EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
99.1
THIS
AGREEMENT
is made
as of this 2nd
day of
October, 2006 by and between NN,
Inc.,
a
Delaware Corporation with its principal place of business in Johnson City,
Tennessee (the “Company”), and Xxxxx X. Xxxxxx (the “Executive”).
WITNESSETH:
WHEREAS,
the
Company recognizes the value of the Executive’s experience and expertise and
desires to continue in its employment of the executive, and
WHEREAS,
the
Executive wishes to continue to be employed by the Company in such capacity;
and
WHEREAS,
the
Company and the Executive mutually desire that their employment relationship
be
set forth under the terms of this written Employment Agreement;
NOW,
THEREFORE,
in
consideration of the foregoing and of the promises, covenants and mutual
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
do
hereby agree as follows:
| 1. |
Employment.
The Company agrees to continue to employ the Executive, and the Executive
agrees to continue to be employed by the Company, on the terms and
conditions set forth herein.
|
| 2. |
Term
of Employment.
The employment of the Executive by the Company as provided herein
shall
commence on October 2, 2006, and end on October 1, 2007 unless further
extended or sooner terminated as hereinafter provided. On October
1, 2007
and on October 1 of each year thereafter, the term of the Executive’s
employment hereunder be extended automatically one (1) additional
year,
unless at least six (6) months prior to the date of such automatic
extension the Company shall have delivered to the Executive or the
Executive shall have delivered to the Company written notice that
the term
of the Executive’s employment hereunder shall not be
extended.
|
| 3. |
Position
and Duties.
The Executive shall serve as the Vice President of Marketing of the
Company with responsibilities and authority as may from time to time
be
assigned by the Chief Executive Officer and/or the Board of Directors
of
the Company. Executive agrees to perform faithfully and industriously
the
duties which the Company may assign to him. The Executive shall devote
substantially all of his working time and efforts to the business
affairs
of the Company, to the exclusion of all other employment or business
interest other than passive personal investments, charitable, religious
or
civic activities. Executive may not engage, directly or indirectly,
in any
other business or businesses, whether or not similar to that of the
Company, except with the consent of the Chief Executive Officer and
the
Board of Directors of the Company.
|
1
| 4. |
Compensation
and Benefits.
In consideration of the Executive’s performance of his duties hereunder,
the Company shall provide the Executive with the following compensation
and benefits during the term of his employment
hereunder.
|
| (a) |
Base
Salary.
The Company shall pay to the Executive an aggregate base salary at
a rate
of One Hundred and Seventy Five Thousand Dollars ($175,000.00) per
annum,
payable in accordance with the Company’s normal payroll practices. Such
base salary may be increased from time to time by the Board of Directors
in accordance with the normal business practices of the
Company.
|
| (b) |
Expenses.
The Company, as applicable, shall promptly reimburse the Executive
for all
reasonable out-of-pocket expenses incurred by the Executive in his
performance of services hereunder, including all such expenses of
travel
and entertainment, provided that such expenses are incurred, accounted
for
and documented in accordance with the Company’s regular policies and in
compliance with IRS Guidelines. The Company reserves the right to
establish limits on the types or amounts of business expenses that
the
Executive may incur.
|
| (c) |
Employee
Benefits.
The Executive shall be entitled to continue to participate in all
Company
employee benefit plans for which he is eligible, subject to the rules
and
regulations applicable thereto, which were in effect on the date
hereof
(including, but not limited to, life, disability, and health insurance
plans and programs and savings plans and programs) as such plans
may
continue or be altered by the Company Board of Directors from time
to time
at the Board’s discretion.
|
| (d) |
Vacation
and Other Absences.
The Executive shall receive reasonable and customary vacation in
each
calendar year during the term of this Agreement, in accordance with
the
Company's present policies. The Executive shall also receive all
paid
absences for holidays or illnesses in accordance with the Company's
applicable plans, policies or
provisions.
|
| 5. |
Termination.
