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EXHIBIT 10(i)
EMPLOYMENT AGREEMENT
This Agreement, dated as of the 9th day of August 9, 2000, by and among NEWCOR,
INC., a Delaware corporation (the "Company"), and XXXXX X. XXXXXX ("Employee")
W I T N E S S E T H:
WHEREAS, the Company desires to engage the services of Employee, and Employee is
willing to accept such employment, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual undertakings set
forth herein the parties hereto agree as follows:
1. Employment and Duties; Board Appointment. In accordance with actions
taken and authorized by the Board of Directors of the Company (the
"Company Board"), effective August 9, 2000, Employee shall become
employed and appointed as the President and Chief Executive Officer of
the Company and shall have the duties and responsibilities commensurate
with such titles and offices, including, without limitation, all such
duties and responsibilities as now are or hereafter may be set forth
with respect to such offices in the by-laws of the Company. The Board
has also taken the appropriate action to appoint Employee as a director
of the Company effective August 9, 2000. The Employee shall continue to
serve as a director as long as elected by the shareholders of the
Company, except that upon termination for any reason of the Employee
and upon request by the Board, Employee agrees to resign as a director.
During the period of his employment hereunder, Employee shall serve as
an officer of such other affiliates of the Company and in such other
capacities as he may be reasonably requested by the Company Board and
shall assume such duties and responsibilities as from time to time may
be reasonably assigned to him by the Company Board, all without
additional compensation. Throughout the period of his employment
hereunder, Employee shall devote his business time, attention, and
energy on a full-time basis (subject to up to four weeks of vacation to
be taken at reasonable intervals during the year) exclusively to the
affairs of the Company and its affiliates.
2. Term of Employment. The employment of Employee hereunder shall become
effective on August 9, 2000 and shall continue unless terminated as
hereinafter provided in Section 10 of this Agreement.
3. Cash Compensation. As full cash compensation for all services to be
performed by Employee hereunder, the Company shall pay to Employee the
following:
(a) salary at the rate of $200,000 per year which shall become
$250,000 per year effective January 1, 2001, (to be reviewed annually
thereafter by the Company Board), payable at the intervals at which
other executive officers of the Company are paid;
(b) eligibility for an additional incentive bonus (if earned)
of up to 100% base pay. Such bonus shall be payable after the fiscal
year-end in accordance with Company policy in an amount determined
based on performance criteria to be developed by the Compensation
Committee of the Board and approved by the Board of Directors.
4. Certain Fringe Benefits. During the period of his employment hereunder,
the Company will provide Employee with the use of a new American-made
automobile of Employee's choice (and replace such automobile every two
years or 50,000 miles, whichever first occurs), maintained, insured,
and equipped at the Company's expense (subject to a $50.00 per month
charge to Employee for personal use of the automobile). The Employee's
selection shall be approved by the Compensation Committee of the Board.
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5. Other Employee Benefits. During the period of his employment hereunder,
Employee also shall be entitled to participate in such Company employee
benefit plans as from time to time are maintained, sponsored, or made
available by the Company to its employees or its executive employees
generally (including but not limited to the Company's pension plan,
401(k) plan, and medical plan), in each case on the same terms and
subject to the same conditions and limitations generally applicable to
other executive officers of the Company with respect to participation
therein.
6. Certain Expenses. The Company shall pay or reimburse Employee for the
reasonable travel, entertainment and other incidental expenses
(including the cost of business publications and professional
associations) incurred on business of the Company with the approval of
the Chairman of the Company, and in accordance with the Company's
practices as in effect during the term of this Agreement as applied to
executive officers.
7. Stock Options. As evidenced by that certain Stock Option Agreement to
between Employee and the Company (the "Option Agreement"), Employee
shall be granted under the Company's 1996 Employee Incentive Stock Plan
so-called non-qualified stock options to purchase an aggregate of
10,000 shares of the common stock of the Company (which options shall
vest with respect to 2,500 shares per year commencing one year from the
date of the Option Agreement) on the terms and subject to the
conditions specified in the Option Agreement.
8. Other Insurance. The Company shall have the right to purchase
disability and group life insurance policies (in addition to the policy
referred to in Section 4 above) on Employee whenever during the period
of his employment hereunder the Company deems it reasonable to acquire
such insurance. Employee agrees to cooperate in the acquisition of such
insurance and to perform all acts necessary and proper in connection
therewith, including submission to such medical examinations as may be
required. Any policy owned by the Company may be dealt with in such
manner as the Company deems appropriate.
9. Certain Continuing Obligations of Employee. Throughout the period of
his employment hereunder and for a two (2) year period thereafter,
Employee agrees to keep confidential all trade secrets, customer lists,
business strategies, financial and marketing information, and other
data concerning the private affairs of the Company or any of its
affiliates made known to or developed by Employee during the course of
his employment hereunder ("Confidential Information"), not to use any
Confidential Information or supply Confidential Information to others
other than in furtherance of the Company's business, and to return to
the Company upon termination of his employment all copies, in whatever
form, of all Confidential Information and all other documents relating
to the business of the Company or any of its affiliates which may then
be in the possession or under the control of Employee. The obligation
hereunder of Employee to retain in confidence Confidential Information
shall not apply to information (i) which at the time of disclosure or
subsequent thereto becomes part of the public domain without action or
fault of the Employee, (ii) which is previously known to the Employee
from sources other than the Company, (iii) which is provided by the
Company to third parties without restriction, or (iv) which is subject
to disclosure pursuant to compulsory legal process.
