Exhibit 10.2
September 1, 2002
Mr. Xxxxxxx Xxxxxx
Xxxxx, Inc.
Xxxxx Xxx
X.X. Xxx 000 Xxxxxx Xxxx, XX 00000
Dear Xx. Xxxxxx:
This letter agreement will confirm the understanding arrived at between
us with respect to your continued employment with Spitz, Incorporated ("Spitz").
1. DUTIES:
A. During the Term (defined below), you shall be employed from time to time in
sales, marketing and other executive-level capacities as the Chief Executive
Officer of Spitz (the "CEO") shall designate, as and when requested by the CEO
and subject to the direction of the CEO. In addition, during the Term, you shall
serve as a Director and Chairman of the Board of Directors of Spitz.
B. Your services hereunder will be limited to an overage of (i) 40 hours per
week from the execution and delivery hereof through August 31, 2003, (ii) 30
hours per week from September 1, 2003 through August 31, 2004, (iii) 20 hours
per week from September 1, 2004 through August 31, 2006, and (iv) 15 hours per
week thereafter. Spitz and you agree to cooperate on fixing your exact schedule
at any time.
C. You hereby resign from all of your officer and director positions with
Transnational Industries, Inc., Spitz's parent corporation ("Transnational").
2. TERM: The term of your employment under this Agreement will begin on the date
hereof and end on June 30, 2007, unless extended by mutual written agreement of
the parties or earlier terminated pursuant to the terms and conditions set forth
herein (the "Term").
3. SALARY: Your salary during the Term shall be paid at a rate of $90,000 per
annum and this salary shall be paid to you in accordance with the regular
payroll practices of Spitz.
4. REIMBURSEMENT OF EXPENSES: In addition to salary, Spitz will pay or reimburse
you for all reasonable expenses incurred in connection with the business of
Spitz (including without limitation use of your automobile for business
purposes) upon presentation of appropriate documentation evidencing such
expenses.
5. MEDICAL AND OTHER BENEFITS: During the Term, you shall be entitled to medical
benefits consistent with those provided during the one-year period prior to the
date hereof. In addition, during the Term, you shall receive all pension, life
and profit sharing benefits that Spitz is then providing to its executive
officers, subject to your eligibility to participate in such benefit plans. You
shall receive paid vacation days in accordance with Spitz's policy for the same.
You acknowledge that, upon your departure, you will be entitled to be paid for
accrued but unutilized vacation time in accordance with Spitz's written policy
(i.e., a maximum of six weeks pay), and that any waiver of such policy could
only be made with the approval of Spitz's Board of Directors (and you further
acknowledge that the Board may elect to waive or refrain from waiving said
six-week maximum at its sole discretion).
6. TERMINATION OF EMPLOYMENT:
A. Termination by You or by Spitz. Spitz may terminate your employment at any
time upon ten days' written notice to you (or without notice with payment of ten
days' salary). You may terminate your employment upon thirty days' written
notice to the CEO. In the event your employment is so terminated (for reasons
other than your permanent disability or death which are covered in paragraph 7
below), Spitz shall pay to you in a single lump sum payment within ten days of
such termination any accrued but unpaid base salary through the date of
termination, including, if Spitz pays salary in respect of accrued but unused
vacation or sick days upon termination, such salary in respect of accrued but
unused vacation or sick days.
If you terminate your employment for Good Reason or if Spitz terminates
your employment with Spitz other than for Cause, you will also be entitled to
the benefits set forth in subparagraph 6B, below.
The Term shall end on the effective date of your termination of
employment regardless of the reason therefor.
B. Termination by You for Good Reason or by Spitz other than for Cause. If your
employment with Spitz is terminated by you for Good Reason or by Spitz other
than for Cause, you shall receive the following benefits, in addition to the
payment set forth in subparagraph 6A: continued payments of your base salary and
continued medical benefits as set forth in paragraph 5 through the fifth
anniversary of the date hereof; provided, however, that medical coverage shall
cease if, and to the extent that, such coverage is provided by another employer.
C. Cause Defined. Termination by Spitz of your employment for "Cause" shall mean
termination upon (i) (a) the gross negligence by you in the performance of your
duties, (b) your willful insubordination to directions given to you by the CEO,
and/or (c) your continued failure to perform substantially your duties with
Spitz (other than any such failure resulting from your incapacity due to
physical or mental illness), in the case of any of (a), (b) or (c) above, after
a notice of such conduct is delivered to you by the Board of Directors of Spitz
which specifically identifies the manner in which the Board believes that you
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have been grossly negligent or insubordinate or have not substantially performed
your duties. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of the entire
membership of Spitz's Board of Directors at a meeting of such Board called and
held for that purpose (after reasonable notice to you and an opportunity for
you, together with your counsel, to be heard before the Board), finding that in
the good faith opinion of the Board you were guilty of the conduct set forth in
this subparagraph 7C and specifying the particulars thereof in detail.
