EMPLOYMENT
AGREEMENT
(Nancy Rowden Brock)
THIS AGREEMENT made as of the 13 day of
June, 2005, by and among Rock of Ages Corporation, a Delaware
corporation, with a place of business at 772 Graniteville Road,
Graniteville, Vermont (the "Company"), and Nancy Rowden Brock (the
"Employee"), residing at 145 Valley View Road, Waterbury Center,
Vermont 05677.
FACTUAL BACKGROUND:
A. Company wishes to
employ Employee as an officer of the Company, initially as Senior
Vice President/Chief Financial Officer and Treasurer of the
Company, reporting to the Chief Executive Officer of the Company,
with principal responsibility for the oversight of the Company's
finance and accounting matters (the "Position") and with such other
executive duties and responsibilities, and such other or different
senior executive positions, as Company may assign to Employee; and
Employee wishes to accept such employment subject to the terms and
conditions of this agreement.
B. Company and
its direct and indirect subsidiaries, successors and assigns
(herein referred to as the ROAC Corporate Group) quarry,
manufacture, sell and otherwise deal in granite, marble, bronze and
other memorials, monuments and other products, perform services
related thereto, and market such products and services at wholesale
and retail in the United States and in various foreign countries
(Company's "Business") and have accumulated valuable and
confidential information including trade secrets and know-how
relating to technology, manufacturing procedures, formulas,
machines, marketing plans, sources of supply, business strategies
and other business records.
C. The
agreement by Employee to enter into the covenants contained herein
is a condition precedent to the employment of Employee by the
Company in the Position; Employee hereby acknowledges said
covenants and acknowledges that Employee's execution of this
agreement is an express condition of Employee's employment; and
that said covenants are given as material consideration for such
employment and the other benefits conferred upon Employee by this
agreement.
D. As
used herein, the term "Company" shall refer to Company and, where
applicable, to any member of the ROAC Corporate Group for which
Employee may from time to time be performing services under this
agreement.
NOW, THEREFORE, in
consideration of the foregoing, the employment provided hereunder,
and other valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. Company
agrees to employ Employee, and Employee accepts employment in the
Position, reporting to the Chief Executive Officer of the Company,
all upon the terms and conditions hereinafter set forth.
2. DUTIES AND
POLICIES.
(a) DUTIES. The Employee
agrees to devote her full time and best efforts to Employee's
employment duties in the Position or such other or different
positions to which Employee may be assigned during the Term (as
hereinafter defined), and to such other duties as may be assigned
to Employee from time to time by Company. Notwithstanding the
foregoing, the Employee may, subject to the provisions of the
Company's Code of Business Conduct and Ethics and with the approval
of the Chief Executive Officer, serve as a director or officer of
an organization or entity not in a competing business with the
Company; deliver lectures, write articles or books, or fulfill
speaking engagements; engage in charitable and community
activities, provided, in each case, that such activities do not
interfere with the performance of Employee's duties hereunder.
(b) POLICIES.
Employee agrees to abide by the policies, rules, regulations or
usages applicable to Employee as established by Company and the
ROAC Corporate Group, from time to time and provided to Employee in
writing (collectively, the Company's "Policies").
(c) COMPANY LOCATIONS.
Employee shall be primarily assigned to the Company's Graniteville,
Vermont office, but the Employee must be available for regular
travel, meetings and temporary functions at other Company and ROAC
Corporate Group locations as may be required to fulfill the duties
and responsibilities of the Position.
3. TERM. The
term of this agreement (the "Term") shall be five (5) years,
beginning on the date first above written, unless terminated
earlier as hereinafter provided.
4.
COMPENSATION. For all services to be rendered by Employee in any
capacity hereunder, the Company shall pay Employee the
following:
(a) SALARY. The
Company shall pay Employee an annual salary of One Hundred Eighty
Five Thousand Dollars ($185,000), less withholding and other taxes
required by federal and state law (the "Annual Base Salary"),
payable in equal monthly installments. Employee shall be eligible
to receive increases in Employee's Annual Base Salary pursuant to
periodic salary reviews consistent with Company's corporate
policies, with the first such review to be made in February, 2006;
it being understood such increases are not guaranteed, but are
subject to Employee's job performance and the determination by the
Company, in its sole discretion, to award salary increases to
Employee.
