Exhibit 10.28
EMPLOYMENT AGREEMENT
Between
INTERMET CORPORATION
And
XXXXXX X. XXXXXX
THIS AGREEMENT, dated as of JANUARY 1, 2003 is made by and between INTERMET
CORPORATION, a Georgia corporation having its principal place of business in
Troy, Michigan (the "Company"), and XXXXXX X. XXXXXX (the "Executive").
WHEREAS, the Company desires the services of the Executive, and the Executive is
willing to render such services; and
WHEREAS, in order to secure the continued services of the Executive, the Company
believes it should provide the Executive with an agreement for severance
payments.
NOW, THEREFORE, the Company and the Executive agree as follows:
Article 1 - Termination of Employment
1.1 Termination of Employment for Cause or Other Than for Good Reason. If,
before the end of the Contract Term, the Company terminates the
Executive's employment for Cause or the Executive terminates employment
other than for Good Reason, then the Company shall pay to the Executive in
a lump sum immediately after the Date of Termination that portion of the
Executive's then current annual base salary which is accrued but unpaid as
of such Date of Termination. The Executive will not be entitled to receive
any other compensation or benefits under this Agreement.
1.2 Termination of Employment for Death or Disability. If, before the end of
the Contract Term, the Executive's employment terminates due to death or
Disability, the Company shall pay to the Executive (or to the Executive's
estate), in accordance with Company policy following the Date of
Termination:
(a) that portion of the Executive's annual base salary which is accrued but
unpaid as of the Date of Termination;
(b) the amount of any Annual Bonus applicable to any Annual Bonus Period which
ended prior to the Date of Termination, but which is unpaid as of the Date
of Termination;
(c) disability, life insurance, and other benefits as typically provided to an
executive under the Company's employee welfare benefit plans as a result
of such an executive's death or Disability; and
(d) a pro rata portion of the Annual Bonus applicable to the Annual Bonus
Period during which the Date of Termination occurs based upon actual
performance for the Annual Bonus Period (such pro rata bonus shall be
based on the portion of such Annual Bonus Period that expired prior to the
Date of Termination, shall be payable following such Annual Bonus Period
in accordance with Company policy and shall be determined without regard
to any reduction in earnings on account of interest
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paid on additional debt incurred by the Company in connection with any
Change in Control).
1.3 Termination of Employment By the Company Without Cause or By the Executive
for Good Reason (other than following a Change of Control). If, before the
end of the Contract Term, unless such event follows a Change of Control,
the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason (as that term is defined in the following
Section 1.4), the Executive shall receive the following:
(a) In a lump sum, that portion of the Executive's annual base salary which is
accrued but unpaid as of the Date of Termination and any unpaid Annual
Bonus applicable to any Annual Bonus Period which ended prior to the Date
of Termination;
(b) In monthly payments, the amount of the Executive's annual base salary (not
taking into account any reductions which would constitute Good Reason)
which would be payable for the period beginning on the Date of Termination
and ending on the date that is one (1) year following the Date of
Termination;
(c) Following the Annual Bonus Period during which the Date of Termination
occurs and in accordance with Company policy, a pro rata portion of the
Annual Bonus applicable to such Annual Bonus Period based upon actual
performance for the Annual Bonus Period (such pro rata bonus shall be
based on the portion of such Annual Bonus Period that expired prior to the
Date of Termination, shall be payable following such Annual Bonus Period
in accordance with Company policy and shall be determined without regard
to any reduction in earnings on account of interest paid on additional
debt incurred by the Company in connection with any Change in Control);
and
(d) During the period in which the Executive is receiving the payments set
forth in subsection 1.3(b) above, the employee benefits to which the
Executive was entitled during the Contract Term. The employee benefits to
which the Executive is entitled hereunder shall include the continued use
of a Company vehicle. The Executive will not be entitled to participate in
the Company's 401(k) plan, employee stock ownership plan, or similar
retirement savings plan following the Date of Termination. The amount of
any employee benefits payable under this Section 1.3(d) and the use of the
Company vehicle shall be reduced or eliminated to the extent the Executive
becomes entitled to duplicative benefits by virtue of his/her subsequent
employment after the Date of Termination.
