1
Exhibit 10(h)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered
into this 4th day of March, 1997 by and between XXXX X. XXXXXX ("Executive") and
GST ACQUISITION CORP., a Delaware corporation. This Agreement shall only take
effect on the date of the closing (the "Closing") of the merger (the "Merger")
between GST Acquisition Corp. and Group. In this Agreement, the term "Group"
shall mean TELEX COMMUNICATIONS GROUP, INC., a Delaware corporation and the
surviving corporation of the Merger, the term the "Company" shall mean TELEX
COMMUNICATIONS, INC., a Delaware corporation and a wholly-owned subsidiary of
Group, and the term "Employer" shall mean collectively the Company and Group.
1. Employment.
For the period set forth in paragraph 2 below (the Period of
Employment), and upon the other terms and conditions set forth in this
Agreement: (i) Group hereby employs Executive, and Executive hereby accepts
employment with Group, as Group's Vice President and Chief Financial Officer;
and (ii) the Company hereby employs Executive, and Executive hereby accepts
employment with the Company, as the Company's Vice President and Chief Financial
Officer.
2. Period of Employment.
The Period of Employment shall commence on the date of the
Closing and, subject only to the provisions of Paragraphs 9, 10, 11 and 12
below, shall continue until the close of business five (5) years from the date
of the Closing. If Executive's employment hereunder has not been previously
terminated prior to the expiration of the initial five-year Period of
Employment, this Agreement and the Period of Employment shall continue and
extend for successive annual periods and shall be subject to the terms and
conditions of this Agreement.
3. The Position.
During the Period of Employment Executive shall serve as an
executive officer of both the Company and Group, reporting directly to the
Chairman and Chief Executive Officer of the Company and Group, respectively, and
shall
2
have the duties and responsibilities appropriate to such offices.
4. Duties.
Throughout the Period of Employment, Executive agrees to
devote Executive's full time and undivided attention during normal business
hours to the business and affairs of Employer and, in particular, to performance
of all the duties and responsibilities as Vice President and Chief Financial
Officer of the Company and Vice President and Chief Financial Officer of Group,
except for reasonable vacations and except for illness; but nothing in this
Agreement shall preclude Executive from devoting reasonable periods required
for:
a. serving as a director, trustee, or member of a committee of
any organization involving no conflict of interest with the interests
of Employer or in direct competition with Employer;
b. delivering lectures, fulfilling speaking engagements,
teaching at educational institutions or business organizations;
c. engaging in charitable and community activities; and
d. managing Executive's personal investments;
provided that such activities do not, individually or together, interfere with
the regular performance of Executive's duties and responsibilities under this
Agreement and do not in any way conflict with Employer's interests.
5. Compensation.
a. For all services to be rendered by Executive pursuant to
this Agreement during the Period of Employment to the Company or Group:
i. Executive shall be paid as compensation a base annual
salary of $150,000 payable at the same intervals at which the Company's
executives are paid, but in no event less frequently than monthly, plus
any increase
2
3
in base salary as determined by the Board of Directors of the Company;
ii. Executive shall participate in a new Management Incentive
Compensation Plan to be approved by the Company's Board of Directors
immediately following the Closing, the terms of which shall be
substantially the same as the terms set forth in Schedule A;
iii. Executive shall be paid a special bonus of $11,333,
subject to adjustment as previously agreed by Executive, 30 days after
the Closing and on each of the next four (4) anniversaries of due date
of the initial payment, provided that on the date a payment is due,
Greenwich Street Capital Partners, Inc. or its Affiliates
(collectively, "GSCP") are in Control of Group and the Company and
there has not been an initial public offering of the Common Stock of
Group (the "Special Bonus"). "Affiliate" means an Affiliate as defined
in Section 19.1 of the Stockholders Agreement. "Control" of a
corporation means the direct or indirect ownership of 50% or more of
the voting power, and of a partnership or limited liability company
means the direct or indirect ownership of 50% or more of the combined
voting power of the company's outstanding voting securities.
iv. Executive shall participate in the Cash Bonus Program to
be approved by the Company's Board of Directors immediately following
the Closing, the terms of which shall be substantially the same as the
terms set forth in Schedule B.
b. Any increase in base salary or in annual incentive awards
or other compensation shall in no way diminish any other obligations of Employer
under this Agreement.
c. The compensation provided for in paragraph (a) above is in
addition to all other benefits, perquisites and other compensation provided for
in this Agreement.
