AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT dated December 1, 2008 which is effective as of October 1, 2008, by and
among Xxxxxxx Xxxxxxx Inc., a Maryland corporation (the “REIT”), Xxxxxxx Xxxxxxx XX, a Delaware
Limited Partnership (the “Operating Partnership”) each with its principal place of business at 0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, and Xxxxxxx X. Xxxxx,
residing at the address set forth on the signature page hereof (the “Executive”).
WHEREAS, the REIT and the Operating Partnership (collectively, the “Company”), on the one
hand, and the Executive on the other hand, entered into a certain Employment Agreement, dated
October 21, 2005 (the “Original Agreement”); and
WHEREAS, the Company and the Executive desire to provide Executive with an increase in salary
and to provide for Executive’s employment for a new stated term of three years, subject to the
terms of this Agreement, and to amend and restate the Original Agreement in its entirety as set
forth herein:
Accordingly, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the Executive, and the
Executive hereby accepts such continued employment, for an initial term (the “Initial Term”)
commencing on October 1, 2008 and continuing through December 31, 2011, unless sooner terminated in
accordance with the provisions of Section 4 or Section 5; with such employment to continue for
successive one-year periods in accordance with the terms of this Agreement (subject to termination
as aforesaid) unless either party notifies the other party of non-renewal in writing prior to 90
days before the expiration of the initial term and each annual renewal, as applicable (the Initial
Term, together with any such extensions of employment hereunder, shall hereinafter be referred to
as the “Term”).
2. Duties. During the Term, the Executive shall be employed by the Company as the
Chief Financial Officer, Senior Vice President and Secretary of the Company, and, as such, the
Executive shall faithfully perform for the Company the duties of said office and shall perform such
other duties of an executive, managerial or administrative nature as shall be specified and
designated from time to time by the Board of Directors of the Company (the “Board”) or the General
Partner of the Operating Partnership (the “General Partner”) (including, without limitation, the
performance of duties for affiliates and subsidiaries of the Company). The Executive shall devote
substantially all of his business time and effort to the performance of his duties hereunder;
provided that, the following activities do not interfere with the Executive’s ability to perform
his duties hereunder, the Executive shall not be prohibited from performing personal and charitable
activities and engaging in any other business interests as may be approved by the Board or the
General Partner. Notwithstanding the foregoing, unless otherwise consented to by the parties
hereto, in the event of any termination of employment with either the REIT or the Operating
Partnership at a time when the REIT and the Operating Partnership are affiliates, then such
termination will be considered to be a termination of such employment with the Company. Nothing
herein shall restrict the ability of the Operating Partnership from classifying the Executive as a
non-employee service provider thereto for tax-administrative purposes, for purposes of employee
benefit plans and programs and for such other purposes as it may deem appropriate.
3. Compensation.
3.1 Salary. The Company shall pay the Executive during the Term a salary at the rate
of $275,000 per annum (the “Annual Salary”), in accordance with the customary payroll practices of
the Company applicable to senior executives (or, if there is no such policy, such practices of the
Company’s principal affiliates). At least annually, the Board and the General Partner shall review
the Executive’s Annual Salary and may provide for increases therein as it may in its discretion
deem appropriate.
3.2 Bonus. During the Term, in addition to the Annual Salary, for each fiscal year of
the Company ending during the Term, the Executive shall have the opportunity to receive an annual
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bonus, if any, in an amount to be determined by the Company in its sole discretion and/or in
conjunction with specific performance measures as determined by the Company (the “Annual Bonus”).
3.3 Benefits — In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans, health programs,
equity-based plans, retirement plans, fringe benefit programs and similar benefits that may be
available to other senior executives of the Company generally, on the same terms as such other
executives, in each case to the extent that the Executive is eligible under the terms of such plans
or programs.
3.4 Expenses. The Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the case of reimbursement, paid) by
the Executive during the Term in the performance of the Executive’s services under this Agreement;
provided that the Executive submits proof of such expenses, with the properly completed forms as
prescribed from time to time by the Company.
3.5. Certain Specific Benefits. The Company shall make available to the Executive,
vacation of 20 business days per year and an appropriate Company car for the Executive’s use as the
Executive reasonably directs.
