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EXHIBIT 10.39
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of March 31, 1999, by and
among The UniMark Group, Inc., a Texas corporation (the "COMPANY"), and Xxxxxxx
Xxxxx, an individual (the "EXECUTIVE").
WHEREAS, the Company wishes to employ Executive and Executive wishes to
be an Executive of the Company for the period and on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the foregoing promises and the
covenants, conditions, representations and warranties contained herein, the
parties hereto agree as follows:
1. Employment. Executive shall perform services for the Company in the
position of Chief Financial Officer and Executive shall perform such duties and
responsibilities as may be assigned from time to time by the Company's Board of
Directors (the "Board") consistent with Executive's position. During the term of
his employment with the Company, Executive will devote his best efforts and
substantially all of his business time and attention (except for vacation
periods as set forth below and reasonable periods of illness or other
incapacities permitted by the Company's general employment policies) to the
business of the Company.
2. Term of Agreement. The term of this Agreement shall commence as of
March 31, 1999 (the "EFFECTIVE DATE"), and shall continue for a period of 48
consecutive months (the "TERM") unless Executive's services are terminated
pursuant to the provisions of Section 7 hereof. If prior to three (3) months
before the end of the Term the Company has not advised Executive by written
notice that Executive's employment shall not be terminated at the end of the
term, the term of this Agreement shall be extended for an additional 12
consecutive months under the same terms or under such terms and conditions
agreed upon by mutual consent of the parties hereto.
3. Location of Services. Executive's services under this Agreement
shall be performed primarily at the facilities of the Company located in
Bartonville, Texas, or at such other facilities as the Company and Executive may
agree upon from time to time. Executive shall not be required to relocate his
primary residence during the terms of this Agreement. Executive acknowledges and
agrees that Executive's job responsibilities may require reasonable travel, and
Executive agrees to travel as necessary to discharge those duties.
4. Standard Terms; Proprietary Information. The employment relationship
between the parties shall also be governed by the general employment policies
and practices of the Company, including those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
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5. Compensation.
5.1 Base Compensation. Effective as of the Effective Date, the
Company shall pay to Executive base compensation at the annualized rate as set
forth below, less taxes and other usual deductions:
FOR THE TWELVE MONTH PERIOD ENDING MARCH 31: BASE COMPENSATION AMOUNT:
2000 $180,000.00
2001 $189,000.00
2002 $198,450.00
2003 $208,372.00
Executive's base compensation shall be payable in installments
consistent with the Company's normal payroll practices for its executives.
5.2 Bonus Compensation. On March 31 of each year following the
execution of this Agreement (the "Anniversary Date"), the Company may pay to
Executive aggregate a performance bonus compensation (the "PERFORMANCE BONUS")
not to exceed 50 percent of Executive's then applicable base compensation
amount, as set forth in Section 5.1 hereof. The Performance Bonus shall consist
of (a) a subjective review component (the "SUBJECTIVE COMPONENt") and (b) a
financial performance component (the "FINANCIAL PERFORMANCE COMPONENT").
(a) The Subjective Component. On an annual basis, the Executive and
the Company shall mutually outline specific subjective criteria
to be accomplished by the Executive during the following 12
month period (the "ANNUAL OBJECTIVES"). The Annual Objectives
shall be presented to the Compensation Committee and/or the
Board of Directors for approval and such approval shall not be
unreasonably denied or delayed. Based upon Executive's
performance during the preceding year, including, but not
limited to, achievement of the Annual Objectives, the
Compensation Committee, in its sole discretion, shall determine
the amount of the of the Subjective Component and authorize the
Company to pay up to the following amounts:
FOR THE TWELVE MONTH PERIOD ENDING MARCH 31: MAXIMUM SUBJECTIVE COMPONENT AMOUNT:
2000 $63,000.00
2001 $66,150.00
2002 $69,457.50
2003 $72,930.00
(b) The Financial Performance Component. Company shall pay to
Executive as the Financial Performance Component of the based
upon the Company's achievement of (i) Budget Revenue (as defined
below) and (ii) Budget Net Income (as defined below). As used
herein, (i) "BUDGET REVENUE" shall mean the total revenue amount
of the Company, as set forth in the annual budget approved by
the Company's Board
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of directors for such fiscal year, (ii) "BUDGET NET INCOME"
shall mean the net income amount of the Company as set forth in
the annual budget approved by the Company's Board of directors
for such fiscal year, (iii) "ACTUAL REVENUE" shall mean the
Company's annual revenue for such fiscal year as set forth in
its Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission and (iv) "ACTUAL NET INCOME" shall mean the
Company's annual net income for such fiscal year as set forth in
its Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission.
