EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on July 1,
1995 by and between Xxxxx X. Xxxxxxx, an individual ("Executive"), and Petrowax
PA Inc., a Delaware corporation (the "Company").
1. EMPLOYMENT BY THE COMPANY AND TERM.
(a) FULL TIME AND BEST EFFORTS. Subject to the terms set forth
herein, the Company agrees to employ Executive as Chief Administrative Officer,
and in such other executive capacities as may be requested from time to time by
the Board of Directors of the Company or a duly authorized committee thereof,
and Executive hereby accepts such employment. Executive shall serve, if elected,
as a member of the Board of Directors of the Company, and shall render such
other services for the Company and corporations controlled by, under common
control with or controlling, directly or indirectly, the Company, and to
successor entities and assignees of the Company ("Company's Affiliates") as the
Company may from time to time reasonably request and as shall be consistent with
the duties Executive is to perform for the Company and with Executive's stature
and experience. During the term of his employment with the Company, Executive
will devote his full time and exclusive attention to, and use his best efforts
to advance, the business and welfare of the Company, and will not engage in any
other employment or business activities for any direct or indirect remuneration
that would be harmful or detrimental to, or that may compete with, the business
and affairs of the Company.
(b) DUTIES. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his then current title,
consistent with the Bylaws of the Company and as required by the Company's Board
of Directors (the "Board") and the officers to whom the Executive reports.
(c) COMPANY POLICIES. The employment relationship between the parties
shall be governed by the general employment policies and practices of the
Company, including but not limited to those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
(d) TERM. The initial term of employment of Executive under this
Agreement shall begin as of July 1, 1995 for an initial term ending on July 1,
1996 (such one year period, the "Initial Term"), subject to the provisions for
termination set forth herein and renewal as provided in Section 1(e) below.
(e) RENEWAL. Unless the Company shall have given Executive notice
that this Agreement shall not be renewed at least ninety (90) days prior to the
end of the Initial Term, the term of this Agreement shall be automatically
extended for a period of one year, such procedure to be followed in each such
successive period. Each extended term shall continue to be subject to the
provisions for termination set forth herein.
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2. COMPENSATION AND BENEFITS.
(a) SALARY. Executive shall receive for services to be rendered
hereunder a salary at the rate of Eleven Thousand Six Hundred Sixty-Seven
Dollars ($11,667) per month payable at least as frequently as monthly and
subject to payroll deductions as may be necessary or customary in respect of the
Company's salaried employees (the "Base Salary"). The Base Salary will be
reviewed by and shall be subject to increase at the sole discretion of the Board
of Directors of the Company each year during the term of this Agreement.
(b) PARTICIPATION IN BENEFIT PLANS. During the term hereof, Executive
shall be entitled to participate in any group insurance, hospitalization,
medical, dental, health and accident, disability or similar plan or program of
the Company now existing or established hereafter to the extent that he is
eligible under the general provisions thereof. The Company may, in its sole
discretion and from time to time, establish additional senior management benefit
programs as it deems appropriate.
(c) VACATION. Executive shall be entitled to a period of annual
vacation time equal to that generally provided to senior managers of the
Company, but in any event not more than four weeks per twelve month period, to
accrue PRO RATA during the course of each such twelve month period. The days
selected for Executive's vacation must be mutually agreeable to Company and
Executive. Accrued unused vacation will expire 12 months after the date of
accrual and in no event shall Executive's total accrued vacation exceed four
weeks.
(d) 401(K) PLAN. To the extent legally permitted, Executive shall be
entitled to place a portion of his Base Salary into a 401(K) or other qualified
deferred tax annuity plan of the Company or, if the Company does not have such a
plan, of any such plan of any of the Company's subsidiaries, as may be
designated by the Executive.
(e) TERM LIFE INSURANCE. During the term hereof, the Company shall
procure and pay for a $500,000 term life insurance policy covering Executive,
for the benefit of such beneficiaries as Executive shall designate.
