EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective April
10, 2001 (the "Effective Date") by and between The Xxxx Group Inc., a Louisiana
corporation (collectively with its affiliates and subsidiaries hereinafter
referred to as "Company"), and X. X. Xxxxxxxx, Xx. ("Employee") and supersedes
the Personal Service and Employment Agreement of December 5, 1993, as amended on
August 25, 1997 (the "Prior Agreement").
WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company currently employs Employee, and Employee
hereby accepts continued employment by the Company, on the terms and conditions
set forth in this Agreement.
2. Term of Employment. Subject to the provisions for earlier
termination provided in this Agreement, the term of this agreement (the "Term")
shall be ten (10) years commencing on the date hereof, and shall be
automatically renewed on each day following the effective date hereof so that on
any given day the unexpired portion of the Term of this Agreement shall be ten
(10) years. Notwithstanding the foregoing provision, at any time after the date
hereof the Company or Employee may give written notice to the other party that
the Term of this Agreement shall not be further renewed from and after a
subsequent date specified in such notice (the "Fixed
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Term Date"), in which event the Term of this Agreement shall become fixed and
this Agreement shall terminate on the tenth anniversary of the Fixed Term Date.
Hereinafter the unexpired Term, whether it be ten years or the Term remaining
until the tenth anniversary of the Fixed Term Date, shall be referred to as the
Remaining Term.
3. Employee's Duties. During the Term of this Agreement, Employee shall
serve as the Chairman, President & Chief Executive Officer of the Company, with
such duties and responsibilities as may from time to time be assigned to him by
the Board of Directors of the Company (the "Board"), provided that such duties
are consistent with the customary duties of such position.
Employee agrees to devote a substantial amount of his attention and
time during normal business hours to the business and affairs of the Company and
to use reasonable best efforts to perform faithfully and efficiently his duties
and responsibilities. Employee shall not, either directly or indirectly, enter
into any business or employment with or for any person, firm, association or
corporation other than the Company during the Term of this Agreement; provided,
however, that Employee shall not be prohibited from making financial investments
in any other company or business or from serving on the board of directors of
any other company, so long as such does not interfere with Employee's fiduciary
duties to the Company. Employee shall at all times observe and comply with all
lawful directions and instructions of the Board.
Employee's place of business shall be at the Company's principal
executive offices in Baton Rouge, Louisiana.
4. (i) Base Compensation. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base Compensation")
of $950,000.00 per
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annum payable in accordance with the Company's customary pay periods and subject
to customary withholdings. The amount of Base Compensation shall be reviewed by
the Board on an annual basis as of the close of each fiscal year of the Company
and may be increased as the Board may deem appropriate. In the event the Board
deems it appropriate to increase Employee's annual base salary, said increased
amount shall thereafter be the "Base Compensation". Employee's Base
Compensation, as increased from time to time, may not thereafter be decreased
unless agreed to by Employee.
(ii) Nothing contained herein shall prevent the Board from paying
additional compensation to Employee in the form of bonuses or otherwise during
the Term of this Agreement. Employee shall be entitled to participate in and
receive bonus awards under any bonus program established by the Company for its
management or key personnel. In the absence of or in addition to such a program,
Employee shall be entitled to receive such bonus, if any, as may be determined
from time to time by the Board in its discretionary and sole judgment based on
merit and the Company's performance.
5. Additional Benefits. In addition to the Base Compensation provided
for in Section 4 herein, Employee shall be entitled to the following:
(a) Expenses. The Company shall provide an expense allowance
to Employee in an amount to be set by the Board. The Company shall, in
accordance with any rules and policies that it may establish from time
to time for executive officers, reimburse Employee for business
expenses reasonably incurred in the performance of his duties. The
Company shall also reimburse Employee for membership and initiation
fees for clubs the Board deems reasonable in order for
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Employee to carry out the duties set forth herein and, at the Board's
discretion, provide Employee with acceptable Company vehicles and a
mid-size jet aircraft (which shall mean a jet aircraft comparable to or
better than the jet aircraft currently being used by Employee as of the
Effective Date) for his personal use and benefit.
