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Exhibit 10.14
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 8th day of December, 1998, by and between
Xxxxxx Group Inc., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxxxx (the "Executive").
WHEREAS, the Company desires to enlist the services and employment of
the Executive as the President and Chief Executive Officer of the Company and
the Executive is willing to render such services on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Employment Term. Subject to the terms and provisions of this
Agreement, the Company hereby agrees to employ the Executive and the Executive
hereby agrees to be employed by the Company for the period commencing on the
date hereof (the "Commencement Date") and ending on December 31, 2001, unless
extended as provided below or terminated sooner as provided in Section 6 hereof
(the "Employment Term"); provided, however, that on December 31, 1999 and on
each December 31 thereafter, the Employment Term shall be automatically extended
for an additional one (1) year period so long as neither the Company nor the
Executive has provided the other party with not less than ninety (90) days prior
written notice that the Employment Term shall not be so extended.
Notwithstanding the foregoing, in no event shall the Employment Term extend
beyond December 31 of the calendar year in which the Executive attains age 65.
2. Position and Duties. During the Employment Term the Executive shall
be employed and shall serve as the President and Chief Executive Officer of the
Company and shall have complete responsibility for the day-to-day management and
operations of the Company and such other duties consistent with the position of
CEO of a publicly-held company as are reasonably assigned to him by the Board of
Directors of the Company (the "Board"). The Executive shall report solely and
directly to the Board and shall perform such other duties, services and
responsibilities as may from time to time be requested by the Board. On the
Commencement Date, the Board shall appoint the Executive to the Board to fill
the position thereon previously held by the Company's immediately former Chief
Executive Officer. As of the Commencement Date and thereafter during the
Employment
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Term, all other officers of the Company and any of its subsidiaries shall report
to the Executive or to one of his designees. The Executive shall devote his full
business time, attention and skill to the performance of his duties, services
and responsibilities hereunder, and will use his best efforts to promote the
interests of the Company; provided, however, that the Executive shall be
entitled to (a) serve on the boards of directors of the three (3) publicly-held
companies listed on Schedule A, attached hereto, and on such additional boards
of directors as may be specifically approved in writing by the Board (but not
more than the boards of four (4) publicly-held companies at any one time), (b)
serve on corporate, civic or charitable boards or committees, (c) deliver
lectures, fulfill speaking engagements or teach at educational institutions, and
(d) manage private investments, in the case of each of (a) through (d), so long
as such activities do not materially interfere with the performance of
Executive's duties hereunder.
The Company will (i) include the Executive in its class of
directors nominated for election to the Board for a term of three (3) years at
the Company's next annual meeting of stockholders during the Employment Term and
at each third annual meeting thereafter during the Employment Term and will use
its reasonable best efforts to cause the Executive to be elected to the Board at
each such meeting, (ii) appoint the Executive to serve as a member of the boards
of directors of each of the Company's subsidiaries (each a "Subsidiary Board")
during the Employment Term, and (iii) upon the Executive's election to the Board
or appointment to any Subsidiary Boards, appoint the Executive to serve as a
member of the Executive Committees (if established) of the Board and each
Subsidiary Board. During the Employment Term the Executive shall also be
permitted to participate actively and meaningfully with the appropriate
committees of the Board in the establishment of targets and performance goals
with respect to the Company's bonus, incentive and equity-based award plans.
3. Location. The Executive shall perform his duties hereunder primarily
at the Company's executive office in Bristol, Connecticut, and shall perform
duties at such other locations as are reasonably designated by the Board. The
Executive shall promptly establish and maintain a residence in the central
Connecticut area.
4. Compensation and Benefits.
4.1 Base Salary. In consideration of the performance of all of
the Executive's obligations during the Employment Term (including any services
as an officer, director, employee, member of any committee of the Board or
Subsidiary Board, or otherwise), the Company will during the Employment Term pay
the Executive a base salary
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(the "Salary") at an annual rate of $550,000, subject to increase but not
decrease each year by the Board in its sole discretion. Any increased Salary
shall then constitute the "Salary" for purposes of this Agreement. The Salary
shall be payable in equal installments on the first working day of each month.
All payments and benefits hereunder shall be subject to all applicable taxes
required to be withheld by the Company pursuant to federal, state or local law.
4.2 Relocation Allowance. The Executive shall be entitled to a
one-time lump sum payment of $100,000 as a relocation allowance, which shall be
paid to the Executive upon securing housing in central Connecticut during the
Employment Term; such allowance shall be fully grossed up by the Company for any
taxes incurred thereon pursuant to the terms of the Company's relocation plan
(but the effective rate of tax for this purpose shall not exceed 45 percent).
4.3 Reimbursement of Legal Fees. Upon presentation of
documentation reasonably acceptable to the Company, the Company shall reimburse
the Executive for reasonable legal fees and expenses incurred in connection with
(i) any good faith action brought by the Executive to enforce his rights under
this Agreement (or to respond to any action commenced by the Company) but only
those fees and expenses attributable to claims with respect to which there was a
substantial likelihood that the Executive would prevail on the merits, and (ii)
the negotiation and documentation of this Agreement.
