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Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of February 4, 1998, by and
between Indesco International, Inc., a Delaware corporation with an address at
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (the "Company"), and
Xxxxx Xxxxxx, an individual residing at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Executive").
INTRODUCTION
A. The Executive is presently employed by the Company and is presently
serving the Company as President and Chief Executive Officer.
B. The Company and the Executive wish to enter into an employment
agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT; TERM; DUTIES
1.1. Employment. The Company hereby employs the Executive upon the
terms and conditions hereinafter set forth, and the Executive hereby accepts
such employment.
1.2. Term. The employment of the Executive hereunder shall be for a
period (the "Term") of five (5) years commencing on the date hereof and ending
at the close of business on February 3, 2003, unless further extended or sooner
terminated as hereinafter provided. The Term of this Agreement shall be
automatically renewed for two successive five-year periods, unless either the
Executive, on the one hand, or the Company, on the other hand, notifies the
other, within six (6) months of the expiration of the existing Term, of his or
its intention not to renew the Term of this Agreement.
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1.3. Duties. During the Term, the Executive shall serve as the
President and Chief Executive Officer of the Company, and shall be responsible
for the general management of the affairs of the Company and its subsidiaries.
The Executive shall devote such time as is reasonably necessary for the
performance of his duties hereunder. In carrying out his duties under this
Agreement, the Executive shall report to the Board of Directors of the Company.
ARTICLE II
COMPENSATION
2.1. Compensation. For services rendered by the Executive hereunder
and all covenants and conditions undertaken by him pursuant to this Agreement,
the Company shall pay, and the Executive shall accept, as base compensation, a
base salary (the "Base Salary") of Five Hundred Thousand Dollars ($500,000) per
annum, payable in accordance with the regular payroll practices of the Company,
but no less frequently than twice a month.
2.2. Bonus. The Company shall pay the Executive an annual bonus
("Bonus") to be determined in accordance with the formula set forth on Exhibit A
and payable on the dates set forth therein; provided, however, that the
Executive shall be paid a minimum guaranteed Bonus of $200,000 per year.
2.3. Deductions. The Company shall deduct from the Base Salary and
Bonus any federal, state or local withholding taxes, social security
contributions and any other amounts which may be required to be deducted or
withheld by the Company pursuant to any federal, state or local laws, rules or
regulations.
ARTICLE III
BENEFITS; VACATION; EXPENSES; FRINGE BENEFITS
3.1. Health and Other Plans. During the Term, the Executive shall be
entitled to participate in such profit sharing, pension, group life, health,
accident, disability or hospitalization employee benefit and insurance plans as
the Company may make available to its executive officers as a group on the same
basis as such executive officers are entitled to participate, all pursuant to
the terms and conditions of such plans as the same may, from time to time, be
amended.
3.2. Vacation. During each twelve month period during the Term, the
Executive shall be entitled to four (4) weeks of
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paid vacation to be taken at times determined by the Executive which do not
unreasonably interfere with the performance of the Executive's duties hereunder.
3.3. Expenses. During the Term, the Executive shall be entitled to
incur reasonable expenses in the performance of his duties and the Company shall
promptly reimburse him for all business expenses incurred in connection
therewith, in accordance with Company policy in effect from time to time.
3.4. Fringe Benefits. During the Term, the Executive shall be
entitled to participate in any of the Company's fringe benefits in accordance
with the terms and conditions of such arrangements as are in effect from time to
time for the Company's executives.
3.5. Automobile. During the Term, the Company shall make available
to the Executive the use of a Company automobile on such terms as are in effect
from time to time for the Company's executives.
ARTICLE IV
TERMINATION; DEATH; DISABILITY
4.1. Termination With Cause.
(a) In addition to any other remedies available to it at law,
in equity or as set forth in this Agreement, the Company shall have the right to
terminate the employment of the Executive under this Agreement for Cause (as
hereinafter defined). As used herein, "Cause" shall mean:
(i) a felony conviction involving moral turpitude; or
(ii) the Executive's engagement in conduct that
constitutes willful gross neglect or willful gross misconduct in carrying
out his duties under this Agreement, resulting, in either case, in
material economic harm to the Company, unless the Executive believed in
good faith that such act or failure to act was in the best interests of
the Company.
(b) In the event the Company terminates the Executive's
employment for Cause, he shall be entitled to:
(i) his Base Salary through the date of the termination
of his employment; and
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(ii) any amounts earned, accrued or owing to the
Executive under this Agreement but not yet paid.
