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Exhibit 10.3
EMPLOYMENT AGREEMENT
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AGREEMENT effective as of September ___, 1998, between XXXXXXX & SYLVAN
POOLS CORPORATION (the "Company"), its successors and assigns, and XXXXXX X.
XXXXXXX (the "Employee").
The Company agrees to employ the Employee as President of the Company,
and the Employee agrees to serve the Company in such position, all in accordance
with the terms and conditions set forth below.
1. EMPLOYMENT
The term of this Agreement (the "Term") shall commence on the date
hereof and terminate on December 31, 2000. Unless, at least thirty days prior to
the end of the Term (whether the initial Term or as theretofore extended), the
Company shall have given written notice to the Employee of its intention not to
renew this Agreement, or the Employee shall have given written notice to the
Company of his unwillingness to renew this Agreement or the employment of the
Employee has otherwise been terminated during the Term, the Term shall
automatically be extended for an additional year.
2. COMPENSATION
The Employee will receive a base salary of $175,000.00, with annual
review for so long as this Agreement is continued, at which times increases will
be considered in good faith. In addition to the base salary, the Company shall
pay the Employee a bonus targeted at fifty percent (50%) of his base salary each
year ("Target Bonus"), and the Compensation Committee of the Company's Board of
Directors shall determine the appropriate target measures or goals in connection
with bonus compensation. There shall be no cap on bonus potential. Such bonus
shall be determined and paid within thirty (30) days after the Company's audited
financial statements become available.
3. BENEFITS
During the term of this Agreement, the Employee and his eligible
dependents shall be entitled to participate in and receive benefits under any
profit-sharing plan, health, disability, medical insurance or other employee
welfare or benefit plan or arrangement made generally available by the Company
during the term of this Agreement to its executives and key management
employees.
4. CAR
During the term of this Agreement, the Company shall provide the
Employee with an automobile of a type customary for executives in similar
positions and shall pay for operating expenses incurred in connection with the
use of the automobile, including the costs of insurance, gas, maintenance and
car phone.
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5. TRADE SECRETS: CONFIDENTIAL AND PROPRIETARY INFORMATION
The Employee shall not at any time or in any manner, either directly or
indirectly, divulge, disclose or communicate to any person, firm, company,
corporation or business in any manner whatsoever any confidential information
relating to the business of the Company, including without limitation, the
Company's customer list, pricing policies, trade secrets, know-how, product
designs, strategic plans and similar types of information. The foregoing
restrictions shall not apply to the extent that such information (a) is
obtainable in the public domain, (b) becomes obtainable in the public domain,
except by reason of the breach by the Employee of the terms hereof, or (c) is
required to be disclosed by rule of law or by order of a court or governmental
body or agency. This Section 5 shall remain in full force and effect for a
period of ten (10) years after expiration or termination of this Agreement for
any reason.
6. COVENANT NOT TO COMPETE
During the term of this Agreement and for a period of two (2) years
thereafter, the Employee will not, without the Company's prior written consent,
directly or indirectly engage in, make any investment in or have any interest in
any business in competition with the business of the Company; and the Employee
will not advise, assist or render services either directly or indirectly to any
person, firm, company, corporation or business other than the Company with
reference to any business in competition with the business engaged in by the
Company during the Employee's employment by the Company. Notwithstanding the
foregoing, the ownership of securities of any business competing with the
Company, if such securities are publicly traded on a national securities market
and constitute less than five percent (5%) of the outstanding stock thereof,
shall not constitute a violation of this provision. For purposes of this Section
6, a business in competition with the Company shall mean any business engaged in
the manufacture, design, installation, processing, sale or distribution of
products that are the same as or similar to those of the Company at any time
during the term of this Agreement.
7. TERMINATION OF CONTRACT
It is agreed that subject to the provisions of Section 8 below, the
Company may terminate the employment of the Employee at any time with or without
cause by prior written notice to the Employee.
8. SEVERANCE AND ENTITLEMENT
In the event the Company decides to terminate the employment of the
Employee under the section entitled "TERMINATION OF CONTRACT" for any reason
and/or at any time, for reasons other than "Good Cause" (as hereinafter
defined), or determines not to renew this Agreement at the end of the Term
(whether the initial Term or as theretofore extended), the Employee will be
entitled to, in lieu of any and all other payments that may otherwise be due
under this Agreement, (i) a termination allowance in an amount equal to (a)
twelve months' salary at the then current rate of the Employee's pay paid by the
Company consistent with the method used to pay salary prior to the termination
and (b) the annual Target Bonus to which the Employee would be entitled if his
targeted goals were attained for the fiscal year during which such termination
occurs and the Employee were employed during such entire year,
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multiplied by a fraction the numerator of which is the number of days elapsed
during the year through such date of termination and the denominator of which is
365, such Target Bonus paid at the same time other Company bonuses are paid, and
(ii) a continuation of all medical and other employee benefits for the shorter
of (a) twelve months following the effective date of the termination and (b) the
effective date of coverage by similar plans of another employer. The termination
allowance shall be paid by the Company as long as the Employee continues to be
in compliance with Sections 5 and 6 above. Any stock options vested as of the
date of such termination may be exercised by the Employee for up to three (3)
months after the date that the Company delivers notice of such termination. In
the event the Company terminates this Agreement for "Good Cause," which will be
defined as the failure or refusal by the Employee to perform his assigned
duties, failure to adhere to Company policy and/or the engaging by the Employee
in misconduct injurious to the Company, the Employee will not be entitled to
receive any termination allowance, continuation of benefits, or any other
payments provided for in this Agreement, and any and all unexercised stock
options held by the Employee, both vested and unvested, shall be automatically
forfeited and cancelled by the Company.
