EMPLOYMENT AGREEMENT
Exhibit
10.17
AGREEMENT
entered into as of August 14th, 2008, by and
between XXXXXXXX CORPORATION, an Iowa corporation (the "Company"), and XXXX X.
XXXXXX ("Executive"), to become effective August 12, 2008 ("Effective
Date").
WITNESSETH:
WHEREAS,
Executive has been employed by the Company as Chief Development Officer, General
Counsel & Secretary, Xxxxxxxx Corporation; and
WHEREAS,
the Company wishes to continue to employ Executive pursuant to the terms and
conditions hereof, and in order to induce Executive to enter into this agreement
(the "Agreement") and to secure the benefits to accrue from his performance
hereunder is willing to undertake the obligations assigned to it herein;
and
WHEREAS,
Executive is willing to continue his employment with the Company under the terms
hereof and to enter into the Agreement;
NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Position; Duties;
Responsibilities.
1.1
Xxxxxxxx shall employ Executive as its Chief Development Officer, General
Counsel & Secretary, reporting to Xxxxx Xxxx (or his successor, if
applicable). While employed hereunder, Executive shall have such responsibility
and authority as has historically attached to being Meredith's Chief Development
Officer, General Counsel & Secretary.
1.2
During the course of his employment, Executive agrees to devote his full time
and attention and give his best efforts and skills to furthering the business
and interests of the Company, which, subject to the mutual agreement of
Executive and Xxxxx Xxxx (or his successor, if applicable), which shall not be
unreasonably withheld, may include Executive volunteering his time and efforts
on behalf of charitable, civic, professional organizations and boards of other
corporations.
2. Term.
The term
of employment under this Agreement shall commence as the Effective Date, and
shall continue through June 30, 2011, unless sooner terminated in accordance
with this Agreement, and thereafter as herein provided. Executive's term of
employment shall automatically renew for subsequent one (1) year terms, the
first of which would begin on July 1, 2011, subject to the terms of this
Agreement unless either party gives written notice six (6) months or more prior
to the expiration of the then existing term of its decision not to renew (the
"Term").
In the
event this Agreement expires at the end of the Term, as extended if applicable,
after the Company has delivered a Non-Renewal Notice to Executive, such
termination of Executive's employment with the Company will be treated for all
purposes hereunder as a termination of employment by the Company Without Cause
pursuant to Section 9.4.
3. Base
Salary.
3.1 The
Company shall pay Executive a base salary at the annual rate of Six Hundred
Thousand Dollars ($600,000.00) ("Base Salary"), retroactive to July 1, 2008 and
continuing through June 30, 2009, payable in accordance with the standard
payroll practices of the Company.
3.2 It is
understood that the Base Salary is to be Executive's minimum annual compensation
during the Term. The Base Salary may increase beginning July 1, 2009 at the
discretion of the Compensation Committee of the Company's Board of Directors
("Compensation Committee"). Base Salary shall include all such increased
amounts, and, if increased, Base Salary shall not thereafter be
decreased.
4. Long-Term Incentive
Plans.
During
the Term of this Agreement, Executive shall be eligible to participate in all
long-term incentive plans, including, without limitation, stock incentive plans
adopted by the Company and in effect (collectively, "Long-Term Incentive
Plans"), at levels of awards to be granted by the Compensation Committee
commensurate with the level of Executive's responsibilities and performance
thereof. At its regular August 2008 meeting, the Compensation Committee, in the
exercise of its discretion, shall approve an award to Executive of:
(a) 65,000 non-qualified stock options with a three (3) year cliff vesting
schedule and a strike price equal to the fair market value of Xxxxxxxx common
stock on the date of such award, and (b) 10,000 Restricted Stock of
Xxxxxxxx common stock with a three (3) year cliff vesting schedule.
5. Bonus.
5.1
During the Term of this Agreement, Executive shall be eligible to participate in
the Xxxxxxxx Management Incentive Plan (or any successor or replacement annual
incentive plan of the Company) ("MIP"), for such periods as it continues in
effect, subject to the terms of the MIP, and to the discretion vested in the
Compensation Committee under the MIP; provided, however, that the percentage of
Base Salary payable as a target bonus under the MIP shall not be less than
Seventy Percent (70%) (actual Company financial results may result in an actual
bonus paid to Executive equal to less than or more than Seventy Percent (70%) of
Base Salary).
