EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 1, 1997 by and between JANUS INDUSTRIES,
INC., a Delaware corporation, with its principal offices located at 000 Xxxxxxx
Xxxxxx, X.X. Xxx 0000, Xxxxx, Xxx Xxxxxx 00000 (the "Company"), and XXXXXXX X.
XXXXXX, XX., with an address at 000 Xxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000,
("Employee");
R E C I T A L S:
WHEREAS, Employee has been employed by the Company as a senior officer
since May 15, 1995 and is presently serving as Chairman of the Board of the
Company; and WHEREAS, both the Company and the Employee wish to continue their
employment relationship, on modified terms, as hereinafter set forth. NOW,
THEREFORE, it is agreed as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Affiliate" shall mean a corporation which, directly or indirectly,
controls, is controlled by or is under common control with the Company, and for
purposes hereof, "control" shall mean the ownership of 20% or more of the Voting
Stock of the corporation in question.
1.2 "Associates" shall have the meaning assigned to that term in Section
11.3 of this Agreement.
1.2 "Basic Salary" shall have the meaning assigned to that term in Section
6.1 of this Agreement.
1.3 "Board" shall mean the Board of Directors of the Company as duly
constituted from time to time.
1.4 "Business" shall mean the business to be conducted by the Company or
any Subsidiary, directly or indirectly, including, but not limited to, the
identification of acquisition candidates and the consummation of acquisition
transactions.
1.5 "Cause" shall mean any of the following: (a) If Employee engages in (i)
fraud, (ii) embezzlement, (iii) any other crime involving moral turpitude, or
(iv) such conduct as results or as is likely to result in substantial damages to
the reputation of the Company or a Subsidiary; or
(b) The commission by Employee of a material breach of any of the
provisions of this Agreement, on his part to be performed (including material
breach of the representation and warranty of Section 10); or
(c) The continuing willful failure of Employee to perform the duties
of such Employee to the Company or a Subsidiary (other than any such failure
resulting from Employee's incapacity due to Disability) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to Employee
by the Board; or
(d) If Employee declines to follow any significant instruction
formally adopted by the Board and formally communicated to Employee, and if
Employee adheres to such persistent refusal or neglect to follow such
instructions or policy.
For purposes of this subparagraph, no act, or failure to act, on Employee's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in the best interests of the Company or a Subsidiary.
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1.6 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules, regulations and interpretations issued thereunder.
1.7 "Commencement Date" shall be January 1, 1997.
1.8 "Confidential Information" shall include, without limitation by reason
of specification, any information, including, without limitation, trade secrets,
operational methods, methods of doing business, technical processes, formulae,
designs and design projects, inventions, research projects, strategic plans,
possible acquisition information and other business affairs of the Company or
its Affiliates, which (i) is or are designed to be used in, or are or may be
useful in connection with, the Business of the Company, any Subsidiary or any
Affiliate of any thereof, or which, in the case of any of these entities,
results from any of the research or development activities of any such entity,
or (ii) is private or confidential in that it is not generally known or
available to the public, except as the result of unauthorized disclosure by or
information supplied by Employee, or (iii) gives the Company or a Subsidiary or
any Affiliate an opportunity or the possibility of obtaining an advantage over
competitors who may not know or use such information or who are not lawfully
permitted to use the same.
1.9 "Date of Termination" shall mean the Term Date or the successive Term
Date, as applicable, or any date upon which this Agreement shall terminate
pursuant to Section 9 hereof.
1.10 "Disability" shall mean the inability of Employee to perform
Employee's duties of employment for the Company, if employed by the Company or a
Subsidiary, pursuant to the terms of this Agreement and by-laws of the Company
as hereinafter provided, because of physical or mental disability, where such
disability shall have existed for a period of more than 90 consecutive days or
an aggregate of 120 days in any 365 day period. The existence of a Disability
means that Employee's mental and/or physical condition substantially interferes
with Employee's performance of his duties for the Company and/or its
Subsidiaries as specified in this Agreement. The fact of whether or not a
Disability exists hereunder shall be determined by appropriate medical experts
selected by the Board.
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1.11 "Duties" shall have the meaning assigned to that term in Section 2.1
of this Agreement.
1.12 "Employment Year" shall mean each twelve-month period, or part
thereof, during which Employee is employed hereunder, commencing on the
Commencement Date and on the same day of any subsequent calendar year, the first
such subsequent Employment Year being the twelve-month period which will begin
on the first anniversary of the Commencement Date.
