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EXHIBIT 10(t)
Agreement,
effective as of January 4, 1998,
between X. X. Xxxxx Corporation
and Xxxxxxx X. Xxxxxxx
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XXXXXXX
AGREEMENT
THIS AGREEMENT is made to be effective as of January 4, 1998,
by and between XXXXXXX X. XXXXXXX (the "Executive") and X. X. Xxxxx Corporation,
an Ohio corporation (the "Corporation").
BACKGROUND
In order to induce the Executive to remain in the employ of
the Corporation, the Corporation wishes to provide the Executive with certain
severance benefits in the event his employment with the Corporation terminates
subsequent to a change in control of the Corporation under the circumstances
described herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings unless otherwise expressly provided in
this Agreement:
(i) Change in Control. A "Change in Control" shall be deemed
to have occurred if (i) any "person" (as that term is used in ss.13(d) and
ss.14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) on the date hereof, including any "group" as such term is used in Section
13(d)(3) of the Exchange Act on the date hereof (an "Acquiring Person"), shall
hereafter acquire (or disclose the previous acquisition of) beneficial ownership
(as that term is defined in Section 13(d) of the Exchange Act and the rules
thereunder on the date hereof) of shares of the outstanding stock of any class
or class of the Corporation which results in such person or group possessing
more than 50.1% of the total voting power of the Corporation's outstanding
voting securities ordinarily having the right to vote for the election of
directors of the Corporation (a "Control Acquisition"); or (ii) as the result
of, or in connection with, any tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions (a "Transaction"), the persons who were directors
of the Corporation immediately before the completion of the Transaction shall
cease to constitute a majority of the Board of Directors of the Corporation or
any successor to the Corporation. Anything contained in this paragraph 1(i) to
the contrary notwithstanding, a "Change in Control" shall not be deemed to have
occurred if the Control Acquisition or the Transaction is approved by a majority
of the directors of the Corporation who were directors of the
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Corporation before the completion of the Control Acquisition or the Transaction,
as the case may be.
(ii) Disability. The Executive's employment shall be deemed to
have been terminated for "Disability" if, as a result of his incapacity due to
physical or mental illness, he shall have been absent from his duties with the
Corporation on a full-time basis for the entire period of four consecutive
months, and within 30 days after written notice of termination is given (which
may occur before or after the end of such four-month period) he shall not have
returned to the full-time performance of his duties.
(iii) Effective Period. The "Effective Period" means the
36-month period following any Change in Control (even if such 36-month period
shall extend beyond the term of this Agreement or any extension thereof).
(iv) Termination for Cause. The Corporation shall have "Cause"
to terminate the Executive's employment hereunder upon (A) the willful and
continued refusal by the Executive substantially to perform his duties with the
Corporation (other than any such refusal resulting from his incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to the Executive by the Corporation which specifically identifies the
manner in which it is believed that the Executive has refused substantially to
perform his duties, (B) failure of Executive to comply with any applicable law
or regulation affecting the Corporation's business, (C) the commission by
Executive of an act of fraud upon or an act evidencing bad faith or dishonesty
toward the Corporation, (D) conviction of Executive of any felony or misdemeanor
involving moral turpitude, (E) the misappropriation by Executive of any funds,
property, or rights of the Corporation, or (F) Executive's breach of any of the
provisions of this Agreement.
(v) Termination For Good Reason. "Good Reason" shall mean,
unless the Executive shall have consented in writing thereto, termination by the
Executive of his employment because of any of the following:
(A) a reduction in the Executive's title, duties,
responsibilities or status, as compared to such title, duties, responsibilities
or status immediately prior to the Change in Control or as the same may be
increased after the Change in Control;
(B) the assignment to the Executive of duties inconsistent
with the Executive's office on the date of
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the Change in Control or as the same may be increased after the Change in
Control;
(C) a reduction by the Corporation in the Executive's base
salary as in effect immediately prior to the Change in Control or as the same
may be increased after the Change in Control or a reduction by the Corporation
after a Change in Control in the Executive's total compensation (including
bonus) so that the Executive's total cash compensation in a given calendar year
is less than 90% of Executive's total compensation for the prior calendar year;
(D) a requirement that the Executive relocate anywhere not
mutually acceptable to the Executive and the Corporation or the imposition on
the Executive of business travel obligations substantially greater than his
business travel obligations during the year prior to the Change in Control;
(E) the relocation of the Corporation's principal
executive offices to a location outside the greater Columbus, Ohio area;
(F) the failure by the Corporation to continue in effect
any material fringe benefit or compensation plan, retirement plan, life
insurance plan, health and accident plan or disability plan in which the
Executive is participating at the time of a Change in Control (or plans
providing the Executive with substantially similar benefits), the taking of any
action by the Corporation which would adversely affect the Executive's
participation in or materially reduce his benefits under any of such plans or
deprive him of any material fringe benefit enjoyed by him at the time of the
Change in Control, or the failure by the Corporation to provide him with the
number of paid vacation days to which he is then entitled on the basis of years
of service with the Corporation in accordance with the normal vacation policy in
effect immediately prior to the Change in Control; or
(G) any breach of this Agreement on the part of the
Corporation.
