ANGELICA CORPORATION EMPLOYMENT AGREEMENT
Exhibit
10.34
XXXXXXXX
CORPORATION
EMPLOYMENT
AGREEMENT
This
agreement (this “Agreement”) has been entered into this 1st day of December,
2005, by and between Xxxxxxxx Corporation, a Missouri corporation (the
“Company”), and Xxxxxxx X. Xxxxx, an individual (the “Employee”).
WHEREAS,
the
Board of Directors of the Company has determined that it is in the best
interests of the Company and its stockholders to retain the Employee in the
employ of the Company as Senior Vice President, West Business Unit of the
Company’s Textile Services business operations as of the Effective Date (as
defined below); and
WHEREAS,
this
Agreement contains the terms and conditions that have been negotiated by the
Company and the Employee as an inducement to the Employee to continue in the
employment of the Company and as an incentive to reinforce and encourage the
continued attention and dedication of the Employee to the Company and its
business throughout the Employment Period (as defined below), even in the face
of a potential Change in Control;
NOW
THEREFORE,
in
consideration of the mutual promises herein contained, the parties hereby agree
as follows:
Section
1: Definitions
and Construction.
1.1 Definitions.
For
purposes of this Agreement, the following words and phrases, whether or not
capitalized, shall have the meanings specified below, unless the context plainly
requires a different meaning.
1.1(a) “Accrued
Obligations”
has the
meaning set forth in Section 4.1(a) of this Agreement.
1.1(b) “Annual
Bonus”
has the
meaning set forth in Section 2.4(b) of this Agreement.
1.1(c) “Annual
Base Salary” has
the
meaning set forth in Section 2.4(a) of this Agreement.
1.1(d) “Board”
means
the Board of Directors of the Company.
1.1(e) “Cause”
has
the
meaning set forth in Section 3.3 of this Agreement.
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1.1(f) “Change
in Control”
means:
(i) The
acquisition by any individual, entity or group, or a Person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of ownership of 25% or
more
of either (a) the then outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (b) the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); or
(ii) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election, by the Company's stockholders was
approved by a vote of at least a majority of the directors then comprising
the
Incumbent Board shall be considered as though such individual were a member
of
the Incumbent Board, but excluding, as a member of the Incumbent Board, any
such
individual whose initial assumption of office occurs as a result of either
an
actual or threatened election contest (as such terms are used in Rule l4a-11
of
Regulation l4A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the
Board; or
(iii) Approval
by the stockholders of the Company of a reorganization, merger or consolidation,
in each case, unless, following such reorganization, merger or consolidation,
(1) more than 50% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger
or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as
the case may be, (2) no Person beneficially owns, directly or indirectly,
25% or more of, respectively, the then outstanding shares of common stock of
the
corporation resulting from such reorganization, merger or consolidation or
the
combined voting power of the then outstanding voting securities of such
corporation, entitled to vote generally in the election of directors, and
(3) at least a majority of the members of the board of directors of the
corporation resulting from such reorganization,
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merger
or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation; or
(iv) Approval
by the stockholders of the Company of (a) a complete liquidation or
dissolution of the Company or (b) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation,
with respect to which following such sale or other disposition, (1) more
than 50% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition
in
substantially the same proportion as their ownership, immediately prior to
such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no Person
beneficially owns, directly or indirectly, 25% or more of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (3) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition
of
assets of the Company.
1.1(g)
“Change
in Control Date”
means
the date that a Change in Control first occurs.
1.1(h) “Company”
has
the
meaning set forth in the first paragraph of this Agreement and, with regard
to
successors, in Section 6.2 of this Agreement.
1.1(i) “Date
of Termination”
has the
meaning set forth in Section 3.8 of this Agreement.
1.1(j) “Disability”
has the
meaning set forth in Section 3.2 of this Agreement.
1.1(k) “Disability
Effective Date” has
the
meaning set forth in Section 3.2 of this Agreement.
1.1(l) “Effective
Date”
means
the date of this Agreement.
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1.1(m) “Employment
Period”
means
the period beginning on the Effective Date and ending on the Date of
Termination.
