Exhibit 10.10
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT")
is entered into as of the date set forth below and effective as of the Effective
Date (defined below), by and between Xxxxxx International, Inc. (the "COMPANY"),
a Delaware corporation, and Xxxxxxx X. Xxxxx (the "EXECUTIVE").
PRELIMINARY STATEMENTS
WHEREAS, the Company and the Executive previously entered into that certain
Executive Employment Agreement, dated as of January 1, 2003 (the "EMPLOYMENT
AGREEMENT");
WHEREAS, the Company and the Executive previously entered into that certain
Severance Agreement (the "SEVERANCE AGREEMENT") dated as of January 29, 2000
whereby the rights and obligations of the Executive in the event of a
termination associated with a change in control of the Company were set forth;
WHEREAS, on March 29, 2004, the Company filed a voluntary petition for
bankruptcy under Chapter 11 of Title 11 of the U.S. Code (11 USC Section 101,
ET. SEQ.) in the U.S. Bankruptcy Court for the Southern District of Indiana (the
"BANKRUPTCY"); and
WHEREAS, the Company and the Executive desire to amend and restate the
Employment Agreement on the terms and conditions set forth herein such that this
Agreement shall supersede and replace both the Employment Agreement and the
Severance Agreement and shall address the Executive's employment and termination
of employment with the Company following the Company's emergence from
Bankruptcy.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
SECTION 1. EMPLOYMENT.
(a) PRIOR AGREEMENTS. Effective as of the effective date of the Company's
plan of reorganization (the "PLAN OF REORGANIZATION") as filed with the U.S.
Bankruptcy Court for the Southern District of Indiana (the "EFFECTIVE DATE"),
the Executive's employment with the Company and benefits upon a termination of
employment shall be governed by this Agreement, which restates and supersedes
each of the Employment Agreement and the Severance Agreement.
(b) OFFER AND ACCEPTANCE. During the Employment Term (as defined in
SECTION 1(d) below), the Company agrees to employ the Executive in the position
of President and Chief Executive Officer of the Company upon the terms and
subject to the conditions set forth herein, and the Executive agrees to remain
in the employ of the Company on such terms and conditions.
(c) DUTIES. The Executive's duties shall include those duties that are
consistent with his position as President and Chief Executive Officer of the
Company as well as those reasonably assigned to him from time to time, in good
faith, by the Board of Directors of the Company (the "BOARD"). The Executive
shall (i) devote his working hours, on a full-time basis, to his duties under
this Agreement; (ii) faithfully, industriously and loyally serve the Company;
(iii) comply in all material respects with the lawful and reasonable directions
and instructions given to him by the Board; and (iv) use his reasonable best
efforts to promote and serve the interests of the Company. The Executive shall
comply in all material respects with all applicable laws, rules and regulations
relating to the performance of the Executive's duties and responsibilities
hereunder. The Executive agrees to serve as (i) a member of the Board and on any
of the board of directors of any subsidiary or affiliate of the Company, and
(ii) as an officer of any subsidiary or affiliate of the Company, without any
additional compensation while he is employed by the Company. Upon termination of
the Executive's employment by the Company for any reason, the Executive shall
immediately resign from the Board and any other position as a member of the
board of directors or as an officer of any such subsidiary or affiliate of the
Company.
(d) EMPLOYMENT TERM. The Executive's employment by the Company under this
Agreement shall commence on the Effective Date and shall continue thereafter and
shall terminate on September 30, 2007 (the "EMPLOYMENT TERM"), unless renewed by
a subsequent written agreement of the parties. The Executive's employment by the
Company shall be subject to termination at any time during the Employment Term
as provided in subsection (f) of this SECTION 1. As used herein, the term
"EMPLOYMENT TERM" shall mean the actual period of time during which the
Executive is employed by the Company under the terms and conditions of this
Agreement.
(e) COMPENSATION AND BENEFITS. During the Employment Term, the Company
shall pay and provide the following compensation and other benefits to the
Executive as full compensation for all services rendered by the Executive as an
employee of the Company under the terms and conditions of this Agreement. All
payments made to the Executive hereunder shall be subject to appropriate payroll
deductions and other withholdings required by law.
(i) ANNUAL SALARY. During the Employment Term, the Company shall
pay to the Executive, in accordance with the then prevailing payroll
practices of the Company, a base salary (the "ANNUAL SALARY") at the annual
rate of Four Hundred Eighty Thousand Dollars ($480,000) per year.