(b) Automobile Allowance. The Company shall provide Employee,
for his business and private use, with an automobile suitable to
Employee's position. In addition, the Company shall either directly pay
or reimburse Employee for all costs of operating and maintaining such
automobile, including insurance thereon in accordance with Company
policies.
(c) Vacation. Employee shall be entitled to a reasonable
period of vacation per year at his discretion, but not less than 5
weeks, without any loss of compensation or benefits. Employee shall be
entitled to carry forward any unused vacation time.
(d) General Benefits. Employee and his family shall be
entitled to participate in the various employee benefit plans or
programs provided to the employees (and their families) of the Company
in general, including but not limited to, health, dental, disability,
401K and life insurance plans, subject to the eligibility requirements
with respect to each of such benefit plans or programs, and such other
benefits or perquisites as may be approved by the Board during the Term
of this Agreement. Nothing in this paragraph shall be deemed to
prohibit the Company from making any changes in any of the plans,
programs or benefits
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described in this Section 5, provided the change similarly affects all
executive officers (and their families) of the Company similarly
situated.
(e) Options. Upon the resignation for Good Reason as defined
in Section 7 (e), discharge as defined in Section 7 (c) (i), or
disability as defined in Section 7 (d), Employee shall be considered as
immediately and totally vested in any and all stock options or other
similar awards previously made to Employee by the Company or its
subsidiaries under a "Long Term Incentive Plan" duly adopted by the
Board (such options or similar awards are hereinafter collectively
referred to as "Options"). In the event that the Options become vested
under this paragraph, employee will be allowed not less than one year
from the date of such vesting in which to exercise such options.
6. Reserved
7. Termination This Agreement may be terminated prior to the end of its
Term as set forth below:
(a) Resignation (other than for Good Reason). Employee may
resign, including by reason of retirement, his position at any time by
providing written notice of resignation to the Company in accordance
with Section 11 hereof. In the event of such resignation, except in the
case of resignation for Good Reason (as defined below), this Agreement
shall terminate and Employee shall not be entitled to further
compensation pursuant to this Agreement other than the payment of any
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unpaid Base Compensation accrued hereunder as of the effective date of
Employee's resignation and payments due under Section 8.5.
(b) Death. If Employee's employment is terminated due to his
death, one (1) year of Employee's Base Compensation shall be paid by
the Company in lump sum in cash within thirty (30) days after
Employee's death to Employee's surviving spouse or estate, and one (1)
year of paid group health and dental insurance benefits shall be
provided by the Company to Employee's surviving spouse and the minor
children (plus adult children, such as full time students, who would
otherwise be eligible for such benefits in accordance with the
Company's policies), and to the extent that, but for his death,
Employee would have otherwise been entitled to a bonus under any bonus
plan then maintained by the Company, or to the extent that other
officers or Company executives are awarded bonuses or otherwise in the
discretion of the Board, a pro rata bonus for the year of his death
shall be paid by the Company in lump sum in cash within thirty (30)
days after Employee's death to Employee's surviving spouse or estate.
After the one (1) year of paid group benefit plans described above,
Employee's surviving spouse and dependents shall be entitled at the
surviving spouse's option to continue thereafter their enrollment under
such plans at her expense for as long as allowed by law (currently
eighteen (18) months thereafter under COBRA, Consolidated Omnibus
Budget Reconciliation Act, 29 U.S.C. Sections 1161 et seq.) In
addition, Employee shall be entitled to a death benefit of $10 million
which shall be provided by the Company through the purchase of a term
life insurance policy naming Employee as
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the insured and as the owner and renewed annually and the renewal
premium paid annually by the Company during the Term of this Agreement.
In the event such insurance is not available, the Company shall instead
pay such death benefit in cash to Employee's estate within thirty (30)
days after Employee's death. After said payments and provision of
insurance benefits, this Agreement shall terminate and the Company
shall have no obligations to Employee or his legal representatives with
respect to this Agreement other than the payment of any unpaid Base
Compensation previously accrued hereunder.
