1
EXHIBIT 10.22
SEVERANCE AGREEMENT
AGREEMENT made as of August 26, 1997 between NEW XXXXXXX HOLDINGS,
INC., a Delaware corporation (the "Company"), and (the "Executive"), but to be
effective as of the Effective Date.
WHEREAS, the Executive is employed by Xxxxxxx Enterprises, Inc.
("Xxxxxxx"), or by one of its wholly-owned consolidated subsidiaries, and the
Company is a wholly-owned subsidiary of Xxxxxxx; and
WHEREAS, the Company, Xxxxxxx, and Capstone Pharmacy Services, Inc.
("Capstone") have entered into an Agreement and Plan of Distribution dated as
of April 15, 1997 whereby Xxxxxxx intends to transfer all of its business
except the institutional pharmacy business to the Company and the Company will
be spun-off as a separate public corporation (the "Distribution"), and
immediately thereafter Xxxxxxx will merge with and into Capstone (the "Merger")
pursuant to an Agreement and Plan of Merger dated as of April 15, 1997 (the
"Merger Agreement"), and the Company will change its name to Xxxxxxx
Enterprises, Inc.; and
WHEREAS, as a result of the Distribution, the Executive will become an
employee of the Company or one of its wholly-owned consolidated subsidiaries;
and
WHEREAS, in connection with this Agreement and in exchange for the
consideration described herein (the receipt and sufficiency of which is hereby
acknowledged), the Executive has agreed to waive any rights he may currently
have under any change in control, severance, or employment agreement or other
compensation or employee benefit plan with or previously assumed by Xxxxxxx and
has agreed to waive any claim that either the Distribution or the Merger
constitutes a "Change in Control" under any such agreements or other employee
benefit or compensation plans under this Agreement; and
WHEREAS, the Company desires to assure itself of the management
services of the Executive by directly engaging the Executive as the of the
Company; and
WHEREAS, the Company recognizes that the Executive's contribution to
the Company's growth and success after the Distribution will be substantial;
and
WHEREAS, the Company wishes to encourage the Executive to remain with
and devote full time and attention to the business affairs of the Company and
wishes to provide income protection to the Executive for a period of time in
the event of an involuntary Termination of Employment not for Cause or a
voluntary Termination of Employment for Good Reason within the Term of this
Agreement, whether or not in connection with a Change in Control (other than a
Change in Control in connection with the Distribution or Merger);
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Company and the
Executive hereby agree as follows:
2
1. Definitions.
(a) "Base Salary" shall mean the Executive's regular annual
rate of base pay as of the date in question.
(b) The "Benefit Multiplier" shall be equal to 1.0 except that
if Executive's Termination of Employment is pursuant to paragraph 3(b), it
shall be equal to Multiplier.
(c) The "Benefit Period" shall be the period of years, equal
to the Benefit Multiplier, which follows the Executive's Termination of
Employment.
(d) "Cause" shall mean the Executive's (i) conviction of a
crime involving moral turpitude, theft or embezzlement of property from
the Company or (ii) willful misconduct or willful failure substantially to
perform the duties of his position, but only if such has continued after
receipt of such notices and cure periods as are provided for by the
Company's disciplinary process.