(ii) BONUSES. With respect to each full fiscal year during the
Employment Term, the Executive shall be eligible to receive an annual bonus
based upon the achievement by the Company of specific performance
requirements (e.g. EBITDA benchmarks' and/or working capital targets) which
shall be determined by the Board in its sole and absolute discretion prior
to or at the commencement of the applicable fiscal year (the "BONUS"). The
actual amount of the Bonus shall be equal to a percentage of the Annual
Salary in effect as
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of September 30th of such fiscal year and shall be determined by the Board
in its sole and absolute discretion prior to or at the commencement of the
applicable fiscal year. Notwithstanding the foregoing, for the 2004 fiscal
year only, the target amount for the Bonus shall be sixty percent (60%) of
the Annual Salary in effect as of September 30, 2004; provided, however,
Executive shall be eligible to receive a minimum Bonus in an amount equal
to thirty-five percent (35%) of such Annual Salary and a maximum Bonus
equal to one hundred twenty percent (120%) of such Annual Salary, based
upon the achievement of the performance requirements, as determined by the
Board in its sole and absolute discretion. The Bonus, if earned, shall be
paid to the Executive by the Company no later than February 1 of the
following calendar year.
(iii) BENEFITS. The Executive shall be eligible to participate in
all employee health and welfare benefit plans in which senior executives of
the Company are entitled to participate, but participation shall be subject
to all of the terms and conditions) of such plans applicable to all such
senior executives, including all waiting periods, eligibility requirements,
contributions, exclusions and other similar conditions or limitations. In
the case of any disability plan, the Company agrees that such plan will
provide the benefits contemplated by SECTION 1(e)(iv) or in lieu of such
plan participation, the Company will provide to the Executive the
disability insurance coverage contemplated by SECTION 1(e)(iv).
(iv) INSURANCE. The Executive shall be entitled to receive
long-term disability insurance coverage and the amount of the benefit
payments under such insurance coverage shall be not less than sixty percent
(60%) of the Annual Salary then in effect (the "DISABILITY INSURANCE"). The
Company shall pay all premiums related to the Disability Insurance as long
as the Executive is employed by Company hereunder. In addition, the Company
shall provide the Executive with a life insurance policy in a face amount
equal to five (5) times the Annual Salary then in effect (the "LIFE
INSURANCE"), which policy shall be convertible to an individual policy at
the election of the Executive upon termination of the Executive's
employment by the Company. The Company shall be the owner of the Life
Insurance and shall pay all premiums related thereto prior to termination
of the Executive's employment by the Company.
(v) EXPENSES. The Company shall reimburse the Executive, in
accordance with the then prevailing reimbursement practices of the Company,
for all reasonable and customary business expenses incurred by the
Executive in connection with his employment by the Company, including, but
not limited to, all reasonable and customary travel-related expenses
incurred in connection with periodic trips to Syracuse, New York, provided,
in any case, that the Executive complies with the standard reporting and
reimbursement policies as may be established by the Company from time to
time.
(vi) VACATION. The Executive shall be entitled to five (5) weeks of
vacation, measured on a calendar year basis. The Executive shall schedule
vacation periods at reasonable times in accordance with the Company's
vacation policy for senior executives. The Executive shall accrue and
receive full compensation and benefits during his vacation periods. Unused
vacation leave time shall not entitle the Executive to any additional
compensation and may not be carried over to a subsequent calendar year.
(vii) SERP. The Executive shall be entitled to participate in the
Xxxxxx International, Inc. Supplemental Executive Retirement Plan on the
terms and conditions
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as set forth in the Participation Agreement entered into by and between the
Executive and the Company dated December 13, 2002 as amended as of the date
hereof (the "SERP").
(viii) COMPANY CAR. The Company shall provide the Executive with the
use of an automobile owned or leased by the Company at its expense for
Company-related purposes (the "COMPANY CAR"). The Company shall pay or
reimburse the Executive for all expenses incurred in connection with the
Executive's use of the Company Car, including, but not limited to,
insurance, gasoline, registration taxes and maintenance. The Company Car
shall be a Buick Park Avenue or an automobile of a similar class. The
Executive agrees that the use of the Company Car for personal-related
matters will result in imputed income to the Executive and at the end of
each calendar year, the Company and its accountants shall reasonably
determine the amount of such income to be included in the Executive's
compensation in connection with the personal use of the Company Car and the
Executive agrees that he shall be responsible for any and all taxes imposed
on such imputed income.
(ix) COUNTRY CLUB MEMBERSHIP. The Company shall reimburse the
Executive for all regular monthly membership dues and business-related
charges incurred by the Executive in connection with his membership at a
country club. The Executive agrees that he shall be responsible for any and
all taxes imposed on the reimbursements made pursuant to the preceding
sentence.
(x) OPTIONS. As of the Effective Date, the Company shall establish
a long-term equity incentive plan in which the Executive is eligible to
participate (the "LTIP"). During the Employment Term, the Executive shall
remain eligible to participate in the LTIP pursuant to the terms and
conditions set forth therein.
(xi) DEATH BENEFIT PLAN. The Executive shall be eligible to
participate in the Xxxxxx International, Inc. Death Benefit Plan, as
amended, pursuant to the terms and conditions set forth in such plan.
