EXHIBIT 10.19
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT between The Carbide/Graphite Group, Inc., a
Delaware corporation (the "Corporation") and Xxxxxx X. Xxxxxx (the "Executive")
dated as of April 1, 1997 (the "Agreement").
WHEREAS, the Corporation and the Executive have entered into an
employment agreement dated March 1, 1995 which is superseded by this Agreement;
and
WHEREAS, the Corporation wishes to employ the Executive as Chairman,
President and Chief Executive Officer of the Corporation on the terms set forth
herein and the Executive wishes to be employed by the Corporation on such terms;
IT IS, THEREFORE, AGREED:
1. Employment. The Corporation hereby agrees to employ the Executive,
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and the Executive hereby agrees to be employed by the Corporation, for the
period commencing as of the date hereof and ending on March 31, 1999 as its
Chairman, President and Chief Executive Officer (the "Employment Period").
2. Duties. During the Employment Period, the Executive agrees to
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devote his attention full time and during normal business hours to the business
and affairs of the Corporation and to use his best efforts to perform faithfully
and efficiently such responsibilities. The Executive shall, subject to the
supervision and control of the Board of Directors of the Corporation, perform
such duties and exercise such supervision and powers over and with regard to the
business of the Corporation as are contemplated to be performed by the Chairman,
President and Chief Executive officer pursuant to the By-laws of the
Corporation, and such additional duties as may from time to time
be prescribed by the Board of Directors. Subject to the provisions of the
Corporation's Charter and By-laws and applicable law, it is the expectation of
the Corporation that the Executive will continue to serve as a member of the
Board of Directors of the Corporation during the Employment Period.
3. Base Compensation. During the Employment Period, the Executive
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shall receive a base salary at an annual rate of at least $300,000 with any
increase thereto to be determined by the Compensation Committee of the Board of
Directors from time to time. The Executive's next salary review is scheduled for
June 30, 1998.
4. Stock Options. As of April 1, 1997, the Corporation shall grant to
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you a stock option to purchase 30,000 shares of the Corporation's Common Stock,
par value $.01 per share, pursuant to the Corporation's 1995 Stock Based
Incentive Option Plan (the "Stock Option Plan") at an exercise price equal to
the fair market value of the Corporation's Common Stock on April 1, 1997 as
determined by the Stock Option Plan Committee. In accordance with the provisions
of the Stock Option Plan, such option shall have a term of 10 years from the
date of grant and shall vest annually to the extent of 10,000 shares on each
July 31, 1997, July 31, 1998 and July 31, 1999 to the extent the Executive is
then employed by the Corporation on such date. The corporation and the Executive
shall enter into a stock option agreement in the form approved by the Stock
Option Plan Committee.
5. Annual Incentive Awards. Subject to the terms of the Corporation's
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Annual incentive Bonus Plan, the Executive's participation in the Plan for the
fiscal year ending July 31, 1997 shall be at award levels equal to 30% of base
pay for the period from August 1, 1996 through March 31, 1997; at the rate of
50% of base pay for the period April 1, 1997 through July 31, 1997; and at the
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rate of 50% of base pay for the fiscal year ending July 31, 1998 and the eight
months ending March 31, 1999.
6. Termination. (a) Death or Disability. This Agreement shall
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terminate automatically upon the Executive's death. The Corporation may
terminate this Agreement during the Employment Period after having established
the Executive's "Disability" (as defined below), by giving the Executive written
notice of its intention to terminate the Executive's employment. For purposes of
this Agreement, "Disability" means the Executive's inability to substantially
perform his duties and responsibilities to the Corporation by reason of a
physical or mental disability or infirmity (i) for a continuous period of six
months or (ii) at such earlier time as the Executive submits medical evidence
satisfactory to the Corporation that the Executive has a physical or mental
disability or infirmity that will likely prevent the Executive from
substantially performing his duties and responsibilities for six months or
longer, The date of Disability shall be the day on which the Executive receives
notice from the corporation pursuant to this Section 6(a).
