Exhibit 10.32
XXXXXX ALUMINUM & CHEMICAL CORPORATION
CHANGE IN CONTROL SEVERANCE AGREEMENT
(EFFECTIVE ____________, 2002)
This Change in Control Severance Agreement (the "Agreement")
is entered into by and between Xxxxxx Aluminum & Chemical Corporation, a
Delaware corporation (the "Corporation"), and Xxxx X. Xxxxxxx ("Executive"),
effective _____________, 2002 (the "Effective Date").
WHEREAS, Executive has made, and is expected to continue to
make, major contributions to the short- and long-term profitability, growth and
financial strength of the Corporation;
WHEREAS, the Corporation continues to pursue strategies that
will result in a stronger and more profitable Corporation going forward and may
lead to acquisitions, divestitures or other forms of corporate restructuring;
WHEREAS, the Corporation previously made available to key
managers of the Corporation, including Executive, an Enhanced Severance
Agreement (together with any other employment or similar agreements which
provide for the payment of severance upon a termination of employment,
collectively referred to as the "Prior Agreement"), in order to ensure that such
managers have appropriate protection in the event of a "Change in Control" of
the Corporation, and to permit them to maintain their focus on key goals related
to the Corporation's initiatives;
WHEREAS, the Corporation now desires to supercede and replace
the Prior Agreement by entering into Change in Control Severance Agreements with
certain key managers, including Executive, and Executive also desires to enter
into this Agreement and to be bound by the terms thereof:
NOW, THEREFORE, the Corporation and Executive agree as
follows:
1. TERM OF AGREEMENT. This Agreement shall be effective as
of the Effective Date and, subject to the provisions of Section 3, shall
terminate on the second anniversary of a Change in Control. Upon
execution of this Agreement, the Executive hereby waives the right to
receive any payments or awards under the Prior Agreement and the Prior
Agreement shall be superseded by this Agreement and shall be of no further
force or effect. Any payments made to Executive under this Agreement
shall be first used to satisfy any obligations the Company or the
Corporation may have to the Executive under the Worker Adjustment and
Retraining Act of 1988 or similar statutes or regulation of any
jurisdiction relating to any plant closing or mass lay-off or as otherwise
required by law.
2. DEFINED TERMS. In addition to terms defined elsewhere
herein, the following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary rate
at a rate not less than his or her annual fixed or base compensation
as in effect immediately prior to termination of employment or, if
higher, the Executive's annual fixed or base compensation in effect
within the six month period preceding a Change in Control, without
reduction for contributions to any qualified or non-qualified
employee benefit plan or fringe benefit plan.
(b) "Bankruptcy Committees" means the committees consisting
of a statutory committee of unsecured creditors and a statutory
committee of asbestos claimants, each appointed by the United States
trustee for the District of Delaware on February 25, 2002, pursuant
to section 1102 of the Bankruptcy Code, 11 U.S.C. xx.xx. 101-1330.
(c) "Cause" means (1) the Executive's engaging in fraud,
embezzlement, gross misconduct or any act of gross dishonesty with
respect to the Corporation or its affiliates, (2) the Executive's
habitual drug or alcohol use which impairs the ability of the
Executive to perform his duties with the Corporation or its
affiliates, (3) the Executive's indictment with respect to,
conviction of, or plea of guilty or no contest to, any felony, or
other comparable crime under applicable local law (except, in any
event, for motor vehicle violations not involving personal injuries
to third parties or driving while intoxicated), or the Executive's
incarceration with respect to any of the foregoing that, in each
case, impairs the Executive's ability to continue to perform his
duties with the Corporation and its affiliates, or (4) the
Executive's material breach of any written employment agreement or
other agreement between the Corporation and the Executive, or of the
Xxxxxx Aluminum & Chemical Corporation Code of Business Conduct, or
failure by the Executive to substantially perform his or her duties
for the Corporation which remains uncorrected or reoccurs after
written notice has been delivered to the Executive demanding
substantial performance and the Executive has had a reasonable
opportunity to correct such breach or failure to perform.
