EMPLOYMENT AGREEMENT OF MICHAEL VICKREY
This Employment Agreement (this "Agreement") is entered into on this 17th
day of December, 1996, by and between The Selmer Company, Inc., a Delaware
corporation (the "COMPANY"), and Michael Vickrey (the "EXECUTIVE").
R E C I T A L S
A. The Executive is currently employed by The Selmer Company, Inc..
B. The Company would like to employ the Executive, and the Executive
would like to be employed by the Company.
In consideration of the foregoing and of mutual covenants, agreements, and
representations herein contained, the parties hereto agree as follows:
A G R E E M E N T
1. TERM OF EMPLOYMENT. The Company agrees to employ the Executive, and
the Executive hereby agrees to accept employment, commencing on January 1, 1997
(the "COMMENCEMENT DATE"), and terminating December 31, 1997, unless otherwise
terminated in accordance with the terms set forth in PARAGRAPH 7 of this
Agreement (including any extensions, the "TERM").
2. DUTIES AND RESPONSIBILITIES.
a. The Executive shall be employed as the Executive Vice President
and Chief Financial Officer of the Company, and shall perform such duties as are
from time to time assigned to him by the Board of Directors of the Company (the
"BOARD") or the President of the Company and that are normally associated with
such position. The Executive shall report to the President of the Company.
b. In addition, the Executive's duties and responsibilities shall
include those ordinarily and customarily performed by a person holding such
position, and shall include primary responsibility for all financial matters of
the Company. The Executive shall be entitled to office and support staff
consistent with such position.
c. During the period of his employment hereunder, the Executive
agrees to devote his entire business time, attention, energies and his best
efforts to the performance of his duties.
3. COMPENSATION.
a. For all services to be performed by the Executive during the
Term, the Company shall pay to him, together with other compensation as
hereinafter provided, an annual salary of $100,000 (subject to such deductions
and withholdings as may be required by law or by further agreement with the
Executive), commencing on the Commencement Date, payable in arrears biweekly.
b. In addition, each year the Executive shall be eligible to receive
an annual bonus in the sole and absolute discretion of the Board.
c. The Executive shall be eligible to receive annual salary
increases based on his performance of his duties, but any such increases shall
be in the sole and absolute discretion of the Board.
4. BENEFITS. In addition to any other items of compensation provided for
in this Agreement, the Executive shall be entitled to the following benefits
(the "BENEFITS"):
a. The Executive shall be entitled to participate in (i) any retirement,
life insurance, health, medical, disability or other plans or benefits, whether
insured or self-insured, which the Company in its sole and absolute discretion
may make available generally from time to time to its executives and (ii) any
bonus plans, incentive or otherwise, which the Company, in its sole absolute
discretion, may establish from time to time for its executives.
b. The Executive shall be entitled to vacation in accordance with the
Seller's current vacation policy during each year of this Agreement.
c. The Executive shall be entitled to a leased automobile and all out-of-
pocket expenses for the upkeep and maintenance of the automobile. It is
estimated that 25% of such aggregate costs shall be deemed the Executive's
personal expenses and therefore subject to income tax to him, which shall be
adjusted in keeping with Internal Revenue Services practices. Any income taxes
due as a result of this paragraph may be reimbursed to him by the Company
consistent with current Company practices.
d. The Executive and the Company may enter into separate agreements in
the future on terms and conditions mutually satisfactory to both parties
regarding the purchase of additional equity securities of Selmer Industries,
Inc.
5. REIMBURSEMENT OF EXPENSES. The Executive shall be entitled to be
reimbursed for all reasonable travel and entertainment expenses that are (a)
incurred by him in the performance of his duties hereunder and (b) evidenced by
appropriate documentation.
