AGREEMENT
This Agreement made and entered into as of the 16th day of July, 1996, by
and between QUIPP, INC., a Florida corporation hereinafter called "COMPANY,"
which term shall include its successors or assigns, QUIPP SYSTEMS, INC., a
Florida corporation, hereinafter called "QUIPP SYSTEMS," which term shall
include its successors and assigns, and XXXXX X. XXXXXX, hereinafter called
"EMPLOYEE."
W I T N E S S E T H :
WHEREAS, COMPANY wholly-owns QUIPP SYSTEMS, which is engaged in the design
and manufacture of material handling equipment for the newspaper and commercial
printing industries; and
WHEREAS, EMPLOYEE has served as President of the COMPANY since May 14,
1995; and
WHEREAS, in consideration of EMPLOYEE'S past services and continued
services to COMPANY, and in recognition of the value of such services both to
COMPANY and QUIPP SYSTEMS, COMPANY, QUIPP SYSTEMS and EMPLOYEE wish to state
their understanding regarding the continuation of the availability of health
insurance for EMPLOYEE under certain circumstances:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties as follows:
1. A. For purposes of this Agreement, the following terms shall have
the following meanings unless the context clearly otherwise requires:
(I) "Base Salary" means the annualized amount of the
aggregate cash remuneration being paid to EMPLOYEE by the COMPANY, exclusive of
any cash payments made to EMPLOYEE under any bonus or similar plan or any
contributions made for EMPLOYEE'S benefit to any pension or profit sharing plan
or other type of executive retirement plan.
(ii) "Change of Control" means an event (the"Acquisition
Event") following which any person, together with all of such person's
"affiliates" and "associates," as defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any group within the
meaning of Section 13(d)(3) or Rule 13d-5(b)(1) under the Exchange Act, shall
become the beneficial owner, directly or indirectly, of an aggregate of twenty
percent (20%) or more of the common stock of COMPANY then outstanding, unless
the Board of Directors of COMPANY (the "Board of Directors"), within thirty
(30) days after having been advised that such ownership level has been reached,
determines, in its sole discretion, that the Acquisition Event should not be
considered as a Change of Control for purposes of this Section 1; provided,
that at such time as the Board of Directors makes such determination, the Board
of Directors is comprised of the same persons as those on the Board of Directors
immediately prior to the Acquisition Event or (ii) if during any 24-month
period, individuals who at the beginning of such period constituted the Board of
Directors cease for any reason to constitute a majority thereof, unless the
election, or the nomination for election by COMPANY shareholders, of the
directors who were not directors at the beginning of such period was approved by
a vote of at least a majority of the directors in office at the time of such
election or nomination who were directors at the beginning of such period.
(iii) "Termination of Employment" means the termination of all
of EMPLOYEE'S actual employment relationships with COMPANY.
(iv) "Termination upon a Change of Control" means a
Termination of Employment after a Change of Control either:
(a) initiated by COMPANY or any successor corporation for
any reason other than the EMPLOYEE'S fraud, or EMPLOYEE'S conviction of a crime
involving moral turpitude, or EMPLOYEE'S willful misconduct or gross negligence
in the performance of his duties or responsibilities for the COMPANY; or
(b) initiated by EMPLOYEE upon one or more of the following
occurrences:
(1) a significant reduction in the authority, duties
or responsibilities held by EMPLOYEE immediately prior to the Change of Control,
default by COMPANY, following the Change of Control, in payment of any
compensation due to EMPLOYEE, or any removal of EMPLOYEE from or any failure to
re-elect EMPLOYEE to the positions held by EMPLOYEE immediately prior to the
Change of Control, except in connection with promotions to higher office;
(2) a reduction in EMPLOYEE'S Base Salary as in effect
immediately prior to the Change of Control; or
(3) a significant increase, following the Change of
Control, in the time commitment required by EMPLOYEE in the performance of his
duties to COMPANY.