(f) TERMINATION OF EMPLOYMENT. Subject to the terms of Section 1(g) below,
the Executive's employment by the Company may be terminated as follows:
(i) TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT TERM. Unless
otherwise agreed to in writing by the Company and the Executive, the
Executive's employment shall terminate on September 30, 2007 unless
terminated earlier pursuant to this SECTION 1(f). In the event that the
Executive's employment terminates upon the expiration of the Employment
Term, then the Executive shall be entitled to receive the compensation and
benefits set forth in SECTION 1(g)(i).
(ii) TERMINATION FOR CAUSE. The Company may immediately terminate,
at any time, Executive's employment by the Company for "Cause." A
termination for "Cause" means a termination by reason of the Board's good
faith determination that the Executive (i) continually failed to
substantially perform his duties with the Company (other than a failure
resulting from the Executive's medically documented incapacity due to
physical or mental illness) including, without limitation, repeated refusal
to follow the reasonable
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directions of the Board, knowing violation of the law in the course of
performance of the Executive's duties with the Company, repeated absences
from work without a reasonable excuse, or intoxication with alcohol or
illegal drugs while on the Company's premises during regular business
hours, (ii) engaged in conduct which constituted a material breach of
SECTION 2 or SECTION 3 of this Agreement, (iii) was indicted (or equivalent
under applicable law), convicted of, or entered a plea of nolo contendere
to the commission of a felony or crime involving dishonesty or moral
turpitude, or (iv) engaged in conduct which is demonstrably and materially
injurious to the financial condition, business reputation, or otherwise of
the Company or its subsidiaries or affiliates, or (v) perpetuated a fraud
or embezzlement against the Company or its subsidiaries or affiliates, and
in each case the particular act or omission was not cured, if curable, in
all material respects by the Executive within thirty (30) days after
receipt of written notice from the Board which shall set forth in
reasonable detail the nature of the facts and circumstances which
constitute Cause. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
Board. If the Company has reasonable belief that the Executive has
committed any of the acts described above, it may suspend the Executive
(with or without pay) while it investigates whether it has or could have
Cause to terminate the Executive. The Company may terminate the Executive
for Cause prior to the completion of its investigation; provided, that, if
it is ultimately determined that the Executive has not committed an act
which would constitute Cause, the Executive shall be treated as if he were
terminated without Cause.
(iii) TERMINATION WITHOUT CAUSE. The Company may, at any time,
terminate the Executive's employment by Company without Cause by providing
prior written notice thereof to the Executive.
(iv) RESIGNATION FOR GOOD REASON. The Executive may terminate his
employment by the Company for Good Reason (as defined below) by providing
written notice thereof to the Company (the "RESIGNATION NOTICE") at least
forty-five (45) days prior to the effective date of the resignation, which
notice shall set forth in reasonable detail the nature of the facts and
circumstances which constitute Good Reason and the Company shall have
thirty (30) days after receipt of the Resignation Notice to cure in all
material respects the facts and circumstances which constitute Good Reason.
For purposes of this Agreement, "GOOD REASON" shall mean the occurrence,
during the Employment Term, of any of the following actions or failures to
act, but in each case only if it is not consented to by the Executive in
writing: (a) a material adverse change in the Executive's duties, reporting
responsibilities, titles or elected or appointed offices as in effect
immediately prior to the effective date of such change; (b) a material
reduction by the Company in the Executive's Base Salary or annual bonus
opportunity in effect immediately prior to the effective date of such
reduction, not including any reduction resulting from changes in the market
value of securities or other instruments paid or payable to the Executive;
or (c) any change of more than 50 miles in the location of the principal
place of employment of the Executive immediately prior to the effective
date of such change. For purposes of this definition, none of the actions
described in clauses (a) and (b) above shall constitute "Good Reason" with
respect to the Executive if it was an isolated and inadvertent action not
taken in bad faith by the Company and if it is
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remedied by the Company within thirty (30) days after receipt of written
notice thereof given by the Executive (or, if the matter is not capable of
remedy within thirty (30) days, then within a reasonable period of time
following such thirty (30) day period, provided that the Company has
commenced such remedy within said thirty (30) day period); provided that
"Good Reason" shall cease to exist for any action described in clauses (a)
and (b) above on the sixtieth (60th) day following the later of the
occurrence of such action or the Executive's knowledge thereof, unless the
Executive has given the Company written notice thereof prior to such date.
(v) RESIGNATION WITHOUT GOOD REASON. The Executive may, at any
time, terminate the Executive's employment by the Company without Good
Reason by providing thirty (30) days' prior written notice thereof to the
Company.
(vi) DEATH; DISABILITY OR RETIREMENT. The Executive's employment
shall terminate immediately upon the Executive's death, Disability, or
Retirement (each as defined below). For purposes of this Agreement,
"DISABILITY" means the Executive is totally and permanently disabled as
defined in the Xxxxxx International, Inc. Pension Plan and "RETIREMENT"
means a resignation by the Executive after having reached age fifty-five
(55), but in no event prior to September 30, 2007.
(g) EFFECT OF TERMINATION.