5.2 The
MIP bonus pursuant to this Section 5.1 shall be paid to Executive in conformance
with the Company's normal MIP bonus pay policies following the end of the
respective fiscal year. For the purpose of Section 5.1, MIP bonuses paid with
respect to the fiscal year shall include payments made outside of the fiscal
year but for such fiscal year and shall exclude payments made in the fiscal year
that are for another fiscal year.
6. Short-Term
Disability.
During
any period of short-term disability, the Company will continue to pay to
Executive the Base Salary throughout the period of short-term disability, but in
no event beyond the end of Term. In addition, Executive will continue
to receive all rights and benefits under the benefit plans and programs of the
Company in which Executive is a participant as determined in accordance with the
terms of such plans and programs, and Executive shall be eligible to receive the
benefit of his target MIP for the initial year in which the short-term
disability occurs without reduction for the period of short-term
disability. In the event of Executive's death during a period of
short-term disability, the provisions of Section 9.1 shall apply. For
the purposes of this Agreement, short-term disability shall be defined as the
incapacitation of Executive by reason of sickness, accident or other physical or
mental disability which continues for a period not to exceed the fifth month
anniversary of the date of the cause or onset of such
incapacitation. All benefits provided under this Section 6 shall be
in replacement of and not in addition to benefits payable under the Company's
short-term and long-term disability plan(s), except to the extent such
disability plan(s) provide greater benefits than the disability benefits
provided under this Agreement, in which case the applicable disability plan(s)
would supersede the applicable provisions of this Agreement. In the event
Executive is determined to be permanently disabled (as determined under Section
9.2), the provisions of Section 9.2 shall apply.
7. Employee Benefit
Plans.
7.1
During the Term of this Agreement and subject to all eligibility requirements,
and to the extent permitted by law, Executive will have the opportunity to
participate in all employee benefit plans and programs generally available to
the Company's employees in accordance with the provisions thereof as in effect
from time to time, including, without limitation, medical coverage, group life
insurance, holidays and vacations, Xxxxxxxx Savings and Investment Plan (401k)
and the Xxxxxxxx Employees' Retirement Income Plan, but not including the
Company's short-term and long-term disability plans, except to the extent that
such disability plans provide greater benefits than the disability benefits
provided under this Agreement, in which case the applicable disability plan
would supersede the applicable provisions of this Agreement.
7.2 In
addition to benefits described in Section 7.1 during the Term of this Agreement,
Executive shall also receive or participate in, to the extent permitted by law,
the various perquisites and plans generally available to officers of the Company
in accordance with the provisions thereof as in effect from time to time
including, without limitation, the following perquisites to the extent the
Company continues to offer them: an automobile or automobile allowance, tax and
estate planning, and executive life insurance (if insurable). Executive shall
also be reimbursed for the regular annual dues for one country club incurred by
Executive in furtherance of the Company's business. All such
reimbursements or in-kind benefits shall be payable by the Company on or before
the last day of Executive’s taxable year following the taxable year in which the
expense was incurred. The expenses paid or in-kind benefits provided
by the Company during any taxable year of Executive will not affect the expenses
paid or in-kind benefits provided by the Company in another taxable
year. This right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit. In addition, Executive shall
participate in the Xxxxxxxx Replacement Benefit Plan and the Xxxxxxxx
Supplemental Benefit Plan.
8. Expense
Reimbursements.
During
Executive's employment with the Company, Executive will be entitled to receive
reimbursement by the Company for all reasonable, out-of-pocket expenses incurred
by him (in accordance with policies and procedures established by the Company),
in connection with his performing services hereunder, provided Executive
properly accounts therefor. All such reimbursements shall be payable
by the Company on or before the last day of Executive’s taxable year following
the taxable year in which the expense was incurred. The expenses paid by the
Company during any taxable year of Executive will not affect the expenses paid
by the Company in another taxable year. This right to reimbursement
is not subject to liquidation or exchange for another benefit.
