EXHIBIT 10(p)
EMPLOYMENT AGREEMENT
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AGREEMENT made this 26th day of March, 1996, by and between
UNITED INDUSTRIAL CORPORATION, a Delaware corporation having an
address at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter
called "Employer"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (hereinafter called
"Employee").
W I T N E S S E T H :
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In consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. Employment. Employer agrees to employ Employee and
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Employee agrees to serve Employer upon the terms and conditions
hereinafter set forth.
2. Term. The employment of Employee hereunder shall be
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effective and shall commence on January 1, 1996 (the "Effective Date")
and shall terminate as of the close of business on the date three (3)
years after the Effective Date (the "Termination Date"). The period
from the Effective Date through the Termination Date is referred to as
the term of this Agreement.
3. Duties and Extent of Services. Employee agrees to serve
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Employer and its subsidiary companies faithfully and to the best of
his ability under the direction of the Board of Directors of Employer,
devoting his entire business time, energy and skill
to his duties hereunder. The principal place of employment of
Employee shall be at the offices of AAI Corporation ("AAI"), a
subsidiary of Employer, which are currently located in ▇▇▇▇ Valley,
Maryland. Employee understands and agrees, however, that in
connection with his employment hereunder, he may be required from time
to time to travel on behalf of Employer.
The principal duties of Employee shall be to serve as
President and Chief Executive Officer of Employer and AAI and, in such
capacity, to render such managerial, administrative and other services
to Employer and AAI and their subsidiaries as normally are associated
with and incident to such positions as Employer from time to time may
require of him. If, during the term of this Agreement, the Board of
Directors of Employer so determines, in its absolute discretion, to
elect Employee to any additional office of Employer or its subsidiary
companies consistent with his position, or a director of Employer or
its subsidiary companies, Employee agrees to accept and serve in such
office or capacity, for no additional compensation or remuneration.
4. Compensation.
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(a) Salary. Employer agrees to pay (or to cause AAI
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to pay) to Employee, as compensation for all of the services to be
rendered by Employee under or pursuant to this Agreement, a salary at
the rate of four hundred forty thousand dollars ($440,000) per annum,
commencing as of the Effective Date,
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payable in accordance with Employer's normal payroll practices. Such
salary shall be subject to annual review by Employer's Board of
Directors and, at the discretion of the Board, may be increased, but
not decreased below such amount. Employee shall also be eligible to
receive annual discretionary bonuses as may be granted by Employer's
Board of Directors, not to exceed fifty percent (50%) of his then
annual base salary.
(b) Employee Benefit Plans. During the term of this
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Agreement, Employee shall be eligible to participate in any life
insurance, medical, retirement, pension or profit-sharing, disability
or other benefit plans or arrangements now or hereafter generally made
available by Employer or AAI to executive employees of Employer or AAI
to the extent Employee qualifies under the provisions of any such
plans. Subject to the foregoing, Employer and AAI shall have the right
to change insurance companies and modify insurance policies covering
employees of Employer and AAI. Employer agrees to provide (or to
cause AAI to provide) medical coverage to Employee after retirement at
age 65 consistent with such coverage then provided to Employer's or
AAI's executive employees. Such coverage shall be provided either
through Employer's or AAI's plan or a private plan, at Employer's
option, but only if and to the extent Employee does not receive such
coverage from another source. Employer shall purchase and keep in
effect during the term of this Agreement a key man life insurance
policy with respect to Employee in the
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amount of not less than $200,000, provided that Employer is able to
obtain a policy in the amount of $5,000,000 and that Employee is
insurable at normal premium rates for such a policy. Employee shall
designate the beneficiary as to $200,000 of such policy, and Employer
shall be the beneficiary as to any portion of such policy in excess of
such amount. For purposes of Employee's participation in the AAI
Pension Plan (the "Plan"), Employee shall be deemed vested in the Plan
as of the Effective Date, provided, however, if he is not vested under
the terms of the Plan, Employer shall make (or shall cause AAI to
make) the payments to him that he otherwise would have received under
the Plan had be been vested under the terms of the Plan. This
provision shall have no impact, however, on the Plan and shall not be
deemed an amendment of the Plan. This provision shall not apply,
however, if Employee's employment by Employer is terminated prior to
the third anniversary of the Effective Date either voluntarily by him
or by Employer for cause as provided in Section 12 hereof.
(c) Stock Options. Employer shall grant to Employee
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on the date hereof options to acquire 150,000 shares of common stock
of Employer pursuant to the terms of Employer's 1994 Stock Option Plan
(the "Plan") and the grant letter in the form annexed hereto as
Exhibit A. The exercise price of such options shall be equal to the
fair market value of such common stock as of the grant date. Employer
shall grant to Employee (i) one year
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after the date hereof additional options to acquire 75,000 shares and
(ii) two years after the date hereof additional options to acquire
75,000 shares, all pursuant to the Plan, provided that he is employed
hereunder on such dates. If for any reason the proposed amendment to
increase the number of shares covered by the Plan and the number of
shares subject to options any one individual may receive is not
approved by Employer's stockholders at Employer's 1996 Annual Meeting,
Employee shall not receive such additional options and a portion of
such 150,000 options granted on the date hereof shall be terminated as
provided in Exhibit A. Employer and Employee agree to consider in
good faith alternative arrangements to compensate Employee for any
such terminated options which are not granted or are terminated.
