Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS Employment Agreement (the "Agreement") is made as of the 1st day
of April, 1999 by and between Applied Extrusion Technologies, Inc., a Delaware
corporation (the "Employer"), and Xxxx X. Xxxxxx (the "Executive").
RECITALS
1. The Executive is currently employed by the Employer as the Chairman
(the "Chairman") of its Board of Directors (the "Board") pursuant to an
Employment Agreement dated as of April 26, 1994, as in effect on the date hereof
(the "Prior Employment Agreement").
2. The Prior Employment Agreement provides that, on or after April 25,
1999, either the Executive or the Employer may, by notice given to the other,
terminate the employment of the Executive by the Employer.
3. The Employer desires to continue to employ the Executive and to make
secure for itself the experience, abilities and services of the Executive and to
prevent the loss of such experience, services and abilities.
4. In consideration of the employment to be provided hereby and the
amounts to be paid as provided herein, the Executive desires to continue to be
employed by the Employer and to agree with the Employer as further provided
herein.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Employer shall continue to employ the Executive, and the
Executive shall continue to perform services for and continue in the employment
of the Employer, for the period (the "Employment Period") beginning on the date
hereof and ending on March 31, 2003, subject to extension as set forth herein
(such date, as from time to time in effect, being referred to herein as the
"Expiration Date"); PROVIDED, HOWEVER, that, unless either the Employer or the
Executive shall give notice to the other (which notice may be given in the sole
discretion of either party hereto) no later than 90 days prior to the
then-current Expiration Date (the "Current Expiration Date") that such party
does not wish to have the Employment Period extended for another year past the
Current Expiration Date, then, at the close of business on such date which is 90
days prior to the Current Expiration Date, the Expiration Date shall
automatically become the date which is exactly one year after the Current
Expiration Date; and PROVIDED, FURTHER, that the employment of the Executive by
the Employer may be terminated prior to the Expiration Date in accordance with
all of the terms and conditions hereof.
2. CAPACITY. During such time as the Executive is employed by the Employer
hereunder:
(a) POSITION AND DUTIES. The Executive shall serve as the Chairman of
the Board, shall report and be accountable to the Board, and shall have such
other powers, duties and responsibilities, consistent with his position and
experience, and consistent in {both} time required, scope and place of
performance, with those services rendered by the Executive pursuant to the prior
Employment Agreement. The Executive shall devote his business judgment, skill
and knowledge to the discharge of his duties and responsibilities hereunder. The
Executive shall be required to devote only so much time as the Executive
determines is reasonably necessary to discharge his duties as the Chairman, and,
subject to the provisions of Sections 5 and 6, may engage in other business
activities during the Employment Period.
(b) BOARD MEMBERSHIP. The Employer agrees to propose to the
shareholders of the Employer at each appropriate Annual Meeting of such
shareholders the reelection of the Executive as a member of the Board, provided
that the Executive is otherwise eligible for such election; PROVIDED, HOWEVER,
that should Executive's employment hereunder terminate for any reason, Executive
agrees to resign from the Board, and from the board of directors of each
subsidiary or affiliate of the Employer, immediately upon the receipt of a
request for such resignation from the Board, if the Employer has paid all
amounts owed to the Executive by virtue of the termination of his employment and
is not otherwise then in default hereunder.
3. COMPENSATION.
(a) SALARY. During each year of the Employment Period, the Executive
shall receive an annual salary (the "Salary") of $415,000; PROVIDED, HOWEVER,
that effective April 1, 2000 the Salary shall be increased to $515,000 and on
each April 1 thereafter, beginning April 1, 2001, the Salary then in effect
shall be increased by the greater of (i) such increase as the Board may specify
in its sole discretion or (ii) an amount equal to the then-current Salary
MULTIPLIED BY the percentage increase (if any) in the Consumer Price Index for
All Urban Consumers (CPI-U) - U.S. City Average during the immediately preceding
calendar year.
(b) INCENTIVE BONUS. During each year of the Employment Period, the
Executive shall be eligible to receive an incentive bonus (the "Bonus") based
upon criteria that are defined annually by the Employer and will be targeted at
50% of Salary, with a maximum payout potential of 100% of Salary.