(f) RELOCATION BENEFITS. If the Company requires Executive to
relocate his residence, the Company shall bear the following costs in connection
with such relocation:
(i) closing costs on sale of old house;
(ii) cost of movement of household goods; and
(iii) such additional relocation benefits as may be mutually
agreed to from time to time between the Company and
Executive.
3. OPTION AND BONUS PLANS.
(a) OPTIONS. Within 60 days following the date of this Agreement, the
Company shall cause its indirect parent, MSC Holdings, Inc. ("MSC"), to grant to
Executive options to purchase up to 5,455 shares of MSC common stock
(constituting 0.40% percent of the outstanding common stock of MSC on the date
hereof on a fully diluted basis) at an exercise price of $10.00 per share, with
such additional terms and
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conditions as MSC shall determine. Such options shall be granted pursuant to the
MSC Holdings, Inc. 1995 Stock Incentive Plan.
(b) BONUSES. For each fiscal year of the Company ending March 31 that
the applicable EBITDA target set forth on Appendix A attached hereto is
achieved, and if Executive is employed by the Company pursuant to the terms of
this Agreement on the last day of such fiscal year, Executive shall receive a
bonus equal to 40% of his then annual Base Salary, to be paid on the June 30
immediately following the end of such fiscal year. Notwithstanding the
foregoing terms of this paragraph (b), the Board of Directors of the Company may
elect in its sole discretion to award all or any part of such bonus
notwithstanding any failure of the applicable EBITDA target to have been
achieved.
4. REASONABLE BUSINESS EXPENSES AND SUPPORT.
Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder. Executive
shall be furnished reasonable office space, assistance and facilities.
5. TERMINATION OF EMPLOYMENT. The date on which Executive's employment by
the Company ceases, under any of the following circumstances, shall be defined
herein as the "Termination Date."
(a) TERMINATION FOR CAUSE.
(i) TERMINATION; PAYMENT OF ACCRUED SALARY AND VACATION.
The Board may terminate Executive's employment with the Company at any time for
cause, immediately upon notice to Executive of the circumstances leading to such
termination for cause. In the event that Executive's employment is terminated
for cause, Executive shall receive payment for all accrued salary and vacation
time through the Termination Date, which in this event shall be the date upon
which notice of termination is given. The Company shall have no further
obligation to pay severance of any kind nor to make any payment in lieu of
notice.
(ii) DEFINITION OF CAUSE. "CAUSE" means the occurrence or
existence of any of the following with respect to Executive, as determined by a
majority of the disinterested directors of the Board: (a) a material breach by
Executive of any of his obligations hereunder which remains uncured after the
lapse of 30 days following the date that the Company has given Executive written
notice thereof; (b) a material breach by the Executive of his duty not to engage
in any transaction that represents, directly or indirectly, self-dealing with
the Company or any of its Affiliates which has not been approved by a majority
of the disinterested directors of the Board or of the terms of his employment,
if in any such case such material breach remains uncured after the lapse of 30
days following the date that the Company has given the Executive written notice
thereof; (c) the repeated material breach by the Executive of any duty referred
to in clause (b) above as to which at least one written notice has been given
pursuant to such clause (b); (d) any act of dishonesty, misappropriation,
embezzlement, intentional fraud or similar conduct involving the Company or any
of its Affiliates; (e) the conviction or the plea of nolo contendere or the
equivalent in respect of a felony involving moral turpitude; (f) any intentional
damage of a material nature to any property of the Company or any of its
Affiliates; (g) the repeated non-prescription use of any controlled substance or
the repeated use of alcohol or any other non-controlled substance which, in any
case described in this clause (g), the Board reasonably determines renders the
Executive unfit to serve in his capacity as an officer or employee of the
Company or its Affiliates; or (h) any other
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material misconduct on the part of Executive which remains uncured after the
lapse of 30 days following the date that the Company has given Executive written
notice thereof.