(e) A "Change in Control" shall be deemed to have taken place
if, after the Distribution and Merger: (i) any person, corporation, or
other entity or group, including any "group" as defined in Section
l3(d)(3) of the Securities Exchange Act of 1934, other than any employee
benefit plan then maintained by the Company, becomes the beneficial owner
of shares of the Company having 30 percent or more of the total number of
votes that may be cast for the election of Directors of the Company; (ii)
as the result of, or in connection with, any contested election for the
Board of Directors of the Company, or any tender or exchange offer, merger
or other business combination or sale of assets, or any combination of the
foregoing (a "Transaction"), the persons who were Directors of the Company
before the Transaction shall cease to constitute a majority of the Board
of Directors of the Company or any successor to the Company or its assets,
or (iii) at any time (a) the Company shall consolidate with, or merge
with, any other Person and the Company shall not be the continuing or
surviving corporation, (b) any Person shall consolidate with, or merge
with the Company, and the Company shall be the continuing or surviving
corporation and in connection therewith, all or part of the outstanding
Company stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (c) the
Company shall be a party to a statutory share exchange with any other
Person after which the Company is a subsidiary of any other Person, or (d)
the Company shall sell or otherwise transfer 50% or more of the assets or
earning power of the Company and its subsidiaries (taken as a whole) to
any Person or Persons; provided, however, that notwithstanding anything to
the contrary herein, a Change in Control shall not include either (a) the
Distribution or Merger, or (b) any transfer to a consolidated subsidiary,
reorganization, spin-off, split-up, distribution, or other similar or
related transaction(s) or any combination of the foregoing in which the
core business and assets of the Company and its subsidiaries (taken as a
whole) are transferred to another entity ("Controlled") with respect to
which (1) the majority of the Board of Directors of the Company (as
constituted immediately prior to such transaction(s)) also serve as
directors of Controlled and immediately after such transaction(s)
constitute a majority of Controlled's board of directors, and (2) more
than 70% of the shareholders of the Company (immediately prior to such
transaction(s)) become shareholders or other owners of Controlled and
immediately after the transaction(s) control more than 70% of the
ownership and voting rights of Controlled.
2
3
(f) The "Change in Control Date" shall mean the date
immediately prior to the effectiveness of the Change in Control.
(g) The "Committee" shall mean the Compensation Committee of
the Company's Board of Directors.
(h) The "Competitive Businesses" shall mean any of the health
care businesses in which the Company is engaged on the effective date of
the Distribution.
(i) "Effective Date" shall mean the effective date of the
Distribution; provided, however, that in the event the Merger Agreement is
terminated prior to consummation of the Merger, then this Agreement shall
be null and void ab initio and of no effect.
(j) The Executive shall have "Good Reason" to terminate
employment if: (i) the Executive is not elected, reelected, or otherwise
continued in the office of the Company or any of its subsidiaries which he
held immediately prior to the Change in Control Date, or he is removed as
a member of the Board of Directors of the Company or any of its
subsidiaries if the Executive was a director immediately prior to the
Change in Control Date; (ii) the Executive's duties, responsibilities or
authority as an employee are materially reduced or diminished from those
in effect on the Change in Control Date without the Executive's consent;
(iii) the Executive's duties, responsibilities, or authority as an
employee are materially reduced or diminished from those in effect on the
Effective Date without the Executive's consent; (iv) the Executive's
compensation or benefits are reduced without the Executive's consent,
unless all Executive-level officers have their compensation or benefits
reduced in the same percentage amount; (v) the Company reduces the
potential earnings of the Executive under any performance-based bonus or
incentive plan of the Company in effect immediately prior to the Change in
Control Date; (vi) the Company requires that the Executive's employment be
based other than at its location on the Effective Date without his
consent; (vii) any purchaser, assign, surviving corporation, or successor
of the Company or its business or assets (whether by acquisition, merger,
liquidation, consolidation, reorganization, sale or transfer of assets or
business, or otherwise) fails or refuses to expressly assume in writing
this Agreement and all of the duties and obligations of the Company
hereunder pursuant to Section 16 hereof; or (viii) the Company breaches
any of the provisions of this Agreement.
(k) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Securities Exchange Act of 1934 and used in
Sections 13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d).
(l) "Target Bonus" shall mean the target bonus (100% level)
established for the Executive for the year in question under the Company's
"Annual Incentive Plan."
(m) "Termination of Employment" shall mean the termination of
the Executive's employment by the Company other than such a termination in
connection with an offer of immediate reemployment by a successor or
assign of the Company or purchaser of the Company or its assets under
terms and conditions which would not permit the Executive to terminate his
employment for Good Reason.
3
4
2. Term. The initial term of this Agreement shall be for the
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date. The Term shall be automatically extended by one additional
day for each day beyond the Effective Date of this Agreement that the Executive
remains employed by the Company until such time as the Company elects to cease
such extension by giving written notice of such to the Executive. (In such
event, the Agreement shall thus terminate on the third anniversary of the
effective date of such notice).
