Exhibit 10(i)
EMPLOYMENT AGREEMENT
This Agreement, dated as of October 24, 1996, between Xxxxxx
International, Inc., a Delaware corporation (hereinafter referred to as the
"Company"), and Xxxx X. X'Xxxxxxx (hereinafter referred to as the
"Employee").
RECITALS
The Employee has been employed by the Company for a substantial period of
time and currently serves as its Chairman and Chief Executive Officer and as a
member of its board of directors. Because of the Employee's extensive
experience and his familiarity with the affairs of the Company, the Company
wishes to assure that, in the event of a "Change in Control," as hereinafter
defined, it will continue to have the Employee available to perform duties
substantially similar to those currently being performed by him and to continue
to contribute to the Company's growth and success as he has in the past. The
Employee is willing to commit to continue in the performance of his services for
the Company upon the terms and conditions set forth herein.
COVENANTS
NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees that, effective upon a "Change
in Control" and provided that Employee is still serving as an employee of the
Company at that time, it will continue to employ Employee as the Chairman and
Chief Executive Officer of the Company to perform the duties described herein,
and Employee hereby accepts such employment on the terms and conditions stated
herein. It is understood that prior to such "Change in Control," this Agreement
shall confer no rights of employment or other benefits (or obligations)
whatsoever upon Employee, and that Employee shall remain subject to termination
at will.
2. TERM OF EMPLOYMENT. Subject to provisions for termination set forth
herein, the term of Employee's employment hereunder shall commence on the date
of a "Change in Control" (if any) and shall extend until three years after the
date of such "Change in Control." For purposes of this Agreement a "Change in
Control" shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934; provided that, without limitation,
such a Change in Control shall be deemed to have occurred if during any period
of two consecutive years individuals who at the beginning of such period
constitute members of the board of directors cease for any reason to constitute
at least a majority thereof, unless the nomination or election of each director
who was not a director at the beginning of the period was approved by a vote of
a majority of the directors still in office at the time of such nomination or
election who were directors at the beginning of the period.
3. DUTIES OF EMPLOYEE. Employee shall be the Chairman and Chief
Executive Officer of the Company and shall perform such duties and
responsibilities for the Company as may be assigned to him by the board of
directors of the Company and which are not unreasonably inconsistent with the
duties of the Chairman
and Chief Executive Officer, including such duties as are currently being
performed by the Employee. During the term of his employment, Employee shall
devote substantially all of his business time, attention and energy, and his
reasonable best efforts, to the interests and business of the Company and to
the performance of his duties and responsibilities on behalf of the Company.
During the term of Employee's employment hereunder, the Company will use its
best efforts to cause the Employee to be elected a director of the Company
and will cause the Employee to be included as a nominee for director in any
proxy solicitation by management.
4. COMPENSATION. Throughout the term of Employee's employment hereunder,
the Company shall pay Employee, for services to be rendered by him hereunder, a
guaranteed minimum salary at an annual rate equal to that being paid on the date
the term of employment hereunder commences, less all applicable federal and
state income tax withholding, FICA taxes and other payroll taxes. The
guaranteed minimum salary shall be reviewed by the Company on a yearly basis to
ascertain if any upward adjustment in the annual rate is in order, and if any
increase is made, the new annual rate shall become the guaranteed minimum salary
under this Section 4. Such compensation shall be payable semi-monthly.
5. WORKING FACILITIES AND FRINGE BENEFITS. The Employee shall be
furnished with office space, secretarial assistance and such other facilities
and services as are appropriate to his position and adequate for the performance
of his duties. The Company also shall provide to Employee during the term of
employment fringe benefits and perquisites at least equal to those provided to
Employee immediately prior to the date thereof, and the Company shall not
discriminate against Employee with respect to any vacation or holiday plan,
medical, hospital, life and disability insurance programs, pension programs and
other similar welfare benefit programs from time to time made available to the
Company's officers and key employees.
6. EXPENSES. The Company shall pay or reimburse Employee for all
reasonable expenses actually incurred or paid by him in the performance of
services rendered by him pursuant to this Agreement. Such expenses shall be
supported by the documentary evidence required to substantiate them as income
tax deductions.
7. COVENANT RESTRICTING COMPETITION; NONDISCLOSURE OF CONFIDENTIAL
INFORMATION.
