EMPLOYMENT AGREEMENT
AGREEMENT entered into this 1st day of January 2000 by and between Xxxxx X.
Xxxxxx (the "Employee") and Spartech Corporation, a Delaware corporation (the
"Employer").
WITNESSETH:
WHEREAS, Employer desires to employ Employee, and Employee is willing to
accept such employment on the terms hereinafter set forth,
NOW, THEREFORE, the parties agree as follows:
1. Employment. Employer hereby employs Employee and Employee agrees to
accept such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall commence January 1, 2000 for a
term of three (3) years ending January 1, 2003 (Original Term), unless extended
by mutual consent of the parties hereto.
It is the intent of the parties to negotiate a new contract to replace this
contract by December 31, 2001. If the parties have not entered into a new three
(3) year contract by December 31, 2001, then it is understood this contract is
effectively terminated and an amount equivalent to the Base Salary plus the last
year's bonus shall become due and payable on demand of the Employee or
throughout the remaining year of the Original Term, at the sole discretion of
the Employee. This amount should be in addition to any other benefits earned as
of that date.
3. Duties. Employer employs Employee to act in an executive capacity, as
Vice President of Finance and Chief Financial Officer for Employer, on all
aspects of its business, as and when requested, and at such times and places as
Employer shall reasonably request, subject always to the control and direction
of Employer's Board of Directors. During the term of this Agreement, Employee
(a) will serve Employer faithfully, diligently and to the best of his ability,
and (b) will devote his best efforts and his entire working time, attention and
skill to the performance of his duties hereunder and to promoting and furthering
the interests of Employer. While he is so employed, Employee will not, without
the prior written consent of employer render any services to any other business
concern; provided, however, that nothing herein shall prevent Employee from (i)
engaging
in additional activities in connection with personal investments
which do not interfere or conflict with his duties hereunder, or (ii) making any
investment in any publicly traded company so long as such investment does not
exceed one percent of the outstanding securities of any class.
4. Compensation. Subject to periodic review for cost of living and/or
merit and other increases, Employer agrees to compensate Employee at the rate of
$160,000 annually (Base Salary). Employer shall further advance or reimburse to
Employee such other monies as Employer determines for credit cards, costs and
other reasonable expenses incurred by Employee in the discharge of Employer's
instructions hereunder, and consistent with the necessities of the operation of
the business. Employee may also participate in all stock option and stock
purchase plans, insurance, medical and other employee benefit programs currently
established and hereafter instituted by Employer which are generally available
to other employees of comparable position. For the term of this Agreement,
Employer shall maintain term life insurance for Employee's designated
beneficiaries equivalent to $250,000.
5. Bonuses. Employee shall be eligible for an annual discretionary bonus
based upon his performance, and based upon the overall results of the Employer's
operations at the end of each year, paid in accordance with the terms and
conditions of Employer's Bonus Program. Any such Bonus shall be subject to
approval by the CEO, and the Compensation Committee of the Board of Directors of
Employer.
6. Non-Disclosure. Employee acknowledges that as a result of his
employment by Employer he has acquired, and in the future, will use and acquire
knowledge and information utilized by Employer in its business which may not be
generally available to the public or to other persons in the plastics business
("Confidential Information"), including, without limitation, Employer's systems,
procedures, formulas, processes, confidential reports, lists of customers,
pricing structure, margins with respect to its products and similar information.
As a material inducement to Employer to enter into this Agreement and to pay
Employee the compensation set forth herein, Employee agrees that he will not, at
any time, directly or indirectly, divulge or disclose to any person, for any
purpose, any Confidential Information, except to those persons authorized by
Employer to receive Confidential Information and except for information which
becomes publicly available through no fault of Employee.
7. Covenant Not To Compete; No Solicitation of Employees. Employee agrees
as follows:
(a) For as long as he is employed by Employer and for one year after
any termination of employment, Employee agrees that he will not, directly or
indirectly, except as a passive investor in publicly held companies in which he
has less than a one percent interest, engage in, own or control any interest in
or act as director, officer or employee of, or consultant to, any firm or
corporation, directly or indirectly engaged, as these terms may be reasonably
construed, in a business substantially similar to that operated by Employer on
the date of termination, in the territories where Employer manufactures or
distributes its products. If the Employee is terminated without cause pursuant
to Paragraph 12(a) hereof, the non-competition provisions of this Paragraph 7(a)
shall apply only so long as Employer continues to pay Employee his base salary.
(b) Employee agrees that for one year after any termination of his
employment with Employer he will not, directly or indirectly, induce, or attempt
to induce, any of the employees of Employer to leave the employment of Employer,
or to employ any such employees within 90 days after any termination of their
employment with Employer.