3. Eligibility for Severance Benefits. The Executive shall be
eligible for the benefits described in Paragraph 4 (the "Severance Benefits")
if, (a) during the Term, the Executive has a Termination of Employment
initiated (i) by the Company without Cause, or (ii) by the Executive for Good
Reason, and, in either case, subsection (b) does not apply; or (b) during the
Term (i) there has been a Change in Control and during the two year period
commencing on the Change in Control Date, the Executive has a Termination of
Employment initiated by the Company without Cause or by the Executive for Good
Reason, or (ii) the Executive has a Termination of Employment initiated by the
Company without Cause or by the Executive for Good Reason following the
commencement of any discussion with a third person that ultimately results in a
Change in Control with such third person within 12 months of the commencement
of such discussions (in which case, the date of such discussion shall be
substituted for the Change in Control Date wherever appropriate, including the
definition of "Good Reason" and in Paragraph 4 hereof).
4. Severance Benefit. Upon satisfaction of the requirements set
forth in Paragraph 3, and subject to Paragraphs 5 and 9, the Executive shall be
entitled to the following Severance Benefits:
(a) Cash Payment. The Executive shall be entitled to receive
an amount of cash equal to the Benefit Multiplier times the greater of:
(i) the sum of the Executive's Base Salary as in
effect upon the Termination of Employment, and the greater of
(A) the Executive's Target Bonus as in effect
upon the Termination of Employment or,
(B) the Executive's actual bonus under the
Company's "Annual Incentive Plan" for the year prior to the year
of the Executive's Termination of Employment; or
(ii) the sum of the Executive's Base Salary as in
effect on the Change in Control Date, and the greater of
(A) the Executive's Target Bonus as in effect
upon the Change in Control Date or,
(B) the Executive's actual bonus under the
Company's "Annual Incentive Plan" for the year prior to the
Change in Control Date.
The payment shall be made in a single lump sum within ten days following the
Executive's Termination of Employment.
4
5
(b) Long-Term Incentive Award; Equity-Based Compensation. The
Executive's interest under the Company's long-term incentive plans shall
be fully vested. Any and all (i) options, phantom units, and other awards
granted to Executive to purchase Company stock or which is measured by the
current market value of Company stock and (ii) restricted stock of the
Company, owned by the Executive, shall be fully vested.
(c) Continuation of Benefits.
(i) For the Benefit Period, the Executive shall be
treated as if he or she had continued to be an employee for all
purposes under the Company's Medical Plan, Executive Medical
Reimbursement Plan and Dental Plan. Following this period, the
Executive shall be entitled to receive continuation coverage under Part
Six of Title I of ERISA ("COBRA Benefits) treating the end of this
period as a termination of the Executive's employment (other than for
gross misconduct).
(ii) The Company shall maintain in force, at its own
expense, for the remainder of the Executive's life, the vested life
insurance in effect under the Company's Executive Life Insurance Plan
as of the Change in Control Date or as of the date of Termination of
Employment, whichever is greater.
(d) Relocation Benefit. If within the Benefit Period after
the Executive's Termination of Employment, the Executive gives the Company
written notice that he or she desires to relocate within the continental
United States, the Company will reimburse the Executive for any reasonable
relocation expenses (in accordance with the Company's general relocation
policy for executives as then in effect, or, at the Executive's election,
as in effect on the Change in Control Date) in connection with such
relocation.
(e) Executive Retirement Plan. For the year of the
Executive's Termination of Employment, the Company will make the
contribution to its Executive Retirement Plan (the "Retirement Plan") that
it would have made if the Executive had not had a Termination of
Employment, but in no event less than the percentage contribution it made
for the Executive in the immediately preceding year (and increased to take
account of the additional year of service), in each case taking account of
the Executive's annualized rate of "Compensation" (as defined in the
Retirement Plan) and the percentage of such Compensation that the
Executive is contributing to the Retirement Plan, as of the date of
Termination of Employment, and the Company's matching contribution rate
for such year (or, if greater, the preceding year). The portion of the
Company's matching contribution which is based on the preceding year's
contribution percentage shall be paid to the Executive immediately upon
his Termination of Employment and any additional contribution shall be
paid as soon as it is determined.
