EXHIBIT 10.15
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EMPLOYMENT AGREEMENT
BETWEEN
INTERMET CORPORATION
AND
XXXX X. XXXX
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EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), effective as of the date of execution
hereof (the "Effective Date"), amends and supersedes the Employment Agreement
dated as of the 1st day of June, 1999, by and between INTERMET CORPORATION, a
Georgia corporation having its principal place of business in Troy, Michigan
(the "Company"), and XXXX X. XXXX, a resident of Rochester Hills, Michigan (the
"Executive").
The Company desires to continue the services of the Executive, and the
Executive is willing to render such services, in accordance with the terms
hereinafter set forth.
Accordingly, the Company and the Executive agree as follows:
ARTICLE I
DUTIES
1.01 Duties. The Executive shall continue to be a member of the Board of
Directors of the Company (the "Board") and following the Board's July, 2003
meeting, shall be appointed as the Chief Executive Officer and President of the
Company (the "Initial Election") and shall assume the duties and
responsibilities commensurate with those positions, it being contemplated that
the shareholders and Directors of the Company will elect and re-elect the
Executive to those offices throughout the Contract Term (as defined in Section
2.01). It is anticipated that Executive will be elected to serve as Chairman of
the Board ("Chairman") following the July, 2004 Board meeting. The Executive
will report solely to the Board. During the Contract Term, and excluding any
periods of vacation, sick leave or Disability (as defined in Section 6.01) to
which the Executive is entitled, the Executive agrees to devote the Executive's
full attention and time to the business and affairs of the Company and to use
the Executive's best efforts to perform faithfully and efficiently the duties
and responsibilities of the Executive's positions as described herein.
1.02 Other Activities. During the Contract Term (as defined in Section
2.01), it shall not be a violation of this Agreement for the Executive to (a)
serve on corporate, civic or charitable boards or committees, (b) deliver
lectures, fulfill speaking engagements or teach at educational institutions or
(c) manage personal investments, so long as such activities are consistent with
the policies of the Company as of the date hereof and do not materially
interfere with the performance of the Executive's duties in accordance with this
Agreement.
ARTICLE II
TERM OF AGREEMENT
2.01 Term. Subject to the termination provisions hereinafter provided, the
term of this Agreement shall commence as of the Effective Date hereof and end on
the third anniversary of such date ("Contract Term"); provided, that the
Contract Term shall be automatically extended each day commencing with the
Effective Date for an additional day such that commencing on the Effective Date
this Agreement shall perpetually have an unexpired term of three years until
the date written notice is provided by either the Company or the Executive that
this Agreement is not to be further extended beyond three years from the date of
such notice.
ARTICLE III
COMPENSATION
3.01 Base Salary. During the Contract Term, the Company shall pay or cause
to be paid to the Executive in cash, in accordance with the normal payroll
practices of the Company for peer executives, in installments not less
frequently than monthly, an annual base salary ("Annual Base Salary") equal to
$400,000 per year until the Initial Election at which time his Annual Base
Salary shall be increased to $450,000 per year. Upon the first anniversary of
the Effective Date, Executive's Annual Base Salary shall be increased to
$500,000 per year. The Company may from time to time increase the Executive's
Annual Base Salary, provided that it shall not be reduced after any such
increase, and the term Annual Base Salary as used in this Agreement shall refer
to the Annual Base Salary as so increased.
3.02 Bonus. The Company shall pay or cause to be paid to the Executive a
bonus ("Annual Bonus") for each year of the Contract Term equal to the Bonus
Percentage (defined below) multiplied by the Company's pretax income for that
fiscal year the last day of which falls within the calendar year with respect to
which the bonus is payable. The percentage of Company income upon which the
bonus shall be determined ("Bonus Percentage") for periods until the Initial
Election shall be equal to one-half of one percent (0.5%) of such income and
following the Initial Election, shall be equal to eight-tenths of one percent
(0.8%) of such income. Upon the first anniversary of the Effective Date, the
Annual Bonus for the Executive shall be increased to one percent (1%) of such
income. In the event the Company adopts a bonus plan applicable to executive
officers which the Board determines reasonably and in good faith offers
Executive similar bonus opportunities as provided in this Section 3.02, then
Executive shall be eligible for and participate in such plan in lieu of the
Annual Bonus provided herein and notwithstanding the provisions of this Section
3.02. For purposes of determining the Annual Bonus, the Company's income shall
be calculated in accordance with generally accepted accounting principles
consistently applied, prior to deduction for applicable federal, state and local
taxes, and prior to payment of executive bonuses and minority interest payments
with respect to subsidiaries and affiliates of the Company of which the Company
owns less than 100%. The portion of the 2003 Annual Bonus with respect to the
period from the Effective Date through June 30, 2003 shall be based upon the
Company's financial statements for the period ending June 30, 2003 and the
portion of the 2003 Annual Bonus for the period July 1, 2003 through December
31, 2003 shall be based upon the Company's income for the entire 2003 calendar
year, reduced by the Company's income for the Effective Date through June 30,
2003 (based upon the Company's financial statements for such period).
Restricted Stock. Pursuant to the Company's Executive Stock Option and
Incentive Award Plan (the "Incentive Plan"), as of the Initial Election the
Company shall grant Executive 60,000 restricted shares of the Company's common
stock which will vest in twenty-five percent (25%) increments on the first,
second, third, and fourth anniversary of the Initial Election. Until vested, the
Restricted Stock shall generally be non-transferable; provided that Executive
shall have the right to transfer such shares to Executive's spouse or
descendants or any
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trust or other entity that principally benefits his spouse and/or descendants.