1.1(n) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
1.1(o) “Good
Reason” has
the
meaning set forth in Section 3.4 of this Agreement.
1.1(p) “Incumbent
Board” has
the
meaning set forth in Section 1.1(f)(ii) of this Agreement.
1.1(q) “Notice
of Termination”
has the
meaning set forth in Section 3.7 of this Agreement.
1.1(r) “Other
Benefits” has
the
meaning set forth in Section 4.3 of this Agreement.
1.1(s) “Outstanding
Company Common Stock” has
the
meaning set forth in Section 1.1(f)(i) of this Agreement.
1.1(t) “Outstanding
Company Voting Securities”
has the
meaning set forth in Section 1.1(f)(i) of this Agreement.
1.1(u) “Person”
means
any “person” within the meaning of Sections 13(d) and 14(d) of the Exchange
Act.
1.2 Gender
and Number.
When
appropriate, pronouns in this Agreement used in the masculine gender include
the
feminine gender, words in the singular include the plural, and words in the
plural include the singular.
1.3 Headings.
All
headings in this Agreement are included solely for ease of reference and do
not
bear on the interpretation of the text. Accordingly, as used in this Agreement,
the terms “Article” and “Section” mean the text that accompanies the specified
Article or Section of the Agreement.
1.4 Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Missouri, without reference to its conflict of law
principles.
Section
2: Terms
and Conditions of Employment.
2.1 Period
of Employment; Term of Agreement.
The
Employee shall remain in the employ of the Company throughout the Employment
Period in accordance with the terms and provisions of this Agreement. Either
party to this Agreement may terminate the Employment Period (and the Employee’s
employment with the Company) at any time by giving the other party a Notice
of
4
Termination,
subject only to the obligation of the Company to pay the benefits to the
Employee as specified in Section 4 of this Agreement. The term of this Agreement
shall begin as of the Effective Date and shall end on the Date of Termination.
2.2 Positions
and Duties.
2.2(a) Throughout
the Employment Period, the Employee shall serve as Senior Vice President, West
Business Unit of the Company’s Textile Services business, subject to the
reasonable directions of the principal executive officer of the Textile Services
business and the principal executive officer of the Company. The Employee shall
have such authority and shall perform such duties as specified by the principal
executive officer of the Textile Services business and the principal executive
officer of the Company from time to time.
2.2(b) Throughout
the Employment Period (but excluding any periods of vacation and sick leave
to
which the Employee is entitled), the Employee shall devote reasonable attention
and time during normal business hours to the business and affairs of the Company
and shall use his reasonable best efforts to perform faithfully and efficiently
such responsibilities as are assigned to him under or in accordance with this
Agreement; provided that, it shall not be a violation of this Section 2.2(b)
for
the Employee to (i) serve on corporate, civic or charitable boards or
committees, (ii) deliver lectures or fulfill speaking engagements, or
(iii) manage personal investments, so long as such activities do not
significantly interfere with the performance of the Employee's responsibilities
as an employee of the Company in accordance with this Agreement or violate
the
Company's conflict of interest policy as is in effect at such times.
2.3 Situs
of Employment. Throughout the Employment Period, the Employee's
services shall be performed from the Company’s divisional support center offices
located in greater Los Angeles, California metropolitan area (currently Orange,
California).
2.4 Compensation.
2.4(a) Annual
Base Salary.
The
Employee will initially receive an annual base salary (“Annual Base Salary”) of
One Hundred Sixty Five Thousand Dollars ($165,000.00), which shall be paid
in
equal or substantially equal bi-weekly installments. During the Employment
Period, the Annual Base Salary payable to the Employee shall be reviewed at
least once annually and shall be increased at the discretion of the Company
but
shall not be reduced without the consent of the Employee.
2.4(b) Annual
Incentive Bonuses.
In
addition to Annual Base Salary, the Employee will be entitled to earn an
incentive bonus on an annual basis (the “Annual Bonus”) during the Employment
Period. The Board will set, on or before the 90th
day of
such fiscal year, the criteria which will be required to be achieved by the
Employee
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during
the fiscal year to earn all or a specified percentage of his Annual Bonus.
