Exhibit 10(o) (xiii)
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement"), is made and entered into this
8th day of July, 2009 (the "Effective Date") by and between Albany International
Corp., a Delaware corporation with its principal place of business at 0000
Xxxxxxxx, Xxxxxx, Xxx Xxxx (the "Company"), and Xxxxxxx Xxxxx ("Employee").
RECITALS
WHEREAS, Employee has been hired, and has commenced employment with the
Company as an officer in a critical managerial position; and
WHEREAS, Employee is employed by the Company on an at-will basis; and
WHEREAS, the Company wishes to encourage Employee's continued service and
dedication to the performance of his or her duties; and WHEREAS, Employee and
the Company each believe it to be in their best interests to provide Employee
with certain severance protections; and
WHEREAS, in order to induce Employee to remain in the employ of the
Company, and in consideration for Employee's continued service to the Company,
the Company agrees that Employee shall receive the benefits set forth in this
Agreement in the event that Employee's employment with the Company is terminated
in the circumstances described herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. The Company hereby agrees to continue Employee's current
employment on an at-will basis in accordance with provisions contained herein
below. Employee shall be based at the
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Company's headquarters in Albany, New York or such other place, as may be
reasonably requested by the Company. Employee shall be subject to the
supervision of, and shall have such authority as is delegated to him or her by
the Chief Executive Officer, or the Board of Directors (the "Board"), as the
case may be.
2. Effect of Termination Without Cause. If Employee's employment is
terminated by the Company at any time before December 31, 2012 other than for
Cause (as defined herein below), the Company shall pay to Employee, as
severance, his or her gross monthly salary in effect as of the date of such
termination (the "Termination Date"), less applicable withholdings and
deductions required by law, or otherwise agreed to by the parties (the
"Severance Amount") for a period of eighteen (18) months. The number of months
over which the Severance Amount shall be paid shall hereinafter be referred to
as the "Severance Period". The Severance Amount shall be paid in monthly
installments during the Severance Period in accordance with the Company's
customary payroll practices by check or direct deposit until paid in full and
may contain a pro rata payment for any partial month or to account for any
prepaid, but unearned salary. Notwithstanding the foregoing, any severance
payments that otherwise would be due after the second anniversary of the
Termination Date shall be paid in a lump sum on the Company's regular payroll
date immediately preceding said second anniversary, together with any other
severance payment due on that date.
Payment of the severance benefits provided for under this Agreement shall be
contingent upon Employee's timely execution, and nonrevocation, of a General
Release and Separation Agreement substantially in the form attached hereto as
Exhibit A. Payment of the severance benefits provided for under this Agreement
shall not commence prior to the effective date of said General Release and
Separation Agreement.
For the purposes of this Section 2, "Cause" shall be deemed to exist upon:
(i) the conviction of Employee for, or the entry of a plea of guilty
or nolo contendere by Employee to, a felony charge or any crime
involving moral turpitude;
(ii) Unlawful conduct on the part of Employee that may reasonably be
considered to reflect negatively on the
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Company or compromise the effective performance of Employee's duties
as determined by the Company in its sole discretion;
(iii) Employee's willful misconduct in connection with his or her
duties or willful failure to use reasonable effort to perform
substantially his or her responsibilities in the best interest of
the Company (including, without limitation, breach by the Employee
of this Agreement), except in cases involving Employee's mental or
physical incapacity or disability;
(iv) Employee's willful violation of the Company's Business Ethics
Policy or any other Company policy that may reasonably be considered
to reflect negatively on the Company or compromise the effective
performance of Employee's duties as determined by the Company in its
sole discretion;
(v) fraud, material dishonesty, or gross misconduct in connection
with the Company perpetrated by Employee;
(vi) Employee undertaking a position in competition with Company;
(vii) Employee having caused substantial harm to the Company with
intent to do so or as a result of gross negligence in the
performance of his or her duties; or
(viii) Employee having wrongfully and substantially enriched himself
or herself at the expense of the Company.
