Exhibit 10.4
EMPLOYMENT AGREEMENT
XIDEX UK LIMITED ("Xidex") whose registered office is situate at Xxxxxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxx XX0 0XX, Xxxxxx Xxxxxxx (1)
ANACOMP INC ("Anacomp") whose registered office is situate at 00000 Xxxxxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxxxxx, 00000, XXX (2)
AND
DR. XXXXX XXXXXXXX of Vagaland, Dardy, Xxxxxxxxxxx, Xxxxxxxxxxx, Xxxxx XX0 0XX,
Xxxxxx Xxxxxxx ("the Employee") (3)
Date of Agreement: May 3, 1995
Effective Date of Agreement: October 1, 1995
1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 3rd day of May 1995,
AMONG
(1) Xidex UK LIMITED, whose registered office is situate at Xxxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxx XX0 0XX (hereinafter referred to as "Xidex"), of the one
part and
(2) Anacomp Inc whose registered office is situate at 00000 Xxxxxxxxxxx Xxxxxx,
Xxxxx, Xxxxxxxxxx, 00000 (hereinafter referred to as "Anacomp"); of the
other part and;
(3) Dr. Xxxxx Xxxxxxxx of Vagaland, Dardy, Llangattock, Crickhowell, Powys NP8
1PU (hereinafter referred to as the "Employee").
The full identification of each party, Date of Agreement and Effective Date of
Agreement are all also included on the cover sheet immediately preceding this
page, which is incorporated herein by this reference. The following conditions
and terms shall apply:
ARTICLE I
PRIOR AGREEMENT AND JURISDICTION
This Agreement takes effect in substitution for all previous contracts,
agreements and arrangements, whether written or oral or implied among, Xidex,
Anacomp and the Employee relating to the service of the Employee by Xidex, all
of which contracts, agreement and arrangements shall be deemed to have been
terminated by mutual consent as from the Effective Date of Agreement.
This Agreement shall be governed by and interpreted in accordance with English
law and each of the parties hereto agrees to submit to the non-exclusive
jurisdiction of the English Courts with respect to any claim or matter arising
under this Agreement.
ARTICLE II
APPOINTMENT, SCOPE, TERM OF EMPLOYMENT AND COMPENSATION
The Employee's appointment as an employee of Xidex and its predecessor commenced
on January 2, 1984, and such employment shall continue, subject as hereinafter
provided, until terminated in accordance with Article IX hereof. Xidex and the
Employee hereby agree that Addendum I, attached hereto and incorporated herein
by this reference, is intended to define the Employee's scope of employment, as
well as his assigned responsibilities, the location of his employment, and the
Base Salary and Bonus payable to the Employee. The Employee acknowledges and
agrees that his compensation is confidential, and that he will only discuss it
with Anacomp's Chairman of the Board, President and/or Magnetics Group
President, as required.
2
Because Xidex is a wholly-owned subsidiary of Anacomp, and because the Employee
is only prepared to enter into this Agreement at the request of Anacomp and on
the basis of the guarantee contained in this Article, Anacomp hereby guarantees
to the Employee the observance and performance of the obligations of Xidex under
this Agreement, and Anacomp hereby undertakes that upon any failure on the part
of Xidex to perform any of its obligations hereunder, Anacomp will pay any
monies and perform and observe any obligations on the part of Xidex contained in
this Agreement.
ARTICLE III
CONTINUOUS EMPLOYMENT
For the purposes of determining the Employee's continuous period of employment
pursuant to the Employment Protection (Consolidation) Xxx 0000, Xidex and
Anacomp agree that the Employee's employment hereunder is continuous with
Employee's previous employment with Control Data Limited since January 2, 1984.
ARTICLE IV
HOURS OF WORK
The Employee's hours of work will be Monday to Friday, 8:45am to 4:45pm, with a
one-half hour for a luncheon break. Additionally, or as reasonably required,
the Employee will work such other hours as may be necessary to carry out his
duties hereunder.
