Exhibit 10.1
EMPLOYMENT AGREEMENT
Agreement, dated as of April 30, 1997, by and between DISCAS, INC., a
Delaware corporation with offices at 000-0 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000, and Xxxxxxx X. XxXxxxx, Xx., an individual residing at 000 Xxxxxx Xxxx,
Xxxxxxxx, XX 06410,(hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Employee mutually desire to enter into
an Employment Agreement with respect to the Employee's employment by the
Company;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration the receipt of which
is hereby acknowledged, the Company and the Employee hereby agree as follows:
1. Term and Position.
The Company agrees to employ the Employee as its President and Chief
Executive Officer for the period (the "Employment Period") commencing on the
date hereof and terminating April 30, 2002. The Employee accepts such
employment, agrees to perform the functions and duties incident to such
position, and further agrees to perform such other services consistent with
his position as shall from time to time be assigned to him by, or pursuant to
authorization of, the Board of Directors of the Company and agrees to devote
substantially all of his business time, skill and attention to such services.
All future employment of family members by the Company made in your capacity
as Chief Executive Officer shall be subject to the prior approval of the Board
of Directors.
2. Directorship.
The Company agrees that the Employee shall be named by its Board of
Directors as one of the nominees to its Board of Directors at each meeting of
the stockholders of the Company during the Employment Period at which
directors are to be elected. The Employee shall act as a director of the
Company and/or any of its subsidiaries or affiliates without any additional
compensation except as otherwise provided by the Board of Directors of the
Company or such subsidiary or affiliate.
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3. Compensation and Benefits.
a. The Company shall pay to the Employee, and the Employee
shall accept from the Company, for the Employee's services hereunder during
the Employment Period, (i) base compensation at the rate of $175,000 per
annum, payable in accordance with the customary payroll policy of the Company
and subject to such payroll deductions as required by law, and in addition to
the items set forth below; and (ii) such cash bonus each year as shall be
determined by the Board of Directors of the Company or any appropriate
committee thereof. The sum of base compensation and cash bonus provided for
herein and paid to Employee shall not exceed $175,000 per annum during the
first three years of the Employment Period, except for bonuses determined by
the Board of Directors which are based upon the Company's achievement of
specific targets for revenues, net income and/or common stock share prices.
The base compensation for the fourth year of this agreement shall be $227,500
and for the fifth year of this agreement shall be $250,000. The Board of
Directors may also provide for the grant of stock options under the Company's
stock option plan and for deferred compensation arrangements in the Board's
sole discretion. Employee shall not participate in any Board meetings which
concern his compensation.
b. The Company agrees to reimburse the Employee for all reasonable
business expenses incurred by him during the Employment Period in connection
with the performance of his services hereunder, including expenses incurred in
connection with activities associated with promoting the business of the
Company that are authorized from time to time by the Board of Directors, upon
presentation by Employee of an accounting of such expenses in such detail as
may be required by then-applicable tax laws.
c. The Employee shall participate at the Company's expense on the
same basis, subject to the same qualifications, as other senior executives of
the Company in any pension, savings, life insurance, health insurance,
hospitalization, long-term disability, and other fringe benefit plans and
vacation policies (the "Fringe Benefits") in effect from time to time with
respect to senior executives of the Company. The Company agrees that each of
the Fringe Benefits in effect on the date hereof or at any time during the
Employment Period shall not be terminated or modified in any manner which
reduces the benefits of the Employee without the written consent of the
Employee. In addition, the Company agrees to provide the Employee with a car
allowance of up to $700 monthly, and to the extent that it obtains key man
life insurance on the life of Employee, to use its best efforts to provide
that such policy be assignable to Employee upon termination of this Agreement.
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4. Termination.
a. For Cause.