9. Consequences of Termination
of Employment.
9.1 Death. In the event
of the death of Executive during the Term of this Agreement or during the period
when payments are being made pursuant to Sections 6 or 9.2, this Agreement shall
terminate and all obligations to Executive shall cease as of the date of death
except that, (a) the Company will pay to the legal representative of his estate
in substantially equal installments the Base Salary until the end of the month
of the first anniversary of Executive's death with each installment treated as a
separate “payment” for purposes of Section 409A of the Code, such that any
payment that would otherwise be payable within 2 ½ months after Executive’s
taxable year in which his employment with the Company is terminated or, if
later, within 2 ½ months after the end of the Company’s taxable year in which
Executive’s employment with the Company is terminated (the “Short Term Deferral
Period”), is exempt from Section 409A of the Code, and (b) all rights and
benefits of Executive under the benefit plans and programs of the Company in
which Executive is a participant, will be provided as determined in accordance
with the terms and provisions of such plans and programs. Any MIP bonus (or
amounts in lieu thereof) pursuant to Section 5, payable for the fiscal year in
which Executive's death occurs, shall be determined by the Compensation
Committee at its meeting following the end of such fiscal year pro rata to the
date of death and promptly paid to Executive's estate. All awards of restricted
stock, stock options and any other benefits under the Long-Term Incentive Plans
shall be handled in accordance with the terms of the relevant plan and
agreements entered into between Executive and the Company with respect to such
awards.
9.2 Disability. If
Executive shall become permanently incapacitated by reasons of sickness,
accident or other physical or mental disability, as such incapacitation is
certified by a physician chosen by the Company and reasonably acceptable to
Executive (if he is then able to exercise sound judgment), and shall therefore
be unable to perform any substantial gainful activity, then the employment of
Executive hereunder and this Agreement may be terminated by Executive or the
Company upon thirty (30) days' written notice to the other party following such
certification. Should Executive not acquiesce (or should he be unable to
acquiesce) in the selection of the certifying doctor, a doctor chosen by
Executive (or if he is not then able to exercise sound judgment, by his spouse
or personal representative) and reasonably acceptable to the Company shall be
required to concur in the medical determination of incapacitation, failing which
the two doctors shall designate a third doctor whose decision shall be
determinative as of the end of the calendar month in which such concurrence or
third-doctor decision, as the case may be, is made. After the final
certification is made and the 30-day written notice is provided, the Company
shall pay to Executive, at such times as Base Salary provided for in Section 3
of this Agreement would normally be paid, 100% of Base Salary for the first
twelve months following such termination, 75% of Base Salary for the next
twelve-month period and 50% of Base Salary for the remaining period of what
would have constituted the current Term of employment but for termination by
reason of disability with each installment treated as a separate “payment” for
purposes of Section 409A of the Code, such that any payment that would otherwise
be payable during the Short Term Deferral Period is exempt from Section 409A of
the Code. Following the termination pursuant to this Section 9.2, the Company
shall pay or provide to Executive such other rights and benefits of
participation under the employee benefit plans and programs of the Company to
the extent that such continued participation is not otherwise prohibited by
applicable law or by the express terms and provisions of such plans and
programs. Furthermore, nothing contained in this Section 9.2 shall preclude
Executive from receiving the benefit of his target MIP bonus for the initial
year in which a short-term disability occurs pursuant to the provisions of
Section 6. All benefits provided under this Section 9.2 shall be in replacement
of and not in addition to benefits payable under the Company's short-term and
long-term disability plans, except to the extent such disability plans provide
greater benefits than the disability benefits provided under this Agreement, in
which case the applicable disability plan(s) would supersede the applicable
provisions of this Agreement. All awards of restricted stock, stock options and
any other benefits under the Long-Term Incentive Plans shall be handled in
accordance with the terms of the relevant plan and agreements entered into
between Executive and the Company with respect to such awards.
