EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made as of the
19th day of April, 2000 by and between USS HOLDINGS, INC., a Delaware
corporation (hereinafter "the Company"), and Xxx X. Xxxxxx, an individual
residing at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
(hereinafter "the Executive").
WHEREAS, the Executive entered into a certain three-year employment
agreement with Better Mineral & Aggregates Company ("Better Mineral"), a wholly
owned subsidiary of the Company, dated as of even date herewith (the "Subsidiary
Employment Agreement") in which the parties agreed to certain terms of
employment;
WHEREAS, pursuant to the Subsidiary Employment Agreement, the Company
desires to employ the Executive as the President and Chief Operating Officer of
Stone Materials Company, L.L.C. ("Stone Materials"), a wholly owned subsidiary
of Better Mineral and the Executive desires to be so employed by the Company, on
the terms and conditions set forth in the Subsidiary Employment Agreement and
herein;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth in the Subsidiary Employment Agreement and
herein, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby agrees to have Stone Materials employ
----------
the Executive, and the Executive hereby agrees to serve, as President and Chief
Operating Officer of Stone Materials. The Executive agrees to perform such
duties and services as set forth in the Subsidiary Employment Agreement. The
Executive further agrees to perform such duties and services under such term of
employment as defined in the Subsidiary Employment Agreement.
2. Sales Bonus. In addition to the salary, bonuses and other benefits set
-----------
forth in the Subsidiary Employment Agreement, the Executive shall be entitled to
the following:
(a) If during the Term of Employment as that term is defined in the
Subsidiary Employment Agreement, an IRR Event occurs as that term is defined in
the Stockholders Agreement, the Executive, in recognition for his services,
shall receive an amount equal to eight million dollars ($8,000,000.00), provided
that the IRR Event recognizes an appreciation in the value of USS Holdings'
Class A Common Stock such that the price at which USS Holdings' Class A Common
Stock will be acquired will be at or in excess of one hundred (100) percent
above the following target stock price in the year in which the IRR Event
occurs:
Year Price per Share
---- ----- --- -----
2000 $84.77
2001 $109.91
2002 $132.22
2003 $152.83
2004 $171.66
2005 $191.72
If the IRR Event prices USS Holdings' Class A Stock at less than one hundred
(100) percent above, but in excess of the above target stock price in the year
in which the IRR Event occurs, the Executive shall receive an amount equal to
the product of (i) the percent by which USS Holdings' Class A Common Stock price
exceeds the above target stock price in the year in which the IRR Event occurs;
and (ii) eight million dollars ($8,000,000.00).
(b) The target stock price referred to in paragraph (a) above shall be
adjusted if, at any time, the number of shares of Class A Common Stock
outstanding is increased by a stock dividend payable in shares of Class A Common
Stock or by a sub-division or split-up of shares of Class A Common Stock in a
manner as determined in good faith by the Board of Directors of the Company so
as to put the Executive in the same economic position as he was prior to such
event. The target stock price referred to in paragraph (a) above should also be
adjusted if, at any time, the Company engages in any capital reorganization, or
any reclassification of the capital stock of the Company (other than a change in
par value or from par value to no par value or from no par value to par value or
as a result of a stock dividend or sub-division, split-up or combination of
shares) or the consolidation or merger of the Company with or into another
person (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any change in the Class A
Common Stock) or of the sale or other disposition of all or substantially all of
the properties and assets of the Company as an entirety to any other person in a
manner as determined in good faith by the Board of Directors of the Company so
as to put the Executive in the same economic position as he was prior to the
transaction. The provisions of this paragraph (b) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales or
other dispositions.
(c) With respect to the payment described in Paragraph 2(a), in the
event such payment, either alone or in combination with any other payments the
Executive may receive under this Agreement, triggers liability under Section
280G and Section 4999 of the Internal Revenue Code of 1986, as amended, (the
"Code"), the Company and the Executive agree to use their best efforts to take
such actions as may be necessary to cause the stockholders of the Company to
approve such payment in a manner complying with Code Section 280G(g)(5)(B),
including without limitation providing information to the stockholders as
required by Code Section 280G(b)(5)(B)(ii). In the event that the Company and
the Executive are unable to obtain such stockholder approval, the Company and
the Executive agree to use their best efforts to maximize the Company's ability
to deduct such payment under Code Section 280G and to minimize the Executive's
tax liability under Code Section 4999, except in no event shall the Executive be
required to accept any payment that would be less than the payment the Executive
would receive if full payment was made under Paragraph 2(a) of this Agreement
and the Executive paid any excise tax due under Code Section 4999 on such
payment. Moreover, the Company and the Executive agree to utilize the procedure
set forth in Exhibit A to this Agreement.
3. Termination Following Change of Control. If the Company terminates,
---------------------------------------
or causes Better Minerals to terminate, the Executive's employment following a
Change in Control as that term is defined in Paragraph 4(f) of the Subsidiary
Employment Agreement, the Company shall pay, or cause Better Minerals to pay,
the Executive any payments due him under Paragraph 2(a) of this Agreement.
Other than as specifically set forth in this Paragraph and under Paragraph 5(f)
of the Subsidiary Employment Agreement, neither the Company nor Better Minerals
shall
2
have any further obligation to Employee in the event of the Executive's
termination following a Change in Control.
