Exhibit 10.46
EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between Sylvan Inc., a Nevada corporation (the "Company"), and
Xxxx X. Xxxxxx (the "Executive"), dated as of this 24th day of September, 2002.
W I T N E S S E T H:
WHEREAS, the Company believes that, in the event it is confronted with a
situation that could result in a change in ownership or control of the Company,
continuity of management will be essential to its ability to evaluate and
respond to such situation in the best interests of shareholders;
WHEREAS, the Company desires to assure itself of the Executive's services during
the period in which it is confronting such a situation, and to provide the
Executive with certain financial assurances to enable the Executive to perform
the responsibilities of the position without undue distraction and to exercise
judgment without bias due to personal circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive desire to
enter into an agreement providing the Company and the Executive with certain
rights and obligations upon the occurrence of a Change of Control or Potential
Change of Control (as defined in Section 2);
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, and intending to be legally bound, it is hereby agreed by and between
the Company and the Executive as follows:
1. OPERATION OF AGREEMENT.
(a) EFFECTIVE DATE. The effective date of this Agreement shall be
the date on which a Change of Control occurs (the "Effective
Date"), provided that, except as provided in Section 1(b), if
the Executive is not employed by the Company or an Affiliate
on the Effective Date, this Agreement shall be void and
without effect.
(b) TERMINATION OF EMPLOYMENT FOLLOWING A POTENTIAL CHANGE OF
CONTROL. Notwithstanding Section 1(a), if (i) the Executive's
employment is terminated by the Company or an Affiliate
without Cause (as defined in Section 6[c]) or by the Executive
with Good Reason (as defined in Section 6[d]) after the
occurrence of a Potential Change of Control and prior to the
occurrence of a Change of Control and (ii) a Change of Control
that arises out of such Potential Change of Control occurs
within 24 months of such termination, the Executive shall be
deemed, solely for purposes of determining the Executive's
rights under this Agreement, to have remained employed until
the Effective Date and to have been terminated by the Company
without Cause immediately after this Agreement becomes
effective.
60
2. DEFINITIONS.
(a) CHANGE OF CONTROL. For the purposes of this Agreement, a
"Change of Control" shall mean:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13[d][3] or 14[d][2]
of the Securities Exchange Act of 1934, as amended
[the "Exchange Act"] or any successor rule thereto)
(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act or any successor rule thereto) of securities or
interests of the Company entitling such Person to 51%
or more of the combined voting power of the then
outstanding voting securities of the Company entitled
to vote generally in the election of directors of
such company (the "Voting Power"); provided, however,
that for purposes of this subsection (i), the
following acquisitions shall not constitute or cause
a Change in Control: (A) any acquisition directly
from the Company following which the members of the
Board continue to be comprised of at least 62% of
Continuing Directors, (B) any acquisition by the
Company, or (C) any acquisition of beneficial
ownership of securities of the Company by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or by any Affiliate; or
(ii) completion of a tender offer to acquire securities of
the Company entitling the holders thereof to 51% or
more of the Voting Power of the Company, excepting
any acquisitions specified in subsection (i), above,
that do not constitute a Change of Control; or
(iii) either a successful solicitation subject to Rule
14a-11 under the Exchange Act relating to the
election or removal of 39% or more of the members of
the Board made by any Person other than the Company
or less than 62% of the members of the Board shall be
Continuing Directors; or
(iv) the occurrence of a merger, consolidation, share
exchange, division or sale or other disposition of
assets of the Company and, as a result of which, the
shareholders of the Company immediately prior to such
transaction do not hold, directly or indirectly,
immediately following such transaction a majority of
the Voting Power (A) in the case of a merger or
consolidation, in the surviving or resulting company,
(B) in the case of a share exchange, in the acquiring
company, or (C) in the case of a division or a sale
or other disposition of assets, in each surviving,
resulting or acquiring company which, immediately
following the transaction, holds more than 30% of the
consolidated assets of the Company immediately prior
to the transaction; or
(v) any other transaction or series of transactions that
the Board, in its sole discretion, determines is a
Change of Control with respect to the Employee.
(b) BOARD. For purposes of this Agreement, "Board" shall mean the
Board of Directors of the Company.
