EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT ("Agreement") is made as of the 1st day of
October, 1998, by and between CMI CORPORATION, an Oklahoma corporation (the
"Corporation"), and XXX XXXXXXXXX (the "Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee upon the terms and
conditions herein set forth; and
WHEREAS, the Employee desires to be so employed upon such terms and
conditions;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement,
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the Corporation hereby employs the Employee as the Chief Executive Officer of
the Corporation, and the Employee hereby accepts and agrees to such employment.
2. Term of Employment. The term of this Agreement shall commence on
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October 1, 1998 (the "Commencement Date") and shall continue until April 1,
2004, unless terminated as provided in Section 9. The expiration date of the
term of this Agreement shall be automatically extended until September 30, 2008
unless, on or before January 1, 2004, either party gives notice to the other
that it elects not to extend the term of this Agreement beyond April 1, 2004.
Notice given by the Corporation to the Employee of its election not to extend
the term of this Agreement beyond April 1, 2004 shall not constitute or be
deemed to constitute a termination of this Agreement by the Corporation.
3. Duties and Responsibilities.
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3.1 As Chief Executive Officer. Subject to the authority of the
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Board of Directors of the Corporation, as Chief Executive Officer, the Employee
shall have executive and active overall responsibility, control and supervision
of all of the business and operations of the Corporation. The Employee shall
directly report to the Board of Directors of the Corporation and shall perform
such duties as are commensurate with his position as Chief Executive Officer.
The Employee's place of employment shall be in the Oklahoma City, Oklahoma
metropolitan area, subject to travel necessary for the performance of his duties
hereunder. The Corporation shall provide to the Employee adequate office
facilities, staff and reporting relationships commensurate with his position to
enable him to perform his duties hereunder.
3.2 Extent of Services. The Employee shall devote his full
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professional time, attention, knowledge and skill to the interests of the
Corporation. Notwithstanding the preceding sentence, the Employee shall not be
prohibited from engaging in other activities, whether for family, recreation,
investment, civic, charity, or other purposes, so long as those activities do
not unduly interfere with the ability of the Employee to carry out his duties
and responsibilities hereunder and so long as they are not inconsistent or
competitive with the interests of the Corporation.
3.3 Duty of Loyalty. The Employee recognizes that he owes a duty of
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loyalty and good faith to the Corporation (including each subsidiary thereof)
and agrees that during the term of this Agreement he will not take advantage of
any corporate opportunity of the Corporation, engage in self-dealing with the
Corporation, sell or disclose any confidential or proprietary information of the
Corporation, have or obtain any material economic interest in any entity or
arrangement which is competitive with the business of the Corporation or engage
in any activities which are competitive with the business of the Corporation,
without first disclosing all facts and details relating thereto to the Board of
Directors and obtaining the approval of the Board of Directors.
4. Compensation.
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4.1 Base Salary. The Corporation shall pay to the Employee for the
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services to be rendered by the Employee hereunder a base salary of $300,000 per
year (the "Base Salary"). The Base Salary shall be payable in equal
installments (subject to withholding tax) in accordance with the Corporation's
regular payroll schedule.
4.2 Incentive Compensation. Within ninety (90) days after the end of
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each fiscal year or partial fiscal year (other than 1998 and 2004) during which
the Employee is employed hereunder, the Employee shall be entitled to receive an
annual bonus equal to seventy-five percent (75%) of his Base Salary in the event
that the Corporation's basic earnings per share ("EPS"), as determined in
accordance with generally accepted accounting principles, for the applicable
fiscal year equal or exceed the target level (the "Targeted EPS Level") set
forth in Exhibit "A" attached hereto. The Employee shall be entitled to receive
a prorated bonus for each partial fiscal year (other than 1998 and 2004) that
the Employee is employed hereunder; provided, however, that if this Agreement is
terminated pursuant to either Section 9.2 or Section 9.3 hereof, the Employee
shall not be entitled to receive a prorated bonus for the fiscal year in which
such
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termination occurs. In the event that the expiration date of this
Agreement is extended until September 30, 2008 in accordance with the terms of
Section 2 hereof, the Board of Directors of the Corporation and the Employee
shall negotiate in good faith Targeted EPS Levels or other performance criteria
for fiscal years 2004, 2005, 2006, 2007 and 2008.
