AGREEMENT
EXHIBIT 10.24
AGREEMENT
THIS AGREEMENT (this “Agreement”) is dated as of June 30, 2009 (the “Effective
Date”), between Xxxx Corporation, a Delaware corporation (the “Company”) and Xxxxxxxx
X. Xxxxxx (“Executive”).
WHEREAS, the Company and Executive are parties to an employment agreement (the “Existing
Agreement”);
WHEREAS, the Company is contemplating a filing under Chapter 11 of the United States
Bankruptcy Code;
WHEREAS, the Existing Agreement would need to conform to the provisions of the United States
Bankruptcy Code as a result of a potential Chapter 11 filing;
WHEREAS, the Company desires to continue to have the benefit of the Executive’s continued
service and the restrictive covenants contained herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Term of Agreement. This Agreement shall commence on and as of the Effective Date and continue
until Executive’s employment has terminated and the obligations of the parties hereunder have
terminated or expired or have been satisfied in accordance with their terms, or if earlier, upon
the execution of a new employment agreement by the parties hereto. Notwithstanding anything
contained herein to the contrary, the provisions of the Existing Agreement will continue to apply
until a filing by the Company for bankruptcy. Upon a filing for bankruptcy by the Company, the
terms of the Agreement will apply and supersede the terms of the Existing Agreement in their
entirety. As of the Effective Date, the title, responsibilities, salary and benefits of Executive
shall be the same as those that are currently in effect.
2. Termination of Employment.
(a) Notice. The employment relationship may be terminated by the Company with or without
Cause or for Incapacity, or by Executive with or without Good Reason, all as defined below,
by giving a Notice of Termination. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the
provision so indicated. All notices under this Section 2(a) shall be given in accordance
with the requirements of Section 6.
(b) Incapacity. If the Company reasonably determines that Executive is unable at any time
to perform the duties of Executive’s position because of a serious illness, injury,
impairment, or physical or mental condition and Executive is not eligible for or has
exhausted all leave to which Executive may be entitled under the Family and Medical Leave
Act (“FMLA”) or, if more generous, other applicable state or local law, the Company may
terminate Executive’s employment for “Incapacity”. In addition, at any time that Executive
is on a leave of absence, the Company may temporarily reassign the duties of Executive’s
position to one or more other executives without creating a basis for Executive’s Good
Reason resignation, provided that the Company restores such duties to Executive upon
Executive’s return to work.
(c) Cause. Termination of Executive’s employment for “Cause” shall mean termination upon:
(i) an act of fraud, embezzlement or theft by Executive in connection with
Executive’s duties or in the course of Executive’s employment with the Company;
(ii) Executive’s material breach of any provision of this Agreement, provided that
in those instances in which Executive’s material breach is capable of being cured,
Executive has failed to cure within a thirty (30) day period after notice from the
Company;
(iii) an act or omission, which is (x) willful or grossly negligent, (y) contrary to
established policies or practices of the Company, and (z) materially harmful to the
business or reputation of the Company, or to the business of the Company’s customers
or suppliers as such relate to the Company; or
(iv) a plea of nolo contendere to, or conviction for, a felony.
(d) Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of
any of the following circumstances or events:
(i) any reduction by the Company in Executive’s base salary or adverse change in the
manner of computing Executive’s incentive compensation opportunity, as in effect
from time to time;
(ii) the failure by the Company to pay or provide to Executive any amounts of base
salary or earned incentive compensation or any benefits which are due, owing and
payable to Executive, or to pay to Executive any portion of an installment of
deferred compensation due under any deferred compensation program of the Company;
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(iii) the failure by the Company to continue to provide Executive with benefits
substantially similar in the aggregate to the Company’s life insurance, medical,
dental, health, accident or disability plans in which Executive is participating at
the date of this Agreement;
(iv) except on a temporary basis as described in Section 2(b), a material adverse
change in Executive’s responsibilities, position, reporting relationships, authority
or duties. For purposes of clarification, Executive agrees that it will not be a
material adverse change for the Company to reassign Executive to a position with at
least substantially similar responsibilities and authority;
(v) the transfer of Executive’s principal place of employment to a location fifty
(50) or more miles from its location immediately preceding the transfer; or
(vi) without limiting the generality or effect of the foregoing, any material breach
of this Agreement by the Company.
