CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between XXXXXXXX INDUSTRIES, a California corporation,
(the "Company") and XXXXX X. XXXX (the "Executive"), dated as of this 26th
day of August, 1997.
WHEREAS, the Executive currently serves as Vice President, Finance and
Chief Financial Officer of the Company;
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility of a change in control of the
Company;
WHEREAS, the Board wishes to diminish the distraction of the Executive by
virtue of any pending or threatened change in control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending change in control; and
WHEREAS, the Board wishes to provide the Executive with compensation
arrangements upon a change in control which satisfy the expectations of the
Executive and which are competitive with those of other corporations.
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NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. TERM OF AGREEMENT.
(a) The term of this Agreement shall commence on the date of its
execution and shall terminate on September 30, 1998. Subject
to Subsection (b), on October 1, 1998, and on each October 1
thereafter, the term of this Agreement shall automatically be
extended for one additional year, unless not later than the
preceding April 1 both parties shall have agreed in writing
not to extend the term of this Agreement.
(b) If a Change in Control occurs during the original term of this
Agreement or any extension thereof under Subsection (a), the
term of this Agreement shall be automatically extended for a
24-month period commencing with the Change in Control Date.
At the end of such 24-month period, this Agreement shall
terminate.
(c) Notwithstanding anything to the contrary in this Section 1, this
Agreement shall terminate --
(1) on the date of the termination of the Executive's employment
with the Company for any reason before the Change in Control
Date, or
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(2) on the Executive's Date of Termination on or after the Change
in Control Date if the Executive's employment with the
Company is terminated (A) by the Company for Cause or by
reason of Disability, (B) by reason of the Executive's death,
or (C) by the Executive without Good Reason.
2. CERTAIN DEFINITIONS. The following words and phrases, when used in
this Agreement, shall have the following meanings, unless otherwise
clearly required by the context.
(a) "AGREEMENT" shall mean this Change in Control Agreement.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CAUSE" shall mean:
(1) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or
its affiliates (for reasons other than the Executive's
Disability), after written notification is delivered to
the Executive specifying the manner in which the Chief
Executive Officer or the Board believes that the
Executive has not substantially performed the Executive's
duties, if
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the Executive does not cure such failure within 90 days of
receiving such written notification; or
(2) the willful engaging by the Executive in criminal conduct or
gross misconduct which is materially and demonstrably
injurious to the Company.
For purposes of this Subsection (c), no act or failure to act,
on the part of the Executive, shall be considered "willful"
unless it is done, or not done, by the Executive in bad faith
or without reasonable belief that the Executive's action or
failure to act was in the best interests of the Company. Any
act, or failure to act, pursuant to a resolution duly adopted
by the Board or upon the instructions of the Chairman of the
Board or the Chief Executive Officer or based upon the advice
of counsel for the Company shall be conclusively presumed to
be done, or not to be done, by the Executive in good faith and
in the best interests of the Company. The termination of
employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the
Executive a copy of a resolution, duly adopted by the
affirmative vote of not less than three-fourths of the group
consisting of the outside directors of the Company and the
Chairman of the Board, at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity,
together with his counsel, to be heard before the Board),
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finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct or misconduct described in
Paragraph (1) or (2), and specifying the particulars thereof in
detail.