5. Benefits.
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5.1 Executive Benefits Generally. The Employee shall be entitled to
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participate in and receive benefits from any insurance, medical, dental, health
and accident, hospitalization, disability, defined benefit, defined
contribution, or other employee benefit plan of the Corporation which may be in
effect at any time during the term of this Agreement and which is generally
available to executives of the Corporation; provided, however, that, except as
set forth in Section 4.2 hereof or unless otherwise agreed to by the Board of
Directors of the Corporation, the Employee shall not be entitled to participate
in any stock purchase programs or programs for incentive and/or bonus
compensation established from time to time for executives of the Corporation.
During the term of this Agreement, the Corporation shall maintain term life
insurance on the life of the Employee in an amount not less than the greater of
(i) three (3) times the Employee's then current Base Salary, or (ii) $1,000,000.
The Employee shall be entitled to designate the beneficiary or beneficiaries of
such insurance coverage.
5.2 Reimbursement of Expenses. The Corporation shall reimburse the
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Employee for all reasonable and ordinary expenses incurred by him on behalf of
the Corporation in the course of his duties hereunder upon the presentation by
the Employee of appropriate documentation substantiating the amount of and
purpose for which such expenses were incurred.
5.3 Vacations. The Employee shall be entitled to four (4) weeks of
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paid vacation in each calendar year (to be prorated for any calendar year during
which the Employee is employed by the Corporation for less than the full
calendar year), which vacation shall be taken at times consistent with the
performance by the Employee of his obligations hereunder.
6. Stock Option.
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6.1 General. As of the Commencement Date, the Corporation shall
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grant to the Employee options (the "Options") to purchase a total of 500,000
shares of the Corporation's Voting Class A Common Stock, par value $.10, at a
price of $6.25 per share. Provided that the stockholders of the Corporation
approve all amendments to the Corporation's 1992 Incentive Stock Option Plan
(the "Plan") necessary to grant the Options under the Plan, the Options will be
granted under the Plan. The Options will be evidenced by Grants of Option in
substantially the forms attached
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hereto as Exhibits "B", "C" and "D". In the event of any inconsistency between
this Agreement and any such Grant of Option executed by the Corporation in favor
of the Employee, the Grant of Option shall control.
6.2 Amendment of Form S-8. On or before March 31, 2000, the
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Corporation will file with the Securities and Exchange Commission a post-
effective amendment to its Registration Statement on Form S-8 (Registration No.
33-66274) permitting reoffers and resales of control securities (as defined in
Instruction C to Form S-8) acquired by the Employee under the Plan to be made by
the Employee. The Corporation will use its commercially reasonable efforts to
keep the Registration Statement, as so amended, effective until the earlier of
(i) the Employee's disposition of all such control securities, and (ii) December
31, 2008. The Employee agrees that he will offer and sell such control
securities in compliance with all applicable state and federal securities laws
and such procedures as may reasonably be established from time to time by the
Corporation. The Employee shall indemnify and hold the Corporation harmless
against any and all losses, claims, damages or liabilities to which the
Corporation may become subject under the Securities Act of 1933 or otherwise as
a result of the Employee's breach of the agreement set forth in the preceding
sentence.