Notwithstanding anything else herein, Good Reason shall not exist if, with regard to the
circumstances or events relied upon in Executive’s Notice of Termination: (x) Executive
failed to provide a Notice of Termination to the Company within sixty (60) days of the date
Executive knew or should have known of such circumstances or events, (y) the circumstances
or events are fully corrected by the Company prior to the Date of Termination, or (z)
Executive gives Executive’s express written consent to the circumstances or events.
(e) Date of Termination. “Date of Termination” shall mean:
(i) if Executive’s employment is terminated by reason of Executive’s death, the date
of Executive’s death;
(ii) if Executive’s employment is terminated by the Company for any reason other
than because of Executive’s death, the date specified in the Notice of Termination
(which shall not be prior to the date of the notice);
(iii) if Executive’s employment is terminated by Executive for any reason, the Date
of Termination shall be not less than thirty (30) nor more than sixty (60) days from
the date such Notice of Termination is given, or such earlier date after the date
such Notice of Termination is given as may be identified by the Company.
Unless the Company instructs Executive not to do so, Executive shall continue to perform
services as provided in this Agreement through the Date of Termination.
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(f) Employee Benefits. A termination by the Company pursuant to Section 2(c) hereof or by
Executive pursuant to Section 2(d) hereof shall not affect any rights which Executive may
have pursuant to any other agreement, policy, plan, program or arrangement of the Company
providing employee benefits, which rights shall be governed by the terms thereof and by
Section 3; provided, however, that if Executive shall have received or shall be receiving
benefits under Section 3(b) hereof and, if applicable, Section 4 hereof, Executive shall not
be entitled to receive benefits under any other policy, plan, program or arrangement of the
Company providing severance compensation to which Executive would otherwise be entitled.
3. Compensation Upon Termination. Upon Executive’s termination of employment, Executive shall
receive:
(a) If Executive’s employment shall be terminated by the Company for Incapacity or for
Cause, by Executive without Good Reason, or upon Executive’s death, the Company shall pay to
Executive (or, in the event of Executive’s death, to Executive’s beneficiary or estate),
when the same would otherwise have been due, the base salary and any other accrued amounts
then payable through the Date of Termination and shall have no further obligations under
this Agreement, other than as set forth in Section 3(c) hereof, as applicable.
(b) If Executive’s employment shall be terminated (a) by the Company, except for a
termination by the Company for Cause or Incapacity (or due to Executive’s death), or (b) by
Executive for Good Reason, then Executive shall be entitled to the benefits provided below,
in addition to the benefits provided in Section 3(c) hereof, as applicable:
(i) The Company shall pay Executive Executive’s full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given (or, if
greater, at the rate in effect at any time within 90 days prior to the time Notice
of Termination is given), plus all other amounts to which Executive is entitled
under any compensation or benefit plans of the Company, including, without
limitation, any accrued amounts under any retention or incentive plan (including,
but not limited to, the Key Management Incentive Plan or successor program), and
including incentive compensation prorated for any applicable measurement period
occurring prior to the Date of Termination, at the time such payments are due,
except as otherwise provided below.
(ii) an amount (the “Severance Payment”) equal to two (2) times the sum of:
(A) the greater of (I) Executive’s annual base salary rate in effect as of
the Effective Date or (II) Executive’s annual base salary rate in effect as
of the Termination Date; and
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(B) the greater of (I) Executive’s annual incentive bonus target amount in
effect as of the Effective Date or (II) Executive’s annual incentive bonus
target amount in effect as of the Termination Date.
In the event that the Date of Termination precedes the Emergence Date (as defined
below), the Severance Payment will be paid in a lump sum as soon as practicable
following the Emergence Date. In the event the Date of Termination is after the
Emergence Date, the Severance Payment will be paid over the two-year period
beginning on the Date of Termination (the “Severance Period”) in twenty-four (24)
equal semi-monthly installments. “Emergence Date” shall mean the effective date of
a Chapter 11 plan of reorganization.
