EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made as of this 21st day of October, 1996 by and between
BOWATER INCORPORATED, a Delaware corporation having a mailing address of 00 Xxxx
Xxxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Corporation"), and Xxxxxx
X. Xxxxx, of 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 (the "Executive").
WHEREAS, the Corporation desires to employ the Executive as Vice President
- Information Technology; and
WHEREAS, the Executive is desirous of serving the Corporation in such
capacity;
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. During the term of this Agreement the Corporation
agrees to continue to employ the Executive, and the Executive agrees to continue
in the employ of the Corporation, in accordance with and subject to the
provisions of this Agreement.
2. Term.
(a) Subject to the provisions of subparagraphs (b) and (c) of
this Section 2, the term of this Agreement shall begin on
the Date hereof and shall continue thereafter until
terminated by either party by written notice given to the
other party at least thirty (30) days prior to the
effective date of any such termination. The effective date
of the termination shall be the date stated in such
notice, provided that if the Corporation specifies an
effective date that is more than (30) days following the
date of such notice, the Executive may, upon thirty (30)
days' written notice to the Corporation, accelerate the
effective date of such termination.
(b) Notwithstanding Section 2(a), upon the occurrence of a
Change in Control as defined in the Change in Control
Agreement of even date herewith between the Corporation
and the Executive (the Change in Control Agreement"), the
term of this Agreement shall be deemed to continue until
terminated, but in any event, for a period of not less
than three (3) years following the date of the Change in
Control, unless such termination shall be at the
Executive's election for other than "Good Reason" as that
term is defined in the Change in Control Agreement.
(c) Notwithstanding Section 2(a), the term of this Agreement
shall end upon:
(i) the death of the Executive;
(ii) the inability of the Executive to perform his
duties properly, whether by reason of ill-health,
accident or other cause, for a period of one
hundred and eighty (180) consecutive days or for
periods totaling one hundred and eighty (180)
days occurring within any twelve (12) consecutive
calendar months; or
(iii) the executive's retirement on his early or
normal retirement date.
3. Position and Duties. Throughout the term hereof, the Executive shall be
employed as Vice President - Information Technology, with the duties and
responsibilities customarily attendant to that office, provided that the
Executive shall undertake such other and further assignments and
responsibilities of at least comparable status as the Board of Directors may
direct. The Executive shall diligently and faithfully devote his full working
time and best efforts to the performance of the services under this Agreement
and to the furtherance of the best interests of the Corporation.
4. Place of Employment. The Executive will be employed at the Corporation's
offices in the City of Greenville, South Carolina or at such other place as the
Corporation shall designate from time to time, provided, however, that if the
Executive is transferred to another place of employment, necessitating a change
in his residence, the Executive shall be entitled to financial assistance in
accordance with the terms of the Corporation's relocation policy then in effect.
The Executive will be entitled to relocation assistance for his move to
Greenville, South Carolina, in accordance with
2
the terms of the Corporation's current relocation policy, except that he shall
be entitled to a "buy-out" option in the event that he does not sell his home
within the time limits provided in the relocation policy. The "buy-out" price
shall equal the greater of (1) the appraised valued of his home as determined
pursuant to the relocation policy, or (2) the purchase price he paid for his
home plus qualifying capital improvements as defined under the Internal Revenue
Code. The "buy-out" price shall be paid to the Executive in exchange for the
conveyance of good, marketable title to his home and provided that as of the
date of such conveyance, his home is in the same condition as it is as of the
date of the appraisal, ordinary wear and care excepted.
5. Compensation and Benefits.
(a) Base Salary. The Corporation shall pay to the Executive a
base salary of $165,000.00 payable in substantially equal
periodic installments on the Corporation's regular payroll
dates. The Executive's base salary shall be reviewed at
least annually and from time to time may be increased (or
reduced, if such reduction is effected pursuant to
across-the-board salary reductions similarly affecting all
management personnel of the Corporation).
(b) Bonus Plan. In addition to his base salary, the Executive
shall be entitled to receive a bonus under the
Corporation's bonus plan in effect from time to time
determined in the manner, at the time, and in the amounts
set forth under such plan. For calendar year 1996, the
Executive shall be entitled to receive a one-time payment
in an amount equal to 71/365s of the amount he would have
received under the Annual Bonus Plan if he had been
employed in the capacity described herein by the
Corporation, for the entire calendar year 1996. Any such
amount shall be paid at the same time and in the same
manner as the Annual Bonuses for 1996 are paid to other
employees of the Corporation.
(c) Benefit Plans. The Corporation shall make contributions on
the Executive's behalf to the various benefit plans and
programs of the Corporation in which the Executive is
eligible to participate in accordance with the provisions
thereof as in effect from time to time.