B. In the event of EMPLOYEE'S Termination upon a Change of
Control, COMPANY or, if QUIPP SYSTEMS was providing such insurance for EMPLOYEE
prior to the Change of Control, QUIPP SYSTEMS shall continue EMPLOYEE'S health
insurance until EMPLOYEE'S sixty-eighth (68th) birthday, provided EMPLOYEE pays
one hundred percent (100%) of the cost of such insurance, as determined pursuant
to subsection 1.C below; provided, however, that EMPLOYEE shall not be obligated
to pay more than the cost of such insurance with respect to a similarly situated
full-time employee. During the time of continuation of said insurance,
insurance provided by COMPANY or QUIPP SYSTEMS shall be subordinate to any other
health insurance (including Medicare or any other governmentally provided
coverage) for which EMPLOYEE is eligible; provided, that COMPANY shall reimburse
EMPLOYEE for any Medicare, Part B premiums paid by EMPLOYEE during such time.
C. For purposes of this Agreement, the cost of EMPLOYEE'S health
insurance shall be the actual premium paid to the insurance company and, if the
party (COMPANY or QUIPP SYSTEMS) providing such insurance is partially self-
insured, the cost per participant for each year or portion thereof relating to
such self-insurance. EMPLOYEE shall pay such amounts at the beginning of the
relevant year or portion thereof for which EMPLOYEE is entitled to receive
health insurance pursuant to subsection 1.B, based on the estimated average cost
per participant for equivalent coverage, and an appropriate adjustment shall be
made at the end of such period, based on the actual cost per participant for
equivalent coverage.
D. (I) In the event that COMPANY and QUIPP SYSTEMS shall fail
or refuse to make available to EMPLOYEE health insurance as provided under
subsection 1.B, COMPANY shall reimburse EMPLOYEE for any payments made by
EMPLOYEE to obtain similar insurance that are in excess of payments EMPLOYEE
would otherwise have to make pursuant to subsection 1.B (the "Excess Payments"),
plus interest, compounded quarterly, on any Excess Payments made by EMPLOYEE
from the latter of the date (1) EMPLOYEE notifies COMPANY that such Excess
Payments are being made or (2) the date EMPLOYEE makes the Excess Payments,
until the date COMPANY reimburses EMPLOYEE for such Excess Payments and all
accrued interest. In the event that COMPANY reimburses only a portion of
EMPLOYEE'S Excess Payments and accrued interest, interest will continue to
accrue on the unpaid portion. Interest payable pursuant to this subsection
1.D(I) shall be payable at the rate from time to time announced by NationsBank,
N.A. as its "prime rate" plus 3%, each change in such rate to take effect on the
effective date of the change in such prime rate.
(ii) In addition to the payments required under subsection
1.D(I), COMPANY shall pay to EMPLOYEE, on demand, the amount necessary to
reimburse EMPLOYEE in full for all expenses (including all attorneys' fees and
expenses) incurred by EMPLOYEE in enforcing any of the obligations of COMPANY
and QUIPP SYSTEMS under subsection 1.B.
2. The invalidity of unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
3. This Agreement shall inure to and be binding on the parties hereto
and their respective heirs, successors and assigns.
4. This document shall be construed for all purposes as a Florida
document and shall be interpreted and enforced in accordance
with the laws of the State of Florida.
5. This Agreement contains the entire understanding among the parties
hereof, and supersedes all prior agreements and understandings relating to the
provision of health insurance to EMPLOYEE in the event of EMPLOYEE'S
"Termination upon a Change of Control." The Agreement is not otherwise intended
to supersede any provision for health insurance coverage that may be available
to EMPLOYEE by virtue of resolutions of the Board of Directors of COMPANY or
QUIPP SYSTEMS, or otherwise. This Agreement may be amended by a written
agreement between COMPANY and EMPLOYEE.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first
above written.
QUIPP INC.
BY:/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chairman of the Board
QUIPP SYSTEMS, INC.
BY: /s/Xxxxx X. Xxxx
Xxxxx X. Xxxx
President
/s/Xxxxx Xxxxxx
Xxxxx Xxxxxx
