EMPLOYMENT AGREEMENT
AGREEMENT, dated effective as of July 11, 2001 ("Effective Date"),
between KMG CHEMICALS, INC., a Texas corporation (the "Company"), with an
office at 00000 Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 and XXXXXX X. XXXXXXXX
("Executive"), with an address at 000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Executive has been an employee of Company and Company
wishes to continue to employ the Executive to perform executive duties for the
Company and its subsidiaries, and the Executive wishes to accept such
employment, all on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual obligations herein set
forth, the parties agree as follows:
1. EMPLOYMENT. The Company hereby continues the employment of the
Executive under this Agreement as of the Effective Date to serve as Executive
Vice President and Chief Operating Officer of the Company's subsidiary,
KMG-Bernuth, Inc., and the Executive hereby accepts such employment, on the
terms and conditions set forth in this Agreement.
2. TERM OF EMPLOYMENT. The term of employment under this Agreement
shall be for the period commencing on the Effective Date and ending July 31,
2004, subject to earlier termination as provided herein. The term of employment
under this Agreement shall be automatically extended for an additional one (1)
year period at the end of the initial term of employment and at the end of any
renewal term of employment unless the Company gives notice at least sixty (60)
days prior to the end of the employment period that the Executive's employment
under this Agreement shall not be so extended; provided, however, that such
automatic extensions of the term of employment shall not extend beyond the
Executive attaining age 65.
3. DUTIES.
(a) The Executive shall continue to perform such duties of an
executive nature for the Company and its subsid-iaries as he shall have
performed heretofore or such other duties as may be assigned to him from time to
time by the President of the Company and that are customarily performed by an
executive holding positions similar to that of the Executive. The Executive
shall serve the Company and its subsidiaries faithfully and to the best of his
ability and shall devote his full business time and attention to the affairs of
the Company and its subsidiaries, subject to reasonable absences for vacation
and illness in accordance with then current Company policy.
The Executive shall be subject at all times to the direction and control of the
President. The Executive shall give the President periodic reports on and keep
him informed on a current basis concerning the business affairs of the Company
and its subsidiaries.
(b) The headquarters for the performance of the Executive's duties
during the term of this Agreement shall be the principal executive offices of
the Company in Houston, Texas, subject to such reasonable travel as the
performance of the Executive's duties in the business of the Company or its
subsidiaries may require.
(c) During the term of this Agreement the Executive shall, if
elected, serve as a member of the Board of Directors and/or Executive Committee
of the Company or its subsidiaries and such other committees to which the
Executive may be appointed.
4. COMPENSATION.
(a) As compensation for all of the duties to be performed by the
Executive hereunder, the Company shall pay the Executive:
(i) A base salary, payable in accordance with the Company's
normal payroll practices, at a rate per annum equal to $135,000 ("Base Salary"),
or such greater amount as shall be approved by the Company in its sole
discretion from time to time;
(ii) for the fiscal year ending July 31, 2001, incentive
compensation under the Company's current incentive program for the Executive,
and for periods beginning after July 31, 2001, incentive compensation pursuant
to an incentive compensation plan for Company executives ("Executive Incentive
Plan") as such plan shall be in effect from time to time;
(iii) (A) on the Effective Date an option to purchase 100,000
shares of the common stock of the Company and (B) on or before September 1 of
each calendar year beginning after January 1, 2001, an option to purchase not
less than 10,000 shares of the common stock of the Company (collectively, the
options described in paragraph 4(a)(iii)(A) and (B) are referred to as the
"Stock Options"), subject to vesting and the other terms and conditions set
forth in such Stock Options.
(b) The Company shall have the unrestricted right to modify, amend,
terminate or change the Executive Incentive Plan at any time during the term of
this Agreement, provided, that the during the term of employment the Company
shall provide the Executive with the opportunity to receive an award of
incentive compensation targeted at fifty percent (50%) of Base Salary when
performance goals
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established by the Company are met; provided, further, that the actual award
will vary in the sole discretion of the Company above and below the targeted
percentage of Base Salary as achievement of the performance goals varies above
and below the goals and the maximum award payable will be seventy-five percent
(75%) of Base Salary in any given fiscal year. The Executive acknowledges and
agrees that the exercise price, vesting, and all other terms and conditions of
the Stock Options to be granted under paragraph 4(a)(iii)(B) shall be
established by the Company in its sole discretion at the time of grant.