(d) Vacations. The Executive shall be entitled to paid
vacation, in keeping with the Corporate policy as in
effect from time to time, to be taken at such time or
times as may be approved by the Corporation.
3
(e) Expenses. The Corporation shall reimburse the Executive
for all reasonable expenses properly incurred, and
appropriately documented, by the Executive in connection
with the business of the Corporation.
(f) Perquisites. The Corporation shall make available to the
Executive all perquisites to which he is entitled by
virtue of his position.
6. Nondisclosure. During and after the term of this Agreement, the
Executive shall not, without the written consent of the Board of Directors of
the Corporation, disclose or use directly or indirectly, (except in the course
of employment hereunder and in furtherance of the business of the Corporation or
any of its subsidiaries and affiliates) any of the trade secrets or other
confidential information or proprietary data of the Corporation or its
subsidiaries or affiliates; provided, however, that confidential information
shall not include any information known generally to the public (other than as a
result of unauthorized disclosure by the Executive) or any information of a type
not otherwise considered confidential by persons engaged in the same or similar
businesses.
7. Noncompetition. During the term of this Agreement, and for a period of
one (1) year after the date the Executive's employment terminates, the Executive
shall not, without the prior approval of the Board of Directors of the
Corporation in the same or a similar capacity engage in or invest in, or aid or
assist anyone else in the conduct of any business (other than the businesses of
the Corporation and its subsidiaries and affiliates) which directly competes
with the business of the Corporation and its subsidiaries and affiliates as
conducted during the term hereof. If any court of competent jurisdiction shall
determine that any of the provisions of this Section 7 shall not be enforceable
because of the duration or scope thereof, the parties hereto agree that said
court shall have the power to reduce the duration and scope of such provision to
the extent necessary to make it enforceable and this Agreement in its reduced
form shall be valid and enforceable to the extent permitted by law. The
Executive acknowledges that the Corporation's remedy at law for a breach by the
Executive of the provisions of this Section 7 will be inadequate. Accordingly,
in the event of the breach or threatened breach by the Executive of this Section
7, the Corporation shall be entitled to injunctive relief in addition to any
other remedy it may have.
8. Severance Pay. If the Executive's employment hereunder is involuntarily
terminated for any reason other than those set forth in Section 2(c) hereof,
then unless the Corporation shall have terminated the Executive for "Cause", the
Corporation shall pay the Executive severance pay in an amount equal to twelve
(12) months of the Executive's base salary on the effective date of the
termination, plus 1/12 of the amount of the last bonus paid to the Executive
under the Corporation's bonus plan
4
applicable to the Executive for each month in the period beginning on January 1
of the year in which the date of the termination occurs and ending on the date
of the termination and for each months' base salary to which the Executive is
entitled under this Section 8, provided, however, that any amount paid to the
Executive by the Corporation for services rendered subsequent to the thirtieth
(30th) day following the communication to the Executive of notice of termination
shall be deducted from the severance pay otherwise due hereunder. Such payment
shall be made in a lump sum within ten (10) business days following the
effective date of the termination. The severance pay shall be in lieu of all
other compensation or payments of any kind relating to the termination of the
Executive's employment hereunder; provided that the Executive's entitlement to
compensation or payments under the Corporation's retirement plans, stock option
or incentive plans, savings plans or bonus plans attributable to service
rendered prior to the effective date of the termination shall not be affected by
this clause and shall continue to be governed by the applicable provisions of
such plans; and further provided that in lieu hereof, at his election, the
Executive shall be entitled to the benefits of the Change in Control Agreement
of even date hereof between the Corporation and the Executive, if termination
occurs in a manner and at a time when such Severance Agreement is applicable.
For purposes of this Agreement, the term for "Cause" shall mean because of gross
negligence or willful misconduct by the Executive either in the course of his
employment hereunder or which has a material adverse effect on the Corporation
or the Executive's ability to perform adequately and effectively his duties
hereunder.
9. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered or mailed, by registered or certified mail, return receipt requested
to the respective addresses of the parties set forth above, or to such other
address as any party hereto shall designate to the other party in writing
pursuant to the terms of this Section 9.
10. Severability. The provisions of this Agreement are severable, and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of any other provision.
11. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the substantive laws of the State of Delaware.
12. Supersedure. This Agreement shall cancel and supersede all prior
agreements relating to employment between the Executive and the Corporation,
except the Change in Control Agreement.
5
13. Waiver of Breach. The waiver by a party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach by any of the parties hereto.
14. Binding Effect. The terms of this Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Corporation and the
heirs, executors, administrators and successors of the Executive, but this
Agreement may not be assigned by the Executive.
IN WITNESS WHEREOF, the Corporation and the Executive have executed this
Agreement as of the day and year first above written.
BOWATER INCORPORATED
By /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx
Vice President - Human Resources
6
