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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
as of July 26, 1995, between PMC International, Inc., a Colorado
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx (the
"Executive").
RECITALS
A. The Company has employed the Executive as its President from
December 1985, and Executive, in such capacity has rendered, and will
continue to render, faithful and valuable service to the Company.
B. The Company desires to continue to receive the services of
Executive and to more fully identify his interest with the future and
success of the Company by setting forth more formally the terms and
conditions upon which the Executive will continue to be employed by
the Company as President and, as of the date of this Agreement, its
Chief Executive Officer, and receive compensation therefor.
In consideration of the mutual promises contained herein, and for
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. Employment; Position; Term. The Company hereby employs the
Executive, and the Executive hereby accepts employment with the
Company, in the capacity of President and Chief Executive Officer.
Subject to Section 4, the term of the Executive Officer. Subject to
Section 4, the term of the Executive's employment under this Agreement
shall be for three (3) years, beginning July 26, 1995. The term of
this Agreement shall be extended for successive one-year periods on
July 26 of each year beginning July 26, 1998, unless on or before
April 26, prior to any such renewal date the Company or the Executive
provides written notice to the other of its intention not to renew.
2. Duties, Responsibilities and Authority. In his capacity as
President and Chief Executive Officer, the Executive shall have
primary responsibility for overall management of the business affairs
of the Company and shall perform such other duties as are prescribed
by applicable law and the Company's bylaws for the offices which the
Executive shall hold pursuant to this Agreement, all of which duties
shall be conducted in accordance with policies established by the
Company's board of directors (the "Board"). In his capacity as
President and Chief Executive Officer, the Executive shall be subject
to the direction and control of the Board. The Executive shall devote
his full professional and managerial time and effort to the
performance of his duties as President and Chief Executive Officer of
the Company and he shall not engage in any other business activity or
activities which, in the judgment of the Board, do, in fact, conflict
with the performance of his duties under this Agreement.
3. Compensation.
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(a) Salary. For services rendered under this Agreement, the Company
shall pay the Executive a base salary of $240,000 per annum beginning
July 26, 1995 or at such time as the Executive requests that his
salary be increased to that level. The Company acknowledges that, in
1994, Executive's base salary was reduced from $240,000 per annum
pursuant to a general salary reduction adopted by the Company with
respect to all of the Company's employees. Notwithstanding the
provisions of subsection 3(b), Executive's base salary shall be
increased to $300,000 per annum at such time as the Company shall
first achieve pre-tax earnings of $1,000,000 annually, excluding from
the calculation thereof any extraordinary non-recurring expenses or
income.
(b) Annual Review. The Executive's salary will not be reviewed
during the first year of the initial three-year term of this
Agreement. The Executive's first salary review shall be for the
period ending July 26, 1996, and, as appropriate, his salary may be
adjusted effective July 26, 1996, and shall be reviewed annually
thereafter during the term of this Agreement or any renewal term
hereof. The Executive's base salary shall not be subject to
reduction, however, without the Executive's consent.
(c) Bonuses. The Company shall, beginning with the fiscal year
ending December 31, 1995, and continuing through the next three fiscal
years, establish and fund annually an executive employee bonus pool
(the "Bonus Pool") in a total amount equal to ten percent (10%) of the
Company's pre-tax earnings, excluding from the calculation of such
pre-tax earnings any extraordinary or non-recurring expenses or
income. At the end of each such fiscal year, the total amount of the
Bonus Pool shall be distributed to certain executive employees within
45 days following the closing of the year-end books of the Company.
The executives to whom the Bonus Pool is to be distributed in any
fiscal year, and the relative percentages thereof to be paid to such
executives, shall be within the sole discretion of the Board, except
that it is hereby agreed that Executive shall be entitled to receive
forty per cent (40%) of the Bonus Pool for each fiscal year subject to
the provisions of this subsection 3(c).
(d) Benefits and Vacation. The Executive shall be eligible to
participate in such insurance programs (health, disability, or life)
or such other health, dental, retirement, or similar employee benefits
programs as the Board may approve, on a basis comparable to that
available to other officers and executive employees of the Company.