4. Termination upon Death or Disability. If the Executive dies during the Term, the
Term shall terminate as of the date of death, and the obligations of the Company to or with respect
to the Executive shall terminate in their entirety upon such date except as otherwise provided
under this Section 4. If the Executive by virtue of ill health or other disability is unable to
perform substantially and continuously the duties assigned to him for more than 180 consecutive or
non-consecutive days out of any consecutive 12-month period, the Company shall have the right, to
the extent permitted by law, to terminate the employment of the Executive upon notice in writing to
the Executive. Upon termination of employment due to death or disability, (i) the Executive (or
the Executive’s estate or beneficiaries in the case of the death of the Executive) shall be
entitled to receive any Annual Salary, Annual Bonus and other benefits earned and accrued under
this Agreement prior to the date of termination (and reimbursement under this Agreement for
expenses incurred prior to the date of termination), (ii) unless otherwise stated
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in an applicable award agreement, all outstanding unvested equity-based awards held by the
Executive shall vest and become immediately exercisable and shall otherwise become free of
restrictions and be exercisable in accordance with their terms, and (iii) except as otherwise
required under applicable law, the Executive (or, in the event of his death, his estate and
beneficiaries) shall have no further rights to any other compensation or benefits hereunder on or
after the termination of employment, or any other rights hereunder.
5. Certain Terminations of Employment.
5.1 Termination by the Company for Cause; Termination by the Executive without Good
Reason.
(a) For purposes of this Agreement, “Cause” shall mean the Executive’s:
(i) conviction of, or formal admission to, a misdemeanor the circumstances of which
are to the material detriment to the Company’s reputation whether or not in the
performance of the Executive’s duties hereunder, or a felony;
(ii) engagement in the performance of his duties hereunder, or otherwise to the
material detriment of the Company, in willful misconduct, willful or gross neglect,
fraud, misappropriation or embezzlement;
(iii) repeated failure to adhere to the directions of the Board or the General
Partner, or to adhere to the Company’s policies and practices;
(iv) willful and continued failure to substantially perform his duties properly
assigned to him (other than any such failure resulting from his disability) after
demand for substantial performance is delivered by the Company specifically
identifying the manner in which the Company believes the Executive has not
substantially performed such duties;
(v) breach of any of the provisions of Section 6; or
(vi) breach in any other material respect of the terms and provisions of this
Agreement (except for Section 6) and failure to cure such breach within 30 days
following written notice from the Company specifying such breach.
(b) During the Term, the Company may terminate the Executive for Cause upon written notice
given to the Executive at any time following the occurrence of any of the events described in
clauses (i), (ii), or (v) above, or upon written notice given to the Executive at any time not more
than 60 days following the occurrence of, or if later, the Board or General Partner’s actual
knowledge of, any of
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the events described in clause (iii), (iv) or (vi) above. Notwithstanding the foregoing, no
termination for Cause shall be effective unless the Board or the General Partner provides written
notice to the Executive that there may be grounds to terminate the Executive for Cause and the
Executive has been provided with the opportunity (with counsel of his choice) to present to the
Board or the General Partner his position with respect to the potential grounds for termination
pursuant to Section 5.1. Such notice from the Board or the General Partner shall provide the
potential grounds for termination and the date of such meeting, which date shall be no less than 14
days and no more than 30 days of issuance of such notice and shall be held at the Company’s offices
in Charlotte, North Carolina. If after the earlier of the (1) meeting referred to above, and (2)
notice from the Executive that he does not intend to present to the Board or the General Partner at
such meeting, the Board determines that the Company has proper grounds to terminate the Executive
under this Section 5.1, then within five business days of the meeting of the Board, the Company may
serve written notice on the Executive that his employment is being terminated in accordance with
this Section 5.1. After the meeting with the Board or General Partner, there shall be no further
internal appeals to dispute the Company’s determination of Cause. The Company may suspend or
reduce the Executive’s duties pending such meeting of the Board and such suspension will not be
deemed to be a termination of employment under Section 5.2.
(c) If the Company terminates the Executive’s employment for Cause, the Executive shall
receive Annual Salary and other benefits (but, in all events, and without increasing the
Executive’s rights under any other provision hereof, excluding any bonuses not yet paid) earned and
accrued under this Agreement prior to the termination of employment (and reimbursement under this
Agreement for expenses incurred prior to the termination of employment); and (ii) except as
otherwise required under applicable law, the Executive shall have no further rights to any other
compensation or benefits hereunder on or after the termination of employment, or any other rights
hereunder.
