EMPLOYMENT AGREEMENT
AGREEMENT, dated as of December 18,1996, by and between Xxxxx Aluminum
Corporation, a Maryland corporation (the "Corporation"), and Xxxxxxx X. Xxxxxx
(the "Executive"), residing at 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx
00000.
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ the Executive and the Executive
is willing to accept such employment with the Corporation, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties hereto do hereby agree as follows:
1. TITLE AND DUTIES OF EXECUTIVE. (a) During the term of his employment as
provided in Section 3 below, the Executive will be employed as President and
Chief Executive Officer of the Corporation, and the Executive agrees to be
employed in such capacities. During such term, the Executive shall hold
responsibility for, and exercise authority over, all operations of the
Corporation, and shall have such powers and duties as generally pertain to a
President and Chief Executive Officer. In no event shall the Executive be
assigned duties inconsistent with his status as an executive officer of the
Corporation.
(b) The Board of Directors of the Corporation may, in addition, from
time to time request the Executive to act (but only in an executive capacity and
with regard to duties reasonable assigned to him) as an officer or director of
subsidiaries of the Corporation which
may hereafter be established, and the Executive agrees, upon such request (and
upon any necessary election), to hold such positions provided such do not
interfere with the Executive's duties hereunder.
(c) The Executive agrees to devote his full business time and his best
efforts to the performance of his duties hereunder and to the promotion of the
best interests of the Corporation. The Executive further agrees to normal and
reasonable business travel related to the performance of his duties hereunder.
2. PLACE OF EMPLOYMENT. The permanent place of the Executive's employment
shall be the Baltimore, Maryland area for the first twelve (12) months of the
term of this Agreement, or the first twelve (12) months following the date of
notification of a Change in Ownership (as hereinafter defined) to the Executive,
following which, if at any time the Board of Directors shall determine it to be
in the best interests of the Corporation for the Executive to be relocated and
the Executive, in the exercise of his sole discretion, shall so elect, he may be
relocated, provided that the Corporation shall reimburse the Executive's
reasonable expenses incurred in moving himself and his immediate family.
3. TERM OF AGREEMENT. The Employment of the Executive hereunder shall
commence on December 18, 1996 and shall continue through December 31, 1999,
unless a Change in Ownership has occurred in which case the term of this
Agreement shall extend three (3) years from the date of notification of a Change
in Ownership to the Executive, and in either case shall be automatically renewed
thereafter on an annual basis unless terminated by either party by written
notice to the other on or before six (6) months preceding any scheduled
-2-
termination date, unless sooner terminated by the Executive's death or as
hereinafter provided in Section 6 below.
4. COMPENSATION. (a) The Corporation agrees to pay the Executive a salary,
payable semi-monthly, at the rate of $233,750 per annum, which salary shall be
subject to increase pursuant to review at least annually.
(b) The Executive shall also be entitled to participate in any
executive incentive compensation or bonus programs of the Corporation each year
he is employed by the Corporation.
5. BENEFITS AND EXPENSES. (a) During the term of the Executive's employment
hereunder, the Executive shall, subject to the terms thereof and the eligibility
requirements therefor, be eligible to participate in any insurance, pension,
retirement or other benefit program maintained by the Corporation for executive
employees, including the Corporation's stock option plan.
(b) In order to facilitate the Executive's carrying out his duties
hereunder, the Corporation shall promptly reimburse the Executive for all
reasonable expenses paid or incurred by him in promoting the business of the
Corporation, upon presentation by the Executive of an itemized accounting
therefor.
6. TERMINATION. (a) In the event of the Executive's willful misconduct (not
including negligence) in any material respect or his material breach of, or
material failure to perform, his duties or responsibilities hereunder, the
Corporation may terminate the Executive's
-3-
employment hereunder at any time for cause by giving written notice to the
Executive stating the cause of such termination. In no event shall the
Executive's exercise of his rights under Section 2 not to relocate be deemed to
permit the Corporation to terminate his employment under this Subsection 6(a).
