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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 5, 1997 (the "Agreement") by and
between XXXXX XXXXXXXX INTERNATIONAL, INC., a Delaware corporation (the
"Company") and a subsidiary of XXXXX XXXXXXXX CORPORATION, a Delaware
corporation ("JM"), and Xxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS the Company desires to employ Executive and to enter into an
agreement embodying terms of such employment (the "Agreement"); and
WHEREAS Executive desires to accept such employment and to enter into such
an Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. The Executive's period of employment hereunder
shall commence on June 23, 1997 and, subject to the extension provisions and
the other terms and conditions provided herein, end on April 10, 2000. At the
April meeting of JM's Board of Directors (the "Board") or at the next meeting
thereafter at which the extension of employment agreements of executives of the
Company is considered, the Board and the Chief Executive Officer of the Company
shall review this Agreement and Executive's performance hereunder and shall
determine, in their sole discretion, whether or not to extend the period of
Executive's employment pursuant to this Agreement by one year. The period of
Executive's employment hereunder, including any extension or extensions
pursuant to the foregoing sentence, is referred to
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hereinafter as the "Employment Term". A failure to renew this Agreement shall
not constitute a termination of Executive's employment.
2. Position. Executive shall serve as Senior Vice President, Global
Roofing of the Company. Executive shall devote substantially all of his
business time and energies to the business of the Company. Notwithstanding the
foregoing, Executive may (a) continue to serve on the board of directors of any
business corporation on which he is serving as of the date of this Agreement
(as shown on Schedule A), (b) serve on the boards of directors or committees of
non-profit organizations and (c) with the prior approval of the Chief Executive
Officer of the Company or of the Board, serve on the boards of directors of
other business corporations, provided that in the Company's sole reasonable
discretion none of the foregoing activities materially interferes with the
performance of Executive's duties hereunder.
3. Base Salary. Company shall pay Executive a base salary at the rate
of not less than $275,000 per year, as the same may from time to time be
increased at the sole discretion of the Board or, prior to a Change in Control,
decreased in the event of across the board salary reductions within the
corporate staff group or the business division in which Executive is employed,
whichever is applicable ("Base Salary").
4. Incentive Compensation. Executive shall participate in the JM
executive incentive compensation plans, as in effect from time to time during
the Employment Term, for which his level of employment makes him eligible.
(References herein to "JM executive incentive compensation plans" whether
annual or long-term, shall include such plans maintained by JM and/or the
Company, as the case may be, from time to
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time.) The JM executive incentive compensation plans in effect on the date
hereof in which Executive participates are listed on Schedule B.
5. Employee Benefits. Executive shall be eligible to participate in
such other of the Company's employee benefit plans and to receive such benefits
for which his level of employment makes him eligible, in accordance with the
Company's policies as in effect from time to time during the Employment Term.
6. Business Expenses. Necessary and reasonable business expenses
incurred by Executive during the Employment Term shall be reimbursed in
accordance with Company policies.
7. Termination Prior to a Change in Control.
(a) Retirement. This Agreement shall terminate automatically upon
Executive's Retirement, as defined hereafter. For purposes of this Agreement,
"Retirement" means termination of Executive's employment initiated by
Executive, other than for Good Reason as defined in Section 7(e) or Section
8(e) hereof, whichever is applicable, whereby Executive is entitled to receive
an immediately payable benefit, including an early retirement benefit, under
the Company's retirement plan generally applicable to its salaried employees or
under any retirement arrangement established with respect to Executive with his
consent, in either case, whether or not Executive commences to receive such
benefit at the time of such termination. Upon termination of Executive's
employment by reason of Retirement prior to a Change in Control, Executive
shall be entitled to benefits determined in accordance with the Company's
retirement, benefit and insurance programs in effect at such time.
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(b) Death or Disability.
(i) Disability. Executive's employment hereunder may be
terminated by the Company if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of six (6) consecutive
months to perform his duties (such incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of the Disability of Executive
as to which Executive and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to Executive
and the Company. Upon any such termination for Disability prior to a Change in
Control, Executive shall be entitled to receive his Base Salary through the
date on which Executive is first eligible to receive payment of disability
benefits in lieu of salary under the Company's employee benefit plans as then
in effect.
(ii) Death. Upon termination for death prior to a Change in
Control, Executive shall be entitled to his Base Salary at the rate in effect
at the time of Executive's death through the end of the month in which his
death occurs.
