EMPLOYMENT AGREEMENT – STRATTON C. LEE, JR.
Exhibit
10.87
EMPLOYMENT
AGREEMENT – XXXXXXXX X. XXX, XX.
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), is made
and entered into as
of ,
2009, by and between PRWT Services, Inc., a Pennsylvania corporation (the “Company”) and
Xxxxxxxx X. Xxx, Xx. (the “Executive”).
W I T N E
S S E T H:
WHEREAS,
the Company desires to employ the Executive and the Executive desires to be
employed by the Company, on the terms and conditions set forth in this
Agreement; and
NOW,
THEREFORE, in consideration of the covenants and agreements hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT AND
DUTIES
1.1. Term
of Employment. The Executive’s employment under this Agreement shall
commence on the date hereof (the “Start Date”) and
shall continue until December 31, 2012 (such period being herein referred to as
the “Initial
Term,” and the period from January 1, 2009 through December 31, 2009 and
any additional 12-month period thereafter ending on December 31st
shall be referred to as an “Employment
Year”). After the Initial Term this Agreement shall be
automatically renewed for a successive two (2) year period (the “First Renewal
Term”). After the First Renewal Term, and on the last day of
any Employment Year thereafter, this Agreement shall be automatically renewed
for successive one year periods (each such period being and the First Renewal
Term referred to herein as a “Renewal Term”),
unless, either the Executive or the Company prior to the expiration of the
Initial Term, First Renewal Term, or thereafter, the then current Employment
Year, gives written notice of not less than ninety (90) days that this agreement
will not be renewed, whereupon the term of the Executive’s employment (the
“Term”) shall
terminate upon the expiration of the Initial Term or the then current Renewal
Term, unless sooner terminated pursuant to Section 5 hereof.
1.2.
General.
1.2.1.
During the Term, the Executive shall have the title of the Executive Vice
President, Business Development of the Company and shall have such duties as may
be from time to time delegated to him by the Chief Executive Officer (the “CEO”)
and the Board of Directors (the “Board”). The Executive shall report
directly to the Chief Executive Officer. The Executive shall
faithfully and diligently discharge his duties hereunder and use his best
efforts to implement the policies established by the Board. The
Executive’s responsibilities shall include, among other things, to render
executive, policy, business development, merger and acquisitions and other
management services to the Company of the type customarily provided by persons
situated in similar executive and management capacities.
1.2.2.
The Executive shall devote all of
his business time, attention, knowledge and skills faithfully, diligently and
to the best of his ability, in furtherance of the business and activities of the
Company; provided, however, that nothing in this Agreement shall
preclude the Executive from devoting reasonable periods of time
required for:
(i)
serving as a director or member of a committee of any organization or
corporation involving no conflict of interest with the interests of the Company
and with the written consent of the Company;
(ii)
delivering lectures, fulfilling speaking engagements, and any writing or
publication relating to his experience or area of expertise;
(iii)
engaging in professional organization and program activities;
(iv)
managing his personal investments; and
(v) to
the extent the Company has given notice of non-renewal of this Agreement as
provided in section 1.1, seeking alternate employment;
provided
that such activities do not materially interfere with the due performance of his
duties and responsibilities under this Agreement as determined by the
Board.
1.3.
Reimbursement of
Expenses.
1.3.1.
The Company shall reimburse Executive for all reasonable, documented out of
pocket expenses incurred by him in rendering his services hereunder, subject to
and in accordance with the Company’s reimbursement policy as same shall be in
effect and amended from time to time, including but not limited to expenses
associated and incurred to maintain licenses, certifications and memberships
required to perform his duties and responsibilities under this
Agreement.
1.3.2.
The Company shall provide Executive with monthly parking at 0000 Xxxxxx Xxxxxx,
subject to availability, or another equivalent parking facility (subject to the
Executive’s approval, which approval will not be unreasonably
withheld).
1.3.3. To
the extent any reimbursements referenced in Sections 1.3.1 and any other
reimbursements of costs and expenses provided for herein are includable in the
Executive’s gross income for federal income tax purposes, all such
reimbursements shall be made no later than March of the calendar year next
following the calendar year in which the expenses to be reimbursed are
incurred.
1.4.
Consideration. In
consideration for the Executive’s execution of this Agreement, the Company
agrees that the Executive shall become employed by the Company as set forth in
this Agreement, and shall be eligible to receive post-Term severance payments
(Sections 5.4.2, 5.4.3 and 5.4.4) as set forth in this Agreement (subject
to his compliance with Sections 7 and 8 of this Agreement). The
Executive understands, acknowledges and agrees that the Executive would not
receive the consideration specified in this Section 1.4, except for the
Executive’s execution of this Agreement and the fulfillment of the promises
contained herein.