(c) Discharge.
(i) The Company may terminate Employee's employment for any
reason at any time upon written notice thereof delivered to Employee in
accordance with Section 11 hereof. In the event that Employee's
employment is terminated during the Term by the Company for any reason
other than his Misconduct or Disability (both as defined below), then
(A) the Company shall pay in lump sum in cash to Employee, within
fifteen (15) days following the Date of Termination(as defined herein),
an amount equal to the product of (i) Employee's Base Compensation as
in effect immediately prior to Employee's termination, multiplied by
(ii) the number of years in the Remaining Term (for this purpose,
treating any partial year as a full year) , (B) for the Remaining Term,
the Company, at its cost, shall provide or arrange to provide Employee
(and, as applicable, Employee's dependents) with disability, accident
and group health insurance benefits
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substantially similar to those which Employee (and Employee's
dependents) were receiving immediately prior to Employee's termination;
however, the welfare benefits otherwise receivable by Employee pursuant
to this clause (B) shall be reduced to the extent comparable welfare
benefits are actually received by Employee (and/or Employee's
dependents) during such period under any other employer's welfare
plan(s) or program(s) , with Employee being obligated to promptly
disclose to the Company any such comparable welfare benefits, (C) in
addition to the aforementioned compensation and benefits, the Company
shall pay in lump sum in cash to Employee within fifteen (15) days
following the Date of Termination an amount equal to the product of (i)
Employee's highest bonus paid by the Company during the most recent ten
(10) years immediately prior to the Date of Termination, multiplied by
(ii) the number of years in the Remaining Term (for this purpose,
treating any partial year as a full year), (D) Employee shall be
considered as immediately and totally vested in any and all Options
previously made to Employee by Company or its subsidiaries, and (E) the
Company shall pay within fifteen (15) days the sums due under Section
8.5.
(ii) Notwithstanding the foregoing provisions of this Section
7, in the event Employee is terminated because of Misconduct, the
Company shall have no obligations pursuant to this Agreement after the
Date of Termination other than the payment of any unpaid Base
Compensation accrued through the Date of Termination and payments due
under Section
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8.5. As used herein, "Misconduct" means (a) the continued failure by
Employee to substantially perform his duties with the Company (other
than any such failure resulting from Employee's incapacity due to
physical or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination by Employee for Good
Reason), after a written demand for substantial performance is
delivered to Employee by the Board, which demand specifically
identifies the manner in which the Board believes that Employee has not
substantially performed his duties and allows such 30 days for Employee
to effect any potential cure, (b) the engaging by Employee in conduct
which is demonstrably and materially injurious to the Company,
monetarily or otherwise (other than such conduct resulting from
Employee's incapacity due to physical or mental illness and other than
any such actual or anticipated conduct after the issuance of a Notice
of Termination by Employee for Good Reason), or (c) Employee's
conviction for the commission of a felony. A finding of Misconduct
shall only be made by resolution of the Board after a meeting called
for such purpose upon thirty (30) days notice to Employee, and at which
Employee is entitled to appear with counsel and be heard.
(iii) Notwithstanding the provisions of this Section 7, in the
event Employee is terminated within thirty (30) days of a Corporate
Change for which he has already received compensation and benefits set
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forth in Paragraph 7(c)(i) and 8.5, Employee shall not be entitled to
any further payments under this Agreement.