1.4 For purposes of the foregoing Section 1.3, the term "Good Reason" means
the occurrence of any one of the following events:
(a) assignment to the Executive of any duties materially inconsistent with the
Executive's current position (or such other position to which he/she may
have been promoted), or any other action that results in a material and
adverse change in the
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Executive's position, status, title or responsibilities, provided,
however, that (i) a change of title or change in reporting relationship
that does not otherwise result in a material diminution of status or
responsibilities, or (ii) a change that results in the Executive not
serving as a member of the Company's highest level executive committee
(currently designated as the Company's Operating Committee) will not
constitute Good Reason,
(b) the failure of the Company to assign this Agreement to a successor to the
Company,
(c) any reduction in the Executive's annual base salary or any change in the
Executive's Annual Bonus that is not permitted by Section 2.1 hereof , or
(d) any other material adverse change to the terms and conditions of the
Executive's employment under this Agreement,
if the Company fails to cure such event within thirty (30) days after written
notice from the Executive; provided, however, that if the event is intentional,
knowing or repeated, the Executive shall not be required to provide written
notice or an opportunity to cure.
1.5 Termination of Employment By the Company Without Cause or By the Executive
for Good Reason (following a Change of Control). If, before the end of the
Contract Term, and within twenty-four (24) months following a Change of
Control, the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason (as that term is defined in the
following Section 1.6), the Executive shall receive the following:
(a) In a lump sum, that portion of the Executive's annual base salary which is
accrued but unpaid as of the Date of Termination and any unpaid Annual
Bonus applicable to any Annual Bonus Period which ended prior to the Date
of Termination;
(b) In monthly payments, the amount of the Executive's annual base salary (not
taking into account any reductions which would constitute Good Reason)
which would be payable for the period beginning on the Date of Termination
and ending on the date that is two (2) years following the Date of
Termination;
(c) Following the Annual Bonus Period during which the Date of Termination
occurs and in accordance with Company policy, a pro rata portion of the
Annual Bonus applicable to such Annual Bonus Period based upon actual
performance for the Annual Bonus Period (such pro rata bonus shall be
based on the portion of such Annual Bonus Period that expired prior to the
Date of Termination, shall be payable following such Annual Bonus Period
in accordance with Company policy and shall be determined without regard
to any reduction in earnings on account of interest paid on additional
debt incurred by the Company in connection with any Change in Control);
and
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(d) During the period in which the Executive is receiving the payments set
forth in subsection 1.5(b) above, the employee benefits to which the
Executive was entitled during the Contract Term. The employee benefits to
which the Executive is entitled under this Section 1.5(d) shall include
the continued use of a Company vehicle. The Executive will not be entitled
to participate in the Company's 401(k) plan, employee stock ownership
plan, or similar retirement savings plan following the Date of
Termination. The amount of any employee benefits payable under this
Section 1.5(d) shall be reduced or eliminated to the extent the Executive
becomes entitled to duplicative benefits by virtue of his/her subsequent
employment after the Date of Termination.
1.6 For purposes of the foregoing Section 1.5, the term "Good Reason" means
the occurrence of any one of the following events:
(a) assignment to the Executive of any duties materially inconsistent with the
Executive's current position (or such other position to which he/she may
have been promoted), or any other action that results in a material and
adverse change in the Executive's position, status, title or
responsibilities,
(b) the failure of the Company to assign this Agreement to a successor to the
Company,
(c) any reduction in the Executive's annual base salary or any change in the
Executive's Annual Bonus that is not permitted by Section 2.1 hereof
(d) any other material adverse change to the terms and conditions of the
Executive's employment under this Agreement, or
(e) any change that would require the Executive's place of employment to be
located outside a radius of thirty-five (35) miles of the Executive's
current place of employment,
if the Company fails to cure such event within thirty (30) days after written
notice from the Executive; provided, however, that if the event is intentional,
knowing or repeated, the Executive shall not be required to provide written
notice or an opportunity to cure.
1.7 Other Termination Benefits. In addition to any amounts or benefits
provided upon termination of employment hereunder and except as otherwise
provided herein, the Executive shall be entitled to any payments or
benefits explicitly provided under the terms of any plan, policy or
program of the Company or as otherwise required by applicable law.
Article 2 - Certain Definitions
2.1 "Annual Bonus" means the annual cash bonus paid to the Executive pursuant
to the Company's annual bonus plan. During the Contract Term, the Company
shall maintain an annual bonus plan that provides the Executive with
benefits that are
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substantially equivalent to the benefits provided under the Company's
current annual bonus plan, provided, however, that the Company shall
continue to be permitted to adjust bonus participation levels for company
executives, including for the Executive, based on performance factors in
accordance with the Company's current practice.
2.2 "Annual Bonus Period" means the annual period on which the Executive's
Annual Bonus is based.
2.3 "Contract Term" means the period commencing on JANUARY 1, 2003 and ending
on DECEMBER 31, 2003; provided, however, that commencing JANUARY 2, 2003
the Contract Term shall be automatically extended by one day on each day
the Executive remains employed; and, provided further, that
notwithstanding anything herein to the contrary, the Contract Term and all
obligations of the Company hereunder shall terminate on the Executive's
sixty-fifth (65th) birthday.
