EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of
this 28th day of October, 2005 ("Effective Date") between Xxxxxx Express
Corporation ("WEX"), a Delaware corporation headquartered in South Portland,
Maine and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, WEX desires to employ the Executive as its President and
Chief Executive Officer, and the Executive desires to serve WEX in such
capacity.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION I
EMPLOYMENT
WEX agrees to employ the Executive and the Executive agrees to be
employed by WEX for the Period of Employment as provided in Section III below
and upon the terms and conditions provided in this Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive will serve as President
and Chief Executive Officer of WEX and, subject to the direction of the Board of
Directors of WEX (the "Board"), will perform such duties and exercise such
supervision with regard to the business of WEX as are associated with such
position, as well as such additional duties as may be prescribed from time to
time by the Board. Further, the Executive will serve as a member of the Board;
provided, however, that nothing contained in this Agreement shall require WEX to
maintain the Executive's status as a member of the Board or to re-nominate him
for election for additional terms of service on the Board; however a removal of
the Executive from the Board may be treated as a Constructive Discharge under
Section VIII below.
The Executive will, during the Period of Employment, devote
substantially all of his time and attention during normal business hours to the
performance of services for WEX. The Executive will maintain a primary office
and conduct his business in South Portland, Maine, except for normal and
reasonable business travel in connection with his duties hereunder. Nothing
contained in this Agreement will prevent or be construed to prevent the
Executive from devoting a reasonable amount of time to serving on civic and
charitable boards and conducting his personal affairs.
The Executive will, in accordance with WEX policy and procedures and
applicable law, certify to the accuracy of WEX's publicly filed financial
statements.
SECTION III
PERIOD OF EMPLOYMENT
The period of the Executive's employment under this Agreement (the
"Period of Employment") will begin on the Effective Date and end on the third
anniversary of such date, subject to earlier termination as provided in this
Agreement; provided, however, that the Period of Employment will be
automatically extended for an additional one year period on October 28, 2006,
and on each anniversary of such date thereafter, unless written notice of intent
not to extend or to reopen negotiations is provided by either party hereto to
the other party hereto at least 30 days prior to such date or any such
anniversary.
SECTION IV
COMPENSATION AND BENEFITS
Compensation. For all services rendered by the Executive pursuant to
this Agreement during the Period of Employment, including services as an
executive, officer, director of committee member of WEX or any subsidiary or
affiliate of thereof, the Executive will be compensated as follows:
i. Base Salary.
WEX will pay the Executive a base salary of not less than $425,000 per
year ("Base Salary"). From time to time, the Executive may be eligible to
receive annual increases as WEX deems appropriate, in accordance with WEX's
customary policies and procedures regarding the salaries of senior officers,
including pursuant to annual compensation reviews to occur no less than once per
year. Base Salary will be payable according to the customary payroll practices
of WEX, but in no event less frequently than semi-monthly.
ii. Annual Incentive Awards.
The Executive will be eligible for discretionary annual incentive
compensation awards; provided, that the Executive will be eligible to receive an
Incentive Compensation Award in respect of each fiscal year of WEX during the
Period of Employment based upon a target bonus equal to no less than 100% of his
earned Base Salary during such fiscal year; provided, however, that such bonus
will be subject to the attainment by WEX of applicable performance targets
reasonably established and certified by or at the direction of the Board (as
hereinafter defined) or the Compensation Committee of the Board (the
"Committee"). For purposes of this Agreement, the term "Incentive Compensation
Award" means the annual bonus paid pursuant to the Xxxxxx Express Corporation
Short-Term Incentive Plan (STIP), as the Plan may be amended from time to time.