ARTICLE V
FRINGE BENEFITS
In addition to the Employee's Base Salary and Bonus compensation set forth in
Addendum I hereto, the Employee shall be entitled to the following fringe
benefits:
1. In addition to the normal 8 days public holidays, 27 days of paid holiday
per annum, the timing of which shall be taken with senior management's
prior approval. Xidex's holiday year runs from January to December. The
Employee's entitlement to holidays shall accrue pro rata throughout each
holiday year. The Employee may, with senior management's approval, carry
any unused holiday entitlement forward to a subsequent year, or at
Anacomp's or Xidex's option receive payment in lieu of such unused holiday
entitlement. Upon the termination of this Agreement for any reason
whatsoever, the Employee will be entitled to pay in lieu of any unused
holiday entitlement.
2. Xidex will make contributions on behalf of the Employee into the Xidex
Wales Employee Benefits Plan ("the Plan") in accordance with the Plan's
Trust Deed and Rules. The Plan includes the benefit of pension, life
assurance, and long term disability coverage. In the event of Xidex and/or
Anacomp terminates the Plan, Xidex and/or Anacomp will ensure that the
Employee is provided with the benefit of a similar benefits plan, which
plan shall not be less
3
favorable than the Plan. A contracting out certificate issued under the
Social Security Pensions Act of 1975 is in force with respect to the
Employee's employment with Xidex.
3. Xidex will provide and maintain coverage from the Private Patients Plan or
other similar private medical plan for the benefit of the Employee and his
immediate family, the extent of the coverage being executive coverage,
hospital band C.
ARTICLE VI
EXPENSES
Xidex will reimburse the Employee for all reasonable expenses incurred in the
performance of his duties hereunder, in accordance with the terms and conditions
of Xidex's standard reimbursement policy (or if Xidex does not have such policy,
Anacomp's standard reimbursement policy).
Xidex will provide the Employee with a petrol payment card with respect to the
Employee's business-related and private use of his car.
ARTICLE VII
INSURANCE
In the event that the Employee is required to work abroad, Xidex or Anacomp will
provide and maintain suitable insurance to cover all costs, expenses and
liabilities, including legal fees, which might be incurred as a result of
personal injury occasioned to or by the Employee, including loss of or damage to
the Employee's property. Xidex shall at its expense provide full coverage for
the Employee under Xidex's Travel and Accident Insurance Scheme.
ARTICLE VIII
REDUNDANCY
In the event the Employee is terminated by reason of redundancy, Xidex will pay
to the Employee, in addition to any payment required by Article X below, a lump
sum payment in an amount equal to twice the Employee's Weekly Salary (as
hereinafter defined) multiplied by the Employee's length of service (calculated
in whole years). For purposes of this Article VIII, "Weekly Salary" shall be
deemed to be the Employee's average, weekly cash compensation (Base Salary and
Bonus) paid to the Employee during the preceding three (3) calendar years
immediately prior to the redundancy. The Employee's Weekly Salary and length of
service will be calculated as at the date of termination of the Employee's
employment by reason of such redundancy.
4
ARTICLE IX
TERMINATION OF EMPLOYMENT
The parties agree that the Employee's employment with Xidex may be terminated as
follows:
1. Without Cause.
Xidex may terminate the Employee at any time without cause by giving
the Employee not less than twelve (12) calendar month's notice in
writing.
