FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.30
FIRST
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
First Amended and Restated Employment Agreement ("Agreement"), dated
this 1st day of August, 2009, is entered into by and between Alpha
Natural Resources, Inc., a Delaware corporation and the successor to Foundation
Coal Corporation ("Foundation"), on behalf of itself and its subsidiaries and
affiliates (collectively, the "Employer"), and Xxxx X. Xxxx ("Employee") and is
effective as of July 31, 2009 (the "Effective Date").
WITNESSETH:
WHEREAS, on the Effective Date,
original Alpha Natural Resources, Inc. merged with and into Foundation Coal
Holdings, Inc. (the "Merger"), with Foundation Coal Holdings, Inc. as the
surviving corporation, which was renamed "Alpha Natural Resources, Inc."
(including its successors, "Alpha"); and
WHEREAS,
following the Merger, Foundation was an indirect subsidiary of Alpha,
and
WHEREAS,
effective August 1, 2009, Foundation merged with and into Alpha;
and
WHEREAS,
Foundation and Employee had entered into an employment agreement dated as of
January 1, 2009 (the "Prior Agreement"); and
WHEREAS, in accordance with Section
12(b) of the Prior Agreement, Employer and Employee desire to amend and restate
the Prior Agreement, as clarified in Annex A to this
Agreement, which is attached hereto and expressly agreed to by Employee by his
execution of this Agreement; and
WHEREAS,
Employee acknowledges that Employee's continued employment with Employer and the
other terms and conditions contained herein serve as sufficient consideration
for Employee's obligations, including post-employment obligations, contained
herein.
NOW,
THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, Employer and Employee agree as
follows:
ARTICLE
1: EMPLOYMENT
AND DUTIES:
1.1 Employer
agrees to employ Employee, and Employee agrees to be employed by Employer,
beginning as of the Effective Date and continuing through December 31, 2010 (the
"Term"), subject to the terms and conditions of this Agreement. The
Term shall be automatically extended for successive 12 month periods unless
either party provides written notice to the other at least 90 days prior to the
end of the then current Term of such party's election not to extend the
Term.
1.2 Beginning
as of the Effective Date, Employee shall be President of Alpha, or
serve in a more senior capacity. Employee shall report to the Chief
Executive Officer of Alpha (the "CEO"). Employee shall serve in the assigned
positions or in such other executive capacities as may be agreed to, from time
to time, between Employee and the CEO, Employer, and/or Alpha's Board of
Directors (the "Board of Directors"). Employee agrees to perform
diligently and to the best of Employee's abilities, and in a trustworthy,
businesslike and efficient manner, the duties and services pertaining to such
positions as reasonably determined by the CEO, Employer and the Board of
Directors, as well as such additional or different duties and services
appropriate to such positions which Employee from time to time may be reasonably
directed to perform by the CEO, the Board of Directors and/or
Employer.
1.3 Employee
shall at all times comply with, and be subject to, such policies and procedures
as Employer may establish from time to time, including, without limitation,
Alpha's Code of Business Ethics (the "Code of Ethics").
1.4 Except
as expressly approved by the Board of Directors, Employee shall, during the
period of Employee's employment by Employer, devote Employee's full business
time, energy, and best efforts to the business and affairs of
Employer. Employee may not engage, directly or indirectly, in any
other business, investment, or activity that interferes with Employee's
performance of Employee's duties hereunder, is contrary to the interest of
Employer or requires any significant portion of Employee's business
time. The foregoing notwithstanding, the parties recognize and agree
that Employee may engage in passive personal investments and other business
activities which do not conflict with the business and affairs of the Employer
or interfere with Employee's performance of his duties
hereunder. Employee may not serve on the board of directors of any
entity (other than for Employer, related industry trade association, public
institution, government appointed public or quasi-public body, or not-for-profit
charitable organization so long as such activities do not interfere with
Employee’s performance of his duties hereunder) during the Term without prior
approval, which will not be unreasonably withheld, by the Board of Directors.
Employee shall be permitted to retain any compensation received for approved
service on any unaffiliated corporation's board of directors.
1.5 Employee
acknowledges and agrees that Employee owes a fiduciary duty of loyalty,
fidelity, and allegiance to act at all times in the best interests of the
Employer and to do no act which would, directly or indirectly, injure any such
entity's business, interests, or reputation. It is agreed that any
direct or indirect interest in, connection with, or benefit from any outside
activities, particularly commercial activities, which interest might in any way
adversely affect Employer, involves a possible conflict of
interest. In keeping with Employee's fiduciary duties to Employer,
Employee agrees that Employee shall not knowingly become involved in a conflict
of interest with Employer or upon discovery thereof, allow such a conflict to
continue. Moreover, Employee shall not engage in any activity that
might involve a possible conflict of interest without first obtaining approval
in accordance with Employer's policies and procedures.
1.6 Employee's
employment may be assigned to, and assumed by, without Employee’s consent, to
another affiliate or subsidiary of Employer ("Subsequent Employer") as of, or at
any time after, the Effective Date and no such assignment or assumption shall be
deemed to be a termination of employment for purposes of Article 3 hereof;
provided, however, that, effective with such assignment, all of Employer's
obligations hereunder shall be assumed by and be binding upon, and all of
Employer's rights hereunder shall be assigned to, such Subsequent Employer and
the defined term "Employer" as used herein and any other terms referring and/or
relating to Employer shall thereafter be deemed amended to mean and refer to
such Subsequent Employer. Except as otherwise provided above, all of
the terms and conditions of this Agreement, including without limitation,
Employee's rights, compensation, benefits and obligations, shall remain in all
material respects and taken as a whole, no less favorable to Employee following
such assignment of employment.
ARTICLE
2: COMPENSATION AND
BENEFITS:
2.1 Employee's
base salary during the Term shall be $565,000 (Five Hundred Sixty-Five Thousand
Dollars) per annum
which shall be paid in accordance with the Employer's standard payroll
practice. Employee's base salary shall be reviewed annually by the
CEO and the Compensation Committee of the Board of
Directors (the "Compensation Committee") or the Board of Directors and may be increased, in
the Compensation Committee's or Board of Directors' sole discretion, from time
to time. Such increased base salary shall become the minimum base
salary under this Agreement and may not be decreased thereafter without the
written consent of Employee unless otherwise permitted by this
Agreement.
2.2 During
the Term, Employee shall participate in a bonus plan pursuant to which an annual
bonus, if earned, shall be paid to Employee in an amount to be determined by the
Compensation Committee or the Board of Directors, which annual bonus opportunity
shall have a threshold opportunity of 45% of Employee's then
current Base Salary, a target opportunity of 90% of Employee's then current base
salary (the "Target Bonus"), with a maximum bonus opportunity of 180% of Employee's then
current base salary. Payment of the bonus, if any, shall be made at
the same time as bonuses are paid to other senior executive officers in
accordance with the applicable plan terms and shall be based on parameters,
including, without limitation, performance goals applicable to Employee, and
such parameters shall be approved by the Compensation Committee or Board of
Directors.
2.3 During
the Term, Employee shall participate in Alpha's long-term incentive plans,
including its equity incentive plans, on the terms established from time to time
by the Compensation Committee or the Board of Directors.
2.4 During
the Term, in the event of a Change in Control (as defined below), Employee shall
be entitled to receive a lump sum cash payment equal to a pro rata Target Bonus
for the year in which the Change in Control occurs, which shall be based on the
portion of such year that Employee was employed by Employer prior to the
effective date of the Change in Control. Such payment, if any, shall be made no
later than 60 days after the effective date of the Change in
Control.
2.5 The
Employee shall be entitled to at least four (4) weeks paid vacation in each
calendar year, or such greater amount of vacation as may be determined in
accordance with Employer's vacation policy as in effect from time to
time. The Employee shall also be entitled to all paid holidays given
by Employer to its executives.
2.6 During
the Term, Employer shall pay or reimburse Employee for all actual, reasonable
and customary expenses incurred by Employee in the course of his employment;
provided that such expenses are incurred and accounted for in accordance with
Employer's applicable policies and procedures.
2.7 While
employed by Employer, Employee shall be allowed to participate, on the same
basis generally as other employees of Employer, in all general employee benefit
plans and programs, including improvements or modifications of the same, which
on the Effective Date or thereafter are made available by Employer to all or
substantially all of Employer's similarly situated employees. Such
benefits, plans, and programs may include, without limitation, medical, health,
and dental care, life insurance, disability protection, qualified and
non-qualified retirement plans, retiree medical plans and stock option and stock
grant programs, if any. Except as specifically provided in this
Agreement, nothing in this Agreement is to be construed or interpreted to
increase or alter in any way the rights, participation, coverage, or benefits
under such benefit plans or programs than provided to similarly situated
employees pursuant to the terms and conditions of such benefit plans and
programs.
2.8 Notwithstanding
anything to the contrary in this Agreement, it is specifically understood and
agreed that Employer shall not be obligated to institute, maintain, or refrain
from changing, amending, or discontinuing any incentive, employee benefit or
stock or stock option program or plan, so long as such actions are similarly
applicable to covered employees generally.