(d) Sale of House. Employer agrees to pay or
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reimburse Employee for the real estate broker's commission and other
customary closing costs in connection with the sale of Employee's
house in Virginia, subject to appropriate gross-up for federal and
state income tax purposes. If Employee sells such house for less than
$408,000, Employer shall reimburse Employee for such short-fall up to
a maximum amount of $33,000.
(e) Vacation. Employee shall be entitled to four (4)
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weeks vacation with pay per year.
(f) Taxes. Employee understands that any and all
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payments described in this Agreement will be subject to such tax
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treatment as applies thereto, and to such withholding as may be
required under applicable tax laws.
5. No Competition. Employee agrees that during the term of
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this Agreement he will not, within the continental United States,
directly or indirectly, engage or participate or make any financial
investments in or become employed by or render advisory or other
services to or for any person, firm or corporation, or in connection
with any business activity, other than that of Employer and its
subsidiary companies, directly or indirectly in competition with any
of the business operations or activities of Employer and its
subsidiary companies. Nothing herein contained, however, shall
restrict Employee from making any investments in any company whose
stock is listed on a national securities exchange or actively traded
in the over-the-counter market, so long as such investment does not
give him the right to control or influence the policy decisions of any
such business or enterprise which is or might be directly or
indirectly in competition with any of such business operations or
activities of Employer or any of its subsidiary companies.
6. Confidentiality; etc.
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(a) Employee will not divulge, furnish or make
accessible to anyone (other than in the regular course of business of
Employer or any of its subsidiary companies) any knowledge or
information with respect to confidential or secret methods, processes,
plans or materials of Employer or any of its
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subsidiary companies, or with respect to any other confidential or
secret aspects of the business of Employer or any of its subsidiary
companies.
(b) Employee agrees to communicate and to make known
to Employer all knowledge possessed by him relating to any methods,
developments, inventions and/or improvements, whether patented,
patentable or unpatentable which concerns in any way the business of
Employer or any of its subsidiary companies or the general industry of
which they are a part, from the time of entering upon employment until
the termination thereof, and whether acquired by Employee before or
during the term of his employment; provided, however, that nothing
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herein shall be construed as requiring any such communication where
the method, development, invention and/or improvement is lawfully
protected from disclosure as the trade secret of a third party,
including, without limitation, any former employer of Employee or by
any other lawful bar to such communication.
(c) Any methods, developments, inventions and/or
improvements, whether patentable or unpatentable, along the lines of
the business of Employer or any of its subsidiary companies, which
Employee may conceive of or make while in the employ of Employer,
shall be and remain the property of Employer. Employee agrees
promptly to communicate and disclose all such methods, developments,
inventions and/or improvements to Employer and to execute and deliver
to Employer any instruments deemed necessary
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by Employer to effect disclosure and assignment thereof to it.
Employee further agrees, on request of Employer, to execute patent
applications based on such methods, developments, inventions and/or
improvements, including any other instruments deemed necessary by
Employer for the prosecution of such patent applications or the
acquisition of Letters Patent in the United States and/or any foreign
countries.
(d) Employee agrees that for a period of three (3)
years from and after the termination or expiration of his employment
by Employer, whether pursuant to the terms of this Agreement or
otherwise, he will not:
(i) directly or indirectly solicit, raid, entice
or induce any employee of Employer or of any of its subsidiary
companies to be employed by any person, firm or corporation which is,
directly or indirectly, in competition with the business or activities
of Employer or any of its subsidiary companies; or
(ii) directly or indirectly approach any such
employee for these purposes; or
(iii) authorize or knowingly approve the taking of
such actions by other persons on behalf of any such person, firm or
corporation, or assist any such person, firm or corporation in taking
such action; or
(iv) directly or indirectly solicit, raid, entice
or induce any person, firm or corporation (other than the
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U.S. Government or its agencies) who or which on the date hereof is,
or at any time during the period of employment hereunder shall be, a
customer of Employer or of any of its subsidiary companies to become a
customer for the same or similar products which it purchased from
Employer or any of its subsidiary companies, of any other person, firm
or corporation, and Employee shall not approach any such customer for
such purpose or authorize or knowingly approve the taking of such
actions by any other person.
(e) Employee agrees that during the term of his
employment by Employer, whether under this Agreement or otherwise, he
will not at any time enter into, on behalf of Employer or any of its
subsidiary companies, or cause Employer or any of its subsidiary com-
panies to enter into, directly or indirectly, any transactions with
any business organization in which he or any member of his immediate
family may be interested as a partner, trustee, director, officer,
employee, shareholder, lender of money or guarantor.