(c) EXPENSES. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him on behalf of the Employer consistent with past practices.
(d) FRINGE BENEFITS. During the Employment Period, (i) the Executive
shall be entitled to participate in or receive benefits under each disability
insurance, health, pension,
-2-
retirement and accident plan or arrangement made generally available by the
Employer to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements, (ii) the Executive shall also be entitled to payments
pursuant to a supplemental executive retirement plan having terms no less
favorable to the Executive than those set forth in Exhibit A hereto and, until
such time (if any) as such a plan is established by the Employer, shall be
entitled to the benefits set forth in said Exhibit A, and (iii) the Employer
shall provide to the Executive, or at Executive's election reimburse the
Executive on an after tax basis for the cost of, (A) disability insurance
providing not less than 65% Salary replacement until age 65, and (B) insurance
protection over the Executive's life providing death benefits of not less than
$2,500,000 payable to such person as the Executive shall have designated in a
notice filed with the Employer (the "Designee"), or, if no such person shall
have been designated, to his estate (the "Estate"), in each case consistent with
the Employer's past practices regarding such insurance for executives.
(e) CHANGE IN CONTROL. If a "Change in Control" (as such term is
defined in Exhibit A to the Employer's 1991 Stock Option Plan for Directors)
shall occur, then (i) Section 1 hereof shall be amended by replacing the date
AMarch 31, 2003" with the date which is exactly four years after the date of the
Change in Control, (ii) all stock options previously granted to the Executive
which, by their terms, have not yet vested, shall immediately vest and become
exercisable, (iii) if such Change in Control occurs prior to March 31, 2000 the
"Performance Target" referred to in Section 3(f) shall be deemed to have been
achieved, and (iv) the Executive shall be entitled to carry out his duties and
responsibilities hereunder primarily from his then current primary place of
business and will not be required to locate his primary place of business
outside such area without his consent (which may be given or withheld in his
sole discretion).
(f) PERFORMANCE TARGET. Except as otherwise provided in Section
3(e)(iii) hereof, in the event that the "Performance Target" set forth in
Exhibit A to the minutes of the March 11, 1999 meeting of the Compensation
Committee of Employer's Board shall not have been achieved by the Company, then
upon written notice referencing this Section 3(f) given by the Board to
Executive at any time during the sixty day period commencing March 31, 2000, (i)
Section 1 hereof shall be amended by replacing the date "March 31, 2003" with
the date "Xxxxx 00, 0000", (xx) Section 3(a) hereof shall be amended by deleting
the words "the Salary shall be increased to $515,000" and the words "beginning
April 1, 2001" from the proviso therein (iii) Section 3(d) hereof shall be
amended by deleting clause (ii) thereof and re-numbering the remaining clauses
of said Section accordingly; and (iv) Section 3(e) hereof shall be amended by
deleting clause (i) thereof and re-numbering the remaining clauses of said
Section accordingly.
4. TERMINATION AND COMPENSATION THEREON.
(a) TERMINATION DATE. As used herein, the term (i) "Termination Date"
shall mean the earlier of (A) the Expiration Date or (B) if the Executive's
employment is terminated (1) by his death, the date of his death, or (2) for any
other reason, the date on which such termination is to be effective pursuant to
the notice of termination given by the party terminating the employment
-3-
relationship, and (ii) "Benefits Termination Date" shall mean the later of (A)
the Expiration Date or (B) the date which is exactly two years after the
Termination Date. The Employment Period shall terminate on the Termination Date;
PROVIDED, HOWEVER, that, unless the Executive's employment is terminated
pursuant to Section 4(d) or 4(g) hereof, the Expiration Date shall not be
changed to the Termination Date if the Executive's employment hereunder
terminates on a date other than the Expiration Date, and, if the Executive's
employment is terminated pursuant to Section 4(d) or 4(g) hereof, the Expiration
Date shall automatically be changed and shall become the Termination Date.