2.9 Employer
shall withhold from any compensation, benefits, or amounts payable under this
Agreement all federal, state, city, or other taxes as may be required pursuant
to any law or governmental regulation or ruling.
ARTICLE
3: TERMINATION
OF EMPLOYMENT AND EFFECTS OF SUCH TERMINATION
3.1 Employee's
employment with Employer shall be terminated prior to the end of the Term: (i)
upon the death of Employee, (ii) upon Employee's Retirement (as defined below),
(iii) upon Employee's Permanent Disability (as defined below), (iv) at any time
by Employer upon written notice to Employee, or (v) by Employee upon 90 days
prior written notice to Employer.
3.2 If
Employee's employment is terminated by reason of any of the following
circumstances (i), (ii), (iii), or (iv), Employee shall be entitled to receive
only the benefits set forth in Section 3.3 below:
(i) Termination due to
Employee's Retirement. "Retirement" shall mean Employee's
retirement at or after normal retirement age (either voluntarily or pursuant to
Employer's retirement policy).
(ii) Termination by Employer for
Employer Cause. Termination of Employee's employment for
"Employer Cause" shall mean termination of Employee's employment by Employer for
any of the following: (a) Employee's gross negligence or willful
misconduct in the performance of the duties and services required of Employee
pursuant to this Agreement, (b) Employee's final conviction of, or plea of
guilty or nolo contendere to, a felony or Employee engaging in fraudulent or
criminal activity relating to the scope of Employee's employment (whether or not
prosecuted), (c) a material violation of Alpha's Code of Ethics,
(d) Employee's material breach of any material provision of this Agreement,
provided that Employee has received written notice from the Employer and been
afforded a reasonable opportunity (not to exceed 30 days) to cure such breach,
(e) any continuing or repeated failure to perform the duties as requested
in writing by the Employee's supervisor(s) or the Board of Directors after
Employee has been afforded a reasonable opportunity (not to exceed 30 days) to
cure such breach, (f) the conviction of a felony or crime involving moral
turpitude, or (g) conduct which brings Employer into public disgrace or
disrepute in any material respect. Determination as to whether or not
Employer Cause exists for termination of Employee's employment will be made by
the Board of Directors.
(iii) Termination by Employee by
Resignation (Other Than for Good Reason). Employee's
resignation, other than for Good Reason (as defined below), shall mean
termination of Employee's employment by Employee's resignation of employment
with Employer, but not including any
termination of employment by Employee for Good Reason as described in Section
3.4(i) or a Termination In Connection With A Change in Control (as defined
below) by Employee described in Section 3.7.
(iv) Election Not to Renew by
Employee. Employee elects not to renew the Term pursuant to
Section 1.1 of this Agreement.
3.3 If
Employee's employment is terminated by reason of Section 3.2(i), (ii), (iii), or
(iv), Employee shall be entitled to each of the following:
(i) Employee
shall be entitled to: (a) any base salary earned, accrued or owing to Employee
through the effective date of termination of employment, (b) reimbursement for
all reasonable and customary expenses incurred by Employee in performing
services for the Employer prior to the effective date of termination of
employment, (c) payment equal to the amount of any accrued, but unused, vacation
time, and (d) any individual annual cash incentive bonuses or individual annual
cash incentive compensation not yet paid, but due and payable under Employer's
plans for years prior to the year of Employee's termination of employment;
provided that, Employee shall not be entitled to: (1) any bonus or incentive
compensation for the year in which he terminates employment unless specifically
granted by the Compensation Committee or Board of Directors, or (2) any other
payments or benefits by or on behalf of Employer except for those which may be
payable pursuant to the terms of Employer's employee benefit plans, stock,
option, or other equity plans or the applicable agreements underlying such
plans. All payments shall be paid no later than 60 days after the
effective date of termination of employment, provided, however,
that all payments under clause (d) shall be paid no later than the
time that such amounts are paid to similarly situated employees in accordance
with the applicable plan terms.
(ii) Except
for (i) above, it is specifically understood that all future compensation to
which Employee is entitled and all future benefits for which Employee is
eligible, shall cease and terminate as of the effective date of termination of
employment except, if applicable, retiree medical benefits under the Alpha
Natural Resources, LLC and Subsidiaries Retiree Medical Benefit Plan (including
any successors thereto, the "Retiree Medical Benefit Plan").
3.4 If
Employee's employment is terminated by reason of (i), (ii), (iii), or (iv)
below, and, in the case of (i) and (ii), other than a Termination In Connection
With A Change in Control, as otherwise provided in Section 3.7, Employee shall
be entitled to receive the benefits set forth in Section 3.5 or Section 3.6, as
applicable.
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(i)
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Termination by
Employee for Good Reason (Other Than A Termination In Connection With A
Change in Control). "Good Reason" shall mean a
termination of Employee's employment by Employee with the Employer as a
result of the occurrence, without Employee's written consent, of one of
the following events: (a) a material reduction in Employee's
(1) annual base salary or (2) Target Bonus opportunity (unless such
reduction in (1) and/or (2) relates to an across-the-board reduction
similarly affecting Employee and all or substantially all other executives
of Employer); (b) a failure to provide Employee with the opportunity to
materially participate in any material equity-based plans of Employer on a
similar basis to those of other similarly situated executives of Employer;
(c) Employer makes or causes to be made a material adverse change in
Employee's position, authority, duties or responsibilities which results
in a significant diminution in Employee's position, authority, duties or
responsibilities, including, without limitation, Employee being required
to report to any person other than the CEO, except in connection with a
termination of Employee's employment with Employer for Permanent
Disability, Employer Cause, death, or temporarily as a result of
Employee's incapacity or other absence for an extended period; (d) a
relocation of Employer's principal place of business, or of Employee's own
office as assigned to Employee by Employer, to a location that increases
Employee's normal work commute by more than 50 miles, other than a
relocation of Employee's own office assigned to him by Employer to
Abingdon, Virginia; or (e) Employer or the Board of Directors engages in
any illegal activity or material violation of
governmental laws, rules or regulations in connection with the Employer;
provided, that such illegal activity or material violation has a material
adverse effect on Employer, taken as a whole, thereby causing a material
adverse change in the conditions under which Employee services are to be
performed. In order for Employee to terminate for Good Reason,
(a) Employer must be notified by Employee in writing within 90 days of the
event constituting Good Reason, (b) the event must remain uncorrected by
Employer for 30 days following such notice (the "Notice Period"), and (c)
such termination must occur within 60 days after the expiration of the
Notice Period.
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(ii)
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Employer Termination
Without Employer Cause (Other Than A Termination In Connection With A
Change in Control). Termination of Employee's employment
by Employer for any reason other than for Employer Cause including,
without limitation, termination due to Employer's election not to renew
the Term pursuant to Section 1.1, but not including a
Termination In Connection With A Change in Control by Employer described
in Section 3.7.
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(iii)
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Death. Termination
due to the death of Employee.
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(iv)
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Termination due to
Employee's Permanent Disability. "Permanent Disability"
shall mean Employee's physical or mental incapacity to perform his usual
duties with such condition likely to remain continuously and permanently
as determined by Employer.
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3.5 Subject
to the provisions of Section 3.7, Section 3.8, and Section 3.9, if Employee's
employment is terminated by Employee under Section 3.4(i) or by Employer under
Section 3.4(ii), Employee shall be entitled to each of the
following:
(i) Employer
shall pay to Employee an amount equal to the sum of: (a) two (2)
times Employee's base salary in effect as of the effective date of termination
of employment plus (b) two (2) times Employee's Target
Bonus for the year in which the effective date of termination of employment
occurs. Except as otherwise provided herein, such compensation shall
be paid to Employee in accordance with the following payment schedule: (a) an
amount equal to the maximum amount eligible to be paid under Treas. Reg.
Sec.1.409A-1(b)(9)(iii) shall be paid to Employee no later than 60 days after
the effective date of termination of employment; and (b) the remaining balance
of such compensation shall be paid to Employee in equal installments in
accordance with Employer's customary payroll practices commencing the first pay
period after the Six Month Payment Date and ending on the earlier to occur of
(1) the 12-month anniversary of the effective date of such termination of
employment, or (2) the date Employee violates any of the covenants set forth in
Article 4 or Article 5 hereof.
(ii) Employee
shall be entitled to a pro rata share of any individual annual cash incentive
bonuses or individual annual cash incentive compensation under Employer's plans
for the year of Employee's termination of employment based on the portion of
such year that Employee was employed by Employer; provided, however, that the
payment of individual annual cash incentive bonuses or individual annual cash
incentive compensation will continue to be subject to the attainment of
performance goals as specified in the applicable plan which amounts, if any,
would be paid no later than the time such amounts are paid to similarly situated
employees in accordance with the applicable plan's terms.
