EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day
of September, 2001, by and between STANDEX INTERNATIONAL
CORPORATION, a Delaware corporation with its executive offices in
Salem, New Hampshire (hereinafter referred to as the "Employer"),
and
XXXXXXXXX XXXXXX
of Quincy, Massachusetts (hereinafter referred to as the
"Executive").
WHEREAS, Executive has heretofore been and is now employed
by Employer in a managerial and supervisory capacity; and
WHEREAS, Employer is desirous of retaining the services of
Executive in a senior executive capacity upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties herein contained, it is agreed by and
between the parties as follows:
1. Employment. Employer hereby agrees to employ Executive on a
full-time basis and Executive agrees to serve Employer on a full-
time basis as Vice President and Chief Financial Officer or other
senior executive, managerial and supervisory capacity, subject to
the direction and control of the Chief Executive Officer of
Employer, said employment being upon the terms and conditions
herein set forth.
2. Term. The initial term (the "Initial Term") of this
Agreement shall commence upon the date it is executed by the
Executive and continue through midnight on December 31, 2004,
unless otherwise terminated in accordance with the provisions of
Sections 6 or 14. Upon the expiration of the Initial Term, this
Agreement shall automatically renew for an additional term of
three (3) years (the "First Renewal Term") commencing upon
January 1, 2007, and upon the expiration of the First Renewal
Term, this Agreement shall automatically renew for an additional
term of three (3) years (the "Second Renewal Term") commencing
upon January 1, 2011. Notwithstanding the foregoing, the First
Renewal Term and the Second Renewal Term shall not occur if this
Agreement has been otherwise terminated in accordance with the
provisions of Sections 6 or 14 and, provided further that neither
the First Renewal Term nor the Second Renewal Term shall occur if
either party has notified the other in writing at least one (1)
year in advance of the end of the existing term of the Agreement
stating its intent to terminate the Agreement at the end of that
particular term.
3. Best Efforts. Executive agrees, as long as this
Agreement is in effect, to continue to devote his same best
efforts and the same time and attention to the business of
Employer that he is presently devoting to said business of
Employer.
4. Non-Compete. Except as set forth in the third paragraph
of this Section 4, Executive shall not, as long as this Agreement
is in effect, engage in, or be interested in, in any active
capacity, any business other than that of Employer or any
affiliate, associate or subsidiary corporation of Employer. It
is the express intent of the Employer and the Executive that: (i)
the covenants and affirmative obligations in this Section be
binding obligations to be enforced to the fullest extent
permitted by law; (ii) in the event of any determination of
unenforceability of the scope of any covenant or obligation, its
limitation which a court of competent jurisdiction deems fair and
reasonable, shall be the sole basis for relief from the full
enforcement thereof; and (iii) in no event shall the covenants
or obligations in this Section be deemed wholly unenforceable.
In addition, except as set forth in the third paragraph of
this Section 4, Executive shall not for a period of two years
after the termination of employment with Employer (whether such
termination is by reason of the expiration of this Agreement or
for any other reason) compete with or directly or indirectly own,
control, manage, operate, join or participate in the ownership,
control, management or operation of any business which competes
with any present or future business of Employer at the time of
such termination.
Notwithstanding the foregoing restrictions, the Executive,
during the two (2) year restriction period shall be entitled to
be employed as a financial manager or officer in an accounting
firm or corporate environment on the condition and understanding
that he will fully abide by and honor the Invention and Trade
Secret Agreement referenced in Section 8 below. No provision
contained in this paragraph shall restrict Executive from making
investments in other ventures which are not competitive with
Employer, or restrict Executive from engaging, during non-
business hours, in any other such non-competitive business or
restrict Executive from owning less than five per cent of the
outstanding securities of companies which compete with any
present or future business of Employer and which are listed on a
national stock exchange or actively traded on the NASDAQ National
Market System.
5. Compensation; Benefits. Employer agrees to compensate
Executive for his services at a minimum annual base salary during
any year of this Agreement (January 1 to December 31) of the
higher of $185,000 or the base salary at the end of the
immediately preceding year of this Agreement. Such base salary
shall be payable at least monthly and shall be increased as
determined (in its sole discretion) by Employer.
Executive shall also be entitled to participate in the
Standex Long Term Incentive Program, the Standex Annual Incentive
Program, the Standex Supplemental Executive Retirement Plan
("SERP"), the Standex Retirement Savings Plan and in such other
benefit plans and programs as are made available from time to
time to executives of the Employer. Executive shall be entitled
to use an automobile furnished at the expense of Employer in
accordance with Employer's policy on this subject, as such policy
shall be revised from time to time.
6. Termination.
A. Death. Executive's employment shall terminate forthwith upon
his death and all liability of Employer under this Agreement or
otherwise shall thereupon cease except for any compensation for
past services remaining unpaid and for benefits due to
Executive's estate or to others under the terms of any benefit
plan or agreement then in effect.