9.3 Due Cause. The
Company may terminate Executive's employment, remove him as an officer of the
Company and terminate this Agreement at any time for Due Cause. In the event of
such termination for Due Cause, Executive shall continue to receive Base Salary
provided for in this Agreement only through the date of such termination for Due
Cause. Executive shall be entitled to no further benefits under this Agreement,
except that any rights and benefits Executive may have under the employee
benefit plans and programs of the Company, in which Executive is a participant,
shall be determined in accordance with the terms and provisions of such plans
and programs. Executive understands and agrees that in the event of the
termination of employment, removal as an officer and termination of this
Agreement pursuant to this Section 9.3: (a) All awards of restricted stock,
stock options and any other benefits under the Long-Term Incentive Plans shall
be handled in accordance with the terms of the relevant plan and agreements
entered into between Executive and the Company with respect to such awards and
(b) the Company shall have no further obligation to pay any bonus to Executive
under the terms of the MIP or this Agreement, but that the obligations of
Executive under Section 10 shall remain in full force and effect. The term "Due
Cause" shall mean (i) the willful and continued failure of Executive to attempt
to perform substantially his duties with the Company (other than any such
failure resulting from Disability), after a demand for substantial performance
is delivered to Executive, which specifically identifies the manner in which
Executive has not attempted to substantially perform his duties and for those
matters which are subject to cure, a ten (10) day notice to cure is provided, or
(ii) the engaging by Executive in willful misconduct which is materially
injurious to the Company, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the part of Executive shall be
considered "willful" unless it is done, or omitted to be done, by Executive in
bad faith and without reasonable belief that Executive's action or omission was
in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best interests of
the Company.
9.4 Without Cause. The
other provisions of this Agreement notwithstanding, the Company may terminate
Executive's employment, remove him as an officer and terminate this Agreement at
any time for whatever reason it deems appropriate, with or without cause and
with or without prior notice. In the event of such a termination of Executive's
employment and this Agreement, Executive shall have no further obligations of
any kind under or arising out of the Agreement (except for the obligations of
Executive under Section 10) and the Company shall be obligated only to promptly
pay Executive within the Short Term Deferral Period the following in a lump sum
payment: (a) 170 percent of Base Salary through the end of the then current Term
of this Agreement (the "Remaining Term") as provided for under Section 2 of this
Agreement, but no less than a total of eighteen (18) months of 170 percent of
Base Salary; and (b) any other amounts due and owing not then paid; provided,
however, that in the event that as a result of such termination of employment
Executive would otherwise be entitled to a severance payment (a "Change of
Control Severance Payment") under Section 4 of the Amended and Restated
Severance Agreement dated as of the 30th day of December, 2008, between Executive
and the Company (the "Severance Agreement"), Executive shall be entitled to the
amounts described in clause (b) above and the greater of: (i) the cash severance
benefits described in clause (a) of this sentence and (ii) the cash severance
benefits described in Section 4(a) of the Severance Agreement, but in no event
to both payments.
After the
date of termination under this Section 9.4 or Section 9.6, Executive shall not
be treated as an employee for purposes of the Company's employee benefit plans
or programs even though he may continue to receive payments as provided in this
Section 9.4, except: that Executive and his eligible dependents shall
continue, to the extent permitted by law, to be covered by health and welfare
insurance plans or programs in which Executive and his eligible dependents
participate immediately prior to Executive's termination of employment for the
Remaining Term; provided, however, that if during such time period Executive
should enter into employment with a new employer and become eligible to receive
comparable insurance benefits, the continued insurance benefits described herein
shall automatically cease. In the event that Executive is ineligible, for
whatever reason, to continue to be so covered with respect to any of the
above-referenced plans or programs, the Company shall provide substantially
equivalent coverage through other sources (determined on an after-tax basis). In
the event Executive would otherwise be entitled to a Change of Control Severance
Payment under the Severance Agreement as a result of a termination of employment
under this Section 9.4, Executive may elect to receive the continued health and
welfare insurance benefits under this Section 9.4 or under Section 4(b) of the
Severance Agreement, but in no event both benefits.
Furthermore,
in the event of a termination Without Cause, Executive shall be presumed to have
met eligibility requirements specified in Section 2.4 of the Xxxxxxxx
Replacement Benefit Plan and the Xxxxxxxx Supplemental Benefit Plan or any
successor thereto and he shall be entitled to the amounts that have accrued
under such plans through the date of his termination without cause. All awards
of restricted stock and stock options shall automatically vest and be
exercisable for the full unexpired term of the option.
