1
Exhibit 10.35
2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of January 4, 2000 (the "EFFECTIVE
DATE") among Xxxxxxx Holdings, Inc., a Delaware corporation ("HOLDINGS"),
Xxxxxxx Company, a Delaware corporation (the "COMPANY"), and Xxxxxxx X. Xxxxx
(the "EXECUTIVE").
WHEREAS, the Executive is possessed of certain experience and expertise
in management; and
WHEREAS, the Company wishes to employ the Executive as its Chairman and
Chief Executive Officer and the Executive wishes to accept such employment.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT.
1.1. AGREEMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, in each case subject to the
terms and conditions set forth herein.
1.2. TERM. The employment of the Executive by the Company shall be for
the period commencing on the Effective Date and expiring on the date on which
termination of employment is effective pursuant to the provisions of Section 8
(the "TERMINATION DATE"). For all purposes of this Agreement, references to the
"term" of the Executive's employment hereunder shall mean the period commencing
on the Effective Date and ending on the Termination Date.
2. POSITION AND DUTIES. The Executive shall serve as Chairman and Chief
Executive Officer of the Company, and shall be accountable to, and shall have
such powers, duties and responsibilities as may from time to time be prescribed
by, the Board of Directors of the Company (the "BOARD"). The Executive shall
perform and discharge, faithfully, diligently, competently and in good faith
such duties and responsibilities. In addition, during the term hereof, the
Company shall cause and maintain the election of the Executive as a member of
the Board, and Holdings shall cause and maintain the election of the Executive
as a member of the board of directors of Holdings. The Executive (a) shall
devote all of his business time and attention and his best efforts and ability
to the business and affairs of the Company and its Subsidiaries and (b) shall
not engage in other business activities whether or not compensated (other than
serving on the board of directors of each of Duke-Weeks Realty Corporation and
American Fidelity Assurance Company) during the term of this Agreement without
prior written consent of the Board. The services of the Executive shall be
performed at the offices of the Company in the Metropolitan Area; PROVIDED,
HOWEVER, that the Executive acknowledges that substantial travel will be
required in view of the
-1-
3
fact that the Company conducts operations and maintain facilities throughout the
United States and elsewhere around the world.
3. COMPENSATION. Subject to all of the terms and conditions hereof and to the
performance by the Executive of his duties and obligations to the Company:
3.1. SALARY. As compensation for services performed during the term of
his employment hereunder, the Company shall pay the Executive a salary at a rate
of $500,000 per annum or such other amount as may from time to time be
established by the Board (such annual rate of salary in effect from time to time
being referred to as the "SALARY"). The Salary shall be payable in accordance
with the payroll practices of the Company. Except as otherwise provided in this
Agreement, the Salary shall be prorated for any period less than a full year.
3.2. ANNUAL BONUS. As additional compensation for services hereunder,
the Executive shall be eligible for a bonus for each Bonus Year commencing on
the first day of each fiscal year and ending on or prior to the last day of the
term hereof. For the sole purpose of calculating Executive's annual bonus for
fiscal year 2000 pursuant to this Section 3.2, the Executive will be presumed to
have commenced employment with the Company as of the first day of fiscal year
2000. The amount of any such bonus shall be determined based upon the
achievement of specified levels of operating performance by the Company for such
Bonus Year measured by the business plan approved by the Board for such fiscal
year (the "EBITDA PERFORMANCE"). The target bonus payable for any Bonus Year
with respect to the EBITDA Performance shall equal 80% of the Salary. The actual
bonus payable for any Bonus Year with respect to the EBITDA Performance shall be
computed as set forth on Exhibit A. Any bonus payable under this Section 3.2 is
referred to herein as an "ANNUAL BONUS".
3.3. STOCK OPTIONS. As soon as practicable after the date of
commencement of the Executive's employment hereunder, the Company shall grant to
the Executive under the Company's 1999 Stock Option Plan stock options (the
"STOCK OPTIONS") to purchase 1,350,000 shares of Common Stock of Holdings. The
Stock Options will have an exercise price of $6.7315 per share of Common Stock.