2. With Cause.
Xidex may immediately terminate the Employee at any time "for cause",
upon written notice to the Employee specifying the cause and the
effective date of termination. As used herein, "for cause" shall
mean:
(a) The inability of the Employee due to ill health (as reasonably
determined by the Board of Directors of Xidex) to perform the
Employee's assigned duties on a full-time basis for any
continuous period of one hundred and twenty (120) days or an
aggregate of one hundred and eighty (180) days in any twelve (12)
month period, which period shall commence on the Effective Date
of Agreement and shall recommence upon every anniversary date of
the Effective Date of the Agreement;
(b) The willful and continued failure by the Employee substantially
to perform his duties and obligations hereunder or the willful
engagement by the Employee in gross misconduct. For the purposes
of this subsection, no act or failure to act on the Employee's
part shall be considered "willful" unless done or omitted to be
done by the Employee in bad faith and without reasonable belief
that his action or omission was in the best interests of Xidex.
3. Death.
Death of the Employee shall automatically terminate this Agreement.
4. Resignation
The Employee may terminate his employment at any time by giving Xidex
not less than twelve (12) calendar month's notice in writing of his
intention to resign.
5. Demotion, Transfer or Reduction in Compensation
The Employee may at his option deem a demotion, a transfer or a
reduction in compensation to be a termination of his employment by
Xidex.
6. Sale of Xidex.
If Anacomp sells substantially all of the assets of Xidex to an
unaffiliated third party, or sells stock representing a controlling
interest in Xidex to such a party, then in either such
5
case, the Employee shall continue to have the benefit of and be
subject to Sections 1 through 5 of this Article IX and to Article X
below.
ARTICLE X
PAYMENT AND OBLIGATIONS AFTER TERMINATION
If the Employee is terminated by Xidex for cause pursuant to Section 2(b) of
Article IX above or if the Employee resigns, then the Employee shall be paid
only that part of the Employee's Base Salary accrued to the date of termination,
and the Employee shall not be entitled to any month-end or year-end Bonus not
already paid or fully earned except and to the extent required by law.
If the Employee is terminated due to his death or for cause pursuant to Section
2(b) of Article IX above, then in addition to the Base Salary described in the
foregoing paragraph, the Employee shall also be paid his Bonus on a pro rata
basis computed to the date of termination.
If the Employee is terminated by Xidex without cause or as a result of a Sale of
Xidex, or if the Employee deems a termination to have occurred due to a
demotion, transfer or reduction in compensation, then the Employee shall be
entitled to termination pay equal to the Employee's previous twelve (12) months'
total compensation, including Bonuses and fringe benefits, payable in lump sum,
and all of his existing options to acquire Anacomp Common Stock shall
immediately vest. All termination payments made pursuant to this paragraph of
Article X shall be in full and complete payment of any and all claims that the
Employee may have against Xidex or Anacomp regarding his employment or the
termination thereof, and the Employee hereby expressly waives all rights that he
may have to any other payments. All payments due to the Employee hereunder are
absolute, and shall not be diminished or otherwise affected by virtue of the
Employee securing alternative employment.
For purposes of calculating this lump sum payment, the Employee's compensation
for the preceding twelve (12) months shall be deemed to be: (i) with respect to
Base Salary, the highest rate of Base Salary remuneration received by the
Employee for any period of twelve (12) consecutive months within the three (3)
calendar years immediately preceding the termination date; (ii) with respect to
Bonuses, the largest Bonus received by the Employees for any period of twelve
(12) consecutive months within the three (3) preceding calendar years
immediately preceding the termination date; and (iii) with respect to fringe
benefits, the value of such benefits received by the Employee during the twelve
(12) month period immediately preceding the termination date.
All payments required to be made to the Employee pursuant to this Article X, and
any redundancy payments required to be made to the Employee pursuant to Article
VIII above, shall be made within forty-five (45) days after the date of
termination. If any such payments are not made during such time period, then
interest will accrue on the sum due from the termination date and until paid at
the rate of four percent (4%) above the base interest rate in effect at Barclays
Bank Plc upon such termination date.
The Employee agrees to return all property of Xidex and/or Anacomp, to a duly
authorized representative of Xidex, including but not limited to, details or
equipment, prices, specifications, programs, customer and prospective customer
lists, and any other proprietary data or objects
6
acquired through the Employee's employment with Xidex within seven (7) days
upon termination of the Employee's employment, whether the termination is
with or without cause.
