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Exhibit 10.17
EMPLOYMENT AGREEMENT
AGREEMENT by and between York International Corporation, a
Delaware corporation (the "Company") and Xxxxx X. Xxxxxxx (the "Executive")
dated as of the 27th day of July, 2000.
The Board of Directors of the Company has determined that it
is in its best interests and that of its shareholders to employ the Executive in
the capacity described below and the Executive wishes to serve in such capacity.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean July 27,
2000.
2. Employment Period. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to enter into the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the third anniversary thereof
(the "Employment Period") provided, however, that the Employment Period shall be
automatically extended without action by either party for an additional one
month period on the 16th day of each month unless, not later than the 15th day
of any month, either party shall give notice to the other in writing that such
party does not intend to extend the Employment Period.
3. Terms of Employment. (a) Position and Duties. (A) During
the Employment Period, the Executive shall serve as President, ESG with such
authority, duties and responsibilities as are commensurate with such position
and (B) the Executive's services shall be performed in York, PA
(b) Compensation.
(i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary of $400,000 ("Annual Base
Salary"), which shall be paid in accordance with the Company's payroll
practices. During the Employment Period, the Annual Base Salary shall be
reviewed at least annually. Any increase in Annual Base Salary shall not serve
to limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.
(ii) Incentive Compensation. During the Employment
Period, the Executive shall have an annual cash bonus and a mid-term performance
bonus opportunity based on a percentage of his Annual Base Salary (determined
annually by the Company's Board in accordance with the provisions of the 1996
Incentive Compensation Plan) and shall otherwise be eligible for incentive
compensation awards on the same basis as similarly situated executives.
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(iii) Employee Benefit Plans. During the Employment
Period, the Executive shall be entitled to participate in all incentive,
employee benefit, retirement, welfare and other plans, practices, policies and
programs applicable to senior executives of the Company.
(iv) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the Company's policies.
(v) Perquisite Benefits. During the Employment
Period, the Executive shall be provided with perquisite benefits as are provided
to other senior executives of the Company.
(vi) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the plans,
policies, programs and practices of the Company and its affiliated companies as
in effect with respect to the senior executives of the Company.
4. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 11(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) knowingly providing the Company with materially
false representations relied upon by the Company in furnishing information to
stockholders, a stock exchange or the Securities and Exchange Commission, or
(ii) maintaining an undisclosed, unauthorized and
material conflict of interest in the discharge of duties owed to the Company, or
(iii) willful misconduct causing serious violation by
the Company of state or federal laws, or
(iv) theft of Company funds or assets, or
(v) conviction of a crime involving moral turpitude.
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For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interest of the Company.
(c) Good Reason. In the event that the Executive's employment
with the Company is voluntarily terminated by the Executive with "Good Reason",
the Executive shall be entitled to a lump sum payment representing the remaining
balance of his or her employment agreement as calculated in accordance with
Section 5 (a). For purposes of this Agreement, "Good Reason" shall mean, in the
absence of a written consent of the Executive, any of the following which occurs
before the expiration of the Executive's Employment Period:
(i) a substantial and adverse change in the
Executive's responsibilities, job description, status or position as a key
employee of the Company, when compared to the Executive's prior
responsibilities, job description, status or position as a key employee of the
Company as contemplated by Section 3(a) of this Agreement, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad
faith, and which is remedied by the Company promptly after receipt or notice
thereof given by the Executive;
(ii) any material failure by the Company to comply
with any of the provisions of Section 3(b) of this Agreement, unless initiated
by the Executive, other than a failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the requiring that the Executive travel on the
Company's business to an extent materially greater than the Executive's normal
business travel, or the Company requiring the Executive to be based at any
office or location more than 35 miles from that provided in Section 3(a)(i)(B)
hereof;
(iv) a material breach by the Company of any terms of
this Agreement, or any failure by the Company to comply with and satisfy Section
9 of this Agreement, or any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement
(v) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the
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Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. Obligations of the Company upon Termination. (a) Good
Reason; Other Than for Cause, Death or Disability. If, during the Employment
Period, the Company shall terminate the Executive's employment other than for
Cause, Death or Disability or the Executive shall terminate employment for Good
Reason:
(i) the Company shall pay to the Executive in a lump
sum in cash within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the sum of the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore
paid, (this amount shall be hereinafter referred to as the
"Accrued Obligations"); and
B. An amount equal to the Executive's Annual Base
Salary plus Annual Cash Bonus (based on the adjusted EV bonus
amount for the Fiscal Year in which the Date of Termination
occurs, the "Adjusted EV Bonus") for the remaining Employment
Period; and
C. an amount equal to the excess of (a) the actuarial
equivalent of the benefit under the Company's qualified
defined benefit retirement plan (the "Retirement Plan")
(utilizing actuarial assumptions no less favorable to the
Executive than those in effect under the Company's Retirement
Plan immediately prior to the Effective Date), and any excess
or supplemental retirement plan in which the Executive
participates (together, the "SERP") which the Executive would
receive if the Executive's employment continued until the end
of the Employment Period assuming for this purpose that all
accrued benefits are fully vested, and, assuming that the
Executive's compensation in each of the periods is that
required by Section 3(b) and that the Executive's Annual Cash
Bonus for such years is the Adjusted EV Bonus, over (b) the
actuarial equivalent of the Executive's actual benefit (paid
or payable), if any, under the Retirement Plan and the SERP as
of the Date of Termination;
(ii) the Company shall continue to provide welfare
benefits to the Executive and his dependants until the end of the Employment
Period on the same basis that such benefits were provided to him immediately
prior to the Date of Termination; and
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(iii) to the extent not theretofore paid or provided,
the Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and its affiliated companies (such other amounts and benefits shall
be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include death benefits as in effect on the
date of the Executive's death with respect to senior executives of the Company
and his beneficiaries.