4.2. Termination Without Cause.
(a) In the event the Executive's employment is terminated
without Cause, the Executive shall be entitled to:
(i) his Base Salary through the date of termination of
the Executive's employment;
(ii) his Base Salary, at the annualized rate in effect
on the date of termination of the Executive's employment, for a period of
thirty-six (36) months following such termination or until the end of the
Term, whichever is longer; provided that, at the Executive's option, the
Company shall pay him the present value of such Base Salary continuation
payments in a lump sum (using as the discount rate the Applicable Federal
Rate for short-term Treasury obligations as published by the Internal
Revenue Service for the month in which such termination occurs);
(iii) his Bonuses for the remainder of the Term (but in
no event less than $200,000 per year), payable as and when such Bonuses
would have been payable to the Executive had his employment with the
Company not been terminated under this Section 4.2.;
(iv) any amounts earned, accrued or owing to the
Executive under this Agreement but not yet paid;
(v) continued participation in all medical, dental,
hospitalization and life insurance coverage and in other employee benefit
plans or programs in which he was participating on the date of the
termination of his employment until the earlier of:
(A) the end of the period during which he is
receiving Base Salary continuation payments (or in respect of which
a lump-sum severance payment is made);
(B) the date, or dates, he receives equivalent
coverage and benefits under the plans and programs of a subsequent
employer (such coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit, basis); provided that
(x) if the Executive is precluded from continuing his participation
in any employee benefit plan or program as provided in this clause
(v) of this Section 4.2, he shall be provided with the after-tax
economic
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equivalent of the benefits provided under the plan or program in
which he is unable to participate for the period specified in this
clause (v) of this Section 4.2, (y) the economic equivalent of any
benefit foregone shall be deemed to be the lowest cost that would be
incurred by the Executive in obtaining such benefit himself on an
individual basis, and (z) payment of such after-tax economic
equivalent shall be made quarterly in advance; and
(vi) other or additional benefits in accordance with
applicable plans and programs of the Company.
4.3. Voluntary Termination. In the event of a termination of
employment by the Executive on his own initiative other than a termination due
to death or Disability, the Executive shall have the same entitlements as
provided in Section 4.1 above for a termination for Cause. A voluntary
termination under this Section 4.3 shall be effective upon 30 days prior written
notice to the Company and shall not be deemed a breach of this Agreement.
4.4. Death; Disability.
(a) Termination Due to Death. In the event the Executive's
employment is terminated due to his death, his estate or his beneficiaries, as
the case may be, shall be entitled to:
(i) his Base Salary for a period of thirty-six (36)
months following the date of death or until the end of the Term, whichever
is longer;
(ii) the Bonus for the year in which the Executive's
death occurred (but in no event less than $200,000), payable as and when
such Bonus would have been payable to the executive but for his death; and
(iii) any amounts earned, accrued or owing to the
Executive under this Agreement but not yet paid; and
(iv) other or additional benefits in accordance with
applicable plans and programs of the Company.
(b) Termination Due to Disability. In the event the
Executive's employment is terminated due to his Disability, as hereinafter
defined, he shall be entitled in such case to the following (but in no event
less than the benefits due him under the then current disability program of the
Company):
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(i) an amount equal to 50% of Base Salary, at the annual
rate in effect at termination of his employment, for a period ending with
the end of the month in which he becomes 65, less the amount of any
disability benefits provided to the Executive by the Company (other than
benefits attributable to the Executive's own contributions) under any
disability plan;
(ii) the Bonus for the year in which the Executive's
Disability occurred (but in no event less than $200,000), payable as and
when such Bonus would have been payable to the Executive but for the
termination of this Agreement on account of his Disability;
(iii) any amounts earned, accrued or owing to the
Executive under this Agreement but not yet paid; and
(iv) other or additional benefits in accordance with
applicable plans and programs of the Company.
In no event shall a termination of the Executive's employment for
Disability occur unless the party terminating his employment gives written
notice to the other party in accordance with Section 6.2 below.
For the purposes of this Agreement, "Disability" shall mean the
Executive's inability to substantially perform his duties and responsibilities
under this Agreement for a period of 180 consecutive days during the Term, as
confirmed in writing by an approved medical doctor. For this purpose, an
"approved medical doctor" shall mean a medical doctor jointly selected by the
Company and the Executive. If the parties cannot agree on a medical doctor, each
party shall select a medical doctor and the two doctors shall jointly select a
third, who shall be the approved medical doctor for this purpose.