(d) If the Executive terminates his employment without Good Reason (on at least 60 days’
written notice given to the Company) the Executive shall receive Annual Salary and other benefits
(but, in all events, and without increasing the Executive’s rights under any other provision
hereof,
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excluding any bonuses not yet paid) earned and accrued under this Agreement prior to the
termination of employment (and reimbursement under this Agreement for expenses incurred prior to
the termination of employment); and (ii) except as otherwise required under applicable law, the
Executive shall have no further rights to any other compensation or benefits hereunder on or after
the termination of employment, or any other rights hereunder.
5.2 Termination by the Company without Cause; Termination by the Executive for Good
Reason.
(a) For purposes of this Agreement, “Good Reason” shall mean, unless otherwise consented to by
the Executive,
(i) the material reduction of the Executive’s authority, duties and
responsibilities, or the assignment to the Executive of duties materially
inconsistent with the Executive’s position or positions with the Company;
(ii) a reduction in Annual Salary of the Executive;
(iii) the relocation of the Executive’s office to more than 50 miles from Charlotte,
North Carolina; or
(iv) the Company’s material and willful breach of this Agreement.
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of
termination on account thereof (specifying a termination date no later than 60 days from the date
of such notice) is given no later than 60 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises and (ii) if there exists (without
regard to this clause (ii)) an event or condition that constitutes Good Reason, the Company shall
have 60 days from the date notice of such a termination is given to cure such event or condition
and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.
(b) During the Term, the Company may terminate the Executive’s employment at any time for any
reason or no reason and the Executive may terminate the Executive’s employment with the Company for
Good Reason. If the Company terminates the Executive’s employment and the termination is not
covered by Section 4, 5.1 or 5.3, or the Executive terminates his employment for Good
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Reason and the termination by the Executive is not covered by Section 5.3, (i) the Executive
shall receive in one lump sum, no later than two and one-half months after the end of the calendar
year in which such termination occurs, Annual Salary, Annual Bonus, if any, and other benefits
earned and accrued under this Agreement prior to the termination of employment (and reimbursement
under this Agreement for expenses incurred prior to the termination of employment); (ii) the
Executive shall receive (A) a cash payment equal to 1.99 times the sum of (x) the Executive’s
Annual Salary (as in effect on the effective date of such termination) payable no later than 30
days after such termination and (y) the greater of (1) the average of the two previous Annual
Bonuses, if any, received by the Executive as provided for in Section 3.2, or (2) the maximum
amount payable under Section 3.2 for the fiscal year in which the termination occurs (the
“Termination Bonus”), or, in the event the Executive has not received any Annual Bonuses pursuant
to Section 3.2 at the time of such termination, the Termination Bonus shall be equal to the Annual
Bonus the Executive would have received under Section 3.2 if the Executive would have remained
employed through the period required to be entitled to receive the Annual Bonus and satisfied all
target performance objectives, as established by the Company, such payment to be made no later than
30 days after such termination (or, if later, as soon as practicable, but in no event more than 30
days after, the amount of the Termination Bonus is known) and (B) for a period of three years after
termination of employment such continuing health benefits (including any medical, vision or dental
benefits), under the Company’s health plans and programs applicable to senior executives of the
Company generally as the Executive would have received under this Agreement (and at such costs to
the Executive) as would have applied in the absence of such termination (but not taking into
account any post-termination increases in Annual Salary that may otherwise have occurred without
regard to such termination and that may have favorably affected such benefits); (iii) unless
otherwise stated in an applicable award agreement, all outstanding unvested equity-based awards
held by the Executive shall vest and become immediately exercisable and shall otherwise become free
of restrictions and be exercisable in accordance with their terms and the Executive shall become
vested in any pension or other deferred compensation other than pension or deferred compensation
under a plan intended to be qualified under Section 401(a) or 403(a) of
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the Internal Revenue Code of 1986, as amended; and (iv) except as otherwise required under
applicable law, the Executive shall have no further rights to any other compensation or benefits
hereunder on or after the termination of employment, or any other rights hereunder.