3. Restrictive Covenants. Employee acknowledges the highly competitive
nature of the Company's business and in recognition thereof agrees as follows:
A. During the Severance Period, whether on Employee's own behalf or
on behalf of or in conjunction with any person, firm, partnership, joint
venture, association, corporation or other business, organization, entity
or enterprise whatsoever ("Person"), Employee shall not directly or
indirectly:
(i) engage in any business which is in competition with the Company
or any of its subsidiaries or affiliates in the same
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geographical areas as the Company or any of its subsidiaries or
affiliates are engaged in their business (a "Competitive Business");
(ii) enter into the employ of, or render any services to, any Person
in respect of any Competitive Business;
(iii) acquire a financial interest in, or otherwise become actively
involved with, any Competitive Business, directly or indirectly, as
an individual, partner, shareholder, officer, director, principal,
agent, trustee or consultant; provided, however, that in no event
shall ownership of less than 2% of the outstanding capital stock of
any corporation, in and of itself, be deemed a violation of this
covenant if such capital stock is listed on a national securities
exchange or regularly traded in an over-the-counter market; or
(iv) interfere with, or attempt to interfere with, any business
relationships (whether formed before or after the Termination Date)
between the Company or any of its subsidiaries or affiliates and
their customers, clients, suppliers or investors.
B. During the Severance Period, whether on Employee's own behalf or
on behalf of or in conjunction with any Person, Employee shall not
directly or indirectly:
(i) solicit or encourage any employee of the Company or any of its
subsidiaries or affiliates to leave the employment of the Company or
any of its subsidiaries or affiliates; or
(ii) hire any such employee who was employed by the Company or any
of its subsidiaries or affiliates as of the Termination Date or, if
later, within the six-month period prior to such date of hire.
It is expressly understood and agreed that although the parties consider the
restrictions in this Paragraph 3 to be reasonable, if a final determination is
made by a court of competent jurisdiction that the time or territory or any
other restriction contained in this paragraph is an unenforceable restriction
against the Employee, the provisions of this paragraph shall not be rendered
void but shall be deemed amended to apply as to such maximum time and territory
and to such maximum extent as such court may determine to be enforceable.
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4. Confidential Information. Employee acknowledges that as a consequence
of his or her employment with the Company proprietary and confidential
information relating to the Company's business may be, or have been, disclosed
to or developed or acquired by the Employee which is not generally known to the
trade or the general public and which is of actual or potential value to the
Company ("Proprietary Information"). Such Proprietary Information includes,
without limitation, information about trade secrets, inventions, patents,
licenses, research projects, costs, profits, markets, sales, customer lists,
proprietary computer programs, proprietary records, and proprietary software;
plans for future development, and any other information not available to the
trade or the general public, including information obtained from or developed in
conjunction with a third party that is subject to a confidentiality or similar
agreement between the Company and such third party. The Employee acknowledges
and agrees that his or her relationship with the Company with respect to such
Proprietary Information has been and shall be fiduciary in nature. Consequently,
during the remainder of, and after, his or her employment by the Company, the
Employee shall not use any Proprietary Information for his or her own benefit,
or for the benefit of any other person or entity or for any other purpose
whatsoever other than the performance of his or her work for the Company, and
the Employee shall maintain all such information in confidence and shall not
disclose any thereof to any person other than employees of the Company
authorized to receive such information. This obligation is in addition to any
similar obligations the Employee may have pursuant to any other agreement,
statute or common-law. Nothing herein, however, shall preclude the Employee from
describing his or her duties with the Company in future job interviews. After
the fifth anniversary of the end of the Employee's employment by the Company,
the term Proprietary Information shall be limited to information constituting
trade secrets of the Company.
5. Non-disparagement. Employee specifically agrees and covenants that he
or she will not directly or indirectly disparage the Company or any subsidiary
or affiliate of the Company, or any of their respective officers, directors,
employees, attorneys or representatives, or any of their respective products or
services in any manner, at any time, to any person or entity. "Disparage" is
defined as, but not limited to, any utterance whatsoever either verbal, in
writing, by gesture or any behavior of any kind that might tend to or actually
harm or injure the Company or any subsidiary or affiliate of the Company,
whether intended or not.
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6. Clawback. Employee shall forfeit any unpaid Severance Amount due
pursuant to this Agreement and shall, upon demand, repay any Severance Amounts
already paid hereunder if, after the Termination Date:
(i) there is a significant restatement of the Company's financial
results, caused or substantially caused by the fraud or intentional
misconduct of the Employee;
(ii) Employee breaches any provision of this Agreement, including,
without limitation, the covenants set for in paragraphs 3, 4 and 5; or
(iii) the Company discovers conduct by Employee that would have
permitted termination for Cause, provided that such conduct occurred prior
to the Termination Date.
7. Remedies for Breach. The Company and Employee agree that a breach by
Employee of the provisions of this Agreement may cause irreparable harm to the
Company which will be difficult to quantify and for which money damages will not
be adequate. Accordingly, the Employee agrees that the Company shall have the
right to obtain an injunction against the Employee, without any requirement for
posting any bond or other security, enjoining any such breach or threatened
breach in addition to any other rights or remedies available to the Company on
account of any breach or threatened breach of this Agreement. Employee and the
Company each further agree that if an action is commenced by any party alleging
breach of this Agreement, the non-prevailing party shall be liable to the
prevailing party for any and all available legal and equitable relief, as well
as reasonable attorneys' fees and costs associated with pursuing or defending
such legal action.
8. Internal Revenue Code Section 409A.
(a) The payments and the payment schedules set forth herein are
intended to be exempt from, or comply with, Section 409A of the Internal Revenue
Code ("Section 409A"). Accordingly, the Agreement shall be interpreted and
performed so as to be exempt from Section 409A, but if that is not possible, the
Agreement shall be interpreted and performed so as to comply with Section 409A.
In the event any payments or benefits are deemed by the IRS to be non-compliant,
this Agreement, at Employee's option, shall be
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modified, to the extent practical, so as to make it compliant by altering the
payments or the timing of their receipt. The methodology to effect or address
any necessary modifications shall be subject to reasonable and mutual agreement
between the parties.
(b) It is the intent of the parties that this Agreement provides
payments and benefits that are either exempt from the distribution requirements
of Section 409A of Code, or satisfy those requirements. Any distribution that is
subject to the requirements of Section 409A may only be made based on the
Employee's "separation from service" (as that term is defined under the final
regulations under Section 409A).
(c) Notwithstanding anything to the contrary in this Agreement, in
the event that (i) a distribution of benefits is subject to Section 409A, (ii)
at the time the distribution would otherwise be made to the Employee, the
Employee is a "specified employee" (as that term is defined in the final
regulations under Section 409A), and (iii) the distribution would otherwise be
made during the 6-month period commencing on the date of the Employee's
separation from service, then such distribution will instead be paid to the
Employee in a lump sum at the end of the 6-month period. The foregoing delay in
the distribution of benefits shall be made in conformance with the final
regulations under Section 409A.
9. Severability. Employee and the Company intend for every provision of
this Agreement to be fully enforceable. But, if a court with jurisdiction over
this Agreement determines that all or part of any provision of this Agreement is
unenforceable for any reason, the Company and Employee intend for each remaining
provision and part to be fully enforceable as though the unenforceable provision
or part had not been included in this Agreement.
10. Entire Agreement. This Agreement and the exhibit hereto constitutes
the entire agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
11. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and Employee.
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12. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York, except to the
extent preempted by federal law.
13. Term. This Agreement shall terminate on December 31, 2012; provided,
however, that if Employee's employment is terminated by the Company on or before
December 31, 2012 other than for cause, the parties' respective rights and
obligations under this Agreement shall survive for a period of five (5) years
following the termination of this Agreement.
