Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS Employment Agreement (the "Agreement") is made as of the 1st day of
April, 2001 by and between Applied Extrusion Technologies, Inc., a Delaware
corporation (the "Employer"), and Xxxxx X. Xxxxx (the "Executive").
RECITALS
1. The Executive is currently employed by the Employer as its Vice
President Manufacturing of the Employer's Films Division pursuant to an
Employment Agreement dated as of April 1, 1999, as in effect on the date hereof
(the "Prior Employment Agreement").
2. The Prior Employment Agreement provides that, on or after March 31,
2002, the Prior Employment Agreement continues in effect from year to year
unless either the Executive or the Employer gives notice to the other that such
continuation should not occur.
3. The Employer desires to continue to employ the Executive and to make
secure for itself the experience, abilities and services of the Executive and to
prevent the loss of such experience, services and abilities.
4. In consideration of the employment to be provided hereby and the amounts
to be paid as provided herein, the Executive desires to continue to be employed
by the Employer and to agree with the Employer as further provided herein.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Employment. The Employer shall continue to employ the Executive, and the
Executive shall continue to perform services for and continue in the employment
of the Employer, for the period (the "Employment Period") beginning on the date
hereof and ending on March 31, 2004, subject to extension as set forth herein
(such date, as from time to time in effect, being referred to herein as the
"Expiration Date"); provided, however, that, unless either the Employer or the
Executive shall give notice to the other (which notice may be given in the sole
discretion of either party hereto) no later than 90 days prior to the
then-current Expiration Date (the "Current Expiration Date") that such party
does not wish to have the Employment Period extended for another year past the
Current Expiration Date, then, at the close of business on such date which is 90
days prior to the Current Expiration Date, the Expiration Date shall
automatically become the date which is exactly one year after the Current
Expiration Date; and provided, further, that the employment of the Executive by
the Employer may be terminated prior to the Expiration Date in accordance with
all of the terms and conditions hereof.
2. Capacity. During such time as the Executive is employed by the Employer the
Executive shall serve on a full-time basis in the capacity of Vice President
Manufacturing of the Employer's Films Division or in such other senior executive
position as the Employer's Chief Executive Officer (the "Chief Executive
Officer") or Chief Operating Officer (the "Chief Operating Officer") may
designate from time to time, and shall perform such duties and responsibilities
on behalf of the Employer as may be designated from time to time by the Chief
Operating Officer. The Executive shall report to the Chief Operating Officer and
shall be accountable to, and shall have such other powers, duties and
responsibilities, consistent with his position and experience, as may from time
to time be prescribed by the Chief Operating Officer. The Executive shall
perform and discharge, faithfully, diligently and to the best of his ability,
such duties and responsibilities. The Executive shall devote his full time and
best efforts, business judgement, skill and knowledge to the advancement of the
Employer's interests and to the discharge of his duties and responsibilities
hereunder. Employee shall not engage in any other business activity during the
term of this Agreement, except as may be approved in advance in writing by the
Chief Executive Officer.
3. Compensation.
(a) Salary. During each year of the Employment Period, the Executive shall
receive an annual salary (the "Salary") of $200,000 which, from time to time,
shall be subject to upward adjustment only as recommended by the Chief Operating
Officer consistent with the Employer's compensation policies and guidelines.
(b) Incentive Bonus. During each year of the Employment Period, the
Executive shall be eligible to receive an incentive bonus based upon criteria
that are defined annually by the Employer.
(c) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable business expenses incurred by
him on behalf of the Employer.
(d) Fringe Benefits. During the Employment Period the Executive shall be
entitled to participate in or receive benefits under each disability insurance,
health, pension, retirement and accident plan or arrangement made generally
available by the Employer to its executives and key management employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements, and shall be entitled to four
weeks of paid vacation in any fiscal year during the Employment Period. In
addition, during the Employment Period the Executive shall be furnished with
either an automobile, of a make and year reasonably satisfactory to the Employer
and the Executive and consistent with the past practices of the Employer and the
Executive in this regard, either owned or leased by the Employer or an
automobile allowance sufficient to permit the Executive to obtain the use of
such an automobile, the choice of providing such automobile or allowance to be
at the sole discretion of the Employer.
