EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of November 3, 1999, between FORMICA CORPORATION,
a Delaware corporation ("Corporation") and XXXXXX X. XXXXXXXX (hereinafter
referred to as "Executive").
WHEREAS, Executive is willing to accept employment by Corporation upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and of the mutual benefits herein provided, Corporation and
Executive hereby agree as follows:
ARTICLE I.
OPERATION OF AGREEMENT
This Agreement shall be effective November 1, 1999.
ARTICLE II.
TERM OF EMPLOYMENT
Subject to termination as provided in Article VI hereof, the Corporation
shall employ Executive, and Executive accepts employment by the Corporation, on
the terms and conditions herein contained, for a period commencing as of the
Effective Date and ending on the second anniversary thereof, except that the
term of employment shall be automatically extended for successive periods of
one year each after such second anniversary unless, prior to 90 days before the
commencement of such a yearly renewal period, either party notifies the other
of an intention to terminate the employment period as of the first day of the
next yearly renewal period (the period from the date hereof through such second
anniversary, together with any successive yearly renewal periods, or the date
of such termination, as the case may be, being hereinafter referred to as the
"Employment Period").
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ARTICLE III.
DUTIES
SECTION 3.01 General Duties. During the Employment Period, Executive shall
serve Formica and its subsidiaries in such senior executive capacity with such
duties consistent therewith and shall perform such other services for the
Corporation and its subsidiaries consistent with the position of a senior
executive officer. Executive's initial position with the Corporation shall be
as President, Formica North America.
SECTION 3.02 Primary Activity. During the Employment Period, Executive
shall devote substantially all of his working time and energy to the interests
and business of the Corporation and such of the Corporation's subsidiaries as
the Chief Executive Officer requests; provided, however, that Executive shall
be excused from performing any services for the Corporation or its subsidiaries
hereunder during periods of temporary illness or incapacity and during
reasonable vacations. During the Employment Period, Executive shall, to the
best of his skill and ability, use his best efforts and endeavors to the
extension and promotion of the business of the Corporation and its
subsidiaries, to the proper servicing of such business and to the protection of
the good will of such business, both as now enjoyed and hereafter acquired.
ARTICLE IV.
COMPENSATION
As full compensation to Executive for performance of his services
hereunder, the Corporation agrees to pay to Executive and Executive agrees to
accept the following salary and other benefits during the Employment Period:
(a) Salary: For his services, the Corporation shall pay the
Executive a salary at an annual rate of $350,000, as of the Effective
Date, November 1, 1999 (the "Base Salary"), or at such higher rate as
may be fixed by the Compensation Committee of the Board of Directors.
In no event shall such compensation be in an amount less than the Base
Salary. In addition, Executive shall also be entitled, during the
Employment Period, to annual bonuses as of March of each year as
determined by the Board of Directors of the Corporation. Executive
shall be entitled to a bonus of no less than $25,000 for his service
during 1999 (payable in March 2000) and to a bonus of no less than
$150,000 for his service during 2000 (payable in March 2001).
(b) Supplemental Benefits: Executive shall, during the
Employment Period, be entitled to vacations and fringe benefits
generally consistent with the practices of the Corporation in effect
from time to time.
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(c) Reimbursement of Expenses: The Corporation shall
reimburse Executive for all reasonable expenses properly incurred by
him in the performance of his duties hereunder in accordance generally
with policies and practices of the Corporation in effect from time to
time.
(d) Other:
(i) Executive shall be entitled to four weeks vacation
per year.
(ii) Executive shall be entitled to the annual cost
of a country club membership in Cincinnati, including any
reasonable initiation fee.
(iii) Executive shall be entitled to health coverage
in New Jersey until relocation is completed.
(iv) Executive shall be entitled to reimbursement
for a reasonable number of trips to Cincinnati for his
spouse, until the relocation is completed.
(v) Executive shall be entitled to an annual physical, to
be paid for by the Corporation.
(vi) Corporation will "gross up" any relocation expenses
that are taxable to the Executive.
(vii) Corporation will make a loan available to
Executive for Executive's purchases pursuant to the Laminates
Acquisition 1999 Stock Plan.
