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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 3rd day of January, 1996, and effective
as of January 1, 1996, by and among XXXXXXX GRANITE COMPANY, INC., a New
Hampshire corporation, with a principal place of business at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, XX 00000 ("Xxxxxxx"), ROCK OF AGES CORPORATION, a Vermont
corporation, with a principal place of business at Main Street, Graniteville,
Barre, Vermont 05654 ("ROAC") and XXXXX X. XXXXXX ("Employee") residing at Xxxx
Xx. Xxx., Xxxxx, Xxxxxxx 00000.
FACTUAL BACKGROUND:
1. ROAC wishes to employ Employee with such duties and
responsibilities, and in such positions, as ROAC may assign to Employee; and
Employee wishes to accept such employment subject to the terms and conditions of
this agreement.
2. ROAC manufactures granite memorials and other granite products,
performs services related thereto, and markets such products and services in the
United States and in various foreign countries (ROAC's "Business") and has
accumulated valuable and confidential information including trade secrets and
know-how relating to technology, manufacturing procedures, formulas, machines,
marketing plans, sources of supply, business strategies and other business
records.
3. Agreement by Employee to enter into the covenants contained herein
is a condition precedent to the employment of Employee. Employee acknowledges
that the same and her execution of this agreement are express conditions of her
employment; and that said covenants are given as material consideration for such
employment and the other benefits conferred upon her by this agreement.
4. Xxxxxxx is a party to this agreement solely for purposes of agreeing
to and undertaking joint and several responsibility with ROAC for ROAC's
agreements, covenants, duties and undertakings hereunder and agreeing to the
provisions of Section 7 hereof.
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Employment. ROAC agrees to employ Employee, and Employee accepts
employment, all upon the terms and conditions hereinafter set forth. ROAC agrees
that Employee's employment hereunder shall not require her to relocate from the
Central Vermont geographic region.
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2. Duties and Policies.
(a) Duties. The Employee agrees to devote her full time and
best efforts to her employment duties in such positions to which Employee is
assigned during the Term (as hereinafter defined). ROAC reserves the right in
its sole discretion to request Employee to perform no duties for it under this
agreement from time to time or at any time for such periods of time during the
Term as it in its sole discretion may determine and in the event ROAC takes such
action, Employee will thereafter not be eligible for any further increases in
her Annual Base Salary or for any bonuses until ROAC requests, if ever, Employee
return to active work.
(b) Policies. Employee agrees to abide by the policies, rules,
regulations or procedures applicable to all ROAC employees as established by
ROAC from time to time and provided to Employee in writing.
3. Term. The term of this agreement (the "Term") shall be five (5)
years, beginning with the day after the date on which the Effective Time (as
defined in the Agreement and Plan of Reorganization by and among ROAC, Swenson,
Rock of Ages Quarries, Inc. ("ROAQ"), Xxxxxx Granite Company, Inc., Employee and
others) occurs, unless terminated earlier pursuant to the provisions of Section
6 below.
4. Compensation. For all services to be rendered by Employee in any
capacity hereunder, the Company shall pay Employee the following:
(a) Salary. The Company shall pay Employee an annual salary of
Sixty Thousand Dollars ($60,000.00) less withholding and other taxes required by
federal and state law (the "Annual Base Salary"), payable in equal monthly
installments, or as otherwise required by law. Employee shall be eligible to
receive increases in Employee's Annual Base Salary pursuant to periodic salary
reviews consistent with ROAC's corporate policies; it being understood such
increases are not guaranteed, but are subject to Employee's job performance and
the determination by ROAC's President or Board of Directors, in her or its sole
discretion, to award salary increases to Employee.
(b) Bonus. Employee may also be awarded a bonus or bonuses
from time to time during the Term at such time, if any, as ROAC's President or
its Board of Directors may determine, in her or its sole discretion, to award
such bonuses.
(c) Standards. ROAC agrees that the standards to be used by
its Board of Directors in awarding salary increases and bonuses to Employee will
be the same standards used by the Boards of Xxxxxxx and ROAQ (as hereinafter
defined) in awarding the same to executive officers of those corporations,
provided, however, that such salary increases and bonuses will be based on the
performance of the Xxxxxxx Corporate Group.
