EXHIBIT 10.98
EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 3, 1997, between Xxxxxxx X.
Xxxxxxxx (the "Executive") and XXXXX XXXXXX, INC., a Delaware corporation (the
"Company").
The Executive is presently the President of Xxxxxxxx Dental
Products, Inc. ("Xxxxxxxx").
The Company and Xxxxxxxx are parties to an Agreement and Plan
of Merger dated August 3, 1997 (the "Merger Agreement"), pursuant to which it is
contemplated that HSI Acquisition Corp., a wholly-owned subsidiary of the
Company, will be merged with and into Xxxxxxxx.
The Company desires to employ the Executive, and the Executive
desires to be employed by the Company, at the Effective Time, as that term is
defined in the Merger Agreement. Accordingly, the parties hereto are entering
into this Agreement to set forth and confirm their respective rights and
obligations with respect to the Executive's employment by the Company commencing
as of the Effective Time.
The parties agree as follows:
1. Employment. The Company shall employ the Executive, as of
the Effective Time, as President of the U.S. Dental Division of the Company and
President of Xxxxxxxx, and the Executive shall accept such employment and serve
as such, subject to and upon the terms and conditions set forth in this
Agreement; provided, however, that this Agreement shall terminate and be of no
further force or effect if the Executive shall have died or, in the reasonable
judgment of the Company, become disabled (as defined in Section 7(a)(i)), or his
employment by Xxxxxxxx shall have been terminated for Cause (as hereinafter
defined), in any such case, prior to the Effective Time.
2. Duties.
(a) At all times during his employment with the Company, the
Executive shall, subject to the direction and control of the Boards of Directors
of the Company and Xxxxxxxx and the President of the North American Dental
Division of the Company, perform such executive duties and functions as he may
be called upon by such Boards or such President of the North American Dental
Division to perform, consistent with his employment hereunder as President of
the U.S. Dental Division of the Company and President of Xxxxxxxx. As President
of the Company's U.S. Dental Division and Xxxxxxxx, the Executive shall have the
authority customarily vested in the President of a significant division of the
Company, including day to day authority
with respect to field sales, equipment service centers and the hiring,
compensation and discharge of all employees who are part of such groups.
(b) The Executive shall devote his full time and reasonable
best efforts to the performance of his duties hereunder; and, to the extent
requested by the Board of Directors of the Company or Xxxxxxxx or the President
of the North American Dental Division of the Company, render such executive
services for any other subsidiary or affiliated business of the Company.
Notwithstanding the foregoing, the Executive may devote time and effort to
charitable activities (subject to the provisions of Section 8) and to Wild
Promotions, Inc., provided that neither of the aforementioned activities
interfere with the Executive's fulfilling his obligations under this Agreement.
3. Compensation.
(a) The Company shall pay to the Executive for all services to
be rendered by him pursuant to this Agreement a base salary at the annual rate
of Two Hundred Ten Thousand Dollars ($210,000), payable in accordance with the
Company's practices with respect to its senior executives as in effect from time
to time, ("Company's Practices"). Such salary rate shall be increased each year
(beginning in 1999) by an amount determined by the Company in accordance with
the Company's Practices, but in any event such amount shall be no less than the
percentage increase in the cost of living over the preceding year.
(b) The Executive shall be entitled to a bonus in respect of
each fiscal year of the Company during which he is employed hereunder, payable
no later than 90 days after the end of each year for which such bonus is
payable, the thresholds and amounts of which shall be determined in accordance
with the Company's Practices.
(c) At the Effective Time, the Executive shall be granted
options to purchase shares of common stock, par value $.01 per share ("Common
Stock"), of the Company in accordance with the stock option agreement attached
hereto as Exhibit A (the "Option Agreement").
(d) At the Effective Time, the Executive shall be granted
shares of Common Stock of the Company in accordance with the restricted stock
agreement attached hereto as Exhibit B (the "Restricted Stock Agreement").