(d) "CHANGE IN CONTROL" shall mean:
(1) the acquisition by any individual, entity, or group (within
the meaning of Section 13(d) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30 percent
or more of either:
(A) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock"), or
(B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company
Voting Securities");
provided, however, that any of the preceding events shall not
constitute a Change in Control unless the conditions of
Paragraph (2) shall also be satisfied within six months of
any of the preceding
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events; and provided, further, that for purposes of this
Paragraph (1), the following acquisitions shall not
constitute a Change in Control:
(C) any acquisition directly from the Company (including,
without limitation, a secondary offering of securities
by the Company);
(D) any acquisition by the Company (including, without
limitation, a repurchase or redemption of Company
securities by the Company);
(E) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(F) any acquisition by any corporation pursuant to a
transaction which complies with Subparagraphs (A),
(B), and (C) of Paragraph (3) of this Subsection (d);
(2) the failure of individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") for any reason
to constitute at least a majority of the Board; provided,
however, that any individual becoming a member of the Board
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders,
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has been approved by a vote of at least a majority of the
members then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of members or other actual
or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(3) approval by the shareholders of the Company of a
reorganization, merger, consolidation, or sale or other
disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless,
following such Business Combination --
(A) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 70 percent of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors,
as
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the case may be, of the corporation resulting from
such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially
all of the Company's assets either directly or
through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately
prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be;
(B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation
resulting from such Business Combination)
beneficially owns, directly or indirectly, 30 percent
or more of, respectively, the then outstanding shares
of common stock of the corporation resulting from such
Business Combination or the combined voting power of
the then outstanding voting securities of such
corporation except to the extent that such ownership
existed prior to the Business Combination; and
(C) at least a majority of the members of the board of
directors of the corporation resulting from such
Business Combination were members of the Incumbent
Board at the time of the execution of
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the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(4) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(e) "CHANGE IN CONTROL DATE" shall mean the first date on which a
Change in Control occurs. Notwithstanding any provision in
this Agreement to the contrary, if a Change in Control occurs
and if the Executive's employment with the Company terminates
prior to the date on which the Change in Control actually
occurs, and if it is reasonably demonstrated by the Executive
that such termination --
(1) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control, or
(2) otherwise arose in connection with or anticipation of a
Change in Control,
for all purposes of this Agreement the Change in Control Date
shall mean the date immediately before the date of such
termination of employment.
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(f) "CHANGE IN CONTROL PERIOD" shall mean the 24-month period
beginning on the Change in Control Date.
(g) "CODE" shall mean the Internal Revenue Code of 1986, as amended,
and all regulatory guidance promulgated thereunder.
(h) "COMPANY" shall mean Xxxxxxxx Industries.
(i) "DATE OF TERMINATION" shall mean:
(1) if the Executive's employment is terminated by the Company
for Cause, or by the Executive for Good Reason, the date
of receipt of a written notice of termination, or any
later date specified therein;
(2) if the Executive's employment is terminated by the Company
other than for Cause or by reason of Disability, the date
on which the Company notifies the Executive of such
termination; or
(3) if the Executive's employment is terminated by reason of
death or Disability, the date of death or 15 days after
the date of determination by the Company (under
Subsection (j)) of Disability.
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(j) "DISABILITY" shall mean an incapacity, due to physical injury or
illness or mental illness, rendering the Executive unable to
perform his duties with the Company on a full-time basis for a
period of at least six consecutive calendar months. In the
case of a dispute between the Executive and the Company, the
determination of Disability shall be made by a doctor
acceptable to both the Executive and the Company. Nothing in
this Agreement shall prevent or limit the Executive from any
benefits to which the Executive is, or may become, entitled
under any short- or long-term disability program sponsored by
the Company or any of its affiliates.
(k) "EXECUTIVE" shall mean Xxxxx X. Xxxx.
(l) "GOOD REASON" shall mean:
(1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including
status, offices, titles, and reporting requirements),
authority, duties, or responsibilities as of the date of
this Agreement, or any other action by the Company which
results in a diminution in such position, authority,
duties, or responsibilities, excluding for this purpose
an isolated, insubstantial, or inadvertent action not
taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive;
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(2) the Company's requiring the Executive to be based at any
office or location more than 30 miles from the Company's
corporate headquarters as of the day before the Change in
Control Date or the Company's requiring the Executive to
travel on Company business to a substantially greater
extent than required immediately prior to the Change in
Control Date;
(3) any material reduction in the Executive's total annual cash
compensation from the Company and its affiliates
(including, without limitation, base salary, bonus, and
incentive plan payments) without the consent of the
Executive;
(4) any material shift in the composition of the Executive's
total annual compensation from the Company and its
affiliates, from base salary to bonus or incentive plan
payments or from cash to non-cash compensation, without
the consent of the Executive;
(5) any purported termination by the Company of the Executive's
employment other than as expressly permitted by this
Agreement; or
(6) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement.