(iii) The Company shall arrange to provide to Executive, Executive’s dependents, and
beneficiaries, for the Severance Period, benefits provided under any “welfare
benefit plan” of the Company (as the term “welfare benefit plan” is defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended)
(“Welfare Benefits”). If and to the extent that any such Welfare Benefits shall not
or cannot be paid or provided under any policy, plan, program or arrangement of the
Company (A) solely due to the fact that Executive is no longer an officer or
employee of the Company or (B) as a result of the amendment or termination of any
plan providing for Welfare Benefits, the Company shall then itself pay or provide
for the payment of such Welfare Benefits to Executive, Executive’s dependents and
beneficiaries. Without otherwise limiting the purposes or effect of the no
mitigation obligation in Section 3(h) hereof, Welfare Benefits payable to Executive
(including Executive’s dependents and beneficiaries) pursuant to this Section
3(b)(iii) shall be reduced to the extent comparable welfare benefits are actually
received by Executive (including Executive’s dependents and beneficiaries) from
another employer during such period, and any such benefits actually received by
Executive shall be reported by Executive to the Company.
(c) If, after the Emergence Date, Executive’s employment shall be terminated by the Company
for Incapacity or for any reason other than Cause, by Executive for Good Reason, or upon
Executive’s death, any unvested shares of restricted stock of the Company held by Executive
that were granted under the Management Equity Plan shall immediately vest in their entirety
upon such termination.
(d) The Company may not set-off or counterclaim losses, fines or damages in respect of any
claim, debt or obligation against any payment to or benefit for Executive provided for in
this Agreement.
(e) Without limiting Executive’s rights at law or in equity, if the Company fails to make
any payment or provide any benefit required to be made or provided hereunder
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within thirty (30) days of the date it is due, the Company will pay interest on the amount
or value thereof at an annualized rate of interest equal to the “prime rate” as quoted from
time to time during the relevant period in The Wall Street Journal, plus three percent.
Such interest will be payable as it accrues on demand. Any change in such prime rate will
be effective on and as of the date of such change.
(f) The Company acknowledges that its severance pay plans and policies applicable in general
to its salaried employees do not provide for mitigation, offset or reduction of any
severance payment received thereunder. Accordingly, the parties hereto expressly agree that
the payment of the severance compensation by the Company to Executive in accordance with the
terms of this Agreement shall be liquidated damages and that Executive shall not be required
to mitigate the amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor shall any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other obligation on the
part of Executive hereunder or otherwise, except as expressly provided in this Section 3.
4. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall
be determined (as hereafter provided) that any payment (or benefit provided) by the Company
to or for Executive’s benefit, whether paid or payable pursuant to the terms of this
Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section
4999 (or any successor thereto) of the Code, and any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest and penalties, are
hereafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to
receive an additional payment or payments (collectively, a “Gross-Up Payment”), including
without limitation any Gross-Up Payment made with respect to the Excise Tax, if any,
attributable to (i) any incentive stock option, as defined by Section 422 of the Code
(“ISO”), or (ii) any stock appreciation or similar right, whether or not limited, granted in
tandem with any ISO. The Gross-Up Payment shall be in an amount such that, after payment by
Executive of the Excise Tax, plus any additional taxes, penalties and interest, and any
further Excise Taxes imposed upon the Gross-Up Payment, Executive retain, after payment of
all such taxes and Excise Taxes, an amount of the Gross-Up Payment equal to the Payment that
Executive would have received if no Excise Taxes had been imposed upon the Payment and no
additional taxes, penalties, and interest or further Excise Taxes had been imposed upon the
Gross-Up Payment.
