Exhibit 10(j)
January 29, 1997
Xx. Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
This letter agreement sets forth the terms and conditions of your
continuing employment with Xxxxxx Industries Inc. Please affix your signature
to the enclosed copy of this letter to document your agreement with these terms
and conditions and return the copy to me at your earliest convenience.
1. Position. During the term of your employment with the Company, you
will continue to serve as President and Chief Executive Officer of the Company.
You agree to devote your full business time and attention to the duties of such
offices and use your best efforts to protect, encourage and promote the
interests of the Company during the term. You shall not during your employment
be employed by, or, without the consent of the Board of Directors, be a director
of, any other business. However nothing shall prevent you from continuing to
serve as a director of National City Bank, Kentucky, or to serve as a director
of any civic or charitable organization.
2. Term. Your term of employment under this Agreement shall be for a
three-year period, commencing as of January 1, 1997. The term shall be
automatically extended at the end of each day for an additional day so that the
remaining term of the Agreement shall be three years. Such automatic extensions
shall terminate upon your receipt of written notice from the Board of Directors
of the Company that the Agreement will not be so extended at the completion of
its remaining three-year term.
3. Compensation. As compensation for the services which you will render
pursuant to this Agreement, you will receive the following payments and
benefits:
a. Salary. You will be paid an annual salary of $360,000 for
the calendar year 1997. Your salary will automatically increase to
$375,000 for 1998 and $390,000 for 1999. Thereafter, your performance
will be subject to review by the Compensation Committee on an annual
basis in accordance with the usual review procedures from time to time
in effect for senior management of the Company and your salary may be
increased (but not decreased) from time to time based on those
reviews.
b. Bonus. You will participate in the Company's annual
executive bonus program for senior executives. Your annual target
bonus will be not less than 60% of your salary and will be earned if
the Company achieves annual financial performance goals established by
the Compensation Committee.
c. Long-Term Incentives. You will participate in the Company's
1995 Incentive Stock Plan and will be awarded stock options and
performance share awards as determined from time to time by the
Compensation Committee based upon the Committee's evaluation of your
performance and the performance of the Company from year to year.
d. Benefits. You will be entitled to participate in all
employee benefit plans and programs of the Company (other than any
severance pay plan) which are made available from time to time to
senior officers of the Company, relating to medical care, dental care,
annual physical examination, long-term disability, and retirement.
The Company's objective is to provide you compensation at a level of at least
the 50% quartile of competitive compensation for chief executive officers in
companies of comparable revenues. The Company intends to reach this objective
over a 3 to 5-year period.
4. Expenses. The Company will pay or reimburse you for any expenses you
reasonably incur in furtherance of your duties hereunder upon submission of
vouchers or itemized reports prepared in compliance with Company policies and as
may be required in order to qualify such payments as proper deductions for tax
purposes. The Company shall also lease or purchase an automobile for your use
in the rendition of services hereunder and you shall be reimbursed for all
expenses incurred in the use of the automobile.
5. Vacation. You shall be entitled to paid vacation during each year of
the term of your employment in accordance with Company policy applicable to
salaried employees.
6. Death. In the event of your death during the employment term, the
Company will pay your estate, or designated beneficiary, any unpaid salary or
other accrued compensation through the date of termination and a pro rata
portion of your target bonus for the year in which your death occurs.
7. Disability. Any physical or mental ailment which prevents you from
performing your duties hereunder for a period of more than 180 consecutive days
and which is expected to be of permanent duration shall constitute total
permanent disability hereunder. In the event of your permanent total
disability, your employment will terminate, the Company will pay you or your
representative your salary through the date of termination and a pro rata
portion of your target bonus for the year in which disability occurs, and all
rights, duties and obligations of both parties under this Agreement (other than
your obligation of noncompetition and confidentiality under paragraph 12 hereof)
shall cease and you shall be entitled to all the benefits then being provided to
senior officers of the Company who become so disabled.
8. Resignation. If you voluntarily terminate your employment at any time
during the term, all obligations of the Company under this Agreement shall
immediately cease, except for obligations involving accrued but unpaid
compensation under this Agreement through the date of such termination.
9. Termination for Cause. The Company may terminate your employment at
any time for cause. For purposes hereof, the term "cause" shall have the same
meaning as it does in the "Employment Agreement" between the parties dated
October 1, 1988 (the "1988 Agreement"). All obligations of the Company under
this Agreement shall immediately cease upon termination of your employment for
cause except for obligations involving accrued but unpaid compensation under
this Agreement through the date of such termination.
10. Severance. If your employment is terminated by the Company without
cause, the Company shall continue to pay you your base salary for a 36-month
period from the date of termination, continue your medical and other insurance
coverage for that period and make a payment to you equal to the present value of
three annual contributions to the Company's retirement plan (based on average of
the Company's last two contributions). Any payments under this paragraph shall
constitute liquidated damages and shall be your sole right to compensation in
the event of such termination of employment. The amount of any payment provided
for under this paragraph 10 shall not be reduced by any compensation earned by
you as a result of employment by another employer after the date of termination.
11. Change of Control. In the event of a change of control of the
Company, the provisions of the 1988 Agreement shall supersede the provisions of
this letter agreement for the "Employment Period" described in the
1988 Agreement. If you are still employed by the Company at the end of that
Employment Period, the terms and conditions of this letter agreement shall apply
to your continuing employment as if the change of control had not occurred.
"Change of control" shall have the same meaning in this letter agreement as it
does in the 1988 Agreement.
12. Noncompetition; Confidential Information.
a. You agree that for a period of one year following your
termination of employment you will not participate in the management
of, or maintain any interest in, any organization which offers
services or products similar to those offered by the Company or its
subsidiaries without the prior written approval of the Board of
Directors of the Company. This subparagraph shall not apply if
termination of your employment is effected by the Company without
cause.
b. Upon termination of your employment, you agree not to take
or retain any records, papers, files or other documents (including
copies thereof) and shall not disclose to any person or entity any
confidential information of any kind relating to the business,
financial or other affairs of the Company or its affiliates without
the prior written approval of the Board of Directors of the Company.
13. Arbitration. Any controversy relating to this Agreement shall be
settled exclusively by arbitration in Louisville, Kentucky in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on an arbitrator's award relating to this Agreement in any court
having jurisdiction.
14. Notices. All notices or other communications hereunder shall be in
writing and shall be effectively given when mailed by registered mail, return
receipt requested, and directed to the party at the address given herein, or to
such other address as either party may hereafter designate to the other in
writing.
If to Executive:
Xx. Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to the Company:
Xxxxxx Industries Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
15. Entire Agreement. This letter agreement constitutes the entire
agreement between you and the Company relating to your current employment and
supersedes all previous agreements or understandings either oral or written with
respect thereto, except for the 1988 Agreement which continues in full force and
effect.
16. Amendment. The terms and conditions of this Agreement may be amended
at any time by written agreement between you and the Company.
17. Continued Employment. If you remain employed by the Company after
termination of this letter agreement, your annual salary shall continue at the
rate in effect immediately prior to termination and you shall continue to
participate in the Company's bonus, incentive and benefit plans (including the
Severance Pay Policy for Officers).
18. Enforceability. The invalidity or unenforceability of any provision
of this letter Agreement shall not affect its other provisions and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision had not been included. Any waiver by the Company of a breach of any
provision of this Agreement by you shall not operate or be construed as a waiver
of any subsequent breach of the Agreement by you.
Very truly yours,
______________________
Chairman
Compensation Committee
I agree to the above terms
and conditions.
____________________________________
Xxxxxxx X. Xxxxx
Date: ________________________, 1997
