Exhibit 5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into as
of March 1, 2003, between XXXXX & XXXXX COMPANY, a Delaware corporation (the
"Company"), and XXXXX X. XXXXXX (the "Executive").
1. POSITION AND DUTIES. The Executive shall have the title and position
of Executive Vice President and Chief Financial Officer of the Company. Subject
to control of the Board of Directors of the Company (the "Board"), the Executive
shall have such duties and responsibilities commensurate with his title and
position, and shall report to the Chief Executive Officer of the Company.
Executive's employment is on a full-time basis, provided however, that Executive
may participate from time to time in civic, charitable and educational
activities, and may continue to be a member of the board of directors of Joplin
Advisors, Inc., and if approved in advance by the Board, may become a member of
one other for-profit board of directors, so long as such activities do not
materially interfere with his duties and responsibilities to the Company.
2. LOCATION OF EMPLOYMENT. Executive's principal place of employment
shall be Northbrook, Illinois.
3. PERIOD OF CONTRACT EMPLOYMENT. The term "Period of Contract
Employment," as used in this Agreement, means the period beginning on March 1,
2003 and ending on the earlier of February 28, 2004 or, subject to the terms
hereof, upon termination of the Executive's employment with the Company.
4. MONTHLY BASE SALARY. During the Period of Contract Employment, the
Company agrees to pay the Executive a base salary (the "Base Salary") in the
monthly amount of Thirty Thousand Dollars ($30,000). The Base Salary shall be
payable as current salary, in installments (not less frequently than monthly)
subject to all applicable withholding and deductions, in accordance with the
Company's customary payroll practices.
5. BONUS COMPENSATION. During the Period of Contract Employment, the
Executive shall be eligible to receive a target bonus compensation ("Bonus
Compensation") of up to fifty percent (50%) of Base Salary. Bonus Compensation
shall be based upon the performance of both the Executive and the Company of
goals to be established by the Chief Executive Officer of the Company, in
consultation with the Executive, within three (3) months of the Executive's
commencement of employment. Fifty percent (50%) of the Bonus Compensation shall
be guaranteed and shall be payable as current salary, in installments (not less
frequently than monthly) subject to all applicable withholding and deductions,
in accordance with the Company's customary payroll practices. The remainder of
the Bonus Compensation, which is in the discretion of the Company, shall be
payable promptly after February 28, 2004 in one lump sum, subject to all
applicable withholding and deductions, in accordance with the Company's
customary payroll and bonus payment practices.
6. BENEFITS. During the Period of Contract Employment, and in the event
of a termination under Section 7(a) or 7(d) of this Agreement during the
Severance Period (as defined below), as applicable, the Executive shall be
entitled to participate in or receive benefits and perquisites equivalent to any
employee benefit plan or other arrangement, including but not limited to any
medical, dental, retirement, disability, life insurance, sick leave and vacation
plans or arrangements, and expense reimbursement policies generally made
available by the Company to its employees having a title and position equivalent
to Executive's, subject to or on a basis consistent with the terms, conditions
and overall administration of such plans or arrangements; PROVIDED, that such
plans and arrangements are made available at the discretion of the Company and
nothing in this Agreement establishes any right of the Executive to the
availability or continuance of any such plan or arrangement. The Company shall
reimburse the Executive for up to two thousand dollars ($2,000) in attorneys'
fees expended in the negotiation of this Agreement. To the extent permitted by
law, Executive shall receive service credit for his prior employment with the
Company for purposes of future vesting or accrual of benefits. Executive shall
accrue vacation at the rate of three weeks per year. Executive shall be
indemnified by the Company in accordance with the Company's Bylaws, as amended
from time to time, and the parties will execute an indemnification agreement, a
copy of which is appended to this Agreement.
7. TERMINATION. The following termination provisions and benefits are
in lieu of the benefits available under the Company's written policies and
procedures, as amended, and the Company's Executive Change of Control Plan, as
amended, and the Company's Executive Incentive Bonus and Severance Plan, as
amended. Executive agrees that his termination provisions and benefits shall not
be governed by such policies and plans.
(a) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment under this Agreement without Cause at
any time by giving written notice to the Executive. Such termination will
become effective upon the date specified in such notice (the "Effective
Date"), provided that such date is at least sixty (60) days after the date
of such notice. Upon any such termination, the Company will pay the
Executive, within five days of the Effective Date of termination and
subject to the Executive's execution and delivery of such documents of
mutual release as the parties may reasonably request: (i) all earned but
unpaid Base Salary, guaranteed Bonus Compensation and any unused but
accrued vacation through the Effective Date, payable in a lump sum within
five (5) days after the Effective Date; and (ii) all Base Salary payable
in accordance with the Company's customary payroll practices, and benefits
for a period (the "Severance Period") of either four (4) months following
the Effective Date or through the end of the Period of Contract
Employment, whichever period is shorter (the "Severance Benefit"). The
Severance Benefit shall not be reduced in the event Executive obtains
other employment or consulting work.
