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Exhibit 10.9
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the
10th day of June, 1996 by and between XXXXXX X. XXXXXXX ("Employee") and HEALTH
O METER PRODUCTS, INC., a Delaware corporation (the "Company").
W I T N E S S E T H
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WHEREAS, the Company desires to retain the services of the
Employee as its Senior Vice President, Treasurer and Chief Financial Officer;
and
WHEREAS, the Company and the Employee deem it necessary and
appropriate to enter into an agreement setting forth the terms and conditions of
the Employee's employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the Employee and the Company agree as follows:
ARTICLE I
EFFECTIVE TIME
Section 1.00. EFFECTIVE TIME. This Agreement shall become
effective as of June 10, 1996 (the "Effective Time").
ARTICLE II
EMPLOYMENT
Section 2.01. EMPLOYMENT. The Company hereby employs the
Employee and the Employee hereby agrees to serve the Company on the terms and
conditions set forth herein. Employee shall initially hold the offices of Senior
Vice President, Treasurer and Chief Financial Officer of the Company.
Section 2.02. AT WILL STATUS. Employee specifically
acknowledges and agrees that his employment with the Company is "at will," and
may be terminated by him or the Company at any time with or without cause.
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ARTICLE III
DUTIES OF EMPLOYMENT
Section 3.00. DUTIES. Subject to the authority of the Board,
Employee shall have the status and powers as are customarily associated with,
and shall perform such duties and functions as the Board shall from time to time
determine and as are customarily assigned to, the Senior Vice President,
Treasurer and Chief Financial Officer of a corporation. Employee shall devote
his full time and effort to the business and affairs of the Company. Employee
further agrees to serve, if elected or appointed thereto, as a director of the
Company's subsidiaries and affiliated entities (if any) and in one or more
executive offices of any of the Company's subsidiaries and affiliated entities
(if any); provided that the indemnity provisions of Section 11.01 of this
agreement shall apply to Employee's service in any such capacity.
ARTICLE IV
COMPENSATION AND RELATED MATTERS
Section 4.01. SALARY. As compensation for the employment
services to be rendered by Employee hereunder, the Company shall pay to Employee
a salary at an initial rate of One Hundred Seventy-five thousand ($175,000)
Dollars per annum, payable at such intervals as may be consistent with the
Company's payroll policies, subject to increase or decrease by the Compensation
Committee of the Board in its sole discretion. Compensation of Employee by
salary payments shall not be deemed exclusive and shall not prevent Employee
from participating in any other compensation or benefit plan of the Company. The
salary payments (including any increased salary payments) hereunder shall not in
any way limit or reduce any other obligation of the Company hereunder, and no
other compensation, benefit or payment hereunder shall in any way limit or
reduce the obligation of the Company to pay Employee's salary hereunder.
Section 4.02. EXPENSES. During the term of Employee's
employment hereunder, Employee shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by Employee in performing the services
hereunder, including, but not limited to, all expenses for travel and living
expenses while away from home on business or at the request of and in the
service of the Company, its subsidiaries or affiliated entities; provided that
such expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company. Employee shall also be provided an
automobile allowance from the Company, in such amount as is determined
appropriate by the Board of Directors of the Company from time to time.
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Section 4.03 CONTINUED PARTICIPATION. Employee shall be
entitled to participate in all of the Company's employee benefit plans in effect
from time to time and made available by the Company to its executives and key
management employees, including the Company's life and long-term disability
insurance plans, medical and dental plans and 401 (k) Plan.
Section 4.04. ANNUAL PERFORMANCE BONUS. In addition to the
Employee's salary, the Employee will be entitled to participate during the
period of his employment in any bonus plan established by the Board of Directors
from time to time that contemplates participation by the executive officers of
the Company. The amount of any annual bonus payable to Employee shall be
determined under such plan; notwithstanding the foregoing, unless the Employee
is terminated for cause or resigns prior to the end of the 1996 fiscal year, the
Employee shall be entitled to receive a cash bonus with respect to such year in
an amount equal to not less than $14,583, whether or not the Employee would be
entitled to receive a Bonus under the terms of such plan.
Section 4.05 SPECIAL BONUS. The Employee will receive a cash
bonus in the amount of $7,500 at the Effective Time; PROVIDED, that if the
Employee resigns from his position with the Company prior to the first
anniversary of the Effective Time, such bonus shall be promptly repaid to the
Company.