(i) TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT TERM. Upon
the termination of the Executive's employment pursuant to SECTION 1(f)(i),
the Executive will be entitled to (A) payment of that portion of the
Executive's then effective) Annual Salary which has been earned but not yet
paid through and including the last day of the Executive's employment (the
"TERMINATION DATE"); (B) payment of any Bonus earned by the Executive under
the terms and conditions of this Agreement prior to the Termination Date
that remains unpaid; (C) reimbursement of any reimbursable business
expenses under SECTION 1(e)(v), which were incurred by the Executive
through and including the Termination Date; (D) continuation of benefits to
which the Executive is entitled under SECTION L(e)(iii) and SECTION
1(e)(iv) through and including the Termination Date and; (E) the SERP that
the Executive is entitled to under SECTION 1(e)(vii). In addition, any
unvested stock options held by the Executive shall terminate immediately
and any vested stock options held by the Executive shall remain exercisable
for ninety days (90) following the Termination Date, but in no event later
than the expiration date of such stock option as specified in the
applicable grant letter.
(ii) TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON. Upon
the Company's termination of the Executive's employment for Cause pursuant
to SECTION 1(f)(ii) or the Executive's resignation without Good Reason
pursuant to SECTION L(f)(v), Executive will be entitled to (A) payment of
that portion of the Executive's then effective Annual Salary which has been
earned but not yet paid through and including the Termination Date; (B)
payment of any Bonus earned by the Executive under the terms and conditions
of this Agreement prior to the Termination Date that remains unpaid; (C)
reimbursement of any reimbursable business expenses under SECTION 1(e)(v),
which were incurred by the Executive through and including the
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Termination Date; (D) continuation of benefits to which the Executive is
entitled under SECTION 1(e)(iii) and SECTION 1(e)(iv) through and including
the Termination Date; and (E) the SERP that the Executive is entitled to
under SECTION 1(e)(vii). In addition, (x) upon a termination by the Company
pursuant to SECTION 1(f)(ii), any vested or unvested stock options held by
the Executive shall terminate immediately and (y) upon the Executive's
resignation pursuant to SECTION 1(f)(v), any unvested stock options held by
the Executive shall terminate immediately and any vested stock option held
by the Executive shall remain exercisable for thirty (30) days following
the Termination Date but in no event later than the expiration date of such
stock option as specified in the applicable grant letter.
(iii) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. Upon
the Company's termination of the Executive's employment without Cause,
pursuant to SECTION 1(f)(iii) or the Executive's resignation for Good
Reason pursuant to SECTION L(f)(iv), the Executive shall be entitled to
receive a lump sum payment equal to (A) payment of that portion of the
Executive's then effective Annual Salary which has been earned but not yet
paid through and including the Termination Date; (B) payment of any Bonus
earned by the Executive under the terms and conditions of this Agreement
prior to the Termination Date that remains unpaid; and (C) payment of an
amount based upon the following formula:
(A + ((B + C)/2)) x 2
Where: "A" equals the Annual Salary then in effect;
"B" equals the Bonus paid or payable to the Executive with respect to the
fiscal year immediately preceding the fiscal year in which the Executive's
termination or resignation occurs (if no such Bonus was paid or payable with
respect to such year, the Bonus amount used for this calculation shall be zero).
"C" equals the Bonus paid or payable to the Executive with respect to the
second fiscal year preceding the fiscal year in which the Executive's
termination or resignation occurs (if no such Bonus was paid or payable with
respect to such year, the Bonus amount used for this calculation shall be zero.)
The Executive shall also be entitled to receive (A) reimbursement of any
reimbursable business expenses under SECTION 1(e)(v), which were incurred by the
Executive through and including the Termination Date; (B) continuation of
medical and hospitalization benefits to which the Executive is entitled under
SECTION 1(e)(iii), Life Insurance and Disability Insurance to which the
Executive is entitled under SECTION 1(e)(iv), in each case, until the second
(2nd) anniversary of the Termination Date; provided, however, that such benefits
shall terminate to the extent that the Executive obtains comparable benefits
coverage from another employer during such two (2) year period and (C) the SERP
that the Executive is entitled to under SECTION 1(e)(vii). In addition, any
unvested stock options held by the Executive will vest immediately and all
options held by the Executive will remain exercisable for one (1) year from the
Termination Date, but in no event later than the expiration date of such stock
option as specified in the applicable grant letter.