2.4 "Date of Termination" means the date on which the Executive's employment
with the Company terminates.
2.5 "Disability" means any medically determinable physical or mental
impairment that can be expected to last for a continuous period of not
less than six (6) months, and that renders the Executive unable to perform
the duties required under this Agreement. The date of the determination of
Disability is the date on which the Executive is certified as having
incurred a Disability by a physician acceptable to the Company.
2.6 "Cause" means (a) the Executive's committing any felony or other crime
involving dishonesty; (b) any serious misconduct in the course of the
Executive's employment; or (c) the Executive's habitual neglect of the
Executive's duties (other than on account of Disability), except that
Cause shall not mean:
(1) bad judgment or negligence other than habitual neglect of duty;
(2) any act or omission believed by the Executive in good faith to have been
in or not opposed to the interest of the Company (without intent of the
Executive to gain therefrom, directly or indirectly, a profit to which the
Executive was not legally entitled); or
(3) any act or omission with respect to which a determination could properly
have been made that the Executive met the applicable standard of conduct
for indemnification or reimbursement under the by-laws of the Company, any
applicable indemnification agreement or the laws and regulations under
which the Company is governed, in each case in effect at the time of such
act or omission.
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2.7 "Change in Control" means the occurrence of any of the following events:
(a) any "person" (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the "Exchange Act") and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 1 3d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities eligible to vote for
the election of the Board of Directors of the Company (the "Company Voting
Securities") provided, however, that the event described in this paragraph
shall not be deemed to be a Change in Control by virtue of any of the
following acquisitions: (i) by the Company or, direct or indirect,
majority-owned subsidiaries of the Company, (ii) by any employee benefit
plan sponsored or maintained by the Company or any corporation controlled
by the Company, (iii) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (iv) pursuant to a Non-Control
Transaction (as defined in paragraph (c)), (v) pursuant to any acquisition
by the Executive or any group of persons including the Executive, or (vi)
in which Company Voting Securities are acquired from the Company, if a
majority of the Board of Directors of the Company approves a resolution
providing expressly that the acquisition pursuant to this clause (vi) does
not constitute a Change in Control under this paragraph (a);
(b) individuals who, on JANUARY 1, 2003, constitute the Board of Directors of
the Company (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that (i) any person becoming a director
subsequent to JANUARY 1, 2003, whose election, or nomination for election,
by the Company's shareholders was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board (either by
a specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this paragraph (b), considered
as though such person were a member of the Incumbent Board; Provided
however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest
with respect to directors or any other actual or threatened solicitation
of proxies or consents by or on behalf of any person other than the Board
of Directors shall be deemed to be a member of the Incumbent Board;
(c) the consummation of a merger or consolidation or similar form of corporate
reorganization, or sale or other disposition of all or substantially all
of the assets, of the Company (a "Business Combination") is consummated,
unless immediately following such Business Combination: (i) more than 50%
of the total voting power of the corporation resulting from such Business
Combination (including, without limitation, for purposes of making such
50% determination, any shares owned through any entity which directly or
indirectly has beneficial ownership of the Company Voting Securities or
all or substantially all of the Company's assets) eligible to elect
directors of such corporation is represented by shares held by
shareholders of the Company immediately prior to such Business Combination
(either by remaining outstanding or being converted), (ii) no person
(other than any
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holding company resulting from such Business Combination, any employee
benefit plan sponsored or maintained by the Company (or the corporation
resulting from such Business Combination), or any person which
beneficially owned, immediately prior to such Business Combination,
directly or indirectly, 30% or more of the Company Voting Securities)
becomes the beneficial owner, directly or indirectly of 30% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the corporation resulting from such Business Combination, and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
action of the Board of Directors, providing for such Business Combination
(a "Non-Control Transaction"); or
(d) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 30% of the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which, by reducing the number of Company Voting
Securities outstanding, increases the percentage of shares beneficially owned by
such person; provided, that if a Change in Control would occur as a result of
such an acquisition by the Company (if not for the operation of this sentence),
and after the Company's acquisition such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, then a
Change in Control shall occur.
2.8 "Good Reason" shall have the meaning set forth in Section 1.4 or 1.6, as
the case may be.