9. NOTICE OF TERMINATION
Any intended termination of the employment of the Employee by the
Company or by the Employee shall be communicated by written notice of
termination ("Notice of Termination") to the other party hereto in accordance
with the section entitled "NOTICES" and shall state the grounds for termination.
Any purported termination of the Employee's employment which is not effected
pursuant to a Notice of Termination shall not be effective in discharging the
Employee.
10. DEATH OR DISABILITY; RESIGNATION
(a) DISABILITY OR DEATH. If the Employee is incapacitated for a period
of three (3) consecutive months so that he cannot perform his duties hereunder
on a full-time basis, then either the Company or the Employee may give written
notice to the other terminating the Employee's employment effective thirty (30)
days thereafter (the "Disability Termination Date"). The Company shall continue
to provide salary, medical coverage, disability and group life insurance to the
Employee for six (6) months after the earlier of the Disability Termination Date
or date of death. In the event of the Employee's death, his estate may exercise
any options vested and exercisable at the date of death for one (1) year after
such death. In the event of disability, the Employee may exercise any options
vested and exercisable at the Disability Termination Date for a period of one
(1) year after the Disability Termination Date. Except as set forth herein, if
the Employee dies prior to the termination of his employment or if notice of
termination for disability is given as provided above, the Company's obligations
hereunder shall terminate as of the earlier of the Employee's death or the
Disability Termination Date.
(b) RESIGNATION. If the Employee's employment is terminated by reason
of his voluntary resignation, all of the Company's obligations hereunder shall
terminate as of the termination date. All unexercised options, both vested and
unvested, shall be automatically forfeited and cancelled by the Company.
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11. CHANGE IN CONTROL
If there occurs a "change in control" (as hereinafter defined) of the
Company, then in any such event the Employee shall have the right to exercise
any options that are vested as of the date of such "change in control" for a
period of three (3) months thereafter.
The term "change in control" means the first to occur of the following
events: (i) when any "person" as defined in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined
in Section 13(d) of the Exchange Act, but excluding the Company and any employee
benefit plan sponsored or maintained by the Company (including any trustee of
such plan acting as trustee), directly or indirectly, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act, as amended from time to
time), of securities of the Company representing more than fifty percent (50%)
of the combined voting power of the Company's then outstanding securities; or
(ii) The completion of a transaction requiring shareholder approval for the
acquisition of substantially all of the stock or assets of the Company by an
entity other than the Company or any merger of the Company into another company
and the Company is not the surviving company.
12. AMENDMENT
This Agreement may be amended at any time by a written agreement signed
by the Company and the Employee.
13. WAIVERS
The voluntary waiver by the Company or the Employee of any provision of
this Agreement or any breach thereof does not entail a waiver of any other
portion of this Agreement or this Agreement as a whole, or any subsequent breach
of the same provision, and does not affect the validity of this Agreement.
14. GOVERNING LAW
This Agreement, and all rights, duties and remedies hereunder shall be
governed by and construed and interpreted in accordance with the procedural and
substantive laws of the State of Ohio.
15. SEVERABILITY
Should any portion of this Agreement be declared by a court of law
having competent jurisdiction over the persons and subject matter of this
Agreement to be invalid or unenforceable, the remainder of this Agreement shall
remain enforceable and in full effect. In the event that any provision of this
Agreement should be or becomes invalid for any reason, such provision shall
remain effective to the maximum extent permissible, and the parties shall
consult and agree on a legally acceptable modification giving effect to the
commercial objectives of the unenforceable or invalid provision, and every other
provision of this Agreement shall remain in full force and effect.
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16. NOTICES
All notices or other communications hereunder shall be in writing and
shall be made by hand delivery, facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
IF TO THE COMPANY, TO: Xxxxxxx & Sylvan Pools Corporation
000 Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
IF TO THE EMPLOYEE, TO: Xxxxxx X. Xxxxxxx
Xxxxxxx & Sylvan Pools Corporation
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made as
of the date so delivered, if delivered personally; when receipt is acknowledged,
if sent by facsimile; and five calendar days after so mailed, if sent by
registered or certified mail.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXXX & SYLVAN POOLS
CORPORATION
By:
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Xxxxxx X. Xxxxxx
Its: Chief Executive Officer
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Xxxxxx X. Xxxxxxx
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