1
EXHIBIT 10.23
WALBRO CORPORATION
________________________________________________________________________
EMPLOYMENT AGREEMENT FOR XXXXXX X. XXXXXXX
________________________________________________________________________
1. Employment ....................................... 1
2. Term ............................................. 1
3. Office and Duties ................................ 1
4. Salary and Annual Incentive Compensation ......... 2
5. Long-Term Compensation, Including Stock
Options, and Benefits, Deferred
Compensation, and
Expense Reimbursement ............................ 2
6. Governing Law; Expense Reimbursement ............. 4
7. Miscellaneous .................................... 5
2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of the 16 day of August, 1996, by
and between WALBRO CORPORATION, a Delaware corporation (the "Company") and
Xxxxxx X. Xxxxxxx ("Executive"), and shall become effective as of August 16,
1996 (the "Effective Date").
1. Employment.
The Company hereby agrees to employ Executive as a senior executive and
Executive hereby agrees to accept such employment and serve in such capacity,
during the Term as defined in Section 2 and upon the terms and conditions set
forth in this Employment Agreement.
2. Term.
The term of employment of Executive under this Employment Agreement
(the "Term") shall be the period commencing on the Effective Date and
terminating on August 15, 1997 and any period of extension thereof in
accordance with this Section 2, subject to earlier termination in accordance
with the Termination and Change of Control Agreement between the Company and
the Executive ("Termination Agreement"). The Term shall be extended
automatically without further action by either party for a one-year period
beginning on August 16, 1997 and each succeeding annual anniversary thereafter,
unless either party shall have served written notice in accordance with the
provisions of Section 7(d) upon the other party on or prior to the applicable
anniversary date upon which such extension would become effective, electing not
to extend the Term, in which case the Term shall terminate (subject to earlier
termination in accordance with the Termination Agreement) on the last business
day prior to the applicable anniversary date with respect to which such notice
is received.
Notwithstanding the above, if there is a Change of Control (as defined
in the Termination Agreement), the Company hereby agrees to continue the Term
of this Employment Agreement and the Executive in its employ, and the Executive
hereby agrees to remain in the employ of the Company subject to the terms and
conditions of this Employment Agreement, for the period commencing on the
Extension Date (as defined in the Termination Agreement) and ending on the
third anniversary of such date (the "Extended Employment Period").
3. Office and Duties.
The provisions of this Section 3 will apply during the Term:
(a) Generally. Executive shall serve as Chief Administrative Officer
of the Company, and shall perform such duties and responsibilities as are
substantially consistent with his duties, responsibilities, rank and status as
of the Effective Date.
1
3
Executive shall devote full business time and attention, and his best efforts,
abilities, experience, and talent to the performance of such duties and
responsibilities for the businesses of the Company and its subsidiaries.
(b) Place of Employment. Executive's principal place of employment
shall be the Executive's present headquarters location or such other
headquarters location as may be assigned by the Company which is less than
fifty (50) miles from the present headquarters location.
4. Salary and Annual Incentive Compensation.
As partial compensation for the services to be rendered hereunder by
Executive, the Company agrees to pya to Executive during the Term the
compensation set forth in this Section 4.
(a) Base Salary. The Company will pay to Executive during the Term a
base salary at the annual rate of 4150,000 ("Annual Base Salary") in effect at
the Effective Date, payable in cash in substantially equal monthly installments
during each calendar year, or portion thereof, of the Term and otherwise in
accordance with the Company's usual payroll practices with respect to senior
executives. Executive's Annual Base Salary shall be reviewed by the Company at
lease once in each calendar year and may be increased above, but may not be
reduced below, the then-current rate of such base salary.
(b) Annual Incentive Compensation. The Company will pay to Executive
during the Term annual incentive compensation in amounts determined by and in
the sole discretion of the Compensation Committee of the Company's Board of
Directors (the "Committee"), consistent with past practices of the Company.