Until the shares of Restricted Stock are vested, such shares shall be held by
the Company; provided that, Executive shall immediately have the right to vote
such shares at any meeting of the Company's stockholders and shall immediately
have the right to receive all cash dividends (less any applicable withholding
taxes) with respect to such shares. In the event Executive's employment
terminates upon his death or Disability (defined in Section 6.01, below), or is
terminated by the Company without Cause (defined in Section 6.02) or Executive
terminates with Good Reason (defined in Section 6.04), the Restricted Stock
shall immediately become 100% fully vested and non-forfeitable. In the event of
Executive's termination for any other reason, Executive shall forfeit any shares
of the Restricted Stock which were not vested immediately prior to his Date of
Termination. Except as otherwise provided in this Section 3.03, the Restricted
Stock shall be subject to the terms, conditions and additional restrictions in
the Incentive Plan and the written award agreement evidencing the grant of the
Restricted Stock.
ARTICLE IV
OTHER BENEFITS
4.01 Incentive, Savings and Retirement Plans. In addition to Annual Base
Salary, Annual Bonus and the Restricted Stock, the Executive shall be entitled
to participate during the Contract Term in all incentive savings and retirement
plans, practices, policies and programs applicable to other peer executives of
the Company, including, without limitation those benefits identified in Sections
4.02 through 4.09, below; provided, that Executive shall not participate in any
Company severance plan, program, policy or practice or in any other plan,
practice, program or policy to the extent the Board reasonably and in good faith
determines that such participation would be duplicative of compensation,
benefits or perquisites otherwise provided by this Agreement.
4.02 Welfare Benefits. During the Contract Term, the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company (including, and without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, dependent life, accidental death and travel accident insurance plans
and programs) and applicable to other peer executives of the Company subject to
the terms and conditions and eligibility requirements of each such plan,
practice, policy, or program.
4.03 Fringe Benefits. During the Contract Term, the Executive shall be
entitled to fringe benefits on the same terms and conditions applicable to other
peer executives of the Company.
4.04 Expenses. During the Contract Term, the Company shall reimburse
Executive for all reasonable employment-related expenses incurred by the
Executive upon the Company's receipt of accountings in accordance with
practices, policies and procedures applicable to peer executives of the Company.
4.05 Automobile. During the Contract Term and in accordance with the
Company's applicable policies, if any, the Company shall furnish to the
Executive a luxury automobile or
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SUV of his choice; provided, that the manufacturer's suggested retail price for
such vehicle shall not exceed $65,000. The Employer shall pay for all expenses
associated with the use and enjoyment of the automobile; and shall replace the
automobile with a new one on a schedule not less frequently than once every
three years. The Company shall issue the Executive a copy of IRS Form 1099 for
tax purposes which reflects the value of the Executive's personal use of the
vehicle, and shall pay to the Executive an amount in cash ("Tax Reimbursement
Payment") which, after reducing such payment by the amount of federal, state,
city, local and any other income or other taxes ("Taxes") applicable to the Tax
Reimbursement Payment, will equal the amount of Taxes which must be paid by the
Executive with respect to the value of the Executive's personal use of the
vehicle.
4.06 Office and Support Staff. During the Contract Term, the Executive
shall be entitled to an office or offices of a size and furnishings and other
appointments, and to personal secretarial and other assistance provided with
respect to other peer executives of the Company, but which is consistent with
his positions as Chief Executive Officer and President.
4.07 Vacation. During the Contract Term, the Executive shall be entitled to
paid vacation time in accordance with the plans, practices, policies, and
programs applicable to other peer executives of the Company, but not less than
four weeks for each calendar year.
4.08 Retirement Benefit. The Executive shall be entitled to a retirement
benefit equal to one year of final Annual Base Salary for each three (3)
continuous years of employment with the Company commencing on the Effective Date
provided that, for purposes of this paragraph, the Executive shall be credited
for periods of continuous employment of less than three years on a pro-rata
basis to be calculated by multiplying the Executive's final Annual Base Salary
by a fraction, the numerator of which shall be the number of days of continuous
employment during the three-year period and the denominator of which is the
total number of days in the three-year period. The Retirement Benefit shall
fully vest and become non-forfeitable upon the first to occur of the following
events: (a) Executive's continuous employment through the date that is the fifth
anniversary of the Effective Date; (b) Executive's termination upon his death or
Disability; (c) termination of Executive by the Company without Cause; or (d)
Executive's termination of employment with Good Reason. Executive shall forfeit
the Retirement Benefit in its entirety if he terminates without Good Reason
(other than for death or Disability) prior to the fifth anniversary of the
Effective Date and shall forfeit the Retirement Benefit in its entirety whether
vested or unvested in the event of his termination by the Company for Cause at
any time. The vested Retirement Benefit, if any, shall be paid immediately in a
lump-sum upon the Executive's termination of employment for any reason other
than Cause.
4.09 Country or Other Private Club Dues. During the Contract Term,
Executive shall be entitled to monthly reimbursement of any country club and/or
other private club dues and/or assessments incurred by him to a maximum of
$1,000 per month. Payments hereunder shall include a Tax Reimbursement Payment
with respect to such dues described in Section 4.05.