5. EXPENSES. The Company shall reimburse the Executive for any
out-of-pocket expenses reasonably incurred by the Executive in the performance
of his duties to the Company upon receipt of appropriate vouchers therefor, in
accordance with the Company's current practices as such practices may be changed
from time to time by the Company.
6. BENEFITS. The Executive shall be entitled to participate in the
Company's Supplemental Executive Retirement Plan, a copy of which has been
provided to the Executive, and all Company group health (including family major
medical plans), life insurance, pension, profit-sharing, stock purchase or stock
option plan, annuity or other benefit programs that may, from time to time, be
available to employees of the Company generally, subject to eligibility, vesting
requirements and other terms and conditions from time to time in effect in
respect of such benefit programs; provided, however, that nothing herein shall
require the Company at any time to create or continue any such plan, program or
arrangement[; provided, further, that no modification, amendment, suspension or
termination of the Plan shall adversely affect the right of the Executive or his
beneficiary to receive the benefits granted under the Supplemental Executive
Retirement Plan in respect of such Executive as of the date of modification,
amendment, suspension or termination unless the Executive or his beneficiary, as
the case may be, agrees in writing to such modification, amendment, suspension
or termination] .
7. COPYRIGHT, PATENTS, TRADEMARKS.
(a) All right, title and interest, of every kind whatsoever, in the
United States and throughout the world, in (i) any work, including the copyright
thereof (for the full terms and extensions thereof in every jurisdiction),
created by the Executive at any time during the term hereof and all material
embodiments of the work subject to such rights; and (ii) all inventions, ideas,
discoveries, designs and improvements, patentable or not, made or conceived by
the Executive at any time during the term of his employment under this
Agreement, shall be and remain the sole property of the Company without the
payment to the Executive or any other person of any further consideration, and
each such work shall, for United States copyright law ("Copyright
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Law") purposes, be deemed created by the Executive pursuant to his duties under
this Agreement and within the scope of his employment and shall be deemed a work
made for hire; and the Executive agrees to assign, at the Company's expense, and
the Executive does hereby assign, all of his right, title and interest in and to
all such works, copyrights, materials, inventions, ideas, discoveries, designs
and improvements, patentable or not, and any copyrights, letters patent,
trademarks, trade secrets, and similar rights, and the applications therefor,
which may exist or be issued with respect thereto. For the purposes of this
paragraph 7, "works" shall include all materials created during the term hereof,
whether or not ever used by or submitted to the Company, including, without
limitation, any work which may be the subject matter of copyright under the
Copyright Law of the United States. In addition to its other rights, the Company
may copyright any such work in its name in the United States in accordance with
the requirements of the United States Copyright Law and the Universal Copyright
Convention and any other Convention or treaty to which the United States is or
may become a party.
(b) Whenever the Company shall so request, whether during or after
the term of this Agreement, the Executive shall execute, acknowledge and deliver
all applications, assignments or other instruments; make or cause to be made all
rightful oaths; testify in all legal proceedings; communicate all known facts
which relate to such works, copyrights, inventions, ideas, discoveries, designs
and improvements; perform all lawful acts and otherwise render all such
assistance as the Company may deem necessary to apply for, obtain, register,
enforce and maintain any copyrights, letters patent and trademark registrations
of the United States or any foreign jurisdiction or under the Universal
Copyright Convention (or any other convention or treaty to which the United
States is or may become a party), or otherwise to protect the Company's
interests therein, including any which the Company shall deem necessary in
connection with any proceeding or litigation involving the same. The Company
shall reimburse the Executive for all reasonable out-of-pocket costs incurred by
the Executive in testifying at the Company's request or in rendering any other
assistance requested by the Company pursuant to this subparagraph 7(b). All
registration and filing fees and similar expense shall be paid by the Company.
