CONTINUITY AGREEMENT
Exhibit
10.21
This
Agreement (the "Agreement") is dated as of September 3, 2002 by and between
Xxxx-XxXxx Corporation, a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxx (the "Executive").
WHEREAS,
the Company's Board of Directors considers the continued services of key
executives of the Company to be in the best interests of the Company and its
stockholders; and
WHEREAS,
the Company's Board of Directors desires to assure, and has determined that it
is appropriate and in the best interests of the Company and its stockholders to
reinforce and encourage the continued attention and dedication of key executives
of the Company to their duties of employment without personal distraction or
conflict of interest in circumstances which could arise from the occurrence of a
change in control of the Company; and
WHEREAS,
the Company's Board of Directors has authorized the Company to enter into
continuity agreements with those key executives of the Company and any of its
respective subsidiaries (all of such entities, together with the Company, are
hereinafter referred to as an "Employer"), such agreements to set forth the
severance compensation which the Company agrees under certain circumstances to
pay such executives; and
WHEREAS,
the Executive is a key executive of an Employer and has been designated as an
executive to be offered such a continuity compensation agreement with the
Company.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Executive agree as follows:
1. Term. This
Agreement shall become effective on the date hereof (the "Effective Date") and
remain in effect until the third anniversary thereof; provided,
however, that
this Agreement shall automatically renew for an additional year on each
successive anniversary of the Effective Date, unless an Employer informs the
Executive, in writing, at least 180 days prior to the renewal date, that this
Agreement shall not be renewed. The foregoing shall constitute the “Term” of
this Agreement for purposes hereof.
2. Change
in Control. No
compensation or other benefit pursuant to Section 4 hereof shall be payable
under this Agreement unless and until either (i) a Change in Control of the
Company (as hereinafter defined) shall have occurred while the Executive is
employed by an Employer and the Executive's employment by an Employer thereafter
shall have terminated in accordance with Section 3 hereof or (ii) the
Executive’s employment by an Employer shall have terminated in accordance with
Section 3(a)(ii) hereof prior to the occurrence of the Change in Control. For
purposes of this Agreement, a "Change in Control" shall be deemed to have
occurred when, during the Term of this Agreement:
(a) any
person ("Person") as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and as used in Section 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) of the Exchange Act but
excluding the Company and any subsidiary and any employee benefit plan sponsored
or maintained by the Company or any subsidiary (including any trustee of such
plan acting as trustee), directly or indirectly, becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities (other than indirectly as a result of the Company’s
redemption of its securities); or
(b) the
consummation of any merger or other business combination of the Company, sale of
50% or more of the Company's assets, liquidation or dissolution of the Company
or combination of the foregoing transactions (the "Transactions") other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 60% of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other business combination;
(B) the purchaser of or successor to the Company's assets; (C) both the
surviving corporation and the purchaser in the event of any combination of
Transactions; or (D) the parent company owning 100% of such surviving
corporation, purchaser or both the surviving corporation and the purchaser, as
the case may be; or
(c) within
any twenty-four month period, the persons who were directors immediately before
the beginning of such period (the "Incumbent Directors") shall cease (for any
reason other than death) to constitute at least a majority of the Board or the
board of directors of a successor to the Company. For this purpose, any director
who was not a director at the beginning of such period shall be deemed to be an
Incumbent Director if such director was elected to the Board by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors (so long as such director was not
nominated by a person who commenced or threatened to commence an election
contest or proxy solicitation by or on behalf of a Person (other than the Board)
or who has entered into an agreement to effect a Change in Control or expressed
an intention to cause such a Change in Control); or
(d) a
majority of the members of the Board of Directors in office immediately prior to
a proposed transaction determine by a written resolution that such proposed
transaction, if taken, will be deemed a Change in Control and such proposed
transaction is consummated.
3. Termination
of Employment; Definitions.
(a) Termination
without Cause by the Company or for Good Reason by the Executive.
(i) The
Executive shall be entitled to the compensation provided for in Section 4
hereof, if within two years after a Change in Control, the Executive's
employment by an Employer shall be terminated (A) by an Employer for any reason
other than (I) the Executive's Disability or Retirement, (II) the Executive's
death or (III) for Cause, or (B) by the Executive with Good Reason (all terms
are as hereinafter defined), unless such termination occurs with the Executive’s
prior written consent expressly waiving the rights provided
hereunder.