The Stock Options will be issued pursuant to a stock option certificate in
substantially the form of Exhibit B (the "STOCK OPTION CERTIFICATE"). The Stock
Options will vest on the schedule specified in, and in accordance with the terms
of, the Stock Option Certificate. Notwithstanding the foregoing provisions of
this Section 3.3, in the case of a conflict between this Section 3.3 and the
Stock Option Certificate, the Stock Option Certificate shall govern.
3.4. BUSINESS EXPENSES. During the term of his employment hereunder,
the Executive shall be entitled to receive prompt reimbursement by the Company
for all reasonable business expenses incurred by him on behalf of the Company or
any of its Subsidiaries or Affiliates (in accordance with the policies and
procedures established by the Board from time to time for the Company's
executive officers) in performing services hereunder; PROVIDED, HOWEVER, that
the Executive shall properly account therefor in accordance with requirements
for federal income tax deductibility and the Company's policies and procedures.
2
4
3.5. FRINGE BENEFITS. From the period commencing on the Effective Date
and ending on the earliest to occur of (i) the date the Executive elects to
participate in or receive benefits under any life insurance, health and accident
plans, retirement plans, or other similar fringe benefits made available by the
Company and (ii) March 30, 2002, the Executive shall be entitled to
reimbursement of the premium and deductible payments of the medical and dental
policies provided to the Executive by his former employer Interface, Inc. and
its successors. At the election of the Executive, the Executive shall be
entitled to participate in or receive benefits under any life insurance, health
and accident plans, retirement plans and other similar fringe benefit
arrangements made generally available by the Company to its executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
Notwithstanding any other arrangements that the Company may make available from
time to time to its other executives or key management employees, the Salary,
the bonuses payable under this Agreement and any stock options granted by the
Company to the Executive in accordance with the Agreement shall be in lieu of
the Executive's participation in any other bonus, equity incentive or
equity-type incentive plans established by the Company, except that the
Executive shall be entitled to participate in any supplemental executive
retirement plans, "401(k) plans" and profit sharing plans.
0.1. VACATIONS. During the term of his employment hereunder, the
Executive shall be entitled to 20 paid working days as vacation in each year and
shall also be entitled to all paid holidays given by the Company to its
employees. The paid vacation days shall be prorated for any period of service
hereunder less than a full year. The Executive shall not be entitled to cash
compensation for any vacation time not taken during the term hereof and shall
not be entitled to accrue unused vacation.
3.6. TRANSPORTATION STIPEND. During the term of his employment
hereunder, the Executive shall be entitled to a stipend of $1,000 each month to
cover expenses associated with transportation, including leasing or owning an
automobile; PROVIDED, HOWEVER, that the Executive shall properly account
therefor on his federal and applicable state tax returns and related
documentation in accordance with the requirements for federal income tax
deductibility and the Company's policies and procedures.
3.7. COUNTRY CLUB ALLOWANCE. The Company shall maintain a corporate
membership at The Golf Club of Georgia, and, during the term of his employment
hereunder, the Executive shall be a designated member of such membership. During
the term of his employment hereunder and so long as Executive is a member of
Cherokee Country Club, the Executive shall be entitled to a reimbursement of
monthly membership dues payable to Cherokee Country Club; PROVIDED, HOWEVER,
that the Executive shall properly account therefor in accordance with the
requirements for federal income tax deductibility and the Company's policies and
procedures.
3.8. ORGANIZATIONAL FEES. During the term of his employment hereunder,
the Executive shall be entitled to a reimbursement of up to $5,000 per annum to
cover membership fees in the
3
5
Young Presidents' Organization/World Presidents' Organization and the Society of
International Business Fellows.
4. OFFICES; SUBSIDIARIES AND AFFILIATES.
4.1. GENERALLY. The Executive agrees to serve during the term of his
employment hereunder, if elected or appointed thereto, in one or more positions
as an officer or director of the Company or any of its Subsidiaries or
Affiliates, or as an officer, trustee, director or other fiduciary of any
pension or other employee benefit plan of the Company or any of its Subsidiaries
or Affiliates. Service in such additional positions will be without additional
compensation except for reimbursement of reasonably related business expenses on
the same terms as provided elsewhere in this Agreement.