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5. Fringe Benefits. During the term of this agreement, Employee shall
be entitled to participate in such fringe benefits as, from time to time, may be
applicable to the Company's similarly situated executive employees, subject to
the terms and conditions of such fringe benefit plans and to the following
fringe benefits:
(i) Medical and major medical health insurance, paid
for by ROAC;
(ii) Life Insurance paid for by ROAC equal to one and
one-half (1 1/2) times Employee's Annual Base Salary;
(iii) Participation in ROAC's qualified 401(k) profit
sharing plan pursuant to the terms thereof;
(iv) Participation in ROAC's qualified defined
benefit Salaried Employees Pension Plan pursuant to the terms
thereof;
(v) The use of an automobile comparable to the
automobiles provided to other similar employees of ROAC and
payment by ROAC of the costs of operation and maintenance of
the automobile; and
(vi) Vacation in accordance with ROAC's employee
policies, in effect from time to time with credit given for
years of service for Employee's service with Xxxxxx Granite
Company, Inc.
Fringe benefits provided to Employee will, in addition, generally be
not less advantageous to Employee than those provided by Xxxxxxx to its
executive employees. Fringe benefits as used in this Section do not include cash
compensation, stock options or other compensation.
6. Termination.
(a) Termination because of Death or Total Disability. This
agreement will terminate automatically upon the date of Employee's death or
Total Disability. The Employee shall be deemed to have incurred a Total
Disability:
(i) if ROAC maintains a long term disability policy
in effect for the benefit of Employee, on the date when the
Employee shall have received total disability benefits under
said policy for a period of six (6) months;
(ii) if no such long term disability insurance policy
is in effect, on the date when the Employee suffers from a
physical or mental disability of such magnitude and effect
that the Employee is unable to perform the essential functions
of Employee's assigned position with or without reasonable
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accommodation and such disability continues during a period of
twelve (12) continuous or noncontinuous months within the
eighteen (18) month period beginning on the first day of the
month in which the first day of disability occurs;
(iii) if Employee illegally uses drugs and, as a
result, performance of her duties and/or employment with ROAC
is in any way impaired; or
(iv) on the date when Employee receives her first
payment under the Social Security Act because of determination
by the Social Security administration that Employee is totally
disabled.
Total Disability as set forth in subsections (ii), (iii) or (iv) above shall be
deemed to have occurred upon the written certification to ROAC thereof by the
Employee's personal physician, which certification may be requested in writing
by ROAC. If the Employee does not have a personal physician or refuses to
consult with his personal physician, ROAC may select a licensed Vermont
physician, board-certified in internal medicine or family practice, to examine
the Employee, which physician shall, for purposes hereof, be deemed to be the
Employee's personal physician; provided, that if the Employee refuses to be
examined by this deemed personal physician within thirty (30) days after the
physician's appointment by ROAC, then the Employee may at ROAC's election be
conclusively presumed to have become Totally Disabled as of the close of such
thirty (30) day period. If ROAC disagrees with the opinion of the Employee's
personal physician, then ROAC may select a second licensed, board-certified
Vermont physician to examine the Employee. The personal physician and this
second physician shall then select a third licensed, board-certified Vermont
physician to examine the Employee. Upon examination of the Employee by the three
(3) physicians, each physician shall render an opinion with respect to the
condition of the Employee in regards to his Total Disability, and the opinion of
a majority of the physicians shall be binding upon all parties.
(b) Termination Without Cause. ROAC shall have the right to
terminate this agreement and Employee's employment under this agreement without
cause at any time (any such termination by ROAC is herein sometimes referred to
as a "Termination Without Cause"). It shall also be deemed a Termination Without
Cause by ROAC if the Employee shall voluntarily resign from employment because
of a required relocation contrary to the provisions of Section 1 of this
agreement.
(c) Termination With Cause. ROAC may terminate this agreement
and the employment of the Employee at any time with cause and without further
notice upon the occurrence of any of the following events: (i) abandonment by
Employee of, or chronic, habitual or continuous failure by, Employee to perform,
over a period of thirty (30) or more days, Employee's duties as an Employee
hereunder; (ii) embezzlement or other theft of ROAC's property or the commission
of other criminal activity against ROAC or its employees, agents and customers;
or (iii) conviction of a crime which ROAC's Board of
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Directors reasonably determines will have a material adverse affect on the
reputation, business and/or financial affairs of ROAC or the Xxxxxxx Corporate
Group (as defined in Section 7 hereof) (any such termination is herein sometimes
referred to as a "Termination With Cause" or as "Terminated With Cause").
(d) Termination by the Employee. Employee may resign from
employment at any time for any reason and terminate this agreement by giving
thirty (30) days' written notice to ROAC (any such termination is herein
sometimes referred to as a "Voluntary Termination") of such intention. In such
event, ROAC may, in its discretion, permit the Employee to work through the
notice period or accept the Employee's immediate resignation. In the event of a
Voluntary Termination, Employee shall not be entitled to payment of any further
compensation or benefits under the terms of this agreement, except for salary
earned, and bonuses declared, if any, prior to the date thereof.