(b) TERMINATION BY EXECUTIVE. Executive shall have the right, at its
election, to terminate his employment with the Company by written notice to the
Company to that effect if the Company shall have failed to substantially perform
a material condition or covenant of this Agreement ("Company's Material
Breach"); provided, however, that termination for Company's Material Breach will
not be effective until Executive shall have given written notice specifying the
claimed breach and, provided such breach is curable, Company fails to correct
the claimed breach within thirty (30) days after the receipt of the applicable
notice or such longer time as may be reasonably required by the nature of the
claimed breach (but within ten (10) days if the failure to perform is a failure
to pay monies when due under the terms of this Agreement).
(c) TERMINATION UPON DISABILITY. Company may terminate Executive's
employment in the event Executive suffers a disability that renders Executive
unable to perform the essential functions of his position, even with reasonable
accommodation, for four (4) months within any eight (8) month period. After the
Termination Date, which in this event shall be the date upon which notice of
termination is given, no further compensation will be payable under this
Agreement except that Executive shall receive the accrued portion of any bonus
through the Termination Date, less standard withholdings for tax and social
security purposes, payable upon such date or over such period of time which is
in accordance with the applicable bonus plan.
(d) TERMINATION WITHOUT CAUSE.
(i) TERMINATION PAYMENTS. In the event that during the term
of this Agreement Executive's employment is terminated by the Company other than
pursuant to paragraph 5(a) or 5(c), or by Executive pursuant to paragraph 5(b),
the Company shall pay Executive as severance an amount equal to six (6) months
of his then Base Salary, less standard withholdings for tax and social security
purposes, payable over such six (6) month term in monthly PRO RATA payments
commencing as of the Termination Date plus the accrued portion of any bonus
through the Termination Date, less standard withholdings for tax and social
security purposes, payable upon such date or over such period of time which is
in accordance with the applicable bonus plan.
(iii) FUNDAMENTAL CHANGES. In the event that the Company
makes a substantial change which results in diminution in the Executive's
duties, authority, responsibility or compensation without performance or market
justification, Executive may terminate his employment; PROVIDED, HOWEVER, that
Executive shall provide the Company 10 days' notice prior to any such
termination and the Company shall have a reasonable period of time to cure. A
termination in such circumstances shall be treated as a Company termination
without cause and Executive shall be entitled to the same severance payments
provided in paragraphs 5(d)(i) and (5)(d)(ii), as applicable.
(e) BENEFITS UPON TERMINATION. All benefits provided under paragraph
2(b) hereof shall be extended, at Executive's election and cost, to the extent
permitted by the Company's insurance policies and benefit plans, for one year
after Executive's Termination Date, except (a) as required by law (e.g., COBRA
health insurance continuation election) or (b) in the event of a termination
described in paragraph 5(a).
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(f) TERMINATION UPON DEATH. If Executive dies prior to the expiration
of the term of this Agreement, the Company shall (i) continue coverage of
Executive's dependents (if any) under all benefit plans or programs of the type
listed above in paragraph 2(b) herein for a period of three (3) months, and (ii)
pay to Executive's estate the accrued portion of any bonus through the
Termination Date, less standard withholdings for tax and social security
purposes, payable upon such date or over such period of time which is in
accordance with the applicable bonus plan.
(g) OUTPLACEMENT SERVICES. Upon any termination of Executive's
employment pursuant to Section 5(c) or 5(d), the Company shall provide to
Executive such outplacement services as may be mutually agreed to from time to
time between the Company and Executive.
6. PROPRIETARY INFORMATION OBLIGATIONS.
During the term of employment under this Agreement, Executive will
have access to and become acquainted with the Company's confidential and
proprietary information, including but not limited to information or plans
regarding the Company's customer relationships, personnel, or sales, marketing,
and financial operations and methods; trade secrets; formulas; devices; secret
inventions; processes; and other compilations of information, records, and
specifications (collectively "Proprietary Information"). Executive shall not
disclose any of the Company's Proprietary Information directly or indirectly, or
use it in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment for the Company
or as authorized in writing by the Company. All files, records, documents,
computer-recorded information, drawings, specifications, equipment and similar
items relating to the business of the Company, whether prepared by Executive or
otherwise coming into his possession, shall remain the exclusive property of the
Company and shall not be removed from the premises of the Company under any
circumstances whatsoever without the prior written consent of the Company,
except when (and only for the period) necessary to carry out Executive's duties
hereunder, and if removed shall be immediately returned to the Company upon any
termination of his employment and no copies thereof shall be kept by Executive;
PROVIDED, HOWEVER, that Executive shall be entitled to retain documents
reasonably related to his interest as a shareholder and any documents that were
personally owned or acquired.