(c) POTENTIAL CHANGE OF CONTROL. For the purposes of this
Agreement, a Potential Change of Control shall be deemed to
have occurred if:
(i) a Person commences a tender offer (with adequate
financing) for securities representing at least 51%
of the Voting Power of the Company's securities or
announces or otherwise makes known a bona fide intent
to commence such a tender offer, excepting any offers
that, if completed, would result in an acquisition
not constituting a Change of Control; or
61
(ii) the Company enters into an agreement the consummation
of which would constitute a Change of Control; or
(iii) there is commenced a solicitation of proxies for the
election of directors of the Company by anyone other
than the Company which solicitation, if successful,
would effect a Change of Control.
(d) CONTINUING DIRECTORS. For purposes of this Agreement,
"Continuing Directors" shall mean a director of the Company
who either (i) was a director of the Company immediately prior
to the Effective Date or (ii) is an individual whose election,
or nomination for election, as a director of the Company was
approved by a vote of at least two-thirds of the directors
then still in office who were Continuing Directors (other than
an individual whose initial assumption of office is in
connection with an actual or threatened election contest
relating to the election of directors of the Company which
would be subject to Rule 14a-11 under the Exchange Act).
(e) AFFILIATE. For purposes of this Agreement, "Affiliate" or
"Affiliates" shall mean any company or business which, by
reason of stock ownership or otherwise, is controlled,
directly or indirectly, by the Company.
3. EMPLOYMENT PERIOD. Commencing on the Effective Date and subject to
Section 6 of this Agreement, the Company agrees to continue the
Executive in its or an Affiliate's employ, and the Executive agrees to
remain in the employ of the Company or the Affiliate.
4. POSITION AND DUTIES.
(a) NO REDUCTION IN POSITION. Commencing on the Effective Date,
the Executive's position (including titles), authority,
responsibilities and status shall be at least commensurate
with those held, exercised and assigned immediately prior to
the Effective Date. It is understood that, for purposes of
this Agreement, such position, authority, responsibilities and
status shall not be regarded as not commensurate merely by
virtue of the fact that a successor shall have acquired all or
substantially all of the business and/or assets of the Company
as contemplated by Section 10(b) of this Agreement. Unless the
Executive willingly elects otherwise, the Executive's services
shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any
office or location within 50 miles from such location.
(b) BUSINESS TIME. Commencing on the Effective Date, the Executive
agrees to devote full attention during normal business hours
to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the
responsibilities assigned to the Executive hereunder, to the
extent necessary to discharge such responsibilities, except
for (i) time spent in managing personal, financial and legal
affairs and serving on corporate, civic or charitable boards
or committees, in each case only if and to the extent not
substantially interfering with the performance of such
responsibilities, and (ii) periods of vacation and sick leave
to which the Executive is entitled.
5. COMPENSATION.
(a) BASE SALARY. Commencing on the Effective Date, the Executive
shall receive a base salary at a monthly rate of $16,667, or,
if higher, the monthly salary paid to the Executive by the
Company and its Affiliates immediately prior to the Effective
Date. The base salary may be increased (but not decreased) at
any time and from time to time by action of the Board of the
Company or any committee thereof or any individual having
authority to take such action in accordance with the Company's
regular practices. The Executive's base salary, as it may be
62
increased from time to time, shall hereafter be referred to as
"Base Salary." Neither the Base Salary nor any increase in
Base Salary after the Effective Date shall serve to limit or
reduce any other obligation of the Company hereunder.
(b) ANNUAL BONUS. Commencing on the Effective Date, in addition to
the Base Salary, for each fiscal year of the Company ending
after the Effective Date and for each partial fiscal year
ending after the Effective Date, the Executive shall be
afforded the opportunity to receive an annual bonus or partial
bonus, as applicable, on terms and conditions substantially no
less favorable, in the aggregate, to the Executive (taking
into account reasonable changes in the Company's goals and
objectives and the consequences of the Change of Control upon
the Company's goals, objectives and performance measures) than
the annual bonus opportunity that had been made available to
the Executive for the fiscal year ended immediately prior to
the Effective Date (the "Annual Bonus Opportunity"). Any
amount payable in respect of the Annual Bonus Opportunity
shall be paid as soon as practicable following the year for
which the amount (or prorated portion) is earned or awarded,
unless electively deferred by the Executive pursuant to any
deferral programs or arrangements that the Company may make
available to the Executive.
