EMPLOYMENT AGREEMENT
Exhibit 10.8
EMPLOYMENT
AGREEMENT,
dated
as of November 1, 2005, between Titan International, Inc., a Illinois
corporation (“Titan” or “the Company”) and its successor (s), and Xxxxx Xxxxx
(“Executive”) (hereinafter, as amended or modified and in effect called
“Agreement”). The effective date of this Agreement (the “Effective Date”) shall
be November 1, 2005.
INTENDING
TO BE LEGALLY BOUND HEREBY, the parties agree as follows:
1.
Position. Titan
agrees to employ Executive and Executive agrees to accept employment as
Executive Vice President and Chief Operating Officer of Titan International,
Inc. pursuant to the terms of this Agreement. Executive will perform such
services in the capacity of Executive Vice President and Chief Operating
Officer
as may be assigned to him by the By-laws and, from time to time by the
President, CEO or Chairman of Titan during the Employment Term and, if
applicable, during the Extended Employment Term, (as such terms are defined
in
Section 2). Executive will devote such of his business skill, time and effort
to
his employment hereunder as shall be reasonably necessary to discharge his
obligations hereunder.
2. Employment
Term.
Executive’s term of employment by Titan under this Agreement will begin on the
Effective Date and will terminate on the date three years after the Effective
Date (the “Employment Term”), unless terminated earlier as provided in Sections
5 and 6 hereof.
Subject
to the provisions of Sections 5 and 6 of this Agreement, this Agreement shall
be
extended for an additional one year period with consent of the parties, and
similarly shall be extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the “Extended Employment Term”), unless the parties have not agreed in
writing to extend said employment. If either party desires not to continue
the
employment of Executive under this Agreement beyond the Employment Term,
or, if
applicable, beyond the Extended Employment Term (the last day of the Employment
Term, or the last day of the Extended Employment Term, if applicable, is
hereinafter referred to as the “Termination Date”), that party shall at least
sixty (60) days prior to the Termination Date shall notify the other party
of
nonrenewal. Unless the notice of nonrenewal is thereafter revoked prior to
the
Termination Date by the party giving notice, and the party receiving notice
of
such nonrenewal consents in writing to the revocation thereof, the employment
of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by the President,
CEO or Chairman of Titan.
3. Direct
Compensation. For
his
service hereunder during the Employment Term and, if applicable, during the
Extended Employment Term, Executive will receive a base salary payable at
an
annual rate of $ 300,000.00 (the “Base Salary”), to be paid in accordance with
the normal practices for remunerating Titan executive management. Nothing
in
this Agreement will be deemed to prohibit an increase at any time in the
Base
Salary if Titan’s Board of Directors approves. (The Base Salary, if so adjusted,
is herein called the “Adjusted Base Salary”). In addition to salary, each
calendar year, the Executive shall be entitled to receive a minimum bonus
of
twenty-five percent (25%) up to a maximum of hundred percent (100%) of his
salary based on performance with specified criteria. The Board of Directors
will
establish the bonus and performance standards at the beginning of each year.
The
Executive shall receive stock options of up to a minimum of fifty percent
(50%)
of his base salary in shares of the Company stock under the Company Stock
Incentive Plan that shall vest and become exercisable as prescribed by the
Plan.
The Executive during the Employment term shall be entitled to four weeks
of
vacation plus Titan designated holidays in each year and shall, during such
periods, be entitled to remuneration as hereinbefore provided.
4. Benefits. In
addition to the benefits described in Sections 4, 5 and 6, Executive and,
as
applicable, Executive’s family, shall be entitled to participate during the
Employment Term, and if applicable, during the Extended Employment Term in
all
of Titan’s then prevailing Executive benefit plans and programs which are
generally available to Titan executive management, including without limitation,
any group life, accidental death and dismemberment insurance plans and/or
benefits, 401k or other plans (collectively, the “ Benefits”), no medical or
dental benefits are being offered to the Executive or his family.
5. Death
or Disability. In
the
event of Executive’s death or disability (hereinafter defined) during the
Employment Term, or, if applicable, during the Extended Employment Term,
Titan
shall pay Executive, his designated beneficiary or estate, in addition to
all
payments due under Section 4, 5 and 6, the Supplemental Death or Disability
Benefits, as the case may be, as described below.