D. Good Reason Defined. Termination by you of your employment for "Good Reason"
shall mean termination based on the failure by Spitz to observe or comply with
any of the material provisions of this Agreement, if such failure has not been
cured within thirty days after written notice thereof has been given by you to
the Board of Directors of Spitz.
7. DISABILITY OR DEATH:
A. Payments. If you should suffer a permanent disability Spitz may terminate
your employment under this Agreement upon ten (10) days written notice to you.
In the event of your death or a termination of your employment as a result of
your permanent disability, you shall receive the payments set forth in paragraph
6A.
B. Permanent Disability Defined. A permanent disability shall be deemed to have
occurred only when you have been unable to perform your customary duties by
reason of physical or mental disability for a period of more than three (3)
consecutive months, or for more than six (6) months during a period of twelve
(12) consecutive months. Any disability other than a permanent disability shall
not result in any reduction of salary or benefits.
8. OTHER TERMINATION: In the event of a termination of your employment by Spitz
for Cause, or by you without Good Reason, or upon your death or permanent
disability, you shall receive the payments set forth in paragraph 6A to the
extent required by law.
9. RESTRICTIVE COVENANT:
A. You acknowledge that the operations of Spitz are intended to be worldwide in
scope. For the period beginning on the date hereof and ending on the seventh
anniversary of the date hereof, you shall not at any time or at any place,
directly or indirectly, own, manage, operate, control, be employed by,
participate in or be connected in any manner with the ownership, management,
operation or control of any business competitive with the business conducted by
Spitz or Transnational (but, in the case of businesses conducted by
Transnational and not by Spitz, only in the event that you have assisted or
worked on such businesses), without the consent of Spitz, which consent will not
be unreasonably withheld. The phrase "business conducted by Spitz or
Transnational" used in the immediately preceding sentence of this paragraph 9
shall mean the business conducted by either Spitz and/or Transnational at any
time during your employment hereunder, to the extent that such business is
actually conducted at the time that or after you cease to be employed hereunder.
B. Because your services are unique and because you have access to confidential
information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this paragraph 9. Therefore, in the event of a breach
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or threatened breach of this paragraph 9, Spitz or its successors or assigns
may, in addition to other rights and remedies existing in their favor at law or
in equity, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any violations
of, the provisions hereof (without posting a bond or other security) or require
you to account for and pay over to Spitz all compensation, profits, moneys,
accruals, increments or other benefits derived from or received as a result of
any transactions constituting a breach of the covenants contained in this
paragraph 9, if and when final judgment of a count of competent jurisdiction is
so entered against you.
C. If, at the time of enforcement of paragraph 9, a court holds that the
restrictions stated herein are unreasonable under the circumstances then
existing, you and Spitz agree that the maximum period, scope or geographical
area reasonable under such circumstances shall be substituted for the stated
period, scope or area so as to protect Spitz to the greatest extent possible
under applicable law from improper competition.
10. ARBITRATION: Except as provided in paragraph 9, any controversy or claim
arising out of or relating to this Agreement, or the breach or asserted breach
thereof, shall be settled by arbitration to be held in Philadelphia,
Pennsylvania by the American Arbitration Association in accordance with its
National Rules for the Resolution of Employment Disputes and judgment upon the
award rendered may be entered by the arbitrator(s) in any court having
jurisdiction thereof. In any such arbitration, the costs of the arbitrator will
be shared equally by you and Spitz and both you and Spitz will be responsible
for your own attorney's fees and expenses.
11. ASSIGNMENT: Spitz shall not assign its rights or obligations under this
Agreement except as part of a sale or transfer of all or substantially all of
its assets. The rights and obligations of Spitz under this Agreement shall inure
to the benefit of, and shall be binding upon, the successors and assigns of
Spitz.
12. SEVERABILITY: It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular provision of this Agreement shall be
determined to be invalid, prohibited or unenforceable for any reason, such
provision, as to such determination, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
13. NON-ASSIGNABILITY: Your rights and benefits hereunder are personal to you
and shall not be alienated, voluntarily or involuntarily, assigned or
transferred.
14. STOCK OPTIONS. You hereby acknowledge and agree that all of your stock
options to acquire the stock of Transnational are hereby immediately forfeited.
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15. ENTIRE AGREEMENT: This Agreement contains your entire employment agreement
and supersedes all prior written and oral agreements, including, without
limitation, the Letter Agreement by and between you and Spitz, dated May 1,
1995. It may not be changed orally but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification,
extension or deletion is sought.
16. HEADINGS: The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
17. COUNTERPARTS: This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
18. WITHHOLDING: The Company may withhold from any compensation payable under
this Agreement all federal, state, city and other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
19. PENNSYLVANIA LAW TO GOVERN: This Agreement shall be governed by, construed
and enforced according to the domestic laws of the State of Pennsylvania without
giving effect to the principles of conflict of laws thereof.
Very truly yours,
SPITZ, INCORPORATED
By: /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Chairman
AGREED TO AND ACCEPTED:
/s/ Xxxxxxx Holmes______
Xxxxxxx Xxxxxx