4.2. INDEMNIFICATION. The Company agrees that in connection with the
Executive's service in additional positions as provided under Section 4.1, the
Executive shall be entitled to the benefit of any indemnification provisions in
the charter and by-laws of the Company and any of its Subsidiaries and
Affiliates for which the Executive serves in such an additional position and any
director and officer liability insurance coverage carried by the Company and any
of its Subsidiaries and Affiliates for which the Executive serves as an officer
or director; PROVIDED, HOWEVER, that this Section 4.2 shall not impose on the
Company or any of its Subsidiaries or Affiliates any obligation to include any
such indemnification provisions in its charter or by-laws or to maintain any
such insurance coverage.
5. UNAUTHORIZED DISCLOSURE; INVENTIONS.
5.1. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
Company and its Subsidiaries and Affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its Subsidiaries or Affiliates and that the Executive may learn of
Confidential Information during the course of employment. The Executive will
comply with the policies and procedures of the Company and its Subsidiaries and
Affiliates for protecting Confidential Information and agrees not to disclose to
any Person (except as required by applicable law or for the proper performance
of his duties and responsibilities to the Company and its Subsidiaries and
Affiliates), or use for his own benefit or gain, any Confidential Information
obtained by the Executive incident to his employment or other association with
the Company or any of its Subsidiaries or Affiliates. The Executive understands
that this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.
-4-
6
5.2. PROTECTION OF DOCUMENTS. All documents, records, tapes and other
media of every kind and description relating to the business, present or
otherwise, of the Company or its Subsidiaries or Affiliates and any copies, in
whole or in part, thereof (the "DOCUMENTS"), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company or its
Subsidiaries or Affiliates. The Executive shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, or at such
earlier time or times as the Board or its designee may specify, all Documents
then in the Executive's possession or control.
5.3. PROPRIETARY RIGHTS. Any and all inventions, discoveries,
developments, methods, processes, compositions, works, supplier and customer
lists (including information relating to the generation and updating thereof),
concepts and ideas (whether or not patentable or copyrightable) conceived, made,
developed, created or reduced to practice by the Executive (whether at the
request or suggestion of the Company or otherwise, whether alone or in
conjunction with others, and whether during regular hours of work or otherwise)
prior to or during the term of his employment by the Company and for one year
thereafter, which may be directly or indirectly useful in, or related to, the
business, ventures or other activities of or products manufactured or sold by
the Company or any of its Subsidiaries or Affiliates or any business or products
contemplated by the Company or any of its Subsidiaries or Affiliates while the
Executive was or is an employee, officer or director of the Company
(collectively, "PROPRIETARY RIGHTS"), shall be promptly and fully disclosed by
the Executive to the Board and shall be the exclusive property of the Company as
against the Executive and his successors, heirs, devisees, legatees and assigns,
and the Executive hereby assigns to the Company his entire right, title and
interest therein and shall promptly deliver to the Company all papers, drawings,
models, data and other material relating to any of the foregoing Proprietary
Rights conceived, made, developed, created or reduced to practice by him as
aforesaid. All copyrightable Proprietary Rights shall be considered "works made
for hire." The Executive shall, upon the Company's request and without any
payment therefor, execute any documents necessary or advisable in the opinion of
the Company's counsel to assign, and confirm the Company's title in, his entire
right, title and interest in the foregoing Proprietary Rights and to direct
issuance of patents or copyrights to the Company with respect to such
Proprietary Rights as are the Company's exclusive property as against the
Executive and his successors, heirs, devisees, legatees and assigns under this
Section 5.3 or to vest in the Company title to such Proprietary Rights as
against the Executive and his successors, heirs, devisees, legatees and assigns,
the expense of securing any such patent or copyright, however, to be borne by
the Company.