7. Negative Covenants.
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7.1 Covenant Not to Compete. The Employee hereby agrees that, during
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his employment by the Corporation and for a period of two (2) years after the
date of termination of such employment, the Employee shall not, directly or
indirectly, as an employee, principal, owner, consultant, officer, director,
agent or otherwise, compete anywhere in the world with the Business of the
Corporation. As used in this Agreement, the term "Business" means (i) the
manufacture of asphalt plants; asphalt pavement recycling systems; concrete
pavers; machines for concrete placing and spreading, finishing, texturing and
curing; pavement profiling machines; pavement reclaimers; automated fine
grading, materials spreading and placing equipment; soil stabilizers; concrete
plants; landfill compactors; soil compactors; materials grinders; soil
remediation equipment; electronic scales for construction, material processing,
mining, agricultural and industrial applications; and heavy-duty trailers for
equipment and material hauling, (ii) any other business engaged in by the
Corporation on the date of termination of the Employee's employment and (iii)
any business that, as of the date of such termination, the Employee was aware
that the Corporation was planning to engage. As used in this Agreement, the
term "compete" means to (x) attempt in any fashion to solicit business similar
in nature to the Business from any of the customers of the Corporation existing
as of the date of termination of the Employee's employment, or (y) invest in,
own, be employed by, manage, operate, control or render services or advice
relating to the Business to any individual, firm, company or
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organization which engages in the Business (hereinafter collectively referred to
as "Competitor"), in whole or in part. This covenant not to compete shall apply
and be binding upon the Employee regardless of the reason for the termination of
the employment of the Employee, whether by discharge, with or without cause, by
voluntary resignation, or by expiration of this Agreement, or by any other
manner whatsoever; provided, however, that if the employment of the Employee is
terminated by the Corporation without cause, then this covenant not to compete
shall only apply for that period of time during which the Corporation is
obligated to pay the Employee's Base Salary in accordance with the provisions of
Section 9.1(a) hereof.
7.2 Nonsolicitation of Other Employees. The Employee hereby agrees
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that, for two (2) years after the termination of his employment by the
Corporation, he will in no way attempt to attract, induce or solicit any
employee of the Corporation to leave his or her employment or to accept
employment with or provide services or advice to any Competitor.
7.3 Acknowledgment of Irreparable Harm. The Employee understands and
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acknowledges that his violation of any of the covenants contained in this
Section 7 would cause irreparable harm to the Corporation and, thus, the
Corporation shall be entitled to an injunction by any court of competent
jurisdiction enjoining and restraining the Employee from any employment, service
or other act prohibited by this Section 7. The Employee and the Corporation
recognize and acknowledge that the scope, area and time limitations contained in
this Agreement are reasonable. In addition, the Employee and the Corporation
recognize and acknowledge that the scope, area and time limitations are properly
required for the protection of the business interests of the Corporation due to
the Employee's status and reputation in the industry and the knowledge to be
acquired by the Employee through his association with the Corporation. The
parties agree that nothing in this Agreement shall be construed as prohibiting
the Corporation from pursuing any other remedies available to it for any breach
or threatened breach of this Section 7 including, without limitation, the
recovery of damages from the Employee or any other person or entity acting in
concert with the Employee. The Employee further agrees that, in the event he
breaches any of the covenants contained in this Section 7, the period of time
during which the Employee shall be restricted from the activities described
herein shall be extended for a period of time equal to any period(s) of time
during which the Employee engages in any conduct that violates this Section 7,
the purpose of this provision being to secure for the benefit of the Corporation
the entire period of time being bargained for by the Corporation for the
restrictions upon the Employee's activities. In the event that any part of this
Section 7 should for any reason be determined by a court of competent
jurisdiction to be unenforceable, but would be valid and enforceable if any part
hereof were deleted or otherwise modified, then the covenants and
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obligations of the Employee as set forth herein shall apply with such
modification as shall be absolutely necessary to make it enforceable.
7.4 Subsidiaries. For purposes of this Section 7, references to "the
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Corporation" shall include any and all subsidiaries of the Corporation.
