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EXHIBIT 10.1
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is made this 4th
day of May, 1995, by and between Young Dental Manufacturing Company, a Missouri
corporation (the "Corporation") and Xxxxxxx X. Xxxxxxxx, Xx. ("Employee"), an
individual residing at 000 Xxxxxxxx, Xxxx & Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, Corporation has entered into a certain Stock Purchase Agreement
("Purchase Agreement") of even date herewith by and between, among others,
Corporation and Lorvic Holdings, Inc., a Delaware corporation ("Lorvic
Holdings"), whereby Corporation shall acquire all of the outstanding stock of
Lorvic Holdings;
WHEREAS, Lorvic Holdings is the sole stockholder and parent corporation of
The Lorvic Corporation, a Delaware corporation ("Lorvic Corporation");
WHEREAS, Employee has heretofore been President and Chief Executive Officer
of Lorvic Corporation; and
WHEREAS, Corporation desires to employ Employee after the consummation and
closing of the Purchase Agreement and Employee desires to accept such
employment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
promises herein contained, the adequacy of which is hereby acknowledged,
Corporation and Employee hereby agree as follows.
I. EMPLOYMENT
Corporation employs Employee, and Employee accepts employment by Corporation
upon all of the terms and conditions set out in this Agreement.
II. POSITIONS AND DUTIES
2.1 POSITIONS. Employee shall serve in the following positions during the
term of this Agreement:
A. Senior Vice President of Corporate Affairs of Corporation.
B. Member of the Board of Directors of Corporation so long as Corporation
remains a privately held corporation. In the event that Corporation
becomes a publicly held company, Employee may continue to serve as a
Director
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of Corporation at the discretion of the Shareholders of Corporation.
C. Member of the Executive Committee of Corporation.
D. Employee shall serve as (i) President of Lorvic Corporation in the event
that, after the consummation of the Purchase Agreement, Lorvic Corporation
is operated as a separate subsidiary corporation of Corporation, or (ii)
General Manager of the operations of the former Lorvic Corporation in the
event that Lorvic Corporation is operated as a division of Corporation
("Lorvic Division"). Employee shall serve as President or General Manager
only to the extent that Lorvic Corporation or Lorvic Division continues to
conduct its primary operations and maintains its operating facility at
0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
2.2 DUTIES, RESPONSIBILITIES AND INVOLVEMENT. Employee's duties,
responsibilities and involvement shall include, without limitation:
A. As President of Lorvic Corporation or General Manager of Lorvic Division,
Employee's duties shall include, without limitation, the supervision and
oversight of the day to day operations of Lorvic Corporation or Lorvic
Division, including personnel matters, and, generally, the performance of
all duties typically vested in the chief executive officer of a
corporation, all to the extent and in the manner prescribed by the Bylaws
of Corporation, the Board of Directors of Corporation or, in the absence
of Board direction, the President of Corporation. Employee shall report
to the Board of Directors and to the President of Corporation.
B. Involvement in product research and development for Corporation, Lorvic
Corporation and/or Lorvic Division.
C. Involvement in mergers and acquisitions concerning Corporation, Lorvic
Corporation and/or Lorvic Division.
D. Involvement in the regulatory affairs of Corporation, Lorvic Corporation
and/or Lorvic Division.
E. Responsibility and control over the major customer relations matters
involving any original equipment manufacturer (OEM) of Lorvic Corporation
and/or Lorvic Division.
2.3 COMMITMENT TO CORPORATION. Employee shall devote so much of Employee's
time, attention and energies to the business of Corporation as shall be
necessary for the performance of his
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responsibilities hereunder, and shall not during the term of this Agreement be
engaged in any other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage. This shall not be
construed as preventing Employee from investing Employee's assets in such form
or manner as will not require any services on the part of Employee in the
operation or affairs of the entities in which such investments are made.
2.4 COMPLIANCE. Employee agrees to abide by the Articles of Incorporation
and By-Laws of Corporation and such reasonable rules and regulations as are
adopted from time to time by the Board of Directors of Corporation which are
not inconsistent with this Agreement and which are communicated to Employee.
