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Exhibit 4(d)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of October, 1997, by and between
Xxxx Xxxx of 00 Xxxxxxxx Xxxxx, Xxx Xxxxxxxx, XX 00000 ("Executive") and
Biosystems, Inc., a corporation organized under the laws of Pennsylvania (the
"Company").
W I T N E S S E T H :
Bacou USA, Inc. has entered into an agreement to purchase the company and
desires to clarify the terms and conditions which Executive shall continue to be
employed by the company; and
WHEREAS, Company wishes to secure the services of Executive as President
and Chief Executive Officer for the period provided in this Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. EMPLOYMENT. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as
President and Chief Executive Officer of Company. Executive agrees to faithfully
perform the duties assigned to him to the best of his ability and, except for
vacations and periods of temporary illness, to devote his full time and
attention to the business of Company. Ancillary employment such as writing,
teaching or lecturing, as well as the acceptance of honorific titles may be
undertaken by the Executive only with the written approval of the Chief
Executive Officer of Bacou USA, Inc. or the Executive Vice President in the
Chairman's absence. Executive also agrees that he will not engage in any other
business activities without the prior approval of the Chairman of the Company.
Executive may only serve as an officer, director, trustee or committee member,
or in any similar position, of a reasonable number (maximum two) of trade
associations and religious, charitable, educational, civic or other non-business
organizations, subject to the approval of the Chairman. The Executive represents
and warrants to Company that he is now under no contract or agreement nor will
he execute any contract or agreement that will in any manner interfere, conflict
with or prevent him from performing his duties under the terms and conditions of
this Agreement, recognizing that his performance hereunder will require the
devotion of his full time and attention during and beyond regular business hours
during the Term (as hereinafter defined), including extensive travel.
2. PERIOD OF EMPLOYMENT. This Agreement shall become effective upon the
closing of the transaction in which Bacou USA, Inc. become the direct or
indirect owner of the Company and its terms shall be retroactively applicable to
the first day of the Initial Term, as defined herein. The Executive's employment
under this Agreement shall initially cover the period October 1, 1997 to
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December 31, 2001 (the "Initial Term"). On December 31, 2001, and at the end of
each year thereafter, the period of employment shall be automatically extended,
without further action by either party, for successive one year periods (each a
"Renewal Term") unless at least six months prior to the end of any Term either
party shall have served written notice on the other of its election to allow
this Agreement to terminate at the end of such Term. The Initial Term and any
Renewal Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment, Company may, at its option, decide that the Executive
shall take a leave-of-absence for part or all of the remaining time of his
employment, continuing to receive all compensation as if actively working;
provided, however, that the Company may not exercise such option prior to
December 31, 2000.
3. TERMINATION. The period of employment shall be terminated upon the
first to occur of the following:
(i) The expiration of the period of employment pursuant to Section 2 of
this Agreement.
(ii) The Executive's death.
(iii) The Executive becoming permanently disabled. Permanent disability
shall mean physical or mental incapacity which entitles Executive to
receive benefits under the long-term disability plan provided for
Executive pursuant to Section 4(e) of this Agreement.
(iv) The Executive's employment being terminated by Company for cause.
Termination for cause shall mean termination by action of the Board
of Directors of Company because of any of the following: (A) the
willful failure of Executive, after written notice and reasonable
opportunity to cure, to perform his duties and obligations under this
Agreement or to execute in a reasonable and responsible manner the
policies of Company; (B) after written notice and reasonable
opportunity to cure, gross negligence in the performance of his
duties under this Agreement; or (C) the commission by Executive of a
felony.
4. COMPENSATION AND BENEFITS.
(a) From October 1, 1997 to December 31, 1997, Executive shall
receive a total salary of Thirty-Two Thousand Five Hundred Dollars ($32,000.00)
which shall be paid in arrears, in periodic installments at the same times and
in the same manner as salaries paid to other employees of the Company, less the
usual payroll deductions. Beginning January 1, 1998, the Executive shall receive
regular compensation ("Base Salary") at the initial rate per annum of Two
Hundred Thirty Thousand Dollars ($230,000.00) per annum for the Initial Term.
The Base Salary shall be paid in arrears, in periodic installments at the same
times and in the same manner as salaries paid to other employees of the Company
less the usual payroll deductions. The Executive shall participate in any wage
increases applicable generally to salaried employees of Company.
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The Base Salary prevailing at any time shall be reviewed annually for a possible
increase beginning in January 1999.
