Exhibit 10n
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 1995 (the "Effective
Date"), between XXXXX X. XXXX ("Executive") and BHA GROUP, INC., a Delaware
corporation ("Employer").
In consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto hereby agree as follows:
1. Employment of Executive
Employer hereby agrees to Employ Executive and Executive hereby
agrees to be employed by Employer upon the terms and conditions hereinafter set
forth.
2. Employment Period
The term of Executive's employment under this Agreement (the
"Employment Period") shall commence as of the Effective Date and shall, subject
to earlier termination as provided in Section 5, continue until September 30,
1997. The expiration date of the Employment Period shall be automatically
extended for an additional one year period (each thereof, a "Renewal Period") on
each October 1, commencing October 1, 1995, unless at least 30 days prior to any
such October 1 either Executive or Employer delivers written notice to the other
of his or its election to have such automatic extensions cease, in which event
the then current expiration date of the Employment Period shall continue in
effect for the balance of the Employment Period.
3. Duties and Responsibilities
During the Employment Period, Executive (i) shall be the
Treasurer and Chief Financial Officer of Employer and (ii) shall devote his full
attention and expend his best efforts, energies and skills on a full-time basis
to the business of the Company (as hereinafter defined). Executive shall have
such authority, discretion, power and responsibility, and shall be entitled to
office, secretarial and other facilities and conditions of employment, as are
customary or appropriate to his position and as are currently exercised by or
afforded to him. During the Employment Period, Executive will be subject to all
of the policies, rules and regulations applicable to Employer's senior executive
employees. Executive shall report directly to Employer's Senior Vice-President.
For all purposes of this Agreement, the term "Company" means Employer and all
corporations, associations, companies, partnerships, firms and other enterprises
controlled by or under common control with Employer.
4. Compensation and Related Matters
4.1 Compensation, Generally. For all services rendered and
required to be rendered by, covenants of, and restrictions imposed on, Executive
under this
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Agreement, Employer shall pay to Executive during and with respect to the
Employment Period, and Executive agrees to accept, such base salary ("Base
Salary") and bonuses as are set forth on Exhibit 4.1. Executive's compensation
shall be reviewed by the Board of Directors prior to commencement of each
Renewal Period and may be adjusted upward only for such Renewal Period to take
into account Executive's prior performance and increases in the cost of living
not previously taken into account in setting Executive's compensation level.
4.2 Automobile. To facilitate the performance of Executive's
responsibilities hereunder, during the Employment Period, Employer shall, at
Employer's expense, continuously make available to Executive for Executive's
personal use the automobile currently made available to Executive, or an
automobile selected by Executive substantially comparable thereto, and shall pay
the costs of operating, maintaining, insuring, garaging and otherwise using such
automobile, subject to such policies as may be in effect from time to time
applicable to Employer's senior executive employees.
4.3 Other Benefits. (a) Employer shall maintain in effect at all
times during the Employment Period, at Employer's expense, a policy of insurance
on the life of Executive in the amount of $500,000 naming such person as
Executive shall designate from time to time as the owner and beneficiary
thereof. Executive agrees to aid, and cooperate in all reasonable respects with,
Employer in procuring such insurance, including, without limitation, by
submitting to the usual and customary medical examinations and filling out,
executing and delivering such applications and other instruments in writing as
may be reasonably required by an insurance company or companies to which any
application or applications for such insurance may be made by or for Employer.
(b) Employer shall reimburse Executive for all out-of-pocket
medical and related expenses incurred by Executive and his immediate family and
not otherwise covered by the Company's insurance plans or programs referred to
in Section 4.3(c), up to but not exceeding an aggregate of $8,000 per Year (as
defined in Paragraph 2 of Exhibit 4.1), upon his presentation to Employer of
signed, itemized accounts of such expenditures, all in accordance with
Employer's procedures and policies as adopted and in effect from time to time
and applicable to its senior executive employees.