The
maximum Annual Bonus that the Employee may earn is 60%,
and the
target bonus is 30%,
of the
Employee’s salary paid during the fiscal year. If a Change in Control occurs,
the Employee will receive a lump-sum payment on or before the Change in Control
Date equal to the Employee’s maximum Annual Bonus, prorated with the numerator
being the number of months in the fiscal year to the Change in Control Date
(including the month in which the Change in Control occurs as a full month)
and
the denominator being 12. This payment will be in lieu of any right of the
Employee to receive an Annual Bonus for the fiscal year in which the Change
in
Control occurs.
2.4(c) Long-Term
Incentive Plan Awards. The
Employee will be entitled to earn long-term incentive bonus awards payable
in
accordance with a plan established by the Board or the Compensation and
Organization Committee (the “Long-Term Bonus”). The Employee will be eligible to
earn a Long-Term Bonus during the Employment Period on the basis of the
achievement of performance goals during a three-year performance period. The
Board will set, on or before the 90th
day of
such fiscal year, the performance goals to be achieved during the performance
period that is then commencing in order for the Employee to earn all or a
specified portion of his Long-Term Bonus. The Long-Term Bonus amount that may
be
earned by the Employee will be set at 35% of the Employee’s then-current Annual
Base Salary, beginning with the fiscal 2006 - 2009 performance period.
2.4(d) Savings
and Deferred Compensation Plans.
Throughout the Employment Period, the Employee shall be entitled to participate
in all savings, deferred compensation and retirement plans generally available
to other peer employees of the Company, including the Company’s 401(k)
Plan.
2.4(e) Welfare
Benefit Plans.
Throughout the Employment Period, the Employee and/or the Employee's family,
as
the case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided
by the Company (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death
and
travel accident insurance plans and programs) to the extent generally available
to other peer employees of the Company.
2.4(f) Business
Expenses.
Throughout the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred by the
Employee in the conduct of the business of the Company (including travel and
entertainment expenses) in accordance with the policies, practices and
procedures generally applicable within the Company.
2.4(g) Office
and Furnishings.
Throughout the Employment Period, the Employee shall be entitled to an office
or
offices of a size and with furnishings and other
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appointments
commensurate with his office, duties and responsibilities with the Company.
2.4(h) Vacation.
Throughout the Employment Period, the Employee shall be entitled to paid
vacation equal to three (3) weeks per year.
Section
3: Termination
of Employment.
3.1 Death.
The
Employee's employment shall terminate automatically upon the Employee's death
during the Employment Period.
3.2 Disability.
If the
Company determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), the Company may give to the Employee written notice in
accordance with Section 7.2 of its intention to terminate the Employee's
employment. In such event, the Employee's employment with the Company shall
terminate effective on the thirtieth (30th) day after receipt of such notice
by
the Employee (the “Disability Effective Date”), provided that, within the thirty
(30) days after such receipt, the Employee shall not have returned to full-time
performance of the Employee's duties. For purposes of this Agreement,
“Disability” shall mean that the Employee has been unable to perform the
services required of the Employee under this Agreement on a full-time basis
for
a period of one hundred eighty (180) consecutive regular business days by reason
of a physical and/or mental condition. “Disability” shall be deemed to exist
when certified by a physician selected by the Company and acceptable to the
Employee or the Employee's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Employee will submit to
such
medical or psychiatric examinations and tests as such physician deems necessary
to make any such Disability determination.
3.3 Termination
for Cause.
The
Company may terminate the Employee's employment during the Employment Period
for
“Cause,” which shall mean termination based upon: (a) the Employee's
willful and continued failure to substantially perform his duties with the
Company (other than as a result of incapacity due to physical or mental
condition), after a written demand for substantial performance is delivered
to
the Employee by the Company, which specifically identifies the manner in which
the Employee has not substantially performed his duties, (b) the Employee's
commission of an act constituting a criminal offense involving moral turpitude,
dishonesty, or breach of trust, or (c) the Employee's material breach of any
provision of this Agreement. For purposes of this Section 3.3, no act or failure
to act on the Employee's part shall be considered “willful” unless done or
omitted to be done without good faith on the part of the Employee and without
the Employee’s reasonable belief that the act or omission was in the best
interest of the Company.