(iii) Death or Disability Benefits. All other benefits to which
Executive may be entitled following Executive's termination for death or
Disability prior to a Change in Control shall be determined in accordance with
the plans, policies and practices of the Company.
(c) For Cause by the Company; Voluntary Termination by Executive.
Executive's employment hereunder may be terminated by the Company for "Cause".
For purposes of this Agreement, prior to a Change in Control, "Cause" shall
mean (i) Executive's willful and continued failure substantially to perform his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness or as
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a result of termination by Executive for Good Reason as defined in Section 7(e)
below), (ii) Executive's dishonesty in the performance of his duties hereunder
or (iii) Executive's conviction of a felony under the laws of the United States
or any state thereof. If Executive is terminated for Cause, or if Executive
voluntarily terminates employment hereunder other than for Good Reason, in
either case, prior to a Change in Control, he shall be entitled to receive his
Base Salary through the date of termination. All other benefits, if any,
payable to Executive following such termination of Executive's employment shall
be determined in accordance with the plans, policies and practices of the
Company.
(d) Without Cause by the Company or with Good Reason by Executive.
If prior to a Change in Control Executive's employment hereunder is terminated
on or before June 23, 1998 by the Company without Cause (other than by reason
of death or Disability) or by Executive with "Good Reason" (as defined in
Section 7(e) below), Executive shall be entitled to receive the following
benefits:
(x) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to one times his Base Salary in
effect at the time of such termination or, in the event of termination by
Executive on account of an event described in Section 7(e)(iv) below, the Base
Salary as in effect prior to the reduction or reductions referred to therein
plus the bonus Executive would have earned in respect of the year of
termination under the JM annual incentive compensation plan, if any, in effect
at the date of termination or, in the event of a termination by Executive by
reason of an event described in Section 7(e)(vi), the plan in effect prior to
the elimination referred to therein, determined as if Executive had been
employed by the
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Company for the full year and without regard to any right reserved by the
Company to decrease or eliminate such bonus, and assuming actual performance
had equaled 100% of the performance objective established for such year
pursuant to the terms of such plan.
(y) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed the lesser of (A) 20% of Executive's Base Salary in effect at the time
of Executive's termination of employment with the Company or (B) $50,000.
If prior to a Change in Control Executive's employment hereunder is
terminated after June 23, 1998 by the Company without Cause (other than by
reason of death or Disability) or by Executive with "Good Reason" (as defined
in Section 7(e) below), Executive shall be entitled to receive the following
benefits:
(i) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to two times his Base Salary in
effect at the time of such termination or, in the event of termination by
Executive on account of an event described in Section 7(e)(iv) below, the Base
Salary as in effect prior to the reduction or reductions referred to therein
plus the bonus Executive would have earned in respect of the year of
termination under the JM annual incentive compensation plan, if any, in effect
at the date of termination or, in the event of a termination by Executive by
reason of an event described in Section 7(e)(vi), the plan in effect prior to
the elimination referred to therein, determined as if Executive had been
employed by the Company for the full year and without regard to any right
reserved by the Company to decrease or eliminate such bonus, and assuming
actual performance had equaled
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100% of the performance objective established for such year pursuant to the
terms of such plan.
(ii) For a 24-month period after such termination, the Company
shall cause Executive to be provided with life, accident, medical, dental and
prescription insurance benefits substantially similar to, and on the same terms
as, those benefits elected and received by Executive under the Company's "Flex
Benefit" program immediately prior to such termination; provided that,
Executive shall be charged an amount equal to any monthly payroll deduction
charged for similar benefits to executives in positions similar to that which
Executive held before his termination; and provided further that, if Executive
receives medical benefits under the JM Retiree Comprehensive Health Care Plan
and post-retirement life insurance benefits (collectively, "Retiree Medical and
Life Insurance Benefits"), at any time during the 24-month period referred to
above, once such benefits begin Executive shall be entitled only to Retiree
Medical and Life Insurance Benefits.
(iii) For a period of 24 months after such termination, the
Company shall provide or cause Executive to be provided with the perquisites
listed on Schedule C, attached hereto, as may be amended by the Company from
time to time without Executive's consent prior to such termination (provided
that nothing herein shall be deemed to permit such an amendment without
Executive's consent following a Change in Control), on the same terms and
conditions on which such perquisites were provided prior to Executive's
termination.
(iv) In addition to all other amounts payable to Executive under
this Section 7(d), Executive shall be entitled to receive all benefits payable
to Executive
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under any other plan, policy or agreement relating to retirement or other
benefits in accordance with the terms of such plans, policies or agreements;
provided, however that, amounts paid pursuant to this Section 7(d) shall be in
lieu of any payments under any JM separation policy.