(f) Change in Control. If a "Change in Control" (as such term is defined in
Exhibit A to the Employer's 1991 Stock Option Plan for Directors) shall occur,
then (i) all stock options previously granted to the Executive which, by their
terms, have not yet vested, shall immediately vest and become exercisable, (ii)
Section 4(d) hereof shall be amended by deleting clauses 4(d)(iii) and 4(d)(iv),
and (iii) the Executive shall be entitled to carry out his duties and
responsibilities hereunder primarily from Executive's current office in New
Castle, Delaware (or another facility serving such purpose and located within 15
miles of such current office) and will not be required to locate his primary
place of business outside such area without his consent (which may be given or
withheld in his sole discretion).
4. Termination and Compensation Thereon.
(a) Termination Date. As used herein, the term (i) "Termination Date" shall
mean the earlier of (A) the Expiration Date or (B) if the Executive's employment
is terminated (1) by his death, the date of his death, or (2) for any other
reason, the date on which such termination is to be effective pursuant to the
notice of termination given by the party terminating the employment
relationship, and (ii) "Benefits Termination Date" shall mean the later of (A)
the Expiration Date or (B) the date which is exactly one year after the
Termination Date. The Employment Period shall terminate on the Termination Date;
provided, however, that, unless the Executive's employment is terminated
pursuant to Section 4(d) or 4(g) hereof, the Expiration Date shall not be
changed to the Termination Date if the Executive's employment hereunder
terminates on a date other than the Expiration Date, and, if the Executive's
employment is terminated pursuant to Section 4(d) or 4(g) hereof, the Expiration
Date shall automatically be changed and shall become the Termination Date.
(b) Death. The Executive's employment hereunder shall terminate upon his
death. In such event, the Employer shall pay to the Designee or, if no such
person shall have been designated, the Estate, as applicable, (i) as promptly as
practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, and (ii) the Executive
shall be deemed for all vesting requirements contained in any of the Employer's
benefit plans, programs and offerings in which the Executive is participating on
the Termination Date to have been employed by the Employer until the Expiration
Date.
(c) Incapacity. If in the reasonable judgment of the Employer, as a result
of the Executive's incapacity due to physical or mental illness, the Executive
shall for at least six consecutive months during the term of this Agreement have
been unable to perform his duties under this Agreement on a full-time basis, the
Employer may terminate the Executive's employment hereunder by notice to the
Executive. In such event, (i) the Employer shall pay the Executive as promptly
as practicable after the Termination Date, an amount equal to any unpaid Salary,
Bonus and benefits accrued through the Termination Date, (ii) during the period
beginning on the Termination Date and ending on the Benefits Termination Date,
shall extend to Executive the applicable fringe benefits referred to in Section
3(d) hereof (or the equivalent thereof in all material respects if continuation
of participation in benefit plans is not able to be continued under applicable
law or the terms of such benefit plans); and (iii) the Executive shall
be deemed for all vesting requirements contained in any of the Employer's
benefit plans, programs or offerings in which the Executive is participating on
the Termination Date to have been employed by the Employer until the Expiration
Date. Any dispute between the Employer and the Executive with respect to the
Executive's incapacity shall be settled by reference to a competent medical
authority mutually agreed to by the Employer and the Executive, whose decision
shall be binding on all parties.
(d) Termination by the Employer for Cause. The Employer may terminate the
Executive's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean (i) other than by reason of Executive's incapacity under
Section 4(c) above, willful conduct by the Executive demonstrating gross
misconduct and gross unfitness to serve and which has caused material harm to
the business or interests of the Employer; (ii) the Executive's conviction of,
or entry into a consent decree or substantially similar arrangement in
connection with, a crime involving fraud, dishonesty or other conduct which
reflects materially and adversely on the Employer; (iii) other material breach
by Employee of any provision of this Agreement; or (iv) other conduct by
Employee that is materially harmful to the business or interests of the
Employer. If the Executive's employment is terminated pursuant to this Section
4(d), the Employer shall have no further obligations to the Executive hereunder
after the Termination Date, except for unpaid Salary, Bonus and benefits accrued
through the Termination Date. For purposes of this Section 4(d), no act, or
failure to act, on Executive's part shall be considered "willful" unless done,
or omitted to be done, by him knowing and with the intent that such action or
inaction would not be in the best interests of the Employer or otherwise was
done or omitted to be done in bad faith or with reckless disregard for the best
interests of the Employer.