(vi) Notice of Termination. A "Notice of Termination" shall
mean a notice which shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment.
(vii) Date of Termination. "Date of Termination" shall mean
(A) if this Agreement is terminated for Disability, 30 days after a Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his
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duties on a full-time basis during such 30-day period), (B) if the Executive's
employment is terminated for Cause, the date specified in the Notice of
Termination, (C) if the Executive's employment is terminated by death, the date
of death, and (D) if the Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given, or, if the
Corporation terminates the Executive's employment without giving a Notice of
Termination, the date on which such termination is effective.
2. TERM. Unless sooner terminated as herein provided, the term
of this Agreement shall commence on the date hereof and shall continue until
January 4, 2001 (the "Termination Date"). It is understood that no amounts or
benefits shall be payable under this Agreement unless (i) there shall have been
a Change in Control during the term of this Agreement and (ii) the Executive's
employment is terminated at any time during the Effective Period as provided in
Section 5 hereof. It is further understood that the Corporation may terminate
the Executive's employment at any time before or after a Change in Control,
subject to the Corporation providing, if required to do so in accordance with
the terms hereof, the severance payments and benefits hereinafter specified,
which payments and benefits shall only be available if a Change in Control has
occurred prior to such termination. Prior to a Change in Control, this Agreement
shall terminate immediately if Executive's employment with the Corporation is
terminated for any reason.
3. SERVICES DURING CERTAIN EVENTS. In the event any person (as
that term is used in Section 1(i) above) commences a tender or exchange offer,
distributes proxy materials to the Corporation's shareholders or takes other
steps to effect a Change in Control, the Executive agrees he will not
voluntarily terminate his employment with the Corporation other than by reason
of his retirement at normal retirement age, and will continue to serve as a
full-time employee of the Corporation until such efforts to effect a Change in
Control are abandoned or terminated or until a Change in Control has occurred.
4. TERMINATION FOLLOWING A CHANGE IN CONTROL. Any termination
of Executive's employment by the Corporation for Cause, Disability or otherwise
or by the Executive for Good Reason, which, in any case, occurs at any time
during the Effective Period, shall be communicated by written Notice of
Termination to the other party.
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5. COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN
CONTROL.
(i) For Cause. If, at any time during the Effective Period,
the Executive's employment shall be terminated for Cause, the Corporation shall
pay the Executive his full base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given and the Corporation
shall not have any further obligations to the Executive under this Agreement.
(ii) Death or Disability. If, at any time during the Effective
Period, the Executive's employment is terminated by reason of the Executive's
death or Disability, the Corporation shall pay to the Executive or his legal
representative his full base salary through the Date of Termination, and the
Corporation shall have no further obligation to the Executive or his legal
representative under this Agreement after the Date of Termination.
(iii) For Good Reason or Without Cause. If the Executive's
employment is terminated by the Corporation for any reason other than for Cause,
Disability, or death, or by the Executive for Good Reason, in either case at any
time during the Effective Period, then:
(A) The Corporation shall pay to the Executive, not later than
30 days following the Date of Termination, the Executive's accrued but unpaid
base salary through the Date of Termination plus compensation for current and
carried-over unused vacation and compensation days in accordance with the
applicable personnel policy.
(B) In lieu of any further payments of salary to the Executive
after the Date of Termination, the Corporation shall pay to the Executive, not
later than thirty (30) days following the Date of Termination and
notwithstanding any dispute between the Executive and the Corporation as to the
payment to the Executive of any other amounts under this Agreement or otherwise,
a lump sum cash severance payment (the "Severance Payment") equal to the greater
of (i) the total compensation (including bonus) paid to or accrued for the
benefit of the Executive by the Corporation for services rendered during the
calendar year ending prior to the date on which a Change in Control of the
Corporation occurred or (ii) the total compensation (including bonus) paid to or
accrued for the benefit of the Executive by the Corporation for services
rendered during the twelve-month period immediately preceding the Date of
Termination.
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(iv) The Executive's right to receive payments under this
Agreement shall not decrease the amount of, or otherwise adversely affect, any
other benefits payable to the Executive under any plan, agreement or arrangement
relating to employee benefits provided by the Corporation.
(v) The Executive shall not be required to mitigate the amount
of any payment provided for in this section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 5 be reduced by any compensation earned by the Executive as the result
of employment by another employer or by reason of the Executive's receipt of or
right to receive any retirement or other benefits after the date of termination
of employment or otherwise.