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(iv) DEATH; DISABILITY OR RETIREMENT. Upon termination of the
Executive's employment pursuant to SECTION 1(f)(vi), the Executive or the
Executive's heirs, estate, personal representative or legal guardian, as
appropriate, will be entitled to receive (A) payment of that portion of the
Executive's then effective Annual Salary which has been earned but not yet
paid through and including the Termination Date; (B) payment of any Bonus
earned by the Executive under the terms and conditions of this Agreement
prior to the Termination Date that remains unpaid; (C) reimbursement of any
reimbursable business expenses under SECTION 1(e)(v), which were incurred
by the Executive through and including the Termination Date; (D)
continuation of benefits to which the Executive is entitled under SECTION
1(e)(iii) and SECTION 1(e)(iv) through and including the Termination Date
(including, without limitation, coverage under any Company disability plan
then in effect); and (E) payment of the SERP that the Executive is entitled
to under SECTION 1(e)(vii) in accordance with its terms. In addition, any
unvested stock options held by the Executive will vest immediately and all
options held by the Executive will remain exercisable for one (1) year in
the event of death or Disability and six (6) months in the event of
Retirement following the Termination Date, but in no event later than the
expiration date of such stock option as specified in the applicable grant
letter.
(v) TIMING OF PAYMENT AND RELEASE. As a condition of receiving
from the Company the payments and benefits provided for under this SECTION
1(g) which the Executive otherwise would not be entitled to receive, the
Executive understands and agrees that, on the Termination Date, he will be
required to execute a release of all claims against the Company in
substantially the form attached hereto as Exhibit I (the "RELEASE") as may
be modified by the Company in good faith to reflect changes in law or its
employment practices. The Executive acknowledges that he has been advised
in writing to consult with an attorney prior to executing the Release. The
Executive agrees that he will consult with his attorney prior to executing
the Release. The Executive and the Company agree that the Executive has a
period of seven (7) days following the execution of the Release within
which to revoke the Release. The parties also acknowledge and agree that
the Release shall not be effective or enforceable until the seven (7) day
revocation period expires. The date on which this seven (7) day period
expires shall be the effective date of the Release (the "RELEASE EFFECTIVE
DATE"). The Company shall make all payments required under this Agreement,
except to the extent that such payments are to be made over time, within
five (5) business days following the Release Effective Date. In the event
of a termination for Cause or by reason of the Executive's death, the
Company shall make any payments under this SECTION 1(g) within five (5)
business days of the Termination Date, except to the extent that such
payments are to be made over time. The Executive understands that as used
in this SECTION 1(g)(iv), the "Company" includes its past, present and
future officers, directors, trustees, shareholders, employees, agents,
subsidiaries, affiliates, distributors, successors, and assigns, any and
all employee benefit plans (and any fiduciary of such plans) sponsored, by
the Company, and any other person related to the Company.
Except as specifically provided in this SECTION 1(g) or required under
applicable law, the Executive will not be eligible to receive any salary,
bonus or other compensation or benefits described in SECTION 1(e) with
respect to any future periods after the
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Termination Date; provided, however, the Executive shall have the right to
receive all compensation and benefits to which he is entitled under any
benefit plans of the Company to the extent he is fully vested as of the
effective date of the termination of the Executive's employment by the
Company pursuant to the terms and conditions of such employee benefit
plans.
SECTION 2. CONFIDENTIALITY. For purposes of this Section 2, the term
"Company" shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and assigns.
The term "Company's Business" shall mean the business of developing,
manufacturing, selling or distributing high-performance alloys for service in
severe corrosion and high temperature applications.
(a) CONFIDENTIAL INFORMATION. As used in this Agreement, "CONFIDENTIAL
INFORMATION" means any and all confidential, proprietary or other information,
whether or not originated by the Executive or the Company, which is in any way
related to the past or present Company's Business and is either designated as
confidential or not generally known by or available to the public. Confidential
Information includes, but is not limited to (whether or not reduced to writing
or designated as confidential) (i) information regarding the Company's existing
and potential customers and vendors; (ii) any contacts (including the existence
and contents thereof and parties thereto) to which the Company is a party or is
bound; (iii) information regarding products and services being purchased or
leased by or provided to the Company; (iv) information received by the Company
from third parties under an obligation of confidentiality, restricted,
disclosure or restricted use; (v) personnel and financial information of the
Company; (vi) information with respect to the Company's products, services,
facilities, business methods, systems, trade secrets, technical know-how, and
other intellectual property; (vii) marketing and developmental plans and
techniques, price and cost data, forecasts and forecast assumptions, and
potential strategies of the Company; and (viii) any other information relating
to the Company which was obtained by the Executive in connection with his
employment by the Company, whether before, on or after the Effective Date.
(b) NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION. The Executive
acknowledges that the Confidential Information of the Company is a valuable,
unique asset of the Company and the Executive's unauthorized use or disclosure
thereof could cause irreparable harm to the Company for which no remedy at law
could be adequate. Accordingly, the Executive agrees that he shall hold all
Confidential Information of the Company in strict confidence and solely for the
benefit of the Company, and that, he shall not, directly or indirectly, disclose
or use or authorize any third party to disclose or use any Confidential
Information except (i) as required for the performance of the Executive's duties
hereunder, (ii) with the express written consent of the Company, (iii) to the
extent that any such information is in or becomes in the public domain other
than as a result of the Executive's breach of any of his obligations hereunder,
or (iv) where required to be disclosed by court order, subpoena or other
government process and in such event, the Executive shall cooperate with the
Company in attempting to keep such information confidential. The Executive shall
follow all Company policies and procedures to protect all Confidential
Information and take any additional precautions necessary to preserve and
protect the use or disclosure of any Confidential Information at all times. The
Company shall reimburse the Executive for all reasonable
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expenses and costs he may incur as a result of cooperating under this SECTION
2(b), upon receipt of proper documentation.