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2. COMPENSATION
2.1.
Base
Salary. During the period beginning with the Start Date of the
Term and ending June 30, 2009, the Executive’s annual base salary (“Base
Salary”) shall remain at its current level. Thereafter, commencing on
July 1, 2009 and continuing for the balance of the Term, the Executive shall be
entitled to receive a Base Salary that
shall be increased to a rate of two hundred and eighty thousand dollars
($280,000.00) per annum during the Term, which Base Salary shall be payable in
arrears in equal installments not less frequently than every two weeks in
accordance with the payroll practices of the Company, with such increases as may
be recommended by the President & CEO to the Compensation Committee for
recommendation by the Compensation Committee to the Board for
approval.
2.2.
Incentive
Bonus. The Executive shall be eligible to receive, in the
discretion of the Board and the Board’s Compensation Committee, a target annual
incentive bonus of 100% of Base Salary for such Employment Year (the “Incentive Bonus”) if
the Company and Executive achieve goals and objectives established by the Board
for such Employment Year. The goals and objectives to be met for Executive to
receive the Incentive Bonus shall be (a) reasonable and in accord with the
general interests of the Company; (b) consistent with the Company’s incentive
structure for its similarly positioned executives; and (c) provided to Executive
in writing no later than ninety (90) days after the beginning of the Employment
Year for which they apply (provided that any such goals and objectives shall
apply only for the period of the Employment Year after which they are accepted
by the parties). Any Incentive Bonus shall be paid in full in a
single lump sum cash payment during the calendar year next following the
Employment Year for which it is earned and vested (“Payment Calendar
Year”) upon the earlier of December 31 of the Payment Calendar Year; or
the date when any other executive of the Company receives any bonus payment for
the Employment Year, but in any event no earlier than December 31 of the
Employment Year. Executive’s goals and objectives for the
determination of the payment of Executive’s Incentive Bonus for 2009 shall be
those in place for Executive as of January 1, 2009, or, if determined
thereafter, upon the mutual agreement of the parties.
2.3.
Additional
Compensation. In addition to the Base Salary and the Incentive
Bonus, if any, the Executive shall be entitled to receive such other cash
bonuses and such other compensation in the form of stock, stock options or other
property or rights as may from time to time be awarded him by the Board during
or in respect of his employment hereunder. Executive shall be
entitled to participate in any compensation programs (including, without
limitation any stock grant or options programs) made available to other
similarly situated employees of the Company.
2.4.
Prior Year
Compensation. The Company shall pay Executive’s incentive
bonus in the amount of one-hundred and eighty-two thousand dollars ($182,000.00)
for calendar year 2008 (to be paid in accord with the Company’s practices in
effect as of December 31, 2008) on or before December 31, 2009. The payment of
this bonus shall not be reduced, or in any way be offset by, any other payments
to be made pursuant to this Agreement.
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3. PLACE OF
PERFORMANCE. In connection with his employment by the Company,
the Executive shall be based at the Company’s principal executive offices in
Philadelphia, Pennsylvania, subject to the mutual agreement of the Executive and
the Company to relocate him to another office of the Company and provided that
Executive shall undertake travel from time to time as necessary to faithfully
execute his duties hereunder.
4. EMPLOYEE
BENEFITS
4.1.
Benefit
Plans. The Executive shall, during the Term, be included to
the extent eligible thereunder in all employee benefit plans, programs or
arrangements of general application (including, without limitation, any plans,
programs or arrangements providing for retirement benefits, options and other
equity-based incentive compensation, profit sharing, bonuses, disability
benefits, health, and life insurance, or vacation and paid holidays) which shall
be established by the Company or any affiliate of the Company, for, or made
available to, their respective senior executives (“Benefits”). During
the Term, the Benefits described in this paragraph 4 may only be reduced, and
Executive’s contributions therefor may only be increased as a result of a
general reduction or increase for senior executives.
4.2.
Vacation. The
Executive shall be entitled to not less than four (4) weeks vacation at full pay
for each calendar year during the Term, subject to increases consistent with the
Company’s policy for other similarly situated employees, using Executive’s
actual commencement date of employment with the Company as the basis for
determining Executive’s tenure. Such vacation may be taken in the
Executive’s discretion, and at such time or times as are not inconsistent with
the reasonable business needs of the Company.
5. TERMINATION OF
EMPLOYMENT
5.1.