(c) LONG-TERM INCENTIVE COMPENSATION PROGRAMS. Commencing on the
Effective Date and to the extent that such programs and plans
exist subsequent to the Effective Date, the Executive shall
participate in all long-term incentive compensation programs
for key executives, including stock option plans, at a level
that is commensurate with the Executive's opportunity to
participate in such plans of the Company immediately prior to
the Effective Date, or, if more favorable to the Executive, at
the level made available to the Executive or other similarly
situated officers at any time thereafter.
(d) BENEFIT PLANS. Commencing on the Effective Date and to the
extent that such plans and programs exist subsequent to the
Effective Date, the Executive shall be entitled to participate
in or be covered under all retirement, target benefit annuity,
medical, disability, group life, and group accidental death
and dismemberment insurance plans and programs of the Company
and its Affiliates at a level that is commensurate with the
Executive's participation in such plans immediately prior to
the Effective Date, or, if more favorable to the Executive, at
the level made available to the Executive or other similarly
situated officers at any time thereafter. All payments by the
Company or an Affiliate hereunder excepting payments for
Accrued Obligations (as defined in Section 7[a]) shall be
taken into account (to the extent permitted by, and consistent
with, law and the terms of the applicable plan document) in
determining the amount of contributions to be made by or on
behalf of the Executive under any tax-qualified defined
contribution plan of the Company or an Affiliate.
(e) VACATION AND FRINGE BENEFITS. Commencing on the Effective Date
and to the extent that such programs exist subsequent to the
Effective Date, the Executive shall be entitled to paid
vacation and fringe benefits at a level that is commensurate
with the paid vacation and fringe benefits available to the
Executive immediately prior to the Effective Date, or, if more
favorable to the Executive, at the level made available from
time to time to the Executive or other similarly situated
officers at any time thereafter.
(f) SUCCESS BONUS. Provided that either (i) the Executive
continues his employment with the Company or an Affiliate
during the Retention Period and remains employed by the
Company or an Affiliate on the last day of the Retention
Period, (ii) the Executive's employment is involuntarily
terminated by the Company or the Affiliate during the
Retention Period for reasons other than for death, disability,
retirement under any retirement plan of the Company or an
Affiliate, or Cause, as defined in Section 6(c), or (iii) the
Executive's employment is voluntarily terminated by the
Executive during the Retention Period for Good Reason, as
defined in Section 6(d), then the Company shall pay the
Executive a success bonus
63
in an amount equal to $50,000. The success bonus shall be paid
in a lump sum to the Executive as soon as practicable
following the earlier of the events set forth in clause (i),
(ii) or (iii) of the foregoing sentence, but in no event later
than the first regular pay period following the last day of
the Retention Period of the Company or the Affiliate employing
the Executive. Nothing herein shall entitle the Executive to
payment of any success bonus if the Executive's employment is
terminated during the Retention Period by reason of death,
disability, retirement under any retirement plan or voluntary
termination (other than for Good Reason) or for Cause.
The success bonus to be provided to the Executive under this
Section 5(f) shall be in addition to, and not in lieu of,
continuation of the Executive's Base Salary, participation in
the Company's or an Affiliate's health, life, disability and
other employee benefit plans, programs and arrangements, in
accordance with the terms of such plans, programs and
arrangements, and other perquisites of employment, as provided
to him at the beginning of the Retention Period or as the same
may be increased thereafter.
For purposes of this Agreement, the Retention Period shall
mean the period:
(i) beginning on the date on which a Potential Change of
Control occurs; and
(ii) ending on the date on which a Change of Control
occurs.
6. TERMINATION.
(a) DEATH, DISABILITY OR RETIREMENT. Subject to the provisions of
Section 1 hereof, this Agreement shall terminate automatically
upon the Executive's death, termination due to permanent and
total disability ("Disability") within the meaning of section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), or successor provision, or voluntary retirement under
any of the Company's retirement plans as in effect from time
to time.
(b) VOLUNTARY TERMINATION. Notwithstanding anything in this
Agreement to the contrary, following a Change of Control the
Executive may, upon not less than 30 days' written notice to
the Company, voluntarily terminate employment for any reason
(including early retirement under the terms of any of the
Company's retirement plans as in effect from time to time),
provided that any termination by the Executive pursuant to
Section 6(d) on account of Good Reason (as defined therein)
shall not be treated as a voluntary termination under this
Section 6(b).