(c) OWNERSHIP OF CONFIDENTIAL INFORMATION. The Executive acknowledges and
agrees that all Confidential Information is and shall remain the exclusive
property of the Company, whether or not prepared in whole or in part by the
Executive and whether or not disclosed to or entrusted to the custody of the
Executive. Upon the termination or resignation of his employment by the Company,
or at any other time at the request of the Company, the Executive shall promptly
deliver to the Company all documents, tapes, disks, or other storage media and
any other materials, and all copies thereof in whatever form, in the possession
of the Executive pertaining to the Company's Business, including, but not
limited to, any containing Confidential Information.
(d) SURVIVAL. The Executive's obligations set forth in this SECTION 2, and
the Company's rights and remedies with respect hereto, shall indefinitely
survive the termination of this Agreement and the Executive's employment by the
Company, regardless of the reason therefor.
SECTION 3. RESTRICTIVE COVENANTS. For purposes of this SECTION 3, the
term "Company" shall include, in addition to the Company, its affiliates,
subsidiaries and any of their respective predecessors, successors and assigns.
(a) NON-COMPETITION. During the Restricted Period and within the
Restricted Area (each as defined in subsection (c) below), the Executive shall
not, directly or indirectly, perform on behalf of any Competitor (as defined in
subsection (c) below) the same or similar services as those that the Executive
performed for the Company during the Executive's employment by the Company or
otherwise. In addition, the Executive shall not, during the Restricted Period or
within the Restricted Area, directly or indirectly engage in, own, manage,
operate, join, control, tend money or other assistance to, or participate in or
be connected with (as an officer, director, member, manager, partner,
shareholder, consultant, employee, agent, or otherwise), any Competitor.
(b) NON-SOLICITATION. During the Restricted Period, the Executive shall
not, directly or indirectly, for himself or on behalf of any Person (as defined
in subsection (c) below), (i) solicit or attempt to solicit any Customers (as
defined in subsection (c) below) or prospective Customers with whom the
Executive had contact at any time during the Executive's employment by the
Company; (ii) divert or attempt to divert any business of the Company to any,
other Person; (iii) solicit or attempt to solicit for employment, endeavor to
entice away from the Company, recruit, hire, or otherwise interfere with the
Company's relationship with, any Person who is employed by or otherwise engaged
to perform services for the Company (or was employed or otherwise engaged to
perform services for the Company, as of any given time, within the immediately
preceding twenty-four (24) month period); (iv) cause or assist, or attempt to
cause or assist, any employee or other service provider to leave the Company; or
(v) otherwise interfere in any manner with the employment or business
relationships of the Company or the business or operations then being conducted
by the Company.
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(c) DEFINITIONS. For purposes of this SECTION 3, the following definitions
have the following meanings:
(i) "COMPETITOR" means any Person that engages in a business that
is the same as, or similar to, the Company's Business.
(ii) "CUSTOMER" means any Person which, as of any given date, used
or purchased or contracted to use or purchase any services or products from
Company within the immediately preceding twenty-four (24) month period.
(iii) "PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, or unincorporated organization, or any governmental agency, officer,
department, commission, board, bureau, or instrumentality thereof.
(iv) "RESTRICTED AREA" means, because the market for the Company's
Business is global, or has the potential of being global, and is not
dependent upon the physical location or presence of the Company, the
Executive, or any individual or entity that may be in violation of this
Agreement, the broadest geographic region enforceable by law (excluding any
location where this type of restriction is prohibited by law) as follows:
(A) everywhere in the world that has access to the Company's Business
because of the availability of the Internet; (B) everywhere in the world
that the Executive has the ability to compete with the Company's Business
through the Internet; (C) each state, commonwealth, territory, province and
other political subdivision located in North America; (D) each state,
commonwealth, territory and other political subdivision of the United
States of America; (E) Indiana and any state in which the Executive has
performed any services for the Company; (F) any geographical area in which
the Company has performed any services or sold any products; (G) any
geographical area in which the Company or any of its subsidiaries have
engaged in the Company's Business, which has resulted in aggregate sales
revenues of at least $25,000 during any year in the five (5) year period
immediately preceding the commencement of the Restricted Period; (H) any
state or other jurisdiction where the Company had an office at any time
during the Executive's employment by the Company; (I) within one hundred
(100) miles of any location in which the Company had an office at any time
during the Executive's employment by the Company; and (3) within one
hundred (100) miles of any location in which the Executive provided
services for the Company.
