EXHIBIT (c)(4)
Employment Agreement
This Agreement ("Agreement") is made and entered into as of the 1st day of
January, 1999 ("Effective Date"), by and among Synthetic Industries, Inc. (the
"Corporation") and Xxxxxx Xxxx (the "Executive").
WITNESSETH:
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WHEREAS, the Corporation currently employs Executive as the Chief Operating
Officer; and
WHEREAS, both the Corporation and Executive (the "Parties") desire to state
certain terms and conditions of Executive's employment and wish to substitute
this agreement for their previous employment agreements;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Parties agree as follows:
1. Employment.
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The Corporation agrees to continue to employ Executive and Executive
agrees to continue to serve the Corporation upon the terms and conditions
hereinafter set forth.
2. Term.
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Except as otherwise provided in Section 7 below, the term of
employment under this Agreement shall continue from the Effective Date for a
period that ends on the date that is the fourth anniversary of the Effective
Date; provided, however, that on the first day of the calendar month next
following the second anniversary of the Effective Date, and on the first day of
each successive month, such term of employment shall automatically be extended
for successive one month periods, providing a minimum remaining term of two
years. Either party
may halt future extension by written notice, in which case such term of
employment shall be the term in effect when such written notice was given.
Notwithstanding the foregoing, this Agreement shall automatically terminate on
the twenty-fifth (25th) anniversary of the Effective Date if it is not
terminated earlier pursuant to Section 7.
3. Duties and Extent of Services; Location of Principal Office.
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During the term set forth in Section 2 above, the Corporation shall
employ Executive and Executive shall serve the Corporation as Chief Operating
Officer of the Corporation and, effective as of August 1, 1999, as President of
the Corporation. During the period of his employment, Executive shall devote
his full business time and attention to the business and affairs of the
Corporation. During such term, Executive's principal office shall be located at
000 Xxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx.
4. Compensation.
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(a) Base Salary. During the term set forth in Section 2 above, the
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Corporation shall pay Executive a base salary, payable in accordance with the
Corporation's standard payroll practices of $275,000 per annum. Executive's
salary may be reviewed from time to time by the Board, to increase the amount of
such salary. Executive's salary shall not be reduced during the term of this
Agreement. Any increased salary shall become Executive's base salary for
purposes of this Agreement.
(b) Annual Incentive. During the term set forth in Section 2 above,
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Executive shall be eligible to participate in the Executive Incentive Plan, or
in such successor plan as may be adopted for the provision of annual incentive
compensation for senior executives (the "Annual Incentive Plan"). Executive
shall be entitled to an incentive payment applicable under
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the Annual Incentive Plan if the Corporation meets its business plan for the
year ("Making Plan").
(c) Stock Options. Executive shall have such rights to stock options
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under either the Synthetic Industries, Inc. 1994 Stock Option Plan, the
Synthetic Industries, Inc. 1996 Stock Option Plan, the Synthetic Industries,
Inc. 1994 Stock Option Plan for Non-employee Directors, or any successor stock
option plan, or any combination of such plans (collectively, the "Option Plan")
as shall be set forth in any applicable stock option agreement.
5. Benefits.
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During the term set forth in Section 2 above, Executive shall be
eligible to participate in all group life insurance, health insurance,
disability insurance, survivor income insurance and similar programs maintained
by the Corporation and covering executive employees. Participation in any
retirement plans maintained by the Corporation shall be as determined under the
provisions of such plans. Executive's eligibility to receive health insurance
following a "Change in Control" shall be determined in accordance with Section
7(e)(3).
6. Reimbursement for Expenses.
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The Corporation shall reimburse Executive for all reasonable business
expenses incurred by him on behalf of the Corporation in the performance of his
duties hereunder, provided Executive shall account therefore in accordance with
the Corporation's business expense policies and procedures.
7. Termination
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Executive's employment may be terminated prior to the end of the term
described in Section 2 only as provided in this Section 7.