6. RESTRICTED ACTIVITIES. The Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the Company
and its Subsidiaries and Affiliates:
6.1. NON-COMPETITION. While the Executive is employed by the Company
and for a period of two years immediately following termination of his
employment (the "NON- COMPETITION PERIOD"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent, employee,
co-venturer or otherwise, compete with the Company or any of its Subsidiaries or
Affiliates within the United States in any Competitive Business or undertake any
-5-
7
planning for any Competitive Business. Without limiting the generality of the
foregoing, during the Non-Competition Period, the Executive will not solicit or
encourage any Person who is or was a customer of the Company or any of its
Subsidiaries or Affiliates to terminate its relationship with any of them, or to
conduct with any other Person any business or activity which such customer
conducted or could conduct with the Company or any of its Subsidiaries or
Affiliates.
6.2. OUTSIDE ACTIVITIES. The Executive agrees that, during his
employment with the Company, he will not undertake any outside activity (other
than serving on the board of directors of each of Duke-Weeks Realty Corporation
and American Home Assurance Company), whether or not competitive with the
business of the Company or any of its Subsidiaries or Affiliates, that could
reasonably give rise to a conflict of interest or otherwise interfere with his
duties and obligations to the Company or any of its Subsidiaries or Affiliates.
6.3. NON-SOLICITATION OF EMPLOYEES. Acknowledging the strong interest
of the Company in an undisrupted workplace, the Executive further agrees that
while he is employed by the Company and for a period of two years immediately
following termination of his employment, the Executive will not (a) hire or
attempt to hire any employee of the Company or any of its Subsidiaries or
Affiliates for employment by any other Person, assist in such hiring by any
Person or seek to persuade any employee of the Company or any of its
Subsidiaries or Affiliates to discontinue employment with the Company or any of
its Subsidiaries or Affiliates or (b) solicit or encourage any independent
contractor providing services to the Company or any of its Subsidiaries or
Affiliates to terminate or diminish its relationship with the Company or any of
its Subsidiaries or Affiliates.
6.4. OWNERSHIP OF SECURITIES. Notwithstanding the provisions of this
Sections 6, the Executive shall have the right to acquire as a passive investor
(with no involvement in the operations or management of the business) up to 1%
of any class of securities which is (a) issued by any Person engaged in a
Competitive Business and (b) publicly traded on a national securities exchange
or over-the-counter market.
7. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed upon him pursuant to Sections 5 and 6. The Executive
agrees that such restraints are necessary for the reasonable and proper
protection of the Company and its Subsidiaries and Affiliates and that each and
every one of the restraints is reasonable in respect to subject matter, length
of time and geographic area. The Executive further acknowledges that, were he to
breach any of the covenants contained in Section 5 or 6, the damage to the
Company would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled to
preliminary and permanent injunctive relief against any breach or threatened
breach by the Executive of any of such covenants, without having to post bond.
The parties further agree that, in the event that any provision of Section 5 or
6 shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.
-6-
8
8. TERMINATION.
8.1. DEATH. The Executive's employment hereunder shall terminate upon
his death.
8.2. INCAPACITY. If the Executive shall have been unable to perform his
duties hereunder by reason of any physical or mental illness, injury or other
incapacity (a) for any period of 60 consecutive days or (b) for a total of 120
days in any period of 12 consecutive calendar months, in the reasonable judgment
of the Board, after consultation with such experts, if any, as the Board may
deem necessary or advisable, the Company may terminate the Executive's
employment hereunder by written notice to the Executive.
8.3. CAUSE. The Company may terminate the Executive's employment
hereunder for Cause at any time upon written notice to the Executive. For the
purposes of this Agreement, the Company shall have "CAUSE" to terminate the
Executive's employment hereunder upon: (a) the Executive's breach of any of his
obligations set forth in this Agreement, which breach is not cured within 15
days after receipt by the Executive from the Board of written notice of such
breach; (b) the Executive's breach of his fiduciary duties as an officer or
director of the Company or any of its Subsidiaries or Affiliates, or as an
officer, trustee, director or other fiduciary of any pension or employee benefit
plan of the Company or any of its Subsidiaries or Affiliates; (c) the
Executive's commission of a felony involving fraud, personal dishonesty or moral
turpitude (whether or not in connection with his employment); or (d) the
Executive's failure to follow the reasonable instructions of the Board, which
failure does not cease within 15 days after receipt by the Executive from the
Board of written notice of such failure.