(v) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed the lesser of (A) 20% of Executive's Base Salary in effect at the time
of Executive's termination of employment with the Company or (B) $50,000.
(e) Good Reason. For purposes of this Agreement, prior to a Change in
Control, "Good Reason" shall mean:
(i) a material reduction in Executive's responsibilities,
authorities or duties, all as contemplated by Section 2 hereof; provided,
however, that such reduction by reason of a termination for Cause or Disability
shall not constitute Good Reason;
(ii) Executive's job is eliminated other than by reason of
promotion or termination for Cause or Disability.
(iii) the Company fails to pay Executive any amount otherwise
vested and due hereunder or under any plan or policy of the Company;
(iv) a reduction in Executive's Base Salary except in the event
of an across the board salary reduction within the corporate staff group or the
business division in which Executive is employed, whichever is applicable;
(v) a reduction in Executive's aggregate level of benefits under
the Company's pension, life insurance, medical, health and accident, disability,
deferred
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compensation or savings or similar plans, except in the event of an across the
board reduction in such benefits within the corporate staff group or the
business division in which Executive is employed, whichever is applicable;
(vi) the elimination of an annual incentive compensation plan
or a material reduction in such a plan not applicable to other executives of
the Company; or
(vii) Executive's office is relocated outside of a 00-xxxx
xxxxxx xx Xxxxxx, Xxxxxxxx without his written consent.
If Executive provides to the Company a Notice of Termination, as defined
in Section 13(f), in connection with an event described in clauses (i) through
(vii) of this Section 7(e), the Company shall have ten (10) business days from
the date of receipt of such notice to effect a cure of the event described
therein, and upon cure thereof by the Company to Executive's reasonable
satisfaction, such event shall no longer constitute Good Reason for purposes of
this Agreement.
(f) Mitigation. In the event of termination of Executive's employment
hereunder by the Company without Cause or by Executive with Good Reason prior
to a Change in Control, benefits otherwise receivable by Executive pursuant to
subsection 7(d)(ii) shall be reduced to the extent comparable benefits are
received by Executive during the 24-month period following such termination.
Executive shall report to the Company any such benefits actually received by
Executive.
8. Termination Following a Change in Control.
(a) Retirement. This Agreement shall terminate automatically upon
Executive's Retirement. Upon a termination of Executive's employment by reason
of
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Retirement following a Change in Control, Executive shall be entitled to
benefits determined in accordance with the Company's retirement, benefit and
insurance programs in effect immediately prior to the Change in Control or, if
more generous, such programs in effect at the time of such Retirement.
(b) Death or Disability.
(i) Disability. Executive's employment hereunder may be
terminated by reason of Executive's Disability, subject to the procedure for
determining such Disability outlined in Section 7(b)(i). Upon any termination
for Disability following a Change in Control, Executive shall be entitled to
receive his Base Salary for a two-year period ending on the second anniversary
of Executive's date of termination. Such Base Salary shall be paid in equal
monthly installments and shall be reduced by any amounts received as disability
benefits in lieu of salary under the Company's employee benefit plans.
(ii) Death. Upon termination for death following a Change in
Control, Executive shall be entitled to (x) his Base Salary at the rate in
effect at the time of Executive's death through the end of the month in which
his death occurs and (y) if and to the extent the death benefits provided
Executive by the Company are less than would have been paid immediately prior
to a Change in Control, a lump sum payment of cash in an amount equal to the
value of such shortfall. Any such lump sum payment shall be made within ten
(10) business days following Executive's death.
(iii) Death or Disability Benefits. All other benefits to which
Executive may be entitled upon Executive's termination for death or Disability
following a Change in Control shall be determined in accordance with the plans,
policies and
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practices of the Company in effect immediately prior to the Change in Control
or, if more generous, such plans, policies and practices as in effect at any
time following the Change in Control; provided that, nothing in this Section
8(b)(iii) shall be interpreted so as to result in the duplication of the
benefits provided under Section 8(b)(i) or (ii).
