EMPLOYMENT CONTRACT
This Agreement made this 11th day of May,1999, between
TRIPLE S PLASTICS, INC. (hereinafter referred to as "Corporation"),
and XXXXXX XXXXXXXXX XXXXXXX (hereinafter referred to as "Xxxxxxx").
WHEREAS, Xxxxxxx is an important and valuable executive with
recognized leadership and experience; and
WHEREAS, the Corporation deems it in its best interest to secure
the services of Xxxxxxx as a director and officer of the Corporation; and
WHEREAS, the Corporation, as an incentive to Xxxxxxx to accept and
continue employment with the Corporation, is willing to offer Xxxxxxx the
opportunity to increase his proprietary interest in the Corporation.
THEREFORE, in consideration of the promises and mutual agreements
hereafter contained and for other good and valuable consideration, it is
agreed as follows:
1. Employment. The Corporation shall employ, and Xxxxxxx shall
serve as the Chief Executive Officer of the Corporation, upon the terms
and conditions set forth below.
2. Term. The employment of Xxxxxxx shall be for five (5) years
commencing on the date hereof.
3. Duties and Location. Xxxxxxx shall serve the Corporation as one
of its Directors and its Chief Executive Officer and shall faithfully, and
to the best of his ability under the direction of the Board of Directors of
the Corporation, devote his entire time (except as set forth in paragraph 19
below), energy, and skill during regular business hours of such employment
and shall perform the duties that are customarily performed by a Chief
Executive Officer and shall, from time to time, perform such other services
as the Board of Directors shall reasonably require. It is understood that
Xxxxxxx shall be responsible and report directly to the Board and to no other
individual or officer(s) in the Corporation. The Corporation shall provide
adequate and appropriate office space at its corporate headquarters for Xxxxxxx
to perform the duties of his position in Kalamazoo County, Michigan. Xxxxxxx
shall not be required to relocate to any other location.
4. Compensation. The Corporation shall pay Xxxxxxx for the term of his
employment hereunder, as base annual salary, the sum of Two Hundred Fifty
Thousand Dollars ($250,000) per annum (or such higher amount as may be agreed
to by Xxxxxxx and the Corporation), paid in equal bi-weekly installments in
accordance with the general practice of the Corporation. The salary may be
increased annually in an amount to be determined by the Board of Directors.
The Corporation will establish a "Salary Reduction Deferred Compensation Plan"
for the benefit of Xxxxxxx as described in paragraph 6(I).
5. Expenses. The Corporation shall reimburse Xxxxxxx (upon submission of
appropriate expense vouchers) for all out-of-pocket expenses for travel, meals,
hotel accommodations, entertainment, and the like incurred by him in the
interest of the Corporation's business, and which are deemed reasonable in
accordance with Corporation's policies and practices.
6. Benefits. When this Agreement is in effect and during any severance
period, Xxxxxxx shall receive the fringe benefits detailed below and any other
benefits or perquisites provided to or available to any other executive
officer(s) of the Corporation. In no event shall the level of fringe benefits
be decreased, except in the situation where standardized fringe benefits for
executive officers of the Corporation are decreased for all such officers.
