EXHIBIT 10.99
EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 3, 1997, between Xxxxx X. Xxxxxxx
(the "Executive") and XXXXX XXXXXX, INC., a Delaware corporation (the
"Company").
The Executive is presently the Executive Vice President of
Xxxxxxxx Dental Products, Inc. ("Xxxxxxxx").
The Company and Xxxxxxxx are parties to an Agreement and Plan
of Merger dated August 3, 1997 (the "Merger Agreement"), pursuant to which it is
contemplated that HSI Acquisition Corp., a wholly-owned subsidiary of the
Company, will be merged with and into Xxxxxxxx.
The Company desires to employ the Executive, and the Executive
desires to be employed by the Company, at the Effective Time, as that term is
defined in the Merger Agreement. Accordingly, the parties hereto are entering
into this Agreement to set forth and confirm their respective rights and
obligations with respect to the Executive's employment by the Company commencing
as of the Effective Time.
The parties agree as follows:
1. Employment. The Company shall employ the Executive,
as of the Effective Time, as Executive Vice President of the U.S. Dental
Division of the Company and Executive Vice President of Xxxxxxxx, and the
Executive shall accept such employment and serve as such, subject to and upon
the terms and conditions set forth in this Agreement; provided, however, that
this Agreement shall terminate and be of no further force or effect if the
Executive shall have died or, in the reasonable judgment of the Company, become
disabled (as defined in Section 7(a)(i)), or his employment by Xxxxxxxx shall
have been terminated for Cause (as hereinafter defined), in any such case, prior
to the Effective Time.
2. Duties.
(a) At all times during his employment with the Company,
the Executive shall, subject to the direction and control of the Boards of
Directors of the Company and Xxxxxxxx and the President of the North American
Dental Division of the Company, perform such executive duties and functions as
he may be called upon by such Boards or such President of the North American
Dental Division to perform, consistent with his employment hereunder as
Executive Vice President of the U.S. Dental Division of the Company and
Executive Vice President of Xxxxxxxx.
1
(b) The Executive shall devote his full time and
reasonable best efforts to the performance of his duties hereunder; and, to the
extent requested by the Board of Directors of the Company or Xxxxxxxx or the
President of the North American Dental Division of the Company, render such
executive services for any other subsidiary or affiliated business of the
Company. Notwithstanding the foregoing, the Executive may devote time and effort
to charitable activities and, provided that such activities do not interfere
with the Executive's fulfilling his obligations under this Agreement.
3. Compensation.
(a) The Company shall pay to the Executive for all
services to be rendered by him pursuant to this Agreement a base salary at the
annual rate of Two Hundred Ten Thousand Dollars ($210,000), payable in
accordance with the Company's practices with respect to its senior executives as
in effect from time to time, ("Company's Practices"). Such salary shall be
increased each year (beginning in 1999) by an amount determined by the Company
in accordance with the Company's Practices, but in any event such amount shall
be no less than the percentage increase in the cost of living over the preceding
year.
(b) The Executive shall be entitled to a bonus in respect
of each fiscal year of the Company during which he is employed hereunder,
payable no later than 90 days after the end of each year for which such bonus is
payable, the thresholds and amounts of which shall be determined in accordance
with the Company's Practices.
(c) At the Effective Time, the Executive shall be granted
options to purchase shares of common stock, par value $.01 per share ("Common
Stock"), of the Company in accordance with the stock option agreement attached
hereto as Exhibit A (the "Option Agreement").
(d) At the Effective Time, the Executive shall be granted
shares of Common Stock of the Company in accordance with the restricted stock
agreement attached hereto as Exhibit B (the "Restricted Stock Agreement").
(e) At the Effective Time, the Executive shall be paid
the sum of Three Hundred Ten Thousand Dollars ($310,000) as an inducement to
enter into this Agreement.
4. Working Conditions and Benefits. While employed by
the Company hereunder:
(a) The Executive shall be entitled to four (4) weeks of
paid vacation per year, in accordance with the Company's Practices and shall be
entitled to sick leave and personal time in accordance with the Company's
policies for its senior executives.
