EXHIBIT 10.51
EMPLOYMENT AGREEMENT
WITH
XXXXXXX X. XXXXXXXX
This Employment Agreement (the "Employment Agreement") is dated as of
this 18th day of December, 2000 (the "Commencement Date"), and made between
Roller Bearing Company of America, Inc., a Delaware corporation ("Employer" or
the "Company"), and Xxxxxxx X. Xxxxxxxx Ph.D. ("Employee"). Employer hereby
employs Employee and Employee hereby accepts employment, on the terms and
conditions hereinafter set forth.
1. DEFINITIONS.
As used in this Agreement, and unless the context requires a different
meaning, the following terms shall be defined as follows:
"Competing Business" means any business or commercial activity
(including, without limitation, research and development) that is carried on in
any material respect during the Term by Employer or any of Employer's
Affiliates.
"Person" means any natural person, partnership, corporation, trust,
company or other entity.
"Territory" means the geographical area in which the Employer or any
of Employer's Affiliates engages in any business (other than an insignificant
amount of business).
2. TERM.
Subject to the terms and conditions of this Agreement, the Company
shall employ Employee as its President and Chief Executive Officer, for a term
commencing on the Commencement Date hereof and continuing until December 17,
2005 unless earlier terminated pursuant to the provisions of Section 7 hereof
(the "Term").
3. DUTIES.
(a) During the Term, Employee agrees to serve Employer as its
President, Chief Executive Officer and Chairman of its Board of Directors (the
"Board"), reporting to the Board, and in such other executive capacities as may
be requested from time to time by the Board or a duly authorized committee
thereof; provided that (i) Employee's duties shall at all times be limited to
those commensurate with the foregoing offices, and (ii) Employee shall not be
obligated, without his consent, to relocate his principal office location from
Fairfield, Connecticut (or the surrounding area), although the foregoing
limitation is not intended to limit Employee's requirement, in the normal course
of business, to travel to the Employer's other business locations. Employee
shall serve, if elected, as a member of the Board, and shall render similar such
services for corporations directly or indirectly controlled by Employer or by
Roller Bearing Holding Company, Inc. ("Employer's Affiliates") as Employer may
from time to time
reasonably request (but only such services as shall be consistent with the
duties Employee is to perform for Employer and with Employee's stature and
experience). All duties and services contemplated by this Section 3 are
hereinafter referred to as the "Services."
(b) During the Term, Employee will devote his full business time and
attention to, and use his good faith efforts to advance, the business and
welfare of Employer; provided that the foregoing shall not restrict Employee's
rights to engage in passive investment activities, to serve on the boards of
directors of other entities (so long as such activities are not violative of
Section 4 below), or to engage in civic and other similar activities.
4. CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE.
(a) Employee hereby agrees that, during the Term and thereafter, he
will not disclose to any Person, or otherwise use or exploit in competition with
Employer or Employer's Affiliates, any of the proprietary or confidential
information or knowledge treated by the Employer or Employer's Affiliates as
confidential, including without limitation, trade secrets, processes, records of
research, information included in proposals, reports, methods, processes,
techniques, computer software or programming, or budgets or other financial
information, regarding Employer or Employer's Affiliates, its or their business,
properties or affairs obtained by him at any time (i) during the Term or (ii)
during any employment of Employee with the Employer or any of Employer's
Affiliates prior to the Commencement Date ("Prior Employment"), except to the
extent required to perform the Services; PROVIDED that the foregoing shall not
apply to: (A) information in the public domain other than by reason of a
violation of this Agreement by Employee, or (B) information that Employee is
compelled to disclose by operation of law or legal process (so long as Employee
provides Employer with prior notice of any such compelled disclosure and an
opportunity to defend against such disclosure), or (C) information generally
known to Employee by reason of his particular expertise that is not specific to
the Employer.
(b) Employee hereby agrees that during the Term and for a period of
two years thereafter (the "Non-Compete Term"), he will not (i) engage in or
carry on, directly or indirectly, any Competing Business in any Territory in
which such Competing Business is then engaged in by the Employer or Employer's
Affiliates, (ii) allow his name to be used by any Person engaged in any
Competing Business, (iii) invest in, directly or indirectly, any Person engaged
in any Competing Business, or (iv) serve as an officer or director, employee,
agent, associate or consultant of any Person engaged in a Competing Business
(other than Employer or any Employer's Affiliate). Notwithstanding the
foregoing, the Non-Compete Term shall be only the Term hereof in the event
Employee's employment hereunder is terminated by the Employer hereunder without
cause (as provided in Section 8(c) below). Subject to Section 3(b) hereof,
nothing herein shall prohibit the Employee from (A) investing in any business
that is not a Competing Business or (B) investing in a publicly-held entity if
such investment (individually or as part of a group) is limited to not more than
five percent (5%) of the outstanding equity issue of such entity.