Those benefits shall include:
A. Participation in Corporation's health, hospitalization, and
medical insurance program for Xxxxxxx, his spouse, and legal
dependents, subject to and in accordance with applicable laws;
B. Participation in any Corporation retirement and/or pension program
applicable to Corporation's executive officers;
C. Long term and short term disability insurance at levels applicable
to Corporation's executive officers, fully paid by the Corporation;
D. Four (4) weeks annual paid vacation, plus such paid holidays as are
provided to all executive and management personnel;
E. A dental insurance plan covering Xxxxxxx, his spouse, and legal
dependents;
F. All membership dues, initiation fees, and other dues and fees in
connection with Xxxxxxx'x membership in the Kalamazoo Country Club
and the Beacon Club. In addition, the Corporation shall reimburse
Xxxxxxx for all reasonable entertainment expenses and costs Xxxxxxx
incurs for the benefit of the Corporation, in accordance with
Corporation's policies and practices;
G. Life insurance in the amount of $2,000,000.00 or such lesser amount
as can be purchased by Corporation at an annual premium not to
exceed $6.000.00; the beneficiary of such insurance shall be
designated by Xxxxxxx;
H. Participation in Corporation's Share the Success Plan, an incentive
compensation plan which is currently being designed and is scheduled
for implementation within ninety (90) days of the date hereof; and
I. The Corporation will establish a nonqualified Salary-Reduction
Deferred Compensation Plan which will allow Xxxxxxx to annually
determine and direct a portion of his base salary for deposit into
the Plan trust. In addition, Corporation shall contribute annually
to such Plan trust an amount equal to the difference between
Twenty-Five Thousand and no/100 ($25,000.00) and Corporation's
annual matching contribution to Xxxxxxx'x account under
Corporation's 401(k) Deferred Compensation Plan. The Plan shall be
on terms and conditions acceptable to Xxxxxxx, but shall include,
at a minimum the creation of an irrevocable "Rabbi" trust by the
Corporation, subject to the claims of the general creditors of the
Corporation. The Plan will further provide that the principal and
interest of all sums in the Plan would become immediately due and
payable to Xxxxxxx if his employment is terminated for any reason
as described in paragraphs 11(A) through 11(E), of if there is a
sale of all, or substantially all, of the Corporation's assets, a
controlling interest in the common shares, a merger, consolidation,
reorganization, or dissolution of the Corporation.
J. All membership and professional dues in the AICPA, MACPA, and one
airline club.
K. An automobile allowance of seven hundred dollars ($700.00) per
month.
7. Covenant Not to Compete. During the term of Xxxxxxx'x employment and
for a period of 2 years following the effective date of his separation from
employment with Corporation, Xxxxxxx agrees that he will not, directly or
indirectly, own, manage, operate, join, control or participate in the ownership,
management, operation or control of, be employed by or be connected in any
manner with any person or entity engaged in the custom injection molding
business or any other business in which Corporation, its divisions or
subsidiaries are engaged at the time of Xxxxxxx'x separation from employment
with Corporation. This Covenant not to Compete shall apply within the
geographic areas consisting of both the entire states in which Corporation,
its divisions or subsidiaries have a manufacturing facility, and a 200-mile
radius from any of Corporation's physical facilities at the time of Xxxxxxx'x
separation from employment with Corporation.
8. Non-Solicitation of Customers. During the term of Xxxxxxx'x employment
and for a period of two (2) year following the effective date of his separation
from employment with Corporation, Xxxxxxx shall not, directly or indirectly,
solicit, contact, accept or otherwise attempt to establish for himself or
any other person, firm or entity any business relationship of a nature that
is competitive with the business or relationship of Corporation with any person,
firm or entity which was a customer of Corporation or was involved in actual
negotiations with Corporation over formation of a customer-supplier
relationship at any time during the twelve (12) months prior to Xxxxxxx'x
separation regardless of whether he had any contact with said customer.
9. Non-Solicitation of Corporation's Employees. Xxxxxxx agrees he will
not, either during his employment or during the two (2) year period thereafter,
solicit or attempt to solicit any employees of Corporation to leave
Corporation's employ, and he will not employ or contract with any employee of
Corporation except as such employee may be acting as a representative of
Corporation with Corporation's express authority.
10. Confidentiality Agreement. Xxxxxxx will not directly or indirectly
use for his personal benefit or disclose to any person (whether such person
is employed by the Corporation or not), without the prior written permission
of an officer of the Corporation, at any time during or subsequent to Xxxxxxx'x
employment with the Corporation, any knowledge or information concerning its
inventions, processes, customers, suppliers, pricing or any other business
affairs, which was acquired during the period of Xxxxxxx'x employment by the
Corporation or his services as Director of the Corporation. Such knowledge and
information shall include, without limitation, all matters:
(a) of a technical nature such as but not limited to methods, know-how,
formulae, compositions, processes, discoveries, machines,
inventions, research projects, computer programs and similar
items;
(b) of a business nature such as, but not limited to, information
about selling prices, cost, purchasing, profits, market, sales or
lists of customers, customer names, and suppliers.
11. Remedies. Based upon previous service to Corporation as a Director,
Xxxxxxx acknowledges that the restrictions contained in paragraphs 7, 8, 9
and 10 are reasonable and necessary to protect the business and interests of
Corporation and that any violation of these restrictions will cause substantial
and irreparable injury to Corporation. Xxxxxxx agrees that Corporation is
entitled, in addition to any other appropriate remedies, to preliminary and
permanent injunctive relieve to secure specific performance, and to prevent a
contemplated breach of this Agreement.
