Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of
February 13, 2006 (the "Effective Date") by CONTINENTAL GLOBAL GROUP, INC., a
Delaware corporation (the "Employer"), and Xxxxxx Xxxxxx, an individual resident
at 000 Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the "Executive").
RECITALS
A. Employer is a holding company headquartered at 000 Xxxxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Headquarters"). Through
its subsidiaries, Employer is primarily engaged in the
worldwide manufacture and distribution of bulk material
handling equipment, conveyors, and replacement equipment,
primarily for use in the mining industry (the "Business").
B. The Employer and the Executive hereby agree upon employment of
the Executive upon terms herein set forth.
C. The Executive will report directly to the Board of Directors
of Employer and to the Chairman of the Board. The Presidents
and General Managers of the Employer's subsidiaries in the
Xxxxxx Xxxxxx, Xxxxxxxxx, xxx Xxxxxx Xxxxxxx, Xxxxx Xxxxxx and
elsewhere will report directly to the Executive.
D. The Employer wishes to employ the Executive as President and
Chief Executive Officer and the Executive wishes to be
employed by the Employer in such capacity and according to the
terms and conditions stated herein.
AGREEMENT
The parties, in consideration of the mutual promises and covenants
contained herein, hereby agree as follows:
1. EMPLOYMENT/DUTIES
1.1 EMPLOYMENT
The Executive shall commence employment no later than February 13, 2006, by
reporting to the Chairman, and then to the Winfield, Alabama facility. The
Executive shall be employed by the Employer on a guaranteed first, one year
basis, after which employment will continue on an at-will basis, and the
Executive shall be subject to the ongoing oversight of the Board of Directors,
any committee thereof, and by the Chairman of the Board. A press release shall
be drafted by the Employer, with cooperation from the Executive, for release
prior to February 13, 2006.
1.2 DUTIES
The Executive will have such duties as are assigned or delegated to the
Executive by the Board of Directors, and will serve as President and CEO of the
Employer. The Executive shall maintain his principal office at the headquarters
in Winfield, Alabama. The Executive shall be required to travel outside that
area to the extent reasonably necessary in the good faith judgment of the Board
of Directors or the Chairman of the Board to advance the interests of the
Business. The Executive will be required to oversee Global operations outside
the U.S.A., which will require substantial travel to various countries. The
Executive will devote his entire business time exclusively to the business of
the Employer, will use his best efforts to promote the success of the Employer's
business, and will cooperate fully with the Board of Directors in the
advancement of the best interests of the Employer. If the Executive is elected
as a director of the Employer or as a director or officer of any of its
affiliates, the Executive will fulfill his duties as such director or officer
without additional compensation.
2. COMPENSATION
(a) Salary. The Executive will be paid a base Salary of
Thirty-Three Thousand, Three Hundred Thirty-Four Dollars
($33,334.00) per month (the "Salary"). The Salary shall be
payable in equal periodic installments according to the
Employer's customary payroll practices and policies and shall
be subject to such withholdings as required by law or as
otherwise permissible under such practices or policies.
(b) Retirement and Health Benefits. The Executive will be
permitted to participate in such defined contribution pension
plan, and 401K, hospitalization, and major medical plans of
the Employer that may be in effect from time-to-time, to the
extent the Executive is eligible under the terms of those
plans (collectively, the "Benefits").
(c) Bonuses. The Employer shall pay bonuses to Executive in the
amount, and subject to the terms and conditions set forth in
Schedule A attached hereto.
(d) Vehicle. During the Executive's employment, Executive shall
have use of a leased company vehicle up to $700.00 per month
(four door GM, Chrysler or Ford) in accordance with the
Employer's standard policy on company vehicles as in effect
from time-to-time. The Employer shall be responsible for
maintenance costs with respect to such vehicle. At Executive's
option, Company will reimburse at least an equal amount for
use of Executive's own automobile.