Section 4.06 STOCK OPTIONS. On June 10, 1996, Employee
will receive the following:
(a) Non-qualified stock options to purchase 25,000 shares of
the Company's Common Stock under the Company's 1995 Stock
Option and Incentive Plan. Such options shall be exercisable
at market price on June 10, 1996, or at $5.375, whichever is
higher, and will vest in 25% increments on an annual basis,
commencing on the first anniversary of the date of grant; and
(b) Non-qualified performance-based stock options to purchase
15,000 share of the Company's Common Stock stock options under
the Company's 1995 Stock Option and Incentive Plan. Such
options shalls be exercisable at market price on June 10,
1996, or $5.375, whichever is higher, and will vest in 20%
increments a year beginning in fiscal 1996, conditioned upon
the Company's achievement of stated EBITDA objectives.
The options set forth in this Paragraph will expire 10 years from the date of
grant, or earlier in the event of termination of the Employee's employment, with
the Company and will be subject to the other terms and conditions set forth in
the forms of Option Agreement relating thereto attached as Exhibit A to this
Agreement.
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ARTICLE V
SEVERANCE ARRANGEMENTS
Section 5.01 DEFINITIONS.
(a) For purposes of this Article, "termination for cause"
shall mean any termination of the Employee's employment resulting from: (i)
Employee's engaging in fraud, misappropriation of funds, embezzlement or like
conduct committed against the Company; (ii) Employee's conviction of a felony;
or (iii) Employee's material violation of any provision of this Agreement which
has not been cured within thirty (30) days after written notice setting forth
such material violation and also setting forth the actions that Employee shall
be required to take to cure such material violation has been given by the
Company to Employee.
(b) The Company may terminate Employee's employment hereunder
at any time without cause. Notwithstanding any other provisions of this
Agreement to the contrary and for purposes of this Article, any termination of
Employee's employment resulting from: (i) Employee's death or (ii) Employee's
inability to perform the essential functions of his job with or without
reasonable accommodation, shall be deemed to be a termination by the Company
without cause.
Section 5.02 RESIGNATION; TERMINATION FOR CAUSE. If Employee
resigns from his positions with the Company or his employment shall be
terminated by the Company for cause, the Company shall pay Employee his full
salary through the date of resignation or termination at the rate then in effect
and the Company shall have no further obligations to Employee under this
Agreement.
Section 5.03 TERMINATION WITHOUT CAUSE. If the Company
terminates Employee's employment hereunder without cause, then:
(a) the Company shall pay Employee his full salary
through the date of termination, at the annual rate
then in effect;
(b) in lieu of any further salary payments to Employee
for periods subsequent to the date of termination, the
Company shall continue to pay to Employee his salary
at the annual rate in effect immediately prior to such
termination until the earlier to occur of (i) the date
that Employee obtains a position with another employer
providing for the payment of an annual base salary at
a rate substantially equivalent to that provided
herein or (ii) the expiration of the twelve (12) month
period following such termination (the "Salary
Continuation Period"), in equal periodic installments
consistent with the Company's payroll policies; and
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(c) payment of the foregoing by the Company shall
constitute complete satisfaction and remedy with
respect to termination of Employee's employment by the
Company without cause.
Section 5.04 CONTINUED BENEFITS. Unless Employee is terminated
by the Company for cause, or Employee shall resign from his positions with the
Company, the Company shall maintain in full force and effect, for the continued
benefit of Employee during the Salary Continuation Period, coverage under all
medical and dental insurance plans and programs in which Employee participated
prior to termination at the same cost to Employee as that applicable to other
employees participating in such plans during such period; PROVIDED, that
Employee's continued participation is possible under the general terms and
provisions of such plans and programs. In the event Employee's participation in
any such plan or program is barred, the Company shall arrange to provide
Employee with benefits substantially similar to those which Employee would
otherwise have been entitled to receive under such plans and programs from which
his continued participation is barred.
ARTICLE VI
BINDING AGREEMENT
Section 6.00 BINDING AGREEMENT. This Agreement and all rights
of Employee hereunder shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Employee should die
while any amounts would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee,
designee or, if there is no such designee, to Employee's estate. This Agreement
and all rights of the Company hereunder shall inure to the benefit of and be
enforceable by the Company's successors and assigns.
