NEWCOR, INC.
Exhibit 10(g) to Form 10-K
For the Year Ended October 31, 1995
EMPLOYMENT AGREEMENT
This Agreement, dated as of the 13th day of February, 1995,
by and among NEWCOR, INC., a Delaware corporation (the
"Company"), and W. XXXX XXXXXXXXX ("Employee")
W I T N E S S E T H:
WHEREAS, the Company desires to engage the services of
Employee, and Employee is willing to accept such employment, on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual undertakings set forth herein the parties hereto agree as
follows:
1. Employment and Duties; Board Appointment. In
accordance with actions taken and authorized by the Board of
Directors of the Company (the "Company Board"), effective upon
the arrival of Employee at the principal offices of the Company
on March 1, 1995 prepared to commence his duties hereunder,
Employee shall become employed and appointed as the President and
Chief Executive Officer of the Company and shall have the duties
and responsibilities commensurate with such titles and offices,
including, without limitation, all such duties and
responsibilities as now are or hereafter may be set forth with
respect to such offices in the by-laws of the Company. As
promptly as practicable following the commencement of Employee's
duties hereunder, the Company Board shall take necessary and
appropriate action to appoint Employee as a director of the
Company. During the period of his employment hereunder, Employee
also shall serve as an officer of such other affiliates of the
Company and in such other capacities as he may be requested by
the Company Board and shall assume such additional duties and
responsibilities as from time to time may be assigned to him by
the Company Board, all without additional compensation therefor.
Throughout the period of his employment hereunder, Employee shall
devote his business time, attention, and energy on a full-time
basis (subject to up to five weeks of vacation to be taken at
reasonable intervals during the year) exclusively to the affairs
of the Company and its affiliates.
2. Term of Employment. The employment of Employee
hereunder shall become effective as and when above provided and
shall continue thereafter through February 28, 1997 (the "Initial
Employment Period"), unless earlier terminated as hereinafter
provided. After the Initial Employment Period, the term of this
Agreement shall be automatically extended for additional one-year
periods unless written notice is given by one party to the other
of his or its intention to terminate Employee's employment
hereunder at the end of the Initial Term or any extended term, as
the case may be.
3. Cash Compensation. As full cash compensation for all
services to be performed by Employee hereunder, the Company shall
pay to Employee the following:
(a) salary at the rate of $250,000 per year (to be
reviewed annually by the Company Board), payable at the
intervals at which other executive officers of the Company
are paid;
(b) a one-time bonus in the amount of $100,000,
payable at the time Employee commences his duties hereunder;
and
(c) an additional incentive bonus (if earned) payable
after fiscal year-end in accordance with Company policy in
an amount determined under the Company's Annual Incentive
Plan, or replacement therefor applicable to executive
officers of the Company generally ("Incentive Plan");
provided, however, that the minimum amount payable to
Employee under the Incentive Plan in respect of the
Company's fiscal year ending October 31, 1995 shall be not
less than $100,000.
4. Certain Fringe Benefits. During the period of his
employment hereunder, the Company will (i) provide Employee with
the use of a new American-made automobile of Employee's choice
(and replace such automobile every two years or 50,000 miles,
whichever first occurs), maintained, insured, and equipped at the
Company's expense (subject to a $50.00 per month charge to
Employee for personal use of the automobile); (ii) subject to
Employee's insurability, obtain and pay the premiums on a whole
life policy on Employee's life in the amount of $1,500,000, which
policy shall be owned by Employee; and (iii) pay or reimburse to
Employee 100% of the dues, fees (but not the initiation fees),
assessments and minimums at one golf club of which Employee is
presently a member.
5. Other Employee Benefits. During the period of his
employment hereunder, Employee also shall be entitled to
participate in such Company employee benefit plans as from time
to time are maintained, sponsored, or made available by the
Company to its employees or its executive employees generally
(including but not limited to the Company's pension plan and
401(k) plan), in each case on the same terms and subject to the
same conditions and limitations generally applicable to other
executive officers of the Company with respect to participation
therein; provided, however, regardless of such conditions and
limitations, the Employee shall be provided (at no cost to
Employee) full family health, hospitalization, major medical and
dental coverage.