(a) Employee acknowledges that his services are special and unique,
and of an unusual and extraordinary character which gives them peculiar
value, the loss of which cannot adequately be compensated in damages.
Therefore, Employee agrees that he will not, except with the written consent
of the Company, for a continuous period of eighteen (18) months commencing
immediately following termination of Employee's employment hereunder,
directly or indirectly engage or become interested in, as a partner,
director, officer, principal, agent or employee, any business which competes
with products produced, marketed or in development by the Company at the time
of such termination.
(b) Employee acknowledges that in his employment he is or will be
making use of, acquiring or adding to, confidential information of the
Company, and is or will be familiar with the Company's business, activities,
employees, customers and suppliers. Therefore, in order to protect the
Company's confidential information and to protect other employees who depend
upon the Company for regular employment, Employee agrees that, except in
connection with his employment by the Company, or with the consent of the
Company, he will not during or after the term of his employment hereunder in
any way utilize any of said confidential information and he will not copy,
reproduce, or take with him the original or any copies of said confidential
information and will not disclose any of said confidential information to
anyone.
In the event of a breach of the covenants contained in this Section 7,
the Company shall be entitled to an injunction restraining such breach in
addition to any other remedies provided by law.
If any provision of this Section 7 is adjudged by a court to be invalid
or unenforceable, the same will in no way affect any other provision of this
Section 7 or any other part of this Agreement, the application of such
provision in any other circumstances or the validity or enforceability of
this Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.
8. TERMINATION BY COMPANY.
(a) DISABILITY. The Company may terminate the active employment of
the Employee if, in the reasonable judgment of the board of directors of the
Company, he becomes unable to satisfactorily perform his duties and
responsibilities hereunder during the term of his employment because of
mental or physical disability. Upon such termination, the Employee shall be
relieved of all further obligations hereunder except obligations pursuant to
Section 7. In the event of such termination, the Company shall continue to
pay to the Employee, until the end of the term of his employment hereunder, a
salary at a rate equal to the annual rate in effect on the date of such
termination (as set forth in Section 4). Notwithstanding the foregoing, the
amounts so payable shall be reduced by any amounts payable to the Employee
during the term of his employment hereunder pursuant to any disability
benefit or wage continuation plan of the Company in effect.
(b) DEATH. In the event of the death of the Employee during the
term, the Company shall make, until the end of the term of employment
hereunder, payments at a rate equal to the annual rate in effect on the date
of death. The payments to be made under this Section 8(b) shall not be
reduced by reason of any insurance proceeds payable directly to the
Employee's beneficiaries or estate pursuant to insurance carried or provided
by the Company, and shall be made to such beneficiary as the Employee may
designate for that purpose by written notice given to the Secretary of the
Company prior to his death, or if the Employee has not so designated, then to
the personal representative of his Estate.
(c) TERMINATION FOR CAUSE. In the event fraud, defalcation, or other
similar dishonesty of the Employee involving the operations, funds or other
assets of the Company is established, or Employee is convicted of a crime
involving moral turpitude, or Employee breaches the terms of this Agreement in
any material respect, then the Company may terminate this Agreement upon giving
written notice to the Employee and thereafter, neither the Employee, his
surviving spouse or his estate shall be entitled to any further salary or
compensation from the Company pursuant to this Agreement, but the Employee's
obligations under Section 7 shall remain in effect. The parties agree that the
provisions of this Section 8(c) shall not be utilized in any manner by the
Company to avoid, negate or frustrate application of the provisions of Section 9
of this Agreement.
9. TERMINATION BY EMPLOYEE.
(a) IF LOCATION OF OFFICE CHANGES. In the event that, at any time
during the term of employment, the Company, without Employee's consent,
changes the location of the Company's offices at which Employee works to a
city more than 150 miles from its present location, the Employee may
terminate his employment with the Company by giving to the Secretary of the
Company notice in writing within three months after this right to termination
arises.
(b) IF POSITION CHANGES. It is the intention of the parties that the
Employee will be the Chairman and Chief Executive Officer of the Company
during the entire term of employment hereunder. In the event that, at any
time during the term hereunder, Employee, without his consent, does not hold
the position of Chairman and Chief Executive Officer of the Company and have
the duties and responsibilities that would normally be
expected of the Chairman and Chief Executive Officer of the Company (except
by reason of termination under Section 8), Employee may terminate his
employment with the Company hereunder by giving to the Secretary of the
Company written notice of such termination within three months after this
right to terminate arises.