8.4. OTHER THAN FOR CAUSE. The Company may terminate the Executive's
employment hereunder other than for Cause at any time upon written notice to the
Executive.
8.5. GOOD REASON. The Executive may terminate the Executive's
employment hereunder for Good Reason at any time upon 60 days' prior written
notice to the Company. In the event of termination of the Executive pursuant to
this Section 8.5, the Board may elect to waive the period of notice or any
portion thereof. For the purposes of this Agreement, the Executive shall have
"GOOD REASON" to terminate the Executive's employment hereunder upon: (a)
material diminution in the nature or scope of Executive's responsibilities,
duties or authority, in each case except in the event of termination of the
Executive's employment pursuant to Section 8.1, 8.2, 8.3 or 8.6; PROVIDED,
HOWEVER, that the Company's failure to continue Executive's appointment or
election as a director or officer of any of its Affiliates and any diminution of
the business of the Company or any of its Affiliates, including without
limitation the sale or transfer of any or all of the assets of the Company or
any of its Affiliates, shall not constitute "Good Reason", or (b) material
failure of the Company to provide Executive the Salary and benefits in
accordance with the terms of Section 3 hereof.
8.6. OTHER THAN FOR GOOD REASON. The Executive may terminate his
employment hereunder at any time upon 60 days' prior written notice to the
Company. In the event of
-7-
9
termination of the Executive pursuant to this Section 8.6, the Board may elect
to waive the period of notice, or any portion thereof.
9. COMPENSATION UPON TERMINATION.
9.1. DEATH. In the event of the Executive's death during the term
hereof, the Company shall pay or transfer, as the case may be, to the
Executive's designated beneficiary or, if no beneficiary has been designated by
the Executive, to his estate, (a) his Salary that is earned and unpaid at the
date of death and (b) on the earlier of (i) the date of the release of the
audited financial statements of the Company for the Bonus Year during which
death occurs or (ii) the date which is 120 days after the end of such Bonus
Year, an amount equal to the product of (A) the Annual Bonus that the Executive
would otherwise have earned for such Bonus Year if death had not occurred
MULTIPLIED BY (B) a fraction, the numerator of which is the number of days from
the beginning of such Bonus Year until the date of death and the denominator of
which is 365.
9.2. INCAPACITY. If the Executive's employment shall be terminated by
reason of his incapacity pursuant to Section 8.2, the Company shall (a) continue
to pay the Executive his Salary through the Termination Date and (b) pay the
Executive on the earlier of (i) the date of the release of the audited financial
statements of the Company for the Bonus Year during which termination pursuant
to Section 8.2 occurs or (ii) the date which is 120 days after the end of such
Bonus Year, an amount equal to the product of (A) the Annual Bonus that the
Executive would otherwise have earned for such Bonus Year if termination
pursuant to Section 8.2 had not occurred MULTIPLIED BY (B) a fraction, the
numerator of which is the number of days from the beginning of such Bonus Year
until the date of termination pursuant to Section 8.2 and the denominator of
which is 365.
9.3. CAUSE. If the Company shall terminate the Executive's employment
for Cause, the Company shall have no further obligations to the Executive under
this Agreement other than payment of his Salary through the Termination Date.
