SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT made as of the 15th day of April, 1998, by and between HOSOKAWA MICRON
INTERNATIONAL INC., a Delaware corporation with its corporate offices at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the "Company"), and
Xxxx Xxxx, residing at 00 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx
(hereinafter called the "Executive").
WITNESSETH:
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WHEREAS, the Executive has served the Company as its President and Chief
Executive Officer;
WHEREAS, the Company desires to continue to employ the Executive in such
capacity and the Executive is willing to continue to serve the Company in such
capacity;
WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of such employment.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements herein contained, the Company and the Executive agree as follows:
1. Employment. The Company hereby agrees to continue to employ the Executive,
and the Executive agrees to be employed by the Company, on the terms and
conditions herein contained.
2. Term. Except as otherwise provided in this Agreement, the Executive shall be
employed under this Agreement for an initial four-year term commencing on
the date hereof. The period during which the Executive is employed hereunder
is referred to as the "Employment Term." The Employment Term shall be
automatically renewed for successive two-year terms unless the Company shall
give the Executive written notice of non-renewal at least six months prior
to the end of the then current term. The Executive may, at any time,
terminate the Employment Term by giving the Company 120 days prior written
notice of the effective date of such termination. Upon the effective date of
a termination of the Employment Term per the preceding sentence, the Company
shall have no obligation to the Executive hereunder other than to pay or
provide the Entitlements.
3. Duties. The Executive shall serve as the Company's President and Chief
Executive Officer, and as such, will be responsible for the overall
profitability, growth and performance of the Company. The Executive shall
perform his duties hereunder at the
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Company's facilities located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx XXX
(the "Employment Site") and shall be available to travel, as may be required
in connection with the performance of his duties hereunder. In no event will
the Executive be required to undertake any duties or perform any tasks which
are inconsistent with his status in the Company. During the Employment Term,
the Executive shall devote substantially all of his business time,
attention, skill and efforts to the performance of his duties hereunder;
provided, however, that the Executive may serve as director of other
corporations, if such service does not conflict in any material respect with
his duties hereunder or his fiduciary duty to the Company, and provided the
Executive has prior written approval from the Company. Nothing herein shall
prevent the Executive from managing his personal investments and
participating in charitable and civic endeavors, so long as such activities
do not materially interfere with the Executive's performance of his duties
hereunder.
4. Base Salary. During the Employment Term, the Company shall pay the
Executive, in accordance with its normal payroll practices and subject to
required withholding, a base salary which, shall be at the annual rate of
$290,000. The base salary may be increased annually, commencing on October
1, 1998, by an amount to be determined by the Company, in its sole
discretion. Once increased, the base salary hereunder may not be decreased.
The base salary, as increased from time to time, is hereinafter referred to
as the "Base Salary."
5. Incentive Compensation. During the Employment Term, the Executive shall be
entitled to incentive compensation ("Incentive Compensation") pursuant to
the terms of the Company's incentive compensation plan, a copy of which is
attached hereto as Exhibit A and any other annual programs or plans
hereafter adopted by the Company.
6. Certain Other Compensation and Benefits. During the Employment Term, the
Executive shall be entitled to:
(a) participation in all benefit, pension, retirement, savings, welfare and
other employee benefit plans and policies in which members of the
Company's senior management generally are entitled to participate
(collectively, the "Benefit Plans"), in accordance with their respective
terms as in effect from time to time and as listed in Exhibit B.
(b) vacation each year in accordance with the Company's policies for members
of senior management in effect from time to time, but in no event less
than twenty days paid vacation for each calendar year (twenty-five days
after fifteen years of employment with the Company and/or any of its
Affiliates) (for purposes of this Agreement, the term "Affiliate" means
an entity controlled by, in control of, or under common control with,
the Company);
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(c) use of an automobile and the costs of fuel, maintenance, repairs and
insurance associated with such automobile pursuant to the terms of the
Company's policy concerning senior executives' automobiles, as such
policy is in effect from time to time, and in the absence of any such
policy, as such policy was last in effect.
(d) life insurance, in addition to any provided to employees of the Company
generally, on the life of the Executive for the benefit of the
Executive's designated beneficiaries as detailed in Exhibit C.
(e) long-term disability coverage for the Executive under the plan or policy
per Exhibit D.
(f) medical and dental insurance for the Executive, his spouse, and his
dependents as detailed in Exhibit E.
(g) such other benefits as the Executive is currently provided and noted in
Exhibit F.
7. Death Prior to Termination of Employment. If the Executive shall die during
the Employment Term, the Company shall have no liability or further
obligation except as follows:
(a) The Company shall pay the Executive's estate, when otherwise due, any
unpaid Base Salary for the period prior to the Executive's death, any
declared or awarded but unpaid Incentive Compensation and any other
unpaid amounts due the Executive under any other Benefit Plans
(collectively, the "Entitlements").