Article 3 - Restrictive Covenants
3.1 Trade Secrets. Confidential and Proprietary Business Information
(a) The Company has advised the Executive and the Executive acknowledges that
it is the policy of the Company to maintain as secret and confidential all
Protected Information (as defined below), and that Protected Information
has been and will be developed at substantial cost and effort to the
Company. "Protected Information" means trade secrets, confidential and
proprietary business information of the Company, any information of the
Company other than information which has entered the public domain (unless
such information entered the public domain through the efforts of or on
account of the Executive), and all valuable and unique information and
techniques acquired, developed or used by the Company relating to its
business, operations, employees and customers, which give the Company a
competitive advantage over those who do not know the information and
techniques and which are protected by the Company from unauthorized
disclosure, including but not limited to, customer lists (including
potential customers), sources of supply
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processes, plans, materials, pricing information, internal memoranda,
marketing plans, internal policies, and products and services which may be
developed from time to time by the Company and its agents or employees.
(b) The Executive acknowledges that the Executive will acquire Protected
Information with respect to the Company and its successors in interest,
which information is valuable, special and a unique asset of the Company's
business and operations and that disclosure of such Protected Information
would cause irreparable damage to the Company.
(c) The Executive shall not, directly or indirectly, divulge, furnish or make
accessible to any person, firm, corporation, association or other entity
(otherwise than as may be required in the regular course of the
Executive's employment) nor use in any manner, either during or after
termination of employment by the Company any Protected Information or
cause any such information of the Company to enter the public domain.
3.2 Non-Competition.
(a) The Executive agrees that the Executive shall not during the Executive's
employment with the Company, and, if the Executive's employment is
terminated for any reason other than termination of employment without
Cause or for Good Reason, thereafter for a period of one (1) year directly
or indirectly, in any capacity, engage or participate in or become
employed by or render advisory or consulting or other services in
connection with any Prohibited Business as defined below.
(b) The Executive agrees that if the Executive's employment is terminated
without Cause or for Good Reason, thereafter during the period in which
the Executive is receiving payments under either Section 1.3(b) or 1.5(b)
hereof, directly or indirectly, in any capacity, engage or participate in
or become employed by or render advisory or consulting or other services
in connection with any Prohibited Business as defined below.
(c) Notwithstanding Section 3.2(b) above, at any time during which the
Executive is receiving the payments and benefits due the Executive
pursuant to Sections 1.3(b) and 1.3(d), or Sections 1.5(b) and 1.5(d), as
the case may be, the Executive may elect by written notice to the Company
to forego and release the Company from paying such payments and providing
such benefits. From and after the date of such notice (i) the Company
shall have no further obligation to make such payments or provide such
benefits, and (ii) the obligation of the Executive set forth in Section
3.2(b) shall terminate.
(d) The Executive agrees that the Executive shall not during the Executive's
employment with the Company, and, if the Executive's employment is
terminated for any reason, thereafter for a period of one (1) year, make
any financial investment,
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whether in the form of equity or debt, or own any interest, directly or
indirectly, in any Prohibited Business. Nothing in this Section 7.02
shall, however, restrict the Executive from making any investment in any
Company whose stock is listed on a national securities exchange or
actively traded in the over-the-counter market; provided that (i) such
investment does not give the Executive the right or ability to control or
influence the policy decisions of any Prohibited Business, and (ii) such
investment does not create a conflict of interest between the Executive's
duties hereunder and the Executive's interest in such investment.
(e) "Prohibited Business" shall be defined as any business and any branch,
office or operation thereof, which is a direct and material competitor of
the Company wherever the Company does business, in the United States or
abroad, and which has established or seeks to establish contact, in
whatever form (including but not limited to solicitation of sales, or the
receipt or submission of bids) with any entity who is at any time a
client, customer or supplier of the Company (including but not limited to
all subdivisions of the federal government).
3.3 Undertaking Regarding Employees. From the date hereof until two years
after the Executive's Date of Termination, the Executive shall not,
directly or indirectly, (a) encourage any employee of the Company or its
successors in interest to leave their employment with the Company or its
successors in interest; or (b) employ, hire, solicit or cause to be
employed or hired or solicited (other than by the Company or its
successors in interest), or establish a business with, or encourage others
to hire, any person who within two (2) years prior thereto was employed by
the Company or its successors in interest.
3.4 Disclosure of Employee-Created Trade Secrets. Confidential and Proprietary
Business Information. The Executive agrees to promptly disclose to the
Company all Protected Information developed in whole or in part by the
Executive during the Executive's employment with the Company and which
relate to the Company's business. Such Protected Information is, and shall
remain, the exclusive property of the Company. All writings created during
the Executive's employment with the Company (excluding writings unrelated
to the Company's business) are considered to be "works-for-hire" for the
benefit of the Company and the Company shall own all rights in such
writings.
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Article 4 - Successors
4.1 The Company shall cause this Agreement to be binding on the Company and
any successor to the Company.
INTERMET CORPORATION
By: /s/ Xxxx X. Xxxx /s/ Xxxxxx X. Xxxxxx
------------------------------------- --------------------------
Xxxx X. Xxxx Xxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
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