(d) "Change in Control" means (at any time on or after the
Effective Date):
(1) The sale, lease, conveyance or other disposition
of all or substantially all of the Corporation's assets
(including the assets and stock of the Corporation's direct
and indirect subsidiaries and affiliates) as an entirety or
substantially as an entirety to any person, entity or group of
persons acting in concert other than in the ordinary course of
business; provided, however, that a Change in Control shall
not occur (A) upon any such sale, lease, conveyance or other
disposition to a direct or indirect subsidiary of the
Corporation or (B) if the voting common equity interests of
the ongoing entity are beneficially owned, directly or
indirectly, by the Corporation's shareholders in substantially
the same proportions as such shareholders owned the
Corporation's outstanding voting common equity interests
immediately prior to such event.
(2) Any transaction or series of related transactions
(as a result of a tender offer, merger, consolidation or
otherwise) that results in any "person" (as defined in Section
13(h)(8)(E) under the Securities Exchange Act of 1934)
becoming the beneficial owner (as defined in Rule l3d-3 under
the Securities Exchange Act of 1934), directly or indirectly,
of more than 50% of the aggregate voting power of all classes
of common equity of the Corporation, except if such person is
(A) a subsidiary of the Corporation, (B) an employee stock
ownership plan or any other tax-qualified benefit plan
maintained by the Corporation or any affiliate thereof , (C) a
corporation or other entity formed to hold the Corporation's
common equity securities and whose shareholders or owners
constituted, at the time such corporation became such holding
company, substantially all the shareholders of the
Corporation, (D) the surviving entity in any transaction if
the shareholders of the Corporation immediately prior to such
transaction continue to own at least 50% of the voting common
equity of such surviving entity immediately following such
transaction, (E) any underwriter temporarily holding
securities pursuant to an offering of such securities, or (F)
Executive or any group of persons including Executive (or any
entity controlled by Executive or any group of persons
including Executive). Notwithstanding the provisions of this
paragraph (2), a Change in Control shall not be deemed to have
occurred solely by virtue of (i) the consummation of a plan of
reorganization of the Corporation under its bankruptcy
proceeding commenced February 12, 2002 under the United States
Bankruptcy Code (11 U.S.C.ss.1101, et seq.) ("Bankruptcy
Code") where the ownership of more than 50% of the common
stock of the Corporation is transferred to the creditors of
the Corporation or a channeling trust (the "Emergence Date"),
or (ii) a plan of liquidation or a plan of asset protection is
approved by the Bankruptcy Court in a proceeding under Chapter
7 or Chapter 11 of the Bankruptcy Code; provided, however,
that if pursuant to such reorganization, restructuring,
liquidation or asset protection plan, any person (other than a
channeling trust or those set forth in clauses (A) through (F)
above) is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing more
than 50% of the combined voting power of the Corporation's
then outstanding securities, a Change in Control will be
deemed to have occurred. Notwithstanding the foregoing, a
Change in Control of the Corporation shall not be deemed to
occur solely because any person acquires beneficial ownership
of more than 50% of the Corporation's voting common equity as
a result of the acquisition of such equity by the Corporation
which reduces the number of such equity outstanding.
(3) A change in the composition of the Corporation's Board
of Directors over a period of thirty-six (36) consecutive
months or less such that a majority of the then current Board
members ceases to be comprised of individuals who either (a)
have been Board members continuously since the beginning of
such period, or (b) have been elected or nominated for
election as Board members during such period by at least a
majority of the Board members described in clause (a) who were
still in office at the time such election or nomination was
approved by the Board; provided, however, that this paragraph
(3) shall not apply solely by virtue of a change in the
individuals constituting a majority of the Board members (a)
as implemented pursuant to the consummation of a plan of
reorganization of the Corporation in a proceeding under
Chapter 11 of the Bankruptcy Code, or (b) prior to the
Emergence Date as a result of any such change caused by Maxxam
Inc.
Notwithstanding the foregoing, prior to the Emergence Date (a) any event
described in paragraphs (1) and (2) above shall only constitute a Change in
Control if such event is approved by the Bankruptcy Court unless the Unsecured
Creditors Committee and the Asbestos Claimants Committee both object to the
approval of such event in its entirety and neither committee withdraws its
objection, and (b) no transaction involving the disposition by Maxxam Inc. of
its voting securities in the Corporation to any person shall constitute a Change
in Control.
For purposes of the definition of a Change in Control, the term "Corporation"
shall mean Xxxxxx Aluminum Corporation ("KAC") and shall include Xxxxxx Aluminum
& Chemical Corporation ("KACC") at any time that the voting securities of KACC
are held by any person other than KAC.