(iii) Employee
shall be entitled to: (a) any base salary earned, accrued or owing to him under
this Agreement through the effective date of termination of employment, (b) any
individual annual cash incentive bonuses or individual annual cash incentive
compensation not yet paid, but due and payable under Employer's plans for years
prior to the year of Employee's termination of employment, (c) reimbursement for
all reasonable and customary expenses incurred by Employee in performing
services for the Employer prior to the effective date of termination of
employment and (d) payment equal to the amount of accrued, but unused, vacation
time. All payments shall be paid no later than 60 days after the
effective date of termination of employment; provided, however, that all
payments under clause (b) of this Section 3.5(iii) shall be paid no later than
the time that such amounts are paid to similarly situated employees in
accordance with the applicable plan terms.
(iv) To
the extent permitted by applicable law and the insurance and benefits policies
to which Employee is entitled to participate (collectively, "Benefit Plans"),
Employer shall maintain Employee's paid coverage for health and dental insurance
(through the payment of Employee's COBRA premiums) and life insurance benefits
(through the reimbursement of Employee's premiums upon conversion to individual
policy) for the earliest to occur of: (a) Employee obtaining the age of 65,
(b) the date Employee is provided by another employer benefits substantially
comparable to the benefits provided by the above-referenced Benefit Plans (which
Employee must provide prompt notice with respect thereto to the Employer), or
(c) the expiration of the COBRA Continuation Period (as defined
below). During the applicable period of coverage described in the
foregoing sentence, Employee shall be entitled to benefits, on substantially the
same basis as would have otherwise been provided had Employee not been
terminated and Employer will have no obligation to pay any benefits to, or
premiums on behalf of, Employee after such period ends. To the extent
that such benefits are available under the above-referenced Benefit Plans and
Employee had such coverage immediately prior to termination of employment, such
continuation of benefits for Employee shall also cover Employee's dependents for
so long as Employee is receiving benefits under this paragraph
(iv). The COBRA Continuation Period for medical and dental insurance
under this paragraph (iv) shall be deemed to run concurrent with the
continuation period federally mandated by COBRA (generally 18 months), or any
other legally mandated and applicable federal, state, or local coverage period
for benefits provided to terminated employees under the health care
plan. For purposes of this Agreement, (a) "COBRA" means the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and (b)
"COBRA Continuation Period" shall mean the continuation period for medical and
dental insurance to be provided under the terms of this Agreement which shall
commence on the first day of the calendar month following the month in which the
date of termination falls and generally shall continue for an 18 month
period. Employee shall be entitled to reimbursement of life insurance
premiums as provided in this Section 3.5(iv) to the extent such expense is
actually incurred for such calendar year and reasonably
substantiated. Any such reimbursement shall be made no later than the
end of the calendar year following the calendar year in which such expense is
incurred by Employee; provided, however, that any life insurance premiums
incurred prior to the Six Month Payment Date shall not be reimbursed prior to
such Six Month Payment Date. Notwithstanding the foregoing, no reimbursement
provided for any expense incurred in one taxable year will affect the amount
available in another taxable year, and the right to this reimbursement is not
subject to liquidation or exchange for another benefit.
3.6 If
Employee's employment is terminated by reason of Section 3.4(iii) or (iv),
Employee's estate, in the case of death, or Employee (or his legal guardian), in
the case of Permanent Disability, shall be entitled to payment of: (a) any base
salary earned, accrued or owing to Employee's estate or Employee (or his legal
guardian), as applicable, through the effective date of termination of
employment, (b) any individual annual cash incentive bonuses or individual
annual cash incentive compensation not yet paid but due and payable under
Employer's plans for years prior to the year of Employee's termination of
employment, (c) a pro rata share of any individual annual cash incentive bonuses
or individual annual cash incentive compensation, based on the target levels set
for such bonuses, under Employer's plans for the year of Employee's termination
of employment based on the portion of such year that Employee was employed by
Employer, (d) all reasonable and customary expenses incurred by Employee in
performing services for the Employer prior to the effective date of termination
of employment, and (e) the amount of accrued, but unused, vacation time,
and (g) participation in the Retiree Medical Benefit Plan, if applicable, and in
the event of Employee's death, Employee's spouse shall be entitled to any
benefits which he is eligible to receive under such plan. All
payments shall be paid no later than 60 days after the effective date of
termination of employment; provided, however, that all payments under clause (b)
shall be paid no later than the time that such amounts are paid to similarly
situated employees in accordance with the applicable plan terms.
3.7 Involuntary Termination In
Connection with a Change in Control. In the event the
Employee's employment is terminated during the 90-day period immediately
preceding a Change in Control, or on or within the one-year period immediately
following a Change in Control (a "Termination In Connection With A Change In
Control") by: (i) the Employee for Good Reason or (ii) the Employer other than
(a) for Employer Cause, (b) due to the Employee's death or (c) due to Permanent
Disability, the Employee shall be entitled to receive the benefits set forth in
Section 3.8. For purposes of this Agreement, "Change in Control"
shall mean the occurrence of any of the following after the date of this
Agreement: (a) any merger, consolidation or business combination in which the
stockholders of Alpha immediately prior to the merger, consolidation or business
combination do not own at least a majority of the outstanding equity interests
of the surviving parent entity, (b) the sale of all or substantially all of
Alpha's assets in a single transaction or a series of related transactions, (c)
the acquisition of beneficial ownership or control of (including, without
limitation, power to vote) a majority of the outstanding common stock of Alpha
by any person or entity (including a "group" as defined by or under Section
13(d)(3) of the Securities Exchange Act of 1934, as amended), (d) the
stockholders of Alpha approve any plan for the dissolution or liquidation of
Alpha, or (e) a contested election of directors, as a result of which or in
connection with which the persons who were directors of Alpha before such
election or their nominees cease to constitute a majority of Alpha's Board of
Directors.
3.8 Subject
to the provisions of Section 3.9, if Employee's employment is terminated
pursuant to Section 3.7, Employee shall be entitled to each of the
following:
(i) Employer
shall pay to Employee a lump sum cash payment equal to (a) two and one-half (2
1/2) times Employee's base salary in effect as of the effective date of
termination, plus (b) two and one-half (2 1/2) times Employee's Target
Bonus for the year in which the effective date of the termination
occurs. Except as otherwise provided herein, such compensation shall
be paid to Employee in accordance with the following payment schedule: (a) an
amount equal to the maximum amount eligible to be paid under Treas. Reg.
Sec.1.409A-1(b)(9)(iii) shall be paid to Employee no later than 60 days after
the effective date of termination of employment; and (b) the remaining balance
of such compensation shall be paid to Employee in equal installments in
accordance with Employer's customary payroll practices commencing the first pay
period after the Six Month Payment Date and ending on the earlier to occur of
(1) the 12-month anniversary of the effective date of such termination of
employment, or (2) the date Employee violates any of the covenants set
forth in Article 4 or Article 5 hereof.
(ii) Employee
shall be entitled to a pro rata share of any individual annual cash incentive
bonuses or individual annual cash incentive compensation, based on the target
levels set for such bonuses, under Employer's plans for the year of Employee's
termination of employment based on the portion of such year that Employee was
employed by Employer. Payment shall be made, in lump sum, no later
than 60 days after effective date of termination of employment.
(iii) Employee
shall be entitled to: (a) any base salary earned, accrued or owing to him under
this Agreement through the effective date of termination of employment,
(b) any individual annual cash bonuses or individual annual cash incentive
compensation not yet paid, but due and payable under Employer's plans for years
prior to the year of Employee's termination of employment, (c) reimbursement for
all reasonable and customary expenses incurred by Employee in performing
services for the Employer prior to the effective date of termination of
employment, and (d)
payment equal to the amount of accrued, but unused, vacation
time. All payments shall be paid no later than 60 days after the
effective date of termination of employment; provided, however, that all
payments under clause (b) shall be paid no later than the time that such
amounts are paid to similarly situated employees in accordance with the
applicable plan terms.
(iv) To
the extent permitted by applicable law and the Benefit Plans, Employer shall
maintain Employee's paid coverage for health insurance (through the payment of
Employee's COBRA premiums) and other dental and life insurance benefits (through
the reimbursement of Employee's premiums upon conversion to individual policy)
until the earlier to occur of: (a) Employee obtaining the age of 65, (b) the
date Employee is provided by another employer benefits substantially comparable
to the benefits provided by the above-referenced Benefit Plans (which Employee
must provide prompt notice with respect thereto to the Employer), or (c) the
expiration of the COBRA Continuation Period. During the applicable
period of coverage described in the foregoing sentence, Employee shall be
entitled to benefits on substantially the same basis as would have otherwise
been provided had Employee not been terminated and Employer will have no
obligation to pay any benefits to, or premiums on behalf of, Employee after such
period ends. To the extent that such benefits are available under the
above-referenced Benefit Plans and Employee had such coverage immediately prior
to termination of employment, such continuation of benefits for Employee shall
also cover Employee's dependents for so long as Employee is receiving benefits
under this paragraph (iv). The COBRA Continuation Period for medical
and dental insurance under this paragraph (iv) shall be deemed to run concurrent
with the continuation period federally mandated by COBRA (generally 18 months),
or any other legally mandated and applicable federal, state, or local coverage
period for benefits provided to terminated employees under the health care plan.