(b) If the Executive is unable to perform his duties hereunder by
reason of mental or physical illness or other incapacity continuing for a period
of six (6) consecutive months, the Corporation may, at any time after the
expiration of such six month period and prior to his recovery from such illness
or incapacity, elect to terminate the Executive's employment hereunder by giving
written notice of such election to the Executive. During such period of
incapacity, the Executive's salary hereunder shall be reduced by the amount of
any disability payments made to him under programs maintained by the
Corporation.
(c) If (i) the Executive's employment is terminated by the Corporation
for any reason other than as provided in Subsection 6(a) or 6(0), or (ii) the
Executive terminates his employment as provided in Subsection 7(b), the
Executive's salary shall continue through the term of this Agreement, and his
incentive bonus for the year during which the termination takes place shall be
paid on a pro-rated basis reflecting that portion of the year during which the
Executive was employed. The obligation of the Corporation to continue salary
pursuant hereto is subject to offset for the Executive's earnings from other
full-time employment, unless a Change in Ownership has occurred prior to the
termination of the Executive's employment, in which case the obligation of the
Corporation to continue salary pursuant hereto is not subject to such offset.
-4-
(d) If (i) the Executive's employment is terminated by the Corporation
for any other reason other than as provided in Subsection 6(a) or 6(b), or (ii)
the Executive terminates his employment as provided in Subsection 7(b), the
Executive shall be entitled to service credit through the term of this Agreement
under the salaried retirement plan of the Corporation. The Corporation shall
also maintain in force the other benefits referred to in Subsection 5(a) through
the term of this Agreement to the extent allowed by the then existing benefit
plans of the Corporation under applicable law, excluding that governing the tax
deductibility of the Corporation's group plan expenses. The obligation of the
Corporation to continue the other benefits pursuant hereto shall cease upon the
Executive's acceptance of other full-time employment.
(e) The Executive may terminate his employment hereunder at any time
by giving the Corporation ninety (90) days' written notice.
7. CHANGE IN OWNERSHIP. (a) In the event that the Corporation shall at any
time be merged or consolidated with or into any corporation or corporations
(other than a subsidiary of the Corporation), or in the event that all or
substantially all of the assets or all or substantially all of the stock of the
Corporation shall be sold or otherwise transferred, or in the event that The
Fulcrum III Limited Partnerships (or, upon distribution, their partners) shall
sell, transfer or otherwise dispose of an aggregate of 80% or more of the shares
of common stock of the Corporation acquired by Fulcrum pursuant to that certain
Stock Subscription Agreement dated as of June 30, 1987 (any of the foregoing
events, a "Change in Ownership"), the Corporation
-5-
shall give the Executive prompt written notice of such event, and the term of
this Agreement shall be automatically extended for the period three (3) years
after the date of such notification.
(b) In the event of a Change in Ownership, the Corporation shall
render to the Executive a special review (the "Review") in the first ten (10)
days of the eighteenth (18th) month following the notification of a Change in
Ownership to the Executive. The Review shall include an evaluation of the
Executive's performance, an assessment of the Executive's position in the
Corporation and the adjustments, if any, to be made to the Executive's
compensation pursuant to Subsection 4(a) of this Agreement. In the event the
Executive gives written notice of his disagreement or dissatisfaction with the
Review within thirty (30) days after the results of the Review are communicated
to the Executive, or in the event the Corporation fails to render the Review at
the time provided above, the Executive, in the exercise of his sole discretion,
may, at any time during the remainder of the term of this Agreement, terminate
his employment hereunder by giving the Corporation ten (10) days' written
notice. If the Corporation renders the Review and the Executive does not notify
the Corporation of his disagreement or dissatisfaction therewith as provided
above, this Agreement shall continue in full force and effect as if this
Subsection 7(b) were not contained herein.
