EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective as of the 29th day of November,
2001 by and among Viskase Companies, Inc. ("VCI"), a Delaware corporation,
Viskase Corporation ("Viskase"), a Pennsylvania corporation, both with principal
offices at 000 Xxxxxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxxxxxx, XX 00000 (VCI and
Viskase shall be collectively referred to herein as the "Company") and Xxxxxx X.
Xxxxxxx, an individual ("Executive") (hereinafter together referred to as "the
parties").
WHEREAS, the Company wishes to provide incentive to Executive to remain in
the employ of the Company during the period of restructuring and thereafter;
WHEREAS, Executive has served as Vice President, Chief Financial Officer
and Treasurer of VCI and Vice President, Chief Financial Officer and Treasurer
of Viskase; and
WHEREAS, the Company and Executive desire that Executive continue to serve
as Vice President, Chief Financial Officer and Treasurer of VCI and Vice
President, Chief Financial Officer and Treasurer of Viskase, respectively, on
the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements and covenants of
the parties contained herein, the parties agree as follows:
1. Employment Term. The Company shall employ Executive and Executive
agrees to be employed by the Company; pursuant to the terms and conditions
hereof; for the period (the "Employment Term") commencing on the date hereof and
ending on December 31, 2004; provided, however, that on January 1, 2003 and on
each subsequent anniversary thereof, the Employment Term shall automatically be
extended for a period of one year unless either party shall have given written
notice to the other party not less than thirty days prior to January 1, 2003 or
any subsequent anniversary thereof that the Employment Term shall not be so
extended.
2. Duties. During the Employment Term, Executive shall serve as Vice
President, Chief Financial Officer and Treasurer of each of VCI and Viskase.
Executive shall perform such services and duties prescribed for such positions
by VCI's and Viskase's Bylaws and as are otherwise incident to such positions
and such other services and duties not inconsistent with such positions as may
be determined from time to time by the President of VCI and Viskase or the Board
of Directors of VCI ("VCI Board") or the Board of Directors of Viskase (the
"Board"). Subject to the terms and conditions of this Agreement, Executive shall
devote his full business time, attention and skills, to the best of his
abilities, to the performance of such services and duties, and use his best
efforts to promote the interests of the Company and its subsidiaries. Nothing in
this Agreement shall preclude Executive from engaging in charitable and
community affairs, from managing his personal investments or, except as
otherwise provided in Sections 8(b) and (c), from serving as a member of the
board of directors or a trustee of other companies, associations or entities,
provided, however, that such activities do not interfere in any material respect
with Executive's performance of his obligations to the Company hereunder.
3. Compensation. In consideration of the performance by Executive of
his obligations hereunder, the Company shall pay Executive the amounts
hereinafter set forth.
(a) During the Employment Term, the Company shall pay Executive
(i) a salary (the "Base Salary") at an annual rate of not less than $178,728
payable in substantially equal installments in accordance with the normal
payroll practices of the Company then in effect for other officers of the
Company. Thereafter, Executive's Base Salary shall be increased by such amount
as shall be determined by the President of the Company in a manner consistent
with its most recent determination of increases in base salary of other senior
officers of the Company.
(b) During the Employment Term, Executive will be eligible to
participate in the Executive Auto Allowance Program, Viskase Companies, Inc.
Non-Qualified Parallel Plan, the Management Incentive Plan or any replacement
thereof, and the 1993 Stock Option Plan and any replacement thereof.
4. Benefits. During the Employment Term, Executive shall be entitled to
participate in any employee benefit plans (including, but not limited to, any
life insurance, disability, medical, dental, hospitalization, savings,
retirement and other benefit plans of the Company) then in effect for executive
officers of the Company and to receive any other fringe benefits that the
Company then provides to executive officers of the Company.
5. Vacations. During the Employment Term, Executive shall be entitled
to paid vacations of no less than five (5) weeks per year. In addition,
Executive's vacation entitlement shall increase in accordance with the Company's
general vacation policy.
6. Termination. Executive's employment hereunder may be terminated
under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate
automatically upon Executive's death.