The term "target" means the value of the STIP bonus payable in the event the
Executive achieves the annual target goals established pursuant to the Plan.
iii. Long Term Incentive Awards
At such times as the Board or the Committee determines to conduct
annual or periodic grants of long term incentive awards to employees and
officers of WEX, the Executive will be eligible to receive such grants, subject
to the sole and complete discretion of the Board or the Committee, and upon such
terms and conditions as determined by the Board or the Committee,
2
but with due consideration given to the Executive's position with WEX and the
Executive's historical performance and anticipated future contributions to WEX.
iv. Additional Benefits
The Executive will be entitled to participate in all other
compensation and employee benefit plans or programs offered generally to
employees of WEX, and will receive all perquisites offered to senior executive
officers of WEX in positions comparable to the Executive's position with WEX, in
either case pursuant to any plan or program now in effect, or later established
by WEX. The Executive will participate to the extent permissible under the terms
and provisions of such plans or programs, and in accordance with the terms of
such plans and programs.
SECTION V
BUSINESS EXPENSES
WEX will reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement. The Executive will comply with such
limitations and reporting requirements with respect to expenses as may be
established by WEX from time to time and will promptly provide all appropriate
and requested documentation in connection with such expenses.
SECTION VI
DISABILITY
If the Executive becomes Disabled, as defined below, during the Period
of Employment, the Period of Employment may be terminated at the option of the
Executive upon notice of resignation to WEX, or at the option of WEX upon 30
days' advance notice of termination to the Executive. WEX's obligation to make
payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and Incentive Compensation Awards earned but
unpaid as of the date of such termination, and except for payment of a pro rata
portion of his Incentive Compensation Award in respect of the year in which such
Disability occurs (paid at target level). For purposes of this Agreement,
"Disabled" means the first to occur of either (i) the Executive's inability to
perform his duties hereunder as a result of serious physical or mental illness
or injury for a period of no less than 180 days, together with a determination
by an independent medical authority after in person examination of the Executive
and review of any relevant medical records that the Executive is currently
unable to perform such duties, or (ii) a determination by the insurance carrier
or third party administrator that the Executive is "Disabled" within the meaning
of the WEX Long Term Disability Plan then in effect. Such independent medical
authority shall be mutually and reasonably agreed upon by WEX and the Executive
and such opinion shall be binding on WEX and the Executive. Nothing contained
herein is intended to limit any of the Executive's vested benefits under any WEX
benefit plan or program.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of
Employment, the Period of Employment will end and WEX's obligation to make
payments under this Agreement will cease as of the date of death, except for
Base Salary and Incentive Compensation Awards
3
earned but unpaid through the date of death, and except for payment of a pro
rata portion of his Incentive Compensation Award in respect of the year in which
his death occurs (paid at target level), which will be paid to the Executive's
surviving spouse, estate or personal representative, as applicable. Nothing
contained herein is intended to limit any of the Executive's vested benefits
under any WEX benefit plan or program.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A. Without Cause Termination and Constructive Discharge Outside of a
Change in Control. If the Executive's employment terminates due to either a
Without Cause Termination or a Constructive Discharge, as defined below, and
Executive is not entitled to receive payment pursuant to Section VIII(B) hereof,
WEX will pay the Executive (or his surviving spouse, estate or personal
representative, as applicable) upon such Without Cause Termination or
Constructive Discharge (i) a cash payment equal to the sum of the Executive's
then current Base Salary plus his then current target Incentive Compensation
Award, multiplied by 200%, payable, at the Company's option, in either one lump
sum or in equal installments not less frequently than once per month over a
twelve month period, and (ii) any and all Base Salary and Incentive Compensation
Awards earned but unpaid through the date of such termination and any legitimate
unreimbursed business expenses. In addition, upon such event, those of the
Executive's outstanding and unvested WEX stock options and WEX restricted stock
units which would have otherwise become vested between the date of termination
of employment and the second anniversary of such date of termination of
employment (without regard for performance based vesting criteria) will
immediately become vested. In addition, in the event that the Executive elects
to continue medical and dental benefits pursuant to COBRA, the Executive's cost
for the first 12 months of such coverage will be no greater than the cost
applicable to active full time employees of WEX, and the Company shall pay for
the balance of the cost for the first 12 months of such coverage. Nothing
contained herein is intended to limit any of the Executive's vested benefits
under any WEX benefit plan or program, including but not limited to rights with
respect to stock options, restricted shares or long term incentive awards.
