EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into at
Honolulu, Hawaii as of __________, 2001 (the "Effective Date"), by and
between [NEWCO], a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxx
("Executive").
RECITALS
A. The Company desires to secure the services of Executive as an employee of the
Company for the period provided in this Agreement.
B. Executive is willing to enter into this Agreement for such period on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the provisions hereinafter
described, Company and Executive agree as follows:
1. DUTIES OF EXECUTIVE
The Company hereby employs Executive as its President and Chief
Executive Officer, and Executive shall have such powers and duties as may be
reasonably consistent with that title, in addition to such other powers and
duties as may be prescribed by the Company's Board of Directors (the "Board") or
the organizational and governance documents of the Company from time to time.
Executive shall also serve on the Board as its Co-Chairman. Executive hereby
accepts said employment and agrees to devote his entire working time and
attention and best talents and abilities exclusively to the services of the
Company as the Board may direct during the term hereof; provided, that Executive
may engage in and devote time to other non-competitive activities, including,
but not limited to, personal homebuilding and investment activities, to the
extent that such time spent does not interfere with Executive's obligations
hereunder.
2. TERM OF AGREEMENT
Unless terminated sooner in accordance with the provisions of this
Agreement, the Company shall employ Executive and Executive accepts such
employment under the conditions set forth herein for a term (the "Term")
beginning on the Effective Date and ending upon the close of business on the
third anniversary of the Effective Date (the "Expiration Date"). Notwithstanding
the foregoing, if this Agreement is not otherwise terminated in accordance with
the provisions herein, on the first anniversary of the Effective Date, the Term
shall be renewed and the Expiration Date shall be extended for an additional
year, and on each successive anniversary the Term shall renew and the Expiration
Date shall be extended for another year unless, at least ninety (90) days prior
to such applicable anniversary of the Effective Date, either Executive or the
Company
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gives the other party written notice of its intent to terminate the Agreement
at the end of such Term.
3. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth in this Section 3:
(a) "ANNUAL BASE SALARY" OR "BASE SALARY" shall mean the annual base
salary rate in effect for Executive from time to time during the Term of this
Agreement in accordance with the provisions of Section 4(a) of this Agreement.
(b) "ANNUAL BONUS" OR "BONUS" shall mean a cash payment available
annually (or as otherwise provided for in this document) to Executive in
addition to Base Salary as determined in accordance with Section 4(b) of this
Agreement.
(c) "CAPITAL TRANSACTION" shall mean and include any consolidation,
merger or stock/asset acquisition involving the Company (whether as the
surviving or disappearing entity or as the purchaser or seller) or any
conversion of debt to equity or equity to debt or any issuance of new equity or
any issuance of new debt outside the ordinary course of business of the Company,
e.g., issuance of high yield debt in the capital markets.
(d) "CAUSE" shall mean (1) fraud, embezzlement, or willful
misconduct engaged in by the Executive and materially detrimental to the
business or reputation of the Company, (2) the conviction of the Executive of
a felony involving moral turpitude, (3) the knowing and intentional imparting
by the Executive of material confidential information relating to the Company
to a third party other than in the course of performing his duties hereunder.
No act, or failure to act, by the Executive shall be considered "willful"
unless committed without good faith and without a reasonable belief that the
act or omission was in the Company's best interest.
(e) "CHANGE IN CONTROL" shall mean any of the following events (whether
in one or a series of related transactions):
(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who in the aggregate owned less than
25% of the Company's combined voting power represented by the Company's
outstanding securities immediately prior to such merger, consolidation or other
reorganization;
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets;
(iii) A change in the composition of the Board, as a result
of which fewer than one-half of the incumbent directors are directors who
either (i) had been
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directors of the Company on the date 24 months prior to the date of the event
that may constitute a Change in Control (the "original directors") or (ii)
were elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the aggregate of the original directors who
were still in office at the time of the election or nomination and the
directors whose election or nomination was previously so approved; or
(iv) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing at least thirty percent
(30%) of the total voting power represented by the Company's then outstanding
voting securities. As long as a Class B common stock exists, the phrase "forty
percent (40%) of Class A common stock" shall be substituted for the phrase
"thirty percent (30%) of the total voting power represented by the Company's
then outstanding voting securities" in the immediately preceding sentence. For
purposes of this Section (iv), the term "person" shall have the same meaning as
when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude:
(A) A trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a subsidiary
of the Company;
(B) A company owned directly or indirectly by the
stockholders of the Company in substantially the same
proportions as their ownership of the common stock of the
Company; and
(C) The Company.