Employee shall be entitled to reimbursement of life insurance premiums as
provided in this Section 3.8(iv) to the extent such expense is actually incurred
for such calendar year and reasonably substantiated. Any such
reimbursement shall be made no later than the end of the calendar year following
the calendar year in which such expense is incurred by Employee; provided,
however, that any life insurance premiums incurred prior to the Six Month
Payment Date shall not be reimbursed prior to such Six Month Payment Date.
Notwithstanding the foregoing, no reimbursement provided for any expense
incurred in one taxable year will affect the amount available in another taxable
year, and the right to this reimbursement is not subject to liquidation or
exchange for another benefit.
(v) If
applicable, Employer shall pay to Employee a lump sum cash payment equal to the
difference between the present value of the Employee's accrued pension benefits
on the effective date of Employee's termination under any qualified defined
benefit plan and (if eligible) supplemental retirement plan (together, the
"pension plans") sponsored by Employer and the present value of the accrued
pension benefits to which the Employee would have been entitled under the
pension plans if Employee had continued participation in those plans for the
24-month period after the effective date of Employee's termination. Such amount
shall be determined based on an average of the amount contributed by Employee in
the two (2) years prior to the effective date of Employee's termination. Payment
shall be made, in lump sum, no later than 60 days after the effective date of
termination of employment.
(vi) Employer
shall pay to Employee a lump sum cash payment of $15,000 in order to cover the
cost of outplacement assistance services for Employee and other expenses
associated with seeking another employment position. Payment shall me made, in
lump sum, no later than 60 days after the effective date of termination of
employment.
3.9 The
severance benefit paid and provided to Employee pursuant to Section 3.3,
Section 3.5, 3.8 and/or Section 3.10 shall be in consideration of
Employee's continuing obligations hereunder after such termination of
employment, including, without limitation, Employee's obligations under Article
4 and Article 5. Further, as a condition to the receipt of such
severance benefit, Employer shall require Employee to first execute a release,
in substantially the form attached hereto as Annex B, releasing
Employer and Releasees (as defined in Annex B), from any and all claims and from
any and all causes of action of any kind or character, including, but not
limited to, all claims and causes of action arising out of Employee's employment
with Employer or the termination of such employment. Unless otherwise
required by applicable law, the release must be executed by the Employee within
thirty (30) days of the date of termination of employment. If the
Employee fails or otherwise refuses to execute a release within the time
specified herein, or revokes the release, the Employee will not be entitled to
any such severance benefits and the Employer shall have no further obligations
with respect to the payment of the severance benefits. The
performance of Employer's obligations under Section 3.3, Section 3.5,
Section 3.8 and/or Section 3.10 and the receipt of the severance benefit
provided thereunder by Employee shall constitute full settlement of all such
claims and causes of action. Employee shall not be under any duty or obligation
to seek or accept other employment following a termination of employment
pursuant to which a severance benefit payment or benefit under Section 3.3,
Section 3.5, Section 3.8 and/or Section 3.10 is owing and the amounts and
benefits due Employee pursuant to Section 3.3, Section 3.5, Section 3.8 and/or
Section 3.10 shall not be reduced or suspended, except as otherwise provided, if
Employee accepts subsequent employment or earns any amounts as a self-employed
individual, provided, however that in the event Employee breaches any of
Employee's obligations under Articles 4 or 5 of this Agreement, then, in
addition to Employer's right to specific performance pursuant to Section 5.5 or
any other rights that Employer may have under this Agreement or otherwise,
Employer shall have the right to terminate payment of any amounts or benefits to
which Employee would otherwise be entitled pursuant to this Article 3 and
recover amounts paid. Employee's rights under Section 3.3, Section
3.5, Section 3.8 and/or Section 3.10 are Employee's sole and exclusive rights
against the Employer and the Employer's sole and exclusive liability to Employee
under this Agreement, whether such claim is based in contract, tort or
otherwise, for the termination of his employment relationship with Employer.
Employee agrees that all disputes relating to Employee's employment or
termination of employment shall be resolved through the dispute resolution
procedures provided in Section 7.7 hereof; provided, however, that decisions as
to whether there is "Employer Cause" for termination of the employment
relationship with Employee and whether and as of what date Employee has become
Permanently Disabled shall be limited to whether such decision was reached in
good faith. Nothing contained in this Article 3 shall be construed to
be a waiver by Employee of any benefits accrued for or due Employee under any
employee benefit plan (as such term is defined in the Employees' Retirement
Income Security Act of 1974, as amended) maintained by Employer except that
Employee shall not be entitled to any severance benefits pursuant to any
severance plan or program of the Employer except as outlined in this
Agreement.
3.10 Vesting of
Equity. With respect to any equity awards or grants made by
Employer on or after the Effective Date and notwithstanding any provision to the
contrary in any applicable plan, program or agreement, upon a termination of
Employee's employment with Employer pursuant to any of the subparagraphs of
Section 3.4 or Section 3.7, all stock options, restricted stock and other equity
rights held by the Employee will become fully vested and/or exercisable, as the
case may be, on the date on which such termination of employment occurs, and all
stock options held by the Employee shall remain exercisable until the earlier to
occur of: (i) the expiration date of the applicable option term or (ii) the two
(2) year anniversary of Employee's termination date; provided, however, that the
payment of performance-based awards will continue to be subject to the
attainment of the performance goals as specified in the applicable plan or award
agreement.
3.11 Termination
of the employment relationship does not terminate those obligations imposed by
this Agreement, which are continuing obligations, including, without limitation,
Employee's obligations under Article 4 and Article 5.
3.12 The
payment of any monies to Employee under this Agreement after the date of
termination of employment does not constitute an offer or a continuation of
employment of the Employee. In no event shall Employee represent or
hold himself out to be an employee of Employer after the effective date of
termination of employment. Except where Employer is lawfully required
to withhold any federal, state, or local taxes, Employee shall be responsible
for any and all federal, state, or local taxes that arise out of any payments to
Employee hereunder.
3.13 During
any period during which any monies are being paid to Employee under this
Agreement after the effective date of termination of employment, Employee shall
provide to Employer reasonable levels of assistance in answering questions
concerning the business of Employer, transition of responsibility, or
litigation, provided that all out of pocket expenses of Employee reasonably
incurred in connection with such assistance are fully and promptly reimbursed
and that any such assistance after the Non-Compete Period (as defined below)
shall not interfere or conflict with the obligations which Employee may owe to
any other employer, and shall always be less than 8 hours per week.
ARTICLE
4: OWNERSHIP
AND PROTECTION OF INTELLECTUAL PROPERTY AND CONFIDENTIAL
INFORMATION:
4.1 All
information, ideas, concepts, improvements, innovations, developments, methods,
processes, designs, analyses, drawings, reports, discoveries, and inventions,
whether patentable or not or reduced to practice, which are conceived, made,
developed or acquired by Employee, individually or in conjunction with others,
during Employee's employment by Employer, both before and after the date hereof
(whether during business hours or otherwise and whether on Employer's premises
or otherwise) which relate to the business, products or services of Employer
(including, without limitation, all such information relating to corporate
opportunities, research, financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition prospects, the identity of
customers or their requirements, the identity of key contacts within the
customer's organizations or within the organization of acquisition prospects, or
marketing and merchandising techniques, prospective names, marks, and any
copyrightable work, trade xxxx, trade secret or other intellectual property
rights (whether or not composing confidential information, and all writings or
materials of any type embodying any of such items (collectively, "Work
Product"), shall be the sole and exclusive property of Employer and shall be
treated as "work for hire." It is recognized that Employee is an
experienced executive in the business of the Employer and through several
decades of prior work in the industry acquired and retains knowledge, contacts,
and information which are not bound by this Article 4.
4.2 Employee
shall promptly and fully disclose all Work Product to Employer and shall
cooperate and perform all actions reasonably requested by Employer (whether
during or after the Term of employment) to establish, confirm and protect
Employer's right, title and interest in such Work Product. Without
limiting the generality of the foregoing, Employee agrees to assist Employer, at
Employer's expense, to secure Employer's rights in the Work Product
in any and all countries, including the execution by Employee of all
applications and all other instruments and documents which Employer shall deem
necessary in order to apply for and obtain rights in such Work Product and in
order to assign and convey to Employer the sole and exclusive right, title and
interest in and to such Work Product. If Employer is unable because
of Employee's mental or physical incapacity or for any other reason (including
Employee's refusal to do so after request therefor is made by Employer) to
secure Employee's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Work
Product belonging to or assigned to Employer pursuant to Section 4.1 above, then
Employee by this Agreement irrevocably designates and appoints Employer and its
duly authorized officers and agents as Employee's agent and attorney-in-fact to
act for and in Employee's behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents or copyright registrations thereon with the
same legal force and effect as if executed by Employee. Employee
agrees not to apply for or pursue any application for any United States or
foreign patents or copyright registrations covering any Work Product other than
pursuant to this Section in circumstances where such patents or copyright
registrations are or have been or are required to be assigned to
Employer.
