EXHIBIT 10.2
Execution Copy
--------------
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made this
14th day of December, 1998, between Better Materials Corporation, a Pennsylvania
corporation, (hereinafter "the Company") and Xxxxx Xxxxxxxxxxxx (hereinafter
"the Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is an indirect wholly-owned subsidiary of USS
Holdings, Inc. ("USSH");
WHEREAS, the Company desires to employ the Executive;
WHEREAS, during the course of the Executive's employment, the
Executive may be required to perform certain duties on behalf of a company
controlling, controlled by or under common control with the Company (such
companies hereinafter collectively called "Affiliates") and to accept such
offices in any Affiliates as the Company may require; and
WHEREAS, the Executive desires to be so employed by the Company, on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements herein set forth, the Company and the
Executive hereby agree as follows:
1. Employment. The Company hereby agrees to employ the Executive,
----------
and the Executive hereby agrees to serve as a senior executive of the Company.
The Executive agrees to perform such services customary to such office as shall
from time to time be assigned to him by the President of the Company or the
Chief Financial Officer of USSH. The Executive further agrees to use his best
efforts to promote the interests of the Company and to devote his full business
time and energies to the business and affairs of the Company. The Executive may
be required in pursuance of his duties hereunder to perform services for an
Affiliate and to accept such offices in any Affiliates as the Company may
require. The Executive shall not be required to have his primary place of
employment more than 25 miles from his current place of employment.
2. Term of Employment. The employment hereunder shall be for a term
------------------
of two years commencing on the Closing Date (as such term is defined in the
Agreement and Plan of Merger among the Company, BMC Acquisition Company and U.S.
Silica Company dated October 30, 1998) and ending on the second anniversary
thereof (the "Expiration Date"), unless terminated earlier pursuant to Paragraph
4 of this Agreement (the "Term of Employment").
3. Compensation and Other Related Matters.
--------------------------------------
(a) Salary. As compensation for services rendered hereunder, the
------
Executive shall receive a minimum Annual Salary of One Hundred Seventy Five
Thousand dollars ($175,000), which salary shall be paid in accordance with the
Company's then prevailing payroll practices.
(b) Signing Bonus. As an inducement to the Executive to enter
-------------
into this Agreement, as of the effectiveness hereof the Executive shall receive
One Hundred Sixty Five Thousand dollars ($165,000).
(c) Bonus. During the term of this Agreement, and in the
-----
Company's sole discretion, the Executive shall be eligible to receive an annual
bonus which is approved by the Board of Directors of USSH to be calculated in
accordance with USSH'a bonus program for its senior executives as it is
developed from time to time with performance targets to be established from year
to year.
(d) Other Benefits. The fringe benefits, perquisites and other
--------------
benefits of employment to be provided to the Executive shall be equivalent to
such benefits and
2
perquisites as are provided to other senior executives of USSH as amended from
time to time. The Company acknowledges and agrees that the Executive shall be
entitled to keep the automobile currently being used by the Executive.
(e) Restricted Stock. The Company shall, in its sole discretion,
----------------
make available for purchase by the Executive shares of common stock of USSH on
substantially the same terms as such stock is made available to other senior
executives of USSH. In addition, in the Company's sole discretion, the Company
shall grant the Executive restricted shares of stock in USSH.
4. Termination.
-----------
(a) Disability. If, as a result of the incapacity of the
----------
Executive due to physical or mental illness, the Executive is unable to perform
substantially and continuously the duties assigned to him hereunder, with or
without a reasonable accommodation, for a period of three (3) consecutive months
or for a non-consecutive period of nine (9) months during the Term of
Employment, the Company may terminate his employment for "Disability" upon
thirty (30) days prior written notice to the Executive.
(b) Death. The Executive's employment shall terminate
-----
immediately upon the death of the Executive.
(c) Cause. The Company shall be entitled to terminate the
-----
Executive's employment for "Cause." Termination by the Company of the employment
of the Executive for "Cause" shall mean termination based upon (i) the willful
failure by the Executive to follow directions communicated to him by the
President of the Company or the Chief Financial Officer of USSH provided that
such directions are in writing and are neither illegal, immoral or unethical;
(ii) a conviction of, a plea of nolo contendere regarding, a guilty plea or
confession by the Executive to an act of fraud, misappropriation or embezzlement
or to a felony; (iii) the
3
Executive's habitual drunkenness or use of illegal substances; (iv) a material
breach by the Executive of this Agreement with respect to the misuse or
unauthorized disclosure of Confidential Information (as defined below); or (v)
an act of gross neglect or gross misconduct which the Company deems to be good
and sufficient cause. With respect to clauses (i) and (v) above, the Executive
shall be entitled to receive written notice allowing the Executive 30 days to
cure any conduct referred to in said clauses that is reasonably likely to be
able to be cured.