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3. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) OTHER THAN FOR CAUSE OR DISABILITY. If, during the Change in
Control Period, the Company terminates the Executive's
employment other than for Cause or Disability, the Company
shall be obligated to pay the Executive the salary substitute
and the bonus equivalent amounts under Subsections (a) and (b)
of Section 4 and to provide the benefits described in Section 5.
(b) GOOD REASON. If, during the Change in Control Period, the
Executive terminates employment with the Company for Good
Reason, the Company shall be obligated to pay the Executive
the salary substitute and the bonus equivalent amounts under
Subsections (a) and (b) of Section 4 and to provide the
benefits described in Section 5.
(c) DEATH. If, during the Change in Control Period, the Executive's
employment is terminated by reason of the Executive's death,
this Agreement shall terminate without further obligation to
the Executive's legal representatives under this Agreement.
(d) BY THE COMPANY FOR CAUSE OR BECAUSE OF DISABILITY, OR BY THE
EXECUTIVE WITHOUT GOOD REASON. If, during the Change in Control
Period, the
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Company terminates the Executive's employment for Cause or
because of Disability, or if, during the Change in Control
Period, the Executive terminates employment without Good
Reason, this Agreement shall terminate without further
obligation to the Executive.
4. COMPENSATION EQUIVALENCIES. The following amounts shall be paid by
the Company to the Executive to the extent required under, and in
accordance with, the provisions of Sections 3, 7, 8, and 9.
(a) SALARY SUBSTITUTE. The Executive shall receive a cash payment
equal to the product of 24 times the highest monthly base
salary paid or payable (including without limitation any base
salary which has been earned but deferred under any deferred
compensation or retirement plan or arrangement) to the
Executive by the Company and its affiliates during the
12-month period immediately preceding the month in which the
Executive's employment with the Company terminates.
(b) BONUS EQUIVALENT. The Executive shall receive a cash payment
equal to the product of two times the average of the
Executive's annual bonus under the Company's Annual Incentive
Plan, and any and all comparable bonuses under any predecessor
or successor plans, for each of the last two full fiscal years
ending immediately before or on the Change in Control Date.
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(c) TIMING OF PAYMENTS. The amounts determined above shall be payable
as soon as practicable after the Executive's Date of Termination,
in a single lump-sum cash payment.
5. BENEFITS. The following benefits shall be provided by the Company for
the Executive and (to the extent applicable) his immediate family, to
the extent required, and in accordance with, the provisions of
Sections 3, 7, 8, and 9.
(a) For two years after the Executive's Date of Termination, or such
longer period as may be provided under the terms of the
appropriate plan, program, practice, or policy, the Company
shall continue benefits to the Executive and/or the
Executive's immediate family at a level at least equal to that
which would have been provided for him and/or them in
accordance with the plans, programs, practices, and policies
described in Subsection (b) if the Executive's employment had
not terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliates and their
families. Notwithstanding the foregoing, if the Executive
becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another
employer-provided plan, or if the Executive breaches any of
the covenants listed in Section 8, the benefits provided under
this Subsection (a) shall be immediately terminated.
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(b) The benefits described herein shall be all benefits under any
welfare benefit plans provided by the Company and its
affiliates (including, without limitation, medical,
prescription drugs, dental, disability, employee life, group
life, accidental death, and travel accident insurance plans
and programs) to the extent applicable generally to other peer
executives of the Company and its affiliates, other than
severance benefits, to the extent not triggered by the
Executive's termination of employment with the Company.
6. ACCELERATION OF STOCK OPTION VESTING. Upon a Change in Control, the
Company shall cause the vesting of any stock options with regard to
stock of the Company or its affiliates held by the Executive to be
accelerated to the Change in Control Date. The Executive shall be
entitled to give notice of exercise of all such options for 30 days
after the Change in Control Date or such longer period permitted under
the original documents granting such options.