A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transactions.
(f) "COMPENSATION COMMITTEE" shall mean the Compensation Committee of
the Board or, if the Board does not have such a committee, the Board itself.
(g) "CONSTRUCTIVE TERMINATION" shall mean either (i) the effective date
of a Change in Control (including a tender offer) that Executive votes against,
either as a Director or as a shareholder of the Company, (ii) Executive's
voluntary Termination of Service within thirty (30) days following the one-year
anniversary of a Change in Control, or (iii) Executive's voluntary Termination
of Service within ninety (90) days following the occurrence of one or more of
the following events, except if such event is approved in writing by Executive
prior to its occurrence:
(i) A failure by the Company to abide by any part of this
Agreement that is not remedied within thirty (30) business days after
receiving written notification by Executive of such failure;
(ii) A failure by the Board to nominate Executive as a
member of the Board; or
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(iii) Relocation of Executive's primary place of work to an
area that is at least twenty-five (25) miles away from the location of the
Company's principal executive office in Honolulu, Hawaii.
(h) "DISABILITY" shall mean that the Executive has been unable to
perform one or more of the Executive's material duties under this Agreement for
a period of not less than 180 consecutive days as a result of the Executive's
incapacity due to physical or mental illness. The Company may terminate the
Executive's employment for Disability by giving the Executive written notice. In
the event that the Executive resumes the performance of substantially all of the
Executive's duties under this Agreement before the termination of the
Executive's employment under Section 5(d) becomes effective, the notice of
termination shall automatically be deemed to have been revoked.
(i) "ENTERPRISE" shall mean any joint venture, business pursuant to a
joint operating agreement, or other alliance or affiliated business of the
Company.
(j) "FISCAL YEAR" shall mean the twelve (12) month period beginning
January 1, unless the Company, with the approval of any government or regulatory
entities from whom approval is necessary, shall establish a different fiscal
year; PROVIDED, HOWEVER, that the Company's establishment of a different fiscal
year shall not negatively or positively affect the amount of any Annual Bonus or
severance payment Executive otherwise would have been entitled to receive
hereunder.
(k) "SERVICE" shall mean Executive's full-time or substantially
full-time employment with the Company, or any affiliated organization, including
any leave of absence approved by the Company.
(l) "TERMINATION OF SERVICE" shall mean Executive's termination of
Service for any reason whatsoever, including death.
4. EXECUTIVE'S RIGHTS WHILE EMPLOYED BY THE COMPANY
(a) BASE SALARY. Beginning on the Effective Date and during the
Term, the minimum Annual Base Salary payable to Executive shall be Six
Hundred Fifty Thousand Dollars ($650,000). Executive's Base Salary shall be
reviewed annually by the Compensation Committee if any, otherwise by the
Board, and may be otherwise increased, but not decreased from time to time
based on prevailing market conditions, performance of the Executive and other
considerations. The Base Salary shall be paid in approximately equal
semi-monthly installments on the Company's normal payroll dates.
(b) ANNUAL BONUS. Executive will be entitled to an Annual Bonus
based on the profitability of the Company. Executive will receive as an
Annual Bonus one percent (1%) of the annual earnings before taxes ("EBT") of
the Company (on a consolidated basis). If the Company enters into a Capital
Transaction, the Annual Bonus may be revised by the Company in its sole
discretion; PROVIDED, HOWEVER, that (i) the payment terms of any Annual Bonus
earned by, but not yet paid to, Executive for any fiscal year ending prior to
or on the date of the Capital Transaction may not be revised without the
Executive's prior written consent, and (ii) the terms determining the amount
of any
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Annual Bonus for any fiscal year ending subsequent to the Capital Transaction
may not be less favorable to Executive than the terms determining the amount
of the Annual Bonus in effect prior to such Capital Transaction (for example,
if the Company would have had annual EBT of $20,000,000 if the Capital
Transaction had not occurred, Executive would be owed not less than one
percent (1%) of $20,000,000).
The Annual Bonus for a given year will be paid in four installments.