6. RESTRICTIVE COVENANTS. The Executive acknowledges that certain of the
Company's products and services are proprietary in nature and have been
manufactured, assembled and marketed through the use of customer lists, supplier
lists, trade secrets, methods of operation and other confidential information
possessed by the Company and disclosed in confidence to the Executive (the
"TRADE SECRETS"), which may not be easily accessible to other persons in the
trade. The executive also acknowledges that he will have substantial and
ongoing contact with the Company's customers and suppliers and will thereby gain
knowledge of customer needs and preferences, sources of equity funding, sources
of supply,, methods of assembly and other valuable information necessary for the
success of the Company's business. Therefore, except as provided in
SUBPARAGRAPHS (a) AND (d) below, and except as provided in PARAGRAPH 8, during
the time the Executive is employed under the provisions of this Agreement and
until the date of the second anniversary of the termination of the Executive's
employment, the Executive shall not, without the prior written consent of the
Company:
a. during the Term, engage in any business activity that competes
with the Company in the manufacturing of band and orchestra instruments or other
business in which the Company is engaged, or exploits or utilizes any of the
Trade Secretes; PROVIDED, HOWEVER, that the Executive may invest in any
publicly-traded company that is similar in nature to the business in which the
Company is engaged, provided that such investment shall not exceed 5% of the
equity interest in such company on a fully diluted basis;
b. solicit any person employed by the Company or any affiliate of
the Company, appointed as a representative of the Company, or any affiliate of
the Company, to
join him as a partner, co-venturer, employee, investor or otherwise, in any
substantial business activity whatsoever;
c. disclose or reveal any Trade Secrets or other confidential
information of the Company to anyone; or
d. become employed by or associated with, any entity that owns,
operates, manages or has a substantial interest in any business activity that
competes with the Company in the manufacturing of band or orchestra instruments
or other significant business in which the Company is engaged, or exploits or
utilizes any of the Trade Secrets; PROVIDED, HOWEVER, if the Executive's
employment is terminated by the Company other than for Cause, as defined herein,
said period for the purposes of this SUBPARAGRAPH d shall be reduced to one
year after the termination of his employment.
7. TERMINATION.
a. The Company shall have the option to terminate the Executive's
employment for "CAUSE", which shall be defined as follows: (i) any criminal act
or criminal omission by the Executive that causes damage to the Company or any
of its properties, assets, businesses, officers, directors, stockholders or
employees; (ii) any fraud, misappropriation or embezzlement by the Executive
involving properties, assets or funds of the Company; (iii) a conviction of the
Executive, or plea of NOLO CONTENDERE by the Executive, to any crime or offense
involving monies or other property of the Company or any other felony or
criminal act involving moral turpitude; (iv) the violation by the Executive of
any non-competition or confidentiality agreement with the Company; or (v) the
Executive's intoxication while engaged in the performance of his duties to the
Company or drug addiction. In the event of termination of the Executive's
employment for Cause, any obligation of the Company to provide any compensation
and Benefits to him, as herein set forth, shall cease immediately except as
provided in PARAGRAPH 11.
b. Notwithstanding any other provisions of this Agreement, the
Company may, in its sole and absolute discretion, elect to terminate the
Executive's employment at any time upon 10 days' written notice; PROVIDED,
however, if such should happen, the Company shall pay the Executive at the time
of termination a sum equal to (i) his salary for the balance of the Term, and
(ii) $100,000, in full satisfaction of all its obligations to him under the
provisions of this Agreement and any other severance or other benefit plan of
the Company. In the event of a breach of PARAGRAPH 6 of this Agreement by the
Executive after his receipt of this payment, in addition to any other remedies
at law or in equity, the Executive, recognizing that the harm to the Company
caused by a breach of PARAGRAPH 6 hereof may not be remediable in damages,
consents to injunctive relief in respect of such breach.
c. In the event of termination of the Executive's employment by
reason of death or permanent disability, he and/or his estate shall be entitled
to his salary and Benefits under the terms of this Agreement for a period of six
months following the date of his death or the date upon which he becomes
permanently disabled, in addition to any other benefits provided by the Company.
d. In the event of termination of the Executive's employment by
reason of his resignation, written notice of which shall be given by him to the
Company at least sixty days prior thereto, he shall be entitled to his salary
and Benefits hereunder up to the date of such termination, subject to extension
of Benefits required by any governmental laws and regulations.
8. NON-RENEWAL. If the Company does not offer to renew this Employment
Agreement at the expiration of the Term upon the same terms hereof or upon
modified terms as mutually agreed upon by the Executive and the Company, the
terms of PARAGRAPH 6(d) shall not apply and the Company shall pay to the
Executive a severance benefit on the date of the non-renewal of not less than
$100,000 in consideration for which the Executive agrees that he will not become
employed by or associated with any entity which owns, operates, manages, or has
a substantial interest in any business activity that competes with the Company
as a manufacturer of band and/or orchestral instruments for a period of one year
after the date of the non-renewal.
9. INDEMNIFICATION. The Company agrees to indemnity the Executive to the
same extent that the Company agrees to indemnity other officers and directors of
the Company in their capacity as such. The Company further agrees that such
indemnification shall survive the Executive's resignation, termination or
expiration of this Agreement, with respect to actions taken by him during his
employment with the Company, unless such actions could have been grounds for
termination for Cause.
