EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 1st day of October
2020 (the “Effective Date”) by and between Standex International Corporation, a
Delaware corporation with executive offices located at 23 Keewaydin Drive,
Salem, New Hampshire 03079 (the “Employer”) and, Sean Valashinas, an individual
residing at 11 Eastgate Rd; Derry, NH 03038 (the “Employee”).

 

1.     Employment; Term; Location.

 

 

(a)

Commencing on the Effective Date, Employer hereby agrees to continue to employ
Employee, and Employee hereby agrees to continue to serve Employer on a
full-time basis as Vice President and Chief Accounting Officer (or such other
designated title as may be assigned from time to time by the Employer) of the
Employer, subject to the direction and control of the Vice President/Chief
Financial Officer of the Employer, through June 30, 2021 (the “Initial Term”).
Thereafter the Agreement shall automatically renew for successive one (1) year
terms commencing on July 1st of each year and ending on June 30th of the next
succeeding year (the “Renewal Term”) unless otherwise terminated pursuant to
Section 1(b) of this Agreement. The Initial Term, together with any Renewal
Terms shall hereinafter be referred to as the “Term” of this Agreement.

 

 

(b)

Subject to the provisions for termination otherwise included in Section 5
herein, either the Employer or the Employee shall have the right to terminate
this Agreement by giving the other party thirty (30) days advance written notice
(the “Notice Period”), at any time during the Term, stating his/its intention to
terminate the Agreement. Such termination will be effective at the end of the
Notice Period. In the event of notice of termination by the Employer, the
provisions of Section 6 shall apply.

 

 

(c)

Employee’s principle office location shall be the corporate headquarters of the
Employer in Salem, NH. Employee shall be expected to engage in such business
travel as may reasonably be necessary in order for Employee to effectively carry
out the responsibilities of his position.

 

2.     Best Efforts. Employee agrees, as long as this Agreement is in effect, to
devote his best efforts, time and attention to the business of Employer, and to
the performance of such executive, managerial and supervisory duties as may be
required of him during the Term of this Agreement.

 

3.      Non-Compete. Except as set forth in the third paragraph of this Section
3, Employee shall not, while this Agreement is in effect, engage in, or be
interested in, in an active capacity, any business other than that of the
Employer or any affiliate, associate or subsidiary corporation of Employer. It
is the express intent of the Employer and Employee that: (i) the covenants and
affirmative obligations of this Section be binding obligations to be enforced to
the fullest extent permitted by law; (ii) in the event of any determination of
unenforceability of the scope of any covenant or obligation, its limitation
which a court of competent jurisdiction deems fair and reasonable, shall be the
sole basis for relief from the full enforcement thereof; and (iii) in no event
shall the covenants or obligations in this Section be deemed wholly
unenforceable.

 

1

--------------------------------------------------------------------------------

 

 

In addition, except as set forth in the third paragraph of this Section 3,
Employee shall not, for a period of one (1) year after termination of employment
(whether such termination is by reason of the expiration of this Agreement or
for any other reason), on a worldwide basis, directly or indirectly, control,
manage, operate, join or participate in the control, management or operation of
any business which directly or indirectly competes with any business of the
Employer at the time of such termination. The Employee shall not during the term
of this non-competition provision (i) contact any employee of the Employer or
its subsidiaries for the purpose of inducing or otherwise encouraging said
employee to leave their employment with the Employer and/or such subsidiary or
(ii) contact any customers or former customers of the Employer and/or its
subsidiaries, in any manner, for the purpose of soliciting or accepting any
competing business or request, induce or advise any customers of the Employer
and/or its subsidiaries to withdraw, curtail or cancel their respective business
with the Employer and/or its subsidiaries.

 

No provision contained in this section shall restrict Employee from making
investments in other ventures which are not competitive with Employer, or
restrict Employee from engaging, during non-business hours, in any other such
non-competitive business or restrict Employee from owning less than five (5)
percent of the outstanding securities of companies which compete with any
present or future business of Employer and which are listed on a national stock
exchange or actively traded on the NASDAQ National Market System.

 

4.      Compensation; Fringe Benefits.

 

 

(a)

Base Compensation. Employer agrees to compensate the Employee for his services
during the period of his employment hereunder at a minimum base salary equal to
$255,000 per annum, payable semi-monthly. Employee shall be entitled to receive
such increases in this minimum base salary, as the Compensation Committee of the
Board of Directors of Employer, upon recommendation of the President and CEO,
shall, in its sole discretion determine.