(e) Termination by the Employer Other Than for Death, Incapacity or Cause.
The Employer may terminate the Executive's employment hereunder, other than
pursuant to Section 4(b) (relating to death), Section 4(c) (relating to
incapacity), or Section 4(d) (relating to Cause), at any time. In the event of
such termination, or if the Executive's employment hereunder shall terminate on
the Expiration Date because the Employer has given the notice contemplated by
the first proviso to Section 1 hereof, then the Employer (i) shall pay the
Executive A) as promptly as practicable after the Termination Date, an amount
equal to any unpaid Salary, Bonus and benefits accrued through the Termination
Date for the fiscal year in which the Termination Date occurs, and (B) a lump
sum payment, within 60 days after the Termination Date, equal to the aggregate
amount of Salary that would have been payable to the Executive over the period
from the Termination Date to the Benefits Termination Date if the Executive had
continued to be employed by the Employer through the Benefits Termination Date
and received his current Salary for periods after the Termination Date, and (ii)
during the period beginning on the Termination Date and ending on the Benefits
Termination Date, shall extend to Executive the applicable fringe benefits
referred to in Section 3(d) hereof on the terms referred to therein (or the
equivalent thereof in all material respects if continuation of participation in
benefit plans is not able to be continued under applicable law or the terms of
such benefit plans). In addition, the Executive shall be deemed for all vesting
requirements contained in any of the Employer's benefit plans, programs or
offerings in which the Executive is participating on the Termination Date to
have been employed by the Employer until the Expiration Date.
(f) Termination by the Executive for Good Reason. After a Change in Control
has occurred, the Executive may terminate his employment hereunder for Good
Reason upon notice to the Employer setting forth in reasonable detail the nature
of such Good Reason. The following shall constitute "Good Reason" for
termination by the Executive if the same has not been cured within 30 days after
written notice to the Chairman by the Executive:
(i) Failure of the Employer to continue the Executive in the position of
Vice President Manufacturing of the Employer's Films Division or in another
position of similar scope, authority and responsibility;
(ii) Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure to pay Executive on a timely basis, or any other material
breach by the Employer of Section 2 or 3 hereof.
In event of termination in accordance with this Section 4(f), then the Employer
(i) shall pay to the Executive (A) as promptly as practicable after the
Termination Date, an amount equal to any unpaid Salary, Bonus and benefits
accrued through the Termination Date for the fiscal year in which the
Termination Date occurs, and (B) a lump sum payment, within 60 days after the
Termination Date, equal to the aggregate amount of Salary that would have been
payable to the Executive over the period from the Termination Date to the
Benefits Termination Date if the Executive had continued to be employed by the
Employer through the Benefits Termination Date and received his current Salary
for periods after the Termination Date, and (ii) during the period beginning on
the Termination Date and ending on the Benefits Termination Date, shall extend
to Executive the applicable fringe benefits referred to in Section 3(d) hereof
on the terms referred to therein (or the equivalent thereof in all material
respects if continuation of participation in benefit plans is not able to be
continued under applicable law or the terms of such benefit plans). In addition,
the Executive shall be deemed for all vesting requirements contained in any of
the Employer's benefit plans, programs or offerings in which the Executive is
participating on the Termination Date to have been employed by the Employer
until the Expiration Date.
(g) Termination by the Executive Other Than for Good Reason. The Executive
may terminate his employment hereunder other than for Good Reason. In the event
of termination of the Executive's employment pursuant to this Section 4(g), or
if the Executive's employment hereunder shall terminate on the Expiration Date
because the Executive has given the notice contemplated by the first proviso to
Section 1 hereof, the Employer shall have no further obligations to the
Executive hereunder after the Termination Date, except for unpaid Salary, Bonus
and benefits accrued through the Termination Date.