(e) "Code" means the Internal Revenue Code of 1986, as
amended from time to time. All references to the Code shall be
deemed also to refer to any successor provisions to such sections.
(f) "Disability" means total and permanent disability as a
result of bodily injury, disease or mental disorder which results in
the Executive's entitlement to long term disability benefits under
the Xxxxxx Aluminum Self-Insured Welfare Plan or the Xxxxxx
Aluminum Salaried Employees Retirement Plan.
(g) "Good Reason" means, without Executive's consent, the
occurrence of any of the following events which is not cured by the
Corporation within ten (10) business days following Executive's
written notice to the Corporation of the event constituting
Good Reason; provided, however, that any such written notice
received by the Corporation following the thirty (30) day period
after the date on which Executive first had knowledge of the
occurrence of such event giving rise to Good Reason (or, in the case
of multiple events, the latest to occur of such events) shall not be
effective and Executive shall be deemed to have waived his/her right
to terminate employment for Good Reason with respect to such event:
(1) Demotion, reduction in title, reduction in
position or responsibilities, or change in reporting
responsibilities or reporting level that is materially
and adversely inconsistent with the Executive's position
immediately prior to the Effective Date or the
assignment of duties and/or responsibilities materially
and adversely inconsistent with such position; provided,
however, that the Corporation no longer being a publicly
traded entity or having filed bankruptcy shall not by
itself be Good Reason; or
(2) Relocation of the Executive's primary office
location more than fifty (50) miles from the Executive's
current office location; or
(3) Reduction of greater than 10% in the Executive's
Base Pay from the level existing prior to the Effective
Date or reduction of greater than 10% in the Executive's
long term or short term Incentive compensation
opportunity as provided for in the KERP approved by the
Bankruptcy Court on September 3, 2002 or a reduction in
the Executive's eligibility for participation in the
Corporation's benefit plans that is not commensurate
with a similar reduction among similarly situated
employees.
(h) "Incentive" means Executive's target bonus.
(i) "Release Agreement" means an agreement pursuant to
which the Executive releases all current or future claims, known or
unknown, arising on or before the date of the release against the
Corporation, its subsidiaries and its officers, substantially in a
form approved by the Corporation.
3. SEVERANCE UPON CHANGE IN CONTROL. If the Executive's
employment is terminated by the Corporation, or any successor to the
Corporation, or the Executive terminates his or her employment due to Good
Reason, within the period beginning ninety (90) days prior to a Change in
Control and ending on the second anniversary of such Change in Control,
the Executive will be entitled to receive the severance payments and
benefits set forth in Sections 4 and 5 below; provided, however, that no
severance payments shall be made, or continuing benefits provided, under
the Agreement (and the Agreement shall terminate immediately), if any of
the following apply:
(a) The Executive voluntarily resigns or retires from
employment other than for Good Reason;
(b) The Executive is terminated for Cause;
(c) The Executive's employment terminates as a result of
death or Disability;
(d) The Executive declines to sign and return a Release
Agreement or revokes such Release Agreement within the time provided
therein; or
(e) The Executive receives severance compensation or benefit
continuation pursuant to the Xxxxxx Aluminum & Chemical Corporation
Severance Plan or any other Prior Agreement.
4. AMOUNT OF SEVERANCE PAYMENTS. If the Executive's
employment terminates as described in Section 3 above, and he or she
becomes entitled to severance benefits under this Agreement, the
Corporation, or any successor to the Corporation, shall pay to the
Executive the following:
(a) Three (3) times the sum of the Executive's Base Pay plus
the Executive's most recent short term Incentive target shall be
paid to the Executive in a single sum cash payment as soon as
practicable following the Executive's termination (but in no event
later than 30 days after such termination);
(b) The prorated short term Incentive program in effect for
the year in which the Executive's termination of employment occurs
shall be paid to the Executive in a single sum cash payment as soon
as practicable following the Executive's termination (but in no
event later than 30 days after such termination). The amount of the
prorated short term Incentive program shall be determined by
multiplying the Executive's short term Incentive target for the full
current year by a fraction, the numerator of which is the number of
days from January 1 until the Executive's termination of employment
and the denominator of which is 365. Notwithstanding the foregoing,
if the Executive is terminated on December 31 of any year, he or she
will participate in the actual short term Incentive program for the
year, based on applicable performance measure(s), and no proration
shall apply; and
(c) The prorated long term Incentive program in effect for
the year in which the Executive's termination of employment occurs
shall be paid to the Executive at the time such long term Incentive
program terminates (but in no event later than 30 days after such
termination) if the Corporation is determined at that time to have
achieved the long term Incentive target under such program. The
amount of the prorated long term Incentive program shall be
determined by multiplying the Executive's long term Incentive target
for such long term period by a fraction, the numerator of which is
the number of days from the inception of the long term program until
the Executive's termination of employment and the denominator of
which is 365.
