EXHIBIT 10.09
July 31, 1997
Xx. Xxxxxxx X. Xxxxxxx
Meridian National Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxx:
The following sets forth our mutual understanding respecting your employment
with the undersigned, Meridian National Corporation (herein referred to as
"Employer"), and when this letter is signed by you the same shall constitute an
Employment Agreement between Employer and you. For purposes of this Agreement,
you are herein referred to in the third person as "Employee". The terms of said
Employment Agreement are as follows:
1. Employment.
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(a) During the term of this Employment Agreement, or any extension or
renewal hereof (for purposes hereof, all references herein to the term of
this Employment Agreement shall be deemed to include references to the
period of extension or renewal hereof, if any), Employee will, except as
described below, devote his full time and best efforts to his employment
and perform diligently such duties as are or may be from time to time
required by the Board of Directors of Employer (the "Board"), which duties
shall be consistent with his position as set forth in paragraph 2 hereof.
Employee, however, will be entitled to devote reasonable amounts of time in
furtherance of his personal investments so long as it does not interfere
with his discharging his duties to Employer.
(b) Employee shall not, without the prior written consent of the Board,
directly or indirectly, during the term of this Employment Agreement, other
than in the performance of duties naturally inherent in the business of
Employer or any subsidiary of Employer
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July 31, 1997
Page 2
and in furtherance thereof, render services of a business, professional or
commercial nature to any other person or firm, whether for compensation or
otherwise. For purposes of this Employment Agreement, all references
herein to subsidiaries of Employer shall be deemed to include references to
subsidiaries now or hereafter existing.
(c) Nothing in this paragraph will be construed to prohibit Employee from
serving on civic, religious or charitable boards, committees or
commissions, or on boards of directors of for-profit corporations so long
as such corporations are not directly or indirectly engaged in any business
that is competitive with any business of Employer or its subsidiaries.
2. Term and Positions.
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(a) Subject to the provisions for termination as hereinafter provided, the
term of this Employment Agreement shall be deemed to begin on the date this
Employment Agreement is executed, and shall continue for a term of five (5)
years from such date; thereafter, this Employment Agreement shall be
automatically renewed for an additional 12 months upon each anniversary
date hereof.
(b) Employee shall serve as Chairman of the Board of Directors and Chief
Executive Officer of Employer and in such similar positions with any
subsidiary of Employer as shall, from time to time, be assigned by the
Board.
3. Compensation.
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(a) For all services he may render to Employer and any subsidiary of
Employer during the term of this Employment Agreement, Employee shall
receive such annual salary as may be determined by the Board, but in no
event may the annual salary be reduced from that in effect for the
remainder of the current fiscal year, to wit: an annual salary of Two
Hundred Forty Thousand Dollars ($240,000.00), and in no event is the annual
salary to be less than Two Hundred Forty Thousand Dollars ($240,000.00).
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July 31, 1997
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(b) During the term of this Employment Agreement, Employee shall be
entitled to such vacation privileges, medical and life insurance and
retirement plan benefits and such other similar employer privileges and
benefits as are afforded generally from time to time to other executives of
Employer.
4. Additional Compensation.
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In addition to his salary as above stated, Employee shall be entitled to
receive such bonuses and other compensation, if any, as may be awarded from time
to time by the Board.
5. Termination and Further Compensation.
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(a) The employment of Employee under this Employment Agreement, and the
term hereof, may be terminated by Employer for cause at any time. For
purposes hereof the term "cause" means:
(i) Employee's fraud, dishonesty, willful misconduct, or gross
negligence in the performance of his duties hereunder; or
(ii) Employee's material breach of any provision of this Employment
Agreement.
Any termination by reason of the foregoing shall not be in limitation of
any other right or remedy Employer may have under this Employment Agreement or
otherwise.
(b) In the event of termination of this Employment Agreement by Employer
pursuant to this paragraph 5, Employee shall be entitled to no further
salary, additional compensation or other benefits under this Employment
Agreement.
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6. Voluntary Termination by Either Party.
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Effective as of each anniversary date hereof, commencing July 31, 2002,
this Employment Agreement may be terminated by either party upon not less than
120 days' prior written notice. Termination by Employer shall be upon
resolution by its Board of Directors.
7. Reimbursement.
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Employer shall reimburse Employee (or provide him with an expense
allowance) for travel, entertainment and other expenses reasonably and
necessarily incurred by Employee in the promotion of Employer's business.
