EXHIBIT 10.3
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 31st day of
December, 1997, is entered into by Globe Manufacturing Co., a Massachusetts
corporation, with its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxx
Xxxxx, XX 00000 (the "Company"), and Xxxxxxxx X. Xxxxx, of Bristol, Rhode Island
(the "Executive").
The Company desires to employ the Executive, and the Executive desires to
be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts employment with the Company, upon
the terms set forth in this Agreement, for the period commencing on January 1,
1998 (the "Commencement Date") and ending on December 31, 2000 (such period, as
it may be extended, the "Employment Period"), unless sooner terminated in
accordance with the provisions of Section 4.
2. Title; Capacity. The Executive shall serve as its Vice President -
Finance and Administration or in such other position as the Company or its Board
of Directors (the "Board") may determine from time to time. The Executive shall
be based at the Company's headquarters in Fall River, Massachusetts, or such
place or places in the continental United States as the Board shall determine.
The Executive shall be subject to the supervision of, and shall have such
authority as is delegated to him by, the Board or such officer of the Company as
may be designated by the Board.
The Executive hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board
or its designee shall from time to time reasonably assign to him. The Executive
agrees to devote his entire business time, attention and energies to the
business and interests of the Company during the Employment Period. The
Executive agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company. The Executive acknowledges receipt of
copies of all such rules and policies committed to writing as of the date of
this Agreement.
3. Compensation and Benefits.
a. Base Salary. The Company shall pay the Executive, in
installments payable at intervals in accordance with Company policy for senior
executives, an annual base salary of $219,000 commencing on the Commencement
Date. Such salary shall be subject to increase, but not decrease, from time to
time thereafter as determined by the Board.
b. Fringe Benefits. The Executive shall be entitled to participate
in all bonus and benefit programs that the Company establishes and makes
available to its Executives, if any, to the extent that Executive's position,
tenure, salary, age, health and other qualifications make him eligible to
participate. The Executive shall be entitled to no less than four weeks
vacation during each year of his employment, such vacation to be taken at such
times and intervals as shall be reasonably determined by the Executive. The
Executive shall be entitled to holiday time and sick leave in accordance with
the policy of the Company for senior executives.
c. Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with, or related to, the performance of
his duties, responsibilities or services under this Agreement, upon presentation
by the Executive of documentation, expense statements, vouchers and/or such
other supporting information as the Company may request, provided,
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however, that the amount available for such travel, entertainment and other
expenses may be fixed in advance by the Board.
4. Termination of Employment.
4.1 Notice of Termination.
(a) Any termination of the Executive's employment by the Company
or by Executive (other than due to the death of the Executive or expiration of
Employment Period) shall be communicated by a written notice to the other party
hereto (the "Notice of Termination"), given in accordance with Section 9. Any
Notice of Termination shall: (i) indicate the specific termination provision (if
any) of this Agreement relied upon by the party giving such notice, (ii) to the
extent applicable, set 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) specify the Date of Termination (as defined
below). The effective date of an employment termination (the "Date of
Termination") shall be the close of business on the date specified in the Notice
of Termination (which date may not be less than 5 days or more than 120 days
after the date of delivery of such Notice of Termination), in the case of a
termination other than due to the Executive's death, or the date of the
Executive's death, as the case may be.
(b) The failure by the 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 any such fact or circumstance in enforcing the
Executive's or the Company's right hereunder.
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(c) Any Notice of Termination for Cause given by the Company must
be given within 90 days of the occurrence of the event(s) or circumstance(s)
which constitute(s) Cause and must include a copy of a resolution of the Board
providing for such termination adopted by the affirmative vote of two-thirds of
all of the members of the Board.
(d) Any Notice of Termination for Good Reason given by the
Executive must be given within 90 days of the occurrence of the events or
circumstances which constitutes Good Reason.
4.2 Events of Termination. The employment of the Executive by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the following:
(a) The expiration of the Employment Period (as it may be
extended from time to time) in accordance with Section 1;
(b) At the election of the Company, for Cause. For the purposes
of this Agreement, Cause shall mean: (i) the Executive's intentional, willful
and continuous failure to substantially perform his or her reasonable assigned
duties (other than any such failure resulting from incapacity due to physical or
mental illness or any failure after the Executive gives notice of termination
for Good Reason), which failure is not cured within 30 days after a written
demand for substantial performance is received by the Executive from the Board
which specifically identifies the manner in which the Board believes the
Executive has not substantially performed the Executive's duties; or (ii) the
Executive's intentional and willful engagement in illegal or dishonest conduct
or gross misconduct.