(b) For the period from October 1, 1997 to December 31, 1997,
Executive shall be entitled to receive a bonus in the amount of Forty-Two
Thousand Five Hundred Dollars ($42,500.00) which shall be paid by the Company on
January 12, 1998. Beginning January 1, 1998, in addition to the Base Salary, the
Executive shall be entitled to receive annual incentive compensation payments
("Incentive Compensation") at such times and in such amounts as may be
determined pursuant to the Bonus Plan for Executives of subsidiaries of Bacou
USA, Inc., as in effect for the applicable year; provided, however, that the
amount of Incentive Compensation for the fiscal year ending December 31, 2000
shall not exceed 35 percent of Executive's Base Salary for such year. Executive
acknowledges that, by agreeing to participate in the Bonus Plan for subsidiaries
of Bacou USA, Inc. he thereby waives any rights to participate in any other
incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for the prior
fiscal year within ten (10) days after a decision is made by the Board of
Directors of Company as to the amount of such Incentive Compensation, but in any
event no later than the earlier of the annual meeting of the Board of Directors
of Company or March 31.
(d) The Executive shall be entitled to participate in any stock
option plan which Bacou USA, Inc. may adopt for Company at levels to be
determined by the Board of Directors of Company in their sole discretion.
(e) The Executive shall be entitled to participate in all savings,
thrift, retirement or pension, short term and long term disability, health and
accident, Blue Cross/Blue Shield, Major Medical or other hospitalization,
holiday, vacation, and other fringe benefit programs generally available to
Presidents of operating subsidiaries of Bacou USA, Inc. in accordance with and
subject to the terms and conditions of such programs.
(f) In addition, the Executive shall be entitled to receive the
following benefits:
(i) The Executive shall have the use of a company car, subject
to the Automobile Policy of Bacou USA, Inc.
(ii) The Executive shall be entitled to vacation pursuant to
the Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a
time convenient for both the Executive and Company. To the extent the Executive
does not take all vacation days the remaining days will be carried forward for
an unlimited period or be paid to the Executive at the level of his Base Salary
valid for the fiscal year in which vacation days are not taken.
(iii) When traveling on Company business, the Executive will be
provided coach-class airfare on domestic trips; business class airfare will be
provided on international trips.
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(iv) The Executive is authorized to incur reasonable expenses
in connection with and for the promotion of the business of Company, including
expenses for meals and lodging (regular hotel room, no suites), entertainment,
and similar items as required from time to time by the Executive's duties.
Company shall reimburse the Executive for all such expenses upon the
presentation of an account therefor, together with appropriate supporting
documentation.
5. LIMITATIONS ON AUTHORITY. Pursuant to the Bylaws of Company, the
Executive and the Chairman of the Board of Directors or his designee shall
constitute the Executive Committee of the Board. Except as otherwise provided
herein, approval by the Chairman or the Executive Vice President of Bacou must
be obtained prior to the Executive taking any of the following actions on behalf
of the Company:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real
property.
(b) Making unbudgeted capital expenditures or any commitment
therefore in an amount greater than $5,000 for any individual
expenditure and $50,000 in the aggregate in any fiscal year;
(c) Borrowing or guaranteeing any borrowings from or on behalf of
any party, or altering the terms of any loan agreements for
such borrowings except for any such loans, guarantees or
borrowings (i) between the Company and Bacou USA, Inc. or its
subsidiaries pursuant to applicable policies and procedures
which shall allow Executive to advance funds under a line of
credit provided pursuant to Section 10.16(c) of that certain
Agreement and Plan of Merger dated as of September 30, 1997 by
and among, inter alia, Bacou USA, Inc., the Company and
Executive or (ii) as shall be authorized by the Board of
Directors of Company;
(d) Hiring or terminating personnel with annual salary in excess of
$50,000;
(e) Granting retirement benefits or other non-earned income to any
individual which is not available to all employees;
(f) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(g) Acquiring the assets or shares of another Company or
partnership;
(h) Acquiring or disposing of the assets or shares of the Company
or selling any fixed asset of the Company below book value;
(i) Entering into or terminating agreements of any kind or nature
with a monthly financial obligation in excess of $5,000 for
more than six (6) months except purchase orders for materials
required for the manufacture of products for sale in the
ordinary course of business;
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(j) Making basic changes in the administration, organization,
production, and distribution of Company or any of its
affiliates, as well as closing or curtailing the functions of
Company or any of its affiliates;
(k) Filing any lawsuit;
(l) Making cash or non-cash corporate contributions above the
annually budgeted amount;
(m) The making of decisions requiring both extraordinary risks and
extraordinary expenditures of more than $50,000;
(n) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(o) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the Chairman or Executive Vice President be
unavailable, if an emergency arises which requires the Executive to take
immediate action in which approval as set forth in this Section would otherwise
be required, the Executive is no longer bound by the limitations described above
and is authorized to make a decision in the best interests of the Company. The
Executive will immediately inform the Chairman and the Executive Vice President
of Bacou USA, Inc. of any such decisions made by him.