(c) CAUSE. The Company or an Affiliate may terminate the
Executive's employment for Cause. For purposes of this
Agreement, "Cause" means (i) the Executive's conviction of, or
plea of NOLO CONTENDERE to, a felony; (ii) an act or acts of
dishonesty or gross misconduct on the Executive's part which
result or are intended to result in material damage to the
Company's business or reputation; or (iii) the willful and
continued failure by Executive to substantially perform the
required duties with the Company (other than any such failure
resulting from Executive's incapacity due to physical or
mental illness or Disability or any actual or anticipated
failure after the termination by Executive for Good Reason as
defined in Section 6(d), below) after a written demand for
substantial performance is delivered to the Executive by the
Company, which demand specifically identifies the manner in
which the Company believes that the Executive has not
substantially performed the required duties.
(d) GOOD REASON. Following the occurrence of a Change of Control
or Potential Change of Control, the Executive may terminate
employment for Good Reason. For purposes of this Agreement,
"Good Reason" means the occurrence of any of the following,
without the express
64
written consent of the Executive, after the occurrence of a
Change of Control or Potential Change of Control:
(i) (A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the
Executive's position, authority, responsibilities or
status as contemplated by Section 4 of this
Agreement, or (B) any other material adverse change
in such position, responsibilities, authority or
status, or any removal of the Executive from or any
failure to re-elect the Executive to any position,
except in connection with the termination of the
Executive's employment due to Cause, Disability,
retirement, death or voluntary termination for
reasons other than those set forth in this Section
6(d);
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than
an insubstantial or inadvertent failure remedied by
the Company promptly after receipt of notice thereof
given by the Executive;
(iii) any purported termination of the employment of the
Executive by the Company or an Affiliate which is not
due to the Executive's Disability, death, retirement,
for Cause in accordance with Section 6(c) or
voluntary termination for reasons other than those
set forth in this Section 6(d);
(iv) the Company's or an Affiliate's requiring the
Executive to be based at any office or location more
than 50 miles from that location at which the
Executive performed services specified under the
provisions of Section 4 immediately prior to the
Change of Control, or the Company's or an Affiliate's
requiring the Executive to travel on business to a
substantially greater extent than required
immediately prior to the Effective Date; or
(v) any failure by the Company to obtain the assumption
and agreement to perform this Agreement by a
successor as contemplated by Section 10(b).
In no event shall the mere occurrence of a Change of Control,
absent any further impact on the Executive, be deemed to
constitute Good Reason.
(e) NOTICE OF TERMINATION. For purposes of this Agreement, a
"Notice of Termination" means a written notice given, in the
case of a termination for Cause, within 30 days of the
Company's having actual knowledge of the events giving rise to
such termination, and in the case of a termination for Good
Reason, within 180 days of the Executive's having actual
knowledge of the events giving rise to such termination, and
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision
so indicated, and (iii) if the termination date is other than
the date of receipt of such notice, specifies the termination
date (which date shall be not more than 15 days after the
giving of such notice). The failure by the Executive to set
forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive
from asserting such fact or circumstance in enforcing the
Executive's rights hereunder.
(f) DATE OF TERMINATION. For the purpose of this Agreement, the
term "Date of Termination" means (i) in the case of a
termination for which a Notice of Termination is required, the
date of receipt of such Notice of Termination or, if later,
the date specified therein, as the case may be, and (ii) in
all other cases, the actual date on which the Executive's
employment terminates on or after the Effective Date.
65
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH OR DISABILITY. If the Executive's employment is
terminated on or after the Effective Date by reason of the
Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the
Executive's legal representatives under this Agreement other
than those obligations accrued hereunder at the Date of
Termination, and the Company shall pay to the Executive (or
the Executive's beneficiary or estate) (i) the Executive's
full Base Salary through the Date of Termination (the "Earned
Salary"), (ii) any vested amounts or benefits owed to the
Executive under the Company's otherwise applicable employee
benefit plans and programs, including any compensation
previously deferred by the Executive (together with any
accrued earnings thereon) and not yet paid by the Company and
any accrued vacation pay not yet paid by the Company (the
"Accrued Obligations"), and (iii) any other benefits payable
due to the Executive's death or Disability under the Company's
plans, policies or programs (the "Additional Benefits").
Any Earned Salary shall be paid in cash in a single lump sum
as soon as practicable, but in no event more than 30 days (or
at such earlier date required by law), following the Date of
Termination. Accrued Obligations and Additional Benefits shall
be paid in accordance with the terms of the applicable plan,
program or arrangement.