Each installment will be paid as soon as practicable after the end of each
fiscal quarter in which the Bonus is earned.
(c) LONG-TERM INCENTIVES. Executive shall participate in any
Long-Term Incentive Plan that may be designed specifically for Executive or
provided to other executives of the Company during the Term. (Grants to
Executive under such Long-Term Incentive Plan shall be no less favorable to
Executive in amount and other key design features, including vesting
restrictions, with any other plans provided to any other executive at the
Company.)
(d) FRINGE BENEFITS AND OTHER. The Company shall provide Executive
with the following:
i. BENEFIT PLANS. Such benefits and perquisites, including
but not limited to disability income, deferred compensation or any form of
savings or retirement plan as may from time to time be provided to other
executives of the Company. Such benefits and perquisites shall exclude fees
paid for Committee service, which are hereby included in Executive's Base
Salary. Benefits and perquisites shall be provided at the same proportional
cost to Executive as that paid by other executives of the Company who
participate in such programs.
ii. AUTOMOBILE. An automobile allowance of one thousand
dollars ($1,000) per month and reimbursement for fuel and other automotive
expenses purchased by Executive and used in the performance of his duties to
the Company.
iii. VACATION. Thirty (30) days of paid vacation benefits
each calendar year, accrued on a pro rata basis. Maximum vacation accruals
and carry-overs of unused vacation days will be in accordance with the
Company policy then in effect.
iv. D&O INSURANCE. Payment of premiums on professional
liability insurance for Executive.
v. DUES. Payment of dues for such professional societies
and associations of which Executive is a member that benefit the Company.
Nothing in this Agreement shall be construed as limiting or restricting
any benefit to Executive under any pension, profit-sharing or similar retirement
plan, or under any group life or group health or accident or other plan of the
Company, for the benefit of its employees generally or a group of them, now or
hereafter in existence.
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It shall be at the Company's discretion to grant any other fringe
benefits to Executive.
5. EXECUTIVE'S RIGHTS UPON TERMINATION OF SERVICE
(a) TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE TERMINATION NOT IN
CONNECTION WITH A CHANGE IN CONTROL. In the event of Executive's Termination
of Service by the Company without Cause or in a Constructive Termination,
Executive (or if Executive dies while benefits remain under this Agreement,
Executive's beneficiaries as designated in accordance with the provisions of
Section 12 herein) shall be entitled to receive the following:
i. Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Annual Bonus granted and
previously unpaid;
ii. Immediate vesting of any stock options, or other rights
previously provided to Executive under any Company Long-Term Incentive Plan
and of any previously unpaid portions of any Annual Bonus; and
iii. A lump sum payment upon Executive's Termination of
Service equal to one percent (1%) of ninety percent (90%) of the Company's
Projected EBT for the Fiscal Year in which Executive's Termination of Service
occurs, and one percent (1%) of eighty percent (80%) of the Company's
Projected EBT for the Fiscal Year immediately following the Fiscal Year in
which Executive's Termination of Service occurs.
(b) TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE TERMINATION IN
CONNECTION WITH A CHANGE IN CONTROL. In the event of Executive's Termination
of Service without Cause or a Constructive Termination within six (6) months
prior to or two (2) years after the effective date of a Change in Control,
Executive (or if Executive dies while benefits remain under this Agreement,
Executive's beneficiaries as designated in accordance with the provisions of
Section 12 herein) shall be entitled to receive the following:
i. Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Annual Bonus granted and
previously unpaid;
ii. Immediate vesting of any stock options, or other rights
previously provided to Executive under any Company Long-Term Incentive Plan
and of any previously unpaid portions of any Annual Bonus;
iii. A lump sum payment of five million dollars
($5,000,000) to be received by Executive no later than sixty (60) days after
Termination of Service (or Change in Control in the case of a Constructive
Termination under Section 3(g)(i)), provided, however, that in the event of a
Change in Control (including a tender offer) that Executive does vote in
favor of, either as a Director or as a shareholder of the Company, Executive
shall not be entitled to receive any payment under this Section 5(b)(iii). In
the event of a Change in Control, Executive shall also be entitled to the
protections outlined in Sections 7 through 9 herein; and
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iv. A lump sum payment, to be delivered no later than sixty
(60) days after the end of the fiscal year in which the Executive's
Termination of Service occurs, of a pro rata portion of any Annual Bonus
which would have been paid to Executive but for his Termination of Service.