5.1 Supplemental
Death Benefit. In
the
event of Executive’s death during the Employment Term, or if applicable, during
the Extended Employment Term, Titan shall pay Executive’s estate a lump sum
equal to all earned yet unpaid Base Salary or Adjusted Base Salary, if any,
in
effect as at such date of death plus the full amount of such Base Salary
or
Adjusted Base Salary for a period ending six (6) months following the month
during which the date of such death occurred (even if such six month period
extends beyond the Termination Date), and thereafter during the remainder
of the
Employment Term, or, if applicable, the Extended Employment Term, fifty percent
(50%) of Executive’s Base Salary. In addition, Titan shall continue to provide
Executive’s family with the Benefits from the date of Executive’s death until
the later of (1) the expiration of the Employment Term or, if applicable,
the
Extended Employment Term or (2) six months.
5.2
Supplemental
Disability Benefits.
In the
event of Disability of Executive (as hereinafter defined), the majority of
Titan’s Board of Directors as then constituted, at its election and upon 30 days
written notice to Executive, may terminate the employment of Executive under
this Agreement effective as of the last day of the month within which the
end of
such 30-day period occurs (the “Disability Termination Date”). For purposes of
this Agreement the term “Disability” shall mean the inability of Executive to
engage in his regular occupation as a senior executive officer of a corporation
generally comparable to Titan at a level of compensation commensurate with
his
education, training and experience for a substantially continue period which
has
extended or will foreseeable extend beyond six months in duration as a result
of
sickness, bodily injury, or mental or emotional disease or disorder of any
type,
excluding attempted suicide or intentionally self-inflicted injury. Upon
termination of the employment of Executive by reason of Disability, the
liabilities of Titan will be as follows:
(a) During
the periods referred to in (i) and (ii) below, Titan shall continue to provide
the Executive with the following direct compensation: (i) commencing with
the
first day of the month next succeeding the Disability Termination Date, a
lump
sum equal to all earned yet unpaid Base Salary or Adjusted Base Salary, if
any,
in effect as of such Disability Termination Date plus a monthly amount which
shall be equal to one-twelfth of Executive’s Base Salary or Adjusted Base
Salary, in effect as at such Disability Termination Date, for a period of
24
months following such Disability Termination Date (the “Disability Benefit
Continuation Period”); and (ii) for the period, if any, of Disability that
extends beyond the Disability Benefit Continuation Period referred to in
(i)
above, and until the date the Executive attains age 65 or, if sooner, his
death,
a monthly amount which shall be equal to one-twelfth of fifty percent (50%)
of
Executive’s Base Salary; provided, however, that the monthly amounts payable
under (i) and (ii) above shall be reduced by an amount equal to the sum of
the
amount of monthly benefits then actually received by Executive pursuant to
(A)
any long-term disability insurance plan then generally provided to executive
management by Titan,
and
(B)
any supplemental disability insurance program then provided to Executive
by
Titan.
(b) During
the Disability Benefit Continuation Period, Titan shall continue to provide
Executive with full participation in the benefits described in Sections 4,
5.1
and 5.2.
If
there
should be any dispute between the parties as to Executive’s incapacity or
physical or mental disability at any time, such dispute shall be determined
by
the written opinion of an impartial reputable physician agreed upon for this
purpose by the parties or their representatives or, failing Agreement by
the
parties within twenty (20) business days of the request by either party to
the
other, by a panel of three impartial reputable physicians to be selected
within
twenty (20) business day of request by either party to the other, one by
Executive and one by Titan, respectively, and one by the two physicians so
selected. If the physician selected by Titan and Executive should fail to
select
the third physician within ten (10) business days of their appointment, or
if
either Titan or Executive should fail to select a physician, the remaining
member(s) of the panel shall be appointed by Director of Mayo Clinic of
Rochester, MN. The opinion of the majority of the panel as to the matter
in
dispute shall be final and binding on the parties. Executive shall submit
to
such examination(s) as may be necessary for the purposes herein.
6. Termination.
Executive’s employment under this Agreement may be terminated by Titan upon the
occurrence of any of the following events:
6.1 Termination
for Cause.
If Titan
terminates the Executive’s employment for cause, for this purpose, “Termination
for Cause” shall mean (i) termination of the Executive’s employment for willful
or gross neglect of duties hereunder, or willful or gross misconduct in the
performance of such duties, so as to cause material harm to Titan and its
subsidiaries considered as a whole, determined in good faith by the President,
CEO or Chairman, (ii) termination following a judicial determination that
Executive has committed fraud, misappropriation or embezzlement against Titan
or
(iii) termination due to Executive’s having committed any felony for which he is
convicted and which, as determined in good faith by the President, CEO or
Chairman and results in material harm to Titan and its subsidiaries considered
as a whole. Upon the occurrence of a Termination for Cause, Titan’s obligations
under this Agreement shall terminate.