3
4
6. Provisions for Perquisites.
During the Period of Employment, Executive shall be entitled
to perquisites including an appropriate office, secretarial and clerical staff,
and fringe benefits accorded generally to executive officers of Employer
pursuant to their policies, as well as to reimbursement, upon proper accounting,
of reasonable expenses and disbursements incurred by Executive in the course of
Executive's duties. In addition, Employer shall pay or provide the following:
a. Executive will be reimbursed for actual expenses incurred
by him in obtaining tax and investment assistance and advice, not to
exceed $2,000 in any calendar year during the Period of Employment.
b. During the Period of Employment, Executive shall be
entitled to four weeks' vacation per year. Executive may take such
vacation at such time so as not to interfere unreasonably with the
business of Employer. Annual unused vacation shall cumulate from year
to year.
7. Employment Benefit Plans.
a. Executive, Executive's dependents and beneficiaries,
including, without limitation, any beneficiary of a joint and survivor annuity
or other optional method of payment applicable to the payment of benefits under
the defined benefit or other pension plans of Employer, or any successor plans,
shall be entitled to all payments and benefits and service credit for benefits
during the Period of Employment to which officers of Employer, their dependents,
and beneficiaries are entitled as the result of their employment under the terms
of employee benefit plans and practices of Employer. Executive, and Executive's
dependents, shall also be entitled to participate in, be covered by and receive
benefits under, Employer's long-term disability, medical, dental, health,
welfare, accidental death and dismemberment, and life insurance plans, other
present or equivalent successor plans and practices of Employer, for which
officers, their dependents, and beneficiaries are eligible, if any, and its
401(k) Plan. Executive, his spouse and his dependents shall also be entitled to
all payments or other benefits under any such plan or
4
5
practice subsequent to the Period of Employment as a result of participation in
such plan or practice during the Period of Employment, as provided in such
plans. In addition, the Company shall reimburse Executive pursuant to Executive
Medical Reimbursement Plan for actual medical and dental expenses incurred by
Executive and his dependents during the Period of Employment which are not
covered by the Company's medical or dental plans; provided, however, that in no
event shall the Company be obligated to reimburse Executive in an amount greater
than the amount to be designated by the Chief Executive Officer and reasonably
agreed to by Executive and Group for such medical or dental expenses in any
calendar year.
b. Nothing in this Agreement shall preclude Employer from
amending or terminating any employee benefit plan or practice other than the
perquisites set forth in paragraph 6 and Executive Medical Reimbursement Plan.
8. Stock Options.
Group shall grant to Executive options (the "Options") to
purchase shares of the Group's common stock, par value $.01 per share under the
Group's Management Stock Option Plan (the "Stock Option Plan"), to be adopted by
Group immediately following the Closing. The Stock Option Plan shall specify the
number of Options to be granted and dates on which and the terms and conditions
under which Options shall be awarded substantially in accordance with the terms
set forth in Schedule C.
9. Effect of Death.
If Executive dies during the Period of Employment, the legal
representative of Executive shall be entitled to (i) the base salary provided
for in paragraph 5(a)(i) above for the month in which Executive's death shall
have occurred and the following month plus all accrued and unpaid vacation, at
the rate being paid at the time of death, (ii) the remaining installments of the
Special Bonus provided for in paragraph 5(a)(iii) above, payable only to the
extent and at such times as Executive would otherwise be entitled to the Special
Bonus in accordance with such paragraph, and (iii) a pro rata portion of any
bonus which would have been payable under the Management Incentive Compensation
Plan for
5
6
the year in which Executive's death occurs, payable on the date bonuses under
such Plan are otherwise payable. The Period of Employment shall be deemed to
have ended as of the close of business on the last day of the month following
the month in which death shall have occurred but without prejudice to any
payments otherwise due in respect of Executive's death.