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 5(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits as in effect at any
time thereafter generally with respect to the senior executives of the Company.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive his Annual Base Salary through the Date of
Termination, and Other Benefits, in each case to the extent theretofore unpaid.
6. Non-exclusivity of Rights. Except as specifically provided,
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 11(e), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
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7. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").
8. Confidential Information. (a) The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 8 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
(b) Any termination of the Executive's employment or of
this Agreement shall have no effect on the continuing operation of this Section
8 or Section 9 below.
9. Noncompetition/Nonsolicitation. (a) For two years after the
Date of Termination, Executive will not directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of or be connected as an officer, employee, partner, director,
consultant or otherwise with, or have any financial interest in, any business
which is in material competition with the business conducted by the Company or
its affiliates. Ownership for personal investment purposes only of less than 2%
of the voting stock of any publicly held corporation shall not constitute a
violation hereof.
(b) For two years after the Date of Termination, the
Executive will not, directly or indirectly, on behalf
of the Executive or any other person, solicit for
employment any person employed by the Company or its
affiliates as of the date hereof or known by the
Executive at the time to be employed by the Company
or its affiliates.
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(c) (i) Executive acknowledges and agrees that the
restrictions contained in this Section 9 and in
Section 8 are reasonable and necessary to protect and
preserve the legitimate interests, properties,
goodwill and business of the Company, and that
irreparable injury will be suffered by the Company
should Executive breach any of the provisions of this
Section. Executive represents and acknowledges that
(1) Executive has been advised by the Company to
consult Executive's own legal counsel in respect of
this Agreement, (2) Executive has had full
opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with Executive's
counsel, and (3) the provisions of this Section 9 are
reasonable and these restrictions do not prevent
Executive from earning a reasonable livelihood.
(ii) Executive further acknowledges and agrees that a
breach of any of the restrictions in this Section 9 and Section 8 cannot be
adequately compensated by monetary damages. Executive agrees that the Company
shall be entitled to preliminary and permanent injunctive relief, without the
necessity of proving actual damages, as well as provable damages and an
equitable accounting of all earnings, profits and other benefits arising from
any violation of this Section 9, which rights shall be cumulative and in
addition to any other fights or remedies to which the Company may be entitled.
In the event that any of the provisions of this Section 9 should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
(iii) Executive irrevocably and unconditionally (1)
agrees that any suit, action or other legal proceeding arising out of this
Section 9 and Section 8, including without limitation, any action commenced by
the Company for preliminary and permanent injunctive relief and other equitable
relief, may be brought in the Court of Common Pleas of York County, Pennsylvania
or if such court does not have jurisdiction or will not accept jurisdiction, in
any court of general jurisdiction in Pennsylvania, (2) consents to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (3) waive any objection which Executive may have to the laying
of venue of any such suit, action or proceeding in any process, pleadings,
notices or other papers in a manner permitted by the notice provisions of this
Section 9.
(d) In exchange for the covenants set forth in this Section 9,
the Company agrees to make to the Executive a lump sum payment equal to two
years of the Executive's then-current Annual Base Salary plus then-current
Adjusted EV Bonus, payable within 30 days after the Date of Termination.
10. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
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(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
herein before defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xx. Xxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxx, XX 00000
If to the Company:
York International Corporation
000 X. Xxxxxxxx Xxxxxx
Xxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
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(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Boards of
Directors, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.
________________________________
Xxxxx X. Xxxxxxx
YORK INTERNATIONAL CORPORATION
By:_____________________________
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