more persons or
entities as the primary and/or contingent beneficiaries of any amounts to be
received under this Agreement. Such designation must be in the form of a signed
writing sent to the Company to the attention of the Corporate Secretary or to
the Board or the Board's designee. The Executive may make or change such
designation at any time.
SECTION 12. GOVERNING LAW
To the extent not preempted by federal law, the provisions of this
Agreement shall be construed and enforced in accordance with the laws of the
State of California.
IN WITNESS WHEREOF, the Executive and the Company (pursuant to a resolution
adopted at a duly constituted meeting of its Board of Directors) have executed
this Agreement, as of the day and year first above written.
Executive:
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ATTEST ZERO CORPORATION
By: _____________________ By: ________________________
Corporate Secretary Chairman, Compensation
Committee of the Board of
Directors
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