ARTICLE VII
REPRESENTATIONS AND AGREEMENTS OF EMPLOYEE
Section 7.01 ABILITY TO PERFORM. Employee represents and
warrants that he is free to enter into this Agreement and to perform the duties
required hereunder, and that there are no employment contracts or
understandings, restrictive covenants or other restrictions, whether written or
oral, preventing the performance of his duties hereunder.
Section 7.02 COOPERATION. Employee agrees to submit to a
medical examination and to cooperate and supply such other information and
documents as may be required by any insurance company in connection with the
Company's obtaining life insurance on the life of Employee, and any other type
of insurance or fringe benefit as the Company shall determine from time to time
to obtain.
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ARTICLE VIII
RESTRICTIVE COVENANTS
Section 8.01 NON-COMPETITION. Employee agrees that during the
Non-Competitive Period (as defined below), Employee shall not, directly or
indirectly, as owner, partner, joint venturer, stockholder, employee, broker,
agent, principal, trustee, corporate officer, director, licensor or in any
capacity whatsoever, engage in, become financially interested in, be employed
by, render any consultation or business advice with respect to, or have any
connection with, any business engaged in manufacturing, assembly, marketing or
sales of coffeemakers, teamakers, filters, scales, massagers or any other
product then being manufactured, assembled, marketed or sold by the Company, or
then being developed by the Company with the expectation of sale by the Company
within 90 days, in any geographic area where, at the time of termination of his
employment hereunder, the business of the Company was being conducted in any
material respect; provided, however, that Employee may own any securities of any
corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time five percent (5%) of any class of
stock or securities of such corporation. The term "Non-Competitive Period" shall
mean the period commencing on the date of his termination or resignation and
ending on the date which is (i) twelve (12) months later, in the event of
termination by the Company without cause, or (ii) eighteen (18) months later, in
the event of termination by Employee of his employment hereunder, or termination
by the Company for cause.
Section 8.02 NO HIRING. During the Non-Competitive Period,
Employee will not knowingly (i) hire or attempt to hire any employee of the
Company or of any of the Company's subsidiaries or affiliated entities (if any);
(ii) assist in such hiring by any other person; or (iii) encourage any such
employee to terminate his employment with the Company or any of such
subsidiaries or affiliated entities.
Section 8.03 SEVERABILITY. If any portion of the restrictions
set forth in this Article VIII should, for any reason whatsoever, be declared
invalid by a court of competent jurisdiction, the validity or enforceability of
the remainder of such restrictions shall not thereby be adversely affected.
Section 8.04 REASONABLENESS. Employee agrees that the
territorial and time limitations set forth in this Article VIII are reasonable
and properly required for the adequate protection of the business of the
Company. In the event any such territorial or time limitation is deemed to be
unreasonable by a court of competent jurisdiction, Employee agrees to the
reduction of the territorial or time limitation to the area or period which such
court shall have deemed reasonable.
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ARTICLE IX
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
Section 9.01 NON-DISCLOSURE. Employee shall not, during the
term of this Agreement and at any time thereafter, directly or indirectly,
disclose or permit to be known outside of the scope of his duties to the
Company, to any person, firm or corporation, any confidential information
acquired by him during the course of, or as an incident to, his employment
relating to the Company. It shall not be outside the scope of Employee's duties
to the Company to disclose confidential information to the Company's directors,
officers, employees, advisors, attorneys, accountants, lenders, financial
institutions or investors. Such confidential information shall be limited to
proprietary technology, market data, formulae, customer and supplier lists,
non-public financial and operating information and data, and any other documents
embodying such confidential information to the extent that such data and
information relate specifically to the Company. Such restrictions apply only to
the reproduction or use of the specific written documents of the Company
relating to the above-described categories and not to any knowledge (including
but not limited to knowledge gained from such confidential information) based on
Employee's experience during his employment with the Company or otherwise.
Section 9.02 RETURN OF DOCUMENTS. Upon termination of
Employee's employment with the Company, all documents, records, reports,
writings and other similar documents containing confidential information,
including copies thereof, then in Employee's possession or control shall be
returned and left with the Company.
