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Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 27, 1996, between CMH
Holdings Corporation, a Delaware corporation (the "Company"), and Xx. Xxxxxx X.
Xxxxx ("Employee").
BACKGROUND
The Company wishes to retain the services of Employee to assist in the
management of the Company and its subsidiaries.
TERMS
In consideration of the premises and of the mutual covenants herein
contained, the parties agree as follows:
1. Position. During the term of his employment with the Company
hereunder, Employee shall serve as President and Chief Executive Officer of the
Company and Xxxxx Material Handling Company, a Delaware corporation wholly owned
by the Company.
Employee shall diligently devote his entire business skill, time and
effort to his employment hereunder; provided, however, that he shall be entitled
annually to vacation and sick leave pursuant to policies adopted by the Company
from time to time for senior executive officers of the Company. Notwithstanding
the foregoing, and provided that such activities do not interfere with the
fulfillment of Employee's obligations hereunder, Employee may (a) serve as a
director or trustee of any charitable or non-profit entity and of not more than
two for profit business corporations so long as such entities are not, directly
or indirectly in competition with the Company or any entity directly or
indirectly controlling, controlled by or under common control with the Company
(an "Affiliate"); and (b) acquire solely as an investment any securities so long
as (i) he remains a passive investor in such entity and (ii) such entity is not,
directly or indirectly, in competition with the Company or any Affiliate.
2. Term of Employment. Employee's term of employment by the Company
under this Agreement shall begin on the date hereof and shall continue for a
period of 36 months (the "Employment Term") (the termination date being
hereafter referred to as the "Normal Termination Date") and shall continue for
successive additional 12 month periods thereafter (each continued term, the
"Extended Employment Term") unless written notice to the contrary is given by
either party to the other at least one hundred eighty (180) days prior to the
then current termination date, unless sooner terminated as hereinafter provided.
3. Compensation. As compensation for the services contemplated hereby,
Employee shall receive during the Employment Term and each Extended Employment
Term a base salary equal to
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$225,000 per annum to be paid monthly in equal installments. The Board of
Directors shall promptly undertake a study of the compensation of chief
executive officers similarly situated to Employee with a view toward making, no
later than June 30, 1997, any upward adjustments in Employee's base salary that
are determined to be appropriate on the basis of such study. Such salary rate
shall be subject to annual merit increase reviews by the Board of Directors
(such salary as adjusted from time to time being the "Base Salary").
4. Other Payment; Bonus. In addition to the compensation provided to
Employee in Section 3 hereof, Employee shall receive, during the Employment Term
and each Extended Employment Term, at the discretion of the Board of Directors,
and subject to annual review, an annual performance bonus based on individual
criteria and/or executive incentive programs to be determined from time to time
by the Board of Directors (the "Performance Bonus").
5. Employee Benefits. Employee shall be entitled to participate, during
the Employment Term and each Extended Employment Term, in all medical benefit
plans, hospitalization plans, group life insurance, long term disability or
other employee welfare benefit plans (collectively, the "Group Insurance Plans")
and any pension plans (including any supplemental executive retirement plans)
that may be provided by the Company or its subsidiaries to senior executive
officers from time to time during the Employment Term or Extended Employment
Term, as the case may be.
6. Expenses. The Company shall pay or reimburse Employee for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, but not limited to, reasonable expenses for traveling, meals and
hotel accommodations, and business related entertainment upon submission by him
of appropriate documentation thereof, all so prepared in compliance with such
policies and procedures relating thereto as the Company may from time to time
adopt.
7. Termination.
(a) Termination by Company for Cause or Without Cause. The Company may
terminate this Agreement and (except as provided below) all of the Company's
obligations hereunder, either for "Cause" or "Without Cause." Such termination
shall be effected by notice thereof delivered by the Company to Employee, and
shall be effective as of the date of such notice. In the event that Employee is
terminated by the Company for Cause, Employee shall be entitled to receive all
Base Salary earned and accrued to the date of termination, but all other rights
of Employee hereunder shall terminate as of the effective date of Employee's
termination, except as otherwise provided by law.
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In the event that Employee is terminated by the Company Without Cause,
and provided that Employee complies with the provisions of Sections 8 and 9,
Employee shall be entitled (i) to receive all payments due as Base Salary during
the 24 months following the date of termination of employment, as and when the
same would have otherwise been payable had Employee not been terminated, (such
term, the "Continuation Period"), (ii) to receive a pro rata portion of any
Performance Bonus for the year in which Employee is terminated which shall be
payable at the time such bonus would have otherwise been payable had Employee
not been terminated, and (iii) to continue to participate in the Group Insurance
Plans during the Continuation Period.