(d) Disability. If Employee shall have been absent from the
full-time performance of Employee's duties with the Company for one
hundred eighty (180) consecutive calendar days as a result of
Employee's incapacity due to physical or mental illness, Employee's
employment may be terminated by the Company for "Disability" and
Employee shall not be entitled to further compensation pursuant to this
Agreement, except that Employee shall (1) be paid monthly (but only for
up to a twelve (12) month period beginning with the Date of
Termination) the amount by which Employee's monthly Base Compensation
exceeds the monthly benefit received by Employee pursuant to any
disability insurance covering Employee; (2) continue to receive paid
group health and dental insurance benefits for Employee and his
dependents for up to twelve (12) month period beginning with Date of
Termination; (3) be considered as immediately and totally vested in any
and all options previously granted to Employee by Company or its
subsidiaries; (4) to the extent that, but for his disability, Employee
would have otherwise been entitled to a bonus under any bonus plan then
maintained by the Company, or to the extent that other officers or
Company executives are awarded bonuses, a pro rata bonus for the year
of such disability; and (5) an assignment to Employee at no cost and
with no apportionment of any prepaid premiums, of all assignable
insurance policies benefiting Employee. After the twelve (12) months of
paid group benefit plans described above, Employee and his dependents
shall be entitled at
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Employee's option to continue thereafter their enrollment under such
plans at his expense for as long as allowed by law (currently eighteen
(18) months thereafter under COBRA). In addition, Employee shall be
entitled to a disability benefit of $10 million which shall be paid by
the Company in cash within fifteen days after the Date of Termination.
(e) Resignation for Good Reason. Employee shall be entitled to
terminate his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason he shall be entitled to the
compensation and benefits provided in Paragraphs 7 (c) (i) and 8.5
hereof. "Good Reason" shall mean the occurrence of any of the following
circumstances without Employee's express written consent unless such
breach or circumstances are fully corrected (or rescinded in the case
of a Corporate Change) prior to the Date of Termination specified in
the Notice of Termination given in respect hereof:
(1) the material breach of any of the Company's
obligations under this Agreement without Employee's express
written consent,
(2) the failure by the Company to elect or re-elect
or to appoint or re-appoint Employee to the office of
Chairman, President, and Chief Executive Officer;
(3) the continued assignment to Employee of any
duties inconsistent with the office of Chairman, President,
and Chief Executive Officer or affecting Employee's authority;
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(4) without Employee's prior written consent, the
relocation of the Company's principal executive offices
outside Baton Rouge, Louisiana or requiring Employee to be
based other than at such principal executive offices;
(5) the failure by the Company to pay to Employee any
portion of Employee's compensation on the date such
compensation is due;
(6) the failure by the Company to continue to provide
Employee with benefits substantially similar to those enjoyed
by other executive officers who have entered into similar
employment agreements with Employer under any of the Company's
medical, health, accident, and/or disability plans in which
Employee was participating immediately prior to such time;
(7) the failure of the Company to obtain a
satisfactory agreement (as determined by Employee in his sole
discretion) from any successor to assume and agree to perform
this Agreement, as contemplated in Section 13 hereof; or
(8) the occurrence of any Corporate Change (as
defined below), but only if Employee gives notice of his
intent to terminate his employment within ninety (90) days
following the effective date of such Corporate Change and has
not otherwise received compensation and benefits
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provided in Paragraph 7(c)(i) and 8.5 as a result of the
Corporate Change preceding Employee's termination.
A "Corporate Change" shall occur if (i) the Company
shall not be the surviving entity in any merger or
consolidation (or survives only as a subsidiary of another
entity), (ii) the Company sells all or substantially all of
its assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) the Company is to be dissolved
and liquidated, (iv) when any "person" as defined in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and as used in Sections 13(d) and 14(d)
thereof, including a "group" as referred to in Section 13(d)
of the Exchange Act, but excluding any 10% or larger
shareholder of record of the Company as of January 1, 2001,
directly or indirectly, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, as amended from
time to time) of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities which are entitled to vote with respect
to the election of the directors of the Company; or (v) as a
result of or in connection with a contested election, the
members of the Board as of the date of this Agreement shall
cease to constitute a majority of the Board. "Contested" as
used herein shall not include selection by a majority of the
current Board for approval by shareholders. Upon any
uncontested election, the resulting Board shall become the
"Board" for purposes of this Section.
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Notwithstanding anything contained herein to the contrary,
upon the occurrence of a Corporate Change, regardless of
termination or continued employment, Employee shall
immediately be entitled to the compensation and benefits
provided in Paragraphs 7(c)(i) and 8.5 hereof without further
obligation to the Company.