4.4 Expenses. The Company shall reimburse the Executive for
all reasonable expenses incurred by the Executive in connection with the
performance of his duties, services and responsibilities under this Agreement in
accordance with the Company's expense reimbursement policy then in effect upon
presentation of documentation reasonably acceptable to the Company.
4.5 Annual Bonus. Each full calendar year during the
Employment Term the Executive shall be eligible to receive an annual bonus
pursuant to the Company's Management Incentive Compensation Plan and any
successor plan (the "MICP"). Under the MICP, the amount of such annual bonus
will be 50% of the Salary upon the attainment of the target performance goal, up
to a maximum annual bonus of 150% of Salary. The amount and payment of such
bonus shall be based on the attainment of performance goals to be established by
the Board in accordance with the MICP. For the calendar year 1999 (without
duplication of any payments under Section 7 hereof or the Change in Control
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Severance Agreement (as defined below)), the Executive shall be entitled to a
bonus under the MICP of at least $275,000, so long as he remains in the employ
of the Company through December 1, 1999.
4.6 Incentive Compensation. As of January 1, 1999, the
Executive shall participate in the Company's 1996 Long Term Incentive Plan and
any successor plan (the "LTIP"). With respect to the two (2) plan cycles that
will have commenced as of January 1, 1999, the Executive will receive LTIP units
for such cycles as follows:
(i) 27,200 units for the 1997-1999 cycle, and
(ii) 63,100 units for the 1998-2000 cycle.
The Executive's long-term incentive objective for the 1999-2001 cycle has been
set at $1,255,000 and will be apportioned between LTIP units and stock options
at the meeting of the Compensation Committee of the Board to be held in
February, 1999 (the "February Meeting").
4.7 Stock Options. The Company shall grant to the Executive on
the Commencement Date options (the "Commencement Option") to acquire 75,000
shares of Company common stock, par value $0.01 per share ("Company Stock"), at
a per share exercise price of 85% of the fair market value of each such share on
the date of grant. The Commencement Option shall (i) have a term of ten (10)
years, (ii) vest and become exercisable ratably on each of the first four
anniversaries of the grant date based on the Executive's continued employment
with the Company, (iii) provide for optional forms of exercise which are
consistent with those provided in the Company's 1991 Stock Incentive Plan (the
"SIP"), and (iv) provide for a post-termination exercise period of (A) three (3)
years following termination of the Executive's employment by the Company without
Cause, by reason of the Executive's Death or Disability, by the Executive for
Good Reason (as such terms are hereinafter defined), or upon expiration of the
Employment Term, and (B) ninety (90) days following termination of the
Executive's employment by the Executive without Good Reason; provided that the
Commencement Option shall expire immediately and the Executive shall not be
entitled to a post-termination exercise period with respect to such option upon
the Executive's termination of employment by the Company for Cause. To the
extent not inconsistent with this Agreement, the Commencement Option agreement
will be based upon the form of option agreement used under the SIP. Prior to the
time that any portion of the Commencement Option first becomes exercisable, the
Company shall cause the shares of the Common Stock underlying the Commencement
Option to be registered.
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Future option grants to the Executive will be subject to the
general terms and conditions of the SIP or any successor plan. The Executive is
eligible to be granted, at the February Meeting, options pursuant to the SIP at
an exercise price per share equal to the fair market value of a share of Company
Stock on the date of grant. The number of shares of Company Stock subject to
such options shall be determined by the Compensation Committee. For that
purpose, the current present value of each such option is equal to $10.04.
Thereafter, the Executive shall be eligible to receive additional grants of
options under the SIP.
4.8 ISUs. The Company shall grant to the Executive on the
Commencement Date 120,000 incentive stock units to acquire restricted shares of
Company Stock ("ISUs"). Sixty thousand of such ISUs will be granted pursuant to
the SIP and will vest over a five (5) year period subject to the attainment of
performance goals established by the Compensation Committee and continued
employment with the Company ("Performance Vested ISUs") (2/3 of such ISUs are
eligible to time vest on the third anniversary of the date of grant and the
remaining 1/3 are eligible to time vest on the fifth anniversary of the date of
grant). The remaining sixty thousand of such ISUs will vest over a five (5) year
period subject only to continued employment with the Company ("Service Vested
ISUs") (2/3 of such ISUs are eligible to time vest on the third anniversary of
the date of grant and the remaining 1/3 are eligible to time vest on the fifth
anniversary of the date of grant). To the extent not inconsistent with this
Agreement, the Service Vested ISUs agreement will be based upon the form of
time-based ISU agreement used under the SIP. Prior to the time that any portion
of the Service Vested ISUs vest, the Company shall cause the shares of the
Common Stock underlying such ISUs to be registered. In the future, the Executive
shall be eligible to receive additional ISUs and other incentive awards under
the SIP.