(c) During the Employment Period, subject to, and to the extent
Executive is eligible under their respective terms, Executive shall be entitled
to receive such fringe benefits as are, or are from time to time hereafter,
generally provided by Employer to its senior executive employees (other than
those provided under or pursuant to separately negotiated individual employment
agreements or arrangements) under any pension or retirement plan, disability
plan or insurance, group life insurance, medical insurance, travel accident
insurance, or other similar plan or program of Employer. Executive's Base Salary
shall (where applicable) constitute the compensation on the basis of which
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the amount of Executive's benefits under any such plan or program shall be
fixed and determined.
4.4 Business Expense Reimbursement. Employer shall reimburse
Executive for all business expenses reasonably incurred by him in the
performance of his duties under this Agreement upon his presentation, not less
frequently than monthly, of signed, itemized accounts of such expenditures, all
in accordance with Employer's procedures and policies as adopted and in effect
from time to time and applicable to its senior executive employees.
4.5 Vacations. Executive shall be entitled to vacations
consistent with those currently provided to Executive, which vacations shall be
taken at such time or times as shall not unreasonably interfere with Executive's
performance of his duties under this Agreement.
5. Termination of Employment Period
5.1 Termination Without Cause. Employer or Executive may, by
notice to the other at any time during the Employment Period, terminate the
Employment Period without cause. The effective date of termination shall be 30
days after the date on which such notice is given.
5.2 By Employer: Cause. Employer may, at any time during the
Employment Period by action of its Board of Directors and upon notice to
Executive, terminate the Employment Period "for cause" effective immediately.
Such notice shall specify the cause for termination. For the purposes hereof,
"for cause" means:
(a) Executive's continued failure or refusal to perform his
duties and responsibilities hereunder after written warning of any such failure
or refusal and reasonable opportunity to appear before Employer's Board of
Directors to explain the reasons for such failure or refusal;
(b) Executive's dishonesty that directly or indirectly materially
affects, or has the likelihood of materially affecting, Employer;
(c) Executive's continued use of illegal drugs or excessive use
of alcohol, which has the effect of interfering materially with the performance
of his obligations under this Agreement, after written warning thereof;
(d) Conviction of Executive for a felony or any crime involving
in either case an act of moral turpitude, dishonesty, fraud, or unethical or
unlawful business conduct; or
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(e) Conduct by Executive that could reasonably be expected to
materially injure the reputation, business or business relationships of the
Company.
5.3 By Executive: Good Reason. Executive may, at any time during
the Employment Period by notice to Employer, terminate the Employment Period
under this Agreement "for good reason" effective immediately. For the purposes
hereof, "for good reason" means (a) any significant reduction in the duties,
responsibilities or prerequisites of Executive or any reduction in the
compensation provided for in Exhibit 4.1 that, in either case, Employer fails to
remedy within 30 days after notice thereof to Employer; or (b) a material breach
by Employer of any provision of this Agreement including, without limitation,
the provisions of Section 7 hereof, that Employer fails to remedy or cease
within 30 days after notice thereof to Employer.
5.4 Disability. During the Employment Period, if, solely as a
result of physical or mental incapacity or infirmity (other than alcoholism or
drug addiction), Executive shall be unable to perform his duties under this
Agreement for (i) a continuous period of at least 180 days, or (ii) periods
aggregating at least 180 days during any period of 12 consecutive months (each a
"Disability Period"), and at the end of the Disability Period there is no
reasonable probability that Executive can promptly resume his duties hereunder
pursuant hereto, Executive shall be deemed disabled (the "Disability") and
Employer, by notice to Executive, shall have the right to terminate the
Employment Period for Disability at, as of or after the end of the Disability
Period. The existence of the Disability shall be determined by a reputable,
licensed physician mutually selected by Employer and Executive, whose
determination shall be final and binding on the parties, provided, that if
Employer and Executive cannot agree upon such physician, such physician shall be
designated by the then acting President of the Kansas City Medical Society, and
if for any reason such President shall fail or refuse to designate such
physician, such physician shall, at the request of either party, be designated
by the American Arbitration Association. Executive shall cooperate in all
reasonable respects to enable an examination to be made by such physician.
5.5 Death. The Employment Period shall end on the date of
Executive's death.