4.10 Executive Indemnification. The Executive shall be entitled to
indemnification to the full extent permitted by Michigan or other applicable
law, including but not limited to attorney fees, judgments and amounts paid in
settlement in accordance with and on terms not less favorable than the Directors
and Officer's coverage currently provided to the Company's officers
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and directors in the Company's By-Laws (a copy of which is attached hereto as
Exhibit A) as of the Effective Date and to the extent more favorable than that
provided in the By-Laws in effect as of the Effective Date hereof, pursuant to
the Company's By-Laws as may be in effect from time to time in the future.
4.11 Personal Use of Company Jet. Executive shall be entitled to use the
Company plane for nonbusiness personal or family use for up to 20 flight hours
per fiscal year during the Contract Term. Executive shall be responsible for any
tax liabilities he incurs as a result of such usage.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.01 Termination of Employment for Cause or Other Than for Good Reason. If,
during the Contract Term, the Company terminates the Executive's employment for
Cause (as defined in Section 6.02) or the Executive terminates employment other
than for Good Reason (as defined in Section 6.04), the Company shall pay to
Executive in a lump-sum immediately after the Date of Termination (as defined in
Section 6.05) that portion of the Executive's Annual Base Salary, if any, which
is accrued but unpaid as of the Date of Termination. Executive will not be
entitled to receive any other compensation or benefits under this Agreement.
Upon termination for Cause, Executive shall forfeit his rights to any Restricted
Stock that is unvested as of his Date of Termination. In addition, in the event
Executive is terminated for Cause, Executive will forfeit any and all rights to
the Retirement Benefit and to any unpaid Annual Bonus as of the Date of
Termination. Notwithstanding the foregoing, no termination of employment for
Cause shall be valid unless, no fewer than seven (7) days prior to the Date of
Termination, the Company provides Executive with written notice of its intent to
consider termination of the Executive's employment for Cause, including a
detailed description of the specific reasons which form the basis for such
consideration ("Notice of Consideration"). Thereafter, for a period of not less
than fourteen (14) days after the date the Notice of Consideration is provided,
the Executive shall have the opportunity to appear before the Board, with or
without legal representation, at the Executive's election, to present arguments
on his own behalf. Following such presentation to the Board, the Executive shall
be terminated for Cause only if (a) three-quarters (3/4) of the members of the
Board determine reasonably and in good faith that the actions of the Executive
constituted Cause and that the Executive's employment should accordingly be
terminated for Cause; and (b) the Board provides the Executive with a written
determination ("Notice of Termination") setting forth in full specificity the
basis of such termination of employment.
5.02 Termination of Employment for Death or Disability. If, before the end
of the Contract Term, the Executive's employment terminates due to death or
Disability, the Company shall pay to the Executive (or to the Executive's
Beneficiary, as defined in Section 8.04) in a lump-sum immediately after the
Date of Termination an amount which is equal to the sum of the amounts specified
in (a), (b) and (c) as follows:
(a) the portion of Executive's Annual Base Salary, if any, which is
accrued but unpaid as of the Date of Termination;
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(b) the amount of any Annual Bonus accrued during any period which ended
during the Contract Term prior to the Date of Termination, but which
is unpaid as of the Date of Termination;
(c) Executive (or his personal representative, the person to whom the
option is transferred by will or applicable laws of descent and
distribution or the beneficiary designated in accordance with the
Incentive Plan) shall be entitled to exercise any vested and
unexercised option for a period of one-year following his Date of
Termination; and
(d) a pro-rata portion of the Annual Bonus (the "Pro-Rata Bonus") for the
fiscal year during which Executive's termination occurs equal to the
Annual Bonus amount that Executive would have received, if any, for
such year if he had remained employed throughout such fiscal year
multiplied by a fraction the numerator of which is the number of days
Executive was employed during such fiscal year and the denominator of
which is 365. The Pro-Rata Bonus shall be calculated and payable at
the same time the Annual Bonus is customarily calculated and paid to
the Company's executives.
5.03 Termination of Employment by the Company Without Cause or by the
Executive for Good Reason. If, before the end of the Contract Term, the
Executive's employment is terminated by the Company without Cause (defined in
Section 6.02) or by the Executive for Good Reason (defined in Section 6.04), the
Executive shall receive the following:
(a) the portion of Executive's Annual Base Salary and Annual Bonus, if
any, that is accrued but unpaid as of the Date of Termination;
(b) a Pro-Rata Bonus (calculated as described in Section 5.02(c);
(c) an amount equal to two (2) times the sum of Executive's Annual Base
Salary and Annual Bonus. For purposes of this paragraph (c),
Executive's Annual Bonus shall be equal to the Annual Bonus paid to
Executive with respect to the fiscal year ended immediately prior to
Executive's Date of Termination; provided, that if Executive's Date of
Termination is prior to the close of the first full fiscal year
following the Effective Date, then the Annual Bonus for purposes of
this paragraph (c), only shall be $150,000;
(d) an amount equal to Executive's unvested benefits, if any, under any
profit sharing plan, retirement plan or ESOP which are forfeited on
account of the Executive's employment being terminated including
without limitation the Retirement Benefit described in Section 4.08;
(e) Executive's unvested options and restricted stock (including, but not
limited to the Restricted Stock described in Section 3.03), if any,
shall fully vest and become non-forfeitable immediately. Executive
shall be
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entitled to exercise any unexercised option for a period of ninety
(90) days following his Date of Termination; and
(f) the Company shall continue to provide medical and life insurance as
described in Section 4.02 for a period of two years following the Date
of Termination; provided, that Executive shall pay an amount equal to
the amount active employees pay for such coverage as of the Date of
Termination; provided further, that notwithstanding the foregoing, the
amount of any benefits provided under Section 4.02 shall be reduced or
eliminated to the extent the Executive becomes entitled to duplicative
benefits by virtue of his subsequent employment after the Date of
Termination; and
(g) in the event such termination is within twelve (12) months of a Change
in Control (as defined in Section 6.03), Executive shall be entitled
to three (3) times (rather than 2 times) the Annual Base Salary and
Annual Bonus amounts described in paragraph (c), above and shall be
entitled to three (3) years (rather than 2 years) of the continued
medical and life insurance benefits described in paragraph (f), above.