(ii) In
addition, the Executive shall be entitled to the compensation provided for in
Section 4 hereof if, (A) in the event that an agreement is signed which, if
consummated, would result in a Change of Control and, within 12 months
thereafter, the Executive is terminated without Cause by the Company (other than
on account of Executive’s Death or Disability) or terminates employment with
Good Reason prior to the Change in Control, (B) such termination is at the
request or instigation of the acquiror or merger partner or otherwise in
connection with the anticipated Change in Control, and (C) within said 12 month
period, such Change in Control actually occurs.
(b) Disability. For
purposes of this Agreement, "Disability" shall mean the Executive's absence from
the full-time performance of the Executive's duties (as such duties existed
immediately prior to such absence) for 180 consecutive business days, when the
Executive is disabled as a result of incapacity due to physical or mental
illness.
(c) Retirement. For
purposes of this Agreement, "Retirement" shall mean the Executive's voluntary
termination of employment pursuant to late, normal or early retirement under a
pension plan sponsored by an Employer, as defined in such plan, but only if such
retirement occurs prior to a termination by an Employer without Cause or by the
Executive for Good Reason.
(d) Cause. For
purposes of this Agreement, "Cause" shall mean:
(i)
the
willful and continued failure of the Executive to perform substantially all of
his or her duties with an Employer (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to such Executive by the Board of Directors
(the "Board") of the Company which specifically identifies the manner in which
the Board believes that the Executive has not substantially performed his or her
duties;
(ii)
the
willful engaging by the Executive in gross misconduct which is materially and
demonstrably injurious to the Company or any Employer; or
(iii) the
conviction of, or plea of guilty or nolo contendere to, a
felony.
Termination
of the Executive for Cause shall be made by delivery to the Executive of a copy
of a resolution duly adopted by the affirmative vote of not less than a
three-fourths majority of the non-employee Directors of the Company or of the
ultimate parent of the entity which caused the Change in Control (if the Company
has become a subsidiary) at a meeting of such Directors called and held for such
purpose, after 30 days prior written notice to the Executive specifying the
basis for such termination and the particulars thereof and a reasonable
opportunity for the Executive to cure or otherwise resolve the behavior in
question prior to such meeting, finding that in the reasonable judgment of such
Directors, the conduct or event set forth in any of clauses (i) through (iii)
above has occurred and that such occurrence warrants the Executive's
termination.
(e) Good
Reason. For
purposes of this Agreement, "Good Reason" shall mean the occurrence, within the
Term of this Agreement, of any of the following without the Executive's written
consent expressly waiving the rights provided hereunder:
(i)
any
material and adverse diminution in the Executive's duties or responsibilities
with the Company (or any affiliate thereof) from those in effect immediately
prior to the Change in Control;
(ii)
any
reduction in the Executive's annual base salary or any adverse change in bonus
opportunity or participation in cash bonus programs in effect immediately prior
to the Change in Control;
(iii)
any
requirement that Executive be based at a location more than 35 miles from the
location at which the Executive was based immediately prior to the Change in
Control (or a substantial increase in the amount of travel Executive is required
to do because of a relocation of the executive offices);
(iv)
any
failure by the Company to obtain from any successor to the Company an agreement
reasonably satisfactory to the Executive to assume and perform this Agreement,
as contemplated by Section 10(a) hereof; or
(v)
any
amendment, reduction or termination of any benefit plan, program or arrangement,
which has the effect of causing the Executive to have benefits which are not
substantially similar, in the aggregate, to those benefits provided to the
Executive immediately prior to the Change in Control.
Notwithstanding
the foregoing, in the event Executive provides the Company with a Notice of
Termination (as defined below) referencing this Section 3(e), the Company shall
have 30 days thereafter in which to cure or resolve the behavior otherwise
constituting Good Reason. Any good faith determination by Executive that Good
Reason exists shall be presumed correct and shall be binding upon the
Company.