3.4 Good
Reason.
The
Employee may terminate his employment with the Company during the Employment
Period for “Good Reason,” which shall mean:
3.4(a) the
assignment to the Employee of any duties inconsistent in any respect with the
Employee's position (including status, offices, titles and reporting
7
requirements),
authority, duties or responsibilities as contemplated by Section 2.2(a) or
any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose any action
not
taken in bad faith by the Company and which the Company remedies promptly after
receipt of notice thereof given by the Employee;
3.4(b) (i)
the
failure by the Company to continue in effect any benefit or compensation plan,
stock ownership plan, life insurance plan, health and accident plan or
disability plan to which the Employee is entitled as specified in Section 2.4,
provided that the Company may amend, modify or replace any such plan or plans
as
long as the Employee is entitled to benefits under the amended, modified or
replaced plan or plans that are substantially similar to those of the plan
or
plans so amended, modified or replaced, (ii) the taking of any action by the
Company which would adversely affect the Employee's participation in, or
materially reduce the Employee's benefits under, any plans described in Section
2.4, or deprive the Employee of any benefits enjoyed by the Employee as
described in Section 2.4(f) and (g), or (iii) the failure by the Company to
provide the Employee with paid vacation to which the Employee is entitled as
described in Section 2.4(h);
3.4(c) the
Company's requiring the Employee to be based at any office or location other
than that described in Section 2.3;
3.4(d) a
material breach by the Company of any provision of this Agreement;
3.4(e) any
purported termination by the Company of the Employee's employment otherwise
than
as expressly permitted by this Agreement; or
3.4(f) in
connection with a Change in Control, the failure of a successor of the Company
to expressly assume and agree to perform this Agreement pursuant to the
provisions of Section 6.2 of this Agreement prior to the Change in Control
Date;
provided, however, that a termination of employment by the Employee: (A)
subsequent to an express assumption and agreement to perform this Agreement
by
such successor on or after the Change in Control Date, or (B) subsequent to
a
date that is two years after a Change in Control Date, shall not be deemed
to be
for “Good Reason” under this subsection.
For
purposes of this Section, any good faith determination of “Good Reason” made by
the Employee shall be conclusive unless and until such determination is
overturned by a court of competent jurisdiction.
3.5 Voluntary
Termination by the Employee. The
Employee may voluntarily terminate his employment with the Company for any
reason or for no reason at any time during the Employment Period.
8
3.6 Termination
by the Company without Cause. The
Company may terminate the Employee’s employment with the Company for any reason
or for no reason, without citing Cause, at any time during the Employment
Period, subject to the provisions of Section 4 of this Agreement.
3.7 Notice
of Termination.
Any
termination by the Company or by the Employee shall be communicated by Notice
of
Termination given in accordance with Section 7.2 to the other party. For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) if the
Date of Termination (as defined in Section 3.8 hereof) is other than the date
of
receipt of such notice, specifies the Date of Termination. The failure by the
Employee or the Company to set forth in the Notice of Termination any fact
or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Employee or the Company hereunder or preclude the
Employee or the Company from asserting such fact or circumstance in enforcing
the Employee's or the Company's rights hereunder.
3.8 Date
of Termination.“Date
of
Termination” means (i) if the Employee's employment is terminated by the
Company for Cause or any other reason, the date of receipt by the Employee
of
the Notice of Termination or any later date specified therein, as the case
may
be, (ii) if the Employee's employment is terminated by reason of death or
Disability, the date of death of the Employee or the Disability Effective Date,
as the case may be, or (iii) if the Employee's employment is terminated by
the Employee for Good Reason, the date specified in the Notice of Termination
which date shall not be more than thirty (30) or less than fifteen (15) days
after the receipt of such notice; or (iv) if the Employee’s employment is
terminated by the Employee voluntarily (either prior to or after a Change in
Control Date), the date that is specified in the Notice of Termination.
Section
4: Certain
Benefits Upon Termination.
