EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.16
THIS AGREEMENT is made as of
this 21st day
of August, 2006, by and between NN, Inc., a Delaware
Corporation with its principal place of business in Johnson City, Tennessee (the
“Company”), and Xxxxxxx X.
Xxxxx (the “Executive”).
WITNESSETH:
WHEREAS, the Company
recognizes the value of the Executive’s experience and expertise and desires to
continue in its employment of the Executive as Level 3 Manager of the Company;
and
WHEREAS, the Executive wishes
to continue to be employed by the Company in such capacity; and
WHEREAS, the Company and the
Executive mutually desire that their employment relationship be set forth under
the terms of this written Employment Agreement;
NOW, THEREFORE, in
consideration of the foregoing and of the promises, covenants and mutual
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
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1.
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Employment. The
Company agrees to continue to employ the Executive, and the Executive
agrees to continue to be employed by the Company, on the terms and
conditions set forth herein.
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2.
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Term of
Employment. The employment of the Executive by the
Company as provided herein shall commence on August 21, 2006, and end on
August 20, 2007 unless further extended or sooner terminated as
hereinafter provided. On August 20, 2007 and on August 20 of
each year thereafter, the term of the Executive’s employment hereunder
shall be extended automatically one (1) additional year, unless at least
six (6) months prior to the date of such automatic extension the Company
shall have delivered to the Executive or the Executive shall have
delivered to the Company written notice that the term of the Executive’s
employment hereunder shall not be
extended.
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3.
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Position and
Duties. The Executive shall serve as the Level 3 Manager
of the Company with responsibilities and authority as may from time to
time be assigned by the Chief Executive Officer and/or the Board of
Directors of the Company. Executive agrees to perform
faithfully and industriously the duties which the Company may assign to
him. The Executive shall devote substantially all of his working time and
efforts to the business affairs of the Company, to the exclusion of all
other employment or business interest other than passive personal
investments, charitable, religious or civic
activities. Executive may not engage, directly or indirectly,
in any other business or businesses, whether or not similar to that of the
Company, except with the consent of the Chief Executive Officer and the
Board of Directors of the Company.
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4.
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Compensation and
Benefits. In consideration of the Executive’s
performance of his duties hereunder, the Company shall provide the
Executive with the following compensation and benefits during the term of
his employment hereunder.
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(a)
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Base
Salary. The Company shall pay to the Executive an
aggregate base salary at a rate of 155,000 Dollars ($155,000) per annum,
payable in accordance with the Company’s normal payroll
practices. Such base salary may be increased from time to time
by the Board of Directors in accordance with the normal business practices
of the Company.
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(b)
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Expenses. The
Company, as applicable, shall promptly reimburse the Executive for all
reasonable out-of-pocket expenses incurred by the Executive in his
performance of services hereunder, including all such expenses of travel
and entertainment, provided that such expenses are incurred, accounted for
and documented in accordance with the Company’s regular policies and in
compliance with IRS Guidelines. The Company reserves the right
to establish limits on the types or amounts of business expenses that the
Executive may incur.
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(c)
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Employee
Benefits. The Executive shall be entitled to continue to
participate in all Company employee benefit plans for which he is
eligible, subject to the rules and regulations applicable thereto, which
were in effect on the date hereof (including, but not limited to, life,
disability, and health insurance plans and programs and savings plans and
programs) as such plans may continue or be altered by the Company Board of
Directors from time to time at the Board’s
discretion.
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(d)
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Vacation and Other
Absences. The Executive shall receive reasonable and
customary vacation in each calendar year during the term of this
Agreement, in accordance with the Company's present
policies. The Executive shall also receive all paid absences
for holidays or illnesses in accordance with the Company's applicable
plans, policies or provisions.
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5.
