EMPLOYMENT AGREEMENT
This Agreement is made December 15, 1993, between ACTION
INDUSTRIES, INC. (the "Company"), a Pennsylvania corporation with
principal offices located at Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx,
XX 00000, and XXXXXX X. XXXXXXX ("Executive"), an individual
residing at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
In consideration of the severance benefit and the mutual promises
herein, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive, and
Executive agrees to serve, as an officer of the Company for a
term beginning January 4, 1994 and ending January 3, 1996, or
until Executive's employment with the Company is terminated by
either party as specified in Section 6 (the "Employment Period").
2. DUTIES. Executive is engaged to perform and shall perform
the duties described in his Job Description, which the parties
shall finalize no later than January 31, 1994, as well as any
other duties which may be assigned to him by the Company's Chief
Executive officer. Executive acknowledges that the Company may
revise his Job Description and title from time to time, and the
Company specifically reserves the right to do so in its sole
discretion. Executive shall devote his full working time and
attention to the performance of his duties. At no time during
the Employment Period shall Executive take any additional
employment without written permission from the Chief Executive
Officer.
3. COMPENSATION
3.1 Base Salary. For all services rendered by Executive
during the Employment Period, the Company shall pay Executive a
base salary, which shall be $105,000 for the first twelve months
of the Employment Period. Salary payments shall be subject to
withholding of applicable taxes. Executive shall be eligible for
increases or decreases in salary as determined by the Company's
Chief Executive Officer in his sole discretion.
3.2 Additional Compensation
3.2.1 Participation in Executive Compensation
Programs. In addition to receiving base salary, Executive shall
be entitled, beginning with the Company's fiscal year 1995, to
participate in any bonus program, incentive compensation program,
and stock option plan established for executives of the Company.
3.2.2 Grant of Stock Options. Executive is hereby
granted the option to purchase 20,000 shares of common stock of
the Company at the closing market value of the shares as of
Executive's first day of employment. this grant is subject to
the terms and conditions of the Company's Stock Option Plan and
to Executive's execution of the Company's Stock Option Agreement.
3.3 Benefits. Executive shall be eligible during the
Employment Period to participate in all other employee benefit
plans in which the Company's executives are generally entitled to
participate, including the Employees' Retirement Plan, except as
may be required by law or relevant plan provisions.
4. DISCLOSURE OF CONFIDENTIAL INFORMATION. Executive will,
during the Employment Period, have access to and become familiar
with various trade secrets and other confidential information,
consisting of technologies, formulas, patterns, devices,
inventions, processes, compilations of information, records, and
specifications owned by the Company and/or regularly used in the
operation of its business, and including but not limited to:
(a) information on the Company's finances and sales,
customers and prospective customers, sources of supply and
identity of suppliers and key purchasing personnel;
(b) the Company's manufacturing formulas and processes,
product research and development, merchandising and marketing
methods; and
(c) the Company's business plans and projections; but not
including information publicly reported by the Company.
Executive shall not during or within two (2) years after any
termination of his employment, disclose all or any part of such
confidential information, which constitute valuable, special, and
unique assets of the Company's business, to any person,
corporation, association, or other entity for any reason
whatsoever.
Disclosure of any confidential information shall not be
prohibited if such disclosure is directly pursuant to the valid
and existing order of a court or other governmental body or
agency within the United States; provided, however, that (i)
Executive shall first have given prompt notice to the Company of
any such possible or prospective order (or proceeding pursuant to
which any such order may result) and (ii) the Company shall have
been afforded a reasonable opportunity to prevent or limit any
such disclosure.
In the event of a breach or a threatened breach by Executive of
the provisions of this Section, the Company shall be entitled to
an injunction restraining Executive from disclosing in whole or
in part the Company's confidential information. Nothing herein
shall prohibit the Company from pursuing any other remedies
legally available to the Company for such breach or threatened
breach, including the recovery of damages from Executive.
5. COVENANT NOT TO COMPETE. Executive acknowledges that the
Company is in the business of marketing and distributing nation-
ally to retailers the following products and services, among
others: (i) promotional programs, i.e. "Dollar Days" and other
similar programs, consisting of a broad array of low price, high
value household goods together with in-store display and print
advertising, (ii) replenishment programs, i.e., ongoing programs
consisting of a broad array of low price, high value household
goods displayed in a promotion format, and (iii) electric table
lamps for basic stock lines.
During the Employment Period and for two years thereafter,
Executive shall not individually or on behalf of or in
conjunction with any other person or entity (except on behalf of
the Company):
(a) directly or indirectly own, manage, operate or otherwise be
engaged in, be employed by, contract with, participate in, or be
connected in any manner with the ownership, management,
operation, or control of any corporation, partnership,
proprietorship, or other entity engaged in the business of the
Company as defined above,
(b) solicit the trade of or do business with the suppliers,
vendors or customers of the Company or its subsidiaries or
affiliates for any business purpose that is in competition with
the Company's business as defined above,
(c) directly or indirectly hire any employee of the Company or
its subsidiaries or affiliates or solicit or induce any employee
of the Company or its subsidiaries or affiliates to leave the
employ of the Company for any reason whatever.