12. Termination of Employment. Xxxxxxx'x employment may be terminated
upon the occurrence of any of the following:
A. His death;
B. At Xxxxxxx'x option at any time upon twelve (12) months prior
written notice to the Corporation;
C. If Xxxxxxx is unable to perform the services hereunder for a
continuous period of six (6) months by reason of his physical or
mental illness or incapacity. If there is any dispute as to whether
Xxxxxxx is or was physically or mentally unable to perform his
duties under this Agreement, such question shall be submitted
to a licensed physician agreed upon by the Corporation and
Xxxxxxx or his authorized representative or, if the parties are
unable to agree, appointed by the Corporation's physician and
Xxxxxxx'x family physician. Xxxxxxx shall submit to such
examination as such physician may request and such physician's
determination of physical and mental condition shall be binding
and conclusive on the parties;
D. At any time by the Corporation for cause, which cause shall include
and be limited to, theft, conviction of a felony, fraudulent
misconduct, gross dereliction of duty on the part of Xxxxxxx, and
any material breach of this Agreement which, after ninety (90) days
from Corporation's written notice to Xxxxxxx of such breach,
remains unremedied; or
E. At the option of the Board of Directors at any time without cause
upon written notice to Xxxxxxx.
An additional condition of Xxxxxxx'x employment under this Agreement is his
receipt of a proxy from Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxxx, Xx. to vote
their shares of Company stock for Xxxxxxx as a Director of the Corporation as
long as he serves as its CEO. In the absence of such proxy, Xxxxxxx may
terminate his employment under this Agreement and such termination shall be
treated as pursuant to paragraph 11E., above.
13. Compensation Upon Termination.
A. If Xxxxxxx'x employment is terminated pursuant to paragraph 11(E),
he shall be entitled to continue to receive his base salary,
bonuses, incentive compensation and fringe benefits during the
"severance" period. Prior to the second anniversary date of this
Agreement, the severance period shall be that period between the
effective date of termination and the third anniversary date of this
Agreement. Following the second anniversary date of this Agreement,
the severance period shall be twelve months from the effective date
of termination, but shall in no event extend past the Agreement's
expiration date. In fulfilling its severance obligations under this
paragraph, Corporation shall be entitled to a setoff for Xxxxxxx'x
interim earnings from all other employment during the severance
period. During any severance period, Xxxxxxx shall not be obligated
to perform any services for the Corporation, but shall be required
to lend Corporation all requested reasonable assistance on any
matter relevant to Xxxxxxx'x employment or service as a Director
with the Corporation.
B. If Xxxxxxx'x employment is terminated for cause pursuant to
paragraph 11(D) or voluntarily terminates pursuant to paragraph
11(B), the Corporation shall pay him his base salary up to and
including the date of termination and have no further obligation
to Xxxxxxx. If Xxxxxxx'x employment is terminated pursuant to
either paragraph 11 A or paragraph 11 C, Xxxxxxx'x legal repre-
sentative or guardian shall be entitled to receive any base salary
installments, prorated bonuses and incentive compensation, and
other benefits accrued, due and earned, up to and including the
date of death or termination due to disability only.
14. Outside Directorships. Xxxxxxx may serve as an outside director on a
maximum of three (3) boards of directors without violating the terms of
paragraph 3; PROVIDED the directorships are disclosed to the Board of Directors
of the Corporation and provided, further, that such service does not constitute
a conflict of interest or otherwise materially detract from Xxxxxxx'x
fulfillment of obligations under this Agreement. In the event Corporation's
Board of Directors determines Xxxxxxx'x service as an outside director fails
to satisfy any of the provisions in this paragraph, it shall notify Xxxxxxx of
the issue and its determination in writing, and Xxxxxxx shall thereafter have
ninety (90) days to remedy the issue. It is understood that service on the
boards of affiliated or related entities shall constitute service on only one
board of directors for purposes of this provision. This provision shall in
no way limit Xxxxxxx from serving as a director of any non-profit or charitable
organizations.
15. Modifications. This Agreement may not be waived, modified, amended,
changed, supplemented nor may any rights hereunder be waived, except by written
instrument signed by both parties.