(b) Subject to the provisions of Section 4(e) hereof, all determinations required to be made
under this Section 4, including whether an Excise Tax is payable by Executive and the amount
of such Excise Tax and whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by a nationally recognized firm of certified public
accountants (the “Accounting Firm”) selected by Executive in Executive’s sole discretion,
other than the Company’s independent auditing firm, to the
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extent prohibited by applicable Public Company Accounting Oversight Board rules. Executive
shall direct the Accounting Firm to submit its determination and detailed supporting
calculations to both the Company and Executive within thirty (30) calendar days after the
later of the Date of Termination or the Emergence Date. If the Accounting Firm determines
that any Excise Tax is payable by Executive, the Company shall pay the required Gross-Up
Payment to Executive within five (5) business days after receipt of the aforesaid
determination and calculations. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall, at the same time as it makes such determination, furnish
Executive with an opinion that Executive does not owe any Excise Tax on Executive’s Federal
income tax return. Any determination by the Accounting Firm as to the amount of the
Gross-Up Payment to be paid by the Company within such thirty (30) calendar day period shall
be binding upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 (or any successor thereto) of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to Section 4(e) hereof and Executive
thereafter are required to make a payment of any Excise Tax, Executive shall direct the
Accounting Firm to determine the amount of the Underpayment that has occurred and to submit
its determination and detailed supporting calculations to both the Company and Executive as
promptly as possible. Any such Underpayment shall be promptly paid by the Company to or for
Executive’s benefit within three calendar days after receipt of such determination and
calculations.
(c) The Company and Executive shall each cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination provided for in Section 4(b) hereof.
Such cooperation shall include without limitation providing the Accounting Firm access to
and copies of any books, records and documents in the possession of the Company or
Executive, as the case may be, that are reasonably requested by the Accounting Firm.
(d) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations provided for in Section 6(b) hereof shall initially be paid
by Executive. The Company shall reimburse Executive for Executive’s payment of such costs
and expenses within five (5) business days after receipt from Executive of a statement
therefor and evidence of Executive’s payment thereof.
(e) Executive shall notify the Company in writing, of any claim by the Internal Revenue
Service (the “IRS”) that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than
ten (10) business days after Executive receives notice of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the earlier of (x) the expiration of the
thirty (30) calendar day period following the date on which Executive
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gives such notice to the Company or (y) the date that any payment of taxes with respect to
such claim is due. If the Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably requested by the Company relating,
to such claim;
(ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing, from time to time, including without limitation
accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to contest such
claim; and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 4(e), the
Company shall, provided that such control does not have a material adverse affect on
Executive’s individual income tax with respect to matters unrelated to the contest
of the Excise Tax, control all proceedings taken in connection with such contest
and, at its sole option, may, provided that such pursuit or foregoing does not have
a material adverse affect on Executive’s individual income tax with respect to
matters unrelated to the contest of the Excise Tax, pursue or forego any and all
administrative appeals, proceedings, hearings and conference with the IRS in respect
of such claim (but, Executive may participate therein at Executive’s own cost and
expense) and may, at its sole option, provided that such payment, suit, contest or
prosecution does not have a material adverse affect on Executive’s individual income
tax with respect to matters unrelated to the contest of the Excise Tax, either
direct Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs Executive to pay the tax claimed and xxx for a
refund, the Company shall advance the amount of such payment to Executive on an
interest-free basis and shall indemnify and hold Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of the
statute of limitations relating to
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payment of taxes for Executive’s taxable year with respect to which the contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of such contest shall be limited to issues with
respect to which a Gross Up Payment would be payable hereunder, and Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by the
IRS.
(f) If, after the receipt by Executive of an amount advanced by the Company pursuant to
Section 4(e) hereof, Executive receives any refund with respect to such claim, Executive
shall (subject to the Company’s complying with the requirements of Section 4(e) hereof)
promptly pay to the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 4(e) hereof, a determination is made
that Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such denial or refund
prior to the expiration of thirty (30) calendar days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.
5. Successors; Binding Agreement. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the business
and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place, and will assign its rights and obligations hereunder to such successor.