III. TERM OF EMPLOYMENT
3.1 INITIAL TERM. The initial term of Employee's employment under this
Agreement shall commence on May 5th, 1995 ("Effective Date"), and shall
continue for a period of three (3) years until midnight on May 5th, 1998 unless
terminated as provided in this Agreement.
3.2 RENEWAL OR ADJUSTMENT. At the end of the initial term, this Agreement
may be extended, renewed or adjusted upon the mutual agreement of Corporation
and Employee.
IV. COMPENSATION
4.1 REGULAR COMPENSATION. For all services rendered by Employee in any
capacity, Employee shall be entitled to receive regular compensation at the
rate determined in accordance with the provisions of the attached Schedule 1.
Such compensation shall be payable in accordance with the Corporation's normal
payroll procedures as determined from time to time by the Board of Directors of
Corporation.
4.2 WITHHOLDING. All payments of regular compensation shall be less such
amounts as are required to be withheld by federal, state or local law.
V. BONUS
5.1 ANNUAL BONUS. Employee shall be entitled to participate in an annual
bonus, on terms comparable to those for other Senior Officers of Corporation
under any then existing bonus program of Corporation; provided, however, that
Employee is not in breach of this Agreement. Any bonus shall be at the
discretion of the Board of Directors of Corporation.
5.2 STOCK OPTIONS. Employee shall be entitled to receive options to
purchase stock in Corporation ("Stock Options") on
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comparable terms and conditions as other Senior Officers of Corporation if
Corporation adopts a stock option plan.
VI. FRINGE BENEFITS
Employee shall be entitled to participate with other employees of
Corporation, so long as Employee meets the applicable eligibility requirements,
in such employee fringe benefit plans as may be authorized and adopted from
time to time by the Board of Directors of Corporation, including, but not
limited to, those fringe benefits that are listed in the attached Schedule 2.
Further, Corporation may furnish, withdraw or modify such other benefits for
Employee as the Board of Directors of Corporation shall determine from time to
time within its discretion.
VII. EXPENSES
Reasonable expenses for promoting the business of Corporation including
expenses for transportation, promotion, entertainment, travel, telephone, and
similar items shall be subject to reimbursement to the extent authorized for
reimbursement by Corporation in accordance with reasonable rules and
regulations adopted by the Board of Directors. Such expenses as are so
authorized for reimbursement shall be paid for by Corporation or reimbursed to
Employee upon Employee's presenting to Corporation an itemized expense
statement with respect thereto.
VIII. DEATH OF EMPLOYEE
In the event of Employee's death during the term of this Agreement (whether
Employee is then actively engaged in the performance of services for
Corporation or is being compensated for disability), this Agreement shall
terminate immediately and Employee's estate shall be entitled to receive from
Corporation an amount equal to the compensation due up until the date of
Employee's death.
IX. TERMINATION OF EMPLOYMENT
9.1 TERMINATION BY CORPORATION. Corporation may terminate Employee's
employment pursuant to this Agreement in the event that Employee during the
term of this Agreement shall be in Actual Default (as defined herein) under any
provision of this Agreement, or if Employee has committed acts of gross
negligence, dishonesty or misconduct in carrying out his obligations or
responsibilities to the Corporation, as determined in the reasonable discretion
of the Board of Directors of the Corporation, by giving at least thirty (30)
days prior written notice to Employee of Corporation's intention to terminate
this Agreement. In the event of such termination by Corporation, Employee
shall have the right to reasonable access to documents
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and records of Corporation in a subsequent investigation by Employee
challenging the grounds for termination.
In the event of such termination by Corporation, Corporation shall be
obligated to continue to pay Employee the salary due Employee under this
Agreement up to the termination date stated in said written notice so long as
Employee continues to be ready, willing and able to perform all of Employee's
duties in accordance with this Agreement.
9.2 TERMINATION BY EMPLOYEE. Employee may terminate Employee's employment
pursuant to this Agreement in the event that Corporation, during the term of
this Agreement, shall be in Actual Default (as defined herein) under any
provision of this Agreement, by giving at least sixty (60) days prior written
notice to Corporation of Employee's intention to terminate this Agreement.