ARTICLE XI
RESTRICTIVE COVENANTS AND NON-COMPETITION;
INVENTIONS AND IMPROVEMENTS;
CONFIDENTIAL INFORMATION
The Employee agrees to strictly abide by the covenants and provisions set out in
Addendum II attached hereto and expressly incorporated by this reference herein.
ARTICLE XII
WARRANTIES AND REPRESENTATIONS OF THE EMPLOYEE
The Employee hereby warrants and represents as follows:
1. That the execution of this Agreement and the discharge of the Employee's
obligations hereunder will not breach or conflict with any other contract,
agreement or understanding between the Employee and any other party or
parties.
2. That the Employee has ideas, information and know-how relating to the type
of business conducted by Xidex and Anacomp, and the Employee's disclosure
of such ideas, information and know-how to Xidex and Anacomp will not
conflict with or violate the rights of any third party or parties with
respect thereto.
ARTICLE XIII
REMEDIES
The parties agree that the remedy for any breach of this Agreement shall include
actions in equity for injunctive relief as well as money damages. The remedies
given to or reserved by Xidex, and Anacomp and/or the Employee hereunder shall
be cumulative and not exclusive of any other remedy available under law.
ARTICLE XIV
NO WAIVER
The failure of any of the parties to enforce at any time or for any period of
time any of the provisions of this Agreement shall not be construed as a waiver
of such provisions or of the right of the party thereafter to enforce each and
every such provision.
7
ARTICLE XV
BENEFIT
This Agreement shall bind, benefit, and be enforceable by Xidex and Anacomp and
their successors and assigns, and by the Employee and his heirs, executors,
administrators and legal representatives.
ARTICLE XVI
SEVERABILITY
Should any provision of the Agreement not be enforceable in any jurisdiction,
the reminder of the Agreement shall not be affected thereby.
ARTICLE XVII
SURVIVAL
The obligations contained in Articles X and XI hereof shall survive any
termination of this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of the
parties hereto upon the day and year first before written.
SIGNED BY
for and on behalf of
Xidex U.K. Limited
in the presence of:
SIGNED BY
for and on behalf of
Anacomp, Inc.
in the presence of:
Signed by:
Dr. Xxxxx Xxxxxxxx
in the presence of:
8
ADDENDUM I
TO
DR. XXXXX XXXXXXXX'
EMPLOYMENT AGREEMENT
SCOPE OF EMPLOYMENT
Xidex employs the Employee in the capacity of Vice President and General Manager
of Operations.
ASSIGNED RESPONSIBILITIES
The Employee is responsible for managing the European Operations for Anacomp's
Magnetics Group and for performing such other reasonable duties as may be
assigned to Employee from time to time by Xxxxx X. Xxxxxxx, J. Xxxx Xxxxx or X.
Xxxx Xxxxxx III, or any of such person's respective replacements, with such
duties to be consistent with the Employee's position as Vice President and
General Manager of Operations.
LOCATION
The Employee is based at Brynmawr, Gwent and shall perform his duties at Xidex's
premises in Brynmawr. Xidex and/or Anacomp shall not, without the Employee's
prior written consent, require him to perform his duties elsewhere, nor shall
Xidex and/or Anacomp be entitled to require the Employee to relocate his
residence without his prior written consent. In the event that the Employee
agrees to relocate, Xidex agrees to reimburse him for all of his reasonable
relocation expenses.
BASE SALARY
For all services rendered by Employee to Xidex under this Agreement, the
Employee shall receive a Base Salary of 54,000 British pounds per year for the
1995 fiscal year that began on October 1, 1994, with such Base Salary to accrue
on a day-to-day basis and to be payable to the Employee by credit transfer of
equal monthly payments in arrears on or before the 15th day of each calendar
month. The Employee's Base Salary will be reviewed at the beginning of each
fiscal year, which for the avoidance of doubt is October 1st of each year.