 

 

(b)

Annual Incentive Compensation. Employee shall receive an annual incentive bonus
opportunity payable each September after the close of the fiscal year, at a
target of 30% of base compensation and variable from 0% to 200% of target based
on the achievement of certain financial and strategic metrics set by the
Compensation Committee of the Board of Directors of the Employer. Currently, 75%
of the bonus opportunity is based on financial metrics and 25% is based on
strategic metrics.

 

 

(c)

Annual Long-Term Incentive Compensation. Employee shall receive a long-term
incentive opportunity pursuant to the terms of the 2018 Omnibus Incentive Plan
of the Employer at a target of 40% of base compensation in such form as the
Compensation Committee of the Employer’s Board of Directors shall determine with
respect to other senior executives of the Employer. Currently, such awards
consist 50% of grants of time- based restricted stock and 50% performance based
restricted stock units. Grants are normally made in the first week of September
each year following approval of the Compensation Committee. Actual stock earned
with respect to the performance based restricted stock units is variable from 0%
to 200% of target based on achievement of certain metrics established by the
Compensation Committee of the Board of Directors of the Employer.

 

2

--------------------------------------------------------------------------------

 

 

 

(d)

Vacation. Employee shall be entitled to twenty (20) days of paid vacation during
each fiscal year of the Employer.

 

 

(e)

Other Benefit Plans and Programs. Employee shall also be entitled to participate
in the Standex Management Stock Purchase Program, the Standex Retirement Savings
Plan and such other incentive, welfare and defined contribution retirement
benefit plans as are made available, from time to time to senior executives of
the Employer.

 

5.     Termination. In addition to the provisions concerning notice of
termination in the second paragraph of Section 1, this Agreement shall terminate
upon the following events:

 

  (a) Death: Employee’s employment shall terminate upon his death, and all
liability of Employer shall thereupon cease except for (i) compensation for past
services remaining unpaid, (ii) any benefits due to Employee’s estate or others
under the terms of any benefit plan of Employer then in effect in which Employee
participated and (iii) any rights with respect to outstanding unvested equity
awards in accordance with the award agreements underlying such awards.        

(b)

Disability: In the event that Employee becomes substantially disabled during the
Term of this Agreement for a period of six consecutive months so that he is
unable to perform the services as contemplated herein, then Employer, at its
option, may terminate Employee’s employment upon written notification to
Employee. Until such termination option is exercised, Employee will continue to
receive his full salary and fringe benefits during any period of illness or
other disability, regardless of duration. Upon exercise of such termination
option, all liability of Employer shall thereupon cease except for (i)
compensation for past services remaining unpaid, (ii) any benefits due to
Employee or others under the terms of any benefit plan of Employer then in
effect in which Employee participated and (iii) any rights with respect to
outstanding unvested equity awards in accordance with the award agreements
underlying such awards. Whether or not Employee has become substantially
disabled and the duration of such disability shall be subject to the Employer’s
good faith determination taking into account the nature of the disability and
the scope of services provided by Employee hereunder.

 

 

(c)

Material Breach: In the event of the commission of any material breach of the
terms of this Agreement by the Employee or Employer, the non-breaching party may
cause this Agreement to be terminated on ten (10) days written notice. Employer
may remove Employee from all duties and authority commencing on the first day of
any such notice period, however, payment of compensation and participation in
all benefits shall continue through the last day of such notice period. For
purposes of this Agreement, material breach by Employee shall be defined as:

 

3

--------------------------------------------------------------------------------

 

 

 

(i)

an act or acts of dishonesty on the Employee’s part which are intended to result
in his substantial personal enrichment at the expense of the Employer; or

 

 

(ii)

the Employee willfully, deliberately and continuously fails to materially and
substantially perform his duties hereunder and which results in material injury
to the Employer (other than such failure resulting from the Employee’s
incapacity due to physical or mental disability) after demand for substantial
performance is given by the Employer to the Employee specifically identifying
the manner in which the Employer believes the Employee has not materially and
substantially performed his duties hereunder; or

 

 

(iii)

the Employee willfully and deliberately fails to comply with the Employer’s code
of conduct, financial corporate policies or other significant, written corporate
policies of the Employer; or

 

 

(iv)

the Employee, through his conduct and actions (whether willful or not and in the
good faith discretion of the Employer), creates a threatening, intimidating or
hostile work place environment and, upon written notice from Employer, has
failed to satisfactorily and permanently address the conduct and actions giving
rise to such environment.