(e) At the Effective Time, the Executive shall be paid the sum
of Three Hundred Thirty Thousand Dollars ($330,000) as an inducement to enter
into this Agreement.
2
4. Working Conditions and Benefits. While employed by the
Company hereunder:
(a) The Executive shall be entitled to four (4) weeks of paid
vacation per year, in accordance with the Company's Practices and shall be
entitled to sick leave and personal time in accordance with the Company's
policies for its senior executives.
(b) The Executive shall be authorized to incur reasonable and
necessary expenses for promoting the business of the Company, including expenses
for entertainment, travel and similar items, all in accordance with the
Company's Practices. The Company shall reimburse the Executive for all such
expenses, upon presentation by the Executive of an itemized account of such
authorized expenditures in accordance with the Company's Practices with respect
to expense reimbursement.
(c) The Company in accordance with Xxxxxxxx'x prior practices
(x) shall provide to the Executive an automobile for business use and (y) shall
pay for certain expenses incurred in connection with such use.
(d) The Company shall provide to the Executive to the full
extent provided for under the laws of the Company's state of incorporation and
the Company's By-Laws, indemnification for any claim or lawsuit which may be
asserted against the Executive with respect to his capacity as an officer or
employee of the Company, provided that said indemnification is not in violation
of any Federal or state law, rule or regulation. The indemnification obligations
of the Company shall survive the termination of this Agreement.
5. Other Benefits. While employed by the Company hereunder the
Executive shall be entitled to participate in all benefit, welfare and
perquisite plans, policies and programs, in accordance with the terms thereof
and in accordance with the Company's Practices (the "Benefit Programs"). Without
limiting the generality of the foregoing, at the Effective Time the Company and
the Executive shall enter into the change in control agreement attached hereto
as Exhibit C (the "Change In Control Agreement").
6. Term. The Executive's employment hereunder shall commence
at the Effective Time and shall continue until the earlier of (a) the fifth
anniversary of the Effective Time, (b) his death, or (c) termination of
employment pursuant to Section 7 hereof. Notwithstanding clause (a) of the
preceding sentence (and subject to clauses (b) and (c) of such sentence), the
term of this Agreement shall automatically be extended for successive one year
periods, commencing on the fifth anniversary of the Effective Time, unless
either party gives written notice of termination at least six months prior to
the commencement of the initial or next successive one year renewal period, as
applicable.
7. Termination.
(a) Notwithstanding anything herein contained, if on or after
the Effective Time and prior to the fifth anniversary of the Effective Time (or
the expiration of the then current renewal period, as applicable), (i) the
Executive shall have been determined by the Board of
3
Directors of the Company to have become "Permanently Disabled", or (ii) the
Executive shall have furnished the Company with Cause for his discharge then,
and in any such case, the Company shall have the right, by notice given to the
Executive, to terminate the Executive's employment as of a date to be specified
in such notice. Cause shall be defined as: (A) the Executive shall be convicted
of a felony involving fraud, dishonesty or moral turpitude (other than ordinary
traffic infractions), (B) the Board of Directors of the Company shall have
determined in good faith that the Executive has committed any act, or omitted to
take any action, in bad faith or has materially neglected the Company's
business, which, in any case, shall have had, or reasonably would be expected to
have, a material adverse effect on the Company or Xxxxxxxx, or (C) the Board of
Directors of the Company shall have determined in good faith that the Executive
has materially breached any term of this Agreement and failed to correct such
breach, if such breach is curable, within 30 days after receipt of written
notice thereof. For purposes hereof, the term "Permanently Disabled" shall mean
a condition (certified by two licensed physicians, one selected by the Company
and one by the Executive and each reasonably satisfactory to the other party)
rendering the Executive unable to perform his responsibilities under this
Agreement for a period of 180 days, whether or not continuous, in any period of
12 months.