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Termination. Except
for the provisions of Paragraphs 7, 8, 9, 10, and 11, which shall continue
in full force and effect, this Agreement shall terminate upon the first to
occur of the following:
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(a)
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The
death of Executive;
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(b)
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The
permanent Disability of Executive, as defined in Paragraph
6(a)(iv);
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(c)
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Termination
of Executive’s employment by Company "For Cause" as defined in
Paragraph 6(a)(i);
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(d)
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Separation
From Service with the Company other than For Cause or Separation From
Service with the Company by Executive with "Good Reason" as defined in
Paragraph 6(a)(ii). The Company reserves the right to terminate
the Executive at any time, subject to the Company's obligation to pay the
Executive Compensation as otherwise provided for herein;
or
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(e)
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Separation
From Service with the Company following a "Change in Control" as defined
in Paragraph 6(a)(iii) and as provided in Paragraph 6(d)(i);
or
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(f)
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Termination
of employment with the Company by Executive without Good Reason, provided
that Executive shall give written notice of his voluntary termination in
accordance with Paragraph 6(a)(v). Upon receipt of notice of
intended termination given by Executive, the Company reserves the right to
terminate the Executive's employment, effective
immediately.
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6.
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Compensation and
Benefits in the Event of Termination or Separation From
Service. In the event of the termination of the
Executive’s employment or a Separation From Service, as applicable, during
the term of this Agreement or any renewal thereof, compensation and
benefits shall be paid as set forth
below.
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(a)
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Definitions. For
purposes of this Agreement, the following terms shall have the meanings
indicated:
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(i)
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The
term "For Cause" shall include, but shall not be limited to (A) the
failure of the Executive to perform the Executive's duties under this
Agreement (other than as a result of physical or mental illness or
injury), which failure, if correctable, and provided it does not
constitute willful misconduct or gross negligence described in Subsection
B below, remains uncorrected for 10 days following written notice to
Executive by the President or the Board of Directors of the Company of
such breach; (B) willful misconduct or gross negligence by the Executive,
in either case that results in material damage to the business or
reputation of the Company; (C) a material breach by Executive of this
Agreement which, if correctable, remains uncorrected for 10 days following
written notice to Executive by the Board of Directors of the Company of
such breach; or (D) the Executive is convicted of a felony or any other
crime involving moral turpitude (whether or not in connection with the
performance by Executive of his duties under this
Agreement).
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(ii)
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The
term "Good Reason" shall mean
either:
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(A)
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assignment
to the Executive of any duties inconsistent with Executive's position
duties, responsibilities, title or office, or any other action by the
Company that results in a material diminution in the Executive's position,
authority, duties or responsibilities, excluding in each case any
assignment or action that is remedied by the Company within 10 days after
receipt of notice thereof from the Executive;
or
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(B)
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any
material failure by the Company to comply with this Agreement, other than
a failure that is remedied by the Company within 10 days after receipt of
notice thereof from the Executive.
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(iii)
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The
term “Change in Control” shall mean
either:
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(A)
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A
person, corporation, entity or group (1) makes a tender or exchange offer
for the issued and outstanding voting stock of the Company and
beneficially owns fifty percent (50%) or more of the issued and
outstanding voting stock of the Company after such tender or exchange
offer, or (2) acquires, directly or indirectly, the beneficial ownership
of fifty percent (50%) or more of the issued and outstanding voting stock
of the Company in a single transaction or a series of transactions (other
than any person, corporation, entity or group for which a Schedule 13G is
on file with the Securities and Exchange Commission, so long as such
person, corporation, entity or group has beneficial ownership of less than
fifty percent (50%) of the issued and outstanding voting stock of the
Company); or
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(B)
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The
Company is a party to a merger, consolidation or similar transaction and
following such transaction, fifty percent (50%) or more of the issued and
outstanding voting stock of the resulting entity is not beneficially owned
by those persons, corporations or entities that constituted the
stockholders of the Company immediately prior to the transaction;
or
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(C)
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The
Company sells fifty percent (50%) or more of its assets to any other
person or persons (other than an affiliate or affiliates of the Company);
or
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(D)
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Individuals who,
as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least seventy-five percent (75%) of the
Board of Directors of the Company; provided, however, that any individual
becoming a director subsequent to the date hereof, whose election or
nomination was approved by a majority of the directors than comprising the
Incumbent Board, shall be considered a member of the Incumbent Board, but
not including any individual whose initial board membership is a result of
an actual or threatened election contest (as that term is used in Rule
14a-11 promulgated under the Securities Act of 1934, as amended) or an
actual or threatened solicitation of proxies or consents by or on behalf
of a party other than the Board.