5. Long-Term Compensation, Including Stock Options, and Benefits
Deferred Compensation, and Expense Reimbursement
(a) Executive Compensation Plans. Executive shall be entitled during
the Term to participate, without discrimination or duplication, in all
executive compensation plans, practices, policies and programs intended for
general participation by senior executives of the Company, as presently in
effect or as they may be modified or added to by the Company from time to time,
subject to the eligibility and other requirements of such plans and programs,
including without limitation of the long-term incentive features of the
Company's Equity Based Long Term Incentive Plan (the "EBP"), any successor to
such plan, and other stock option plans, performance share plans, management
incentive plans, deferred compensation plans, and supplemental retirement
plans.
(b) Employee and Executive Benefit Plans. Executive shall be entitled
during the Term to participate, without discrimination or duplication, in all
employee and
2
4
executive benefit plans and programs of the Company, as presently in effect or
as they may be modified or added to by the Company from time to time, to the
extent such plans are available to similarly situated senior executives or
employees of the Company, subject to the eligibility and other requirements of
such plans and programs, including without limitation plans providing pensions,
other retirement benefits, medical insurance, life insurance, disability
insurance, and accidental death or dismemberment insurance, and participation
in savings, profit-sharing, and stock ownership plans.
In furtherance of and not in limitation of the foregoing, during the Term:
(i) Executive will participate in all executive and
employee vacation and time-off programs;
(ii) The Company will provide Executive with coverage by
long-term disability insurance and benefits
substantially no less favorable (including any required
contributions by Executive) than such insurance and
benefits provided to Executive on the Effective Date;
(iii) Executive will be covered by Company-paid group term
life insurance providing a death benefit of one and
one-half (1 1/2) times Executive's Annual Base Salary
but not to exceed $150,000; and
(iv) The Executive will be covered by a nonqualified
supplemental employee retirement plan ("SERP") which will
provide to Executive a lifetime monthly benefit.
Executive acknowledges that his rights to the deferred
compensation provided for in this Section 5(b) shall be
no greater than those of a general unsecured creditor of
the Company, and that such rights may not be pledged,
collateralized, encumbered, hypothecated, or liable for
or subject to any lien, obligation, or liability of
Executive, or be assignable or transferable by Executive,
otherwise than by will or the laws of descent and
distribution, provided that Executive may designate one
or more beneficiaries to receive any payment of such
amounts in the event of his death.
(c) Deferral of Compensation. The Company shall implement deferral
arrangements permitting Executive to elect to defer receipt, pursuant to
written deferral election terms and forms (the "Deferral Election Forms"), of
all or a specified portion of Executive's annual incentive compensation under
Section 4(b) until such date(s) or event(s) as elected by the Executive and
specified in the Deferral Election Forms; provided, however, that such
deferrals shall not reduce Executive's total cash
3
5
compensation in any calendar year below the sum of (i) the FICA maximum taxable
wage base plus (ii) 1.45% of Executive's wages in excess of such FICA maximum.
In accordance with such duly executed Deferral Election Forms, the
Company shall , in lieu of payment by the Company to Executive, credit to one
or more bookkeeping accounts maintained for Executive, on the respective date
or dates payments would otherwise be due to Executive a number of phantom
shares of Common Stock equal to (1) divided by (2) where (1) is the cash amount
deferred multiplied times the number 1.25 and (2) is the value of a share of
Common Stock on the date such shares are credited. Phantom shares shall not
entitle the Executive to receive any shares of Common Stock nor to vote or
receive dividends.
Upon such date(s) or event(s) set forth in the Deferral Election Forms
(including forms filed after deferral but before settlement in which Executive
may elect to further defer settlement), the Company shall pay to Executive cash
equal to the then value of any phantom shares of Common Stock then credited to
Executive's deferral accounts, less applicable withholding taxes, and such
distribution shall be deemed to fully settle such accounts; provided, however,
that the Company may instead settle such accounts in full or in part by
directing the Trustee to distribute the assets of the "rabbi trust" and the
Company shall be relieved of its obligation under this Employment Agreement and
the Termination Agreement to the extent that assets are so distributed. The
Company and Executive agree that compensation deferred pursuant to this Section
5(c) shall be fully vested and nonforfeitable; provided, however, Executive
acknowledges that his rights to the deferred compensation provided for in this
Section 5(c) shall be no greater than those of a general unsecured creditor of
the Company, and that such rights may not be pledged, collateralized,
encumbered, hypothecated, or liable for or subject to any lien, obligation, or
liability of Executive, or be assignable or transferable by Executive,
otherwise than by will or the laws of descent and distribution, provided that
Executive may designate one or more beneficiaries to receive any payment of
such amounts in the event of his death.