8. CONFIDENTIAL INFORMATION; NON-COMPETITION.
(a) Company and its affiliates shall disclose to Executive, or place
Executive in a position to have access to or develop, trade secrets or
confidential information of Company or its affiliates; and/or shall entrust
Executive with business opportunities of Company or its affiliates; and/or shall
place Executive in a position to develop business good will on behalf of Company
or its affiliates. Executive recognizes and acknowledges that Executive will
have access to certain information of Company and its affiliates and that such
information is confidential and constitutes
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valuable, special and unique property of Company or its affiliates . Executive
shall not at any time, either during or subsequent to the term of employment
with Company, disclose to others, use, copy or permit to be copied, except in
pursuance of Executive's duties for and on behalf of Company and its affiliates,
successors, assigns or nominees, any Confidential Information of Company or its
affiliates (regardless of whether developed by Executive) without the prior
written consent of Company. The Executive may make disclosure of Confidential
Information if, and solely to the extent that, the Executive is advised in
writing by legal counsel prior to disclosure that such disclosure is required by
law or court order and a copy of such advice is provided to the Company. The
term "Confidential Information" means any secret or confidential information or
know-how and shall include, but shall not be limited to, the plans, customers,
costs, prices, uses, corporate opportunities, research, financial data,
evaluations, prospects, and applications of products and services, results of
investigations or studies owned or used by Company or its affiliates, and all
apparatus, products, processes, compositions, samples, formulas, computer
programs, computer hardware designs, computer firmware designs, and servicing,
marketing or manufacturing methods and techniques at any time used, developed,
investigated, made or sold by Company or its affiliates, before or during the
term of employment with Company, that are not generally available to the public.
Executive shall maintain in confidence any Confidential Information of third
parties received as a result of Executive's employment with Company in
accordance with Company's obligations to such third parties and the policies
established by Company. Executive acknowledges that all books, records,
documents, manuals, computer data, notes, files, customer lists, marketing
studies and any other similar or dissimilar information or data, whether or not
containing Confidential Information, that are used by the Executive or other
employees or affiliates of the Company during Executive's term of employment are
the exclusive property of the Company or its affiliates and shall be delivered
by Executive to Company on termination of Executive's term of employment for
whatever reason, or at any earlier time requested by Company.
(b) As part of the consideration for the compensation and benefits
to be paid to Executive hereunder; to protect the Confidential Information of
Company and its affiliates that has been and will in the future be disclosed or
entrusted to Executive, the business goodwill of Company and its affiliates that
has been and will in the future been developed in Executive, or the business
opportunities that have been and will in the future be disclosed or entrusted to
Executive by Company and its affiliates; and as an additional incentive for
Company to enter into this Agreement, Company and Executive agree to the
non-competition obligations hereunder. During the term of employment under this
Agreement and for a period of one year thereafter, the Executive shall not,
without the Company's prior written consent, directly or indirectly engage or be
interested in any business which is then competitive to the business of the
Company or the business of any of its subsidiaries in the United States
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or Canada. For the purpose of this paragraph, the Executive will be considered
to have been directly or indirectly engaged or interested in a business if the
Executive is engaged or interested in such business as a stockholder, director,
officer, employee, agent, broker, partner, individual proprietor, lender,
consultant, licensor, independent contractor or otherwise, except that nothing
herein will prevent the Executive from owning or participating as a member of a
group which owns less than a five percent (5%) block of equity or debt
securities of any company traded on a national securities exchange or in any
established over-the-counter securities market. For the purpose of this
paragraph, the term "any business then competitive" to the business of the
Company or its subsidiaries shall be deemed to include, without limitation, any
business which manufactures, sells or distributes chemicals manufactured, sold
or distributed by the Company or any of its affiliates for which, during the one
year immediately preceding the termination of the Executive's term of employment
under this Agreement, the Executive provided substantial executive services.
(c) In the event the Executive shall breach any provisions of this
paragraph 8 (which provisions the Executive hereby acknowledges are reasonable
and equitable), the Company shall be entitled to terminate any payments then
owing to the Executive under this Agreement and/or to seek specific performance
and injunctive relief for such breach or threatened breach. This termination of
payments shall be in addition to and not in substitution for any and all other
rights of the Company at law or in equity against the Executive arising out of
any such breach. The Executive acknowledges that his breach or attempted or
threatened breach of any provisions of this paragraph 8 would cause irreparable
injury to the Company not compensable in money damages and that the Company
shall be entitled, in addition to all other applicable remedies, to obtain a
temporary and a permanent injunction and a decree for specific performance of
paragraph 8 without being required to prove damages or furnish any bond or other
security.