(b) TERMINATION BY THE COMPANY FOR CAUSE. The Company may
immediately terminate the Executive's employment at any time for Cause by
giving written notice to the Executive. Upon any such termination for
Cause, the Executive shall have no right to compensation under Section
7(a)(ii), including, without limitation, and except as required by law, to
participate in any employee benefit programs under Section 6 for any
period subsequent to the date of termination. For purposes of this Section
7(b), "Cause" shall
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mean: (i) the Executive is convicted of or pleads guilty or nolo
contendere to a felony; (ii) the Executive, in carrying out his duties
hereunder, commits acts involving dishonesty or fraud or is guilty of
gross negligence or willful misconduct; or (iii) the Executive refuses to
comply with any lawful directive of the Board that is commensurate with
the Executive's titles within 15 days after written notice has been given
to the Executive by the Company.
(c) DEATH OR DISABILITY. This Agreement and the obligations of the
Company hereunder will, upon the Company's election in writing to the
Executive within thirty (30) days thereafter, terminate upon the death or
disability of the Executive. For purposes of this Section 7(c),
"disability" shall mean that for a period of more than three (3) months
the Executive is unable to perform the essential functions of his duties
because of physical, mental or emotional incapacity resulting from injury,
sickness or disease.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
may terminate his employment under this Agreement at any time for Good
Reason by giving sixty (60) days written notice to the Company. For
purposes of this Section 7(d), "Good Reason" shall mean: (i) there is a
Change of Control as defined in the Company's 2000 Stock Option Plan; (ii)
the Executive's principal place of employment is moved to a location other
than in the Chicago, Illinois metropolitan area; (iii) the Executive
suffers a reduction in title or is required to report to other than one of
the following: the Chief Executive Officer of the Company, the Chairman of
the Board of Directors of the Company or the Board of Directors of the
Company or one of its committees; or (iv) a material breach of the
Agreement by the Company that is not cured fifteen (15) days after written
notice of the breach has been given to the Company by the Executive. In
the event of such a termination, the Executive shall be entitled to the
Severance Benefit set forth in Section 7(a) and benefits set forth in
Section 6 during the Severance Period.
(e) TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The
Executive may terminate his employment under this Agreement at any time by
giving written notice to the Company. Such termination will become
effective upon the date specified in such notice, provided that such date
is at least sixty (60) days after the date of delivery of the notice. Upon
any such termination, the Company shall be relieved of all of its
obligations under this Agreement, except for payment of Base Salary and
guaranteed Bonus Compensation and the provision of benefits through the
effective date of termination.
8. Non-Competition; Non-Solicitation
(a) Executive hereby agrees and covenants that during the period
of Executive's employment with the Company, Executive will not directly or
indirectly engage in or become interested (whether as an owner, principal,
agent, stockholder, member, partner, trustee, venturer, lender or other
investor, director, officer, employee, consultant or through the agency of
any corporation, limited liability company, partnership, association or
agent or otherwise) in any business or enterprise that shall, at the time,
be in whole or in substantial part competitive with any material part of
the business conducted by the Company (a "Competitor")
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(which, for purposes of this SECTION 8 shall include the Company's subsidiaries
and affiliates) during the period of Executive's employment with the Company
(except that ownership of not more than 1% of the outstanding securities of any
class of any entity that is listed on a national securities exchange or traded
in the over-the-counter market shall not be considered a breach of this SECTION
8(A)). The Company acknowledges that Executive is a principal of Joplin
Advisors, Inc. ("Joplin"), a management consulting firm. While Executive will
work full time for the Company during the Period of Contract Employment, it is
acknowledged that Executive may need to address certain issues in respect of
Joplin from time to time, provided that (i) it does not interfere with his
duties and responsibilities for the Company and (ii) neither Executive nor
Joplin will engage in any activities on behalf of a Competitor.
(b) Executive agrees and covenants that for the period commencing on the
date hereof and ending six (6) months following the termination of Executive's
employment with the Company (the "LIMITED Period"), Executive will not (without
first obtaining the written permission of the Company) directly or indirectly
divert or attempt to divert from the Company any business of any kind in which
the Company or its subsidiaries or affiliates is engaged.