(c) In the event of a Change in Ownership, the provisions of this
Agreement shall inure to the benefit of the successor of the Corporation
resulting from such merger or consolidation or the purchaser in such sale of
assets, except that, if applicable, the Executive's employment shall be as
President and Chief Executive of the corporation or division thereafter carrying
on the business of the Corporation.
-6-
8. CONFIDENTIAL INFORMATION. (a) The Executive agrees that, during his
employment by the Corporation and at all times thereafter, he will not disclose
to others, directly or indirectly, any unpublished confidential information,
which is in the nature of trade secrets, relating to the business, prospects or
plans of the Corporation. Upon termination of his employment with the
Corporation, the Executive shall surrender to the Corporation any and all work
papers, reports, manuals, documents and the like (including all originals and
copies thereof) in his possession which contain any such unpublished
confidential information.
(b) The Executive agrees that, provided he is still employed by the
Corporation or is receiving payments pursuant to Subsection 6(c) above, he will
not directly or indirectly be engaged in the operation or management of, or be
interested as owner, holder of 5% or more of the outstanding equity, creditor,
partner, officer, employee or otherwise in, any business competing with the
business of the Corporation; provided, however, that nothing contained herein
shall prevent the Executive from working for a business or entity which has a
subsidiary, division or separate branch which is competitive with the business
of the Corporation, but only if the Executive does not work for, participate in
or otherwise render services to such competitive subsidiary, division or branch;
and provided, further, that the Executive may elect to terminate his obligations
under this Subsection 8(b) by waiving, irrevocably and in writing, any right to
further compensation, benefits or any other claim under this Agreement against
the Corporation, its affiliates and the directors, officers and employees of
each.
(c) The Executive agrees that he will not, for a three (3) year period
following the date of the termination of his employment under this Agreement,
solicit or encourage any
-7-
employee of the Corporation to work for the Executive or any company,
partnership or other organization in which the Executive then works or with
which the Executive then has a relationship or from which the Executive then
receives compensation.
(d) In the event of a breach or threatened breach of the terms of this
Section 8 by the Executive, the Corporation shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction and/or a decree for
specific performance, in accordance with the provisions hereof, without showing
any actual damage or that monetary damagers would not provide an adequate remedy
and without any bond or other security being required.
9. NOTICES. Any and all notices or consents required or permitted to be
given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given and received when delivered personally
or three (3) days after mailing, if mailed by registered or certified mail,
return receipt requested, as to the Executive, at his address appearing above,
and as to the Corporation, at its principal office at that time. The Executive
may change his mailing address for the purposes of this Agreement by notice to
the Corporation as herein provided.
10. AUTHORITY. This Agreement has been duly authorized on behalf of the
Corporation by its Board of Directors. The Executive represents that he is free
to enter into this Agreement and that his entering into this Agreement does not
violate any obligation that he has to any other person, firm or corporation.
-8-
11. SEPARABILITY. In the event that any provision of this Agreement would
be held invalid or unenforceable for any reason unless narrowed by construction,
this Agreement shall be construed as if such invalid or unenforceable provision
had been more narrowly drawn so as not to be invalid or unenforceable. If,
notwithstanding the foregoing, any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, such invalidity or unenforceability
shall attach only to such provision and shall not affect or render invalid or
unenforceable any other provision of this Agreement.
12. MISCELLANEOUS. (a) This Agreement sets forth the entire understanding
of the Corporation and the Executive with respect to the subject matter hereof
and cannot be amended or modified except by a writing signed by both parties.
(b) Except as otherwise expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, and their
respective successors and assigns, heirs and personal representatives.
(c) The Section headings contained herein are for purposes of
convenience only and are not intended to define or limit the contents of said
Sections.
(d) This Agreement shall be deemed to be a contract under the laws of
the State of Maryland and shall be construed and enforced in accordance with
such laws.
(e) This Agreement may be executed in two counterparts which, taken
together, shall constitute a single original document.
-9-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXX ALUMINUM CORPORATION:
By /s/
----------------------------------
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
-10-