B. Disability. In the event that Executive becomes
substantially disabled during the term of this Agreement for a
period of six consecutive months so that he is unable, in the
reasonable opinion of Employer, to perform the services as
contemplated herein, then Employer, at its option, may terminate
Executive's employment and this Agreement upon at least six (6)
additional months advance written notification to Executive.
Until such termination option is exercised and the six month
period has been satisfied or as otherwise mutually agreed in
writing, Executive will continue to receive her full salary and
fringe benefits during any period of illness or other disability,
regardless of duration.
C. Material Breach. In the event of a material breach of the
terms of this Agreement by Executive or Employer, the non-
breaching party may cause this Agreement to be terminated on 90
days written notice, provided, however, that termination by
Employer for material breach following a change of control, as
defined in Section 14, shall be effective only upon twelve (12)
months prior written notice. Employer may remove Executive from
all duties and authority commencing on the first day of any such
notice period, however, payment of compensation and participation
in all benefits shall continue through the last day of such
notice period. For purposes of this Agreement material breach
shall be defined as:
(i) an act or acts of dishonesty on the Executive's
part which are intended to result in his
substantial personal enrichment at the expense of
the Employer; or
(ii) the Executive willfully, deliberately and
continuously fails to materially and
substantially perform his duties hereunder and
which result in material injury to the Employer
(other than such failure resulting from the
Executive's incapacity due to physical or mental
disability) after demand for substantial
performance is given by the Employer to the
Executive specifically identifying the manner in
which the Employer believes the Executive has not
materially and substantially performed his duties
hereunder.
No action, or failure to act, shall be considered "willful" if it
is done by the Executive in good faith and with reasonable belief
that his action or omission was in the best interest of the
Employer.
D. Legal Expenses. It is further agreed that Employer will pay
all reasonable legal expenses of Executive in the event that
Executive defends or brings any action under this Agreement,
provided, however, that Employer shall not be obligated to pay
the legal expenses of Executive if, in good faith, the Board of
Directors determines that, Executive acted in a manner Executive
believed to be adverse to the best interests of Employer or that
Executive should have known that his conduct was unlawful.
Notwithstanding such a determination, the Board shall be
obligated to reimburse Executive for said legal expenses if he
successfully defends or successfully prosecutes his case.
7. Notices. Any notice to be given pursuant to this
Agreement shall be sent by certified mail, postage prepaid, or by
fax (with a copy mailed via first class mail, postage pre-paid)
or delivered in person to the parties at the following addresses
or at such other address as either party may from time to time in
writing designate:
To Executive: Xxxxxxxxx Xxxxxx
000 Xxxxxx Xxxxx, #000
Xxxxxx, XX 00000
To Employer: Standex International Corporation
0 Xxxxx Xxxxxxx
Xxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
8. Invention and Trade Secret Agreement. Executive agrees
that the Invention and Trade Secret Agreement dated July 26, 1999
and the Confidentiality Agreement and Acknowledgment of Title
dated July 26, 1999, by and between Executive and Standex
International Corporation and signed by Executive shall remain in
full force and effect while this Agreement is in effect and, as
provided in the Invention and Trade Secret Agreement, after
termination hereof.
9. Specific Performance. It is acknowledged by both
parties that damages will be an inadequate remedy to Employer in
the event that Executive breaches or threatens to breach his
commitments under Section 4 or under the Invention and Trade
Secret Agreement. Therefore, it is agreed that Employer, may
institute and maintain an action or proceeding to compel the
specific performance of the promises of Executive contained
herein and therein. Such remedy shall, however, be cumulative,
and not exclusive, to any other remedy that Employer may have.
10. Survival. The obligations contained in Sections 4 and
8 shall survive the termination of this Agreement. In addition,
the termination of this Agreement shall not affect any of the
rights or obligations of either party arising prior to or at the
time of the termination of this Agreement or which may arise by
any event causing the termination of this Agreement.
11. Covenants Severable. In the event that any covenant of
this Agreement shall be determined invalid or unenforceable and
the remaining provisions can be given effect, then such remaining
provisions shall remain in full force and effect.
12. Entire Agreement; Amendment. This Agreement supersedes
any employment understanding or agreement (except the Invention
and Trade Secret Agreement) that may have been previously made by
Employer or its respective subsidiaries or affiliates with
Executive. This Agreement, together with the Invention and Trade
Secret Agreement, represents all the terms and conditions and the
entire agreement between the parties hereto with respect to the
employment of Executive by Employer. This Agreement may be
modified or amended only by written agreement signed by Employer
and Executive.
13. Assignment. This Agreement is personal between
Employer and Executive and may not be assigned; provided,
however, that Employer shall have the absolute right at any time,
or from time to time, to sell or otherwise dispose of its assets
or any part thereof or to reconstitute the same into one or more
subsidiary corporations or divisions or to merge, consolidate or
enter into similar transactions. In the event of any such
transaction, the term "Employer" as used herein shall mean and
include such successor corporation.