10. Effect of Disability.
a. In the event of the Disability of Executive during the
Period of Employment, Executive shall be entitled to (i) all compensation,
benefits and perquisites hereunder through the effective date of his termination
of employment, (ii) an amount equal to the base salary provided for in paragraph
5(a)(i) above, at the rate being paid at the time of the commencement of
Disability, for the period of such Disability plus six (6) months from the end
of the period that establishes such Disability, as described in paragraph 10(c)
below, (iii) the remaining installments of the Special Bonus provided for in
paragraph 5(a)(iii) above, payable only to the extent and at such times as
Executive would otherwise be entitled to the Special Bonus in accordance with
such paragraph, and (iv) a pro rata portion of any bonus which would have been
payable under the Management Incentive Compensation Plan for the year in which
Executive's Disability occurs, payable on the date bonuses under such Plan are
otherwise payable. The Period of Employment shall be deemed to have ended as of
the last day of the period that establishes Disability.
b. The amount of any payments due under paragraph 10(a)(i)
shall be reduced by any payments to which Executive may be entitled for the same
period because of disability under any disability plan or insurance of Employer
or as the result of workers' compensation or non-occupational disability
payments.
c. The term "Disability", as used in this Agreement, shall
mean an illness or accident occurring during the Period of Employment which
prevents Executive from performing Executive's duties under this Agreement for a
period in excess of 270 days (whether or not consecutive) or 180 consecutive
days, as the case may be, in any twelve-month period during the Period of
Employment. The Period of
6
7
Employment shall be deemed to have ended as of the close of business on the last
day of such period (either the 270th or 180th day, as the case may be) but
without prejudice to any payments due Executive in respect of disability under
paragraph 11(a) or otherwise due to Executive or Executive's legal
representative or beneficiary and without prejudice to continue any medical
insurance coverage, subject to the terms of the plan or applicable law.
11. Provision of Severance Allowance.
a. Either Group or the Company may terminate the Period of
Employment and Executive's employment at any time during the Period of
Employment (i) for any reason upon thirty (30) days' notice to Executive and
(ii) immediately for Cause, as defined in paragraph 11(c) below. If Executive's
employment is terminated by either Group or the Company during the Period of
Employment but prior to a Change in Control (as defined in paragraph 13) for any
reason other than for Cause or the death or Disability of Executive or if
Executive's employment is terminated by Executive for Good Reason during the
Period of Employment but prior to a Change in Control (as defined in paragraph
13) and prior to the second anniversary of the date hereof, Employer shall pay
Executive (x) all compensation, benefits and perquisites accrued hereunder
through the effective date of his termination of employment, (y) a severance
allowance equal to the sum of (1) two times the base salary provided for in
paragraph 5(a)(i) above, at the rate being paid at the date of termination, (2)
two times the most recent fiscal year's incentive bonus compensation provided
for in paragraph 5(a)(ii) above and (3) a pro rata portion of the highest
incentive bonus payable under paragraph 5(a)(ii) above in the most recent three
fiscal years, and (z) the remaining installments of the Special Bonus provided
for in paragraph 5(a)(iii) above payable only to the extent and at such times as
Executive would otherwise be entitled to the Special Bonus in accordance with
such paragraph. If Executive's employment is terminated by either Group or the
Company for any reason other than for Cause or the death or Disability of
Executive or if Executive's employment is terminated by Executive for Good
Reason during the Period of Employment but prior to a Change in Control (as
defined in paragraph 13) and after the second anniversary of the date hereof,
Employer shall pay Executive (x) all compensation,
7
8
benefits and perquisites accrued hereunder through the effective date of his
termination of employment, (y) a severance allowance equal to one year's base
salary at the rate being paid at the time of the termination of Executive
employment, commencing on the first day of the month following the month in
which the termination of Executive's employment becomes effective and continuing
on the first day of each month thereafter for a period of twelve (12)
consecutive months and (z) the remaining installments of the Special Bonus
provided for in paragraph 5(a)((iii) above payable only to the extent and at
such times as Executive would otherwise be entitled to the Special Bonus in
accordance with such paragraph.