General. The
Executive’s employment under this Agreement may be terminated without any breach
of this Agreement on the following circumstances:
5.1.1.
Death. The
Executive’s employment under this Agreement shall terminate upon his
death.
5.1.2.
Disability. If,
as a result of the Executive’s Disability (as defined below), the Executive
shall have been absent from his duties under this Agreement for sixty (60)
consecutive days (which shall not include any vacation time which Executive is
entitled to exercise under this Agreement), the Company may terminate the
Executive’s employment upon fifteen (15) days prior written notice; provided
that the Executive has not returned to full time performance of his duties
during such fifteen (15) day period. For purposes hereof, “Disability” shall
mean that the Executive is unable to perform his normal and customary duties
hereunder as a result of physical or mental incapacity, illness or
disability.
5.1.3.
Good
Reason. The Executive may terminate his employment for Good
Reason at any time. For purposes of this Agreement, “Good Reason” shall
mean:
(i) the
failure by the Company to comply with its material obligations and agreements
contained in this Agreement;
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(ii) a
material diminution or shift of the executive responsibilities or a material
modification of title of the Executive with the Company without the consent of
the Executive; or
(iii) a
reduction by the Company in the Base Salary as in effect on the date hereof, or
as the same may be increased from time to time, without the express written
consent of the Executive.
provided, however,
the Executive must give notice to the Company of the existence of the condition
described in paragraph 5.1.3 within a period not to exceed 120 days of the
initial existence of the condition, upon notice of which the Company may, within
30 days thereafter, remedy or cure such condition.
5.1.4.
Cause. The
Company may terminate the Executive’s employment under this Agreement for
Cause. Termination for “Cause” shall mean
termination of the Executive’s employment because of the occurrence of any of
the following as determined by the Board:
(i) the
willful failure by the Executive to substantially perform his obligations under
this Agreement (other than any such failure resulting from the Executive’s
incapacity due to physical or mental incapacity, illness or disease); provided, however, that the
Company shall have provided the Executive with written notice that such actions
are occurring and the Executive has been afforded a reasonable opportunity of at
least thirty (30) days to remedy or cure same; or
(ii) the
indictment of the Executive for a felony or other crime involving moral
turpitude as defined by the Company’s Employee Handbook and/or Code
of Ethical Conduct; or
(iii) a
material breach of Section 7 or Section 8 hereof or a breach of any
representation contained in this Agreement by the Executive; or
(iv) a
material breach of fiduciary duty involving personal profit; or
(v) the
Executive having committed acts or omissions constituting gross negligence or
willful misconduct (including theft, fraud, embezzlement, and securities law
violations) which is injurious to the Company, monetarily, or
otherwise. For purposes of this Section 5.1.4(v), no act, or failure
to act, on the part of the Executive shall be considered “gross negligence” or
“willful” unless done, or omitted to be done, by him in bad faith and without
reasonable belief that his action or omission was in the best interest of the
Company; or
(vi) the
Executive having committed any willful or material violation of, or willful or
material noncompliance with, any securities law, rule or regulation or stock
exchange regulation or rule relating to or affecting the Company, including
without limitation the Executive’s failure or refusal to honestly provide a
certificate in support of the chief executive officer’s and/or principal
executive officer’s certification required under the Xxxxxxxx-Xxxxx Act of 2002,
including the rules and regulations promulgated thereunder (the “Xxxxxxxx-Xxxxx
Act”). For purposes of determining "Cause" under this Section
5.1.4(vi), no act or failure to act on the party of Executive shall be deemed to
be a violation of or noncompliance with any securities law, rule or regulation
or stock exchange regulation or rule to the extent Executive has relied in good
faith on the written advice of the Company's General Counsel in making the
determination to act or fail to act.
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5.2.
Notice of
Termination. Any termination of the Executive’s employment by
the Company or by the Executive (other than termination by reason of the
Executive’s death) shall be communicated by written Notice of Termination to the
other party of this Agreement. 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 and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so
indicated.
5.3.
Date of
Termination. The “Date of Termination”
shall mean (a) if the Executive’s employment is terminated by his death,
the date of his death, (b) if the Executive’s employment is terminated
pursuant to subsection 5.1.2 above, fifteen (15) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such fifteen (15) day
period), (c) if the Executive’s employment is terminated pursuant to
subsections 5.1.3 or 5.1.4 above, the date specified in the Notice of
Termination after the expiration of any applicable cure periods, and (d) if
the Executive’s employment is terminated for any other reason, the date on which
a Notice of Termination is given.