(i) With respect to the revenue component of the Financial
Performance Component, on each Anniversary Date, the
Company shall pay to Executive an amount as follows for
each of the fiscal year as follows:
FOR THE TWELVE MONTH PERIOD FINANCIAL PERFORMANCE COMPONENT BASED UPON
ENDING MARCH 31, BUDGET REVENUE:
2000 (i) If the Company's Actual Revenue for
fiscal 1999 is 90% of Budget Revenue
for fiscal 1999, the Company shall pay
Executive $4,500; or
(ii) If the Company's Actual Revenue for
fiscal 1999 is 100% of Budget Revenue
for fiscal 1999, the Company shall pay
Executive $9,000; or
(iii) If the Company's for fiscal 1999 is
110% of Budget Revenue or higher for
fiscal 1999, the Company shall pay
Executive $13,500.
2001 (i) If the Company's Actual Revenue for
fiscal 2000 is 90% of Budget Revenue
for fiscal 2000, the Company shall pay
Executive $4,725; or
(ii) If the Company's Actual Revenue for
fiscal 1999 is 100% of Budget Revenue
for fiscal 1999, the Company shall pay
Executive $9,450; or
(iii) If the Company's Actual Revenue for
fiscal 1999 is 110% of Budget Revenue
or higher for fiscal 1999, the Company
shall pay Executive $14,175.
2002 (i) If the Company's Actual Revenue for
fiscal 2001 is 90% of Budget Revenue
for fiscal 2001, the Company shall pay
Executive $4,961; or
(ii) If the Company's Actual Revenue for
fiscal 1999 is 100% of Budget Revenue
for fiscal 1999, the Company shall pay
Executive $9,922; or
(iii) If the Company's Actual Revenue for
fiscal 1999 is 110% of Budget Revenue
or higher for fiscal 1999, the Company
shall pay Executive $14,889.
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2003 (i) If the Company's Actual Revenue for
fiscal 2002 is 90% of Budget Revenue
for fiscal 2002, the Company shall pay
Executive $5,209; or
(ii) If the Company's Actual Revenue for
fiscal 2002 is 100% of Budget Revenue
for fiscal 2002, the Company shall pay
Executive $10,418; or
(iii) If the Company's Actual Revenue for
fiscal 2002 is 110% of Budget Revenue
or higher for fiscal 2002, the Company
shall pay Executive $15,628.
(ii) With respect to the net income component of the
Financial Performance Component, the Company shall pay
to Executive an amount of follows for each of the fiscal
year as follows:
FOR THE TWELVE MONTH PERIOD FINANCIAL PERFORMANCE COMPONENT BASED UPON
ENDING MARCH 31, BUDGET NET INCOME:
2000
(i) If the Company's Actual Net Income for
fiscal 1999 is 90% of Budget Net
Income for fiscal 1999, the Company
shall pay Executive $4,500; or
(ii) If the Company's Actual Net Income for
fiscal 1999 is 100% of Budget Net
Income for fiscal 1999, the Company
shall pay Executive $9,000; or
(iii) If the Company's Actual Net Income for
fiscal 1999 is 110% of Budget Net
Income or higher for fiscal 1999, the
Company shall pay Executive $13,500.
2001 (i) If the Company's Actual Net Income for
fiscal 2000 is 90% of Budget Net
Income for fiscal 2000, the Company
shall pay Executive $4,725; or
(ii) If the Company's Actual Net Income for
fiscal 1999 is 100% of Budget Net
Income for fiscal 1999, the Company
shall pay Executive $9,450; or
(iii) If the Company's Actual Net Income for
fiscal 1999 is 110% of Budget Net
Income or higher for fiscal 1999, the
Company shall pay Executive $14,175.
