EXHIBIT 10(o)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of September 22, 1995,
between PICO PRODUCTS, INC., a New York corporation ("Employer"), and EVERETT T.
KEECH ("Employee").
BACKGROUND. Employee is currently employed by Employer as its
Chairman and Chief Executive Officer. Employer and Employee mutually agree to
continue the employment of Employee as Chairman and Chief Executive Officer of
Employer upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
accepts such employment and agrees to perform his duties and responsibilities
hereunder, in accordance with the terms and conditions hereinafter set forth.
1.1 EMPLOYMENT TERM. The employment term of this Agreement shall be
for a period of three years and may be renewed in accordance with Section 1.2.
The term "Employment Term" shall refer to the initial Employment Term, which
shall commence on the date hereof and shall continue until and end of the third
anniversary date of this Agreement (unless terminated prior thereto in
accordance with Section 7 hereof) and, to the extent this Agreement is renewed
pursuant to Section 1.2, to the last day of any successive one year period.
1.2 RENEWAL. This Agreement shall be automatically renewed for
successive one year terms at the expiration of the initial Employment Term, and
any subsequent Employment Term, unless written notice to the contrary is
provided by either the Employer or the Employee at least ninety days prior to
the expiration of such Employment Term. In the event that Employer does not
elect to renew this Agreement upon the expiration of an Employment Term,
Employee shall be entitled to receive the severance compensation described in
Section 1.8(a)(i) and Section 1.8(b).
1.3 DUTIES AND RESPONSIBILITIES.
(a) During the Employment Term, Employee shall serve as Chairman
and Chief Executive Officer of Employer and shall perform all duties and accept
all responsibilities incidental to such position or as
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may be assigned to him by Employer's Board of Directors, and he shall report to
and cooperate fully with the Board of Directors. Employee shall operate
primarily out of Employer's executive office in West Conshohocken, Pennsylvania,
but shall be expected to spend a significant amount of time devoted to
Employer's business affairs at other locations, including Employer's principal
offices in Los Angeles and Employer's facilities outside the United States, and
traveling as appropriate on Employer's business.
(b) Employee represents and covenants to Employer that he is
subject to or a party to only those employment agreements, non-competition
covenants, and non-disclosure agreements listed on Exhibit "A" hereto. Employee
represents and covenants to Employer that neither those documents nor any other
similar agreement, covenant, understanding or restriction to which Employee is
subject would prohibit Employee from executing this Agreement and performing his
duties and responsibilities hereunder, or would in any manner, directly or
indirectly, limit or affect the duties and responsibilities which may now or in
the future be assigned to Employee by Employer.
1.4 EXTENT OF SERVICE. During the Employment Term, Employee agrees
to use his best efforts to carry out his duties and responsibilities under
Section 1.3 hereof and to devote his full time, attention and energy thereto.
The foregoing shall not be construed as preventing Employee from (a) serving as
a consultant or director for one or more non-competitive business enterprises,
(b) engaging in charitable or civic activities, (c) teaching, or (d) making
investments in other businesses or enterprises; provided that such activities in
the aggregate shall not prevent him from discharging his duties and
responsibilities to Employer.
1.5 BASE COMPENSATION. For all the services rendered by Employee
hereunder, Employer shall pay Employee an annual salary at the rate of $175,000
for the Employment Term, plus such additional amounts, if any, as may be
approved by the Employer's Board of Directors, less withholding required by law
or agreed to by Employee, payable in installments at such times as Employer
customarily pays its other executive officers. The annual salary may be
increased by the Board of Directors in its sole discretion.
1.6 BENEFITS. During the Employment Term, Employee shall be entitled
to certain benefits and shall be eligible for certain incentive compensation, as
follows:
(a) During the Employment Term, Employee shall be entitled to
fifteen working days of paid vacation during the Employment Term in accordance
with Employer's then existing vacation policy.
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(b) Employee shall be entitled to all normal and usual benefits
provided by Employer to its management employees, including, but not limited to,
participation in profit sharing, disability, health, hospitalization and
retirement plans and such other benefits as the Board of Directors of Employer
may from time to time determine based upon the benefits paid to other executive
officers of Employer. In addition Employee shall be entitled to a car allowance
of $9,600 per annum. Employee shall also be entitled to such executive
benefits, including executive disability and life insurance as shall be approved
by Employer's Board of Directors or an appropriate committee of the Board.
(c) Employee shall be eligible to receive such stock options or
other forms of stock grants as shall be determined by Employer's Board of
Directors or an appropriate committee of such Board.
(d) Employee shall be eligible for an annual management bonus
with such target levels and performance goals as shall be set by Employer's
Board of Directors or an appropriate committee of such Board.