(d) Executive understands that the restrictions set forth in this
paragraph 8 may limit Executive's ability to engage in certain businesses
anywhere in the world during the period provided for above, but acknowledges
that Executive will receive sufficiently high remuneration and other benefits
under this Agreement to justify such restriction. It is expressly understood and
agreed that Company and Executive consider the restrictions contained in this
paragraph 8 to be reasonable and necessary to protect the Confidential
Information of Company. Nevertheless, if any of the aforesaid restrictions are
found by a court having jurisdiction to be unreasonable, or overly broad as to
geographic area or time, or otherwise unenforceable, the parties intend for the
restrictions therein set forth to be modified by such court so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.
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9. TERMINATION. The Executive's employment under this Agreement shall
terminate as provided in paragraph 2 and under the following circumstances:
(a) DEATH OR DISABILITY. The Executive's employment shall terminate
upon the death or Disability of Executive. For purposes of this Agreement,
"Disability" shall be the inability to perform executive-level services,
combined with eligibility to receive disability benefits under the standards
used by the Company's long-term disability benefit plan. In the event Executive
is a "Qualified Individual with a Disability," as such term is defined in the
Americans with Disabilities Act, the Company shall not terminate Executive's
employment hereunder if Executive is able to perform the essential functions of
Executive's job with reasonable accommodation from the Company.
(b) WITH "CAUSE". For purposes of this Agreement, the Company shall
have "Cause" to terminate Executive's employment hereunder upon the occurrence
of any of the following: (i) embezzlement, theft or other misappropriation of
any property of the Company or any of its subsidiaries by Executive, (ii) gross
negligence or willful misconduct by Executive resulting in substantial loss to
the Company or any of its subsidiaries or substantial damage to the reputation
of the Company or any of its subsidiaries, (iii) any act by Executive that
results in a conviction of, or a pleading nolo contendere to, a felony or other
crime involving moral turpitude, fraud or misrepresentation, (iv) willful and
continued failure or neglect by Executive to substantially perform his assigned
duties for the Company or any of its subsidiaries, (v) gross breach of
Executive's fiduciary obligations to the Company or any of its subsidiaries,
(vi) any chemical dependence which materially affects the performance of
Executive's duties and responsibilities to the Company or any of its
subsidiaries; provided, that in the case of the misconduct set forth in clauses
(iv) and (vi) above, such misconduct shall continue for a period of five (5)
days following written notice thereof by the Company to Executive.
(c) WITHOUT "CAUSE". Notwithstanding any provisions of this
Agreement to the contrary, the Company may terminate Executive's employment
hereunder for any reason other than those specified in the foregoing paragraphs
(a) and (b), or for no reason, at any time, effective upon delivery of sixty
(60) day's notice by the Company.
(d) VOLUNTARY RESIGNATION. Executive may terminate his employment
hereunder at any time during the Term subject only to the requirement that
Executive shall provide the Company with a minimum of sixty (60) days prior
written notice (a "Voluntary Resignation").
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(e) WITH "GOOD REASON". Notwithstanding any provision of this
Agreement to the contrary, Executive may terminate his employment hereunder for
Good Reason, subject to the requirement that Executive shall provide the Company
with a minimum of sixty (60) days prior written notice and subject to the
requirement that such notice is given within thirty (30) days (plus the
applicable cure period, if any) after the occurrence of the events constituting
a Good Reason. For purposes of this Agreement, Executive shall have "Good
Reason" to terminate his employment hereunder upon the occurrence, without
Executive's written consent, of any of the following: (i) a failure by the
Company to pay to Executive any amounts due to Executive (including but not
limited to Base Salary and incentive compensation payable under the Company's
Executive Incentive Compensation Plan), which failure is not cured within thirty
(30) days following receipt by the Company of written notice from Executive of
such failure; (ii) demotion of Executive from his position as Executive Vice
President and Chief Operating Officer of KMG-Bernuth, Inc. or a change in his
management reporting relationship such that he no longer reports to the Chief
Executive Officer of the Company; (iii) a relocation of the headquarters for the
performance of the Executive's duties during the term of this Agreement more
than fifty miles outside the limits of Houston, Texas, or (iv) any other
material breach by the Company of this Agreement that remains uncured for thirty
(30) days after written notice thereof by Executive to the Company.