8. Inventions. Employee acknowledges that all inventions, production
processes, techniques, programs, patents, discoveries, formulas and improvements
invented, discovered or learned by Employee during employment hereunder, and
relating to Employer's business, will be disclosed to Employer and will be the
sole property of Employer.
Employee further acknowledges that information imparted to him by
Employer, relating to Employer's production and business methods, techniques,
customer lists, statistics, credit, customers and suppliers is secret and
confidential. Therefore, Employee shall, upon termination of his employment
hereunder and as a prior condition to receiving final wages, return to Employer
all books, records and notes containing customer lists and addresses, all
duplicate invoices, all statements and correspondence pertaining to such
customers, and all information and documents (including all copies thereof)
relating to customers, their needs, products of Employer used by them, schedules
of discussions with them, all formulas, code books, price lists, products,
manuals and equipment, production or processing information or instructions,
data applicable to methods of manufacture, types, kinds, suppliers and costs of
raw materials, and all other information of confidential or secret nature
applicable to Employer, its customers and the manner of conducting its business.
Employer agrees, however, to provide Employee, upon request, with
copies of whatever documents he may reasonably require. As a prior condition to
his receiving final wages, Employee, if requested, shall also execute an
affidavit to the effect that he has complied with the provisions in this
Paragraph 8. The restraints on Employee, as set forth in this Paragraph 8,
however, shall not apply to those inventions for which no equipment, supplies,
facility or trade secret information of Employer was used and which was
developed entirely on Employee's own time and which does not relate to the
business of the Employer, to Employer's actual or demonstrably anticipated
research or development, or which did not result from any work performed by
Employee for Employer.
9. Remedies. By reason of the fact that irreparable harm would be
sustained by Employer if there is any breach by Employee of the provisions of
Paragraphs 6, 7 and 8 hereof, it is agreed that, in addition to any other rights
which Employer may have under this Agreement or at law or in equity, Employer
shall be entitled to apply to any court of competent jurisdiction for, and
obtain, injunctive relief against Employee or against any third party, in order
to prevent any breach or threatened breach of the provisions of such paragraph.
10. Death During Employment. If Employee should die during the term of
this Agreement, Employer's only obligation shall be to pay Employee's spouse, or
his estate if he has no spouse, his base monthly salary to the month in which
death occurs.
11. Disability. Employer, at its option, may terminate this Agreement upon
written notice to Employee if the Employee, because of physical or mental
incapacity or disability, fails in any material respect to perform the services
required of him hereunder for a continuous period of 120 days, or for shorter
periods aggregating 180 days or more in any consecutive period of 240 days.
Upon such termination, all obligations hereunder of the Employer shall cease.
12. Termination. Anything herein to the contrary notwithstanding, Employer
shall have the right to terminate this Agreement as follows:
(a) Employer may terminate this Agreement without cause upon written
notice to Employee. In the event of such termination, Employee will be entitled
to receive the unpaid portion of base salary for the remaining term of this
Agreement, paid out over the remaining term of this Agreement.
(b) Employer may terminate this Agreement at any time for cause.
"Cause" as used herein shall mean dishonesty, theft, conviction of a felony,
drunkenness or a material breach of this Agreement. "Cause" shall also include
the failure of Employee, within ten days after receipt of written notice
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thereof from Employer, for any reason, to correct, cease or
otherwise alter any failure to comply with the lawful
instructions of the corporation's Board of Directors or other act or
omission which, in the sole opinion of the Board of Directors, will materially
adversely affect Employer's business. In the event of termination for cause,
Employer shall have no obligation to pay any compensation except to the extent
the Employee's base salary has been accrued but is unpaid at the time of
termination.
13. Severability. If any part of this Agreement is found to be void or
unenforceable for any reason, the remainder of this Agreement shall be severable
and may be enforced accordingly.
14. Benefit. This Agreement shall inure to the benefit of and be binding
upon Employee, his heirs, executors and administrators, and upon the Employer
and its successors, but this Agreement may not be assigned by either party
except by operation of law by a merger of the Employer into another corporation
or by Employer in connection with any sale of its business or parts thereof.
15. Headings. These headings have been inserted in this Agreement for
convenience only and shall not affect the interpretation hereof.
16. Entire Agreement. This Agreement contains the entire understanding of
the parties and may not be amended or changed except by an agreement in writing
signed by the parties.
17. Notices. Any notices required or permitted hereunder shall be
addressed to Employer at its principal office and to Employee at his address as
it appears in the records of the Employer, or at such other address as either
party may have furnished to the other for such purpose in writing.
18. Applicable Law. This Agreement has been entered into in, and shall be
construed under the laws of, the State of Missouri.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
EMPLOYER:
SPARTECH CORPORATION
By: /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Chairman, President and CEO
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