(b) CAUSE AND VOLUNTARY TERMINATION. If, on or after the Effective
Date, the Executive's employment shall be terminated for Cause
or voluntarily terminated by the Executive (other than on
account of Good Reason following a Change of Control), the
Company shall pay the Executive (i) the Earned Salary in cash
in a single lump sum as soon as practicable, but in no event
more than 30 days (or at such earlier date required by law),
following the Date of Termination, and (ii) the Accrued
Obligations in accordance with the terms of the applicable
plan, program or arrangement.
(c) TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE AND
TERMINATION BY THE EXECUTIVE FOR GOOD REASON.
(i) LUMP SUM PAYMENTS. If, on or after the Effective
Date, the Company terminates the Executive's
employment other than for Cause, or the Executive
terminates employment for Good Reason, the Company
shall pay to the Executive the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal
to two times the Executive's annual Base
Salary; and
(C) the Accrued Obligations.
The Earned Salary and one-half of the Severance
Amount shall be paid in cash in a single lump sum as
soon as practicable, but in no event more than 30
days (or at such earlier date required by law),
following the Date of Termination. The remaining
one-half of the Severance Amount shall be paid in
cash in four semi-annual installments commencing on
the first business day of the seventh month following
the Date of Termination. The Accrued Obligations
shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(ii) CONTINUATION OF BENEFITS. If, on or after the
Effective Date, the Company terminates the
Executive's employment other than for Cause, or the
Executive terminates employment for Good Reason, the
Executive (and, to the extent applicable, the
66
Executive's dependents) shall be entitled, after the
Date of Termination until the earlier of (A) the
twelve month anniversary of the Date of Termination
(the "End Date") and (B) the date the Executive
becomes eligible for comparable benefits under a
similar plan, policy or program of a subsequent
employer, to continue participation in all of the
employee and executive welfare and fringe benefit
plans of the Company or of the Affiliate employing
the Executive (the "Benefit Plans"). To the extent
any such benefits cannot be provided under the terms
of the applicable plan, policy or program, the
Company shall provide a comparable benefit under
another plan or from the Company's general assets.
The Executive's participation in the Benefit Plans
will be on the same terms and conditions that would
have applied had the Executive continued to be
employed by the Company or the Affiliate through the
End Date.
(d) TAX GROSS-UP AMOUNT. In the event that any amount or benefit
paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits
otherwise paid or distributed to the Executive by the Company
or any affiliated company (collectively, the "Covered
Payments"), would be an excess parachute payment" as defined
in Section 280G of the Code and would thereby subject the
Executive to the tax (the "Excise Tax") imposed under Section
4999 of the Code (or any similar tax that may hereafter be
imposed), then the Company will reimburse the Executive in an
amount equal to the "Tax Gross-Up Amount" (as defined in the
next sentence). The Tax Gross-Up Amount means an amount equal
to the sum of the Excise Tax, any other similar federal tax
and the amount of any other additional federal tax, including
any additional income tax, arising as a result of any payment
pursuant to this Section 7(d), which sum may be due and
payable by the Executive or withheld by the Company
(collectively, the "Total Taxes") so that the Executive
receives actual payments or benefits, after payment or
withholding, in an amount no less than that which would have
been received by him or her if no obligation for Total Taxes
had arisen.
8. LEGAL FEES AND EXPENSES. If the Executive asserts any claim in any
contest (whether initiated by the Executive or by the Company) as to
the validity, enforceability or interpretation of any provision of this
Agreement and if the Executive is the prevailing party in such contest,
the Company shall pay the Executive's costs (or cause such costs to be
paid) in so asserting, including, without limitation, reasonable
attorneys' fees and expenses, as determined by the arbitrators selected
pursuant to Section 11(b) hereof to resolve such contest.
9. CONFIDENTIAL INFORMATION; COMPANY PROPERTY; NON-COMPETE. For and in
consideration of the salary and benefits to be provided by the Company
hereunder, the Executive agrees that:
(a) CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its Affiliates, and their respective
businesses, (i) obtained by the Executive during the
Executive's employment by the Company or any Affiliate and
(ii) not otherwise public knowledge (other than by reason of
an unauthorized act by the Executive). After termination of
the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body
having jurisdiction over such matter, communicate or divulge
any such information, knowledge or data to anyone other than
the Company and those designated by it.