 

No action, or failure to act, shall be considered “willful” if it is done by the
Employee in good faith and with reasonable belief that his action or omission
was in the best interest of the Employer. Termination pursuant to Section 5(c)
above shall not qualify for any severance under Section 6 below.

 

6.          Severance.

 

(a) In the event that Employee’s employment is terminated by Employer pursuant
to Section 1 of this Agreement (exclusive of a termination after a change in
control where severance is governed by the provisions contained in Section 13
herein and exclusive of termination pursuant to Section 5), the Employee shall
receive one (1) year of severance pay following termination of employment.
Severance will be paid in accordance with normal and customary payroll practices
of the Employer. The aggregate severance will be equal to the Employee’s then
current, annual base compensation. In addition, in the event that Employee
elects to continue health insurance under COBRA, Employee also shall be entitled
to monthly reimbursement of COBRA premiums for a period of up to twelve (12)
months. The Employer’s obligation with respect to such severance and COBRA
payments is conditioned upon the Employee’s continued compliance with the
provisions of Section 3 of this Agreement. Employee is not obligated to seek
other employment in mitigation of the severance provided for herein nor will
subsequent employment with another employer impact the severance obligations of
the Employer herein.

 

4

--------------------------------------------------------------------------------

 

 

(b) In the event that Employee’s employment is terminated by the Employee
pursuant to Section 1 of this Agreement (exclusive of a termination after a
change in control where severance is governed by the provisions contained in
Section 14 herein), Employee’s entitlement to compensation and benefits shall
cease on the effective date of such termination and Employee shall not be
entitled to any severance or other post-employment benefits except as may be
provided for under applicable law (e.g., vested 401(k) benefits).

 

7.     Invention and Trade Secret Agreement. Employee acknowledges that he
previously has entered into the Employer’s standard form of Invention and Trade
Secret Agreement and such agreement shall remain effective. To the extent,
however, that the non-compete clause of the Invention and Trade Secret Agreement
is inconsistent with Section 3 of this Agreement, the provisions of Section 3 of
this Agreement shall be controlling.

 

8.     Specific Performance. It is acknowledged by both parties that damages
will be an inadequate remedy to Employer in the event that Employee breaches or
threatens to breach his commitments under Section 3 or under the Invention and
Trade Secret Agreement. Therefore, it is agreed that Employer may institute and
maintain an action or proceeding to compel the specific performance of the
promises of Employee contained herein and therein. Such remedy shall, however,
be cumulative, and not exclusive, to any other remedy, which Employer may have.

 

9.     Entire Agreement; Amendment. This Agreement supersedes any employment
understanding or agreement (except the Invention and Trade Secret Agreement)
which may have been previously made by Employer or its respective subsidiaries
or affiliates with Employee, and this Agreement, together with the Invention and
Trade Secret Agreement, represents all the terms and conditions and the entire
agreement between the parties hereto with respect to such employment. This
Agreement may be modified or amended only by a written document signed by
Employer and Employee.

 

10.     Assignment. This Agreement is personal between Employer and Employee and
may not be assigned; provided, however, that Employer shall have the absolute
right at any time, or from time to time, to sell or otherwise dispose of its
assets or any part thereof, to reconstitute the same into one or more subsidiary
corporations or divisions or to merge, consolidate or enter into similar
transactions. In the event of any such assignment, the term “Employer” as used
herein shall mean and include such successor corporation.

 

11.     Governing Law; Binding Nature of Agreement.   This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
Hampshire, excluding its choice of law provisions. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective heirs, executors, administrators, successors and assigns.

 

12.     Survival. The obligations contained in Sections 3, 6, 7, 8 and 13 herein
shall survive the termination of this Agreement. In addition, the termination of
this Agreement shall not affect any of the rights or obligations of either party
arising prior to or at the time of the termination of this Agreement or which
may arise by any event causing the termination of this Agreement.

 

5

--------------------------------------------------------------------------------

 

 

13.     Change of Control.

 

 

(a)

In the event of a change in control of Employer required to be reported under
Item 6(e) of Schedule 14A of Regulation 14A of the Securities Exchange Act of
1934:

 

  (i) Employer may terminate Employee's employment only upon conclusive evidence
of substantial and indisputable intentional personal malfeasance in office such
as a conviction for embezzlement of Employer's funds; and        

(ii)

Employee may terminate his employment at any time if there is a change in his
general area of responsibility, title or place of employment, or if his salary
or benefits are lessened or diminished.