6. Certain Expenses. The Company shall pay or reimburse
Employee for the reasonable travel, entertainment and other
incidental expenses (including the cost of business publications
and professional associations) incurred on business of the
Company with the approval of the Chairman of the Company, and in
accordance with the Company's practices as in effect during the
term of this Agreement as applied to executive officers.
7. Stock Options. As evidenced by that certain Stock
Option Agreement to be entered into between Employee and the
Company (the "Option Agreement"), Employee shall be granted under
the Company's 1993 Management Stock Incentive Plan so-called non-
qualified stock options to purchase an aggregate of 100,000
shares of the common stock of the Company (which options shall
vest with respect to 25,000 shares per year commencing one year
from the date of the Option Agreement) on the terms and subject
to the conditions specified in the Option Agreement, including a
condition that Employee commence employment hereunder by March 3,
1995.
8. Other Insurance. The Company shall have the right to
purchase disability and group life insurance policies (in
addition to the policy referred to in Section 4 above) on
Employee whenever during the period of his employment hereunder
the Company deems it reasonable to acquire such insurance.
Employee agrees to cooperate in the acquisition of such insurance
and to perform all acts necessary and proper in connection
therewith, including submission to such medical examinations as
may be required. Any policy owned by the Company may be dealt
with in such manner as the Company deems appropriate.
9. Certain Continuing Obligations of Employee. Throughout
the period of his employment hereunder and thereafter, Employee
agrees to keep confidential all trade secrets, customer lists,
business strategies, financial and marketing information, and
other data concerning the private affairs of the Company or any
of its affiliates made known to or developed by Employee during
the course of his employment hereunder ("Confidential
Information"), not to use any Confidential Information or supply
Confidential Information to others other than in furtherance of
the Company's business, and to return to the Company upon
termination of his employment all copies, in whatever form, of
all Confidential Information and all other documents relating to
the business of the Company or any of its affiliates which may
then be in the possession or under the control of Employee.
Employee acknowledges and agrees that any intellectual
property of any sort developed or invented by Employee while
employed by the Company (whether or not during work hours) shall
be and remain the sole and exclusive property of the Company, and
Employee shall have no interest therein.
Employee further agrees that, during the period of his
employment hereunder and for five years thereafter, he will make
no attempt whatsoever to induce or encourage any other employee
of the Company or any of its affiliates to leave such employment
for employment with any other entity engaged in any line of
business competitive with the Company or any of its affiliates.
At the request of the Company Board, whether or not made
during the period of his employment hereunder, Employee agrees to
execute such confidentiality agreements, assignments of
intellectual property rights, and other documents as hereafter
may be reasonably determined by the Company Board to be
appropriate to carry out the purposes of this Section.
10. Termination of Employment; Effect.
(a) Employee's employment hereunder will be terminated
in any of the following ways:
(i) Immediately upon the death of the
Employee;
(ii) Immediately upon the Employee becoming
permanently disabled within the meaning of the
Company's long term disability policy as then in
effect;
(iii) By either the Employee or the Company
giving notice of his or its intention not to extend
this Agreement's term as provided in Section 2 above,
in which case Employee's employment will terminate at
the end of the Initial Term or extended term, as the
case may be; or
(iv) By either the Employee or the Company,
without or with Cause (as hereinafter defined), by 30
days' prior written notice to the other, effective as
of the date specified in such notice.
(b) Upon the termination of Employee's employment in
any of the ways provided in subsection (a), then this
Agreement and all rights and obligations of Employee and the
Company hereunder (as opposed to rights and obligations
under the Option Agreement and under any Company employee
benefit plan in which Employee participated) shall terminate
and cease immediately, except for (i) Employee's rights to
the payments provided in Section 11 below; and (ii) the
rights and obligations set forth in Section 9 above and
Section 14 below. 11. Payments On Termination. Employee
shall be entitled to the following payments and benefits
upon termination of his Employment:
(a) If Employee's employment is terminated under
Section 10(a)(i) above, or if Employee's employment is
terminated by Employee under Section 10(a)(iii) above, or if
Employee's employment is terminated (either voluntarily by
Employee or for Cause by the Company) under Section
10(a)(iv) above, then Employee shall be entitled to the cash
compensation under Section 3(a) above, and the benefits to
which Employee is entitled under Sections 4 and 5 above,
through the date of termination of employment.