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(a) Termination for Disability. If the Executive becomes unable to
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substantially perform his duties due to permanent physical or mental disability,
as determined by a physician agreed upon by the Corporation and the Executive,
his employment pursuant to this Agreement shall terminate. If Executive's
employment is terminated on account of disability under this Section 7(a),
Executive's rights to compensation and benefits shall be as follows:
(i) Executive (or in the event of his death, his estate)
shall be paid his base salary accrued through the date of termination of
employment.
(ii) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan.
(iii) Executive's rights with respect to stock options, if any,
shall be determined under the Option Plan and any applicable stock option
agreement.
(iv) Following his termination, Executive's right to
participate in the benefit programs described in Section 5 above, including the
rights of Executive's dependents to participate in such programs, if any, shall
be as determined under the provisions of such benefit programs.
(b) Termination on Executive's Death. In the event of termination
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of employment by reason of the death of Executive, payment of compensation and
benefits shall be as set forth below. Payment shall be made to the executor or
administrator of Executive's estate, or, in the case of a payment made under a
benefit program, to the person or persons who have been designated pursuant to
the terms of such program to receive such payments.
(i) Executive's base salary accrued through the date of
termination of employment.
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(ii) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan. In addition, Executive
shall be entitled to an incentive payment, in lieu of an incentive payment under
the Annual Incentive Plan for the plan year in which his employment terminates,
in an amount equal to the payment otherwise determined under the Annual
Incentive Plan, as if the Executive were employed by the Corporation to the end
of the year of his termination, multiplied by a fraction the numerator of which
is the number of weeks Executive was employed during such year, and the
denominator of which is 52.
(iii) Executive's rights with respect to stock options, if any,
shall be determined under the Option Plan and any applicable stock option
agreement.
(iv) Following his death, Executive's rights under the benefit
programs described in Section 5 above, including the rights of Executive's
dependents to participate in such programs, if any, shall be as determined under
such programs.
(c) Termination for Cause. The Corporation shall have the right to
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terminate Executive's employment for "Cause." If Executive's employment is
terminated for Cause, Executive's rights to compensation and benefits shall be
as follows:
(i) Executive shall be paid his base salary accrued through
the date of termination of employment.
(ii) Executive's rights with respect to stock options, if any,
shall be determined under the Option Plan and any applicable stock option
agreements.
(iii) Following his termination, Executive's right to
participate in the benefit programs described in Section 5, above, including the
rights of Executive's dependents to
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participate in such programs, if any, shall be as determined under the
provisions of such benefit programs.
For purposes of this Subsection, "Cause" shall mean (1) Executive's
conviction of, or plea of, guilty or nolo contendere to a felony (unless
committed in the good faith belief that Executive's actions were in the best
interests of the Corporation and would not violate criminal law); or (2) gross
neglect or gross misconduct in the performance of Executive's duties. Executive
shall be given written notice that the Corporation intends to terminate his
employment for Cause under this Subsection. Such notice shall specify the
particular acts, or failures to act, that give rise to the decision to so
terminate employment.
In the case of termination for Cause under definition (1), Executive's
employment shall be terminated effective as of the date such notice is given,
provided, however, that Executive shall be given the opportunity to meet with
the Board of Directors of the Corporation within 30 days of the date such notice
is given, to be heard with regard to whether he, in good faith, believed that
his actions or inactions were both in the best interests of the Corporation and
would not violate criminal law.
In the case of termination for Cause under definition (2), Executive shall
be given the opportunity within 20 days of the receipt of such notice to meet
with the Board to defend such acts or failures to act. Executive shall be given
seven days after such meeting to correct any particular acts or failures to act,
and upon failure of Executive, within such seven day period, to correct such
acts or failures to act, Executive's employment by the Corporation shall be
terminated.
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Termination on account of disability, as provided in Section 7(a) above,
shall not be considered a termination for Cause under this Section 7(c).
(d) Termination Without Cause.