Except for the provisions of Paragraphs 7, 8, 9, 10, and 11, which
shall
continue in full force and effect, this Agreement shall terminate
upon the
first to occur of the following:
|
| (a) |
The
death of Executive;
|
| (b) |
The
permanent Disability of Executive, as defined in Paragraph
6(a)(iv);
|
| (c) |
Termination
of Executive’s employment by Company "For Cause" as defined in
Paragraph 6(a)(i);
|
| (d) |
Separation
From Service with the Company other than For Cause or Separation
From
Service with the Company by Executive with "Good Reason" as defined
in
Paragraph 6(a)(ii). The Company reserves the right to terminate the
Executive at any time, subject to the Company's obligation to pay
the
Executive Compensation as otherwise provided for herein;
or
|
2
| (e) |
Separation
From Service with the Company following a "Change in Control" as
defined
in Paragraph 6(a)(iii) and as provided in Paragraph 6(d)(i); or
|
| (f) |
Termination
of employment with the Company by Executive without Good Reason,
provided
that Executive shall give written notice of his voluntary termination
in
accordance with Paragraph 6(a)(v). Upon receipt of notice of intended
termination given by Executive, the Company reserves the right to
terminate the Executive's employment, effective
immediately.
|
| 6. |
Compensation
and Benefits in the Event of Termination or Separation From
Service.
In the event of the termination of the Executive’s employment or a
Separation From Service, as applicable, during the term of this Agreement
or any renewal thereof, compensation and benefits shall be paid as
set
forth below.
|
| (a) |
Definitions.
For purposes of this Agreement, the following terms shall have the
meanings indicated:
|
| (i) |
The
term "For Cause" shall include, but shall not be limited to (A) the
failure of the Executive to perform the Executive's duties under
this
Agreement (other than as a result of physical or mental illness or
injury), which failure, if correctable, and provided it does not
constitute willful misconduct or gross negligence described in Subsection
B below, remains uncorrected for 10 days following written notice
to
Executive by the President or the Board of Directors of the Company
of
such breach; (B) willful misconduct or gross negligence by the Executive,
in either case that results in material damage to the business or
reputation of the Company; (C) a material breach by Executive of
this
Agreement which, if correctable, remains uncorrected for 10 days
following
written notice to Executive by the Board of Directors of the Company
of
such breach; or (D) the Executive is convicted of a felony or any
other
crime involving moral turpitude (whether or not in connection with
the
performance by Executive of his duties under this
Agreement).
|
| (ii) |
The
term "Good Reason" shall mean
either:
|
|
(A)
|
assignment
to the Executive of any duties inconsistent with Executive's position
duties, responsibilities, title or office, or any other action by
the
Company that results in a material diminution in the Executive's
position,
authority, duties or responsibilities, excluding in each case any
assignment or action that is remedied by the Company within 10 days
after
receipt of notice thereof from the Executive;
or
|
|
(B)
|
any
material failure by the Company to comply with this Agreement, other
than
a failure that is remedied by the Company within 10 days after receipt
of
notice thereof from the Executive.
|
3
| (iii) |
The
term “Change in Control” shall mean
either:
|
| (A) |
A
person, corporation, entity or group (1) makes a tender or exchange
offer
for the issued and outstanding voting stock of the Company and
beneficially owns fifty percent (50%) or more of the issued and
outstanding voting stock of the Company after such tender or exchange
offer, or (2) acquires, directly or indirectly, the beneficial ownership
of fifty percent (50%) or more of the issued and outstanding voting
stock
of the Company in a single transaction or a series of transactions
(other
than any person, corporation, entity or group for which a Schedule
13G is
on file with the Securities and Exchange Commission, so long as such
person, corporation, entity or group has beneficial ownership of
less than
fifty percent (50%) of the issued and outstanding voting stock of
the
Company); or
|
| (B) |
The
Company is a party to a merger, consolidation or similar transaction
and
following such transaction, fifty percent (50%) or more of the issued
and
outstanding voting stock of the resulting entity is not beneficially
owned
by those persons, corporations or entities that constituted the
stockholders of the Company immediately prior to the transaction;
or
|
| (C) |
The
Company sells fifty percent (50%) or more of its assets to any other
person or persons (other than an affiliate or affiliates of the Company);
or
|
|
(D)
|
Individuals
who, as of the date hereof, constitute the Board (the "Incumbent
Board")
cease for any reason to constitute at least seventy-five percent
(75%) of
the Board of Directors of the Company; provided, however, that any
individual becoming a director subsequent to the date hereof, whose
election or nomination was approved by a majority of the directors
than
comprising the Incumbent Board, shall be considered a member of the
Incumbent Board, but not including any individual whose initial board
membership is a result of an actual or threatened election contest
(as
that term is used in Rule 14a-11 promulgated under the Securities
Act of
1934, as amended) or an actual or threatened solicitation of proxies
or
consents by or on behalf of a party other than the
Board.