4.3 Employee
acknowledges that the businesses of Employer are highly competitive and that
their strategies, methods, books, records, and documents, their technical
information concerning their products, equipment, services, and processes,
procurement procedures and pricing techniques, the names of and other
information (such as credit and financial data) concerning their former, present
or prospective customers and business affiliates, all comprise confidential
business information and trade secrets which are valuable, special, and unique
assets which Employer use in their business to obtain a competitive advantage
over their competitors. Employee further acknowledges that protection
of such confidential business information and trade secrets against unauthorized
disclosure and use is of critical importance to Employer in maintaining their
competitive position. Employee acknowledges that by reason of
Employee's duties to, and association with, Employer, Employee has had and will
have access to, and has and will become informed of, confidential business
information which is a competitive asset of Employer. Employee hereby
agrees that Employee will not, at any time during or after his employment by
Employer, make any unauthorized disclosure of any confidential business
information or trade secrets of Employer, or make any use thereof, except in the
carrying out of his employment responsibilities hereunder. Employee
shall take all necessary and appropriate steps to safeguard confidential
business information and protect it against disclosure, misappropriation,
misuse, loss and theft, including, but not limited to, confidential business
information entrusted or assigned to Employer by third
parties. Confidential business information shall not include
information in the public domain (but only if the same becomes part of the
public domain through a means other than a disclosure prohibited
hereunder). The above notwithstanding, a disclosure shall not be
unauthorized if (i) it is required by law or by a court of competent
jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute
resolution or other legal proceeding in which Employee's legal rights and
obligations as an employee or under this Agreement are at issue; provided,
however, that Employee shall, to the extent practicable and lawful in any such
events, give prior notice to Employer of his intent to disclose any such
confidential business information in such context so as to allow Employer an
opportunity (which Employee will not oppose) to obtain such protective orders or
similar relief with respect thereto as may be deemed appropriate. Any
information not specifically related to the Employer would not be considered
confidential to the Employer.
4.4 All
written materials, records, and other documents made by, or coming into the
possession of, Employee during the period of Employee's employment by Employer
which contain or disclose confidential business information or trade secrets of
Employer, or which relate to Employee's Work Product described in Section 4.1
above, shall be and remain the property of Employer. Upon termination
of Employee's employment, for any reason, Employee promptly shall deliver the
same, and all copies thereof, to Employer.
ARTICLE
5: COVENANT
NOT TO COMPETE:
5.1 In
consideration of the compensation to be paid to Employee under this Agreement,
Employee acknowledges that in the course of Employee's employment with
Foundation, he had prior to the date of this Agreement, and during the Term of
employment with Employer, he has become or will become familiar with Employer's
trade secrets, business plans and business strategies and with other
confidential business information concerning Employer and that Employee's
services have been and shall be of special, unique and extraordinary value to
Employer. Employee also acknowledges that in the course of his
employment he will have access to Employer's relationships and goodwill with its
customers, distributors, suppliers and employees. In light of
Employee's value to, and knowledge of, Employer and the Business (as defined
below) and Employee's compensation pursuant to this Agreement, Employee agrees
that, during the Term and for a period of one (1) year thereafter (the
"Non-Compete Period"), he will not, in association with or as an officer,
principal, manager, member, advisor, agent, partner, director, material
stockholder, employee or consultant of any corporation (or sub-unit, in the case
of a diversified business) or other enterprise, entity or association, work on
the acquisition or development of, or engage in any line of business, property
or project which is, directly or indirectly, competitive with any business that
Employer engages in during the Term of employment, including but not limited to,
the mining, processing, transportation, distribution, trading and sale of
synfuel, coal and coal byproducts (the "Business"). Such restriction
shall cover Employee's activities anywhere in the states in which Employer
conducts operations during the Term of this Agreement.
5.2 During
the applicable Non-Compete Period, Employee will not solicit or induce any
person who is or was employed by Employer at any time during such term or period
(i) to interfere with the activities or businesses of Employer or (ii) to
discontinue his or her employment with Employer.
5.3 During
the applicable Non-Compete Period, Employee will not, directly or indirectly,
influence or attempt to influence any customers, distributors or suppliers of
Employer to divert their business to any competitor of Employer or in
any way interfere with the relationship between any such customer, distributor
or supplier and Employer (including, without limitation, making any negative
statements or communications about Employer). During the applicable
Non-Compete Period, Employee will not, directly or indirectly, acquire or
attempt to acquire any business in the states in which Employer conducts
operations during the Term of this Agreement; prior to the termination of the
Term of employment, has made an acquisition proposal relating to the possible
acquisition of such business by Employer, (such business, an "Acquisition
Target"); or take any action to induce or attempt to induce any Acquisition
Target to consummate any acquisition, investment or other similar transaction
with any person other than Employer.
5.4 Employee
understands that the provisions of Sections 5.1, 5.2 and 5.3 hereof may limit
his ability to earn a livelihood in a business in which he is involved, but as a
member of the management group of Employer he nevertheless agrees and hereby
acknowledges that: (i) such provisions do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of Employer; (ii)
such provisions contain reasonable limitations as to time, scope of activity,
and geographical area to be restrained; and (iii) the consideration provided
hereunder, including without limitation, any amounts or benefits provided under
Article 3 hereof, is sufficient to compensate Employee for the restrictions
contained in Sections 5.1, 5.2 and 5.3 hereof. Subject to the final
sentence of Section 5.1, in consideration of the foregoing and in light of
Employee's education, skills and abilities, Employee agrees that he will not
assert that, and it should not be considered that, any provisions of Sections
5.1, 5.2 or 5.3 otherwise are void, voidable or unenforceable or should be
voided or held unenforceable.
5.5 If,
at the time of enforcement of Articles 4 or 5 of this Agreement, a court shall
hold that the duration, scope, or area restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
the court shall be allowed and directed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by
law. Employee acknowledges that he is a member of Employer's
management group with access to Employer's confidential business information and
his services are unique to Employer. Employee therefore agrees that
the remedy at law for any breach by him of any of the covenants and agreements
set forth in Articles 4 and 5 will be inadequate and that in the event of any
such breach, Employer may, in addition to the other remedies which may be
available to it at law, apply to any court of competent jurisdiction to obtain
specific performance and/or injunctive relief prohibiting Employee (together
with all those persons associated with him) from the breach of such covenants
and agreements and to enforce, or prevent any violations of, the provisions of
this Agreement. In addition, in the event of a breach or violation by
Employee of this Article 5, the applicable Non-Compete Period set forth in this
Article shall be tolled until such breach or violation has been
cured.
5.6 Each
of the covenants of this Article 5 are given by Employee as part of the
consideration for this Agreement and as an inducement to Employer to enter into
this Agreement and accept the obligations hereunder.
5.7 Provisions
of Article 5 shall not be binding on Employee if Employer fails to perform any
material obligation under this Agreement, including, without limitation, the
failure of Employer to make timely payments of monies due to Employee under
Article 3 of this Agreement; provided, that (a) Employee has notified Employer
in writing within 30 days of the date of the failure of Employer to perform such
material obligation and (b) such failure remains uncorrected and/or uncontested
by Employer for 15 days following the date of such notice.
5.8 Notwithstanding
anything to the contrary contained in this Article 5, the non-competition and
non-solicitation provisions of this Article 5 shall not apply in the event that
this Agreement (a) shall be terminated by Employee for Good Reason pursuant to
Section 3.4(i) or (b) Employer elects not to renew the Term of this
Agreement pursuant to Section 1.1; provided that Employee does not receive, or
does not elect to receive, any of the benefits or payments under Sections 3.5,
3.8 and/or 3.10 of this Agreement (if applicable).
5.9 If
Employee breaches any obligation under Article 4 and/or Article 5 hereof,
Employer shall provide notice of such breach to Employee. The
Employee agrees that, within 30 days after Employer provides such notice,
Employee shall pay to Employer, in cash, an amount equal to any and all payments
paid to or on behalf of Employee under Article 3 of this Agreement including,
without limitation, to the extent Employee has sold any equity which vested
pursuant to Section 3.10 hereof, any cash proceeds received from such
sale. Employee agrees that failure to make such timely payment to
Employer constitutes an independent and material breach of this Agreement by
Employee, for which Employer may seek recovery of the unpaid amount as
liquidated damages, in addition to all other rights and remedies Employer may
have resulting from Employee's breach of the obligations set forth in Article 4
and/or Article 5 hereof. Employee agrees that timely payment to
Employer as set forth herein is reasonable and necessary because the damages
that will result from a breach of Article 4 and/or Article 5 hereof cannot
readily be ascertained. Further, Employee agrees that timely payment
to Employer as set forth herein is not a penalty, and it does not preclude
Employer from seeking all other remedies that may be available to Employer,
including, without limitation, those set forth in this Article 5.
ARTICLE
6: CERTAIN
ADDITIONAL PAYMENTS BY EMPLOYER:
6.1 The
provisions of this Article 6 shall apply notwithstanding anything in this
Agreement to the contrary. Subject to Section 6.2 below, in the event
that it shall be determined that any payment or distribution by Employer to, or
for the benefit of, the Employee, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), would constitute an "excess parachute payment" within the meaning of
Section 280G of the Code, Employer shall pay the Employee an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Employee after
deduction of any excise tax imposed under Section 4999 of the Code, and any
federal, state and local income tax, employment tax, excise tax and other tax
imposed upon the Gross-Up Payment, shall be equal to the Payment.