Employee acknowledges and agrees that any intellectual property of any
sort developed or invented by Employee while employed by the Company
(whether or not during work hours) shall be and remain the sole and
exclusive property of the Company, and Employee shall have no interest
therein.
Employee further agrees that, during the period of his employment
hereunder and for a two year period thereafter, he will make no attempt
whatsoever to induce or encourage any other employee of the Company or
any of its affiliates to leave such employment for employment with any
other entity engaged in any line of business competitive with the
Company or any of its affiliates.
At the request of the Company Board, whether or not made during the
period of his employment hereunder, Employee agrees to execute such
confidentiality agreements, assignments of intellectual property
rights, and other documents as hereafter may be reasonably determined
by the Company Board to be appropriate to carry out the purposes of
this Section.
10. Termination of Employment; Effect.
(a) Employee's employment hereunder will be terminated in any of
the following ways:
(i) Immediately upon the death of the Employee;
(ii) Immediately upon the Employee becoming permanently
disabled within the meaning of the Company's long
term disability policy as then in effect;
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(iii) By the Employee providing 30 days' prior written
notice to the Company of his desire to terminate the
contract, effective as of the date specified in such
notice;
(iv) By the Company, without or with Cause (as hereinafter
defined), providing 30 days' prior written notice to
the Employee, effective as of the date specified in
such notice.
(b) Upon the termination of Employee's employment in any of the
ways provided in subsection (a), then this Agreement and all
rights and obligations of Employee and the Company hereunder
(as opposed to rights and obligations under the Option
Agreement and under any Company employee benefit plan in which
Employee participated) shall terminate and cease immediately,
except for (i) Employees obligation to resign from the Board
of Directors in accordance with Paragraph 1; (ii) Employee's
rights to the payments provided in Section 11 below; and (iii)
the rights and obligations set forth in Section 9 above and
Section 14 below.
11. Payments on Termination. Employee shall be entitled to the following
payments and benefits upon termination of his Employment:
(a) If Employee's employment is terminated under Section 10(a)(i)
above, or if Employee's employment is terminated by Employee
under Section 10(a)(iii) above, or if Employee's employment is
terminated for Cause by the Company under Section 10(a)(iv)
above, then the cash compensation under Section 3(a) above,
and the benefits to which Employee is entitled under Sections
4 and 5 above, shall cease on the date of termination of
employment.
(b) If Employee's employment is terminated under Section 10(a)(ii)
above, or by the Company without Cause under Section 10(a)(iv)
above, Employee shall be entitled to the cash compensation
payable under Section 3(a) above, continuation of the benefits
referred to in Sections 4 and 5 above (subject to the
provisions below regarding the Company medical plan), for a
period of one year following the effectiveness of such
termination of employment; and provided, further, that the
benefits provided under Section 4 above shall continue for the
period determined as aforesaid but not after Employee shall be
effectively provided with substantially equivalent benefits by
another employer. In the event termination of employment
occurs under Section 10(a)(ii) above, the payments made by the
Company as aforesaid shall be reduced by any payments made to
Employee under the Company's long-term disability policy. In
addition, Employee
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shall be entitled to receive any bonus earned by Employee
under Section 3(b) above through the date of termination of
employment payable at such time as any like bonuses are paid
by the Company generally.
(c) If Employee's employment is terminated either voluntarily or
involuntarily due to a "Change in Control" as defined by the
Securities and Exchange Commission, no payments shall be paid
under this Agreement. Employee shall be entitled to payments
agreed to in a separate letter agreement regarding "Change in
Control" dated August 9, 2000.
12. Definition. For purposes of this Agreement, "Cause" means any of the
following:
(a) Material breach of any of the terms of this Agreement or of
the Company's policies and procedures applicable to employees
and/or directors;
(b) Conviction of or plea of guilty or nolo contendere to a crime
involving moral turpitude or involving any violation of
securities or commodities law or regulation, or the issuance
of any court or administrative order enjoining or prohibiting
Employee from violating any such law or regulation;
(c) Repeated or habitual intoxication with alcohol or drugs while
on the premises of the Company or any of its affiliates or
during the performance by Employee of any of his duties
hereunder;
(d) Embezzlement of any property belonging or entrusted to the
Company or any of its affiliates;
(e) Repeated or protracted absence from work without cause;
(f) Willful misconduct or gross neglect of duties, or failure to
act with respect to duties or actions previously communicated
to Employee in writing by the Company Board;
13. Integration; Amendment. This Agreement, the Change in Control Letter
Agreement and the Option Agreement contain the entire agreement of the
parties relating to the subject matter hereof and thereof, and together
supersede and replace in their entirety any prior agreements or
understandings concerning such subject matter. This Agreement may not
be waived, changed, modified, extended, or discharged orally, but only
by agreement in writing signed in the case of the Company by a duly
authorized non-employee member of the Company Board.
14. Arbitration. Any controversy, dispute, or claim arising out of or
relating to Employee's employment or to this Agreement or breach
thereof shall be settled by arbitration in accordance with the
commercial rules of the American Arbitration Association at its
Southfield, Michigan offices. Judgment upon any award may be entered in
any circuit court or other court having jurisdiction thereof, without
notice to the opposite party or parties. Anything contained herein to
the contrary notwithstanding, this agreement to arbitrate shall not be
deemed to be a waiver of the Company's right to secure equitable relief
including injunction (whether as part of or separate from the
arbitration proceeding) if and when otherwise appropriate.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan applicable to
contracts made and to be performed within such State.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NEWCOR, INC.
BY: /s/ Xxxxx X. Xxxxxx
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Its: President & Chief Executive Officer
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