(c) All intellectual properties developed by Employee during the Term
or during any Prior Employment and related to the business (or foreseeable
business prospects) of
2
the Employer shall be for the account of the Employer. Employee agrees to enter
into such agreements (including transfer documents) as may be reasonably
required by Employer to confirm the foregoing.
(d) Employee shall not, during the Non-Compete Term, directly or
indirectly, solicit or induce or attempt to solicit or induce any affiliate,
director, agent, or employee of Employer or any of Employer's Affiliates or
contractor then under contract to the Employer, to terminate his, her or its
employment or other relationship for the purpose of entering into an employment
or other relationship with any of the Employer's competitors or for any other
purpose or no purpose. Employee shall not, during the Non-Compete Term, directly
or indirectly, solicit or induce or attempt to solicit or induce any customer or
supplier of Employer or of any of Employer's Affiliates to terminate his, her or
its relationship for the purpose of entering into a similar relationship with
any competitors of Employer or Employer's Affiliates or for any other purpose or
no purpose.
(e) Employee agrees that the remedy at law for any breach by him of
any of the covenants and agreements set forth in this Section 4 will be
inadequate and will cause immediate and irreparable injury to Employer and that
in the event of any such breach, Employer, in addition to the other remedies
which may be available to it at law, shall be entitled to obtain injunctive
relief prohibiting him (together with all those persons associated with him)
from the breach of such covenants and agreements.
(f) The parties hereto intend that the covenants and agreements
contained in this Section 4 shall be deemed to include a series of separate
covenants and agreements, one for each and every county of the states in which
the Employer or any of the Employer's Affiliates does business. If, in any
judicial proceeding, the duration or scope of any covenant or agreement of
Employee contained in this Section 4 shall be adjudicated to be invalid or
unenforceable, the parties agree that this Agreement shall be deemed amended to
reduce such duration or scope to the extent necessary to permit enforcement of
such covenant or agreement, such amendment to apply only with respect to the
operation of such covenant and agreement in the particular jurisdiction in which
such adjudication is made.
5. INDEMNIFICATION.
Employer hereby agrees to indemnify Employee to the maximum extent
permitted by Delaware law at the time of the assertion, against any liability
against Employee arising out of or relating to his status as an employee acting
within the course and scope of employment, officer or director of Employer or
any Employer's Affiliate at any time during the Term, whether such liability is
asserted during or after the Term.
6. BASE SALARY AND BENEFITS.
During the Term, Employer shall pay Employee a salary at the rate of
thirty-seven thousand five hundred dollars ($37,500) per month payable at least
as frequently as monthly and subject to payroll deductions as may be necessary
or customary in respect of Employer's salaried employees ("Base Salary"). The
Base Salary will be subject to an automatic annual increase
3
effective December 1 of each year during the Term in a percentage amount equal
to the greater of (i) five percent (5%) or (ii) the annual percentage increase
in the All-Items Consumer Price Index for All Urban Consumers for such year as
determined for the month of August. Employee shall also be entitled to receive
the normal executive benefits of Employer and the benefits set forth in Schedule
A hereto (the "Additional Benefits") and to the following (the "Special
Benefits"):
(a) four weeks of paid vacation for each twelve month period during
the Term, to accrue PRO RATA during the course of each such twelve month period;
and
(b) medical and hospitalization insurance furnished to all other
executive employees of Employer, as such insurance may be in effect from time to
time (subject always to the right of Employer to amend such insurance).
7. EXPENSES.
Employer will pay or reimburse Employee for such reasonable travel,
entertainment, or other expenses as he may incur on behalf of Employer during
the Term in connection with the performance of his duties hereunder. Employee
shall furnish Employer with such evidence that such expenses were incurred as
Employer may from time to time reasonably require or request.
8. TERMINATION OF EMPLOYMENT.
Notwithstanding Section 1 hereof, the Term may be terminated prior to
December 17, 2005, under the following circumstances:
(a) DEATH OR TOTAL DISABILITY. The Term shall automatically and
immediately terminate upon Employee's death or "Total Disability." For purposes
of this Agreement, "Total Disability" shall mean Employee's physical or mental
incapacitation or disability that renders Employee unable to perform the
Services as performed prior to such incapacitation or disability for a period of
twenty-six (26) consecutive weeks or during any one hundred fifty (150) business
days (whether or not consecutive) during any twelve (12) month period during the
Term.