Executive
agrees that the payments described in this Section 9.4 shall be full and
adequate compensation to Executive for all damages Executive may suffer as a
result of the termination of his employment pursuant to this Sections 9.4 or
9.6, and in consideration of the payments and benefits provided in this Section
9.4, Executive agrees to execute a Waiver and Release Agreement in the form
attached hereto as Attachment A; provided, however, that, except as specifically
provided for under this Section 9.4, any rights and benefits Executive may have
under the employee benefit plans and programs of the Company, in which Executive
is a participant, shall be determined in accordance with the terms and
provisions of such plans and programs.
9.5 Employee Voluntary.
In the event Executive terminates his employment of his own volition prior to
the end of the term of this Agreement, except for a termination as described in
Section 9.6 and except for termination for Good Reason as specifically provided
otherwise in the Severance Agreement, such termination shall constitute a
voluntary termination and in such event the Company's only obligation to
Executive shall be to make Base Salary payments provided for in this Agreement
through the date of such voluntary termination. Any rights and benefits
Executive may have under the employee benefit plans and programs of the Company,
in which he is a participant, shall be determined in accordance with the terms
and provisions of such plans and programs. Executive understands and agrees that
in the event of the termination of employment pursuant to this Section 9.5: (a)
All awards of restricted stock, stock options and any other benefits under the
Long-Term Incentive Plans shall be handled in accordance with the terms of the
relevant plan and agreements entered into between Executive and the Company with
respect to such awards; and (b) the Company shall have no further obligation to
pay any bonuses to Executive under the terms of the MIP or this
Agreement.
9.6 Change in Title, Duties or
Reporting Relationship. If at any time prior to the end of the Term of
this Agreement (a) an adverse change is made to Executive's title as Chief
Development Officer, General Counsel & Secretary, (b) an adverse material
change is made with respect to Executive's having such responsibility and
authority as has historically attached to being Chief Development Officer,
General Counsel & Secretary, or (c) a change is made in Executive's
reporting relationship to Xxxxx Xxxx or his successor, Executive shall have the
right to terminate his employment with the Company after first giving the
Company written notice of the violation within ninety (90) days of its initial
existence and providing a period of thirty (30) days in which the violation may
be cured and by thereafter, if such violation has not been corrected or cured,
by giving written notice within ninety (90) days of his termination,
and such termination shall be deemed to be termination by the Company without
"Due Cause," and such termination shall be treated in accordance with the terms
of Section 9.4 above.
9.7 The
Company agrees to continue Executive's coverage under such directors and
officers' liability insurance policies as shall from time to time be in effect
for active officers and employees for not less than six years following
Executive's termination of employment.
10. Covenants of
Executive.
10.1
Executive acknowledges that as a result of the services to be rendered to the
Company hereunder, Executive will be brought into close contact with many
confidential affairs of the Company, its subsidiaries and affiliates, not
readily available to the public. Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; that the business of the Company is
international in scope; that its goods and services are marketed throughout the
United States and various parts of the world and that the Company competes with
other organizations that are or could be located in nearly any part of the
United States and in various parts of the world.
10.2 In
recognition of the foregoing, Executive covenants and agrees that, except as is
necessary in providing services under this Agreement or to the extent necessary
to comply with law or the valid order of a court or government agency of
competent jurisdiction, Executive will not knowingly use for his own benefit nor
knowingly divulge any Confidential Information and Trade Secrets of the Company,
its subsidiaries and affiliated entities, which are not otherwise in the public
domain and, so long as they remain Confidential Information and Trade Secrets
not in the public domain, will not intentionally disclose them to anyone outside
of the Company either during or after his employment. For the purposes of this
Agreement, "Confidential Information and Trade Secrets" of the Company means
information which is secret to the Company, its subsidiaries and affiliated
entities. It may include, but is not limited to, information relating to the
magazines, books, publications, products, services, television stations, real
estate franchise operations, new and future concepts and business of the
Company, its subsidiaries and affiliates, in the form of memoranda, reports,
computer software and data banks, customer lists, employee lists, books,
records, financial statements, manuals, papers, contracts and strategic plans.
