Employment Agreement
This agreement ("Agreement") is made and entered into as of the August
10, 1998 (the "Effective Date"), by and among Synthetic Industries, Inc. ("the
Corporation") and Xxxxxxx X. Xxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, both the Corporation and Executive (the "Parties") desire to state
certain terms and conditions of Executive's employment;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Parties agree as follows:
1. Employment.
The Corporation agrees to employ Executive and Executive
agrees to serve the Corporation upon the terms and conditions hereinafter set
forth.
2. Term.
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 third anniversary of the Effective
Date; provided, however, that on the first day of the calendar month next
following the first 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. Executive shall notify the Corporation's Compensation Committee sixty
(60) days prior to the first anniversary of the Effective Date that the
"evergreen" feature of the within Agreement will be in effect on a given date.
3. Duties and Extent of Services: Location of Principal Office.
During the term set forth in Section 2 above, the Corporation
shall employ Executive and Executive shall serve the Corporation as Vice
President Technical Services 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 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx.
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4. Compensation.
(1)......Base Salary. The Corporation shall pay Executive a base salary, payable
in accordance with the Corporation's standard payroll practices, as follows:
$120,900 per annum. Executive's salary may be increased from time to time by the
Board. 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 upon the date such increase commences. (2) Annual
Incentive. During the term set forth in Section 2 above, 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 the Annual Incentive Plan if the
Corporation meets its business plan for the year ("Making Plan"). During the
first year of employment Executive's annual incentive compensation for the
Corporation's Making Plan will be $41,000. To the extent Annual Incentive Plans
for senior executives of the Corporation are modified then Executive's Annual
Incentive Plan shall be modified to correspond with the plans of other senior
executives.
(3) Stock Options. Executive shall be entitled to participate
in stock option plans or their equivalent based upon the Corporation's success
and the Executive's performance, duties, responsibilities and compensation.
(d) Long term incentive compensation. Executive shall be
entitled to participate in all long term incentive compensation programs
established by the Corporation for senior executive employees. Participation in
any such plans shall be determined under the provisions of such plans.
Executive's participation in any such plans shall be commensurate with his
performance, duties, responsibilities and compensation.
5. Benefits.
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 shall be entitled to
vacation benefits enjoyed by other senior executives.
6. Reimbursement for Expenses.
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.
The Corporation shall reimburse reasonable expenses incurred by the Executive to
maintain professional certifications and licenses including mandatory continuing
education courses and required professional memberships.
7. Termination
Executive's employment may be terminated prior to the end
of the term described in Section 2 only as provided in this Section 7.
(a) Termination for Disability. If the Executive becomes
unable to substantially perform his duties due to permanent physical or mental
disability, as determined by a physician agreed upon by the Corporation and the
Executive or Executive's representative, his employment pursuant to this
Agreement shall terminate. In the event 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 at the rate in effect on the date of
termination of employment until the earlier of (A) the date six months following
termination of employment, or (B) the date of commencement of long term
disability payments under the Corporation's long term disability plan as then in
effect.
(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 applicable
stock option agreement.
(iv) Executive shall be entitled to participate in
any and all benefit programs described in Section 5,above, during the period
Executive is continuing to receive salary pursuant to Clause (i), above.
(b) Termination on Executive's Death. In the event of
termination 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 written plan, to the person or persons who have been
designated pursuant to the terms of the plan to receive such payments.
(i) Executive's base salary at the rate in effect
on the date of Executive's death shall be paid for a period of six months. Such
salary may, in the Corporation's discretion, be paid in a lump-sum promptly
following the date of Executive's death.
(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 applicable stock option agreement.
(iv) 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 terminate Executive's employment for "Cause". In the event 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 applicable stock option
agreement.
(iii) Executive's rights to participate in benefit
programs described in Section 5, above, if any, shall be as determined under
such 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.
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.
(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 at
the rate in effect on the date of termination of employment for a period of two
years from 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. In addition, in lieu of future
payments under the Annual Incentive Plan, Executive shall be entitled to a
payment that equals the average of the incentive payments received by Executive
(or fully accrued by him) under the Annual Incentive Plan for the three full
plan years immediately preceding his termination of employment.
(iii) Executive's rights with respect to stock
options, if any, shall be determined under the applicable stock option
agreement.
(1)
(iv) To the extent allowed by applicable law,
Executive shall be entitled
to participate in any and all benefit programs described in Section 5, above,
during the period Executive is continuing to receive salary pursuant to Clause
(i), above, provided that Executive's right to any such benefit shall terminate
on the date Executive becomes entitled to the same or any similar benefit as a
result of Executive's entering into subsequent employment; any other rights in
regard thereto, if any, shall be determined under each of such programs,
respectively. Executive agrees promptly to notify the Corporation of any
subsequent employment which may cause the cessation of benefits under this
Subsection.
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 (c) 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.
(1) Definitions.