(b) DEATH. The Executive's employment hereunder shall terminate upon
his death. In such event, the Employer shall pay to the Designee or, if no such
person shall have been designated, the Estate, as applicable, (i) as promptly as
practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, together with an amount
equal to the Average Bonus (pro rated for the period from the beginning of the
fiscal year through the Termination Date) for the fiscal year in which the
Executive's death occurs, and (ii) the Executive shall be deemed for all vesting
requirements contained in any of the Employer's benefit plans, programs and
offerings in which the Executive is participating on the Termination Date
(including without limitation any supplemental executive retirement plan or
benefits, including that benefit referenced in Exhibit A of this Agreement) to
have been employed by the Employer until the Expiration Date. For purposes of
this Agreement, the "Average Bonus" shall mean, with respect to any fiscal year
of the Company, the greater of (A) the Bonus accrued by the Employer as payable
to the Executive with respect to the fiscal year immediately preceding the
Termination Date or (B) 25% of the Salary payable in such fiscal year.
(c) INCAPACITY. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall for at least six consecutive
months during the term of this Agreement have been unable to perform his duties
under this Agreement on a full-time basis, the Employer, by action of the Board,
may terminate the Executive's employment hereunder by notice to the Executive.
In such event, (i) the Employer shall pay the Executive as promptly as
practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, together with an amount
equal to the Average Bonus (pro rated for the period from the beginning of the
fiscal year through the Termination Date) for the fiscal year in which the
Termination Date occurs, (ii) during the period beginning on the Termination
Date and ending on the Benefits Termination Date, shall extend to Executive the
applicable fringe benefits referred to in Sections 3(d)(i) and 3(d)(ii) and
3(d)(iii)(B) hereof (or the equivalent thereof in all material respects if
continuation of participation in benefit plans is not able to be continued under
applicable law or the terms of such benefit plans), and (iii) the Executive
shall be deemed for all vesting requirements contained in any of the Employer's
benefit plans, programs or offerings in which the Executive is participating on
the Termination Date (including without limitation any supplemental executive
retirement plan or benefit, including that benefit referenced in Exhibit A of
this Agreement) to have been employed by the Employer until the Expiration Date.
Any dispute between the Board and the Executive with
-4-
respect to the Executive's incapacity shall be settled by reference to a
competent medical authority mutually agreed to by the Board and the Executive,
whose decision shall be binding on all parties.
(d) TERMINATION BY THE EMPLOYER FOR CAUSE. The Employer may terminate
the Executive's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean the Executive's conviction of, or entry into a consent decree
or substantially similar arrangement in connection with, a felony crime
involving fraud, dishonesty or other conduct which materially and adversely
affects the Employer. If the Executive's employment is terminated pursuant to
this Section 4(d), the Employer shall have no further obligations to the
Executive hereunder after the Termination Date, except for unpaid Salary, Bonus
and benefits accrued through the Termination Date.
(e) TERMINATION BY THE EMPLOYER OTHER THAN FOR DEATH, INCAPACITY OR
CAUSE. The Employer may terminate the Executive's employment hereunder, other
than pursuant to Section 4(b) (relating to death), Section 4(c) (relating to
incapacity), or Section 4(d) (relating to Cause), at any time. In the event of
such termination, or if the Executive's employment hereunder shall terminate on
the Expiration Date because the Employer has given the notice contemplated by
the first proviso to Section 1 hereof, then the Employer (i) shall pay the
Executive (A) as promptly as practicable after the Termination Date, an amount
equal to any unpaid Salary, Bonus and benefits accrued through the Termination
Date, together with an amount equal to the Average Bonus (pro rated for the
period from the beginning of the fiscal year through the Termination Date) for
the fiscal year in which the Termination Date occurs, and (B) a lump sum
payment, within 60 days after the Termination Date, equal to the aggregate
amount of Salary and Average Bonus that would have been payable to the Executive
over the period from the Termination Date to the Benefits Termination Date if
the Executive had continued to be employed by the Employer through the Benefits
Termination Date and received Salary and Average Bonus for periods after the
Termination Date based upon the Salary he would have received under Section 3(a)
if this Agreement was extended through the Benefits Termination Date (but
excluding any cost of living or discretionary increases under clauses (i) or
(ii) of Section 3(a) that would have occurred after the Termination Date), and
(ii) during the period beginning on the Termination Date and ending on the
Benefits Termination Date, shall extend to Executive the applicable fringe
benefits referred to in Section 3(d) hereof on the terms referred to therein (or
the equivalent thereof in all material respects if continuation of participation
in benefit plans is not able to be continued under applicable law or the terms
of such benefit plans). In addition, the Executive shall be deemed for all
vesting requirements contained in any of the Employer's benefit plans, programs
or offerings in which the Executive is participating on the Termination Date
(including without limitation any supplemental executive retirement plan or
benefit, including that benefit referenced in Exhibit A of this Agreement) to
have been employed by the Employer until the Expiration Date.