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It is not
intended that a Change of Control will serve as an event which entitles
Executive to any payment hereunder.
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(iv)
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The
term “Disability” shall mean the Executive’s failure to satisfactorily
perform his regular duties on behalf of the Company on a full-time basis
for one hundred and twenty (120) days during any three hundred and sixty
(360) day period, by reason of the Executive’s incapacity due to physical
or mental illness.
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(v)
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The
term “Notice of Termination” shall mean a written notice which shall
include the specific termination provision under this Agreement relied
upon, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s
employment. Any purported termination of the Executive’s
employment hereunder by action of either party shall be communicated by
delivery of a Notice of Termination to the other party. Any
termination by Executive of his employment without Good Reason shall be
made on not less than 14 days'
notice.
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(vi)
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The
term “Separation From Service” shall have the meaning contemplated in
guidance issued by the U. S. Department of the Treasury for purposes of
applying the provisions of Section 409A of the Internal Revenue
Code.
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(vii) The term “Specified Employee” shall have
the meaning contemplated bySection 409A(a)(2)(B)(i) of the
Internal Revenue Code and guidance issued thereunder by the U. S.
Department of the Treasury.
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(b)
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Separation From
Service By Company Not For Cause Or By Executive With Good Reason Prior To
A Change Of Control. In the event Executive incurs a
termination of employment by action of the Company without Cause prior to
a Change of Control, or by the Executive with Good Reason prior to a
Change in Control, then upon a Separation From Service the Executive shall
be entitled to receive: (1) The annual salary due to him
through the date of termination of his employment which occurs in
connection with the Separation From Service. In addition,
Executive shall be entitled to receive a lump sum amount equal to his
Annual Salary in effect on the date of termination of his employment which
occurs in connection with the Separation From Service, payable (except as
provided in Paragraph 6(e)) within seventy-five (75) days of said
Separation From Service. (2) Any vested rights of Executive
shall be paid to Executive in accordance with the Company's plans,
programs or policies. (3) The Company shall promptly reimburse
Executive for any and all reimbursable business expenses (to the extent
not already reimbursed) upon Executive's properly accounting for the
same. (4) The Company shall (except as provided in Paragraph
6(e)) promptly reimburse Executive for Executive's payment of the COBRA
premium required in order to continue coverage for Executive and his
family under the Company's existing benefit plans until the first
anniversary of the date the COBRA continuation period begins or until
Executive becomes eligible for similar coverage under the terms of new
employment undertaken by Executive, whichever first occurs; and provided
further, that the terms of the Company's benefit plans shall be subject to
amendment during such period, to the extent that such amendments are
applicable to the executive officers of the Company
generally.
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(c)
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Termination By The
Company For Cause Or By The Executive Without Good
Reason. In the event the Executive’s employment
hereunder is terminated (A) by action of the Company for Cause; (B) by
action of the Executive without Good Reason; or (C) by reason of the
Executive’s death, Disability or retirement, the following compensation
and benefits shall be paid and provided the Executive (or his
beneficiary)::
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(1)
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The
Executive’s annual salary provided under Paragraph 5(a) through the date
of termination, at the annual rate in effect at the time the Notice of
Termination is given (or death occurs), to the extent unpaid prior to such
Date of Termination;
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(2)
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Any
vested rights of Executive shall be paid to Executive or in accordance
with the Company's plans, programs or policies. Without
limiting the foregoing, in the event of the termination of Executive's
employment due to death or disability, the rights and benefits of
Executive (or his designated beneficiary or representatives, as
applicable) under any Company life, health and long-term disability plans
and policies shall be determined in accordance with the terms and
provisions of such plans and policies;
and
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(3)
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The
Company shall promptly reimburse Executive for any and all reimbursable
business expenses (to the extent not already reimbursed) upon Executive's
properly accounting for the same.