b. During the twelve month period following a termination of
Executive's employment provided for in paragraph 11(a), Executive shall be
entitled to: (i) use of an office, appropriate for use by an executive; and (ii)
continued coverage under the Company's health, dental and life insurance plans,
as well as Executive Medical Reimbursement Plan, providing reimbursement of
medical or dental expense not otherwise covered by insurance in an amount agreed
to pursuant to Paragraph 7. If and to the extent that such benefits shall not be
payable under any such plan by reason of Executive's no longer being an
employee, Group or the Company shall pay or provide for payment of such benefits
to Executive, Executive's dependents, and beneficiaries.
c. For the purpose of paragraph 11(a) above and any other
provision of this Agreement, termination of Executive's employment shall be
deemed to have been for Cause only
i. if termination of Executive's employment shall have been
the result of an act or acts of fraud, theft, or embezzlement on the
part of Executive which, if convicted, would constitute a felony, or
ii. if termination of Executive's employment results from
Executive's refusal to perform the duties appropriate to Executive's
position or a material breach by Executive of the provisions of
paragraphs 15, 16 and 17 of this Agreement and Executive has been given
written notice by the Board of Directors of the
8
9
Company with respect to such refusal or such material breach and
Executive continues to refuse unreasonably the performance of the
duties specified or to materially breach the provisions of paragraphs
15, 16 and 17 of this Agreement.
d. For purposes of paragraph 11(a) above and any other
provision of this Agreement, a termination of Executive's employment for Good
Reason shall mean a termination by Executive within 30 days following
i. a material diminution, without the written consent of
Executive, in the nature or scope of Executive's rights, authority,
responsibilities and duties with the Company or Group;
ii. without Executive's prior written consent, a significant
reduction by the Company or Group of Executive's base annual salary as
provided for in paragraph 5(a)(i), other than any such reduction which
is part of a general salary reduction or other concessionary
arrangement affecting all employees or affecting the group of employees
of which Executive is a member;
iii. the taking of any action by the Company or Group that
would substantially diminish the aggregate value of the benefits
provided Executive under the Company's or Group's accident, disability,
life insurance and any other employee benefit plans in which Executive
was participating on the date hereof, other that any such reduction
which is (x) required by law, (y) implemented in connection with a
general concessionary arrangement affecting all employees or affecting
the group of employees of which Executive is a member or (z) generally
applicable to all beneficiaries of such plans; or
iv. a relocation of the Executive's principal office to a
location that is at least 50 miles farther from his principal residence
than his office on the date hereof.
9
10
12. Termination by Executive.
Executive may terminate his employment hereunder at any time
during the Period of Employment upon sixty (60) days' written notice to the
Company, and, without regard to whether such termination occurs prior to a
Change in Control, Executive shall be paid or accrue (as the case may be) (i)
all compensation, benefits and perquisites accrued hereunder through the
effective date of his termination of employment, plus (ii) the remaining
installments of the Special Bonus provided for in paragraph 5(a)(iii) above.
However, Executive shall not be entitled to receive the severance allowance
provided in paragraph 11(a) or (b).