(b) Notwithstanding anything herein contained, on or after the
Effective Time and prior to the fifth anniversary of the Effective Time (or the
expiration of the then current renewal period, as applicable), the Executive
shall have the right to terminate this Agreement for good reason. For purposes
of this Agreement, "good reason" shall mean (i) a material breach by the Company
of this Agreement, which breach is not cured within 30 days after notice from
the Executive thereof or (ii) the Company's requiring Executive to maintain his
principal office anywhere other than within a 50 mile radius of Xxxxxxxx'x
principal executive offices in West Allis, Wisconsin, provided that the
Executive shall travel on the Company's behalf within and outside such area to
the extent necessary to perform his duties hereunder.
(c) Upon the Executive's death, or termination of the
Executive's employment pursuant to Section 7(a)(i), the Executive (or his
estate, as the case may be) shall be entitled to receive only (i) his salary at
the rate provided in Section 3(a) to the date of termination (ii) any unpaid
bonus pursuant to Section 3(b) in respect of the fiscal year of the Company
ended prior to the year in which such termination occurs and (iii) an amount
equal to such bonus in respect of such prior fiscal year multiplied by a
fraction the numerator of which shall be the number of days that shall have
elapsed from the first day of the fiscal year in which such termination occurs
to the date of such termination and the denominator of which shall be 365.
(d) Upon termination of the Executive's employment hereunder
pursuant to Section 7(a)(ii) or the Executive's voluntary termination of his
employment hereunder other than pursuant to Section 7(b), the Executive shall be
entitled to receive only (i) his salary at the rate provided in Section 3(a) to
the date of termination and (ii) any unpaid bonus pursuant to Section 3(b) in
respect of the fiscal year of the Company ended prior to the year in which such
termination occurs. In either event, the Executive shall not be entitled to
receive any bonuses pursuant to Section 3(b) in respect of the year in which
such termination occurs or any year thereafter.
4
(e) Upon termination of the Executive's employment by the
Company without Cause or by the Executive hereunder pursuant to Section 7(b),
the Executive shall be entitled to receive (i) his salary at the rate provided
in Section 3(a) to the date of termination, (ii) continuation of the Executive's
base salary for a period after the date of such termination equal to the
unexpired term of this Agreement but in no event less than twelve months at the
rate in effect at such date of termination (iii) any unpaid bonus pursuant to
Section 3(b) in respect of the fiscal year of the Company ended prior to the
year in which such termination occurs, (iv) for a period following such
termination equal to the unexpired term of this Agreement, continuation of the
participation of the Executive and his spouse and dependent children, if any, in
all health and medical benefit plans, policies and programs in effect from time
to time with respect to the most senior executive officers of the Company and
their families generally (at the same levels and at the same cost, if any, as
provided to such officers generally) and (v) an amount equal to such bonus in
respect of such prior fiscal year multiplied by a fraction the numerator of
which shall be the number of days left in the unexpired term of this Agreement
and the denominator of which shall be 365.
8. Confidentiality and Non-Competition. In view of the unique
and valuable services it is expected the Executive will render to the Company,
the Executive's knowledge of the customers, trade secrets, and other proprietary
information relating to the business of the Company and its customers and
suppliers, and in consideration of (i) Nine Hundred Fifty Thousand Dollars
($950,000), payable to the Executive within 60 days of the third anniversary of
the date of this Agreement and (ii) the compensation to be received hereunder,
the Executive agrees that he will not, during his employment with the Company
and for three years thereafter except on behalf of the Company: (a) directly or
indirectly engage or have an interest (whether as owner, partner, lender,
consultant, employee, agent, supplier distributor or otherwise) in any business,
activity or enterprise which competes with any material businesses or operations
of the Company or any of the Company's affiliates (including Xxxxxxxx) at any
time during his employment with the Company provided, however, that Executive
may be employed by or otherwise interested in the businesses listed on Schedule
1; (b) directly or indirectly employ or otherwise engage, or offer to employ or
otherwise engage, any person who is then (or was at any time within three months
prior to the time of such employment, engagement or offer thereof) an employee,
sales representative or agent of the Company or any of the Company's affiliates
(including Xxxxxxxx); or (c) solicit any business from any person or entity that