(e) Life Insurance. During the Executive's employment, the
Employee shall be eligible to participate in the Employer's
term or group life insurance benefit plan and to the extent
the Employee meets applicable underwriting criteria, at the
expense of the Employer, shall have death benefit coverage up
to $1,000,000.00, for which the Employee may designate a
beneficiary.
(f) Vacation. During his first full year of employment, the
Executive shall be entitled to two weeks vacation in
accordance with the Employer's then applicable vacation
policy. Thereafter, the Executive shall be entitled to three
weeks of vacation in accordance with the Employer's then
applicable vacation policy. The Executive may elect to take up
to two weeks additional vacation in any year, at his option,
however, such vacation shall be without pay.
(g) Relocation. The Employer shall pay reasonable relocation and
moving expenses for Executive and his immediate family's
personal and household goods. Prior to incurring any such
expenses, Executive shall obtain three competitive bids for
any relocation or moving services and submit such bids for
approval by the Employer. For any new residence that Executive
will purchase in the close vicinity of Winfield, or another
location approved by the Board of Directors, the Employer will
also reimburse the Executive for closing costs of both
properties.
(i) The Employer shall pay reasonable travel and
lodging expenses for three house-hunting trips for the
Executive and spouse. These, and any other miscellaneous
related relocation and moving expenses, shall not exceed
$10,000. The Employer shall gross up to the Executive, the
projected tax liability for payment of such expense by the
Employer.
(ii) Temporary housing for 150 days (or until he is
permanently relocated), before Executive's permanent
relocation in the Winfield area (or other location approved by
the Board), will be reimbursed for all expenses, by the
Employer.
(iii) The Executive shall permanently re-locate
within the Winfield area within 150 days from commencement of
employment.
(iv) The Employer will pay for initiation fee and any
fees of a country club, including expenses monthly incurred at
the club for business purposes, at a location in the Winfield
area.
3. TERMINATION
3.1 EVENTS OF TERMINATION
All rights of the Executive under this Agreement or otherwise as an
employee of the Employer will terminate:
(a) upon the death of the Executive;
(b) upon the disability of the Executive (as defined in Section
3.2) immediately upon notice from either party to the other;
(c) for cause (as defined in Section 3.3), immediately upon notice
from the Employer to the Executive, or at such later time as
such notice may specify; or
(d) upon not less than ninety (90) days' prior notice by either
party to the other.
3.2 DEFINITION OF DISABILITY
For purposes of Section 3.1, the Executive will be deemed to have a "disability"
if, for physical or mental reasons, the Executive is unable to perform the
essential functions of the Executive's duties under this Agreement for 60
consecutive days, or 120 days during any twelve month period, as determined in
accordance with this Section 3.2. The disability of the Executive will be
determined by a medical doctor selected by the Employer, upon fifteen days'
advance written notice to the Executive. The Executive must submit to a
reasonable number of examinations by the medical doctor making the determination
of disability under this Section 3.2, and the Executive hereby authorizes the
disclosure and release to the Employer of such determination and all supporting
medical records. The determination of the medical doctor selected under this
Section 3.2 will be binding on both parties.
3.3 DEFINITION OF "FOR CAUSE"
For purposes of this Agreement, the phrase "for cause" means: (a) the
Executive's material breach of this Agreement; (b) the Executive's violation of
any written Employer policy for which other employees would be subject to
termination; (c) the appropriation (or attempted appropriation) of a business
opportunity of the Employer, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of the
Employer; (d) the misappropriation (or attempted misappropriation) of any of the
Employer's funds or property; (e) the conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of no contest
with respect to, a felony, the equivalent thereof, or any other crime, with
respect to which imprisonment is the punishment; or (f) the Executive's failure
to obey a written directive of the Board of Directors or Chairman of the Board,
having a bearing on the Executive's duties.
3.4 TERMINATION PAY
Effective upon the termination of the Executive's employment, the Employer will
be obligated to pay the Executive (or, in the event of his death, his estate)
only such compensation as is provided in this Section 3.4, and in lieu of all
other amounts and in settlement and complete release of all claims the Executive
may have against the Employer.