5. CONTINUATION OF BENEFITS. If the Executive's employment
terminates as described in Section 3 above, and he or she becomes entitled
to severance benefits under this Agreement, the Corporation, or any
successor to the Corporation, shall provide to the Executive the following:
(a) Continuation of his or her coverage under the
Corporation's medical, dental, vision, life insurance and disability
benefit plans, as if the Executive had continued in employment with
the Corporation uninterrupted for a period of three (3) years
following the Executive's termination of employment as described in
Section 3 above; provided, however, that the Participant must
continue to pay the monthly medical and life insurance contributions
(if any) paid by active employees of the Company for this coverage
to remain in effect. If the Executive is unable to continue
participating in the Company's benefit plans due to the provisions
of the documents governing such plans or any other reason, the
Company will reimburse the Executive for his or her expenses in
obtaining comparable benefit coverage. Notwithstanding the
foregoing, coverage under any qualified retirement plan and (except
as otherwise required by law) coverage under any cafeteria plan,
dependant care spending account or health care spending account will
cease. The Corporation may satisfy a portion of its obligations by
reimbursing and/or paying the Participant's applicable COBRA premium
with respect to any such plans. The Company's obligations under
this clause (a) shall cease once the Participant is eligible for
comparable coverage from a subsequent employer. The Corporation may
require the health benefit continuation period required under the
continuation coverage requirements of Section 4980B of the Internal
Revenue Code of 1986, as amended, and Part 6 of Subtitle B of
Title I of the Employee Retirement Income Security Act of 1974,
as amended, to run concurrently with the benefit continuation period
hereunder; and
(b) Continuation of all other existing perquisites,
including, without limitation, the continuation of his or her
company car benefit, for a period of three (3) years following the
Executive's termination of employment as described in Section
3 above, with the exception of gas reimbursement. The company
reserves the right to offer a reasonable cash buy-out of the company
car benefit.
6. GROSS-UP FOR TAX PAYMENTS. If any payment or
distribution by the Corporation or any of its affiliates to or for the
benefit of Executive, whether paid or payable or distributed or
distributable under this Agreement or under any other agreement, policy,
plan, program or arrangement, or the lapse or termination of any
restriction under any agreement, policy, plan, program or arrangement (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of
the Code by reason of being considered contingent on a change in ownership
or control of the Corporation, within the meaning of Section 280G of the
Code, or to any similar tax imposed by state or local law, or any interest
or penalties with respect to such tax (such tax or taxes, together with
any such interest and penalties, being hereafter collectively referred to
as the "Excise Tax"), then Executive will be entitled to receive an
additional payment or payments (collectively, a "Gross-Up Payment"). The
Gross-Up Payment will be in an amount such that, after payment by
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed on the Payment. Notwithstanding the foregoing, if no
Excise Tax would apply if the aggregate Payments were reduced by five
percent (5%), then the aggregate Payments shall be reduced by the amount
necessary to avoid application of the Excise Tax, in such manner as the
Executive shall direct, and no Gross-Up Payment will be made. The
following provisions shall apply in determining whether a Gross-Up Payment
shall apply:
(a) Unless the Corporation and Executive otherwise agree in
writing, any determination required under this Section 6 shall be
made in writing by nationally recognized independent public
accountants (the "Accounting Firm"), whose determination shall be
conclusive and binding upon Executive and the Corporation for all
purposes. For purposes of making the calculations required by this
Section 6, the Accounting Firm may make reasonable assumptions and
approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Corporation and Executive
shall furnish to the Accounting Firm such information and documents
as the Accounting Firm may reasonably request in order to make a
determination hereunder. The Corporation shall bear all costs the
Accounting Firm may reasonably incur in connection with any
calculations contemplated hereunder. The Accounting Firm shall be
required to provide its determination within sixty (60) days after
the date of the Executive's termination, and the Corporation shall
be responsible for any income tax, penalty or interest liability
incurred as a result of delay by the Accounting Firm.