ARTICLE V.
CERTAIN COVENANTS
In order to induce the Corporation to enter into this Agreement, Executive
hereby acknowledges and agrees as follows:
SECTION 5.01 Proprietary Information. As used in this Agreement,
"Proprietary Information" shall mean information relating to the business and
operations of the Corporation that has not previously been publicly released by
duly authorized representatives of the Corporation and shall include
Corporation information encompassed in all research, drawings, designs, plans,
proposals, marketing and sales plans, financial information, costs, pricing
information, customer and supplier information, trade secrets, proprietary
processes, specifications, expertise, techniques, inventions and all
proprietary methods, concepts, or ideas in or reasonably related to the
business of the Corporation. Notwithstanding the foregoing, Proprietary
Information
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does not include information which is or becomes publicly released by duly
authorized representatives of the Corporation (except as may be disclosed by
Executive in violation of this Agreement).
The Executive agrees to regard and preserve as confidential all
Proprietary Information pertaining to the Corporation or any of its
subsidiaries' business that has been or may be obtained by Executive in the
course of his employment with the Corporation whether he has such information
in his memory or in writing or other physical form. The Executive will not,
without written authority from the Corporation to do so, use for this benefit
or purposes, or disclose to others, either during the Employment Period or for
a period of two years thereafter, except as required by the condition of his
employment hereunder, any Proprietary Information connected with the business
or development of the Corporation or any of its subsidiaries.
SECTION 5.02 Removal of Documents or Objects. The Executive agrees not to
remove from the premises of the Corporation or any of its subsidiaries, except
as an employee of the Corporation in pursuit of the business of the Corporation
or any of its subsidiaries, or except as specifically permitted in writing by
the Corporation, any document or object containing or reflecting any
Proprietary Information of the Corporation or any of its subsidiaries. The
Executive recognizes that all such documents and objects, whether developed by
him or by someone else, are the exclusive property of the Corporation and its
subsidiaries.
SECTION 5.03 Non-Competition. Executive expressly acknowledges that: (i)
important and essential assets of the Corporation and its subsidiaries are both
the business and the Corporation's lists of the names and addresses of its
clients, the Corporation's and its subsidiaries' knowledge of the needs of such
clients, and the goodwill the Corporation and its subsidiaries enjoy with its
clients, which leads to continued patronage by such clients; (ii) the
Corporation and its subsidiaries have expended substantial time, money and
effort in acquiring the business of its clients, learning such clients' needs
and developing the goodwill which it enjoys with its clients, and shall do the
same with respect to the business; (iii) the business and its other activities
require special skill and knowledge in order that the client receive the
desired product and service and that knowledge and skill with respect to the
processes and procedures involved in the business are valuable assets of the
Corporation and its subsidiaries; and (iv) Executive has gained and, as an
employee of the Corporation, will continue to gain valuable knowledge regarding
the Corporation and its business, and thereby will gain valuable knowledge and
skill regarding the processes and procedures involved in respect of the
business and the Corporation's other activities, has developed and will
continue to develop a close personal relationship with and the confidence of
the Corporation's clients, lenders and stockholders who substantially depend
upon the Executive for the success of the business and the Corporation's other
activities.
(a) Non-Competition During the Term of the Employment. In
recognition of the above-noted facts, Executive agrees that during the
Employment Period, he shall not:
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(i) Directly or indirectly own, manage, operate,
join, control or participate in or be connected as an
officer, employee, partner, creditor, guarantor, advisor or
otherwise in any business or entity which shall then be in
competition with the business carried on by the Corporation
or any of its subsidiaries;
(ii) Other than in the ordinary course of the
Corporation's business and consistent with past practice,
induce or attempt to induce, directly or indirectly, any
customer of the Corporation or any of its subsidiaries to
cease doing business in whole or in part with the Corporation
or any of its subsidiaries or solicit the business of any
such customer for any products which compete with any of the
products offered or sold by the Corporation; or
(iii) Divulge to any other party any and all
confidential information and business secrets of the
Corporation or its subsidiaries, including, but not limited
to, confidential information and business secrets relating to
such matters as its finances and operations, the materials,
processes, plans, designs, models, apparatus, equipment and
formulae used in its operations, the names of its customers
and such customers' requirements and the names of its
suppliers and other Proprietary Information.