(h) Effect of Termination. Payment in full by the Employer of the amount
that it may be required to pay Executive pursuant to this Section 4 upon
termination of his employment hereunder shall constitute the entire obligation
of the Employer to Executive under this Agreement, and performance by the
Employer shall constitute full settlement of any claim that
Executive might otherwise assert against the Employer or any of those connected
with it on account of such termination; provided, however, that the benefits
provided hereunder shall be in addition to, and not in lieu of, any benefits
provided to the Executive by the Employer under any plan in which the Executive
participates, including without limitation any stock option or supplemental
executive retirement plan or benefit, including that benefit referenced in
Exhibit A of this Agreement but excluding any severance plans or policies
administered by the Employer. The provisions of this Section 4 and of Sections
5, 6, 7, 8 and 10 hereof shall survive the Termination Date.
5. Nondisclosure and Nonuse of Confidential Information. Executive shall not
disclose to any other person (except as required by applicable law or in
connection with the performance of his duties and responsibilities hereunder),
or use for his own benefit or gain, any Confidential Information (as defined
below) relating to the business conducted by the Employer. Executive understands
that this restriction shall continue to apply after Executive's employment
terminates, regardless of the reason for such termination, and after the
expiration or other termination of this Agreement. "Confidential Information"
means all confidential, proprietary or other information relating to the
Employer and its subsidiaries and affiliates and their businesses, and includes
without limitation all such information relating to (i) the development,
research, testing, manufacturing and marketing activities of the Employer, (ii)
the products manufactured, sold or distributed by the Employer, (iii) the costs,
sources of supply and strategic plans of the Employer, (iv) the identity and
special needs of the customers of the Employer, (v) the financial arrangements
and capital structure of the Employer, (vi) the management and operation of the
Employer and (vii) people and organizations with whom the Employer has business
relationships and those relationships. Confidential Information also includes
comparable information that the Employer may receive or has received belonging
to customers or others who do business with the Employer. Confidential
Information shall not include information which (a) is publicly known, or
becomes publicly known through no fault of Executive or (b) is generally known
or readily obtainable by the public.
6. Restricted Activities. Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Employer. While Executive is employed by the Employer and for two (2) years
after the Benefits Termination Date (or, in the event the Executive's employment
is terminated pursuant to Section 4(d), 4(g), or if the Executive's employment
hereunder shall terminate on the Expiration Date because the Executive has given
the notice contemplated by the first proviso to Section 1 hereof, for two (2)
years after the Termination Date), Executive shall not, directly or indirectly,
whether as owner, partner, investor, consultant, agent, employee, co-venturer or
otherwise, engage in any activity that is competitive or potentially competitive
with the business of the Employer as conducted at any time during Executive's
employment without the Employer's written consent, which consent shall not be
unreasonably withheld. Executive understands that these restrictions shall
continue to apply even if this Agreement expires or otherwise terminates. The
foregoing restriction shall not prevent Executive from owing 5% or less of the
equity securities of any publicly traded company or from accepting employment
from or providing consulting services to any person who does not compete with
the Employer.
7. Documents and Material. Upon termination of Executive's employment with the
Employer or at any other time upon the Employer's request, Executive will
promptly deliver to the Employer, without retaining any copies, all documents
and other materials furnished to Executive by the Employer, prepared by
Executive for the Employer or otherwise relating to the Employer's business, if
and to the extent that the information therein constitutes Confidential
Information.
8. Relief, Interpretation. Executive agrees that the Employer shall, in addition
to any other remedies available to it, be entitled to preliminary and permanent
injunctive relief against any breach by him of the covenants and agreements
contained in Sections 5, 6 and 7 hereof without having to post bond. In the
event that any provision of Sections 5, 6 and 7 hereof shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be enforceable.
For purposes of Sections 5, 6 and 7 hereof the term "Employer" shall mean the
Employer and any of its subsidiaries and affiliates to the extent that such
enterprises are, during the term of Executive's employment by the Employer,
engaged in the same line of business as the Employer.