- 2 -
(b) BONUS. Employee may also be
awarded a bonus or bonuses from time to time during the Term in
such amounts, if any, and at such time, if any, as the Company may
determine, in its sole discretion, to award such bonuses.
Employee's annual bonus target shall be up to 50% of Annual Base
Salary, with performance criteria to achieve the bonus target to be
set by the CEO or such other person as may be designated by the
Company from time to time, and by the Rock of Ages Corporation
("ROAC") Compensation Committee of the Board of Directors.
5. FRINGE BENEFITS.
During the term of this agreement, Employee shall be entitled to
participate in such fringe benefits as, from time to time, may be
applicable to the Company's similarly situated employees, subject
to the terms and conditions of such fringe benefit plans. The
Employee's "Initial Fringe Benefits" include those listed on
EXHIBIT 5 attached hereto and incorporated herein by reference. The
Initial Fringe Benefits may be phased out and terminated and the
Company may substitute for the Initial Fringe Benefits such
different and/or additional fringe benefits as the Company from
time to time, after the date hereof, makes available for the
Company's similarly situated employees.
Fringe benefits as used in this
section do not include cash compensation, stock options or other
compensation. The Company reserves the right to modify, eliminate
or change fringe benefits in its discretion. Fringe benefits
provided to Employee will, however, generally be not less
advantageous to Employee than those provided by Company to its
similarly situated employees.
6. INCENTIVE
STOCK OPTIONS. The Company, subject to approval by the ROAC
Compensation Committee, will grant Employee incentive stock options
under the Rock of Ages Corporation 2005 Stock Plan (the "Option
Plan") for Twenty Five Thousand (25,000) shares of ROAC Class A
Common Stock, One Cent ($.01) par value, at a price per share
authorized and approved by the grant by the ROAC Compensation
Committee, namely the closing price of the ROAC Class A Common
Stock on the date of grant in accordance with ROAC's 2005 Stock
Plan, by ROAC and Employee of ROAC's standard form Stock Option
Agreement, which will provide that the term of the option will be
for ten (10) years, and that the options will vest in equal
installments over three years, commencing one year from date of
grant. Employee acknowledges and understands that the Option Plan
has not been approved by the Company's stockholders, and that the
making of the grant shall be contingent upon the approval of the
Option Plan by the Stockholders at the Company's 2005 Annual
Meeting of Stockholders to be held June 22, 2005.
7.
TERMINATION.
(a) TERMINATION
BECAUSE OF DEATH OR TOTAL DISABILITY. This agreement will terminate
automatically upon the date of Employee's Death or Total
Disability. Employee shall be deemed to have incurred a Total
Disability:
(i) if Company maintains a long term disability policy in effect
for the benefit of Employee, on the date when the Employee shall
have received total disability benefits under said policy for a
period of six (6) months;
- 3 -
(ii) if no such long term disability insurance policy is in effect
on the date when Employee suffers from a physical or mental
disability of such magnitude and effect that Employee is unable to
perform the essential functions of Employee's assigned Position
notwithstanding reasonable accommodation and such disability
continues during a period of twelve (12) continuous or
noncontinuous months within the eighteen (18) month period
beginning on the first day of the month in which the first day of
disability occurs;
(iii) if Employee illegally uses drugs and, as a result,
performance of Employee's duties and/or employment with Company is
in any way impaired; or
(iv) on the date when Employee receives more than twelve (12) weeks
of payments under the Social Security Act because it is determined
by the Social Security Administration that Employee is totally
disabled.