8. Covenants and Confidential Information.
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(a) Employee agrees that in the event his employment under this Employment
Agreement is voluntarily terminated by Employee or is terminated by
Employer for cause (as defined in paragraph 5), then during the term of
this Employment Agreement and for a period of two (2) years thereafter
(and, as to clause (iii) of this subparagraph (a), at any time after the
term of this Employment Agreement) he will not, directly or indirectly, do
or suffer any of the following without the prior written consent of the
Board:
(i) Own, manage, control or participate in the ownership, management
or control of, or be employed or engaged by or otherwise affiliated or
associated as a consultant, independent contractor or otherwise with,
any other corporation, partnership, proprietorship, firm, association,
or other business entity, or otherwise engage in any business serving
customers in any of the same territory or territories in which any
customers of Employer or any of Employer's subsidiaries are served,
which is engaged in any manner in, or otherwise competes with, the
business of Employer or any of Employer's subsidiaries (as conducted on
the date Employee
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ceases to be employed by Employer in any capacity, including as a
consultant); provided, however, that the ownership of not more than
one percent (5%) of the stock of an publicly traded corporation shall
not be deemed a violation of this covenant;
(ii) Induce any person who is an employee, officer or agent of
Employer or any of Employer's subsidiaries to terminate said
relationship; and
(b) Employee agrees that at any time during or after the term of this
Employment Agreement he will not disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in competition with, or
contrary to the interests of, Employer or any of Employer's subsidiaries,
the customer lists, manufacturing methods, product research or engineering
data or other trade secrets of Employer or any of Employer's subsidiaries,
it being acknowledged by Employee that all such information regarding the
business of Employer and Employer's subsidiaries compiled or obtained by,
or furnished to, Employee while Employee shall have been employed by or
associated with Employer is confidential information and Employer's
exclusive property.
(c) Employee expressly agrees and understands that the remedy at law for
any breach by him of this paragraph 8 will be inadequate and that the
damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that upon
adequate proof of Employee's violation of any legally enforceable provision
of this paragraph 8, Employer shall be entitled to immediate injunctive
relief and may obtain a temporary order restraining any threatened or
further breach. Nothing in this paragraph 8 shall be deemed to limit
Employer's remedies at law or in equity for any breach by Employee of any
of the provisions of this paragraph 8 which may be pursued or availed of by
Employer.
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July 31, 1997
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(d) In the event Employee shall violate any legal enforceable provision of
this paragraph 8 as to which there is a specific time period during which
he is prohibited from taking certain actions or from engaging in certain
activities, as set forth in such provision, then, in such event, such
violation shall toll the running of such time period from the date of such
violation until such violation shall cease.
(e) Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon Employer
under this paragraph 8, and hereby acknowledges and agrees that the same
are reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to Employer, do not stifle the inherent
skill and experience of Employee, would not operate as a bar to Employee's
sole means of support, are fully required to protect the legitimate
interests of Employer and do not confer a benefit upon Employer
disproportionate to the detriment to Employee.
9. Severable Provisions.
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The provisions of this Employment Agreement are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions and any partially unenforceable
provision to the extent enforceable in any jurisdiction shall, nevertheless, be
binding and enforceable.
10. Death or Permanent Disability.
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(a) In the event of Employee's death or permanent disability (as
hereinafter defined) occurring during the term of this Employment
Agreement, this Employment Agreement shall be deemed terminated and he or
his estate, as the case may be, shall be entitled to no further
compensation or other privileges or benefits hereunder, except (i) that
portion of any unpaid salary or other benefits accrued and earned by
Employee hereunder up to and including the day of death or disability, as
the case may be; (ii) in the case of death, continuation of salary under
Section 3(a) by
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payment to Employee's surviving spouse while she is living, otherwise to
his estate, such payments to continue for three (3) years; (iii) in the
case of permanent disability, continuation of salary payments for 12
months, less, however, any payments received by Employee (or his personal
representative) directly from any insurer under any insurance policy of
health or disability, the premiums for which have been paid by Employer;
and (iv) in the event of permanent disability, the medical and life
insurance benefits provided under paragraph 3(b) will continue to be
provided during the period of disability until termination of employment as
provided in this Agreement and the payments under any disability policy
provided under Paragraph 3(b) will continue until exhausted under the terms
of such policy.
(b) Employer has obtained an insurance policy on the life of Employee, to-
wit: Empire General Life Assurance Corporation, Policy No. 00041609 (the
"Empire General" policy) in the face amount of $2,500,000.00. Employer
agrees to maintain the Empire General policy, or a suitable replacement
policy, during the term of employment hereunder. The proceeds of said
insurance policy shall be segregated (assuming death of Employee during the
term hereof) to the extent necessary to fund the salary continuation
provided for hereinabove, and further to provide for the redemption of
Employee's 1,334 shares of Series A Preferred Stock at face value ($100.00)
and repayment of the Employer's Amended and Restated Non-negotiable
Promissory Note dated July 28, 1989, with a present balance of $275,232.26.