The pro rata portion of such Annual Bonus shall be determined by multiplying
such Annual Bonus by a fraction, the numerator of which is the number of days
which elapsed between and including the first day of the applicable fiscal
year and the date of Termination of Service and the denominator of which is
three hundred sixty-five (365).
(c) FOR REASON OF EXPIRATION OF THE TERM OF THIS AGREEMENT. In the
event of Executive's Termination of Service for reason of expiration of the
Term of this Agreement pursuant to Section 2 hereof, Executive (or if
Executive dies while benefits remain due under this Agreement, Executive's
beneficiaries as designated in accordance with the provisions of Section 12
hereof) shall be entitled to receive the following:
i. Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and any Annual Bonus granted and
previously unpaid and any Annual Bonus earned by Executive;
ii. Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term Incentive Plan;
and
iii. Payment of any Disability or other benefits provided
to Executive by the Company in accordance with the terms and conditions of
such benefits and this Agreement.
(d) FOR REASON OF DISABILITY. In the Event of Executive's
Termination of Service for reason of Disability, Executive (or if Executive
dies while benefits remain due under this Agreement, Executive's
beneficiaries as designated in accordance with the provisions of Section 12
hereof) shall be entitled to receive the following:
i. Payment immediately upon Executive's Termination of
Service of (A) any previously unpaid Base Salary and any Annual Bonus earned
and previously unpaid, (B) one percent (1%) of ninety percent (90%) of the
Company's consolidated Projected EBT for the Fiscal Year in which Executive's
Termination of Service occurs, and (C) one percent (1%) of eighty percent
(80%) of the Company's consolidated Projected EBT for the Fiscal Year
immediately following the Fiscal Year in which Executive's Termination of
Service occurs;
ii. Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term Incentive Plan;
and
iii. Payment of any Disability or other benefits provided
to Executive by the Company in accordance with the terms and conditions of
such benefits and this Agreement.
(e) FOR REASON OF DEATH. In the Event of Executive's Termination of
Service for Reason of Death, Executive's beneficiaries as designated in
accordance with the
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provisions of Section 12 hereof or Executive's estate, as applicable, shall
be entitled to receive the following upon such Termination of Service:
i. Payment immediately upon Executive's Termination of
Service of (A) any previously unpaid Base Salary and any Annual Bonus earned
and previously unpaid, (B) one percent (1%) of ninety percent (90%) of the
Company's Projected EBT for the Fiscal Year in which Executive's Termination
of Service occurs, and (C) one percent (1%) of eighty percent (80%) of the
Company's Projected EBT for the Fiscal Year immediately following the Fiscal
Year in which Executive's Termination of Service occurs;
ii. Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term Incentive Plan;
and
iii. Payment of any other benefits provided by the Company
in accordance with the terms and conditions of such benefits and this
Agreement.
(f) FOR REASON OF VOLUNTARY RESIGNATION NOT CONSTITUTING
CONSTRUCTIVE TERMINATION. In the event of Executive's Termination of Service
for reason of voluntary resignation by Executive not constituting
Constructive Termination, Executive shall be entitled to receive the
following upon such Termination of Service:
i. Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and the first installment only
of any Annual Bonus earned but previously unpaid for the previous fiscal year;
ii. Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights previously granted
to Executive under any Company Long-Term Incentive Plan provided such options
or other rights have vested as of the date of the termination of Executive's
service in accordance with any agreement between the Company and Executive
covering such options or other rights; and
iii. Payment of any Disability or other benefits provided
to Executive by the Company in accordance with the terms and conditions of
such benefits and this Agreement.
(g) FOR REASON OF CAUSE. In the Event of Executive's Termination of
Service for reason of Cause, the Company's obligations to Executive shall be
limited to:
i. Payment immediately upon Executive's Termination of
Service of any previously unpaid Base Salary and the first installment only
of any Annual Bonus earned but previously unpaid for the previous fiscal
year; and
ii. Performance of Company obligations with respect to
Executive's exercise of any stock options or other rights previously granted
to Executive under any Company Long-Term Incentive Plan provided such options
or other rights have vested as of the date of the termination of executive's
service in accordance with any agreement between the Company and Executive
covering such options or other rights.