6. Termination Compensation
6.1 Termination Without Cause By Employer or By Executive For
Good Reason. If the Employment Period is terminated by Employer without cause
pursuant to Section 5.1, or by Executive for good reason pursuant to Section
5.3, then Executive shall be entitled to be paid by Employer, as liquidated
damages and not as a penalty, (a) all Base Salary that he would have been
entitled to receive pursuant to this Agreement if the Employment Period had
continued through the then current expiration date of the Employment Period as
determined in accordance with Section 2 hereof (the "Relevant Period"), and (b)
the pro rata portion of any bonuses that Executive would have been
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entitled to receive pursuant to Paragraph 2 of Exhibit 4.1, in respect of the
Year in which the Employment Period is terminated, if the Employment Period had
continued through the end of such Year. Any payments required to be made
pursuant to the preceding sentence shall be made on the same dates such payments
would have been made had Executive continued to be employed by Employer during
the Relevant Period. Executive shall not be required to mitigate the amount of
any payments provided for hereunder upon termination of the Employment Period by
seeking employment with any other person, or otherwise; provided, however, that
if, at any time during the Relevant Period Executive shall commence employment
or engagements for the rendition of services to any other business, then, the
aggregate Base Salary thereafter payable to Executive pursuant to this Section
6.1 shall be reduced by 50% of all amounts received by him from such employment
or engagements in respect of the Relevant Period.
6.2 Termination Upon Death or Disability. If the Employment
Period is terminated by reason of Disability or the death of Executive, then
Executive shall be entitled to be paid by Employer (in addition to any amounts
payable under the insurance, plans or programs referred to in Section 4.3) the
pro rata portion of any bonuses that Executive would have been entitled to
receive pursuant to Paragraph 2 of Exhibit 4.1, in respect of the Year in which
the Employment Period is terminated, if the Employment Period had continued
through the end of such Year. Any payment required to be made pursuant to the
preceding sentence shall be made on the same date such payment would have been
made had the Employment Period continued through such date.
6.3 Determination of Pro Rata Portion. For the purposes hereof,
the pro rata portion of any bonus in respect of any Year means the total amount
of such bonus (as if the Employment Period had not terminated prior to the end
of such Year), multiplied by a fraction, the numerator of which is the number of
days within such Year on or prior to the termination of the Employment Period
and the denominator of which is 365.
6.4 No Other Termination Compensation. Executive shall not,
except as set forth in this Section 6, be entitled to compensation in respect of
any period following termination of the Employment Period.
7. Location of Executive's Activities
Executive's principal place of business in the performance of his
duties and obligations under this Agreement shall be in Kansas City, Missouri.
Notwithstanding the preceding sentence, Executive will engage in such travel and
spend such time in other places as may be necessary and appropriate in
furtherance of his duties hereunder.
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8. Exclusivity of Services, Confidential Information and Restrictive Covenants
8.1 Exclusivity of Services and Restrictions. During the
Employment Period and the three-year period thereafter (the "Post-Employment
Period"), Executive shall not, directly or indirectly, (a) be or become
interested in or associated with (as an officer, director, stockholder, partner,
consultant, owner, employee, agent, creditor or otherwise) any business that is
then, or which then proposes to become, a competitor of the Company, provided,
that the foregoing shall not restrict Executive from the ownership, solely as an
investment, of securities of any business if such ownership is not as
controlling person of such business, not as a member of a group that controls
such business, and not as a direct or indirect beneficial owner of 5% or more of
any class of securities of such business, (b) induce or seek to influence any
employee of (or consultant to) the Company to leave its employ (or terminate
such consultancy), (c) aid a competitor or supplier of the Company in any
attempt to hire a person who shall have been employed by, or who was a
consultant to, the Company within the one-year period preceding the date of any
such aid, or (d) induce or attempt to influence any person who was a supplier to
the Company during such period to transact business with a competitor of the
Company; provided, however, that, unless the Employment Period has been
terminated by Employer for cause pursuant to Section 5.2, the provisions of this
Section 8.1 shall continue in effect during the Post-Employment Period only so
long as Employer continues to pay Executive all amounts to which Executive is
entitled pursuant to Section 6.1 and all other Base Salary that he would have
been entitled to receive pursuant to this Agreement (and at such times as such
Base Salary would have been payable) if the Employment Period had continued
through the end of the Post-Employment Period.