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(1) The Corporation shall have the right to terminate
Executive's employment without Cause as defined in Section 7(c) above. In the
event of a termination by the Corporation without Cause, other than (A)
following a Change in Control, as defined in Section 7(e) below, or (B) as
described in Subsection (2) below, Executive's rights to compensation and
benefits shall be as follows:
(i) Executive shall be paid his base salary accrued through
the date of termination.
(ii) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan. In addition, Executive
shall be entitled to an incentive payment, in lieu of an incentive payment under
the Annual Incentive Plan for the plan year in which his employment terminates,
in an amount equal to the payment otherwise determined under the Annual
Incentive Plan, as if the Executive were employed by the Corporation to the end
of the year of his termination, multiplied by a fraction the numerator of which
is the number of weeks Executive was employed during such year, and the
denominator of which is 52.
(iii) Executive's rights with respect to stock options, if any,
shall be determined under the Option Plan and any applicable stock option
agreement.
(iv) Executive and his covered dependents shall be entitled to
continue to participate in whatever hospital, medical, and dental group benefit
programs the Corporation or its successor makes available to salaried
executives, on the same terms and conditions those
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benefits are made available to salaried executives of the Corporation or its
successor, until the earlier of (i) age 65, or (ii) the date Executive has
commenced new employment and has thereby become eligible for comparable
benefits.
Termination on account of disability, as provided in Section 7 (a) above,
shall not be considered a termination without Cause under this Section 7(d).
(2) If Executive's employment is terminated by the
Corporation without Cause, as defined in Subsection (e) above, prior to the
occurrence of a Change in Control of the Corporation (as defined below), and if
it can be shown that Executive's termination (i) was at the direction or request
of a third party that had taken steps reasonably calculated to effect the Change
in Control of the Corporation thereafter, or (ii) otherwise occurred in
connection with, or in anticipation of, the Change in Control of the
Corporation, then Executive shall have the rights described in Section 7(e)
below, as if a Change in Control of the Corporation had occurred on the date
immediately preceding such termination.
(e) Termination Following a Change in Control.
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(1) Definitions.
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(A) "Act" means the Securities Exchange Act of 1934, as
amended.
(B) "Affiliate of any specified persons" means any other
person that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with such specified person. For the purposes of this definition, "control" means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting
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securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(C) "Base Amount" means an amount equal to Executive's
Annualized Includable Compensation for the Base Period as defined in Section
280(G)(d)(1) and (2) of the Code (as hereinafter defined).
(D) "Change in Control" of the Corporation means a Change in
Control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Act or any
successor thereto, provided that without limiting the foregoing, a Change in
Control of the Corporation also shall be deemed to have occurred if:
(i) any "person" (as defined under Section 3(a) (9) of
the Act) or "group" of persons (as provided under Rule 13d-3 of the Act) (other
than Synthetic Industries, LP (the "Partnership") is or becomes the "beneficial
owner" (as defined in Rule 13d-3 or otherwise under the Act), directly or
indirectly (including as provided in Rule 13d-3(d) (1) of the Act), of capital
stock of the Corporation the holders of which are entitled to vote ("voting
stock") representing that percentage of the Corporation's then outstanding
voting stock (giving effect to the deemed ownership of securities by such person
or group, as provided in Rule 13d-3(d)(1) of the Act, but not giving effect to
any such deemed ownership of securities by another person or group) equal to or
greater than thirty-five percent (35%) of all such voting stock;
(ii) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof. Any person becoming a director subsequent to such date whose
election, or nomination for election, is, at any
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time, approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board shall be considered as though he were a member of the Incumbent
Board;
(iii) the Corporation combines with another person or
entity, whether through a merger, asset sale, reorganization or otherwise, and
(a) any person or group of persons (other than the Partnership) holds at any
time after such combination, voting stock equal to or greater than thirty-five
percent (35%) of all such voting stock determined by reference to the voting
securities of the surviving entity, or (b) the Corporation's Directors, as of
the date immediately before such combination, constitute less than a majority of
the Board of Directors of the combined entity;
(iv) the shareholders of the Corporation approve any
merger, consolidation or share exchange as a result of which the voting stock of
the Corporation shall be changed, converted or exchanged (other than a merger
solely with a wholly owned subsidiary of the Corporation), or any dissolution or
liquidation of the Corporation or any sale or the disposition of 50% or more of
the assets or business of the Corporation in a single transaction or in a series
of transactions; or
(v) the shareholders of the Corporation approve any
merger or consolidation to which the Corporation is a party or a share exchange
in which the Corporation shall exchange its shares for shares of another
corporation as a result of which the persons who were shareholders of the
Corporation immediately prior to the effective date of the merger, consolidation
or share exchange shall have beneficial ownership of less than 50% of the
combined voting power for election of directors of the surviving corporation
following the effective date of such merger, consolidation or share exchange.
