EMPLOYMENT AGREEMENT
AGREEMENT entered into this 31st day of March, 1997 by and between Xxxxx X.
Xxxxxx (the "Employee") and Spartech Corporation, a Delaware corporation (the
"Employer").
WITNESSETH:
WHEREAS, Employer desires to employ Employee, and Employee is willing to accept
such employment on the terms hereinafter set forth,
NOW, THEREFORE, the parties agree as follows:
1. Employment. Employer hereby employs Employee and Employee agrees to accept
such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall commence March 31, 1997 and, unless
earlier terminated as provided herein, continue through March 30, 1999.
3. Duties. Employer employs Employee to act in an executive capacity, as Vice
President-Finance and Chief Financial Officer for Employer, on all aspects of
its business, as and when requested, and at such times and places as Employer
shall reasonably request, subject always to the control and direction of
Employer's Board of Directors. During the term of this Agreement, Employee (a)
will serve Employer faithfully, diligently and to the best of his ability, and
(b) will devote his best efforts and his entire working time, attention and
skill to the performance of his duties hereunder and to promoting and furthering
the interests of Employer. While he is so employed, Employee will not, without
the prior written consent of employer render any services to any other business
concern; provided, however, that nothing herein shall prevent Employee from (i)
engaging in additional activities in connection with personal investments which
do not interfere or conflict with his duties hereunder, or (ii) making any
investment in any publicly traded company so long as such investment does not
exceed one percent of the outstanding securities of any class.
4. Compensation. Subject to periodic review for cost of living and/or merit
and other increases, Employer agrees to compensate Employee at the rate of
$120,000 annually. Employer shall further advance or reimburse to Employee such
other monies as Employer determines for credit cards, costs and other reasonable
expenses incurred by Employee in the discharge of Employer's instructions
hereunder, and consistent with the necessities of the operation of the business.
Subject to any applicable waiting period, Employee may also participate in all
stock option and stock purchase plans, insurance, medical and other employee
benefit programs currently established and hereafter instituted by Employer
which are generally available to other employees of comparable position.
For the term of this agreement, Employer shall maintain term life insurance for
Employee's designated beneficiaries equivalent to $250,000.
5. Bonuses. Employee shall be eligible for an annual discretionary bonus
based upon his performance, and based upon the overall results of the Employer's
operations at the end of each year, paid in accordance with the terms and
conditions of Employer's Bonus Program. Any such Bonus shall be subject to
approval by the CEO, and the Compensation Committee of the Board of Directors of
Employer.
6. Non-Disclosure. Employee acknowledges that as a result of his employment
by Employer he has acquired, and in the future, will use and acquire knowledge
and information utilized by Employer in its business which may not be generally
available to the public or to other persons in the plastics business
("Confidential Information"), including, without limitation, Employer's systems,
procedures, formulas, processes, confidential reports, lists of customers,
pricing structure, margins with respect to its products and similar information.
As a material inducement to Employer to enter into this Agreement and to pay
Employee the compensation set forth herein, Employee agrees that he will not, at
any time, directly or indirectly, divulge or disclose to any person, for any
purpose, any Confidential Information, except to those persons authorized by
Employer to receive Confidential Information and except for information which
becomes publicly available through no fault of Employee.
7. Covenant Not To Compete; No Solicitation of Employees. Employee agrees as
follows:
(a) For as long as he is employed by Employer and for one year after any
termination of employment, Employee agrees that he will not, directly or
indirectly, except as a passive investor in publicly held companies in which he
has less than a one percent interest, engage in, own or control any interest in
or act as director, officer or employee of, or consultant to, any firm
or corporation, directly or indirectly engaged, as these terms may be reasonably
construed, in a business substantially similar to that operated by Employer on
the date of termination, in the territories where Employer manufactures
or distributes its products. If the Employee is terminated without cause
pursuant to Paragraph 12(a) hereof, the non-competition provisions of this
Paragraph 7(a) shall apply only so long as Employer continues to pay
Employee his base salary.
(b) Employee agrees that for one year after any termination of his employment
with Employer he will not, directly or indirectly, induce, or attempt to induce,
any of the employees of Employer to leave the employment of Employer, or to
employ any such employees within 90 days after any termination of their
employment with Employer.
8. Inventions. Employee acknowledges that all inventions, production
processes, techniques, programs, patents, discoveries, formulas and improvements
invented, discovered or learned by Employee during employment hereunder, and
relating to Employer's business, will be disclosed to Employer and will be the
sole property of Employer.
Employee further acknowledges that information imparted to him by Employer,
relating to Employer's production and business methods, techniques, customer
lists, statistics, credit, customers and suppliers is secret and confidential.