1.7 CHANGE IN CONTROL.
(a) For purposes of this paragraph 1.7, "Change in Control"
shall mean (i) a merger or consolidation of Employer with any entity other than
an entity with which Employer is affiliated at the date of execution of this
Agreement; (ii) a sale of substantially all of the assets of Employer to any
person or entity other than a person or entity with which Employer is affiliated
at the date of execution of this Agreement; or (iii) a change in a majority of
the members of the Board of Directors of Employer within any twelve-month
period.
(b) In the event of a Change in Control, Employee may elect,
within one year after such Change in Control, to terminate this Agreement. If
Employee terminates this Agreement following a Change in Control:
(i) Employer shall pay Employee, as severance compensation,
an amount equal to 2.99 times Employee's base annual cash compensation. Such
severance compensation shall be paid in twenty-four equal monthly installments,
commencing thirty days after the date of termination of this Agreement; and
(ii) Employer shall continue to provide Employee with all
health, dental, hospitalization, life, and disability insurance benefits, plus
car allowance, which Employee received pursuant to Section 1.6(b) hereof, for a
period of twenty-four months following the termination of this Agreement.
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Notwithstanding the foregoing, the payments to be made to Employee pursuant to
this paragraph (b) shall not exceed an amount sufficient to characterize any
portion of such payments as an "excess parachute payment" within the meaning of
Section 280G(b) of the Internal Revenue Code of 1986, as amended, or any
successor provision. In the event that a portion of such payments would
otherwise be deemed to be an excess parachute payment, Employer shall notify
Employee of such fact and Employee shall have a period of thirty days in which
to notify Employer of the order in which the categories of amounts payable to
him hereunder shall be reduces to that no portion of such payments shall
constitute an excess parachute payment. In the event that Employee shall fail
so to notify Employer, Employer shall solely make such determination.
1.8 SEVERANCE COMPENSATION. If Employer terminates this Agreement,
other than pursuant to Section 7 hereof:
(a) Employer shall pay Employee an amount equal to twice the sum
of (i) Employee's base annual cash compensation plus (ii) the bonus or other
additional compensation Employee would have received for the current fiscal year
based on targeted performance goals. Such severance compensation shall be
payable in 24 equal monthly installments, commencing thirty days after the date
of termination of this Agreement; and
(b) Employer shall continue to provided Employee with the
health, dental, hospitalization and disability benefits which Employee received
pursuant to Section 1.6(b) hereof, for a period of twelve months following the
termination of this Agreement.
Notwithstanding the foregoing, in the event that Employer terminates this
Agreement, other than pursuant to Section 7 hereof, within one year after a
Change in Control, Keech shall be entitled to the benefits of Section 1.7 of
this Section 1.8, which ever shall be greater.
2. EXPENSES. Employee shall be reimbursed for the reasonable business
expenses incurred by him in connection with his performance of services
hereunder during the Employment Term upon presentation of an itemized account
and written proof of such expenses.
3. DEVELOPMENTS. Employee will disclose promptly in writing to Employer
all inventions, ideas, discoveries, and improvements, whether or not patentable,
conceived by Employee during the period of Employee's employment with Employer,
or a parent or subsidiary thereof, whether alone or with others, and whether or
not during regular business hours, or on Employer premises or with the aid of
Employer materials, which pertain in any way to Employee's work with Employer or
to any business activity which is or at the time of such conception may be
carried on by Employer or a parent or subsidiary thereof. All such inventions,
ideas, discoveries, and
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improvements are the property of Employer to which Employee hereby assigns and
transfers forever all Employee's rights, titles and interests.
Employee, upon request by Employer and at Employer's sole expense,
will prepare and execute applications for patents for such inventions, ideas,
discoveries, and improvements, both in the United States and in foreign
countries, and will do everything necessary to ensure the issuance of such
patents, irrespective of whether required to be done during or after the
termination of Employee's period of employment with Employer.
Any inventions, ideas, discoveries, and improvements conceived or made
by Employee prior to the execution of this Agreement and not intended to be
included within its provisions are listed or described on Exhibit "B" attached
to this Agreement, and the absence of any such list or description indicates
that there are no inventions, ideas, discoveries, or improvements not covered by
this Agreement.
4. TRADE SECRETS. The Employee agrees that he will not at any time,
either during or subsequent to the Employment Term, unless given express consent
in writing by the Employer, either directly or indirectly use or communicate to
any person or entity any confidential information of any kind concerning matters
affecting or relating to the names, addresses, buying habits or practices of any
of Employer's clients or customers; Employer's marketing methods, programs,
formulas, patterns, compilations, devices, methods, techniques or processes and
related data; the amount of compensation paid by Employer to employees and
independent contractors and other terms of their employment or contractual
relationships; other information concerning Employer's manner of operations.