6. Non-Competition; Confidentiality
(i) Period. For a period of two years following the
termination of Executive's employment with the Corporation (other than following
a Change of Control), Executive shall not, as a shareholder, employee, officer,
director, partner, consultant or otherwise, engage directly or indirectly in any
business or enterprise which is in Competition with the Corporation.
(ii) Competition with the Corporation. For purposes of this
Agreement, (A) the words "Competition with the Corporation" shall be deemed to
include competition with the Corporation or any entity controlling, controlled
by or under common control with the Corporation (an "Affiliate"), or their
respective successors or assigns, or the business of any of them, and (B) a
business or enterprise shall be deemed to be in Competition with the Corporation
if it is engaged in any business activity which is the same or comparable to any
business activity of the Corporation or any Affiliate from time to time during
the Executive's employment with the Corporation in any geographic area of the
United States in which the Corporation or any Affiliate conducted such business.
Notwithstanding the foregoing, nothing herein contained shall prevent Executive
from purchasing and holding for investment less than 5% of the shares of any
corporation the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market.
(iii) Interpretation of Covenant. The parties hereto agree
that the duration and area for which the covenant not to compete set forth in
this Section 6 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto
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agree that the covenant shall remain in full force and effect for the greatest
time period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and ever county of each and every state of the United
States of America where the covenant not to compete is intended to be effective.
The provisions of this Section 6 shall survive any termination of this
Agreement.
(iv) Prohibition on Disclosure or Use. Executive shall at all
times keep and maintain Confidential Information (as defined below)
confidential, and Executive shall not, at any time, either during or subsequent
to his employment with the Corporation, either directly or indirectly, use any
Confidential Information for Executive's own benefit or divulge, disclose, or
communicate any Confidential Information to any person or entity in any manner
whatsoever other than employees or agents of the Company having a need to know
such Confidential Information, and only to the extent necessary to perform their
responsibilities on behalf of the Company and other than in the performance of
Executive's employment duties to the Corporation.
(v) Definition of Confidential Information. "Confidential
Information" shall mean any and all information (excluding information in the
public domain) related to the business of the Corporation or any Affiliate,
including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing
techniques; information concerning pricing and pricing policies; marketing
techniques; plans and forecasts; new product information; information concerning
suppliers; methods and manner of operations; and information relating to the
identity and location of all past, present, and prospective customers.
(vi) Equitable Relief. Executive's obligations contained in
this Section 6 are of special and unique character which gives them a peculiar
value to the Corporation, and the Corporation cannot be reasonably or adequately
compensated in damages in an action at law in the event Executive breaches such
obligations. Executive therefore expressly agrees that, in addition to any other
rights or remedies which Corporation may possess, the Corporation shall be
entitled to injunctive and other equitable relief in the form of preliminary and
permanent injunctions without bond or other security in the event of any actual
or threatened breach of said obligations by Executive.
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7. SUCCESSORS; BINDING AGREEMENT.
(i) The Corporation will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation and its
subsidiaries to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no succession had taken place. Failure of the Corporation to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to compensation in the same
amount and on the same terms as he would be entitled hereunder if he terminated
his employment for Good Reason during the Effective Period, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, "Corporation" shall mean the Corporation as defined above and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 7 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law. Nothing
contained in this Section 7 shall be construed to modify or affect the
definition of a "Change in Control" contained in Section 1 hereof.
(ii) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. ARBITRATION. Any dispute or controversy arising out of or
relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. The award of the arbitrator shall be final, conclusive and
nonappealable and judgment upon such award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall be an
arbitrator qualified to serve in accordance with the rules of the American
Arbitration Association and one who is approved by both the Corporation and the
Executive. In the absence of such approval, each party shall designate a person
qualified to serve as an arbitrator in accordance with the rules of the American
Arbitration Association and the two persons so designated shall select the
arbitrator from among those persons qualified to serve in accordance with the
rules of the American Arbitration Association. The arbitration shall be held in
Columbus, Ohio or such other place as may be agreed upon at the time by the
parties to the arbitration.
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9. NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed in the
case of the Executive, to
Xxxxxxx X. Xxxxxxx
__________________________________
__________________________________
and in the case of the Corporation, to the principal executive offices of the
Corporation, provided that all notices to the Corporation shall be directed to
the attention of the Corporation's Chief Executive Officer with copies to the
Secretary of the Corporation and to its Board of Directors, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and a duly authorized officer of
the Corporation. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio.
11. VALIDITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be effective as of the date and year first above written.
X. X. XXXXX CORPORATION
By: /s/ XXXXXX XXXXX
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Title: CEO
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/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
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