(c) Notwithstanding clause (ii)(B) of the second sentence of Section 5.2(b), (i) nothing
herein shall restrict the ability of the Company to amend or terminate the plans and programs
referred to in such clause (ii)(B) from time to time in its sole discretion, but the Company may
not reduce benefits already earned and accrued by, but not yet paid to, the Executive and (ii) the
Company shall in no event be required to provide any benefits otherwise required by such clause
(ii)(B) after such time as the Executive becomes entitled to receive benefits of the same type from
another employer or recipient of the Executive’s services (such entitlement being determined
without regard to any individual waivers or other similar arrangements).
5.3 Change of Control.
(a) Without duplication of the foregoing, upon a “Change in Control” (as defined below) while
the Executive is employed, all outstanding unvested equity-based awards (including stock options
and restricted stock) shall fully vest and become immediately exercisable, as applicable. In
addition, if, after a Change in Control, the Executive terminates his employment with the Company
for any reason on or before the first anniversary of the Change in Control, such termination shall
be deemed a termination by the Executive for Good Reason covered by Section 5.2, provided, that the
Executive provides no less than 30 days’ advance written notice to the Company.
(b) For purposes of this Agreement, “Change in Control” shall have the same meaning as in the
Company 2005 Long Term Incentive Compensation Plan (or any successor plan thereof).
5.4 Non-Renewal of the Employment Term. If the Executive’s employment is terminated
as a result of the expiration of the Term and he is not offered another employment agreement on
substantially the same terms and conditions or the Company declines to renew the Term, then the
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Executive shall receive the same amounts as specified in Section 5.2(b), except that, the
multiplier in Section 5.2(b)(ii) of “1.99” will be reduced to “1” for purposes of this Section 5.4.
This provision shall not apply in the event the Executive gives notice of non-renewal in which
event any termination shall be covered under Section 5.1.
6. Covenants of the Executive.
6.1 Company Election and Special Payment. The Executive acknowledges, understands and
agrees that, in consideration for his agreeing to and complying with the terms and conditions
contained in this Section 6 hereof (excluding Section 6.2(b) which will be enforceable by the
Company without the receipt of any payment by the Executive), he will be entitled to a lump sum
payment, payable no later than 30 days after a termination of the Executive’s employment under
Section 5 of this Agreement, equal to the sum of (i) the Executive’s Annual Salary for one year and
(ii) the greater of (A) the average of the two previous Annual Bonuses received by the Executive as
provided for in Section 3.2, or (B) the maximum amount payable under Section 3.2 for the fiscal
year in which the termination occurs, or, in the event the Executive has not received any Annual
Bonuses pursuant to Section 3.2 at the time of such termination, such Annual Bonus shall be equal
to the Annual Bonus the Executive would have received under Section 3.2 if the Executive would have
remained employed through the period required to be entitled to receive the Annual Bonus and
satisfied all target performance objectives. Notwithstanding the foregoing, within seven days of a
termination of the Executive’s employment under Section 5 of this Agreement, the Company may give
written notice to the Executive stating that it does not wish to enforce the terms and conditions
contained in this Section 6 (excluding Section 6.2(b)), and upon issuance of such notice, the
Company will not be obligated to pay and the Executive will not be entitled to receive any
consideration under this Section 6 and the covenants contained in this Section 6 (other than
Section 6.2(b)) will have no force and effect.
6.2 Covenant Against Competition; Other Covenants. The Executive acknowledges that
(i) the principal business of the Company (which expressly includes for purposes of this Section 6
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(and any related enforcement provisions hereof), its successors and assigns) is the ownership,
operation, design, development, redevelopment, acquisition and management of strategically located
medical office buildings and other healthcare related facilities in the United States. (such
business and any and all other businesses that after the date hereof, and from time to time during
the Term, become material with respect to the Company’s then-overall business, herein being
collectively referred to as the “Business”); (ii) the Company is one of the limited number of
persons who have developed such a business; (iii) the Company’s Business is, in part, national in
scope; (iv) the Executive’s work for Xxxxxxx Xxxxxxx Advisors, Inc. and the Company has given and
will continue to give him access to the confidential affairs and proprietary information of the
Company; (v) the covenants and agreements of the Executive contained in this Section 6 are
essential to the business and goodwill of the Company; and (vi) the Company would not have entered
into this Agreement, including but not limited to providing Executive with an extended term of
employment as set forth in this Agreement, but for the covenants and agreements set forth in this
Section 6. Accordingly, by and in consideration of the payments to the Executive to be provided by
the Company hereunder and in consideration for the Company’s promise to employ the Executive for a
definite extended term as set forth in this Agreement, and further in consideration of the
Executive’s exposure to the confidential, sensitive and proprietary information of the Company, the
Executive covenants and agrees as follows.