6.2
Termination
Without Cause.
If Titan
terminates the Executive’s employment and unless such termination shall be
pursuant to Section 5 or 6.1, such termination shall, in all cases, constitute
“Termination Without Cause” with effect from the date of action by Titan. Any
demotion from the position of Chief Operating Officer set forth in Section
1, or
any material reduction in the authorities inherent to such position, in each
instance unless made with Executive’s prior written consent, or upon a
termination pursuant to Sections 5 or 6.1, or any non-payment or reduction
in
the Base Salary or Adjusted Base Salary then in effect or any other breach
by
Titan of this Agreement shall be deemed to constitute Termination Without
Cause:
(a) In
the
event of Executive’s Termination Without Cause, Titan shall remain obligated to
pay Executive 100% of his Base Salary or Adjusted Base Salary then in effect
from the effective date of the Termination Without Cause, to the termination
date of the Employment Term but in no event beyond the Employment Term or,
if
applicable, the Extended Employment Term, plus benefits described in Sections
4,
5 and 6 during the Employment Term;
(b)
In
the
event of Executive’s Termination Without Cause, Titan agrees to provide for of
the Executive and his spouse and dependents which live in the household shall
receive, at not cost and expense to them for the remaining Employment term,
benefits provided or furnished or made available to the Executive under this
Agreement. Titan shall pay the full premiums for all such benefits taken
by the
Executive as well as all other charges and expenses for providing such benefits;
(c)
In
the event of Executive’s Termination Without Cause, Titan agrees all outstanding
stock options and the Employer match under Titan’s 401k Plan for the Executive
shall vest 100% immediately; and
(d) In
the
event of Executive’s Termination Without Cause, Titan shall provide, as a
condition of any such sale, that the acquiring corporation and successor
shall
assume this Agreement and become obligated to perform all of the terms and
conditions hereof.
7. Successors
and Assigns. This
Agreement shall be binding upon any successor or assigns of Titan and a
successor or assigns shall be any surviving corporation under which it might
be
merged or consolidated or the purchaser of substantially all of the assets
of
Titan.
8. Termination.
This
Agreement shall terminate on October 31, 2008 unless extended in writing
by the
parties. Any extension shall be for one year periods.
9. Expenses. Titan
will pay or reimburse Executive for any expenses reasonably incurred by him
in
furtherance of his duties hereunder, including, without limitation expenses
for
entertainment, travel (including automobile operating expenses), meals, hotel
accommodations and other ordinary and necessary activities incurred on behalf
of
the company, subject to reasonable documentation of such expenses by
Executive.
10. Inventions
and Improvements.
Any
invention or development of any kind related to Titan’s business
made or conceived by Executive (solely, jointly or in conjunction with anyone
else) while he is employed by Titan pursuant to this Agreement shall be promptly
disclosed by Executive to Titan and shall be the sole property of Titan.
Executive shall execute an assignment to Titan, or to another designated
by it,
of his entire claim to and interest in each such invention or development.
Executive undertakes to sign all lawful papers and, at Titan’s expense, to
assist it in every lawful way to obtain and sustain patents or copyrights
for
its benefit in any such inventions or developments when requested by Titan.
Executive shall not be entitled to compensation beyond his Base Salary or
Adjusted Base Salary for the performance of any such acts.
11. Confidential
Information..
Executive acknowledges that by reason of his employment with Titan he has
and
will hereafter, from time to time during his Employment Term, and, if
applicable, during the Extended Employment Term, become exposed to and/or
become
knowledgeable about proposals, plans, inventions, practices, systems, programs,
formulas, customer lists, and other forms of business information which are
not
known to Titan’s competitors and which are not recognized as being encompassed
within standard business management practices and which are kept secret and
confidential by Executive (the “Confidential Information”). Executive therefore
agrees that at no time during or after the period of his employment by Titan
will he disclose or use the Confidential Information except as may be required
in the prudent course of business for the benefit of Titan, provided, that
no
payment required to be made by Titan under the terms of this Agreement including
the Exhibits hereto after termination of the employment of Executive shall
be
subject to any right of set-off, counterclaim, defense, abatement, suspension,
deferment or reduction by reason of any claim against Executive based upon
breach of the covenant in this Section 12 other than execution of an unsatisfied
final judgment rendered by a court of competent jurisdiction.