As a guide, Executive is to consider information originated, owned, controlled
or possessed by the Company, its subsidiaries or affiliated entities which is
not disclosed in printed publications stated to be available for distribution
outside the Company, its subsidiaries and affiliated entities as being secret
and confidential. In instances where doubt does or should reasonably be
understood to exist in Executive's mind as to whether information is secret and
confidential to the Company, its subsidiaries and affiliated entities, Executive
agrees to request an opinion, in writing, from Meredith's Chief Executive
Officer.
10.3
Anything to the contrary in this Section 10 notwithstanding, Executive shall
disclose to the public and discuss such information as is customary or legally
required to be disclosed by a Company whose stock is publicly traded, or that is
otherwise legally required to disclose, or that is in the best interests of the
Company to do so.
10.4
Executive will deliver promptly to the Company on the termination of his
employment with the Company, or at any other time the Company may so request,
all memoranda, notes, records, reports and other documents relating to the
Company, its subsidiaries and affiliated entities, and all property owned by the
Company, its subsidiaries and affiliated entities, which Executive obtained
while employed by the Company, and which Executive may then possess or have
under his control.
10.5
During and for a period of twenty-four (24) months after the termination of
employment with the Company (except that the time period of such restrictions
shall be extended by any period during which Executive is in violation of this
Section 10.5), Executive will not knowingly interfere with, disrupt or attempt
to disrupt, any then existing relationship, contractual or otherwise between the
Company, its subsidiaries or affiliated entities, and any customer, client,
supplier, or agent, or knowingly solicit, or assist any other entity in
soliciting for employment, any person known to Executive to be an agent or
executive employee of the Company, its subsidiaries, or affiliated entities, it
being understood that the right to seek or enter into contractual arrangements
with independent contractors, including, without limitation, consultants,
professionals, authors, advertisers and the like, shall not be abridged by
reason of this Section 10. In addition, in the event of a voluntary termination
under Section 9.5, during and for a period of twenty-four (24) months after the
termination of employment with the Company, Executive will not render services
directly or indirectly as an employee, officer, director, consultant,
independent contractor or in any other capacity to any person or entity that is
a competitor of the Company.
10.6
Executive will promptly disclose to the Company all inventions, processes,
original works of authorship, trademarks, patents, improvements and discoveries
related to the business of the Company, its subsidiaries and affiliated entities
(collectively "Developments"), conceived or developed during Executive's
employment with the Company and based upon information to which he had access
during the term of employment, whether or not conceived during regular working
hours, through the use of the Company time, material or facilities or otherwise.
All such Developments shall be the sole and exclusive property of the Company,
and upon request Executive shall deliver to the Company all outlines,
descriptions and other data and records relating to such Developments, and shall
execute any documents deemed necessary by the Company to protect the Company's
rights hereunder. Executive agrees upon request to assist the Company to obtain
United States or foreign letters patent and copyright registrations covering
inventions and original works of authorship belonging to the Company hereunder.
If the Company is unable because of Executive's mental or physical incapacity to
secure Executive's signature to apply for or to pursue any application for any
United States or foreign letters patent or copyright registrations covering
inventions and original works of authorship belonging to the Company hereunder,
then Executive hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as his agent and attorney in fact, to act
for and in his behalf and stead to execute and file any such applications and to
do all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by him. Executive hereby waives and quitclaims to the
Company any and all claims, of any nature whatsoever, that he may hereafter have
for infringement of any patents or copyright resulting from any such application
for letters patent or copyright registrations belonging to the Company
hereunder.
10.7
Executive agrees that the remedy at law for any breach or threatened breach of
any covenant contained in this Section 10 may be inadequate and that the
Company, in addition to such other remedies as may be available to it, in law or
in equity, shall be entitled to injunctive relief without bond or other
security.