In the event of any such termination by Employee, Corporation shall continue
to pay Employee the salary due Employee under this Agreement up to the
termination date stated in Employee's written notice so long as Employee
continues to perform all of Employee's duties in accordance with the terms of
this Agreement and so long as there is no earlier termination date under any
notice given by Corporation.
9.3 COOPERATION BY EMPLOYEE. Following any such notice of termination,
Employee shall fully cooperate with Corporation in all matters relating to the
winding up of Employee's pending work on behalf of Corporation and the orderly
transfer of any such pending work to such other employees of Corporation as may
be designated by the Corporation; and to that end Corporation shall be entitled
to such full-time or part-time services of Employee as Corporation may
reasonably require during all or any part of the period from the time of giving
any such notice until the effective date of such termination.
9.4 SETTLEMENT OF ACCOUNTS. After any termination of this Agreement, all
compensation and amounts due to Employee with respect to work performed or
expenses incurred prior to the date of termination shall be reconciled with
amounts due to Corporation from Employee. Each party shall be entitled to
offset against any amounts that may be due to the other party such amounts as
are due from such other party to it or him. The parties shall proceed
expeditiously to accomplish the foregoing, and the resulting amount due from
one party to the other shall be paid promptly after it is determined.
X. FILES AND RECORDS
All files, records, documents, reports and so forth concerning customers of
Corporation, including, without limitation, clients and customers consulted,
interviewed or
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served by Employee during the term of this Agreement shall belong to and remain
the property of Corporation.
XI. CONFIDENTIAL INFORMATION
11.1 NONDISCLOSURE BY EMPLOYEE. Employee will not, except as authorized by
Corporation, during or at any time after the termination of Employee's
employment with Corporation, directly or indirectly, use for himself or others,
or disclose, communicate, divulge, furnish to, or convey to any other person,
firm, or corporation, any secret or confidential information, knowledge or data
of Corporation or that of third parties obtained by Employee during the period
of his employment with Corporation and such information, knowledge or data
includes, without limitation, the following:
a) Secret or confidential matters of a technical nature such as, but not
limited to, methods, know-how, formulae, compositions, processes,
discoveries, manufacturing techniques, inventions, computer programs, and
similar items or research projects involving such items;
b) Secret or confidential matters of a business nature such as, but not
limited to, information about costs, purchasing, profits, market, sales or
lists of customers; or
c) Secret or confidential matters pertaining to future developments such as,
but not limited to, research and development or future marketing or
merchandising.
11.2 SURRENDER OF INFORMATION. Employee, upon termination of his employment
with Corporation, or at any other time upon Corporation's written request,
shall deliver promptly to Corporation all drawings, blueprints, manuals,
letters, notes, notebooks, reports, sketches, formulae, computer programs and
similar items, memoranda, lists of customers, and all other materials and
copies thereof relating in any way to Corporation's business which contain
confidential information and which were in any way obtained by Employee during
the term of his employment with Corporation which are in his possession or
under his control; and Employee will not make or retain any copies of any of
the foregoing and will so represent to Corporation upon termination of his
employment.
11.3 NOTIFICATION OF SUBSEQUENT EMPLOYERS. Corporation may notify any
person, firm, or corporation employing Employee or evidencing an intention to
employ Employee as to the existence and provisions of this Agreement.
11.4 REMEDIES. Employee understands and acknowledges that such confidential
information or other commercial ideas mentioned
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herein are unique and that the disclosure or use of such matters or any other
secret or confidential information other than in furtherance of the business of
Corporation would reasonably be expected to result in irreparable harm to
Corporation; and that in addition to whatever other remedies Corporation and/or
its successors or assigns may have at law or in equity, Employee specifically
covenants and agrees that, in the event of default under or breach of this
Agreement, Corporation and/or its successors and assigns shall be entitled to
apply to any court of competent jurisdiction to enjoin any breach, threatened
or actual, of the foregoing covenants and promises by Employee, and/or to xxx
to obtain damages for default under or any breach of this Agreement. In the
event of default under or breach of this Agreement, Employee hereby agrees to
pay all costs of enforcement and collection of any and all remedies and damages
under this Agreement, including reasonable attorneys' fees as determined by a
court of competent jurisdiction.