(b) TERMINATION BY EMPLOYER FOR CAUSE. Employer, at its election,
shall have the right to terminate the Term, by written notice to Employee to
that effect, for "Cause". The term "Cause" shall mean:
(i) any act of fraud, embezzlement, theft or commission of a
crime involving moral turpitude;
(ii) any material breach by Employee of any material covenant,
condition, or agreement in this Agreement ("Employee's Material Breach"); or
(iii) any chemical dependency by Employee (other than in
connection with medicines prescribed for Employee).
4
To terminate the Term pursuant to this Section 8(b), Employer shall give written
notice ("Cause Notice") to the Employee specifying the claimed Cause. If
Employee fails to cure the same within thirty (30) days after the receipt of the
applicable Cause Notice (or such longer period as may be reasonably required if
such actions are subject to cure), the Term shall terminate at the end of such
thirty (30) day period or such longer reasonable period, as the case may be.
Notwithstanding anything that may be interpreted to the contrary, it is
expressly agreed that no act of the type contemplated by or described in Section
8(b)(i) shall be capable of being cured by Employee and the Employer may
terminate Employee immediately without the requirement for such cure period.
(c) TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer shall have the
right, at its election, to terminate the Term at any time for any reason other
than "Cause" upon not less than sixty (60) days prior written notice to
Employee.
(d) TERMINATION BY EMPLOYEE. Employee shall have the right, at his
election, to terminate the Term at any time by written notice to Employer upon
not less than one hundred and twenty (120) days prior written notice; provided,
however, that (i) such notice period shall be thirty (30) days in the case of a
termination for "Good Reason"; and (ii) if such termination is other than for
Good Reason the Term, for purposes of Section 4(b) and (d), shall continue
through November 30, 2005.
(e) SALARY AND BENEFITS IN EVENT OF TERMINATION. Upon termination of
the Term, the following shall be applicable, notwithstanding anything to the
contrary elsewhere herein:
(i) If the Term is terminated by Employer pursuant to Section
8(b) or by Employee pursuant to Section 8(d) other than for "Good Reason,"
Employee shall thereafter be entitled to the Base Salary, the Special Benefits
and the Additional Benefits only until the effective date of such termination,
unless otherwise agreed by Employer.
(ii) If the Term is terminated (A) pursuant to Employee's death
or Total Disability pursuant to Section 8(a) hereof, or (B) by the Employer
without Cause pursuant to Section 8(c) hereof, or (C) by Employee with Good
Reason pursuant to Section 8(d) hereof, (x) Employer shall pay to Employee on
the date of termination the Base Salary due to Employee for the then remainder
of the Term, net of any benefits paid to Employee pursuant to any policy of
disability insurance maintained by Employer, plus a PRO RATA portion of the
Employee's annual bonus for the fiscal year of the Employer in which such
termination occurs (provided that in the case of Employee's death or Total
Disability such payment and benefits shall extend for no longer than two (2)
years following such event), and (y) Employee shall be entitled to the Special
Benefits described in Section 6(b) hereof for the then remainder of the Term.
(f) GOOD REASON. For purposes of this Agreement, Good Reason shall
mean any of the following which occurs subsequent to the date of this Agreement:
(i) a substantial reduction in the Employee's position,
duties, responsibilities and status with the Company inconsistent with the
Employee's duties,
5
responsibilities and status immediately prior to a change in the Employee's
titles or offices, or any removal of the Employee from or any failure to reelect
the Employee to any of such positions, except in connection with the termination
of his employment for disability, retirement or Cause or by the Employee other
than for Good Reason; PROVIDED that such reduction or removal occurs at a time
when (A) Employee does not have a majority of the voting power of the Company or
(B) Employee has a majority of the voting power of the Company, but,
notwithstanding Employee's objections, the Board of Directors of the Company has
approved the taking of such actions;
(ii) a relocation of Employee without his consent to a location
more than 75 miles from the Company's headquarters at Fairfield, Connecticut;
(iii) any material breach by the Company of any provision of
this Agreement; or
(iv) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(g) DELIVERY OF RECORDS UPON TERMINATION. Upon termination of the
Term, Employee will deliver to Employer all records of research, proposals,
reports, memoranda, computer software and programming, budgets and other
financial information, and other materials or records (including any copies
thereof) made, used or obtained by Employee in connection with his employment by
Employer and/or any Employer's Affiliate.
9. MISCELLANEOUS.
(a) MODIFICATION AND WAIVER OF BREACH. No waiver or modification of
this Employment Agreement shall be binding unless it is in writing signed by the
parties hereto and expressly stating that it is intended to modify this
Agreement. No waiver of a breach hereof shall be deemed to constitute a waiver
of a future breach, whether of a similar or dissimilar nature.