13. Effect of Change in Control
If following a Change in Control Executive's employment is
terminated by either Group or the Company during the Period of Employment for
any reason other than for Cause or the death or Disability of Executive, then
the Company shall pay Executive (i) all compensation, benefits and perquisites
accrued hereunder through the effective date of his termination of employment,
(ii) the remaining installments of the Special Bonus provided for in paragraph
5(a)(iii) above payable only to the extent and at such times as Executive would
otherwise be entitled to the Special Bonus in accordance with such paragraph,
plus (iii) a severance allowance equal to two times the base salary provided for
in paragraph 5(a)(i) above, at the rate being paid at the date of termination,
plus two times the most recent fiscal year's incentive bonus compensation
provided for in paragraph 5(a)(ii) above. "Change in Control" means the
occurrence of any of the following events: (i) the acquisition by any person,
entity or "group" (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended), other than any stockholder of the Company immediately after
giving effect to the Merger, or any Affiliate of any such stockholder, of 50% or
more of the combined voting power of the Company's then outstanding voting
securities; (ii) if at any time after the initial public offering of common
stock of the Group, (A) any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act), excluding for this purpose GSCP, is or becomes the
Beneficial Owner of more than thirty-five percent (35%) of the total voting
power of the Group or of the Company, (B) GSCP beneficially
10
11
owns a lesser percentage of the voting power of the Group or of the Company and
(C) GSCP does not have the right or ability by voting power, contract or
otherwise to elect or designate a majority of the Board or the Board of
Directors of such corporation in Control; (iii) if after the initial public
offering of the Stock of the Group, a change in the composition of the Board
occurs during any period of two consecutive years such that the directors who
were in office at the beginning of the period cease to constitute at least a
majority of the Board, unless the election of an individual by such Board or
whose nomination for election by the shareholders of the Group was approved by a
vote of at least two-thirds (66-2/3%) of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved; or (iv) more than 65% of the
total value of the assets of the Group are sold and the acquiror of such assets
is not GSCP, or an entity controlled by GSCP.
14. Resignation.
If Executive's employment hereunder terminates (except due to
his death), Executive agrees to resign effective immediately upon termination of
the Period of Employment all positions as an officer or director of Group or the
Company. If Executive fails to deliver such resignation, the Boards of Directors
of Employer may deem Executive to have resigned pursuant to this paragraph 14
effective upon the termination of his employment.
15. Non-Disclosure.
Executive shall not at any time after the date hereof divulge,
provide, or make assessable to anyone, other than in connection with the
business of the Company, any knowledge or information with respect to
confidential or secret processes, inventions, discoveries, improvements,
formulae, plans, materials, devises, materials, devices or ideas or other
know-how, whether patentable or not, with respect to any confidential or secret
aspects of the Company's business (including without limitation customer lists,
supplier lists and pricing arrangements with customers or suppliers or any
similar lists, arrangements or understandings, marketing plans, sales plans,
manufacturing plans, management organization information, data and other
11
12
information relating to members of the Board of Directors of Group and the
Company, management and GSCP), operating policies or manuals, business plans,
financial records, packaging designs or other financial, commercial, business or
technical information relating to the Employer or any of their subsidiaries or
information designated as confidential or proprietary that the Employer or any
of their subsidiaries may receive belonging to suppliers, customers or others
who do business with the Employer or any of their subsidiaries (collectively,
"Confidential Information"); provided, however, that Executive may disclose such
information (i) at the request of any governmental regulatory authority or in
connection with an examination of Executive by any such authority, (ii) pursuant
to subpoena or other court process, (iii) when required to do so in accordance
with the provisions of any applicable law or regulation, or (iv) if such
information has otherwise been made generally available to the public other than
by reason of Executive's breach of this paragraph 15. Upon the expiration of the
Period of Employment or upon termination of Executive's employment, Executive or
his legal representative shall promptly deliver to the Company all property
relating to the business of the Company, including all Confidential Information,
and all copies thereof that are in the possession or control of Executive.