1.13 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
1.14 "Subsidiary" shall mean a corporation of which more than 50% of the
Voting Stock is owned, directly or indirectly, by the Company.
1.15 "Term" shall mean the term of employment of Employee under this
Agreement.
1.16 "Term Date" shall have the meaning assigned to that term in Section 3
of this Agreement.
1.17 "Voting Stock" shall mean capital stock of a corporation which gives
the holder the right to vote in the election of directors for such corporation
in the ordinary course of business and not as the result of, or contingent upon,
the happening of any event.
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Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
2. EMPLOYMENT AND DUTIES OF EMPLOYEE
2.1 Employment; Title; Duties. The Company hereby employs Employee, and
Employee hereby accepts appointment, as Chairman of the Board of the Company.
The duties of Employee shall be to pursue the objectives of the Business in
cooperation with the Company's President and Chief Executive Officer, to perform
generally those responsibilities typical of a chairman of the board and to
render services as are necessary and desirable to protect and to advance the
best interests of the Company and its Subsidiaries (collectively, the "Duties"),
acting, in all instances, in accordance with the policies set by the Board.
Without further compensation, Employee shall attend meetings of the Board and
committees of the Board, as applicable, and serve as an officer and/or director
of any Subsidiary; provided, however, if other senior executives of the Company
are paid director's fees for service as a director, Employee will be paid such
fees on a consistent basis.
2.2 Performance of Duties. Employee shall devote such time as is reasonably
necessary to perform the Duties as Chairman of the Board of the Company and for
the performance of such other executive duties as are assigned to him from
time-to-time by the Board and agrees to make himself available at least 500
hours on an annualized basis. During the Term, Employee: (i) shall comply with
all laws, statutes, ordinances, rules and regulations relating to the Business,
and (ii) shall not engage in or become employed, directly or indirectly, in a
business which competes with the Business of the Company and its Subsidiaries,
without the prior written consent of the Board, nor shall he act as a consultant
to or provide any services to, whether on a remunerative basis or otherwise, the
commercial or professional business of any other Person which competes with the
Business of the Company and its Subsidiaries, without such written consent,
which, in both instances, may be given or withheld by the Board in its absolute
discretion.
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3. TERM OF EMPLOYMENT
The employment of Employee pursuant to this Agreement commenced as of the
Commencement Date and shall end one year thereafter (the "Term Date"), unless
sooner terminated pursuant to Section 9.
4. [Intentionally Omitted]
5. COMPENSATION AND BENEFITS
The Company and/or its Subsidiaries shall pay Employee, as compensation for
all of the services to be rendered by him hereunder during the Term, and in
consideration of the various restrictions imposed upon Employee during the Term
and the Restricted Period, and otherwise under this Agreement, the Basic Salary
and other benefits as provided for and determined pursuant to Sections 6 and 7,
inclusive, of this Agreement; provided, however, that no compensation shall be
paid to the Employee under this Agreement for any period subsequent to the
termination of employment of the Employee for any reason whatsoever.
6. BASIC SALARY/BONUS
6.1 Basic Salary. The Company shall pay Employee, as compensation for all
of the services to be rendered by him hereunder during each Employment Year, a
salary of $75,000 per Employment Year (the "Basic Salary"), payable in
substantially equal monthly payments, less such deductions or amounts as are
required to be deducted or withheld by applicable laws or regulations,
deductions for employee contributions to welfare benefits provided by the
Company or a Subsidiary to Employee and such other deductions or amounts, if
any, as are authorized by Employee.
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6.2 Bonus. At the discretion of the Board, the Company may pay Employee a
cash bonus in the event that during the Term the Company successfully carries
out the objectives of the Business and the Employee's services are determined as
having contributed to same.
7. ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES
7.1 Additional Benefits. The Company shall provide the following additional
benefits to Employee during the Term:
(i) participation by Employee in a stock award and stock option plan
for senior management of the Company on a basis determined by the committee of
the Board administering the Company's stock award and stock option plans, if
any;
(ii) an annual allowance of $2,000 on account of dental expenses
incurred by Employee and his spouse against the presentation of bills for same;
(iii) reimbursement for all premium payments made by Employee to Blue
Cross and Blue Shield of New York (or another health insurance company) for
health insurance benefits and up to $2,000 in additional out-of-pocket medical
payments; and
(iv) such other benefits as the Board shall lawfully adopt and
approve.