(b) Non-Competition Upon Termination of Employment. In
recognition of the above-noted facts, Executive agrees that, for a
period of two years from the Date of Termination, he shall not
knowingly:
(i) Directly or indirectly own, manage, operate,
join, control or participate in or be connected as a
director, officer, employee, partner, creditor, guarantor,
advisor, consultant or otherwise in any business or entity
which competes or shall compete with the business as
conducted or, to Executive's knowledge, was contemplated to
be conducted by the Corporation or any of its subsidiaries
during the Employment Period, including but not limited to,
engaging in or otherwise carrying on the design, development,
manufacture or sale of any product of any type designed,
developed, manufactured or sold now or hereafter during such
period by the Corporation or any subsidiary thereof following
the termination of the Executive's employment under this
Agreement;
(ii) Induce or attempt to induce, directly or
indirectly, any customer of the Corporation or any of its
subsidiaries to cease doing business in whole or in part with
the Corporation or any of its subsidiaries or solicit the
business of any such customer for any products which compete
with any of the products offered or sold by the Corporation
or any of its subsidiaries;
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(iii) Divulge to any other party any and all
confidential information and business secrets of the
Corporation or any of its subsidiaries, including, but not
limited to, confidential information and business secrets
relating to such matters as its finances and operation, the
materials, processes, plans, designs, models, apparatus,
equipment and formulae used in its operations, the names of
its customers and such customers' requirements and the names
of its suppliers and other Proprietary Information; or
(iv) Solicit, either on his own account or for any
other person, firm or company, any employee of the
Corporation, or any of its subsidiaries to leave his
employment or breach his employment with the Corporation or
such subsidiary.
SECTION 5.04 Corporate Opportunities. The Executive agrees that during the
Employment Period he will not take any action which might divert from the
Corporation or any subsidiary of the Corporation any opportunity which would be
within the scope of any of the present businesses thereof or any of the
businesses thereof engaged in, or proposed to be engaged in, during the
Employment Period.
ARTICLE VI.
TERMINATION OF EMPLOYMENT
SECTION 6.01 Events of Termination. The Employment Period shall cease and
terminate upon the earliest date on which one of the events specified below
occurs (the "Date of Termination"):
(a) The close of business on the last day of the Employment Period;
(b) The death of Executive;
(c) A material breach by Executive of this Agreement;
(d) Termination of Executive's employment by the Corporation for cause
(for "Cause"), as follows:
(i) Frequent and unjustifiable absenteeism;
(ii) Dishonesty to the Corporation or any of its
subsidiaries for improper personal benefit (such as
falsifying expense reports or obtaining material personal
consideration (monetary or non-monetary) from the
Corporation's suppliers, customers, employees or agents)
which is injurious to the Corporation, any of its
subsidiaries or to any of their respective businesses,
operations, assets or condition;
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(iii) Gross or willful misconduct, or willful neglect
to act which misconduct or neglect is committed or omitted by
Executive in bad faith;
(iv) Material breach of his fiduciary obligations to
the Corporation; or
(v) The conviction of Executive as a felon.
(e) The delivery by the Corporation of written notice to the effect
that Executive at any time after the expiration of any consecutive 90-day
period during the Employment Period during which Executive shall be unable
by reason of illness or physical or mental disability to perform the
duties given to Executive prior to the substantially full resumption by
him of the performance of such duties; or
(f) the voluntary severance by Executive of his employment with the
Corporation for any reason.
SECTION 6.02 Severance. In the event of termination as herein provided
during the Employment Period, the Corporation shall make the following payments
as severance pay:
(a) Termination by the Corporation. If the Corporation
terminates the Executive's employment other than for Cause or if
Executive resigns for "Good Reason", then the Corporation shall be
obligated to pay Executive an amount equal to the prior year's salary,
including bonus, multiplied by a factor of two (2.00) (the
"Termination Benefit"), plus Executive shall be entitled for two years
from the Date of Termination to medical benefits provided to the
Corporation's employees and reasonable "out-placement" services. The
Termination Benefit shall be paid in semi-monthly installments until
the Termination Benefit is paid in full.