(f) Notice of Termination. Any purported termination
of Employee's employment by the Company under Sections
7(c)(ii) or 7(d), or by Employee under Section 7(e), shall be
communicated by written Notice of Termination to the other
party hereto in accordance with Section 11 hereof. For
purposes of this Agreement, a "Notice of Termination" shall
mean a notice which, if by the Company and is for Misconduct
or Disability, shall set forth in reasonable detail the reason
for such termination of Employee's employment, or in the case
of resignation by Employee for Good Reason, said notice must
specify in reasonable detail the basis for such resignation. A
Notice of Termination given by Employee pursuant to Section
7(e) shall be effective even if given after the receipt by
Employee of notice that the Board has set a meeting to
consider terminating Employee for Misconduct. Any purported
termination for which a Notice of Termination is required
which is not effected pursuant to this Section 7(f) shall not
be effective.
(g) Date of Termination, Etc. "Date of Termination"
shall mean the date specified in the Notice of Termination,
provided that the Date of Termination shall be at least 15
days following the date the Notice of Termination is given.
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Notwithstanding the foregoing, in the event Employee is
terminated for Misconduct, the Company may refuse to allow
Employee access to the Company's offices (other than to allow
Employee to collect his personal belongings under the
Company's supervision) prior to the Date of Termination.
(h) Mitigation. Employee shall not be required to
mitigate the amount of any payment provided for in this
Section 7 by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Agreement be
reduced by any compensation earned by Employee as a result of
employment by another employer, except that any severance
amounts payable to Employee pursuant to the Company's
severance plan or policy for employees in general shall reduce
the amount otherwise payable pursuant to Sections 7(c)(i) or
7(e).
(i) Excess Parachute Payments. Notwithstanding
anything in this Agreement to the contrary, to the extent that
any payment or benefit received or to be received by Employee
hereunder in connection with the termination of Employee's
employment would, as determined by tax counsel selected by the
Company, constitute an "Excess Parachute Payment" (as defined
in Section 280G of the Internal Revenue Code (the "Code"))
subject to the excise tax imposed by Section 4999 of the Code
(together with any interest or penalties imposed with respect
to such taxes), the Company shall fully "gross-up" such
payment and benefit by paying to Employee additional amounts
("gross-up payments"), which shall include any excise taxes
and income taxes imposed upon such gross-up payments, so that
Employee is in the same "net" after-tax position he would have
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been if such payment, benefit and gross-up payments had not
constituted Excess Parachute Payments.
As a result of the uncertainty in the application of Section 4999 of
the Code, it is possible that any gross-up payments calculated at the time of
the initial determination described above and made by the Company will be less
than the gross-up payments that should have been made. If Employee determines
from time to time in his sole discretion that he is or will be required to make
a payment of any excise taxes under Section 4999 of the Code (together with any
interest or penalties with respect to such taxes) in addition to that initially
determined as described above and that he is therefore entitled to additional
gross-up payments, he shall inform the Company of the amount of the additional
gross-up payments and any such additional gross-up payments shall be paid
promptly by the Company to or for the benefit of Employee.
8. Non-Compete.
8.1 No Other Activities. Employee agrees that during the term of this
Agreement, he shall not, directly or indirectly, represent or otherwise engage
in or participate in, the business or ventures of any person, firm, partnership,
association, or corporation other than the Company, without first obtaining the
written consent of the Company. Employee further agrees that during the term of
this Agreement, he shall not, directly or indirectly, solicit or attempt to
solicit any products or agreements for the purpose of using the products or
agreements in the formation of a business outside of the Company, regardless of
whether any such products or the subject of such agreements are then being
handled by the Company.
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8.2 Non-Disclosure. Employee further agrees that he will not, during or
after the term of his employment, disclose to any person, firm, partnership,
association, or corporation, the names and addresses of any past or present
customers, or prospective customers, of the Company, any of their methods or
practices of obtaining business, their trade secrets, consultant contracts and
the details thereof, their pricing policies, their operational methods, their
marketing plans or strategies, their business acquisition plans and all other
information pertaining to the business of the Company that is not publicly
available. Employee agrees to keep all information gained as a result of his
relationship with the Company on a confidential basis and shall not disclose
that information to anyone not authorized by the Company to receive information.