(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 securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(C) "Annual Compensation" means the sum of:
(1)
(i) Executive's annual salary at the rate in
effect on the date of a termination of employment (or, in the event of a
termination for Good Reason below, the annual salary as in effect immediately
before the actions giving rise to Good Reason); plus
(ii) the greatest of the incentive payments under
the Annual Incentive Plan either paid or accrued in either the Year of the
Change in Control or the immediately preceding Year.
(D) "Base Amount" means an
amount equal to Executive's Annualized Includable Compensation for the Base
Period as defined in Section 280G(d)(1) and (2) of the Code (as hereinafter
defined).
(E) "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
5(f) 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, L.P., 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 for the election of
directors ("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 time, approved by a vote of at
least a majority of the directors comprising the Incumbent Board shall be
considered as though he were a member of the Incumbent Board; (1)
(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 holds at any
time after such combination, voting stock equal to or greater than thirty-five
percent (35%) 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.
(F) "Code" means the Internal Revenue Code of 1986, including
any amendments thereto.
(G) "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 outside
the same metropolitan area in which Executive was employed at the time of such
Change in Control, or the imposition of any requirement that Executive spend
more than 90 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; (1)
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.
(H) "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.
(I) "Person or Group" means a "person" or "group," as defined
in the definition of "Change in Control" above.
(J) "Year" means a calendar year unless otherwise specifically
provided.
(2) Payments for Termination Following Change in Control. If, following a Change
in Control, Executive's employment with the Corporation is terminated by the
Corporation other than for Cause, or by Executive for Good Reason, then:
(A) Executive shall be entitled to all compensation and
benefits accrued through the date of termination of employment;
(B) Executive shall receive from the Corporation, no less than
ten days following
termination of his employment, a lump sum payment (the "Termination
Payment") equal to two times Executive's Annual Compensation;
(C) Executive shall be entitled to any unpaid amount
previously fully accrued
under the Annual Incentive Plan. In addition, in lieu of future payments under
the Annual Incentive Plan, Executive shall be entitled to a payment that equals
the average of the incentive payments received by Executive (or fully accrued by
him) under the Annual Incentive Plan for the three plan years immediately
preceding his termination of employment.
(D) Executive's rights, if any, to supplemental pension
shall be fully vested; and
(1)
(E) Executive shall continue to be covered at the expense of
the Corporation by
the same or equivalent hospital, medical, dental, accident, disability and life
insurance coverage as in effect for Executive immediately prior to termination
of his employment, until the earlier of (i) 18 months following termination of
employment, or (ii) the date Executive has commenced new employment and has
thereby become eligible for comparable benefits.
(3) Vesting of Options upon Change in Control. In the event of
a Change in
Control, whether or not Executive's employment continues with the Corporation,
all options shall immediately vest on the date of the Change in Control.
(4) Certain Supplemental Payments by the Corporation.
(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 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 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. (1)
(D) Notwithstanding anything herein to the contrary, in the
event that any
payment received or to be received by Executive in connection with a Change in
Control of the Corporation or the termination of Executive's employment (whether
payable pursuant to the terms of this Agreement or any other plan, arrangement
or agreement) (all such payment being referred to in the aggregate as "Total
Payment") would not be deductible (in whole or in part) as a result of Section
280G of the Code, the payments otherwise due to Executive pursuant to Section
7(e)(2) above ("Severance Payments") shall be reduced until no portion of the
Total Payments is not deductible as a result of Section 280G of the Code, or the
Severance Payments are reduced to zero. For purposes of this limitation (i) no
portion of the Total Payments, the receipt or enjoyment of which Executive shall
have effectively waived in writing prior to the date of payment of the Severance
Payments , shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of tax counsel selected by the
Corporation's independent auditors and reasonably acceptable to Executive ("Tax
Counsel"), does not constitute a "parachute payment" within the meaning of
Section 280G (b)(2) of the Code, (iii) the Severance Payments shall be reduced
only to the extent necessary so that the Total Payments (other than those
referred to in clause (i) or (ii)) in their entirety constitute reasonable
compensation for services actually rendered within the meaning of Section 280G
(b)(4) of the Code, in the opinion of Tax Counsel, and (iv) the value of any
non-cash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Corporation's independent auditors in
accordance with the principles of Sections 280G (d)(3) and (4) of the Code.
(5) Expenses and Interest. If, after a Change in Control
of the Corporation, a good faith dispute arises with respect to the
enforcement of the Executive's rights under this Agreement, or if any legal or
arbitration proceeding shall be brought in good faith to enforce or interpret
any provision contained herein, or to recover damages for breach hereof,
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 award obtained by
Executive calculated at the legal rate of interest from the date that payments
to him should have been made under this Agreement.
(f) Voluntary Termination. Executive may terminate his
employment voluntarily at any time. In the event Executive terminates his
employment voluntarily, other than for Good Reason following a Change in Control
as provided in Section 7(e), above, Executive's rights to compensation and
benefits shall be as follows:
(1)
(i) Executive shall be paid salary accrued
through the date of termination of employment.