7. CONTINGENT LIMITATION ON AMOUNTS.
(a) Notwithstanding any other provisions of this Agreement or any
other agreement, plan, or arrangement (except as provided in
the following paragraph of this Subsection (a)), if any
payment or benefit received or to be received by the Executive
(under the terms of this Agreement, or any other plan,
arrangement, or agreement with the Company, or any other plan,
arrangement, or agreement with any person whose actions result
in a
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Change in Control or any person affiliated with the Company or
any such person) (all such payments and benefits being
hereinafter called "Total Payments") would be subject (in
whole or in part) to taxes imposed by Code Section 4999, the
portion of the Total Payments payable under this Agreement
shall be reduced as herein provided.
The Total Payments payable under this Agreement shall be reduced
to the extent necessary so that no portion of the Total
Payments shall be subject to the parachute excise tax (the
"Excise Tax") imposed by Code Section 4999 (after taking into
account any reduction in the Total Payments provided by reason
of Code Section 280G in any other plan, arrangement, or
agreement) but only if the amount determined under Paragraph
(1) is greater than the amount determined under Paragraph (2).
(1) The amount determined hereunder shall be the net amount of
such Total Payments, as so reduced (and after deduction
of the net amount of Federal, state, and local income
taxes on such reduced Total Payments computed at the
Executive's highest marginal tax rate).
(2) The amount determined hereunder shall be the excess of --
(A) the net amount of such Total Payments, without
reduction (but after deduction of the net amount of
Federal, state, and local
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income taxes on such Total Payments computed at the
Executive's highest marginal tax rate), over
(B) the amount of Excise Tax to which the Executive would
be subject in respect of such Total Payments.
Any reduction of the Total Payments shall be made under one of
the two alternative methods described in Subsection (b). For
purposes of this Section 7 and the calculations hereunder,
Total Payments shall not include any amounts considered a
"parachute payment" under Code Section 280G in the opinion of
Xxxxxx Xxxxxxxx LLP (or suitable experts selected by the
Board).
(b) If the Total Payments all become payable at approximately the same
time,
(1) the payments under Section 4(b) shall first be reduced (if
necessary, to zero);
(2) the payments under Section 4(a) shall next be reduced (if
necessary, to zero);
(3) the other portions of the Total Payments shall next be
reduced (if necessary, to zero); and
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(4) the acceleration of vesting of awards under stock options
shall be reduced as necessary.
If the Total Payments do not become due and payable at
approximately the same time, the respective Total Payments
shall be paid in full in the order in which they become
payable until any portion thereof would not be deductible, and
such portion (and any subsequent portions) of the Total
Payments shall be reduced to zero. In such case, the Company
shall make every reasonable effort to make such payments in
the order that results in the most favorable tax treatment and
financial results for the Executive.
(c) For purposes of determining whether and the extent to which the
Total Payments would be subject to the Excise Tax,
(1) no portion of the Total Payments the receipt or enjoyment of
which the Executive shall have effectively waived in
writing prior to the date of termination shall be taken
into account;
(2) no portion of the Total Payments shall be taken into account
which in the opinion of Xxxxxx Xxxxxxxx LLP (or suitable
experts selected by the Board) does not constitute a
"parachute payment" within the
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meaning of Code Section 280G(b)(2), including by reason of
Code Section 280G(b)(4)(A);
(3) in calculating the Excise Tax, the payments shall be reduced
only to the extent necessary so that the Total Payments
in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Code
Section 280G(b)(4) or are otherwise not subject to
disallowance as deductions because of Code Section 280G,
in the opinion of Xxxxxx Xxxxxxxx LLP (or suitable
experts selected by the Board); and
(4) the value of any non-cash benefit or any deferred payment
or benefit included in the Total Payments shall be
determined by Xxxxxx Xxxxxxxx LLP (or suitable experts
selected by the Board) in accordance with the principles
of Code Section 280G(d)(3) and (4).