(b) If the Accounting Firm determines that no Excise Tax is
payable by Executive, it will, at the same time as it makes such
determination, furnish the Corporation and Executive an opinion that
Executive has substantial authority not to report any Excise Tax on
his or her federal, state or local income or other tax return. If
the Accounting Firm determines that an Excise Tax will (or would,
but for reduction in the Payment) be payable by Executive, it will,
at the same time as it makes such determination, furnish the
Corporation and Executive the detailed basis for such opinion. The
Corporation will make the Gross-Up payment within five (5) business
days thereafter.
(c) If the federal, state and local income or other tax
returns filed by Executive are consistent with the determination of
the Accounting Firm under paragraph (b) above, and the Internal
Revenue Service or any other taxing authority asserts a claim or
notice of deficiency (referred to in this Section 6 as a "claim")
against the Executive that, if successful, would require the payment
by the Corporation of a Gross-Up Payment, the following shall apply.
Executive will not pay such claim prior to the earlier of (1) the
expiration of the thirty (30) calendar day period following the date
on which he or she gives such notice to the Corporation and (2) the
date that any payment of amount with respect to such claim is due.
If the Corporation notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim,
Executive will:
(i) Provide the Corporation with any written records
or documents in his or her possession relating to such claim
reasonably requested by the Corporation;
(ii) Take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing
from time to time, including without limitation accepting legal
representation with respect to such claim by an attorney competent
in respect of the subject matter and reasonably selected by the
Corporation;
(iii) Cooperate with the Corporation in good faith in
order effectively to contest such claim, which may include the
payment of an amount advanced by the Corporation and assertion of a
claim for refund; and
(iv) Permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such contest and any such payments.
If the Corporation directs Executive to pay the tax claimed, or otherwise fails
to contest the claim as described above, the Corporation will immediately pay to
Executive the amount of the required deficiency payment, including any Excise
Tax or income tax, and interest and penalties with respect thereto.
(d) As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the determination, it is
possible that Gross-Up Payments which will not have been made by the
Corporation should have been made ("Underpayment") or Gross-Up
Payments are made by the Corporation which should not have been made
("Overpayment"), consistent with the calculations required to be
made hereunder. In the event that Executive thereafter is required
to make payment of any Excise Tax or additional Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the
Corporation to or for the benefit of Executive. In the event the
amount of the Gross-Up Payment exceeds the amount necessary to
reimburse Executive for his Excise Tax, the Accounting Firm shall
determine the amount of the Overpayment that has been made and any
such Overpayment shall be promptly paid by Executive to or for the
benefit of the Corporation.
7. Restrictive Covenants.
(a) Noncompetition; Nonsolicitation. For the one year period
following the termination of employment with the Corporation,
Executive agrees that he will not, without the prior written consent
of the Corporation, which shall not unreasonably be withheld,
directly or indirectly, whether as a principal, agent, employee,
consultant, contractor, advisor, representative, stockholder (other
than as a holder of an interest of five percent (5%) or less in the
equity of any corporation whose stock is traded on a public stock
exchange), or in any other capacity:
(i) provide services, advice or assistance to
any business, person or entity which competes with
the Corporation directly, as a primary focus of
its business, in the United States or in any other
location in which the Corporation operates, in the
manufacture, sale or delivery of any materials,
products or services which constitute more than
twenty percent (20%) of the Corporation's revenues
in the prior twelve month period; or
(ii) intentionally entice, induce or solicit, or
attempt to entice, induce or solicit, any
individual or entity having a business
relationship with the Corporation, whether as an
employee, consultant, customer or otherwise, to
terminate or cease such relationship.
By entering into this Agreement, Executive acknowledges that these prohibitions
are reasonable as to time, geographical area and scope of activity and do not
impose a restriction greater than is necessary to protect the Corporation's good
will, proprietary information and business interests.