16. Inventions.
Executive shall promptly disclose to the Company all
processes, trademarks, inventions, improvements and discoveries related to the
business of the Company (collectively, "Developments") conceived or developed by
him or with others during the Period of Employment, if such Developments were
conceived or developed during the Company's business hours or through the use of
the Company's resources. All such Developments shall be the sole and exclusive
property of the Company. Executive, upon the request of and at the Company's
expense, shall assist the Company in obtaining patents thereon and execute all
documents and other instruments necessary or proper to obtain letters patent and
to vest the Company with full title thereto.
12
13
17. Post-Employment Activities
a. Covenant Not to Compete. Following termination of
Executive's employment by the Company or Group for Cause or by
Executive for any reason, Executive shall not compete, directly or
indirectly, in any area of the continental United States, with any
facet of the business conducted by the Company or any of its
subsidiaries, whether as an employee, director, agent, principal,
stockholder or limited partner owning more than 5% of any class of
securities or equity of a corporation, association or partnership, or
by maintaining any other type of interest in or affiliation with or
providing any assistance whatsoever to, any other person, firm,
corporation or entity in any business located or doing business within
the continental United States which at the time of Executive's
affiliation therewith is in direct competition with any facet of the
business then being conducted by the Company or any of its
subsidiaries, for a one-year period beginning on the date of
Executive's departure and terminating on the first anniversary of the
date of his departure (the "Non-Compete Period").
b. Non-Solicitation of Employees. During (i) Executive's
employment with the Company or any of its subsidiaries or Affiliates
and (ii) for a two-year period beginning on the date of Executive's
departure and terminating on the second anniversary of the date of his
departure, Executive shall not directly or indirectly induce any
employee of the Company or any of its subsidiaries to terminate
employment with such entity, and shall not directly or indirectly,
either individually or as owner, agent, employee, consultant or
otherwise, employ or offer employment to any person who is or was
employed by the Company or any of its subsidiaries, unless such person
shall have ceased to be employed by such entity for a period of at
least six months.
c. Non-Solicitation of Customers and Suppliers . During (i)
Executive's employment with the Company or Group and (ii) the
Non-Compete Period, Executive shall not, directly or indirectly,
interfere with the business relationship of the Company or any of its
subsidiaries, with any customer or supplier, or prospective customer or
supplier, with respect to which Executive has had access to
13
14
Confidential Information or with which Executive dealt in connection
with Executive's duties for Group, the Company or any of its
subsidiaries.
d. Injunctive Relief with Respect to Covenants . Executive
acknowledges that irreparable damage would result to the Group and
Company if the provisions of paragraphs 15, 16 and 17(a) through (c)
were not specifically enforced, and agrees that the Group or Company
shall be entitled to any appropriate legal, equitable or other remedy,
including injunctive relief, a restraining order or other equitable
relief (without the requirement to post bond) with respect to any
failure of Executive to comply with the provisions of such sections.
e. Severability; Reformation . In the event that one or more
of the provisions of this paragraph 17 shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein shall not be affected
thereby. In the event any provision of paragraph 15, 16 or 17(a)
through (c) is not enforceable in accordance with its terms, such
paragraph shall be reformed to make such paragraph enforceable in a
manner which provides the Company or any of its subsidiaries the
maximum rights permitted at law.
f. Waiver . Waiver by Group, the Company or any of its
subsidiaries of any breach or default by Executive of any of the terms
of paragraphs 15, 16 or 17(a) through (c) shall not operate as a waiver
of any other breach or default, whether similar to or different from
the breach or default waived. No waiver of any provision of paragraph
15, 16 or 17(a) through (c) shall be implied from any course of dealing
between the Company or any of its subsidiaries and Executive or from
any failure by the Company or any of its subsidiaries to assert its
rights hereunder on any occasion or series of occasions.
18. Insurance.
The Company shall have the right at its own cost and expense
to apply for and to secure in its own name, or otherwise, life, health or
accident insurance or any or all of them covering Executive, and Executive
agrees to submit to usual and customary medical examination and otherwise to
14
15
cooperate with the Company in connection with the procurement of any such
insurance and any claims thereunder.