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(E) "Code" means the Internal Revenue Code of 1986, including
any amendments thereto.
(F) "Good Reason" means:
(i) any breach of this Agreement by the Corporation,
including without limitation (a) any reduction during the employment period in
the amount of Executive's base salary or aggregate benefits as in effect from
time to time, (b) failure to provide Executive with the same fringe benefits
that were provided to Executive immediately prior to a Change in Control of the
Corporation, or with a package of fringe benefits (including paid vacations)
that, though one or more of such benefits may vary from those in effect
immediately prior to such a Change in Control, is substantially comparable in
all material respects to such fringe benefits taken as a whole, or (c) any other
breach by the Corporation of its obligations to pay compensation under this
Agreement;
(ii) without Executive's express written consent, the
assignment to Executive of any duties which are materially inconsistent with
Executive's positions, duties, responsibilities and status immediately prior to
the Change in Control of the Corporation, a material change in Executive's
reporting responsibilities, titles or offices as an employee and as in effect
immediately prior to the Change in Control, or a significant reduction in
Executive's title, duties or responsibilities, or in the level of his support
services;
(iii) the relocation of Executive's principal place of
employment, without Executive's written consent, to a location more than 50
miles from Executive's principal place of employment at the time of such Change
in Control, or the
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imposition of any requirement that Executive spend more than 60 business days
per year at a location other than such principal place of employment;
(iv) any purported termination of Executive's
employment for Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements defined below;
Upon the occurrence of any of the events described in
(i), (ii), (iii), or (iv) above, Executive shall give the Corporation written
notice that such event constitutes Good Reason, and the Corporation shall
thereafter have 30 days in which to cure. If the Corporation has not cured in
that time, the event shall constitute Good Reason.
(G) "Notice of Termination" means a notice which shall
indicate the specific termination provision relied upon in this Agreement and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(H) "Person" or "Group" means a "person" or "group," as
defined in the definition of "Change in Control" above.
(I) "Year" means a calendar year unless otherwise
specifically provided.
(2) Payments for Termination Following Change in Control. If,
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following a Change in Control, Executive's employment with the Corporation is
terminated by the Corporation other than for Cause, or by Executive on or before
120 days following the date of the Change in Control or, if later, for Good
Reason, then:
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(A) Executive shall be entitled to all compensation and
benefits accrued through the date of termination of employment; and
(B) Executive shall be entitled to any unpaid amount
previously fully accrued under the Annual Incentive Plan. In addition, Executive
shall be entitled to an incentive payment, in lieu of an incentive payment under
the Annual Incentive Plan for the plan year in which his employment terminates,
in an amount equal to the payment otherwise determined under the Annual
Incentive Plan, as if the Executive were employed by the Corporation to the end
of the year of his termination, multiplied by a fraction the numerator of which
is the number of weeks Executive was employed during such year, and the
denominator of which is 52; and
(C) The payments described above shall be made within 2
business days after termination in the event termination is by the Corporation
or Executive gives at least 5 business days notice of termination by the
Executive. In the case of termination by the Executive without 5 business days
notice, the payments shall be made within 10 business days after the
termination. Any payments not timely made will accrue interest at 8.5% per annum
until made.
(3) Vesting of Options and Health Insurance upon Change in
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Control.