(f) Notice
of Termination. Any
purported termination of the Executive's employment (other than on account of
Executive’s death) with an Employer, if such termination occurs after the
occurrence of a Change in Control or under circumstances specified under Section
3(a)(ii) above, shall be communicated by a Notice of Termination to the
Executive, if such termination is by an Employer, or to an Employer, if such
termination is by the Executive. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provisions so
indicated. For
purposes of this Agreement, no purported termination of Executive's employment
with an Employer shall be effective without such a Notice of Termination having
been given.
4. Compensation
Upon Termination After a Change in Control.
Subject
to Section 9 hereof, if within two years of a Change in Control, the Executive's
employment by an Employer shall be terminated in accordance with Section 3(a)
(the "Termination"), the Executive shall be entitled to the following payments
and benefits:
(a) Severance. The
Company shall pay or cause to be paid to the Executive a cash severance amount
equal to (i) three (3)
times the sum of (A) the Executive's annual base salary on the date of the
Change in Control (or, if higher, the annual base salary in effect immediately
prior to the giving of the Notice of Termination) and (B) the higher of: (x) the
average of the actual bonuses earned by the Executive in respect of the three
years prior to the year in which the Change in Control occurs under the
Company’s incentive award program, or (y) the Executive’s target bonus for the
year of Termination, plus (ii) in lieu of continuation of any of the Executive’s
perquisites as provided to the Executive prior to the Change in Control (or, if
greater, at the time of Termination), a cash payment equal to 7 percent of the
Executive’s annual base salary as in effect on the date of the Change in Control
for each of the three (3) years following the date of Termination. This cash
severance amount shall be payable in a lump sum.
(b) Additional
Payments and Benefits. The
Executive shall also be entitled to:
(i)
a lump
sum cash payment equal to the sum of (A) the Executive's accrued but unpaid
annual base salary through the date of Termination, (B) the unpaid portion, if
any, of bonuses previously earned by the Executive pursuant to the Company's
Executive incentive award program, plus the pro rata portion of the bonus to be
paid for the year in which the date of Termination occurs (calculated through
the date of Termination), and (C) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and any accrued
vacation pay, in each case, in full satisfaction of Executive's rights
thereto.
(ii)
a lump
sum cash payment equal to the aggregate sum of (A) additional pension
contributions in an amount equal to the Company's contributions under the
Company's 401(k) plan, profit sharing or other savings pension plans (or such
other qualified and nonqualified defined contribution pension plans as then in
effect) for the three (3) year
period following the date of Termination (the "Separation Period") (based on
assumed rates of Executive's contributions at the level of participation in
effect as of the last date Executive was permitted to participate); and (B) the
difference between the discounted present value (i.e., lump sum value) of the
annuity benefit the Executive is entitled to receive under the Company’s
qualified and nonqualified defined benefit retirement programs in which the
Executive is a participant calculated through the date of Termination and the
discounted present value (i.e., lump sum value) of the annuity benefit the
Executive would be entitled to receive under such retirement programs calculated
after adding an additional five years of credit to age and service up to a
maximum of age 65 as if the executive had been paid at the rate used to
calculate the payments under Section 4(a), provided that the additional credits
added with respect to each retirement program shall not exceed five years when
added to any additional credits already provided by the terms of the such
programs in respect of the Termination covered hereby.
(iii)
continued
medical, dental, vision, and life insurance coverage (excluding accident, death,
and disability insurance) for the Executive and the Executive's eligible
dependents or, to the extent such coverage is not commercially available, such
other arrangements reasonably acceptable to the Executive, on the same basis as
in effect prior to the Change in Control or the Executive's Termination,
whichever is deemed to provide for more substantial benefits, for a period
ending on the earlier of (A) the end of the Separation Period or (B) the
commencement of comparable coverage by the Executive with a subsequent
employer;
(iv)
unless it
would adversely affect the Company’s ability to use pooling of interest
accounting in a Change in Control transaction in which such accounting is
intended to be used, immediate 100% vesting of all outstanding stock options,
stock appreciation rights and restricted stock granted or issued by any Employer
to the extent not previously vested on or following the Change of Control;
and
(v) all
other accrued or vested benefits in accordance with the terms of the applicable
plan (with an offset for any amounts paid under Section 4(b)(i)(C),
above).