8. Confidential Information. The Employee shall not at any time during
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the term of this Agreement or after the termination hereof directly or
indirectly divulge, furnish, use, publish or make accessible to any person or
entity any Confidential Information (as hereinafter defined). All records of
Confidential Information prepared by the Employee or which come into the
Employee's possession during the term of this Agreement are and shall remain the
property of the Corporation, and upon termination of the Employee's employment
by the Corporation all such records and copies thereof shall be either left with
or returned to the Corporation. The term "Confidential Information" shall mean
information disclosed to the Employee or known, learned, created or observed by
him as a consequence of or through his employment by the Corporation, not
generally known in the relevant trade or industry, about the Corporation's
business activities, products, customers, suppliers, services, manufacturing
processes and procedures including, but not limited to, information concerning
costs, product performance, customer requirements, advertising, sales promotion,
publicity, sales data, research, finances, accounting, manufacturing methods and
procedures, trade secrets, business plans, client or supplier lists and records,
potential client or supplier lists, and client or supplier billing.
Notwithstanding the foregoing, "Confidential Information" shall not include
information publicly disclosed by the Corporation or known by the Employee other
than because of his employment with the Corporation.
9. Termination of Employment.
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9.1 Termination By the Corporation Without Cause.
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(a) The Corporation may terminate this Agreement at any time, without
cause and for any reason, upon not less than sixty (60) days notice to the
Employee setting forth the date of termination. In this event, the Employee
shall be entitled to continue to receive his Base Salary (in the manner and
as described in Section 4.1) for a period of eighteen (18) months following
the early termination date. Additionally, if the Corporation terminates
this Agreement without cause within two (2) years after the Commencement
Date, the Corporation shall reimburse the Employee for all reasonable
relocation and moving expenses to return to the Chicago area.
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(b) This Agreement shall terminate immediately upon the Employee's
death. In this event, the Employee shall not be entitled to earn any
further compensation or benefits under this Agreement. This provision is
not intended to and shall not interfere with any pension or deferred
compensation to which the Employee or his heirs or beneficiaries is
entitled under the Corporation's employee benefit plans.
9.2 By the Corporation with Cause. The Corporation may terminate
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this Agreement at any time for cause, upon notice to the Employee setting forth
the early termination date. For purposes of this Section 9.2, the term "cause"
shall mean (a) willful failure by the Employee to perform any duty reasonably
requested to be performed by the Corporation's Board of Directors for any reason
other than illness or other emergency, (b) the breach by Employee of any term or
provision of this Agreement, which breach is not cured within thirty (30) days
after notice of such breach to the Employee by the Corporation setting forth the
facts upon which the breach is based, (c) conviction of a felony, (d) fraud by
the Employee with respect to the business or affairs of the Corporation, or (e)
alcohol or drug abuse by the Employee. In such event, the Employee shall not
be entitled to earn any further compensation or benefits under this Agreement.
9.3 By Employee Without Cause. The Employee may terminate this
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Agreement at any time, without cause and for any reason, upon not less than
sixty (60) days notice to the Corporation setting forth the early termination
date. In such event, the Employee shall not be entitled to earn any further
compensation or benefits under this Agreement.
9.4 By Employee With Cause. The Employee may terminate this
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Agreement at any time for cause, upon notice to the Corporation setting forth
the early termination date. For purposes of this Section 9.4, the term "cause"
shall mean a material breach by the Corporation of any material term or
provision of this Agreement, which breach is not cured within thirty (30) days
after notice of such breach to the Corporation by the Employee setting forth the
facts upon which the breach is based. In such event, the Employee shall be
entitled to receive his Base Salary (in the manner and as described in Section
4.1) for a period of eighteen (18) months following the early termination date.
9.5 Compensation and Benefits Payable or Accrued as of Termination
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Date. In the event this Agreement is terminated, regardless of the reason for
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termination, the Employee shall be entitled to receive all compensation,
reimbursements and benefits hereunder which were either payable to the Employee,
or which had accrued to the benefit of the Employee, as of the date of
termination. Any such compensation, reimbursements or benefits shall be paid or
provided to the Employee no less quickly than they
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would have been paid or provided to the Employee had the termination date not
occurred.