Total Disability as set forth in subsections (ii) or (iii) above
shall be deemed to have occurred upon the written certification to
Company thereof by the Employee's personal physician, which
certification may be requested in writing by Company. If Employee
does not have a personal physician or refuses to consult with
Employee's personal physician, Company may select a licensed
physician, board-certified in internal medicine or family practice,
at its cost, to examine the Employee, which physician shall, for
purposes hereof, be deemed to be the Company's physician; provided,
that if Employee refuses to be examined by the Company's physician
within thirty (30) days after the physician's appointment by
Company, then Employee may be conclusively presumed to have become
Totally Disabled as of the close of such thirty (30) days period.
If Employee disagrees with the opinion of Company physician, then
Employee may select a second licensed, board-certified physician,
at Employee's cost, to examine Employee. If said two (2) physicians
disagree as to whether Employee is Totally Disabled, then the
personal physician and the Company shall then select a third
licensed, board-certified physician, with the cost of this third
physician to be split between Company and Employee, to examine
Employee. Upon examination of Employee by the three (3) physicians,
each physician shall render an opinion with respect to the
condition of Employee in regards to Employee's Total Disability,
and the opinion of a majority of the physicians shall be binding
upon all parties.
(b) TERMINATION
BY THE COMPANY OR EMPLOYEE. The Company may terminate this
agreement with or without cause and by giving Employee thirty (30)
days prior written notice. In the event of termination or notice of
termination by Company without cause, or in the event that Employee
terminates this agreement for "Good Reason" (defined below)
Employee will be entitled to the following: (i) the then current
Annual Base Salary, payable in 12 equal monthly installments (less
applicable withholdings), with the first such installment being due
on the 15th day of the month following the date of such termination
and subsequent payments being made on the same day of each of the
following months; (ii) earned but unpaid bonus (if any) for the
year in which this agreement is terminated, prorated to date of
termination and payable when such bonuses are normally paid; and
(iii) continuation of health care coverage at active employee
contribution rates for a period of 1 year following the date of
termination of this agreement, provided, however, that health care
coverage shall cease if the Employee or Employee's spouse becomes
eligible for health care coverage at another employer. Said
payments shall release the Company from any further obligations
under this agreement.
- 4 -
Termination of Employee by the Company for (1) abandonment by
the Employee of, or chronic, habitual or continuous failure by
Employee to perform, over a period of thirty (30) or more days,
Employee's duties as an employee hereunder; (2) violation, default
or breach of any of Employee's material covenants and agreements
hereunder; (3) Employee's material failure to observe, comply with
or to abide by the Company's Policies after written notice and a
reasonable opportunity to cure; (4) embezzlement or other theft of
corporate property; (5) drug, alcohol or other substance abuse, (6)
sexual harassment, battery or other criminally actionable offense
by Employee against an employee or customer of the Company; or (7)
Employee's conviction of any felony while employed by the Company
shall constitute and be in all respects termination for cause by
the Company. In the event that Employee's employment hereunder is
terminated with cause, or in the event that Employee resigns in
lieu of such termination, Employee shall not be entitled to payment
of any further compensation, salary or benefits under the terms of
this agreement (including the termination payment described above)
except (i) Annual Base Salary to date of termination; (ii) any
vested benefits under the then current Company employee benefit
plans; (iii) accrued but unused vacation; and (iv) any benefit
continuation or conversion rights under the then current Company
employee benefit plans.
Employee may resign from employment at any time for any reason
and terminate this agreement by giving thirty (30) days written
notice to Company of such intention. In such event, Company may, in
its discretion, permit Employee to work through the notice period
or accept the Employee's immediate resignation. In the event of a
resignation by Employee, Employee shall not be entitled to payment
of any further compensation, salary or benefits under the terms of
this agreement (including the termination payment described above)
except (i) Annual Base Salary to date of termination; (ii) earned
but unpaid bonus for the year prior to the date of termination;
(iii) any vested benefits under the then current Company employee
benefit plans; (iv) accrued but unused vacation; and (v) any
benefit continuation or conversion rights under the then current
Company employee benefit plans.
- 5 -
For the purposes of this section 7, "Good Reason" shall mean the
occurrence, without Employee's consent, of any of the following
events or circumstances: (a) any material breach by the Company of
this agreement; (b) any material diminution in the Employee's
position, authority or responsibilities with the Company; or (c) a
change by the Company in the location of the Employee's office at
Graniteville, Vermont to a new location that is both (i) outside a
radius of 50 miles from the Employee's principal residence in
Vermont and (ii) more than 50 miles from the Employee's office in
Graniteville, Vermont.