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(d)
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Separation From
Service Following a Change of
Control
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(i)
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Severance
Benefits. In the event that Executive incurs a
termination of employment coincident with or followed by a Separation From
Service, in either event within two (2) years following a "Change of
Control" (as defined in Paragraph 6(a)(iii)) and such
termination or Separation From Service is either (i) Without Cause (as
defined below), or (ii) is a
Constructive Termination (as defined below), Executive shall receive, in
addition to all compensation due and payable to or accrued for the benefit
of Executive:
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(A)
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a
lump sum payment equal to an amount set forth on Schedule A to
this Agreement ("Severance Payment"). The Severance payment
shall be made by wire transfer or immediately available funds to an
account designated by Executive within seven (7) business days following
the date of the Separation From Service, except as provided in Paragraph
6(e) with respect to payments to Specified
Employees;
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(B)
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a
payment equal to the annual bonus to which Executive would have been
entitled but for Executive's termination of employment in connection with
the Separation From Service, for the year of Executive's termination;
pro-rated for the portion of the year during which he was employed by the
Company (“Pro-rated Bonus”). The Pro-rated Bonus shall be
payable to Executive within seventy-five (75) days following Executive's
Separation From Service, except as provided in Paragraph 6(e);
and
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(C)
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for
a period of twelve months after such termination (the "Coverage Period"),
medical, dental, prescription drug, life, accidental death and disability
insurance coverage substantially similar to the coverage which Executive
was receiving or entitled to receive immediately prior to the date of the
termination of Executive's employment ("Insurance Benefits”), to the
extent permitted by the terms of each particular existing benefit plan
and, if not so permitted, the Company shall, except as provided in
Paragraph 6(e), promptly reimburse Executive for Executive's
payment of the COBRA premium required in order to continue coverage for
Executive and his family under the Company's existing benefit
plans. Notwithstanding the foregoing, Executive shall not be
entitled to receive the Insurance Benefits (or a portion thereof) to the
extent that Executive obtains other employment that provides equal or
greater benefits during the Coverage
Period.
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The
Severance Payment, Pro-rated Bonus and Insurance Benefits are collectively
referred to in this Agreement as the "Severance Benefit."
(ii) Termination or Separation
From Service Without Cause. For purposes of this subparagraph
6(d), "Without Cause" shall mean termination of Executive by the Company for
reasons other than: (i) the willful, persistent failure of Executive (after
thirty (30) days written notice and a reasonable opportunity to cure ) to
perform his material duties for reasons other than death or disability; (ii) the
breach by Executive of any material provision of this Agreement; or (iii)
Executive's conviction of a felony involving dishonesty, deceit or moral
turpitude by a trial court of competent jurisdiction, whether or not appeal is
taken.
(iii) Constructive
Termination. For purposes of this subparagraph 6(d)
"Constructive Termination" shall mean: (1) a material, adverse change of
Executive's responsibilities, authority, status, position, offices, titles,
duties or reporting requirements (including directorships); (2) an adverse
change in Executive's annual compensation and benefits; (3) a requirement to
relocate in excess of fifty (50) miles from the Executive's then current place
of employment; or (4) the breach by the Company of any material provision of
this Agreement, other than a breach that is remedied by the Company within 10
days after receipt of notice thereof from Executive. For purposes of
this definition, Executive's responsibilities, authority, status, position,
offices, titles, duties and reporting requirements are to be determined as of
the date of this Agreement.
(iv) Other Severance
Benefits. The Severance Benefit payable to Executive pursuant
to this subparagraph 6(d) shall be reduced by any severance benefits to which
Executive is entitled under the Company's severance policies for terminated
employees generally or any termination payments otherwise payable under this
Agreement.
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(v) Excise
Tax.
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(A)
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Notwithstanding
anything to the contrary set forth in this Agreement, in no event shall a
Severance Benefit payable pursuant to this Paragraph 6(d) exceed an amount
equal to the lesser of (i) 2.99 times the "base amount" (as defined in
Section 280G(b)(3) of the Internal Revenue Code) of Executive's
compensation, or (ii) such other amount which would constitute a
"parachute payment" (as defined in Section 280G of the
Code). In the event that it shall be determined that any
Severance Benefit to Executive (whether paid or payable or distributed or
distributable) would be subject to the excise tax imposed by Section 4999
of the Code, or any successor provision thereto (the "Excise Tax"), then
Executive shall be entitled to receive from the Company an additional
payment (the "Gross-Up Payment”) in an amount such that the net amount of
the Severance Benefit and the Gross-Up Payment retained by the Executive
after calculation and deduction of all Excise Taxes (including any
interest or penalties imposed with respect to such taxes) or the Gross-Up
Payment provided for in this Section, and taking into account any lost or
reduced tax deductions on account of the Gross-Up payment, shall be equal
to the Severance Benefit.
