Exhibit 99(a)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 27th day of February, 1998, by and between
Xxxx Xxxx, P. 0. Xxx 0000, Xxxxxx Xxxxx Xx, XX 00000 ("Executive") and Bacou USA
Safety, Inc., a corporation organized under the laws of Delaware (the
"Company").
W I T N E S S E T H:
WHEREAS, on this date the Company has acquired substantially all of the
assets and liabilities of Xxxxxx X. Xxxxxx & Associates, Inc., d/b/a/ Xxxxxx
Xxxxxx Industries ("Seller") and, until the closing of that transaction (the
"Transaction"), Executive served as Chief Executive Officer of Seller; and
WHEREAS, Company wishes to secure the services of Executive as President
and Chief Operating Officer of Company with duties to be defined and as
President of the Xxxxxx Xxxxxx division of the Company for the period provided
in this Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. Employment. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as
President and Chief Operating Officer of the Company. Executive agrees to
faithfully perform the duties assigned to him to the best of his ability, comply
with the written Policies and Procedures of Bacou USA, Inc. as then applicable
to its subsidiaries and, except for vacations and periods of temporary illness,
to devote his, full time and attention to the business of Company. Ancillary
employment such as writing, teaching or lecturing, as well as the acceptance of
honorific titles may be undertaken by the Executive only with the approval of
the Chief Executive Officer of Bacou USA, Inc. or his designee (together
referred to as the "CEO"). Executive also agrees that he will not engage in any
other business activities without the prior approval of the CEO. Executive may
only serve as an officer, director, trustee or committee member, or in any
similar position, of a reasonable number (maximum two) of trade associations and
religious, charitable, educational, civic or other nonbusiness organizations,
subject to the approval of the CEO. The Executive represents and warrants to
Company that he is now under no contract or agreement nor will he execute any
contract or agreement that will in any manner interfere, conflict with or
prevent him from performing his duties under the terms and conditions of this
Agreement, recognizing that his performance hereunder will require the devotion
of his full time and attention during and beyond regular business hours during
the Term (as hereinafter defined), including extensive travel. Nothing in this
Agreement shall be construed as prohibiting Executive from owning an interest in
Xxxxxx Xxxxxx Enterprises or serving as a director of that corporation.
2. Period of Employment. This Agreement shall become effective upon the
closing of the Transaction and continue until December 31, 1999 (the "Initial
Term"). On December 31, 1999, and at the end of each year thereafter, the period
of employment shall be automatically extended, without further action by either
party, for successive one-year periods (each a "Renewal Term") unless at least
one year prior to the end of the Initial Term or any Renewal Term either party
shall have served written notice on the other of its election to allow this
Agreement to terminate at the end of such Term. The Initial Term and any Renewal
Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment, Company may, at its option, decide that the Executive
shall utilize any unused vacation and/or take a leave-of-absence for part or all
of the remaining time of his employment, subject to payment by the Company
pursuant to Section 4(h) hereof.
3. Termination. The period of employment shall be terminated upon the first
to occur of the following:
(i) The expiration of the period of employment pursuant to Section 2
of this Agreement.
(ii) The Executive's death.
(iii)The Executive becoming permanently disabled. Permanent disability
shall mean physical or mental incapacity of a nature which
prevents Executive from performing his duties under this
Agreement for a period of more than six months in any twelve
month period.
(iv) The Executive's employment being terminated by Company for cause.
Termination for cause shall mean any one or more of the
following: (a) termination by action of the Board of Directors of
Company because of the willful failure of Executive to perform
his duties and obligations under this Agreement; or (b) failure
to execute in a reasonable and responsible manner the written
policies and procedures of Company; or (c) gross negligence in
the performance of his duties under this Agreement; or (d) the
commission by Executive of a felony which the Company reasonably
determines would materially adversely affect the Company or the
conduct of its business.
4. Compensation and Benefits.
(a) The Executive shall receive regular compensation (the "Base Salary") at
the initial rate of Four Hundred Thousand Dollars ($400,000.00) per annum for
the Initial Term. The Base Salary shall be payable in arrears less the usual
payroll deductions at the same times and in the same manner as salaries paid to
other employees of the Company. After the Initial Term, the Base Salary shall be
reviewed annually for possible increase including participation in any wage
increases applicable generally to salaried employees of the Company.
(b) In addition to the Base Salary, the Executive shall be entitled to
receive annual incentive compensation payments ("Incentive Compensation") at
such times and in such amounts as may be determined pursuant to a written plan
in effect for each year of the term. There is attached to this Agreement a copy
of such Bonus Plan as applicable for fiscal years 1998 and 1999. The maximum
possible Incentive Compensation payable per annum under this Agreement shall not
exceed 125% of the amount of Base Salary paid by Company to Executive in the
fiscal year for which such Incentive Compensation is determined. Executive
acknowledges that, by agreeing to participate in the Bonus Plan for subsidiaries
of Bacou USA, Inc., he thereby waives any rights to participate in any other
incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for the prior fiscal
year within ten (10) days after a decision is made by the Board of Directors of
Bacou USA, Inc. as to the amount of such Incentive Compensation, but in any
event no later than the earlier of the annual meeting of the Board of Directors
or March 31.