9.4. OTHER THAN FOR CAUSE; GOOD REASON. If the Company shall terminate
the Executive's employment pursuant to Section 8.4 or the Executive shall
terminate the Executive's employment pursuant to Section 8.5, then the Company
shall pay to the Executive:
(a) as soon as reasonably practicable after the Termination
Date, his Salary through the Termination Date;
(b) as soon as reasonably practicable after the Termination
Date, his Annual Bonus as described in Section 3.2; provided that for
purposes of computing the Annual Bonus payment under this Section 9.4,
the budgeted EBITDA target on the date the Executive's employment
terminates shall be an amount equal to the product of (A) the budgeted
EBITDA target for the fiscal year in which the Executive's employment
terminates MULTIPLIED BY (B) a fraction, the numerator of which is the
number of days from
-8-
10
the beginning of the Bonus Year during which such termination occurs
until the date of such termination and the denominator of which is 365;
and
(c) until the second anniversary of the Termination Date,
severance at a rate equal to 100% of his Salary in effect at the time
notice of termination is given, such severance to be paid on a monthly
basis or such other time increment as the Executive and the Company
mutually agree.
With respect to any termination of employment to which this Section 9.4 applies,
until the earlier to occur of (1) the second anniversary of the Termination Date
or (2) the date on which the Executive commences other employment in connection
with which the Executive receives medical and dental benefits substantially
comparable to those made available by the Company (including self-employment or
engaging in an enterprise as a sole proprietor or partner) (the "BENEFITS
TERMINATION DATE"), the Company shall, if medical and dental insurance coverage
was not being provided by Interface, Inc. and the Executive was participating in
any Company medical and dental insurance plans pursuant to Section 3.5
immediately prior to the effectiveness of his termination of employment and
subject to any employee contribution applicable to the Executive immediately
prior to such effectiveness, continue to contribute to the cost of the
Executive's participation in such medical and dental insurance plans so long as
the Executive is entitled to continue such participation under applicable law
and plan terms. The obligations of the Company to the Executive under this
Section 9.4 (other than clause (a) of the first sentence of this Section 9.4)
are conditioned upon the Executive's signing a release of claims in the form of
Exhibit C (the "RELEASE") within 28 days of the date on which notice of
termination is given and upon such Release remaining in full force and effect
thereafter. All severance payments under this Section 9.4 will be in the form of
salary continuation, payable in accordance with the normal payroll practices of
the Company and will begin at the Company's next regular payroll period
following the effective date of the Release, but shall be retroactive to the
Termination Date.
9.5. OTHER THAN FOR GOOD REASON. If the Executive shall terminate his
employment pursuant to Section 8.6, the Company shall have no further
obligations to the Executive under this Agreement other than payment of his
Salary through the Termination Date (it being understood that if, in accordance
with Section 8.6, the Board elects to waive the period of notice, or any portion
thereof, the payment of Salary under this Section 9.5 shall continue through the
notice period or any portion thereof so waived).
9.6. POST-TERMINATION OBLIGATIONS GENERALLY. Except as expressly set
forth in this Section 9 and the Stock Option Certificate, the Company shall have
no further obligations to the Executive following expiration of the term of the
Executive's employment hereunder, and performance by the Company of any
obligation specifically provided in this Section 9 shall constitute full
settlement of any claim that the Executive may have on account of such
termination against the Company and its Subsidiaries and Affiliates and all of
their respective past and present officers, directors, stockholders, controlling
Persons, employees, agents, representatives, successors and assigns and all
other others connected with any of them, both individually and in their official
capacities.
-9-
11
10. CONFLICTING AGREEMENTS. Executive hereby represents and warrants that the
execution of this Agreement and the performance of Executive's obligations
hereunder will not breach or be in conflict with any other agreement to which
Executive is a party or is bound and that Executive is not now subject to any
covenants against competition, nonsolicitation or similar covenants that would
affect the performance of Executive's obligations hereunder or would restrict
the Company in its operations, including hiring any additional executives.
Executive has provided the Company with a true and correct copy of all
agreements between Executive and Executive's former employer or employers and
any similar agreements governing Executive's rights and obligations relating to
any former employer. Executive will not disclose to or use on behalf of the
Company any confidential or proprietary information of a third party without
such party's consent.
11. WITHHOLDING. All payments made by the Company under this Agreement shall be
net of any tax or other amounts required to be withheld by the Company under any
applicable law or legal requirement.