19. Notices.
All notices, requests and other communications pursuant to
this Agreement shall be in writing and shall be deemed to have been given if
delivered in person or by courier, the date delivered, and if sent by telegraph,
telex, facsimile transmission, the date sent, or if mailed by registered or
certified mail, postage prepaid, the date mailed, if sent, delivered or mailed
to the parties at the following addresses:
If to Executive:
Xxxx X. Xxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
If to the Employer:
Telex Communications, Inc.
0000 Xxxxxxx Xxxxxx X.
Xxxxxxxxxxx, XX 00000
With a copy to:
Greenwich Street Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxxxxx X. Xxxxxx
Any party may, by written notice to the other, change the
address to which notices to such party are to be delivered, sent or mailed.
20. No Trust Created.
Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be construed to
create a trust fund of any kind. Any funds which may be set aside or provided
for in this Agreement shall continue for all purposes to be a part of the
general funds of Employer and no person other than
15
16
Employer shall by virtue of the provisions of this Agreement have any interest
in such funds. To the extent that any person acquires a right to receive
payments from Employer under this Agreement, such right shall be no greater than
the right of any unsecured general creditor of Employer.
21. Successor In Interest.
This Agreement and the rights and obligations hereunder shall
be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, and shall also bind and inure to the benefit
of any successor of Employer by merger or consolidation or any purchaser or
assignee of all or substantially all of its assets, but, except to any such
successor, purchaser, or assignee of Employer, neither this Agreement nor any
rights or benefits hereunder may be assigned by either party hereto.
22. Full Discharge of Company Obligations.
The amounts payable to Executive pursuant to paragraphs 9, 10,
11, 12, and 13 following termination of his employment shall be in full and
complete satisfaction of Executive's rights under this Agreement but shall not
affect Executive's rights under any other agreement with Group or the Company.
Such amounts shall constitute liquidated damages with respect to any and all
such rights and claims and, upon Executive's receipt of such amounts, the
Employer shall be released and discharged from any and all liability to
Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Employer and their subsidiaries.
23. Arbitration of Disputes.
The parties agree that any controversy or claim arising out of
or relating to this Agreement, or any dispute arising out of the interpretation
or application of this Agreement, which the parties hereto are unable to
resolve, shall be finally resolved and settled exclusively by arbitration in
Minnesota by a single arbitrator under the American Arbitration Association's
Commercial Arbitration Rules then obtaining and in accordance with the
substantive laws of the State of Minnesota. If the parties cannot agree upon an
arbitrator out of the panel, then for the sole pur-
16
17
pose of selecting an arbitrator, each party (the Company and Group shall be
considered collectively one party) shall choose its own independent
representative and those independent representatives shall in turn choose the
single arbitrator within thirty (30) days of the date of the selection of the
first independent representative. The parties severally recognize and consent to
the jurisdiction over each of them by the courts of the State of Minnesota. The
legal expenses of Executive shall be reimbursed to Executive if an award is
rendered in favor of Executive or if the arbitrator finds that Executive acted
reasonably and exercised good faith in demanding arbitration of any such
dispute.
24. Governing Laws.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Minnesota applicable to agreements
made and to be performed entirely in Minneapolis, Minnesota.
25. Entire Agreement.
This Agreement shall constitute the entire agreement between
the parties superseding all prior agreements between the Group or Company and
Executive, and may not be modified or amended and no waiver shall be effective
unless by written document signed by both parties hereto; provided, however,
that any increase in base salary, as provided in paragraph 5 hereof, shall
become an amendment to this Agreement when approved by the Board of Directors of
the Company and recorded in the approved minutes of such meeting.
IN WITNESS WHEREOF, the parties execute this Employment
Agreement as of the date first above written.
EXECUTIVE:
___________________________
Xxxx X. Xxxxxx
17
18
GST ACQUISITION CORP.