4.1 Termination
Without Cause or For Good Reason Not in Connection with a Change in Control.
If,
prior
to a Change in Control Date during the Employment Period (except in the event
that one of the following terminations of employment occurs within the six-month
period prior to the earlier of (a) a Change in Control Date or (b) the execution
of a definitive agreement or contract that eventually results in a Change in
Control, which shall result in the payment of severance benefits set forth
in
Section 4.2 of this Agreement), (i) the Company shall terminate the Employee's
employment without Cause, or (ii) the Employee shall terminate his employment
for Good Reason, the Employee shall be entitled to the payment of the benefits
provided below:
4.1(a) Accrued
Obligations.
Within
thirty (30) days after the Date of Termination, the Company shall pay to the
Employee the sum of (i) the Employee's Annual Base Salary through the Date
of
Termination to the extent not previously paid, (ii) the accrued benefit payable
to the Employee under any compensation plan, program or arrangement in which
the
Employee is a participant subject to the computation of
9
benefits
provisions of such plan, program or arrangement, and (iii) any accrued vacation
pay; in each case to the extent not previously paid (the “Accrued
Obligations”).
4.1(b) Annual
Base Salary Continuation.
For a
period of twelve (12) months beginning in the month immediately subsequent
to
the month in which the Date of Termination occurs, the Company shall pay to
the
Employee, on a bi-weekly basis consistent with its then-existing payroll
practices, an amount equal to one/twenty-six (1/26th)
of the
Employee’s then-current Annual Base Salary; provided, however, that during
months seven (7) through twelve (12) of such period, the amount of such payments
shall be reduced by the amounts, if any, earned by the Employee during such
months as a result of self-employment and/or employment with another employer.
As a condition of payment during months seven through twelve, the Employee
agrees to provide the Company with verification, reasonably acceptable to the
Company, substantiating the amounts of any such earnings or the Employee’s lack
of other employment, as the case may be. The Company at any time may elect
to
pay the balance of such payments then remaining in a lump sum, without
discount.
4.2 Benefits
Upon Termination without Cause or for Good Reason in Connection with a Change
in
Control. If
(a) a
Change in Control occurs during the Employment Period and within two (2) years
after the Change in Control Date (i) the Company shall terminate the Employee's
employment without Cause, or (ii) the Employee shall terminate employment with
the Company for Good Reason,
or,
alternatively, (b) if one of the above-described terminations of employment
occurs within the six-month period prior to the earlier of (i) a Change in
Control Date or (ii) the execution of a definitive agreement or contract that
eventually results in a Change in Control, then the Employee shall become
entitled to the payment of the benefits as provided below as of either (y)
the
Date of Termination, in the case where the sequence of the requisite events
is
as set forth in subsection (a) above or (z) the Change in Control Date, in
the
case where the sequence of the requisite events occurred as set forth in
subsection (b) above (the relevant date for purposes of entitlement to the
benefits as set forth in this Section 4.2 is hereinafter referred to as the
“Entitlement Date”):
4.2(a) Accrued
Obligations.
Within
thirty (30) days after the Entitlement Date, the Company shall pay to the
Employee the Accrued Obligations.
4.2(b) Severance
Amount.
Within
thirty (30) days after the Entitlement Date, the Company shall pay to the
Employee as severance pay in a lump sum, in cash, an amount equal to one (1)
times an amount equal to the Employee’s then-current Annual Base
Salary.
4.2(c) Stock
Options and Restricted Stock.
To the
extent not otherwise provided for under the terms of the Company's stock-based
compensation plans or the Employee's award or grant agreements, all stock
options and restricted stock held by the Employee that have not expired in
accordance with their respective terms shall fully vest as of the Entitlement
Date.
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4.3 Death.
If the
Employee's employment is terminated by reason of the Employee's death during
the
Employment Period (either prior or subsequent to the Change in Control Date),
this Agreement shall terminate without further obligations to the Employee's
legal representatives under this Agreement, other than for (i) payment of
Accrued Obligations (which shall be paid to the Employee's estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30) days of
the
Date of Termination) and (ii) the timely payment or provision of such other
benefits required to be paid or provided by the Company to the Employee or
the
Employee’s family under any plan, program, policy, practice, contract or
agreement of the Company generally provided to other peer employees and their
families (“Other Benefits”), including all such benefits payable in the event of
death.