(c) For Cause by the Company; Voluntary Termination by Executive. For
purposes of this Agreement, following a Change in Control, "Cause" shall mean
(i) Executive's willful and continued failure substantially to perform his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness or as a result of termination by Executive for Good
Reason as defined in Section 8(e) below) after a written demand for substantial
performance is delivered to Executive personally and Executive shall have
failed during the 60-day period following such written demand to have corrected
such failure, (ii) Executive's dishonesty in the performance of his duties
hereunder or (iii) Executive's conviction of a felony under the laws of the
United States or any state thereof. For purposes of this Section 8(c) no act or
failure to act on Executive's part shall be deemed willful unless done or
omitted to be done by Executive not in good faith and without reasonable belief
that Executive's action or omission was in the best interest of the Company.
If Executive is terminated for Cause, or if Executive voluntarily
terminates his employment with the Company other than for Good Reason, in
either case, following a Change in Control, he shall be entitled to receive his
Base Salary through the date of termination. All other benefits, if any,
payable to Executive following such termination of Executive's employment shall
be determined in accordance with the plans, policies and practices of the
Company.
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(d) Without Cause by the Company or with Good Reason by Executive. If
Executive's employment is terminated by the Company following a Change in
Control without Cause (other than by reason of death or Disability) or by
Executive with "Good Reason" (which following a Change in Control shall have
the meaning set forth in Section 8(e) below), Executive shall be entitled to
receive the following benefits:
(i) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to two times the sum of (A) his
Base Salary in effect at the time of such termination or, in the event of
termination by Executive by reason of an event described in Section 8(e)(iv)
below, the Base Salary as in effect prior to the reduction or reductions
referred to therein plus (B) the bonus Executive would have earned in respect
of the year of termination under the JM annual incentive compensation plan, if
any, in effect at the date of termination or in the event of a termination by
Executive by reason of an event described in Section 8(e)(v), the plan in
effect immediately prior to the reduction or reductions referred to therein,
determined as if Executive had been employed by the Company for the full year
and without regard to any right reserved by the Company to decrease or
eliminate such bonus, and assuming actual performance had equaled 100% of the
performance objective established for such year pursuant to the terms of such
plan.
(ii) The Company shall pay Executive in a lump sum a cash
amount equal to a fraction of the annual bonus which (absent such termination
and without regard to any right reserved by the Company to decrease or
eliminate such bonus) Executive would have earned with respect to the year of
termination under the JM annual executive incentive compensation plan, if any,
in effect at the date of
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termination or, in the event of a termination by Executive by
reason of an event described in Section 8(e)(v), the plan in effect prior to
the reduction or reductions referred to therein, assuming actual performance
had equaled 100% of the performance objective established for such year
pursuant to the terms of such plan, the numerator of which fraction is the
number of days in such year during which the Executive was employed by the
Company and the denominator of which is 365. Such payment shall be made at the
time of Executive's termination.
(iii) [Reserved.]
(iv) Executive shall receive
credit under the Supplemental Plan for Participants in the JM Salaried
Retirement Plan for two additional years of service for purposes of both
vesting and accrual of benefits.
(v) For a 36-month period following
Executive's termination, the Company shall pay Executive in monthly
installments the sum of the monthly costs to Executive of purchasing life,
accident, medical, dental and prescription insurance benefits substantially
similar to such benefits elected and received by Executive under the Company's
"Flex Benefit" program immediately prior to Executive's termination or, if more
generous, immediately prior to the Change in Control ("Continued Benefits")
less the monthly payroll deduction, if any, charged to Executive immediately
prior to Executive's termination, or, if applicable, immediately prior to the
Change in Control, for any of such Continued Benefits; notwithstanding the
foregoing, if Executive begins to receive Retiree Medical and Life Insurance
Benefits at any time during the 36-month period referred to above, once such
benefits begin, the monthly payment due Executive under the preceding clause
shall equal the monthly costs to Executive of purchasing
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Continued Benefits not provided by the Company to Executive as Retiree Medical
and Life Insurance Benefits.
(vi) For a 24-month period after such termination, the Company
shall provide or cause Executive to be provided with the perquisites listed on
Schedule C, attached hereto (which the Company may amend from time to time
prior to a Change in Control, without Executive's consent), on the same terms
and conditions on which such perquisites were provided at the time of
Executive's termination or, if more generous, immediately prior to such
termination.
(vii) In addition to all other amounts payable to Executive
under this Section 8(d), Executive shall be entitled to receive all benefits
payable to Executive under any other plan, policy or agreement relating to
retirement or other benefits, in accordance with the terms of such plans,
policies or agreements; provided, however that, amounts paid pursuant to this
Section 8(d) shall be in lieu of any payments under any JM separation policy.
