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Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT between The Carbide/Graphite Group, Inc.,
a Delaware corporation (the "Corporation") and Xxxxxx X. Xxxxxx (the
"Executive") dated as of September 1, 1999 (the "Agreement").
WHEREAS, the Corporation and the Executive have entered into
an employment agreement dated April 1, 1997 which is superseded by this
Agreement; and
WHEREAS, the Corporation wishes to employ the Executive as
Chairman, President and Chief Executive Officer of the Corporation on the terms
set forth herein and the Executive wishes to be employed by the Corporation on
such terms;
IT IS, THEREFORE AGREED:
1. Employment. The Corporation hereby agrees to employ the
Executive, and the Executive hereby agrees to be employed by the Corporation,
for the period commencing as of the date hereof and ending on August 31, 2001 as
its Chairman, President and Chief Executive Officer (the "Employment Period").
2. Duties. During the Employment Period, the Executive agrees
to devote his attention full time and during normal business hours to the
business and affairs of the Corporation and to use his best efforts to perform
faithfully and efficiently such responsibilities. The Executive shall, subject
to the supervision and control of the Board of Directors of the Corporation,
perform such duties and exercise such supervision and powers over and with
regard to the business of the Corporation as are contemplated to be performed by
the Chairman, President and Chief Executive Officer pursuant to the By-laws of
the Corporation, and such additional duties as may from time to time be
prescribed by the Board of Directors. Subject to the provisions of the
Corporation's Charter and By-laws and applicable law, it is the expectation
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of the Corporation that the Executive will continue to serve as a member of the
Board of Directors of the Corporation during the Employment Period.
3. Base Compensation. During the Employment Period, the
Executive shall receive a base salary at an annual rate of at least $350,000
with any increase thereto to be determined by the Compensation Committee of the
Board of Directors from time to time.
4. Stock Options. During the Employment Period, the Executive
shall receive stock option grants as determined by the Stock Option Plan
Committee on terms and conditions consistent with other participants in the
Stock Option Plan.
5. Annual Incentive Awards. Subject to the terms of the
Corporation's Annual Incentive Bonus Plan, the Executive's participation in the
Plan for the fiscal years ending July 31, 2000 and July 31, 2001 shall be at a
target award level equal to a rate of 50% of base pay, a "near-miss" award level
of 25% of base pay and a maximum award level of 100% of base pay.
6. Termination. (a) Death or Disability. This Agreement shall
terminate automatically upon the Executive's death. The Corporation may
terminate this Agreement during the Employment Period after having established
the Executive's "Disability" (as defined below), by giving the Executive written
notice of its intention to terminate the Executive's employment. For purposes of
this Agreement, "Disability" means the Executive's inability to substantially
perform his duties and responsibilities to the Corporation by reason of a
physical or mental disability or infirmity (i) for a continuous period of six
months or (ii) at such earlier time as the Executive submits medical evidence
satisfactory to the Corporation that the Executive has a physical or mental
disability or infirmity that will likely prevent the Executive from
substantially performing his duties and responsibilities for six months or
longer. The date of
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Disability shall be the day on which the Executive receives notice from the
Corporation pursuant to this Section 6(a).
(b) Cause. The Corporation shall have the right to
terminate the Executive's employment for "Cause" during the Employment Period.
For purposes of this Agreement, "Cause" shall mean (i) the willful and continued
failure by the Executive to perform substantially his duties to the Corporation
or its subsidiaries (other than any such failure resulting from his Disability)
within a reasonable period of time after a written demand for substantial
performance is delivered to the Executive by the Board of Directors, which
demand specifically identities the manner in which the Board of Directors
believes that the Executive has not substantially performed his duties, (ii)
embezzlement or theft from the Corporation or any subsidiary or affiliate by the
Executive or the commission or perpetration by the Executive of any act
involving moral turpitude, or (iii) any material and willful violation by the
Executive of his obligations under Section 8 hereof.
(c) Change of Control. The Executive shall have the
right to terminate this Agreement during the Employment Period upon thirty (30)
days prior written notice to the Corporation or a successor of the Corporation,
as the case may be, for "Good Reason" on or subsequent to the consummation of a
"Change of Control". For purposes of this Agreement, (A) "Good Reason" shall
mean (1) a change in the Executive's duties and responsibilities without his
consent such that his duties and responsibilities are materially reduced or
altered in a manner unfavorable to him or a decrease in the Executive's salary
or bonus award potential, or a material decrease in his benefits or (2) a change
in the location at which the Executive's duties are principally carried out of
more than 20 miles from the Corporation's principal executive offices in
Pittsburgh, Pennsylvania or (3) the Corporation or its successor is unwilling to
extend the
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Executive's employment upon terms at least as favorable to the Executive as the
terms set forth in this agreement; and (B) "Change of Control" shall mean (i) a
change in control of the Board of Directors of the Corporation pursuant to which
any single Person or two or more Persons acting in concert acquires control of
such Board of Directors or (ii) the Transfer of a least 51% or more of the
voting equity interests in the Corporation (or any parent of the Corporation),
whether by sale, merger, consolidation or otherwise, to any single Person or two
or more Persons acting in concert; provided that two or more Persons shall be
considered to be acting in concert for purposes of clauses (i) and (ii) hereof
only if such Persons would have been considered to be acting in concert as a
"group" for purposes of Section 13(d) of the Securities Exchange Act of 1934,
for such purposes treating voting equity interests of the Corporation held or
acquired by such Persons as if such voting equity interests were equity
securities in respect of which a Schedule 13D would be required to be filed with
the Securities and Exchange Commission and as if the requisite percentage and
other threshold conditions to such filing were satisfied. "Person" means any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or governmental body. "Transfer"
means, sell, transfer, convey, lease and/or deliver (other tenses of the term
have similar meaning) or sale, transfer, assignment, conveyance, lease and/or
delivery, as indicated by the context.
7. Effect of Termination. (a) Upon termination of the
Executive's employment during the Employment Period, because of death or
Disability as provided in subsection 6(a), following termination of the
Executive's employment the Corporation shall continue to pay the Executive or
his estate or other personal representative as severance (x) the amount of the
Executive's salary as provided in Section 3 at the rate in effect immediately
prior to termination of his employment for a period of twenty-four months less
the amount of any
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disability payments made by the Corporation or any Corporation plan and (y) in
the case of a Disability termination will afford to the Executive at the
Corporation's expense, health insurance benefits (including medical and dental)
and life insurance equivalent to the benefits enjoyed by the Executive at the
date of termination (the "Insurance Benefits') for a period of twenty-four
months from the date of such termination.
(b) If the Executive's employment is terminated by
the Corporation during the Employment Period (other than for death, Disability
or Cause or other than by virtue of a Change of Control pursuant to subsection
6(c)), or in the event the provisions of subsection 6(c)(A)(3) are not
applicable and the Corporation is unwilling to extend the Executive's employment
at the expiration of this Agreement upon terms at least as favorable to the
Executive as the terms set forth herein, the Corporation shall pay to the
Executive a cash amount as severance in a lump sum equal to two times the
Executive's annual base salary then in effect pursuant to Section 3 plus two
times the average of the previous two years of bonus plan payouts for the
Executive and shall continue to maintain the Insurance Benefits for a period of
24 months from the date of such termination or expiration. The lump sum payment
shall be paid to the Executive within 45 days after the date of such termination
or expiration.
(c) If the Executive's employment is terminated by
the Executive during the Employment Period pursuant to subsection 6(c)
(including a termination arising from the circumstances set forth in subsection
6(c)(A)(3)), the Corporation shall pay to the Executive a cash amount as
severance in a lump sum equal to 2.99 times the Executive's base salary then in
effect pursuant to Section 3 plus 2.99 times the average of the previous two
years of bonus plan payouts for the Executive; provided that such payment under
this subsection 7(c) shall be limited to an amount which would not constitute an
"excess parachute payment" under Section 280G of
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the federal Internal Revenue Code. Such lump sum payment shall be paid within 45
days after the date of termination provided for in subsection 6(c). The
Corporation shall continue to maintain the Insurance Benefits for a period of 36
months from the date of the termination provided for in subsection 6(c).