5.04 Other Termination Benefits. Except to the extent the Board determines
reasonably and in good faith that it would be duplicative of benefits provided
in this Agreement and excluding any severance or termination benefits, in
addition to any amounts or benefits payable upon termination of employment
hereunder and except as otherwise provided herein, the Executive shall be
entitled to any payments or benefits explicitly provided under the terms of any
plan, policy or program of the Company subject to the terms and conditions of
such plan, policy or program or as otherwise required by applicable law.
5.05 Gross-up of Excise Taxes.
(a) Subject to Section 5.05(b), in the event it shall be determined that
any payment or distribution by the Company or its affiliated companies
to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments
required under this Section 5.05) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), or imposed by any other taxing
authority, or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment"), no later than thirty
(30) days prior to the due date (without regard to any extensions
thereof) for payment of the Excise Tax, in an amount such that after
payment by the Executive of all Taxes (and any interest and penalties
imposed with respect thereto) including, without limitation, any
income and employment taxes and Excise Tax, imposed
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upon the Payments. Calculations of Taxes shall be based upon the
maximum marginal rates then in effect.
(b) Notwithstanding any other provision of this Section 5.05, if the
aggregate After-Tax Amount (defined below) of the Payments and
Gross-Up Payment that, but for this paragraph (b), would be payable to
Executive, does not exceed 110% of the After-Tax Floor Amount (defined
below), then no Gross-Up Payment shall be made to Executive and the
aggregate amount of Payments payable to Executive shall be reduced
(but not below the Floor Amount) to the largest amount which would
both (i) not cause any Excise Tax to be payable by Executive and (ii)
not cause any Payment to become nondeductible by the Company by reason
of Section 280G of the Code (or any successor provision). For purposes
of the preceding sentence, Executive shall be deemed to be subject to
the highest effective after-tax marginal rate of Taxes. For purposes
of this paragraph: (i) "After-Tax Amount" means the portion of a
specified amount that would remain after payment of all Taxes paid or
payable by Executive in respect of such specified amount; (ii) "Floor
Amount" means the greatest pre-tax amount of Payments that could be
paid to Executive without causing Executive to become liable for any
Excise Taxes in connection therewith; and (iii) "After-Tax Floor
Amount" means the After-Tax Amount of the Floor Amount.
(c) In the event that the amount of Excise Tax that the Executive paid in
connection with any Payments or Gross-Up Payments is subsequently
determined to be greater than the amount of the Executive's actual
Excise Tax liability, the Executive shall repay to the Company at the
time that the amount of the actual Excise Tax liability is finally
determined the amount of the Gross-Up Payment attributable to such
overpayment, plus interest on the amount of such overpayment at the
applicable federal rate (as defined in Section 1274(d) of the Code).
In the event that the amount of Excise Tax that the Executive paid in
connection with any Payment or Gross-Up Payment is subsequently
determined to be less than the amount of the Executive's actual Excise
Tax liability, the Company shall make an additional Gross-Up Payment
in respect of such underpayment (and in respect of any interest and
penalties payable by the Executive to the Internal Revenue Service
with respect to such underpayment) at the time that the amount of the
actual Excise Tax liability is finally determined.
(d) All determinations required to be made under this Section 5.05 shall
be made by the public accounting firm that is retained by the Company
at the time immediately prior to the Change in Control. Such
accounting firm shall provide its determinations to the Executive and
such determinations shall be binding upon the Company and the
Executive.
(e) The Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings
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concerning the existence or amount of liability for Excise Tax and the
expenses of any such proceedings shall be borne solely by the Company.
ARTICLE VI
CERTAIN DEFINITIONS
6.01 "Disability" means any medically determinable physical or mental
impairment, that can be expected to last for a continuous period of not less
than six (6) months, and that renders the Executive, with or without reasonable
accommodation, unable to perform the duties required under this Agreement. The
date of the determination of Disability is the date on which the Board, based on
such medical and other evidence and advice as it deems appropriate, reasonably
and in good faith determines that Executive suffers from a Disability.
6.02 "Cause" means (a) Executive's commission of any felony or other crime
involving moral turpitude, fraud or dishonesty; (b) any serious misconduct in
the course of the Executive's employment; (c) the Executive's habitual neglect
of his duties (other than on account of Disability); or (d) any material breach
of the Agreement or any other written agreement with or written policy of the
Company; provided that, with respect to (d), following the Company's provision
of Notice of Consideration (defined in Section 5.01) to Executive, the Company
shall allow Executive to cure to the fullest extent possible any such breach
capable of cure for a period of seven (7) days following the Notice of
Consideration; provided however, that if such act or omission is determined
reasonably and in good faith by the Board to be intentional, knowing or
repeated, the Company shall not be required to provide Executive with such
opportunity to cure; provided, further, that for purposes of this Agreement,
Cause shall not mean:
(i) bad judgment or negligence other than habitual neglect of duty;
(ii) any act or omission believed by the Executive in good faith to
have been in the interest of the Company (without intent of the
Executive to gain therefrom, directly or indirectly, a profit to
which the Executive was not legally entitled);
(iii) any act or omission with respect to which a determination could
properly have been made by the Board that the Executive met the
applicable standard of conduct for indemnification or
reimbursement under the By-Laws of the Company, any applicable
indemnification agreement or the laws and regulations under which
the Company is governed, in each case in effect at the time of
such act or omission; or
(iv) any act or omission with respect to which Notice of Consideration
is given more than twelve (12) months after the earliest date on
which any member of the Board who is not a party to the act or
omission knew of such act or omission.