B. Without Cause Termination and Constructive Discharge In Case of
Change in Control. If the Executive's employment terminates due to either a
Without Cause Termination or a Constructive Discharge, in either case within the
time period beginning 90 days before the Change in Control and ending 540 days
after the Change in Control, then WEX will pay the Executive (or his surviving
spouse, estate or personal representative, as applicable) (i) a cash payment
equal to the sum of the Executive's then current Base Salary plus his then
current target Incentive Compensation Award, multiplied by 300%, payable, at the
Company's option, in either one lump sum or in equal installments not less
frequently than once per month over a twelve month period, and (ii) any and all
Base Salary and Incentive Compensation Awards earned but unpaid through the date
of such termination and any legitimate unreimbursed business expenses. In
addition, upon such termination, those of the Executive's outstanding and
unvested WEX stock options and unvested WEX restricted stock units held by the
Executive as of the date of termination will immediately become vested. In
addition, WEX shall pay to the Executive in a lump sum an amount equal to the
present value of WEX's share of the cost of medical and dental insurance
premiums for a thirty-six (36) month period. Nothing contained herein is
intended to limit any of the Executive's vested benefits under any WEX benefit
plan or program including but not limited to rights with respect to stock
options, restricted shares or long term incentive awards. Payment of cash and
benefits and accelerated vesting under this Section VIII(B) shall be
4
in lieu of and not in addition to anything that might be owed to Executive under
Section VIII(A).
C. Termination for Cause; Resignation. If the Executive's employment
terminates due to a Termination for Cause or a Resignation, Base Salary and any
Incentive Compensation Awards earned but unpaid as of the date of such
termination will be paid to the Executive in a lump sum. Except as provided in
this paragraph, WEX will have no further obligations to the Executive hereunder.
Nothing contained herein is intended to limit any of the Executive's vested
benefits under any WEX benefit plan or program.
D. For purposes of this Agreement, the following terms have the
following meanings:
i. "Termination for Cause" means termination because of (i) the Executive's
willful failure to substantially perform his duties as an employee of WEX or any
subsidiary thereof (other than any such failure resulting from incapacity due to
physical or mental illness), (ii) any act of fraud, embezzlement, gross
misconduct, dishonesty or similar conduct, in each case against WEX or any
subsidiary thereof, (iii) the Executive's conviction of or indictment for a
felony or any crime involving moral turpitude, (iv) the Executive's gross
negligence in the performance of his duties, (v) the Executive's knowing or
negligent making of a false certification to WEX pertaining to its financial
statements, or (vi) the Executive's knowing or grossly negligent violation of
any provision of Section IX of this Agreement or any knowing violation of WEX's
Code of Business Conduct and Ethics. WEX will provide the Executive a written
notice that describes the circumstances being relied on for the termination with
respect to this paragraph. In the event that WEX terminates the Executive's
employment without Cause but the Company later discovers evidence not known at
the time of termination that would have justified a Termination for Cause under
this paragraph, the Company may terminate the payment of all amounts to the
Executive pursuant to Section VIII(A) or (B), excluding any and all Base Salary
and Incentive Compensation Awards earned but unpaid through the date of such
termination and any legitimate unreimbursed business expenses.
ii. "Constructive Discharge" means the Executive resigns in response to:
(i) any material failure of WEX to fulfill its obligations under this Agreement
(including without limitation any reduction of the Base Salary or any reduction
in the target bonus percentage amount, as the same may be increased during the
Period of Employment), (ii) a material and adverse change to the Executive's
titles, positions, duties and responsibilities with or to WEX, (iii) the
relocation of the Executive's primary business office to a location more than 50
miles from Portland, Maine or (iv) WEX's failure to cause this Agreement to be
assumed by any successor to the business of WEX. The Executive will provide WEX
a written notice that describes the circumstances being relied on for the
termination with respect to this paragraph within sixty (60) days after the
event giving rise to the notice. WEX will have sixty (60) days after receipt of
such notice to remedy the situation prior to the termination for Constructive
Discharge.
iii. "Without Cause Termination" or "Terminated Without Cause" means
termination of the Executive's employment by WEX other than due to death,
disability, or Termination for Cause.
iv. "Resignation" means a termination of the Executive's employment by the
Executive, other than in connection with a Constructive Discharge.
