EXHIBIT 10.11
EMPLOYMENT AGREEMENT
between
XXXXXX XXXXXXX
and
XXXXXXXXX HOLDING CORP.
Dated March 2, 1998
EMPLOYMENT AGREEMENT dated as of March 2, 1998, between
Xxxxxxxxx Holding Corp., a Delaware corporation (the "Company")
and Xxxxxx Xxxxxxx, a California resident ("Xxxxxxx").
W I T N E S S E T H :
WHEREAS, Xxxxxxx has executed an Agreement and Plan of
Merger dated January 28, 1998, as amended by Amendment No. 1
dated February 20, 1998 (the "Merger Agreement") among The
Xxxxxxxxx Corporation ("Fairchild"), Special-T Fasteners, Inc.
("Special T"), Xxxxxxx Lock & Management Company and Xxxxxxx; and
WHEREAS, in connection with the transactions
contemplated by the Merger Agreement, the parties desire Xxxxxxx
to serve in certain capacities with the Company.
NOW, THEREFORE, in consideration of the mutual
covenants set forth herein, the parties agree as follows:
1. Definitions. Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the
Merger Agreement. As used herein, the following capitalized
terms have the following meanings:
"Agreement" shall mean this Agreement and any
amendments hereto.
"Agreement Term" shall have the meaning ascribed to it
in Section 2(a).
"Board of Directors" shall mean the members of the
board of directors of the Company, excluding Xxxxxxx.
"Business" shall mean the manufacture, sale,
distribution or other involvement in the aerospace and industrial
hardware business, including, without limitation, the
manufacture, sale, or distribution of fasteners.
"Cause" shall have the meaning ascribed to it in
Section 10.
"Compensation" shall mean the compensation to which
Xxxxxxx is entitled under Section 5, paid in the manner provided
in Section 5.
"Effective Time" has the meaning ascribed to such term
in the Merger Agreement.
"Salary" has the meaning ascribed to such term in
Section 5.
2. Agreement Term. The Company will employ Xxxxxxx
and Xxxxxxx will work for the Company for the period commencing
on the date of this Agreement and ending on the second
anniversary thereof, unless extended or sooner terminated as
provided in Section 10.
3. Duties. During the Agreement Term, Xxxxxxx shall
serve as Vice President of the Company and as Chief Executive
Officer of Special T, and as such shall be in charge of worldwide
logistics for the Company. In addition, Xxxxxxx shall have such
other responsibilities and duties that the Company may, from time
to time, reasonably require.
4. Non-Competition; Non-Solicitation; Confidentiality.
(a) During the Agreement Term and for a period of two years
commencing on the date of termination or expiration of this
Agreement, Xxxxxxx will not engage in any capacity in a business
(x) competitive with the Business and (y) located anywhere in the
world, except as an officer, director, shareholder or employee of
the Company or its affiliates and subsidiaries.
(b) During the Agreement Term and for a period of two
years commencing on the date of termination or expiration of this
Agreement, Xxxxxxx will not, unless acting with the express
written consent of the Board of Directors of the Company,
directly or indirectly, solicit or interfere with, or endeavor to
entice away:
(i) any person who was employed by the Company in the
Business during the twelve month period immediately
preceding the date of termination or expiration of this
Agreement;
(ii) any person who otherwise performed services on a
regular basis for the Company in the Business during the
twelve month period immediately preceding the date of
termination or expiration of this Agreement; or
(iii) with respect to the Business, any person or
entity who was a customer or client of the Company (with
whom Xxxxxxx or the Company has had substantial business
contact) or any person or entity who requested or received a
proposal from the Company (if Xxxxxxx or the Company has had
substantial business contact with such person or entity or
has expended substantial efforts in the preparation of any
such proposal).