(b) Disability. The Company or Executive may terminate Executive's
employment after having established Executive's Disability. For purposes of this
Agreement, "Disability" shall be established if Executive shall be unable to
perform fully his duties hereunder because of illness, physical or mental
disability or other incapacity, as confirmed by medical evidence satisfactory to
the Company, that is expected to prevent him from returning to the full
performance of his duties hereunder for six months or longer.
(c) Cause. The Company may terminate Executive's employment for
"Cause." Cause shall mean a finding adopted in good faith by the Board that
Executive (i) willfully failed to substantially perform his services or duties
for the Company (other than a failure resulting from Executive's Disability) and
such failure continues for 30 days after the Board has given written notice to
Executive providing a reasonable description of the basis for the determination
that Executive has failed to perform his services or duties, (ii) has been
convicted of (or plead nolo contendere to) a felony or to a misdemeanor
involving moral turpitude or the use of a controlled substance, (iii) has
breached this Agreement in any material respect if such breach is not cured or
remedied within 30 days after the Board has given written notice to Executive
providing a reasonable description of the breach, or (iv) engaged in
embezzlement or misappropriation of the assets of the Company or any of its
subsidiaries or (v) engaged in conduct constituting willful malfeasance in
connection with his employment which is materially injurious to the Company and
its subsidiaries taken as a whole. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by Executive after Notice of
Termination (as hereinafter defined) is given by Executive shall constitute
Cause for purposes of this Agreement. No act, or failure to act, on Executive's
part, shall be
considered "willful" for purposes of (i) or (v) above unless he has acted or
failed to act with an absence of good faith and without a reasonable belief that
his action or failure to act was in the best interests of the Company. Any
action of the Board to terminate Executive for cause under clause (i), (iii),
(iv) or (v) of the preceding sentence shall not be made until after Executive
and his legal advisors have been provided an opportunity to meet with the Board,
contest the basis for such termination and to demonstrate that Executive's
continued employment is in the best interests of the Company.
(d) Good Reason. Executive may terminate his employment for "Good
Reason." For purposes of this Agreement, Good Reason shall mean the occurrence
of one of the following events within a period of twenty-four (24) months
following a Change of Control (as hereinafter defined) or consolidation or
elimination of the corporate office:
(i) a reduction in Executive's base compensation and
incentive bonus opportunity from that in effect on the day immediately before
the effective date of a Change of Control;
(ii) a reduction in Executive's principal responsibilities
from those in effect on the day immediately before the effective date of a
Change of Control;
(iii) any change in Executive's work location which is
different than that on the day immediately before the effective date of a Change
of Control by more than fifty (50) miles; and
(iv) a material breach of this Agreement by the Company which
is not cured within thirty (30) days written notice thereof.
As used in this Section 7(d), the term "Company" shall also
refer to its successor entity or any entity which has acquired control of VCI or
Viskase as a result of a Change of Control.
(e) Notice of Termination. Any purported termination of
Executive's employment hereunder shall be communicated by a written Notice of
Termination to the other. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon as a basis for termination. For purposes
of this Agreement, no such purported termination of employment shall be
effective without such Notice of Termination.
(f) Termination Date. "Termination Date" shall mean in the case of
Executive's death, his date of death, or in all other cases, the date specified
in the Notice of Termination; provided, however, that if the Company terminates
Executive's employment other than for Cause, or Executive terminates his
employment for any reason other than Good Reason, the date specified in the
Notice of Termination shall be no less than 30 days from the date the Notice of
Termination is given to Executive.
7. Compensation Upon Termination. Upon termination of Executive's
employment during the Employment Term, Executive shall be entitled to the
following benefits:
(a) If Executive's employment is terminated by the Company for
Cause, or by Executive for any reason other than Good Reason, the Company shall
pay to Executive all amounts earned or accrued hereunder through the Termination
Date but not paid as of the Termination Date, including (i) Base Salary, (ii)
accrued but unpaid vacation pay, (iii) any earned or awarded and
vested, but unpaid bonus for any fiscal year of the Company ending prior to the
year in which such termination occurs and (iv) any previous compensation which
Executive has previously deferred (including any interest earned or credited
thereon) (collectively, "Accrued Compensation"). Executive's entitlement to any
other benefits shall be determined in accordance with the Company's employee
benefit plans and other applicable programs and practices then in effect.