6.2 Notwithstanding
Section 6.1, and notwithstanding any other provisions of this Agreement to the
contrary, if the net after-tax benefit to the Employee of receiving the Gross-Up
Payment does not exceed the Safe Harbor Amount (as defined below) by more than
10% (as compared to the
net-after tax benefit to the Employee resulting from elimination of the Gross-Up
Payment and reduction of the Payments to the Safe Harbor Amount), then (i)
Employer shall not pay the Employee the Gross-Up Payment, and (ii) the
provisions of Section 6.3 below shall apply. The term "Safe Harbor
Amount" means the maximum dollar amount of parachute payments that may be paid
to the Employee under Section 280G of the Code without imposition of an excise
tax under Section 4999 of the Code.
6.3 The
provisions of this Section 6.3 shall apply only if Employer is not required to
pay the Employee a Gross-Up Payment as a result of Section 6.2
above. If Employer is not required to pay the Employee a Gross-Up
Payment as a result of the provisions of Section 6.2, Employer will apply a
limitation on the Payment amount as set forth below (a "Parachute Cap") as
follows: The aggregate present value of the Payments under Section
3.8 and Section 3.10 of this Agreement ("Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the aggregate
present value of Agreement Payments without causing any Payment to be subject to
the limitation of deduction under Section 280G of the Code. For
purposes of this Article 6, "present value" shall be determined in accordance
with Section 280G(d)(4) of the Code.
6.4 Except
as set forth in the next sentence, all determinations to be made under this
Article 6 shall be made by the nationally recognized independent public
accounting firm used by Employer immediately prior to the Change in Control
("Accounting Firm"), which Accounting Firm shall provide its determinations and
any supporting calculations to Employer and the Employee within ten (10) days of
the Employee's termination date. The value of the Employee's
non-competition covenant under Article 5 of this Agreement shall be determined
by independent appraisal by a nationally-recognized business valuation firm
acceptable to both the Employee and Employer, and a portion of the Agreement
Payments shall, to the extent of that appraised value, be specifically allocated
as reasonable compensation for such non-competition covenant and shall not be
treated as a parachute payment. If any Gross-Up Payment is required
to be made, Employer shall make the Gross-Up Payment within 60 days after
receiving the Accounting Firm's calculations, but in no event later than the end
of the Employee's taxable year following the Employee's taxable year in which
the Employee remits the related taxes. Any such determination by the
Accounting Firm shall be binding upon Employer and the Employee.
6.5 All
of the fees and expenses of the Accounting Firm in performing the determinations
referred to in this Article 6 shall be borne solely by
Employer.
ARTICLE
7: MISCELLANEOUS:
7.1 For
purposes of this Agreement, the terms "affiliate" or "affiliates" mean an entity
or entities in which Employer or any other person has a 20% or more direct or
indirect equity interest or entity or entities that have a 20% or more direct or
indirect equity interest in Employer or such other person.
7.2 Section
409A.
(i) The
provisions of this Agreement will be administered, interpreted and construed in
a manner intended to comply with Section 409A of the Code, the regulations
issued thereunder or any exception thereto (or disregarded to the extent such
provision cannot be so administered, interpreted, or construed).
(ii) For
purposes of Section 409A, each payment hereunder, including each salary
continuation installment payment, shall be treated as a separate
payment. For purposes of this Agreement, each payment is intended to
be excepted from Section 409A to the maximum extent provided under Section 409A
as follows: (i) each payment that is scheduled to be made following Employee's
termination date and within the applicable 2½ month period specified in Treas.
Reg. Sec. 1.409A-1(b)(4) is intended to be excepted under the short-term
deferral exception as specified in Treas. Reg. Sec. 1.409A-1(b)(4); (ii)
post-termination medical benefits are intended to be excepted under the medical
benefits exception as specified in Treas. Reg. Sec.
1.409A-1(b)(9)(v)(B), and (iii) each payment that is not otherwise
excepted under the short-term deferral exception or medical benefits exception
is intended to be excepted under the involuntary separation pay exception as
specified in Treas. Reg. Sec. 1.409A-1(b)(9)(iii). The Employee shall have no
right to designate the date of any payment hereunder.
(iii) With
respect to payments subject to Section 409A of the Code (and not excepted
therefrom), if any, it is intended that each payment is paid on permissible
distribution event and at a specified time consistent with Section 409A of the
Code. The Employer reserves the right to accelerate and/or defer any
payment to the extent permitted and consistent with Section 409A.
Notwithstanding any provision of this Agreement to the contrary, to the extent
that a payment hereunder is subject to Section 409A of the Code (and not
excepted therefrom) and payable on account or a termination of employment, such
payment shall be delayed for a period of six months after the date of
termination (or, if earlier, the death of the Employee ) if the Employee is a
"specified employee" (as defined in Section 409A of the Code and determined in
accordance with the procedures established by the Employer). Any
payment that would otherwise have been due or owing during such six-month period
will be paid immediately following the end of the six-month period in the month
following the month containing the 6-month anniversary of the date of
termination.
(iv) For
purposes of the Agreement, the Employee shall be considered to have experienced
a termination of employment only if the Employee has terminated employment with
the Company and all of its controlled group members within the meaning of
Section 409A of the Code. For purposes hereof, the determination of
controlled group members shall be made pursuant to the provisions of Section
414(b) and 414(c) of the Code; provided that the language "at least 50 percent"
shall be used instead of "at least 80 percent" in each place it appears in
Section 1563(a)(1),(2) and (3) of the Code and Treas. Reg. Sec.
1.414(c)-2. Whether the Employee has terminated employment will be
determined based on all of the facts and circumstances and in accordance with
the guidance issued under Section 409A of the Code.
(v) Notwithstanding
any provision of this Agreement to the contrary, Employee acknowledges and
agrees that the Employer shall not be liable for, and nothing provided or
contained in this Agreement will be construed to obligate or cause the
Employer to be liable for, any tax, interest or penalties imposed on
Employee related to or arising with respect to any violation of Section
409A.
7.3 For
purposes of this Agreement, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been duly given when
received by or tendered to Employee or Employer, as applicable, by pre-paid
courier or by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to
Employer:
Xxx Xxxxx
Xxxxx
X.X. Xxx
0000
Xxxxxxxx,
XX 00000
Attn: General
Counsel
If to
Employee: To his last known personal residence
7.4 This
Agreement shall be governed by and construed and enforced, in all respects in
accordance with; the law of the Commonwealth of Virginia, without regard to
principles of conflicts of law, unless preempted by federal law, in which case
federal law shall govern; provided, however, that Employer's Dispute Resolution
Plan, or if no such plan is in place, then the rules of the American Arbitration
Association shall govern in all respects with regard to the resolution of
disputes hereunder as provided in Section 7.7.
7.5 No
failure by either party hereto at any time to give notice of any breach by the
other party of, or to require compliance with, any condition or provision of
this Agreement shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
7.6 It
is a desire and intent of the parties that the term, provisions, covenants, and
remedies contained in this Agreement shall be enforceable to the fullest extent
permitted by law. If any such term, provision, covenant, or remedy of
this Agreement or the application thereof to any person, association, or entity
or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
applicable law to the fullest extent permitted by law. In any case,
the remaining provisions of this Agreement or the application thereof to any
person, association, or entity or circumstances other than those to which they
have been held invalid or unenforceable, shall remain in full force and
effect.
7.7 It
is the mutual intention of the parties to have any dispute concerning this
Agreement resolved out of court. Accordingly, the parties agree that
any such dispute shall, as the sole and exclusive remedy, be submitted for
resolution, then pursuant to binding arbitration to be held in Abingdon,
Virginia, in accordance with the employment arbitration rules (except as
modified below) of the American Arbitration Association and with the Expedited
Procedures thereof (collectively, the "Rules"); provided, however, that the
Employer shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any breach or the continuation of any
breach of the provisions of Articles 4 and 5 and Employee hereby consents that
such restraining order or injunction may be granted without the necessity of the
Employer posting any bond. Each of the parties hereto agrees that
such arbitration shall be conducted by a single arbitrator selected in
accordance with the Rules; provided that such arbitrator shall be experienced in
deciding cases concerning the matter which is the subject of the
dispute. Each of the parties agrees that in any such arbitration that
pre-arbitration discovery shall be limited to the greatest extent provided by
the Rules, that the award shall be made in writing no more than 30 days
following the end of the proceeding, that the arbitration shall not be conducted
as a class action, that the arbitration award shall not include factual findings
or conclusions of law. Any award rendered by the arbitrator shall be
final and binding and judgment may be entered on it in any court of competent
jurisdiction. Each of the parties hereto agrees to treat as
confidential the results of any arbitration (including, without limitation, any
findings of fact and/or law made by the arbitrator) and not to disclose such
results to any unauthorized person.
