EMPLOYMENT AGREEMENT
Agreement dated as of October 1, 1997, between BALCHEM
CORPORATION ("Company") and XXXX X. XXXXX ("Employee").
In consideration of the agreements contained below, the
parties agree as follows:
1. Company shall employ Employee as its General Manager and
Chief Executive Officer for a term (the "Term") commencing as of the date hereof
and terminating September 30, 2000.
2. Throughout the Term, Employee shall be elected as a
President and as a director of Company.
3. During the Term, Employee shall devote all of his time,
attention and effort to the performance of his duties for Company.
4. During the Term, Employee shall receive a salary at the
rate of $150,000 per annum, which salary may be increased, at a minimum
annually, but not decreased during the Term at the instance of the Board of
Directors of Company.
5. In addition to his salary aforesaid, Employee shall be
entitled to all of the fringe benefits afforded by Company to its executives,
including a company car, and to annual discretionary bonuses based on a target
figure of 50% of his annual salary for the respective bonus year. Employee shall
be entitled to three weeks paid vacation per calendar year or such greater
amount as may be provided under the Company's then prevailing vacation policy as
in effect from time to time. All vacation shall be scheduled so as not to
interfere with Company's operations. In addition, simultaneously herewith,
Employee has been granted options to purchase 50,000 shares of Company's common
stock under conditions set forth in a Board of Directors resolution dated
October 17, 1997.
6. During the Term, and for one year thereafter, Employee,
shall not
(i) directly or indirectly own, manage,
operate, join, control, or
participate in the ownership,
management, operation, or control
of, or make any financial
investments in, or become employed
by, or be connected in any manner
with, or
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render (whether or not for
compensation) any consulting,
advisory or other services to or for
the benefit of, any person, firm or
corporation, or otherwise engage in
any business activity which directly
or indirectly competes with any
business conducted by the Company;
PROVIDED, HOWEVER, that it shall not
be a violation of this Agreement for
Employee to have beneficial
ownership of less than 1% of the
outstanding amount of any class of
securities listed on a national
securities exchange or quoted on an
inter-dealer quotation system in
such entity;
(ii) directly or indirectly, solicit, in
competition with the Company, any
person who is a customer of any
business conducted by the Company;
or
(iii) directly or indirectly, induce or
attempt to induce any employee of
the Company to terminate his or her
employment for any purpose,
including without limitation, in
order to enter into employment with
any entity which competes with any
business conducted by the Company.
7. Employee acknowledges that in the course of his employment
with the Company, he will have acquired information concerning the Company which
is not publicly available, including non-public financial information and trade
secrets ("Proprietary Information"). Employee will keep such Proprietary
Information confidential at all times after his employment terminates, and will
not make use of such Proprietary Information on his own behalf, or on behalf of
any third party without the prior written consent from the Company (which may be
withheld for any reasons), unless such information shall have become public
knowledge other than by being divulged or made accessible by him in breach of
this provision, or unless such information is required to be disclosed pursuant
to governmental or judicial process or procedure.
8. Employee acknowledges that as CEO and President of the
Company he has been placed in a position of confidence and trust with the
clients and employees of the Company, and that in connection with such services
to the company, he has access to confidential information vital to the Company's
business. Employee
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further acknowledges that in view of the nature of the business in which the
Company is engaged, the foregoing restrictive covenants in this Section 6 and 7
hereof are reasonable and necessary in order to protect the legitimate interests
of the Company and that violation of Sections 6-8 hereof would result in
irreparable injury to the Company. Accordingly, Employee consents and agrees
that this Section 8 is reasonable and necessary in order to protect the
legitimate interests of the Company and that violation of Sections 6-8 hereof
would result in irreparable injury to the Company. Accordingly, he consents and
agrees that if he violates or threatens to violate any of the provisions of such
sections the Company would sustain irreparable harm and, therefore, the Company
shall be entitled to obtain from any court of competent jurisdiction, without
the posting of any bond or other security, to preliminary and permanent
injunctive relief as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies in law or
equity to which the Company may be entitled.
9. The Company may terminate the employment of Employee under
this Agreement for cause at any time during the terms of this Agreement.
"For Cause" as used herein shall mean the following:
(a) Habitual absence or lateness;
(b) Insubordination;
(c) Gross failure to perform duties assigned in
a competent and workmanlike manner;
(d) Failure to observe the provisions of
paragraph 3 of this Agreement concerning the
devotion of full time to the Company's
business;
(e) Failure to protect Confidential Information;
(f) Any action which constitutes a violation of
applicable criminal statutes; or
(g) Any act which frustrates or violates the
undivided duty of loyalty owed by Employee
to the Company and/or which violates the
essence of this Agreement.
10. If, at the end of the Term, Company is unwilling to
continue to employ Employee at a salary at least equal to the
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salary being paid Employee at the end of the Term hereof for at least one year
further, and Employee thus leaves the employ of Company, Employee shall receive
as severance a sum equal to the previous year's annual salary and he shall be
immediately vested in the right to exercise employee stock options theretofore
granted to him and not yet vested. If, however, Employee leaves for any other
reason, or is terminated for cause he is not to be entitled to a severance
payment or the immediate vesting of such stock options.
11. Employee may not assign or transfer this Agreement or any
of his rights, duties or obligations hereunder. Company may assign this
Agreement to any person or entity acquiring all or substantially all of the
Company's assets (by merger or otherwise) so long as such person, entity or
affiliate assumes the Company's obligations hereunder.
12. This Agreement sets forth the entire understanding of the
parties and supersedes any and all prior agreements, oral or written, relating
to Employee's employment by the Company or the termination thereof. This
Agreement may not be modified except by a writing, signed by you and by a duly
authorized officer of the Company. This Agreement shall be binding upon
Employee's heirs and personal representatives, and the successors and assigns of
the Company.
Executed as of the day and year first above written.
BALCHEM CORPORATION
By: /S/ XXXXXXX XXXXXX
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Secretary
/s/ XXXX X. XXXXX
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Xxxx X. Xxxxx
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