(f) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate his employment hereunder for Good Reason upon notice to the Employer
setting forth in reasonable detail the nature of such Good Reason. The following
shall constitute "Good Reason" for
-5-
termination by the Executive if the same has not been cured within 30 days after
written notice to the Employer by the Executive:
(i) Failure of the Employer to continue the Executive in the
position of Chairman of the Board;
(ii) Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure to pay Executive on a timely basis, or any other
material breach by the Employer of Section 2 or 3 hereof.
In event of termination in accordance with this Section 4(f), then the Employer
(i) shall pay the Executive (A) as promptly as practicable after the Termination
Date, an amount equal to any unpaid Salary, Bonus and benefits accrued through
the Termination Date, together with an amount equal to the Average Bonus (pro
rated for the period from the beginning of the fiscal year through the
Termination Date) for the fiscal year in which the Termination Date occurs, and
(B) a lump sum payment, within 60 days after the Termination Date, equal to the
aggregate amount of Salary and Average Bonus that would have been payable to the
Executive over the period from the Termination Date to the Benefits Termination
Date if the Executive had continued to be employed by the Employer through the
Benefits Termination Date and received Salary and Average Bonus for periods
after the Termination Date based upon the Salary he would have received under
Section 3(a) if this Agreement was extended through the Benefits Termination
Date (but excluding any cost of living or discretionary increases under clauses
(i) or (ii) of Section 3(a) that would have occurred after the Termination
Date), and (ii) during the period beginning on the Termination Date and ending
on the Benefits Termination Date, shall extend to Executive the applicable
fringe benefits referred to in Section 3(d) hereof on the terms referred to
therein (or the equivalent thereof in all material respects if continuation of
participation in benefit plans is not able to be continued under applicable law
or the terms of such benefit plans). In addition, the Executive shall be deemed
for all vesting requirements contained in any of the Employer's benefit plans,
programs or offerings in which the Executive is participating on the Termination
Date (including without limitation any supplemental executive retirement plan or
benefit, including that benefit referenced in Exhibit A of this Agreement) to
have been employed by the Employer until the Expiration Date.
(g) TERMINATION BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. The
Executive may terminate his employment hereunder other than for Good Reason. In
the event of termination of the Executive's employment pursuant to this Section
4(g), or if the Executive's employment hereunder shall terminate on the
Expiration Date because the Executive has given the notice contemplated by the
first proviso to Section 1 hereof, the Employer shall have no further
obligations to the Executive hereunder after the Termination Date, except for an
amount equal to any unpaid Salary, Bonus and benefits accrued through the
Termination Date.
-6-
(h) EFFECT OF TERMINATION. This Section 4 sets forth all obligations of
the Employer to the Executive upon termination of his employment hereunder;
PROVIDED, HOWEVER, that the benefits provided hereunder shall be in addition to,
and not in lieu of, any benefits provided to the Executive by the Employer under
any plan in which the Executive participates, including without limitation any
stock option or supplemental executive retirement plan or benefit, including
that benefit referenced in Exhibit A of this Agreement but excluding any
severance plans or policies administered by the Employer. The provisions of this
Section 4 and of Sections 5, 6, 7, 8, 10, and 12 hereof shall survive the
Termination Date.
(i) CONSULTING SERVICES. Following termination of his employment
hereunder pursuant to the provisions of Section 4(e) or 4(f) hereof, and in
partial consideration of the payments provided pursuant thereto, during the
period from the Termination Date until the Benefits Termination Date, Executive
shall provide to Employer up to one day per month of consulting services as
reasonably requested by Employer. Such consulting services shall be provided
from locations and at times reasonably acceptable to Executive in his sole
discretion. Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses incurred by him in connection with the provision of
consulting services to Employer.
5. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Executive shall not
disclose to any other person (except as required by applicable law or in
connection with the performance of his duties and responsibilities hereunder),
or use for his own benefit or gain, any Confidential Information (as defined
below) relating to the business conducted by the Employer. Executive understands
that this restriction shall continue to apply after Executive's employment
terminates, regardless of the reason for such termination, and after the
expiration or other termination of this Agreement. "Confidential Information"
means all confidential, proprietary or other information relating to the
Employer and its subsidiaries and affiliates and their businesses, and includes
without limitation all such information relating to (i) the development,
research, testing, manufacturing and marketing activities of the Employer, (ii)
the products manufactured, sold or distributed by the Employer, (iii) the costs,
sources of supply and strategic plans of the Employer, (iv) the identity and
special needs of the customers of the Employer, (v) the financial arrangements
and capital structure of the Employer, (vi) the management and operation of the
Employer and (vii) people and organizations with whom the Employer has business
relationships and those relationships. Confidential Information also includes
comparable information that the Employer may receive or has received belonging
to customers or others who do business with the Employer. Confidential
Information shall not include information which (a) is publicly known, or
becomes publicly known through no fault of Executive or (b) is generally known
or readily obtainable by the public.
6. RESTRICTED ACTIVITIES. Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Employer. While Executive is employed by the Employer and for two (2) years
after the Benefits Termination Date (or, in the event the Executive's employment
is terminated pursuant to Section 4(d), 4(g), or if the Executive's employment
hereunder shall
-7-
terminate on the Expiration Date because the Executive has given the notice
contemplated by the first proviso to Section 1 hereof, for two (2) years after
the Termination Date), Executive shall not, directly or indirectly, whether as
owner, partner, investor, consultant, agent, employee, co-venturer or otherwise,
engage in any activity that is competitive or potentially competitive with the
business of the Employer as conducted at any time during Executive's employment
without the Employer's written consent, which consent shall not be unreasonably
withheld. Executive understands that these restrictions shall continue to apply
even if this Agreement expires or otherwise terminates. The foregoing
restriction shall not prevent Executive from owing 5% or less of the equity
securities of any publicly traded company or from accepting employment from or
providing consulting services to any person who does not compete with the
Employer.
7. DOCUMENTS AND MATERIAL. Upon termination of Executive's employment with the
Employer or at any other time upon the Employer's request, Executive will
promptly deliver to the Employer, without retaining any copies, all documents
and other materials furnished to Executive by the Employer, prepared by
Executive for the Employer or otherwise relating to the Employer's business, if
and to the extent that the information therein constitutes Confidential
Information.
8. RELIEF, INTERPRETATION. Executive agrees that the Employer shall, in addition
to any other remedies available to it, be entitled to preliminary and permanent
injunctive relief against any breach by him of the covenants and agreements
contained in Sections 5, 6 and 7 hereof without having to post bond. In the
event that any provision of Sections 5, 6 and 7 hereof shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be enforceable.
For purposes of Sections 5, 6 and 7 hereof the term "Employer" shall mean the
Employer and any of its subsidiaries and affiliates to the extent that such
enterprises are, during the term of Executive's employment by the Employer,
engaged in the same line of business as the Employer.
9. CONFLICTING AGREEMENTS. Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder. Executive will not disclose to or use on behalf of the
Employer any proprietary information of a third party without such party's
consent. Executive will not enter into any agreement, whether written or oral,
conflicting with the provisions of this Agreement.
10. LEGAL EXPENSES. The Employer shall pay or reimburse Executive on an
after-tax basis for all costs and expenses (including, without limitation, court
costs and reasonable legal fees and expenses incurred by Executive) as a result
of any claim, action or proceeding (i) arising out of the termination of his
employment during the Employment Period, (ii) contesting, disputing or enforcing
any right, benefits or obligations under this Agreement, or (iii) arising out of
or
-8-
challenging the validity, advisability or enforceability of this Agreement or
any provision thereof. Such payments or reimbursements shall be made promptly,
but in no event later than five business days following, receipt by the Employer
of request by Executive for such payment or reimbursement, including an invoice
detailing any such legal fees and expenses. Requests for payment or
reimbursement hereunder may be delivered no more frequently than monthly.