(c) During the Agreement Term and at all times
thereafter Xxxxxxx agrees to hold in confidence all matters and
things related to the business of the Company or any of its
affiliates and subsidiaries of a confidential or secret nature as
to which Xxxxxxx may now have knowledge or acquire knowledge
during the Agreement Term and will not, without the consent of
the Board of Directors, use any such matter or thing or disclose
to others any such matter or thing related to the business of the
Company or any of its affiliates and subsidiaries, provided,
however, that in each case, Xxxxxxx does not agree to hold in
confidence information (i) otherwise publicly available (other
than as a result of a breach of the terms of this Agreement by
Xxxxxxx), (ii) required to be disclosed by applicable law or
court order, or (iii) disclosed to him by a party who to his
knowledge has no duty of confidence to the Company or any of its
affiliates and subsidiaries.
(d) It is expressly understood by and between the
Company and Xxxxxxx that the covenants contained in this Section
4 shall be deemed to be a series of independent covenants. The
Company and Xxxxxxx expressly agree that the character, duration
and geographical scope of these covenants are reasonable in light
of the circumstances as they exist at the date upon which this
Agreement has been executed. However, should a determination
nonetheless be made by any tribunal of competent jurisdiction
that the character, duration or geographical scope of these
covenants are unreasonable in light of the circumstances as they
then exist, then it is the intention and agreement of the Company
and Xxxxxxx that these covenants shall be construed by such
tribunal in such a manner as to impose only those restrictions on
the conduct of Xxxxxxx which are reasonable in light of the
circumstances as they then exist and necessary to insure the
Company of the intended benefit of these covenants. If, in any
proceeding, such tribunal shall refuse to enforce all of the
separate covenants deemed included herein because, taken
together, they are more extensive than necessary to assure the
Company of the intended benefit, it is expressly understood and
agreed between the parties that those of such covenants which, if
eliminated, would permit the remaining separate covenants to be
enforced in such proceeding shall, for the purposes of such
proceeding, be deemed eliminated herefrom.
5. Compensation. In consideration for his services to
the Company, the Company shall pay to Xxxxxxx a salary equal to
$520,000 per year, payable in equal installments, less tax
withholding, in accordance with the Company's payroll practices
(the "Salary").
It is hereby understood that Special T will change its
fiscal year to June 30.
6. Vacation. Xxxxxxx shall be entitled to vacation
periods annually during Xxxxxxx' employment under this Agreement
consistent with the Company's vacation policy for employees
generally (which shall be no less favorable to Xxxxxxx than under
the Company's policy for senior management of Fairchild).
7. Reimbursement for Expenses. The Company shall
reimburse Xxxxxxx for all reasonable and necessary expenses and
other disbursements actually incurred by Xxxxxxx for and on
behalf of the Company in the performance of Xxxxxxx' duties upon
submission of adequate documentation of such expenses.
8. Automobile Expenses. Xxxxxxx shall be entitled to
reimbursement of out of pocket expenses for business use of an
automobile during the Agreement Term in an amount equal to that
which senior management of Fairchild is reimbursed.
9. Benefits. Xxxxxxx shall be entitled to participate
in any employee benefit plan, program or policy of Fairchild
(including, but not limited to, any pension plan), whether funded
or unfunded, now existing or established hereafter, for the
benefit of its employees generally and/or its employees and key
personnel to the extent that Xxxxxxx is eligible under the
general provisions thereof.
10. Extension and Termination
(a) Automatic Extension. Unless the Agreement Term
and Xxxxxxx' employment hereunder is terminated as provided in
this Section 10, the Agreement Term shall be subject to
automatic, one-year extensions.
(b) Termination Upon Notice. Either party may at any
time during the Agreement Term, upon six months prior written
notice to the other party, terminate the Agreement Term and
Xxxxxxx' employment hereunder, without Cause, in which event
Xxxxxxx shall be entitled to his Compensation, benefits and
reimbursable expenses accrued through the effective date of such
termination. Xxxxxxx shall have no right to receive any other
compensation or benefit hereunder after the effective date of
such termination.
(c) Termination Upon Death. If Xxxxxxx shall die
during the Agreement Term, this Agreement shall terminate, except
that Xxxxxxx' legal representatives shall be entitled to receive
his Compensation, benefits and reimbursable expenses accrued
through the effective date of such termination.