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6.03 "Change in Control" means the occurrence of any of the following
events:
(a) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of
the Company's then outstanding securities eligible to vote for
the election of the Board of Directors of the Company (the
"Voting Securities") provided, however, that the event described
in this paragraph shall not be deemed to be a Change in Control
by virtue of any of the following acquisitions: (i) by the
Company or, direct or indirect, majority-owned subsidiaries of
the Company, (ii) by any employee benefit plan sponsored or
maintained by the Company or any corporation controlled by the
Company, (iii) by any underwriter temporarily holding securities
pursuant to any offering of such securities, (iv) pursuant to a
Non-Control Transaction (as defined in paragraph (c)), (v)
pursuant to any acquisition by the Executive or any group of
persons including the Executive, or (vi) in which Voting
Securities are acquired from the Company, if a majority of the
Board of Directors of the Company approves a resolution providing
expressly that the acquisition pursuant to this clause (vi) does
not constitute a Change in Control under this paragraph (a);
(b) individuals who, as of the Effective Date, constitute the Board
of Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that
(i) any person becoming a director subsequent to the Effective
Date, whose election, or nomination for election, by the
Company's shareholders was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for
director, without objection to such nomination) shall be, for
purposes of this paragraph (b), considered as though such person
were a member of the Incumbent Board; provided, however, that no
individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest
with respect to directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors shall be deemed to be a member
of the Incumbent Board;
(c) the consummation of a merger or consolidation or similar form of
corporate reorganization, or sale or other disposition of all or
substantially all of the assets, of the Company (a "Business
Combination") is consummated, unless immediately following such
Business Combination: (i) more than 50% of the total Voting
Securities of the corporation resulting from such Business
Combination (including, without limitation,
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for purposes of making such 50% determination, any shares owned
through any entity which directly or indirectly has beneficial
ownership of such Voting Securities) are represented by shares
held by shareholders of the Company immediately prior to such
Business Combination (either by remaining outstanding or being
converted), (ii) no person (other than any holding company
resulting from such Business Combination), any employee benefit
plan sponsored or maintained by the Company (or the corporation
resulting from such Business Combination), or any person which
beneficially owned, immediately prior to such Business
Combination, directly or indirectly, 30% or more of the Voting
Securities) is the beneficial owner, directly or indirectly of
30% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the corporation
resulting from such Business Combination, and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial agreement, or action of the Board of Directors, providing
for such Business Combination (a "Non-Control Transaction"); or
(d) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person acquires beneficial ownership of more than 30%
of the Voting Securities as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding,
increases the percentage of shares beneficially owned by such person; provided,
that if a Change in Control would occur as a result of such an acquisition by
the Company (if not for the operation of this sentence), and after the Company's
acquisition such person becomes the beneficial owner of additional Voting
Securities that increases the percentage of outstanding Voting Securities
beneficially owned by such person, then a Change in Control shall occur.
6.04 "Good Reason" means the occurrence of any one of the following events:
(a) the failure of the Company's shareholders and the Board to elect
and re-elect the Executive Chief Executive Officer, President and
a member of the Board following the Initial Election,
(b) assignment to the Executive of any duties materially and
adversely inconsistent with the Executive's position as specified
in Article I hereof (or such other position to which he may be
promoted), including status, offices, or responsibilities
contemplated under Article I of this Agreement, or any other
action by the Company which results in a material and adverse
diminution in such position, status, offices, titles or
responsibilities,
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(c) the failure of the Company to assign this Agreement to a
successor to the Company,
(d) any failure by the Company to comply with the provisions of
Article III of this Agreement,
(e) the Company's requiring, without the Executive's prior written
consent, the Executive to be based at any office or location more
than 30 miles from the Troy, Michigan office, or
(f) any material adverse change in the terms and conditions of the
Executive's employment under this Agreement.
Executive shall provide the Company written notice of any act or omission he
believes constitutes Good Reason hereunder within thirty (30) days after such
act or omission and any such act or omission identified in such written notice
to the Company shall constituted Good Reason hereunder only if the Company fails
to cure such act or omission within thirty (30) business days after written
notice from the Executive; provided, however, that if the act or omission is
intentional or knowing, the Executive shall not be required to provide such
opportunity to cure.
6.05 "Date of Termination" means the date as of which the Executive's
employment with the Company is terminated by the Company or by the Executive for
any reason including, but not limited to, death or Disability.
ARTICLE VII
RESTRICTIVE COVENANTS
7.01 Confidential and Proprietary Information.
(a) Obligation to Keep Confidential. At all times during the term of
Executive's employment with the Company and thereafter, Executive
will hold in strictest confidence and will not disclose, use,
lecture upon or publish any of the Confidential Information
(defined below) of the Company and its affiliates ("Company
Parties") except as such disclosure, use or publication may be
required in connection with Executive's ordinary course
performance of his services for the Company, or unless Executive
is expressly authorized in writing by the Company to make such
disclosure or use of Confidential Information in advance.
