OFFICER EMPLOYMENT AGREEMENT
Exhibit 10.10
This Officer Employment
Agreement (the "Agreement") is made and entered into to become effective as of
the 1st day of October, 2003, by and between WEBCO INDUSTRIES, INC., an Oklahoma
corporation (hereinafter called the "Company"), and F. XXXXXXX XXXXX
(hereinafter called "Officer") and incorporates by reference the Amendment
(dated December 3, 1998 and modified February 27, 2003) to the Officer Employment
Agreement dated December 31, 1996.
Recitals:
Officer has served as the Company's Chief Executive Officer since the inception of the
Company's business. Officer and the Company desire to enter into this Agreement to state
the terms and conditions of Officer's employment by the Company.
NOW THEREFORE, in consideration of the mutual covenants and promises herein and intending
to be legally bound, Officer and the Company agree as follows:
1. EMPLOYMENT OF OFFICER. The Company employs Officer to serve in the capacities of the
Company's Chairman of the Board of Directors ("Board") and Chief Executive
Officer. Officer accepts his employment by the Company in the capacities stated and no
others.
2. DUTIES. The Company and Officer recognize that it is not feasible to specify in detail
all of the duties of Officer in his capacities as Chairman of the Board and Chief
Executive Officer. In general terms, Officer will perform those duties which are
commensurate and consistent with these positions as may reasonably be assigned to Officer
by the Board. Officer shall report to the Board and shall not have reporting
responsibilities to any other person. Without limiting the generality of the foregoing,
Officer shall attend and be entitled to participate in all meetings of the Company's Board
and stockholders.
3. TERM. The term of this Agreement shall commence on October 1, 2003 and shall terminate
on September 30, 2006 or earlier upon the occurrence of any of the following (herein
called "Termination Events"):
(a) The mutual agreement of the parties;
(b) The voluntary resignation by Officer;
(c) Officer's death;
(d) Officer's "retirement", or "permanent disability";
(e) The involuntary termination of Officer by the Company other than for
"Cause"; or
(f) The involuntary termination of Officer by the Company for "Cause".
4. COMPENSATION. During the term of this agreement, the Company agrees to pay Officer a
base compensation ("Base Compensation") as recommended by the Compensation
Committee and approved by the Board of the Company, payable in biweekly installments and
subject to federal and state withholding deductions required by law. Officer's Base
Compensation may be increased from time to time by action of the Compensation Committee,
but Officer's Base Compensation shall not be decreased below Officer's then current Base
Compensation without Officer's consent. This paragraph shall not exclude Officer from
receiving bonus compensation provided by the Company's Compensation Committee or Board,
either for Officer individually or as a participant in a bonus pool. Additionally, this
paragraph shall not exclude Officer from receiving stock grants, stock options or
participating in any other employee benefit plan involving the Company's stock, as
determined by the Company's Compensation Committee or by the Board.
5. EXPENSE REIMBURSEMENT. The Company will reimburse Officer for all out-of-pocket
expenses incurred by Officer in the performance of Officer's service for the Company. The
Company recognizes that Officer's participation in professional societies and civic
organizations will enhance Officer's capabilities and the image of the Company in the
local community. Accordingly, as a part of Officer's duties, the Company expects Officer
to participate in professional society activities and civic club activities. The Company
will reimburse Officer for professional society and civic club dues and will provide
Officer with reasonable time off with pay to attend professional and civic club meetings.
6. FRINGE BENEFITS. The Company will provide Officer with the following "fringe
benefits":
(a) Vacation. Thirty (30) days per calendar year with full salary. Unused vacation days in
any calendar year may not be carried over and used in any subsequent calendar year.
(b) Physical Examination. An annual complete physical examination by a physician of
Officer's selection.
(c) Medical Insurance. Medical insurance for Officer and Officer's dependents with
deductible and co-payment provisions that are consistent with the Company's general
Medical Insurance Plan.
(d) Club Dues. Reimbursement for country club, Summit Club and Admirals Club (or other
comparable clubs) memberships and dues.
(e) Automobile. The use of an automobile appropriate to Officer's position.
The foregoing shall not be exclusive and Officer shall be entitled to participate in all
other employee benefits, which the Company extends to executive officer employees of the
Company generally or to Officer individually.