The Executive shall be entitled to four (4) weeks of paid vacation
during each year of his employment under this Agreement. Vacation
time may be accumulated for one (1) year beyond the year for which it
is accrued and used any time during such year, but any vacation time
not used during such additional year shall be forfeited. The value of
any accrued but unused vacation time shall be paid in cash to the
Executive upon termination of his employment for any reason.
(e) Stock Options. The Executive may participate in stock option
programs of the Company in accordance with the policies applicable to
other officers of the Company, upon such terms as the administrators
of such programs in their discretion determine. Subject to the terms
and conditions of any such option program, any options held by the
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Executive shall become fully vested immediately upon either the death
of the Executive or a Change of Control (as defined herein).
(f) Reimbursement of Expenses. The Company shall, consistent with
past practices, reimburse the Executive for all reasonable out-of-
pocket expenses incurred by the Executive in connection with the
business of the Company and in the performance of his duties under
this Agreement upon the Executive's presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data.
(g) Vehicle Allowance. The Company shall provide the Executive a
vehicle allowance generally necessary for the type of vehicle the
Executive has traditionally driven. The vehicle allowance shall be
reviewed annually at the time the Executive's base salary is reviewed,
but shall not be reduced without the consent of the Executive.
4. Termination. Either party may terminate the Executive's employment under
this Agreement, without cause, upon ninety (90) days' written advance notice to
the other party, but subject to the provisions of Section 7 hereof. The Company
may terminate the Executive's employment for "Cause" (as hereinafter defined)
effective immediately upon the giving written notice stating the basis for such
termination. For purposes of this Agreement, "Cause" shall mean (a) a breach of
this Agreement and either (i) such breach is not cured within 30 days after
notice from the Company specifying the action which constitutes the breach and
demanding its discontinuance, or (ii) such breach is cured and the breach recurs
during or after such 30-day period, (b) exhibited willful disobedience of or
repeated failure to perform reasonable directions of the Board, or committed
gross malfeasance in performance of his duties hereunder or acts resulting in an
indictment charging the Executive with the commission of a felony; engaging in
fraud, misappropriation or embezzlement; disclosure of confidential information
in violation of this Agreement; or willfully engaging in conduct materially
injurious to the Company. A material failure to perform his duties hereunder
that results from the disability of the Executive shall not be considered Cause
for his termination.
5. Disability. If the Executive shall be prevented by illness,
accident, or other incapacity from properly performing his duties
hereunder (and, if required by the Company, upon the furnishing of
evidence satisfactory to the Company of such disability), the Company
shall, during the continuance of his disability, but only for the
remaining term of this Agreement, pay the Executive his compensation
payable under the provisions of Section 3 (other than the bonus
provided for in subsection 3(c) and less the amount of any benefits
paid to Executive under any disability insurance provided by the
Company) and continue to provide the Executive all other benefits
provided hereunder. As used herein, the term "disability" shall mean
the complete and total inability of the Executive, due to illness,
physical or comprehensive mental impairment to substantially perform
all of his duties as described herein for a consecutive period of
thirty (30) days or more.
6. Death. In the event of the death of the Executive, except with
respect to any benefits which have accrued and have not been paid to
the Executive hereunder, the provisions of this Employment Agreement
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shall terminate immediately. However, the Executive's estate shall
have the right to receive compensation due to the Executive as of and
to the date of his death and, furthermore, to receive an additional
amount equal to one-twelfth (1/12) of the Executive's annual
compensation then in effect as specified in Section 3(a), above.
7. Severance Pay. In the event that the Executive's employment is
terminated by the Company other than for Cause, whether during or
after the term of this Agreement, the Executive shall be entitled to
receive his then current compensation as provided for in Section 3(a),
payable at the Company's regular payment intervals, for a period of
two years following the date of termination, so long as Executive
shall not have breached the covenants set forth in Section 8;
provided, that if any of such payments would (i) constitute a
"parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986 (the "Code") and (ii) but for this proviso be
subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), the amount payable hereunder shall be reduced to the
largest amount which the Executive determines would result in no
portion of the payments hereunder being subject to the Excise Tax. If
the Executive voluntarily resigns his employment hereunder, or if his
employment is terminated for Cause, the Executive shall not be
entitled to any severance pay or other compensation beyond the date of
termination of his employment.