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(B)
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Executive
shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon
as practicable after Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the
date on which Executive gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes, interest and/or
penalties with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of such period that
it desires to contest such claim, Executive
shall:
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(1)
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give
the Company any information reasonably requested by the Company relating
to such claim;
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(2)
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take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the
Company;
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(3)
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cooperate
with the Company in good faith in order to effectively contest such claim;
and
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(4)
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permit
the Company to participate in any proceedings relating to such
claims;
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provided, however, that the
Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify Executive for and hold Executive harmless from, on an after-tax basis,
any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of all related
costs and expenses. Without limiting the foregoing provisions of this
section, the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and xxx for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that if
the Company directs Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to Executive, on an
interest-free basis, and shall indemnify Executive for and hold Executive
harmless from, on an after-tax basis, any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance (including as
a result of any forgiveness by the Company of such advance); provided, further, that any
extension of the statute of limitations relating to the payment of taxes for the
taxable year of Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
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(e)
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Payments to Specified
Employees. Notwithstanding the foregoing
provisions which normally require payment of certain elements of
compensation within a stated period after a Separation From Service, in no
event shall any payment to a Specified Employee of compensation which is
subject to Internal Revenue Code Section 409A be made prior to the date
which is six (6) months and one (1) day after the date of such Separation
From Service. Any amount otherwise required to be paid within
such payment suspension period shall be paid in a lump sum on the date the
suspension period lapses or, if such date is not a regular business day of
the Company, on the first regular business day of the Company which
follows the expiration of the payment suspension
period.
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(f)
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Continuation of
Benefits. Following the termination of Executive’s
employment hereunder, the Executive shall have the right to continue in
the Company’s group health insurance plan or other Company benefit program
as may be required by COBRA or any other federal or state law or
regulation.
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(g)
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Limit on Company
Liability. Except as expressly set forth in this
Paragraph 6, the Company shall have no obligation to Executive under this
Agreement following a termination of Executive's employment with the
Company. Without limiting the generality of the provision of
the foregoing sentence, the Company shall not, following a termination of
Executive's employment with the Company, have any obligation to provide
any further benefit to Executive or make any further contribution for
Executive's benefit except as provided in this paragraph
6.
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7.
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Disclosure of
Confidential Information. The Company has developed
confidential information, strategies and programs, which include customer
lists, prospects, lists, expansion and acquisition plans, market research,
sales systems, marketing programs, computer systems and programs, product
development strategies, manufacturing strategies and techniques, budgets,
pricing strategies, identity and requirements of national accounts,
customer lists, methods of operating, service systems, training programs
and methods, other trade secrets and information about the business in
which the Company is engaged that is not known to the public and gives the
Company an opportunity to obtain an advantage over competitors who do not
know of such information (collectively, "Confidential
Information"). In performing duties for the Company, Executive
regularly will be exposed to and work with Confidential
Information. Executive acknowledges that such Confidential
Information is critical to the Company's success and that the Company has
invested substantial sums of money in developing the Confidential
Information. While Executive is employed by the Company and
after such employment ends for any reason, Executive will never reproduce,
publish, disclose, use, reveal, show or otherwise communicate to any
person or entity any Confidential Information unless specifically directed
by the Company to do so in writing. Executive agrees that
whenever Executive's employment with the Company ends for any reason, all
documents containing or referring to Confidential Information as may be in
Executive's possession or control will be delivered by Executive to the
Company immediately, with no request being
required.
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8.
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Non-Interference with
Personnel Relations. While Executive is employed by the
Company and for twenty-four (24) months after such employment ends for any
reason, Executive acting either directly or indirectly, or through any
other person, firm, or corporation, will not hire contract with or employ
any employee of the Company or induce or attempt to induce or influence
any employee of the Company to terminate employment with the
Company. However, this provision shall not apply to Executive
in the case of the solicitation of his or her immediate family
members.