7. Expenses Upon Termination and Xxxxxxx Corporate Group. In the event
that Employee's employment is terminated for any reason or Employee resigns in
lieu of such termination, Employee shall only be entitled to be paid any
expenses she has incurred prior to the termination and for which she is entitled
to reimbursement hereunder, and such prorated salary as she may have earned up
to the date of termination. ROAC, ROAQ and Xxxxxxx and their direct and indirect
subsidiaries, affiliates and successors and assigns are sometimes herein
sometimes referred to as the "Xxxxxxx Corporate Group."
8. Severance Payments. If Employee's employment under this agreement
and this agreement are terminated, then in consideration thereof and as
liquidated damages incurred by Employee because of such termination and not as a
penalty, Employee agrees to accept and ROAC agrees to pay to Employee, as
Employee's sole entitlement because of any such termination, severance payments
(the "Severance Payment") pursuant to the following schedule:
Termination Without Cause or Severance Payment Equal to: $420,000,
termination because of Death or payable in five (5) equal annual payments
Total Disability during the First of $84,000 each with the first such
Year through the Fifth Year of payment being due on the first day of the
the Term: month following the date of the termination
(the "First Date") and the remaining four
on the second (2nd) through the fifth (5th)
annual anniversaries of the First Date.
If Employee is Terminated with Cause or Voluntarily Terminates,
Employee will still be entitled to a Severance Payment in the amount set forth
above but payment thereof shall be made over seven (7) years instead of five (5)
years in seven equal installments of Sixty
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Thousand Dollars ($60,000.00) each commencing on the First Date and continuing
on the second (2nd) through the seventh (7th) annual anniversaries of the First
Date.
If at the end of the Term, Employee does not continue to work for ROAC,
then she will be entitled to a Severance Payment in the amount set forth above
paid in the same seven (7) year fashion as if she had Voluntarily Terminated her
employment with Company.
If at the end of the Term, Employee continues to work for ROAC any
Severance Payments will be negotiated between Employee and Company as a part of
a new employment agreement between them.
Employee, in consideration of the payment of the severance payments set
forth in this Section 8, hereby waives and releases, all members of the Xxxxxxx
Corporate Group from any and all lawsuits, claims, damages, expenses, costs,
(including attorneys fees) which Employee may incur or suffer because of
Employee's termination of employment under this agreement.
9. Non-Disclosure of Confidential Information. Employee acknowledges
that during her employment, she will become fully familiar with all aspects of
the ROAC's Businesses and the Xxxxxxx Corporate Group's businesses and will
obtain access to confidential and proprietary information relating to such
businesses. Employee understands and agrees that such information is valuable
and Employee has no property interest in it. Therefore, Employee covenants and
agrees that during her employment with ROAC and thereafter Employee will not
use, disclose, communicate or divulge such information to any person not
employed by ROAC or use such information except as may be necessary to perform
her duties as an Employee under this agreement. Such obligation shall survive
the expiration of the term of this agreement and/or termination of Employee's
employment with ROAC for any reason whatsoever.
10. Non-Solicitation of Employees, Clients and Customers. During the
Term of this agreement and for the period of Employee's non-competition covenant
set forth in Section 12 hereof, following the termination this agreement,
Employee agrees not to, on her own behalf or on behalf of any other person,
corporation, firm or entity, directly or indirectly, solicit or induce any
client, customer, employee or sales representative of ROAC or the Xxxxxxx
Corporate Group to stop doing business with or to leave any of said companies
for any reason whatsoever or to hire any of their employees.
11. Return of Company Property. Upon termination or nonrenewal of this
agreement for any reason, Employee agrees to immediately return all ROAC and
Xxxxxxx Corporate Group property, whether confidential or not, without keeping
any copies or excerpts thereof, including but not limited to computers,
printers, customer lists, samples, product information, financial information,
price lists, marketing materials, keys, credit cards, automobiles, technical
data, research, blueprints, trade secrets information, and all confidential or
proprietary information.