(The foregoing shall not be deemed to prohibit the disclosure of information
which (a) is, at the time of disclosure, in the public domain other than as a
result of Employee's breach of this Agreement, or (b) can be demonstrated by
Employee to be known by Employee on the date of his commencement of employment.)
The Employee agrees that the above information and items are important, material
and confidential trade secrets and that they affect the successful conduct of
the Employer's business and its good will. The Employee agrees that all
business procured by the Employee while employed by the Employer is and shall
remain the permanent and exclusive property of the Employer. Employee further
agrees that Employer's relationship with each of its employees and independent
contractors is a significant and valuable asset of the Employer. Any
interference with the Employer's business, property, confidential information,
trade secrets, clients, customers, employees or independent contractors by the
Employee or any of Employee's agents during or after the term of this Agreement
shall be deemed a material breach of this Agreement.
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5. NONSOLICITATION; COVENANT NOT TO COMPETE.
(a) The Employee hereby acknowledges and agrees that he is likely to
be exposed to a significant amount of confidential information concerning the
Employer's business methods, operations, employment relationships and customers
while employed under this Agreement, that such information might be retained by
Employee in tangible form or simply retained in the Employee's memory, and that
the protection of the Employer's exclusive rights to such confidential
information and the benefits flowing from it can best be ensured by means of a
restriction on the Employee's activities after termination of employment.
Therefore, the Employee agrees that for the one-year period following
termination of employment (whether with or without cause) he shall not solicit,
divert or initiate (or attempt to solicit, divert or initiate) any contact with
any customer, client or vendor of the Employer if such action is on behalf of
any person (including Employee) who shall then be in a business competitive with
that of Employer, for any commercial or business reason whatsoever. The
Employee also agrees that for such period he will not directly or indirectly
solicit the employment of any employee of the Employer and will not attempt to
persuade any employee to leave the employment of the Employer.
(b) Employee covenants that during his employment with Employer, and
for a period of one year after termination of such employment, Employee will not
directly or indirectly, as principal, owner, employee, or agent, engage in any
business competing with the business of Employer (or an affiliate of Employer)
in any place where Employer (or such affiliate of Employer) is conducting
business or exploring business opportunities at the time of termination of
Employee's employment with Employer.
6. EQUITABLE RELIEF.
(a) Employee acknowledges that the restrictions contained in Sections
4 and 5 hereof are reasonable and necessary to protect the legitimate interests
of Employer and that any violation of such restrictions would result in
irreparable injury to Employer. If the period of time or other restrictions
specified in Sections 4 and 5 should be adjudged unreasonable at any proceeding,
then the period of time or such other restrictions shall be reduced by the
elimination or reduction of such portion thereof so that such restrictions may
be enforced in a manner adjudged to be reasonable. Employee acknowledges that
Employer shall be entitled to preliminary and permanent injunctive relief for a
violation of any such restrictions without having to prove actual damages or to
post a bond; Employer shall also be entitled to 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
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to which Employer may be entitled in law or equity. In the event of a
violation, the period referred to in Section 5 hereof shall be extended by a
period of time equal to that period beginning with the commencement of any such
violation and ending when such violation shall have been finally terminated in
good faith.
(b) Employee agrees that until the expiration of the covenants
contained in Sections 4 and 5 of this Agreement, he will provide, and that
Employer may similarly provide, a copy of the covenants contained in such
Sections to any business or enterprise (i) which he may directly or indirectly
own, manage, operate, finance, join, control or participate in the ownership,
management, operation, financing, control or control of, or (ii) with which he
may be connected with as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise, or in connection with which he
may use or permit his name to be used.
7. TERMINATION. This Agreement shall terminate prior to the expiration
of the term set forth in Section 1.1 above upon the occurrence of any one of the
following events:
7.1 DISABILITY. In the event that Employee is unable fully to
perform his duties and responsibilities hereunder to the full extent required by
the Board of Directors of the Employer by reason of illness, injury or
incapacity for six consecutive months, during which time he shall continue to be
compensated as provided in Section 1.5 hereof (less any payments due Employee
under disability benefit programs, including Social Security disability,
workers' compensation and disability retirement benefits), this Agreement may be
terminated by Employer, and Employer shall have no further liability or
obligation to Employee for compensation hereunder; provided, however, that
Employee will be entitled to receive the payments prescribed under any
disability benefit plan which may be in effect for employees of Employer and in
which he participated. Employee agrees, in the event of any dispute under this
Section 7.1, to submit to a physical examination by a licensed physician
mutually agreed on by Employee and the Board of Directors of Employer.