6. TERMINATION
6.1 Disability. If Executive becomes disabled during the
Employment Period, i.e., he is prevented from effectively
performing all or substantially all of his duties hereunder by
reason of physical or mental illness or injury, his employment
hereunder shall terminate if the disability extends for a period
of one year. Prior to any termination for disability, Executive
shall be eligible to participate in any Company Salary
Continuance Program and the Long-Term Disability Plan which
Executive has elected under the Company's flexible benefits
program.
6.2 Death. In the event Executive's employment with the
Company is terminated by reason of his death during the
Employment Period, Executive's estate shall be entitled to
payment of only the base salary earned by Executive under Section
3.1 prior to the date of death and not to any other compensation
otherwise payable under this Agreement.
6.3 Without Cause. In the event Executive's employment is
terminated by the Company prior to the expiration of the
Employment period, other than for cause, the Company shall
continue to provide Executive (or Executive's estate in the event
of Executive's death subsequent to termination) the following:
(i) the base salary set forth in Section 3.1 for the remainder of
the Employment Period, or, with the mutual consent of the Company
and Executive (or Executive's estate) and in lieu thereof, a lump
sum equal to the remaining unpaid base salary under Section 3.1,
discounted at the prime interest rate then in effect, and (ii)
continuation of health care benefits for the remainder of the
Employment Period, provided that Executive continues to make
timely payment to the Company for his portion of the premium for
the health care benefit he selected. If termination without
cause occurs within the last 12 months of the Employment period,
Executive's compensation and benefits shall be provided for 12
months from termination. No compensation other than that
specifically provided shall be payable.
6.4 Resignation. Executive may resign from employment with
the Company upon one (1) month's written notice, in which event
Executive shall be entitled to payment of only his base salary
earned prior to the date of resignation and not to any other
compensation otherwise payable under this Agreement.
6.5 For Cause. In the event Executive's employment is
terminated by the Company for cause prior to the end of the
Employment period, Executive shall be entitled to payment of only
his base salary earned under Section 3.1 prior to the date of
termination and not to any other compensation otherwise payable
under this Agreement. Termination of employment "for cause"
means a dismissal of Executive by the Company because of:
(a) Executive's gross negligence, willful misconduct, or
gross neglect of duty;
(b) any criminal act by Executive or any conduct by
Executive involving fraud or constituting bad faith by Executive
in dealing with or on behalf of the Company; or
(c) the material violation by Executive of any of the
agreements, covenants, terms, or conditions of this Agreement,
provided that the Company has given Executive notice in writing
reasonably specifying the violation(s), and Executive has failed
to cure the violation(s) within thirty (30) days thereafter.
6.6 Expenses of Enforcement. In the event Executive's
employment is terminated by the Company, other than for cause,
prior to the expiration of the Employment Period, then,
notwithstanding any provisions in this Agreement to the contrary,
the Company shall pay all reasonable legal fees and expenses
incurred by Executive in the successful enforcement of
Executive's rights under this Agreement.
6.7 Limitations. Executive shall in no event have any claims
or causes of action against the Company for any amounts not
specifically provided for in this Agreement, except as to
indemnification rights and contractual limitations on liability
provided for directors, officers, and/or employees of the Company
pursuant to the Company's bylaws then in effect.
7. NOTICES. Notices to Executive shall be sent to Executive's
address set forth above or to such other address as Executive may
provide to the Company in writing. Notices to the Company shall
be sent to its address set forth above, to the attention of the
Chief Executive Officer, or to such other address as the Company
may provide to Executive in writing.
8. WAIVER OF BREACH. The failure by a party to enforce its
rights against the other party following a breach of any
provision of this Agreement shall not operate or be construed as
a waiver of any other provision hereof or any subsequent breach
by such other party.
9. SEVERABILITY. The provisions of this Agreement will be
deemed to be severable. If any provision is held to be void or
illegal under applicable law, it shall be modified to conform to
the law in a manner that is consistent with the intention of the
parties. If the provision cannot be so modified, then it shall
be void, and the remaining provisions of the Agreement shall
remain binding upon the parties unless those provisions are so
impaired as to render the entire Agreement void.
10. GOVERNING LAW. This Agreement shall be governed by and con-
strued in accordance with the laws of the Commonwealth of
Pennsylvania.
11. ENTIRE AGREEMENT. This Agreement supersedes and replaces
all prior employment agreements between the parties. Subject to
the Incentive Stock Option Agreement and other benefit and
compensation plans to which Executive is entitled under Section
3, this Agreement contains the entire understanding of the
parties as to the subject matter hereof and can be amended or
supplemented only by a written agreement signed by the parties.
Intending to be legally bound, the parties hereby execute this
Agreement.
ATTEST: ACTION INDUSTRIES, INC.
XXXXX X. XXXXXXX By: R. XXXXX XXXXXX
R. Xxxxx Xxxxxx, President
and Chief Executive Officer
WITNESS:
XXXXX X. XXXXXXX XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