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(A) In the event of a Change in Control, whether or not
Executive's employment continues with the Corporation, all options under the
Option Plan shall immediately vest on the date of the Change in Control.
(B) In the event of a Change in Control, whether or not
Executive's employment continues with the Corporation, Executive and his covered
dependents shall become entitled to continue to participate in whatever
hospital, medical, and dental group benefit
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programs the Corporation or its successor makes available to salaried
executives, on the same terms and conditions those benefits are made available
to salaried executives of the Corporation or its successor, until he reaches
age 65.
(4) Certain Supplemental Payments by the Corporation.
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(A) In the event Executive's employment is terminated
pursuant to this Subsection, and if in connection therewith it is determined
that (i) part or all of the compensation and benefits to be paid to Executive
constitute "parachute payments" under Section 280G of the Code, and (ii) the
payment thereof will cause Executive to incur excise tax under Section 4999 of
the Code, the Corporation, on or before the date for payment of such excise tax,
shall pay Executive, in a lump sum, an amount (the "Gross-Up Amount") such that,
after payment of all federal, state and local income tax and any additional
excise tax under Section 4999 of the Code in respect of the Gross-Up Amount
payment, Executive will be fully reimbursed for the amount of such excise tax.
(B) The determination of the Parachute Amount, the Base
Amount and the Gross-Up Amount, as well as any other calculations necessary to
implement this Subsection shall be made by a nationally recognized accounting or
benefits consulting firm ("Consultant") selected by Executive and reasonably
satisfactory to the Corporation and which has not performed services, other than
minor indirect or incidental services, for either the Corporation or Executive
for three years prior to the date the Consultant is retained for this purpose.
The Consultant's fee shall be paid by the Corporation.
(C) As promptly as practicable following such determination
and the elections hereunder, the Corporation shall pay to or distribute to or
for the benefit of the
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Executive such amounts as are then due to Executive under this Agreement and
shall promptly pay to or distribute for the benefit of Executive in the future
such amounts as become due to Executive under this Agreement.
(5) Expenses and Interest. If, after a Change in Control of
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the Corporation, a good faith dispute arises with respect to the enforcement of
the Executive's rights under this Subsection 7(e), or if any legal or
arbitration proceeding shall be brought in good faith to enforce or interpret
any rights provided under this Subsection 7(e), Executive shall recover from the
Corporation any reasonable attorney's fees and necessary costs and disbursements
incurred as a result of such dispute, and prejudgment interest on any money
judgment or arbitration obtained by Executive calculated at 8.5% per annum from
the date that payments to him should have been made under this Subsection.
(f) Voluntary Termination. Executive may terminate his employment
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voluntarily at any time by giving the Corporation two weeks written notice. In
the event Executive terminates his employment voluntarily, other than as
provided in Subsection 7(e) above, Executive's rights to compensation and
benefits shall be as follows:
(i) Executive shall be paid salary accrued through the date
of termination of employment.
(ii) Executive's rights to annual incentive, if any, shall be
as determined under the Annual Incentive Plan.
(iii) Executive's rights with respect to stock options, if any,
shall be determined under the Option Plan and any applicable stock option
agreement.
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(iv) Following his termination, Executive's right to
participate in the benefit programs described in Section 5 above, including the
rights of Executive's dependents to participate in such programs, if any, shall
be as determined under the provisions of such benefit programs.
8. Payment Obligations Absolute.
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The Corporation's obligation to pay the Executive the compensation and
to make the arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the Corporation
may have against him or anyone else. All amounts payable by the Corporation
hereunder shall be paid without notice or demand. Each and every payment made
hereunder by the Corporation shall be final and the Corporation will not seek to
recover all or any part of such payment from the Executive or from whomsoever
may be entitled thereto, for any reason whatever provided that if the Executive
is convicted of, or pleads guilty or nolo contendere to, a felony or misdemeanor
involving acts or omissions of the Executive in connection with his employment
by the Corporation, the Corporation shall be allowed to recover any actual
damages it has incurred from such action or omission out of amounts paid or
owing him hereunder.