Furthermore, Executive will keep secret all matters entrusted to
Executive as an employee of the Company, and shall not use or
attempt to use any such information in any manner which may
injure or cause loss or may be calculated to injure or cause loss
whether directly or indirectly to the Company or any of its
affiliates. Further, Executive agrees that during his employment
he shall not take, use or permit to be used any notes, memoranda,
reports, lists, records, drawings, sketches, specifications,
software programs, data, documentation or other materials of any
nature
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relating to any matter within the scope of the business of the
Company or concerning any of its dealings or affairs ("Company
Materials") otherwise than for the benefit of the Company, and
shall not use any Company Materials after the termination of
Executive's employment. Notwithstanding the foregoing, however,
Executive shall be permitted to disclose Confidential Information
as may be required by a subpoena or other governmental order,
provided that Executive first notifies the Company of such
subpoena or order and allows the Company the opportunity to
obtain a protective order or other appropriate remedy.
(b) Definition of Confidential Information. The term "Confidential
Information" shall mean trade secrets, confidential knowledge,
data or any other proprietary information of any of the Company
Parties. By way of illustration but not limitation, "Confidential
Information" includes (a) inventions, trade secrets, ideas,
processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries,
developments, designs and techniques (hereinafter collectively
referred to as "Inventions"); and (b) information regarding plans
(whether contemplated, initiated or completed) for research,
development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices
and costs, the identity of suppliers and customers, recruiting
information and information regarding the skills and compensation
of the employees of the Company or other personnel matters.
"Confidential Information," however, does not include information
that is or becomes publicly available through no breach of this
Agreement (although the confidentiality restrictions of this
Agreement shall continue to apply to information which only
became public as a result of a breach of a confidentiality
obligation owed to any of the Company Parties to the extent that
Executive knows that the information became public by virtue of
an improper disclosure).
(c) Third Party Information. Executive understands, in addition, that
the Company Parties have received and in the future may receive
from third parties confidential or proprietary information
("Third Party Information") subject to a duty on the part of the
Company Parties to maintain the confidentiality of such
information and to use it only for certain limited purposes.
During the term of Executive's employment with the Company and
thereafter, Executive will hold Third Party Information in the
strictest confidence and will not disclose (to anyone other than
Company personnel who need to know such information in connection
with their work for the Company) or use, except in connection
with Executive's work for the Company, any Third Party
Information unless expressly authorized in writing by the Board
in advance.
(d) Ownership and Assignment of Confidential Information and
Proprietary Rights. Executive hereby assigns to the Company any
rights Executive
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may have or acquire in Confidential Information, and recognizes
that all Confidential Information shall be the sole property of
the Company and its assigns and that the Company and its assigns
shall be the sole owner of all patent rights, copyrights, trade
secret rights, and all other rights throughout the world
(collectively, "Proprietary Rights") in connection therewith. In
furtherance of the foregoing, Executive hereby agrees that
immediately upon the termination of Executive's employment,
Executive will deliver all Company Materials and any copies
thereof then in Executive's possession to the Company. Executive
further agrees that any property situated on the Company's
premises and owned by the Company or any of the Company Parties,
including disks and other storage media, filing cabinets or other
work areas, is subject to inspection by Company personnel at any
time with or without notice. Finally, Executive understands and
agrees that the Company maintains an electronic mail system and
related facilities for the purpose of business communications,
and that the Company retains the right to review any and all
electronic mail communications, with or without notice, at any
time.
(e) Assignment of Inventions. Executive hereby assigns to the Company
all of his right, title and interest in and to any and all
Inventions (and all Proprietary Rights with respect thereto),
whether or not patentable or registrable under copyright or
similar statutes, made or conceived or reduced to practice or
learned by Executive, either alone or jointly with others, (i)
during the course of the performance of services for the Company,
(ii) relating to the business of the Company or any customer of
or supplier to the Company or any of the products or services
being developed, manufactured or sold by the Company or which
reasonably may be used in proximate relation therewith or (iii)
which results from the use of premises or personal property
(whether tangible or intangible) owned, leased or contracted for
by the Company. EXECUTIVE UNDERSTANDS, AGREES AND IS HEREBY
NOTIFIED THAT THIS SECTION 7.01(e) SHALL NOT APPLY TO ANY
INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITIES,
CONFIDENTIAL INFORMATION OR TRADE SECRET INFORMATION OF THE
COMPANY WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE
EXECUTIVE'S OWN TIME UNLESS (i) THE INVENTION RELATES (I) TO THE
BUSINESS OF THE COMPANY, OR (II) TO THE COMPANY'S ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (ii) THE
INVENTION RESULTS FROM ANY WORK PERFORMED BY EXECUTIVE FOR THE
COMPANY, OR OTHERWISE AS SET FORTH IN THE PRECEDING SENTENCE.
Inventions assigned to the Company by this paragraph 7.01(e) are
hereinafter referred to as "Company Inventions." Executive
acknowledges that all original works of authorship which are made
by Executive (solely or jointly with others) during the course of
the performance of services for the Company and which are
protectable by
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copyright are "works made for hire," as that term is defined in
the United States Copyright Act (17 U.S.C., Section 101).