(b) The Executive shall be authorized to incur reasonable
and necessary expenses for promoting the business of the Company, including
expenses for entertainment, travel
2
and similar items, all in accordance with the Company's Practices. The Company
shall reimburse the Executive for all such expenses, upon presentation by the
Executive of an itemized account of such authorized expenditures in accordance
with the Company's Practices with respect to expense reimbursement.
(c) The Company in accordance with Xxxxxxxx'x prior
practices (x) shall provide to the Executive an automobile for business use and
(y) shall pay for certain expenses incurred in connection with such use.
(d) The Company shall provide to the Executive to the
full extent provided for under the laws of the Company's state of incorporation
and the Company's By-Laws, indemnification for any claim or lawsuit which may be
asserted against the Executive with respect to his capacity as an officer or
employee of the Company, provided that said indemnification is not in violation
of any Federal or state law, rule or regulation. The indemnification obligations
of the Company shall survive the termination of this Agreement.
5. Other Benefits. While employed by the Company
hereunder the Executive shall be entitled to participate in all benefit, welfare
and perquisite plans, policies and programs, in accordance with the terms
thereof and in accordance with the Company's Practices (the "Benefit Programs").
Without limiting the generality of the foregoing, at the Effective Time the
Company and the Executive shall enter into the change in control agreement
attached hereto as Exhibit C (the "Change In Control Agreement").
6. Term. The Executive's employment hereunder shall
commence at the Effective Time and shall continue until the earlier of (a) the
fifth anniversary of the Effective Time, (b) his death, or (c) termination of
employment pursuant to Section 7 hereof. Notwithstanding clause (a) of the
preceding sentence (and subject to clauses (b) and (c) of such sentence), the
term of this Agreement shall automatically be extended for successive one year
periods, commencing on the fifth anniversary of the Effective Time, unless
either party gives written notice of termination at least six months prior to
the commencement of the initial or next successive one year renewal period, as
applicable.
7. Termination.
(a) Notwithstanding anything herein contained, if on or
after the Effective Time and prior to the fifth anniversary of the Effective
Time (or the expiration of the then current renewal period, as applicable), (i)
the Executive shall have been determined by the Board of Directors of the
Company to have become "Permanently Disabled", or (ii) the Executive shall have
furnished the Company with Cause for his discharge then, and in any such case,
the Company shall have the right, by notice given to the Executive, to terminate
the Executive's employment as of a date to be specified in such notice. Cause
shall be defined as: (A) the Executive shall be convicted of a felony involving
fraud, dishonesty or moral turpitude (other than ordinary traffic infractions),
(B) the Board of Directors of the Company shall have determined in good faith
that the Executive has committed any act, or omitted to take any action, in bad
faith or has materially neglected the Company's business, which, in any case,
shall have had, or reasonably would be expected to have, a material adverse
effect on the Company or Xxxxxxxx, or (C) the Board of
3
Directors of the Company shall have determined in good faith that the Executive
has materially breached any term of this Agreement and failed to correct such
breach, if such breach is curable, within 30 days after receipt of written
notice thereof. For purposes hereof, the term "Permanently Disabled" shall mean
a condition (certified by two licensed physicians, one selected by the Company
and one by the Executive and each reasonably satisfactory to the other party)
rendering the Executive unable to perform his responsibilities under this
Agreement for a period of 180 days, whether or not continuous, in any period of
12 months.
(b) Notwithstanding anything herein contained, on or
after the Effective Time and prior to the fifth anniversary of the Effective
Time (or the expiration of the then current renewal period, as applicable), the
Executive shall have the right to terminate this Agreement for good reason. For
purposes of this Agreement, "good reason" shall mean (i) a material breach by
the Company of this Agreement, which breach is not cured within 30 days after
notice from the Executive thereof or (ii) the Company's requiring Executive to
maintain his principal office anywhere other than within a 50 mile radius of
Xxxxxxxx'x principal executive offices in West Allis, Wisconsin, provided that
the Executive shall travel on the Company's behalf within and outside such area
to the extent necessary to perform his duties hereunder.