4. Disputes. In the event of any dispute between the parties hereto
--------
arising out of or relating to this Agreement or the employment relationship,
including, without limitation, any claims of discrimination, between the Company
and the Executive, such dispute shall be settled by arbitration in Washington,
D.C. in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association. Judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
5. Miscellaneous.
-------------
(a) Successors; Binding Agreement. This Agreement and the obligations
-----------------------------
of the Company hereunder and all rights of the Executive hereunder shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, provided, however, that the duties of
the Executive hereunder are personal to the Executive and may not be delegated
or assigned by him. The Executive specifically agrees that the Company may
assign this Agreement to any successor, provided that such successor agrees to
assume the terms and conditions of this Agreement.
(b) Notice. All notices of termination and other communications
------
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed by United States registered
mail, return receipt requested, addressed as follows:
If to the Company:
USS Holdings, Inc.
000 Xxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
With a Copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
If to the Executive:
Xxx X. Xxxxxx
3
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
or to such other address as either party may designate by notice to the other,
which notice shall be deemed to have been given upon receipt.
(c) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of West Virginia without regard to the
conflict of law rules thereof.
(d) Waivers. The waiver of either party hereto of any right hereunder
-------
or of any failure to perform or breach by the other party hereto shall not be
deemed a waiver of any other right hereunder or of any other failure or breach
by the other party hereto, whether of the same or a similar nature or otherwise.
No waiver shall be deemed to have occurred unless set forth in writing executed
by or on behalf of the waiving party. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
(e) Validity. 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 otherwise remain in full force and
effect. Moreover, if any one or more of the provisions contained in this
Agreement is held to be excessively broad as to duration, scope or activity,
such provisions shall be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.
(f) Survival. The parties agree that the obligation and rights set
--------
forth in Paragraph 4 of this Agreement shall survive the termination of this
Agreement for any reason.
(g) Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(h) Entire Agreement. This Agreement and the Subsidiary Employment
----------------
Agreement set forth the entire agreement and understanding of the parties 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, Executive or
representative of either party in respect of said subject matter.
(i) Headings Descriptive. The headings of the several paragraphs of
--------------------
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any of this Agreement.
(j) Capacity. The Executive represents and warrants that he is not a
--------
party to any agreement that would prohibit him from entering into this Agreement
or performing fully his obligations hereunder.
[signature page follows]
4
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.
USS HOLDINGS, INC.
/s/ Xxxxxx X. Xxxxxxxxxx
By: ____________________________________
Xxxxxx X. Xxxxxxxxxx
Vice President
XXX X. XXXXXX
/s/ Xxx X. Xxxxxx
_____________________________
5
EXHIBIT A
---------
Limitation on Payment
---------------------
Notwithstanding any other provision of this Agreement, if following an
IRR Event, any portion of the payment set forth in Paragraph 2(a), any severance
benefits or any other payment under this Agreement, or under any other agreement
with or plan of the Company (in the aggregate "Total Payments") would constitute
an "excess parachute payment," then the payments to be made to the Executive
under this Agreement may, if approved by the Executive, be reduced such that the
value of the aggregate Total Payments that the Executive is entitled to receive
shall be one dollar ($1) less than the maximum amount which the Executive may
receive without becoming subject to the tax imposed by Section 4999 of the
Internal Revenue Code of 1986 (the "Code"), or which the Company may pay without
loss of deduction under Section 280G(a) of the Code.
However, the payments to be made to the Executive under this Agreement
shall be reduced if and only if so reducing the payments results in the
Executive receiving a greater net benefit than he would have received had a
reduction not occurred and an excise tax been paid pursuant to Code Section
4999.
For purposes of this Agreement, the terms "excess parachute payment"
and "parachute payments" shall have the meanings assigned to them in Section
280G of the Code, and such "parachute payments" shall be valued as provided
therein.
Procedure for Establishing Limitation on Payments in Connection with an IRR
---------------------------------------------------------------------------
Event
-----
Within sixty (60) days following an IRR Event and delivery of notice
by the Company to the Executive of its belief that there is a payment or benefit
due to the Executive which will result in an "excess parachute payment" as
defined in Section 280G of the Code, the Executive and the Company, at the
Company's expense, shall obtain the opinion of such legal counsel, which need
not be unqualified, as the Executive may choose, which sets forth: (i) the
amount of the Executive's "annualized includible compensation for the base
period" (as defined in Code Section 280G(d)(1); (ii) the present value of the
Total Payments; and (iii) the amount and present value of any "excess parachute
payment." The opinion of such legal counsel shall be supported by the opinion of
a certified public accounting firm and, if necessary, a firm of recognized
executive compensation consultants. Such opinion shall be binding upon the
Company and the Executive.
In the event that such opinion determines that there would be an
"excess parachute payment," the severance benefits hereunder or any other
payment determined by such counsel to be includible in Total Payments may, if
approved by Executive, be reduced or eliminated as specified by the Executive in
writing delivered to the Company within thirty (30) days of his receipt of such
opinion.
The calculations, notices, and opinion provided for herein shall be
based upon the conclusive presumption that (i) the compensation and benefits
provided for herein; and (ii) any other compensation earned prior to the
effective date of termination by the Executive pursuant to the Company's
compensation programs (if such payments would have been made in the future in
any event, even though the timing of such payment is triggered by the Change in
Control), are reasonable.
The Company shall pay any costs associated with obtaining the above
opinion.
2