(v) "RESTRICTED PERIOD" means the period of time during the
Executive's employment by the Company plus a period of twenty-four (24)
months from the Termination Date. In the event of a breach of this
Agreement by the Executive, the Restricted Period will be extended
automatically by the period of the breach.
(d) SURVIVAL. The Executive's obligations set forth in this Section 3, and
the Company's rights and remedies with respect thereto, will remain in full
force and effect during the Restricted Period and until full resolution of any
dispute related to the performance of the Executive's obligations during the
Restricted Period.
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(e) PUBLIC COMPANY EXCEPTION. The prohibitions contained in this SECTION 3
do not prohibit the Executive's ownership of stock which is publicly traded,
provided that (1) the investment is passive, (2) the Executive has no other
involvement with the company, (3) the Executive's interest is less than five
percent (5%) of the shares of the company, and (4) the Executive makes full
disclosure to the Company of the stock at the time that the Executive acquires
the shares of stock.
SECTION 4. ASSIGNMENT OF INVENTIONS. Any and all inventions,
improvements, discoveries, designs, works of authorship, concepts or ideas, or
expressions thereof, whether or not subject to patents, copyrights, trademarks
or service xxxx protections, and whether or not reduced to practice, that are
conceived or developed by the Executive while employed with the Company and
which relate to or result from the actual or anticipated business, work,
research or, investigation of the Company (collectively, "INVENTIONS"), shall be
the sole and exclusive property of the Company. The Executive shall do all
things reasonably requested by the Company to assign to and vest in the Company
the entire right, title and interest to any such Inventions and to obtain full
protection therefor. Notwithstanding the foregoing, the provisions of this
Agreement do not apply to an Invention for which no equipment, supplies,
facility, or Confidential Information of the Company was used and which was
developed entirely on the Executive's own time, unless (a) the Invention relates
(i) to the Company's Business, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the Invention results from any work
performed by the Executive for the Company.
SECTION 5. GENERAL.
(a) REASONABLENESS. The Executive has carefully considered the nature,
extent and duration of the restrictions and obligations contained in this
Agreement, including, without limitation, the geographical coverage contained in
SECTION 3 and the time periods contained in SECTION 2 and SECTION 3, and
acknowledges and agrees that such restrictions are fair and reasonable in all
respects to protect the legitimate interests of the Company and that these
restrictions are designed for the reasonable protection of the Company's
Business.
(b) REMEDIES. The Executive recognizes that any breach of this Agreement
shall cause irreparable injury to the Company, inadequately compensable in
monetary damages. Accordingly, in addition to any other legal or equitable
remedies that may be available to the Company, the Executive agrees that the
Company shall be able to seek and obtain injunctive relief in the form of a
temporary restraining order, preliminary injunction, or permanent injunction, in
each case without notice or bond, against the Executive to enforce this
Agreement. The Company shall not be required to demonstrate actual injury or
damage to obtain injunctive relief from the courts. To the extent that any
damages are calculable resulting from the breach of this Agreement, the Company
shall also be entitled to recover damages, including, but not limited to, any
lost profits of the Company and/or its affiliates or subsidiaries. For purposes
of this Agreement, lost profits of the Company shall be deemed to include all
gross revenues resulting from any activity of the Executive in violation of this
Agreement and all such revenues shall be held in trust for the benefit of the
Company. Any recovery of damages by the Company shall be in addition to and not
in lieu of the injunctive relief to which the Company is entitled. In no event
will a damage recovery be considered a penalty in liquidated damages. In
addition, in any action at law or in equity arising out of this Agreement, the
prevailing party shall be entitled
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to recover, in addition to any damages caused by a breach of this Agreement, all
costs and expenses, including, but not limited to, reasonable attorneys' fees,
expenses, and court costs incurred by such party in connection with such action
or proceeding. Without limiting the Company's rights under this SECTION 5(b) or
any other remedies of the Company, if a court of competent jurisdiction
determines that the Executive breached any of the provisions of Section or
SECTION 3, Company will have the right to cease making any payments or providing
any benefits otherwise due to the Executive under the terms and conditions of
this Agreement.
(c) CLAIMS BY EXECUTIVE. The Executive acknowledges and agrees that, any
claim or cause of action by the Executive against the Company shall not
constitute a defense to the enforcement of the restrictions and covenants set
forth in this Agreement and shall not be used to prohibit injunctive relief.
(d) AMENDMENTS. This Agreement may not be modified, amended, or waived in
any manner except by an instrument in writing signed by both parties to this
Agreement.
(e) WAIVER. The waiver by either party of compliance by the other party
with any provision of this Agreement shall not operate or be construed as a
waiver of any other provision of this Agreement (whether or not similar), or a
continuing waiver, or a waiver of any subsequent breach by a party of any
provision of this Agreement.