5.4.
Compensation upon
Termination.
5.4.1.
Termination for
Cause. If the Executive’s employment shall be terminated for
Cause, the Company shall pay the Executive his Base Salary through the Date of
Termination in accordance with the Company’s standard payroll practices, at the
rate in effect at the time Notice of Termination is given, and any Incentive
Bonus for a preceding Employment Year which Executive is entitled to receive for
that Employment Year which has not been paid as of the Date of Termination, and
all expenses and accrued Benefits arising prior to such termination which are
payable to the Executive pursuant to this Agreement through the Date of
Termination and any accrued but unused vacation time to which Executive is
entitled under this Agreement as of the Date of Termination, to be paid at the
rate in effect at the time the Notice of Termination is given and the Company
shall have no further obligation with respect to this Agreement. If
Executive’s employment is terminated for Cause, all vested and or unvested stock
option awards shall terminate immediately.
5.4.2.
Termination Following
Change in Control. In the event the Executive’s employment
hereunder is terminated following a Change in Control (as defined below) by the
Company without Cause, by the Executive with Good Reason, or by the Company for
Disability then the provisions of subsection 5.4.3 herein
shall apply to any such termination as though there had been no Change in
Control for purposes of calculating severance pay during the Severance
Period.
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For
purposes of this Agreement, a “Change in Control”
shall be deemed to occur (i) when any “person” as defined in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
as used in Section 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) of the Exchange Act, but excluding the Executive, the Company or
any subsidiary or any affiliate of the Company or any employee benefit plan
sponsored or maintained by the Company or any subsidiary of the Company
(including any trustee of such plan acting as trustee), becomes the “beneficial
owner” (as defined in Rule 13(d)(3) under the Exchange Act) of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities; or (ii) when, during any period of twelve (12)
consecutive months, the individuals who, at the beginning of such period,
constitute the Board (the “Incumbent Directors”)
cease for any reason other than death to constitute at least a majority thereof;
provided, however, that a
director who was not a director at the beginning of such twelve (12) month
period shall be deemed to have satisfied such twelve (12) month requirement (and
be an Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least a majority of the directors
who then qualified as Incumbent Directors either actually (because they were
directors at the beginning of such twelve (12) month period) or through the
operation of this proviso; or (iii) the occurrence of a transaction
requiring stockholder approval for the acquisition of the Company by an entity
other than the Company or a subsidiary or an affiliated company of the Company
through purchase of assets, or by merger, or otherwise.
If after
the occurrence of a Change in Control, the Company shall terminate the
Executive’s employment without Cause or the Executive terminates his employment
for Good Reason, then notwithstanding the vesting and exercisability schedule in
any stock option or other equity award agreement between the Company and the
Executive, all unvested stock options and other equity awards granted by the
Company to the Executive, if any, pursuant to such agreement shall immediately
vest and become exercisable and shall remain exercisable for not less than 180
days thereafter.
5.4.3.
Termination without
Cause, For Good Reason or For Disability. If, prior to the
expiration of the Term the Executive’s employment hereunder is terminated by the
Executive for Good Reason or by the Company without Cause or due to Disability,
the Company shall pay to the Executive any Incentive Bonus for a preceding
Employment Year which Executive is entitled to receive for that Employment Year
which has not been paid as of the Date of Termination and all expenses and
accrued Benefits arising prior to such termination which are payable to the
Executive pursuant to this Agreement through the Date of Termination and any
accrued but unused vacation time to which Executive is entitled under this
Agreement as of the Date of Termination, to be paid at the rate in effect at the
time the Notice of Termination is given and the Company shall continue to pay
the Executive his Base Salary as then in effect for the greater of (i) the
remainder of the Initial Term or Renewal Term as applicable; or (ii) one
(1) year from the Date of Termination (such period being referred to
hereinafter as the “Severance Period”),
in equal installments on the Company’s normal payroll dates during the Severance
Period in accordance with the payroll practices of the Company, beginning with
the first pay date that begins after the Date of Termination and, shall pay a
pro rata portion of the Incentive Bonus, if any, earned for the Employment Year
through the Date of Termination as determined in the discretion of the Board, at
such time the Incentive Bonus, if any, would otherwise have been payable in
accordance with Section 2.2 hereof. In addition, during the Severance
Period, the Executive shall be entitled to continue to participate in all
employee benefit plans that the Company provides (and continues to provide)
generally to its senior executives at Company’s
expense. Notwithstanding anything to the contrary, any payment due
under this Section 5.4.3 shall continue to be made even in the event of death
during the Severance Period to the beneficiary designated in writing for such
purpose by the Executive or, if no such beneficiary is specifically designated,
to the Executive’s estate. The foregoing notwithstanding any payments due
hereunder in the event of the Disability of the Executive shall be reduced by
any amounts received by the Executive pursuant to any disability plan sponsored
by the Company in which the Executive participates.