2002 (i) If the Company's Actual Net Income for
fiscal 2001 is 90% of Budget Net
Income for fiscal 2001, the Company
shall pay Executive $4,961; or
(ii) If the Company's Actual Net Income for
fiscal 1999 is 100% of Budget Net
Income for fiscal 1999, the Company
shall pay Executive $9,922; or
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(iii) If the Company's Actual Net Income for
fiscal 1999 is 110% of Budget Net
Income or higher for fiscal 1999, the
Company shall pay Executive $14,884.
2003 (i) If the Company's Actual Net Income for
fiscal 2002 is 90% of Budget Net
Income for fiscal 2002, the Company
shall pay Executive $5,209.31; or
(ii) If the Company's Actual Net Income for
fiscal 2002 is 100% of Budget Net
Income for fiscal 2002, the Company
shall pay Executive $10,418; or
(iii) If the Company's Actual Net Income for
fiscal 2002 is 110% of Budget Net
Income or higher for fiscal 2002, the
Company shall pay Executive $15,628.
5.3 Options for Common Stock Options Granted. On the Effective Date and
in connection with his employment with the Company, the Company shall grant to
Executive options for fifty thousand (50,000) shares of Common Stock, par value
$.01 per share, of The UniMark Group, Inc. at market value at the date of grant
pursuant to The UniMark Group, Inc.'s 1994 Executive Stock Option Plan
(the"INITIAL GRANT"). The options included in the Initial Xxxxx xxxx
immediately. In addition, on an annualized basis, the Company shall grant to
Executive options for ten thousand (10,000) shares of Common Stock, pursuant to
The UniMark Group, Inc.'s 1994 Executive Stock Option Plan.
6. Benefits.
6.1 General. Except as otherwise expressly provided in this Section
6, for as long as Executive is employed by the Company, Executive shall be
entitled to all fringe benefits that the Company may make available from time to
time for its executive Executives, including a car allowance of $650 per month.
Without limitation, such fringe benefits shall include those available, if any,
under any health and benefits package, life insurance and disability programs,
and participation in any plan or program designed for all executive Executives
by the Company. Executive shall be entitled to paid vacation in accordance with
the Company's standard employment policies and practices for executive
Executives, as the same may be in effect from time to time. In addition,
Executive shall be entitled to take all Company holidays as the same may be
designated by the Company from time to time for all Executives. Executive shall
receive such additional fringe benefits, if any, as the Board shall determine in
its sole discretion from time to time. Executive shall be entitled to, at the
sole cost of the Company, no less than Eighty Thousand Dollars ($80,000) in life
insurance, and shall be named as an additional insured under the Company's
Director and Officer liability insurance policy.
6.2 Business Expenses. The Company shall reimburse Executive for all
ordinary and necessary expenses incurred by Executive, including disbursements,
in the performance of Executive's duties for the Company upon presentation
within the time period specified by the Company of an itemized statement of all
expenses incurred showing the date, nature, recipient, purpose and amount of
each item, subject to prior approval of the Company as required of executive
Executives.
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6.3 Termination of Benefits. All unvested benefits provided under
this Section 6 shall terminate concurrently with termination of Executive's
employment hereunder for any reason whatsoever. Nothing herein shall vest any
rights in any profit sharing or bonus plans, general expense or automotive
reimbursements, and similar fringe benefits that the Company may provide, if
any, beyond the date on which Executive's employment is terminated for any
reason.
7. Termination of Employment.
7.1 Termination For Cause. Notwithstanding any other provision of
this Agreement, Executive's employment with the Company may be terminated for
cause at any time by the Company, upon reasonable notice to Executive. For the
purposes of this Agreement, "cause" shall mean (a) gross or habitual failure to
perform pursuant to the terms of this Agreement and such performance failure is
not corrected within thirty (30) days after written notice by the Company or the
Board to Executive thereof; or (b) misconduct, including, but not limited, to:
(i) conviction of a crime or entry of a plea of nolo contendere with regard to a
crime involving moral turpitude or dishonesty, (ii) any breach of the
Non-Disclosure Agreement, (iii) Executive's repeated insubordination or refusal
to comply with any lawful and reasonable request of the Board relating to the
scope or performance of Executive's duties, provided Executive receives written
notice of asserted insubordination and reasonable opportunity to cure such
asserted insubordination, or (iv) conduct that in the good faith and reasonable
determination of the Board demonstrates Executive's gross unfitness to serve,
provided Executive receives written notice of asserted conduct and reasonable
opportunity to cure such asserted conduct.
