EXHIBIT 10.60
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of
November 25, 1996, is made by and between Xxxxxx International Industries,
Incorporated, a Delaware corporation ("Employer"), and Xxxxxxx X. Xxxxx
("Employee").
WHEREAS, Employer desires to secure the continued services of Employee
as President and Chief Operating Officer of Employer;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, and agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and subject to the terms and conditions set forth
below, Employer and Employee hereby agree as follows:
Section 1. Definitions
Section 1.1. Effective Date. "Effective Date" is November 25, 1996.
Section 1.2. Employment. "Employment" means Employee's employment
by the Employer, both hereunder and prior to the Effective Date.
Section 1.3. Expiration Date. "Expiration Date" means December 31,
1999.
Section 1.4. Services. "Services" mean Employee's responsibilities and
duties during the Term, as set forth in Section 0 including any extension
hereof.
Section 1.5. Term. "Term" means the term of this Agreement,
commencing on the Effective Date and ending on the earlier to occur of (a)
the Expiration Date or (b) the termination of this Agreement pursuant to
Section 7.
Section 2. Term of Employment. Employer shall employ Employee and
Employee shall serve Employer during the Term. Upon the expiration of the
Term, this Agreement may be extended upon such terms as shall then be
mutually agreed upon by Employer and Employee.
Section 3. Position, Duties, Location, Responsibilities
Section 3.1. Position, Duties and Location. During the Term, Employee
shall serve as President and Chief Operating Officer of Employer, subject to
the terms of this Agreement, and shall report to the Board of Directors of
Employer and the Chief Executive Officer, and shall assume and perform
such reasonable executive and managerial responsibilities and duties as are
consistent with his position as a President and Chief Operating Officer of
Employer.
Section 3.2. Devotion of Efforts to Business. During Employee's Employ-
ment, Employee shall devote his best efforts, and full business time and
attention to the Services.
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Employee shall not promote the business, products or services of any other
company or engage in any outside business activity during his Employment.
Employee shall perform the Services in accordance with such reasonable
procedures and policies as Employer may adopt from time to time.
Section 3.3. Protection of Employer's Name. Employee shall at all times
during the Term promote and protect the good name of Employer as well as
that of its officers, directors, employees, agents, products and services and
shall not, during and after the Term, defame or disparage Employer's
business, products, services, officers, employees or other representatives or
otherwise willfully detract from or reflect adversely upon their reputation,
nor shall Employee willfully engage in any unfair trade practices with respect
to Employer.
Section 4. Compensation During the Term
Section 4.1. Salary and Bonus. Except as otherwise provided in
Section 7 hereof, as compensation for his Services during the Term,
Employee shall receive an annual salary of Four Hundred Fifty Thousand
Dollars ($450,000) (such amount and any increment thereof made pursuant
hereto, the "Salary") during the period beginning on the Effective Date and
ending on the Expiration Date. Employee's Salary shall be payable at the
same intervals as salaries are paid to other salaried employees of Employer.
Employee's Salary shall be reviewed at each July meeting of the
Compensation and Option Committee of the Board of Directors during the
Term and may be increased (but shall not be decreased) at such time on the
basis of merit and performance. Employee shall be entitled to such bonus as
the Compensation and Option Committee of the Board of Directors may
approve on the basis of merit and performance (the "Bonus").
Section 4.2. Options. Except as otherwise provided in Section 7 hereof
by reference to the terms of such agreements, notwithstanding anything to the
contrary contained in agreements executed between Employee and Employer
(the "Stock Option Agreements") relating to options to purchase the common
stock of Employer ("Stock Options"), Stock Options granted prior to or after
the Effective Date, shall exist, accrue, vest and be exercisable by their terms
during the period ending on the Expiration Date, all determined as if
Employee had continued to be a full-time executive officer of Employer until
the Expiration Date.
Section 4.3. Benefits. Except as otherwise provided in Section 7 hereof,
rights and benefits under the Employer's Executive Deferred Compensation
Plan, the Retirement Savings Plan (including both matching and profit sharing
contributions) and employee health, life and other similar plans, in each case
as such plans shall have been or be amended (collectively, the "Benefits"),
shall exist, accrue and vest during the period ending on the Expiration Date,
all determined as if Employee had continued to be a full-time executive
officer of Employer until the Expiration Date. Except as otherwise provided
hereby, such participation shall be subject to the normal eligibility
requirements of such plans.