(d) Termination Without Cause by the Company. The Company may
----------------------------------------
terminate the Executive's employment under this Agreement at any time for any
reason other than "Cause" upon thirty (30) days prior written notice to the
Executive.
5. Compensation Upon Termination or During Disability.
--------------------------------------------------
(a) Disability. During any period that the Executive fails to
----------
perform his full-time duties with the Company as a result of incapacity due to
physical or mental illness (the "Disability Period"), the Executive shall
continue to receive his Annual Base Salary at the rate set forth in Paragraph
3(a) of this Agreement, less any compensation payable to the Executive under the
applicable disability insurance plan of the Company during such period, until
this Agreement is terminated pursuant to Paragraph 4(a) hereof. Thereafter, or
in the event the Executive's employment shall be terminated by reason of his
death, the Executive's benefits shall be determined under the Company's
insurance and other compensation programs then in effect in accordance with the
terms of such programs and the Company shall have no further obligation to the
Executive under this Agreement or otherwise.
(b) Death. In the event of the Executive's death, the
-----
Executive's beneficiary shall be entitled to receive the Executive's Annual
Salary at the rate set forth in Paragraph 3(a) of this Agreement until the date
of his death. Thereafter, the Company shall have
4
no further obligation to the Executive or the Executive's beneficiary under this
Agreement or otherwise.
(c) Cause. If the Executive's employment shall be terminated by
-----
the Company for "Cause" as defined in Paragraph 4(c) of this Agreement, the
Company shall continue to pay the Executive his Annual Base Salary at the rate
set forth in Paragraph 3(a) of this Agreement through the date of termination of
the Executive's employment. Thereafter, the Company shall have no further
obligation to the Executive under this Agreement or otherwise.
(d) Termination Without Cause by the Company; Expiration of
-------------------------------------------------------
Agreement. If (i) the Company voluntarily terminates the Executive's employment
---------
with the Company pursuant to Paragraph 4(d) of this Agreement or (ii) the
Executive and the Company fail to enter into a new agreement with respect to the
employment of the Executive within ninety days after the Expiration Date and the
Executive's employment with the Company is terminated either by the Company or
by the Executive, then the Company shall pay the Executive an amount equal to
two (2) years of his Annual Salary at the rate in effect at the date of
termination of the Executive's employment in same manner and at the same times
as are in accordance with the practice with respect to payment of the
Executive's compensation as of such date of termination; provided that, the
-------------
Company may elect to pay any unpaid portion of such two (2) years Annual Salary
at any time. Thereafter, the Executive acknowledges that the Company shall have
no further obligation to the Executive under this Agreement or otherwise. There
shall be no duty on the part of the Executive to mitigate damages, nor is the
Company or any affiliate of the Company entitled to a right of set-off.
6. Confidentiality and Restrictive Covenants.
-----------------------------------------
(a) The Executive acknowledges that:
5
(i) the business in which the Company is engaged is
intensely competitive and that his employment by the Company will require that
he have access to and knowledge of confidential information of the Company,
including, but not limited to, certain/all of the Company's plans for creation,
acquisition or disposition of products or publications, expansion plans,
financial status and plans, products, improvements, formulas, designs or styles,
method of distribution, customer lists, product development plans, rules and
regulations, personnel information and trade secrets of the Company, all of
which are of vital importance to the success of the Company's business
(collectively, "Confidential Information");
(ii) the direct or indirect disclosure of any Confidential
Information to existing or potential competitors of the Company would place the
Company at a serious competitive disadvantage and would do serious damage,
financial and otherwise, to the Company's business;
(iii) by his training, experience and expertise, the
Executive's services to the Company will be special and unique; and
(iv) if the Executive leaves the Company's employ to work
for a competitive business, in any capacity, it would cause the Company
irreparable harm.
(v) references to Company in this paragraph 6 shall
include the Company and the Affiliates.
(b) Covenant Against Disclosure. The Executive therefore
---------------------------
covenants and agrees that all Confidential Information relating to the business
products and services of the Company, any Affiliate or customer shall be and
remain the sole property and confidential business information of the Company,
free of any rights of the Executive. The Executive further agrees not to make
any use of the confidential information except in the performance of his duties
hereunder and not to disclose the information to third parties, without the
prior written
6
consent of the Company. The obligations of the Executive under this Paragraph 6
shall survive any termination of this Agreement. The Executive agrees that, upon
any termination of his employment with the Company, all Confidential Information
in his possession, directly or indirectly, that is in written or other tangible
form (together with all duplicates thereof) will forthwith be returned to the
Company and will not be retained by the Executive or furnished to any third
party, either by sample, facsimile, film, audio or video cassette, electronic
data, verbal communication or any other means of communication.