(b) Confidentiality. Executive shall keep secret and
confidential and shall not disclose to any third party, in any
fashion or for any purpose whatsoever, any information regarding the
Corporation which is (i) not available to the general public, and/or
(ii) not generally known outside the Corporation, to which Executive
has or will have had access at any time during the course of his or
her employment by the Corporation, including, without limitation,
any information relating to: the Corporation's business or
operations; its plans, strategies, prospects or objectives; its
products, technology, Intellectual Property described in Subsection
(g), processes or specifications; its research and development
operations or plans; its customers and customer lists; its
manufacturing, distribution, sales, service, support and marketing
practices and operations; its financial condition and results of
operations; its operational strengths and weaknesses; and, its
personnel and compensation policies and procedures. However, this
provision shall not preclude Executive from providing truthful
information to the extent required by subpoena, court order, search
warrant or other legal process, provided that Executive immediately
notifies the Corporation of such request in order to provide the
Corporation an opportunity to object to such request in the
appropriate forum and to obtain a ruling on such objection.
(c) Cooperation. Upon termination of employment for any
reason, Executive shall fully cooperate with the Corporation in all
matters relating to the winding up of his or her pending work on
behalf of the Corporation and the orderly transfer of any such
pending work to other employees of the Corporation as may be
designated by the Corporation.
(d) Enforcement. Any claim arising out of or relating to
this Agreement or Executive's employment with the Corporation or the
termination thereof, other than an action for injunctive relief as
provided below, shall be resolved by confidential, final and binding
arbitration conducted by Judicial Arbitration and Mediation Services
("JAMS") to be held in Houston, Texas, under the then-existing JAMS
rules, rather than by litigation in court, trial by jury,
administrative proceeding, or in any other forum. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. The Corporation shall promptly pay all
costs and expenses, including without limitation reasonable
attorneys' fees, incurred by Executive or his/her beneficiaries in
resolving any claim hereunder in which Executive or his/her
beneficiaries shall prevail. In all other cases the parties shall
bear their own costs and expenses, except that Executive shall pay
all costs and expenses, including, without limitation, reasonable
attorney's fees incurred by the Corporation in resolving such claim
if the arbitrator(s) determine such claim to have been brought by
Executive (i) in bad faith or (ii) without any reasonable basis.
Notwithstanding the foregoing, the parties agree that any breach of
Subsection (a) or (b) above is likely to cause irreparable injury to
the Corporation and that damages for any breach of Subsections (a),
(b) or (g) are difficult to calculate. Therefore, upon breach of
Subsections (a), (b) or (g) hereof, the Corporation shall, at its
election, be entitled to injunctive and other equitable relief from
a court or such other relief or remedies, including damages, to
which it may be entitled, and shall not be required to submit the
matter to arbitration.
(e) Return of Property. Upon termination of Executive's
employment for any reason, Executive will return to the Corporation
all property belonging to it, including without limitation, computer
equipment, computer programs, cellular telephones, beepers or other
property belonging to the Corporation, and documents, property and
data of any nature and in any form, including electronic or magnetic
form, reflecting any confidential information described in
Subsection (b) above.
(f) Disparagement. Executive agrees not to make any
derogatory, unfavorable, negative or disparaging statements
concerning the Corporation and its affiliates, officers, directors,
managers, employees or agents, or its and their business affairs or
performance. This provision shall not be construed to limit
Executive's ability to give non-malicious and truthful testimony
should Executive be subpoenaed to do so by competent authority
having jurisdiction.
(g) Intellectual Property. For purposes of this Subsection
(g), the term "Intellectual Property" means all inventions,
creations, trade secrets, patents (utility or design) and other
intellectual property relating to any programming, documentation,
technology, material, product, service, idea, process, plan or
strategy concerning the business or interests of the Corporation
that Executive conceives, develops or delivers to the Corporation,
in whole or in part, at any time during his or her employment with
the Corporation including, without limitation, all copyrights,
inventions, discoveries and improvements, trademarks, designs and
all other intellectual property rights. All such Intellectual
Property shall be considered work made for hire by Executive and
owned by the Corporation. Executive agrees to perform, upon the
request of the Corporation, during or after his or her employment,
such acts as may be necessary or desirable to transfer, perfect and
defend the Corporation's ownership and any resulting registrations
of the Intellectual Property.
