This
EMPLOYMENT AGREEMENT (the “Agreement”) is made as of
the 1st day of May, 2006 by and between BARRIER SYSTEMS, INC., a
California corporation, with its principal place of business
located at 180 River Road, Rio Vista, California 94571 (the
“Company”) and Owen Denman, an individual, residing at
9528 Crystal Bay Ln, Elk Grove, CA (the “Executive”),
and, contingent upon the closing of the transactions contemplated
by the Merger Agreement (as defined below) and as of the Closing
Date (as defined in the Merger Agreement), shall supersede all
prior employment, consulting and compensation agreements or
arrangements, if any, between the Executive and the Company or any
of its affiliates (including, without limitation, that certain
Memorandum, dated February 17, 2004, from Chris Sanders to
John Duckett and Executive regarding incentive
compensation).
WHEREAS,
Lindsay Manufacturing Co., a Delaware corporation
(“Lindsay”), is in the process of acquiring the stock
of the Company pursuant to an Agreement and Plan of Merger, of even
date herewith (the “Merger Agreement”), by and among
the Company, Lindsay, Merger Sub (as defined in the Merger
Agreement) and the Shareholder Representative (as defined in the
Merger Agreement);
WHEREAS, the
Executive has been employed by the Company, and the Company and
Lindsay wish for Executive to serve as the President of the Company
for the period provided in this Agreement; and WHEREAS, in order to
induce Lindsay to enter into the Merger Agreement and in
recognition of the consideration to be received by the Executive in
connection with the transactions contemplated thereby, the
Executive is willing to serve in such capacity in the employ of the
Company for such period upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE,
in consideration of the foregoing and the mutual promises and
agreements hereinafter set forth, the Company and the Executive
agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
Position and
Responsibilities . The
Company hereby employs the Executive to render full-time exclusive
services (as defined in Section Error! Reference source not
found. hereof) to the Company during the Term (as hereinafter
defined) as the President of the Company, subject to the direction
of the President of Lindsay (the “President”), or such
other person as the President or the Board of Directors of Lindsay
(the “Board”) may designate from time to time (the
President or such other person so designated, the
“Supervisor”). In such capacity and subject to such
direction, the Executive shall (i) devote his full
professional time and attention, best efforts, energy and skills to
the services required of him as an employee of the Company, except
for paid time off taken in accordance with the Company’s
policies and practices, and subject to the Company’s policies
pertaining to reasonable periods of absence due to sickness,
personal injury or other disability; (ii) use his best efforts
to promote the interests of the Company; (iii) comply with all
applicable governmental laws, rules and regulations and with all of
the Company’s or Lindsay’s policies, rules and/or
regulations applicable to the employees of the Company, including,
without limitation, the Code of Conduct of Lindsay attached as
Exhibit A hereto; and (iv) discharge his
responsibilities in a diligent and faithful manner, consistent with
sound business practices and in accordance with the
Supervisor’s directives.
Acceptance . The Executive hereby accepts such employment
and agrees to render the services described above in the manner
described above.
Exclusive
Service . It is
understood and agreed that the Executive may not engage in other
business activities during the Term, whether or not for profit or
other pecuniary advantage; provided, however, that the Executive
may make financial investments which do not involve his active
participation and may engage in other activities such as
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participation
in charitable, educational, religious, civic and similar type
organizations and similar types of activities and, with the consent
of the President, may serve as an outside director on the board of
directors of other corporations which are not affiliates or
competitors of the Company or Lindsay or any of their affiliates,
all to the extent that such activities do not hinder or interfere
with the performance of his duties under this Agreement or conflict
with the policies of the Company and Lindsay concerning conflicts
of interest or with the businesses of Lindsay, the Company or any
of their affiliates in any material way.
Term .
Contingent upon the closing of the transactions contemplated by the
Merger Agreement, and beginning on the Closing Date (as defined in
the Merger Agreement), the Executive will be employed by the
Company for a period of three years, unless his employment is
terminated at an earlier date in accordance with ARTICLE IV (the
“Term”). Those obligations which by their terms survive
the termination of this Agreement shall not be extinguished by the
expiration of the Term or the termination of this
Agreement.
Basic
Salary . The Company
shall pay the Executive salary for the services to be rendered by
him during the Term at the rate of $210,000 per annum, subject to
increase on an annual basis in the discretion of the President or
the Board (the “Salary”). The Salary shall be payable
in periodic installments in accordance with the Company’s
regular payroll practices as in effect from time to
time.
Bonus;
Equity Incentives . In
addition to the Salary:
(a) The
Executive shall be eligible to receive an annual bonus (the
“Bonus”), in the discretion of the Board, based on the
performance of the Company relative to financial objectives, and
the performance of the Executive relative to personal objectives,
in each case as such objectives are set forth in the
Company’s annual management incentive plan; provided that,
for purposes of the Executive’s bonus for the fiscal year of
the Company ending August 31, 2006, such objectives are set
forth on Exhibit B hereto. The Executive’s target
bonus shall be 35% of the Salary, subject to change in the
discretion of the Board.
(b) The
Executive shall be eligible to receive annual stock options to
purchase Lindsay stock and/or restricted stock units, in either
case in the discretion of the Board or the committee of the Board
administering the relevant plan.
Pro-ration
and Payment of Taxes .
All required employment taxes, withholding and deductions shall be
deducted from the Salary and the Bonus. If the Executive does not
work any full year or this Agreement has been terminated before the
end of any year, the Salary shall be pro-rated for the period
actually worked.
Benefits . The Executive shall be eligible to participate
in and receive the benefits under any deferred compensation plan,
health, life, accident and disability insurance plans or programs
and any other employee benefit or fringe benefit plans or
arrangements that the Company makes available generally to other
senior executives of the Company, pursuant to the provisions of
such plans or arrangements as in effect from time to
time.
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Vacations . The Executive will be entitled to vacation and
sick days in accordance with the policies of the Company for its
employees generally, as in effect from time to time. Vacation must
be taken by the Executive at such time or times as reasonable
approved by the President.
Expenses . The Company shall pay or reimburse the
Executive for all reasonable, ordinary and necessary business
expenses incurred or paid by the Executive during the Term in the
performance of the Executive’s services under this Agreement
in accordance with the applicable policies and procedures of the
Company as in effect from time to time, upon the presentation of
proper expense statements or such other supporting documentation as
the Company may reasonably require.
ARTICLE IV
TERMINATION OF EMPLOYMENT
General . The Executive’s employment may be
terminated by the Company during the Term as provided in this
Error! Reference source not found. . Upon termination of
employment, the Term shall end and the Executive shall be paid the
pro-rated portion of the Salary accrued but unpaid to the date of
his termination. The Executive’s rights under the
Company’s employee benefit plans shall be determined under
the provisions of such plans and/or applicable law and any payments
due under such plans shall be distributed pursuant to the
provisions thereof.
Death or
Disability . The
Executive’s employment hereunder shall terminate
automatically as of the date of his death, and the Company may at
any time at its option, exercised by notice to the Executive,
terminate his employment for “disability” (as
hereinafter defined). In the event of termination for
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