All lump
sum payments under this Section 4 shall be paid within 15 business days after
Executive's date of Termination, provided,
however, that
such payment shall be made 30 days after Termination in the event that the
Company requires the Executive to sign a release at the time of Termination.
Discounted present value (i.e., lump sum value) for purposes of subsection (ii)
above shall be calculated using a discount factor equal to one percentage point
below the rate of interest, per annum, publicly announced by The Chase Manhattan
Bank, N.A. as its prime rate in effect at its principal office in New York City,
and using the actuarial factors set forth in the defined benefit retirement
program.
(c) Outplacement. If so
requested by the Executive, outplacement services shall be provided by a
professional outplacement provider selected by Executive; provided,
however, that
such outplacement services shall be provided the Executive at an aggregate total
cost to the Company of not more than ten (10) percent of such Executive's annual
base salary.
(d) Withholding.
Payments and benefits provided pursuant to this Section 4 shall be subject to
any applicable payroll and other taxes required to be withheld.
5. Compensation
Upon Termination for Death, Disability or Retirement.
If an
Executive's employment is terminated by reason of Death, Disability or
Retirement prior to any other termination, Executive will receive:
(a) the sum
of (i) Executive's accrued but unpaid salary through the date of Termination,
(ii) the pro rata portion of the Executive's target bonus for the year of
Executive's Death or Disability (calculated through the date of Termination),
and (iii) an amount equal to any compensation previously deferred and any
accrued vacation pay; and
(b) other
accrued or vested benefits in accordance with the terms of the applicable plan
(with an offset for any amounts paid under item (a)(iii), above).
6. Excess
Parachute Payments.
(a) (i)
If it is determined (as hereafter provided) that any payment or distribution by
the Company or any Employer to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any stock option,
stock appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
"Severance Payment"), would be subject to the excise tax imposed by Section 4999
of the Code (or any successor provision thereto) by reason of being "contingent
on a change in ownership or control" of the Company, within the meaning of
Section 280G of the Code (or any successor provision thereto) or to any similar
tax imposed by state or local law, or any interest or penalties with respect to
such excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Severance Payments.
(ii) Subject
to the provisions of Section 6(a)(i) hereof, all determinations required to be
made under this Section 6, including whether an Excise Tax is payable by the
Executive and the amount of such Excise Tax and whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by the
nationally recognized firm of certified public accountants (the "Accounting
Firm") used by the Company prior to the Change in Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall be a nationally
recognized firm of certified public accountants selected by the Executive). The
Accounting Firm shall be directed by the Company or the Executive to submit its
preliminary determination and detailed supporting calculations to both the
Company and the Executive within 15 calendar days after the Termination Date, if
applicable, and any other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment
to, or for the benefit of, the Executive within five business days after receipt
of such determination and calculations. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, it shall, at the same time as it
makes such determination, furnish the Executive with an opinion that he has
substantial authority not to report any Excise Tax on his/her federal, state,
local income or other tax return. Any determination by the Accounting Firm as to
the amount of the Gross-Up Payment shall be binding upon the Company and the
Executive absent a contrary determination by the Internal Revenue Services or a
court of competent jurisdiction; provided,
however, that no
such determination shall eliminate or reduce the Company’s obligation to provide
any Gross-Up Payment that shall be due as a result of such contrary
determination. As a result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the possibility of similar
uncertainty regarding state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments that will
not have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Section
6(a) hereof and the Executive thereafter is required to make a payment of any
Excise Tax, the Executive shall direct the Accounting Firm to determine the
amount of the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be promptly paid by the
Company to, or for the benefit of, the Executive within five business days after
receipt of such determination and calculations.
(iii)
The
federal, state and local income or other tax returns filed by the Executive (or
any filing made by a consolidated tax group which includes the Company) shall be
prepared and filed on a consistent basis with the determination of the
Accounting Firm with respect to the Excise Tax payable by the Executive. The
Executive shall make proper payment of the amount of any Excise Tax, and at the
request of the Company, provide to the Company true and correct copies (with any
amendments) of his/her federal income tax return as filed with the Internal
Revenue Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents reasonably
requested by the Company, evidencing such payment. If prior to the filing of the
Executive's federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, the Executive shall within five business
days pay to the Company the amount of such reduction.