9. Further Obligations of Executive.
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(a) Definitions.
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For purposes of this Section, the following definitions apply:
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(i) "Restricted Activities" means the rendering of any
advertising, marketing, sales, administrative, financial planning or
accounting, supervisory, or consulting services.
(ii) "Territory" means the continental United States and
Canada.
(iii) "Restricted Businesses" means the manufacture,
distribution, and/or sale of fabrics and fibers manufactured from polypropylene
resin.
(iv) "Confidential Information" means any data or information,
other than Trade Secrets, that is valuable to the Corporation and not generally
known to the public or to competitors of the Corporation.
(v) "Nondisclosure Period" means the period beginning on the
date of this Agreement and ending two years after the date Executive's
employment with the Corporation ends or is terminated for any reason.
(vi) "Nonsolicitation Period" means the period beginning on
the date of this Agreement and ending two years after the date Executive's
employment with the Corporation ends or is terminated for any reason.
(vii) "Trade Secret" means information including, but not
limited to, any technical or nontechnical data, formula, pattern, compilation,
program, device, method, technique, drawing, process, financial data, financial
plan, product plan, list of actual or potential customers or suppliers or other
information similar to any of the foregoing, which (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can derive economic value
from its
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disclosure or use and (ii) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
(b) Trade Secrets and Confidential Information.
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(i) Trade Secrets. Executive hereby covenants and agrees
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that he shall hold in confidence all Trade Secrets of the Corporation, its
direct and indirect subsidiaries, and/or its customers (the "Associated
Companies") that came into his knowledge during his employment by the
Corporation and shall not disclose, publish or make use of at any time after the
date hereof such Trade Secrets without the prior written consent of the
Corporation for as long as the information remains a Trade Secret.
(ii) Confidential Information. Executive hereby covenants
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and agrees that, during the Non-Disclosure Period, he will hold in confidence
all Confidential Information of the Corporation or of the Associated Companies
that came into his knowledge during his employment by the Corporation and will
not disclose, publish or make use of such Confidential Information without the
prior written consent of the Corporation.
(iii) Return of Materials. Upon the request of the Corporation
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and, in any event, upon the termination of Executive's employment with the
Corporation, Executive shall deliver to the Corporation all memoranda, notes,
records, manuals or other documents (including, but not limited to, written
instruments, voice or data recordings, or computer tapes, disks or files of any
nature), including all copies of such materials and all documentation prepared
or produced in connection therewith, pertaining to the performance of
Executive's services for the Corporation, the business of the Corporation, or
containing Trade Secrets or Confidential Information regarding the Corporation's
business, whether made or compiled by
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Executive or furnished to Executive by virtue of his employment with the
Corporation. Executive shall also deliver to the Corporation all computers,
credit cards, telephones, office equipment, software, and other property the
Corporation furnished to Executive by virtue of his employment with the
Corporation.
(c) Nonsolicitation.
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(i) Nonsolicitation of Customers. Executive hereby covenants
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and agrees that he will not, during the Nonsolicitation Period, without the
prior written consent of the Corporation, solicit, directly or indirectly, any
business related to the Restricted Businesses from any of the Corporation's
customers, including actively sought prospective customers, with whom Executive
had contact during his employment with the Corporation.
(ii) Nonsolicitation of Employees. Executive hereby covenants
----------------------------
that he will not, during the Nonsolicitation Period, without the prior written
consent of the Corporation, solicit or attempt to solicit for employment for or
on behalf of any corporation, partnership, venture or other business entity any
person who, on the last day of Executive's employment with the Corporation or
within 12 months prior to that date, was employed by the Corporation or its
direct or indirect subsidiaries and with whom Executive had contact during the
course of his employment with the Corporation (whether or not such person would
commit a breach of contract).
(d) Non-competition.
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(i) Noncompete. Executive hereby covenants that he will not,
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within the Territory and during the Nonsolicitation Period, without the prior
written consent of the
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Corporation, engage in any Restricted Activities for or on behalf of any
corporation, partnership, venture or other business entity which engages in any
of the Restricted Businesses.
