EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of the 1st day of January, 2005, by and between Xxxxxxxxx International Inc., a
Delaware corporation (the "EMPLOYER"), and Xxxxx X. Xxx Xxxx (the "EXECUTIVE").
RECITALS
A. The Employer desires that the Executive continue to provide
services for the benefit of the Employer and the Executive desires to accept
such continued employment with the Employer.
B. The Employer and the Executive acknowledge that the Executive
is, and will continue to be, a member of the senior management team of the
Employer and, as such, has participated in and will participate in implementing
the Employer's business plan.
NOW, THEREFORE, in consideration of the above premises and the
following mutual covenants and conditions, the parties agree as follows:
1. EMPLOYMENT. The Employer shall employ the Executive as its
Vice President, General Counsel and Secretary, and the Executive hereby accepts
such employment on the following terms and conditions.
2. DUTIES. The Executive shall work for the Employer in a
full-time capacity. The Executive shall, during the term of this Agreement, have
the duties, responsibilities, powers, and authority customarily associated with
the positions of Vice President, General Counsel and Secretary. The Executive
shall report to, and follow the direction of, the President and Chief Executive
Officer of the Company. In addition to, or in lieu of, the foregoing, the
Executive also shall perform such other duties as may be assigned to him from
time to time by the President and Chief Executive Officer. The Executive shall
diligently, competently, and faithfully perform all duties, and shall devote his
entire business time, energy, attention, and skill to the performance of duties
for the Employer and will use his best efforts to promote the interests of the
Employer; provided the Executive shall be entitled to devote time to outside
boards of directors, personal investments, and professional activities to the
extent such activities do not unduly interfere with his duties hereunder.
3. TERM OF EMPLOYMENT. This Agreement shall be entered into for a
period of one (1) year, commencing January 1, 2005 (the "INITIAL TERM"). The
term of employment shall be renewed for successive periods of one (1) year (a
"RENEWAL TERM") after the expiration of the Initial Term and any subsequent
Renewal Term, unless the Board of Directors provides the Executive, or the
Executive provides the Board of Directors, with written notice to the contrary
at least sixty (60) days prior to the end of the Initial Term or any Renewal
Term.
4. COMPENSATION.
A. SALARY. The Employer shall pay the Executive an annual
salary of US$350,000 (the "BASE SALARY"), payable in substantially
equal installments in accordance with the Employer's payroll policy
from time to time in effect. The Executive's salary shall be subject to
any payroll or other deductions as may be required to be made pursuant
to law, government order, or by agreement with, or consent of, the
Executive. The Base Salary is subject to increase at the discretion of
the Board of Directors, or a Committee thereof acting under delegated
authority, as appropriate.
B. PERFORMANCE BONUS. The Executive shall be eligible for
an annual bonus targeted at seventy-five percent (75%) of the
Executive's Base Salary (the "TARGET BONUS"), such bonus, if any, to be
paid within ninety (90) days following the end of each calendar year
during the term hereof, beginning with calendar year 2005. The bonus
shall be based upon an annual calendar year bonus plan, to be
established by the Board of Directors of Employer as soon as reasonably
practicable after the date hereof. The actual bonus to be paid to
Executive shall be determined by the Board of Directors, or by a
Committee thereof with delegated authority, based upon such criteria as
are established by the Board or such Committee and communicated to
Executive. The actual bonus to be paid to Executive may exceed or be
lower than the Target Bonus, based upon performance relative to the
established criteria.
C. OTHER COMPENSATION. Executive shall be eligible to
participate in any and all other incentive compensation programs
established by Employer in which Employer's senior executives
participate or with respect to which they are eligible. The Board of
Directors, or a Committee thereof with delegated authority, shall
determine the amount of any such awards in its sole discretion.
D. BENEFITS AND PERQUISITES. Executive shall be eligible
to participate in all benefit plans and programs for which other senior
executives of Employer are eligible, and shall be entitled to such
perquisites as are available to other senior executives of Employer,
and such additional perquisites as may be approved by the Board of
Directors or the Compensation Committee thereof.
5. EXPENSES. The Employer shall reimburse the Executive for
expenses in accordance with the Employer's policies from time to time in effect.
6. TERMINATION. The Executive's services shall terminate upon the
first to occur of the following events:
A. At the end of the term of this Agreement, including any
Renewal Terms.