If Employee should cease, either voluntarily or involuntarily, to be an employee
of the Company, he hereby expressly agrees that, for a period of ten (10) years
following termination of his employment, he shall not assist any competitor or
prospective competitor located anywhere in the entire world in any way
detrimental to the Company through the use of any information gained as a result
of his employment with the Company. Employee agrees that all computer programs,
print-outs, customer lists, methods, forms, systems and procedures used by the
Company constitute the exclusive property and will remain the exclusive property
of the Company and agrees that he will not disclose any of these matters without
the prior written permission of the Company.
8.3 Non-Solicitation, etc. In further consideration of the other terms
and provisions of this Agreement, and to protect the vital interests of the
Company, upon termination of his employment for any reason, for a period of ten
(10) years after the termination of his employment, Employee agrees and binds
himself that he shall not, directly or indirectly, or as a member,
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shareholder, officer, director, consultant or employee of any other person or
entity, compete with the Company or own, manage, operate, join, control or
participate in the ownership, management, operation, or control of, or become
employed by, consult or advise, or be connected in any manner with any business
or activity which is in actual, direct or indirect competition or anticipated
competition with the Company anywhere in the entire world so long as the Company
carries on the business presently conducted by the Company, being the supply of
industrial piping systems for new construction and retrofit projects, which
includes design and engineering services, piping system fabrication,
manufacturing and sale of specialty pipe fittings, design and fabrication of
pipe support systems and industrial and commercial construction and maintenance.
Not by way of limitation or exclusion, Employee shall not, within the aforesaid
locations and during the aforesaid time period, call upon, solicit, advise or
otherwise do, or attempt to do, business with any customers or distributors of
the Company with whom the Company had any dealings during the period of
Employee's employment hereunder or take away or interfere or attempt to
interfere with any custom, trade, business or patronage of the Company or
interfere with or attempt to interfere with any officers, employees,
distributors, representatives or agents of the Company or employ or induce or
attempt to induce any of them to leave the employ of the Company or violate the
terms of their contracts, or any employment arrangements, with the Company.
Employee acknowledges and agrees that any breach of the foregoing covenant not
to compete would cause irreparable injury to the Company and that the amount of
injury would be impossible or difficult to fully ascertain. Employee agrees that
the Company shall, therefore, be entitled to obtain an injunction restraining
any violation, further violation or threatened violation of the covenant not to
compete hereinabove set forth, in addition to any other remedies that the
Company may pursue.
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8.4 Duration/Other. If the ten (10) year period referred to in any of
this Section 8 or the geographical boundaries referred to herein shall be
finally determined by a court to exceed the maximum which is permissible by
applicable law, the said period or boundaries, as the case may be, shall be
reduced to the maximum permitted by such law. Alternatively, upon such
determination, Employee agrees to execute whatever documentation is necessary to
give effect to this Section 8 in each and every jurisdiction to which it applies
for a period of the lesser of ten (10) years or the maximum period allowed under
the applicable law, from the Date of Termination.
8.5 Consideration For Non-Compete. In consideration for the agreement
set forth in this Section 8, upon termination, Employee shall receive
(i) the sum of fifteen million ($15,000,000.00) dollars plus interest
accrued thereon from the date of deposit payable as follows:
Beginning on the effective date of this Agreement, the Company shall
set aside $5 million per year for the next 3 years in a trust or other vehicle
suitable to Employee which trust or other vehicle shall invest the funds in an
interest bearing account for the purpose of securing payment hereunder; it being
understood that such amounts shall remain subject to claims of the general
creditors of the Company. Upon Employee's termination (no matter whether
voluntary resignation by Employee, voluntary termination by the Company,
termination by the Company for Misconduct, or Resignation by Employee for Good
Reason), such amount shall be paid to Employee in a lump sum within thirty (30)
days of the Date of Termination. However, in the event of a Corporate Change as
defined herein, the entire sum payable hereunder shall be immediately due
consistent with Section 7(f).