(a) The Executive covenants and agrees that, during the period commencing on the date hereof
and ending two years following the date upon which the Executive shall cease to be an employee of
the Company and its affiliates (the “Restricted Period”), he shall not directly or indirectly,
whether as an owner, partner, shareholder, principal, agent, employee, consultant or in any other
relationship or capacity, (i) engage in any element of the Business, in competition with the
Company or its affiliates for any entity or person that competes with the Company or its affiliates
in the Restricted Territory, (ii) render any services to any person, corporation, partnership or
other entity engaged in competition with the Company or its affiliates in the Restricted Territory
if such services are the same or substantially similar to the services performed by the Executive
on behalf of the Company, or (iii) provide
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financial assistance to or otherwise obtain an ownership interest in a competitor of the
Company or its affiliates; provided, however, that, notwithstanding the foregoing, the Executive
may invest in securities of any entity, solely for investment purposes and without participating in
the business thereof, if (A) such securities are traded on any national securities exchange or the
National Association of Securities Dealers, Inc. Automated Quotation System, (B) the Executive is
not a controlling person of, or a member of a group which controls, such entity and (C) the
Executive does not, directly or indirectly, own 5% or more of any class of securities of such
entity.
For purposes of this Agreement, the “Restricted Territory” shall mean:
(i) North Carolina;
(ii) South Carolina;
(iii) Kentucky;
(iv) Georgia;
(v) Louisiana;
(vi) Florida;
(vii) Tennessee;
(viii) Illinois;
(ix) Indiana;
(x) Mississippi; and
(xi) any other state in the United States in which the Company is actively
conducting its business.
(b) During and after the Restricted Period, the Executive shall keep secret and retain in
strictest confidence, and shall not use for his benefit or the benefit of others, except in
connection with the business and affairs of the Company and its affiliates, all confidential
matters relating to the Company’s Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or hereafter directly or
indirectly from the Company or any of its affiliates (the “Confidential Company Information”), and
shall not disclose such Confidential Company
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Information to anyone outside of the Company except with the Company’s express written consent
and except for Confidential Company Information which is at the time of receipt or thereafter
becomes publicly known through no wrongful act of the Executive or is received from a third party
not under an obligation to keep such information confidential and without breach of this Agreement.
(c) During the Restricted Period, the Executive shall not, without the Company’s prior written
consent, directly or indirectly, knowingly (i) solicit or encourage to leave the employment or
other service of the Company, or any of its affiliates, any employee or independent contractor
thereof or (ii) hire (on behalf of the Executive or any other person or entity) any then current
employee or independent contractor of the Company or any of Company’s affiliates; or (iii) hire (on
behalf of the Executive or any other person or entity) any employee or independent contractor of
the Company or any of Company’s affiliates who has left the employment or other service of the
Company or any of its affiliates within the one-year period which follows the termination of such
employee’s or independent contractor’s employment or other service with the Company and its
affiliates.
(d) From the date hereof through the end of the Restricted Period, the Executive will not,
within the Restricted Territory, whether for his own account or for the account of any other
person, firm, corporation or other business organization, intentionally interfere with the
Company’s or any of its affiliates’ relationships with, or endeavor to entice away from the Company
or any of its affiliates, any person who during the 12-month period prior to the Executive’s
termination is or was a customer or client of the Company or any of its affiliates.
(e) While the Executive’s non-compete obligations under Section 6.2(a) are in effect, the
Executive shall not publish any statement or make any statement under circumstances reasonably
likely to become public that is critical of the Company or any of its affiliates, or in any way
adversely affecting or otherwise maligning the Business or reputation of the Company or any of its
affiliates.
6.3 Rights and Remedies upon Breach.
(a) The Executive acknowledges and agrees that any breach by him of any of the provisions of
Section 6.2 or any subparts thereof (individually or collectively the “Restrictive
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Covenants”) would result in irreparable injury and damage for which money damages would not
provide an adequate remedy. Therefore, if the Executive breaches, or threatens to commit a breach
of, any of the provisions of Section 6.2 or any subpart thereof, the Company and its affiliates, in
addition to, and not in lieu of, any other rights and remedies available to the Company and its
affiliates under law or in equity (including, without limitation, the recovery of damages); shall
have the right and remedy to have the Restrictive Covenants specifically enforced (without posting
bond and without the need to prove damages) by any court having equity jurisdiction, including,
without limitation, the right to an entry against the Executive of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or
actual, and whether or not then continuing, of such covenants.
