Exhibit 10.16
EMPLOYMENT AGREEMENT
AGREEMENT by and between York International Corporation, a Delaware
corporation (the "Company") and Xxxx X. Xxxxxx (the "Executive") dated as of the
29th day of December, 1999.
The Board of Directors of the Company has determined that it is in its
best interests and that of its shareholders to employ the Executive in the
capacity described below and the Executive wishes to serve in such capacity.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean December 29, 1999.
2. Employment Period. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to enter into the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the third anniversary thereof
(the "Employment Period") provided, however, that the Employment Period shall be
automatically extended without action by either party for an additional one
month period on the 16th day of each month unless, not later than the 15th day
of any month, either party shall give notice to the other in writing that such
party does not intend to extend the Employment Period.
3. Terms of Employment. (a) Position and Duties. (A) During the
Employment Period, the Executive shall serve as Chief Executive Officer and
President with such authority, duties and responsibilities as are commensurate
with such position and (B) the Executive's services shall be performed in York,
Pennsylvania.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary of $650,000 ("Annual Base Salary"), which shall be
paid in accordance with the Company's payroll practices. During the Employment
Period, the Annual Base Salary shall be reviewed at least annually. Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Company.
(ii) Incentive Compensation. During the Employment Period, the
Executive shall have an annual cash bonus and a mid-term performance bonus
opportunity based on a percentage of his Annual Base Salary (determined annually
by the Company's Board in accordance with the provisions of the 1996 Incentive
Compensation Plan) and shall otherwise be eligible for incentive compensation
awards on the same basis as similarly situated executives.
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(iii) Employee Benefit Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, employee benefit,
retirement, welfare and other plans, practices, policies and programs applicable
to senior executives of the Company.
(iv) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the Company's policies.
(v) Perquisite Benefits. During the Employment Period, the Executive
shall be provided with perquisite benefits as are provided to other senior
executives of the Company.
(vi) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of the Company and its affiliated companies as in effect with respect
to the senior executives of the Company.
4. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) knowingly providing the Company with materially false
representations relied upon by the Company in furnishing information to
stockholders, a stock exchange or the Securities and Exchange Commission, or
(ii) maintaining an undisclosed, unauthorized and material conflict of
interest in the discharge of duties owed to the Company, or
(iii) willful misconduct causing serious violation by the Company of
state or federal laws, or
(iv) theft of Company funds or assets, or
(v) conviction of a crime involving moral turpitude.
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For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interest of the Company.
(c) Good Reason. In the event that the Executive's employment with the
Company is voluntarily terminated by the Executive with "Good Reason", the
Executive shall be entitled to a lump sum payment representing the remaining
balance of his or her employment agreement as calculated in accordance with
Section 5 (a). For purposes of this Agreement, "Good Reason" shall mean, in the
absence of a written consent of the Executive, any of the following which occurs
before the expiration of the Executive's Employment Period:
(i) a substantial and adverse change in the Executive's
responsibilities, job description, status or position as a key employee of the
Company, when compared to the Executive's prior responsibilities, job
description, status or position as a key employee of the Company as contemplated
by Section 3(a) of this Agreement, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith, and which is
remedied by the Company promptly after receipt or notice thereof given by the
Executive;
(ii) any material failure by the Company to comply with any of the
provisions of Section 3(b) of this Agreement, unless initiated by the Executive,
other than a failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) the requiring that the Executive travel on the Company's
business to an extent materially greater than the Executive's normal business
travel, or the Company requiring the Executive to be based at any office or
location more than 35 miles from that provided in Section 3(a)(i)(B) hereof;
(iv) a material breach by the Company of any terms of this Agreement,
or any failure by the Company to comply with and satisfy Section 9 of this
Agreement, or any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement
(v) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
(d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the
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Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause, Death
or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (this amount shall be
hereinafter referred to as the "Accrued Obligations"); and
B. An amount equal to the Executive's Annual Base Salary plus Annual
Cash Bonus (based on the adjusted EV bonus amount for the Fiscal Year in
which the Date of Termination occurs, the "Adjusted EV Bonus") for the
remaining Employment Period; and
C. an amount equal to the actuarial equivalent of the benefit under
the Company's qualified defined benefit retirement plan (the "Retirement
Plan") (utilizing actuarial assumptions no less favorable to the Executive
than those in effect under the Company's Retirement Plan immediately prior
to the Effective Date), and the supplemental early retirement plan in which
the Executive participates (the "SERP") which the Executive would receive
if the Executive's employment continued until the Executive reached age 62,
assuming for this purpose that at age 62 the Executive would have 20 years
of credited service and all accrued benefits are fully vested, and assuming
that the Executive's compensation in each of the periods is that required
by Section 3(b) and that the Executive's Annual Cash Bonus for such years
is the Adjusted EV Bonus;
(ii) the Company shall continue to provide welfare benefits to the
Executive and his dependants until the end of the Employment Period on the same
basis that such benefits were provided to him immediately prior to the Date of
Termination; and
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(iii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 5(b) shall include
death benefits as in effect on the date of the Executive's death with respect to
senior executives of the Company and his beneficiaries.