(c) TERMINATION IN CONNECTION
WITH A CHANGE IN CONTROL. If the Employee's employment hereunder is
terminated (x) by the Company (other than a termination due to
Employee's death, Disability or for cause) within 12 months after a
Change in Control, or (y) by the Employee for Good Reason within 12
months after a Change in Control, then (1) the Company shall pay to
the Employee a lump sum in cash within 15 days after the effective
date of termination equal to one (1) times the then current Annual
Base Salary, plus the benefits referenced in section 7(b)(ii),
(iii) and (iv) and (2) immediately prior to the effective date of
such termination, any outstanding options granted to Employee
pursuant to the Option Plan shall fully vest and become immediately
exercisable.
For the purposes of this Agreement, a "Change
in Control" shall mean:
(i) the acquisition by any individual or entity, or by any
"group" or "person" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (an individual or entity or any such group or
person, a "Person"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) after the date of
this Agreement of 50% or more of the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
paragraph (i), the following acquisitions shall not constitute a
Change in Control: (1) any acquisition directly from the Company;
(2) any acquisition by the Company or by any entity controlled by
the Company; (3) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or by any
entity controlled by the Company; (4) any acquisition pursuant to a
transaction which satisfies the criteria set forth in clauses (A),
(B) and (C) of paragraph (iii) below; or (5) any acquisition by
Kurt M. Swenson or his siblings, any Permitted Transferee (as
defined in the Company's Amended and Restated Certificate of
Incorporation as in effect as of the date of this Agreement) of
Kurt M. Swenson or his siblings, any Person controlled by any such
Person(s) or any group of which any such Person is a member (any of
the Persons described in this clause 5 being referred to as an
"Excluded Person"); or
(ii) individuals who, as of the date of this Agreement,
constitute the Board (the "Incumbent Board"), cease for any reason
to constitute at least a majority of the Board, other than in
connection with a transaction between or among the Company and any
Excluded Person(s) (an "Excluded Transaction") or by reason of
death, retirement or voluntary resignation; provided, however, that
any individual becoming a director after the date of this Agreement
whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least the majority of
the directors then comprising the Incumbent Board (other than such
an individual becoming a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) shall be
considered for all purposes of this definition of "Change in
Control" as though such individual were a member of the Incumbent
Board; or
- 6 -
(iii) consummation by the Company of a merger or consolidation
other than a merger or consolidation constituting an Excluded
Transaction (a "Business Combination"), unless, immediately
following consummation of such Business Combination, (A) the
Outstanding Company Voting Securities immediately prior to
consummation of such Business Combination continue to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity in such Business Combination, or
of the ultimate parent entity of such surviving entity if such
surviving entity has any direct or indirect parent entities
immediately following consummation of such Business Combination)
more than 40% of the combined voting power of the then outstanding
securities or other interests entitled to vote generally in the
election of directors or other governing body of such surviving
entity (or of the ultimate parent entity of such surviving entity
if such surviving entity has any direct or indirect parent entities
immediately following consummation of such Business Combination);
(B) no Person (excluding any (1) Excluded Person, (2) direct or
indirect parent entity of the surviving entity in such Business
Combination and (3) employee benefit plan (or related trust) of the
Company (including the Company as the surviving entity in such
Business Combination) or of any subsidiary of the Company)
beneficially owns (within the meaning of Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, securities or
other interests representing 50% or more of the combined voting
power of the outstanding securities or other interests entitled to
vote generally in the election of directors or other governing body
of such surviving entity (or of the ultimate parent entity of such
surviving entity if such surviving entity has any direct or
indirect parent entities immediately following consummation of such
Business Combination); and (C) at least half of the members of the
board of directors or other governing body of such surviving entity
(or of the ultimate parent entity of such surviving entity if such
surviving entity has any direct or indirect parent entities
immediately following consummation of such Business Combination)
were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(iv) the
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or consummation of the sale or
disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company
of all or substantially all of the Company's assets to an entity or
an entity at least 60% of the combined voting power of the voting
securities of which are beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, by stockholders of the Company in substantially the
same proportions as their ownership of Outstanding Company Voting
Securities immediately prior to such sale.