As used herein, (i) "Cause" means (A) the Employee's conviction of a
felony which constitutes a crime involving moral turpitude and results in harm
to the Company or any 6f its Affiliates; or (B) a judicial determination that
Employee has committed fraud, misappropriation or embezzlement against any
person; or (C) the Employee's failure to comply with the terms of this Agreement
and/or the Employee's willful or gross and repeated neglect of duties hereunder,
or willful or gross and repeated misconduct in the performance of such duties,
in each instance so as to cause material harm to the Company or any of its
Affiliates, determined in good faith by its Board of Directors and after written
notice to Employee by the Board of Directors specifying the manner in which the
Board of Directors believes that such failure, neglect or misconduct has
occurred; and the failure by the Employee to cure such failure, neglect or
misconduct within thirty (30) days after written notice from the Board of
Directors and, if requested by Employee within such 30-day period, after
Employee has had the opportunity to meet and discuss such failure with such
Board of Directors, and (ii) "Without Cause" means any termination of Employee
other than for Cause, resignation, Total Disability or death, and shall include
material and substantial diminution of Employee's duties and authorities
hereunder, as compared with his duties and authorities as of the date hereof or
a demotion from the office of President (individually or collectively, a
"Demotion").
(b) Resignation of Employee. In the event that Employee resigns (except
in the case of resignation due to Total Disability or following a Demotion)
during the Employment Term or any Extended Employment Term, Employee shall be
entitled to receive all Base Salary earned and accrued to the date of
resignation, but all other rights of Employee hereunder shall terminate as of
the date of Employee's resignation, except as otherwise provided by law.
(c) Employee's Total Disability. In the event that Employee is
terminated by the Company or Employee resigns due to Employee's Total
Disability, Employee shall be entitled to receive all Base Salary earned and
accrued to the date of termination or resignation plus Base Salary for a period
of 12 months following the date of termination or resignation as and when the
same would
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otherwise have been payable had Employee not been terminated or not resigned,
less amounts received by Employee under disability insurance or any other
similar program maintained by the Company, and a pro rata portion of any
Performance Bonus for the year in which Employee is terminated which shall be
payable at the time such bonus would have otherwise been payable had Employee
not been terminated or not resigned, and shall be entitled to continue to
participate in the Group Insurance Plans for a period of 12 months following the
date of termination or resignation, but all other rights of Employee hereunder
shall terminate as of the date of Employee's termination or resignation, except
as otherwise provided by law.
As used herein, "Total Disability" shall mean any physical or mental
ailment or incapacity as determined by a licensed physician agreed to by the
Company and Employee (or, in the event that Employee and the Company cannot so
agree, by a licensed physician agreed upon by a physician selected by Employee
and a physician selected by the Company), which prevents the Employee from
performing the duties incident to the Employee's employment hereunder which has
continued for a period of either (i) ninety (90) consecutive days in any
12-month period or (ii) one hundred eighty (180) total days in any 12-month
period, and which is expected to be of permanent duration. Employee shall permit
such physician to examine Employee from time to time prior to Employee's being
determined to be Totally Disabled, as reasonably requested by the Company, to
determine whether Employee has suffered a Total Disability hereunder.
(d) Death. In the event that Employee dies during the Employment Term,
Employee's estate shall be entitled to receive all Base Salary earned and
accrued to the date of death, and a pro rata portion of any Performance Bonus
for the year in which Employee dies which shall be payable at the time such
bonus would have otherwise been payable had Employee not died, but all other
rights of Employee hereunder shall terminate, except as otherwise provided by
law.
8. Protection of Confidential Information.
(a) Covenant. Employee acknowledges that his employment by the Company
will, throughout the term of this Agreement, bring him into close contact with
many confidential affairs of the Company and its Affiliates, including
information concerning the Company's finances and operating results, its
markets, key personnel, operational methods and other business affairs and
methods, technical data, computer software and other proprietary intellectual
property, other information not readily available to the public, and plans for
future developments relating thereto. Employee further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
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extraordinary and intellectual character. In recognition of the foregoing, the
Employee covenants and agrees that he will:
(i) keep secret all confidential matters of the Company and
its Affiliates known to him which are not otherwise in the public
domain and will not intentionally disclose them to anyone outside of
the Company and its Affiliates, wherever located, either during or
after the term of this Agreement except with the Company's prior
written consent.
(ii) promptly disclose to the Company, and that the Company
will own all right, title and interest in, all inventions, computer
software and other intellectual property (the "Intellectual Property")
which he conceives or develops during the course of his employment
(excluding that which he conceives or develops without the use of the
time, resources or facilities of the Company or its Affiliates and
which does not relate to the past, present or prospective activities of
the Company or its Affiliates), will affix appropriate legends and
copyright notices indicating the Company's ownership of all
Intellectual Property and all underlying documentation, and will
execute such further assignments and other documents as the Company
considers necessary to vest, perfect, patent, maintain or defend the
Company's right, title and interest in the Intellectual Property; and
(iii) deliver promptly to the Company on termination of his
employment by the Company, or at any other time the Company may so
request, all memoranda, notes, records, reports, computer discs and
other documents (and all copies thereof) relating to the business of
the Company or its Affiliates which he obtained or developed while
employed by, or otherwise serving or acting on behalf of, the Company
or its Affiliates and which he may then possess or have under his
control or relating to the Intellectual Property.