(c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 5(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits as in effect at any time thereafter
generally with respect to the senior executives of the Company.
(d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause or the Executive terminates his employment without
Good Reason during the Employment Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to pay to the
Executive his Annual Base Salary through the Date of Termination, and Other
Benefits, in each case to the extent theretofore unpaid.
6. Non-exclusivity of Rights. Except as specifically provided, nothing
in this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Executive may qualify, nor,
subject to Section 11(e), shall anything herein limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or any of its affiliated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
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7. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").
8. Confidential Information. (a) The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 8 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
(b) Any termination of the Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 8 or Section 9
below.
9. Noncompetition/Nonsolicitation. (a) For two years after the Date of
Termination, Executive will not directly or indirectly, own, manage, operate,
control or participate in the ownership, management, operation or control of or
be connected as an officer, employee, partner, director, consultant or otherwise
with, or have any financial interest in, any business which is in material
competition with the business conducted by the Company or its affiliates.
Ownership for personal investment purposes only of less than 2% of the voting
stock of any publicly held corporation shall not constitute a violation hereof.
(b) For two years after the Date of Termination, the Executive
will not, directly or indirectly, on behalf of the Executive
or any other person, solicit for employment any person
employed by the Company or its affiliates as of the date
hereof or known by the Executive at the time to be employed by
the Company or its affiliates.
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(c) (i) Executive acknowledges and agrees that the restrictions
contained in this Section 9 and in Section 8 are reasonable
and necessary to protect and preserve the legitimate
interests, properties, goodwill and business of the Company,
and that irreparable injury will be suffered by the Company
should Executive breach any of the provisions of this Section.
Executive represents and acknowledges that (1) Executive has
been advised by the Company to consult Executive's own legal
counsel in respect of this Agreement, (2) Executive has had
full opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with Executive's counsel, and
(3) the provisions of this Section 9 are reasonable and these
restrictions do not prevent Executive from earning a
reasonable livelihood.
(ii) Executive further acknowledges and agrees that a breach
of any of the restrictions in this Section 9 and Section 8 cannot be adequately
compensated by monetary damages. Executive agrees that the Company shall be
entitled to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, as well as provable damages and an equitable
accounting of all earnings, profits and other benefits arising from any
violation of this Section 9, which rights shall be cumulative and in addition to
any other fights or remedies to which the Company may be entitled. In the event
that any of the provisions of this Section 9 should ever be adjudicated to
exceed the time, geographic, service, or other limitations permitted by
applicable law in any jurisdiction, it is the intention of the parties that the
provision shall be amended to the extent of the maximum time, geographic,
service, or other limitations permitted by applicable law, that such amendment
shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
(iii) Executive irrevocably and unconditionally (1) agrees
that any suit, action or other legal proceeding arising out of this Section 9
and Section 8, including without limitation, any action commenced by the Company
for preliminary and permanent injunctive relief and other equitable relief, may
be brought in the Court of Common Pleas of York County, Pennsylvania or if such
court does not have jurisdiction or will not accept jurisdiction, in any court
of general jurisdiction in Pennsylvania, (2) consents to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding, and (3)
waive any objection which Executive may have to the laying of venue of any such
suit, action or proceeding in any process, pleadings, notices or other papers in
a manner permitted by the notice provisions of this Section 9.
(d) In exchange for the covenants set forth in this Section 9, the
Company agrees to make to the Executive a lump sum payment equal to two years of
the Executive's then-current Annual Base Salary plus then-current Adjusted EV
Bonus, payable within 30 days after the Date of Termination.
10. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
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(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
herein before defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Xx. Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxx, Xxxxx
Xxx Xxxx, XX 00000
If to the Company:
York International Corporation
000 X. Xxxxxxxx Xxxxxx
Xxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
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(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Boards of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
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Xxxx X. Xxxxxx
YORK INTERNATIONAL CORPORATION
By:
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