4.4 Disability.
If the
Employee's employment is terminated by reason of the Employee's Disability
during the Employment Period (either prior or subsequent to a Change in
Control), this Agreement shall terminate without further obligations to the
Employee, other than for (i) payment of Accrued Obligations (which shall be
paid to the Employee in a lump sum in cash within thirty (30) days of the Date
of Termination) and (ii) the timely payment or provision of Other Benefits
including all such benefits payable in the event of Disability.
4.5 Termination
for Any Other Reasons.
If the
Employee's employment shall be terminated for Cause or by the Employee
voluntarily (either prior or subsequent to a Change in Control Date), this
Agreement shall terminate without further obligations to the Employee other
than
the obligation to pay to the Employee the Accrued Obligations. In such case,
all
of the Employee’s Accrued Obligations shall be paid to the Employee in a lump
sum in cash within thirty (30) days of the Date of Termination.
4.6 Entire
Agreement; Prior Agreements and Benefits under Other Plans
Superceded.
This
Agreement is the entire agreement of the parties on the subject matter contained
herein and shall supercede all prior agreements, arrangements and understandings
that the Employee and the Company may have had with respect to the Employee’s
employment with the Company and the payment of benefits by the Company to the
Employee in the event of a termination of the Employee’s employment, either
prior to or in conjunction with a Change in Control. The benefits payable
pursuant to this Agreement are in lieu of and in substitution for any
termination benefits payable by the Company in conjunction with any other plan,
program, policy, practice, contract or agreement that the Company may have
had
either in the past, currently or in the future.
4.7 Full
Settlement.
The
parties agree that the Company's obligation to make the payments provided for
in
this Agreement and otherwise to perform its obligations hereunder are intended
to be in full settlement of all claims that the Employee may have against the
Company with respect to the termination of the Employee’s employment with the
Company and the Employee may be required to execute and deliver an agreement
to
this effect prior to receipt of any payments under this Agreement. The payments
to be made by the Company or any other obligation that the Company is required
to perform pursuant to this Agreement shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Employee or others. In
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no
event
shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any
of
the provisions of this Agreement and, except as provided in Section 4.1(b),
such
amounts shall not be reduced whether or not the Employee obtains other
employment. To the extent the Employee prevails in any contest with respect
to
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of
any
contest by the Employee regarding the amount of any payment pursuant to this
Agreement), the Company agrees to pay promptly, to the full extent permitted
by
law, all legal fees and expenses which the Employee may reasonably incur as
a
result of any such contest, plus in each case interest on any delayed payment
at
the applicable Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 Resolution
of Disputes.
If there
shall be any dispute between the Company and the Employee (i) as to whether
any
termination of the Employee's employment was for Cause, or (ii) as to
whether any termination of the Employee’s employment for Good Reason was made in
good faith, then, unless and until there is a final, non-appealable judgment
by
a court of competent jurisdiction declaring that such termination was for Cause
or that the determination by the Employee of the existence of Good Reason was
not made in good faith, the Company shall pay all amounts, and provide all
benefits, to the Employee and/or the Employee's family or other beneficiaries,
as the case may be, that the Company would be required to pay or provide
pursuant to Section 4.1 or 4.2 as though such termination was without Cause
or
for Good Reason, as the case may be; provided, however, that the Company shall
not be required to pay any disputed amounts pursuant to this Section 4.8 except
upon receipt of an undertaking by or on behalf of the Employee to repay all
such
amounts to which the Employee is ultimately adjudged by such court not to be
entitled.
Section
5: Non-Competition.
5.1 Non-Compete
Agreement.
5.1(a) During
the period beginning on the Date of Termination and ending one (1) year
thereafter, the Employee shall not, without prior written approval of the
principal executive officer of the Company, become a partner, officer, director,
stockholder, advisor, employee, consultant, agent, salesman or otherwise of
any
business enterprise in substantial direct competition (as defined in Section
5.1(b)) with the Company or any of its subsidiaries in the United States or
in
any other country in which the Company does business on the Date of Termination;
provided that, if the Employee’s employment is terminated for Good Reason, then
the Employee will not be subject to the restrictions of this Section 5.1(a).
