Exhibit 10.31
SEVERANCE AGREEMENT FOR THE XXXXXX
ALUMINUM & CHEMICAL CORPORATION SEVERANCE PLAN
(EFFECTIVE SEPTEMBER 3, 2002) (A)
THIS AGREEMENT (the "Agreement") is made, effective as of the ____ day
of ____________, 2002, between Xxxxxx Aluminum & Chemical Corporation, a
Delaware corporation (the "Company"), and _______________________________
(hereinafter called the "Participant").
R E C I T A L S:
WHEREAS, the Company has adopted the Xxxxxx Aluminum & Chemical
Corporation Severance Plan (Effective September 3, 2002) (the "Plan"), which
Plan is incorporated herein by reference and made a part of this Agreement.
Capitalized terms not otherwise defined herein will have the same meanings as in
the Plan; and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company to grant the severance benefits provided for herein to
the Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Severance Benefits. If the Company terminates the Participant's
employment without "Cause" (as defined below) (and other than as a result of the
Participant's death or disability) or the Participant terminates employment with
Good Reason (each, a "Qualifying Termination"), the Company or its successor
shall:
(a) make a payment to the Participant in an amount equal to the
product of the Participant's Base Salary, multiplied by ___________________(B)
(the "Severance Amount"), payable as a lump sum as soon as practicable (but in
no event later than 30 days) after the Qualifying Termination; and
(b) continue to provide welfare benefits to the Participant under
the Company's medical, dental, vision, life insurance and disability benefit
plans for a period of ____________ (B) following the Participant's
Qualifying Termination; provided, however, that the Participant must continue to
pay the monthly medical and life insurance contributions (if any) paid by active
employees of the Company for this coverage to remain in effect. If the
Participant is unable to continue participating in the Company's benefit plans
due to the provisions of the documents governing such plans or any other reason,
the Company will reimburse the Participant for his expenses in obtaining
comparable benefit coverage. Notwithstanding the foregoing, coverage under any
qualified retirement plan and (except as otherwise required by law) coverage
under any cafeteria plan, dependant care spending account or health care
spending account will cease upon any termination of employment, whether or not a
Qualifying Termination. The Company may satisfy a portion of its obligations by
reimbursing and/or paying the Participant's applicable COBRA premium with
respect to any such plans. The Company may require the health benefit
continuation period required under the continuation coverage requirements of
Section 4980B of the Internal Revenue Code of 1986, as amended, and Part 6 of
Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as
amended, to run concurrently with the benefit continuation period hereunder. The
Company's obligations under this clause (b) shall cease once the Participant is
eligible for comparable coverage from a subsequent employer.
(c) For purposes of this Agreement, "Cause" means (1) the
Participant's engaging in fraud, embezzlement, misconduct or any act of
dishonesty with respect to the Company or its affiliates, (2) the Participant's
habitual drug or alcohol use which impairs the ability of the Participant to
perform his duties with the Company or its affiliates, (3) the Participant's
indictment with respect to, conviction of, or plea of guilty or no contest to,
any felony, or other comparable crime under applicable local law (except, in any
event, for motor vehicle violations not involving personal injuries to third
parties or driving while intoxicated), or the Participant's incarceration with
respect to any of the foregoing that, in each case, impairs the Participant's
ability to continue to perform his duties with the Company and its affiliates,
or (4) the Participant's material breach of any written employment agreement or
other agreement between the Company and the Participant, or of the Xxxxxx
Aluminum & Chemical Corporation Code of Business Conduct, or failure by the
Participant to substantially perform his or her duties for the Company which
remains uncorrected or reoccurs after written notice has been delivered to the
Participant demanding substantial performance and the Participant has had a
reasonable opportunity to correct such breach or failure to perform.
2. Conditions to Receipt of Benefits. Notwithstanding any other
provision of this Agreement:
(a) The Company shall not be obligated to make any payment or
provide any benefit under Section 1 hereof if either:
(i) the Participant receives severance compensation or benefit
continuation pursuant to the Xxxxxx Aluminum & Chemical Corporation
Change in Control Severance Plan; or
(ii) the Participant's employment with the Company is
terminated for any reason other than a Qualifying Termination.
(b) The Company shall not be obligated to make any payment or
provide any benefit under Section 1 hereof unless the Participant executes a
Release Agreement, and thereby releases all current or future claims, known or
unknown, arising on or before the date of the release against the Company, its
subsidiaries and its officers, substantially in a form approved by the Company.