(b) Subject to Section 7(c), if Executive's employment is
terminated by the Company for any reason other than for Cause, death or
Disability, or by Executive for Good Reason, the Company shall pay to Executive
an amount equal to (i) all Accrued Compensation, plus (ii) 200% of Executive's
Base Salary, plus (iii) the bonus which would have been payable to Executive
under the Management Incentive Plan in respect of the year of the Employment
Term in which the Termination Date occurs and calculated as if Executive were
employed by the Company as of the end of such year (but, to the extent the bonus
is contingent on the achievement of performance targets, based on whether such
targets were actually achieved as of the Termination Date) multiplied by a
fraction, the numerator of which shall be the number of days in such year which
have elapsed prior to the Termination Date and the denominator of which shall be
the number of days in such year. The Company shall also provide outplacement
services consistent with outplacement services provided to executive officers in
the past; provided, however, no payment shall be made to Executive in lieu of
outplacement services. In addition, Executive shall be entitled to coverage for
twenty-four (24) calendar months following the month on which the Termination
Date occurs under the life insurance, medical, dental and hospitalization
benefits which Executive would have been entitled to receive if he had continued
his employment with the Company for such period, on the terms and conditions
applicable to other executive officers of the Company as in effect from time to
time during such period. Executive's entitlement to any other benefits shall be
determined in accordance with the Company's employee benefit plans and other
programs and practices then in effect. All outstanding stock options granted or
issued pursuant to this Agreement shall become exercisable, vested and
nonforfeitable.
(c) If Executive's employment by the Company is terminated by the
Company following a Change of Control other than for Cause, death or Disability,
or by Executive for Good Reason, then Executive shall be entitled to the amounts
described in paragraph (b) above, except that in applying clause (iii) thereof,
it shall be assumed that the bonus to which the Executive shall be entitled
shall be equal to 40% of Base Salary irrespective of the Company's performance
or the date on which the termination occurs.
(d) For purposes of this Agreement, a "Change of Control" shall
mean any of the following events:
(1) any Person (an "Acquiring Person") becomes the
"beneficial owner" (as such term is defined in Rule 13d3 promulgated under the
Exchange Act, a "Beneficial Owner"), directly or indirectly, of securities of
VCI or Viskase representing 20% or more of the combined voting power of VCI's or
Viskase's then outstanding securities, other than beneficial ownership by VCI or
Viskase, any employee benefit plan of VCI or Viskase or any person or entity
organized, appointed or established pursuant to the terms of any such benefit
plan;
(2) VCI's or Viskase's stockholders approve an agreement to
merge or consolidate VCI or Viskase with another corporation, or an agreement
providing for the sale of substantially all of the assets of VCI or Viskase to
one or more corporations, in any case other than with or to a corporation
50% or more of which is controlled by or is under common control with, VCI or
Viskase;
(3) during any two-year period, individuals who at the date
on which the period commences constitute a majority of the VCI Board cease to
constitute a majority thereof for any reason; provided, however, that a director
who was not a director at the beginning of such period shall be deemed to have
satisfied the two-year requirement if such director was elected by, or on the
recommendation of, at least a majority of the directors who were directors at
the beginning of such period (either actually or by prior operation of this
provision), other than any director who is so approved in connection with any
actual or threatened contest for election to positions on the VCI Board; or
(4) at any time, a majority of the members of the VCI Board
shall consist of individuals who were not nominated for election to the VCI
Board by VCI's Compensation and Nominating Committee or such other committee of
the VCI Board (including the VCI Board itself) as shall, from time to time, be
performing the function of proposing nominees for election to the VCI Board.