(viii) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed 20% of Executive's Base Salary in effect at the time of such termination
or, in the event of termination by Executive by reason of an event described in
Section 8(e)(iv) below, the Base Salary as in effect prior to the reduction or
reductions referred to therein.
(e) Good Reason Following a Change in Control. For purposes of this
Agreement, following a Change in Control, "Good Reason" shall mean:
(i) a material adverse change in the nature or scope of
Executive's responsibilities, authorities, duties and/or position (including by
reason of a
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substantial reduction in the size of the Company or other substantial change in
the character or scope of the Company's operations);
(ii) Executive no longer serves in the position described in
Section 2, other than by reason of a promotion or a termination for Cause or
Disability;
(iii) the Company fails to pay Executive any amounts otherwise
vested and due hereunder or under any plan or policy of the Company;
(iv) a reduction in Executive's Base Salary in effect
immediately prior to the Change in Control or as the same may be increased from
time to time;
(v) a reduction in Executive's incentive compensation
opportunity, as defined below, under the JM executive incentive compensation
plans as in effect immediately prior to the Change in Control or as the same
may be increased from time to time (absent, in the case of any such reduction
relative to Executive's annual bonus, a corresponding increase in his Base
Salary);
(vi) the failure of the Company, to continue to provide
Executive with benefits and perquisites which are substantially similar in the
aggregate to those enjoyed by Executive under the Company's pension, life
insurance, medical, health and accident, disability, deferred compensation or
savings or similar plans and fringe benefit programs (including vacation) in
which Executive was participating immediately prior to the Change in Control;
or the failure by the Company to continue to provide Executive with directors'
or officers' insurance, as applicable, at the level maintained immediately
prior to the Change in Control;
(vii) the Executive's office is relocated outside of a 00-xxxx
xxxxxx xx Xxxxxx, Xxxxxxxx without his written consent;
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(viii) the failure of the Company to obtain an agreement from
any successor to assume and agree to perform this Agreement, as contemplated in
Section 13(e) hereof; or
(ix) any purported termination of Executive's employment by the
Company which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 13(f) and, if applicable, following the written
demand described in Section 8(c) and the relevant cure period.
If Executive provides a Notice of Termination, as defined in Section
13(f), in connection with an event described in clauses (i) through (vii) of
this Section 8(e), to the Company, the Company shall have ten (10) business
days from the date of receipt of such notice to effect a cure of the event
described therein, and upon cure thereof by the Company to Executive's
reasonable satisfaction, such event shall no longer constitute Good Reason for
purposes of this Agreement.
(f) Reduction in Incentive Compensation Opportunity. For purposes of
this Agreement, a "reduction in Executive's incentive compensation opportunity"
under the JM executive incentive compensation plans shall include:
(i) the failure to maintain both an annual and a long-term
incentive plan;
(ii) any reduction or elimination by the Company of Executive's
annual or long-term incentive compensation pursuant to any reserved right under
any such plan to decrease or eliminate such bonus or award;
(iii) any reduction in Executive's participation level under any
such plan; and
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(iv) any adverse change in the payout schedule or its
equivalent or in the manner of assessing actual performance under any such plan
and/or any extraordinary change in the applicable performance criteria
thereunder.
(g) Change in Control. For purposes of this Agreement, the phrase
"Change in Control" shall mean the following and shall be deemed to have
occurred if any of the following events shall have occurred:
(i) any Person (as defined below) (other than JM, any trustee
or other fiduciary holding securities under any employee benefit plan of JM, or
any company owned, directly or indirectly, by the stockholders of JM in
substantially the same proportions as their ownership of the common stock of
JM) becomes the Beneficial Owner (as defined below) (except that a Person shall
be deemed to be the Beneficial Owner of all shares that any such Person has the
right to acquire pursuant to any agreement or arrangement or upon exercise of
conversion rights, warrants or options or otherwise, without regard to the
sixty day period referred to in Rule 13d-3 under the Exchange Act (as defined
below)), directly or indirectly, of securities of JM or any Significant
Subsidiary (as defined below), representing 30 percent or more of the combined
voting power of JM's or such subsidiary's then outstanding securities;
provided, however, that such event shall not constitute a Change in Control
unless or until the percentage of such securities owned beneficially, directly
or indirectly, by such Person is equal to or more than all such securities
owned beneficially, directly or indirectly, by Manville Personal Injury
Settlement Trust (the "Trust");
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board, and any new director
(other than a
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director designated by a person who has entered into an agreement with JM to
effect a transaction described in clause (i), (iii), or (iv) of this paragraph)
whose election by the Board or nomination for election by JM's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved but excluding
for this purpose any such new director whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of an individual, corporation, partnership, group, associate or other
entity or Person other than the Board, cease for any reason to constitute at
least a majority of the Board; provided, however, that such event shall not
constitute a Change in Control unless or until the percentage of voting
securities of JM owned beneficially, directly or indirectly, by the Trust is
less than 50 percent of all such outstanding securities;
(iii) the consummation of a merger or consolidation of JM or any
subsidiary owning directly or indirectly all or substantially all of the
consolidated assets of JM (a "Significant Subsidiary") with any other
corporation, other than a merger or consolidation which would result in the
voting securities of JM or a Significant Subsidiary outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or resulting entity)
more than 50 percent of the combined voting power of the surviving or resulting
entity outstanding immediately after such merger or consolidation;
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(iv) the stockholders of JM or any affiliate approve a plan or
agreement for the sale or disposition of all or substantially all of the
consolidated assets of JM (other than such a sale or disposition immediately
after which such assets will be owned directly or indirectly by the
stockholders of JM in substantially the same proportions as their ownership of
the common stock of JM immediately prior to such sale or disposition) in which
case the Board shall determine the effective date of the Change in Control
resulting therefrom; or
(v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of JM or its ownership.