(c) FOLLOWING CHANGE IN CONTROL. Employee may terminate his employment
under this Agreement in the event of a Change in Control, as defined in Section
2 hereof, by giving written notice of such termination to the Secretary of the
Company not less than six months nor more than twelve months following such
Change in Control. Without limiting the generality of the definition of Change
in Control as set forth in Section 2, the failure of the Employee to be re-
elected a director of the Company shall be deemed a Change in Control unless
such failure is due to the Employee's voluntary act or the Employee's employment
has been terminated by the Company for Cause.
(d) LUMP SUM PAYMENT. In the event of termination pursuant to subsection
(a), (b) or (c) of this Section 9, the Company shall pay to the Employee, in a
lump sum and within 30 days of such termination, an amount equal to the
aggregate balance (based on the annual rate in effect at the time of such
termination) which would have been payable to the Employee during the remaining
portion of the term hereunder had such termination not occurred, including any
benefits payable to Employee.
(e) REIMBURSEMENT. If a tax is imposed pursuant to Section 4999 of the
Internal Revenue Code, or successor provision of like import, upon payments due
under this Agreement or upon other payments to the Employee by the Company, the
Employee shall be paid an additional amount calculated so as to provide the
Employee, after he has paid the tax (including any related interest and/or
penalty) imposed by Section 4999 of the Code, with the same compensation he
would have received had not tax (including any related interest and/or penalty)
been imposed by Section 4999. For purposes of this subsection (e), the term
"Company" shall include any parent, subsidiary, affiliate, assignee, or
successor in interest of the Company or of such assignee or successor in
interest.
10. ASSIGNMENT. This Agreement is binding upon and shall be for the
benefit of the successors and assigns of the Company, including any corporation
or any other form of business organization with which the Company may merge or
consolidate, or to which it may transfer substantially all of its assets.
Employee shall not assign his interest in this Agreement or any part thereof.
11. CONSENT OF THE COMPANY. Any act, request, approval, consent or
opinion of the Company under this Agreement must be in writing and may be
authorized, given or expressed only by resolution of the board of directors of
the Company, or by such other person as the board of directors of the Company
may designate.
12. NOTICES. Any notice required hereunder to be given shall be in
writing and if:
(a) by the Company to Employee shall be directed to him at his address
set forth below, or to such other address as he shall have furnished in
writing to the Company; or
(b) by Employee to the Company shall be directed to Xxxxxx International,
Inc., 000 Xxxxxx Xxxx., Xxxxxxxxxx, Xxxxxxxx 00000, Attn: Secretary, or to such
designee or other address as the board of directors shall name and have
furnished in writing to Employee.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to contracts made
and to be performed therein.
14. ENFORCEMENT EXPENSES AND ARBITRATION. The Company agrees to reimburse
the Employee for all costs and expenses incurred by him (including the
reasonable fees of his counsel) in successfully enforcing any
of his rights under this Agreement or any claim arising out of the breach
thereof. In addition, the parties acknowledge the relative economic power of
the Company versus the Employee, and the ability of the Company to resist the
conclusion of litigation should the Employee institute legal proceedings to
enforce this Agreement or to recover damages for the breach thereof. In
recognition of this, any controversy or claim arising out of or relating to
this Agreement, including any dispute over or interpretation of the
occurrence of a "Change in Control," as previously defined, shall be settled
by arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, at the sole election of the Employee;
provided, however, that an action by the Company to enforce its rights under
Section 7 hereof shall be excluded from the arbitration provisions of this
Section 14. Any such election by Employee shall be made by written notice
given to the Company any time after such controversy or claim arises, and in
the event Employee is served with process relating to any court proceeding
concerning any such claim or controversy commenced by the Company, such
election, to be effective, shall be made by written notice within 15 days of
the time Employee is served with such process. Commencement of court
proceedings by Employee shall be deemed an election not to arbitrate. In the
event the Company commences court proceedings (other than an action by the
Company solely to enforce its rights under Section 7 hereof) and is given
notice of the election to arbitrate by the Employee within the time period
set forth above, the Company agrees to promptly dismiss such court
proceedings and submit to arbitration. In the event of such arbitration,
judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXX INTERNATIONAL, INC.
By: ___________________________________
Title: ________________________________
_______________________________________
Xxxx X. X'Xxxxxxx
_______________________________________
Address