7. NONINTERFERENCE. While employed by the Company and until two years
from termination of this Agreement, Executive agrees not to interfere with the
business of the Company by directly or indirectly soliciting, attempting to
solicit, inducing, or otherwise causing any employee of the Company to terminate
his or her employment in order to become an employee, consultant or independent
contractor to or for any other employer.
8. NONCOMPETITION. Executive agrees that during the term of this
Agreement and for a period of two (2) years after the termination hereof, he
will not, without the prior consent of the Company, directly or indirectly, have
an interest in, be employed by, or be connected with, as an employee,
consultant, officer, director, partner, stockholder or joint venturer, in any
person or entity owning, managing, controlling, operating or otherwise
participating or assisting in any business which is similar to or in competition
with the business of the Company (i) during the term of this Agreement, in any
location, and (ii) for the two year period following the termination of this
Agreement, in any state in which the Company was conducting business at the date
of termination of Executive's employment and continues to do so thereafter;
provided, however, that the foregoing shall
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not prevent the Executive from being a stockholder of less than 1% of the issued
and outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.
9. MISCELLANEOUS.
(a) NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telecopy or telex) or the third day after mailing by first
class mail to the recipient at the address indicated below:
To the Company:
Petrowax PA Inc.
c/o Aurora Capital Partners L.P.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
To Executive:
Xxxxx X. Xxxxxxx
c/o Astor Corporation
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(b) SEVERABILITY. Any provision of this Agreement which is deemed
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
(c) ENTIRE AGREEMENT. This document constitutes the final, complete,
and exclusive embodiment of the entire agreement and understanding between the
parties related to the subject matter hereof and supersedes and preempts any
prior or contemporaneous understandings, agreements, or representations by or
between the parties, written or oral.
(d) COUNTERPARTS. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
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(e) SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors and assigns, except that Executive may not assign
any of his duties hereunder and he may not assign any of his rights hereunder
without the prior written consent of the Company.
(f) ATTORNEYS FEES. If any legal proceeding is necessary to enforce
or interpret the terms of this Agreement, or to recover damages for breach
therefore, the prevailing party shall be entitled to reasonable attorney's fees,
as well as costs and disbursements, in addition to any other relief to which he
or it may be entitled.
(g) AMENDMENTS. No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties. No amendment
or waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.
(h) CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the internal
law, and not the law of conflicts, of the State of New York.
IN WITNESS WHEREOF, the parties have executed this agreement effective as
of the date it is last executed below by either party.
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------------
XXXXX X. XXXXXXX
PETROWAX PA INC.
By: /s/ illegible
--------------------------------------------
Title: CHAIRMAN & CEO
--------------------------------------------
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APPENDIX A
Fiscal Year Ending EBITDA* Target
------------------ --------------
March 31, 1996 19,500,000
March 31, 1997 23,100,000
(applicable if Agreement renewed)
March 31, 1998 27,000,000
(applicable if Agreement renewed)
March 31, 1999 26,300,000
(applicable if Agreement renewed)
March 31, 2000 27,700,000
(applicable if Agreement renewed)
*"EBITDA" shall have the meaning ascribed thereto in the Facility Agreement,
dated as of June 16, 1995 (the "Facility Agreement"), between ABI Acquisition 2
PLC and Petrowax PA Inc. as initial borrowers, the Companies named therein as
initial guarantors, Union Bank of Switzerland as arranger, Union Bank of
Switzerland as facility agent, Union Bank of Switzerland as security trustee,
and certain others, but adjusted to subtract therefrom, without duplication, the
sum of all performance bonuses paid to employees of the Group (as such term is
defined in the Facility Agreement) with respect to the fiscal year for which
EBITDA is being computed, regardless of when such performance bonuses are
actually paid.
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