8.2 Confidential Information. Executive shall not at any time,
whether during the Employment Period or thereafter, disclose or use (except in
the course of his employment hereunder and in furtherance of the business of the
Company, or as required by applicable law) any confidential information, trade
secrets or proprietary data (including, without limitation, customer lists and
the identity of and any information relating to any customer) of the Company.
8.3 Disclosure of Restrictions. If Executive shall accept or
commence employment with, or agree to provide services to, any person (except a
person who is then affiliated with Employer) during the period from the date
hereof through the end of the Post-Employment Period then, and in such event, on
or before the date of such acceptance or agreement (and before commencement of
employment or the provision of services) Executive shall deliver a copy of this
Section 8 to his proposed employer.
8.4 Injunction. Notwithstanding any other provisions of this
Agreement, Executive acknowledges and agrees that in the event of a violation or
threatened violation of any of the provisions of this Section 8, Employer shall
have no adequate remedy at law and shall therefore be entitled to enforce each
such provision by temporary or permanent injunctive or mandatory relief obtained
in any court of
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competent jurisdiction without the necessity of proving damage or posting
any bond or other security, and without prejudice to any other remedies that
may be available at law or in equity.
9. Intellectual Property
During the Employment Period, Executive shall disclose to
Employer all ideas, inventions and business plans developed by him during the
Employment Period that relate directly or indirectly to the Company's business,
including, without limitation, any process, operation, product or improvement
that may be patentable or copyrightable. Executive agrees that such shall be the
property of the Company and that he shall at the Company's request and cost do
whatever is necessary to secure the rights thereto by patent, copyright or
otherwise to the Company.
10. Miscellaneous
10.1 Notices. Any notice, consent or authorization required or
permitted to be given pursuant to this Agreement shall be in writing and sent to
the party for or to whom intended, at the address of such party set forth below,
by registered or certified mail (if available), postage paid, or at such other
address as either party shall designate by notice given to the other in the
manner provided herein.
If to Employer, to it at:
0000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Board of Directors
If to Executive, to him at:
0000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, XX 00000
10.2 Taxes. Employer is authorized to withhold, from any
compensation or benefits payable hereunder to Executive, such amounts for income
tax, social security, unemployment compensation and other taxes as shall be
necessary or appropriate in the reasonable judgment of Employer to comply with
applicable laws and regulations.
10.3 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of Missouri applicable to
agreements made and to be performed therein.
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10.4 Headings. All descriptive headings in this Agreement are
inserted for convenience only and shall be disregarded in construing or applying
any provision of this Agreement.
10.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.6 Severability. If any provision of this Agreement, or part
thereof, is held to be unenforceable, the remainder of such provision and this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.
10.7 Entire Agreement. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. This Agreement supersedes any prior agreement between the
parties relating to the subject matter hereof.
10.8 Arbitration. Any controversy or claim arising out of, under
or relating to this Agreement or the performance or breach hereof, shall be
resolved by arbitration in Kansas City, Missouri, before the American
Arbitration Association, in accordance with the rules then in effect of such
Association; and judgment upon the award or decision rendered may be entered and
enforced in any court of competent jurisdiction; provided, however, that suit
for equitable relief may be brought in any court of competent jurisdiction in
the State of Missouri. The award of the arbitrator in any arbitration shall
include provision for payment of legal fees and expenses incurred by the
prevailing party. The parties hereto hereby submit to the personal jurisdiction
of the state courts of the State of Missouri and the rules and regulations of
said courts applicable to actions to be finally determined therein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
BHA GROUP, INC.
By: XXXXX X. XXXX
-----------------------
Name: XXXXX X. XXXX
------------------
Title: President
-----------------
XXXXX X. XXXX
---------------------------
XXXXX X. XXXX
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Exhibit 4.1
Compensation
1. Base Salary. During the Employment Period, Employer shall pay
to Executive Base Salary, payable in equal monthly installments at such times
during each month as is customary with Employer with respect to its senior
executive employees, at a rate of $79,700 per annum through September 30, 1995.