(iv)
The
Company and the Executive shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
the Executive, as the case may be, reasonably requested by the Accounting Firm,
and otherwise cooperate with the Accounting Firm in connection with the
preparation and issuance of the determination contemplated by Section 6(a)
hereof.
(v) The fees
and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Sections 6(a)(ii) and (iv)
hereof shall be borne by the Company. If such fees and expenses are initially
advanced by the Executive, the Company shall reimburse the Executive the full
amount of such fees and expenses within five business days after receipt from
the Executive of a statement therefor and reasonable evidence of his/her payment
thereof.
(b) In the
event that the Internal Revenue Service claims that any payment or benefit
received under this Agreement constitutes an "excess parachute payment," within
the meaning of Section 280G(b)(1) of the Code, the Executive shall notify the
Company in writing of such claim. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30 day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall (i) give the Company any information reasonably requested by the Company
relating to such claim; (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company and reasonably
satisfactory to the Executive; (iii) cooperate with the Company in good faith in
order to effectively contest such claim; and (iv) permit the Company to
participate in any proceedings relating to such claim; provided,
however, that
the Company shall bear and pay directly all costs and expenses (including, but
not limited to, additional interest and penalties and related legal, consulting
or other similar fees) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for and
against any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.
(c) The
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and xxx for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided,
however, that if
the Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or other tax (including interest and
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided,
further, that if
the Executive is required to extend the statute of limitations to enable the
Company to contest such claim, the Executive may limit this extension solely to
such contested amount. The Company's control of the contest shall be limited to
issues with respect to which a corporate deduction would be disallowed pursuant
to Section 280G of the Code and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority. In addition, no position may be taken nor
any final resolution be agreed to by the Company without the Executive's consent
if such position or resolution could reasonably be expected to adversely affect
the Executive (including any other tax position of the Executive unrelated to
matters covered hereby).
(d) If, after the receipt
by the Executive of an amount advanced by the Company in connection with the
contest of the Excise Tax claim, the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto); provided,
however, if the
amount of that refund exceeds the amount advanced by the Company or it is
otherwise determined for any reason that additional amounts could be paid to the
Named Executive without incurring any Excise Tax, any such amount will be
promptly paid by the Company to the named Executive (or shall be applied to
reduce any amount that Executive would otherwise be required to pay the
Company). If, after the receipt by the Executive of an amount advanced by the
Company in connection with an Excise Tax claim, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest the
denial of such refund prior to the expiration of 30 days after such
determination, such advance shall be forgiven and shall not be required to be
repaid and shall be deemed to be in consideration for services rendered after
the date of the Termination.
7. Expenses. In
addition to all other amounts payable to the Executive under this Agreement, the
Company shall pay or reimburse the Executive for reasonable legal fees
(including without limitation, any and all court costs and reasonable attorneys'
fees and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive with
respect to or arising out of this Agreement or any provision hereof;
provided,
however, that
the Company shall have no obligation to pay any such legal fees, if (i) in the
case of an action brought by the Executive, the Company is successful in
establishing with the court that the Executive’s action was frivolous or
otherwise without any reasonable legal or factual basis; or (ii) in connection
with any such claim, action or proceeding arising out of Section 12 of this
Agreement.
8. Obligations
Absolute; Non-Exclusivity of Rights; Joint Several Liability.
(a) The
obligations of the Company to make the payments to the Executive, and to make
the arrangements, provided for herein shall be absolute and unconditional and
shall not be reduced by any circumstances, including without limitation any
set-off, counterclaim, recoupment, defense or other right which the Company may
have against the Executive or any third party at any time.
(b) Nothing
in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company or any other Employer and for which the Executive may qualify,
nor shall anything herein limit or reduce such rights as the Executive may have
under any agreements with the Company or any other Employer.
(c) Each
entity included in the definition of "Employer" and any successors or assigns
shall be joint and severally liable with the Company under this
Agreement.
9. Not an
Employment Agreement; Effect On Other Rights.
(a) This
Agreement is not, and nothing herein shall be deemed to create, a contract of
employment between the Executive and the Company. The Company may terminate the
employment of the Executive by the Company at any time, subject to the terms of
this Agreement and/or any employment agreement or arrangement between the
Company and the Executive that may then be in effect.