This Agreement may be terminated immediately by the Company
for cause, which shall constitute and be limited to the occurrence of any of
the following events: (i) the death of Employee; (ii) Employee's loss of legal
capacity for any reason; (iii) willful breach of this Agreement or his duties
hereunder by Employee; (iv) any act committed by the Employee against the
Company, its subsidiaries or divisions constituting (A) fraud, (B)
misappropriation of corporate opportunity, (C) self-dealing without the
express prior approval of the Board of Directors of the Company, (D)
embezzlement of funds, or (E) felony conviction for conduct involving moral
turpitude or other criminal conduct materially and adversely affecting the
operations of the Company, its subsidiaries or divisions; (v) the breach or
default by Employee in the performance of any material covenant on the part of
the Employee to be performed under this Agreement, which breach or default
shall continue for a period of fourteen (14) days after receipt of written
notice from the Company; (vi) chronic alcoholism or any other form of drug
addiction which impairs the Employee's ability to perform his duties
hereunder; or (vii) disability of Employee, which prevents Employee from
performing any material amount of his duties hereunder, and such disability is
expected, in the opinion of a physician engaged by the Company for such
purpose, to continue in excess of 120 days. In the event of disability,
Employee shall be entitled to cause his own physician to make an examination
of Employee, and if such personal physician disagrees with the opinion of the
Company's doctor, then the two doctors shall together appoint a third
physician to examine Employee, and the determination of such third physician
shall be final. The fees of such third physician shall be paid by the Company.
b. Without Cause.
This Agreement may be terminated by the Company at any time
without cause, subject to the payments set forth in subsection 4.c below. In
the event that this Agreement is terminated by the Company at any time
following a change in control of the Company (as defined in Section 203 of the
Delaware General Corporation Law), it shall be rebuttably presumed that
termination has been without cause.
c. Compensation Upon Termination.
In the event that Employee is terminated with cause, as set
forth in Section 4.a above, then the obligation of the Company to compensate
Employee shall cease with the payment of all amounts accrued (including
reimbursement of expenses properly incurred by Employee prior to termination)
as of such date. In the event that
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Employee is terminated without cause, as set forth in Section 4.b above, then
the Company shall be obligated to pay Employee his regular salary and benefits
(but not including any discretionary bonuses in the event termination occurs
prior to the seventh month of any contract year) through the normal term of
this Agreement, without setoff for new employment by Employee.
5. Breach, Notice.
The Company and the Employee agree that neither party shall have the
right to terminate this Employment Agreement by reason of any breach by the
other party of the provisions hereof unless written notice specifying such
breach shall have been given to the other party and unless the other party
shall continue such breach for at least fourteen days after the receipt of
such notice.
6. Non-Competition.
a. During the period of Employee's employment by the
Company, whether or not this Agreement or the Employment Period provided
hereunder has expired or terminated, (such period hereinafter the
"Non-Competition Period"), except if Employee discontinues his employment as a
result of a change in control of the Company subsequent to the date of this
Agreement (as defined in Section 203 of the Delaware General Corporation Law),
Employee agrees that he will not, anywhere in the United States, directly or
indirectly enter into or participate (whether as owner, partner, shareholder,
officer, director, salesman, consultant, employee or otherwise) in any
business which designs, develops, manufactures, markets, distributes and/or
otherwise sells any Products (as defined below) or which is otherwise in
competition with any substantial business conducted by the Company during any
period in which the Employee is employed by the Company, without first having
obtained the consent of the Company, in writing; provided, that the Employee
may own up to five (5%) percent of the outstanding equity securities of any
entity that is subject to the public reporting requirements of the Securities
Exchange Act of 1934. As used herein, the term "Products" means any and all
goods and/or products of the type at any time sold by the Company, including
but not limited to a broad range of plastic and rubber compounds and goods
manufactured therefrom using a variety of recycled and prime materials, and
any functionally similar goods and/or products.
b. During the Non-Competition Period, the Employee shall
not, without the prior written consent of the Company, directly or indirectly
(i) solicit, request, cause or induce any person who is at the time, or three
months prior thereto had been, an employee of or a consultant to the Company,
to leave the employ of or terminate his relationship with the Company, (ii)
employ, hire, engage or be associated with, or endeavor to entice away from
the Company, any such person or (iii) induce any customers of the 4
Company to discontinue doing business with the Company.