2. Bonuses.
(a) For the purposes hereof, the following terms shall have the
respective meanings ascribed thereto below:
(i) "Actual Ratio" for any Year means a fraction, the
numerator of which is the Earnings Per Share for such Year and the denominator
of which is the Earnings Per Share for the immediately preceding Year.
(ii) "Average Earnings Growth" for any Year means one-third
of the sum of the Yearly Earnings Growth for such Year and for each of the two
Years immediately preceding such Year; provided, however, that, for the Year
ending September 30, 1990, "Average Earnings Growth" means one-half of the sum
of the Yearly Earnings Growth for such Year and the immediately preceding Year,
but calculated before giving effect to any bonuses payable pursuant to the
provisions of this Paragraph 2 and any bonus provisions of other employment
arrangements of Employer.
(iii) "Earnings Per Share" for any Year means the earnings
per share (after taxes) of Employer for such Year on a consolidated basis, as
determined in accordance with generally accepted accounting principles
consistently applied with prior periods, and shown on Employer's income
statement for such Year.
(iv) "Target Earnings Per Share" for any Year means the
target established prior to such Year pursuant to this Paragraph 2 for the
Earnings Per Share for such Year.
(v) "Target Ratio" for any Year means a fraction, the
numerator of which is the Target Earnings Per Share for such Year and the
denominator of which is the Earnings Per Share for such Year.
(vi) "Year" means the fiscal year of Employer ending on the
September 30 of each calendar year.
(vii) "Yearly Earnings Growth" for any Year means a
fraction, the numerator of which is the Earnings Per Share for such Year and the
denominator of which is the Earnings Per Share for the immediately preceding
Year.
(b) Prior to commencement of each Year during the Employment
Period, Employer's Board of Directors shall determine the Target Earnings Per
Share. The
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parties acknowledge that Employer's Board of Directors has heretofore determined
the Target Earnings Per Share for the Year ending September 30, 1995.
(c) Within 75 days following the end of each Year during the
Employment Period, Employer shall pay to Executive a bonus in respect of such
Year in the applicable amount set forth below:
If the Actual Ratio for such Year is: Then the amount of such bonus shall be:
------------------------------------- ---------------------------------------
.85 or less zero
Greater than .85 and less than 1.0 the product of (i) $12,000 , times (i) a
fraction, the numerator of which is the
excess of the Actual Ratio over .85 and
the denominator of which is .15
1.0 $12,000
Greater than 1.0 and less than the the sum of (i) $12,000, plus (ii) the
Target Ratio product of (A) $18,000, times (B) a
fraction, the numerator of which is the
excess of the Actual Ratio over 1.0 and
the denominator of which is the excess
of the Target Ratio over 1.0
Greater than or equal to the Target $30,000
Ratio
(d) Within 75 days following the end of each Year during the
Employment Period, Employer shall pay to Executive a bonus in respect of such
Year (in addition to the bonus, if any, to be paid pursuant to Paragraph 2(c))
in the applicable amount set forth below, except, that the maximum amount of
such bonus in respect of the Year ending September 30, 1995, which shall be
based on the formula set forth below, shall be equal to $25,000.
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If the Average Earnings Growth for such Then the amount of such bonus shall be:
Year is:
--------------------------------------- ---------------------------------------
Less than 1.15 zero
1.15 $10,000
Greater than 1.15 and less than 1.35 the sum of (i) $10,000, plus (ii) the
product of (A) $15,000, times (B) a
fraction, the numerator of which is the
excess of the Average Earnings Growth
for such Year over 1.15 and the
denominator of which is 0.20
Greater than or equal to 1.35 $25,000
At the option of Employer, the bonus provided for in this paragraph (d) may be
paid to Executive by delivery of shares of Class A Common Stock having a fair
market value (equal for this purpose to the average of the closing prices of
such shares on the principal national securities exchange or over-the-counter
market on which such shares are traded for each of the last 30 days on which
such shares were traded prior to the payment date); provided, however, that upon
request of Executive at least one-third of the bonus shall be paid in cash.
Executive agrees to acquire such shares for investment and to take such other
actions as shall be reasonably required by Employer to insure compliance with
the Securities Act of 1933, as amended.
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