5
v. "Change in Control" means the happening of any of the following events:
(1) An acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (any of which, a "Person") resulting in such
Person having beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (i) the
then-outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (A) Any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (B) Any acquisition by the
Company, (C) Any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by
the Company, or (D) Any acquisition pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of Section VIII(D)(v)(3);or
(2) A change in the composition of the board of directors of the Company
(the "Board") such that the individuals who, as of the Effective Date,
constitute the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, for purposes of this definition, that any
individual who becomes a member of the Board subsequent to the Effective
Date, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board;
but, provided further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board shall not be so considered as a member of the Incumbent Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company
or the acquisition of shares or assets of another company ("Corporate
Transaction"); excluding, however, such a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or indirectly, more
than 50% of, respectively, the outstanding shares of common stock (or
equity interests), and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors
(or equivalent governing body, if applicable), as the case may be, of the
entity resulting from such Corporate Transaction (including an entity which
as a result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as
6
the case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) of the Company or such entity resulting
from such Corporate Transaction) will beneficially own, directly or
indirectly, 50% or more of, respectively, the outstanding shares of common
stock (or equity interests) of the entity resulting from such Corporate
Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election
of directors (or equivalent governing body, if applicable) except to the
extent that such ownership existed prior to the Corporate Transaction, and
(iii) individuals who were members of the Incumbent Board will constitute
at least a majority of the members of the board of directors (or equivalent
governing body, if applicable) of the entity resulting from such Corporate
Transaction; or
(4) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
E. Conditions to Payment. All payments due to the Executive under this
Section VIII shall be made as soon as practicable; provided, however, that such
payments, shall be subject to, and contingent upon, the execution by the
Executive (or his beneficiary or estate) of a release of any and all claims
against WEX and its affiliates in such reasonable form and substance adopted by
WEX; provided further that such release shall not waive, release or limit any
rights the Executive has, or may have, to indemnification under the Articles or
Certificate of Incorporation, Bylaws, or other corporate governance documents of
WEX to the extent arising out of claims asserted other than by the company or
its affiliates, or under applicable law, or any coverage or rights to coverage
the Executive may have under insurance maintained by WEX relating to the
Executive's actions on behalf of WEX within the scope of and during the course
of his employment with WEX. The payments due to the Executive under this Section
VIII shall be in lieu of any other severance benefits otherwise payable to the
Executive under any severance plan of WEX or its affiliates and/or any other
agreement or arrangement. Nothing herein shall be construed as limiting the
Executive's entitlement to any other vested accrued benefits to which he (or his
estate if applicable) is then entitled under WEX's applicable employee benefit
plans, including without limitation any disability or life insurance plan
benefits which may become payable. Any payments made under this agreement shall
be compliant with IRS code 409A including the timing of such payments.
SECTION IX
OTHER DUTIES OF THE EXECUTIVE
DURING AND AFTER THE PERIOD OF EMPLOYMENT
A. Cooperation with Legal Claims. The Executive will, with reasonable
notice during or after the Period of Employment, furnish information as may be
in his possession and reasonably cooperate with WEX and its affiliates as may
reasonably be requested in connection with any claims or legal action in which
WEX or any of its affiliates is or may become a party. The foregoing shall not
unreasonably interfere with the Executive's duties to any successor employer and
the Company shall reimburse the Executive for any reasonable expenses incurred
for providing such assistance.
B. Protection of Confidential Information.
7
i. Acknowledgement. The Company and the Executive acknowledge that the
services to be performed by the Executive under this Agreement are unique and
extraordinary and that, as a result of the Executive's employment, the Executive
will be in a relationship of confidence and trust with the Company and will come
into possession of Confidential Information (as defined below) that is (1) owned
or controlled by the Company, (2) in the possession of the Company and belonging
to third parties or (3) conceived, originated, discovered or developed, in whole
or in part, by the Executive. "Confidential Information" means trade secrets and
other confidential or proprietary business, technical, personnel or financial
information, whether or not the Executive's work product, in written, graphic,
oral, electronic or other tangible or intangible forms, including
specifications, samples, records, data, computer programs, drawings, diagrams,
models, customer names, business or mailing addresses, ID's or e-mail addresses,
business or marketing plans, studies, analyses, projections and reports,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and software systems and processes.