(vi) Defined terms.
(A) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.
(B) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(C) "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, and shall include a "group" as defined in Section 13(d) thereof.
9. [Reserved.]
10. Indemnification. The Company will indemnify Executive (and his
heirs, legal representatives or other successors) to the fullest extent
permitted (including payment of expenses in advance of final disposition of a
proceeding) by the laws of the jurisdiction of incorporation of the Company, as
in effect at the time of the subject act or
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omission, or by the Restated Certificate of Incorporation and By-Laws of the
Company, as in effect at such time or on the effective date of this Agreement,
or by the terms of any indemnification agreement between the Company and
Executive, whichever affords or afforded greatest protection to Executive, and
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers (and to the extent the Company maintains such an insurance policy or
policies, Executive shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for
any Company officer or director), against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representatives at the
time such costs, charges and expenses are incurred or sustained, in connection
with any action, suit or proceeding to which he (or his legal representatives
or other successors) may be made a party by reason of his being or having been
a director, officer or employee of the Company, JM or any subsidiary of either
of them, or his serving or having served any other enterprise as a director,
officer or employee at the request of the Company or JM.
11. Legal Fees. In the event of a dispute between Executive and the
Company with respect to any of Executive's rights under this Agreement, the
Company shall reimburse Executive for any and all legal fees and related
expenses incurred by him in connection with enforcing such rights, at the time
such fees and related expenses are incurred; provided that, if Executive's
claim is found by a court of competent jurisdiction to have been frivolous,
Executive shall reimburse the Company for all amounts paid by it under this
Section.
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12. Noncompetition; Confidentiality; Specific Performance.
(a) In consideration of the agreements herein of the Company,
Executive acknowledges and herein recognizes the competitive nature of the
businesses of the Company and its affiliates and agrees that he will not at any
time during his employment with the Company or for a period of two years after
termination of his employment, without the Company's written consent, serve as
an employee, owner, officer, agent, director or consultant of any firm or
business which competes with a line of business (i) then being conducted by the
Company or one of its affiliates, in any geographic area in which the Company
or any of its affiliates conducts such line of business, and (ii) that at any
time during Executive's employment by the Company is or was conducted, or is or
was actively being developed, by the Company or any affiliate of the Company.
(b) Executive will not at any time (whether during or after his
employment with the Company) disclose or use for his own benefit or purposes,
or the benefit or purposes of any other person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise other than the Company and any of its subsidiaries or affiliates,
any Trade Secrets of the Company without first obtaining the written consent of
the Company.
Executive will not at any time during his employment with the Company or
for a period of two years after termination of his employment, disclose or use
for his own benefit or purposes or the benefit or purposes, of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company and any of
its subsidiaries or affiliates, any
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Confidential Information of the Company which is disclosed to or learned by
Employee during employment with the Company. Employee acknowledges that
Confidential Information and materials developed by Employee, or Confidential
Information and materials received by the Company in confidence from third
parties, are also included within the meaning of this Section.
As used herein "Trade Secret" means the whole or any portion or phrase of
any technical information, design, process, procedure, formula or improvement
known or used by the Company that is valuable and secret (in the sense that it
is not generally known to competitors of the Company). To the extent consistent
with the foregoing, Trade Secrets include (without limitation) the specialized
information and technology that provide the Company with an advantage over
competitors or potential competitors in its industry.