This restriction will not limit the Employee’s right to invest in five percent
(5%) or less of the outstanding capital stock or other equity securities of
any
corporation, the stock or securities of which are publicly traded on a national
stock exchange.
5.1(b) For
purposes of Section 5.1, a business enterprise with which the Employee becomes
associated shall be considered in substantial direct competition, if such
entity
12
competes
with the Company or its subsidiaries in any business in which the Company or
any
of its subsidiaries is engaged and is within the Company's or the subsidiary’s
market area as of the Date of Termination.
5.1(c)
During
the period beginning on the date the Employment Period terminates and ending
one
(1) year thereafter, the Employee shall not directly or indirectly solicit
the
employment of, recruit, employ, hire, cause to be employed or hired, entice
away
or establish a business relationship with, (i) any then current employee of
the
Company or any of its subsidiaries or (ii) any person who was employed by the
Company or any of its subsidiaries during the six (6) months immediately prior
to the date that the Employee first solicits such person.
5.2 Confidential
Information.
The
Employee shall hold in a fiduciary capacity for the benefit of the Company
all
secret or confidential information, knowledge or data relating to the Company
or
any of its affiliated companies, and their respective businesses, which shall
have been obtained by the Employee during the Employee's employment by the
Company and which shall not be or become public knowledge (other than by acts
by
the Employee or representatives of the Employee in violation of this Agreement).
After termination of the Employee's employment with the Company, the Employee
shall not, without the prior written consent of the Company, or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions
of
this Section constitute a basis for deferring or withholding any amounts
otherwise payable to the Employee under this Agreement.
Section
6: Successors.
6.1 Successors
of Employee.
This
Agreement is personal to the Employee and, without the prior written consent
of
the Company, the rights (but not the obligations) shall not be assignable by
the
Employee otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal representatives.
6.2 Successors
of Company.
The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Employee
to
terminate this Agreement at his option on or after the Change in Control Date
for Good Reason. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
13
Section
7:
Miscellaneous.
7.1 Other
Agreements. The
Board
may, from time to time in the future, provide other incentive programs and
bonus
arrangements to the Employee with respect to the occurrence of a Change in
Control that will be in addition to the benefits required to be paid in the
designated circumstances in connection with the occurrence of a Change in
Control. Such additional incentive programs and/or bonus arrangements will
affect or abrogate the benefits to be paid under this Agreement only in the
manner and to the extent explicitly agreed to by the Employee in any such
subsequent program or arrangement.
7.2 Notice.
For
purposes of this Agreement, notices and all other communications provided for
in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses as set forth
below; provided that all notices to the Company shall be directed to such other
address as one party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
Notice
to
Employee:
Xxxxxxx
X. Xxxxx
c/o
Xxxxxxxx Textile Services, Inc.
0000
Xxxx
Xx.
Xxxxxx,
Xxxxxxxxxx 00000-0000
Notice
to
Company:
Xxxxxxxx
Corporation
000
Xxxxx
Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention:
General Counsel
7.3 Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
7.4 Withholding.
The
Company may withhold from any amounts payable under this Agreement such Federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
7.5 Waiver.
The
Employee's or the Company's failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to
assert any right the Employee or the Company may have hereunder, including,
without limitation, the right of the Employee to terminate employment for Good
Reason pursuant to Section 3.4 shall not be deemed to be a waiver of such
provision or right or any other provision or right of this
Agreement.
14
IN
WITNESS WHEREOF, the
Employee and, the Company, pursuant to the authorization from its Board, have
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
“Employee”
/s/
Xxxxxxx X.
Xxxxx
|
Xxxxxxx
X. Xxxxx
|
“Company”
XXXXXXXX
CORPORATION
By
/s/
Xxxxxxx X.
X’Xxxx
Name:
Xxxxxxx X. X’Xxxx
Title:
CEO
15