10. COMPENSATION UPON TERMINATION. Executive shall be entitled to the
following compensation from Company, in lieu of all compensation or other sums
or benefits owed or payable to Executive under paragraph 4 of this Agreement,
upon the termination of Executive's employment during the term of this
Agreement. Except as may be specifically provided to the contrary in
subparagraphs (a) and (f) of this paragraph 10, Executive shall also be entitled
to the compensation or benefits payable to Executive, if any, on termination of
Executive's employment under the terms and conditions of the Supplemental
Executive Retirement Plan or other benefit plan.
(a) DEATH OR DISABILITY. In the event of the death or Disability of
Executive during the term of this Agreement, except for amounts of Base Salary
and accrued vacation time earned by Executive as of the date of termination but
not yet paid by the Company, the Company shall have no obligation to make
payments to Executive or his estate for the periods after the date Executive's
employment with the Company terminates on account of death or Disability. On the
termination of Executive's employment by reason of death, Company shall pay
Executive's legal representative $500,000 on or before sixty (60) days after the
Executive's death, and such payment shall be in lieu of and relieve Company from
any obligation to pay the benefit, if any, payable under the Supplemental
Executive Retirement Plan on termination of employment by death.
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(b) WITH CAUSE. In the event that Executive's employment is
terminated by the Company for Cause, except for the amounts of Base Salary and
accrued vacation time earned by Executive as of the date of termination but not
yet paid by the Company, the Company shall have no obligation to make payments
to Executive for the periods before or after the date Executive's employment
with the Company terminates for Cause.
(c) WITHOUT CAUSE OR ON A FAILURE TO EXTEND. In the event that
Executive's employment is terminated by the Company without Cause at any time
during the term of this Agreement or if the Executive's employment is terminated
because the Company elects not to extend the Executive's term of employment at
the end of the initial term or any renewal term, Executive shall be entitled to
receive (A) if the termination was not within one year after a Change of
Control, (i) the amounts of Base Salary and accrued vacation time earned by
Executive as of the date of termination but not yet paid by the Company, (ii) an
amount equal to three times the Base Salary then in effect in a lump sum 45 days
after the date of termination, and (iii) the Stock Options that are vested as of
the date of termination may be exercised within two years of such termination as
provided therein; or (B) if the termination was within one year after a Change
of Control, (i) the amounts of Base Salary and accrued vacation time earned by
Executive as of the date of termination but not yet paid by the Company, (ii) an
amount equal to three times the Base Salary then in effect in a lump sum 45 days
after the date of termination, and (iii) the Stock Options shall be deemed fully
vested as of the date of termination and may be exercised within two years of
such termination as provided therein.
(d) VOLUNTARY RESIGNATION.
(i) Without Good Reason. In the event that Executive's
employment is terminated by Executive as a Voluntary
Resignation pursuant to paragraph 9(d), except for amounts
of Base Salary and accrued vacation time earned by Executive
as of the date of termination but not yet paid by the
Company, the Company shall have no obligation to make
payments to Executive for the periods after the date
Executive's employment with the Company terminates on
account of Voluntary Resignation.
(ii) With Good Reason. Notwithstanding any provision of this
Agreement to the contrary, if Executive's employment with
the Company terminates on account of Voluntary Resignation
for Good Reason, Executive shall be entitled to receive (1)
if the termination was not within one year after a Change of
Control, (a) the amounts of Base Salary and accrued vacation
time earned by
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Executive as of the date of termination but not yet paid by
the Company, (b) an amount equal to three times the Base
Salary then in effect in a lump sum 45 days after the date
of termination, and (c) the Stock Options that are vested as
of the date of termination may be exercised within two years
of such termination as provided therein; or (2) if the
termination was within one year after a Change of Control,
(a) the amounts of Base Salary and accrued vacation time
earned by Executive as of the date of termination but not
yet paid by the Company, (b) an amount equal to three times
the Base Salary then in effect in a lump sum 45 days after
the date of termination, and (c) the Stock Options shall be
deemed fully vested as of the date of termination and may be
exercised within two years of such termination as provided
therein.