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In
addition, if Executive terminates his employment for Good Reason or is
terminated without cause, then notwithstanding the vesting and exercisability
schedule in any stock option or other equity award agreement between the Company
and the Executive, all unvested stock options and other equity awards granted by
the Company to the Executive pursuant to such agreement shall immediately vest
and become exercisable and shall remain exercisable for not less than 180 days
thereafter.
5.4.4.
Termination upon
Death. In the event of the termination of the Executive’s
employment by reason of death the Company shall pay the Executive his Base
Salary through the Date of Termination in accordance with the Company’s standard
payroll practices, at the rate then in effect, and any Incentive Bonus for a
preceding Employment Year which Executive is entitled to receive for that
Employment Year which has not been paid as of the Date of Termination and all
expenses or accrued Benefits arising prior to such termination which are payable
to the Executive pursuant to this Agreement through the Date of Termination and
any accrued but unused vacation time to which Executive is entitled under this
Agreement as of the Date of Termination. In addition, the Executive
and/or his beneficiaries shall be entitled to such other Benefits as shall be
determined in accordance with the benefit plans maintained by the
Company.
5.4.5.
Delivery of General
Release Upon Termination. The Executive understands,
acknowledges and agrees that prior to being able to receive any
post-termination severance payments or other benefits referenced
herein, Executive must deliver to PRWT, in writing, a general release in form
and substance satisfactory to PRWT releasing PRWT and its subsidiaries from all
liability.
6. INSURABILITY; RIGHT TO
INSURE
During
the continuance of the Executive’s employment hereunder, the Company shall have
the right to maintain key man life insurance in its own name covering the
Executive’s life in such amount as shall be determined by the Company, for a
term ending on the termination or expiration of this Agreement. The
Executive shall aid in the procuring of such insurance by submitting to the
required medical examinations, if any, and by filling out, executing and
delivering such applications and other instrument in writing as may be
reasonably required by an insurance company or companies to which application or
applications for insurance may be made by or for the
Company. For the avoidance of doubt, the Company’s
inability to obtain any insurance as provided in this Section or the rate of any
such insurance shall not be deemed to be “Cause” for the purposes of terminating
Executive’s employment under this Agreement.
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7. CONFIDENTIALITY;
NONCOMPETITION; NONSOLICITATION; NONDISPARAGEMENT
7.1.
Confidentiality. The
Company and the Executive acknowledge that the services to be performed by the
Executive under this Agreement are unique and extraordinary and, as a result of
such employment, the Executive shall be in possession of confidential
information relating to the business practices of the
Company. It is also acknowledged that Executive has previously
been in possession of confidential information relating to the business
practices of the Company in his previous capacities with the
Company. The term “confidential information” shall mean any and all
information (oral and written) relating to the Company or any of its affiliates,
or any of their respective activities, as well as any distributors, vendors,
suppliers, customers or other third party of which the Executive currently
possesses or shall possess in connection with his employment with the Company,
other than such information which (i) can be shown by the Executive to be in the
public domain (such information not being deemed to be in the public domain
merely because it is embraced by more general information which is in the public
domain) other than as the result of breach of the provisions of this paragraph 7
or (ii) the Executive is required to disclose under any applicable laws,
regulations or directives of any government agency, tribunal or authority having
jurisdiction in the matter or under subpoena or other process of
law. The Executive shall not, during the Term and for a period of
five (5) years thereafter, except as may be required in the course of the
performance of his duties hereunder, directly or indirectly, use, communicate,
disclose or disseminate to any person, firm or corporation any confidential
information regarding the clients, customers or business practices of the
Company acquired by the Executive, without the prior written consent of the
Company; provided, however, that the
Executive understands that Executive shall be prohibited from misappropriating
any trade secret at any time during or after the Term.
7.2.
Return of
Documents. Upon the termination of the Executive’s employment for any
reason whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession of the Executive, including all copies thereof,
shall be promptly returned to the Company. Subject to the Executive’s
removal of any confidential information therefrom in a manner reasonably
acceptable to the Company, the parties agree that the Executive shall be
entitled to retain any laptop computer and blackberry, cell phone or other
similar device which was in use by the Executive prior the Executive’s Date of
Termination and Company shall transfer the ownership thereof to
Executive.