(f) Executive Deferred Compensation Plan. For the year of the
Executive's Termination of Employment, the Company will make the
contribution to its Executive Deferred Compensation Plan (the "EDC Plan")
that it would have made if the Executive had not had a Termination of
Employment determined based on the Executive's deferral for such year. At
Executive's election, the Company contribution shall be paid to the
Executive immediately upon his Termination of Employment.
5
6
(g) Disability. For the Benefit Period, the Company shall
provide long-term disability insurance benefits coverage to Executive
equivalent to the coverage that the Executive would have had had he
remained employed under the Company's Long-Term Disability Plan and
Supplemental Long-Term Disability Plan applicable to Executive on the date
of Termination of Employment, or, at the Executive's election, the plan or
plans applicable to Executive as of the Change in Control Date. Should
Executive become disabled during such period, Executive shall be entitled
to receive such benefits, and for such duration, as the applicable plan(s)
provide.
(h) Plan Amendments. The Company shall adopt such amendments
to its employee benefit plans and insurance policies as are necessary to
effectuate the provisions of this Agreement. If and to the extent any
benefits under this Paragraph 4 are not paid or payable or otherwise
provided to the Executive or his dependents or beneficiaries under any
such plan or policy (whether due to the terms of the plan or policy, the
termination thereof, applicable law, or otherwise), then the Company
itself shall pay or provide for such benefits.
5. Golden Parachute Gross-Up. If, in the written opinion of a Big 6
accounting firm engaged by either the Company or the Executive for this purpose
(at the Company's expense), or if so alleged by the Internal Revenue Service,
the aggregate of the benefit payments under Paragraph 4 would cause the payment
of one or more of such benefits to constitute an "excess parachute payment" as
defined in Section 280G(b) of the Internal Revenue Code ("Code"), then the
Company will pay to the Executive an additional amount in cash (the "Gross-Up
Payment") equal to the amount necessary to cause the net amount retained by the
Executive, after deduction of any (i) excise tax on the payments under
Xxxxxxxxx 0, (xx) federal, state or local income tax on the Gross-Up Payment,
and (iii) excise tax on the Gross-Up Payment, to be equal to the aggregate
remuneration the Executive would have received under Section 4, excluding such
Gross-Up Payment (net of all federal, state and local excise and income taxes),
as if Sections 280G and 4999 of the Code (and any successor provisions thereto)
had not been enacted into law. The Gross-Up Payment provided for in this
Paragraph shall be made within ten (10) days after the termination of
Executive's employment, provided however that if the amount of the payment
cannot be finally determined at the time, the Company shall pay to Executive an
estimate as determined in good faith by the Company of such payments (together
with interest at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the date of termination. Any dispute concerning the
application of this Paragraph shall be resolved pursuant to Paragraph 8, and if
Paragraph 9 applies, any reference in this Paragraph to Paragraph 4 shall also
be deemed to include a reference to Paragraph 9 as well.
6. Non-Solicitation.
(a) Executive shall not at any time during the period of his
employment with the Company, or during the one (1) year period immediately
following his Termination of Employment with the Company
("Non-Solicitation Period"), without the prior written consent of the
Company, on behalf of himself or any other person, solicit for employment
or employ any of the current officers or employees of the Company;
provided, however, that nothing contained herein shall prohibit Executive
from hiring employees of the Company when such employment results from
general solicitations for employment.
6
7
(b) Executive shall not at any time during the period of his
employment with the Company, or during the Non-Solicitation Period,
without the prior written consent of the Company, solicit for his own use,
or for the use of any company or person by whom he is employed, or for
whom he may be acting, any of the current customers of the Company, nor
shall he divulge to any other person any information or fact relating to
the management, business (including prospective business), finances, its
customers or the terms of any of the contracts of the Company which has
heretofore or which may hereafter come to the knowledge of Executive which
is not freely available to the public.
(c) Executive shall not, during the Non-Solicitation Period,
in any way defame the Company or disparage its business capabilities,
products, plans or management to any customer, potential customer, vendor,
supplier, contractor, subcontractor of the Company so as to affect
adversely the goodwill or business of the Company.