7.2 Reimbursement for Expenses. The Company shall pay or reimburse Employee
for all reasonable expenses actually incurred or paid by him during the Term in
the performance of his services under this Agreement, upon presentation of such
bills, expense statements, vouchers or such other supporting information as the
Board may reasonably require. In the event the Company requires Employee to
travel on business during the Term, Employee shall be reimbursed for any travel
expenses in accordance with this Section 7.2.
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8. [Intentionally Omitted]
9. TERMINATION OF EMPLOYMENT
9.1 Death. If Employee dies during the Term, the Company shall continue to
pay to Employee's spouse, or in the absence of a surviving spouse, his estate,
Employee's Basic Salary for a period through the third full month following the
date of death.
9.2 Disability. If, during the Term, Employee has a Disability, the Company
may, at any time after Employee has a Disability, terminate Employee's
employment by written notice to him. In the event that Employee's employment is
terminated, the Company shall continue to pay Employee's Basic Salary for a
period through the third full month following the date of the termination of his
employment.
9.3 Voluntary Termination. The Agreement may be terminated by Employee at
any time without Cause upon sixty (60) days prior written notice to the Company.
9.4 Termination for Cause. The Company may terminate Employee's employment
hereunder for Cause at any time by written notice given to Employee by the
Board.
10. REPRESENTATION AND WARRANTY BY EMPLOYEE
Employee hereby represents and warrants to the Company, the same being part
of the essence of this Agreement that, as of the Commencement Date, he is not a
party to any agreement, contract or understanding, and that no facts or
circumstances exist, which would in any way restrict or prohibit him in any
material way from undertaking or performing any of his obligations under this
Agreement. The foregoing representation and warranty shall remain in effect
throughout the Term.
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11. CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS
11.1 Acknowledgment of Confidentiality. Employee understands and
acknowledges that he may obtain Confidential Information during the course of
his employment by the Company. Accordingly, Employee agrees that he shall not,
either during the Term or at any time within one year after the Date of
Termination, (i) use or disclose any such Confidential Information outside the
Company, its Subsidiaries and Affiliates; or (ii) except as required in the
proper performance of his services hereunder, remove or aid in the removal of
any Confidential Information or any property or material relating thereto from
the premises of the Company or any Subsidiary or Affiliate.
The foregoing confidentiality provisions shall cease to be applicable to
any Confidential Information which becomes generally available to the public
(except by reason of or as a consequence of a breach by Employee of his
obligations under this Section 11).
In the event Employee is required by law or a court order to disclose any
such Confidential Information, he shall promptly notify the Company of such
requirement and provide the Company with a copy of any court order or of any law
which in his opinion requires such disclosure and, if the Company so elects, to
the extent that he is legally able, permit the Company an adequate opportunity,
at its own expense, to contest such law or court order.
11.2 Delivery of Material. Employee shall promptly, and without charge,
deliver to the Company on the termination of his employment hereunder, or at any
other time the Company may so request, all memoranda, notes, records, reports,
manuals, computer disks, videotapes, drawings, blueprints and other documents
(and all copies thereof) relating to the Business of the Company and the
Affiliates, and all property associated therewith, which he may then possess or
have under his control.
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12. SURVIVAL
The provisions of Sections 8, 9.1 and 9.2 and this Section 12 shall survive
termination of this Agreement and remain enforceable according to their terms.
13. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement shall
in no way affect the validity or enforceability of any other provisions hereof.
14. NOTICES
All notices, demands and requests required or permitted to be given under
the provisions of this Agreement shall be deemed duly given if made in writing
and delivered personally or mailed by postage prepaid certified or registered
mail, return receipt requested, accompanied by a second copy sent by ordinary
mail, which notices shall be addressed as follows:
If to the Company:
Janus Industries, Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President and Chief Executive Officer
If to Employee:
Xxxxxxx X. Xxxxxx, Xx.
000 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
By notifying the other parties in writing, given as aforesaid, any party
may from time-to-time change its address or the name of any person to whose
attention notice is to be given, or may add another person to whose attention
notice is to be given, in connection with notice to any party.
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15. ASSIGNMENT AND SUCCESSORS
Neither this Agreement nor any of his rights or duties hereunder may be
assigned or delegated by Employee. This Agreement is not assignable by the
Company, including, without limitation, to any successor in interest which takes
over all or substantially all of the business of the Company, as it is conducted
at the time of such assignment, without the consent of Employee. Any corporation
into or with which the Company is merged or consolidated or which takes over all
or substantially all of the business of the Company shall be deemed to be a
successor of the Company for purposes hereof. This Agreement shall be binding
upon and, except as aforesaid, shall inure to the benefit of the parties and
their respective successors and permitted assigns.