 

 

(b)

Following a change of control of Employer, in the event of any termination of
Employee's employment either by Employee pursuant to Section 13(a)(ii) or by
Employer under any circumstances other than involving conclusive evidence of
substantial and indisputable intentional personal malfeasance in office, then:

 

  (i) Employee shall be promptly paid a lump sum payment equal to two times his
current annual base salary plus two times the higher of the most recent annual
bonus paid to him under the Annual Incentive Program or his target bonus amount
under the Annual Incentive Program as of the date immediately prior to the
change in control;         (ii) Employee shall receive a lump sum payment
equivalent to the greater of [(i) the target annual incentive bonus for Employee
or (ii) the level of bonus accrual on the Company’s books as of the date of
termination] times the percentage of the Company’s then current fiscal year that
has elapsed as of the time of such termination.        

(iii)

Employee shall become 100% vested in all benefit plans in which he participates
including but not limited to the Standex Retirement Savings Plan, the Management
Stock Purchase Program and all restricted stock awards and performance share
units granted under the 2008 Long-Term Incentive Plan, the 2018 Omnibus
Incentive Program and any other stock-based awards of the Employer; and

 

 

(iv)

All life insurance and medical plan benefits covering the Employee and his
dependents shall be continued at the expense of Employer for the two-year period
following such termination as if the Employee were still an employee of the
Employer.

        (v) The benefits set forth in clauses (i) through (iv) above shall be
conditioned upon the Employee’s continued compliance with the provisions of
Section 3 of this Agreement.

 

6

--------------------------------------------------------------------------------

 

 

  (vi) In the event that any payment or distribution of any type to or for the
benefit of the Employee made by the Employer, by any of its affiliates, by any
person or entity which acquires ownership or effective control or ownership of a
substantial portion of the Employer’s assets within the meaning of Section 280G
of the Code, and all related regulations or any similar federal tax that may
hereinafter be imposed, whether paid or payable or distributed or distributable
pursuant to this Agreement or otherwise (collectively called the “Total
Payments”), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code, and all related regulations or any similar federal tax
that may hereinafter be imposed or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest or penalties
are hereinafter collectively referred to as the “Excise Tax”), then the amount
paid to the Employee shall be reduced, in such manner as is determined by the
Compensation Committee of the Board of Directors of the Employer, to the maximum
amount that can be paid to the Employee without requiring the payment of an
excise tax, as described in Section 4999 of the Code on “excess parachute
payments,” as defined therein, if and to the extent necessary for the Employee
to receive a greater after-tax benefit than if the amounts otherwise received by
the Employee would require payment of the excise tax described in Section 4999
of the Code.

 

14.     Notices. Any notice to be given pursuant to this Agreement shall be sent
by certified mail, postage prepaid, by facsimile (with a copy mailed via first
class mail, postage pre-paid), delivery in person to the parties at the
addresses set forth in the preamble to this Agreement, by email to such email
address as designated in writing from time to time by either Employer or
Employee, or at such other address as either party may from time to time
designate in writing.

 

15.     Covenants Several. In the event that any covenant of this Agreement
shall be determined invalid or unenforceable and the remaining provisions can be
given effect, then such remaining provisions shall remain in full force and
effect.

 

16.     Compliance with Section 409A of the Code. Notwithstanding any other
provisions of this Agreement herein to the contrary and to the extent
applicable, the Agreement shall be interpreted, construed and administered so as
to comply with the provisions of Section 409A of the Internal Revenue Code and
any related Internal Revenue Service guidance promulgated thereunder. Employee
and Employer acknowledge that it may be necessary to amend the Agreement, within
the time period permitted by the applicable Treasury Regulations, to make
changes so as to cause payments and benefits under this Agreement not to be
considered “deferred compensation” for purposes of Section 409A of the Code, to
cause the provisions of the Agreement to comply with the requirements of
Section 409A of the Code, or a combination thereof, so as to avoid the
imposition of taxes and penalties on Employee pursuant to Section 409A of the
Code. Employee hereby agrees that the Company may, without any further consent
from Employee, make any and all such changes to the Agreement as may be
necessary or appropriate to avoid the imposition of penalties on Employee
pursuant to Section 409A of the Code, while not substantially reducing the
aggregate value to Employee of the payments and benefits to, or otherwise
adversely affecting the rights of, Employee under the Agreement.

 

7

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, Employer has caused this Agreement to be executed on its
behalf by its authorized officers and Employee has executed this Agreement as of
the day and year first above written.

 

 

STANDEX INTERNATIONAL CORPORATION

 

By:         David Dunbar    Sean Valashinas Its: Chairman, President & CEO    

 

 

8