(f) Assistance in Enforcement of Proprietary Rights. Executive will
assist the Company in every proper way to obtain, renew, restore
and from time to time enforce United States and foreign
Proprietary Rights relating to Company Inventions in any and all
countries. To that end Executive will execute, verify and deliver
such documents and perform such other acts (including appearances
as a witness) as the Company may reasonably request for use in
applying for, obtaining, perfecting, evidencing, sustaining and
enforcing such Proprietary Rights and the assignment thereof. In
addition, Executive will execute, verify and deliver assignments
of such Proprietary Rights to the Company or its designee.
Executive's obligation to assist the Company with respect to
Proprietary Rights relating to such Company Inventions in any and
all countries shall continue beyond the termination of
Executive's employment with the Company, but the Company shall
compensate Executive at a reasonable rate after Executive's
termination for the time actually spent by Executive at the
Company's request in rendering such assistance. In the event the
Company is unable for any reason, after reasonable effort, to
secure Executive's signature on any document needed in connection
with the actions specified in the preceding paragraph, Executive
hereby irrevocably designates and appoints the Company and its
duly authorized offices and agents as Executive's agent and
attorney-in-fact, to act for and on Executive's behalf to
execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding
paragraph thereon with the same legal force and effect as if
executed by Executive.
(g) Obligation to Keep Company Informed. During the period of
Executive's service to the Company, Executive will promptly and
fully disclose in writing to the Company any and all Company
Inventions that Executive has, alone or jointly with others,
conceived, developed or reduced to practice or caused to be
conceived, developed or reduced to practice. In addition, after
termination of Executive's employment with the Company, Executive
will disclose all patent applications filed by Executive within
two (2) years after such termination.
7.02 Non-Competition.
(a) Executive agrees that during his employment and for a period of
two-years following the termination of his employment with the
Company for any reason, he will not, directly or indirectly,
engage in any business (whether as a compensated or uncompensated
officer, director, consultant, advisor, partner, joint venturer,
investor, independent contractor, employee or otherwise) which,
to the best of Executive's knowledge, is or is about to become
engaged in the same or similar business as the Company or that is
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or is about to become competitive in any respect with the
business in which the Company or any of its subsidiaries is
involved or plans to be involved (provided Executive is aware of
such plans) within any place in the United States or world-wide
where the Company or its affiliates operate and/or conduct
business as of the Date of Termination.
(b) If Executive desires to engage in any business, employment or
other activity that may violate the restrictions of Section
7.02(a), above, Executive shall give the Board written notice of
such proposed activity in such form and detail as is acceptable
to the Board and request that the Board consent to such activity
and agree that such activity will not be considered a violation
of the restrictions of Section 7.02(a). The Board may, reasonably
and in its sole discretion, grant or refuse to grant such consent
and/or may condition its consent, if any, on such terms and
conditions as the Board shall deem reasonably appropriate.
7.03 Non-Solicitation of Executives, Employees and Consultants. For a
period of two (2) years following the Date of Termination with the Company, the
Executive shall not solicit, hire, attempt to solicit or hire, or participate
either directly or indirectly in any attempt to solicit or hire any person who
was an executive, employee or independent contractor or consultant of the
Company or any affiliate as of the Executive's Date of Termination or within the
twelve (12) month period prior thereto.
7.04 Non-interference with Business Relations. During the Contract Term and
for a period of two (2) years following the Date of Termination, Executive shall
not, directly or indirectly, solicit, induce or attempt to solicit or induce any
client, customer, supplier, vendor licensee or other business relation of the
Company or any of its affiliates to cease doing business with the Company, or in
any way interfere with any such business relation of the Company.
7.05 Nondisparagement. During the Contract Term and for a period of two (2)
years thereafter, Executive shall not in any form of written or oral expression,
or by act or deed, communicate any criticism, disparaging remark or condemn or
impugn the reputation of the Company or disclose or cause to be disclosed any
negative, adverse or derogatory comments or information about the Company, about
any product or service provided by the Company, or about the Company's prospects
for the future, except as may be required by legal process.
7.06 Return of Company Property. Immediately upon termination of the
Executive's employment under this Agreement for any reason, the Executive shall
return to the Company all Company Materials and property in his possession or
control including without limitation all manuals, records, reports, notes,
contracts, lists, hardware, software, computer programs, computer systems, and
other documents or materials, of any type or nature whatsoever, regardless of
form, which relate to the Company, without retaining any copies or reproductions
thereof. Executive acknowledges and agrees that all such information, property
and equipment shall be the sole and exclusive property of the Company, as the
case may be.
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7.07 Remedies and Acknowledgment of Reasonableness. Executive acknowledges
that compliance with this Article VII is necessary for the protection of the
goodwill and other proprietary interests of Company, and that, after carefully
considering the extent of the restrictions upon him and the rights and remedies
conferred upon Company under this Article VII, the same are reasonable in time
and territory, are designed to eliminate competition which otherwise would be
unfair to Company, do not stifle the inherent skill and experience of Executive,
would not operate as a bar to Executive's sole means of support, are designed
fully to protect the legitimate interests of Company, and do not confer a
benefit upon Company disproportionate to the detriment to Executive. Executive
further acknowledges and agrees that in the event of a breach of this Article
VII, Company would not have an adequate remedy at law because the damages
flowing from such breach would not be readily susceptible of measurement in
monetary terms and that Company shall be entitled to injunctive relief and may
obtain a temporary order restraining any threatened breach or future breach in
addition to any other remedies which may be available at law or equity. Nothing
in this paragraph shall be deemed to limit Company's remedies at law or in
equity for breach of this Article VII or any other paragraph of this Agreement.