(c) Upon execution of this Agreement, the Participant hereby
waives the right to receive any payments under the Prior Plan and the Prior Plan
shall be superceded by this Agreement and shall be of no further force or
effect.
3. No Right to Continued Employment. Neither the Plan nor this
Agreement will be construed as giving the Participant the right to be retained
in the employ of the Company. Further, the Company may at any time dismiss the
Participant, free from any liability or any claim under the Plan or this
Agreement, except as otherwise expressly provided therein or herein.
4. Transferability. The rights of the Participant hereunder may
not, at any time, be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance will be void and
unenforceable against the Company; provided that the designation of a
beneficiary will not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance. No such permitted transfer to heirs or legatees
of the Participant will be effective to bind the Company unless the Committee
will have been furnished with written notice thereof and a copy of such evidence
as the Committee may deem necessary to establish the validity of the transfer
and the acceptance by the transferee or transferees of the terms and conditions
hereof.
5. Withholding. The Company will deduct from each payment all
applicable federal, state, local and other taxes required by law to be withheld
with respect to such payments.
6. Choice of Law. The interpretation, performance and enforcement
of this Agreement will be governed by the laws of the State of Texas, without
regard to principles of conflicts of law.
7. Subject to Plan. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and read a
copy of the Plan. This Agreement is subject to the Plan. The terms and
provisions of the Plan as it may be amended from time to time are hereby
incorporated herein by reference. In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the applicable
terms and provisions of the Plan will govern and prevail.
8. Confidentiality. Except as otherwise required by law or in
connection with tax and personal planning and family matters, the Participant
agrees to keep his participation in the Plan and the amount of any payments or
benefits hereunder confidential.
9. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which will be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
10. Complete Agreement. This Agreement embodies the complete
agreement and understanding between the parties with respect to the subject
matter hereof and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral (including, without limitation, any award or agreement granted under the
Prior Plan), which may have related to the subject matter hereof in any way. The
Company and the Participant hereby agree that upon execution of this Agreement,
any such prior agreements shall be superseded by this Agreement and such prior
agreements shall be of no further force or effect.
11. Restrictive Covenants.
(a) Noncompetition; Nonsolicitation. For the ____(B) period
following the termination of employment with the Company, the Participant agrees
that he will not, without the prior written consent of the Company, which shall
not unreasonably be withheld, directly or indirectly, whether as a principal,
agent, employee, consultant, contractor, advisor, representative, stockholder
(other than as a holder of an interest of five percent (5%) or less in the
equity of any corporation whose stock is traded on a public stock exchange), or
in any other capacity:
(i) provide services, advice or assistance to any business,
person or entity which competes with the Company directly, as a primary focus of
its business, in the United States or in any other location in which the Company
operates, in the manufacture, sale or delivery of any materials, products or
services which constitute more than twenty percent (20%) of the Company's
revenues in the prior twelve month period; or
(ii) intentionally entice, induce or solicit, or attempt to
entice, induce or solicit, any individual or entity having a business
relationship with the Company, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
By entering into this Agreement, the Participant acknowledges that these
prohibitions are reasonable as to time, geographical area and scope of activity
and do not impose a restriction greater than is necessary to protect the
Company's good will, proprietary information and business interests.
(b) Confidentiality. The Participant shall keep secret and
confidential and shall not disclose to any third party, in any fashion or for
any purpose whatsoever, any information regarding the Company which is (i) not
available to the general public, and/or (ii) not generally known outside the
Company, to which the Participant has or will have had access at any time during
the course of his or her employment by the Company, including, without
limitation, any information relating to: the Company's business or operations;
its plans, strategies, prospects or objectives; its products, technology,
Intellectual Property described in Subsection (g), processes or specifications;
its research and development operations or plans; its customers and customer
lists; its manufacturing, distribution, sales, service, support and marketing
practices and operations; its financial condition and results of operations; its
operational strengths and weaknesses; and, its personnel and compensation
policies and procedures. However, this provision shall not preclude the
Participant from providing truthful information to the extent required by
subpoena, court order, search warrant or other legal process, provided that the
Participant immediately notifies the Company of such request in order to provide
the Company an opportunity to object to such request in the appropriate forum
and to obtain a ruling on such objection.
(c) Cooperation. Upon termination of employment for any reason,
the Participant shall fully cooperate with the Company in all matters relating
to the winding up of his or her pending work on behalf of the Company and the
orderly transfer of any such pending work to other employees of the Company as
may be designated by the Company.