B. Upon the Executive's date of death or the date the
Executive is given written notice from the Employer that he has been
determined to be disabled. For purposes of this Agreement, the
Executive shall be deemed to be "disabled" if the Executive, as a
result of illness or incapacity, shall be unable to perform
substantially his required duties for a period of three (3) consecutive
months or for any aggregate period of three (3) months in any six (6)
month period.
C. On the date the Employer provides the Executive with
written notice that he is being terminated for "cause." For purposes of
this Agreement, "cause" means that Executive has: (i) been convicted of
(or has pleaded guilty or no contest to) a felony, or (ii) engaged in
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conduct that constitutes willful gross neglect or willful gross
misconduct with respect to his employment duties; PROVIDED, no act or
omission on Executive's part shall be considered "willful" if conducted
in good faith and with a reasonable belief that his conduct was in the
best interests of Employer. Notwithstanding the foregoing, the Employer
may not terminate Executive's employment for cause under clause (ii) of
this Paragraph 6C unless Executive is given at least thirty (30) days
to cure any such conduct (if capable of cure), and only after Executive
has received a certified copy of a resolution of the Board of Directors
terminating his employment for cause and stating specifically the
conduct that the Board of Directors believes satisfies the definition
of cause.
D. On the date the Executive terminates his employment for
any reason, provided that the Executive shall give the Employer thirty
(30) days written notice prior to such date of his intention to
terminate this Agreement.
E. On the date the Employer terminates the Executive's
employment for any reason other than in the event of Executive's death
or disability or for cause, provided that the Employer shall give the
Executive sixty (60) days written notice prior to such date of its
intention to terminate this Agreement.
7. COMPENSATION UPON TERMINATION.
A. If the Executive's services are terminated pursuant to
Paragraph 6B, 6C or (except as provided in Paragraph 7C) 6D, or the
Executive elects to terminate this Agreement at the end of its term
pursuant to Paragraph 6A, the Executive shall be entitled to his salary
and health and welfare benefits through his final date of active
employment, plus any accrued but unused vacation pay. The Executive
shall also be entitled to any benefits mandated under the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") or required under
the terms of any death, insurance, or retirement plan, program, or
agreement, or any other plan or arrangement, provided by the Employer
and to which the Executive is a party or in which the Executive is a
participant, including, but not limited to, any short-term or long-term
disability plan or program, if applicable.
B. If the Executive's services are terminated by the
Employer pursuant to Paragraph 6A or 6E prior to and not in connection
with a Change in Control (as defined herein), Executive shall receive
(i) continuation of his final Base Salary for a period ending one year
from the date that the term of this Agreement would have expired absent
the termination of Executive, (ii) continuation of health and welfare
benefits for such period, and (iii) an amount equal to Executive's
Target Bonus on all amounts paid pursuant to clause (i) of this
Paragraph 7B and all amounts paid to Executive as Base Salary during
the then-current term of this Agreement, to be paid within ninety (90)
days following the end of each calendar year during the period of
Executive's salary continuation under clause (i) of this Xxxxxxxxx 0X.
Xxxxxx the period of Executive's salary continuation under clause (i)
of this Paragraph 7B, all unvested equity-based awards will continue to
vest in accordance with their original schedules. Employer's
obligations to pay the amounts and furnish the benefits as provided in
this Paragraph 7B shall be conditioned upon receipt by Employer of
Executive's written release of the Employer from all claims for
additional severance payments and benefits and otherwise.