(b) Cause. The Corporation shall have the right to terminate the
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Executive's employment for "Cause" during the Employment Period. For purposes of
this Agreement, "Cause" shall mean M the willful and continued failure by the
Executive to perform substantially his duties to the Corporation or its
subsidiaries (other than any such failure resulting from his Disability) within
a reasonable period of time after a written demand for substantial performance
is delivered to the Executive by the Board of Directors, which demand
specifically identifies the manner in which the Board of Directors believes that
the Executive has not substantially performed his duties, (ii) embezzlement or
theft from the Corporation or any subsidiary or affiliate by the Executive or
the commission or perpetration by the Executive of any act involving moral
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turpitude, or (iii) any material and willful violation by the Executive of
his obligations under Section 8 hereof.
(c) Change of Control. The Executive shall have the right to terminate
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this Agreement during the Employment Period upon thirty (30) days prior written
notice to the Corporation or a successor of the Corporation, as the case may be,
for "Good Reason" on or subsequent to the consummation of a "Change of Control".
For purposes of this Agreement, (A) "Good Reason" shall mean (1) a change in the
Executive's duties and responsibilities without his consent such that his duties
and responsibilities are materially reduced or altered in a manner unfavorable
to him or a decrease in the Executive's salary or a material decrease in his
benefits or (2) a change in the location at which the Executive's duties are
principally carried out or more than 20 miles from the Corporation's principal
executive offices in Pittsburgh, Pennsylvania; and (B) "Change of Control" shall
mean (i) a change in control of the Board of Directors of the Corporation
pursuant to which any single Person or two or more Persons acting in concert
acquires control of such Board of Directors or (ii) the Transfer of at least 51%
or more of the voting equity interests in the Corporation (or any parent of the
Corporation), whether by sale, merger, consolidation or otherwise, to any single
Person or two or more Persons acting in concert; provided that two or more
Persons shall be considered to be acting in concert for purposes of clauses (i)
and (ii) hereof only if such Persons would have been considered to be acting in
concert as a "group" for purposes of Section 13(d) of the Securities Exchange
Act of 1934, for such purposes treating voting equity interests of the
Corporation held or acquired by such Persons as if such voting equity interests
were equity securities in respect of which a Schedule 13D would be required to
be filed with the Securities and Exchange commission and as if the requisite
percentage and other threshold
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conditions to such filing were satisfied. "Person" means any individual,
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corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or governmental body. "Transfer" means,
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sell, transfer, convey, lease and/or deliver (other tenses of the term have
similar meaning) or sale, transfer, assignment, conveyance, lease and/or
delivery, as indicated by the context.
7. Effect of Termination. (a) Upon termination of the Executive's
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employment during the Employment Period, because of death or Disability as
provided in subsection 6(a), following termination of the Executive's employment
the Corporation shall continue to pay the Executive or his estate or other
personal representative as severance (x) the amount of the Executive's salary as
provided in Section 3 at the rate in effect immediately prior to termination of
his employment for a period of twenty-four months less the amount of any
disability payments made by the Corporation or any Corporation plan and (y) in
the case of a Disability termination will afford to the Executive at the
Corporation's expense, health insurance benefits (including medical and dental)
and life insurance equivalent to the benefits enjoyed by the Executive at the
date of termination (the "Insurance Benefits") for a period of twenty-four
months from the date of such termination.
(b) If the Executive's employment is terminated by the Corporation
during the Employment Period (other than for death, Disability or Cause or other
than by virtue of a Change of Control pursuant to subsection 6(c)), or in the
event the Corporation is unwilling to extend the Executive's employment at the
expiration of this Agreement upon terms at least as favorable to the Executive
as the terms set forth herein, the Corporation shall continue the Executive's
salary for the remainder of the Employment Period or twenty-four (24) months,
whichever is longer and shall continue to maintain the Insurance Benefits for
such period.
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(c) If the Executive's employment is terminated by the Executive
during the Employment Period pursuant to subsection 6(c), the Corporation shall
pay to the Executive a cash amount as severance in a lump sum equal to 2.99
times the Executive's base salary then in effect pursuant to Section 3; provided
that such payment under this subsection 7 (c) shall be limited to an amount
which would not constitute an "excess parachute payment" under section 280G of
the federal Internal Revenue Code. Such lump sum payment shall be paid within 45
days after the date of termination provided for in subsection 6 (c).