As used herein "Confidential Information" means any data or information
known by the Company related to the business of the Company, other than Trade
Secrets, that is of competitive significance to the Company and not generally
known by the public. To the extent consistent with the foregoing, "Confidential
Information" includes (without limitation): cost data (such as labor or
material costs pertaining to the products or services) of the Company; data
relating to efficiency of the Company's operations; the identity and location
of vendors and the terms of sale (including prices) negotiated with such
vendors; data relating to sales -- by customer, by location, by product
category, by sales price, or by end-use application; customer lists; financial
information hat has not been released to the public; future business plans,
marketing strategies, or advertising campaigns; and personnel files.
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Executive agrees that upon termination of his employment with the Company for
any reason, he will return to the Company immediately all memoranda, books,
papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Executive further agrees that he will not retain or use for his account at any
time any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.
(c) Executive acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of this Section
would be inadequate and, in recognition of this fact, Executive agrees that, in
the event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may then be available.
13. Miscellaneous.
(a) Governing Law; Liability of the Executive. This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado.
Executive shall not be subject to liability for breach of this Agreement by
reason of his termination of his employment hereunder.
(b) Entire Agreement/Amendments/Effectiveness. This Agreement shall
supersede any and all existing employment, change-in-control or severance
agreements between Executive and the Company or any of its affiliates and
contains
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the entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement and any amendment hereto shall not be effective unless and until
signed by the Chief Executive Officer of the Company and attested to by the
General Counsel of the Company.
(c) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
(d) Severability. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in Section 12 to
be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory restriction in Section 12 is
an unenforceable restriction against Executive, such provision shall not be
rendered void but shall be deemed amended to apply to such maximum time and
territory, if applicable, or otherwise to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in Section 12 is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein. In the event that any one or more of the
other provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect,
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the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
(e) Successors; Binding Agreement. (i) In the event of a Change in
Control, the Company will require the successor to the Company as Executive's
employer (whether such succession is direct or indirect, by purchase, merger,
consolidation or otherwise, to any portion of the business and/or assets of JM
or the Company) to expressly assume 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. As used in this Agreement,
"Company", shall mean the Company as hereinbefore defined and any successor to
its business and/or assets. Prior to a Change in Control, the term "Company",
shall also mean any affiliate of the Company to which Executive may be
transferred and the Company shall cause such successor employer to be
considered the "Company" bound by the terms of this Agreement and this
Agreement shall be amended so to provide. Following a Change in Control the
term "Company" shall not mean any affiliate of the Company to which Executive
may be transferred unless Executive shall have previously approved of such
transfer in writing, in which case the Company shall cause such successor
employer to be considered the "Company" bound by the terms of this Agreement
and this Agreement shall be amended so to provide.
(ii) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amount would still be payable to Executive
hereunder if Executive had continued to
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live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's heirs, devisee,
legatee or other designee or, if there is no such designee, to Executive's
estate. This Agreement shall not be assignable by Executive.
(f) Notice; Notice of Termination. (i) For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and, except as otherwise provided in paragraph (iii) below,
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the signature page of this Agreement;
provided that all notices to the Company shall be directed to the attention of
the General Counsel of JM, or to such other address as either 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.
(ii) Any purported termination of Executive's employment by the
Company or by Executive shall not be effective unless communicated by written
Notice of Termination to the other party hereto in accordance with paragraph
(i) above. For purposes of this Agreement, a "Notice of Termination" in the
case of a termination for Cause following a Change in Control shall mean a
notice given within ten (10) business days of the Company's having actual
knowledge of the events giving rise to such termination and in all cases shall
mean a notice which indicates the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
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(iii) The date of termination of Executive's employment shall
be the date of receipt of the Notice of Termination, except in the case of (A)
Executive's death, in which case the date of termination of employment shall be
the date of death or (B) Executive's termination for Cause following a Change
in Control, in which case the date of termination shall be ten (10) business
days after actual receipt by Executive of the Notice of Termination; provided
that, if within thirty (30) days after any Notice of Termination following a
Change in Control is received, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
date of termination of Executive's employment shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or the
time for appeal therefrom has expired and no appeal has been perfected); and
provided further that the date of termination of Executive's employment shall
be extended by a notice of dispute only if such notice is given in good faith
and the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Company will continue to pay Executive his full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
Base Salary and incentive compensation) or, if higher, the compensation in
effect immediately prior to the Change in Control, and continue Executive as a
participant in all compensation, benefit (including fringe benefits and
perquisites) and insurance plans in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this paragraph (iii).