6. Governing Law; Expense Reimbursement.
Governing Law. This Employment Agreement is governed by and is to be
construed, administered, and enforced in accordance with the laws of the State
of Michigan, without regard to Michigan conflicts of law principles, except
insofar as the Delaware General Corporation Law and federal laws and
regulations may be applicable. If under the governing law, any portion of this
Employment Agreement is at any time deemed to be in conflict with any
applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary
to conform thereto or, if that is not possible, to be omitted from this
Employment Agreement. The invalidity of any such portion shall not affect the
force, effect, and validity of the remaining portion hereof.
4
6
(b) Expense Reimbursement. All reasonable costs and expenses
(including fees and disbursements of counsel) incurred by Executive in seeking
to enforce equitable rights pursuant to this Employment Agreement shall be paid
on behalf of or reimbursed to Executive promptly by the Company, whether or not
Executive is successful in asserting such rights.
7. Miscellaneous.
(a) Integration. This Employment Agreement modifies and supersedes any
and all prior agreements and understandings between the parties hereto with
respect to the employment of Executive by the Company and its subsidiaries,
except for the Termination Agreement and contracts relating to compensation
under executive compensation and employee benefit plans of the Company. Subject
to the rights, benefits and obligations provided for in such executive
compensation contracts and employee benefit plans of the Company, this
Employment Agreement and the Termination Agreement constitute the entire
agreement among the parties with respect to the matters herein provided, and no
modification or waiver of any provision hereof shall be effective unless in
writing and signed by the parties hereto. Executive shall not be entitled to
any payment or benefit under this Employment Agreement which duplicates a
payment or benefit received or receivable by Executive under such prior
agreements and understandings with the Company or under any benefit or
compensation plan of the Company.
(b) Non-Transferability. Neither this Employment Agreement nor the
rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and
distribution or as specified in Section 7(c). The Company may assign this
Employment Agreement and the Company's rights and obligations hereunder, and
shall assign this Employment Agreement, to any Successor (as hereinafter
defined) which, by operation of law or otherwise, continues to carry on
substantially the business of the Company prior to the event of succession, and
the Company shall, as a condition of the succession, require such Successor to
agree to assume the Company's obligations and be bound by this Employment
Agreement. For purposes of this Employment Agreement, "Successor" shall mean
any person that succeeds to, or has the practical ability to control (either
immediately or with the passage of time), the Company's business directly, by
merger or consolidation, or indirectly, by purchase of the Company's voting
securities or all or substantially all of its assets, or otherwise.
(c) Beneficiaries. Executive shall be entitled to designate (and
change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits payable hereunder
following Executive's death.
(d) Notices. Whenever under this Employment Agreement it becomes
necessary to give notice, such notice shall be in writing, signed by the party
or parties giving or making the same, and shall be served on the person or
persons for whom it is
5
7
intended or who should be advised or notified, by Federal Express or other
similar overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set forth
below or at such other address as may be designated by such party by like
notice:
If to the Company: Walbro Corporation
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Secretary
If to Executive: Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxx 00000
If the parties by mutual agreement supply each other with telecopier numbers
for the purposes of providing notice by facsimile, such notice shall also be
proper notice under this Employment Agreement. In the case of Federal Express
or other similar overnight service, such notice or advice shall be effective
when sent, and, in the cases of certified or registered mail, shall be
effective 2 days after deposit into the mails by delivery to the U.S. Post
Office.
(e) Reformation. The invalidity of any portion of this Employment
Agreement shall not deemed to render the remainder of this Employment Agreement
invalid.
(f) Headings. The headings of this Employment Agreement are for
convenience of reference only and do not constitute a part hereof.
(g) No General Waivers. The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
(h) Successors and Assigns. This Employment Agreement shall be binding
upon and shall inure to the benefit of Executive, his heirs, executors,
administrators and beneficiaries, and shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
6
8
IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company
has caused this instrument to be duly executed as of the day and year first
above written.
WALBRO CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman & Chief Executive Officer
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
7