(d) The Executive shall be entitled to participate in any stock option plan
which Bacou USA, Inc. may adopt for Company at levels to be determined by the
Board of Directors of Bacou USA, Inc. in their sole discretion.
(e) In connection with the execution of this Agreement as a signing bonus
and subject to the execution of the Stock Option Notice and Agreement attached
hereto as Exhibit A, Executive shall receive $200,000 upon execution of this
Agreement and be granted options to purchase 15,000 shares of common stock of
Bacou USA, Inc. at a per share price equal to the closing price on the trading
day immediately preceding the effective date of this Agreement.
(f) The Executive shall be entitled to participate in all savings, thrift,
retirement or pension, short-term and long-term disability, health and accident,
Blue Cross/Blue Shield, Major Medical or other hospitalization, holiday,
vacation, and other fringe benefit programs generally available to executives of
Company in accordance with and subject to the terms and conditions of such
programs.
(g) In addition, the Executive shall be entitled to receive the following
benefits:
(i) The Executive shall have the use of a company car, subject to the
written Automobile Policy of Bacou USA, Inc.; provided, however,
that for any period of time Executive elects to continue using
his own automobile, the Company shall pay him a car allowance of
$650 per month plus the costs of gas, maintenance, repairs and
insurance.
(ii) The Executive shall be entitled to vacation pursuant to the
written Bacou USA, Inc. Executive Vacation Policy. Vacation days
will be taken at a time convenient for both the Executive and
Company. To the extent the Executive does not take all vacation
days the remaining days will be carried forward for an unlimited
period or be paid to the Executive at the level of his Base
Salary valid for the fiscal year in which vacation days are not
taken.
(iii)When traveling on Company business, the Executive will be
provided first class airfare on domestic trips; business class
airfare will be provided on international trips.
(iv) The Executive is authorized to incur reasonable expenses in
connection with and for the promotion of the business of Company,
including expenses for meals and lodging (regular hotel room, no
suites), entertainment, and similar items as required from time
to time by the Executive's duties. Company shall reimburse the
Executive for all such expenses upon the presentation of an
account therefor, together with appropriate supporting
documentation.
(h) In the event that either (a) during the term of this Agreement the
Executive is discharged by the Company for reasons other than those set forth in
clauses (a), (c) or (d) of Section 3(iv) hereof or (b) the Company elects not to
renew this Agreement pursuant to Section 2 of this Agreement, then the Company
agrees to pay the Executive a severance payment equal to twelve (12) months of
direct salary and benefits, payable at normal payroll intervals during the
severance period, plus Incentive Compensation equal to the amount of Incentive
Compensation paid by the Company to Executive for the prior fiscal year. In the
event that the Executive elects not to renew this Agreement pursuant to Section
2 of this Agreement, then the Company agrees to pay the Executive a severance
payment equal to twelve (12) months of direct salary and benefits, payable at
normal payroll intervals during the severance period.
5. Limitations on Authority. Except as otherwise provided herein, approval
by the CEO must be obtained prior to the Executive taking any of the following
actions on behalf of the Company or any of its affiliates:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real property.
(b) Making unplanned capital expenditures or any commitment therefore
in an amount greater than $7,500 for any individual expenditure
and $75,000 in the aggregate in any fiscal year;
(c) Borrowing or guaranteeing any borrowings from or on behalf of any
party, or altering the terms of any loan agreements for such
borrowings except for any such loans or borrowings as shall be
agreed upon by the Board of Directors of Bacou USA, Inc.;
(d) Hiring or terminating executive personnel with annual salary in
excess of $70,000;
(e) Granting retirement benefits or other non-earned income to any
individual which is not available to all employees;
(f) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(g) Acquiring the assets or shares of another Company or partnership;
(h) Acquiring or disposing of the assets or shares of the Company, or
selling any fixed asset of the Company below book value;
(i) Entering into or terminating any employment, consulting, or other
service agreements of any kind or nature with a monthly financial
obligation in excess of U.S. $5,000 for more than six (6) months;
(j) Making basic changes in the administration, organization,
production, and distribution of Company or any of its affiliates,
as well as closing or curtailing the functions of Company or any
of its affiliates;
(k) Filing or settling any lawsuit;
(1) Making cash or non-cash corporate contributions above the
annually budgeted amount;
(m) With respect to orders for large quantities of goods which do not
ordinarily have fast inventory turns, making commitments to
deliver goods which would result in extraordinary risks or
expenditures;
(n) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(o) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the CEO be unavailable, if an emergency arises
which requires the Executive to take immediate action in which approval as set
forth in this Section would otherwise be required, the Executive is no longer
bound by the limitations described above and is authorized to make a decision in
the best interests of Company. The Executive will immediately inform the CEO in
writing of any such decisions made by him.