(b) The Executive's estate shall have such rights, if any, under employee
benefit, fringe benefit or incentive plans as may be provided in such
plans and any grants thereunder in accordance with their respective
terms.
8. Common Stock Ownership. No later than five (5) years after the date the
Company's Common Stock is listed on a United States stock exchange and at
all times thereafter during the Executive's employment by the Company, the
Executive must own, directly or beneficially, Common Stock of the Company
with an aggregate fair market value equal to (i) one times his Base Salary;
or (ii) such greater amount as is required under the current ownership
guidelines, if any, as may be established by the Board of Directors of the
Company, provided, however, that in no event shall the Executive be required
to own Common Stock having a value equal to more than three (3) times his
Base Salary. To the extent permitted under applicable law and subject to
agreement between the Executive and the Company, the Company may assist the
Executive in obtaining financing to effectuate the purchases of Common Stock
necessary to meet
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the requirements of this section which may include Company guarantees and
adjustment of incentive and bonus programs to provide that up to fifty
percent (50%) of any awards may be paid in Common Stock to an Executive who
does not meet the requirements of this section.
9. Disability. If the Executive shall be physically or mentally incapable of
performing his material duties as provided in Section 3 of this Agreement
during a period of not less than one hundred eighty (180) consecutive days,
the Company may, at its election at any time thereafter while the Executive
remains incapable of performing his material duties hereunder, terminate the
Executive's employment hereunder, effective immediately, by giving the
Executive written notice of such termination. In such event, the Company
shall have no other obligation to the Executive or his dependents hereunder
other than the obligation to pay or provide the Entitlements.
10. Cause. The Company may terminate the Executive's employment hereunder for
Cause by giving the Executive written notice of immediate termination. For
purposes of this Agreement, "Cause" shall mean (a) the Executive's
dishonesty, misappropriation, willful breach of fiduciary duty or fraud with
regard to the Company or any of its assets or businesses which has a
material adverse effect on the Company; (b) the Executive's conviction of or
pleading of nolo contendere with regard to a felony (other than traffic
violations) or any other crime involving moral turpitude; or (c) any other
breach by the Executive of a material provision of this Agreement that
remains uncured for thirty (30) days after written notice thereof is given
to the Executive. If the Executive's employment hereunder is terminated by
the Company for Cause, the Company shall have no other obligation to the
Executive hereunder other than the obligation to pay or provide the
Entitlements.
11. Good Reason. The Executive may terminate his employment hereunder for Good
Reason provided that there has first occurred a Change in Control of the
Company as defined in Section 9.2 of the Company's 1997 Stock Option Plan
and provided that the Executive provides written notice to the Company. For
purposes of this Agreement, "Good Reason" shall mean the occurrence or
failure to cause the occurrence of any of the following events without the
Executives express prior written consent after a Change in Control: (a) any
material demotion of the Executive, any material reduction of the
Executive's authority or responsibility or any other change in the terms of
the Executive's authority or responsibility or any other change in the terms
of the Executive's employment which is inconsistent with Section 3 hereof;
(b) the Company requiring the Executive to perform services hereunder at any
location outside a 60-mile radius from the Employment Site or the Company
requiring the Executive to work in an office of substantially inferior
characteristics or without the personnel assistance and support currently
provided the Executive; or (c) any breach by the Company of any provision of
this Agreement which is not cured by the Company within 30 days after notice
thereof from the Executive. If the Executive's
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employment hereunder is terminated by the Executive without Good Reason, the
Company shall have no other obligation to the Executive hereunder other than
the obligation to pay or provide the Entitlements.
12. Termination of Employment by the Executive for Good Reason after a Change in
Control or by the Company Without Cause: Non-renewal of Agreement. In the
event; (i) the Executive terminates his employment for Good Reason pursuant
to Section 11 hereof; or, (ii) the Company terminates the Executive's
employment other than for Cause or due to a disability pursuant to Section 9
hereof; or, (iii) the Executive's employment hereunder terminates due to the
non-renewal hereof following notice of such non-renewal given by the
Company, then, in any such event, the Company shall be deemed to have
breached this Agreement, and the Executive shall be entitled to the
following:
(a) in a lump sum (to the extent such obligations are capable of being paid
in a lump sum under the terms of the plan with respect to which such
obligation arose) in cash within thirty business days after the date of
termination, and, otherwise, in accordance with the terms of the
applicable plan or applicable law, any and all Entitlements as of the
date of termination of employment; and
(b) as severance pay, within thirty business days after the date of
termination, a lump sum in an amount equal to the greater of (A) the
Executive's Ending Compensation, hereinafter defined, multiplied by the
number of years (including any fraction of a year) in the period from
the date of termination of employment to the date the Employment Term
would have otherwise expired pursuant to Section 2 hereof (the
"Remaining Term"); or (B) the Executive's Ending Compensation multiplied
by two. For purposes of this Agreement, the Executive's Ending
Compensation means the sum of (A) one year's Base Salary at the annual
rate in effect immediately prior to such termination of employment; and
(B) the average of the Incentive Compensation paid or payable to the
Executive in respect of the three full years preceding the date of
termination of employment.