7.8 This
Agreement shall be binding upon and inure to the benefit of Employer its
respective successors in interest, or any other person, association, or entity
which may hereafter acquire or succeed to all or substantially all of the
business assets of Employer by any means, whether indirectly or directly, and
whether by purchase, merger, consolidation, or otherwise. Employer's
rights are assignable and assumable under this Agreement. Employee's
rights and obligations under this Agreement are personal and such rights,
benefits, and obligations of Employee shall not be voluntarily or involuntarily
assigned, alienated, or transferred, whether by operation of law or otherwise,
without the prior written consent of Employer, other than in the case of death
or Permanent Disability of Employee.
7.9 This
Agreement replaces and merges any previous agreements and discussions pertaining
to the subject matter covered herein, including, without limitation,
the
Prior
Agreement, and Employee hereby expressly acknowledges and consents to the
assignment of the Prior Agreement to Alpha Services, as amended and restated
herein. This Agreement constitutes the entire agreement of the
parties with regard to the terms of Employee's employment, termination of
employment and severance benefits, and contains all of the covenants, promises,
representations, warranties, and agreements between the parties with respect to
such matters. Each party to this Agreement acknowledges that no
representation, inducement, promise, or agreement, oral or written, has been
made by either party with respect to the foregoing matters which is not embodied
herein, and that no agreement, statement, or promise relating to the employment
of Employee by Employer that is not contained in this Agreement shall be valid
or binding. This Agreement may not be amended orally, but only by an
instrument in writing signed by each of the parties to this Agreement; provided,
however, the Employer may, solely to the extent necessary to comply with Section
409A of the Code, modify the terms of this Agreement if it is determined that
such terms would subject any payments or benefits hereunder to the additional
tax and/or interest assessed under Section 409A of the Code.
7.10 Notwithstanding
any provision of this Agreement to the contrary, the parties' respective rights
and obligations under Articles 3, 4, 5, 6, and this Article 7 will survive any
termination or expiration of this Agreement or the termination of Employee's
employment for any reason whatsoever.
7.11 The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
7.12 This
Agreement may be executed in one or more counterparts, each of which shall
deemed to be in an original but all of which together will constitute one and
the same instrument.
[Signature
Page Follows]
IN WITNESS WHEREOF, Employer
and Employee have duly executed this Agreement in multiple originals to be
effective as of the Effective Date.
EMPLOYER
By: /s/
Xxxxx X.
Xxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
CEO
EMPLOYEE
/s/ Xxxx Xxxx
Xxxx X.
Xxxx
ANNEX A
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1.
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Under
Employee's Prior Agreement with Foundation, he was entitled, upon his
termination of employment from Foundation for certain reasons, to receive
varying levels of severance benefits and compensation, as more
specifically set forth in the Prior
Agreement.
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2.
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The parties to this Agreement agree that the
merger of original Alpha Natural Resources, Inc. with and into Foundation
Coal Holdings, Inc. (the "Merger") has not constituted a "termination" of
Employee's employment from Foundation such that Employee's severance
rights are triggered under his Prior Agreement with
Foundation. That is, it shall not be a "termination" under
paragraphs 7(b) or (c) of Employee's Prior
Agreement.
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3.
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The parties to this Agreement agree that the
merger of Foundation with and into Alpha (the "Second Merger") has not
constituted a "termination" of Employee's employment from Foundation such
that Employee's severance rights are triggered under his Prior Agreement
with Foundation. That is, it shall not be a "termination" under
paragraphs 7(b) or (c) of Employee's Prior
Agreement.
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4.
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Employee has agreed to forego his right, if any,
to recover any and all severance benefits and compensation as more
specifically set forth in paragraphs 7(b) and (c) of his Prior Agreement
and has instead chosen to negotiate this new Agreement with Employer to
govern his employment relationship going
forward.
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5.
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The parties agree that upon the Merger and the
Second Merger, Employee was entitled to receive only his Accrued Rights
(as defined under the Prior Agreement) as of those dates from Foundation,
and his change from being a Foundation President and Chief Operating
Officer to becoming the President of Alpha shall not constitute a
termination under his Prior Agreement such that any severance benefits or
compensation (other than the Accrued Rights) are
paid.
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6.
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The parties agree that by entering into this
Agreement, Employee shall have no "Good Reason" to terminate his
employment such that he would be entitled to any severance benefits under
the Prior Agreement.
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7.
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It is the intention of the parties that following
the Merger and the Second Merger, Employee's terms and conditions of
employment shall be governed exclusively by this Agreement which shall
supersede his Prior
Agreement.
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8.
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To the extent that Employee might have any valid
right or claim to severance benefits or compensation under the terms of
his Prior Agreement upon the Merger or Second Merger, he is willingly
waiving those rights in exchange for the consideration offered by the
Employer in this Agreement.
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9.
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Employee
affirms that Employee has not filed, nor has Employee caused to be filed,
nor is Employee presently a party to any claim, complaint, or action
against Foundation (or any parent or subsidiary entity of Foundation) in
any forum or form. Employee further affirms that Employee has
been paid and/or has received all leave (paid or unpaid), compensation,
wages, bonuses and/or commissions to which Employee may be entitled and
that no other leave (paid or unpaid), compensation, wages, bonuses and/or
commissions are due to Employee from Foundation (or any parent or
subsidiary of Foundation) as of the signing of this Agreement other than
Employee's Accrued Rights.
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ANNEX B
SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE
THIS
SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made
as of this _____ day of ___________, _____, by and between Alpha Natural
Resources, Inc. (the “Company”) and Xxxx X. Xxxx (“Executive”).
WHEREAS,
the Company advises Executive to consult with Executive's own legal counsel
before signing this Agreement; and
WHEREAS,
the Executive formerly was employed by the Company as ____________;
and
WHEREAS,
the Company employs Executive pursuant to the terms and conditions set forth in
that certain Employment Agreement dated as of August __, 2009 between Executive
and the Company (as amended from time to time, the “Employment Agreement”) which
provides for certain payments and benefits in the event that the Executive's
employment is terminated under certain circumstances; and
WHEREAS,
an express condition of the Executive's entitlement to the payments and benefits
under the Employment Agreement is the execution of a general release in the form
set forth below; and
WHEREAS,
the Executive and the Company mutually desire to terminate the Executive's
employment effective _____________ ____, ____ (“Date of
Termination”).
NOW,
THEREFORE, IT IS HEREBY AGREED by and between the Executive and the Company as
follows:
1. (a) To
the fullest extent permitted by law, the Executive, for and in consideration of
the commitments of the Company as set forth in paragraph 5 of this Agreement,
and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER
DISCHARGE the Company, its affiliates, predecessors, subsidiaries and parents,
and their present or former officers, directors, shareholders, employees, and
agents, and its and their respective successors, assigns, heirs, executors, and
administrators and the current and former trustees or administrators of any
pension or other benefit plan applicable to the employees or former employees of
the Company (collectively, “Releasees”) from all causes of action, suits, debts,
claims and demands whatsoever in law or in equity, which the Executive ever had,
now has, or hereafter may have, whether known or unknown, or which the
Executive's heirs, executors, or administrators may have, by reason of any
matter, cause or thing whatsoever, from any time prior to the date of this
Agreement, and particularly, but without limitation of the foregoing general
terms, any claims arising from or relating in any way to the Executive's
employment relationship with the Company and/or its affiliates, the terms and
conditions of that employment relationship, and the termination of that
employment relationship, including, but not limited to, any claims arising under
the Age Discrimination in Employment Act, the Older Workers Benefit Protection
Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the Employee Retirement Income Security Act of 1974, the Virginians with
Disabilities Act, the Virginia Human Rights Act, the Virginia Wage Payment and
Collection Act, and any other claims under any federal, state or local common
law, statutory, or regulatory provision, now or hereafter recognized, and any
claims for attorneys' fees and costs. This Agreement is effective
without regard to the legal nature of the claims raised and without regard to
whether any such claims are based upon tort, equity, implied or express contract
or discrimination of any sort. This release is intended to be a
general release, and excludes only those claims that Executive cannot release as
a matter of law under any statute or common law. Executive is advised
to seek independent legal counsel if Executive seeks clarification on the scope
of this release.
(b) To
the fullest extent permitted by law, and subject to the provisions of
paragraph 10 and paragraph 12 below, the Executive represents and affirms
that the Executive has not filed or caused to be filed on the Executive's behalf
any charge, complaint or claim for relief against the Company or any Releasee
and, to the best of the Executive's knowledge and belief, no outstanding
charges, complaints or claims for relief have been filed or asserted against the
Company or any Releasee on the Executive's behalf; and the Executive has not
reported any improper, unethical or illegal conduct or activities to any
supervisor, manager, department head, human resources representative, agent or
other representative of the Company or any Releasee, to any member of the
Company's or any Releasee's legal or compliance departments, or to the ethics
hotline, and has no knowledge of any such improper, unethical or illegal conduct
or activities. In the event that there is outstanding any such
charge, complaint or claim for relief, Executive agrees to seek its immediate
withdrawal and dismissal with prejudice. In the event that for any
reason said charge, complaint or claim for relief cannot be withdrawn, Executive
shall not voluntarily testify, provide documents or otherwise participate in any
investigation or litigation arising therefrom or associated therewith and shall
execute such other papers or documents as the Company's counsel determines may
be necessary to have said charge, complaint or claim for relief dismissed with
prejudice. Nothing herein shall prevent Executive from testifying in
any cause of action when required to do so by process of
law. Executive shall promptly inform the Company if called upon to
testify.