(c) Executive agrees and covenants that for the Limited Period,
Executive will not (without first obtaining the written permission of the
Company) for himself or any third party, directly or indirectly, recruit for
employment, or induce or seek to cause such person to terminate his or her
employment or association with the Company, any person who then is an employee,
consultant or independent contractor salesperson of the Company, except Xxx
Xxxxx, Xxxxxx XxXxxx, Xxxxxx Xxxxxxx or Xx Xxxxxxx.
9. CONFIDENTIALITY. The Executive hereby covenants and agrees, for a
period of five (5) years from the date hereof (the "Restricted Period"), he will
not, directly or indirectly, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means or any other
confidential information concerning the business or policies of the Company or
any subsidiary thereof. The Executive's obligations shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his receipt of such information from the Company
or any of its subsidiaries, as evidenced by the Executive's written records; or
(iv) is disclosed to the Executive by a third party not under an obligation of
confidence to the Company.
10. SEVERABILITY, ENFORCEABILITY. In the event that the provisions of
the Section captioned "Non-Competition; Non-Solicitation" or "Confidentiality",
or any portion thereof, should ever be adjudicated by a court of competent
jurisdiction in proceedings to which the Company is a proper party to exceed the
time or geographic or other limitations permitted by applicable law, then such
provisions will be deemed reformed to the maximum time or other limitations
permitted by applicable law, as determined by such court in such action, the
parties hereby acknowledging their desire that in such event such action be
taken. Without limiting the foregoing, the covenants contained herein will be
construed as separate covenants covering their respective subject matters,
including, without limitation, with respect to (a) each business now conducted
by the Company or its successors, and (b) the Company and its successors
separately. In addition to the above, all provisions of this Agreements are
severable, and the invalidity or unenforceability of any provision or provisions
of this Agreement or portions or aspects thereof
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will not affect the validity or enforceability of any other provision, or
portion of this Agreement, which will remain in full force and effect as if
executed with the unenforceable or invalid provision or portion or aspect
thereof modified, as set forth above.
11. GOVERNING LAW. This Agreement is being made and executed in and is
intended to be performed in the State of Illinois and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Illinois, without regard to the conflict of laws principles
thereof.
12. ENTIRE AGREEMENT. This Agreement comprises the entire agreement
between the parties hereto relating to the subject matter hereof and, as of the
date hereof, supersede, cancel and annul all previous employment agreements
between the Company (and/or its predecessors) and the Executive, as the same may
have been amended or modified, and any right of the Executive thereunder other
than for compensation accrued thereunder as of the date hereof, and supersede,
cancel and annul all other prior written and oral agreements between the
Executive and the Company or any predecessor to the Company. The terms of this
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and may
not be contradicted by evidence of any prior or contemporaneous agreement.
13. DISPUTES. Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall be finally determined and
settled by arbitration. Arbitration shall be initiated by one party making
written demand upon the other party and simultaneously filing the demand
together with required fees in the office of the American Arbitration
Association in Chicago, Illinois. The arbitration proceeding shall be conducted
in Chicago, Illinois by a single arbitrator in accordance with the Expedited
Procedures of the Employment Dispute Resolution Rules required by the
arbitrator, the parties shall have no obligation to comply with discovery
requests made in the arbitration proceeding. The arbitration award shall be a
final and binding determination of the dispute and shall be fully enforceable as
an arbitration award in any court having jurisdiction and venue over such
parties. Attorneys fees and costs shall be awarded to the prevailing party, as
determined by the arbitrator.
14. NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party will be effective upon receipt (or refusal
of receipt) and will be in writing and delivered personally or sent by telecopy
or certified or registered mail, postage prepaid, as follows: if to the Company,
addressed to the attention of its General Counsel at 0000 Xxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000; and if to the Executive, at:
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Either party may change the notice address by notifying the other party in
writing.
15. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, approved by the Board and signed
by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or
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the Company may waive compliance by the other party with any provision of this
Agreement that such other party was or is obligated to comply with or perform;
provided, that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure. No failure to exercise and no delay
in exercising any right, remedy or power hereunder shall preclude any other or
further exercise of any other right, remedy or power provided herein or by law
or in equity.
16. Executive acknowledges that the services to be rendered by Executive
are unique and personal and Executive may not assign his rights or delegate his
duties or obligations under this Agreement without the prior approval of the
Company. The rights and obligations of the Company under this Agreement shall
inure and be binding upon its legal representatives, successors and assigns,
including without limitation, successors by merger, sale of assets or otherwise,
provided however that an assignment to a shell company without a reasonable
amount of assets is not permitted.
17. The obligations of the parties shall survive the termination of this
Agreement to the extent necessary to carry out the intent of the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XXXXX & XXXXX COMPANY
By:
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Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx
Chief Executive Officer and President
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