(d) Termination Upon Disability. If, during the
Agreement Term, Xxxxxxx shall become physically or mentally
disabled, whether totally or partially, so that he is unable
substantially to perform his services hereunder for a period of
three consecutive months, or for shorter periods aggregating six
months during any twelve month period, the Company may, at any
time after the last day of the three consecutive months of
disability, or the day on which the shorter periods of disability
shall have equaled in the aggregate six months, by written notice
to Xxxxxxx, but before Xxxxxxx has recovered from such
disability, terminate the Agreement Term and Xxxxxxx' employment
hereunder, and upon such termination no further sums shall be due
to Xxxxxxx as a result of such termination. Prior to the
effective date of such termination, notwithstanding such
disability, Xxxxxxx shall be entitled to receive a disability
benefit payment, after a seven (7) day elimination period, of
sixty percent (60%) of his Compensation, which shall increase
after a ninety (90) day elimination period to seventy-five
percent (75%) of his Compensation, commencing on the date of
disability and continuing up to and including the date of such
termination, such payment to be Xxxxxxx' sole and exclusive
entitlement to compensation (except as may be available under
applicable disability plans).
(e) Termination by the Company for Cause. The Company
may at any time during the Agreement Term, by written notice to
Xxxxxxx, immediately terminate the Agreement Term and Xxxxxxx'
employment hereunder for Cause, in which event Xxxxxxx shall be
entitled to receive his Compensation, benefits and reimbursable
expenses accrued through the effective date of such termination.
Xxxxxxx shall have no right to receive any other compensation or
benefit hereunder after the effective date of such termination.
As used herein, the term for "Cause" shall be deemed to
mean (i) the willful and continued failure by Xxxxxxx after
written notice from the Board of Directors, to substantially
perform his duties hereunder, (ii) any act of intentional
dishonesty by Xxxxxxx involving or affecting the Company or any
of its affiliates and subsidiaries, (iii) any misappropriation by
Xxxxxxx of any asset of the Company or any of its affiliates and
subsidiaries, (iv) the intentional engaging by Xxxxxxx in conduct
which is materially injurious, monetarily or otherwise, to the
Business or the reputation of the Company or any of its
affiliates and subsidiaries, (v) gross negligence or recklessness
by Xxxxxxx in the performance of his duties hereunder, (vi)
conviction of Xxxxxxx of a felony or crime involving moral
turpitude, (vii) any breach by Xxxxxxx of his material
obligations under this Agreement, (viii) abuse of alcohol or
other substances so as to interfere with the performance of
Xxxxxxx' duties hereunder or (ix) intoxication or use of illegal
substances "on the job."
11. Certain Remedies. If Xxxxxxx commits a breach, or
threatens to commit a breach, of any of the provisions of this
Agreement, the Company shall have the following rights and
remedies:
(a) The right and remedy to seek to have the
provisions of Section 4 of this Agreement specifically enforced,
it being acknowledged and agreed that any such breach or
threatened breach may cause irreparable injury to the Company and
that money damages may not provide an adequate remedy to the
Company; and
(b) The right and remedy to require Xxxxxxx to account
for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits (collectively,
"Benefits") derived or received by Xxxxxxx as the result of any
breach of Section 4 hereof or as a result of any transaction
constituting "Cause" under clause (ii) or (iii) of the definition
of such term set forth in Section 10 hereof and Xxxxxxx hereby
agrees to account for and pay over such Benefits to the Company.
Each of the rights and remedies enumerated above shall
be independent of the other, and shall be severally enforceable,
and all of such rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the
Company under the law or in equity.
12. Notice. (a) Any notice or communication to any
party hereto shall be duly given if in writing and delivered in
person or mailed by first class mail (registered or certified,
return receipt requested), facsimile or overnight air courier
advertising guarantied next day delivery, to such other party's
address.
(i) If to Xxxxxxx:
Xxxxxx Xxxxxxx
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000.
(ii) If to the Company:
c/o The Xxxxxxxxx Corporation
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000.