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(ii) for ten years from the Date of Termination, the Company shall
provide Employee for his private use in his sole discretion, the use of a
mid-size jet aircraft (which shall mean a jet aircraft comparable to but not
less than the jet aircraft most commonly used by Employee in the year prior to
the Date of Termination) for 150 hours annually.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Employee's continuing or future participation in any benefit, bonus,
incentive, or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may qualify, nor shall anything
herein limit or otherwise adversely affect such rights as Employee may have
under any Options with the Company or any of its affiliated companies.
10. Assignability. The obligations of Employee hereunder are personal
and may not be assigned or delegated by him or transferred in any manner
whatsoever, nor are such obligations subject to involuntary alienation,
assignment or transfer. The Company shall have the right to assign this
Agreement and to delegate all rights, duties and obligations hereunder, either
in whole or in part, to any parent, affiliate, successor or subsidiary
organization or company of the Company, so long as the obligations of the
Company under this Agreement remain the obligations of the Company.
11. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee's
residence address on the records of the Company or to such other address as
either party may have
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furnished to the other in writing in accordance herewith except that notice of
change of address shall be effective only upon receipt.
12. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Successors; Binding Agreement.
(a) The Company will 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
expressly assume 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. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Employee to
compensation from the Company in the same amount and on the same terms
as he would be entitled to hereunder if he terminated his employment
for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used herein, the term
"Company" shall include any successor to its business and/or assets as
aforesaid which executes and delivers the Agreement provided for in
this Section 13 or which otherwise becomes bound by all terms and
provisions of this Agreement by operation of law.
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(b) This Agreement and all rights of Employee hereunder shall
inure to the benefit of and be enforceable by Employee's personal or
legal representatives, executors, administrators, successors, heirs
distributees, devisees and legatees. If Employee should die while any
amounts would be payable to him hereunder if he had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee,
legatee, or other designee or, if there be no such designee, to
Employee's estate.
14. Indemnification: Liability Insurance. The Company shall indemnify
and hold Employee (or his legal representative) harmless to the full extent
permitted by applicable law for all legal expenses and all liabilities, losses,
judgments, fines, expenses, and amounts paid in settlement in connection with
any proceeding involving him (including any action by or in the right of the
Company) by reason of his being or having been a director, officer, employee,
consultant, or agent of the Company or any of its subsidiaries, affiliates, or
any other enterprise if he is serving or has served at the request of the
Company. In addition, the Company shall cause any such subsidiary, affiliate, or
enterprise also to so indemnify and hold Employee harmless to the full extent
permitted by applicable law. The foregoing shall not be deemed to limit any
rights of Employee pursuant to applicable indemnification provisions of the
Company's Articles of Incorporation or By-Laws or otherwise, and the Company
agrees to amend such Articles of Incorporation and Bylaws to provide Employee
indemnification consistent herewith. The Company also agrees to amend its
Articles of Incorporation to provide immunity to Employee to the full extent
allowed by law. In addition, the Company shall acquire and maintain with
reputable insurance companies or associations acceptable to Employee, directors'
and officers' liability
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insurance for the benefit of Employee, providing terms and coverage amounts of
at least $50,000,000, or as favorable as those provided to other officers or
directors of the Company, whichever is greater. Such insurance shall remain in
place (to the extent that the Company is able to purchase the same for any
officer of director) as long as necessary under applicable statutes of
limitations to cover all events occurring during the term of this Agreement
regardless of when the claim is made.
In the event of any action, proceeding, or claim against Employee
arising out of his serving or having served in a capacity specified above, the
Company shall provide Employee with counsel, who may be counsel for the Company
as well, as long as no conflict of interest exists between the Company and
Employee and no ethical or professional responsibility rules prevent the same
counsel from representing both Employee and the Company. In the event of any
such conflict of interest or other bar to Employee being represented by counsel
for the Company, Employee may retain his own separate counsel (such choice of
counsel may be made in his sole and absolute discretion), and the Company shall
be obligated to advance to Employee (or pay directly to his counsel) reasonable
counsel fees and other costs associated with Employee's defense of such action,
proceeding, or claim; provided, however, that in such event, Employee shall
first agree in writing, without posting bond or collateral, to repay all sums
paid or advanced to him pursuant to this provision in the event the final
disposition of such action, proceeding, or claim is one for which Employee would
not be entitled to indemnification.