10.8
Although the restrictions contained in Sections 10.1, 10.2, 10.4 and 10.5 above
are considered by the parties hereto to be fair and reasonable in the
circumstances, it is recognized that restrictions of such nature may fail for
technical reasons, and accordingly it is hereby agreed that if any of such
restrictions shall be adjudged to be void or unenforceable for whatever reason,
but would be valid if part of the wording thereof were deleted, or the period
thereof reduced or the area dealt with thereby reduced in scope, the
restrictions contained in Section 10.1, 10.2, 10.4 and 10.5 shall be enforced to
the maximum extend permitted by law, and the parties consent and agree that such
scope or wording may be accordingly judicially modified in any proceeding
brought to enforce such restrictions.
10.9
Notwithstanding that Executive's employment hereunder may expire or be
terminated as provided in Sections 2 or 9 above, this Agreement shall continue
in full force and effect insofar as is necessary to enforce the covenants and
agreements of Executive contained in this Section 10. In addition, the Company
obligations under Sections 9, 11 and 19 shall continue in full force and effect
with respect to Executive or his estate.
11. Arbitration.
The
parties shall use their best efforts and good will to settle all disputes by
amicable negotiations. The Company and Executive agree that, with the express
exception of any dispute or controversy arising under Section 9.2 or Section 10
of this Agreement or as may be required under Section 3(g) of the Severance
Agreement, any controversy or claim arising out of or in any way relating to
Executive's employment with the Company, including, without limitation, any and
all disputes concerning this Agreement and the termination of this Agreement
that are not amicably resolved by negotiation, shall be settled by arbitration
in Des Moines, Iowa, or such other place agreed to by the parties, as
follows:
(a) Any
such arbitration shall be heard before an arbitrator who shall be impartial.
Except as the parties may otherwise agree, the arbitrator shall be appointed by
the American Arbitration Association, from its panel of commercial arbitrators,
in accordance with its rules and procedures. In determining the appropriate
background of the arbitrator, the appointing authority shall give due
consideration to the issues to be resolved, but its decision as to the identity
of the arbitrator shall be final.
(b) An
arbitration may be commenced by any party to this Agreement by the service of a
written Request for Arbitration upon the other affected party. Such Request for
Arbitration shall summarize the controversy or claim to be arbitrated, and shall
be referred by the complaining party to the appointing authority for appointment
of arbitrators ten (10) days following such service. If an arbitrator is not
appointed by the appointing authority within sixty (60) days following such
reference, any party may apply to any court within the State of Iowa for an
order appointing arbitrators qualified as set forth below. No Request for
Arbitration shall be valid if it relates to a claim, dispute, disagreement or
controversy that would have been time barred under the applicable statute of
limitations had such claim, dispute, disagreement or controversy been submitted
to the courts of the State of Iowa.
(c)
Judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
(d) It is
intended that controversies or claims submitted to arbitration under this
Section 11 shall remain confidential, and to that end it is agreed by the
parties that neither the facts disclosed in the arbitration, the issues
arbitrated, nor the views or opinions of any persons concerning them, shall be
disclosed by third persons at any time, except to the extent necessary to
enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration. In addition, Executive shall be
entitled to disclose the facts disclosed in arbitration, the issues arbitrated,
and the views or opinions of any persons concerning them to legal and tax
advisors so long as such advisors agree to be bound by the terms of this
Agreement.
12. Successors and
Assigns.
12.1
Assignment by the
Company. This Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company.
12.2
Assignment by
Executive. Executive may not assign this Agreement or any part thereof;
provided, however, that nothing herein shall preclude one or more beneficiaries
of Executive from receiving any amount that may be payable following the
occurrence of his legal incompetency or his death and shall not preclude the
legal representative of his estate from receiving such amount or from assigning
any right hereunder to the person or persons entitled thereto under his will or,
in the case of intestacy, to the person or persons entitled thereto under the
laws of the intestacy applicable to his estate.
13. Governing
Law.
This
Agreement shall be deemed a contract made under, and for all purposes shall be
construed in accordance with, the laws of the State of Iowa without reference to
the principles of conflict of laws.
14. Entire
Agreement.
This
Agreement and those plans and agreements referenced herein, including, but not
limited to, the Severance Agreement entered into between the Company and
Executive on the 30th day of December, 2008, contain all the
understandings and representations between the parties hereto pertaining to the
subject of the employment of Executive by the Company and supersede all
undertakings and agreements, whether oral or in writing, if any there be,
previously entered into by them with respect thereto.