(b) If Employee's employment is terminated under
Section 10(a)(ii) above, or by the Company, either without
Cause under Section 10(a)(iv) above or pursuant to Section
10(a)(iii) above, Employee shall be entitled to the cash
compensation payable under Section 3(a) above, continuation
of the benefits referred to in Sections 4(i), 4(iii) and 5
above, and payment of premiums due on the life insurance
policy referred to in Section 4 above, for a period of one
year following the effectiveness of such termination of
employment; provided, however, that in the event termination
of employment occurs during the Initial Employment Period,
such payments and benefits shall continue for the longer of
one year following termination, or the balance of the
Initial Employment Period; and provided, further, that the
benefits provided under Section 4(i) and (iii) above shall
continue for the period determined as aforesaid but not
after Employee shall be effectively provided with
substantially equivalent such benefits by another employer.
In the event termination of employment occurs under Section
10(a)(ii) above, the payments made by the Company as
aforesaid shall be reduced by any payments made to Employee
under the Company's long-term disability policy. In
addition, Employee shall be entitled to receive any bonus
earned by Employee under Section 3(c) above through the date
of termination of employment payable at such time as any
like bonuses are paid by the Company generally, and
outplacement services (including an office) with a firm
designated by the Employee and approved by the Company for a
period not to exceed twelve months.
12. Definition. For purposes of this Agreement, "Cause"
means any of the following:
(a) Material breach of any of the terms of this
Agreement or of the Company's policies and procedures
applicable to employees and/or directors;
(b) Conviction of or plea of guilty or nolo contendere
to a crime involving moral turpitude or involving any
violation of securities or commodities law or regulation, or
the issuance of any court or administrative order enjoining
or prohibiting Employee from violating any such law or
regulation;
(c) Repeated or habitual intoxication with alcohol or
drugs while on the premises of the Company or any of its
affiliates or during the performance by Employee of any of
his duties hereunder;
(d) Embezzlement of any property belonging or
entrusted to the Company or any of its affiliates;
(e) Repeated or protracted absence from work without
cause;
(f) Willful misconduct or gross neglect of duties, or
failure to act with respect to duties or actions previously
communicated to Employee in writing by the Company Board;
(g) Any other act or omission of kind or nature
similar to any of the foregoing, or determined in good faith
by the Company Board to be of comparable seriousness, which
in the good faith judgment of the Company Board may have
adversely affected or may in the future adversely affect the
Company or any of its affiliates, or has irreparably damaged
Employee's continued ability to function effectively in any
of the capacities contemplated by this Agreement.
13. Integration; Amendment. This Agreement and the Option
Agreement contain the entire agreement of the parties relating to
the subject matter hereof and thereof, and together supersede and
replace in their entirety any prior agreements or understandings
concerning such subject matter. This Agreement may not be waived,
changed, modified, extended, or discharged orally, but only by
agreement in writing signed in the case of the Company by a duly
authorized non-employee member of the Company Board.
14. Arbitration. Any controversy, dispute, or claim
arising out of or relating to Employee's employment or to this
Agreement or breach thereof shall be settled by arbitration in
accordance with the commercial rules of the American Arbitration
Association at its Southfield, Michigan offices. Judgment upon
any award may be entered in any circuit court or other court
having jurisdiction thereof, without notice to the opposite party
or parties. Anything contained herein to the contrary
notwithstanding, this
agreement to arbitrate shall not be deemed to be a waiver of the
Company's right to secure equitable relief including injunction
(whether as part of or separate from the arbitration proceeding)
if and when otherwise appropriate.
15. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Michigan applicable to contracts made and to be performed within
such State.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
NEWCOR, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Its Chairman of the Board
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/s/ W. Xxxx Xxxxxxxxx
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W. XXXX XXXXXXXXX
DEFS2\341555.1\064789-00031