BONUS COMPENSATION
In addition to his Base Salary, the Employee shall receive a minimum annual
Bonus of 23,300 British Pounds for the 1995 fiscal year commencing October 1,
1994, based upon the Employee achieving 100% of his assigned objectives. The
Employee's annual Bonus and objectives shall be established at the beginning of
each fiscal year.
The Employee's Bonus shall be payable to the Employee by credit transfer within
90 days of the end of Anacomp's fiscal year.
9
Subject to Article X hereof, if the Employee shall be employed under this
Agreement for only a part of Xidex's fiscal year, then he shall be entitled to a
rateable proportion (apportioned on a time bases) of the Bonus to which he would
have been entitled if he had been employed for the whole of that year, payable
to the Employee by credit transfer.
If Xidex fails to pay the Employee any Base Salary or Bonus due under this
Addendum I within thirty (30) days of its payment date, then interest will
accrue on the sum from the due date and until paid at the rate of four percent
(4%) above the base interest rate in effect at Barclays Bank Plc upon the date
that the payment was due.
10
ADDENDUM II
TO
DR. XXXXX XXXXXXXX'
EMPLOYMENT AGREEMENT
EMPLOYEE'S COVENANT NOT TO COMPETE UNFAIRLY OR DISCLOSE TRADE SECRETS
The Employee acknowledges and agrees that all references in this Addendum II to
"Anacomp" shall be deemed to include Anacomp, Xidex, and any other company in
which Anacomp directly or indirectly owns a controlling interest.
1. The Employee acknowledges and agrees that it has had access to important
competitive information and trade secrets maintained by Anacomp as
proprietary and confidential, and the Employee specifically undertakes and
agrees that during the twelve (12) months following the termination of his
employment with Anacomp for whatever reason, the Employee will not,
directly or indirectly, compete with Anacomp's Magnetics Business (as
hereinafter defined) or enter the employ of or become financially
interested in or affiliated or connected, directly or indirectly, with any
business that is engaged in the Magnetics Business or that will compete in
any manner whatsoever with the Magnetics Business of Anacomp. For purposes
of this Agreement, the Magnetics Business of Anacomp shall be defined as
the manufacturer, sale or distribution of magnetic media data storage
products, including but not limited to (i) open reel tape, 3480 and 3490E
data tape cartridges, and TK CompacTape data tape cartridges, (ii) rigid
disk packs and cartridges, and Lark/RSD cartridges, (iii) voice logging
tape, instrumentation tape and transfer tape, (iv) "cookies" used in the
manufacture of flexible diskettes, and (v) flexible diskettes, optical and
magneto-optical disks, and quarter-inch, 4mm and 8mm data tape cartridges,
and any data storage products that are similar to or that replace any of
the foregoing products.
2. For a period of twelve (12) months (or the maximum period permitted by law,
whichever is less) following the termination of his employment with Anacomp
for whatever reason, the Employee agrees that he will not combine or
conspire with any person employed by Anacomp (or who was employed by
Anacomp during the last six (6) months of the Employee's employment by
Anacomp) for the purpose of undertaking planning for or organization of any
business that will engage in the Magnetics Business or that will compete in
any manner with the Magnetics Business of Anacomp.
3. For a period of twelve (12) months (or the maximum period allowed by law,
whichever is less) following the termination of his employment with Anacomp
for whatever reason, the Employee agrees that he will not, directly or
indirectly, or by action in concert with others, induce or influence (or
seek in to induce or influence) any person who is engaged (as an employee,
agent, independent contractor, or otherwise) by Anacomp to terminate his or
her employment or engagement and to enter the employ of or become
affiliated or connected, directly or indirectly, with any business that is
engaged in the Magnetics Business or that will compete in any manner
whatsoever with the Magnetics Business of Anacomp.
