SEVERANCE AGREEMENT
EXHIBIT 10.40
THIS SEVERANCE AGREEMENT (this “Agreement”) is entered into as of the 13th day of March, 2006
(the “Effective Date”), by and between Xxxxxx CDT Inc. (the “Company”) and Xxxxxx Xxxxx (the
“Employee”).
SECTION 1. DEFINITIONS. As hereinafter used:
1.1 “Cause” for termination by the Company or its affiliates of the Employee’s
employment means (i) the willful and continued failure by the Employee to substantially perform the
Employee’s duties with the Company or its affiliates (other than any such failure resulting from
the Employee’s incapacity due to physical or mental illness) that has not been cured within 30 days
after a written demand for substantial performance is delivered to the Employee by the CEO, which
demand specifically identifies the manner in which the CEO believes that the Employee has not
substantially performed the Employee’s duties, or (ii) the willful engaging by the Employee in
conduct which is demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of this definition, no act, or failure to act, on the
Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee not
in good faith and without reasonable belief that the Employee’s act, or failure to act, was in the
best interest of the Company or its affiliates.
1.2 “Health Care Coverage” means life insurance, hospitalization, medical and dental
coverage at a level that is no less favorable in the aggregate to the Employee than the level in
effect on the Effective Date with respect to the Employee.
1.3 “Severance” means the termination of the Employee’s employment with the Company or
its affiliates by the Company or its affiliates other than for Cause. The Employee will not be
considered to have incurred a Severance if his employment is discontinued by reason of the
Employee’s death or a physical or mental condition causing the Employee’s long-term inability to
substantially perform his duties with the Company or its affiliates, including, without limitation,
such condition entitling him to benefits under any sick pay or disability income policy or program
of the Company or its affiliates.
1.4 “Severance Date” means the date on which the Employee incurs a Severance.
1.5 “Severance Pay” means the payment determined pursuant to Section 2.1.
1
1.6 “Successor Company” means any successor to all or substantially all of the
business and/or assets of Xxxxxx CDT Inc., whether direct or indirect, by purchase, merger,
consolidation or otherwise.
1.7 “Weekly Compensation” means (i) 1/52nd of the Employee’s highest annual rate of
base salary with the Company as in effect at any time after the Effective Date, plus (ii) 1/52nd of
the Employee’s highest annual bonus award (if any) earned by the Employee with the Company with
respect to the Company’s three complete fiscal years preceding the Severance Date.
SECTION 2. BENEFITS.
2.1 If the Employee incurs a Severance, he shall be entitled to receive Severance Pay equal to
(i) twenty-six (26), multiplied by (ii) the Employee’s Weekly Compensation.
2.1 The Company shall pay the Severance Pay to the Employee in installments, twice per month,
over the twenty-six (26) week period following the Severance Date.
2.2 If the Employee incurs a Severance, the Company shall provide to the Employee at its
expense with continued Health Care Coverage, and with outplacement services (on an individual
basis), in each case for twenty-six (26) weeks following the Severance Date. Health care coverage
under COBRA shall run concurrently with the foregoing Health Care Coverage.
2.3 The Company shall be entitled to withhold from amounts to be paid to the Employee
hereunder any federal, state or local withholding or other taxes or charges which it is then
legally required to withhold.
2.4 The benefits to Employee hereunder are in lieu of, and Employee shall not be deemed a
participant in, the Xxxxxx Inc. Employee Severance Plan (Saint Louis Corporate Office).
SECTION 3. NON-COMPETITION.
3.1 Commencing on the Effective Date, and continuing during Employee’s employment with the
Company and for the twelve (12) month period following the Severance Date (“Restricted Period”),
the Employee agrees that the Employee shall not, without the prior written consent of the Company,
directly or indirectly, individually or on behalf of any other person, firm, corporation or other
entity: (i) solicit, recruit or employ (whether as an employee, officer, director, agent,
consultant or independent contractor) any person who was or is at any time during the twelve (12)
months preceding the Severance Date an employee, representative, officer or director of the Company
or its affiliates; or (ii) knowingly solicit, aid or
2
induce any customer of the Company or its affiliates to purchase goods or services then sold
by the Company or its affiliates from another person, firm, corporation or other entity or assist
or aid any other persons or entity in identifying or soliciting any such customer. Further, during
the Restricted Period, the Employee agrees that the Employee shall not, directly or indirectly,
own, manage, operate, control, be employed by (whether as an employee, consultant, independent
contractor or otherwise, and whether or not for compensation) or render services to any person,
firm, corporation or other entity, in whatever form, engaged in any business of the same type as
any business in which the Company or its affiliates is engaged on the Severance Date or in which
they have proposed, on or prior to such date, to be engaged in at any time during the twelve
(12)-month period on or after such date, in any locale of any country in which the Company or its
affiliates conduct business (provided that the foregoing shall not prohibit ownership of less than
two percent (2%) of the stock of publicly held entities). The Employee’s covenants in this Section
3.1 are a material inducement to the Employee’s benefits under this Agreement.
SECTION 4. GENERAL PROVISIONS.
4.1 When a payment is due under this Agreement to the Employee, if the Employee is unable to
care for his affairs, payment may be made directly to his legal guardian or personal
representative.
4.2 Neither the establishment of this Agreement, nor any modification hereof, nor the creation
of any fund, trust or account, nor the payment of any benefits shall be construed as giving the
Employee, or any person whomsoever, the right to be retained in the service of the Company or its
affiliates, and the Employee shall remain subject to discharge to the same extent as if this
Agreement had never been adopted, subject to the payments and benefits herein provided.
4.3 If any provision of this Agreement shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Agreement shall be
construed and enforced as if such provisions had not been included.
4.4 This Agreement shall be fully binding upon in inure to the benefit of the Employee and his
heirs, executors, administrators, successors and assigns. This Agreement shall also be fully
binding on the Company and each Successor Company, and all references herein to the “Company” shall
be deemed to include references to each Successor Company.
4.5 The headings and captions herein are provided for reference and convenience only, shall
not be considered part of this Agreement, and shall not be employed in the construction of this
Agreement.
4.6 Any notice or other communication required or permitted pursuant to the terms hereof shall
have been duly given when delivered or mailed by
3
United States Mail, first class, postage prepaid, addressed to the intended recipient at his,
her or its last known address.
4.7 This Agreement shall be construed and enforced according to the laws of the State of
Delaware.
This Agreement is executed by the parties hereto as of the Effective Date.
XXXXXX CDT INC. |
||
By: /s/ Xxxxx Xxxx Staples
|
||
/s/ Xxxxxx Xxxxx
|
||
XXXXXX XXXXX |
4