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(h) FOR REASON OF EXECUTIVE'S RESIGNATION AS CHIEF EXECUTIVE OFFICER
UPON REQUEST BY MAJORITY VOTE OF THE BOARD NOT IN CONNECTION WITH A CHANGE IN
CONTROL. In the Event of Executive's Termination of Service as Chief
Executive Officer upon request by a majority vote of the Board more than six
(6) months prior to or more than two (2) years after a Change in Control,
Executive (or if Executive dies while benefits remain due under this
Agreement, Executive's beneficiaries as designated in accordance with the
provisions of Section 12 hereof) shall be entitled to receive the following:
i. Payment immediately upon Executive's Termination of
Service of (A) any previously unpaid Base Salary and any Annual Bonus earned
and previously unpaid, (B) one percent (1%) of ninety percent (90%) of the
Company's consolidated Projected EBT for the Fiscal Year in which Executive's
Termination of Service occurs, and (C) one percent (1%) of eighty percent
(80%) of the Company's consolidated Projected EBT for the Fiscal Year
immediately following the Fiscal Year in which Executive's Termination of
Service occurs;
ii. Immediate vesting of any stock options or other rights
previously provided to Executive under any Company Long-Term Incentive Plan;
and
iii. Monthly payment of Executive's Base Salary for a
period of three (3) years following the date of Termination of Service.
6. MITIGATION AND OFFSET REQUIREMENTS
Executive shall not be required to mitigate the amount of any benefit
provided for in this Agreement by actively seeking alternative employment during
the period in which such benefits are paid. In addition, Executive shall not be
required to offset any such benefits provided for in this Agreement by amounts
earned as a result of Executive's employment or self-employment during the
period in which Executive is entitled to receive such benefits.
7. TAX RESTORATION PAYMENT
In the event it is determined that any payment or distribution of any
type to or for the benefit of the Executive, pursuant to this Agreement or
otherwise, by the Company, any person who acquires ownership or effective
control of the Company, or ownership of a substantial portion of the assets of
the Company (within the meaning of section 280G of the Code and the regulations
thereunder) or any affiliate of such person (the "Total Payments") would be
subject to the excise tax imposed by section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as, the "Excise
Tax"), then the Executive shall be entitled to receive an additional payment (a
"Tax Restoration Payment") in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Tax Restoration
Payment, the Executive retains an amount of the Tax Restoration Payment equal to
the Excise Tax imposed upon the Total Payments.
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8. DETERMINATION BY ACCOUNTANT
All mathematical determinations and determinations as to whether any of
the Total Payments are "parachute payments" (within the meaning of section 280G
of the Code), in each case which determinations are required to be made under
this Section 8, including whether a Tax Restoration Payment is required, the
amount of such Tax Restoration Payment, and amounts relevant to the last
sentence of this Section 8, shall be made by an independent accounting firm
selected by the Executive from amount the largest five accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm shall provide to the
Company and to the Executive its determination (the "Determination"), together
with detailed supporting calculations regarding the amount of any Tax
Restoration Payment and any other relevant matter, within ten days after
termination of the Executive's employment, if applicable, or at such earlier
time as is requested by the Executive (if the Executive reasonably believes that
any of the Total Payments may be subject to the Excise Tax). If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall furnish
the Executive with a written statement that such Accounting Firm has concluded
that no Excise Tax is payable (including the reasons therefor) and that the
Executive has substantial authority not to report any Excise Tax on the
Executive's federal income tax return. If a Tax Restoration Payment is
determined to be payable, it shall be paid to the Executive within ten days
after the Determination is delivered to the Company or the Executive. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive, absent manifest error.
As a result of uncertainty in the application of section 4999 of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Tax Restoration Payments not made by the Company and members
of the Company should have been made ("Underpayment"), or that Tax Restoration
Payments will have been made by the Company and members of the Company that
should not have been made ("Overpayments"). In either such event, the Accounting
Firm shall determine the amount of the Underpayment or Overpayment that has
occurred. In the case of an Underpayment, the Company promptly shall pay, or
cause to be paid, the amount of such Underpayment to or for the benefit of the
Executive. In the case of an Overpayment, the Executive shall, at the direction
and expense of the Company, take such steps as are reasonably necessary
(including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the Company, and otherwise
reasonably cooperate with the Company to correct such Overpayment; provided,
however, that (1) Executive shall not in any event be obligated to return to the
Company an amount greater than the net after-tax portion of the Overpayment that
he has retained or recovered as a refund from the applicable taxing authorities
and (2) this provision shall be interpreted in a manner consistent with the
intent of Section 8, which is to make the Executive whole, on an after-tax
basis, from the application of the Excise Tax, it being understood that the
correction of an Overpayment may result in the Executive repaying to the Company
an amount that is less than the Overpayment.