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12. Non-Competition Covenant by Employee. ROAC and the Employee agree
that ROAC is currently engaged in the business of manufacturing, marketing and
selling granite memorials and other granite products (herein referred to as the
"Restricted Business") and ROAC is engaged in the Restricted Business in all of
the states of the United States and in all of the provinces of Canada (herein
the territory of all such states and provinces is referred to as the "Restricted
Territory") and has hired the Employee to expand and grow the Restricted
Business in the Restricted Territory. Accordingly, as a material and essential
inducement to ROAC to hire the Employee and in consideration of ROAC's and
Xxxxxxx'x agreements with the Employee under this agreement, including without
limitation the Severance Payments, Employee agrees that during the Term of this
agreement and, if this agreement is terminated for any reason, lapses, is not
renewed for any reason, or Employee is not employed by ROAC after the end of the
Term hereof for any reason, for a period equal to the greater of (a) two (2)
years; or (b) the periods during which ROAC is paying Severance Payments to
Employee pursuant to Section 8 hereof, the Employee will not, in the Restricted
Territory, directly or indirectly, in any manner whatsoever:
(a) compete with ROAC, its successor and assigns, or the
Xxxxxxx Corporate Group, its successors and assigns, in the Restricted
Business;
(b) engage in the Restricted Business, except as an employee
of ROAC or the Xxxxxxx Corporate Group;
(c) have any ownership interest in (other than the ownership
of less than five percent (5%) of the ownership interests of a company
whose stock or other ownership interests are publicly traded) any
business entity which engages in the Restricted Business in the
Restricted Territory except for any ownership interest owned by
Employee during the Term of this agreement, and after termination of
this agreement, in any member of the Xxxxxxx Corporate Group;
(d) contract, subcontract, work for, solicit work from,
solicit ROAC or Xxxxxxx Corporate Group employees for, or solicit
customers for, advise or become affiliated with, any business entity
which engages in the Restricted Business in the Restricted Territory
except as an employee of ROAC or of the Xxxxxxx Corporate Group; or
(e) lend money or provide anything of value to any entity
which engages in the Restricted Business in the Restricted Territory.
The term "compete" as used in this Section 12 means engage in
competition, either as an owner, agent, member, consultant, partner, sole
proprietor, stockholder, or any other ownership or other capacity.
While the restrictions as set forth herein are considered by the
parties hereto to be reasonable in all circumstances, it is recognized that any
one or more of such restrictions
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might fail for unforeseen reasons. Accordingly, it is hereby agreed and declared
that if any of such restrictions shall be adjudged to be void as unreasonable in
all circumstances for the protection of ROAC and the Xxxxxxx Corporate Group and
their interests, but would be valid if part of the wording thereof were deleted,
the period thereof reduced, or the range of activities or area dealt with
reduced in scope, such restrictions shall apply with the minimum modification as
may be necessary to make them valid and effective, while still affording to ROAC
and the Xxxxxxx Corporate Group the maximum amount of protection contemplated
thereby.
Employee represents that she has carefully reviewed Employee's
restrictive non-competition covenant set forth in this Section 12 and has
determined that this covenant will not impose undue hardship, financial or
otherwise, on Employee; that its Restrictive Territory and duration will not
impose a hardship on Employee; that it protects ROAC's and the Xxxxxxx Corporate
Group's legitimate interests in their investment in Employee and their
Restricted Business; and that in Employee's opinion Employee not being able to
compete in the Restrictive Territory for the duration of this covenant will not
be injurious to the public interest.
Employee agrees that Employee's breach of her covenants in this Section
12 will cause irreparable harm to ROAC and the Xxxxxxx Corporate Group.
Employee, therefore, further agrees that if she so breaches, ROAC may cease to
make any Severance Payments remaining due to Employee on the date of the breach
and ROAC's obligation to make any further Severance Payments to Employee will,
therefore, terminate and be null, void and of no further force and effect.
13. Loyalty. Employee shall devote her full time and best efforts to
the performance of her employment under this agreement. During the term of this
agreement, Employee shall not at any time or place whatsoever, either directly
or indirectly, engage in the Restricted Business or any other profession or
active business to any extent whatsoever, except on or pursuant to the terms of
this agreement, or with the prior written consent of ROAC. Employee agrees that
she will not, while this agreement is in effect, do any unlawful acts or engage
in any unlawful habits or usages which injure, directly or indirectly, ROAC and
its business. ROAC agrees that if it exercises its rights in Section 2(a) hereof
to have Employee perform no duties for it, then during such period of time
during the Term as Employee is so not performing her duties, Employee may engage
in other employment which does not violate her non-competition covenant in
Section 12 and her other covenants in Sections 9, 10 and 11 of this agreement.
14. Governing Law, Jurisdiction and Venue. This agreement shall be
governed by and construed in accordance with the laws of the state of Vermont.