(ii) Executive's rights to annual incentive
compensation, 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.
(iv) Executive's rights to participate in any
and all benefit programs described in Section 5, above, if any, shall be as
determined under such programs.
8. Payment Obligations Absolute.
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 setoff, 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.
During and following Executive's employment by the
Corporation, Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Corporation, except to the extent authorized by the
Board of Directors of the Corporation or required by any court or administrative
agency, other than to an employee of the Corporation or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of duties as an executive of the Corporation.
Confidential information shall not include any information known generally to
the public or any information of a type not otherwise considered confidential by
persons engaged in the same business or a business similar to that of the
Corporation. All records, files, documents and materials or copies thereof,
relating to the Corporation's business which the Executive shall prepare, or
use, or come into contact with, shall be and remain the sole property of the
Corporation and shall be promptly returned to the Corporation upon termination
of employment with the Corporation.
10. Non-Competition.
(a) To induce the Corporation to enter into this Agreement,
and in consideration thereof, the Executive agrees that, during the term of this
Agreement and for a period of one year after the termination of this Agreement
(the "Restricted Period"), he shall not, directly or indirectly, for his own
account or for the account of others, as an officer, director, stockholder,
owner, partner, employee, promoter, consultant, manager or otherwise,
participate in the promotion, financing, ownership, operation, or management of,
or assist in or carry on through a proprietorship, corporation, partnership or
other form of business entity or otherwise, any business which competes with the
Corporation in any area in which the Corporation is engaged in or is actively
planning to engage in related to the production of polypropylene fabrics and
fibers activities as of the date of such termination.
Nothing in this Section 10 shall prohibit Executive from
acquiring or holding any issue of stock or securities of any person that has any
securities registered under Section 12 of the Exchange Act, listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. so long as (i) Executive is not deemed
to be an "affiliate" of such person as such term is used in paragraphs (c) and
(d) of Rule 145 under the Securities Act of 1933, as amended, and (ii) Executive
and/or members of his immediate family or persons under his control do not own
or hold more than 5% of any voting securities of any such person.
(b) To induce the Corporation to enter into this Agreement,
and in consideration thereof, the Executive agrees that during the Restricted
Period, the Executive shall not, whether for his own account or for the account
of any other person (excluding the Corporation), (a) solicit or contact in an
effort to do business with any person who was a customer of the Corporation
during the term of this Agreement, or any affiliate of any such person, if such
solicitation or contact is in competition with the Corporation, (b) solicit or
induce any of the employees of the Corporation or its affiliates to leave their
employment with the Corporation or such affiliate or accept employment with
anyone else or hire any such employees or (c) interfere in a similar manner with
the business of the Corporation or its affiliates. Nothing herein shall prohibit
or preclude the Executive from performing any other types of services that are
not precluded by Section 10(a) for any other person.
(c) Executive has carefully read and considered the
provisions of this Section 10 and, having done so, agrees that the restrictions
set forth in this Section 10 (including the Restricted Period, scope of activity
to be restrained and the geographical scope) are fair and reasonable and are
reasonably required for the protection of the interests of the Corporation, its
officers, directors, employees, creditors and shareholders. Executive
understands that the restrictions contained in this Section 10 may limit his
ability to engage in a business similar to the Corporation's business, but
acknowledges that he will receive sufficiently high remuneration and other
benefits from the Corporation hereunder to justify such restrictions.
11. Arbitration.
Any controversy or claim arising under, out of or relating to
this Agreement, or the breach thereof, shall be determined and settled by
arbitration at the American Arbitration Association in Chattanooga, Tennessee,
in accordance with the rules of procedure of the Association. Any award rendered
shall be final and binding on the parties hereto, and judgment may be entered in
any court having jurisdiction thereof.
12. 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
satisfied that all requirements of law affecting its responsibilities to
withhold such taxes have been satisfied.
13. 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 in the event of a merger or
consolidation in which the Corporation is not the continuing entity, or the sale
or liquidation of all or substantially all of the assets of the Corporation,
provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Corporation and such assignee or
transferee assumes the liabilities, obligations and duties of the Corporation,
as contained in this Agreement, either contractually or as a matter of law.
14. Entire Agreement.
This Agreement supersedes any prior agreements and, together
with such plans and programs as are specifically referred to herein, contains
the entire agreement between the parties concerning the subject matter hereof.
15. 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.
16. 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.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
To Executive: Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
17. Severability.
In the event that any provision or portion of this Agreement
will be determined to be invalid or unenforceable for any reason the remaining
provisions or portions of this Agreement will be unaffected thereby and will
remain in full force and effect to the fullest extent permitted by law.
18. 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.
19. 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.
20. 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.
21. Applicable Law.
This agreement shall be construed and enforced in accordance with the
laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in Xxxxxxxx County, Tennessee as of the day and year first above
written.
SYNTHETIC INDUSTRIES, INC.
By:
Xxxxxxx Chill
President
EMPLOYEE
---------------------------
Xxxxxxx X. Xxxxxxx
