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Exhibit 10.10 - Amendment to Letter Agreement with Xxx X. Parrot
JUNE 23, 2000
Xxx X. Xxxxxxx
Xxxxxxx Industries, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Re: Change in Control Agreement Modification
Dear Xx. Xxxxxxx:
As you are aware, the Board of Directors of Xxxxxxx Industries, Inc. (the
"Company") previously determined that you should be protected in the event of a
Change in Control of the Company, and you received a letter from me dated
September 12, 1989 setting forth the terms of compensation that you would
receive if your employment is terminated pursuant to a Change in Control (the
"Agreement"). Recently, the Board of Directors reviewed the terms of the
Company's Change in Control provisions, which have been in effect for a long
period of time, and concluded that the individual agreements should be updated
to reflect the current economic environment. For purposes of this letter,
"Change in Control" has the same definition as set forth in Section 3 of your
Agreement.
This letter is intended to constitute an amendment to your Agreement and
describes certain changes in the benefits that will be provided to you if your
employment is terminated pursuant to a Change in Control. Unless specifically
addressed in this letter, the terms in your Agreement will remain unchanged.
1. Subsection (iii)(B) of Section 5 - Compensation upon Termination or
During Disability is amended and restated in its entirety to read as
follows:
(iii) (B) You shall be entitled to receive as severance pay
(a) a lump sum payment to be made within 30 days of your Date of
Termination in an amount equal to 36 months of your base monthly
compensation, as in effect on the Date of Termination, plus the
average of the actual short-term incentive bonus payments made to
you during the two years prior to the Date of Termination, divided
by 12 and multiplied by 36, reduced by applicable income and
employment tax withholding requirements; (b) full benefits for up to
36 months under each employee welfare benefit plan in which you were
entitled to participate immediately prior to the Date of
Termination, with the health and dental continuation coverage to run
concurrently with your COBRA rights; (c) vesting credit for up to 36
months under the Company's Supplemental Executive Retirement Plan;
and (d) 100% vesting in all outstanding stock options that were
granted to you prior to the Change in Control under any of the
Company's stock plans.
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2. Subsection (iv) of Section 5 - Compensation upon Termination or
During Disability is amended and restated in its entirety to read as
follows:
(iv) Notwithstanding the foregoing, no benefits shall be
provided under subsection (iii) to the extent that they would (a)
disqualify an employee benefit plan under the Internal Revenue Code
of 1986, as amended (the "Code"); (b) cause an employee benefit plan
to violate the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); or (c) be denied by the insurance carrier that
provides such coverage to the Company. Health and dental benefits
shall cease upon eligibility through another employer's plan.
3. Subsection (v) shall be added to Section 5 - Compensation upon
Termination or During Disability to read as follows:
(v) Payments under this Agreement, when aggregated with any
other "golden parachute" amounts (defined under Section 280G of the
Code as compensation that becomes payable or accelerated due to a
Change in Control) payable under this Agreement or any other plans,
agreements or policies of the Company, shall not be subject to the
golden parachute caps under Sections 280G and 4999 of the Code. To
the extent that the amount of aggregate parachute payments provided
to you by the Company or the Company's employee benefits plans
equals or exceeds the golden parachute cap set forth in Code
Sections 280G and 4999, the Company shall pay you the additional
compensation as is necessary (after taking into account all Federal,
state and local income taxes payable by you as a result of the
receipt of such compensation) to place you in the same after-tax
position as you would have been in had no such excise tax (or any
interest or penalties thereon) been paid or incurred. The Company
shall pay such additional compensation at the time when the Company
withholds such excise tax from any payments to you. The calculation
of the tax gross-up shall be approved by the independent certified
public accounting firm that was used by the Company immediately
prior to the Change in Control.
4. Section 10 - Arbitration is amended and restated in its entirety to
read as follows:
10. Arbitration. Any dispute or controversy arising under or
in connection with this Agreement (except as set forth in Section 11
below), shall be settled exclusively by arbitration in Oakland
County, Michigan in accordance with the American Arbitration
Association's National Rules for the Resolution of Employment
Disputes. The arbitrator shall not have jurisdiction or authority to
change, add to or subtract from any of the provisions of this
Agreement. The parties to this Agreement hereby acknowledge that
with arbitration as the exclusive remedy with respect to any
grievance hereunder (except as set forth in Section 11
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below), neither party has the right to resort to any Federal, state
or local court or administrative agency concerning breaches of this
Agreement (except as set forth in Section 11 below), and that the
decision of the arbitrator shall be a complete defense to any suit,
action or proceeding instituted in any Federal, state or local court
or before any administrative agency with respect to any dispute
which is arbitrable as set forth herein. The decision of the
arbitrator shall be final and enforceable in any court of competent
jurisdiction.
5. Section 11 - Covenant Not to Compete shall be added to the Agreement
to read as follows:
11. Covenant Not to Compete.
(i) During the term of your employment with the Company and
for a period of 36 months after your termination of
employment with the Company for any reason, or for such
shorter period as the Company may agree in writing, you
shall not directly or indirectly engage in any activity,
whether on your own behalf or as an employee, consultant
or independent contractor of any other person or entity
which competes with the Company within North America for
the development, production or sale of any product,
material or process to be sold, produced or used by the
Company during the course of your employment with the
Company, including any product, material or process
which may be under development by the Company during the
course of your employment with the Company and of which
you have, or hereafter may gain, knowledge.
(ii) You agree that the covenant not to compete set forth
above shall not impose undue hardship on you and is
reasonable in both geographic scope and duration in view
of: (a) the Company's legitimate interest in protecting
proprietary information, the disclosure of which to the
Company's competitors would substantially and unfairly
impair the Company's ability to compete in the
marketplace or substantially and unfairly benefit the
Company's competitors; (b) the specialized training and
experience that continues to be provided to you by the
Company in the course of your employment with the
Company; (c) the fact that the services rendered by you
on behalf of the Company are specialized, unique and
extraordinary; (d) the fact that the Company directly
competes within North America in the sale, production
and development of products, materials and
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processes; and (e) the good and valuable consideration
provided to you by the Company.
(iii) During the term of your employment with the Company and
for a period of 36 months after your termination of
employment with the Company for any reason, you shall
not employ, hire, solicit, induce, or attempt to employ,
hire, solicit, or induce for employment, directly or
indirectly any employee(s) of the Company to leave his
or her employment and become an employee, consultant or
representative of any other entity, including but not
limited to you or your new employer, if any.
(iv) The covenant not to compete set forth herein is of a
special, unique, extraordinary and intellectual
character, which gives the Company a peculiar value, the
loss of which cannot be reasonably or adequately
compensated for in damages in an action at law. A breach
by you of the covenant not to compete shall cause the
Company great and irreparable injury and damage.
Therefore, the Company will be entitled to injunctive
relief, specific performance and other equitable relief
to prevent your breach of the covenant not to compete.
This subsection shall not, however, be construed to
constitute a waiver of any of the rights which the
Company may have for damages or otherwise.
(v) This covenant not to compete inures to the benefit of
the Company and any successors and assigns of the
Company.
To confirm your acceptance of the terms of this letter as a valid
modification to your Agreement, kindly sign and return to the Company the
enclosed copy of this letter.
Sincerely,
XXXXXXX INDUSTRIES, INC.
By:
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F. Xxx Xxxxxx, Chair, Compensation Committee
Agreed to this 23rd day of June, 2000
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Xxx X. Xxxxxxx