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9.
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Non-Competition. While
Executive is employed by the Company and for twenty-four (24) months after
such employment ends for any reason, Executive will not, directly or
indirectly, or through any other person, firm or corporation (i) be
employed by, consult for, have any ownership interest in or engage in any
activity on behalf of any competing business, or (ii) call on, solicit or
communicate with any of the Company's customers (whether actual or
potential) for the purpose of selling precision steel balls and rollers
and other related items to such customer other than for the benefit of the
Company. As used in this Agreement, the term "competing
business" means a business that is a manufacturer and supplier of
precision steel balls and rollers to anti-friction bearing manufacturers
(excluding any ball and roller manufacturers who manufacture such products
for use in their business or the business of their affiliates and do not
supply such products to third parties) and the term "customer" means any
customer (whether actual or potential) with whom Executive or any other
employee of the Company had business contact on behalf of the Company
during the eighteen (18) months immediately before Executive's employment
with the Company ended. Notwithstanding the foregoing, this
paragraph shall not be construed to prohibit Executive from owning less
than five percent (5%) of the outstanding securities of a corporation
which is publicly traded on a securities exchange or
over-the-counter.
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10.
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Notification to
Subsequent Employers. Executive grants the Company the
right to notify any future employer or prospective employer of Executive
concerning the existence of and terms of this Agreement and grants the
Company the right to provide a copy of this Agreement to any such
subsequent employer or prospective
employer.
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11.
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Company Proprietary
Rights.
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(a)
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Company to Retain
Rights. Executive agrees that all right, title and
interest of every kind and nature whatsoever in and to copyrights,
patents, ideas, business or strategic plans and concepts, studies,
presentations, creations, inventions, writings, properties, discoveries
and all other intellectual property conceived by Executive during the term
of this Agreement and pertaining to or useful in or to (directly or
indirectly) the activities of the Company (collectively, "Company
Intellectual Property") shall become and remain the exclusive property of
the Company, and Executive shall have no interest
therein.
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(b)
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Further
Assurances. At the request of the Company, Executive
shall, at the Company's expense but without additional consideration,
execute such documents and perform such other acts as the Company may deem
necessary or appropriate to vest in the Company or its designee such title
as Executive may have to all Company Intellectual Property in which
Executive may be able to claim any rights by virtue of his employment
under this Agreement.
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(c)
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Return of
Material. Upon the termination of the Executive's
employment under this Agreement, the Executive will promptly return to the
Company all copies of information protected by Paragraph 11(a) hereof
which are in his possession, custody or control, whether prepared by him
or others, and the Executive agrees that he shall not retain any of
same.
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11
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12.
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Representation and
Warranty of Executive. Executive represents and warrants
to the Company that he is not now under any obligation, of a contractual
nature or otherwise, to any person, partnership, company or corporation
that is inconsistent or in conflict with this Agreement or which would
prevent, limit or impair in any way the performance by him of his
obligations hereunder.
|
|
13.
|
Withholding. Any
provision of this Agreement to the contrary notwithstanding, all payments
made by the Company hereunder to the Executive or his estate or
beneficiaries shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company may reasonably
determine should be withheld pursuant to any applicable law or
regulation. In lieu of withholding such amounts, the Company
may accept other provisions, provided that it has sufficient funds to pay
all taxes required by law to be withheld in respect of any or all such
payments.
|
|
14.
|
Mitigation. The
Company's obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this agreement and
such amounts shall not be reduced whether or not Executive obtains other
employment.
|
|
15.
|
Notices. All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be sufficiently given if and when
mailed in the continental United States by registered or certified mail,
or personally delivered to the party entitled thereto, at the address
stated below or to such changed address as the addressee may have given by
a similar notice:
|
| To the Company: | President | |
| NN, Inc. | ||
| 0000 Xxxxxx Xxxx Xxxxx | ||
| Xxxxxxx Xxxx, XX 00000 | ||
|
To
the Executive:
|
Xxxxxxx
X. Xxxxx
|
|
|
_______________
|
||
|
_______________
|
||
|
16.