The Company shall provide the Executive with the calculation of the
foregoing amounts and any supporting materials as are reasonably
necessary for the Executive to evaluate the calculations. All
calculations hereunder shall be performed by Xxxxxx Xxxxxxxx LLP
(or suitable experts selected by the Board).
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8. RESTRICTIVE COVENANTS.
(a) The Executive shall devote his full time, attention, and energies
to the business of the Company. The Executive shall not,
during the term of this Agreement, be engaged in any other
activity which interferes with the performance of his duties.
(b) During the term of this Agreement and the two-year period
beginning on the Executive's Date of Termination, the
Executive shall not engage directly or indirectly, either as
an owner, principal, shareholder, agent, proprietor, director,
officer, employee, or adviser of (inclusive of the direct or
indirect holdings of his spouse, child, or parent), or
participate in the ownership, management, operation, or
control of, or have any other significant financial interest
in, any of the following businesses, their affiliates, or any
part thereof, or any successors or assigns (in whole or in
part) thereto:
(1) Arrow Electronics, Inc.;
(2) Avnet, Inc.;
(3) Xxxx Industries, Inc.;
(4) Wyle Electronics; or
(5) Pioneer-Standard Electronics, Inc.
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(c) As part of the consideration for this Agreement, the Executive
shall not, at any time during the term of this Agreement or
thereafter, divulge to another person trade secrets or
confidential information of the Company and its affiliates
including, but not limited to, the Company's unique business
methods, processes, operating techniques, and "know-how" (all
of which have been developed by the Company or its affiliates
through substantial effort and investment), profit and loss
results, market and supplier strategies, customer identity and
needs, information pertaining to employee effectiveness and
compensation, inventory strategy, product costs, gross
margins, or any other information relating to the affairs of
the Company and its affiliates that he may acquire during his
employment with the Company.
(d) The Executive shall not, at any time during the term of this
Agreement or the two-year period beginning on the Executive's
Date of Termination, solicit or induce any of the employees
of the Company or its affiliates to terminate their employment
with their employer.
9. REMEDIES.
(a) The Executive agrees that the provisions of Section 8 are
necessary for the protection of the Company and that any
breach thereof will cause the Company irreparable damage for
which there is no adequate remedy at
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law. The Executive consents to the issuance of an injunction in
favor of the Company as a matter of right, enjoining the
breach of any of the aforesaid covenants by any court of
competent jurisdiction.
(b) Upon a breach by the Executive of any of the covenants listed in
Section 8, the Company's obligation to make any payments or
provide any benefits under Section 3 which have not yet been
paid or provided, or to allow the Executive to exercise any
options the vesting of which were accelerated under Section 6
but which remain unexercised, shall cease and this Agreement
shall cease without further obligations to the Executive.
(c) Upon a breach by the Executive of any of the covenants listed in
Section 8, to the extent the Company shall have paid any of
the compensation equivalencies described in Section 4, the
Executive shall pay to the Company, within 15 days of receipt
of written demand by the Company, the difference between the
amounts determined under Paragraphs (1) and (2).
(1) The amount determined under this Paragraph shall be
100 percent of the amount the Executive received as a cash
payment under Sections 3 and 4.
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(2) The amount determined under this Paragraph shall be the
product of 100 percent of the amount the Executive
received as a cash payment under Sections 3 and 4, and a
fraction. The numerator of this fraction shall be 730
less the number of days that have elapsed from the
Executive's Date of Termination through the first date of
the breach by the Executive of one or more of the
covenants listed in Section 8. The denominator of the
fraction shall be 730.
(d) This Section 9 shall survive the termination of this Agreement.
The remedies described herein, including the Company's right
to an injunction, shall be cumulative and in addition to
whatever other remedies the Company may have under this
Agreement or otherwise.