7.3.
Noncompetition. The
Executive hereby agrees that he shall not, during the Term and for a period
ending on the later of (i) one year from the Date of Termination or (ii) the
last day of the applicable Severance Period after the Date of Termination,
directly or indirectly, within any county (or adjacent county) in any State
within the United States or territory outside of the United States in which the
Company is engaged in business during the Term, engage, have an interest in or
render any services to any business (whether as owner, manager, operator,
licensor, licensee, lender, partner, stockholder, joint venturer, employee,
consultant, advisor or otherwise) competitive with the business activities
conducted by the Company, its subsidiaries, or affiliates during the
Term. Notwithstanding the foregoing, nothing herein shall prevent the
Executive from owning stock in a publicly traded corporation whose activities
compete with those of the Company’s, provided that such stock holdings are not
greater than two percent (2%) of such corporation.
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7.4.
No
Interference. The Executive shall not, during the Term and for
a period ending on the later of (i) one year from the Date of Termination or
(ii) the last day of the applicable Severance Period after the Date of
Termination, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company’s business activities
including, without limitation, the solicitations of the Company’s customers,
distributors or vendors or persons listed on the personnel lists of the
Company.
7.5.
Nonsolicitation. For
purposes of clarification, but not of limitation, the Executive hereby
acknowledges and agrees that the provisions of Sections 7.3 and 7.4 above shall
serve as a prohibition against him from, during the period referred to therein,
directly or indirectly, hiring, offering to hire, enticing, soliciting or in any
other manner persuading or attempting to persuade any officer, employee, agent,
lessor, lessee, licensor, licensee or customer of the Company, its subsidiaries,
or affiliates (but only those existing during the time of the
Executive’s employment by the Company, or at the termination of his employment),
to discontinue or alter his, her or its relationship with the
Company. The placement by Executive (or any organization or
individual with which Executive is affiliated) of an advertisement of general
solicitation that does not violate the provisions of this agreement shall not be
deemed a breach of the foregoing obligations.
7.6.
Inventions.
7.6.1.
The Executive agrees that all processes, technologies and inventions (“Inventions”),
including new contributions, improvements, ideas and discoveries, whether
patentable or not, conceived, developed, invented or made by him during the Term
shall belong to the Company, provided that such Inventions grew out of the
Executive’s work with the Company, are related in any manner to the business
(commercial or experimental) of the Company or are conceived or made on the
Company’s time or with the use of the Company’s facilities or
materials. The Executive shall further: (a) promptly disclose such
Inventions to the Company; (b) assign to the Company, without additional
compensation, all patent and other rights to such Inventions for the United
States and foreign countries; (c) sign all papers necessary to carry out the
foregoing; and (d) give testimony in support of his
inventorship (provided that to the extent Company requests the
Executive to perform any of the functions set forth in (c) or (d) above after
the Executive’s Date of Termination, the Company shall reasonably compensate
Executive for any time and expense involved therewith);
7.6.2. If
any Invention is described in a patent application or is disclosed to third
parties, directly or indirectly, by the Executive within two (2) years after the
termination of his employment by the Company, it is to be presumed that the
Invention was conceived or made during the Term by the Company; and
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7.6.3.
The Executive agrees that he will not assert any rights to any Invention as
having been made or acquired by him prior to the date of this Agreement, except
for Inventions, if any, disclosed to the Company in writing prior to the date
hereof.
7.7.
Ownership by
Company. The Company shall be the sole owner of all products
and proceeds of the Executive’s services hereunder, including, but not limited
to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the term of the Executive’s employment hereunder, free and clear of any claims
by the Executive (or anyone claiming under the Executive) of any kind or
character whatsoever (other than the Executive’s right to receive payments
hereunder). The Executive shall, at the request of the Company,
execute such assignments, certificates or other instruments as the Company may
from time to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend its right, or title and interest in or to
any such properties, provided that to the extent Company requests the Executive
to perform any of the foregoing after the Executive’s Date of Termination, the
Company shall reasonably compensate Executive for any time and expense involved
therewith.
7.8.
Nondisparagement. At
no time during or after the Term shall the Executive, directly or indirectly,
disparage the commercial, business, professional or financial, as the case may
be, reputation of the Company or its officers or directors.
7.9.