7.2 Termination Without Cause. The Company may terminate Executive's
employment under this Agreement without cause at any time upon written notice to
Executive.
7.3 Termination for Death or Disability. Employment hereunder shall
automatically terminate upon Executive's death or disability. Disability, for
purposes of this Agreement, shall mean a physical or mental disability that
interferes with Executive's ability to perform duties pursuant to this Agreement
for a continuous period of six (6) months or more.
7.4 Termination of Executive. Executive shall be entitled to
terminate Executive's employment with the Company during the term, within 60
days after the occurrence of a Change in Control (as defined in Section 7.5),
for any reason or without any reason whatsoever, with the right to severance
compensation as provided in Section 7.5 of this Agreement.
7.5 Severance Payment after Change in Control.
(a) If the Executive terminates Executive's employment pursuant to
Section 7.4 hereof, Executive shall be entitled to a lump sum severance payment
as set forth in Section 8.2.
(b) For purposes of this Agreement, a "Change in Control" shall be
deemed to have taken place if, at any time during the term, any of the following
events occurs:
(i) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person, or securities of the Company are
exchanged for securities of another corporation or other legal person, and
immediately after such merger, consolidation,
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reorganization or exchange less than a majority of the combined voting power of
the then-outstanding securities of such corporation or person immediately after
such transactions are held, directly or indirectly, in the aggregate by the
holders of securities entitled to vote generally in the election of directors of
the Company immediately prior to such transaction;
(ii) The Company, in any transaction or series of related
transactions, sells all or substantially all of its assets to any other
corporation or other legal person, and less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such sale or sales are held, directly or indirectly, in the
aggregate by the holders of securities entitled to vote generally in the
election of directors of the Company immediately prior to such sale; or
(iii) The Company and its affiliates shall sell or dispose of
(in a single transaction or series of related transactions) business operations
that generated two-thirds of the consolidated revenues (determined on the basis
of the Company's four most recently completed fiscal quarters for which reports
have been filed under the Securities Exchange Act of 1934) or the Company and
its subsidiaries immediately prior thereto.
8. Post-Termination Compensation.
8.1 Termination By the Company for Cause. Notwithstanding any other
provision of this Agreement to the contrary, if Executive's employment is
terminated for cause pursuant to Section 7.1, the Company shall make no further
salary payments except those earned prior to the date of termination and shall
make no further bonus payments except for the Financial Performance Component
set forth in Section 5.2 with respect to any fiscal year completed before the
date that the Company sends written notice of termination to Employee.
8.2 Termination By the Company Without Cause. If the Company
terminates this Agreement without cause as defined in Section 7.2 hereof, then
the Company shall pay Executive severance in one payment equal to Executive's
then applicable base compensation as determined pursuant to Section 5.1 for
twelve (12) months within 15 days after such termination. In addition, subject
to the Company's sole discretion, the Company shall pay for reasonable executive
level outplacement costs. The Company shall make no further bonus payments
except for the Financial Performance Component set forth in Section 5.2 with
respect to any fiscal year completed before the date that the Company sends
written notice of termination to Employee..
8.3 Termination By Executive's Death or Disability. If employment
shall terminate by reason of Executive's death or disability, the Company shall
compensate Executive or Executive's estate pursuant to the Company's death and
disability insurance plan in place at the time of Executive's termination.
9. Noncompetition. Until two (2) years after termination of Executive's
employment with the Company, Executive shall not (a) either directly or
indirectly, carry on, engage in or have any interest in any fruit processing,
distribution or marketing business that competes with the Company, excepting
ownership by Executive of no more than five percent (5%) of the publicly traded
common stock of any corporation, (b) without the express written consent of the
Company, accept employment with, or in any other manner agree to provide, for
compensation, services for any
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other person or entity that competes directly or indirectly with the Company, or
(c) materially disrupt, damage, impair or interfere with the business of the
Company, whether by way of interfering with or soliciting its Executives,
disrupting its relationship with customers, agents, representatives or vendors,
or otherwise.