during his employment with the Company has been a customer of the Company or any
of the Company's affiliates (including Xxxxxxxx) or directly or indirectly
induce or influence any customer, supplier or other person that has a business
relationship with the Company or any of the Company's affiliates (including
Xxxxxxxx) to discontinue or reduce the extent of such relationship with the
Company or any of the Company's affiliates (including Xxxxxxxx). In addition,
the Executive shall never use or divulge (unless available in the public domain
not due to Executive's disclosure in violation of this Agreement) any trade
secrets, customer or supplier lists, pricing information, marketing arrangements
or strategies, business plans, internal performance statistics, training manuals
or other information concerning the Company or its affiliates that is
confidential, except on behalf of the Company, and shall not knowingly make
false or misleading or negative statements, either orally or in writing, about
the Company or its affiliates (including Xxxxxxxx), or their respective
directors, officers or employees. Because the breach or attempted breach of this
Section 8 will result in immediate and
5
irreparable injury to the Company for which the Company will not have an
adequate remedy at law, the Company shall be entitled, in addition to all other
remedies, to a decree of specific performance of this covenant and to a
temporary and permanent injunction enjoining such breach, without posting bond
or furnishing similar security. The provisions of this Section 8 are in addition
to and independent of any agreements or covenants contained in any other
agreement between the Company and the Executive. If any restriction contained in
this Section 8 shall be deemed to be invalid, illegal, or unenforceable by
reason of the extent, duration, or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope, or other provisions hereof, and in its
reduced form such restriction shall then be enforceable in the manner
contemplated hereby. Notwithstanding any of the forgoing the Executive (i) may
have an interest (as owner, partner, lender, consultant, employee or agent but
not as a distributor or supplier) in any manufacturer that sells its products
exclusively and directly to health care practitioners rather than through
distributors or (ii) hold up to 2% of the outstanding shares of any class of
stock of a publicly traded entity.
9. Amendment and Modification; Waiver. This Agreement may be
amended, modified or supplemented only by written agreement (referring
specifically to this Agreement) of the parties. The waiver by either party of
any breach or violation of any provision of this agreement shall not operate or
be construed as a waiver of any subsequent breach.
10. Notice. All notices required to be given under the terms
of this agreement shall be in writing and shall be deemed to have been duly
given if delivered to the addressee in person or mailed by certified mail,
return receipt requested, as follows:
If to the Company, addressed to:
Xxxxx Xxxxxx, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
With a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
6
If to the Executive, addressed to:
Xxxxxxx X. Xxxxxxxx, President
Xxxxxxxx Dental Products, Inc.
00000 Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxx 00000
With a copy to:
Xxxxx, Xxxxx & Ryd
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.
11. Further Agreement. In the event that any amounts paid or
payable to the Executive pursuant to this Agreement shall adversely affect the
qualification of the Merger (as defined in the Merger Agreement) as a pooling of
interests, then the Company and the Executive shall endeavor in good faith to
modify such payments so that they will not adversely affect the Merger as a
pooling of interests for financial reporting purposes; provided, however, that
the parties shall, in any event, carry out the intent of this Agreement.
12. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. Entire Agreement; Benefit. This Agreement constitutes the
entire agreement and supersede all other prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof and all prior employment or other compensation or compensation
continuation agreements and arrangements between the Executive and Xxxxxxxx.
This agreement shall inure to and shall be binding upon the parties hereto, the
successors and assigns of the Company and the heirs and personal representatives
of the Executive.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the provisions thereof relating to conflicts of law.
15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
7
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the day and year first above written.
------------------------------------
Xxxxxxx X. Xxxxxxxx
XXXXX XXXXXX, INC.
By:
---------------------------------
Authorized Officer
8
Schedule 1
1. Dash Medical Gloves, Inc.
2. Dash Medical Gloves Sdn Bhd
In each case only to the extent that, except for their current principal
business activities, the above companies do not engage in any activities that
would otherwise be prohibited by Section 8.