7. Non-Disclosure of Confidential Information.
a. The Employee acknowledges that it is the policy of the
Company to maintain as secret and confidential all valuable and unique
information heretofore or hereafter acquired, developed or used by the Company
relating to the business, operations employees and customers of the Company,
which information gives the Company a competitive advantage in its industry,
and which information includes technical knowledge, know-how or trade secrets
and information concerning the operations, sales, personnel, suppliers,
customers, costs, profits, markets, pricing policies, "Confidential Material"
(as hereinafter defined), and the results of any investigations or experiments
of the Company (as such information is hereinafter referred to as
"Confidential Information"). The Employee recognizes that the services to be
performed by the Employee are special and unique, and that by reason of his
duties he will acquire Confidential Information. The Employee recognizes that
all such Confidential Information is the sole and exclusive property of the
Company. In consideration of the Company's entering into this Agreement, the
Employee agrees that:
i. he shall never for so long as such information
is valuable and unique (but in no case for longer than five years following
the termination of Employee's employment by the Company), directly or
indirectly, use, publish, disseminate or otherwise disclose any Confidential
Information obtained during his employment by the Company without the prior
written consent of the Company's Board of Directors, it being understood that
this subparagraph shall survive the term of this Agreement;
ii. the parties hereto agree that the Employee,
during the course of his employment, may be directed to perform services for
the benefit of a customer of the Company, such customer shall be deemed a
third party beneficiary of the provisions of this Agreement and, in addition
to the proscriptions contained in subparagraph (i) above, shall not disclose
any "confidential information" which relates to the customer (defined with
respect to such customer in the same manner as for the Company) to any person,
firm or enterprise without the prior written consent of the Company and such
customer;
iii. during the term of his employment by the
Company, he shall exercise all due and diligent precautions to protect the
integrity of the Company's customer lists, mailing lists and sources thereof,
statistical data and compilations, Agreements, contracts, manuals or other
documents and any and all other materials embodying any Confidential
Information (the "Confidential Materials") and, upon termination of his
employment
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hereunder, or at such earlier time as the Company may so request, he shall
immediately return to the Company all such Confidential Materials (and copies
thereof) then in his possession or control;
iv. the Employee agrees that he will at all times
comply with all security regulations (a) in effect from time to time at the
Company's or its customers' premises and (b) in effect for materials belonging
to the Company or its customers; and
v. the Employee agrees that the provisions of this
subsection (a) are reasonably necessary to protect the proprietary rights of
the Company in the Confidential Information and its trade secrets, goodwill
and reputation.
b. The Employee acknowledges that any breach of the
provisions of this Section 7 can cause irreparable harm to the Company for
which the Company would have no adequate remedy at law. In the event of a
breach or threatened breach by the Employee of any of such provisions, in
addition to any and all other rights and remedies it may have under this
Agreement or otherwise, the Company may immediately seek any judicial action
deemed necessary, including, without limitation, temporary and preliminary
injunctive relief.
8. Arbitration.
Any controversy or claim arising out of or in connection
with this Employment Agreement or any breach of this Employment Agreement or
any default under this Employment Agreement shall be settled by arbitration in
the State of Connecticut in accordance with the rules of the American
Arbitration Association and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.
9. Successors and Assigns.
This Employment Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, administrators,
executors, successors and assigns; provided, however, that this Employment
Agreement may not be assigned by either party hereto.
10. Governing Law.
This Employment Agreement shall be governed by, and construed in
accordance with, the laws of the State of Connecticut.
11. Notice.
Any notice required hereunder shall be delivered by hand, sent by
telecopy, or sent by registered or certified mail, addressed to
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the other party hereto at its address set forth above or at such other address
as notice thereof shall have been given in accordance with the provisions of
this Section 11. Any such notice shall become effective (a) when mailed, three
days after having been deposited in the mails, postage prepaid, and (b) in the
case of delivery by hand or telecopy, upon delivery.
12. Agreement; Amendment.
This Agreement supersedes any prior Agreements or understandings,
oral or written, between the parties hereto and represents their entire
understanding and Agreement with respect to the subject matter hereof, and
this Agreement can be amended, supplemented or changed, and any provision
hereof can be waived, only by written instrument making specific reference to
this Agreement which is signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought.
13. Severability.
In the event of the invalidity or unenforceability of any one or more
provisions of this Agreement, such illegality or unenforceability shall not
affect the validity or enforceability of the other provisions hereof and such
other provisions shall be deemed to remain in full force and effect. The
Employee specifically acknowledges and agrees that the provisions of Sections
6 and 7 hereof are reasonable and valid in all respects. If any tribunal
having jurisdiction determines that any of the provisions of either Section 6
or Section 7 or any part or parts thereof, is invalid or unenforceable because
of the duration or scope of such provision, such tribunal shall have the power
to reduce the duration or scope of such provision, and in its reduced form,
such provision shall then be enforceable.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Employment Agreement the day and year first above written.
DISCAS, INC.
By:
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Xxx Xxxxxxxxxx, Chief
Financial Officer and
Secretary
EMPLOYEE:
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Xxxxxxx X. XxXxxxx, Xx.
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