Notwithstanding the foregoing, the Executive shall reimburse the Employer for
any fees or expenses previously paid or reimbursed by Employer in connection
with a dispute if the relevant trier-of-fact determines that Executive's claim
or position was frivolous and without reasonable foundation.
11. TAXES. All payments made by the Employer under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Employer
under applicable law. Notwithstanding the immediately preceding sentence, in the
event that it is determined that any payment or benefit provided by the Employer
to or for the benefit of the Executive, either under any Section of this
Agreement, any stock option, any supplemental executive retirement plan or
otherwise, will be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any successor provision ("Section 4999"), the Employer
will, prior to the date on which any amount of the excise tax must be paid or
withheld, make an additional lump-sum payment (the "gross-up payment") to the
Executive. The gross-up payment will be sufficient, after giving effect to all
federal, state and other taxes (including any excise tax under Section 4999) and
charges (including interest and penalties, if any) with respect to the gross-up
payment, to make the Executive whole for all taxes (including withholding taxes)
and any associated interest and penalties, imposed under or as a result of
Section 4999 with respect to all payments and benefits provided by the Employer
to or for the benefit of the Executive under any Section of this Agreement, any
stock option, any supplemental executive retirement plan or otherwise.
Determinations under this Section 11 will be made by the Employer's independent
auditors unless the Executive has reasonable objections to the use of that firm,
in which case the determinations will be made by a comparable firm chosen by the
Executive after consultation with the Employer (the firm making the
determinations to be referred to as the "Firm"). The determinations of the Firm
will be binding upon the Employer and the Executive except as the determinations
are established in resolution (including by settlement) of a controversy with
the Internal Revenue Service to have been incorrect. All fees and expenses of
the Firm will be paid by the Employer. If the Internal Revenue Service asserts a
claim that, if successful, would require the Employer to make a gross-up payment
or an additional gross-up payment, the Employer and the Executive will cooperate
fully in resolving the controversy with the Internal Revenue Service. The
Employer will make or advance such gross-up payments as are necessary to prevent
the Executive from having to bear the cost of payments made to the Internal
Revenue Service in the course of, or as a result of, the controversy. The Firm
will determine the amount of such gross-up payments or advances and will
determine after resolution of the controversy whether any advances must be
returned by the Executive to the Employer. The Employer will bear all expenses
of the controversy and will gross the Executive up for any additional taxes that
may be imposed upon the Executive as a result of its payment of such expenses.
-9-
12. INDEMNIFICATION. To the maximum extent permitted under the laws of The
Commonwealth of Massachusetts, as from time to time in effect, the Employer
hereby agrees to indemnify Executive and hold him harmless from, against and in
respect of any and all damages, deficiencies, actions, suits, proceedings,
demands, assessments, judgements, claims, losses, costs, expenses, obligations
and liabilities arising from or related to the performance of this Agreement by
Executive, other than for gross negligence, willful misconduct or willful
violation of this Agreement.
13. WAIVER. The waiver by either party of a breach of any provision of this
Agreement by the other party will not operate or be construed as a waiver of any
other subsequent breach by the other party.
14. AMENDMENTS. No amendment to this Agreement shall be effective unless it
shall be in writing and signed by each party hereto. No oral waiver, amendment
or modification will be effective under any circumstances whatsoever.
15. NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or three days after being
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Employer, to it at:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
(ii) if to the Executive, to him at:
c/o BE Aerospace, Inc.