Any Confidential Information that is not readily available to the public shall
be considered to be a trade secret and confidential and proprietary, even if it
is not specifically marked as such, unless the Company advises the Executive
otherwise in writing.
ii. Nondisclosure. The Executive agrees that the Executive will keep
the Confidential Information in strictest confidence and trust, and will not,
without the prior written consent of the Company, directly or indirectly, use or
disclose Confidential Information to any person, during or after the Executive's
employment, except as may be necessary in the ordinary course of performing the
Executive's duties under this Agreement. This Section IX(B) shall apply
indefinitely, both during and after the Period of Employment.
iii. Surrender Upon Termination. The Executive agrees that in the
event of the termination of the Executive's employment for any reason, at any
time, the Executive will immediately deliver to the Company all property
belonging to the Company, including documents and materials of any nature
pertaining to the Executive's work with the Company, and will not take with the
Executive any documents or materials of any description, or any reproduction
thereof of any description, containing or pertaining to any Confidential
Information. It is understood that the Executive is free to use information that
is in the public domain, but not as a result of a breach of this Agreement.
C. Restrictions.
i. During the Period of Employment and for the Post Termination Period
thereafter (collectively, the "Restricted Period"), the Executive will not
knowingly use his status with WEX or any of its affiliates to obtain loans,
goods or services from another organization on terms that would not be available
to him in the absence of his relationship to WEX or any of its affiliates. The
Post Termination Period means a period of: (a) two (2) years following the
Executive's termination of employment if, in connection with such termination,
the Executive receives a severance under Sections VIII(A) or VIII (B) of this
Agreement; or (b) one (1) year following the Executive's termination in all
other cases, irrespective of the cause, manner or time of such termination.
8
ii. During the Restricted Period, the Executive will not make any
statements or perform any acts intended or reasonably calculated to advance the
interest of any existing or prospective Competing Enterprise or in any way to
injure the interests of or disparage WEX or any of its affiliates.
iii. During the Restricted Period, the Executive, without prior
express written approval by the Board, will not become employed by, render
services to or directly or indirectly (whether for compensation or otherwise)
own or hold a proprietary interest in, manage, operate, or control, or join or
participate in the ownership, management, operation or control of, or furnish
any capital to or be connected in any manner with, any Competing Enterprise.
iv. For purposes of this Section IX, a "Competing Enterprise" means
any entity, organization or person engaged, or planning to become engaged, in
substantially the same or similar business to that being conducted or actively
and specifically planned to be conducted within the Restricted Period by WEX or
its subsidiaries, owned or controlled. It includes, without limitation: (i) the
business of developing, managing, operating, marketing, processing, financing,
or otherwise being involved in providing any products or services for the
benefit of or use by commercial vehicle or aviation fleets through charge cards,
credit cards, procurement cards or any other form of payment services or
electronic commerce; (ii) the sale, distribution or publication of petroleum
product pricing or management information or other products or services
currently sold or contemplated to be sold by WEX or any of its owned or
controlled subsidiaries, and (iii) the business of developing, managing,
operating, marketing, processing, financing, or otherwise being involved in
providing commercial travel, entertainment and purchasing credit cards. The
restrictions in this Section shall not be construed to prevent the Executive
from working for a business entity that does not compete with WEX or its
subsidiaries simply because the entity is affiliated with a Competing
Enterprise, so long as the entity is operationally separate and distinct from
the Competing Enterprise and the Executive's job responsibilities at that entity
are unrelated to the Competing Enterprise. The Executive acknowledges that WEX's
and its subsidiaries' businesses are conducted nationally and agrees that the
provisions in this paragraph shall operate throughout the United States.