Failure of the Company to make such an assignment and to obtain such assumption and agreement
prior to the effectiveness of any such succession, unless Executive agrees otherwise in writing
with the Company or the successor, shall entitle Executive to compensation from the Company in the
same amount and on the same terms as Executive would be entitled to hereunder if Executive
terminates Executive’s employment for Good Reason and the date on which any such succession becomes
effective shall be deemed Executive’s Date of Termination. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees and/or legatees. This
Agreement is personal in nature and neither of the parties hereto shall, without the consent of the
other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 5. Without limiting the generality of the foregoing,
Executive’s right to receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than by a transfer by Executive’s will
or by the laws of descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 5, the Company shall have no liability to pay to the purported
assignee or transferee any amount so attempted to be assigned or transferred. The Company and
Executive recognize that each party will have no
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adequate remedy at law for any material breach by the other of any of the agreements contained
herein and, in the event of any such breach, the Company and Executive hereby agree and consent
that the other shall be entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of this Agreement.
6. Notices. For the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing, and shall be deemed to have been duly given when delivered
by hand, or mailed by United States certified mail, return receipt requested, postage prepaid, or
sent by Federal Express or similar overnight courier service, addressed to the respective addresses
set forth on the signature page of this Agreement, or sent by facsimile with confirmation of
receipt to the respective facsimile numbers set forth on the signature page of this Agreement,
provided that all notices to the Company shall be directed to the attention of the Secretary of the
Company (or, if Executive is the Secretary at the time such notice is to be given, to the Chairman
of the Company’s Board of Directors), or to such other address or facsimile number as either party
may have furnished to the other in writing in accordance herewith, except that notice of change of
address or facsimile number shall be effective only upon receipt.
7. Noncompetition.
(a) From the Effective Date until the Date of Termination, Executive agrees not to engage in
any Competitive Activity. For purposes of this Agreement, the term “Competitive Activity”
shall mean Executive’s participation as an employee or consultant, without the written
consent of the CEO or the Board or any authorized committee thereof, in the management of
any business enterprise anywhere in the world if such enterprise is a “Significant Customer”
of any product or service of the Company or engages in competition with any product or
service of the Company (including without limitation any enterprise that is a supplier to an
original equipment automotive vehicle manufacturer) or is planning to engage in such
competition. For purposes of this Agreement, the term “Significant Customer” shall mean any
customer who represents in excess of 5% of the Company’s sales in any of the three calendar
years prior to the date of determination. “Competitive Activity” shall not include the mere
ownership of, and exercise of rights appurtenant to, securities of a publicly-traded company
representing 5% or less of the total voting power and 5% or less of the total value of such
an enterprise. Executive agrees that the Company is a global business and that it is
appropriate for this Section 7 to apply to Competitive Activity conducted anywhere in the
world.
(b) Executive agrees not to engage directly or indirectly in any Competitive Activity (i)
until one (1) year after the Date of Termination if Executive is terminated by the Company
for Cause, or Executive terminates Executive’s employment for other than Good Reason, or
(ii) until two (2) years after the Date of Termination in all other circumstances.
(c) Executive shall not directly or indirectly, either on Executive’s own account or with or
for anyone else, solicit or attempt to solicit any of the Company’s customers,
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solicit or attempt to solicit for any business endeavor or hire or attempt to hire any
employee of the Company, or otherwise divert or attempt to divert from the Company any
business whatsoever or interfere with any business relationship between the Company and any
other person, (i) until one (1) year after the Date of Termination if Executive is
terminated by the Company for Cause, or Executive terminates Executive’s employment for
other than Good Reason, or (ii) until two (2) years after the Date of Termination in all
other circumstances.
(d) Executive acknowledges and agrees that damages in the event of a breach or threatened
breach of the covenants in this Section 7 will be difficult to determine and will not afford
a full and adequate remedy, and therefore agree that the Company, in addition to seeking
actual damages pursuant to Section 7 hereof, may seek specific enforcement of the covenant
not to compete in any court of competent jurisdiction, including, without limitation, by the
issuance of a temporary or permanent injunction, without the necessity of a bond. Executive
and the Company agree that the provisions of this covenant not to compete are reasonable.