(c) Non-competition. The Executive agrees that, during the Term
---------------
of Employment and for a period of three (3) years following the date of
termination of the Executive's employment with the Company for any reason
(including by reason of the failure of the Company and the Executive to enter
into a new agreement with respect to the employment of the Executive within
ninety days of the Expiration Date), the Executive will not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management or control of, or be connected as an officer, employee, partner,
director, or otherwise with, or have any financial interest in, or aid or assist
anyone else in the conduct of, any entity or business which competes with any
business conducted by the Company or any of its subsidiaries or affiliates, in
any area where such business is being conducted on the date the Executive's
employment is terminated hereunder and as to which the Executive has material
responsibilities.
(d) Further Covenant. Until the date which is three (3) years
----------------
after the date of the termination of the Executive's employment hereunder for
any reason, the Executive will not, directly or indirectly, take any of the
following actions, and, to the extent the Executive owns, manages, operates,
controls, is employed by or participates in the ownership, management, operation
or control of, or is connected in any manner with, any business of the type and
character engaged in and competitive with that conducted by the Company or any
of the
7
Affiliates during the period of the Executive's employment, the Executive will
use his best efforts to ensure that such business does not take any of the
following actions:
(i) persuade or attempt to persuade any client of the Company
to cease doing business with the Company or any Affiliate, or to reduce the
amount of business it does with the Company or any Affiliate;
(ii) solicit for himself or any entity the business of a client
of the Company or any Affiliate, or solicit any business which was a client of
the Company or any Affiliate within six months prior to the termination of the
Executive's employment;
(iii) persuade or attempt to persuade any employee of the
Company or any Affiliate or any individual who was its employee of the Company
or any Affiliate during the two (2) years prior to the Executive's termination
of employment, to leave the employ of the Company or any of its subsidiaries or
affiliates.
7. Breach by Employee. Both parties recognize that the services to
------------------
be rendered under this Agreement by the Executive are special, unique and
extraordinary in character, and that in the event of a breach by Employee of the
terms and conditions of the Agreement to be performed by him, then the Company
shall be entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction, either in law or in equity, to obtain
damages for any breach of this Agreement, or to enforce the specific performance
thereof by the Executive. Without limiting the generality of the foregoing, the
parties acknowledge that a breach by the Executive of his obligations under
Paragraph 6 would cause the Company irreparable harm, that no adequate remedy at
law would be available in respect thereof and that therefore the Company would
be entitled to injunctive relief with respect thereto.
8. Miscellaneous.
-------------
8
(a) Successors; Binding Agreement. This Agreement and the
-----------------------------
obligations of the Company hereunder and all rights of the Executive hereunder
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns, provided, however, that the
duties of the Executive hereunder are personal to the Executive and may not be
delegated or assigned by him.
(b) Notice. All notices of termination and other communications
------
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed by United States registered
mail, return receipt requested, addressed as follows:
If to the Company to:
Better Materials Corporation
c/o U.S. Silica Company
Xxxxx 000
X.X. Xxx 000
Xxxxxxxx Xxxxxxx, XX
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: President
and to:
D. Xxxxxx Xxxxxx & Associates, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
9
If to the Executive to:
Xxxxx Xxxxxxxxxxxx
Better Materials Corporation
X.X. Xxx 000
Xxxxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
and to:
Xxxxxx Xxxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
or to such other address as either party may designate by notice to the other,
which notice shall be deemed to have been given upon receipt.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Pennsylvania without
regard to the conflict of law rules thereof.
(d) Waivers. The waiver of either party hereto of any right
-------
hereunder or of any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.
10
(e) Validity. The invalidity or enforceability of any provision
--------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall otherwise remain in full force and
effect. Moreover, if any one or more of the provisions contained in this
Agreement is held to be excessively broad as to duration, scope or activity,
such provisions shall be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.
(f) Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(g) Entire Agreement. This Agreement sets forth the entire
----------------
agreement and understanding of the parties in respect of the subject matter
contained herein, and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of either party in respect
of said subject matter.
(h) Headings Descriptive. The headings of the several paragraphs
--------------------
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any of this Agreement.
(i) Capacity. The Executive represents and warrants that he is
--------
not a party to any agreement that would prohibit him from entering into this
Agreement or performing fully his obligations hereunder.
11
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.
XXXXX XXXXXXXXXXXX BETTER MATERIALS CORPORATION
_______________________________ By:__________________________
Name:
Title:
12