Remedies for
Breach. Without intending to limit the remedies available to
the Company, the Executive acknowledges that a breach of any of the covenants
contained in this Section 7 may result in material and irreparable injury to the
Company, or its affiliates or subsidiaries, for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat the Company shall be
entitled to seek a temporary restraining order and/or a preliminary or permanent
injunction restraining the Executive from engaging in activities prohibited by
this Section 7 or such other relief as may be required specifically to enforce
any of the covenants in this Section 7. If for any reason it is held
that the restrictions under this Section 7 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be interpreted or
modified to include as much of the duration and scope identified in this Section
as will render such restrictions valid and enforceable.
8. EXECUTIVE’S
COOPERATION
During
the Term and thereafter, the Executive shall cooperate with the Company in any
internal investigation or administrative, regulatory or judicial proceeding as
reasonably requested by the Company (including, without limitation, the
Executive being available to the Company upon reasonable notice for interviews
and factual investigations, appearing at the Company’s request to give testimony
without requiring service of a subpoena or other legal process, volunteering to
the Company all pertinent information and turning over to the Company all
relevant documents which are or may come into the Executive’s possession, all at
times and on schedules that are reasonably consistent with the Executive’s other
permitted activities and commitments). In the event the Company
requires the Executive’s cooperation in accordance with this section after the
termination of the Term, the Company shall reimburse the Executive for all of
his reasonable costs and expenses incurred, in connection therewith, plus pay
the Executive a reasonable amount per day for his time spent.
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9. RIGHTS OF
INDEMNIFICATION
The
Company during the Term of this Agreement and at any time thererafter shall
indemnify the Executive to the fullest extent permitted by the Law of the
Commonwealth of Pennsylvania, as amended from time to time, for all amounts
(including without limitation, judgments, fines, settlement payments, expenses
and attorney’s fees) incurred or paid by the Executive in connection with any
action, suit, investigation or proceeding arising out of or relating to the
performance by the Executive of services for, or the acting by the Executive as
a director, officer or employee of the Company, or any other person or
enterprise at the Company’s request.
10. MISCELLANEOUS
10.1.
Notices. All
notices or communications hereunder shall be in writing, addressed as
follows:
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To
the Company:
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0000
Xxxxxx Xxxxxx
Xxxxx
000
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Attention:
Xxxxxx X. Xxxx, President & CEO
Telephone:
000-000-0000
Telecopy:
000-000-0000
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with
a copy to:
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Xxxxx
Xxxxxx
SVP,
Human Resources
Deputy
General Counsel
Telephone:
000-000-0000
Telecopy:
000-000-0000
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To
the Executive:
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Xxxxxxxx
X. Xxx, Xx.
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0000
Xxxxxx Xxxxxx
Xxxxx
000
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
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All such
notices shall be conclusively deemed to be received and shall be effective
(i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission, (iii) if sent by overnight courier, one business day after
being sent by overnight courier, or (iv) if sent by registered or certified
mail, postage prepaid, return receipt requested, on the fifth day after the day
on which such notice is mailed.
10.2.
Severability. Each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
10.3.
Binding Effect;
Benefits. Executive may not delegate his duties or assign his
rights hereunder. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
10.4.
Entire
Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive. This Agreement
may be amended at any time by mutual written agreement of the parties
hereto. In the case of any conflict between any express term of this
Agreement and any statement contained in any employment manual, memo or rule of
general applicability of the Company, this Agreement shall control.
10.5.
Warranty. The
Executive hereby represents and warrants as follows: (i) that the execution
of this Agreement and the discharge of the Executive’s obligations hereunder
will not breach or conflict with any other contract, agreement, or understanding
between the Executive and any other party or parties; and (ii) the
Executive’s statements provided to the Company by the Executive about the
Executive’s employment history are true, accurate and complete in all material
respects.
10.6.
Withholding. The
payment of any amount pursuant to this Agreement shall be subject to applicable
withholding and payroll taxes, and such other deductions as may be required
under the Company’s employee benefit plans, if any.
10.7.
Governing
Law. This
Agreement and the performance of the parties hereunder shall be
governed by the internal laws (and not the law
of conflicts) of the Commonwealth of Pennsylvania. Any claim or controversy
arising out of or in connection with this Agreement, or the breach thereof,
shall be adjudicated exclusively by the state courts for the
Commonwealth of Pennsylvania, or by a federal court sitting in the Commonwealth of Pennsylvania. The parties hereto agree to
the personal jurisdiction of such courts and agree to accept process by regular
mail in connection with any such dispute.
10.8.
Execution in
Counterparts. This Agreement may be executed by the parties in
one or more counterparts, each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement, and
shall become effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties
hereto. A photocopy or electronic facsimile of this Agreement or of
any signature hereon shall be deemed an original for all purposes.