(a) Termination by the Employer for Cause. If the Employer terminates
this Agreement for Cause, the Executive will be entitled to receive his Salary
and Benefits only through the date such termination is effective.
(b) Termination upon Disability. If this Agreement is terminated by
either party as a result of the Executive's disability, as determined under
Section 3.2, the Employer will continue to pay the Executive his Salary through
the remainder of the calendar month during which such termination is effective
and for the lesser of twelve consecutive months thereafter or the period until
disability insurance benefits commence under any disability insurance coverage
furnished by the Employer to the Executive.
(c) Termination upon Death. If this Agreement is terminated because of
the Executive's death, the Executive will be entitled to receive his Salary and
Benefits through the end of the calendar month in which his death occurs.
(d) Termination by Notice by the Employer. After the guaranteed first
year term, if this Agreement is terminated by Employer upon the provision of
ninety (90) days' notice to the Executive thereof in accordance with Section
3.1(d), the Employer will continue to pay the Executive his Salary and Benefits
(excluding pension contribution) for twelve consecutive months after the date of
such notice.
(e) Termination by Notice by Executive. If Executive resigns his
employment as delivers the ninety (90) day notice required by Section 3.1(d),
then Employer will continue to pay the Executive his Salary and Benefits through
the 90 day period.
(f) Benefits. The Executive's accrual of, or participation in plans
providing for, the Benefits and all other benefits will cease at the effective
date of the termination of this Agreement, and the Executive will be entitled to
accrued Benefits pursuant to such plans only as provided in such plans. The
Executive will not receive, as part of his termination pay pursuant to this
Section 3, any payment or other compensation for any vacation, holiday, sick
leave, or other leave unused on the date the notice of termination is given
under this Agreement.
3.5 DEFINITION OF "CHANGE OF CONTROL"
For purposes of this Agreement "Change of Control" means the occurrence of any
of the following: (a) adoption of a plan relating to the liquidation or
dissolution of the Employer, or (b) the sale, lease, transfer, conveyance or
other disposition in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, excluding,
however, any transaction or series or series of transactions to the shareholder
or to an affiliate of the shareholder, or to an immediate family member of any
such affiliate.
3.6 RESIGNATION AFTER "CHANGE OF CONTROL"
After the occurrence of any event or events which constitute a "change in
control" in the Employer, the Executive shall have the election to voluntarily
terminate employment with the Employer and to receive the continuation of Base
Salary for a period of 24 months following the effective date of his
resignation. Within 45 days of the occurrence of a change in control event, the
Executive shall deliver written notice to the Board of Directors of the Employer
in which the specific change of control event shall be identified with
particularity and in which the Executive shall provide notice of his voluntary
resignation from all positions held in the Employer and its subsidiaries and
affiliates, the same being effective not less than 30 days from the date of
notice and not more than 60 days from the date of notice. The Company may, at
its election, waive the waiting time set forth in such notice, in full or in
part. The Executive will not independently make any announcement of his
election.
If the Executive obtains other employment, or commences business as a
principal, agent or representative of another business entity while the
continuation of his salary is ongoing according the previous paragraph, then the
payments made by the Employer will be reduced by the amount of compensation
earned or accrued by the Executive in his new business relationship, for the
balance of the 24 month period. The Executive shall have a duty to report all
such income to the Employer, in order for this section to be administered.
4. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
In consideration of the compensation and benefits to be paid or
provided to the Executive by the Employer under this Agreement, the Executive
covenants as follows:
(a) Confidentiality.
(i) The Executive will at all times, hold in confidence
all proprietary or business confidential information
of the Employer and will not disclose it to any
person except with the specific prior written consent
of the Employer or except as otherwise expressly
permitted by the terms of this Agreement.