(b) COMPANY PROPERTY. Except as expressly provided herein,
promptly following the Executive's termination of employment,
the Executive shall return to the Company all property of the
Company and all copies thereof in the Executive's possession
or under the Executive's control.
67
(c) NON-COMPETE.
(i) Commencing on the Effective Date and continuing for
two years after the Effective Date, the Executive
shall not engage directly or indirectly in any
competing business.
(ii) Commencing on the Effective Date and continuing for
two years after the Effective Date, the Executive
shall not, directly or indirectly, (A) use any
information obtained in the course of the Executive's
employment by the Company or an Affiliate for the
purpose of notifying individuals of the termination
of such employment, or of the Executive's willingness
to provide services after such termination, (B)
otherwise solicit any person who is, or at any time
during the term of the Executive's employment by the
Company or an Affiliate was, a customer of the
Company or an Affiliate, or (C) solicit or induce, or
attempt to solicit or induce, any employee of the
Company or an Affiliate to terminate such employment
for any reason whatsoever or hire any employee of the
Company or an Affiliate.
(iii) The Executive may request from the Company a waiver
of the application to the Executive of all or parts
of Sections 9(c)(i) and (ii), above, and the Company
shall not unreasonably deny such a request.
(d) INJUNCTIVE RELIEF AND OTHER REMEDIES WITH RESPECT TO
COVENANTS. The Executive acknowledges and agrees that the
covenants and obligations of the Executive with respect to
confidentiality and Company property relate to special, unique
and extraordinary matters and that a violation of any of the
terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies are not
available at law. Therefore, the Executive agrees that the
Company shall (i) be entitled to an injunction, restraining
order or such other equitable relief (without the requirement
to post bond) restraining Executive from committing any
violation of the covenants and obligations contained in this
Section 9 and (ii) have no further obligation to make any
payments to the Executive hereunder following any finding by a
court or an arbitrator that the Executive has engaged in a
material violation of the covenants and obligations contained
in this Section 9. These remedies are cumulative and are in
addition to any other rights and remedies the Company may have
at law or in equity. In no event shall an asserted violation
of the provisions of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
10. 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. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives,
including by will or the laws of descent and distribution.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require
any successor to all or substantially all of the business
and/or assets of the Company, whether direct or indirect, by
purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory
to the Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession
had taken place.
68
11. MISCELLANEOUS.
(a) APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania, applied without reference to principles of
conflict of laws.
(b) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved by binding
arbitration. The arbitration shall be held in the City of
Pittsburgh, Commonwealth of Pennsylvania, and except to the
extent that it is inconsistent with this Agreement, shall be
conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then
in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court
of law or equity. The arbitrator shall be acceptable to both
the Company and the Executive. If the parties cannot agree on
an acceptable arbitrator, the dispute shall be heard by a
panel of three arbitrators, one appointed by each of the
parties and the third appointed by the other two arbitrators.
(c) AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal
representatives.
(d) ENTIRE AGREEMENT. Excepting any plans, agreements or
arrangements specifically referred to in this Agreement, this
Agreement constitutes the entire agreement between the parties
hereto with respect to the matters referred to herein.
(e) TAX WITHHOLDING. The Company shall withhold from any amounts
payable under this Agreement such federal, state, foreign, or
local taxes or levies as shall be required to be withheld
pursuant to any applicable law or regulation.
(f) SEVERABILITY. In the event that one or more of the provisions
of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
shall not be affected thereby.
(g) EFFECT OF AGREEMENT ON RIGHTS OF EXECUTIVE. 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 is
"at will" and, prior to the Effective Date, the Executive's
employment may be terminated by the Executive or by the
Company or an Affiliate, in which case the Executive shall
have no further rights under this Agreement except in
circumstances relating to a Potential Change of Control as
provided for herein.
(h) WAIVER. Waiver by any party hereto of any breach or default by
the other party of any of the terms of this Agreement shall
not operate as a waiver of any other breach or default,
whether similar to or different from the breach or default
waived.
(i) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(j) CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
69
IN WITNESS WHEREOF, the Executive has hereunder set his hand and 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.
SYLVAN INC.
By: /s/ XXXXXX XXXXXXXXXXXX
Chairman, Compensation Committee
EXECUTIVE
/s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
70