6. NON-DISCLOSURE OF INFORMATION. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
have access to confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed
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by Company for a period of three (3) years except in respect of any information
or knowledge disclosed or otherwise generally available to the public, other
than through an unauthorized disclosure by the Executive.
7. TRADE SECRETS. The Executive covenants that he shall, while employed
by Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. NON-COMPETITION. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to one year thereafter,
should the Executive's contract be terminated or not be renewed, the Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of either the
Company or any respiratory protection business owned by Bacou USA, Inc. In the
event that Company chooses to exercise its option to prevent the Executive from
competing with Company following termination or non-renewal of his employment,
Company shall notify the Executive in writing within two (2) weeks following his
last day of employment or within two (2) weeks of notice by Company of its
decision that the Executive shall take a leave-of-absence, in either case
specifying the period of up to one year following termination, resignation, or
non-renewal of employment during which such competitive activity shall be
prohibited. In the event Company exercises its option, Company shall continue to
pay Executive his Base Salary at the time of termination, resignation or
non-renewal for the period during which the Executive is prohibited from
competition with Company. Notwithstanding the foregoing, the Executive may own
five (5%) percent of the securities of any business in competition with the
business of Company or any of its affiliates, which securities are regularly
traded on a public exchange, provided that any such ownership shall not result
in the Executive becoming a record or beneficial owner at any time of more than
five (5%) percent of equity securities of said business entity.
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(b) The Executive shall not during the term of his Employment under
this Agreement or any renewal thereof, and for a period of three (3) years
thereafter, employ, retain or arrange to have any other person or entity employ
or retain any person who was employed by Company or any of its affiliated
companies having an annual compensation of at least U.S. $50,000 per annum
during the term of this Agreement or any renewal thereof.
(c) If any provision of this Section is held to be unenforceable
because of the scope, duration or area of its applicability or otherwise, the
legal entity making that determination will have the power to modify the scope,
duration or area, or all of them, and the provision will then apply in its
modified form.
9. PROPERTY. All letters, memoranda, documents, business notes
(including all copies thereof) and other information contained on any other
computer media including computer disks and hard drives of the Executive in any
manner relating to the duties of Executive under this agreement are the property
of Company.
10. NOTICES. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
Bacou USA, Inc..
00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
with a copy to:
Xxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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(b) If to the Executive, to him at:
00 Xxxxxxxx Xxxxx
Xxx Xxxxxxxx, XX 00000
Telephone No. 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
Arent Fox Xxxxxxx Xxxxxxx & Xxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Telephone No.: (000-000-0000)
Telecopier No.: (202-857-6395)
Any party may change its address for receiving notice by written notice given to
the other names above in the manner provided above.
11. FULL AND COMPLETE AGREEMENT; AMENDMENT. This Agreement constitutes
the full and complete understanding and agreement of the parties and supersedes
all prior understandings and agreements. This Agreement may be modified only by
a written instrument executed by both parties.
12. CONSTRUCTION. This Agreement shall be construed under the laws of the
State of Connecticut.
13. ARBITRATION. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Hartford, Connecticut and any award shall be deemed to be a Hartford,
Connecticut award. There shall be a single arbitrator who shall be admitted to
practice law in Connecticut, with no less than ten (10) years experience in the
handling of commercial or corporate matters or disputes. If the parties do not
agree upon an arbitrator by mutual consent within thirty days after a party
requests arbitration, then each party shall name a person who meets the
eligibility requirements to serve as arbitrator and the two designees shall
appoint the arbitrator by mutual consent. The arbitrator shall render a written
decision stating his reasons therefor, and shall render an award within six (6)
months of the request for arbitration, and such award shall be final and binding
upon both parties. Judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction in any state of the United States
or country or application may be made to such court for a judicial acceptance of
the award and an enforcement, as the law of such jurisdiction may require or
allow. The substantive law to be applied to any case determined pursuant to this
Section 13 is that of State of Connecticut. The
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expense of arbitration shall be borne by the respective parties except if the
arbitrator shall determine that either party had acted in bad faith, in which
case the entire expense shall be borne by the party who acted in bad faith.
14. BINDING NATURE. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
BIOSYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, Chairman
EXECUTIVE:
/s/ Xxxx Xxxx
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Xxxx Xxxx
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