(c) The death or Disability of the Executive. For purposes of
this Agreement, the term "Disability" shall mean the inability of the Executive,
due to a physical or
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mental disability, for a period of 180 consecutive calendar days, to perform the
services contemplated under this Agreement. A determination of disability shall
be made by a physician satisfactory to both the Executive and the Company,
provided that if the Executive and the Company do not agree on a physician, the
Executive and the Company shall each select a physician and these two together
shall select a third physician, whose determination as to disability shall be
binding on all parties;
(d) At the election of the Executive for Good Reason. For
purposes of this Agreement, Good Reason shall mean the occurrence, without the
Executive's written consent, of any of the events or circumstances set forth in
clauses (i) through (v) below. Notwithstanding the occurrence of any such event
or circumstance, such occurrence shall not be deemed to constitute Good Reason
if, prior to the Date of Termination specified in the Notice of Termination
(each as defined in Section 4.1(a)) given by the Executive in respect thereof,
such event or circumstance has been fully corrected and the Executive has been
reasonably compensated for any losses or damages resulting therefrom (provided
that such right of correction by the Company shall only apply to the first
Notice of Termination for Good Reason given by the Executive).
(i) any significant diminution in the Executive's duties,
responsibilities or authority in effect immediately prior to the execution of
this Agreement (the "Measurement Date");
(ii) a reduction in the Executive's annual base salary as
in the failure by the Company to (1) continue in effect any material
compensation or benefit plan or program (a "Benefit Plan") in which the
Executive participates or which is applicable to the Executive immediately prior
to the Measurement Date, unless an equitable arrangement
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(embodied in an ongoing substitute or alternative plan or reasonable cash
compensation in lieu thereof) has been made with respect to such plan or
program, (2) continue the Executive's participation in a Benefit Plan (or in
such substitute or alternative plan or make reasonable cash compensation in lieu
thereof) on a basis not materially less favorable, both in terms of the amount
of benefits provided and the level of the Executive's participation relative to
other participants, than the basis existing immediately prior to the Measurement
Date or (3) award cash bonuses to the Executive in amounts and in a manner
substantially consistent with past practice in light of the Company's financial
performance;
(iii) a change by the Company in the location at which the
Executive performs the Executive's principal duties for the Company to a new
location that is either (1) outside a radius of 35 miles from the Executive's
principal residence immediately prior to the Measurement Date or (2) more than
25 miles from the location at which the Executive performs his or her principal
duties for the Company immediately prior to the Measurement Date, and which
results in an increase in the Executive's daily commuting distance; or a
requirement by the Company that the Executive travel on Company business to a
substantially greater extent than required immediately prior to the Measurement
Date;
(iv) the failure of the Company to obtain the agreement,
in a form reasonably satisfactory to the Executive, from any successor to the
Company to assume and agree to perform this Agreement; or
(v) any failure of the Company to pay or provide to the
Executive any portion of the Executive's compensation or benefits due under any
Benefit Plan within seven days of the date such compensation or benefits are
due, or any material breach by the Company of this Agreement.
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The Executive's right to terminate his or her employment for Good Reason
shall not be affected by his or her incapacity due to physical or mental
illness.
(e) By the Executive or Company at any time without
cause.
5. Effect of Termination.
5.1 Termination by Company Without Cause or by the Executive for Good
Reason. If the Executive's employment with the Company is terminated by the
Company pursuant to Section 4.2(a) or (e) or by the Executive for Good Reason,
pursuant to Section 4.2(d) then the Executive shall be entitled to the following
benefits:
(a) the Company shall pay to the Executive in a lump sum within
15 days after the Date of Termination the sum of (A) the Executive's base salary
through the Date of Termination, and (B) the amount of any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case to the extent not
previously paid, (hereinafter referred to as the "Accrued Obligations");
(b) the Company shall pay each month to the Executive, beginning
on the date of the first normal executive payroll of the Company which occurs
more than 30 days after the Date of Termination the amount equal to one-twelfth
of the Executive's annual base salary as of the Measurement Date or as of the
date immediately before the Date of Termination provided, however, such payments
shall cease upon the Executive's death or upon the date the Employment Period
would have expired, had the Executive not been terminated.