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Section 4.4. Retirement Benefits. Except as otherwise provided in
Section 7 hereof by reference to the terms of such plan, retirement benefits
(the "Retirement Benefits") existing at the Effective Date or accruing during
the Term under the Employer's Supplemental Executive Retirement Plan, as
amended (the "SERP"), shall continue to exist, accrue and vest during the
period ending on the Expiration Date, all determined as if Employee had
continued to be a full-time executive officer of Employer until the Expiration
Date. Except as otherwise provided hereby, such participation shall be
subject to the normal eligibility requirements of the SERP.
Section 5. Treatment of Information
Section 5.1. Definition of Confidential Information. Employee
acknowledges that in the course of his Employment, he may have access to
and become informed of proprietary, non-public information relating to
Employer and its affiliated companies (each of such companies including
Employer, an "Employer-Related Company"), and their business and
products. The term "Confidential Information" means all information
disclosed to Employee, including:
(i) service specifications, schematics, designs, procedures, practices,
testing methods, concepts for new or improved services and other service
data; (ii) product specifications, schematics, designs, procedures, practices,
testing methods, concepts for new or improved products and other product
data; (iii) sources of supply, and potential sources of supply, for capital
equipment, components, raw materials and products; (iv) all technical
information relating to the invention, patenting, technological advancement,
formulation, development, design, specifications, testing, manufacture and
use of products, services, methods, processes, machinery and equipment; (v)
customer and prospective customer information, such as lists of such
customers, purchasing and servicing habits and credit information; (vi) cost
and pricing information; (vii) selling and marketing information, such as
selling methods, strategies, catalogues, order books and instructional and
promotional materials; (viii) training and recruiting methods and materials;
(ix) business techniques, (x) corporate planning data; and (xi) financial
results and business conditions;
provided that such information:
(a) has not been made generally available to the public; and
(b) is useful or of value to Employer's current or anticipated business,
research or development activities or those of any customer or supplier of
Employer.
Confidential Information does not include Employee's general skills and
experience as defined by law.
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Section 5.2. Employee's Obligation of Confidentiality. During the Term
and for a period of five (5) years thereafter, Employee agrees to maintain in
strict confidence and not, directly or indirectly, divulge or use the
Confidential Information in any manner, without Employer's prior consent,
other than in the performance of Services for Employer; provided, that,
Employee shall not be so obligated, if such Confidential Information:
(a) is in or hereafter enters the public domain through no fault of
Employee; or
(b) is required to be disclosed pursuant to a court order or government
action and Employee has made reasonable efforts to provide Employer with
prior notice of such required disclosure.
Section 5.3. Inventions, Copyrights
(a) Assignment. Employee hereby assigns and agrees to assign to
Employer or its successors, assigns or nominees, all of his rights to any
discoveries, inventions and improvements, whether patentable or not, made,
conceived or suggested, either solely or jointly with others, by Employee in
connection with the Business during the Term. Upon request by Employer
with respect to any such discoveries, inventions or improvements, Employee
shall execute and deliver to Employer, at Employer's sole expense, but
without further or additional consideration, all appropriate documents for use
in applying for, obtaining and maintaining such domestic and foreign patents
in the name of Employer as Employer may desire and all proper assignments
therefor.
(b) Statutory Notice. Consistent with the laws of certain states,
Employer acknowledges that no provision of this Agreement is intended to
require assignment of any of Employee's rights in an invention if no
equipment, supplies, facilities, trade secret, or Confidential Information of
Employer was used, and the invention was developed entirely on the
Employee's own time, unless the invention relates to the to the Employer's
actual or demonstrably anticipated research or development, or the invention
results from any work performed by the Employee for the Employer.
c) Ownership of Materials. Employee acknowledges that to the extent
permitted by law, all work papers, reports, computer files, documentation,
drawings, photographs, negatives, tapes and masters therefor, prototypes and
other materials (hereinafter in this paragraph, collectively, "items"),
generated by Employee during the Term, shall be considered as "work made
for hire" and that ownership of any and all copyrights in any and all such
items shall belong to Employer.
Section 5.4. Return of Property. Upon termination of Employee's
employment with Employer whether pursuant to the terms hereof or following
extension of such employment for an additional period of time, Employee
shall return to Employer, in good condition, all property of the Employer-
Related Companies, including the originals and all copies of any materials
which contain, reflect, summarize, describe, analyze or refer or relate to
Proprietary Information. If any property is not so returned, Employer will
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have the right to charge Employee for all reasonable damages, costs,
attorneys' fees and other expenses incurred in searching for, taking, removing
or recovering such property in a commercially reasonable manner.