16. LIMITATION OF LIABILITY; INDEMNIFICATION
16.1 Limitation of Liability. Employee shall not be liable to the Company
or to any creditor, creditor's committee, director, officer, employee,
affiliate, stockholder, consultant or subcontractor, of the Company or to any
Person controlling the Company for any cost, damage, expense or loss, including
without limitation any special, indirect, consequential or punitive damages, of
the Company or any such creditor, creditor's committee, officer, director,
employee, stockholder, affiliate, consultant, subcontractor or controlling
Person alleging arising out of (i) Employee's performance, failure to perform or
misperformance under this Agreement, or (ii) the Company's or such creditor's,
creditor's committees', officer's director's, employee's, stockholder's,
affiliate's, consultant's, subcontractor's or controlling Person's reliance on
any Duties or advice that Employee may provide to pursuant to this Agreement.
16.2. Indemnification. The Company shall indemnify and hold harmless
Employee against any damage, loss, cost or expense (including court costs and
reasonable attorneys' fees) which Employee may sustain or incur by reason of any
claim, demand, suit or recovery by any Person arising in connection with this
Agreement or out of Employee's performance of obligations under this Agreement,
provided, however, that no such indemnification shall extend to any claims to
the extent that such claims arise out of the gross negligence or willful
misconduct of Employee.
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16.3. Procedure. If a claim is made against Employee as to which Employee
may seek indemnity against the Company under this Section 16, Employee shall
notify the Company promptly after any written assertion of such claim
threatening to institute an action or proceeding with respect thereto and shall
notify the Company promptly of any action commenced against Employee within a
reasonable time after Employee shall have been served with a summons or other
first legal process giving information as to the nature and basis of the claim.
Failure so to notify shall not, however, relieve the Company from any liability
which it may have on account of the indemnity under this Section 16. Employee
shall be entitled to participate at its own expense in the defense of any such
litigation or proceeding, if it so elects, provided that such defense shall be
conducted by counsel chosen by Employee and reasonably satisfactory to the
Company. Notwithstanding anything to the contrary herein, if the resolution of
any claim for which Employee is indemnified hereunder will or is reasonably
expected to have a direct and significant adverse effect on Employee's business
operations or reputation then Employee shall be entitled to control such
resolution, including without limitation to take control of the defense and
investigation of such lawsuit or act, to employ and engage attorneys of its own
choice to handle and defend the same, and to compromise and settle such claims,
at the Company's cost, risk and expense.
17. ENTIRE AGREEMENT, WAIVER AND OTHER
17.1. Integration. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous agreements
between the parties hereto, written or oral, express or implied, covering the
subject matter hereof. No representations, inducements, promises or agreements,
oral or otherwise, not embodied herein, shall be of any force or effect.
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17.2. No Waiver. No waiver or modification of any of the provisions of this
Agreement shall be valid unless in writing and signed by or on behalf of the
party granting such waiver or modification. No waiver by any party of any breach
or default hereunder shall be deemed a waiver of any repetition of such breach
or default or shall be deemed a waiver of any other breach or default, nor shall
it in any way affect any of the other terms or conditions of this Agreement or
the enforceability thereof. No failure of the Company to exercise any power
given it hereunder or to insist upon strict compliance by Employee with any
obligation hereunder, and no custom or practice at variance with the terms
hereof, shall constitute a waiver of the right of the Company to demand strict
compliance with the terms hereof.
Employee shall not have the right to sign any waiver or modification of any
provisions of this Agreement on behalf of the Company, nor shall any action
taken by Employee reduce his obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by instrument in
writing signed by all of the parties hereto after the date hereof. Neither this
Agreement nor any of the rights of any of the parties hereunder may be
terminated except as provided herein.
18. GOVERNING LAW
This Agreement shall be governed by and construed, and the rights and
obligations of the parties hereto enforced, in accordance with the laws of the
State of New Jersey.
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19. HEADINGS
The Section and Subsection headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above, to be effective as of the Commencement Date.
JANUS INDUSTRIES, INC.
By:_____________________________
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
________________________________
Xxxxxxx X. Xxxxxx, Xx.
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