9. Conflicting Agreements. Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which he is a
party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder. Executive will not disclose to or use on behalf of the
Employer any proprietary information of a third party without such party's
consent. Executive will not enter into any agreement, whether written or oral,
conflicting with the provisions of this Agreement.
10. Arbitration. Any dispute, controversy or claim between the parties arising
out of or related to any term or condition of the Executive's employment or the
termination of his employment shall be settled by arbitration conducted in
Boston, Massachusetts in accordance with the Commercial Rules of the American
Arbitration Association then in force (the "Rules") and the laws of The
Commonwealth of Massachusetts. In the event that a party requests arbitration,
it shall serve upon the other party (the "Non-Requesting Party") a written
demand for arbitration stating the substance of the controversy, dispute or
claim, the contention of the party requesting arbitration and the name and
address of the arbitrator appointed by it. The Non-Requesting Party, within
twenty (20) days of such demand, shall accept the arbitrator or appoint a second
arbitrator and notify the other party of the name and address of this second
arbitrator so selected, in which case the two arbitrators shall appoint a third.
The decision or award of the single arbitrator or, in the case of three
arbitrators, the decision or award of any two arbitrators, shall be final and
binding upon the parties. In the event that the two arbitrators fail in any
instance to appoint a third arbitrator within twenty (20) days of the
appointment of the second arbitrator, either arbitrator or any party to the
arbitration may apply to the American Arbitration Association for appointment of
the third arbitrator in accordance with the Rules. Should the Non-Requesting
Party (upon whom a demand for arbitration has been served) fail or refuse to
accept the arbitrator appointed by the other party or to appoint an arbitrator
within twenty (20) days, the single arbitrator shall have the right to decide
alone, and such arbitrator's decision or award shall be final and binding upon
the parties. The decision of the arbitrator or arbitrators shall be in writing
and shall set forth the basis therefor. The parties shall abide by all awards
rendered in the arbitration proceedings, and all such awards may be enforced and
executed upon in any court having jurisdiction over the party against whom
enforcement of such award is sought. The parties involved in the dispute shall
divide equally the administrative charges, arbitrator's fees and related
expenses of the arbitration, but each party shall pay its own legal fees
incurred in connection with such arbitration.
11. Taxes. All payments made by the Employer under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Employer
under applicable law.
12. Waiver. The waiver by the Employer of a breach of any provision of this
Agreement by Executive will not operate or be construed as a waiver of any other
subsequent breach by Executive.
13. Amendments. No amendment to this Agreement shall be effective unless it
shall be in writing and signed by each party hereto. No oral waiver, amendment
or modification will be effective under any circumstances whatsoever.
14. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or three days after being
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Employer, to it at:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx Xxxxxxx,
Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
(ii) if to the Executive, to him at:
Applied Extrusion Technologies, Inc.
00 Xxxx'x Xxx
Xxx Xxxxxx, Xxxxxxxx 00000
15. Assignment. Neither the Employer nor Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party; provided, however, that the
Employer may assign its rights and obligations under this Agreement without the
consent of Executive in the event that the Employer shall hereafter effect a
reorganization, consolidate with, or merge into any other person or transfer all
or substantially all of its properties or assets to any other person. This
Agreement shall inure to the benefit of and be binding upon the Employer and
Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
16. Miscellaneous. The Prior Employment Agreement is hereby terminated with
respect to the employment of the Executive by the Employer on and after the date
hereof, and shall be of no further force or effect with respect to such
employment; provided, however, that the Prior Employment Agreement shall
continue to govern the terms of the Executive's employment by the Employer with
respect to all periods ending on or prior to the date hereof. This Agreement
constitutes the entire agreement between the parties and supersedes all prior
and contemporaneous communications, agreements, representations, understandings
and negotiations, whether oral or written, with respect to the subject matter
hereof. The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
The headings in this Agreement are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof. This Agreement may be executed
in any number of counterparts which together shall constitute one instrument and
shall be governed and construed in accordance with the domestic substantive laws
of The Commonwealth of Massachusetts without regard to any choice or conflicts
of laws rules or principles that would cause the application of the domestic
substantive laws of any jurisdiction other than The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
By: /S/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chief Operating Officer and
Executive Vice President
By: /S/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