Provided further, such repayments shall be reduced by the amount of any
loans or advances made by Employer to Employee still outstanding at the
date of Employee's death unless the Estate of the Employee elects to
satisfy such obligations to the Employer by the redemption by the Employer
of Meridian National Corporation Common Stock, par value $.01, ("Common
Stock"), owned by the Estate of the Employee, using the Market Price of
such Common Stock in the determination of the number of common shares to be
redeemed. The Market Price is deemed to be the Closing Price on the date
preceding the Employee's date of death. The Closing Price will be the last
sales price, regular way, as reported in a composite published report of
transactions which includes transactions on the exchange or other principal
markets in which the Common Stock is
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traded, or if there is no such composite report as to any day, the last
reported sales price, regular way, (or if there is no such reported sale on
such day, the average of the closing reported bid and asked prices) on the
principal United States securities trading market in which the Common Stock
is traded; provided, however, that if the Common Stock is not publicly
traded or listed during the time of any computation, the Market Price for
the purposes hereof will be the fair value as determined in good faith by
the Board of Directors of Meridian National Corporation.
(c) In the event of the termination of this Employment Agreement and the
employment of Employee by Employer, Employee shall have the right to
acquire the life insurance policy noted above, or substitutes therefor, at
a price not less than the unearned premium as reflected on the books of
Employer.
(d) For purposes of this Employment Agreement, as amended, the phrase
"Permanent Disability" shall be deemed to occur after 300 days in the
aggregate during any consecutive 18 month period, or after ten (10)
consecutive months, during which 300 days or ten (10) months, as the case
may be, Employee, by reason of his physical or mental disability or
illness, shall have been unable to discharge fully his duties under this
Employment Agreement.
11. Binding Agreement.
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The rights and obligations of Employer under this Employment Agreement
shall inure to the benefit of, and shall be binding upon, Employer and its
successors and assigns, and the rights and obligations of Employee under this
Employment Agreement shall inure to the benefit of, and shall be binding upon,
Employee and his heirs, personal representatives and estate.
12. Arbitration.
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Any controversy or claim arising out of or relating to this Employment
Agreement, or the breath thereof, shall be settled by arbitration in accordance
with the Rules of the American Arbitration Association then pertaining in the
City of Toledo, Ohio, and judgment upon the award rendered by the Arbitrator or
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July 31, 1997
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Arbitrators may be entered in any Court having jurisdiction thereof. The
Arbitrator or Arbitrators shall be deemed to possess the power to issue
mandatory orders and restraining orders in connection with such arbitration;
provided, however, that nothing in this paragraph 12 shall be construed so as to
deny Employer the right and power to seek and obtain injunctive relief in a
court of equity for an breach or threatened breach by Employee of any of his
covenants contained in subparagraph (a) or (b) of paragraph 8 hereof.
13. Notices.
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Any notice to be given under this Employment Agreement shall be personally
delivered in writing or shall have been deemed duly given after it is posted in
the United States Mails, postage prepaid, registered or certified, return
receipt requested, and if mailed to Employer, shall be addressed to Employer at
its principal place of business, attention: Xxxxx X. Xxxxxx, Vice-President,
Finance, and if mailed to Employee, shall be addressed to him at his home
address last shown on the records of Employer, or at such other address or
addresses as either Employer or Employee may hereafter designate in writing to
the other.
14. Waiver.
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The failure of either party to enforce any provision or provisions of this
Employment Agreement shall not in any way be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Employment Agreement. The rights granted the parties herein are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
15. Miscellaneous.
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This Employment Agreement supersedes all prior employment agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination or attempted waiver of this Employment Agreement
shall be valid unless in writing and signed by the party against who the same is
sought to be enforced. This Employment Agreement shall be governed by and
construed according to the laws of the State of Ohio.
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If the foregoing understanding respecting the Employment Agreement between
you and the undersigned is acceptable to you, please indicate your approval
thereof by signing a copy of this letter in the space provided below and return
it to the undersigned. Thereupon, the Employment Agreement shall be in full
force and effect in accordance with its terms above set forth.
Sincerely,
MERIDIAN NATIONAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Vice President
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The terms and provisions of the Employment Agreement are hereby approved
and accepted this 31st day of July, 1997.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