(e) CHANGE OF CONTROL. For purposes of this Agreement, a "Change of
Control" shall be deemed to exist upon the occurrence of any of the following:
(i) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 ("Act") (other
than (i) the Company, (ii) any trustee or other fiduciary
holding securities under any employee benefit plan of the
Company, (iii) any company owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of the common stock of the
Company) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company's
then outstanding securities;
(ii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent
(50%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no person, not already the beneficial
owner of less than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities,
acquires more than
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fifty percent (50%) of the combined voting power of the
Company's then outstanding securities shall not constitute a
Change in Control of the Company; and provided, further, a
merger or consolidation in which the Company is the
surviving entity (other than as a wholly owned subsidiary or
another entity) and in which the Board of the Company after
giving effect to the merger or consolidation is comprised of
a majority of members who are either (x) directors of the
Company immediately preceding the merger or consolidation,
or (y) appointed to the Board of the Company by the Company
(or its Board) as an integral part of such merger or
consolidation, shall not constitute a Change in Control of
the Company; or
(iii) the consummation of a plan of complete liquidation of the
Company or of a sale or disposition by the Company of all or
substantially all of the Company's assets other than (i) the
sale or disposition of all or substantially all of the
assets of the Company to a person or persons who
beneficially own, directly or indirectly, more than fifty
percent (50%) of the combined voting power of the
outstanding voting securities of the Company at the time of
the sale or (ii) pursuant to a dividend in kind or spin-off
type transactions, directly or indirectly, of such assets to
the stockholders of the Company.
(f) SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN BENEFIT. In the event
that Executive's employment is terminated either by the Company without Cause at
any time during the term of this Agreement, or by the Company giving notice that
the term of employment under the Agreement shall not extend at the end of the
initial term or any renewal term, or by the Executive's Voluntary Resignation
For Good Reason, (A) if the termination was not within one year after a Change
of Control the termination shall be deemed under the Supplemental Executive
Retirement Plan as an early retirement and Executive shall be paid the benefit
provided in the Supplemental Executive Retirement Plan on early retirement on
the terms and conditions thereof except in calculating any early retirement
Supplemental Pension Benefit the requirement of having reached his 60th birthday
shall be waived, or (B) if the termination was within one year after a Change of
Control, the termination shall be deemed under the Supplemental Executive
Retirement Plan as a retirement at the Normal Retirement Date and the Equivalent
Actuarial Value of the benefit provided in the Supplemental Executive Retirement
Plan, calculated at such termination as if the Executive had reached Normal
Retirement Date with 20 years of Credited Service, shall be paid in a single sum
45 days after the date of termination. Any such payments shall be in lieu of and
relieve Company from any obligation to pay the benefit, if any,
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otherwise payable under the Supplemental Executive Retirement Plan on
termination of employment.
(g) CERTAIN DEFINITIONS. For purposes of this Agreement, the term
"Equivalent Actuarial Value", "Supplemental Pension Benefit", "Credited Service"
and "Normal Retirement Date" shall have the meaning set forth in the
Supplemental Executive Retirement Plan.
(h) MUTUAL RELEASE. Payment of the amounts payable on the
termination of the employment of the Executive under this paragraph 10, other
than Base Salary and accrued vacation time earned by Executive as of the date of
termination but not yet paid by the Company, shall be conditioned upon the
execution by the Executive and the Company of a valid mutual release, pursuant
to which the Executive and the Company shall each mutually release each other,
to the maximum extent permitted by law, from any and all claims either party may
have against the other as of the date of termination that relate to or arise out
of the employment or termination of employment of the Executive, except such
claims arising under this Agreement, any employee benefit plan, or any other
written plan or agreement (a "Mutual Release").