4.5. No Mitigation; No Offset. In the event of any termination of
employment under this Article IV, the Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain, except as specifically provided in
this Article IV.
4.6 Nature of Payments. Any amounts due under this Article IV are in
the nature of severance payments considered to be reasonable by the Company and
are not in the nature of a penalty.
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ARTICLE V
NON-DISCLOSURE, ETC.
5.1. Non-Disclosure. The Executive acknowledges that he will acquire
during the Term Confidential Information (as defined below) regarding the
business of the Company and its subsidiaries. Accordingly, the Executive agrees
that, without the written consent of the Board of Directors of the Company, the
Executive will not, at any time during the Term or thereafter, disclose or
furnish to any other person, firm or corporation or otherwise use any
Confidential Information, except in the course of the proper performance of his
duties hereunder or as required by law or governmental order. For this purpose,
Confidential Information shall mean non-public information concerning the
financial data, business strategies, product development (and proprietary
product data including processes, techniques or procedures used by the Company),
customer lists, marketing plans, and other proprietary information concerning
the Company and its subsidiaries, except for specific items which have become
publicly available as a result of the Executive's breach of this Agreement.
5.2 Return of Property. At the expiration or earlier termination of
the Term, the Executive shall return to the Company or its successors or
assigns, as the case may be, all documents and papers relating to the Company or
its affiliates, including any Confidential Information.
5.3. Inventions. All processes, technologies and inventions
(collectively, "Inventions"), including new improvements, ideas, discoveries,
trademarks and trade names, conceived, developed, invented, made or found by the
Executive, alone or with others, during his employment by the Company, whether
or not patentable and whether or not conceived, developed, invented, made or
found on the Company's time or with the use of the Company's facilities or
materials, shall be the property of the Company and shall be promptly and fully
disclosed by the Executive to the Company. The Executive shall perform all
necessary acts (including, without limitations, executing and delivering any
confirmatory assignments, documents or instruments requested by the Company) to
vest title to any such Invention in the Company and to enable the Company, at
its expense, to secure and maintain domestic and/or foreign patents, trademarks,
service marks or any other rights for such Inventions.
5.4. Reasonable Restrictions. The Executive acknow- ledges that the
foregoing restrictions are reasonable and necessary for the protection of the
Company and its business. If any of the foregoing restrictions is determined by
a court of
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competent jurisdiction to be too broad so as to be unenforceable, such provision
shall be deemed to have been modified to be only so broad as is enforceable.
5.5. Breach of Provisions. In the event the Executive shall breach
any of the provisions of this Article V, or in the event that any such breach is
threatened by the Executive, in addition to and without limiting or waiving any
other remedies available to the Company at law or in equity, the Company shall
be entitled to seek immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain any such breach
or threatened breach and to enforce the provisions of this Article V. The
Executive acknowledges and agrees that there is no adequate remedy at law for
any such breach or threatened breach and, in the event that any action or
proceeding is brought seeking injunctive relief, the Executive shall not use as
a defense thereto that there is an adequate remedy at law and any such possible
defense is hereby expressly waived.
ARTICLE VI
MISCELLANEOUS
6.1. Binding Effect; Successors; Survivorship.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, heirs (in the case of
the Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company, except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action is legally permissible in
order to cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law, except as provided in this Section 6.1.
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(b) The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's employment to the
extent necessary to preserve the parties' respective rights and obligations
under this Agreement.
(c) The Executive shall be entitled, to the extent permitted
under any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
6.2. Notices. Any notice provided for herein shall be in writing and
shall be deemed to have been given or made (i) when received, if delivered in
person or sent by telecopier and confirmed in writing within three (3) days
thereafter, or (ii) five (5) days following the mailing thereof, if mailed by
first class registered or certified mail, postage prepaid, return receipt
requested, to the address of the other party set forth below (or to such other
address as may be specified by notice given in accordance with this Section
6.2):
(a) If to the Company, to:
Indesco International, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: ___________________
Telecopier No.: (___) ___-____
(b) If to the Executive, to:
Xx. Xxxxx Xxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
6.3. Waiver. A waiver by a party hereto of a breach of any term,
covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as a waiver of any other or subsequent breach by such
party of the same or any other term, covenant or condition hereof. No waiver,
modification, change or amendment of any provision of this Agreement shall be
valid unless in writing and signed by the party against whom such claimed
waiver, modification, change or amendment is sought to be enforced.