14. Change of Control.
A. In the event of a change in control of Employer required
to be reported under Item 6(e) of Schedule 14A of Regulation 14A
of the Securities Exchange Act of 1934:
(i) Employer may terminate Executive's employment only upon
conclusive evidence of substantial and indisputable intentional
personal malfeasance in office such as a conviction for
embezzlement of Employer's funds; and
(ii) Executive may terminate his employment at any time if
there is a change in his general area of responsibility, title or
place of employment, or if his salary or benefits are lessened or
diminished.
B. Following a change of control of Employer, any
termination of Executive's employment either by Executive
pursuant to Section 14.A.(ii) or by Employer under any
circumstances other than involving conclusive evidence of
substantial and indisputable intentional personal malfeasance in
office, then:
(i) Executive shall be promptly paid a lump sum payment equal to
three times his current annual base salary plus three times the
most recent annual incentive paid to him;
(ii) Executive shall become 100% vested in all benefit plans
in which he participates including but not limited to the Standex
Retirement Savings Plan, the Management Savings Program portion
of the Standex Annual Incentive Program and all restricted stock
options and performance share units granted under the Standex
Long Term Incentive Program and any other stock option plans of
the Employer;
(iii) Three years of benefit service shall be added to the
years of service credited to Executive under the Standex
Retirement Plan;
(iv) The salary and bonus paid under Section 14.B.(i) shall
be deemed the Executive's compensation during such three
additional years for purposes of the computation of his pension
under the Standex Retirement Plan;
(v) All life insurance and medical plan benefits covering the
Executive and his dependents shall be continued at the expense of
Employer for the three-year period following such termination as
if the Executive were still an employee of the Employer; and
(vi) In the event that any payment or distribution of any
type to or for the benefit of the Executive made by the Employer,
by any of its affiliates, by any person or entity which acquires
ownership or effective control or ownership of a substantial
portion of the Employer's assets within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended, and all
related regulations or any similar federal tax that may
hereinafter be imposed, whether paid or payable or distributed or
distributable pursuant to this Agreement or otherwise
(collectively called the "Total Payments"), would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended, and all related regulations or any
similar federal tax that may hereinafter be imposed or any
interest or penalties with respect to such excise tax (such
excise tax, together with any such interest or penalties are
hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive from the Employer an
additional payment (an "Excise Tax Restoration Payment") in an
amount that shall fully fund the payment by the Executive of any
Excise Tax on the Total Payments as well as any income taxes
imposed on the Excise Tax Restoration Payment, any Excise Tax
imposed on the Excise Tax Restoration Payment and any interest or
penalties imposed with respect to taxes on the Excise Tax
Restoration Payment or any Excise Tax. If the Employer refuses
or fails to timely pay the Excise Tax Restoration Payment to the
Executive without a good faith lawful justification and such
refusal or failure is not corrected within twenty (20) business
days after the Executive provides written notice to the Employer
concerning the refusal or failure, then the Employer shall
immediately pay to the Executive an additional amount equal to
75% of the Executive's last annual base salary as a late fee for
the Employer's late payment of the Excise Tax Restoration
Payment. The Employer shall furnish to the Executive a written
statement setting forth in detail the manner in which the Excise
Tax Restoration Payment was calculated and the basis for such
calculations, including any opinions or other advice that the
Employer received from outside counsel, auditors or consultants.
Notwithstanding the foregoing, it is the express intent and
desire of the parties that if the Total Payments would trigger an
Excise Tax, then the Executive shall be entitled to promptly
receive such additional monetary compensation from the Employer
as may be necessary to ensure that the Executive's net after tax
benefit of the Total Payments would be the same as if no Excise
Tax had been imposed upon the Total Payments. In the event of any
dispute between the Executive and the Employer involving the
Excise Tax Restoration Payment, the matter shall be promptly
submitted to binding arbitration on an expedited basis before a
mutually acceptable arbitrator at a national accounting firm.
15. Governing Law; Binding Nature of Agreement. This
Agreement shall be construed in accordance with the laws of the
State of New Hampshire and shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF, Employer has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized
and its corporate seal to be hereto affixed, and Executive has
executed the within instrument as a sealed document, all as of
the day and year first above written.
STANDEX INTERNATIONAL CORPORATION
/s/Xxxxxx X. Xxxxxxx
By:________________________________
Xxxxxx X. Xxxxxxx, President/CEO
ATTEST:
/s/Xxxxxxx X. Xxxxx
_______________________________
Xxxxxxx X. Xxxxx, Secretary
/s/Xxxxxx X. Xxxxx /s/Xxxxxxxxx Xxxxxx
Witness Xxxxxxxxx Xxxxxx