ARTICLE X
EQUITABLE RELIEF
Section 10.00 RIGHT TO INJUNCTION. Employee recognizes that
the services to be rendered by him hereunder are of a special, unique, unusual,
extraordinary and intellectual character, involving skill of the highest order
and giving them peculiar value, the loss of which cannot be adequately
compensated for in damages. In the event of a breach of this Agreement by
Employee, the Company shall be entitled to injunctive relief or any other legal
or equitable remedies. Employee agrees that the Company may recover by
appropriate action the amount of the actual damages caused the Company by any
failure, refusal or neglect of Employee to perform his agreements,
representations and warranties herein contained. The remedies provided in this
Agreement shall be deemed cumulative and the exercise of one shall not preclude
the exercise of any other remedy, at law or in equity, for the same event or any
other event.
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ARTICLE XI
MISCELLANEOUS
Section 11.01 INDEMNIFICATION; INSURANCE. The Company will
indemnify Employee to the maximum extent permitted by law (including advancing
expenses where appropriate) with respect to actions taken by him as an officer
or director of the Company, any of its subsidiaries, or any affiliated entity of
the Company or any of its subsidiaries. The Company's obligation to provide
indemnification shall survive termination of employment. The Company will also
maintain in effect during Employee's employment hereunder directors and officer
liability insurance, to the extent the same can be obtained on commercially
reasonable terms. If permitted by the terms of the policy providing such
insurance, Employee will remain insured under such policy until the first to
occur of (i) termination of such policy (other than termination by the Company),
or (ii) the fifth anniversary of termination of Employee's employment with the
Company.
Section 11.02 ARBITRATION. Should any dispute arise between
the parties concerning the performance of this Agreement, the parties agree to
mediation and, if not resolved through such mediation within thirty (30) days,
final and binding arbitration in Cleveland, Ohio in accordance with the rules of
the American Arbitration Association, subject to Article X in the case of
alleged breach of Articles VIII or IX.
The decision rendered in any arbitration proceedings shall be
in writing and shall set forth the basis therefor. The parties shall abide by
the award rendered in the arbitration proceedings, and such award may be entered
as a final, non-appealable judgment, and may be enforced and executed upon, in
any court having jurisdiction over the party against whom enforcement of such
award is sought. Each of the parties agrees (in connection with any action
brought to enforce the arbitration provisions of this paragraph) not to assert
in any such action, any claim that it is not subject to the personal
jurisdiction of such court, that the action is brought in an inconvenient forum,
that the venue of the action is improper or that such mediation or arbitration
may not be enforced by such courts. Each party agrees that service of process
may be made upon it by any method authorized by the laws of the state in which
arbitration is to be conducted in accordance with this Section 11.02.
Section 11.03 NOTICE. For the purposes of this Agreement,
notices, demands and all other communications provided for in the Agreement
shall be in writing, shall be deemed to have been duly given when delivered or
unless otherwise specified mailed by U.S. registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to Employee: Xxxxxx X. Xxxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to the Company: Health o meter Products, Inc.
00000 Xxxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxx 00000
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With a copy to: Xxxxxx, Xxxxxx & Xxxxxxxx
0000 XxXxxxxx Xxxxxxxxxx Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. XxXxx, Esq.
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
Section 11.04 AMENDMENT OR ALTERATION. No amendment or
alteration of the terms of this Agreement shall be valid unless made in writing
and signed by both of the parties hereto.
Section 11.05 GOVERNING LAW. This Agreement shall be governed
by the laws of the State of Ohio, without giving effect to the conflicts of laws
provisions thereof.
Section 11.06 SEVERABILITY. The holding of any provision of
this Agreement to be invalid or unenforceable by a court of competent
jurisdiction shall not affect any other provision of this Agreement, which shall
remain in full force and effect.
Section 11.07 WAIVER OR BREACH. No waiver of or failure to
enforce any provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision of this Agreement, nor shall such waiver or
failure to enforce constitute a continuing waiver.
Section 11.08 ASSIGNMENT. This Agreement may not be
transferred or assigned by either party without the prior written consent of the
other party.
Section 11.09 FURTHER ASSURANCES. The parties agree to execute
and deliver all such further documents, agreements and instruments and take such
other and further action as may be necessary or appropriate to carry out the
purposes and intent of this Agreement.
Section 11.10 HEADINGS. The section headings appearing in this
Agreement are for purposes of each reference and shall not be considered a part
of this Agreement or in any way modify, amend or affect its provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
HEALTH O METER PRODUCTS, INC.
BY: /s/ S. Xxxxxx XxXxxxxxxx
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Name: S. Xxxxxx XxXxxxxxxx
Title: President
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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