13. Non-Competition: Confidential Information.
(a) The Executive agrees that, if he terminates his employment hereunder
other than for Good Reason pursuant to Section 11 hereof, or if his
employment hereunder is terminated for Cause, he will not for a period
of two years after such termination of employment with the Company, in
any manner, directly or indirectly (or have a substantial ownership in,
manage, operate, or control any entity which shall directly or
indirectly) (i) perform, or cause to be performed, or solicit or aid, in
any manner, solicitation of, any work of a type performed by the Company
for any firm, corporation, or other entity ("Customer") with which, at
any time during
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the twelve (12) month period prior to termination of the Employment
Term, the Company or any subsidiary conducted any business; or (ii)
induce any personnel to leave the service of the Company or of any
subsidiary of the Company. Within two weeks of a written request of the
Executive following termination of the Employment Term, the Company
shall deliver to the Executive a list of Customers and the Executive
shall within two weeks after such delivery on reasonable prior notice
have the right during normal business hours to examine such books and
records of the Company as shall be reasonably necessary to confirm that
only the names of Customers are set forth on the list.
(b) The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data
relating to the Company and its subsidiaries, and their respective
businesses, (i) obtained by the Executive during his employment by the
Company or any of its subsidiaries; and (ii) not otherwise public
knowledge or known within the Company's industry. After termination of
the Executive's employment with the Company, the Executive shall not,
without prior written consent of the Company, unless compelled pursuant
to a court order, communicate or divulge any such information, knowledge
or data to anyone other than the Company and those designated by it.
(c) After termination of the Executive's employment with the Company, the
Executive shall refrain from disparaging, whether orally, in writing or
in other media, the Company, its subsidiaries and Affiliates, the
officers, directors and employees of each of them, and the products and
services of each of them.
(d) The Executive agrees that the remedy at law for any breach by him of the
foregoing shall be inadequate and that the Company shall be entitled to
injunctive relief. This Section constitutes an independent and separable
covenant that shall be enforceable notwithstanding any right or remedy
that the Company may have under any other provision of this Agreement or
otherwise.
14. No Mitigation; No Set-Off. The Company agrees that if the Executive's
employment with the Company is terminated for any reason whatsoever, the
Executive is not required to seek other employment or to attempt in any way
to reduce any amounts payable to the Executive by the Company pursuant to
this Agreement. Further, the amount of any payment or benefit provided for
in this Agreement shall not be reduced by any compensation earned by the
Executive or benefit provided to the Executive as the result of employment
by another employer or otherwise. Notwithstanding anything to the contrary
contained herein, the Company's obligation, if any, following termination of
the Executive's employment hereunder, to provide any ongoing benefits of a
type provided for in Sections 6(a), (d), (f), and (g) hereof, shall be
excused for so long as, and to the extent that, such benefits are provided
by a subsequent employer of the Executive.
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15. Garnishment. The benefits payable under this Agreement shall not be subject
to garnishment, execution or levy of any kind, and any attempt to cause any
benefits to be so subjected shall not be recognized.
16. Notice. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, or sent by certified
mail, return receipt requested, by overnight delivery or courier service, or
by telecopy. Notice to the Executive shall be delivered to his address set
forth at the beginning of this Agreement, and notice to the Company shall be
sent to the address set forth at the beginning of the Agreement to the
Attention: General Counsel
Any notice given by certified mail shall be deemed given five days after the
time of certification thereof. Any notice given by other means permitted by
this Section 16 will be deemed given at the time of receipt thereof.
Either party may, by notice given in accordance with this Section 18 to the
other party, designate another address or person for receipt of notices
hereunder.
17. Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without
reference to its conflicts of law provisions.
18. Binding Agreement. Notwithstanding anything herein to the contrary, this
Agreement may not be assigned by the Company without the prior written
consent of the Executive. This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. This Agreement is personal to the Executive and neither this
Agreement nor any rights hereunder may be assigned by the Executive.
19. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer of the Company as may
be specifically designated. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. This Agreement
constitutes the entire Agreement between the parties hereto pertaining to
the subject matter hereof. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.
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20. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
21. Separability. If any provisions of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provision hereof which shall
remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Executive has hereunto set his hand as of the date first set forth
above.
HOSOKAWA MICRON INTERNATIONAL INC.
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By: /s/ Xxxxx Xxxxxxxxx
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Name:
Title:
Xxxx Xxxx
/s/ Xxxx Xxxx
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Name:
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