13
10.9.
Section 409A of the
Code.
10.9.1.
It is intended that the provisions of this Agreement comply with Section 409A of
Code and the regulations and guidance promulgated thereunder (collectively
“Code Section
409A”), and all provisions of this Agreement shall be construed in a
manner consistent with the requirements for avoiding taxes or penalties under
Code Section 409A. If any provision of this Agreement (or of any
award of compensation, including equity compensation or benefits) would cause
the Executive to incur any additional tax or interest under Code
Section 409A, the Company shall, upon the specific request of the
Executive, use its reasonable business efforts to in good faith reform such
provision to comply with Code Section 409A; provided, that to the
maximum extent practicable, the original intent and economic benefit to the
Executive and the Company of the applicable provision shall be maintained, but
the Company shall have no obligation to make any changes that could create any
additional economic cost or loss of benefit to the
Company. Notwithstanding the foregoing, the Company shall have
no liability with regard to any failure to comply with Code Section 409A so long
as it has acted in good faith with regard to compliance therewith. Any provision
required for compliance with Code Section 409A that is omitted from this
Agreement shall be incorporated herein by reference and shall apply
retroactively, if necessary, and be deemed a part of this Agreement to the same
extent as though expressly set forth herein. “Code” means the United
States Internal Revenue Code of 1986, as amended. All references to
the Code, U.S. Treasury regulations or other governmental pronouncements shall
be deemed to include references to any applicable successor regulations or
amending pronouncement.
10.9.2. A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “Separation from Service” within the meaning of Code Section 409A and,
for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like terms shall mean Separation
from Service. If the Executive is deemed on the date of termination
of his employment to be a “specified employee”, within the meaning of that term
under Section 409A(a)(2)(B) of the Code and using the identification methodology
selected by the Company from time to time, or if none, the default methodology,
then with regard to any payment or the providing of any benefit subject to this
Section 10.9.2, to the extent required to be delayed in compliance with Section
409A(a)(2)(B) of the Code, and any other payment or the provision of any other
benefit that is required to be delayed in compliance with Section 409A(a)(2)(B)
of the Code, such payment or benefit shall not be made or provided prior to the
earlier of (i) the expiration of the six-month period measured from the date of
the Executive’s Separation from Service or (ii) the date of the Executive’s
death. On the first day of the seventh month following the date of
Executive’s Separation from Service or, if earlier, on the date of his death,
all payments delayed pursuant to this Section 10.9.2 (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein. On any delayed payment date under this Section 10.9.2, there
shall be paid to the Executive or, if the Executive has died, to his estate, in
a single cash lump sum together with the payment of such delayed payment,
interest on the aggregate amount of such delayed payment at the Delayed Payment
Interest Rate (as defined below) computed from the date on which such delayed
payment otherwise would have been made to the Executive until the date
paid. For purposes of the foregoing, the “Delayed Payment Interest
Rate” shall mean the short term Applicable Federal Rate as of the
business day immediately preceding the payment date for the applicable delayed
payment.
14
10.9.3.
Each installment payable hereunder shall constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b), including Treasury
Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the
terms of the “short-term deferral” rule set forth in Treasury Regulation Section
1.409A-1(b)(4) is intended to meet the “short-term deferral”
rule. Each other payment is intended to be a payment upon an
involuntary termination from service and payable pursuant to Treasury Regulation
Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that
regulation, with any amount that is not excepted from Code Section 409A being
subject to Code Section 409A (“Section 409A
Amounts”). Notwithstanding anything to the contrary in this
Agreement and to the extent that there is a lump sum option, said lump sum
option shall not apply to any Section 409A Amount and the payment of the Section
409A Amounts shall begin with the first installment that next follows the last
full installment payment of a non Section 409A Amount or would have been the
last full installment in the event that a lump sum payment is made with regard
to non Section 409A Amounts under this Agreement.
10.9.4.
With regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the
right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to expenses reimbursed
under any arrangement covered by Section 105(b) of the Code solely because such
expenses are subject to a limit related to the period the arrangement is in
effect and (iii) such payments shall be made on or before the last day of the
Executive’s taxable year following the taxable year in which the expense was
incurred.
[Remainder
of page intentionally left blank]
15
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and
the Executive has hereunto set his hand, as of the day and year first above
written,
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THE
COMPANY:
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By:
|
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Name:
Xxxxxx X. Xxxx
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Title:
President & CEO
|
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EXECUTIVE
|
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Xxxxxxxx
X. Xxx, Xx.
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16