|
It
is not
intended that a Change of Control will serve as an event which entitles
Executive to any payment hereunder.
| (iv) |
The
term “Disability” shall mean the Executive’s failure to satisfactorily
perform his regular duties on behalf of the Company on a full-time
basis
for one hundred and twenty (120) days during any three hundred and
sixty
(360) day period, by reason of the Executive’s incapacity due to physical
or mental illness.
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4
| (v) |
The
term “Notice of Termination” shall mean a written notice which shall
include the specific termination provision under 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.
Any purported termination of the Executive’s employment hereunder by
action of either party shall be communicated by delivery of a Notice
of
Termination to the other party. Any termination by Executive of his
employment without Good Reason shall be made on not less than 14
days'
notice.
|
| (vi) |
The
term “Separation From Service” shall have the meaning contemplated in
guidance issued by the U. S. Department of the Treasury for purposes
of
applying the provisions of Section 409A of the Internal Revenue
Code.
|
| (vii) | The term “Specified Employee” shall have the meaning contemplated by Section 409A(a)(2)(B)(i) of the Internal Revenue Code and guidance issued thereunder by the U. S. Department of the Treasury. |
| (b) |
Separation
From Service By Company Not For Cause Or By Executive With Good Reason
Prior To A Change Of Control. In the event Executive incurs a
termination of employment by action of the Company without Cause
prior to
a Change of Control, or by the Executive with Good Reason prior to
a
Change in Control, then upon a Separation From Service the Executive
shall
be entitled to receive: (1) The annual salary due to him through
the date
of termination of his employment which occurs in connection with
the
Separation From Service. In addition, Executive shall be entitled
to
receive a lump sum amount equal to his Annual Salary in effect on
the date
of termination of his employment which occurs in connection with
the
Separation From Service, payable (except as provided in Paragraph
6(e))
within seventy-five (75) days of said Separation From Service. (2)
Any
vested rights of Executive shall be paid to Executive in accordance
with
the Company's plans, programs or policies. (3) The Company shall
promptly
reimburse Executive for any and all reimbursable business expenses
(to the
extent not already reimbursed) upon Executive's properly accounting
for
the same. (4) The Company shall (except as provided in Paragraph
6(e))
promptly reimburse Executive for Executive's payment of the COBRA
premium
required in order to continue coverage for Executive and his family
under
the Company's existing benefit plans until the first anniversary
of the
date the COBRA continuation period begins or until Executive becomes
eligible for similar coverage under the terms of new employment undertaken
by Executive, whichever first occurs; and provided further, that
the terms
of the Company's benefit plans shall be subject to amendment during
such
period, to the extent that such amendments are applicable to the
executive
officers of the Company generally.
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5
| (c) |
Termination
By The Company For Cause Or By The Executive Without Good
Reason.