(b) NOTICES. All notices and other communications required or
permitted under this Employment Agreement shall be in writing, served personally
on, or made by certified or registered United States mail to, the party to be
charged with receipt thereof. Notices and other communications served in person
shall be deemed delivered when so served. Notices and other communications
served by mail shall be deemed delivered hereunder 72 hours after deposit of
such notice or communication in the United States Post Office as certified or
registered mail with postage prepaid and duly addressed to whom such notice or
communications is to be given, in the case of
(i) Employer:
Roller Bearing Holding Company, Inc.
c/o Roller Bearing Company of America, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
6
with a copy (which shall not constitute notice to
Employer) to:
Whitney Acquisition II Corp.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxx
(ii) Employee:
Xxxxxxx X. Xxxxxxxx
c/o Roller Bearing Company of America, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Any party may change said party's address for purposes of this Section
by giving to the party intended to be bound thereby, in the manner provided
herein, a written notice of such change.
(c) COUNTERPARTS. This instrument may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Employment Agreement.
(d) GOVERNING LAW. This Employment Agreement shall be construed in
accordance with, and governed by, the internal laws of the State of Delaware
applicable to agreements executed and to be performed in such state without
regard to principles of choice of law or conflicts of laws.
(e) COMPLETE EMPLOYMENT AGREEMENT. This Employment Agreement and its
Exhibits and Schedules, together contain the entire agreement between the
parties hereto with respect to the subject matter of this Employment Agreement
and supersedes all prior and contemporaneous oral and written negotiations,
commitments, writings, and understandings with respect to the subject matter of
Employee's relationship with Employer, including that certain Employment
Agreement, dated June 23, 1997 between the Company and the Employee.
(f) NON-TRANSFERABILITY OF EMPLOYEE'S INTEREST. None of the rights of
Employee to receive any form of compensation payable pursuant to this Employment
Agreement shall be assignable or transferable. Any attempted assignment,
transfer, conveyance, or other disposition of any interest in the rights of
Employee hereunder shall be void.
7
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement on the day and year first above written.
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXXX
EMPLOYER:
ROLLER BEARING COMPANY OF AMERICA,
INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Financial Officer
8
SCHEDULE A
XXXXXXX XXXXXXXX
EMPLOYEE BENEFITS
1. Continuation of existing life insurance coverage in the amount of
$1,500,000, with Employee's designees as beneficiaries.
2. Executive Medical Coverage ($6000 supplemental coverage).
Dental insurance.
Prescription drug coverage.
The above benefits are subject to change at any time at the discretion
of the Board of Directors of Employer; provided that such coverages provided to
Employee shall at all times be consistent with coverages provided to others of
Employer's executive employees.
3. Disability insurance (as currently provided by Roller Bearing
Company, provided that such insurance may be modified from time to time at the
discretion of the Board of Directors of Employer).
4. Employee shall be entitled to an annual performance bonus with
respect to each fiscal year of the Employer during which Employee remains an
employee of the Company beginning with the fiscal year ending March 31, 2001, in
an amount determined as a percentage of Employee's Base Salary, based on the
following criteria:
Percentage of Actual EBITDA to Plan Amount of Bonus
----------------------------------- ---------------
Less than 90% Discretion of Board of Directors
90% to 99.9% 100% of Base Salary
100% to 109.9% 150% of Base Salary
110% or higher 200% of Base Salary
The amount payable under this paragraph 3, if any, shall be paid to Employee
within fifteen (15) days following the delivery of the Company's financial
statements for each fiscal year of the Employer during the Term, but in no event
later than one hundred twenty (120) days following the end of such fiscal year.
"Plan" shall mean the operating plan established by the Employee, in
his status as CEO of Employer and as approved by the Board within thirty (30)
days following the beginning of each fiscal year, as applicable to Employer and
all of Employer's Affiliates and as applicable to the determination of bonuses
payable to others of Employer's (and Employer's Affiliates) employees to the
extent such bonuses are calculated by reference to operating results.
9
"EBITDA" shall mean the income of the Employer and the Employer's
Affiliates increased by interest, taxes, depreciation and amortization,
calculated in a manner consistent with the calculation of the Plan.
For the purposes hereof, (i) the performance bonus for the fiscal year
ending March 31, 2001 shall encompass the period beginning April 1, 2000 and the
plan for such fiscal year shall be [$___________]; and (ii) the performance
bonus for the period April 1, 2005 through December 17, 2005 shall be calculated
on the basis of the Plan for fiscal year ending March 31, 2006, pro rated for
the applicable short period.
5. Contributions by Employer to 401(K) or other pension or profit
sharing plans pursuant to arrangements applicable to all executive level
employees.
6. The Employer shall maintain an apartment in Los Angeles for use
by the Employee while on business.
10