However, should any court or arbitrator determine that any provision of this covenant not to
compete is unreasonable, either in period of time, geographical area, or otherwise, the
parties agree that this covenant not to compete should be interpreted and enforced to the
maximum extent which such court or arbitrator deems reasonable.
(e) In consideration of the payment by the Company of the amounts pursuant to Sections
3(b)(ii) and 3(b)(iii) hereto, Executive shall execute a general release in form and
substance reasonably acceptable to the Company acknowledging, among other things,
Executive’s obligations under this Agreement.
8. Confidentiality and Cooperation.
(a) Executive shall not knowingly use, disclose or reveal to any unauthorized person, at any
time after the Effective Date, any trade secret or other confidential information relating
to the Company or any of its affiliates, or any of their respective businesses or
principals, such as, without limitation, dealers’ or distributor’s lists, information
regarding personnel and manufacturing processes, marketing and sales plans, pricing or cost
information, and all other such information; and Executive confirms that such information is
the exclusive property of the Company and its affiliates. Upon termination of Executive’s
employment, Executive agrees to return to the Company on demand by the Company all
memoranda, books, papers, letters and other data, and all copies thereof or therefrom, in
any way relating to the business of the Company and its affiliates, whether made by
Executive or otherwise in Executive’s possession.
(b) Any design, engineering methods, techniques, discoveries, inventions (whether patentable
or not), formulae, formulations, technical and product specifications, xxxx of materials,
equipment descriptions, plans, layouts, drawings, computer programs, assembly, quality
control, installation and operating procedures, operating manuals,
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strategic, technical or marketing information, designs, data, secret knowledge, know-how and
all other information of a confidential nature prepared or produced during the period of
Executive’s employment and which ideas, processes, and other materials or information relate
to any of the businesses of the Company, shall be owned by the Company and its affiliates
whether or not Executive should in fact execute an assignment thereof or other instrument or
document which may be reasonably necessary to protect and secure such rights to the Company.
(c) Following the termination of Executive’s employment, Executive agrees to make himself or
herself reasonably available to the Company to respond to periodic requests for information
relating to the Company or Executive’s employment which may be within Executive’s knowledge.
Executive further agrees to cooperate fully with the Company in connection with any and all
existing or future depositions, litigation, or investigations brought by or against the
Company, any entity related to the Company, or any of its (their) agents, officers,
directors or employees, whether administrative, civil or criminal in nature, in which and to
the extent the Company deems Executive’s cooperation necessary. In the event that Executive
is subpoenaed in connection with any litigation or investigation, Executive will immediately
notify the Company. Executive shall not receive any additional compensation, other than
reimbursement for reasonable costs and expenses incurred by Executive, in complying with the
terms of this Section 8(c).
9. Arbitration.
(a) Except as contemplated by Section 7(d) or Section 9(c) hereof, any dispute or
controversy arising under or in connection with this Agreement that cannot be mutually
resolved by the parties to this Agreement and their respective advisors and representatives
shall be settled exclusively by arbitration in Southfield, Michigan, before one arbitrator
of exemplary qualifications and stature, who shall be selected jointly by an individual to
be designated by the Company and an individual to be selected by Executive, or if such two
individuals cannot agree on the selection of the arbitrator, who shall be selected pursuant
to the procedures of the American Arbitration Association, and such arbitration shall be
conducted in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect.
(b) The parties agree to use their best efforts to cause (i) the two individuals set forth
in the preceding Section 9(a), or, if applicable, the American Arbitration Association, to
appoint the arbitrator within thirty (30) days of the date that a party hereto notifies the
other party that a dispute or controversy exists that necessitates the appointment of an
arbitrator, and (ii) any arbitration hearing to be held within thirty (30) days of the date
of selection of the arbitrator, and, as a condition to his or her selection, such arbitrator
must consent to be available for a hearing, at such time.