(c) Executive
does not waive any right to file a charge with the Equal Employment Opportunity
Commission (“EEOC”) or participate in an investigation or proceeding conducted
by the EEOC, but explicitly waives any right to file a personal lawsuit or
receive monetary damages that the EEOC might recover if said charge results in
an EEOC lawsuit against the Company or Releasees. Executive does not
waive the right to challenge the validity of this Agreement.
2. In
consideration of the Company's agreements as set forth in paragraph 5 herein,
the Executive agrees to comply with the limitations described in Article 4 and
Article 5 of the Employment Agreement.
3. The
Executive further agrees and recognizes that the Executive has permanently and
irrevocably severed the Executive's employment relationship with the Company,
that the Executive shall not seek employment with the Company or any affiliated
entity at any time in the future, and that the Company has no obligation to
employ him in the future. Effective as of the Date of Termination,
Executive is removed from all boards and committees of the Company and its
affiliates on which Executive may have previously served. The Company
shall deliver to Executive a copy of the documents delivered to the Office of
Mine Safety which are necessary for that office to establish an ending date of
your positions as an officer and director of Alpha Natural Resources, Inc., the
Company and their respective subsidiaries.
4. The
Executive further agrees that the Executive will not disparage or subvert the
Company or any Releasee, or make any statement reflecting negatively on the
Company, its affiliated corporations or entities, or any of their officers,
directors, employees, agents or representatives, including, but not limited to,
any matters relating to the operation or management of the Company or any
Releasee, the Executive's employment and the termination of the Executive's
employment, irrespective of the truthfulness or falsity of such
statement.
5. In
consideration for the Executive's promises, as set forth herein, the Company
agrees to pay or provide to or for the Executive the payments and benefits
described in the Employment Agreement, the provisions of which are incorporated
herein by reference. Except as set forth in this Agreement, it is
expressly agreed and understood that Releasees do not have, and will not have,
any obligations to provide the Executive at any time in the future with any
payments, benefits or considerations other than those recited in this paragraph,
or those required by law, other than under the terms of any benefit plans which
provide benefits or payments to former employees according to their
terms.
6. The
Executive understands and agrees that the payments, benefits and agreements
provided in this Agreement are being provided to him in consideration for the
Executive's acceptance and execution of, and in reliance upon the Executive's
representations in, this Agreement. The Executive agrees that absent
execution without revocation of this Agreement containing a release of all
claims against the Releasees, the Executive is not entitled to the payments and
benefits set forth in the Employment Agreement.
7. The
Executive acknowledges and agrees that this Agreement and the Employment
Agreement supersede any employment agreement or offer letter the Executive has
with the Company or any Releasee. To the extent Executive has entered
into any other enforceable written agreement with the Company or any Releasee
that contains provisions that are outside the scope of this Agreement and the
Employment Agreement and are not in direct conflict with the provisions in this
Agreement or the Employment Agreement, the terms in this Agreement and the
Employment Agreement shall not supercede, but shall be in addition to, any other
such agreement. Except as set forth expressly herein, no
promises or representations have been made to Executive in connection with the
termination of the Executive's Employment Agreement, if any, or offer letter, if
any, with the Company, or the terms of this Agreement.
8. The
Executive agrees not to disclose the terms of this Agreement or the Employment
Agreement to anyone, except the Executive's spouse, attorney and, as necessary,
tax/financial advisor. It is expressly understood that any violation
of the confidentiality obligation imposed hereunder constitutes a material
breach of this Agreement.
9. The
Executive represents that the Executive does not, without the Company's prior
written consent, presently have in the Executive's possession any records and
business documents, whether on computer or hard copy, and other materials
(including but not limited to computer disks and tapes, computer programs and
software, office keys, correspondence, files, customer lists, technical
information, customer information, pricing information, business strategies and
plans, sales records and all copies thereof) (collectively, the “Corporate
Records”) provided by the Company and/or its predecessors, subsidiaries or
affiliates or obtained as a result of the Executive's prior employment with the
Company and/or its predecessors, subsidiaries or affiliates, or created by the
Executive while employed by or rendering services to the Company and/or its
predecessors, subsidiaries or affiliates. The Executive acknowledges
that all such Corporate Records are the property of the Company. In
addition, the Executive shall promptly return in good condition any and all
Company owned equipment or property, including, but not limited to, automobiles,
personal data assistants, facsimile machines, copy machines, pagers, credit
cards, cellular telephone equipment, business cards, laptops, computers, and any
other items requested by the Company. As of the Date of Termination,
the Company will make arrangements to remove, terminate or transfer any and all
business communication lines including network access, cellular phone, fax line
and other business numbers.
10. Nothing
in this Agreement shall prohibit or restrict the Executive
from: (i) making any disclosure of information required by law;
(ii) providing information to, or testifying or otherwise assisting in any
investigation or proceeding brought by, any federal regulatory or law
enforcement agency or legislative body, any self-regulatory organization, or the
Company's designated legal, compliance or human resources officers; or
(iii) filing, testifying, participating in or otherwise assisting in a
proceeding relating to an alleged violation of any federal, state or municipal
law relating to fraud, or any rule or regulation of the Securities and Exchange
Commission or any self-regulatory organization.
11. The
parties agree and acknowledge that the agreement by the Company described
herein, and the settlement and termination of any asserted or unasserted claims
against the Releasees, are not and shall not be construed to be an admission of
any violation of any federal, state or local statute or regulation, or of any
duty owed by any of the Releasees to the Executive.
12. The
Executive agrees and recognizes that should the Executive breach any of the
obligations or covenants set forth in this Agreement, the Company will have no
further obligation to provide the Executive with the consideration set forth
herein, and will have the right to seek repayment of all consideration paid up
to the time of any such breach. Further, the Executive acknowledges
in the event of a breach of this Agreement, Releasees may seek any and all
appropriate relief for any such breach, including equitable relief and/or money
damages, attorneys' fees and costs. Notwithstanding the foregoing, in the event
the Company fails to perform any material obligation under the Employment
Agreement, including, without limitation, the failure of the Company to make
timely payments of monies due to Executive under Article 3 of the Employment
Agreement, this Release shall be null and void and Executive shall have the
right to pursue any and all appropriate relief for any such failure, including
monetary damages, attorneys' fees and costs; provided, that (i) Executive has
notified the Company in writing within 30 days of the date of the failure of the
Company to perform such material obligation and (ii) such failure remains
uncorrected and/or uncontested by the Company for 15 days following the date of
such notice.
13. The
Executive further agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, as
well as to an equitable accounting of all earnings, profits and other benefits
arising from any violations of this Agreement, which rights shall be cumulative
and in addition to any other rights or remedies to which the Company may be
entitled. The dispute resolution provisions set forth in Section 7.7
of the Employment Agreement apply to any dispute regarding the termination of
Executive's employment, and any dispute related to and/or arising under this
Agreement, including without limitation any challenge Executive may make
regarding the validity of this Agreement.
14. This
Agreement and the obligations of the parties hereunder shall be construed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Virginia.
15. The
parties agree that this Agreement shall be deemed to have been made and entered
into in Abingdon, Virginia. Jurisdiction and venue in any proceeding
by the Company or Executive to enforce their rights hereunder is specifically
limited to any court geographically located in Virginia.
16. The
Executive certifies and acknowledges as follows:
(a) That
the Executive has read the terms of this Agreement, and that the Executive
understands its terms and effects, including the fact that the Executive has
agreed to RELEASE AND FOREVER DISCHARGE the Releasees from any legal action
arising out of the Executive's employment relationship with the Company and the
termination of that employment relationship; and
(b) That
the Executive has signed this Agreement voluntarily and knowingly in exchange
for the consideration described herein, which the Executive acknowledges is
adequate and satisfactory to him and which the Executive acknowledges is in
addition to any other benefits to which the Executive is otherwise entitled;
and
(c) That
the Executive has been and is hereby advised in writing to consult with an
attorney prior to signing this Agreement; and
(d) That
the Executive does not waive rights or claims that may arise after the date this
Agreement is executed; and
(e) That
the Company has provided Executive with a period of [twenty-one (21)] or
[forty-five (45)] days within which to consider this Agreement, and that the
Executive has signed on the date indicated below after concluding that this
Separation of Employment Agreement and General Release is satisfactory to
Executive; and
(f) The
Executive acknowledges that this Agreement may be revoked by him within seven
(7) days after execution, and it shall not become effective until the expiration
of such seven (7) day revocation period. In the event of a timely
revocation by the Executive, this Agreement will be deemed null and void and the
Company will have no obligations hereunder.
[SIGNATURE
PAGE FOLLOWS]
Intending
to be legally bound hereby, the Executive and the Company executed the foregoing
Separation of Employment Agreement and General Release this ______ day of
______________, _____.
_________________________
Witness:_____________________
Xxxx X.
Xxxx
By:_______________________ Witness:______________________
Name:_____________________
Title:______________________