(ii) Any trade secrets of the Employer will be entitled to
all of the protections and benefits under any
applicable law. If any information that the Employer
deems to be trade secret is found by a court of
competent jurisdiction not to be a trade secret for
purposes of this Agreement, such information will,
nevertheless, be considered confidential information
for purposes of this Agreement. The Executive hereby
waives any requirement that the Employer submit proof
of the economic value of any trade secret or post a
bond or other security.
(iii) None of the foregoing obligations and restrictions
applies to any part of the confidential information
that the Executive demonstrates was or became
generally available to the public other than as a
result of a disclosure by the Executive.
(iv) The Executive recognizes that, as between the
Employer and the Executive, all of the Proprietary
Items, whether or not developed by the Executive, are
the exclusive property of the Employer. Upon
termination of this Agreement by either party, or
upon the request of the Employer during the
employment, the Executive will return to the Employer
all of the proprietary items in the Executive's
possession or subject to the Executive's control, and
the Executive shall not retain any copies, abstracts,
sketches, or other physical embodiment of any of the
Proprietary Items.
5. NON-COMPETITION AND NON-INTERFERENCE
5.1 The Executive acknowledges that: (a) the Employer's business is
international in scope and its products are or will be marketed
throughout the world; (b) the Employer competes with other businesses
that are or could be located in any part of the United States; and (c)
the provisions of this Section 5 are reasonable and necessary to
protect the Business.
5.2 COVENANTS OF THE EXECUTIVE
In consideration of the acknowledgments by the Executive, and in consideration
of the compensation and benefits to be paid or provided to the Executive by the
Employer, the Executive covenants that he will not, directly or indirectly:
(a) during his employment, and for three years thereafter, be
employed by, participate in, associate with, or invest in,
own, manage, operate, finance, or control, any business whose
products or activities compete in whole or in part with the
products or activities of the Employer anywhere in the world;
(b) whether for the Executive's own account or for the account of
any other person, at any time during this employment or for
three years thereafter, solicit business of the same or
similar type being carried on by the Employer, from any person
known by the Executive to be a customer of the Employer,
whether or not the Executive had personal contact with such
person during and by reason of the Executive's employment with
the Employer;
(c) whether for the Executive's own account or the account of any
other person (i) at any time during his employment or for five
years thereafter, solicit, employ or otherwise engage as an
employee, independent contractor, or otherwise, any person who
is or was an employee of the Employer at any time during the
employment or in any manner induce or attempt to induce any
employee of the Employer to terminate his employment with the
Employer; or (ii) at any time during his employment and for
five years thereafter, interfere with the Employer's
relationship with any person, including any person who at any
time during the employment was an employee, contractor,
supplier, or customer of the Employer; or
(d) at any time during or after the employment, disparage the
Employer or any of its shareholders, directors, officers,
employees, or agents.
If any covenant in this Section 5.2 is held to be unreasonable, arbitrary, or
against public policy, such covenant will be considered to be diminished or
modified, as a court of competent jurisdiction may determine in order to allow
it to comply with applicable law, and shall be binding as so modified. The
period of time applicable to any covenant in this Section 5.2 will be extended
by the duration of any violation by the Executive of such covenant. The
Executive will, while the covenant under this Section 5.2 is in effect, give
notice to the Employer, within ten (10) days after accepting any other
employment, of the identity of the Executive's employer. The Employer may notify
such employer that the Executive is bound by this Agreement and, at the
Employer's election, furnish such employer with a copy of this Agreement or
relevant portions thereof.
6. GENERAL PROVISIONS
6.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of this Agreement would be
irreparable and that an award of monetary damages to the Employer for such a
breach would be an inadequate remedy. Consequently, the Employer will have the
right, in addition to any other rights it may have, to obtain injunctive relief
to restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement, and the Employer will not be obligated to post
bond or other security in seeking such relief. Without limiting the Employer's
rights under this Section 6 or any other remedies of the Employer, if the
Executive breaches any of the provisions of Section 4 or 5, the Employer will
have the right to cease making any payments otherwise due to the Executive under
this Agreement. The covenants by the Executive in Sections 4 and 5 are essential
elements of this Agreement, and without the Executive's agreement to comply with
such covenants, the Employer would not have entered into this Agreement or
employed the Executive.