7.2 DEATH. In the event that Employee dies during the Employment
Term, Employer shall pay to his executors, legal representatives or
administrators an amount equal to the installment of his salary set forth in
Section 1.5 hereof for the month in which he dies, and thereafter Employer shall
have no further liability or obligation hereunder to his executors, legal
representatives, administrators, heirs or assigns or any other person claiming
under or through him; provided, however, that Employee's estate or designated
beneficiaries shall be entitled to receive the payments prescribed for such
recipients under any death benefit plan which may be in effect for employees of
the Employer and in which Employee participated.
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7.3 CAUSE. Notwithstanding any other provision hereof, Employer
may terminate this Agreement at any time for "cause." For purposes of this
Agreement, "cause" shall include, but not be limited to, the failure of Employee
to perform or observe any of the terms or provisions of this Agreement (after
notice of such failure and an opportunity to cure such failure within 30 days
after such notice), dishonesty, misconduct, conviction of a crime involving
moral turpitude, habitual insobriety, misappropriation of funds, disparagement
of the Employer, its management or its employees or financial inability of the
Employer to continue to do business. The Employer's liability, if any, for
payment to Employee as a consequence of termination of Employee's employment
pursuant to this Agreement shall be reduced by and to the extent of any earnings
received by or accrued for the benefit of Employee during any unexpired part of
the Employment Term.
8. SURVIVAL. Notwithstanding the termination of this Agreement by reason
of Employee's disability under Section 7.1 or for cause under Section 7.3, his
obligations under Sections 4 and 5 hereof shall survive and remain in full force
and effect for the periods therein provided, and the provisions for equitable
relief against Employee in Section 6 hereof shall continue in force.
9. GOVERNING LAW. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania.
10. DISPUTES AND ARBITRATION. Any disputes arising hereunder, including
disputes arising from or relating to termination, shall be resolved by binding
arbitration. Notice of the demand for arbitration by either party shall be
given in writing to the other party to this Agreement. Upon such demand, the
dispute shall be settled by arbitration before a single arbitrator pursuant to
the rules of the American Arbitration Association (the "AAA"). Discovery shall
be permitted prior to arbitration and Pennsylvania law shall be applied. The
arbitrator shall be selected by the joint agreement of the parties, but if the
parties do not so agree within twenty days after the date of the notice referred
to above, the selection shall be made pursuant to the rules of, and from the
panels of arbitrators maintained by the AAA. Any award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto; provided,
however, that any such award shall be accompanied by written opinion of the
arbitrator giving the reasons for the award. Each party shall pay its own
expenses of arbitration and the expenses of the arbitrator shall be equally
shared by the parties. Nothing herein shall prevent the parties from settling
any dispute by mutual agreement at any time.
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11. NOTICES. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to Employer, to: Pico Products, Inc.
12500 Foothill Boulevard
Lakeview Terrace, CA 91342
With a required copy to: Spencer W. Franck, Jr., Esquire
Saul, Ewing, Remick & Saul
3800 Centre Square West
Philadelphia, PA 19102
If to Employee, to: Mr. Everett T. Keech
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or to such other names or addresses as Employer or Employee, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.
12. CONTENTS OF AGREEMENT; AMENDMENT AND ASSIGNMENT.
(a) This Agreement supersedes all prior agreements and sets forth the
entire understanding among the parties hereto with respect to the subject matter
hereof and cannot be changed, modified, extended or terminated except upon
written amendment approved by the Board of Directors of Employer and executed on
its behalf by a duly authorized officer. Without limitation, nothing in this
Agreement shall be construed as giving Employee any right to be retained in the
employ of Employer beyond the expiration of the Employment Term, and Employee
specifically acknowledges that, unless this Agreement is renewed in accordance
with Section 1.2 hereof, he shall be an employee-at-will of Employer thereafter,
and thus subject to discharge by Employer with or without cause and without
compensation of any nature.
(b) Employee acknowledges that from time to time, Employer may
establish, maintain and distribute employee manuals or handbooks or personnel
policy manuals, and officers or other representatives of Employer may make
written or oral statements relating to personnel policies and procedures. Such
manuals handbooks and statements are intended only of general guidance. No
policies, procedures or statements of any nature by or on behalf of Employer
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual),
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and no acts or practices of any nature, shall be construed to modify this
Agreement or to create express or implied obligations of any nature to Employee.
(c) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable or delegatable in
whole or in part by Employee.
13. SEVERABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.
14. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon Employer by
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by Employer in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by Employer from time to time and
as often as may be deemed expedient or necessary by Employer in its sole
discretion.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
Attest: PICO PRODUCTS, INC.
/s/ Spencer W. Franck, Jr. By: /s/ Joseph T. Kingsley
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Secretary Senior Vice President, CFO
/s/ Everett T. Keech
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Chairman and CEO
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EXHIBIT "A"
EMPLOYMENT AGREEMENTS, NON-COMPETITION AGREEMENTS AND NON-DISCLOSURE AGREEMENTS
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