C. In the event of a Change in Control, and the subsequent
termination, within thirty-six (36) months after the Change in Control,
of Executive's employment by Employer without cause or by Executive for
Good Reason, the Executive shall receive (i) a lump sum
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amount equal to (a) the amount of Base Salary that would have been paid
to Executive to the end of the term of this Agreement, PLUS (b)
Executive's Target Bonus on the amount paid to Executive pursuant to
Clause 7C(i)(a), PLUS (c) Executive's final Base Salary, multiplied by
two (2), plus (d) the higher of Executive's Target Bonus calculated
with respect to the amount paid pursuant to Clause 7C(i)(c) or the
highest annual bonus actually received by Executive during the two most
recent years, multiplied by two (2); and (ii) continuation of
Executive's health and welfare benefits for a period ending two years
from the date upon which the term of this Agreement would have expired
absent the termination of Executive of the end of the term of this
Agreement. In addition, upon a Change in Control, all unvested awards
and grants previously made to Executive shall become immediately fully
vested and payable (if applicable). For purposes of this Xxxxxxxxx 0X,
"Xxxx Reason" for termination of Executive's employment by Executive
shall exist if a Change of Control has occurred and, at any time during
the thirty-six (36) months thereafter, any of the following has also
occurred: Executive's title, authority or principal duties are reduced,
diminished or eliminated; Executive's base salary is reduced;
Executive's benefits are diminished; Executive's principal place of
employment is relocated more than thirty-five (35) road miles from its
then-current location; or Executive's annual bonus opportunity is
reduced. For purposes of this Xxxxxxxxx 0X, a "CHANGE IN CONTROL" shall
be deemed to have occurred upon:
(1) the acquisition after the date of this Agreement by any
"person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") (excluding for this purpose, (i) the Employer or any
subsidiary of the Employer or (ii) any employee benefit plan
of the Employer or of any subsidiary of the Employer or any
person or entity organized, appointed or established by the
Employer for or pursuant to the terms of any such plan which
acquires after the date of this Agreement beneficial ownership
of voting securities of the Employer) of ownership of
securities of the Employer whereby such person becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of the
Employer representing more than fifty percent (50%) of the
combined voting power of the Employer's then outstanding
securities; provided, however, that no Change in Control will
be deemed to have occurred as a result of a change in
ownership percentage resulting solely from an acquisition of
securities by the Employer; or
(2) Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxx X. Paris, Xxxxxx X. Xxxxxx, Xxxxxxx X.X. Xxxxx, Xxxxx
X. Xxxxxxxx (collectively, "INCUMBENT DIRECTORS") and any new
directors whose election by the Board of Directors or
nomination by the Board of Directors for election by the
Employer's stockholders was approved by a vote of a least
two-thirds (2/3) of the directors then still in office who
either are Incumbent Directors or whose election or nomination
for election was previously so approved (such new directors
being referred to as "SUCCESSOR INCUMBENT DIRECTORS") ceasing
for any reason to constitute at least a majority of the Board
of Directors;
(3) the adoption, enactment or effectiveness of any action
(including, without limitation, by resolution or by amendment
to the Employer's charter or bylaws) that materially limits or
diminishes the power or authority of the Employer's board of
directors or any committee thereof, if such action has not
been approved by a vote of a least two-thirds (2/3) of the
directors then still in office who either are Incumbent
Directors or Successor Incumbent Directors; or
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(4) the consummation of, or the execution of a definitive
agreement the consummation of which would result in, a
reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the
Employer (a "BUSINESS COMBINATION"), in each case, unless,
following such Business Combination, all or substantially all
of the individuals and entities who were the beneficial owners
of outstanding voting securities of the Employer immediately
prior to such Business Combination beneficially own, directly
or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the
entity resulting from such Business Combination (including,
without limitation, an entity which, as a result of such
transaction, owns the Employer, or all or substantially all of
the Employer's assets, either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of
the outstanding voting securities of the Employer; or
(5) the consummation of a complete liquidation or
dissolution of the Employer.
D. If the Executive is subject to a tax pursuant to
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"CODE"), or any successor provision that may be in effect, as a result
of "parachute payments" (as that term is defined in Section
280G(b)(2)(A) and (d)(3) of the Code) made pursuant to this Agreement,
the Employer shall pay to Executive, in advance, all sums necessary to
pay any such tax, plus an amount necessary to gross-up such payments
for income and employment taxes relating to such payments and such
gross-up payments, plus any penalties and interest on such taxes (to
the extent caused by the Employer).
8. CONFIDENTIAL INFORMATION. Executive acknowledges that the
Confidential Information (as defined herein) obtained by him concerning the
business and affairs of the Employer and its affiliates and its and their
predecessors during the course of his performance of services for, or employment
with, any of the foregoing persons (whether or not compensated for such
services) are the property of the Employer and its affiliates. Therefore,
Executive agrees that he will not at any time (whether during or after his
employment period) disclose to any unauthorized person or, directly or
indirectly, use for his own account, any Confidential Information without the
Board of Directors' consent. Executive agrees to deliver to the Employer at the
termination of his employment, or at any other time the Employer may request in
writing (whether during or after his employment period), all memoranda, notes,
plans, records, reports and other documents, regardless of the format or media
(and copies thereof), relating to the business of the Employer and its
affiliates and its and their predecessors which he may then possess or have
under his control and which contain Confidential Information. As used herein,
"CONFIDENTIAL INFORMATION" means information or materials of a confidential or
proprietary nature and includes, but is not limited to, (a) matters of a
technical nature, such as trade secrets, methods, data and know-how, inventions,
designs, machines, computer programs or printouts, and documentation and similar
items or research projects, and (b) matters of a business nature, such as
information about past, present, or future company performance, correspondence,
notes, reports, files, financial information, sales figures and projections,
budgets, marketing plans, price lists, strategies, and lists of actual or
potential customers, partners, or investors. Notwithstanding the foregoing,
Confidential Information shall not include information that is generally
ascertainable from public or published information or trade sources.