(e) If Executive's employment by the Company is terminated by
reason of Executive's death, Executive's estate or designated beneficiaries
shall receive:
(i) all of Executive's Accrued Compensation; and
(ii) and any death benefits provided under the employee
benefits plans specified in Section 4 hereof; and
(f) If Executive's employment by the Company is terminated by the
Company or Executive by reason of Executive's Disability, Executive shall be
entitled to receive those amounts provided for under the Company's short-term
and long-term disability plans.
(g) The amounts (other than any life insurance and medical, dental
and hospitalization coverage) provided for in this Section 7 shall be paid
within five (5) business days after Executive's Termination Date. The
continuation of any life insurance, medical, dental or hospitalization benefits
pursuant to Section 7(b) or 7(c) shall be in satisfaction of the Company's
obligations under Section 4980B of the Internal Revenue Code of 1986, or any
similar state law requiring continuation of such insurance or benefits, with
respect to the period of time during which such insurance or benefits are
continued hereunder.
(h) The Company shall use its best efforts to ensure that shares
of the Company's common stock obtained by Executive from the Company by reason
of the exercise of stock options shall be covered by an effective registration
statement on Form S-8 (or similar or successor form) with the intention that
Executive may sell such shares in compliance with the Securities Act of 1933
(whether or not he is employed by the Company at the time of the sale).
8. Nondisclosure of Confidential Information; Non-Competition.
(a) Executive shall not, without the prior written consent of the
Company, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity any Confidential Information pertaining
to the business of the Company, except (i) while employed by the
Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
purported or apparent jurisdiction to order Executive to divulge, disclose or
make accessible such information. When Executive shall cease to be employed by
the Company, the Executive shall surrender to the Company all Confidential
Information obtained by him or entrusted to him during the course of his
employment hereunder (together with all copies thereof) which pertain
specifically to any of the businesses covered by the covenants in this paragraph
or which were paid for by the Company or any of its subsidiary; provided,
however, that the Executive may retain copies of such documents as necessary for
the Executive's personal records for federal income tax purposes. For purposes
of this Section 9(a), "Confidential Information" shall mean nonpublic
information concerning the financial data of the Company or any subsidiary,
strategic business plans, product development, bidding information (or other
proprietary product data), customer lists, marketing plans and other proprietary
and confidential information of the Company or any of its subsidiaries, in each
case which is not otherwise available to the public.
(b) During the Employment Term and for a period of two years
thereafter, except with the prior written consent of the Board, the Executive:
(1) shall not engage in any activities whether as employer,
proprietor, partner, stockholder (other than the holder of less than 5% of the
stock of a corporation the securities of which are traded on a national
securities exchange or in the over-the-counter market), director, officer,
employee or otherwise, in competition with (1) the businesses conducted at the
date hereof by the Company or any of its subsidiaries or affiliates over which
he shall have exercised, directly or indirectly, any supervisory, management,
fiscal or operating control during the Employment Term (the "Managed
Companies"), or (2) any business in which the Managed Companies are
substantially engaged at any time during the Employment Period;
(2) shall not solicit, in competition with the Company, any
person who is a customer of the businesses conducted by the Managed Companies at
the date hereof or of any business in which the Managed Companies are
substantially engaged at any time during the Employment Period; and
(3) shall not induce or attempt to persuade any employee of
the Managed Companies to terminate his employment relationship in order to enter
into competitive employment.
(c) For purposes of Section 8(b) hereof, a business shall be
deemed to be in competition with the Company if it is significantly involved in
the sale of any product or the rendering of any service significantly sold or
rendered by the Company or its subsidiaries. Nothing in this Section 8 shall be
construed so as to preclude Executive from investing in any publicly held
company, provided Executive's beneficial ownership of any class of such
company's securities does not exceed 5% of the outstanding securities of such
class.