(c) Upon the Executive's death, or termination of the
Executive's employment pursuant to Section 7(a)(i), the Executive (or his
estate, as the case may be) shall be entitled to receive only (i) his salary at
the rate provided in Section 3(a) to the date of termination (ii) any unpaid
bonus pursuant to Section 3(b) in respect of the fiscal year of the Company
ended prior to the year in which such termination occurs and (iii) an amount
equal to such bonus in respect of such prior fiscal year multiplied by a
fraction the numerator of which shall be the number of days that shall have
elapsed from the first day of the fiscal year in which such termination occurs
to the date of such termination and the denominator of which shall be 365.
(d) Upon termination of the Executive's employment
hereunder pursuant to Section 7(a)(ii) or the Executive's voluntary termination
of his employment hereunder other than pursuant to Section 7(b), the Executive
shall be entitled to receive only (i) his salary at the rate provided in Section
3(a) to the date of termination and (ii) any unpaid bonus pursuant to Section
3(b) in respect of the fiscal year of the Company ended prior to the year in
which such termination occurs. In either event, the Executive shall not be
entitled to receive any bonuses pursuant to Section 3(b) in respect of the year
in which such termination occurs or any year thereafter.
(e) Upon termination of the Executive's employment by the
Company without Cause or by the Executive hereunder pursuant to Section 7(b),
the Executive shall be entitled to receive (i) his salary at the rate provided
in Section 3(a) to the date of termination, (ii) continuation of the Executive's
base salary for a period after the date of such termination equal to the
unexpired term of this Agreement but in no event less than twelve months at the
rate in effect at such date of termination (iii) any unpaid bonus pursuant to
Section 3(b) in respect of the fiscal year of the Company ended prior to the
year in which such termination occurs, (iv) for a period following such
termination equal to the unexpired term of this Agreement, continuation of the
participation of the Executive and his spouse and dependent children, if any, in
all health and medical benefit plans, policies and programs in effect from time
to time with respect to the most senior executive officers of the Company and
their families generally (at the same levels and at
4
the same cost, if any, as provided to such officers generally) and (v) an amount
equal to such bonus in respect of such prior fiscal year multiplied by a
fraction the numerator of which shall be the number of days left in the
unexpired term of this Agreement and the denominator of which shall be 365.
8. Confidentiality and Non-Competition. In view of the
unique and valuable services it is expected the Executive will render to the
Company, the Executive's knowledge of the customers, trade secrets, and other
proprietary information relating to the business of the Company and its
customers and suppliers, and in consideration of (i) an aggregate sum of Two
Hundred Fifty-Five Thousand Dollars ($255,000) payable to the Executive in three
(3) equal annual installments of Eighty-Five Thousand Dollars ($85,000)
commencing on the first anniversary of the date of this Agreement and (ii) the
compensation to be received hereunder, the Executive agrees that he will not,
during his employment with the Company and for three years thereafter (the
"Noncompete Period") except on behalf of the Company: (a) directly or indirectly
engage or have an interest (whether as owner, partner, lender, consultant,
employee, agent, supplier distributor or otherwise) in any business, activity or
enterprise which competes with any material businesses or operations of the
Company or any of the Company's affiliates (including Xxxxxxxx) at any time
during his employment with the Company; (b) directly or indirectly employ or
otherwise engage, or offer to employ or otherwise engage, any person who is then
(or was at any time within three months prior to the time of such employment,
engagement or offer thereof) an employee, sales representative or agent of the
Company or any of the Company's affiliates (including Xxxxxxxx); or (c) solicit
any business from any person or entity that during his employment with the
Company has been a customer of the Company or any of the Company's affiliates
(including Xxxxxxxx) or directly or indirectly induce or influence any customer,
supplier or other person that has a business relationship with the Company or
any of the Company's affiliates (including Xxxxxxxx) to discontinue or reduce
the extent of such relationship with the Company or any of the Company's
affiliates (including Xxxxxxxx). Notwithstanding the foregoing, however, if the
Executive's employment hereunder continues until the fifth anniversary of the
Effective Time (or the end of the then applicable renewal period pursuant to
Section 6 hereof), then (subject to the immediately following sentence), the
Executive shall not upon termination of his employment be subject to the
restrictions and limitations set forth in clause (a) above, subject to the right