v. During the Restricted Period, the Executive, without express prior
written approval from the Board, will not solicit any then-current clients,
customers or private label, cobrand or similar strategic partners of WEX or any
of its affiliates. In addition, during the Restricted Period, the Executive,
without express prior written approval from the Board, will not discuss with any
employee of WEX or any of its affiliates information related to the operation or
potential operation of any Competing Enterprise.
vi. During the Restricted Period, the Executive will not interfere
with the employees or affairs of WEX or any of its affiliates or solicit or
induce any person who is an employee of WEX or any of its affiliates to
terminate any relationship such person may have with WEX or any of its
affiliates. In addition, neither the Executive nor any entity he controls or
person he employs shall, during such period, directly or indirectly engage,
employ or compensate, any employee of WEX or any of its affiliates. The
Executive hereby represents and warrants that the Executive has not entered into
any agreement, understanding or arrangement with any employee of WEX or any of
its affiliates pertaining to any business in which the Executive has
participated or plans to participate, or to the employment, engagement or
compensation of any such employee.
9
vii. For the purposes of this Agreement, "proprietary interest" means
legal or equitable ownership, whether through stock holding or otherwise, of an
equity interest in a business, firm or entity or ownership of more than 1% of
any class of equity interest in a publicly-held company and the term "affiliate"
will include without limitation all subsidiaries of WEX.
D. The Executive hereby acknowledges that damages at law may be an
insufficient remedy to WEX if the Executive violates the terms of this Agreement
and that WEX will be entitled, upon making the requisite showing, to preliminary
and/or permanent injunctive relief in any court of competent jurisdiction to
restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section IX without the necessity of showing any actual damage
or that monetary damages would not provide an adequate remedy. Such right to an
injunction will be in addition to, and not in limitation of, any other rights or
remedies WEX may have. Without limiting the generality of the foregoing, neither
party will oppose any motion the other party may make for any expedited
discovery or hearing in connection with any alleged breach of this Section IX.
E. The Executive agrees that the restrictions contained in this
Section IX are an essential element of the compensation the Executive is granted
hereunder and but for the Executive's agreement to comply with such
restrictions, WEX would not have entered into this Agreement
SECTION X
DIRECTORS AND OFFICERS INSURANCE
WEX will indemnify the Executive to the fullest extent permitted by
the laws of the state of WEX's incorporation in effect at that time, or the
certificate of incorporation and by-laws of WEX, whichever affords the greater
protection to the Executive. WEX will maintain D&O insurance for the Executive
on a basis no less favorable than it maintains for other officers of WEX.
SECTION XI
MITIGATION
The Executive will not be required to mitigate the amount of any
payment provided for hereunder by seeking other employment or otherwise, nor
will the amount of any such payment be reduced by any compensation earned by the
Executive as the result of employment by another employer after the date the
Executive's employment hereunder terminates or by offset against any amount
claimed to be owed by the Executive to WEX, or otherwise. The parties'
respective obligations hereunder shall be absolute and unconditional and shall
not be affected by any circumstances, including without limitation any setoff,
counterclaim, recoupment, defense or other right which the other party hereto
may have.
SECTION XII
WITHHOLDING TAXES
The Executive acknowledges and agrees that WEX may directly or
indirectly withhold from any payments under this Agreement all federal, state,
city or other taxes that will be required pursuant to any law or governmental
regulation.
10
In the event it shall be determined that any payment or distribution
of any type by WEX or its affiliates 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 (the "Total Payments"), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax"), then WEX shall,
within thirty days following the Executive's incurrence thereof, pay the
Executive an additional payment (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 Total Payments.
SECTION XIII
EFFECT OF PRIOR AGREEMENTS
This Agreement will supersede any prior employment agreement between
the Executive on the one hand, and WEX (or any of its affiliates or parents) on
the other hand (including without limitation the Employment Agreement dated
February 1, 2005, the Employment Agreement dated March 24,1998 and all
amendments thereto), and any such prior employment agreement will be deemed
terminated without any remaining obligations of either party thereunder,
provided that nothing in this Agreement will supersede, modify or vitiate any
obligation of Cendant Corporation or Executive to each other pursuant to the
Employment Agreement dated February 1, 2005.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement will preclude WEX from consolidating or
merging into or with, or transferring all or substantially all of its assets to,
another corporation that assumes this Agreement and all obligations and
undertakings of WEX hereunder. Upon such a consolidation, merger or sale of
assets the term "WEX" will mean the other corporation and this Agreement will
continue in full force and effect.