(d) Executive covenants and agrees that a breach of these
subparagraphs (a), (b) or (c) would immediately and irreparably harm the
Company and that a remedy at law would be inadequate to compensate the
Company for its losses by reason of such breach and therefore that the
Company shall, in addition to any rights and remedies available under this
Agreement, at law or otherwise, be entitled to any injunction to be issued
by any court of competent jurisdiction enjoining and restraining Executive
from committing any violation of these subparagraphs (a), (b) or (c), and
Executive hereby consent to the issuance of such injunction.
(e) For purposes of this Section 6 and in consideration of
this Agreement, this non-solicitation agreement has been separately
negotiated and bargained for, and constitutes a substantial portion of the
consideration for this Agreement.
7. Waiver of Other Severance Benefits. The benefits payable
pursuant to this Agreement are in lieu of any other severance benefits which
may otherwise be payable to the Executive upon termination of employment with
either Xxxxxxx or the Company, whether or not in connection with a Change in
Control (including without limitation, any benefits to which Executive might
otherwise have been entitled under any employment, change in control or
severance agreement or other compensation or employee benefit plan to which
Xxxxxxx was a party or which was assumed by Xxxxxxx), except those benefits
which are to be made available to the Executive as required by applicable law.
8. Disputes. Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall, at the election and
upon written demand of either party, be finally determined and settled by
binding arbitration in the city of Fort Xxxxx, Arkansas, using a single
arbitrator, in accordance with the Labor Arbitration rules and procedures of
the American Arbitration Association, and judgment upon the award may be
entered in any court having jurisdiction thereof. The arbitrator shall have
the power to order specific performance, mandamus, or other appropriate legal
or equitable relief to enforce the provisions of this Agreement. The Company
shall pay all costs of the arbitration and all reasonable attorney's and
accountant's fees of the Executive in connection therewith.
9. Additional Payments Due to Dispute. Notwithstanding anything to
the contrary herein, and without limiting the Executive's rights at law or in
equity, if the Company fails or refuses to timely pay to the Executive the
benefits due under Paragraphs 4 and/or 5 hereof, then the benefits under
Paragraph 4(a) shall be increased and the benefits under Paragraphs 4(c), 4(d),
and 4(g) shall each be continued by one additional day for each day of any such
failure or refusal of the Company to pay. In
7
8
addition, any Gross-Up Payment due under Paragraph 5 shall be increased to take
into account any increased benefits under this Paragraph.
10. No Set-Off. There shall be no right of set-off or counterclaim
in respect of any claim, debt, or obligation against any payment to or benefit
for the Executive provided for in this Agreement.
11. No Mitigation Obligation. The parties hereto expressly agree
that the payment of the benefits by the Company to the Executive in accordance
with the terms of this Agreement will be liquidated damages, and that the
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall any
profits, income, earnings or other benefits from any source whatsoever create
any mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise.
12. Trust. Any payments or installments that may be required to be
made to Executive under this Agreement shall be funded immediately prior to any
Change in Control Date (or, if earlier, within ten (10) days after any
Termination of Employment) by a contribution by the Company of the necessary
amount of cash, as determined by independent actuaries acceptable to both
Executive and the Company, to the irrevocable grantor trust created for such
purpose by the Company, with Chemical Bank as Trustee, dated July 18, 1995, a
copy of which Trust Agreement may be obtained from the Company or the Trustee.
13. Letter of Credit for Legal Fees. In order to ensure the
benefits intended to be provided to the Executive hereunder, immediately prior
to any Change in Control Date the Company shall establish and hereby agrees to
maintain throughout the remaining Term an irrevocable standby Letter of Credit
in favor of the Executive and each other person who is named an Executive under
similar agreements, drawn on a bank selected by the Company (the "Letter of
Credit") which provides for a credit amount of $250,000 being made available to
the Executive against presentation at any time and from time to time of his
clean sight drafts, accompanied by statements of his counsel for fees and
expenses, in an aggregate amount not to exceed $250,000, unless a larger amount
is authorized by either the Chief Executive Officer, General Counsel, Chief
Financial Officer, or an Executive Vice President of the Company.
14. Waiver of Rights with Respect to Xxxxxxx Enterprises, Inc.
Executive hereby waives any rights against Xxxxxxx, including without
limitation any rights under any employment, change in control, or severance
agreement; under any stock option or long-term incentive plan or any other
compensation or employee benefit plan; or any rights he may have by virtue of
the Distribution or Merger constituting a Change in Control under any such
agreement or plan or any other Xxxxxxx compensation or employee benefit plan.