(e) Noncompete Payment. Notwithstanding any other provision of this
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Agreement, the Parties agree that in consideration of and as an inducement to
Executive's undertaking the obligations contained in this Section 9, the
Corporation shall pay Executive (or in the event of his death, his estate),
within 5 business days after the date of termination of employment, a lump sum
payment equal to (i) two times Executive's base salary at the rate in effect on
the date of the termination of employment (or, in the event of a termination for
Good Reason, the base salary as in effect immediately before the actions giving
rise to Good Reason); plus (ii) two times the greatest of the incentive payments
under the Annual Incentive Plan either paid or accrued in either the Year of the
termination of employment or the immediately preceding Year (the "Noncompete
Payment"). The parties further acknowledge and agree that should Executive
breach any of the covenants contained in this Section 9, the Corporation will
suffer material damages, including but not limited to lost business revenues,
sales, and customers. Because of the difficulty in quantifying these damages,
Executive hereby agrees that, in addition to any other rights the Corporation
may have at law or in equity, he shall forfeit the Noncompete Payment upon any
breach of the covenants contained in this Section 9. In the event a breach of
covenant occurs after the termination of employment, Employee agrees to
immediately return the Noncompete Payment to the Corporation.
(f) Specific Performance. Executive acknowledges that the
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obligations undertaken by him pursuant to this Section 9 are unique and that the
Corporation likely will have no adequate remedy at law if he fails to perform
any of his obligations. Executive therefore
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confirms that the Corporation's right to specific performance of the terms of
this Agreement is essential to protect the rights and interests of the
Corporation. Accordingly, in addition to any other remedies that the Corporation
may have pursuant to Subsection 9(e), at law, or in equity, the Corporation
shall have the right to have all obligations, covenants, agreements and other
provisions of this Agreement specifically performed by Executive and the
Corporation shall have the right to obtain preliminary and permanent injunctive
relief from any court with proper jurisdiction, without having to first submit
to arbitration, to secure specific performance and to prevent a breach or
contemplated breach of the obligations contained in this Section.
10. Arbitration.
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(a) Except as provided in Subsection 9(f) above, any dispute,
controversy, or claim between the parties arising out of, relating to, or
concerning this Agreement; the breach, termination, or invalidity of this
Agreement; and the scope of this arbitration clause, shall be settled by
arbitration at the American Arbitration Association ("AAA") in Atlanta, Georgia,
in accordance with the Employment Dispute Resolution Rules of the AAA then in
effect. Any award rendered shall be final and binding on the parties hereto, and
judgment may be entered in any court having jurisdiction thereof. Nothing in
this section, however, shall prevent the Corporation from seeking immediate
relief from a court of competent jurisdiction to enforce the obligations
undertaken in Section 9 above without first having to undergo arbitration.
(b) The arbitrator shall be mutually acceptable to the parties, or
failing agreement, selected pursuant to the Employment Dispute Arbitration Rules
of the AAA. The arbitration award shall be in writing and shall specify the
factual and legal bases for the award.
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In rendering the award, the arbitrator shall determine the respective rights and
obligations of the parties according the laws of the State of Georgia or, if
applicable, federal law.
(c) All costs and expenses of the arbitration shall be paid for by
the Corporation. Except as provided in Subsection 7(e)(5), each party shall pay
its own attorneys' fees.
(d) It is the specific intent of the parties that this arbitration
clause be governed by the Federal Arbitration Act, 9 U.S.C. (S) 1, et seq.
-- ----
("FAA"); however, if this clause is unenforceable for any reason under the FAA,
then the parties intend that it be governed by the provisions of the Georgia
Arbitration Code, O.C.G.A. (S) 9-9-1, et seq.
-- ----
(e) Both Executive and the Corporation represent and warrant they
have read this Section, have had an opportunity to consult with and receive
advice from legal counsel regarding this Section, and hereby forever waive all
rights to assert that this Section was a result of duress, coercion, or mistake
of law of fact.