10. General.
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10.1 Assignment. This Agreement shall not be assignable.
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10.2 Notices. All notices under this Agreement shall be in writing
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and shall be deemed to have been given on the second business day after mailed
by registered or certified mail, addressed to the address below of the party to
which notice is given, or to such changed address as such party may have fixed
by notice:
To the Corporation: CMI Corporation
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P. O. Xxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
ATTN: Chairman of the Board of Directors
With a copy to: Xxxxxxx Xxxxxx & Xxxxx
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000 Xxxxxx X. Xxxx Xxx.
1600 Bank of Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
To the Employee: Xxx Xxxxxxxxx
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c/o Xxxxx Xxxxx Xxxxxxxxxx
Xxxxxxxxxx Xxxxxxxx & Mikva
000 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
10.3 Entire Agreement. This instrument and its attachments contain
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and constitute the entire agreement between and among the parties herein and
supersedes all prior agreements and understandings between the parties hereto
relating to the subject matter hereof.
10.4 Applicable Law. This Agreement shall be construed, enforced and
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governed in accordance with the laws of the State of Oklahoma.
10.5 Invalidity. If any provision contained in this Agreement shall
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for any reason be held to be invalid, illegal, void or unenforceable in any
respect, such provision shall be deemed modified so as to constitute a provision
conforming as nearly as possible to such invalid, illegal, void or unenforceable
provision while still remaining valid and enforceable, and the remaining terms
or provisions contained herein shall not be affected thereby.
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10.6 Dispute Resolution. Any dispute arising in any way out of this
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Agreement and which cannot be resolved by good faith negotiations between the
parties within sixty (60) days after either party shall have notified the other
party in writing of its desire to arbitrate the dispute shall be submitted to
and settled through binding arbitration in accordance with the rules of the
American Arbitration Association as from time to time in effect. The arbitration
proceedings shall be conducted by a sole arbitrator mutually agreed upon by the
parties, who shall be an attorney with not less than ten (10) years experience
in commercial law. In the event the parties are unable to mutually agree upon
an arbitrator, the American Arbitration Association shall appoint a sole
arbitrator who shall be an attorney with not less than ten (10) years experience
in commercial law. All disputes or claims of the parties subject to arbitration
shall be consolidated into a single arbitration proceeding. The arbitration
proceedings shall be conducted in Oklahoma City, Oklahoma. The award or
determination of the arbitrator shall be final and binding upon all parties and
shall be subject to enforcement in any court of competent jurisdiction. The
arbitrator shall have the authority to award costs and expenses of arbitration
to either party as the arbitrator sees fit. The parties acknowledge and agree
that nothing in this Section 10.6 shall be construed as prohibiting the
Corporation from pursuing in any court of competent jurisdiction any remedies
available to it for any breach or threatened breach of any of the covenants of
the Employee contained in Section 7 hereof.
10.7 Binding Effect. This Agreement shall be binding upon, inure to
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the benefit of and be enforceable by the parties hereto and their respective
heirs, executors, personal representatives and successors.
10.8 Construction. The parties have participated jointly in the
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negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.9 Relocation Expenses. The Corporation will reimburse the Employee
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for all expenses reasonably incurred by the Employee in connection with his
relocation to Oklahoma City, Oklahoma. The Company will also pay the legal fees
and expenses (up to $11,000) incurred by the Employee in connection with the
negotiation and execution of this Agreement.
10.10 Survival. The provisions of Sections 7, 8 and 9 shall survive
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the termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CORPORATION: CMI CORPORATION
By: /s/ Xxx X. Xxxxxxx
___________________________
Xxx X. Xxxxxxx, Senior Vice
President and Chief
Financial Officer
EMPLOYEE: /s/ Xxx Xxxxxxxxx
______________________________
Xxx Xxxxxxxxx
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