12. NOTICES. All notices, requests and demands to or upon the parties hereto to
be effective shall be in writing, by facsimile, by overnight courier or by
registered or certified mail, postage prepaid and return receipt requested, and
shall be deemed to have been duly given or made upon: (a) delivery by hand, (b)
one business day after being sent by nationally recognized overnight courier; or
(c) in the case of transmission by facsimile, when confirmation of receipt is
obtained. Such communications shall be addressed and directed to the parties as
follows (or to such other address as either party shall designate by giving like
notice of such change to the other party):
If to the Executive:
Xxxxxxx X. Xxxxx
0000 Xxxx Xxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to the Company:
Xxxxxxx Company
c/o Fenway Partners, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
-10-
12
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
13. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this Section
13. Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term "Section" refers to
sections of this Agreement, (b) the capitalized term "Exhibit" refers to
exhibits to this Agreement, (c) references to a particular Section include all
subsections thereof, (d) the word "including" shall be construed as "including
without limitation" and (e) references to "$" mean United States dollars.
13.1. "AAA" is defined in Section 19.
13.2. "AFFILIATE" shall mean (a) any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company (or other specified Person), (b) any other Person which, together with
its Affiliates (as defined in clause (a) above), shall, directly or indirectly,
own beneficially or control the voting of at least 10% of the ownership interest
in the Company (or other specified Person) and (c) any other Person of which the
Company (or other specified Person) and its Affiliates (as defined in clauses
(a) and (b) above) shall, directly or indirectly, own beneficially or control
the voting of at least 10% of any class of outstanding capital stock or other
evidence of beneficial interest or of any interest as a general partner or joint
venturer.
13.3. "ANNUAL BONUS" is defined in Section 3.2.2.
13.4. "BENEFITS TERMINATION DATE" is defined in Section 9.4.
13.5. "BONUS YEAR" means fiscal year of the Company, PROVIDED, HOWEVER,
that in the event the fiscal year of the Company is changed, any calculations
made under Section 3.2 and Exhibit A shall be proportionately adjusted as the
Board, in its sole and absolute discretion, shall deem appropriate.
13.6. "BOARD" is defined in Section 2.
13.7. "CAUSE" is defined in Section 8.3.
13.8. "COMMON STOCK" means the common stock, $.01 par value, of
Holdings.
13.9. "COMPANY" is defined in the preamble to this Agreement.
-11-
13
13.10. "COMPETITIVE BUSINESS" means any business conducted or proposed
to be conducted by the Company or any of its Subsidiaries during the term of the
Executive's employment with the Company.
13.11. "CONFIDENTIAL INFORMATION" means any and all information of the
Company and its Subsidiaries and Affiliates that is not generally known by
others with whom they compete or do business, or with whom they actively plan to
compete or do business, including such information relating to (a) the
development, research, testing, manufacturing, marketing and financial
activities of the Company and its subsidiaries, (b) the Products, (c) the costs,
sources of supply, financial performance and strategic plans of the Company and
its Subsidiaries and Affiliates, (d) the identity and special needs of the
customers of the Company and its Subsidiaries and Affiliates and (e) the people
and organizations with whom the Company and its Subsidiaries and Affiliates have
business relationships and those relationships, but excluding information which
(i) is generally available to and known by the public or (ii) is or becomes
known on a non-confidential basis from a source other than the Executive.
13.12. "DOCUMENTS" is defined in Section 5.2.
13.13. "EBITDA PERFORMANCE" is defined in Section 3.2.
13.14. "EFFECTIVE DATE" is defined in the preamble.
13.15. "EXECUTIVE" is defined in the preamble.
13.16. "FENWAY" means Fenway Capital Partners Fund, L.P., a Delaware
limited partnership, and Fenway Capital Partners Fund II, L.P., a Delaware
limited partnership.
13.17. "GOOD REASON" is defined in Section 8.5.
13.18. "HOLDINGS" means Xxxxxxx Holdings, Inc., a Delaware
corporation.
13.19. "METROPOLITAN AREA" means the Atlanta, Georgia metropolitan
area.
13.20. "NON-COMPETITION PERIOD" is defined in Section 6.1.