10. TERMINATION IN EVENT OF SALE OF COMPANY. If (a) all or substantially
all of the Company's voting stock or assets is sold while the Executive is
employed hereunder, and such purchaser (the "PURCHASER") does not choose to
continue the Executive's employment or to hire him, as the case may be; or (b)
if the Executive does not choose to be employed by the Purchaser upon the
employment terms offered to him by the Purchaser and resigns as a result, in
either event of (a) or (b) the Company shall pay him on the date of such sale,
or on the date of the Executive's resignation, as the case may be, a sum equal
to $100,000 plus the balance of his salary computed over the balance of the Term
of this Agreement. The Executive agrees that if he receives any payment under
this paragraph he will not accept employment with the Purchaser or its
affiliates for a period of one year plus the remaining term of this Agreement as
of the date of termination. No other payments shall be due to the Executive
under any of the Company's other severance or other plans or arrangements or
hereunder, and this Agreement shall be terminated and of no further force or
effect.
11. EMPLOYMENT BENEFITS TO CONTINUE AFTER TERMINATION. If the Executive's
employment is terminated by the Company with or without Case, or by resignation,
he shall be entitled to continue to participate in any health and medical plans
maintained by the Company at his employee rate if he so elects and pays the
premium cost of such insurer in advance to the Company until such time as he
becomes a participant in another plan or for an additional period of time in
accordance with governmental laws and regulations. The Company is not obligated
to maintain any such benefit plans under this Agreement.
12. LIMITATION ON ASSIGNMENT. The Company agrees that if the assets of
the business are transferred to any other entity the Executive shall have the
right to have this contract assigned to such entity.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties in connection with the subject matter hereof, supersedes any
and all prior agreements or understandings between the parties and may only be
changed by agreement in writing between the parties and may only be changed by
agreement in writing between the parties.
14. BINDING NATURE OF AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon the parties hereto, the heirs and legal representatives of the
Executive and the successors and assigns of the Company.
15. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Indiana, without giving effect to the
conflict of laws principles thereof.
16. CONSTRUCTION AND JURISDICTION.
a. If any legal action relating to or other proceeding is brought by
any party for the enforcement of this Agreement, or because of an alleged
dispute, breach or default in connection with any provisions of this Agreement,
such action shall be commenced in the State of Indiana, and the parties hereto
agree that such State shall have exclusive jurisdiction thereof; provided,
however, if any court in said State shall decline to afford injunctive relief to
the Company on account of the breach or threatened breach of this Agreement by
the Executive, the Company shall be entitled to seek such relief from any other
court of competent jurisdiction, wherever located.
b. The prevailing party shall be entitled to recover reasonable
attorney's fees and other reasonable costs incurred in such action or proceeding
in addition to any other relief to which it may be entitled.
c. The parties hereby further agree that, in connection therewith,
service of process by registered or certified mail or in person shall confer
jurisdiction over them.
17. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
or provisions were omitted.
18. SECTION HEADINGS. The section headings herein have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms or provisions hereof.
19. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver by
said party of any other or subsequent breach.
20. NOTICES. All notices and other communications required or permitted
to be given under the terms of this Agreement shall be given in writing and
shall be deemed to have been duly given (a) when delivered personally, (b) if
sent by telecopy, when receipt thereof is acknowledged at the telecopy number
listed below for the receiving party, (c) the day following the day on which the
same has been delivered prepaid for overnight delivery to a national air courier
service or (d) three days following deposit in the United States Mail,
registered or certified, postage prepaid, in each case addressed as follows (or
to such other addresses that may have been designated by the respective parties
hereto for this purpose):
If to the Company:
The Selmer Company, Inc.
Kirkland Messina, Inc.
11100 Santa Monica Boulevard - Suite 825
Los Angeles, CA 90025
Attention: Dana Messina
With a copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street
30th Floor
Los Angeles, California 90017
Attention: Eric H. Schunk, Esq.
The Selmer Company, Inc.
600 Industrial Parkway
Elkhart, IN 46515
Attention: Thomas Burzycki
If to the Executive:
Mr. Michael Vickrey
P.O. Box 308
Union, Michigan 49130
IN WITNESS WHEREOF, the parties have executed this agreement on the day and year
first above written.
The Selmer Company, Inc.
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By: Dana D. Messina
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Michael Vickrey