11
4. The Employee specifically agrees that he will not, for a period of twelve
(12) months following the termination of his employment with Anacomp for
whatever reason, in any fashion, form, or manner, unless specifically
consented to in writing by Anacomp, either directly or indirectly use or
divulge, disclose or communicate to any person, firm, or corporation, in
any manner whatsoever, any confidential information of any kind, nature or
description concerning any matters affecting or relating to the business of
Anacomp including, without limiting the generality of the foregoing, the
names, buying habits, or practices of any of its customers, its marketing
methods and related data, the names of any of its vendors or suppliers,
costs of materials, the prices it obtains or has obtained or at which it
sells or has sold its products or services manufacturing and sales costs,
lists or other written records used in the business of Anacomp,
compensation paid to employees and other terms of employment, or any other
confidential information of, about, or concerning the business of Anacomp,
its manner of operation, or other confidential data of any kind, nature or
description, the parties hereto stipulating that as between them, the same
are important, material, and confidential trade secrets and affect the
successful conduct of the business of Anacomp, and its goodwill, and that
any breach of any term of this paragraph is a material breach of this
Agreement. All equipment, notebooks, documents, memoranda, reports, files,
samples, books, correspondence, lists, other written and graphic records,
affecting or relating to the business of Anacomp, which the Employee shall
prepare, use, construct, observe, possess, or control shall be and remain
Anacomp's sole property. For purposes of this section 4 and any subsequent
Sections of this Addendum II, the "business of Anacomp" shall be deemed to
be the business conducted by Anacomp as a whole, including the Magnetics
Business.
5. The Employee acknowledges and agrees that all experiments, developments,
formulas, patterns, devices, secret inventions and compilations of
information, records, and specifications created by or disclosed to the
Employee during his employment with Anacomp are Anacomp trade secrets,
which the Employee hereby agrees that he will not disclose, directly or
indirectly, or use in any way, for a period of twelve (12) months following
his termination as an employee of Anacomp for whatever reason.
6. The Employee further acknowledges and agrees that all improvements,
discoveries, systems, techniques, ideas, processes, programs and other
things of value made or conceived in whole or in part by the Employee while
an employee of Anacomp shall be and remain the sole and exclusive property
of Anacomp, and he will disclose all such things of value to Anacomp and
will cooperate with Anacomp to ensure that the ownership by Anacomp of such
things of value is protected. Upon termination of his employment with
Anacomp, all of the property and other things of value of Anacomp in the
Employee's possession or control, including but not limited to property and
other things of value relating to the business of Anacomp and its trade
secrets, shall be immediately delivered to Anacomp. Nothing in this
Section 6 is meant to apply to an invention for which no equipment,
supplies, facility, or trade secret information of Anacomp was used and
which was developed entirely in the Employee's own time, and (a) which is
not related (1) to the business of Anacomp or (2) to Anacomp's actual or
demonstrably anticipated research or development, or (b) which does not
result from any work performed by the Employee for Anacomp.
7. For a period of twelve (12) months (or for the maximum period permitted by
law, whichever is less) following his termination as an employee of
Anacomp, the Employee agrees that he will not directly or indirectly,
either for himself or any other person, firm,
12
or corporation, divert or take away or attempt to divert or take away,
call on or solicit or attempt to call on or solicit any of Anacomp's
customers or patrons, including but not limited to those upon whom he
has called or whom he solicited or whom he catered or with whom he became
acquainted while engaged as an Employee in the business of Anacomp.
This restriction shall not apply unless the Employee has entered the
employ of or become financially interested in or affiliated or connected,
directly or indirectly, with any business that is engaged in a business
that competes with the business of Anacomp.
8. Anacomp's failure to enforce any provision or provisions of this Agreement
shall not in any way be construed as a waiver of any such provision or
provisions, or prevent Anacomp thereafter from enforcing each and every
provision of this Agreement.
13