_____________ (Initialed by Executive)
_____________ (Initialed by the Corporation)
11. Withholding.
-----------
Payments required to be made by the Corporation to Executive, his
spouse, his estate or beneficiaries, will be subject to withholding of such
amounts relating to taxes as the Corporation may reasonably determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Corporation may, in its sole discretion,
accept other provision for payment of taxes as required by law, provided it is
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satisfied that all requirements of law affecting its responsibilities to
withhold such taxes have been satisfied.
12. Assignability; Binding Nature.
-----------------------------
This Agreement is binding upon, and will inure to the benefit of, the
parties and their respective successors, heirs, administrators, executors and
assigns. No rights or obligations of Executive hereunder may be assigned or
transferred by Executive except that (a) rights to compensation and benefits
hereunder, which rights will remain subject to the limitations hereunder, may be
transferred by will or operation of law, and (b) rights under employee benefit
plans or programs described in Section 5, above, may be assigned or transferred
in accordance with such plans, programs or regular practices thereunder. No
rights or obligations of the Corporation under this Agreement may be assigned or
transferred except that rights or obligations may be assigned or transferred by
operation of law or otherwise pursuant to this Section 12. The Corporation shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business assets
of the Corporation by written agreement in form and substance satisfactory to
the Executive, as a condition to such transaction, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Corporation would be required to perform if no such succession had occurred.
13. Entire Agreement.
----------------
This Agreement supersedes any prior agreements, including but not
limited to the Employment Agreements between the parties and, together with such
plans and programs as are
23
specifically referred to herein, contains the entire agreement between the
parties concerning the subject matter hereof.
14. Amendments and Waivers.
----------------------
This Agreement may not be modified or amended, except by a writing
signed by both parties. A party may waive compliance by the other party with any
term or provision of this Agreement, or any part thereof, provided that the term
or provision, or part thereof, is for the benefit of the waiving party. Any
waiver will be limited to the facts or circumstances giving rise to the non-
compliance and will not be deemed either a general waiver or modification with
respect to the term or provision, or part thereof, being waived, or as to any
other term or provision of this Agreement, nor will it be deemed a waiver of
compliance with respect to any other facts or circumstances then or thereafter
occurring.
15. Notices.
-------
Any notice given hereunder will be in writing and will be deemed
given when delivered personally or by courier, or five days after being mailed,
certified or registered mail, duly addressed to the party concerned at the
address indicated below or at such other address as such party may subsequently
provide, in accordance with the notice and delivery provisions of this Section:
To the Corporation: Attn: Corporate Secretary
Synthetic Industries, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx; XX 00000
To Executive: Xxxxxx Xxxx
000 Xxxxxxx Xxxxx Xxxx
XxXxxxxxx, XX 00000
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16. Severability.
------------
If fulfillment of any provision of this Agreement, at the time such
fulfillment shall be due, shall transcend the limit of validity prescribed by
law, then the obligation to be fulfilled shall be deemed reduced to the limit of
such validity; and if any clause or provision contained in this Agreement
operates or would operate to invalidate this Agreement, in whole or in part,
then such clause or provision only shall be held ineffective to the extent of
such invalidity, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
17. Survivorship.
------------
The respective rights and obligations of the parties hereunder will
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. References.
----------
In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive will be deemed, where
appropriate, to refer to his legal representative or, where appropriate, to his
beneficiary or beneficiaries.
19. Headings.
--------
The headings of paragraphs contained in this Agreement are for
convenience only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
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20. Governing Law.
-------------
Except to the extent governed by the FAA as provided in Section 10
above, this Agreement, the rights and obligations of the parties, and any claims
or disputes relating thereto shall be governed by and construed in accordance
with the laws of the State of Georgia, not including the choice-of-law rules
thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
SYNTHETIC INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxx
--------------------------
Xxxxxx Xxxx
Title: Chief Operating Officer
Date: October 15, 1999
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