The parties agree that because performance of this agreement will take place
predominantly in Washington County, Vermont, the Washington County Superior
Court, Vermont, or the U.S. District Court for the District of Vermont, in said
State are the sole and exclusive forums for any actions or claims by the parties
of this agreement and each party hereto consents to the jurisdiction of
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said courts in any action brought by another party hereto and agrees that no
claims or actions relating to any matter hereunder will be brought by them in
any other courts in this State, any other state or any other country.
15. Headings. The descriptive headings of the several sections of this
agreement are inserted for convenience of reference only and shall not control
or affect the meanings or construction of any of the provisions hereof.
16. Severability and Violation of Laws. If any provision of this
agreement shall be held invalid or unenforceable according to law, such
provision shall be modified to the extent necessary to bring it within the legal
requirements. Any such invalidity or unenforceability shall not affect the
remaining provisions of this agreement, and such remaining provisions shall
continue in full force and effect.
17. Specific Performance. The Employee hereby agrees and stipulates
that it would be impossible to measure in monetary terms the damages which would
be suffered by ROAC in the event of any breach by Employee of Sections 8, 9, 10,
11, 12 and 13 of this agreement. Therefore, if ROAC shall institute any action
in equity to enforce such sections of this agreement, it is agreed that the
Employee waives any claim or defense that ROAC has an adequate remedy at law,
and Employee agrees ROAC is entitled to specific performance of such terms of
the agreement.
18. Notices. Any notice or other communication required or permitted
under this agreement shall be in writing and shall be deemed to have been duly
given (i) upon hand delivery, or (ii) on the third day following delivery to the
U.S. Postal Service as certified or registered mail, return receipt requested
and postage prepaid, or (iii) on the first day following delivery to a
nationally recognized United States overnight courier service for next business
day delivery, fee prepaid, return receipt or other confirmation of delivery
requested or (iv) when telecopied or sent by facsimile transmission if an
additional notice is also given under (i), (ii) or (iii) above within three days
thereafter. Any such notice or communication shall be directed to a party at its
address set forth below or at such other address as may be designated by a party
in a notice given to all other parties hereto in accordance with the provisions
of this Section.
For the ROAC:
Xx. Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Xxxxxxx Granite Company, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
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with a copy to:
Xxxx X. Xxxxxx, Esquire
Xxxxxx & Xxxxxx, P.A.
00 Xxxxxx Xxxxxx, P. O. Xxx 000
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000-0000
For the Employee:
Xx. Xxxxx X. Xxxxxx
Xxxx Xx. Xxx.
Xxxxx, Xxxxxxx 00000
with a copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxx, Nicholls & Xxxxxx, P.C.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, XX 00000
19. Assignment. The rights and obligations of ROAC together with its
obligations and all of the Employee's covenants and agreements hereunder may be
assigned by ROAC to any third party by operation of law or by contractual
assignment; provided, however, that Xxxxxxx remains liable under this agreement
after such assignment as set forth in Section 23 hereof and upon such assignment
ROAC shall be relieved of all of its obligations, agreements, duties and
covenants hereunder. The rights and obligations of the Employee under this
agreement are not assignable.
20. Complete and Entire Agreement. This agreement contains all of the
terms agreed upon by the parties with respect to the subject matter hereof and
supersedes all prior agreements, representations and warranties of the parties
as to the subject matter hereof.
21. Amendments. This agreement may be amended, or any provision of the
agreement may be waived, provided that any such amendment or waiver will be
binding on the parties only if such amendment or waiver is set forth in a
writing executed by all parties hereto. The waiver by any party hereto of a
breach of any provision of this agreement shall not operate or be construed as a
waiver of any other breach.
22. Survival. Sections 8, 9, 10, 11, 12, 14, 16 and 17 shall survive
expiration of the term of this agreement and/or termination of Employee's
employment under this agreement.
23. Xxxxxxx as a Party. Xxxxxxx hereby agrees to joint and several
liability with ROAC for all of ROAC's agreements, covenants, duties and
undertakings under this
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agreement and Employee agrees that Xxxxxxx has all of ROAC's rights under this
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement, all
as of the date first written above.
WITNESS: ROCK OF AGES CORPORATION
/s/ By: /s/ Xxxx X. Xxxxxxx
-------------------------------- -------------------------------
Xxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
WITNESS: XXXXXXX GRANITE COMPANY, INC.
/s/ By: /s/ Xxxx X. Xxxxxxx
-------------------------------- -------------------------------
Xxxx X. Xxxxxxx, President
WITNESS: EMPLOYEE
/s/ /s/ Xxxxx X. Xxxxxx
-------------------------------- -------------------------------
Xxxxx X. Xxxxxx
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