(h) Blue Pencil. If, at any time, the provisions of this
Section 7 shall be determined to be invalid or unenforceable under
any applicable law, by reason of being vague or unreasonable as to
area, duration or scope of activity, this Agreement shall be
considered divisible and shall become and be immediately amended to
only such area, duration and scope of activity as shall be
determined to be reasonable and enforceable by the court or other
body having jurisdiction over the matter and Executive and the
Corporation agree that this Agreement as so amended shall be valid
and binding as though any invalid or unenforceable provision had
not been included herein.
(i) Acknowledgement. EXECUTIVE ACKNOWLEDGES THAT HE HAS
CAREFULLY READ THIS SECTION 7 AND HAS HAD THE OPPORTUNITY TO REVIEW
ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED NECESSARY AND THAT
EXECUTIVE UNDERSTANDS THIS AGREEMENT'S CONTENTS AND SIGNIFIES SUCH
UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.
8. MISCELLANEOUS.
(a) Waiver. Neither party shall, by mere lapse of time,
without giving notice or taking other action hereunder be deemed to
have waived any breach by the other party of any of the provisions
of this Agreement. Further, the waiver by either party of a
particular breach of this Agreement by the other shall neither be
construed as, nor constitute, a continuing waiver of such breach or
of other breaches by the same or any other provision of this
Agreement.
(b) Severability. If for any reason a court of competent
jurisdiction or arbitrator finds any provision of this Agreement to
be unenforceable, the provision shall be deemed amended as necessary
to conform to applicable laws or regulations, or if it cannot be so
amended without materially altering the intention of the parties,
the remainder of the Agreement shall continue in full force and
effect as if the offending provision were not contained herein.
(c) No Mitigation. Executive shall have no duty to mitigate
the Corporation's obligation with respect to the termination
payments set forth herein by seeking other employment following
termination of his or her employment, nor shall such termination
payments be subject to offset or reductions by reason of any
compensation received by Executive from such other employment. The
Corporation's obligations to make any payments hereunder shall not
terminate in the event Executive accepts other full time employment.
(d) Notices. All notices and other communications required
or permitted to be given under this Agreement shall be in writing
and shall be considered effective upon personal service or upon
depositing such notice in the U.S. Mail, postage prepaid, return
receipt requested and addressed to the Chairman of the Board of the
Corporation at its principal corporate address, and to Executive at
his most recent address shown on the Corporation's corporate
records, or at any other address which he may specify in any
appropriate notice to the Corporation.
(e) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
and all of which taken together constitutes one and the same
instrument and in making proof hereof it shall not be necessary to
produce or account for more than one such counterpart.
(f) Entire Agreement. The parties hereto acknowledge that
each has read this Agreement, understands it, and agrees to be bound
by its terms. The parties further agree that this Agreement
constitutes the complete and exclusive statement of the agreement
between the parties and supersedes all proposals (oral or written),
understandings, representations, conditions, covenants, and all
other communications between the parties relating to the subject
Matter hereof.
(g) Governing Law. This Agreement shall be governed by the
law of the State of Texas.
(h) Assignment and Successors. This Agreement will be
binding upon and inure to the benefit of the Corporation and any
successor to the Corporation, including, without limitation, any
persons acquiring directly or indirectly all or substantially all of
the business or assets of the Corporation whether by purchase,
merger, consolidation, reorganization or otherwise (and such
successor will thereafter be deemed the "Corporation" for the
purposes of this Agreement), but will not otherwise be assignable or
delegable by the Corporation. The Corporation will require any such
successor, by agreement in form and substance identical hereto,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Corporation would be required to
perform if no such succession had taken place. This Agreement will
inure to the benefit of and be enforceable by, if then applicable,
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees, but
shall not otherwise be assignable by the Executive, whether by
pledge, creation of a security interest or otherwise.
(i) No Employment Rights. Nothing expressed or implied in
this Agreement will create any right or duty on the part of the
Corporation or Executive to have Executive remain in the employment
of the Corporation prior to or following a Change in Control.
(j) Withholding. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal,
state or local law and any additional withholding to which the
Executive has agreed.
(k) Amendment. This Agreement may not be amended other than
by written agreement of the Corporation and the Executive.
9. IMPACT ON OTHER AGREEMENTS. This Agreement supercedes
and replaces the Prior Agreement. Severance payments under this Agreement
shall be in lieu of any severance or other termination payments provided
under any other agreement between the Executive and the Corporation.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first above written.
Xxxxxx Aluminum & Chemical Corporation
By:
Name:
Title:
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[Executive]