15. Miscellaneous.
(a) Amendment and Waiver. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or
discharge is
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agreed to in writing and signed by Employee and such officer as may be
specifically authorized by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or in
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time.
(b) Entire Agreement. The Company and Employee have heretofore
entered into the Prior Agreement. The Prior Agreement shall continue in
full force and effect until the Effective Date, after which it will be
superseded by this Agreement; provided that nothing in this Agreement
shall be deemed to discharge or otherwise prejudice Employee's right to
receive, or the Company's obligation to pay or provide, any of the
benefits accrued under the Prior Agreement as of the Effective Date.
Subject to the foregoing, this Agreement is an integration of the
parties' agreement; no agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party, except those which are set forth expressly in
this Agreement.
(c) Governing Law. THE VALIDITY, INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF LOUISIANA, except for Section 8, in which case the law of the
jurisdiction in which the non-compete is sought to be enforced by the
Company shall govern in the event such applicable law is more favorable
to the Company.
Page 24 of 27
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Arbitration. Either party may elect that any dispute or controversy
arising under or in connection with this Agreement be settled by arbitration in
Baton Rouge, Louisiana in accordance with the rules of the American Arbitration
Association then in effect. If the parties cannot mutually agree on an
arbitrator, then the arbitration shall be conducted by a three arbitrator panel,
with each party selecting one arbitrator and the two arbitrators so selected
selecting a third arbitrator. The findings of the arbitrator(s) shall be final
and binding, and judgment may be entered thereon in any court having
jurisdiction. The findings of the arbitrator(s) shall not be subject to appeal
to any court, except as otherwise provided by applicable law. The arbitrator(s)
may, in his or her (or their) own discretion, award legal fees and costs to the
prevailing party.
18. Expenses. In order that the purpose of this Agreement not be
frustrated, it is the intent of the Company that the Employee not be required to
incur the expenses associated with enforcement of the Employee's rights under
this Agreement by litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Employee hereunder, nor be bound to negotiate any settlement of the
Employee's rights hereunder under threat of incurring such expenses.
Accordingly, if following the Effective Date it should appear to the Employee
that the Company has failed to comply with any of its obligations under this
Agreement or, if at any time, in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or institutes
any
Page 25 of 27
litigation or other legal action designed to deny, diminish or to recover from
the Employee the benefits intended to be provided to the Employee hereunder, and
that the Employee has complied with all of the Employee's obligations under this
Agreement, the Company irrevocably authorizes the Employee from time to time to
retain counsel of the Employee's choice at the expense of the Company to
represent the Employee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer, stockholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel (other than a counsel acting
on behalf of the Company in connection with this Agreement), the Company
irrevocably consents to the Employee's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Employee agree that a confidential relationship shall exist between the Employee
and such counsel. The Company agrees to pay as incurred, to the full extent
permitted by law, all costs and expenses which the Employee may reasonably incur
as a result of any contest (regardless of the outcome thereof) by the Company,
the Employee or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including, without limitation, as a result of any contest by the Employee about
the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate. Included within
such costs and expenses shall be the reasonable fees and expenses of counsel
selected from time to time by the Employee as hereinabove provided, which fees
and expenses shall be paid or reimbursed to the Employee by the Company on a
regular, periodic basis upon presentation by the Employee of a statement or
statements prepared by such counsel in accordance with its customary practices.
Page 26 of 27
IN WITNESS WHEREOF, the parties have executed this Agreement on
____________________________, effective for all purposes as provided above.
THE XXXX GROUP INC.
By
Name:
--------------------------------
EMPLOYEE:
Name:
-----------------------------
X. X. Xxxxxxxx, Xx.
Chairman, President and
Chief Executive Officer
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