10. RIGHTS NOT EXCLUSIVE. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan,
program, policy, or practice provided by the Company or any of its
affiliates for which the Executive may otherwise qualify. Subject to
Section 14(f), nothing herein shall limit or otherwise affect such
rights as the Executive may have under any contract or agreement with
the Company or any of its affiliates. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice, or program of, or any contract or
agreement with, the Company or any of its affiliates at or subsequent
to the Date of Termination shall be payable
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in accordance with such plan, policy, practice, program, contract, or
agreement except as explicitly modified by this Agreement.
11. FULL SETTLEMENT; LEGAL FEES. The Company's obligation to make any
payments required under this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense, or other claim, right, or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable or
benefits provided to the Executive under any of the provisions of this
Agreement; and, except as specifically provided in Sections 5, 7, 8,
and 9, such amounts or benefits shall not be reduced whether or not
the Executive obtains other employment.
12. SUCCESSORS.
(a) This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the
Executive, other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and
be enforceable by the Executive's legal representatives.
Notwithstanding the foregoing, the rights transferable,
assignable, or enforceable pursuant to this Subsection shall
only relate to benefits accrued and actually payable to the
Executive before his death. The
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provisions of this Subsection shall not be deemed to create any
additional rights or benefits.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or
otherwise.
13. ARBITRATION. Except for the Company's right to seek equitable relief
as provided herein, any controversy arising out of or relating to this
Agreement, or any written modification or extension thereof, including
any claim for damages, whether based on contract, tort, or any theory
of law, shall be settled by arbitration. Such arbitration shall take
place in Los Angeles, California, in accordance with the commercial
rules then applicable of the American Arbitration Association. The
arbitrator or arbitrators sitting in any such controversy shall
26
have no power to alter or modify any express provisions of
this Agreement or any written instrument modifying or
extending this Agreement, or to render any award which by
its terms effects any such alteration or modification. The
parties consent to the jurisdiction of the Superior Court
of the State of California and of the U.S. District Court for
the Central District of California for all purposes in connection
with arbitration, including the entry of judgment on any
award. The parties consent that any process or notice of
motion or other application to any of said courts, and any
paper in connection with arbitration, may be served by
certified mail return receipt requested or by personal
service or in such other manner as may be permissible under
the rules of the applicable court or arbitration tribunal,
provided a reasonable time for appearance is allowed. The parties
further agree that arbitration proceedings shall be instituted
within one year after the claimed breach shall have occurred, and
that any failure to institute arbitration proceedings within such
period shall constitute an absolute bar to the institution of any
administrative, court, or arbitration proceedings and a waiver of all
claims. The Company shall pay all of the Executive's reasonable legal
expenses and other reasonable costs in presenting the matter and all
reasonable costs of the arbitrator.
14. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of California, without reference to
principles of conflict of
27
laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified other than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxx
Vice President and Chief Financial Officer
Xxxxxxxx Industries
0000 Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
If to the Company: Xxxxxx Xxxxx
President and Chief Executive Officer
Xxxxxxxx Industries
0000 Xxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notices and
communications shall be effective when actually received by the
addressee.
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(a) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(b) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local, and foreign taxes as
shall be required to be withheld pursuant to any applicable
law or regulation.
(c) The Executive's or the Company's failure to insist upon compliance
with any provision of this Agreement or the failure to assert
any right that the Executive or the Company may have
hereunder, including without limitation the right of the
Executive to terminate employment for Good Reason and the
right of the Company to any remedy under Section 9, shall not
be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(d) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the
Executive by the Company is "at will." Prior to the Change in
Control Date, the Executive's employment may be terminated by
either the Executive or the Company at any time, in which case
the Executive shall have no further rights under this
Agreement. From and after the Change in Control Date, this
Agreement
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shall supersede any other agreement between the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, the Company has
caused this Agreement to be executed in its name on its behalf, all as
of the day and year first above written.
/s/ XXXXX X. XXXX
----------------------------------------
XXXXX X. XXXX
XXXXXXXX INDUSTRIES
By /s/ XXXXXX XXXXX
-------------------------------------
XXXXXX XXXXX
President and Chief Executive Officer
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