Executive also agrees to the cancellation of his Xxxxxxx stock options and the
substitution of such options with new stock options to be issued by the Company
with similar terms and conditions (including 100% vesting) as the prior
options, other than an increase in the number of such options and a decrease in
the exercise price thereof in order to take into account the effect of the
Distribution. Executive also waives any rights against the Company or Capstone
which he might otherwise have by virtue of the Distribution or Merger
constituting a Change in Control under any such aforementioned Xxxxxxx
agreements or plans.
15. Non-disclosure of Proprietary Information, Surrender of Records;
Inventions and Patents.
(a) Proprietary Information. Executive shall not during the
term of employment or at any time thereafter (irrespective of the
circumstances under which Executive's employment terminates), directly or
indirectly use for his own purpose or for the benefit of any person or
entity
8
9
other than Company, nor otherwise disclose, any proprietary information,
as defined below, to any individual or entity, unless such disclosure has
been authorized in writing by the Company or is otherwise required by law.
For purposes of this Agreement, the term "proprietary information" shall
include, but is not limited to: (a) the name or address of any client or
affiliate of Company or any information concerning the transactions or
relations of any client or affiliate of Company with Company or any of its
shareholders; (b) any information concerning any product, service,
methodology, analysis, presentation, technology or procedure employed by
Company but not generally known to its clients or competitors, or under
development by or being tested by Company but not at the time offered
generally to clients; (c) any information relating to Company's computer
software, computer systems, pricing or marketing methods, capital
structure, operating results, borrowing arrangements or business plans;
(d) any information which is generally regarded as confidential or
proprietary in any line of business engaged in by Company; (e) any
information contained in any of Company's written or oral policies and
procedures or employee manuals; (f) any information belonging to clients
or affiliates of Company which Company has agreed to hold in confidence;
(g) any inventions, innovations or improvements covered by subsection
15(c) below; (h) any other information which Company has reasonably
determined to be confidential or proprietary; and (i) all written,
graphic, electronic and other material relating to any of the foregoing.
Information that is not novel or copyrighted or patented may nonetheless
be proprietary information. Proprietary information, however, shall not
include any information that is or becomes generally known to the
industries in which Company competes through sources independent of
Company or Executive or through authorized publication by Company to
persons other than Company's employees.
(b) Confidentiality and Surrender of Records. Executive shall
not during the term of employment or at any time thereafter (irrespective
of the circumstances under which Executive's employment terminates),
except as required by law, directly or indirectly give or disclose any
"confidential records" (as hereinafter defined) to, or permit any
inspection or copying of confidential records by, any individual or entity
other than in the ordinary course and scope of such individual's or
entity's employment or retention by Company, nor shall he use or retain
any of the same following termination of his employment. Executive shall
promptly return to Company all "confidential records" upon the termination
of Executive's employment with Company. For purposes hereof,
"confidential records" means all correspondence, memoranda, files,
analyses, studies, reports, notes, documents, manuals, books, lists,
financial, operating or marketing records, computer software, magnetic
tape, or electronic or other media or equipment of any kind which may be
in Executive's possession or under his control or accessible to him which
contain any proprietary information as defined in subsection 15(a) above.
All confidential records shall be and remain the sole property of Company
during the term of employment and thereafter.
(c) Inventions, Patents, and Copyrights. All inventions,
innovations or improvements in Company's method of conducting its business
(including policies, procedures, products, improvements, software, ideas
and discoveries, whether or not patentable or copyrightable) conceived or
made by Executive, either alone or jointly with others, during the term
of employment belong to Company. Executive will promptly disclose in
writing such inventions, innovations or improvements to Company and
perform all actions reasonably requested by Company to establish and
confirm such ownership by Company, including, but not limited to,
cooperating with and assisting Company in obtaining patents and copyrights
for Company in the United States and in foreign countries. Any patent or
copyright application filed by Executive within a year after termination
of his employment hereunder shall be presumed to relate to an invention or
work of
9
10
authorship which was made during the term of employment unless Executive
can provide conclusive evidence to the contrary.
16. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger or consolidation
where the Company is not the surviving corporation, or upon any transfer
of all or substantially all of the Company's assets, or any other Change
in Control. The Company shall require any purchaser, assign, surviving
corporation, or successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly
to assume and agree to perform this Agreement in the same manner and to
the same extent the Company would be required to perform if no such
succession had taken place. This Agreement shall be binding upon and
inure to the benefit of the Company and any purchaser, assign, surviving
corporation or successor to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization, transfer of all or substantially all of the
business or assets of the Company, or otherwise (and such purchaser,
assign, surviving corporation or successor shall thereafter be deemed the
"Company" for the purposes of this Agreement), but this Agreement shall
not otherwise be assignable, transferable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and/or
legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer
or delegate this Agreement or any rights or obligations hereunder except
as expressly provided in this Section 16. Without limiting the generality
of the foregoing, the Executive's right to receive payments hereunder
shall not be assignable, transferable or delegable, whether by pledge,
creation of a security interest or otherwise, or otherwise subject to
anticipation, alienation, sale, encumbrance, charge, hypothecation, or
set-off in respect of any claim, debt, or obligation, or to execution,
attachment, levy or similar process, or assignment by operation of law,
other than by a transfer by his will or by the laws of descent and
distribution. Any attempt, voluntarily or involuntarily, to effect any
action prohibited by this Paragraph shall be null, void, and of no effect.
17. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex, telecopy, or certified or registered mail, postage prepaid, or other
similar means of communication, as follows:
(a) If to the Company, addressed to its principal executive
offices to the attention of its Secretary;
(b) If to the Executive, to him or her at the address set
forth below under the Executive's signature; or at any such other address
as either party shall have specified by notice in writing to the other.
10
11
18. Amendments; Waivers. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, signed by the
Executive and by a duly authorized representative of the Company. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform; provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any
right, remedy, or power hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, or power hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, or power provided herein or by law or in equity.
19. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto. The parties further
intend that this Agreement shall constitute the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any judicial, administrative, or other legal proceeding involving
this Agreement.
20. Severability; Enforcement. If any provision of this Agreement,
or the application thereof to any person, place, or circumstance shall be held
by a court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
21. Indemnification. The Company shall indemnify, defend, and hold
the Executive harmless from and against any liability, damages, costs, or
expenses (including attorney's fees) in connection with any claim, cause of
action, investigation, litigation, or proceeding involving him by reason of his
having been an officer, director, employee, or agent of the Company, unless it
is judicially determined, in a final, nonappealable order, that the Executive
was guilty of gross negligence or willful misconduct. The Company also agrees
to maintain adequate directors and officers liability insurance for the benefit
of Executive for the term of this Agreement and for at least three years
thereafter.
22. ERISA. This Agreement is pursuant to the Company's Severance
Plan for Executives (the "Plan") which is unfunded and maintained by the
Company primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees. The Plan
constitutes an employee welfare benefit plan ("Welfare Plan") within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). Any payments pursuant to this Agreement which could
cause the Plan not to constitute a Welfare Plan shall be deemed instead to be
made pursuant to a separate "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA as to which the applicable portions of the document
constituting the Plan shall be deemed to be incorporated by reference. None of
the benefits hereunder may be assigned in any way.
23. Governing Law. This Agreement shall be interpreted,
administered and enforced in accordance with the law of the State of Arkansas,
except to the extent pre-empted by Federal law.
11
12
The parties have duly executed this Agreement as of the date first
written above.
NEW XXXXXXX HOLDINGS, INC. EXECUTIVE
By:
----------------------------------- ------------------------------
Xxxxx X. Xxxxx Name
Chairman and Chief Executive Officer Address
State zip
By:
-----------------------------------
Xxxxxx X. Xxxxxxxxxxx Agreed as to those provisions
Executive Vice President, relating to or affecting
General Counsel and Secretary Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X XXXXXXX ENTERPRISES, INC.
Xxxx Xxxxx, XX 00000
Attention: Secretary By:
----------------------------
Xxxxx X. Xxxxx
Chairman and Chief Executive
Officer
By:
----------------------------
Xxxxxx X. Xxxxxxxxxxx
Executive Vice President,
General Counsel and Secretary
12