SECTION XV
MODIFICATION: WAIVER
This Agreement may not be modified or amended except in writing signed
by the parties. No term or condition of this Agreement will be deemed to have
been waived except when waived in writing by the party charged with waiver. A
waiver will operate only as to the specific term or condition waived and will
not constitute a waiver for the future or have any impact on anything other than
that which is specifically waived.
SECTION XVI
GOVERNING LAW
This Agreement has been executed and delivered in the State of Maine
and its validity, interpretation, performance and enforcement will be governed
by the internal laws of that state.
11
SECTION XVII
ARBITRATION
A. Any controversy, dispute or claim arising out of or relating to
this Agreement or the breach hereof which cannot be settled by mutual agreement
(other than with respect to the matters covered by Section IX for which WEX may,
but will not be required to, seek injunctive relief) will be finally settled by
binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who is
aggrieved will deliver a written notice to the other party setting forth the
specific points in dispute. Any points remaining in dispute twenty (20) days
after the giving of such written notice may be submitted by either party, upon
ten (10) days prior written notice to the other party, to arbitration in
Portland, Maine, to the American Arbitration Association, before a single
arbitrator appointed in accordance with the arbitration rules of the American
Arbitration Association, National Rules for the Resolution of Employment
Disputes, modified only as herein expressly provided. The arbitrator may enter a
default decision against any party who fails to participate in the arbitration
proceedings.
B. The decision of the arbitrator on the points in dispute will be
final and binding, and judgment on the award may be entered in any court having
jurisdiction thereof.
C. Except as otherwise provided in this Agreement, the arbitrator will
be authorized to apportion his/her fees and expenses as the arbitrator deems
appropriate. In the absence of any such apportionment, the fees and expenses of
the arbitrator will be borne equally by each party, and each party will bear the
fees and expenses of its or his own attorney.
D. The parties agree that this Section XVII has been included to
rapidly and inexpensively resolve any disputes between them with respect to this
Agreement, and that this Section XVII will be grounds for dismissal of any court
action commenced by either party with respect to this Agreement, other than
post-arbitration actions seeking to enforce an arbitration award, or matters
covered by Section IX. In the event that any court determines that this
arbitration procedure is not binding, or otherwise allows any litigation
regarding a dispute, claim, or controversy covered by this Agreement to proceed,
the parties hereto hereby waive any and all right to a trial by jury in or with
respect to such litigation and do hereby consent to the jurisdiction of the
appropriate court within the State of Maine.
E. The parties will keep confidential, and will not disclose to any
person, except as may be required by law, the existence of any controversy
hereunder, the referral of any such controversy to arbitration or the status or
resolution thereof.
SECTION XVIII
SURVIVAL
Sections IX, X, XI, XII, XIV and XVII will continue in full force in
accordance with their respective terms notwithstanding any termination of the
Period of Employment.
12
SECTION XIX
SEPARABILITY
All provisions of this Agreement are intended to be severable. In the
event any provision or restriction contained herein is held to be invalid or
unenforceable in any respect, in whole or in part, such finding will in no way
affect the validity or enforceability of any other provision of this Agreement.
The parties hereto further agree that any such invalid or unenforceable
provision will be deemed modified so that it will be enforced to the greatest
extent permissible under law, and to the extent that any court of competent
jurisdiction determines any restriction herein to be unreasonable in any
respect, such court may limit this Agreement to render it reasonable in the
light or the circumstances in which it was entered into and specifically enforce
this Agreement as limited.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
XXXXXX EXPRESS CORPORATION
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
By: Xxxxxx X. Xxxxxxx
Title: SVP Human Resources
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
13