7. Injunctive Relief. Employee acknowledges that the
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services to be rendered by him hereunder are of a special, unique and
extraordinary character and that it would be very difficult or
impossible to replace such services and further that irreparable
injury would be sustained by Employer and its subsidiary companies in
the event of a violation by Employee of any of the provisions of this
Agreement, and by reason thereof Employee
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consents and agrees that if he violates any of the provisions of this
Agreement, Employer shall be entitled to an injunction to be issued by
any court of competent jurisdiction restraining him from committing or
continuing any violation of this Agreement.
8. Survival of Provisions. The provisions of Sections 5, 6
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and 7 hereof shall survive the termination or expiration of this
Agreement, irrespective of the reason therefor.
9. Expenses. Employer shall reimburse Employee for all
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reasonable expenses properly incurred by him on behalf of Employer in
the performance of his duties hereunder, provided that proper vouchers
are submitted to Employer by Employee evidencing such expenses and the
purposes for which the same were incurred.
10. Disability. If Employee shall be incapacitated by
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reason of mental or physical disability or otherwise during the term
of this Agreement so that he is prevented from performing his
principal duties and services hereunder for a period of three (3)
consecutive months or one or more periods aggregating three (3) months
during any twelve (12) month period, Employer shall have the right to
terminate this Agreement by sending written notice of termination to
Employee, and thereupon his employment pursuant to this Agreement
shall terminate and Employee shall be entitled to no further payments
hereunder, other than (i) for any compensation due pursuant to Section
4 hereof through the date of such termination, (ii) the reimbursement,
pursuant to Section 9
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hereof, of any expenses incurred prior to the date of such termina-
tion, and (iii) the continuation of Employee's base salary pursuant to
Section 4(a) hereof for a period of six (6) months from the date of
such termination, but not beyond the Termination Date or the date on
which Employee shall commence to receive benefits pursuant to
Employer's long term disability plan, as then in effect.
11. Death. In the event of the death of Employee during
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the term hereof, this Agreement shall automatically terminate and
Employer shall have no further obligations hereunder, other than to
pay to Employee's estate any compensation due pursuant to Section 4
hereof through the date of such termination and to reimburse, pursuant
to Section 9 hereof, any expenses incurred by Employee through the
date of such termination.
12. Termination by Employer for Cause. Employer shall have
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the right to terminate the employment of Employee under this Agreement
as well as any and all payments to be made hereunder, other than for
any compensation due pursuant to Section 4 hereof through the date of
such termination and any reimbursement, pursuant to Section 9 hereof,
of expenses incurred by Employee through the date of such termination,
if Employee shall commit any of the following acts of default:
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(i) Employee shall have committed any material
breach of any of the provisions or covenants set forth herein; or
(ii) Employee shall have committed any act of
gross negligence in the performance of his duties or obligations
hereunder; or
(iii) Employee shall have committed any material
act of dishonesty or breach of trust against Employer or any of its
subsidiary companies; or
(iv) Employee's conviction of, or plea of nolo
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contendere to, a felony.
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If Employer elects to terminate this Agreement as set forth
above, Employer shall send written notice to Employee terminating this
Agreement and describing the action of Employee constituting the act
of default, and thereupon no further payments of any type shall be
made or shall be payable to Employee hereunder notwithstanding any
other provisions of this Agreement, except as set forth in the first
sentence of this Section 12.
13. No Conflicting Agreements. Employee represents and
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warrants that he is not a party to any agreement, contract or
understanding, whether employment or otherwise, which would in any way
restrict or prohibit him from undertaking or performing employment in
accordance with the terms and conditions of this Agreement.
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14. Entire Agreement. This Agreement sets forth the entire
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understanding of the parties with respect to the subject matter
hereof, and no statement, representation, warranty or covenant has
been made by either party except as expressly set forth herein. This
Agreement shall not be changed or terminated orally. This Agreement
supersedes and cancels all prior agreements between the parties,
whether written or oral, relating to the employment of Employee. The
Employment Agreement dated September 20, 1993 between AAI and Employee
is hereby cancelled and shall be of no further force or effect.
15. Applicable Law. This Agreement shall be governed by,
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construed and enforced in accordance with the laws of the State of New
York, without regard to its conflict of laws principles.
16. Notices. All notices, requests, demands and other
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communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered, telecopied or mailed,
first class, postage prepaid, certified mail, return receipt
requested, to each of the parties at its or his address above written
or as set forth beneath their signatures below or at such other
address or telecopy number as either of the parties may designate in
conformity with the foregoing.
17. Section Headings. The section headings set forth in
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this Agreement are for convenience only and shall not be considered as
part of this Agreement in any respect nor shall they
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in any way affect the substance of any provisions contained in this
Agreement.
18. Successors and Assigns. This Agreement shall not be
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assignable by Employee. 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 and personal representatives of
Employee and the successors and assigns of Employer.
19. Severability. If, at any time subsequent to the date
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hereof, any provision of this Agreement shall be held by any court of
competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon and shall
not impair the enforceability of any other provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
UNITED INDUSTRIAL CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE-PRESIDENT
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Solely with respect to
Section 14 hereof:
AAI CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE-PRESIDENT
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NYFS11...:\95\78495\0001\70\AGR2296M.20A