6. Non-Disclosure of Information. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
secure confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed by Company for a period of three (3) years except in respect of
any information or knowledge disclosed to the public, other than through an
unauthorized disclosure by the Executive.
7. Trade Secrets. The Executive covenants that he shall, while employed by
Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. Non-Competition. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to one year thereafter,
should the Executive's contract be terminated or not be renewed, the Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of Company or any
of its affiliates. In the event that Company chooses to exercise its option to
prevent the Executive from competing with Company following termination or
non-renewal of his employment, Company shall notify the Executive in writing
within two (2) weeks following his last day of employment or within two (2)
weeks of notice by Company of its decision that the Executive shall take a
leave-of-absence, in either case specifying the period of up to one year
following termination, resignation, or non-renewal of employment during which
such competitive activity shall be prohibited. In the event Company exercises
its option, Company shall continue to pay Executive his Base Salary at the rate
applicable at the time of termination, resignation or non-renewal for the period
during which the Executive is prohibited from competition with Company, plus an
amount equal to the Incentive Compensation paid to him for the prior fiscal
year, pro-rated for the period during which the Executive is prohibited from
competition with the Company (if less than a full year); provided, however, that
the Company shall not be obligated to make any such payments (and shall be
entitled to a refund of any payments actually made) to the extent that Executive
violates his obligation of non-competition or invalidates such obligations
through legal action; and provided further, however, that any amounts paid to
Executive pursuant to Section 4(h) hereof shall be credited against (i.e.,
reduce on a dollar for dollar basis) any amounts payable by the Company pursuant
to this Section 8. Notwithstanding the. foregoing, the Executive (as
hereinbefore described in Section 2(d)) may own five (5%) percent of the
securities of any business in competition with the business of Company or any of
its affiliates, which securities are regularly traded on a public exchange,
provided that any such ownership shall not result in the Executive becoming a
record or beneficial owner at any time of more than five (5%) percent of equity
securities of said business entity.
(b) The Executive shall not during the term of his Employment under this
Agreement or any renewal thereof, and for a period of one (1) year thereafter,
solicit or arrange to have any other person or entity solicit any person who was
employed by the Company or any of its affiliated companies having an annual
compensation of at least U.S. $50,000 per annum for other employment or
otherwise induce such employees to terminate their employment with the Company
or such affiliates.
(c) If any provision of this Section is held to be unenforceable because of
the scope, duration or area of its applicability or otherwise, the legal entity
making that determination will have the power to modify the scope, duration or
area, or all of them, and the provision will then apply in its modified form.
9. Property. All letters, memoranda, documents, business notes (including
all copies thereof) and other information contained on any other computer media
including computer disks and hard drives of the Executive in any manner relating
to the duties of Executive under this agreement are the property of Company.
10. Notices. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
Bacou USA Safety, Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
(b) If to the Executive, to him at:
P.0. Xxx 0000
Xxxxxx Xxxxx Xx, XX 00000,
Tel. No.: 000-000-0000
Any party may change its address for receiving notice or add persons to receive
copies of notices by written notice given to the other names above in the manner
provided above.
11. Full and Complete Agreement; Amendment. This Agreement constitutes the
full and complete understanding and agreement of the parties and supersedes all
prior understandings and agreements, whether written or oral, express or
implied, pertaining in any manner to the employment of Executive. This Agreement
may be modified only by a written instrument executed by both parties.
12. Construction. This Agreement shall be construed under the laws of the
State of California without reference to its conflicts of laws provisions.
13. Arbitration. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Los Angeles, California and any award shall be deemed to be a Los
Angeles, California award. There shall be a single arbitrator who shall be
admitted to practice law in California with no less than ten (10) years
experience in the handling of commercial or corporate matters or disputes. The
arbitrator shall render a written decision stating his reasons therefor, and
shall render an award within six (6) months of the request for arbitration, and
such award shall be final and binding upon both parties. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement, as the law of
such jurisdiction may require or allow. The substantive law to be applied to any
case determined pursuant to this Section 13 is that of State of California. The
expense of arbitration shall be borne by the respective parties except to the
extent that the arbitrators shall determine that the entire expense shall be
borne by a single party.
14. Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
BACOU USA SAFETY, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
By: /s/ Xxxxxx X. Xxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice Chairman, Secretary and
Treasurer
EXECUTIVE:
/s/ Xxxx Xxxx
-------------------------------------
Xxxx Xxxx