14. Successors and Assigns. This Agreement will be binding upon and inure
to the benefit of (a) the heirs, executors, and legal representatives of
Employee upon Employee's death, and (b) any successor of the Company. Any such
successor of the Company will be deemed substituted for the Company under the
terms of this Agreement for all purposes. For this purpose, "successor" means
any person, firm, corporation, or other business entity which at any time,
whether by purchase, merger, or otherwise, directly or indirectly acquires all
or substantially all of the assets or business of the Company. None of the
rights of Employee to receive any payment pursuant to this Agreement may be
assigned or transferred except by will or the laws of descent and distribution.
Any other attempted assignment, transfer, conveyance, or other disposition of
any right of the Employee under this Agreement will be null and void.
15. Waiver of Jury Trial. The parties agree that they have waived, and
hereby waive, their right to a jury trial with respect to any controversy,
claim, or dispute arising out of or relating to this Agreement, or the breach
thereof, or arising out of or relating to the employment of the Employee, or the
termination thereof, including any claims under federal, state, or local law,
and that any such controversy, claim, or dispute shall be heard and adjudicated
in the state courts of the State of New York, in Albany County.
16. Non-admission of Liability. This Agreement does not constitute an
admission by the Company of any liability to Employee, and Employee understands
and agrees that the Company denies any such liability to Employee.
17. Headings. All captions and Section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
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IN WITNESS WHEREOF, Employee and a duly authorized representative of the
Company have signed this Agreement as of the dates set forth below.
Xxxxxxx Xxxxx Albany International Corp.
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------- --------------------------
Name: Xxxxxx X. Xxxxxx
President and CEO
Dated: July 1, 2009 Dated: July 2, 2009
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EXHIBIT A
General Release and Separation Agreement
This General Release and Separation Agreement (the or this "Agreement") is
made and entered into this ____ day of ___________, 20___ by and between Albany
International Corp. (the "Company") and Xxxxxxx Xxxxx ("Employee").
In consideration of the acknowledgements and mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Presentation of Agreement.Employee acknowledges that on ____________
___, 20___ he or she was given this Agreement and was afforded _____ days to
consider same.
2. Legal Advice. Employee was, and hereby is, advised to consult a lawyer
before signing this Agreement.
3. Acceptance of Agreement. Employee may accept this Agreement only by
signing, dating and delivering the Agreement to the Company (in the manner set
forth in Section 12) on or before the Company's normal close of business on
___________ ___, 20___. Time is of the essence with regard to this Section 3.
4. Revocation. Employee may revoke this Agreement at any time within seven
(7) days after signing and delivering it to the Company by notifying the Company
in writing (in the manner set forth in Section 12) of Employee's decision to
revoke. Time is of the essence with regard to this Section 4.
5. Effective Date. The effective date of this Agreement shall be the
eighth (8th) day after Employee signs and delivers it to the Company in
accordance with Section 3 above, unless Employee revokes the Agreement before
then in accordance with Section 4 above. If Employee fails to accept this
Agreement in accordance with Section 3 above, or timely revokes the Agreement in
accordance with Section 4 above, the Agreement will not become effective and
will not be binding on Employee or the Company.
6. Termination of Employment.Employee's employment by the Company has been
terminated effective ___________ ____, 20__. The parties agree that said
termination of employment was a termination by the Company other than for Cause
within the meaning of Section 2 of that certain Severance Agreement (the
"Severance Agreement") entered into by and between the parties with an effective
date of July 8, 2009.
7. Severance Payments. In accordance with, and subject to, the terms of
the Severance Agreement, the Company shall pay to Employee the Severance Amount
as specified in the Severance Agreement.
8. Employee's Acknowledgement. Employee acknowledges and agrees that,
except for this Agreement, Employee would have no right to receive the benefits
described in Section 7.
9. Defined Term. As used in this Agreement, the term "Albany" means,
individually and collectively, Albany, each subsidiary and affiliate of Albany,
and their respective employee welfare benefit plans, employee pension benefit
plans, successors and assigns, as well as all present and former shareholders,
directors, officers, fiduciaries, agents, representatives and employees of those
companies and other entities.