(b) Specific Remedy. If Employee commits a breach of any of the
provisions of paragraph 8(a), the Company and its Affiliates shall have the
right and remedy to have such provisions specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and its
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Affiliates.
9. Covenant Not to Compete.
(a) Covenant. Upon termination of the Employment Term or
Extended Employment Term, as the case may be, during the Restriction Period,
Employee will not (i) directly or indirectly, engage in, represent in any way,
be connected with, become employed by or have any interest in any business or
activity in the United
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States competing in any manner with any businesses carried on by the Company or
its Affiliates at the time of such termination, or (ii) solicit, employ, retain
as a consultant, interfere with or attempt to entice away from the Company or
its Affiliates any individual who is, has agreed to be or within one year of
such solicitation, employment, retention, interference or enticement has been,
employed or retained by the Company or any of its Affiliates in a senior
executive capacity. As used herein, "Restriction Period" means two years
following the date of termination of the Employment Term or Extended Employment
Term, as the case may be.
(b) Specific Remedy. If Employee commits a breach of the provisions of
paragraph 9 (a) , the Company and its Affiliates shall have the right and remedy
to have such provisions specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and its
Affiliates and that money damages will not provide an adequate remedy to the
Company and its Affiliates.
10. Independence, Severability and Non-Exclusivity. Each of the rights
and remedies enumerated in paragraphs 8(b) and 9(b) shall be independent of the
others and shall be severally enforceable and all of such rights and remedies
shall be in addition to and not in lieu of any other rights and remedies
available to the Company or its Affiliates under the law or in equity. If any of
the provisions contained in paragraph 8(a) or 9(a) or if any of the rights or
remedies enumerated in paragraph 8 (b) or 9 (b) is hereafter construed to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, or rights or remedies, which shall be given full effect
without regard to the invalid portions. If the courts of any one or more
jurisdictions shall hold all or any part of such provisions wholly unenforceable
by reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination shall not bar or in any way affect the Company's
or its Affiliates' right to relief in the court of any other jurisdiction as to
failures to observe such provisions in such other jurisdictions, the above
provisions as they relate to each jurisdiction, being, for this purpose,
severable into diverse and independent provisions. If any of the provisions
contained in paragraph B(a) or 9(a) 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 shall have the power to reduce the duration
and/or area of such provision and in its reduced form such provision shall then
be enforceable.
11. Assignment of Employee Benefits; Successors and Assigns. Absent
the prior written consent of the Company, and subject to the laws of descent
and distribution, Employee shall have no right to exchange, convert, encumber or
dispose of the rights of Employee to receive benefits and payments under this
Agreement, which payments,
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benefits and rights thereto are non-assignable and non-transferable. This
Agreement shall inure to the benefit of and shall be binding upon the Company
and Employee and, subject to the preceding sentence, their respective heirs,
executors, personal representatives, successors and assigns. Nothing in this
Section 11, however, shall prevent Employee from making assignments or transfers
for purposes of personal estate planning.
12. Notices. All notices hereunder shall be given in writing by
personal delivery or by registered or certified mail addressed to the Company at
its principal place of business and to Employee at his residence address as then
listed in the Company's records.
13. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association and judgment
upon such award rendered by the arbitrators(s) may be entered in any court
having jurisdiction thereof. The arbitration shall be held in Cincinnati, Ohio
unless another location shall be mutually agreed to by the parties at the time
of arbitration. In any dispute between the parties as to which Employee is
sustained on the claim(s) by or against him, the Company shall pay all legal
fees and other related expenses incurred by Employee in connection with the
dispute over such claim(s). If more than one claim is involved in any dispute
and if Employee is sustained as to one or more of such claims but not as to all
of such claims, there shall be a reasonable allocation of applicable expenses.
The Company will reimburse Employee for those legal expenses and other related
expenses determined by the arbitrator(s) or by the consent of the parties to be
allocable to the claim or claims as to which the Employee is upheld.
14. General.
(a) Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Kentucky, without giving effect to conflicts of laws principles thereof which
might refer such interpretations to the laws of a different state or
jurisdiction.
(b) Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(c) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, between the parties.
(d) No Other Representations. No representation, promise or inducement
has been made by any party hereto that is not
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embodied in this Agreement, and no party shall be bound by or liable for any
alleged representation, promise or inducement not so set forth.
(e) Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms or covenants hereof
may be waived, only by a written instrument executed by all of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The failure
of any party at any time or times to require performance of any provision hereof
shall in no manner affect the right of such party at a later time to enforce the
same. No waiver by any party of the breach of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first set forth above.
CMH HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Vice President, General
Counsel and Secretary
/s/ Xxxxxx X. Xxxxx
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Xx. Xxxxxx X. Xxxxx
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