XII. LIMITATION ON COMPETITION
12.1 NONCOMPETITION AGREEMENT. During the period of employment and for a
period of two (2) years after expiration or termination of this Agreement, for
cause or by Employee, Employee shall not, within the United States of America,
directly or indirectly as an owner, employee, consultant or otherwise,
individually or collectively, acquire an interest in, become an employee of or
consultant to a dental manufacturing or distribution business. Employee agrees
that the area, in light of the character of the industry, and the duration of
this limitation are reasonable under the circumstances, considering Employee's
position with Corporation and other relevant factors, and that in all
likelihood this will not constitute a serious handicap to Employee in securing
future employment.
12.2 NONSOLICITATION AGREEMENT. Employee will not, either during employment
or during the period of two (2) years after expiration or termination of this
Agreement, for cause or by Employee, directly or indirectly, either for himself
or for any other person, firm, or corporation, take any action or perform any
services which are designed to or in fact call upon, compete for, solicit,
divert, or take away, or attempt to divert or take away, any of the customers
of Corporation; this prohibition includes customers existing at the present
time or prospective or past customers solicited, sold to or served by
Corporation during the five (5) years prior to termination or expiration of
this Agreement.
12.3 NON-HIRE AGREEMENT. Employee will not, either during employment or
during the period of two (2) years after expiration or termination of this
Agreement, for cause or by Employee, directly or indirectly, either for himself
or for any other person, firm, or corporation, induce, employ or attempt to
employ
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any person who is at that time, or has been within six (6) months immediately
prior thereto, employed by Corporation.
12.4 REMEDIES. It is further agreed that, if Employee shall violate the
foregoing prohibitions, Corporation shall be entitled to seek specific
performance of these covenants, and Employee shall pay all costs and attorneys'
fees, as determined by a court of competent jurisdiction, incurred by
Corporation in enforcing the aforesaid covenants if Corporation is successful
in so doing after a final adjudication of the matter. If any of the foregoing
covenants is not enforceable to the full extent provided, it shall be and
remain enforceable to the extent permitted by law, and a court is authorized by
the parties to modify such covenant to make it reasonable and, as so modified,
enforce it.
12.5 TERMINATION OF PROVISIONS. Notwithstanding the provisions hereof
regarding termination of this Agreement, the provisions of this Section shall
remain in full force and effect (including any extensions or renewals) provided
for hereunder. However, in the event that this Agreement is terminated as a
result of (i) Corporation being in Actual Default, (ii) Corporation filing for
bankruptcy, having an involuntary petition filed against it which is not
dismissed within sixty (60) days, ceasing operations, dissolving or becoming
insolvent, or (iii) Corporation terminating Employee without cause, the
provisions of this Article shall be null and void.
XIII. BINDING ARBITRATION
Except for matters arising under Article XII, any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association at a mutually convenient location agreed to by the parties or the
arbitrators, and the parties hereby agree to be bound by the results thereof.
Each party shall choose one arbitrator and a third arbitrator shall be chosen
by the two arbitrators so chosen by the parties. A judgment upon any award
rendered by a majority opinion of the arbitrators so chosen may be entered in
any court having jurisdiction thereof.
XIV. ACTUAL DEFAULT
In the event either party believes that the other party has failed to fulfill
any of his or its obligations under this Agreement, the party aggrieved by such
default shall give the other party written notice of such default specifying
the nature thereof. If within thirty (30) days after the giving of such
notice, the alleged defaulting party has failed or refused to remedy such
default, the party aggrieved by such alleged default may by notice in writing
declare the alleged defaulting party to be in actual default ("Actual Default")
of this Agreement and
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proceed in the manner otherwise provided for herein. The provisions of this
Section are intended to provide a means whereby the party alleged to be in
default under this Agreement will have an opportunity to cure any such alleged
default before the aggrieved party shall be entitled to attempt to terminate
this Agreement. The giving of such notice and the expiration of the thirty
(30) day period provided for herein shall not, however, prevent the alleged
defaulting party from establishing that no default did in fact exist.