of the Company to enforce clause (a) for a period beginning on the date of
termination of the Executive's employment and ending not more than eighteen (18)
months after such date (the "Optional Period") upon payment to the Executive of
an amount equal to the Executive's then current rate of salary for the Optional
Period. Notwithstanding immediately preceding sentence, if prior to the fifth
anniversary of the Effective Time (or the end of the then applicable renewal
period pursuant to Section 6 hereof), the Executive gives notice of termination
pursuant to Section 6, then the Executive shall remain subject to the
restrictions and limitations set forth in clauses (a), (b) and (c) above for the
full Noncompete Period. In addition, the Executive shall never use or divulge
(unless available in the public domain not due to Executive's disclosure in
violation of this Agreement) any trade secrets, customer or supplier lists,
pricing information, marketing arrangements or strategies, business plans,
internal performance statistics, training manuals or other information
concerning the Company or its affiliates that is confidential, except on behalf
of the Company, and shall not knowingly make false or misleading or negative
statements, either orally or in writing, about the Company or its affiliates
(including Xxxxxxxx), or their respective directors, officers or employees.
Because the breach or attempted breach of this Section 8 will
5
result in immediate and irreparable injury to the Company for which the Company
will not have an adequate remedy at law, the Company shall be entitled, in
addition to all other remedies, to a decree of specific performance of this
covenant and to a temporary and permanent injunction enjoining such breach,
without posting bond or furnishing similar security. The provisions of this
Section 8 are in addition to and independent of any agreements or covenants
contained in any other agreement between the Company and the Executive. If any
restriction contained in this Section 8 shall be deemed to be invalid, illegal,
or unenforceable by reason of the extent, duration, or geographical scope
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope, or other provisions
hereof, and in its reduced form such restriction shall then be enforceable in
the manner contemplated hereby. Notwithstanding any of the forgoing the
Executive (i) may have an interest (as owner, partner, lender, consultant,
employee or agent but not as a distributor or supplier) in any manufacturer that
sells its products exclusively and directly to health care practitioners rather
than through distributors or (ii) hold up to 2% of the outstanding shares of any
class of stock of a publicly traded entity.
9. Amendment and Modification; Waiver. This Agreement
may be amended, modified or supplemented only by written agreement (referring
specifically to this Agreement) of the parties. The waiver by either party of
any breach or violation of any provision of this agreement shall not operate or
be construed as a waiver of any subsequent breach.
10. Notice. All notices required to be given under the
terms of this agreement shall be in writing and shall be deemed to have been
duly given if delivered to the addressee in person or mailed by certified mail,
return receipt requested, as follows:
If to the Company, addressed to:
Xxxxx Xxxxxx, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
With a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Executive, addressed to:
Xxxxx X. Xxxxxxx, Executive Vice President
Xxxxxxxx Dental Products, Inc.
00000 Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxx 00000
6
With a copy to:
Xxxxx, Xxxxx & Ryd
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.
11. Further Agreement. In the event that any amounts paid
or payable to the Executive pursuant to this Agreement shall adversely affect
the qualification of the Merger (as defined in the Merger Agreement) as a
pooling of interests, then the Company and the Executive shall endeavor in good
faith to modify such payments so that they will not adversely affect the Merger
as a pooling of interests for financial reporting purposes; provided, however,
that the parties shall, in any event, carry out the intent of this Agreement.
12. 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.
13. Entire Agreement; Benefit. This Agreement constitutes
the entire agreement and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and all prior employment or other compensation or
compensation continuation agreements and arrangements between the Executive and
Xxxxxxxx. This agreement shall inure to and shall be binding upon the parties
hereto, the successors and assigns of the Company and the heirs and personal
representatives of the Executive.
14. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the provisions thereof relating to conflicts of law.
15. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
7
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the day and year first above written.
------------------------------------
Xxxxx X. Xxxxxxx
XXXXX XXXXXX, INC.
By:
---------------------------------
Authorized Officer
8