"Good Reason" means, without the Executive's express written
consent, the relocation of the principal place of Executive's
employment to a location outside of the contiguous 00 xxxxxx xx xxx
Xxxxxx Xxxxxx.
SECTION 6.03 Effect of Termination. This Agreement and all liabilities and
obligations of the parties hereto hereunder shall cease and terminate effective
upon the termination of the Employment Period; provided, however, that the
parties' obligations pursuant to Article V and Article VI, Section 6.02 shall
survive any such termination.
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ARTICLE VII.
ASSIGNMENT
This Agreement shall not be assigned by either party hereto, except that
the Corporation shall have the right to assign its rights hereunder to any
direct or indirect subsidiary or parent of the Corporation, to any person
controlling or which controls or is under common control with the Corporation
or any such subsidiary and as set forth in Article IX hereof; provided, that in
any event the Corporation shall remain liable hereunder.
ARTICLE VIII.
MERGER OR CONSOLIDATION
In the event of the merger (including, without limitation, the Merger) or
consolidation of the Corporation with any other corporation or corporations, or
of the sale by the Corporation of a major portion of its assets or of its
business and good will, this Agreement may be assigned and transferred to such
successor in interest as an asset of the Corporation upon such assignee
assuming the Corporation's obligations hereunder, in which event the Executive
agrees to continue to perform his duties and obligations according to the terms
and conditions hereof for such assignee or transferee of this Agreement.
If the Executive purchases Class A Common Stock pursuant to the Laminates
Acquisition Co. 1999 Stock Plan, the Corporation's Right of Repurchase for
Restricted Shares with respect to the 50% of the Restricted Shares that are
time-vested shall lapse and such Shares shall become vested if the Corporation
is subject to a Change in Control before the Executive's service terminates.
"Change in Control" shall mean:
(i) the consummation of a merger or consolidation of the Company
with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power
of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger,
consolidation or other reorganization; or
(ii) the sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is
to change the state of the Company's incorporation or to create a holding
company that will be owned
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in substantially the same proportions by the persons who held the Company's
securities immediately before such transaction.
ARTICLE IX.
NOTICES
All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been given if delivered by hand or
mailed by first class, registered mail, return receipt requested, postage and
registry fees prepaid and addressed as follows:
(a) If to the Corporation: 00 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxx
Xxxxxx 00000, Attention: General Counsel.
(b) If to the Executive: 0 Xxxxxxxx Xxxxx, Xxxxxx Xxxxxx, XX 00000.
Addresses may be changed by notice in writing signed by the addressee.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 Headings. The headings in this Agreement are for convenience
or reference only and shall not be considered as part of this Agreement or to
limit or otherwise affect the meaning hereof.
SECTION 10.02 Severability. If any provision of this Agreement shall be
held invalid, illegal or unenforceable in whole or in part, neither the
validity of the remaining part of such provision nor the validity of any other
provision of this Agreement shall in any way be affected thereby. Additionally,
any and all covenants not to compete shall by construed as separate and
independent covenants so that, in case any one or more of the covenants or any
part of a covenant shall for any reason be held to be invalid, illegal or
unenforceable in any respect in any jurisdiction, such invalidity, illegality
or unenforceability shall be deemed not to affect any other jurisdiction or any
other covenant or part of a covenant, but any and all such covenants not to
compete shall be reformed and construed in such jurisdiction as if such
covenant or part of a covenant held to be invalid or illegal or unenforceable
had never been contained herein and such covenant or part shall be reformed so
that it would be valid, legal and enforceable in such jurisdiction to the
maximum extent possible.
SECTION 10.03 Governing Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of laws.
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SECTION 10.04 Additional Assurances. Each party shall execute, acknowledge
and deliver such additional documents, writing or assurances as the other may
periodically require so as to give full force and effect to the terms and
provisions of this Agreement.
FORMICA CORPORATION
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Xxxxxxx X. Xxxxxxx Date
Chairman, President, and
Chief Executive Officer
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Xxxxxx X. Xxxxxxxx Date