XV. GENERAL PROVISIONS
15.1 WAIVER. The waiver by either party of a breach or violation of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any subsequent breach hereof.
15.2 SEVERABILITY. Should any one or more sections of this Agreement be
found to be invalid, illegal, or unenforceable in any respect, the validity,
legality and enforceability of the remaining sections contained herein shall
not in any way be affected or impaired thereby. In addition, if any section
hereof is found to be partially enforceable, then it shall be enforced to that
extent.
15.3 NOTICES. Any and all notices required or permitted to be given under
this Agreement shall be sufficient if furnished in writing and personally
delivered or sent by registered or certified mail to the last known residence
address of Employee or to Corporation at its principal office at 00000
Xxxxxxxxx Xxxxx Xxxx, Xxxxx Xxxx, Xxxxxxxx 00000 or such other place as it may
subsequently designate in writing.
15.4 GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Missouri.
15.5 SECTION HEADINGS. The section headings contained in this Agreement are
for convenience only and shall in no manner be construed to limit or define the
terms of this Agreement.
15.6 COUNTERPARTS. This Agreement shall be executed in two or more
counterparts, each of which shall be deemed an original and together they shall
constitute one and the same Agreement, with at least one counterpart being
delivered to each party hereto.
15.7 ASSIGNABILITY. Corporation shall have the right to assign this
Agreement to a third party which purchases substantially all of the then assets
of the business formerly operated by it.
15.8 SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and
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their respective heirs, personal representatives, successors and assigns.
15.9 ENTIRE AGREEMENT. This is the entire and only Agreement between the
parties respecting the subject matter hereof. This Agreement may be modified
only by a written instrument executed by all parties hereto.
IN WITNESS WHEREOF, Corporation has caused this Agreement to be executed by
and its corporate seal to be affixed by its duly authorized officers, and
Employee has executed this Agreement as of the date first written above.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.
YOUNG DENTAL MANUFACTURING COMPANY
By:/s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Its: President
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EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
XXXXXXX X. XXXXXXXX
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SCHEDULE 1
This constitutes Schedule 1 to the Employment and Noncompetition Agreement
between Young Dental Manufacturing Company, a Missouri corporation (the
"Corporation"), and Xxxxxxx X. Xxxxxxxx ("Employee").
Compensation
Employee shall be entitled to minimum compensation during the term of this
Agreement of One Hundred Forty Thousand dollars ($140,000) annually, excluding
any bonus compensation. Eighty-five Thousand dollars ($85,000) of the
above-referenced amount shall be payable as salary, and Fifty-five Thousand
dollars ($55,000) shall be attributable to the noncompetition provisions of
this Agreement.
Employee shall be entitled to consideration for annual increases in
compensation, as determined by the Board of Directors of Corporation using the
Corporation's standard procedures and criteria in determining salary increases
for Senior Officers of Corporation.
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SCHEDULE 2
This constitutes Schedule 2 to the Employment and Noncompetition Agreement
between Young Dental Manufacturing Company, a Missouri corporation (the
"Corporation"), and Xxxxxxx X. Xxxxxxxx ("Employee").
Fringe benefits of Employee shall include:
1. Company car. Comparable to what Employee has at the execution of this
Agreement.
2. Insurance: Health insurance coverage comparable to the Lorvic Corporation
coverage prior to the execution of this Agreement; provided that, if
Lorvic Corporation employees generally are covered by Corporation's health
plan, Employee will be entitled to participate in that plan.
3. Retirement Plans: Participation in all retirement plans generally
available to Senior Officers of Corporation.
4. Vacation. Employee shall be entitled to paid vacation time during each
year of this Agreement in accordance with the established policies of
Corporation, provided, however, that Employee shall be entitled to a
minimum of three (3) weeks of paid vacation annually. The time or times
(consecutive or separate) when such weeks of vacation are scheduled in
each year shall be determined to the mutual satisfaction of Employee and
Corporation.
5. Holidays. Employee shall also be entitled to the same paid holidays as
are available to other executive employees of Corporation.
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