10. Arbitration. Any and all disputes or controversies, whether of law
or fact of any nature whatsoever, arising from or respecting this Agreement
shall be decided by arbitration by the Judicial Arbitration Mediation Services,
Inc. ("JAMS") in accordance with the rules and regulations of JAMS, or by any
other body mutually agreed upon by the parties. Pre-arbitration discovery shall
be permitted at the request of any party under appropriate protection for
proprietary and confidential business information.
Before filing a demand for arbitration, a party must send the other
parties written notice identifying the matter in dispute and invoking the
procedures in this paragraph. Such written notice shall be sent promptly after
the party knew or reasonably should have known of an alleged violation of this
Agreement. Within fifteen (15) days after such written notice is given, one or
more principals of each party shall meet at a mutually agreeable location in
Dallas, Texas, or any other location mutually agreeable to the parties, for the
purpose of determining whether they can resolve the dispute themselves by
written agreement. If the parties fail to resolve the dispute by written
agreement within the fifteen-day (15-day) period, the complaining party may then
initiate the arbitration process by filing a demand with JAMS or such other body
as the parties may agree upon. Nothing in this paragraph shall prevent a party
from seeking temporary equitable relief from JAMS or such other body as the
parties may mutually agree upon during the fifteen-day (15-day) period if
necessary to prevent irreparable harm.
The arbitrators shall be selected as follows: the Company and
Executive shall each select one (1) independent, qualified arbitrator and the
two (2) arbitrators so selected shall select the third arbitrator. Any party may
disqualify any individual arbitrator who is a present or past Executive, owner,
officer, director, relative or consultant to any party hereto or a competing
organization.
Arbitration shall take place in Dallas, Texas, or any other
location mutually agreeable to the parties. At the request of any party,
arbitration proceedings will be conducted in the utmost secrecy and, in such
case, all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for inspection
only by the Company or Executive, their respective attorneys, and their
respective experts or consultants who shall agree, in advance and in writing, to
receive all such information confidentially and to maintain such information in
secrecy, and make no use of such information except for the purposes of the
arbitration, until such information shall become generally known.
The arbitrators, who shall act by majority vote, shall be able to
decree any and all relief of an equitable nature, including but not limited to
such relief as a temporary restraining order, a temporary injunction, or a
permanent injunction, and shall also be able to award damages, with or without
an accounting and costs. The decree or judgment of an award rendered by the
arbitrators may be entered in any court having jurisdiction over the parties.
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Reasonable notice of the time and place of arbitration shall be
given to persons other than the parties, if such notice is required by law, in
which case such persons or their authorized representatives shall have the right
to attend or participate in the arbitration hearing in such manner as the law
shall require.
If any action is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs, and necessary disbursements in addition to any other relief to
which that party may be entitled.
11. Power and Authority. Each party executing this Agreement hereby
covenants, represents and warrants that he or she has full power and authority
to execute this Agreement, that no other consents or approvals of any other
third parties are required or necessary for this Agreement to be so binding
(except as otherwise herein expressly stated) and that this Agreement shall be
fully enforceable in accordance with its terms.
12. Heirs, Administrators and Successors. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon, the
heirs, administrators and successors of each of the parties hereto.
13. Nonassignability. The Company may assign the benefit of this
Agreement to any successor in interest that results from a merger,
reorganization or acquisition. Otherwise, no party to this Agreement may assign
any right hereunder or delegate any duty hereunder without the written consent
of the other party affected by such assignment or delegation.
14. No Oral Modification. This Agreement may only be changed or
modified and any provisions hereof may only be waived in or by a writing signed
by a party against whom enforcement of any waiver, change or modification is
sought.
15. Governing Law. This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of
Texas.
16. Severability. If any portion of this Agreement shall be held
illegal, unenforceable, void or voidable by any court, each of the remaining
terms hereof shall nevertheless remain in full force and effect as a separate
contract.
17. Right of Setoff. Whenever the Company owes Executive any amounts of
money by virtue of this Agreement or otherwise, the Company shall be entitled to
setoff against any such sums due to Executive the amount of any claims that the
Company has against Executive. This right to setoff shall also apply to amounts
due on the date of termination.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties pertaining to the matters set forth herein, and
all prior agreements,
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understandings or representations are hereby terminated and canceled in their
entirely and are of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY:
THE UNIMARK GROUP, INC.
A Texas Corporation
By: /s/ Soren Bjorn
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Soren Bjorn
President and Chief Executive Officer
Executive:
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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