7.08 Additional Remedy -- Forfeiture. In addition to the remedies set forth
in Section 7.07, in the event Executive breaches any of the restrictive
covenants in this Article VII, the Company may require Executive to refund to
the Company any severance payments or other benefits made or provided pursuant
to this Agreement or otherwise.
7.09 Enforcement. If, at the time of enforcement of this Article VII, a
court shall hold that the duration, scope, area or activity restrictions stated
herein are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope, area or activity restrictions reasonable and
enforceable under such circumstances shall be substituted for the stated
duration, scope, area or activity restrictions.
7.10 Survival. All of the provisions of this Article VII shall survive
Executive's termination of employment without regard to (i) the reasons for such
termination or (ii) expiration of the Contract Term. In the event of any such
violation of any section in this Article VII, the Executive further agrees that
the time periods set forth herein shall be extended by the period of such
violation.
ARTICLE VIII
MISCELLANEOUS
8.01 Expenses.
(a) If the Executive incurs legal or other fees and expenses in an
action to establish entitlement to benefits under this Agreement,
and if Executive prevails in such action as to a material claim
or issue, the Company shall reimburse the Executive for
reasonable legal fees and related expenses associated with such
claim or issue.
(b) The Company shall provide reimbursement of reasonable fees and
expenses, as described in paragraph (a) above, to the Executive
upon the
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Executive's written submission of a request for reimbursement
together with proof that the fees and expenses were incurred both
of which shall be in a form satisfactory to the Company.
(c) The Company shall reimburse legal expenses related to the
negotiation and documentation of this Agreement between Executive
and Company; provided, that such reimbursement shall not exceed
$20,000.
(d) If the Company incurs legal or other fees in any effort to
enforce the provisions of Article VII and the Company prevails as
to a material claim or issue in such effort, Executive shall
reimburse the Company for all reasonable legal fees and expenses
incurred with respect to such claim or issue upon written request
from the Company evidencing such fees and expenses.
8.02 Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, set-off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others. If the
Company fails to make any payment payable hereunder within thirty (30) days
after such amounts are due, then the Executive shall be entitled to receive
interest, compounded monthly, on the unpaid amount, at a rate equal to the
highest interest rate applicable to the Company in its borrowing of funds from
any third party during the period of nonpayment, and if no such rate is
determinable, or if higher, at a rate equal to one percent above the prime
commercial lending rate announced by Trust Company Bank, N.A. in effect from
time to time during the period of such nonpayment. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, nor shall the amount of any payment hereunder be
reduced, except as otherwise specifically provided herein, by any compensation
earned by the Executive as a result of employment by another employer.
8.03 Successors. This Agreement shall be binding upon and inure to the
benefit of the Executive and the Executive's estate and shall be binding on the
Company or any successor to the Company.
8.04 Beneficiary. If the Executive dies prior to receiving all of the
amounts payable hereunder, such amounts shall be paid in a lump-sum payment to
the beneficiary designated in writing by the Executive ("Beneficiary") and if no
such Beneficiary is designated, to the Executive's estate.
8.05 Nonalienation of Benefits. Benefits payable under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, executive or levy of any
kind, either voluntary or involuntary, prior to actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
hereunder shall be void.
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8.06 Severability. If all or any part of this Agreement is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of this Agreement not
declared to be unlawful or invalid. Any paragraph or part of a paragraph so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such paragraph or part of a paragraph to
the fullest extent possible while remaining lawful and valid.
8.07 Amendment and Waiver. This Agreement shall not be altered, amended or
modified except by written instrument executed by both the Company and
Executive. A waiver of any term, covenant, agreement or condition contained in
this Agreement shall not be deemed a waiver of any other term, covenant,
agreement or condition, and any waiver of any default in any such term,
covenant, agreement or condition shall not be deemed a waiver of any later
default thereof or of any other term, covenant, agreement or condition.
8.08 Notices. All notices and other communications hereunder shall be in
writing and delivered by hand or by first class registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Company: Intermet Corporation
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attn: General Counsel
If to the Executive: Xxxx X. Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
with a copy to: Valentine & Associates, P.C.
0000 Xxxx Xxxxx Xx., Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxx
Either party may from time to time designate a new address by notice given in
accordance with this Section. Notice and communications shall be effective when
actually received by the addressee.
8.09 Counterpart Originals. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
8.10 Entire Agreement. This Agreement forms the entire agreement between
the parties hereto with respect to any severance payment and with respect to the
subject matter contained in the Agreement.
8.11 Effect on Other Agreements. This Agreement shall supersede all prior
agreements, promises and representations regarding severance or other payments
contingent upon termination of employment, including the Employment Agreement
between the Executive and the Company, dated June 1, 1999.
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8.12 Applicable Law. The provisions of this Agreement shall be interpreted
and construed in accordance with the laws of the state of Michigan, without
regard to its choice of law principles.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
INTERMET CORPORATION XXXX X. XXXX
Company Executive
By: /s/ Xxxx Xxxx /s/ Xxxx X. Xxxx
----------------------------------- -------------------------------
Xxxx Xxxx Xxxx X. Xxxx
Its: Chairman of Compensation Committee
-----------------------------------
Date: July 23, 2003 Date: July 21, 2003
--------------------------------- ------------------------
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EXHIBIT A
BY-LAWS