In the event the Executive’s employment hereunder is terminated (A) by
action of the Company for Cause; (B) by action of the Executive without
Good Reason; or (C) by reason of the Executive’s death, Disability or
retirement, the following compensation and benefits shall be paid
and
provided the Executive (or his
beneficiary):
|
| (1) |
The
Executive’s annual salary provided under Paragraph 5(a) through the date
of termination, at the annual rate in effect at the time the Notice
of
Termination is given (or death occurs), to the extent unpaid prior
to such
Date of Termination;
|
| (2) |
Any
vested rights of Executive shall be paid to Executive or in accordance
with the Company's plans, programs or policies. Without limiting
the
foregoing, in the event of the termination of Executive's employment
due
to death or disability, the rights and benefits of Executive (or
his
designated beneficiary or representatives, as applicable) under any
Company life, health and long-term disability plans and policies
shall be
determined in accordance with the terms and provisions of such plans
and
policies; and
|
| (3) |
The
Company shall promptly reimburse Executive for any and all reimbursable
business expenses (to the extent not already reimbursed) upon Executive's
properly accounting for the same.
|
| (d) |
Separation
From Service Following a Change of
Control
|
|
(i)
|
Severance
Benefits.
In the event that Executive incurs a termination of employment coincident
with or followed by a Separation From Service, in either event within
two
(2) years following a "Change of Control" (as defined in Paragraph
6(a)(iii)) and
such termination or Separation From Service is either (i) Without
Cause
(as defined below), or
(ii) is a Constructive Termination (as defined below), Executive
shall
receive, in addition to all compensation due and payable to or accrued
for
the benefit of Executive:
|
|
(A)
|
a
lump sum payment equal to an amount set forth on Schedule
A
to
this Agreement ("Severance Payment"). The Severance payment shall
be made
by wire transfer or immediately available funds to an account designated
by Executive within seven (7) business days following the date of
the
Separation From Service, except as provided in Paragraph 6(e) with
respect
to payments to Specified Employees;
|
|
(B)
|
a
payment equal to the annual bonus to which Executive would have been
entitled but for Executive's termination of employment in connection
with
the Separation From Service, for the year of Executive's termination;
pro-rated for the portion of the year during which he was employed
by the
Company (“Pro-rated Bonus”). The Pro-rated Bonus shall be payable to
Executive within seventy-five (75) days following Executive's Separation
From Service, except as provided in Paragraph 6(e);
and
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6
|
(C)
|
for
a period of twelve months after such termination (the "Coverage Period"),
medical, dental, prescription drug, life, accidental death and disability
insurance coverage substantially similar to the coverage which Executive
was receiving or entitled to receive immediately prior to the date
of the
termination of Executive's employment ("Insurance Benefits”), to the
extent permitted by the terms of each particular existing benefit
plan
and, if not so permitted, the Company shall, except as provided in
Paragraph 6(e), promptly reimburse Executive for Executive's payment
of
the COBRA premium required in order to continue coverage for Executive
and
his family under the Company's existing benefit plans. Notwithstanding
the
foregoing, Executive shall not be entitled to receive the Insurance
Benefits (or a portion thereof) to the extent that Executive obtains
other
employment that provides equal or greater benefits during the Coverage
Period.
|
The
Severance Payment, Pro-rated Bonus and Insurance Benefits are collectively
referred to in this Agreement as the "Severance Benefit."
(ii) Termination
or Separation From Service Without Cause.
For
purposes of this subparagraph 6(d), "Without Cause" shall mean termination
of
Executive by the Company for reasons other than: (i) the willful, persistent
failure of Executive (after thirty (30) days written notice and a reasonable
opportunity to cure ) to perform his material duties for reasons other than
death or disability; (ii) the breach by Executive of any material provision
of
this Agreement; or (iii) Executive's conviction of a felony involving
dishonesty, deceit or moral turpitude by a trial court of competent
jurisdiction, whether or not appeal is taken.
(iii) Constructive
Termination.