(b) The Executive agrees that the provisions of Section 6.2 of this Agreement and each
subsection thereof are reasonably necessary for the protection of the Company’s legitimate business
interests and if enforced, will not prevent Executive from obtaining gainful employment should his
employment with Company end. The Executive agrees that in any action seeking specific performance
or other equitable relief, he will not assert or contend that any of the provisions of this Section
6 are unreasonable or otherwise unenforceable. The existence of any claim or cause of action by
the Executive, whether predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement of the Restrictive Covenants.
7. Other Provisions.
7.1 Return of Property. All memoranda, notes, lists, records, property and any other
tangible product and documents (and all copies thereof), whether visually perceptible,
machine-readable or otherwise, made, produced or compiled by the Executive or made available to the
Executive concerning the business of the Company or its affiliates, (i) shall at all times be the
property of the Company (and, as applicable, any affiliates) and shall be delivered to the Company
at any time upon its request, and (ii) upon the Executive’s termination of employment, shall be
immediately returned to the Company.
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7.2 Severability. The Executive acknowledges and agrees that (i) he has had an opportunity to
seek advice of counsel in connection with this Agreement and (ii) the Restrictive Covenants are
reasonable in geographical and temporal scope and in all other respects. If it is determined that
any of the provisions of this Agreement, including, without limitation, any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of the provisions of
this Agreement shall not thereby be affected and shall be given full effect, without regard to the
invalid portions.
7.3 Duration and Scope of Covenants. If any court or other decision-maker of competent
jurisdiction determines that any of the Executive’s covenants contained in this Agreement,
including, without limitation, any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such provision, as the
case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.
7.4 Enforceability; Jurisdiction; Arbitration.
(a) The Company and the Executive intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants set forth in Section 6 upon the courts of any jurisdiction within the
geographical scope of the Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of breadth of scope or
otherwise it is the intention of the Company and the Executive that such determination not bar or
in any way affect the Company’s right, or the right of any of its affiliates, to the relief
provided above in the courts of any other jurisdiction within the geographical scope of such
Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each jurisdiction’s being, for this
purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine
of res judicata. The parties hereby agree to waive any right to a trial by jury for any and all
disputes hereunder (whether or not relating to the Restricted Covenants).
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(b) Any controversy or claim arising out of or relating to this Agreement or the breach of
this Agreement (other than a controversy or claim arising under Section 6, to the extent necessary
for the Company (or its affiliates, where applicable) to avail itself of the rights and remedies
referred to in Section 6.3) that is not resolved by the Executive and the Company (or its
affiliates, where applicable) shall be submitted to arbitration in Charlotte, North Carolina in
accordance with North Carolina law and the procedures of the American Arbitration Association. The
determination of the arbitrator(s) shall be conclusive and binding on the Company (or its
affiliates, where applicable) and the Executive and judgment may be entered on the arbitrator(s)’
award in any court having jurisdiction.
7.5 Notices. Any notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or
sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, five days after the date of deposit in the United States mails as follows:
(i)
|
If to the Company, to: | |
| Xxxxxxx Xxxxxxx Inc. | ||
| 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000 | ||
| Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 | ||
| Attention: Xxxxx X. Xxxxxxx | ||
| with a copy to: | ||
| Xxxxxxxx Chance US LLP | ||
| 00 Xxxx 00 Xxxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 | ||
| Attention: Xxx Xxxxxxxxx | ||
(ii)
|
If to the Executive, to: | |
| Xxxxxxx X. Xxxxx | ||
| [at the address set forth on the signature page hereof] |
Any such person may by notice given in accordance with this Section 7.5 to the other parties hereto
designate another address or person for receipt by such person of notices hereunder.
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7.6 Entire Agreement. This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
7.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument signed by the parties
or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege nor any single or partial
exercise of any such right, power or privilege, preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.
7.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW WHICH COULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NORTH CAROLINA.
7.9 Assignment. This Agreement, and the Executive’s rights and obligations hereunder, may not
be assigned by the Executive; any purported assignment by the Executive in violation hereof shall
be null and void. In the event of any sale, transfer or other disposition of all or substantially
all of the Company’s assets or business, whether by merger, consolidation or otherwise, the Company
may assign this Agreement and its rights hereunder.