|
Successors: Binding
Agreement. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of
the Company, by agreement in the form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of
the Company to obtain such agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement. For
purposes of this Agreement, “Company” shall include any successor to its
business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of
law.
|
12
This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die
while any amount would still be payable to him hereunder if he had continued to
live, all such amounts, except to the extent otherwise provided under this
Agreement, shall be paid in accordance with the terms of this Agreement to his
devisee, legatee or other designee, or if there be no such designee, to the
Executive’s estate.
|
17.
|
Modification, Waiver
or Discharge. No provision of this Agreement may be
modified or discharged unless such modification or discharge is authorized
by the Board of Directors of the Company and is agreed to in writing,
signed by the Executive and by an officer of the Company duly authorized
by the Board. However, the Company may unilaterally revise the
provisions of this Agreement governed by the provisions of Internal
Revenue Code Section 409A in order to make the Agreement compliant
therewith. No waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this Agreement to
be performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the time or at any time or at any
prior or subsequent time.
|
|
18.
|
Entire
Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to its subject matter and
supersedes all prior agreements between the parties hereto with respect to
its subject matter, including, but not limited to, all employment
agreements, change of control agreements, non-competition agreements or
any other agreement related to Executive's employment with the Company;
provided, however, nothing herein shall affect the terms of the
Indemnification Agreement entered into between the Company and Executive
dated May 15, 2006, which shall continue and remain in full force and
effect.
|
|
19.
|
Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State
of Tennessee to the extent federal law does not
apply.
|
|
20.
|
Resolution of
Disputes. Any dispute or claim arising out of or
relating to this Agreement shall be settled by final and binding
arbitration in Johnson City, Tennessee in accordance with the Commercial
Arbitration rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The fees and expenses of the
arbitration panel shall be equally borne by the Company and
Executive. Each party shall be liable for its own costs and
expenses as a result of any dispute related to this
Agreement.
|
|
21.
|
Validity. The
invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of the other provisions of this
Agreement, which latter provisions shall remain in full force and
effect.
|
13
|
22.
|
No Adequate Remedy At
Law; Costs to Prevailing Party. The Company and the
Executive recognize that each party may have no adequate remedy at law for
breach by the other of any of the agreements contained herein, and
particularly a breach of Paragraphs 7, 8, 9, or 11, and, in the event of
any such breach, the Company and the Executive hereby agree and consent
that the other shall be entitled to injunctive relief or other appropriate
remedy to enforce performance of such
agreements.
|
|
23.
|
Non-Assignability. This
Agreement, and the rights and obligations of the parties hereunder, are
personal and neither this Agreement, nor any right, benefit or obligation
of either party hereto, shall be subject to voluntary or involuntary
assignment, alienation or transfer, whether by operation of law
or otherwise, without the prior written consent of the other party;
provided, however, that the Company may assign this Agreement in
connection with a merger or consolidation involving the Company or a sale
of substantially all of its assets to the surviving corporation or
purchaser, as the case may be, so long as such assignee assumes the
Company's obligations hereunder.
|
|
24.
|
Headings. The
section headings contained in this Agreement are for convenience of
reference only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement. Reference to
Paragraphs are to Paragraphs in this
Agreement.
|
|
25.
|
Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but of which together will constitute one and
the same instrument.
|
IN WITNESS WHEREOF, the
Executive and the Company (by action of its duly authorized officers) have
executed this Agreement as of the date first above written.
|
NN,
INC.
|
|||
|
By:
/s/Xxxxxxxx X.
Xxxx
|
|||
| Xxxxxxxx X. Xxxx, Chairman/CEO | |||
|
Attest:
|
|||
|
EXECUTIVE:
|
|||
| /s/Xxxxxxx X. Xxxxx | |||
|
Xxxxxxx X. Xxxxx
|
|||
14
Schedule
A
Executive's Severance Payment shall be
a lump sum payment equal to:
1. 2.0
times Executive's base salary (as of the date of Executive's termination);
plus
2. 1.0
times Executive's median bonus available at the following bonus target
percentage: 40%.
15