For
purposes of this subparagraph 6(d) "Constructive Termination" shall mean: (1)
a
material, adverse change of Executive's responsibilities, authority, status,
position, offices, titles, duties or reporting requirements (including
directorships); (2) an adverse change in Executive's annual compensation and
benefits; (3) a requirement to relocate in excess of fifty (50) miles from
the
Executive's then current place of employment; or (4) the breach by the Company
of any material provision of this Agreement, other than a breach that is
remedied by the Company within 10 days after receipt of notice thereof from
Executive. For purposes of this definition, Executive's responsibilities,
authority, status, position, offices, titles, duties and reporting requirements
are to be determined as of the date of this Agreement.
(iv) Other
Severance Benefits.
The
Severance Benefit payable to Executive pursuant to this subparagraph 6(d) shall
be reduced by any severance benefits to which Executive is entitled under the
Company's severance policies for terminated employees generally or any
termination payments otherwise payable under this Agreement.
7
(v) Excise
Tax.
|
(A)
|
Notwithstanding
anything to the contrary set forth in this Agreement, in no event
shall a
Severance Benefit payable pursuant to this Paragraph 6(d) exceed
an amount
equal to the lesser of (i) 2.99 times the "base amount" (as defined
in
Section 280G(b)(3) of the Internal Revenue Code) of Executive's
compensation, or (ii) such other amount which would constitute a
"parachute payment" (as defined in Section 280G of the Code). In
the event
that it shall be determined that any Severance Benefit to Executive
(whether paid or payable or distributed or distributable) would be
subject
to the excise tax imposed by Section 4999 of the Code, or any successor
provision thereto (the "Excise Tax"), then Executive shall be entitled
to
receive from the Company an additional payment (the "Gross-Up Payment”) in
an amount such that the net amount of the Severance Benefit and the
Gross-Up Payment retained by the Executive after calculation and
deduction
of all Excise Taxes (including any interest or penalties imposed
with
respect to such taxes) or the Gross-Up Payment provided for in this
Section, and taking into account any lost or reduced tax deductions
on
account of the Gross-Up payment, shall be equal to the Severance
Benefit.
|
|
(B)
|
Executive
shall notify the Company in writing of any claim by the Internal
Revenue
Service that, if successful, would require the payment by the Company
of
the Gross-Up Payment. Such notification shall be given as soon as
practicable after 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. Executive shall not pay such claim
prior to
the expiration of the 30-day period following the date on which Executive
gives such notice to the Company (or such shorter period ending on
the
date that any payment of taxes, interest and/or penalties with respect
to
such claim is due). If the Company notifies Executive in writing
prior to
the expiration of such period that it desires to contest such claim,
Executive shall:
|
|
(1)
|
give
the Company any information reasonably requested by the Company relating
to such claim;
|
|
(2)
|
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;
|
8
|
(3)
|
cooperate
with the Company in good faith in order to effectively contest such
claim;
and
|
|
(4)
|
permit
the Company to participate in any proceedings relating to such
claims;
|
provided,
however,
that the
Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify Executive for and hold Executive harmless from, on an after-tax basis,
any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of all related
costs and expenses. Without limiting the foregoing provisions of this section,
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 Executive to pay the
tax
claimed and xxx for a refund or contest the claim in any permissible manner,
and
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 Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to Executive, on an
interest-free basis, and shall indemnify Executive for and hold Executive
harmless from, on an after-tax basis, any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance (including
as
a result of any forgiveness by the Company of such advance); provided,
further,
that
any extension of the statute of limitations relating to the payment of taxes
for
the taxable year of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and 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.
| (e) |
Payments
to Specified Employees.
Notwithstanding the foregoing provisions which normally require payment
of
certain elements of compensation within a stated period after a Separation
From Service, in no event shall any payment to a Specified Employee
of
compensation which is subject to Internal Revenue Code Section 409A
be
made prior to the date which is six (6) months and one (1) day after
the
date of such Separation From Service. Any amount otherwise required
to be
paid within such payment suspension period shall be paid in a lump
sum on
the date the suspension period lapses or, if such date is not a regular
business day of the Company, on the first regular business day of
the
Company which follows the expiration of the payment suspension
period.
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9
| (f) |
Continuation
of Benefits.