(d) The following provisions shall apply to the covenants of the
Executive contained in Sections 8.01 and 8.02
(1) the covenants contained in paragraphs (A) and (B) of
Section 8(1)(b).01 shall apply within all territories in which any of the
Managed Companies are actively engaged in the conduct of business during the
Employment Term, including, without limitation, the territories in which
customers are then being solicited;
(2) without limiting the right of the Company to pursue all
other legal and equitable remedies available for violation by the Executive of
the covenants contained in Sections 8(a) and 8(b), it is expressly agreed by the
Executive and the Company that such other remedies cannot fully compensate the
Company for any such violation and that the Company shall be entitled to
injunctive relief to prevent any such violation or any continuing violation
thereof;
(3) each party intends and agrees that if in any action
before any court or agency legally empowered to enforce the covenants contained
in Sections 8(a) and 8(b) any term, restriction, covenant or promise contained
therein is found to be unreasonable and accordingly unenforceable, then such
term, restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or agency; and
(4) the covenants contained in Sections 8(a) and 8(b) shall
survive the conclusion of Executive's Employment by the Company.
9. Conditional Adjustments in Compensation.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
or its affiliated companies to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise ("Total Compensation")), would be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax") and if it is determined that the
amount of Total Compensation remaining after payment of the Excise Tax is less
than the maximum amount of Total Compensation that could be paid without
becoming subject to such Excise Tax, the Total Compensation shall be reduced to
such maximum amount.
(b) All determinations required to be made under this Section 9,
and the assumptions to be utilized in arriving at such determination, shall be
made by the Company's public accounting firm (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within 15 business days of a request therefor by either Executive or the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting a Change of Control,
Executive shall appoint another nationally recognized public accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion that failure to report the Excise tax on
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and Executive.
10. Withholding. Anything to the contrary herein notwithstanding, all
payments required to be made by the Company hereunder to Executive, or his
estate or beneficiaries, shall be subject to the withholding of such amounts as
the Company may reasonably determine it should withhold pursuant to any
applicable tax law or regulation.
11. Joint and Several Obligation. The obligations of VCI and Viskase
hereunder shall be joint and several.
12. General Release. In order to receive any payment hereunder (other
than Accrued Compensation), Executive shall be required to execute a General
Release, in such form as determined by the Company, which releases the Company
and its subsidiaries, shareholders, directors, officers, employees, successors
and assigns from any existing and future claims except as such claims relate
directly to the payment of any amount under this Agreement.
13. Beneficiaries; References. Executive shall be entitled but shall not
be required to select (and change, to the extent permitted under any applicable
law) a beneficiary of beneficiaries to receive any compensation or benefit
payable hereunder following Executive's death, and may change such election, in
either case by giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
14. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns, and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken place. The
term "the Company" as used herein shall include such successors and assigns. The
term "successors and assigns" as used herein shall mean a corporation or other
entity acquiring all or substantially all of the assets and business of the
Company (including this Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
personal representative.
15. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail return receipt requested,
postage prepaid, addressed to the respective address last given by each party to
the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
16. Non-Exclusivity of Rights. Nothing in this Agreement shall limit or
reduce such rights as Executive may have under any other agreements with the
Company or any of its subsidiaries concerning any subject matter other than that
which is addressed herein; provided, however, that the payments and benefits
provided under Section 8 shall be in lieu of any other termination benefits
(including severance, notice and pay and salary continuation) to which Executive
may otherwise be entitled, and executive hereby waives any and all rights to
such other termination benefits. Amounts which are vested benefits or which
Executive is otherwise entitled to receive under any plan or program of the
Company or any of its subsidiaries shall be payable in accordance with such plan
or program, except as explicitly modified by this
Agreement.
17. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification, or discharge is agreed to
in writing and signed by Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.
18. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Illinois, without
giving effect to the conflict of law principles thereof.
19. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
21. Attorneys' Fees and Costs. The Company agrees to pay all costs and
expenses, including attorneys' fees, which may be incurred by Executive in
enforcing this Agreement against the Company or in connection with any contest
of the validity or enforceability of this Agreement by the Company or any third
party, including without limitation any rejection of this Agreement in any
bankruptcy or similar procedure.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and Executive has executed this Agreement as of
the day and year first above written.
VISKASE COMPANIES, INC.
By: ___________________________
Title: ________________________
VISKASE CORPORATION
By: ___________________________
Title: ________________________
_______________________________
Xxxxxx X. Xxxxxxx
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