15. Amendment or Modification;
Waiver.
No
provision of this Agreement may be amended or modified unless such amendment or
modification is agreed to in writing, signed by Executive and by a duly
authorized officer of the Company and approved in advance by the Compensation
Committee. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party of any condition
or provision of the Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar provision or condition at the same or
any prior or subsequent time.
16. Notices.
Any
notice to be given hereunder shall be in writing and delivered personally or
sent by overnight mail, such as Federal Express, addressed to the party
concerned at the address indicated below or to such other address as such party
may subsequently give notice of hereunder in writing:
If to
Company:
Xxxxx
Xxxx
President
and CEO
Xxxxxxxx
Corporation
0000
Xxxxxx Xxxxxx
Xxx
Xxxxxx, Xxxx 00000-0000
If to
Executive:
Xxxx X.
Xxxxxx
0000
Xxxxxxxxx
Xxxx Xxx
Xxxxxx, Xxxx 00000
17. Severability.
In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
18. Withholding.
Anything
to the contrary notwithstanding, all payments required to be made by the Company
hereunder to Executive or his beneficiaries, including his estate, shall be
subject to withholding and deductions as the Company may reasonably determine it
should withhold or deduct pursuant to any applicable law or regulation. In lieu
of withholding or deducting, such amounts, in whole or in part, the Company may,
in its sole discretion, accept other provision for payment as permitted by law,
provided it is satisfied in its sole discretion that all requirements of law
affecting its responsibilities to withhold such taxes have been
satisfied.
19. Deferred
Payments.
Any
amounts required under this Agreement to be paid to Executive that Executive can
and does elect to defer under any Company benefit plan or program shall be
deemed to have been paid to him for purposes of this Agreement; provided,
however, that if the Company breaches the terms of any deferred compensation
plan, arrangement or agreement with respect to which such amounts are to be
paid, Executive may claim a breach of this Agreement.
Notwithstanding
anything in this Agreement or elsewhere to the contrary:
(a) If
payment or provision of any amount or other benefit that is "deferred
compensation" subject to Section 409A of the Code at the time otherwise
specified in this Agreement or elsewhere would subject such amount or benefit to
additional tax pursuant to Section 409A(a)(1)(B) of the Code, and if payment or
provision thereof at a later date would avoid any such additional tax, then the
payment or provision thereof shall be postponed to the earliest date on which
such amount or benefit can be paid or provided without incurring any such
additional tax. In the event this Section requires a deferral of any payment,
such payment shall be accumulated and paid in a single lump sum on such earliest
date together with interest for the period of delay, compounded annually, equal
to the prime rate (as published in The Wall Street Journal), and in effect as of
the date the payment should otherwise have been provided.
(b) If
any payment or benefit permitted or required under this Agreement, or otherwise,
is reasonably determined by either party to be subject for any reason to a
material risk of additional tax pursuant to Section 409A(a)(1)(B) of the Code,
then the parties shall promptly agree in good faith on appropriate provisions to
avoid such risk without materially changing the economic value of this Agreement
to either party.
20. Survivorship.
The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
21. Duty to Mitigate:
Set-off.
Executive
shall not be required to seek employment, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as the result of employment by another employer after the date of
termination of Executive's employment, or otherwise, except as may be provided
under Section 9.4 with respect to health and welfare insurance benefits. 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 that the
Company may have against Executive or others, except to be extent such
employment violates Section 10.5.
22. Headings.
Headings
of the sections of this Agreement are intended solely for convenience and no
provision of this Agreement is to be construed by reference to the title of any
section.
23. Knowledge and
Representation.
Executive
acknowledges that the terms of this Agreement have been fully explained to him,
that Executive understands the nature and extent of the rights and obligations
provided under this Agreement, and that Executive has been represented by legal
counsel in the negotiation and preparation of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have re-executed and acknowledged this
Agreement as of the date set forth below.
XXXXXXXX
CORPORATION
By: /s/ Xxxxxxx X.
Xxxx
XXXX
X. XXXXXX
/s/ Xxxx X.
Xxxxxx
Date:
August 24, 2009