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6.4. Indemnification.
(a) The Company shall, to the full extent permitted by law,
pay directly, or if direct payment is not lawful, indemnify the Executive
against and hold him harmless from, all expense, liability and loss (including,
without limitation, judgments, settlements (whether or not approved by court),
fines, taxes, penalties and fees and disbursements of counsel) imposed upon or
incurred by the Executive in connection with or resulting from any action, suit,
proceeding, investigation or claim ("Proceeding"), whether civil, criminal,
administrative, legislative or other, or any appeal relating thereto, that is
brought or threatened in which the Executive is made a party or is otherwise
involved by reason of his being or having been, at any time during the term of
this Agreement, a director, officer, employee or agent of the Company or any
affiliate of the Company and whether or not the basis of such Proceeding is
alleged action or inaction in an official capacity for the Company or any
affiliate or in any other capacity.
(b) The Company shall, to the full extent permitted by law,
pay directly, or if not lawful, indemnify the Executive against and pay to him,
in advance of final disposition of any such Proceeding, as and when incurred,
the actual costs and expenses (including, without limitation, fees and
disbursements of counsel) of the Executive arising from the investigation,
preparation and/or defense of such Proceeding.
(c) To the extent that any action is required by law to be
taken by the Company prior to, or to authorize, indemnification of the
Executive, the Company agrees that it shall promptly and fairly take all such
actions.
(d) The Executive's right of indemnification hereunder shall
be in addition to any rights to which the Executive may otherwise be entitled
under the Certificate of Incorporation or by-laws of the Company.
(e) The Company agrees to continue and maintain a directors'
and officers' liability insurance policy covering the executive to the extent
the Company provides coverage for its other executive officers.
6.5. Entire Agreement. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements between the parties.
6.6. Severability. Should any portion, word, clause, phrase,
sentence or paragraph of this Agreement be declared void or unenforceable, such
portion shall be considered independent
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and severable from the remainder, the validity of which shall remain unaffected.
6.7. Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
without giving effect to principles thereof relating to conflicts of law.
6.8. Titles. The titles of the Articles and Sections of this
Agreement are inserted for convenience and ease of reference only and shall not
affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.
6.9. Resolution of Disputes. Any disputes arising under or in
connection with this Agreement shall, at the election of the Executive or the
Company, be resolved by binding arbitration, to be held in New York, New York in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Costs of the arbitration or
litigation, including, without limitation, reasonable attorneys' fees of both
parties, shall be borne by the Company. Pending the resolution of any
arbitration or court proceeding, the Company shall continue payment of all
amounts due the Executive under this Agreement and all benefits to which the
Executive is entitled at the time the dispute arises.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
INDESCO INTERNATIONAL, INC.
By: /s/ X.X. Xxxxx, Xx.
_________________________________
Name: X.X. Xxxxx, Xx.
_______________________________
Title: Vice President, CFO, Treasurer,
and Secretary
______________________________
/s/ Xxxxx Xxxxxx
_____________________________________
XXXXX XXXXXX
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EXHIBIT A
Executive Bonus Payment
1. The Executive shall be paid a minimum guaranteed bonus of
$200,000 per year (the "Guaranteed Bonus").
2. In addition to the Guaranteed Bonus, the Executive shall be paid
additional annual bonus payments as follows:
(a) For each fiscal year (or portion thereof) of the Company
during the Term, the Executive shall be entitled to an annual cash bonus
("Additional Bonus") equal to seven and one-half percent (7.5%) of the amount,
if any, by which the consolidated EBITDA of the Company and all of its
subsidiaries ("Consolidated EDITDA") for such year exceeds Consolidated EBITDA
for the immediately preceding fiscal year.
(b) With respect to the Company's fiscal year ended December
31, 1997, Consolidated EBITDA shall mean $28,600,000, representing the pro forma
combined Consolidated EBITDA for the year ended December 31, 1997, assuming that
the acquisitions of the Company's subsidiaries, AFA Products, Inc., Continental
Sprayers, Inc. and Polytek B.V., occurred on January 1, 1997 for income
statement purposes.
(c) The determination of Consolidated EBITDA shall be made by
the Company's independent accounting firm.
3. Each Guaranteed Bonus and Additional Bonus shall be paid to the
Executive in cash no later than 90 days after the end of the fiscal year to
which it relates.