7. TERMINATION BY MUTUAL AGREEMENT OR VOLUNTARY RESIGNATION BY OFFICER. In the event
Officer's employment with the Company terminates by mutual agreement of the Company and
Officer or Officer voluntarily resigns from the employment of the Company, this Agreement
will terminate effective upon the date of Officer's termination of employment and Officer
shall be entitled to receive his Base Compensation as then in effect and all other amounts
due Officer under this Agreement through the date of such termination. In addition, but
without duplication, Officer will be entitled to the standard benefits available to any
employee who voluntarily terminates his or her employment with the Company as well as any
other compensation and benefits as may be mutually agreed to in writing and approved by
the Compensation Committee of the Board.
8. TERMINATION IN THE EVENT OF DEATH. In the event Officer's employment with the Company
terminates by reason of the death of Officer, this Agreement will terminate effective upon
the date of Officer's death and the legal representative or beneficiary of Officer shall
be entitled to receive all accrued benefits under this Agreement through the date of
Officer's death. In addition, if officer is still employed by the Company at the time of
his death, the legal representative or beneficiary of Officer shall be entitled to receive
a lump sum equal to $225,000 less any amounts paid under any life insurance carried by the
Company to Officer upon his death. All payments under this Section 8 shall be paid to
Officer's estate or Officer's designated beneficiary within thirty days (30) of notice to
the Company of Officer's death.
9. TERMINATION DUE TO OFFICER'S RETIREMENT OR PERMANENT DISABILITY. In the event Officer's
employment with the Company terminates by reason of "retirement" of Officer or
the "permanent disability" of Officer, this Agreement will terminate effective
upon the date of such termination and Officer will be entitled to the following; provided
that, Officer does not become an employee or consultant for any competitors of the Company
during the respective period set forth below:
(a) Officer will receive non-discretionary bonuses for the 2 years immediately following
his termination (inclusive of the bonus payable for the year in which such termination
occurred) as if Officer was still employed by the Company.
(b) The Company will make one month's Cobra payment (or otherwise provide comparable
insurance) on behalf of the Officer for each year Officer was employed by the Company in
any capacity.
(c) Officer will receive his Base Compensation and other benefits under this Agreement for
the first six (6) months of such disability.
(d) For purposes of this Agreement, the term "retirement" shall mean as such
term is defined in the Company's policies and procedures from time to time in effect, or
if no such policies and procedures are in effect, as such term is defined in the Social
Security Act of 1935, as amended. The term "permanent disability" shall mean the
inability of Officer to perform his duties under this Agreement due to physical or mental
incapacity for a period of six (6) consecutive months or for a period of eight (8) months
during any twelve consecutive month period.
10. INVOLUNTARY TERMINATION OF OFFICER OTHER THAN FOR CAUSE. In the event Officer's
employment with the Company is terminated by the Company without "Cause" (as
such term is defined below), this Agreement will terminate effective upon the date of such
termination and Officer will be entitled to the following as long as Officer does not
become an employee or consultant for any of the Company's competitors during the
respective period:
(a) Officer (or his designated beneficiary) will continue to receive his Base Compensation
as in effect at the time of such termination for a period of twelve (12) months following
such termination.
(b) Officer will receive non-discretionary bonuses for the 2 years immediately following
his termination (inclusive of the bonus payable for the year in which such termination
occurred) as if he was still employed by the Company.
(c) The Company will provide one month's insurance, through Cobra or other comparable
insurance, on behalf of Officer for each year Officer was employed by the Company in any
capacity.
11. TERMINATION FOR CAUSE. The Company may terminate Officer's employment with the Company
for Cause. In the event Officer's employment with the Company is terminated by the Company
for "Cause", this Agreement will terminate effective upon such termination for
Cause and Officer shall not be entitled to any of the benefits of this Agreement through
the date of such termination or otherwise. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Officer's employment only on the basis of:
(a) Officer's willful and continued failure to substantially perform his duties with the
Company (other than any such failure resulting from his incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered to Officer
by the Company's Board which specifically identifies the manner in which such Board
believes that Officer has not substantially performed his duties; or
(b) Officer's willful engagement in conduct materially and demonstrably injurious to the
Company.
For purposes of this subsection, no act or failure to act on the Officer's part shall be
considered "willful" unless done, or omitted to be done, by Officer not in good
faith and without reasonable belief that his action or omission was in the best interest
of the Company. Officer shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to Officer a copy of a resolution duly adopted by
the affirmative vote of not less than two-thirds of the entire membership (excluding
Officer) of the Company's Board, at a meeting of the Board called and held for the
purpose, finding that in the good faith opinion of the Board Officer was guilty of conduct
set forth in subsection (a) or (b) of this Section and specifying the particulars thereof
in detail. If Officer believes that the Company does not have Cause to terminate Officer's
employment, Officer may request, by written notice to the Company given within thirty (30)
days from the date Officer received a copy of the resolution referred to above, that the
question of Cause to terminate Officer's employment be submitted to final and binding
arbitration under the Oklahoma Arbitration Act. Pending the arbitration decision, Officer
shall be entitled to receive all of Officer's benefits under this Agreement.