(d) Enforcement. Any claim arising out of or relating to this
Agreement or the Participant's employment with the Company or the termination
thereof, other than an action for injunctive relief as provided below, shall be
resolved by confidential, final and binding arbitration conducted by Judicial
Arbitration and Mediation Services ("JAMS") to be held in Houston, Texas, under
the then-existing JAMS rules, rather than by litigation in court, trial by jury,
administrative proceeding, or in any other forum. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The Company shall promptly pay all costs and expenses, including
without limitation reasonable attorneys' fees, incurred by the Participant or
his/her beneficiaries in resolving any claim hereunder in which the Participant
or his/her beneficiaries shall prevail. In all other cases the parties shall
bear their own costs and expenses, except that the Participant shall pay all
costs and expenses, including, without limitation, reasonable attorney's fees
incurred by the Company in resolving such claim if the arbitrator(s) determine
such claim to have been brought by the Participant (i) in bad faith or (ii)
without any reasonable basis. Notwithstanding the foregoing, the parties agree
that any breach of Subsection (a) or (b) above is likely to cause irreparable
injury to the Company and that damages for any breach of Subsections (a), (b) or
(g) are difficult to calculate. Therefore, upon breach of Subsections (a), (b)
or (g) hereof, the Company shall, at its election, be entitled to injunctive and
other equitable relief from a court or such other relief or remedies, including
damages, to which it may be entitled, and shall not be required to submit the
matter to arbitration.
(e) Return of Property. Upon termination of the Participant's
employment for any reason, the Participant will return to the Company all
property belonging to it, including without limitation, computer equipment,
computer programs, cellular telephones, beepers or other property belonging to
the Company, and documents, property and data of any nature and in any form,
including electronic or magnetic form, reflecting any confidential information
described in Subsection (b) above.
(f) Disparagement. The Participant agrees not to make any
derogatory, unfavorable, negative or disparaging statements concerning the
Company and its affiliates, officers, directors, managers, employees or agents,
or its and their business affairs or performance. This provision shall not be
construed to limit the Participant's ability to give non-malicious and truthful
testimony should the Participant be subpoenaed to do so by competent authority
having jurisdiction.
(g) Intellectual Property. For purposes of this Subsection (g),
the term "Intellectual Property" means all inventions, creations, trade secrets,
patents (utility or design) and other intellectual property relating to any
programming, documentation, technology, material, product, service, idea,
process, plan or strategy concerning the business or interests of the Company
that the Participant conceives, develops or delivers to the Company, in whole or
in part, at any time during his or her employment with the Company including,
without limitation, all copyrights, inventions, discoveries and improvements,
trademarks, designs and all other intellectual property rights. All such
Intellectual Property shall be considered work made for hire by the Participant
and owned by the Company. The Participant agrees to perform, upon the request of
the Company, during or after his or her employment, such acts as may be
necessary or desirable to transfer, perfect and defend the Company's ownership
and any resulting registrations of the Intellectual Property.
(h) Blue Pencil. If, at any time, the provisions of this Section
11 shall be determined to be invalid or unenforceable under any applicable law,
by reason of being vague or unreasonable as to area, duration or scope of
activity, this Agreement shall be considered divisible and shall become and be
immediately amended to only such area, duration and scope of activity as shall
be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter and the Participant and the Company agree that this
Agreement as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
(i) Acknowledgement. PARTICIPANT ACKNOWLEDGES THAT HE HAS
CAREFULLY READ THIS SECTION 11 AND HAS HAD THE OPPORTUNITY TO REVIEW ITS
PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED NECESSARY AND THAT PARTICIPANT
UNDERSTANDS THIS AGREEMENT'S CONTENTS AND SIGNIFIES SUCH UNDERSTANDING AND
AGREEMENT BY SIGNING BELOW.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the ____ day of ____________, 2002.
Xxxxxx Aluminum & Chemical Corporation
By:
Name:
Title:
Participant
(A) Form of Severance Agreement entered into as of September 3, 2002 with
executive officers of KAC and KACC, other than Xxxxxx X. Xxxx and Xxxx X.
Xx Xxx.
(B) For Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx, the multiplier
in Section 1(a) is two, the period of continued coverage in Section
1(b) is two years, and the non-solicitation/non-competition period in
Section 11(a) is one year.