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9. EXTENSION OF TERM UPON A CHANGE IN CONTROL
The Term of this Agreement shall automatically be extended through the
close of business an additional twelve (12) months following the effective date
of any Change in Control.
10. CONFIDENTIAL INFORMATION
Executive acknowledges that, by reason of his employment by and service
to the Company, he will have access to confidential information of the Company
(and its affiliates) including, without limitation, information and knowledge
pertaining to products, present and future developments, techniques, programs,
trade secrets, services, marketing strategies, processes, patents, copyrights,
trademarks, policies, contracts, personnel information, computer programs and
data, improvements, methods of operation, sales and profit figures, pricing
information, customer and client lists, relationships between the Company and
those persons, entities and affiliates with which the Company has contracted and
others who have business dealings with it and other confidential property and
information of the Company and its customers (collectively, "Confidential
Information"). Executive acknowledges that the Confidential Information is a
valuable and unique asset of the Company and covenants that, both during and
after the Term, he will not use any Confidential Information or disclose any
Confidential Information to any person, firm or corporation (except as his
duties as an employee of the Company may require) without the prior written
authorization of the Company and that all such matters and properties shall be
and shall remain the property of the Company and/or its customers. The
obligation of confidentiality imposed by this Section 10 shall not apply to
information that appears in issued patents, that is required by governmental
authorities to be disclosed, or that otherwise becomes generally known in the
industry through no act of Executive in breach of this Agreement.
11. RETURN OF COMPANY PROPERTY
Promptly upon termination of Executive's employment by the Company for
any reason or no reason, Executive or Executive's personal representative shall
return to the Company (a) all Confidential Information; (b) all other records,
designs, patents, business plans, financial statements, manuals, memoranda,
lists, correspondence, reports, records, charts, advertising materials, and
other data or property delivered to or compiled by Executive by or on behalf of
the Company, or its representatives, vendors, or customers that pertain to the
business of the Company, whether in paper, electronic, or other form; and (c)
all keys, credit cards, vehicles, and other property of the Company. Executive
shall not retain or cause to be retained any copies of the foregoing. Executive
hereby agrees that all of the foregoing shall be and remain the property of the
Company, and be subject at all times to its discretion and control.
12. DESIGNATION OF BENEFICIARIES
Executive shall have the right at any time to designate any person(s)
or trust(s) as beneficiaries to whom any benefits payable under this Agreement
shall be made in the
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event of Executive's death prior to the distribution of all benefits due
Executive under this Agreement. Each beneficiary designation shall be
effective only when filed in writing with the Company during Executive's
lifetime. If Executive designates more than one beneficiary, distributions of
cash payments shall be made in equal proportions to each beneficiary unless
otherwise provided for in Executive's beneficiary designation. The filing of
a new beneficiary designation shall cancel all designations previously filed.
Any finalized marriage or divorce (other than common law marriage) of
Executive subsequent to the date of filing a beneficiary designation shall
revoke such designation unless (a) in the case of divorce, the previous
spouse was not designated as beneficiary, and (b) in the case of marriage,
Executive's new spouse had previously been designated as beneficiary. If
Executive fails to designate a beneficiary as provided for above, or if the
beneficiary designation is revoked by marriage, divorce or otherwise without
execution of a new designation, or if the beneficiary designated by Executive
dies prior to distribution of the benefits due Executive under this
Agreement, the Company shall direct the distribution of any benefits due
under this Agreement to Executive's estate.
13. SUCCESSORS
Except as provided for in Section 12 above, the rights and duties of a
party hereunder shall not be assignable by that party; provided, however, that
this Agreement shall be binding upon and shall inure to the benefit of any
successor of the Company, and any such successor shall be deemed substituted for
the Company under the terms of this Agreement. The term successor as used herein
shall include any person, firm, corporation or other business entity which at
any time, by merger, purchase or otherwise, acquires substantially all of the
assets or business of the Company.