(b) This
Agreement supersedes all prior agreements covering change in control or any
other subject matter covered by this Agreement and Executive hereby represents
that the Executive has no other oral or written representations, understandings
or agreements with the Company or any of its officers, directors or
representatives covering any such subject matter and agrees that any and all
prior written agreements relating to such subject matter shall be terminated
effective as of the date of execution of this Agreement and shall be of no
further force or effect.
10. Successors;
Binding Agreement, Assignment.
(a) The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
of the Company, by agreement to expressly, absolutely and unconditionally 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 material breach of this
Agreement and shall entitle the Executive to terminate the Executive's
employment with the Company or such successor for Good Reason immediately prior
to or at any time after such succession. As used in this Agreement, "Company"
shall mean (i) the Company as hereinbefore defined, and (ii) any successor to
all the stock of the Company or to all or substantially all of the Company's
business or assets which executes and delivers an agreement provided for in this
Section 10(a) or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law, including any parent or subsidiary of
such a successor.
(b) This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amount would be payable to the Executive hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's estate or
designated beneficiary. Neither this Agreement nor any right arising hereunder
may be assigned or pledged by the Executive.
11. Notice. For
purpose of this Agreement, notices and all other communications provided for in
this Agreement or contemplated hereby shall be in writing and shall be deemed to
have been duly given when personally delivered, delivered by a nationally
recognized overnight delivery service or when mailed United States certified or
registered mail, return receipt requested, postage prepaid, and addressed, in
the case of the Company, to the Company at:
Xxxx-XxXxx
Corporation
000
Xxxxxx X. Xxxx Xxxxxx
P.O. Box
25861
Xxxxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
Chief Executive Officer
(with a
copy to General Counsel)
and in
the case of the Executive, to the Executive at the address set forth on the
execution page at the end hereof.
Either
party may designate a different address by giving notice of change of address in
the manner provided above, except that notices of change of address shall be
effective only upon receipt.
12.
Confidentiality.
(a) The
Executive shall retain in confidence any and all confidential information
concerning the Company and its respective business which is now known or
hereafter becomes known to the Executive, except as otherwise required by law
and except information (i) ascertainable or obtained from public information,
(ii) received by the Executive at any time after the Executive's employment by
the Company shall have terminated, from a third party not employed by or
otherwise affiliated with the Company or (iii) which is or becomes known to the
public by any means other than a breach of this Section 12. Upon the Termination
of employment, the Executive will not take or keep any proprietary or
confidential information or documentation belonging to the Company.
(b) The
Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach of any of the provisions of this Section 12 would be
inadequate and, in recognition of this fact, Executive agrees that, in the event
of such a breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond, shall be entitled to cease making any
payments or providing any benefit otherwise required by this Agreement during
the pendency of any dispute involving such Section and to obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available. Upon the resolution of such dispute, any payments or benefits
required by this Agreement which were suspended during the pendency of the
dispute shall be paid or provided to the Executive if it is determined that no
breach of this Section 12 occurred.
This
paragraph 12 shall survive this Agreement.
13.
Release. In the
event that the Company requests a release from the Executive, in the form
attached hereto as Exhibit A, then as a condition to providing any payments or
benefits under this Agreement, the Executive shall deliver such
release.
14. Miscellaneous. No
provision of this Agreement may be amended, altered, modified, waived or
discharged unless such amendment, alteration, modification, waiver or discharge
is agreed to in writing signed by the Executive and such officer of the Company
as shall be specifically designated by the Committee or by the Board of
Directors of the Company. No waiver by either party, at any time, of any breach
by the other party of, or of compliance by the other party with, any condition
or provision of this Agreement to be performed or complied with by such other
party shall be deemed a waiver of any similar or dissimilar provision or
condition of this Agreement or any other breach of or failure to comply with the
same condition or provision at the same time or at any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement.
15. Severability. If any
one or more of the provisions of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party hereto waives any provision of
law which renders any provision of this Agreement invalid, illegal or
unenforceable in any respect.
