Exhibit (c)(4)
Form of Employment Agreements, dated as of December 20, 1998.
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 20th day of December, 1998, by and between
LEARONAL, INC., a New York corporation, having its office and place of business
at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company") and [ ],
residing at [ ] (the "Executive").
BACKGROUND
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The Company has entered into an Agreement and Plan of Merger dated
December 20, 1998 among the Company, ROHM AND XXXX COMPANY ("Parent") and
LIGHTNING ACQUISITION CORP. ("Purchaser") (the "Merger Agreement").
Parent, Purchaser and the Company want to continue the employment
relationship between Executive and the Company following the effective date of
the contemplated merger (the "Merger") and the Executive wants to continue in
that employment, in each case on the terms and conditions set forth herein.
AGREEMENT
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Accordingly, in consideration of the mutual promises contained herein,
and intending to be legally bound, the Company and the Executive agree that
contingent upon, and effective upon the date of the earlier of the consummation
of the Offer or the Merger (as such terms are defined in the Merger Agreement),
(a) all prior employment agreements and amendments thereto are hereby amended
and restated in their entirety as follows, and simultaneously with the earlier
to occur of the Offer or the
Merger, will be of no further effect, and (b) that the Executive will remain
employed by the Company on the terms and conditions set forth herein.
1. Employment; Duties:
(A) The Company hereby continues the employment of the Executive
and the Executive hereby accepts such continued employment on the terms and
conditions hereinafter set forth. During his employment hereunder, the Executive
shall serve as [ ] of the Company, and shall have and perform such duties
and responsibilities relating to the business and operations of the Company as
may be appropriate to such position, and as the Board of Directors from time to
time may assign to him, consistently with the requirement that his duties be
appropriate to his position, subject to reasonable vacation periods and other
leaves of absence.
(B) During his employment hereunder, the Executive shall devote
his full time, attention and best efforts to the business of the Company and to
the furtherance of its interests, and shall not, without the prior written
consent of the Board of Directors of the Company, directly or indirectly, engage
in, or enter into the employment of, or otherwise render services to or for, or
act as a director, officer or employee of any other business, partnership,
association, corporation or other entity (other than established trade
associations of which the Company is a member) except for non-remunerative
participation in charitable organizations.
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(C) The principal place of performance of the Executive's
services hereunder shall be Freeport, New York, subject to reasonable travel
requirements on behalf of the Company.
(D) The Executive represents and warrants that he is free to
enter into this Agreement and the performance of his obligations and duties in
the manner contemplated hereunder will not violate the provisions of any other
agreement or understanding to which he is a party or by which he is bound.
2. Term: The term of this Agreement shall be for the period
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commencing on the earlier of the date of the consummation of the Offer or the
date of the Merger and ending on the third anniversary of that date.
3. Compensation:
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(A) As compensation for the Executive's services hereunder, the
Company shall pay and the Executive shall accept an annual salary ("Base
Salary") of not less than [ ] Dollars per year, or such greater sum as the
Company may from time to time deem appropriate, payable in such installments and
at such regular intervals as the Company may from time to time use for the
payment of salaries, but not less frequently than monthly.
(B) Executive shall also be entitled to participate in an annual
bonus program that shall provide an opportunity to receive an annual bonus,
including for the year, if any that begins before and ends after the Effective
Time, that is as a dollar amount at least consistent with the opportunity
provided to him in accordance with the Company's practices and policies in
effect before the Effective Time, based on
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performance objectives established by the Board, in consultation with the Chief
Executive Officer, following the Effective Time.
(C) In addition to the compensation set forth in (A) above, to
induce the Executive to remain in the employ of the Company, and as additional
compensation for the critical services to rendered by the Employee during the
difficult period of integration and transition following the Effective Time, the
Executive shall be entitled on the first anniversary of the effective date of
this Agreement, to an amount equal to 60% of the annual Compensation then
payable under (A) above, provided that the Executive is employed on the payment
date. If the Executive's employment is terminated by the Company without Cause,
or by the Executive for Good Reason, the Executive shall be paid a pro rata
portion of the amount otherwise payable under this Section 3(C) determined by
dividing the number of days elapsed from the beginning of the term of this
Agreement (determined under Section 2) by 365. If the Executive's employment
hereunder is terminated for any other reason, no payment shall be made under
this Section 3(C).
4. Additional Benefits:
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(A) The Company shall provide the Executive with such
retirement, medical and other fringe benefits as the Company or the Parent may
from time to time decide to generally provide for the Company's similarly
situated executive personnel, provided that during the term of this Agreement,
the total of such benefits shall be substantially comparable in the aggregate to
those provided to the Executive before the Effective Time. Until the third
anniversary of the Effective Time, as defined
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in the Merger Agreement, there shall be no adverse change or reduction in the
level or amount of any Executive perquisite made available to the Executive
immediately before the Effective Time.
(B) The Company shall reimburse the Executive for all reasonable
and necessary travel, entertainment and other expenses incurred by the Executive
in connection with the performance of his duties hereunder, provided such
expenses are documented and vouchers supported by receipts are submitted; the
good faith determination of the Company as to the reasonableness and necessity
of any such expense shall be binding and conclusive. Any reimbursed expense
which is disallowed as the result of any audit of the Company's tax returns by
any governmental taxing authority shall be refunded by the Executive to the
Company promptly following such disallowance.
5. Stock Option Payments: Executive agrees with respect to each
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outstanding stock option (each "Option") heretofore granted under the Company's
1990 Nonqualified Stock Option Plan, dated June 1, 1990 (the "1990 Plan") and
the Company's 1996 Long-Term Incentive Plan (the "1996 Plan", and together with
the 1990 Plan, the "Company Stock Option Plans"), to be bound by the terms of
Section 2.10 of the Merger Agreement.
6. Termination:
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(A) The Company may terminate the Executive's employment at any
time for "Cause" or upon 90 days notice for any other reason. The Executive may
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terminate employment hereunder upon 90 days written notice, with or without
"Good Reason."
(B) If the Executive's employment is terminated for "Cause" or
by the Executive without "Good Reason" the Executive shall have no further
rights under this Agreement, except the right to receive the Compensation
payable under Section 3 up to the date of termination by the Company of the
Executive's employment hereunder, and the right to receive any vested benefits
under any plan or arrangement described in Section 4. The Executive's employment
shall be deemed to have been terminated for "Cause" if his employment is
terminated for: (i) embezzlement, theft, or other misappropriation of any
property of more than nominal value of the Company; (ii) the Executive's neglect
of, or failure substantially to perform or comply with, his duties,
responsibilities and obligations as an officer of the Company (other than any
such failure resulting from his incapacity due to physical or mental illness, as
determined by a physician appointed by the Company) after a demand for
substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which such Board believes that the
Executive has not substantially performed his duties and the Executive fails or
refuses to remedy such failure to the reasonable satisfaction of the Board
within ninety (90) days after the receipt of such notice; (iii) the Executive's
willful and material breach of his restrictive covenants set forth in this
Agreement; (iv) any act which if the subject of a criminal proceeding could
reasonably result in a conviction for a felony; (v) an act or acts of dishonesty
on the Executive's part intended to result or resulting in substantial gain or
personal enrichment to him at
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the expense of the Company or (vi) a material breach of the Parent's Code of
Business Conduct or other policies governing employee conduct.
(C) In the event the Executive's employment is terminated by the
Company without "Cause" or by the Executive with "Good Reason," the Executive
shall have the right to receive (a) the Compensation payable under Section 3 and
(b) continuation of the benefits in which the Executive is participating under
Section 4 on the date of termination, in each case for the remaining term of
this Agreement following the date of such termination without "Cause." The
amount payable under (a) above shall be paid in a lump sum within 30 days of the
date of the Executive's termination without "Cause."
(D) "Good Reason" shall mean, without the Executive's express
prior written consent, the occurrence of any one or more of the following:(i)
The assignment of the Executive to duties materially inconsistent with the
Executive's authorities, duties, responsibilities, and status (including titles
and reporting requirements) as an officer of the Company, or a material
reduction or alteration in the nature or status of the Executive's authorities,
duties, or responsibilities from those in effect as of the effective date (or as
subsequently increased), other than an insubstantial and inadvertent act that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; (ii) The Company's requiring the Executive to be based at a location
in excess of twenty five (25) miles from the location of the Executive's
principal job location or office as of the effective date, except for required
travel on the Company's business to an extent substantially consistent with the
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Executive's present business obligations; (iii) A reduction by the Company of
the Executive's Base Salary as in effect on the effective date, or as the same
shall be increased from time to time; (iv) A failure by the Company to provide
the benefits described in Section 4, other than an immaterial failure that is
remedied by the Company promptly after the receipt of timely notice thereof
given by the Executive. For this purpose, the Company may eliminate and/or
modify existing programs and coverage levels; provided, however, that the
Executive's level of coverage under all such programs must be at least as great
as is such coverage provided to executives who have the same or lesser levels of
reporting responsibilities within the Company's organization;
(E) Any provision hereof to the contrary notwithstanding, if
this Agreement shall not have previously expired or the Executive's employment
hereunder shall not have otherwise been sooner terminated, the Executive's
employment hereunder shall automatically terminate upon:
(i) the Executive's becoming physically or mentally disabled so as to
be unable to perform the essential duties of his employment with
or without reasonable accommodation for a period aggregating six
months in any twelve (12) month period; provided that the
Executive shall be entitled to continue to receive his then
effective annual salary, in such installments and intervals as
then payable, less the sum of any payments to which the Executive
or the Executive's family may then be entitled under Social
Security, the Company's disability insurance plan, if any, and
any other source of disability income, for the balance of the
then remaining term hereunder or six months, whichever is longer,
but only for so long as the Executive is living; or
(ii) the Executive's death; provided that the Executive's widow shall
be entitled to receive payments equal to fifty (50%) percent of
the Executive's then effective annual salary, less the sum of
payments
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to which the Executive's widow may then be entitled under Social
Security, and the Company's pension or retirement plans, if any,
for the balance of the then remaining term hereunder or six (6)
months, whichever is longer, but only for so long as the
Executive's widow survives him.
(F) Upon the expiration of this Agreement or the sooner
termination of the Executive's employment hereunder, the Executive shall
promptly return all copies of all documents and records reflecting any trade
secrets, confidential information, formulae, proprietary data or other matter
pertaining to the business of the Company, its customers or suppliers, to which
access by the public is restricted, all of which are and shall remain the
Company's property. The Company may withhold any monies due the Executive
hereunder or otherwise until all such property is returned.
7. Confidential Information:
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Executive acknowledges that the Company owns, possesses or controls
trade secrets, proprietary information, formulae, methods, products, processes,
data customer lists, sources of supply, and other information pertaining to the
business of the Company (singly and collectively, the "Confidential
Information") , that it may from time to time develop or improve upon such
Confidential Information, and acquire additional Confidential Information,
sometimes from third parties upon the express condition that such Confidential
Information will not be disclosed, that all of such Confidential Information
constitutes a unique and valuable asset of the Company, and that disclosure of
any such Confidential Information to or use by anyone other than in the ordinary
course of the Company's business and for its benefit would result in irreparable
and continuing damage to the Company. The Executive shall keep all such
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Confidential Information and other matters pertaining to the business of the
Company, its customers or Suppliers, which is not generally available to the
public, in strict secrecy and confidence, and shall not at any time during the
term of his employment hereunder, or thereafter for so long as access thereto is
not generally available to the public, directly or indirectly, make use of,
disclose or furnish to any person, firm or Company or other third party any such
Confidential Information, nor participate in the use, disclosure or publication
of any elements thereof, either alone or in conjunction with others, except as
may be required in the ordinary course of the Company's business, or as may be
mandated under applicable law by competent authority.
8. Executive Knowledge:
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(A) Executive shall from time to time communicate and make known
to the Company all knowledge possessed by him relating to any methods,
developments, inventions or improvements, whether patented, patentable or
unpatentable, which relate to the business of the Company, whether acquired by
him prior to or during his employment by the Company; provided, however, that
nothing herein shall be construed as requiring any such communication where the
method, development, invention or improvement is lawfully protected from
disclosure as the trade secret of a third party or by any other lawful bar to
such communication existing prior to the commencement of such employment.
(B) Any such methods, developments, inventions or improvements,
whether patentable or unpatentable, which Executive may conceive of or develop
while in the Company's employ, shall be and remain the exclusive property
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of the Company. Executive shall, on request, execute patent applications, and
any other records or memoranda requested by the Company, utilizing,
incorporating or based on any such methods, developments, inventions or
improvements, including instruments deemed necessary by the Company for the
prosecution of any patent application or the acquisition of Letters Patent in
this, any foreign country, or otherwise.
(C) Executive shall keep records in connection with his
employment as the Company may from time to time direct, and all such records
shall be the sole and exclusive property of the Company. At any time and from
time to time, within five (5) days after the Company's request, Executive shall
surrender to the Company any and all documents, memoranda, books, papers
letters, price lists, notebooks, reports, logbooks, code books, salesmen
records, customer lists, activity reports, video or audio recordings, computer
programs, any and all data and information, and any and all copies thereof
relating to the Company's business or any Confidential Information.
9. Restrictive Covenants:
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(A) The services of Executive are unique, extraordinary and
essential to the business of the Company, particularly in view of Executive's
access to Confidential Information. Accordingly, if the Executive's employment
by the Company shall at any time be terminated for any reason whatsoever (other
than as a result of the Company's failure to make payments due to Executive
hereunder), for a period equal to eighteen (18) months, twelve (12) months if
the Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, commencing with
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the date of such termination without the Company's prior written approval, the
Executive shall not, actively or inactively, directly or indirectly, for himself
or for others (i) employ, become employed by, or associate in any business
relationship with any person who was an employee of the Company, or any
business, partnership, association, corporation or other entity which was
affiliated with, or was a customer or supplier of the Company, during the twelve
(12) month period preceding such termination, where such employment, association
or relationship would result in the Executive's being engaged in a commercial
enterprise which competes with or contemplates competing with the Company; nor
(ii) engage in any business which competes or then contemplates competing with
the Company; nor (iii) solicit for competitive purposes any prospective or
existing account of the Company which at the time of such termination was then
actively being solicited by or doing business with the Company; nor (iv)
purposefully affect to the Company's detriment any relationship of the Company
with any customer, supplier or employee of the Company or cause any customer or
supplier to refrain from entrusting additional business to the Company. In the
event that any of the provisions of this Section 8 shall be adjudicated to
exceed the time, geographic or other limitations permitted by applicable law in
any jurisdiction, then such provision shall be deemed reformed in such
jurisdiction to the maximum time, geographic or other limitations permitted by
applicable law.
(B) As specifically used in Sections 6, 7 and 8 hereof as well
as in this Agreement throughout, the term "Company" shall mean and include any
parent
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or subsidiary of the Company, as well as any and all corporations or other
entities as may succeed to all or substantially all of the business or assets of
the Company.
10. Injunctive Relief: The Executive acknowledges that the Company's
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remedies at law for the breach of any of the confidentiality or other
requirements and restrictive covenants of Sections 6, 7 or 8 of this Agreement
would be inadequate, that the harm to the Company's business likely to arise
from any threatened or actual breach thereof would be material and irreparable,
and, accordingly, that the Company shall be entitled to enforce such
requirements and restrictive covenants by temporary and permanent injunction or
other mandatory remedies restraining the Executive from committing or continuing
any threatened or actual violation of such requirements or restrictive
covenants, without the necessity of proving damages and without prejudice to any
other rights and remedies available to the Company under this Agreement or
otherwise, at law or in equity.
11. Notices: All notices or other communications required or
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permitted to be given hereunder shall be in writing and shall be deemed
sufficient if delivered against receipt or mailed by registered or certified
mail, return receipt requested, as follows: if to the Company, to its offices at
000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, or such other address as the
Company may hereafter designate for that purpose; and if to the Executive, to
him at 0 Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000, or such other address as he may
hereafter designate for that purpose.
12. Binding Effect: This Agreement shall be binding upon and inure to
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the benefit of the legal representatives, successors and permitted assigns of
the
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parties, including any corporation or other entity into which the Company may
consolidate or merge or to which it may transfer substantially all of its
assets, provided that the rights and obligations of the Executive hereunder
shall not be assignable or delegable without the prior written consent of the
Company.
13. Merger: This Agreement is intended as the final and sole
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expression of the agreement between the parties regarding the subject matter
thereof. Neither party shall be bound by any representations, promises or
inducements not set forth herein, none of which have been made or relied upon in
the making of this Agreement. No change, modification, discharge or termination
of any of the provisions of this Agreement or the obligations of either party
thereunder shall be valid unless in writing signed by the parties hereto.
14. Waiver: Any waiver by either party hereto of any right, default,
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terms, conditions, options or remedies hereunder in any one or more instances
shall not thereafter be deemed a waiver of the future enforceability of any such
right or of any subsequent default, or any such term, condition, option or
remedy.
15. Severability: The invalidity or unenforceability of any
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paragraph, term or provision hereof shall in no way affect the validity or
enforceability of the remaining paragraph, terms and provisions thereof. In any
such event, it is the parties' intention and agreement that any such paragraph,
term or provision which is held or determined to be unenforceable, as written,
shall nonetheless be in force and binding
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to the fullest extent permitted by law as though such paragraph, term or
provision had been written in such a manner and to such an extent as to be
enforceable under the circumstances. Without limiting the foregoing, with
respect to any confidentiality requirement or restrictive covenant contained
herein, if it is determined that any such provision is excessive as to duration
or scope, it is intended that it nevertheless be enforced for such shorter
duration or with such narrower scope as will render it enforceable.
16. Headings: Headings to paragraphs contained herein are for
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reference purposes only and are not to be given any substantive effect or
meaning.
17. Governing Law: This Agreement has been made in the State of New
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York, shall be interpreted and construed in accordance with the laws of that
State, without giving effect to conflict of law and principles requiring the
application of the substantive laws of another jurisdiction.
IN WITNESS WHEREOF, the parties hereunto have duly executed this
Agreement as of the day and year first above written.
LEARONAL, INC.
By:__________________
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