Section 6. Remedies
Section 6.1. Remedies. In the event of any breach by Employee of the
provisions of Section 0, the parties hereby recognize and acknowledge that a
remedy at law may be inadequate, and an Employer-Related Company may
suffer irreparable injury. Accordingly, Employee consents to Employer's
instituting a proceeding seeking injunctive and other appropriate equitable
relief in order to protect its rights under Section 5. Such relief shall be in
addition to any other relief to which the Employer-Related Company may be
entitled at law or in equity. Resort to any remedy provided for under this
Section 6 or provided for by law shall not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies, or
preclude the recovery by the Employer-Related Company of monetary
damages.
Section 6.2. Jurisdiction; Venue; Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the
[State of California, County of Los Angeles, or in the United States District
Court for the Southern District of California], and each party consents to the
jurisdiction of such courts in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the
world.
Section 7. Termination
Section 7.1. Termination Upon Death or Disability. To the extent
consistent with federal and state law, this Agreement and Employee's
Employment shall terminate automatically upon the death or a final
determination of disability (as defined below) of Employee and in such event
Employer shall have no further obligation to Employee hereunder or
otherwise except (a) to pay Employee or his estate the unpaid portion, if any,
of the Salary, Bonus and Benefits payable to Employee, in each case, for the
period ending on the termination date, (b) provide Employee with the Salary
and Benefits to which Employee would have been entitled pursuant to
Sections 4.1 and 4.3 during the period from the date of termination until the
Expiration Date as if Employee had continued to be a full-time executive
officer of Employer until the Expiration Date, (c) pay Employee the
Retirement Benefits payable in accordance with the terms of the SERP, and
(d) permit Employee or his estate to exercise the Stock Options until the
Expiration Date as if Employee had continued to be a full-time executive
officer of Employer until the Expiration. For purposes hereof, "disability"
shall mean an illness or incapacity (mental or physical or both) of a
character,
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nature, degree or effect that has rendered Employee incapable, with
reasonable accommodation and in accordance with federal and state laws, of
performing the essential functions of his position hereunder for a period of
more than 120 consecutive days or 150 days in any 180-day period. The
determination of "disability" shall be made by physicians acceptable to
Employer, and Employee hereby consents to examination by such physicians
and to the disclosure by any physicians of any and all diagnoses, test results,
opinions and other information obtained by such physicians during or as a
result of the examinations to which Employee hereby consents.
Section 7.2. Retirement.
(a) This Agreement and Employee's Employment shall terminate
automatically if Employee is eligible to and elects to retire in accordance
with the Employer's retirement plan (or any successor plan) as then in effect
with respect to the Employee.
(b) Upon such termination prior to December 31, 1997 and except as
otherwise provided under such plan or required by law, Employer shall have
no further obligation to Employee hereunder or otherwise except to (i) pay
Employee the unpaid portion, if any, of the Salary, Bonus and Benefits
payable to Employee, in each case, for the period ending on the date of
termination, (ii) pay Employee the Retirement Benefits payable in accordance
with the terms of the SERP, and (iii) permit Employee to exercise the Stock
Options in accordance with the terms of the Stock Option Agreements.
c) Upon such termination after December 31, 1997 and except as
otherwise provided under such plan or required by law, Employer shall have
no further obligation to Employee hereunder or otherwise except to (i) pay
Employee the unpaid portion, if any, of the Salary, Bonus and Benefits
payable to Employee, in each case, for the period ending on the date of
termination, (ii) provide Employee with the Salary and Benefits to which
Employee would have been entitled pursuant to Sections 4.1 and 4.3 during
the period from the date of termination until the Expiration Date as if
Employee had continued to be a full-time executive officer of Employer until
the Expiration Date, (iii) pay to Employee the Retirement Benefits payable in
accordance with the terms of the SERP beginning on the date of termination,
as if Employee had continued to be a full-time executive officer of Employer
until the Expiration Date, and (iv) permit Employee to exercise the Stock
Options until the Expiration Date as if Employee had continued to be a full-
time executive officer of Employer until the Expiration Date.
Section 7.3. Termination by Either Party. Either party may terminate
this Agreement at any time and for any reason.
(a) Termination by Employee Other than Retirement.