Following the termination of Executive’s employment hereunder, the
Executive shall have the right to continue in the Company’s group health
insurance plan or other Company benefit program as may be required
by
COBRA or any other federal or state law or
regulation.
|
|
(g)
|
Limit
on Company Liability.
Except as expressly set forth in this Paragraph 6, the Company shall
have
no obligation to Executive under this Agreement following a termination
of
Executive's employment with the Company. Without limiting the generality
of the provision of the foregoing sentence, the Company shall not,
following a termination of Executive's employment with the Company,
have
any obligation to provide any further benefit to Executive or make
any
further contribution for Executive's benefit except as provided in
this
paragraph 6.
|
| 7. |
Disclosure
of Confidential Information.
The Company has developed confidential information, strategies and
programs, which include customer lists, prospects, lists, expansion
and
acquisition plans, market research, sales systems, marketing programs,
computer systems and programs, product development strategies,
manufacturing strategies and techniques, budgets, pricing strategies,
identity and requirements of national accounts, customer lists, methods
of
operating, service systems, training programs and methods, other
trade
secrets and information about the business in which the Company is
engaged
that is not known to the public and gives the Company an opportunity
to
obtain an advantage over competitors who do not know of such information
(collectively, "Confidential Information"). In performing duties
for the
Company, Executive regularly will be exposed to and work with Confidential
Information. Executive acknowledges that such Confidential Information
is
critical to the Company's success and that the Company has invested
substantial sums of money in developing the Confidential Information.
While Executive is employed by the Company and after such employment
ends
for any reason, Executive will never reproduce, publish, disclose,
use,
reveal, show or otherwise communicate to any person or entity any
Confidential Information unless specifically directed by the Company
to do
so in writing. Executive agrees that whenever Executive's employment
with
the Company ends for any reason, all documents containing or referring
to
Confidential Information as may be in Executive's possession or control
will be delivered by Executive to the Company immediately, with no
request
being required.
|
| 8. |
Non-Interference
with Personnel Relations.
While Executive is employed by the Company and for twenty-four (24)
months
after such employment ends for any reason, Executive acting either
directly or indirectly, or through any other person, firm, or corporation,
will not hire contract with or employ any employee of the Company
or
induce or attempt to induce or influence any employee of the Company
to
terminate employment with the Company. However, this provision shall
not
apply to Executive in the case of the solicitation of his or her
immediate
family members.
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10
| 9. |
Non-Competition.
While Executive is employed by the Company and for twenty-four (24)
months
after such employment ends for any reason, Executive will not, directly
or
indirectly, or through any other person, firm or corporation (i)
be
employed by, consult for, have any ownership interest in or engage
in any
activity on behalf of any competing business, or (ii) call on, solicit
or
communicate with any of the Company's customers (whether actual or
potential) for the purpose of selling precision steel balls and rollers
and other related items to such customer other than for the benefit
of the
Company. As used in this Agreement, the term "competing business"
means a
business that is a manufacturer and supplier of precision steel balls
and
rollers to anti-friction bearing manufacturers (excluding any ball
and
roller manufacturers who manufacture such products for use in their
business or the business of their affiliates and do not supply such
products to third parties) and the term "customer" means any customer
(whether actual or potential) with whom Executive or any other employee
of
the Company had business contact on behalf of the Company during
the
eighteen (18) months immediately before Executive's employment with
the
Company ended. Notwithstanding the foregoing, this paragraph shall
not be
construed to prohibit Executive from owning less than five percent
(5%) of
the outstanding securities of a corporation which is publicly traded
on a
securities exchange or
over-the-counter.
|
| 10. |
Notification
to Subsequent Employers.
Executive grants the Company the right to notify any future employer
or
prospective employer of Executive concerning the existence of and
terms of
this Agreement and grants the Company the right to provide a copy
of this
Agreement to any such subsequent employer or prospective
employer.
|
| 11. |
Company
Proprietary Rights.
|
|
(a)
|
Company
to Retain Rights.