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(c) Judgment may be entered on the arbitrator’s award in any court having jurisdiction,
provided that Executive shall be entitled to seek specific performance of Executive’s right
to be paid and to participate in benefit programs during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The Company and Executive
hereby agree that the arbitrator shall be empowered to enter an equitable decree mandating
specific performance of the terms of this Agreement. If any dispute under this Section 9
shall be pending, Executive shall continue to receive at a minimum the base salary which
Executive was receiving immediately prior to the act or omission which forms the basis for
the dispute. At the close of the arbitration, such continued base salary payments may be
offset against any damages awarded to Executive or may be recovered from Executive if it is
determined that Executive was not entitled to the continued payment of base salary under the
other provisions of this Agreement.
10. Modifications. No provision of this Agreement may be modified, amended, waived or discharged
unless such modification, amendment, waiver or discharge is agreed to in writing and signed by both
Executive and such officer of the Company as may be specifically designated by the Board.
11. No Implied Waivers. Failure of either party at any time to require performance by the other
party of any provision hereof shall in no way affect the full right to require such performance at
any time thereafter. Waiver by either party of a breach of any obligation hereunder shall not
constitute a waiver of any succeeding breach of the same obligation. Failure of either party to
exercise any of its rights provided herein shall not constitute a waiver of such right.
12. Governing Law. The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Michigan without giving effect to any conflicts of
laws rules.
13. Payments Net of Taxes. Except as otherwise provided in Section 4 herein, any payments provided
for herein which are subject to Federal, State, local or other governmental tax or other
withholding requirements or obligations, shall have such amounts withheld prior to payment, and the
Company shall be considered to have fully satisfied its obligation hereunder by making such
payments to Executive net of and after deduction for all applicable withholding obligations.
14. Capacity of Parties. The parties hereto warrant that they have the capacity and authority to
execute this Agreement.
15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not, at
the option of the party for whose benefit such provision was intended, affect the validity or
enforceability of any other provision of the Agreement, which shall remain in full force and
effect.
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16. Counterparts. 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.
17. Entire Agreement. Upon a filing for bankruptcy by the Company, this Agreement will contain the
entire agreement by the parties with respect to the matters covered herein and supersedes any prior
agreement (including, but not limited to, prior employment agreement(s)), condition, practice,
custom, usage and obligation with respect to such matters insofar as any such prior agreement,
condition, practice, custom, usage or obligation might have given rise to any enforceable right.
No agreements, understandings or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
18. Legal Fees and Expenses. It is the intent of the Company that Executive not be required to
incur the expenses associated with the enforcement of Executive’s rights under this Agreement by
litigation or other legal action because the cost and expense thereof would substantially detract
from the benefits intended to be extended to Executive hereunder. Accordingly, the Company shall
pay or cause to be paid and be solely responsible for any and all reasonable attorneys’ and related
fees and expenses incurred by Executive (i) as a result of the Company’s failure to perform this
Agreement or any provision hereof or (ii) as a result of the Company unreasonably or maliciously
contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid.
19. Code Section 409A. Notwithstanding anything to the contrary in Section 3(b) hereof, to
the extent necessary to comply with the requirements of Section 409A of the Internal Revenue Code
the following provisions shall apply to the portion of the Severance Payment that does not qualify
for exemption from Section 409A of the Internal Revenue Code:
(a) “Emergence Date” shall mean the date of a “change in control event” (as defined for
purposes of Section 409A of the Code and the regulations thereunder) that coincides with the
effective date of a Chapter 11 plan of reorganization.
(b) Distribution of the Severance Payment shall commence within thirty (30) days after the
later of the Date of Termination or the Emergence Date.
(c) The form of such distribution shall be as provided in Section 3(b) hereof; provided,
however, that if the Termination Date is later than the end of the two-year period beginning
on the Emergence Date, distributions of the Severance Payment shall be made in the same
manner as for a Termination Date prior to the Emergence Date.
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The “Xxxx Corporation Code Section 409A Policies and Procedures” as in effect on the Effective Date
are hereby incorporated by reference in this Agreement as if set forth herein, and shall supersede
any conflicting provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.
| XXXX CORPORATION | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxxx | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
| EXECUTIVE: | ||||
| /s/ Xxxxxxxx X. Xxxxxx | ||||
| Xxxxxxxx X. Xxxxxx | ||||
| Address: | ||||
| Fax: | ||||
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