(f) GOVERNING LAW; JURISDICTION. The laws of the State of New York shall
govern the validity, performance, enforcement, interpretation, and other aspects
of this Agreement, notwithstanding any state's choice of law provisions to the
contrary. The parties intend the provisions of this Agreement to supplement, but
not displace, their respective obligations and responsibilities under the New
York and Indiana Uniform Trade Secrets Act. Any proceeding to enforce,
interpret, challenge the validity of, or recover for the breach of any provision
of, this Agreement may be filed in the courts of the State of Indiana or the
United States District Court sitting in Indianapolis, Indiana, and the parties
hereto expressly waive any and all objections to personal jurisdiction, service
of processor venue in connection therewith.
(g) COMPLETE AGREEMENT; RELEASE. This Agreement constitutes a complete and
total integration of the understanding of the parties with respect to the
subject matter hereof and thereof and supersedes all prior or contemporaneous
negotiations, commitments, agreements, writings, and discussions with respect to
the subject matter of this Agreement, including but not limited to the Severance
Agreement and the Employment Agreement. The Executive hereby unconditionally
releases and discharges the Company from any and all claims, causes of action,
demands, lawsuits or other charges whatsoever, known or unknown, directly or
indirectly related to the Severance Agreement and the Employment } Agreement
arising prior to the Effective Date.
(h) SEVERABILITY. If a court having proper jurisdiction holds a particular
provision of this Agreement unenforceable or invalid for any reason, that
provision shall be modified only to the extent necessary in the opinion of such
court to make it enforceable and valid and the remainder of this Agreement shall
be deemed valid and enforceable and shall be enforced to the greatest extent
possible under the then existing law. In the event the court determines such
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modification is not possible, the provision shall be deemed severable and
deleted, and all other provisions of this Agreement shall remain unchanged and
in full force and effect.
(i) ENFORCEABILITY IN JURISDICTIONS. The parties hereto intend to and
hereby confer jurisdiction to enforce the covenants contained in SECTIONS 2 AND
3 above upon the courts of any state within the geographical scope of such
covenants. If the courts of any one or more of such states shall hold any of the
previous covenants unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's rights to the relief provided above in
the courts of any other states within the geographical scope of such covenants,
as to breaches of such covenants in such other respective jurisdictions, the
above covenants as they relate to each state being, for this purpose, severable
into diverse and independent covenants.
(j) FAIR DEALING. The Executive acknowledges that the Company has
negotiated this Agreement in good faith and has been fair in its dealing with
the Executive. The Executive shall not raise any defense and expressly waives
any defense against the Company based upon any alleged breach of good faith or
fair dealing by the Company in connection with this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in two (2) counterparts,
each of which shall be deemed an original but both of which together shall
constitute one and the same Agreement. Facsimile transmission of the executed
version of this Agreement or any counterpart hereof shall have the same force
and effect as the original.
(l) EXECUTIVE WARRANTIES. The Executive warrants and represents to the
Company that the execution and performance of this Agreement does not and shall
not violate any express or implied obligations of the Executive to any other
person and that the Executive shall inform any prospective employer about the
existence of this Agreement before accepting employment by such employer.
(m) HEADINGS. The headings of the Sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction of this Agreement.
(n) THIRD PARTY BENEFICIARIES. The Company's affiliates and subsidiaries
are expressly made third party beneficiaries of this Agreement.
(o) NOTICES. Any notice required or permitted hereunder shall be
personally delivered or mailed by certified mail, return receipt requested, to
the addresses of the parties set out on the signature pages hereto, or as
changed from time to time by notice as provided herein.
(p) SUCCESSORS AND ASSIGNS. The Executive shall not assign or transfer any
of his rights or obligations under this Agreement to any individual or entity.
The Company may assign its rights hereunder to any of its affiliates or to any
individual or entity who or that shall acquire or succeed to, by operation of
law or otherwise, all or substantially all of the assets of the Company or the
Company's Business. All provisions of this Agreement are binding upon, shall
inure to the benefit of, and are enforceable by or against, the parties and
their respective heirs, executors, administrators or other legal representatives
and permitted successors and assigns.
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(q) OPPORTUNITY TO CONSULT COUNSEL. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS
CAREFULLY READ THIS AGREEMENT AND HAS BEEN GIVEN ADEQUATE OPPORTUNITY, AND HAS
BEEN ENCOURAGED BY THE COMPANY, TO CONSULT WITH LEGAL COUNSEL OF HIS CHOICE
CONCERNING THE TERMS HEREOF BEFORE EXECUTING THIS AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have made this Agreement effective as of
the Effective Date.
COMPANY
XXXXXX INTERNATIONAL, INC.
By: : /s/ Xxxxxx Xxxxxx
------------------------------------------
Printed: Xxxxxx Xxxxxx
----------------------------------------
Title: V.P. Finance, CFO
------------------------------------------
0000 X. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
[Exhibit I - Form of Release of Claims has been omitted from the Agreement
as filed with the Securities and Exchange Commission (the "SEC"). The omitted
information is filed as Exhibit 10.08 to the Registration Statement. The
Registrant will furnish supplementally a copy of any of the omitted exhibit to
the SEC upon request from the SEC.]
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