12. CHANGE IN CONTROL. The provisions of this paragraph will be "triggered" by a
"Change in Control" of the Company. For the purpose of this paragraph, a
"Change in Control" shall be deemed to have occurred if:
(a) There shall be consummated any consolidation, merger or sale of all or substantially
all of the assets and business of the Company following which the holders of the Company's
common stock immediately prior to such transaction own less than 80% of the combined
voting power of the surviving entity immediately after such transaction; or
(b) The shareholders of the Company shall approve any plan or proposal for the liquidation
or dissolution of the Company; or
(c) Any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), other than the Company,
the F. Xxxxxxx Xxxxx Family or any employee benefit plan sponsored by the Company, shall
become the beneficial owner directly or indirectly (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company representing either (i) 51% of the
Company's common stock or (ii) a greater percentage of the Company's common stock than the
aggregate percentage held or controlled by the F. Xxxxxxx Xxxxx Family.
(d) At any time during a period of two (2) consecutive years, individuals who, at the
beginning of such period constituted the Board of the Company, shall cease for any reason
to constitute at least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such (2) year period
was approved by a vote of at least two-thirds (2/3) of the directors then still in office
who were directors at the beginning of such two (2) year period.
For the purpose of this paragraph, the term, "F. Xxxxxxx Xxxxx Family" shall
mean, collectively, F. Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxxxx Xxxxx
Xxxxx, Xxxxxx Xxxxx, and the lineal descendants of the persons above named.
In the event of a Change of Control as above defined that is not the result of a mutual
consent with Officer, the Company or the entity surviving such transaction shall pay
Officer a lump sum payment equal to: (1) three (3) times Officer's "annual cash
compensation" from the Company; plus (2) such amount as is necessary so that such
payment is received net of any special or excise taxes imposed on the payment or on
Officer under the Internal Revenue Code of 1986, as amended, or any similar provision of a
subsequent revenue law. The term "annual cash compensation" shall mean the sum
of: (x) Officer's annual Base Salary in effect at the time of the Change of Control; and
(y) an amount equal to the highest annual bonus paid Officer in the three (3) calendar
years preceding the Change of Control. The Change of Control payment shall be made within
thirty (30) days after the Change of Control takes place, except that if Officer so elects
by notice to the Company within fifteen (15) days after the Change of Control event, in
lieu of the lump sum compensation payment, for a period of thirty-six (36) months from the
date of Change of Control, the Company shall pay Officer monthly an amount equal to
one-thirty-sixth (1/36) of the total amount which, payable over such period in
installments, would have compounded future value equal to the amount of the lump sum
compensation payment, based on the prime interest rate, plus four (4) percentage points,
of the Company's primary banking source at the date of the Change of Control.
13. SUCCESSOR TO THE COMPANY. Except in the event of a Change of Control, the Company will
require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Officer, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such succession or
assignment had taken place. Any failure of the Company to obtain such agreement prior to
effectiveness of any such succession or assignment shall be a material breach of this
Agreement and shall be deemed to be a Change of Control event.
14. NOTICES. All notices and other communications under this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (5) days after posting by
U.S. Mail, certified, return receipt requested, postage prepaid as follows:
IF TO COMPANY:
WEBCO INDUSTRIES, INC.
Attn: President
X.X. Xxx 000
Xxxx Xxxxxxx, XX. 00000
IF TO OFFICER:
F. XXXXXXX XXXXX
0000 X. Xxxxxxxxxxxx
Xxxxx, XX 00000
or such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective only upon
receipt.
15. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by Officer
and the Company. 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 of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. 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 set forth expressly in this Agreement.
16. VALIDITY. The invalidity or unenforceability of any provisions of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
17. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and
the same instrument.
18. LAWS GOVERNING. This Agreement has been entered into in the State of Oklahoma, and
shall be construed, interpreted and governed in accordance with the laws of the State of
Oklahoma without regard to the conflict of law provisions thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement to become effective as of the date first above written.
"OFFICER":
"COMPANY":
WEBCO INDUSTRIES, INC.
/s/ F. Xxxxxxx Xxxxx
By /s/ Xxxx Xxxxx
F. Xxxxxxx Xxxxx
Xxxx Xxxxx
Chairman of the Board,
Chairman, Compensation Committee
Chief Executive Officer