- 7 -
As used in the
foregoing definition of "Change of Control," "control" or
"controlled" shall have the meaning set forth in Rule 405 under the
Securities Act of 1933, as amended.
8.
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Employee acknowledges
that during Employee's employment, Employee will become fully
familiar with all aspects of Company's Business and the ROAC
Corporate Group's businesses, and will obtain access to
confidential and proprietary information relating to such
businesses. Employee understands, agrees and covenants that such
information is valuable and Employee has no property interest in
it. Therefore, Employee covenants and agrees that during Employee's
employment with Company and thereafter, Employee will not use,
disclose, communicate or divulge such information to any person not
employed by Company and the ROAC Corporate Group, or use such
information except as may be necessary to perform Employee's duties
as an Employee under this agreement. Employee's obligations in this
section shall survive the expiration of the Term of this agreement
and/or termination of Employee's employment under this agreement
for any reasons whatsoever.
9.
NON-SOLICITATION OF EMPLOYEES, CLIENTS AND CUSTOMERS. During the
Term of this agreement and for the period of Employee's
non-competition covenant set forth in Section 11 hereof, following
the termination of this agreement, Employee agrees not to, on
Employee's own behalf or on behalf of any other person,
corporation, firm or entity, directly or indirectly, solicit or
induce any client, customer, employee or sales representative of
Company or the ROAC Corporate Group to stop doing business with or
to leave any of the said companies for any reason whatsoever or to
hire any of said companies' employees.
10. RETURN OF PROPERTY.
Upon termination or non-renewal of this agreement for any reason,
employee agrees to immediately return all Company and ROAC
Corporate Group property, whether confidential or not, without
keeping copies or excerpts thereof, including, but not limited to,
computers, printers, customer lists, samples, product information,
financial information, price lists, marketing materials, keys,
credit cards, automobiles, technical data, research, blueprints,
trade secrets information, and all confidential or proprietary
information.
- 8 -
11.
NON-COMPETITION COVENANT BY EMPLOYEE. Company and Employee agree
that the Company and the ROAC Corporate Group are currently engaged
in the business of quarrying, manufacturing, lettering, setting,
marketing and selling at need and pre-need granite, bronze and
other memorials and monuments and related products and services at
wholesale and at retail (herein collectively referred to as the
"Restricted Business") and Company is, or during the Term intends
to be, engaged in the Restricted Business in every state of the
United States as of the date of this agreement and has hereby hired
the Employee to help expand and grow the Restricted Business.
Therefore, the restricted territory shall include all the states of
the United States (the "Restricted Territory"). Accordingly, as a
material and essential inducement to Company to hire the Employee
and in consideration of Company's agreements with the Employee
under this agreement, Employee agrees that during the Term of this
agreement and, if this agreement is terminated for any reason,
lapses, is not renewed for any reason, or Employee is not employed
(with or without a written contract) by Company after the end of
the Term hereof for any reason, then, in any such case, for a
period equal to two (2) years thereafter Employee will not, in the
Restricted Territory, directly or indirectly, in any manner
whatsoever:
(a) compete with Company, its successors and assigns, or the
ROAC Corporate Group, its successors and assigns, in the Restricted
Business, in the Restricted Territory;
(b)
engage in the Restricted Business, except as an employee of Company
or the ROAC Corporate Group, in the Restricted Territory;
(c)
have any ownership interest in (other than the ownership of less
than five percent (5%) of the ownership interests of a company
whose stock or other ownership interests are publicly traded) any
business entity which engages, directly or indirectly, in the
Restricted Business in the Restricted Territory except for any
ownership interest owned by Employee during the Term of this
agreement, and after termination of this agreement, in the Company
or in any member of the ROAC Corporate Group;
(d) contract, subcontract, work for, solicit work from,
solicit Company or ROAC Corporate Group employees for, or solicit
customers for, advise or become affiliated with, any business
entity which engages in the Restricted Business in the Restricted
Territory except as an employee of Company or of the ROAC Corporate
Group; or
(e) lend money or provide anything of value to any entity
which engages in the Restricted Business in the Restricted
Territory.