7.10 Withholding. The Company shall be entitled to withhold from any payments or deemed
payments any amount of tax withholding it determines to be required by law.
7.11 No Duty to Mitigate. Except as may be provided in Section 5.2(c)(ii), the Executive
shall not be required to mitigate damages or the amount of any payment provided for under this
Agreement by seeking other employment or otherwise, nor will any payments hereunder be subject to
offset in the event the Executive does mitigate.
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7.12 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, permitted assigns, heirs, executors and legal
representatives.
7.13 Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each counterpart may consist
of two copies hereof each signed by one of the parties hereto.
7.14 Survival. Anything contained in this Agreement to the contrary notwithstanding, the
provisions of Sections 6, 7.1, 7.4 and 7.10, and the other provisions of this Section 7 (to the
extent necessary to effectuate the survival of Sections 6, 7.1, 7.4 and 7.10), shall survive
termination of this Agreement and any termination of the Executive’s employment hereunder.
7.15 Existing Agreements. The Executive represents to the Company that he is not subject or a
party to any employment or consulting agreement, non-competition covenant or other agreement,
covenant or understanding which might prohibit him from executing this Agreement or limit his
ability to fulfill his responsibilities hereunder.
7.16 Headings. The headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.
7.17 Parachutes. If the Executive is terminated for any reason, other than a termination
covered by the provisions of Section 5.1, then if any amount payable to or other benefit receivable
by the Executive pursuant to this Agreement is deemed to constitute a Parachute Payment (as defined
below), alone or when added to any other amount payable or paid to or other benefit receivable or
received by the Executive which is deemed to constitute a Parachute Payment (whether or not under
an existing plan, arrangement or other agreement), and would result in the imposition on the
Executive of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), then, in addition to any other benefits to which the Executive is entitled under this
Agreement, the Executive shall be paid by the Company an amount in cash equal to the sum of the
excise taxes payable by the Executive by reason of receiving Parachute Payments plus the amount
necessary to put the Executive in the same
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after-tax position (taking into account any and all applicable federal, state and local
excise, income or other taxes at the highest applicable rates on such Parachute Payments and on any
payments under this Section 7.17) as if no excise taxes had been imposed with respect to Parachute
Payments. “Parachute Payment” shall mean a “parachute payment” as defined in Section 280G of the
Code. The amount of any payment under this Section 7.17 shall be computed by a certified public
accounting firm selected by the Company and reasonably acceptable to the Executive.
7.18 Section 409A Compliance. Any payments under this Agreement that are deemed to be
deferred compensation subject to the requirements of Section 409A of the Code (“Section 409A”), are
intended to comply with the requirements of Section 409A. To this end and notwithstanding any
other provision of this Agreement to the contrary, if at the time of Executive’s termination of
employment with the Company, (i) the Company’s securities are publicly traded on an established
securities market; (ii) Executive is a “specified employee” (as defined in Section 409A); and (iii)
the deferral of the commencement of any payments or benefits otherwise payable pursuant to this
Agreement as a result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A, then the Company will defer the commencement of
such payments (without any reduction in amount ultimately paid or provided to Executive) that are
not paid within the short-term deferral rule under Section 409A (and any regulations thereunder) or
within the “involuntary separation” exemption of Treasury Regulation § 1.409A-1(b)(9)(iii). Such
deferral shall last until the date that is six months following Executive’s termination of
employment with the Company (or the earliest date as is permitted under Section 409A). Any amounts
the payment of which are so deferred shall be paid in a lump sum payment within 10 days after the
end of such deferral period. If Executive dies during the deferral period prior to the payment of
any deferred amount, then the unpaid deferred amount shall be paid to the personal representative
of Executive’s estate within 60 days after the date of Executive’s death. For purposes of Section
409A, the right to a series of installment payments under this Agreement shall be treated as a
right to a series of separate payments.
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IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first
above written.
| XXXXXXX XXXXXXX INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
| XXXXXXX XXXXXXX XX | ||||||
| By: | CS Business Trust I, its General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxx | |||||
| Title: | Trustee | |||||
| XXXXXXX X. XXXXX | ||||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||||
| Name: | Xxxxxxx X. Xxxxx | |||||
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