(c) the Company shall pay the Executive, on or before 90 days
after the end of the Company's fiscal year in which the Date of Termination
occurs, the maximum amount the Executive would have been entitled to under the
incentive plan for such fiscal year
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per any plan, policy, program or agreement, had the Executive's employment not
been terminated.
(d) for 36 full calendar months after the Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue to provide life,
medical, dental, and health disability insurance benefits ("Insurance Benefit
Plans") to the Executive and the Executive's family at least equal to those
which would have been provided to them if the Executive's employment had not
been terminated, in accordance with the applicable Insurance Benefit Plans in
effect on the Measurement Date or, if more favorable to the Executive and his or
her family, in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies; provided, however,
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that if the Executive becomes reemployed with another employer and is eligible
to receive comparable benefits under another employer-provided plan, on terms at
least as favorable to the Executive and his or her family, then the benefits
described in this clause (d) shall be reduced to the extent such other benefits
are available to the Executive and his or her family; and
(e) to the extent not previously 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
following the Executive's termination of employment under any plan, program,
policy, practice, contract or agreement of the Company and its affiliated
companies (such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits").
5.2 Resignation without Good Reason; Termination for Cause;
Termination for Death or Disability. If the Executive terminates his or her
employment with the Company
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pursuant to Section 4.2(e), or if the Executive's employment with the Company is
terminated by the Company pursuant to Section 4.2(b), or by reason of the
Executive's death or Disability, then the Company shall (a) pay the Executive
(or his or her estate, if applicable), in a lump sum in cash within 15 days
after the Date of Termination, the Accrued Obligations and (b) timely pay or
provide to the Executive the Other Benefits.
6. Indemnification. The Company shall indemnify and hold harmless the
Executive from and against any and all damage, loss, liability or expense
(including reasonable legal fees) arising out of or with respect to the
performance of his duties hereunder in his capacity as an officer, director (if
applicable) and employee of the Company to the maximum extent permitted under
the laws of the Commonwealth of Massachusetts. The Executive shall notify the
Company of any claim by any third party coming to his attention which may result
in any liability on the Company's part. The Company shall have the right to
conduct the defense against any such claim with counsel of its selection.
7. Notice. All notices, instructions and other communications given
hereunder or in correction herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to Globe
Manufacturing Co., 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, XX 00000, Attention:
President, and to the Executive at the address listed on page 1 (or to such
other address as either the Company or the Executive may have furnished to the
other in writing in accordance herewith). Any such notice, instruction or
communication shall be deemed to have been delivered five business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give
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any notice, instruction or other communication hereunder using any other means,
but no such notice, instruction or other communication shall be deemed to have
been duly delivered unless and until it actually is received by the party for
whom it is intended.
8. Miscellaneous.
8.1 Employment by Subsidiary. For purposes of this Agreement, the
Executive's employment with the Company shall not be deemed to have terminated
solely as a result of the Executive continuing to be employed by a wholly-owned
subsidiary of the Company.
8.2 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
8.3 Injunctive Relief. The Company and the Executive agree that any
breach of this Agreement by the Company is likely to cause the Executive
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Executive
shall have the right to specific performance and injunctive relief.
8.4 Survival. The provisions of Section 8.9 shall survive the
termination of this Agreement.
8.5 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.
8.6 Waivers. No waiver by the Executive at any time of any breach
of, or compliance with, any provision of this Agreement to be performed by the
Company shall be deemed a waiver of that or any other provision at any
subsequent time.
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8.7 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but both of which together will
constitute one and the same instrument.
8.8 Tax Withholding. Any payments provided for hereunder shall be
paid net of any applicable tax withholding required under federal, state or
local law.
8.9 Non-Competition Agreement. Nothing herein shall be deemed to
supercede or amend the provisions of that certain Agreement between the
Executive and the Company dated December 16, 1992, as amended, relating to non-
competition, non-solicitation and intellectual property obligations of the
Executive, which Agreement and which obligations shall remain in full force and
effect.
8.10 Entire Agreement. Except as provided Section 8.9 above, this
Agreement sets forth the entire agreement of the parties hereto in respect of
the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto, including without limitation the employment agreement dated
April 7, 1988 and amended December 22, 1992; and any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.
8.11 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
GLOBE MANUFACTURING CO.
By: /s/ Xxxxxx X. Xxxxxxx, III
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Title: President
EXECUTIVE:
Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
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