10. General Release. By signing this Agreement Employee immediately gives
up and releases Albany from, and with respect to, any and all rights and claims
that Employee may have against Albany (except as expressly state in subsection
10(c) below), whether or not Employee presently is aware of such rights or
claims or suspects them to exist. In addition, and without limiting the
foregoing:
(a) The Employee on behalf of himself or herself, his or her agents,
spouse, representatives, assignees, attorneys, heirs, executors and
administrators, fully releases Albany and Albany's past and present
successors, assigns, parents, divisions, subsidiaries, affiliates,
officers, directors, shareholders, employees, agents and
representatives from any and all liability, claims, demands,
actions, causes of action, suits, grievances, debts, sums of moneys,
controversies, agreements, promises, damages, back and front pay,
costs, expenses, attorneys fees, and remedies of any type, which
Employee now has or hereafter may have, by reason of any matter,
cause, act or
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omission arising out of or in connection with Employee's employment
or the termination of his or her employment with Albany prior to
Employee signing this Agreement, including, without limiting the
generality of the foregoing, any claims, demands or actions arising
under the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act, the Employee Retirement Income
Security Act of 1974, Title VII of the Civil Rights Act of 1964, the
Civil Rights act of 1991, the Civil Rights Act of 1866, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of
1990, and any other federal, state or local statute, ordinance or
common law regarding employment, discrimination in employment, or
the termination of employment. Notwithstanding the foregoing,
Employee is not waiving any right that cannot, as a matter of law,
be voluntarily waived, including the right to file a charge or
complaint with, or participate in the adjudication of charge or
complaint of discrimination filed with, any federal, state or local
administrative agency, though Employee expressly waives any right to
recover any money or obtain any other relief or benefit as a result
of any complaint or charge being filed with any federal, state or
local administrative agency.
The foregoing release includes, but is not limited to, any claim of
discrimination on the basis of race, sex, religion, marital status,
sexual orientation, national origin, handicap or disability, age,
veteran status, special disabled veteran status, citizenship status;
any other claim based on a statutory prohibition; any claim arising
out of or related to an express or implied employment contract, any
other contract affecting terms and conditions of employment, or any
covenant of good faith and fair dealing; all tort claims; and all
claims for attorney's fees or expenses.
The Employee represents that he or she understands the foregoing
release, that rights and claims under the Age Discrimination in
Employment Act of 1967, as amended, are among the rights and claims
against Albany he or she is releasing, and that he or she
understands that he or she is not releasing any rights or claims
arising after the date Employee signs this Agreement.
(b) If Employee breaches any obligation under this Agreement, Employee
agrees that Albany shall not be obligated to
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continue to make payments under Section 7, and that Employee shall
reimburse Albany for all payments made pursuant to Section 7.
(c) Nothing in this Agreement, however, shall be deemed a waiver of any
vested rights or entitlements Employee may have under any retirement
or other employee benefit plans administered by Albany. Nor shall
anything in this Agreement operate to release Albany from its
obligations under this Agreement.
11. Non-admission of Liability. This Agreement does not constitute an
admission by Albany of any liability to Employee, and Employee understands and
agrees that Albany denies any such liability to Employee.
12. Notices. Notices or other deliveries required or permitted to be given
or made under this Agreement by Employee to Albany shall, except to the extent
otherwise required by law, be deemed given or made if delivered by hand or by
express mail or overnight courier service to Albany International Corp., 0000
Xxxxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: _________________.
13. Headings. All captions and Section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
IN WITNESS WHEREOF, Employee and a duly authorized representative of the
Company have signed this Agreement as of the dates set forth below.
Xxxxxxx Xxxxx Albany International Corp.
________________________ By: _______________________
Name: Xxxxxx X. Xxxxxx
President and CEO
Dated: ____________, 20___ Dated: _____________, 20___
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