(i) If Employee terminates his Employment prior to December 31, 1997,
for any reason (not including termination by reason of his retirement in
accordance with Section 7.2) by voluntarily resigning all of his positions with
the Employer, Employer shall have no further obligation to Employee
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hereunder or otherwise except to (A) pay Employee the unpaid portion, if
any, of the Salary, Bonus and Benefits payable to Employee, in each case, for
the period ending on the date of termination, (B) pay Employee the
Retirement Benefits payable in accordance with the terms of the SERP, and
(C) permit Employee to exercise the Stock Options in accordance with the
terms of the Stock Option Agreements.
(ii) If Employee terminates his Employment after December 31, 1997 for
any reason (not including termination by reason of his retirement in
accordance with Section 7.2) by voluntarily resigning all of his positions with
the Employer, Employer shall have no further obligation to Employee
hereunder or otherwise except to (A) pay Employee the unpaid portion, if any,
of the Salary, Bonus and Benefits payable to Employee, in each case, for the
period ending on the date of termination, (B) provide Employee with the
Salary and Benefits to which Employee would have been entitled pursuant to
Sections 4.1 and 4.3 during the period from the date of termination until the
Expiration Date as if Employee had continued to be a full-time executive
officer of Employer until the Expiration Date, (C) pay to Employee the
Retirement Benefits payable in accordance with the terms of the SERP
beginning on the date of termination, as if Employee had continued to be a
full-time executive officer of Employer until the Expiration Date, and (D)
permit Employee to exercise the Stock Options until the Expiration Date as if
Employee had continued to be a full-time executive officer of Employer until
the Expiration Date.
(b) Termination by Employer for Cause
(i) In the event that Employer terminates this Agreement and Employee's
Employment for "cause" (as defined below) at any time by delivering notice
of termination to Employee, Employer shall have no further obligation to
Employee hereunder or otherwise except to (A) pay Employee the unpaid
portion, if any, of the Salary, Bonus and Benefits payable to Employee, in
each case, for the period ending on the date of termination, (B) pay Employee
the Retirement Benefits payable in accordance with the terms of the SERP,
and (C) permit Employee to exercise the Stock Options in accordance with the
terms of the Stock Option Agreements.
(ii) For purposes hereof, "cause" shall mean (A) misappropriation of
corporate funds, (B) conviction of a felony, (C) willful misconduct by
Employee resulting in material harm to Employer, or (D) the breach by
Employee of any of his covenants contained in Sections 3 or 5.
c) Termination by Employer Other Than for Cause. In the event that
Employer terminates this Agreement and Employee's Employment without
"cause," Employer shall have no further obligation to Employee hereunder or
otherwise, except to (i) pay Employee the unpaid portion, if any, of the
Salary, Bonus and Benefits payable to Employee, in each case, for the period
ending on the date of termination, (ii) provide Employee with the Salary and
Benefits to which Employee would have been entitled pursuant to Sections
4.1 and 4.3 during the period from the date of termination until the Expiration
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Date as if Employee had continued to be a full-time executive officer of
Employer until the Expiration Date, (iii) pay to Employee the Retirement
Benefits payable in accordance with the terms of the SERP beginning on the
date of termination, as if Employee had continued to be a full-time executive
officer of Employer until the Expiration Date, and (iv) permit Employee or his
estate to exercise the Stock Options until the Expiration Date as if Employee
had continued to be a full-time executive officer of Employer until the
Expiration Date.
Section 7.4. Continuance of Covenants. Notwithstanding any other
provision hereof to the contrary, if this Agreement is terminated for any
reason, Sections 3, 0 and 0 shall survive and continue to bind Employee.
Section 8. Miscellaneous
Section 8.1. Amendment. This Agreement may be amended only by a
writing executed by each party hereto.
Section 8.2. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior understandings,
agreements or representations by or between the parties, written or oral, to
the extent they have related in any way to the subject matter hereof.
Section 8.3. Notices. Any notice, request, consent and other communica-
tion required or permitted hereunder shall be in writing and shall be deemed
to have been duly given (i) when received if personally delivered, (ii) within
one day after being sent by recognized overnight delivery service, or
(iii) within five days after being sent by registered or certified mail, return
receipt requested, postage prepaid, to the parties (and to the persons to whom
copies shall be sent) at their respective addresses set forth below.
(a) If to any Employer-Related Company:
Xxxxxx International Industries, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxxxx Xxxxxx
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) If to Employee:
0000 Xxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
With a copy to:
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Any party may change the address or the persons to whom notice shall be
directed by notifying the other parties as provided in this Section 8.3.