Therefore, Employee shall, upon termination of his employment hereunder and as a
prior condition to receiving final wages, return to Employer all books, records
and notes containing customer lists and addresses, all duplicate invoices, all
statements and correspondence pertaining to such customers, and all information
and documents (including all copies thereof) relating to customers, their needs,
products of Employer used by them, schedules of discussions with them, all
formulas, code books, price lists, products, manuals and equipment, production
or processing information or instructions, data applicable to methods of
manufacture, types, kinds, suppliers and costs of raw materials, and all other
information of confidential or secret nature applicable to Employer, its
customers and the manner of conducting its business.
Employer agrees, however, to provide Employee, upon request, with copies of
whatever documents he may reasonably require. As a prior condition to his
receiving final wages, Employee, if requested, shall also execute an affidavit
to the effect that he has complied with the provisions in this Paragraph 8.
The restraints on Employee, as set forth in this Paragraph 8, however, shall not
apply to those inventions for which no equipment, supplies, facility or trade
secret information of Employer was used and which was developed entirely on
Employee's own time and which does not relate to the business of the Employer,
to Employer's actual or demonstrably anticipated research or development, or
which did not result from any work performed by Employee for Employer.
9. Remedies. By reason of the fact that irreparable harm would be sustained
by Employer if there is any breach by Employee of the provisions of Paragraphs 6
, 7 and 8 hereof, it is agreed that, in addition to any other rights which
Employer may have under this Agreement or at law or in equity, Employer shall
be entitled to apply to any court of competent jurisdiction for, and obtain,
injunctive relief against Employee or against any third party, in order to
prevent any breach or threatened breach of the provisions
of such paragraph.
10. Death During Employment. If Employee should die during the term of this
Agreement, Employer's only obligation shall be to pay Employee's spouse, or his
estate if he has no spouse, his base monthly salary to the month in which death
occurs.
11. Disability. Employer, at its option, may terminate this Agreement upon
written notice to Employee if the Employee, because of physical or mental
incapacity or disability, fails in any material respect to perform the services
required of him hereunder for a continuous period of 120 days, or for shorter
periods aggregating 180 days or more in any consecutive period of 240 days.
Upon such termination, all obligations hereunder of the Employer shall cease.
12. Termination. Anything herein to the contrary notwith- standing, Employer
shall have the right to terminate this Agreement as follows:
(a) Employer may terminate this Agreement without cause upon written notice to
Employee. In the event of such termination, Employee will be entitled to
receive the unpaid portion of base salary for the remaining term of this
Agreement, paid out over the remaining term of this Agreement.
(b) Employer may terminate this Agreement at any time for cause. "Cause"
as used herein shall mean dishonesty, theft, conviction of a felony, drunkenness
or a material breach of this Agreement. "Cause" shall also include the failure
of Employee, within ten days after receipt of written notice thereof from
Employer, for any reason, to correct, cease or otherwise alter any failure to
comply with the lawful instructions of the corporation's Board of Directors or
other act or omission which, in the sole opinion of the Board of
Directors, will materially adversely affect Employer's business. In the event
of termination for cause, Employer shall have no obligation to pay any
compensation except to the extent the Employee's base salary has been accrued
but is unpaid at the time of termination.
13. Severability. If any part of this Agreement is found to be void or
unenforceable for any reason, the remainder of this Agreement shall be severable
and may be enforced accordingly.
14. Benefit. This Agreement shall inure to the benefit of and be binding upon
Employee, his heirs, executors and administrators, and upon the Employer and its
successors, but this Agreement may not be assigned by either party except by
operation of law by a merger of the Employer into another corporation or by
Employer in connection with any sale of its business or parts thereof.
15. Headings. These headings have been inserted in this Agreement for
convenience only and shall not affect the interpretation hereof.
16. Entire Agreement. This Agreement contains the entire understanding of the
parties and may not be amended or changed except by an agreement in writing
signed by the parties. An Agreement for a succeeding two-year period, beginning
at the end of the term of this Agreement, shall be entered into between Employer
and Employee at least six months prior to the term of this Agreement.
Alternatively, compensation under this Agreement shall continue through term of
this Agreement without a requirement for full-time services from such date to
the completion of this Agreement.
17. Notices. Any notices required or permitted hereunder shall be addressed to
Employer at its principal office and to Employee at his address as it appears in
the records of the Employer, or at such other address as either party may have
furnished to the other for such purpose in writing.
18. Applicable Law. This Agreement has been entered into in, and shall be
construed under the laws of, the State of Missouri.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
EMPLOYER:
SPARTECH CORPORATION
By:
Xxxxxxx X. Xxxxxxxx
President and CEO
EMPLOYEE:
Xxxxx X. Xxxxxx