12. Competition.
Executive hereby agrees that until the termination of his employment under
this
Agreement, and for a period of three (3) years thereafter, he will not, unless
authorized in writing to do so by Titan, directly or indirectly own, manage,
operate, join, control or participate in the ownership, management, operation
or
control of, or be employed or otherwise connected in any substantial manner
with
any business which directly competes to a material extent with line of business
of Titan or its subsidiaries that is material to the businesses, financial
condition or prospects of Titan and its subsidiaries considered as a whole;
provided that nothing in this paragraph shall prohibit Executive from acquiring
up to 5% of any class of outstanding equity securities of any corporation
whose
equity securities are regularly traded on a national securities exchange
or in
the “over-the-counter market”.
13. Relocation.
Executive shall not be required to relocate his residence during the Employment
Term or, if applicable, during the Extended Employment Term, without his
consent. If the Board of Directors of Titan approves or requires relocation
of
its executive from Knoxville, TN and if such relocation reasonably would
require
Executive to move and thereby sell his present residence and purchase a
different one and if Executive consents to relocate his residence to such
new
location, then Titan shall pay all reasonably requested moving and relocation
expenses including but not limited to real estate commissions, legal fees
and
costs, appraisals, title insurance, surveys and inspections directly related
to
such sale and closing and financing costs directly related to the purchase
or
construction of a new residence. In addition, Titan will indemnify Executive
for
any net loss (measured by the difference between (a) the average of two current
appraisals by recognized appraisers mutually agreed upon by the parties,
and (b)
the actual selling price of the residence) arising from the sale of his
residence (caused by such required relocation): provided, however, that Titan
shall alternatively have a right of first refusal to acquire the residence
at
the average appraisal price giving rise to such loss. Notwithstanding the
foregoing, Executive shall have the right to relocate his residence and perform
his services hereunder at a location other than Titan’s Corporate Headquarters
or the successor location thereto, so long as such relocation and performance
of
services does not prevent the fulfillment of his duties and obligations
hereunder.
14. 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
arbitrator(s) may be entered in any court having jurisdiction thereof. The
arbitration shall be held in Illinois unless another location shall be mutually
agreed to by the parties at the time of the arbitration. In any dispute between
the parties as to which Executive is sustained on the claim(s) by or against
him, Titan shall pay all legal fees incurred by Executive in connection with
the
dispute over such claim(s). If more than one is involved in any dispute and
if
Executive 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 legal
expenses. Titan will reimburse Executive for those legal expenses determined
by
the arbitrator(s) or by the consent of the parties to be allocable to the
claim
or claims as to which Executive is upheld.
15. Binding
Effect: Amendments.
Executive’s undertakings hereunder will be binding regardless of (i) the
duration of his employment with Titan; or (ii) the reasons for or manner
of
termination of his employment. This Agreement will bind and inure to the
benefit
of the heirs, personal representatives, successors and assigns of the parties,
will supersede any prior understanding between the parties relating to the
same
subject matter and may be modified and varied only in writing signed by the
parties hereto.
16. Notices.
All
notices hereunder shall be given in writing by personal delivery or by
registered mail addressed to Titan at is principal place of business and
to
Executive at his residence address as then listed in Titan’s
records.
17. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Illinois and jurisdiction of the State of Illinois, Xxxxx County
8th
Circuit
Court.
18. Miscellaneous. (a)
the
failure of a party to insist on any occasion upon strict adherence to any
term
of this Agreement shall not be considered to be a waiver or deprive that
party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing signed by the
party
waiving any right; (b) the underlined captions in this Agreement at the
beginning of Sections are for reference only and shall not be deemed to define
or limit the provisions hereof or to affect their construction and application;
(c) the parties agree that this Agreement may be executed in any number of
counterparts, and in the event, each counterpart shall be deemed a complete
original and be enforceable without reference to any other
counterpart.
19. Survival.
Termination of the Executive’s employment whether voluntary or involuntary,
whether with or without cause, shall not relieve the Company and/or its
successor (s) from their obligations hereunder. All of Sections 5 and 6 and
shall survive the termination of this Agreement and shall not relieve the
Company and/or successor from their obligations under these Sections.