Section 8.4 Assignability. This Agreement shall be assignable by
Employer to any affiliate of Employer, with the consent of Employee, which
consent shall not be unreasonably withheld. Employee may not assign,
pledge or encumber any interest in this Agreement or any part thereof (this
Agreement being personal to Employee).
Section 8.5. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the internal, substantive laws of
the State of California, without regard to that State's principles governing
conflicts of laws.
Section 8.6. Waivers. Any waiver by any party or any violation of,
breach of or default under any provision hereof by the other party shall not
be construed as, or constitute, a continuing waiver of such provision, or
waiver of any other violation of, breach of or default under any other
provision hereof.
Section 8.7. Headings. The headings herein are solely for convenience
and shall not be given any effect in the construction or interpretation hereof.
Section 8.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 8.9. Third Parties. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give to any person or entity
other than the Employer-Related Companies, Employee, and any permitted
assignees, any rights or remedies under, or by reason of, this Agreement.
Section 8.10. Withholding of Taxes. Employer may withhold from any
amounts payable hereunder all federal, state, city or other taxes as shall be
required to be withheld pursuant to any law or government regulation or
ruling.
Section 8.11. Survival of Certain Obligations. Employer's and Employee's
obligations which by their terms extend beyond or survive the termination of
Employee's Employment shall not be affected or diminished in any way by
the termination hereof.
Section 8.12. Construction
(a) To the extent that the terms of this Agreement are inconsistent with
or vary from the terms of (i) any plan of the Company pursuant to which
benefits are payable to Employee or (ii) any other agreement between
Employee and Employer (including the Stock Option Agreements) or any
plan related thereto, then in any such case this Agreement shall supersede,
amend and modify the terms of such plan or agreement.
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(b) Each section and subsection hereof constitutes a separate and
distinct provision. The parties hereto intend that the provisions hereof be
enforced to the fullest extent permissible under the laws and public policies
applicable in each jurisdiction in which enforcement is sought. Accordingly,
if any provision is adjudicated to be invalid, ineffective or unenforceable,
the remaining provisions shall not be affected thereby. The invalid,
ineffective or unenforceable provision shall, without further action by the
parties, be automatically amended to effect the original purpose and intent of
such provision to the fullest extent legally permissible, provided, that such
amendment shall apply only with respect to the operation of such provision in
the particular jurisdiction with respect to which such adjudication is made.
c) In this Agreement, unless otherwise indicated or required by the
context:
(i) use of the singular form includes the plural and conversely;
(ii) "or" is not exclusive;
(iii) forms of the verb "include" are not limiting;
(iv) "hereof," "herein," "hereunder," and words of similar
construction refer to this Agreement as a whole and not to any particular part;
and
(v) a reference to a section or other part of a document is to such
part hereof.
(d) The parties hereto have each been represented by their own counsel
and have participated jointly in the negotiation and drafting of this
Agreement. If any ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any provision hereof.
(e) EMPLOYEE REPRESENTS THAT, PRIOR TO SIGNING THIS
AGREEMENT, HE READ IT IN ITS ENTIRETY; THAT HE FULLY
UNDERSTANDS AND VOLUNTARILY AGREES TO THE ABOVE
TERMS AND CONDITIONS; THAT HE WAS NOT COERCED TO SIGN
THIS AGREEMENT; THAT HE WAS NOT UNDER DURESS AT THE
TIME HE SIGNED THIS AGREEMENT; THAT HE WILL NOT, BY
SIGNING THIS AGREEMENT, VIOLATE THE TERMS OF ANY OTHER
AGREEMENT PREVIOUSLY ENTERED INTO BY HIM; AND THAT,
PRIOR TO SIGNING THIS AGREEMENT, HE HAD ADEQUATE TIME
TO CONSIDER ENTERING INTO THIS AGREEMENT, INCLUDING THE
OPPORTUNITY TO DISCUSS ITS TERMS AND CONDITIONS AS WELL
AS ITS LEGAL CONSEQUENCES, WITH AN ATTORNEY OF HIS
CHOICE.
Section 8.13. Execution and Delivery. Any party may execute and deliver
this Agreement by signing the signature page and electronically transmitting a
facsimile thereof.
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IN WITNESS WHEREOF, Employer has caused this Agreement to be duly
executed and delivered by its duly authorized officer, and Employee has duly
executed and delivered this Agreement, as of the date first written above.
/s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED
By: /s/ Xxxxxx Xxxxxx
------------------------------
Name: Xx. Xxxxxx Xxxxxx
Title: Chairman of the Board of Directors and
Chief Executive Officer
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