Executive agrees that all right, title and interest of every kind
and
nature whatsoever in and to copyrights, patents, ideas, business
or
strategic plans and concepts, studies, presentations, creations,
inventions, writings, properties, discoveries and all other intellectual
property conceived by Executive during the term of this Agreement
and
pertaining to or useful in or to (directly or indirectly) the activities
of the Company (collectively, "Company Intellectual Property") shall
become and remain the exclusive property of the Company, and Executive
shall have no interest therein.
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|
(b)
|
Further
Assurances.
At the request of the Company, Executive shall, at the Company's
expense
but without additional consideration, execute such documents and
perform
such other acts as the Company may deem necessary or appropriate
to vest
in the Company or its designee such title as Executive may have to
all
Company Intellectual Property in which Executive may be able to claim
any
rights by virtue of his employment under this
Agreement.
|
|
(c)
|
Return
of Material.
Upon the termination of the Executive's employment under this Agreement,
the Executive will promptly return to the Company all copies of
information protected by Paragraph 11(a) hereof which are in his
possession, custody or control, whether prepared by him or others,
and the
Executive agrees that he shall not retain any of
same.
|
11
| 12. |
Representation
and Warranty of Executive.
Executive represents and warrants to the Company that he is not now
under
any obligation, of a contractual nature or otherwise, to any person,
partnership, company or corporation that is inconsistent or in conflict
with this Agreement or which would prevent, limit or impair in any
way the
performance by him of his obligations
hereunder.
|
| 13. |
Withholding.
Any provision of this Agreement to the contrary notwithstanding,
all
payments made by the Company hereunder to the Executive or his estate
or
beneficiaries shall be subject to the withholding of such amounts,
if any,
relating to tax and other payroll deductions as the Company may reasonably
determine should be withheld pursuant to any applicable law or regulation.
In lieu of withholding such amounts, the Company may accept other
provisions, provided that it has sufficient funds to pay all taxes
required by law to be withheld in respect of any or all such
payments.
|
| 14. |
Mitigation.
The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall
not be
affected by any set-off, counterclaim, recoupment, defense or other
claim,
right or action which the Company may have against Executive or others.
In
no event shall Executive be obligated to seek other employment or
take any
other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this agreement and such amounts shall
not
be reduced whether or not Executive obtains other
employment.
|
| 15. |
Notices.
All notices, requests, demands and other communications provided
for by
this Agreement shall be in writing and shall be sufficiently given
if and
when mailed in the continental United States by registered or certified
mail, or personally delivered to the party entitled thereto, at the
address stated below or to such changed address as the addressee
may have
given by a similar notice:
|
|
To
the
Company:
|
President
|
|
|
NN,
Inc.
|
||
|
0000
Xxxxxx Xxxx Xxxxx
|
||
|
Xxxxxxx
Xxxx, XX 00000
|
|
To
the
Executive:
|
Xxxxx
X. Xxxxxx
|
|
|
0000
Xxxxxxx Xxxxx
|
||
|
Xxxxxx,
Xxxx 00000
|
||
| 16. |
Successors:
Binding Agreement.
The Company shall require any successor (whether direct or indirect,
by
purchase, merger, consolidation or otherwise) to all or substantially
all
of the business and/or assets of the Company, by agreement in the
form and
substance satisfactory to the Executive, to expressly assume and
agree to
perform this Agreement in the same manner and to the same extent
that the
Company would be required to perform it if no such succession had
taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement.
For purposes of this Agreement, “Company” shall include any successor to
its business and/or assets as aforesaid which executes and delivers
the
agreement provided for in this Section or which otherwise becomes
bound by
all the terms and provisions of this Agreement by operation of
law.
|
12
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 still be payable to him hereunder if he had continued to live,
all
such amounts, except to the extent otherwise provided under this Agreement,
shall be paid in accordance with the terms of this Agreement to his devisee,
legatee or other designee, or if there be no such designee, to the Executive’s
estate.
| 17. |
Modification,
Waiver or Discharge.
No provision of this Agreement may be modified or discharged unless
such
modification or discharge is authorized by the Board of Directors
of the
Company and is agreed to in writing, signed by the Executive and
by an
officer of the Company duly authorized by the Board. However, the
Company
may unilaterally revise the provisions of this Agreement governed
by the
provisions of Internal Revenue Code Section 409A in order to make
the
Agreement compliant therewith. No waiver by either party hereto of
any
breach by the other party hereto of any condition or provision of
this
Agreement to be performed by such other party will be deemed a waiver
of
similar or dissimilar provisions or conditions at the time or at
any time
or at any prior or subsequent time.
|
| 18. |
Entire
Agreement.
This Agreement constitutes the entire understanding of the parties
hereto
with respect to its subject matter and supersedes all prior agreements
between the parties hereto with respect to its subject matter, including,
but not limited to, all employment agreements, change of control
agreements, non-competition agreements or any other agreement related
to
Executive's employment with the Company; provided, however, nothing
herein
shall affect the terms of the Indemnification Agreement entered into
between the Company and Executive dated August 7, 2003, which shall
continue and remain in full force and
effect.
|
| 19. |
Governing
Law.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Tennessee
to the
extent federal law does not apply.
|
| 20. |
Resolution
of Disputes.
Any dispute or claim arising out of or relating to this Agreement
shall be
settled by final and binding arbitration in Johnson City, Tennessee
in
accordance with the Commercial Arbitration rules of the American
Arbitration Association, and judgment upon the award rendered by
the
arbitrators may be entered in any court having jurisdiction thereof.
The
fees and expenses of the arbitration panel shall be equally borne
by the
Company and Executive. Each party shall be liable for its own costs
and
expenses as a result of any dispute related to this
Agreement.
|
| 21. |
Validity.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions
of
this Agreement, which latter provisions shall remain in full force
and
effect.
|
13
| 22. |
No
Adequate Remedy At Law; Costs to Prevailing Party.
The Company and the Executive recognize that each party may have
no
adequate remedy at law for breach by the other of any of the agreements
contained herein, and particularly a breach of Paragraphs 7, 8, 9,
or 11,
and, in the event of any such breach, the Company and the Executive
hereby
agree and consent that the other shall be entitled to injunctive
relief or
other appropriate remedy to enforce performance of such
agreements.
|
| 23. |
Non-Assignability.
This Agreement, and the rights and obligations of the parties hereunder,
are personal and neither this Agreement, nor any right, benefit or
obligation of either party hereto, shall be subject to voluntary
or
involuntary assignment, alienation or transfer, whether by operation
of
law or otherwise, without the prior written consent of the other
party;
provided, however, that the Company may assign this Agreement in
connection with a merger or consolidation involving the Company or
a sale
of substantially all of its assets to the surviving corporation or
purchaser, as the case may be, so long as such assignee assumes the
Company's obligations hereunder.
|
| 24. |
Headings.
The section headings contained in this Agreement are for convenience
of
reference only and will not be deemed to control or affect the meaning
or
construction of any provision of this Agreement. Reference to Paragraphs
are to Paragraphs in this
Agreement.
|
| 25. |
Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed to be an original, but of which together will constitute
one and the same instrument.
|
IN
WITNESS WHEREOF,
the
Executive and the Company (by action of its duly authorized officers) have
executed this Agreement as of the date first above written.
| NN, INC. | ||
| |
|
|
| Attest: | By: | /s/ Xxxxxxxx X. Xxxx |
|
Xxxxxxxx X. Xxxx, Chairman/CEO |
||
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Xxxxx X. Xxxxxx, Vice President of Marketing |
||
14
Schedule
A
Executive's
Severance Payment shall be a lump sum payment equal to:
| 1. | 2.0 times Executive's base salary (as of the date of Executive's termination); plus |
| 2. | 1.0 times Executive's median bonus available at the following bonus target percentage: 35% |
15