11. ARBITRATION. The parties will attempt to promptly resolve any
dispute or controversy arising out of or relating to this Agreement or
termination of the Executive by the Company. Any negotiations pursuant to this
paragraph 11 are confidential and will be treated as compromise and settlement
negotiations for all purposes. If the parties are unable to reach a settlement
amicably, the dispute will be submitted to binding arbitration before a single
arbitrator in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association. The arbitrator will be instructed and
empowered to take reasonable steps to expedite the arbitration and the
arbitrator's judgment will be final and binding upon the parties subject solely
to challenge on the grounds of fraud or gross misconduct. The parties agree that
the arbitrator shall not be empowered to award punitive or exemplary damages
each party hereby irrevocably waives any such damages. The arbitration will be
held in Xxxxxx County, Texas. Judgment upon any verdict in arbitration may be
entered in any court of competent jurisdiction and the parties hereby consent to
the jurisdiction of, and proper venue in, the federal and state courts located
in Xxxxxx County, Texas. Each party will bear its own costs in connection with
the arbitration and the costs of the arbitrator will be borne by the party who
the arbitrator determines did not prevail in the matter. Unless otherwise
expressly set forth in this Agreement, the procedures specified in this
paragraph 11 will be the sole and exclusive procedures for the resolution of
disputes and controversies between the parties arising out of or relating to
this Agreement. Notwithstanding the foregoing, a party may seek a preliminary
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injunction or other provisional judicial relief if in such party's judgment such
action is necessary to avoid irreparable damage or to preserve the status quo.
12. MISCELLANEOUS.
(a) Any notice required or permitted under this Agreement shall be
in writing and shall be deemed given when delivered personally or three days
after being sent by first-class registered or certified mail, return receipt
requested, to the party for which intended at its or his address set forth at
the beginning of this Agreement (which, in the case of the Company, shall be
sent "Attention: President") or to such other address as either party may
hereafter specify by similar notice to the other.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas governing contracts made and to be performed
in Texas.
(c) This Agreement supersedes all prior agreements between the
parties, written or oral, and cannot be amended or modified except by a writing
signed by both parties. It may be executed in one or more counterpart copies,
each of which shall be deemed an original, but all of which shall constitute the
same instrument.
(d) This Agreement, which is personal in nature, may not be assigned
by either party without the prior written consent of the other party, but the
Executive may, upon reasonable prior notice to the Company, assign his right to
receive any payment previously due and owing provided, that, such assignment
shall be subject to all claims and defenses of the Company against the
Executive.
(e) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns. The term "personal
representative" as used in this Agreement with respect to an individual shall
mean such individual's guardian, committee, executor, administrator or other
legal representative duly empowered to act on his behalf following his death or
legal incapacity.
(f) Captions used in this Agreement are for convenience of
reference only and shall not be deemed a part of this Agreement nor used in the
construction of its meaning. Exhibits attached to this Agreement shall be deemed
as fully a part of this Agreement as if set forth in full herein.
(g) The Company may setoff any amounts owed by it or its
subsidiaries to the Executive (or to the personal representative of the
Executive's estate), including but not limited to amounts owed hereunder,
against amounts owed
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by the Executive or his estate to the Company or any of its subsidiaries under a
promissory note or for any loans or advances made by the Company or its
subsidiaries to the Executive, including but not limited to loans or advances of
compensation hereunder.
(h) This Agreement has a term co-extensive with the term of
employment provided in paragraph 2. Termination shall not affect any right or
obligation of any party which is accrued or vested prior to such termination.
Without limiting the scope of the preceding sentence, the provisions of
paragraphs 8 and 11 shall survive the termination of the employment relationship
and/or of this Agreement.
(i) If any provision of this Agreement shall be deemed invalid or
unenforceable as written it shall be construed, to the greatest extent possible,
in a manner which shall render it valid and enforceable and any limitations on
the scope or duration of any such provision necessary to make it valid and
enforceable shall be deemed to be part thereof; no invalidity or
unenforceability shall affect any other portion of this Agreement unless the
provision deemed to be so invalid or unenforceable is a material element of this
Agreement, taken as a whole.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
KMG CHEMICALS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Xxxxx X. Xxxxxxx,
President
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
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