14. ATTORNEYS' FEES
(a) SUBSEQUENT TO ANY CHANGE IN CONTROL. Subsequent to any Change in
Control, in any action at law or in equity brought by either party hereto to
enforce any of the provisions or rights under this Agreement in which
Executive is the successful party, the Company, in addition to bearing its
own expenses, shall pay to Executive all costs, expenses and reasonable
attorneys' fees incurred therein by Executive (including without limitation
such costs, expenses and fees on any appeals), and if Executive shall recover
judgment in any such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of such judgment.
(b) PRIOR TO ANY CHANGE IN CONTROL. Prior to any Change in Control,
in any action at law or in equity to enforce any of the provisions or rights
under this Agreement, the unsuccessful party to such litigation, as
determined by the Court in a final judgment or decree, shall pay the
successful party or parties all costs, expenses and reasonable attorneys'
fees incurred therein by such party or parties (including without limitation
such costs, expenses and fees on any appeals), and if such successful party
or parties shall recover judgment in such action or proceeding, such costs,
expenses and attorneys' fees shall be included as part of such judgment.
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15. ADDITIONAL REMEDIES
Executive recognizes that irreparable injury will result to the Company
and its business and properties in the event of any breach by Executive of
Section 10 or 11 of this Agreement. In the event of any breach of Executive's
commitments pursuant to Section10 or 11, the Company shall be entitled, in
addition to any other remedies and damages available, to injunctive relief from
a court of competent jurisdiction to restrain the violation of such commitments
by Executive or by any person or persons acting for or with Executive in any
capacity whatsoever.
16. ARBITRATION
Any disputes between Executive and the Company arising out of this
Agreement or Executive's employment by the Company or the termination of his
employment shall be resolved by an impartial arbitrator in Honolulu, Hawaii
pursuant to the Rules for Resolution of Employment Disputes of the American
Arbitration Association. The arbitrator shall be selected by agreement between
Executive and the Company, but if they do not agree on the selection of an
arbitrator within thirty (30) days after the date of the request for
arbitration, the arbitrator shall be selected pursuant to the rules of that
Association. The award rendered by the arbitrator shall be conclusive and
binding upon Executive and the Company. The unsuccessful party shall pay its own
expenses and the expenses of the successful party for the arbitration and the
fee and expenses of the arbitrator.
17. ENTIRE AGREEMENT
With respect to the matters specified herein, this Agreement contains
the entire agreement between the Company and Executive and supersedes all prior
written agreements, understandings and commitments between the Company and
Executive. No amendments to this Agreement may be made except through a written
document signed by the Executive and approved in writing by the Company.
18. VALIDITY
In the event that any provision of this Agreement is held to be
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of this Agreement.
19. PARAGRAPHS AND OTHER HEADINGS
Paragraphs and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.
20. NOTICE
Any notice or demand required or permitted to be given under this
Agreement shall be made in writing and shall be deemed effective upon the
personal delivery thereof
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if delivered or, if mailed, forty-eight (48) hours after having been
deposited in the United States mail, postage prepaid, and addressed, in the
case of the Company, to the attention of the Board at the Company's then
principal place of business, presently 000 Xxxx Xxxxxx Xxxx, 0xx Xxxxx,
Xxxxxxxx, Xxxxxx, 00000 and in the case of Executive, to his residence as on
file with the Company as of the Effective Date. Either party may change the
address to which such notices are to be addressed to it by giving the other
party notice in the manner herein set forth.
21. RIGHT OF EMPLOYMENT
Nothing stated or implied by this Agreement shall prevent the Company
from terminating the Service of Executive at any time nor prevent Executive from
voluntarily terminating Service at any time.
22. WITHHOLDING TAXES AND OTHER DEDUCTIONS
To the extent required by law, the Company shall withhold from any
payments due Executive under this Agreement any applicable federal, state or
local taxes and such other deductions as are prescribed by law or Company
policy.
23. APPLICABLE LAW
To the full extent controllable by stipulation of the Company and
Executive, this Amendment shall be interpreted and enforced under Hawaii law,
without regard to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized representative(s) and Executive has affixed his
signature as of the date first written above.
EXECUTIVE:
------------------------
Xxxxx X. Xxxxxxx
COMPANY:
[NEWCO]
By:
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Title:
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