(d) Nothing herein shall be deemed to restrict or
reduce the Executive's vested benefits under the Corporation's Stock Option
Plans, the compensation deferral plan, the Savings Incentive Plan or the Annual
Incentive Bonus Plan as determined in accordance with the provisions of such
plans.
(e) No continued salary or severance shall be paid if
the Executive's employment terminates for any reason during the Employment
Period other than as set forth above in this Section 7. Upon the termination of
employment with the Corporation for any reason, the Executive shall offer to
resign his position as a director of the Corporation, effective as of the date
of such termination.
8. Confidential Information; Non-Competition. (a) For a three
year period commencing on the date on which the Executive's employment with the
Corporation, or any of its affiliates, terminates for whatever reason (the "Date
of Termination"), (i) the Executive shall hold in a fiduciary capacity for the
benefit of the Corporation all secret or confidential information, knowledge or
data relating to the Corporation or its affiliates, and their respective
businesses which shall not be public knowledge (other than information which
becomes public as a result of acts of the Executive or his representatives in
violation of this Agreement), including without limitation, customer lists, bid,
proposals, contracts, matters subject to litigation, technology or financial
information of the Corporation or its subsidiaries and other know-how, and (ii)
the Executive shall not, without the prior written consent of the Corporation,
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communicate or divulge any such information, knowledge or data to anyone other
than the Corporation and those designated by it in writing.
(b) For a three year period commencing on the Date of
Termination, the Executive will not, directly or indirectly, (i) own, manage,
operate, control or participate in the ownership, management or control of, or
be connected as an officer, employee, partner, director, or consultant or
otherwise, with, or have any financial interest in (except for (A) ownership as
of the date hereof, (B) any ownership in the common stock of the Corporation, or
(C) any ownership of less than 5% of the outstanding equity interest in any
entity) (I) the manufacture of graphite electrodes, or (II) the refining of
products required for production of, or the production of, needle coke, or the
manufacture or marketing of calcium carbide and its direct derivatives, in each
case, in any market in which the Corporation or its affiliates conducts or
solicits business or (ii) solicit or contact any employee of the Corporation or
its affiliates with a view to inducing or encouraging such employee to leave the
employ of the Corporation or its affiliates for the purpose of being employed by
the Executive, an employer affiliated with the Executive, or any competitor of
the Corporation or any affiliate thereof; provided that the provisions of
subsection (b)(i) shall be limited to a period of two years in the event the
Corporation is unwilling to extend the Executive's employment at the expiration
of this Agreement upon terms at least as favorable to the Executive as set forth
in this Agreement or the termination by the Corporation of the Executive's
employment during the Employment Period other than for Cause or Disability.
(c) The Executive acknowledges that the provisions of
this Section 8 are reasonable and necessary for the protection of the
Corporation and that the Corporation will be irrevocably damaged if such
provisions are not specifically enforced. Accordingly, the
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Executive agrees that, in addition to any other relief to which the Corporation
may be entitled in the form of actual or punitive damages, the Corporation shall
be entitled to seek and obtain injunctive relief from a court of competent
jurisdiction (without the posting of a bond therefor) for the purposes of
restraining the Executive from any actual or threatened breach of such
provisions.
9. Successors. (a) This Agreement is personal to the Executive
and without the prior written consent of the Corporation shall not be assignable
by the Executive other than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors.
(c) This Agreement supersedes the employment
agreement dated April 1, 1997 between the Executive and the Corporation which
prior agreement is no longer in force.
10. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxx
00 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
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If to the Corporation:
The Carbide/Graphite Group, Inc.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(d) The Corporation's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision hereof. The Executive's failure to insist upon
strict compliance with any provision hereof shall not be deemed to be a waiver
of such provision hereof.
(e) This Agreement embodies the entire agreement
between the parties with respect to the Executive's employment, and may not be
changed or terminated orally.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and pursuant to the authorization from its Board of Directors the Corporation
has caused these presents to be executed in its name and on its behalf, all as
of the day and year first above written.
THE CARBIDE/GRAPHITE GROUP,
INC.
By /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Secretary
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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