16. Governing
Law; Venue. The
validity, interpretation, construction and performance of this Agreement shall
be governed exclusively by the laws of the State of Delaware
without giving effect to its conflict of laws rules. For purposes of
jurisdiction and venue, the Company and each Employer hereby consents to
jurisdiction and venue in any suit, action or proceeding with respect to this
Agreement in any court of competent jurisdiction in the state in which Executive
resides at the commencement of such suit, action or proceeding and waives any
objection, challenge or dispute as to such jurisdiction or venue being
proper.
17. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be an
original and all of which shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above
written.
|
XXXX-XXXXX
CORPORATION
By:
/s/
Xxxx X.
Xxxxxxx
Xxxx
X. Xxxxxxx
Chairman
and Chief Executive Officer | |
|
/s/
Xxxxx X.
Xxxxx
Xxxxx
X. Xxxxx
0000
Xxxx Xxxxxx Xxxxx
Xxxxxxxx,
Xxxxx 00000 |
Exhibit
A
RELEASE
[__________]
("Executive"), for and in consideration of the payments and benefits that
Executive shall receive under this Agreement, hereby executes the following
General Release ("Release") and agrees as follows:
1. Executive,
on behalf of Executive, Executive’s agents, assignees, attorneys, successors,
assigns, heirs and executors, to, and Executive does hereby fully and completely
forever release the Company and its affiliates, predecessors and successors and
all of their respective past and/or present officers, directors, partners,
members, managing members, managers, Executives, agents, representatives,
administrators, attorneys, insurers and fiduciaries in their individual and/or
representative capacities (hereinafter collectively referred to as the
"Releasees"), from any and all causes of action, suits, agreements, promises,
damages, disputes, controversies, contentions, differences, judgments, claims,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, variances, trespasses, extents, executions and demands of
any kind whatsoever, which Executive or Executive’s heirs, executors,
administrators, successors and assigns ever had, now have or may have against
the Releasees or any of them, in law, admiralty or equity, whether known or
unknown to Executive, for, upon, or by reason of, any matter, action, omission,
course or thing whatsoever occurring up to the date this Release is signed by
Executive, including, without limitation, in connection with or in relationship
to Executive’s employment or other service relationship with the Company or its
affiliates, the termination of any such employment or service relationship and
any applicable employment, compensatory or equity arrangement with the Company
or its respective affiliates; provided that such released claims shall not
include any claims to enforce Executive’s rights under, or with respect to, this
Release (such released claims are collectively referred to herein as the
"Released Claims").
2.
Notwithstanding
the generality of clause (1) above, the Released Claims include, without
limitation, (a) any and all claims under Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of
1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Executive
Retirement Income Security Act of 1974, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, and any and all other federal, state or
local laws, statutes, rules and regulations pertaining to employment or
otherwise, and (b) any claims for wrongful discharge, breach of contract, fraud,
misrepresentation or any compensation claims, or any other claims under any
statute, rule, regulation or under the common law, including compensatory
damages, punitive damages, attorney’s fees, costs, expenses and all claims for
any other type of damage or relief.
3.
This
means that, by signing this Release, the Executive shall have waived any right
to which the Executive may have had to bring a lawsuit or make any claim against
the releasees based on any acts or omissions of the releasees up to the date of
the signing of this Release.
4.
Executive
represents that he has read carefully and fully understands the terms of this
Release, and that Executive has been advised to consult with an attorney and
have had the opportunity to consult with an attorney prior to signing this
Release. Executive acknowledges that he is executing this Release voluntarily
and knowingly and that he has not relied on any representations, promises or
agreements of any kind made to Executive in connection with Executive’s decision
to accept the terms of this Release, other than those set forth in this Release.
Executive acknowledges that Executive has been given at least twenty-one (21)
days to consider whether Executive wants to sign this Release and that the Age
Discrimination in Employment Act gives Executive the right to revoke this
Release within seven (7) days after it is signed, and Executive understands that
he will not receive any payments due him under this Release until such seven (7)
day revocation period (the "Revocation Period") has passed and then, only if
Executive has not revoked this Release. To the extent Executive has executed
this Release within less than twenty-one (21) days after its delivery to
Executive, Executive hereby acknowledges that his decision to execute this
Release prior to the expiration of such twenty-one (21) day period was entirely
voluntary.
XXXX-XXXXX
CORPORATION
_________________________ ______________________________
Executive Title:
Name:
