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EXHIBIT 10.35
XXXXXXXX MANUFACTURING COMPANY, INC.
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (the "AGREEMENT") is made and
entered into by and between Xxxxxxx X. Xxxxxxxxx (the "EXECUTIVE") and Xxxxxxxx
Manufacturing Company, Inc., a Texas corporation (the "COMPANY"), effective as
of October 2, 2000 (the "EFFECTIVE DATE") and supersedes and replaces all
previous Executive Severance Agreements.
RECITALS
A. The Company and Executive desire to enter into this Agreement to set
forth certain severance benefits to which Executive will be entitled to
receive if (i) Executive's employment with the Company is involuntarily
terminated by the Company other than for Cause (as defined), or (ii)
Executive's employment with the Company is voluntarily terminated by
Executive for Good Reason (as defined).
B. Certain capitalized terms used in the Agreement and the Summary of
Terms are defined in Section 3 below.
The parties hereto agree as follows:
AGREEMENT
1. SEVERANCE BENEFITS.
1.1. Involuntary Termination other than For Cause or Voluntary
Termination for Good Reason. If the Executive's employment
with the Company is (i) involuntarily terminated by the
Company other than for Cause (as defined) at any time or
voluntarily terminated by Executive for Good Reason (as
defined), then the Executive shall receive the following
severance benefits from the Company.
1.2. Severance Payment. Cash payments (the "SEVERANCE PAYMENT") in
an aggregate amount equal one-hundred percent (100%) of the
Executive's Annual Compensation (as defined); provided,
however, that if such aggregate payments, either alone or
together with other payments which Executive may have the
right to receive from the Company, would not be deductible (in
whole or in part) by the Company as a result of such payments
constituting a "PARACHUTE PAYMENT" (as defined in Section 280G
of the Internal Revenue Code of 1986, as amended (the
"CODE")), such payments shall be reduced to the maximum
deductible amount under the Code. The Severance Payment shall
be made in equal installment payments over the course of
twenty-six (26) weeks, following the termination, with no
interest accruing thereon; and
1.3. Continuation of Benefits. The continuation of the medical and
other insurance plans or policies that the Company may provide
for executive officers of the Company, as from time to time in
effect, until the earlier of (i) the date which is six months
following the date on which Executive's employment with the
Company is terminated, and (ii) the date on which Executive
commences new employment.
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1.4. Voluntary Resignation other than for Good Reason; Termination
For Cause. If the Executive's employment terminates by reason
of the Executive's voluntary resignation other than for Good
Reason, or if the Executive is terminated involuntarily by the
Company for Cause.
2. NON-COMPETITION. The Executive acknowledges that the nature of the
Executive's engagement by the Company is such that the Executive shall
have access to information of a confidential and/or trade secret nature
which has great value to the Company and which constitutes a
substantial basis and foundation upon which the business of the Company
is based. Such information includes financial, manufacturing and
marketing data, techniques, processes, formulas, developmental or
experimental work, work in process, methods, trade secrets (including,
without limitation, customer lists and lists of customer sources), or
any other secret or confidential information relating to the products,
services, customers, sales or business affairs of the Company (the
"CONFIDENTIAL INFORMATION"). In order to protect the Confidential
Information, the Executive agrees that during the term of the
Executive's employment, and for a period of six months following the
date that the Executive ceases to be employed by the Company while
receiving the severance arrangement, the Executive shall not, directly
or indirectly, whether as an owner, partner, shareholder, agent,
employee, creditor, or otherwise, promote, participate or engage in any
activity or other business competitive with the Company's business
anywhere in the continental United States. A business shall be
considered competitive with the Company's business if it manufactures,
distributes or sells products competitive with the products
manufactured, distributed or sold by the Company at the date hereof and
as may be manufactured, distributed or sold by the Company at any time
prior to the date Executive ceases to be employed by the Company.
3. AT-WILL EMPLOYMENT. The Company and the Executive acknowledge that the
Executive's employment is and shall continue to be at-will, as defined
under applicable law. If the Executive's employment terminates for any
reason, the Executive shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this
Agreement, or as may otherwise be available in accordance with the
Company's established Executive plans.
4. DEFINITION OF TERMS. The following terms referred to in this Agreement
shall have the following meanings:
4.1. Annual Compensation. "Annual Compensation" means an amount
equal to the Executive's annual salary, excluding bonuses, at
the highest rate in effect during the twelve months
immediately preceding the Change of Control.
4.2. Cause. "Cause" shall mean a material act of dishonesty, or
after receipt of 15 days written notice refusal or failure to
perform any reasonable lawful duty, responsibility or
direction of the Company's Chief Executive Officer or its
Board of Directors.
4.3. Good Reason. "Good Reason" shall mean (i) a reduction, other
than a general salary and/or benefits reduction affecting
substantially all members of management, in the Executive's
annual base pay and benefits, or (ii) a requirement that
Executive be based anywhere other than within 50 miles of
Executive's present office location, except for required
travel.
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5. SUCCESSORS.
5.1. Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets
shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be
required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's
business and/or assets or successor, which becomes bound by
the terms of this Agreement by operation of law.
6. MISCELLANEOUS PROVISIONS.
6.1. Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Executive
and by an authorized officer of the Company (other than the
Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision
at another time.
6.2. Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or
implied) which are not expressly set forth in this Agreement
and Attachment A hereto, have been made or entered into by
either party with respect to the subject matter hereof. This
Agreement represents the entire understanding of the parties
hereto with respect to the subject matter hereof and
supersedes all prior arrangements and understandings regarding
the same.
6.3. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Texas.
6.4. Arbitration. Any dispute or controversy arising out of,
relating to or in connection with this Agreement shall be
settled exclusively by binding arbitration in Tarrant County,
Texas in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's
award in any court having jurisdiction. Company and the
Executive shall each pay one-half of the costs and expenses of
such arbitration, and each shall separately pay its counsel
fees and expenses. Punitive damages shall not be awarded.
6.5. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision hereof,
which shall remain in full force and effect. The parties
intend with respect to the provisions contained herein that if
in any proceeding an arbitrator shall refuse to enforce all of
the covenants included herein because they cover too extensive
a geographic area or because they cover too long a period of
time or because they cover too broad a range of activities,
then any such covenants shall be reduced in scope to the
extent required by law.
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6.6. Withholding. All payments made pursuant to this Agreement will
be subject to withholding of applicable income and employment
taxes to the extent required by law.
6.7. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year set forth
below.
Dated: October 2, 2000
Company Xxxxxxxx Manufacturing Company, Inc.
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
EXECUTIVE: By: /s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. Xxxxxxxxx
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