0000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
-10-
16. ASSIGNMENT. Neither the Employer nor Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; provided, HOWEVER, that the
Employer may assign its rights and obligations under this Agreement without the
consent of Executive in the event that the Employer shall hereafter effect a
reorganization, consolidate with, or merge into any other person or transfer all
or substantially all of its properties or assets to any other person. This
Agreement shall inure to the benefit of and be binding upon the Employer and
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
17. MISCELLANEOUS. The Prior Employment Agreement is hereby terminated with
respect to the employment of the Executive by the Employer on and after the date
hereof, and shall be of no further force or effect with respect to such
employment; PROVIDED, HOWEVER, that the Prior Employment Agreement shall
continue to govern the terms of the Executive's employment by the Employer with
respect to all periods ending on or prior to the date hereof. This Agreement
constitutes the entire agreement between the parties and supersedes all prior
and contemporaneous communications, agreements, representations, understandings
and negotiations, whether oral or written, with respect to the subject matter
hereof. The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
The headings in this Agreement are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof. This Agreement may be executed
in any number of counterparts which together shall constitute one instrument and
shall be governed and construed in accordance with the domestic substantive laws
of The Commonwealth of Massachusetts without regard to any choice or conflicts
of laws rules or principles that would cause the application of the domestic
substantive laws of any jurisdiction other than The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
APPLIED EXTRUSION TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
-11-
EXHIBIT A
TERMS OF THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Executive shall be entitled to the following benefits after his
employment by the Employer has terminated for any reason, provided Executive has
no less than ten Years of Service with the Employer at least 48 months of which
shall be after the effective date of this Agreement (subject to the provisions
regarding vesting of benefits upon termination as contained in Sections 4(b)
(Death), 4(c) (Incapacity), 4(e) (Termination by the Employer Other Than for
Death, Incapacity, or Cause), and 4(f) (Termination by Executive for Good
Reason) of the Employment Agreement to which this Exhibit A is attached, as from
time to time in effect (the "Employment Agreement")): During the period
beginning on the date (the "Retirement Payment Commencement Date") which is the
later of (i) the Termination Date, or (ii) the date on which the Executive
attains age 60, and ending on the tenth anniversary of the Retirement Payment
Commencement Date, the Employer shall pay to the Executive, in accordance with
the Employer's current payroll practices for its executive employees generally,
an annual amount equal to the product of the Benefit Percentage multiplied by
the Average Compensation; PROVIDED, HOWEVER, that amounts payable to the
Executive pursuant to this sentence shall be reduced by amounts received by the
Executive as proceeds received concurrently from any disability insurance paid
or reimbursed by the Employer for the benefit of the Executive. In the event of
the Executive's death, a lump sum payment of his remaining benefits shall be
made to his Designee or Estate (determined by using a discount factor of 5% per
annum) under this provision. The value of the Executive's benefits under this
provision shall be at all times fully funded by the Employer as they accrue and
become vested, through contributions by the Employer to a rabbi trust. In the
event of a Change in Control, or if a Change in Control is imminent, the
Employer shall immediately make an additional contribution to the rabbi trust in
an amount sufficient to fully fund the Executive's benefits under the Plan,
whether or not vested, and upon the later of the Retirement Payment Commencement
Date or the date of the Change in Control, Executive may elect to receive a lump
sum payment of his benefits (determined by using a discount factor of 5% per
annum) under this provision.
As used in this Exhibit A:
(i) Terms defined in the Employment Agreement and not
otherwise defined herein are used herein with the meanings so
defined;
(ii) "Years of Service" shall mean the number of calendar
months of Executive's employment with Employer DIVIDED BY
twelve, with any remainder rounded up to the next whole
number;
(iii) "Benefit Percentage" means (A) 25% if vesting occurs
subsequent to March 31, 2000 and the Performance Target has
not been achieved, and (B) 50%
-12-
if vesting occurs subsequent to March 31, 2000 and the
Performance Target has been achieved; PROVIDED, HOWEVER, the
Benefit Percentage shall be 50% in the event that the
Executive's employment is terminated pursuant to Sections
4(b),4(c), 4(e), or 4(f) of the Employment Agreement,
notwithstanding the date of vesting, and
(iv) "Average Compensation" means the average annual Salary
and Bonus paid by the Employer to the Executive pursuant to
the Employment Agreement determined by averaging the three
fiscal years in which the Executive earned the highest
aggregate Salary and incentive bonus during any fiscal year
prior to the Termination Date; PROVIDED, HOWEVER, the that the
Average Compensation shall never be less than the Executive's
current Salary.
-13-