(d) Nothing herein shall be deemed to restrict or reduce the
Executive's vested benefits under the 1988 Stock Option Plan, the compensation
deferral plan, the Savings Incentive Plan or the Annual Incentive Bonus Plan as
determined in accordance with the provisions of such plans.
(e) No continued salary or severance shall be paid if the Executive's
employment terminates for any reason during the Employment Period other than as
set forth above in this Section 7. Upon the termination of employment with the
Corporation for any reason, the Executive shall offer to resign his position as
a director of the Corporation, effective as of the date of such termination.
8. Confidential Information; Non-Competition. (a) For a three year
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period commencing on the date on which the Executive's employment with the
Corporation, or any of its affiliates, terminates for whatever reason (the "Date
of Termination"), (i) the Executive shall hold in a fiduciary capacity for the
benefit of the Corporation all secret or confidential information, knowledge or
data relating to the Corporation or its affiliates, and their respective
businesses which shall not be public knowledge (other than information which
becomes public as a result of acts of the Executive or his
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representatives in violation of this Agreement), including without limitation,
customer lists, bid, proposals, contracts, matters subject to litigation,
technology or financial information of the Corporation or its subsidiaries and
other know-how, and (ii) the Executive shall not, without the prior written
consent of the Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those designated by
it in writing.
(b) For a three year period commencing on the Date of Termination,
the Executive will not, directly or indirectly, (i) own, manage, operate,
control or participate in the ownership, management or control of, or be
connected as an officer, employee, partner, director, or consultant or
otherwise, with, or have any financial interest in (except for (A) ownership as
of the date hereof, (B) any ownership in the common stock of the Corporation, or
(C) any ownership of less than 5% of the outstanding equity interest in any
entity) (I) the manufacture of graphite electrodes, (II) the manufacture of
specialty carbon and graphite products, or (III) the refining of products
required for production of, or the production of, needle coke, or the
manufacture or marketing of calcium carbide and its direct derivatives, in each
case, in any market in which the Corporation or its affiliates conducts or
solicits business or (ii) solicit or contact any employee of the Corporation or
its affiliates with a view to inducing or encouraging such employee to leave the
employ of the Corporation or its affiliates for the purpose of being employed by
the Executive, an employer affiliated with the Executive, or any competitor of
the Corporation or any affiliate thereof; provided that the provisions of
subsection (b) (i) shall be limited to a period of two years in the event the
Corporation is unwilling to extend the Executive's employment at the expiration
of this Agreement upon terms at least as favorable to the Executive
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as set forth in this Agreement or the termination by the corporation of the
Executive's employment during the Employment Period other than for Cause or
Disability.
(c) The Executive acknowledges that the provisions of this Section 8
are reasonable and necessary for the protection of the Corporation and that the
Corporation will be irrevocably damaged if such provisions are not specifically
enforced. Accordingly, the Executive agrees that, in addition to any other
relief to which the Corporation may be entitled in the form of actual or
punitive damages, the Corporation shall be entitled to seek and obtain
injunctive relief from a court of competent jurisdiction (without the posting of
a bond therefor) for the purposes of restraining the Executive from any actual
or threatened breach of such provisions.
9. Successors. (a) This Agreement is personal to the Executive and
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without the prior written consent of the corporation shall not be assignable by
the Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Corporation and its successors.
(c) This Agreement supersedes the employment agreement dated March 1,
1995 between the Executive and the Corporation which prior agreement is no
longer in force.
10. Miscellaneous. (a) This Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
(b) All notices and other communications here-under shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Executive:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
If to the Corporation:
The Carbide/Graphite Group, Inc.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The Corporation may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(d) The Corporation's failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof. The Executive's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision hereof.
(e) This Agreement embodies the entire agreement between the parties
with respect to the Executive's employment, and may not be changed or terminated
orally.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and
pursuant to the authorization from its Board of Directors the Corporation has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
THE CARBIDE/GRAPHITE GROUP, INC.
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By: /s/ Xxxxxxxx X. Xxxxxx
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Name:
Title:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx 4/10/97
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