The term "compete" as used in this Section 11 means engage in
competition, directly or indirectly, either as an employee,
officer, director, owner, agent, member, consultant, partner, sole
proprietor, stockholder, or any other ownership form or other
capacity.
- 9 -
While the restrictions as set forth herein and in Sections 8, 9 and
11 are considered by the parties hereto to be reasonable in all
circumstances, it is recognized that any one or more of such
restrictions might fail for unforeseen reasons. Accordingly, it is
hereby agreed and declared that if any of such restrictions shall
be adjudged to be void as unreasonable in all circumstances for the
protection of Company and the ROAC Corporate Group and their
interests, but would be valid if part of the wording thereof were
deleted, the period thereof reduced, or the range of activities or
area dealt with reduced in scope, such restrictions shall apply
with the minimum modification as may be necessary to make them
valid and effective, while still affording to Company and the ROAC
Corporate Group the maximum amount of protection contemplated
thereby.
Employee represents that he has carefully reviewed Employee's
restrictive non-competition covenant set forth in this Section 11
and the non-disclosure covenant in Section 8 and the
non-solicitation covenant in Section 9 and has determined that
these covenants will not impose undue hardship, financial or
otherwise, on Employee; that their Restrictive Territory and
duration will not impose a hardship on Employee; that they protect
Company's and the ROAC Corporate Group's legitimate interests in
their investment in Employee and in their goodwill of their
Restricted Business; and that in Employee's opinion Employee not
being able to compete in the Restrictive Territory for the duration
of Employee's covenants will not be injurious to the public
interest.
Employee agrees that Employee's breach of Employee's covenants
in Sections 8, 9, 10 and 11 will cause irreparable harm to Company
and the ROAC Corporate Group.
12. LOYALTY. Employee
shall devote Employee's full time and best efforts to the
performance of Employee's employment under this agreement. During
the term of this agreement, Employee shall not at any time or place
whatsoever, either directly or indirectly, engage in the Restricted
Business or any other professional or active business to any extent
whatsoever, except on or pursuant to the terms of this agreement,
or with the prior written consent of Company. Employee agrees that
he will not, while this agreement is in effect, do any unlawful
acts or engage in any unlawful habits or usages which injure,
directly or indirectly, Company and its business or the ROAC
Corporate Group and its businesses.
13. GOVERNING LAW, JURISDICTION
AND VENUE. This agreement shall be governed by and construed in
accordance with the laws of the State of Vermont.
14. HEADINGS. The
descriptive headings of the several sections of this agreement are
inserted for convenience of reference only and shall not control or
affect the meanings or construction of any of the provisions
hereof.
15. SEVERABILITY AND VIOLATION OF
LAWS. If any provision of this agreement shall be held invalid or
unenforceable according to law, such provision shall be modified to
the extent necessary to bring it within the legal requirements. Any
such invalidity or unenforceability shall not affect the remaining
provisions of this agreement, and such remaining provisions shall
continue in full force and effect.
-10 -
16. SPECIFIC PERFORMANCE.
The Employee hereby agrees and stipulates that it would be
impossible to measure in
monetary terms the damages which would be suffered by Company in
the event of any breach by Employee of Sections 8, 9, 10, 11 and 12
of this agreement. Therefore, if the Company shall institute any
action in equity to enforce such sections of this agreement, the
Employee hereby waives any claim or defense that the Company has an
adequate remedy at law, and the Employee agrees that the Company is
entitled to specific performance of such terms of the
agreement.
17. NOTICES. Any
notice or other communication required or permitted under this
agreement shall be in writing and shall be deemed to have been duly
given (i) upon hand delivery, or (ii) on the thi