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Amounts paid under this paragraph are in addition to all other amounts
due under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
(g) Arbitration. The parties hereby agree to submit all controversies,
claims and matters of difference in any way related to this Agreement or the
performance or breach of the whole or any part hereof, to arbitration in
Denver, Colorado, according to the rules and practices of the American
Arbitration Association from time to time in force. If such rules and practices
shall conflict with the Colorado Rules of Civil Procedure or any other
provisions of Colorado law then in force, such Colorado rules and provisions
shall govern. Arbitration of any such controversy, claim or matter of
difference shall be a condition precedent to any legal action thereon. This
submission and agreement to arbitration shall be specifically enforceable.
Awards shall be final and binding on all parties to the extent and in the
manner provided by Colorado law; provided that an arbitration award shall not
be binding on the Company to the extent such award exceeds the maximum amount
the Company would be required to pay Executive pursuant to the express terms of
this Agreement. All awards may be filed by any party with the Clerk of the
District Court in the County of Denver, Colorado and an appropriate judgment
entered thereon and execution issued therefor. At the election of any party,
said award may also be filed, and judgment entered thereon and execution issued
therefor, with the clerk of one or more other courts, state or federal, having
jurisdiction over the party against whom such award is rendered or its
property.
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(h) Counterparts. This Agreement may be signed in several
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(i) Non-Disparagement. The Company and the Executive shall each use
its respective best efforts not to make any statements or take any action that
may be derogatory or disparaging to the reputation of the other or, in the case
of the Executive, to the reputation of any of the Company's affiliates.
Notwithstanding the foregoing, nothing in this Agreement shall preclude either
party from truthful statements or disclosures that are required by applicable
law or regulation, or from taking any position or from disclosing the terms of
this Agreement in prosecuting or defending any judicial, administrative or
arbitration proceeding arising hereunder.
(j) Cooperation. Executive agrees that following termination of
Executive's employment with the Company prior to a Change in Control for a
period ending on the earlier to occur of the fifth anniversary of such
termination or a Change in Control, Executive shall make himself reasonably
available to the Company and its legal counsel, taking into consideration
Executive's other obligations, and shall cooperate with the Company in
connection with any litigation, investigation or other proceeding relating to
events occurring during Executive's employment hereunder or facts as to which
he has knowledge; provided that Executive shall be entitled to reimbursement of
necessary and reasonable expenses incurred in connection therewith subject to
provision of receipts therefor and provided further that (i) nothing herein
shall require Executive to make any but truthful statements and (ii) Executive
will not be required so to cooperate to the extent his position is in conflict
with that of the Company.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
/s/ XXXXXX X. XXXXXXXXX
---------------------------------------
Xxxxxx X. Xxxxxxxxx
XXXXX XXXXXXXX INTERNATIONAL, INC.
/s/ X. X. XXXXX
---------------------------------------
X.X. Xxxxx
Chairman, Chief Executive Officer
and President
ATTEST: /s/ XXXXXXX X. XXX XXXX
-------------------------------------------
Xxxxxxx X. Xxx Xxxx
Executive Vice President, General Counsel
and Secretary
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Xxxxxx X. Xxxxxxxxx
Schedule A
Outside Directorships Held
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Xxxxxx X. Xxxxxxxxx
Schedule B
Incentive Compensation Plans in Effect
Annual Incentive Compensation Plan for Xxxxx Xxxxxxxx Corporation.
Xxxxx Xxxxxxxx Corporation 1996 Executive Incentive Compensation Plan.
Xxxxx Xxxxxxxx Corporation 1996 Deferred Compensation Plan.
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Xxxxxx X. Xxxxxxxxx
Schedule C
Fringe Benefit Arrangements and Perquisites in Effect
Club Initiation Fee & Dues
The Company will pay the initial fee and dues for one country club
and one luncheon or city club of the Executive's choice. The
initiation fee and first year's dues will be "grossed up" for tax
purposes.
Financial & Estate Planning
The Company will pay the reasonable cost of periodic financial and
estate planning.
Annual Executive Physical Exam Program
Income Tax Return Preparation
The Company will pay annual income tax return preparation fees up to
$2,000 plus additional fees if incurred on account of job-related
circumstances including the cost of representation by return preparer
during an audit.
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