8. Covenant Not to Compete; Trade Secrets. During the continuance of
his employment by the Company and for a period of twenty-four (24)
months after termination of his employment, the Executive shall not
(a) anywhere in the United States, engage in any business which
competes directly or indirectly with the Company or (b) directly or
indirectly, use, disseminate, or disclose for any purpose other than
for the purposes of the Company's business, any of the Company's
confidential information or trade secrets, unless such disclosure is
compelled in a judicial proceeding. Upon termination of his
employment, all documents, records, notebooks, and similar
repositories of records containing information relating to any trade
secrets or confidential information then in the Executive's possession
or control, whether prepared by him or by others, shall be left with
the Company or returned to the Company upon its request.
9. Key Man Life Insurance. The Company may maintain "key man" life
insurance on the Executive in the amount of up to $3,000,000 for the
benefit of the Company or any other beneficiary designated as such by
the Company. Executive shall cooperate with the reasonable
requirements of any insurer with respect to such insurance, including
the submission to physical examination.
10. Change of Control. For purposes of this Agreement, a "Change of
Control" shall be deemed to have occurred on the date on which (a) any
person or entity other than Executive or Bedford Capital Financial
Corporation becomes the record or beneficial owner, directly or
indirectly, of more than fifty percent (50%) of the then outstanding
voting stock of the Company; (b) the shareholders of the Company
approve a merger or consolidation of the Company with any other
entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent at least 80% of the combined voting power of
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the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (c) the
shareholders approve an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
11. Severability. It is the desire and intent of the parties that
the provisions of Section 8 shall 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 sentence or portion of Section 8 shall be adjudicated to be
invalid or unenforceable, the remaining portions of such section
nevertheless shall continue to be valid and enforceable as though the
invalid portions were not a part thereof. In the event that any of
the provisions of Section 8 relating to the geographic areas of
restriction or the period of restriction shall be deemed to exceed the
maximum area or period of time which a court of competent jurisdiction
would deem enforceable, the geographic areas and times shall, for the
purposes of this Agreement, be deemed to be the maximum areas or time
periods which a court of competent jurisdiction would deem valid and
enforceable in any state in which such court of competent jurisdiction
shall be convened.
12. Injunctive Relief. The Executive agrees that any violation by
him of the agreements contained in Section 8 are likely to cause
irreparable damage to the Company, and therefore agrees that if there
is a breach or threatened breach by the Executive of the provisions of
said sections, the Company shall be entitled to an injunction
restraining the Executive from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies
for such breach or threatened breach.
13. Miscellaneous.
(a) Notices. Any notice required or permitted to be given under this
Agreement shall be directed to the appropriate party in writing and
mailed or delivered, if to the Company, to 000 Xxxxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000 or to the Company's then principal
office, if different, and if to the Executive, to 000 Xxxxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000, or to the Company's then
principal office, if different.
(b) Binding Effect. This Agreement is a personal service agreement
and may not be assigned by the Company or the Executive, except that
the Company may assign this Agreement to a successor by merger,
consolidation, sale of assets or other reorganization. Subject to the
foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors,
assigns, and legal representatives.
(c) Amendment. This Agreement may not be amended except by an
instrument in writing executed by each of the parties hereto.
(d) Applicable Law. This Agreement is entered into in the State of
Colorado and for all purposes shall be governed by the laws of the
State of Colorado.
(e) Counterparts. This instrument may be executed in one or more
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counterparts, each of which shall be deemed an original.
(f) Entire Agreement. This Agreement supersedes and replaces all
prior agreements or other expressions or understandings between the
parties related to the employment of the Executive by the Company.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.
PMC INTERNATIONAL, INC.
By: /s/
Title:Xxxx Xxxx, CFO
THE EXECUTIVE:
/s/
Xxxxxxx X. Xxxxxxxx