13.21. "PERSON" means any individual, partnership, corporation,
association, trust, joint venture, limited liability company, unincorporated
organization or entity, and any government, governmental department or agency
or political subdivision thereof.
13.22. "PRODUCTS" means all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or put
into use by the Company or any of its Subsidiaries or Affiliates, together with
all services provided or planned by the Company or any of its Subsidiaries or
Affiliates, during the Executive's employment.
-12-
14
13.23. "PROPRIETARY RIGHTS" is defined in Section 5.3.
13.24. "RELEASE" is defined in Section 9.4.
13.25. "SALARY" is defined in Section 3.1.
13.26. "STOCK OPTION CERTIFICATE" is defined in Section 3.3.
13.27. "STOCK OPTIONS" is defined in Section 3.3.
13.28. "SUBSIDIARY" means any Person of which the Company (or other
specified Person) shall, directly or indirectly, own beneficially or control the
voting of at least a majority of the outstanding capital stock (or other shares
of beneficial interest) entitled to vote generally or at least a majority of the
partnership, joint venture or similar interests, or in which the Company (or
other specified Person) or a Subsidiary thereof shall be a general partner or
joint venturer without limited liability.
13.29. "TERMINATION DATE" is defined in Section 1.2.
14. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is approved by the
Board and agreed to in writing by the Executive and such officer as may be
specifically authorized by the Board in connection with such approval. No
waiver by either party hereto at any time of compliance with or of any breach
by the other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement and the legal relations created
thereby shall be governed by the domestic substantive laws of the State of
Georgia without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction. The Executive acknowledges and agrees that, because the
Company's legal remedies may be inadequate in the event of a breach of, or
other failure to perform, any of the covenants and agreements set forth in
Section 5 or 6 by the Executive, the Company may, in addition to obtaining any
other remedy or relief available to it (including damages at law), enforce the
provisions of Sections 5 and 6 by injunction and other equitable relief.
15. SEVERABILITY. If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
-13-
15
16. COUNTERPARTS. This Agreement may be executed in any one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement (together with the Stock Option
Certificate) constitutes the entire agreement between the parties hereto, and
supersedes any and all prior communications, agreements and understandings,
written or oral, with respect to the terms and conditions of the Executive's
employment with the Company.
18. ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
upon (a) the Executive, his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and (b)
the Company and its successors (including by means of reorganization, merger,
consolidation or liquidation) and permitted assigns. The Company may assign
this Agreement to any of its Subsidiaries or to any successor of the Company by
reorganization, merger, consolidation or liquidation and any transferee of all
or substantially all of the business or assets of the Company or of any
division or line of business of the Company with which the Executive is at any
time associated. The Company requires the personal services of the Executive
hereunder and the Executive may not assign this Agreement.
19. ARBITRATION. With the exception of Sections 5 and 6, any unresolved dispute
or controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration, conducted by a single arbitrator in
Atlanta, Georgia in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect; PROVIDED, HOWEVER, that the parties may agree to use an arbitrator
other than those provided by the AAA. The arbitrator shall not have the
authority to add to, detract from, or modify, any provision hereof nor to award
punitive damages to any injured party. The arbitrator shall have the authority
to order back-pay, severance compensation, reimbursement of costs (including
those incurred to enforce this Agreement), together with interest thereon. A
decision by a the arbitrator shall be final and binding. Judgment may be
entered on the arbitrator's award in any court having competent jurisdiction.
Responsibility for bearing the cost of the arbitration shall be determined by
the arbitrator and shall be proportional to the arbitrator's decision on the
merits.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seal, as of the date first above written.
THE COMPANY:
XXXXXXX COMPANY
By_________________________________
Name:
Title:
-14-
16
HOLDINGS (SOLELY FOR
PURPOSES OF SECTION 2
HEREOF):
XXXXXXX HOLDINGS, INC.
By: ___________________________________
Name:
Title:
THE EXECUTIVE:
-----------------------------------
Xxxxxxx X. Xxxxx
-15-