9. NOTICES. Any and all notices required in connection with this
Agreement shall be deemed adequately given only if in writing and (a) personally
delivered, or sent by first class, registered, or certified mail, postage
prepaid, return receipt requested or by recognized overnight courier, (b) sent
by facsimile, provided a hard copy is mailed on that date to the party for whom
such notices are intended, or
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(c) sent by other means at least as fast and reliable as first class mail. A
written notice shall be deemed to have been given to the recipient party on the
earlier of (a) the date it shall be delivered to the address required by this
Agreement; (b) the date delivery shall have been refused at the address required
by this Agreement; (c) with respect to notices sent by mail or overnight
courier, the date as of which the Postal Service or overnight courier, as the
case may be, shall have indicated such notice to be undeliverable at the address
required by this Agreement; or (d) with respect to a facsimile, the date on
which the facsimile is sent and receipt of which is confirmed. Any and all
notices referred to in this Agreement, or which either party desires to give to
the other, shall be addressed to his residence in the case of the Executive, or
to its principal office in the case of the Employer.
10. WAIVER OF BREACH. A waiver by the Employer of a breach of any
provision of this Agreement by the Executive shall not operate or be construed
as a waiver or estoppel of any subsequent breach by the Executive. No waiver
shall be valid unless in writing and signed by an authorized officer of the
Employer.
11. ASSIGNMENT. The Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, the Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of the Employer under this Agreement shall
inure to the benefit and shall be binding upon the successors and assigns of the
Employer. Employer covenants and agrees that it will secure the assumption by or
the agreement of any successor or assignee of this Agreement to the terms
hereof.
12. ENTIRE AGREEMENT. This Agreement sets forth the entire and
final agreement and understanding of the parties and contains all of the
agreements made between the parties with respect to the subject matter hereof.
This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto, with respect to the subject matter hereof;
provided, however, that this Agreement does not supersede any stock option or
other equity grants provided to the Executive under the terms of any stock
option or long-term incentive program or agreement. No change or modification of
this Agreement shall be valid unless in writing and signed by the Employer and
the Executive. If any provision of this Agreement shall be found invalid or
unenforceable for any reason, in whole or in part, then such provision shall be
deemed modified, restricted, or reformulated to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein as so modified, restricted, or
reformulated or as if such provision had not been originally incorporated
herein, as the case may be. The parties further agree to seek a lawful
substitute for any provision found to be unlawful; provided, that, if the
parties are unable to agree upon a lawful substitute, the parties desire and
request that a court or other authority called upon to decide the enforceability
of this Agreement modify those restrictions in this Agreement that, once
modified, will result in an agreement that is enforceable to the maximum extent
permitted by the law in existence at the time of the requested enforcement.
13. HEADINGS. The headings in this Agreement are inserted for
convenience only and are not to be considered a construction of the provisions
hereof.
14. EXECUTION OF AGREEMENT. This Agreement may be executed in
several counterparts, each of which shall be considered an original, but which
when taken together, shall constitute one agreement.
15. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to its conflict of law provisions.
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16. LITIGATION EXPENSES. In the event Executive brings an action
seeking to enforce his rights under this Agreement, the Employer will pay, on a
regular and current basis, all of Executive's legal fees and expenses incurred
in connection with such action. Executive will be obligated to return all
amounts so advanced only in the event of a final judgment or arbitration
determination denying in full Executive's requested relief.
17. INDEMNIFICATION. During and after the term hereof, Executive
shall be entitled to indemnification by Employer from and against any loss, cost
or expense incurred by Executive in connection with any threatened, pending or
completed action, suit or proceeding, by reason of the fact that Executive is or
was the Vice President, General Counsel and Secretary of Employer to the fullest
extent permitted under applicable law. Executive shall be entitled to
advancement of expenses to the fullest extent permitted under applicable law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have set their signatures on the
date first written above.
XXXXXXXXX INTERNATIONAL INC.
a Delaware corporation
By: /s/ Xxxxxx X. Paris /s/ Xxxxx X. Xxx Xxxx
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Its: President & CEO Xxxxx X. Xxx Xxxx
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