(b) All notices and communications will be deemed to
have been duly given (i) at the time delivered by hand, if
personally delivered, (ii) five business days after being
deposited in the mail, if mailed, (iii) when receipt
acknowledged, if sent by facsimile and (iv) the next business day
after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
13. Successors and Assigns. This Agreement is
personal in its nature and, except as expressly permitted
pursuant to Section 10(c), neither of the parties hereto shall,
without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except that the
Company may assign this Agreement to any affiliate or subsidiary;
provided that such assignment will not alter in any fashion the
definition of the "Business" set forth in Section 1 hereof.
14. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of New York without regard to the principles of conflict of
laws thereof. Each of the parties to this Agreement irrevocably
and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in the City of New York over any
claims for injunctive or other equitable relief arising out of or
relating to this Agreement.
15. No Recourse Against Others. No director, officer
or employee, as such, of the Company or any of its affiliates and
subsidiaries shall have any liability for any obligations of the
Company under this Agreement for any claim based on, in respect
of or by reason of such obligations or their creation.
16. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement by any party
hereto, or where any provision hereof is validly asserted as a
defense by such party, such party, if successful, shall be
entitled to recover reasonably attorneys' fees in addition to any
other available remedy.
17. Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof.
18. Modification; Waiver. This Agreement may be
modified or amended only with the written consent of each party
hereto. No party hereto shall be released from its obligations
hereunder without the written consent of the other party. The
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but
any such waiver shall be effective only if in a writing signed by
the party against which such waiver is to be asserted. Except as
otherwise specifically provided herein, no delay on the part of
any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party hereto of any right, power or privilege
hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege hereunder.
19. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the
meaning or construction of this Agreement.
20. Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
21. 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 shall constitute one and the
same instrument. This Agreement shall become effective when one
or more counterparts have been signed by each party hereto and
delivered to the other party.
22. Interpretation. As used in this Agreement:
(i) "person" means any natural person, corporation,
limited or general partnership, joint venture, association,
joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof;
(ii) "subsidiary" of any person means (x) a corporation
more than fifty percent of the outstanding voting stock of
which is owned, directly or indirectly, by such person or by
one or more other subsidiaries of such person or by such
person and one or more subsidiaries thereof or (y) any other
person (other than a corporation) in which such person, or
one or more other subsidiaries of such person or such person
and one or more other subsidiaries thereof, directly or
indirectly, have at least a majority ownership and voting
power relating to the policies, management and affairs
thereof;
(iii) "affiliate" of any person means (x) any other
person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such person (including any subsidiaries
of such person) and (y) if such person is a natural person,
includes (1) any member of the immediate family (including
parents, spouse and children) of such natural person and (2)
any trust whose principal beneficiary is such natural person
or one or more members of such immediate family and any
person who is controlled by any such member or trust;
provided, however, that any limited partner of a partnership
shall not be an affiliate of such partnership solely by
virtue of its status as a limited partner.
(iv) "control" (including, with its correlative
meanings, "controlled by" and "under common control with")
means possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether
through ownership of securities or partnership or other
ownership interests, by contract or otherwise); provided,
however, that any person which owns directly or indirectly
ten percent or more of the securities having ordinary voting
power for the election of directors or other governing body
of a corporation or ten percent or more of the partnership
or other ownership interests of any other person (other than
as a limited partner or non-managing member of such other
person) will be deemed to control such corporation or other
person.
23. Arbitration. All claims, other than claims for
injunctive or other equitable relief, arising out of or relating
to this Agreement shall be settled by arbitration, conducted
before a panel of three arbitrators in New York, New York, in
accordance with the applicable rules and procedures of the
American Arbitration Association then in effect. Arbitration
shall be the exclusive remedy for any such claim except only as
to the failure to abide by an arbitration award rendered
hereunder. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction. Such
arbitration shall be final and binding on the parties. The costs
and expenses of arbitration shall be borne equally by the
parties, except as provided in Section 16 hereof.
24. Adjustment. In the event the Company or Special T
makes any material acquisition or disposition, the Company and
Xxxxxxx agree to negotiate in good faith to make any necessary
adjustments to this Agreement to reflect such acquisition or
disposition.
IN WITNESS WHEREOF, the Company and Xxxxxxx have
executed this Agreement as of the date first above written.
XXXXXXXXX HOLDING CORP.
By
Name:
Title:
Xxxxxx Xxxxxxx