6.2 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
6.3 NOTICES
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to the Employer: Continental Global Group, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board - PERSONAL &
CONFIDENTIAL
Also at his office: 0000 Xxxxxxxx Xxxx., Xxxxxxxx
Xxx., XX 00000
If to the Executive: Xxxxxx X. Xxxxxx
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This Agreement and any documents executed in connection herewith, contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, between
the parties hereto with respect to the subject matter hereof. This Agreement may
not be amended orally, but only by an agreement in writing signed by the parties
hereto.
6.4 ARBITRATION
This Agreement shall be governed by and construed in accordance with the laws of
the State of Alabama, without regard to principles of conflicts of laws. All
disputes under this Agreement, except for claims for injunctive relief, shall be
settled by arbitration in Birmingham, Alabama, before a single arbitrator
pursuant to the Rules of Commercial Arbitration of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction there over. Arbitration may be
commenced at any time by any party hereto giving written notice to each other
party to a dispute that such dispute has been referred to arbitration under this
section 6.4. The arbitrator shall be selected by the joint agreement of the
Executive and the Employer, but if they do not so agree within 20 days after the
date of the notice referred to above, the selection shall be made pursuant to
the rules of such Association from the panels of arbitrators maintained by such
Association. Any award rendered by the arbitrator shall be conclusive and
binding upon the parties hereto.
6.5 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
6.6 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
6.7 WAIVER OF JURY TRIAL
THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO
THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date above first written above.
EMPLOYER: EXECUTIVE:
CONTINENTAL GLOBAL GROUP INC.
By: __________________________________ _____________________
Xxxxxx X. Xxxxxx
Title: ________________________________
EXHIBIT A
BONUSES
Annual Bonuses - The Executive shall be entitled to the payment of an annual
bonus of up to 50% of Basic Compensation upon the achievement of certain pre-tax
profit targets established by the Board of Directors in connection with approval
of the Employer's annual business plan. If earned by the Executive, such annual
bonus shall be paid within 90 days of the date that the Employer's audited
financial statements have been approved by the Board of Directors for the
previous fiscal year; provided, however, the Executive shall not be entitled to
any bonus payment unless the Executive is employed by the Employer at the time
such bonus payment becomes due. If the Executive is terminated during any year
in which an annual bonus would have become payable had the Executive remained
employed with the Employer, the Executive shall be entitled to a pro-rated
annual bonus based upon actual results through his date of termination as
reasonably determined by the Board of Directors. The bonus due and payable to
the Executive for any Fiscal Year shall be calculated in accordance with the
table below:
Achievement of
Bonus Percentage Pre-Tax Profit Target
50% 100%
0% 75%
Notwithstanding the foregoing, if the percentage of target achieved is greater
than 75%, but less than 100%, of the annual pre-tax profit target established by
the Board of Directors, than the Executive's annual bonus shall be determined by
on a pro-rata basis for each percentage point of pre-tax profit achieved that is
greater than 75% of target. If the percentage of target achieved is greater than
100%, of the annual pre-tax profit target established by the Board of Directors,
than the Executive's annual bonus percentage shall be 50% plus an additional 1%
for each percentage point of pre-tax profit achieved that is greater than 100%
of target. If a change in accounting practice results in a material increase or
decrease of the Employer's pre-tax profit for any fiscal year, than the Board of
Directors may determine in good faith whether any adjustment in the pre-tax
profit goal and bonus calculation will be made. Pre-tax profit shall be
determined in accordance with the Employer's annual audited financial statements
without giving effect to any extraordinary transaction, such as a repurchase of
securities or a sale or purchase of a business unit, or the sale of a material
capital asset. The Board of Directors determination of any applicable bonus
amount and of whether a pre-tax profit target has been achieved shall be final
and binding upon the Executive.