16. Governing Law And Choice of Forum. This Agreement shall be construed
and interpreted under and in accordance with laws of the State of Michigan.
17. Waiver. The waiver by either party of a violation of any provision
of this agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach of the same or other provisions hereof.
18. Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to persons or circumstances, other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.
19. Headings. Headings, in this agreement, are provided solely for the
convenience of the parties and shall not be used to interpret or construe its
provisions.
20. Notices. Any notice, demand, or communication required, permitted,
or desired to be given hereunder, shall be deemed effectively given when
personally delivered or mailed by prepaid, certified mail, return receipt
requested, addressed as follows:
Triple S Plastics, Inc.
00000 Xxxxxxx Xx.
Xxxxxxxxx, Xxxxxxxx 00000
A. Xxxxxxxxx Xxxxxxx
0000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Or such other address, and to the attention of such other persons or officers
as either party may designate by advance written notice.
21. Drafting. This Agreement has been executed after negotiation and
the opportunity by both parties to have this Agreement reviewed and revised by
legal counsel of their choice. None of the provisions of this Agreement shall
be interpreted or construed against a party hereto solely by virtue of the fact
that any such provision shall have been drafted by legal counsel representing
such party.
22. Xxxxxxx'x Attorney's Fees. The Corporation shall reimburse Xxxxxxx
for the reasonable attorney's fees he incurs in the drafting, negotiation and
finalization of this Agreement in a maximum amount of five thousand dollars
($5,000.00).
23. Arbitration. With the specific exclusion of disputes arising out of
paragraph 7. Covenant Not to Compete, 8. Non-Solicitation of Customers, 9.
Non-Solicitation of Corporation's Employees and 10. Confidentiality Agreement,
the sole and exclusive method for resolving any dispute arising out of this
Agreement (or relating to the Employment or any termination of the Employment
occurring during the term of this Agreement) shall be arbitrated in accordance
with this paragraph. A party wishing to invoke arbitration of an issue will
deliver written notice to the other party, including a description of the issue
to be arbitrated not more than one hundred (180) days after the alleged
breach occurred. Thereafter, the parties or their representatives shall meet
promptly and attempt to select a mutually acceptable arbitrator, using whatever
means and resources available to them. If the parties fail to agree upon
an arbitrator within thirty days (30) or such longer period as they expressly
agree upon, the matter shall be submitted to arbitration pursuant to the
Employment Dispute Resolution Rules of the American Arbitration Association.
The arbitration hearing shall take place in Kalamazoo, Michigan absent the
parties' agreement to another acceptable location. The fees and expenses of the
arbitrator(s), any filing fees or other American Arbitration Association fees,
shall be paid one-half by each party. The arbitrator(s) shall award costs
and expenses, including reasonable attorney fees, to the prevailing party; if
neither party prevails on all issues, the arbitrator(s) shall allocate costs
and expenses in the arbitrator's discretion based on the extent to which each
party has prevailed. The decision of the Arbitrator(s) will be final and
binding on the parties and there shall be no appeal therefrom. Judgment may
be entered on the arbitrators' award in any court having jurisdiction.
24. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, personal
representatives, successors, and assigns. As used herein, the successor of
the Corporation shall include, but not be limited to, any successor by way of
merger, consolidation, sale of all or substantially all of its assets, change
of control, or similar reorganization. Notwithstanding the assignment of this
Agreement by the Corporation, the Corporation agrees that it shall not be
released from its obligations hereunder. Xxxxxxx acknowledges that services
to be rendered by him are unique and personal. Accordingly, in no event may
Xxxxxxx assign any of his rights or delegate any of his duties or obligations
under this Agreement. However, if Xxxxxxx should die while any amounts are
due and owing hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his estate.
IN WITNESS WHEREOF, this Agreement has been executed the day and
year first above written.
TRIPLE S PLASTICS, INC.
DATED: May 11, 1999 /s/ Xxxxxx X. Xxxxxxxxx, Xx.
By: Xxxxxx X. Xxxxxxxxx, Xx.
Its: President
DATED: May 11, 1999 /s/ Xxxxxx Xxxxxxxxx Xxxxxxx
XXXXXX XXXXXXXXX XXXXXXX