By:________________________
18
19
SCHEDULE A
Telex Communications Group, Inc.
Management Cash Compensation Plan
Management Incentive Compensation (the "MIC Plan")
- Objective: The MIC Plan is intended to motivate key management
to achieve company objectives by providing a direct link
between the company objectives and incentive compensation
awards.
- Incentive Compensation Awards: Awards are calculated as a
percent of base salary based on achieving certain performance
hurdles as defined below.
a.Threshold: 90% of objectives equal to 25% of base salary
x.Xxxxxx: 100% of objectives equal to 50% of base salary
c.Upside: 110% of objectives equal to 75% of base salary
d.Maximum: 120% of objectives equal to 100% of base salary
- Performance Measurement: For top three senior officers, there
are two weighted components upon which an award is based:
- 75% - quantitative comparison of objectives against AOP
- corporate revenue
- corporate EBITDA
20
- 25% - qualitative judgment by the CEO and Board of Directors.
- For SBU executives, there are three weighted components upon
which an aware is based:
- 30% - quantitative comparison of objectives against total
company AOP
- 40% - quantitative comparison against SBU AOP
- SBU Revenue
- SBU Gross Profit
- SBU Operating Income
- 30% - qualitative judgment by CEO and Board of Directors
- Other Participants - based on total company performance,
business unit performance, if applicable, and an evaluation of
individual performance.
- General Guidelines for MIC Plan
- Awards are earned based on company's audited results
- AOP is to include an accrual for possible award payout
- Awards are pro-rated for results between the specified
breakpoints (i.e. target, maximum, upside and threshold)
- Awards above maximum are at the specified maximum and there
is no award below threshold amount.
- Only with the recommendation of the CEO and approval of the
Board of Directors can a participant be added.
2
21
- Officers terminating due to death, disability, retirement
or for good reason are eligible to receive a pro-rata award
for the year, paid at the normal date.
- Officers terminating voluntarily or terminated for
performance reasons or cause prior to the date of payout
are not eligible to receive an award.
3
22
SCHEDULE B
TELEX COMMUNICATIONS GROUP, INC.
CASH BONUS PLAN
INITIAL INCENTIVE AWARD:
A cash bonus shall be paid to the following individuals no later than the first
anniversary of the Effective Time (as defined in the Recapitalization Agreement
and Plan of Merger, dated as of March __, 1997, by and among Greenwich II LLC,
GST Acquisition Corp. and Telex Communications Group, Inc.) in the amounts set
forth below:
80% of AOP Achieved
-------------------
Xxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Xxxx
Xxxxxxxxxx
Xxxxxx
ADDITIONAL AWARDS:
An additional cash bonus shall be paid to the following individuals on each of
the first five anniversaries of the Effective Time in the amounts set forth
below:
23
100% of AOP 105% of AOP
Achieved Achieved
----------- -----------
Xxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Xxxx
Xxxxxxxxxx
Xxxxxx
AOP shall be determined under the Management Incentive Compensation Plan.
An additional cash bonus shall be paid to the following individuals on the
earlier of the fifth anniversary of the Effective Time or a Change in Control
(as defined in the 1997 Telex Communications Group, Inc, Stock Option Plan) in
the amounts set forth below:
110% of LTP 120% of LTP
Achieved Achieved
----------- -----------
Xxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxx
Xxxx
Xxxxxxxxxx
Xxxxxx
LTP shall be determined as set forth in Schedule B to the Stock Option Plan.
2
24
SCHEDULE C
Number of Number of Number of
Shares Shares Shares
Available under Available under Available under
the Initial the Performance the Super
Option Option Grant Performance
Grant Option Xxxxx
Xxxxxx 1,163 1,827 1,322
All numbers are subject to adjustment based on the final Merger Consideration
payable pursuant to Section 1.3(a) of the Merger Agreement and to reflect a
twenty-two-one stock split to become effective upon the Merger.