4.9 Other Benefits. During the Employment Term, the Executive
(and his dependents, if eligible thereunder) shall participate immediately in
all existing and future employee benefit plans, programs and policies (other
than severance plans) generally available to senior executive officers of the
Company, as they may be amended from time to time, provided, however, that such
participation shall be subject to the eligibility and participation requirements
of any such plan which is intended to be qualified under Section 401(a) of the
Code (as defined below), including, without limitation, the following:
(a) Life Insurance. Pursuant to the Executive's participation
in the Company's Officer Enhanced Life Insurance Program (the "ELIP"),
until the Executive attains age 65 the Company shall pay all premiums
for a whole life
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insurance policy on the life of the Executive. The insurance policy
shall be owned by the Executive and shall have a death benefit equal to
four (4) times the Salary. The Company shall fully gross up the
Executive for any income tax attributable to the premiums paid by the
Company in accordance with the ELIP (but the effective rate of tax for
this purpose shall not exceed 45%). The Executive shall have the
opportunity at his own cost to purchase additional life insurance with
a death benefit equal to one (1) times the Salary pursuant to the
Company's supplemental life insurance program.
(b) Financial Planning. The Company shall reimburse the
Executive for an amount of (i) up to $15,000 for financial planning
assistance and related services for the period commencing on the
Commencement Date and ending on April 30, 2000, and (ii) up to $5,000
for such assistance and services per full twelve-month period
thereafter (each such period commencing May 1st and ending April 30th),
in each case upon presentation of documentation reasonably acceptable
to the Company, and, in each case, fully grossed-up for taxes (but the
effective rate of tax for this purpose shall not exceed 45 percent).
(c) Automobile Allowance. The Company shall provide the
Executive with a car allowance not to exceed $900 per month, in
accordance with the Company's automobile policy as from time to time in
effect.
(d) Pension. Provided the Executive is actually employed by
the Company on a continual basis from the Commencement Date until
December 8, 2003, the Executive shall receive two (2) years of service
credit for each one (1) year of actual service under each of the
Company's non-qualified retirement plans in which he participates.
(e) Vacation. For each full calendar year during the
Employment Term, the Executive shall be entitled to four (4) weeks of
paid vacation.
(f) Welfare Benefit Plan Participation. The Company shall
waive any waiting periods, pre-existing condition limitations and
physical examination requirements applicable to the Executive and any
of his eligible dependents with respect to any Company medical plan,
dental plan, disability plan or other welfare benefit plan (other than
severance plans).
(g) Country Club. The Company shall reimburse (not grossed-up
for taxes) the Executive for his membership in one (1) country club in
accordance with Company policy as in effect from time to time.
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5. Purchase of Company Stock. The Executive shall purchase on the open
market $1,000,000 of Company Stock; at least $500,000 of which shall be
purchased in accordance with the Company's Xxxxxxx Xxxxxxx Policy during the
first 30-day window period occurring during 1999 and the remainder of which
shall be so purchased during the second 30-day window period occurring in 1999.
6. Termination. The Executive's employment with the Company and the
Employment Term shall terminate upon the expiration of the Employment Term or
upon the earlier occurrence of any of the following events of termination:
(a) By the Company (other than for Cause) upon thirty (30)
days prior written notice or by the Executive (other than for Good Reason) upon
thirty (30) days prior written notice.
(b) By the Company for Cause upon thirty (30) days prior
written notice (the "Cause Notice") to the Executive. The
Company may not terminate the Executive's employment for Cause
unless such written notice is delivered to the Executive
within thirty (30) days of any member of the Board (other than
the Executive) becoming aware of the action or omission
constituting Cause. "Cause" shall mean (i) the willful and
continued failure by the Executive to substantially perform
the Executive's duties with the Company (other than any such
failure resulting from the Executive's incapacity due to
physical or mental illness) after a written demand for
substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in
which the Board believes that the Executive has not
substantially performed the Executive's duties, (ii) the
willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise, (iii) the Executive's
conviction for the commission of (A) a felony or (B) any other
crime involving moral turpitude, and (iv) a willful and
material breach by the Executive of any provision of this
Agreement which is not cured within twenty (20) days of
receipt of written notice thereof from the Board which
specifies the nature of such breach. For purposes of clauses
(i), (ii) and (iv) of this definition, no act, or failure to
act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the Executive's act,
or failure to act, was in the best interest of the Company.
The Executive
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shall have the right to appear before the Board prior to any
final determination by the Board to terminate his employment
for Cause. The Executive may request a meeting with the Board
by submitting a written request to the Board within ten (10)
days of receipt of the Cause Notice. Such meeting with the
Board shall be fixed and shall occur on a date selected by the
Board (such date being not less than five (5) nor more than
twenty (20) days after the Board receives Executive's written
request). Such meeting shall take place at the executive
offices of the Company. For all purposes of this Agreement, if
the Executive's employment is terminated for Cause, the
effective date of such termination shall be the date of
delivery of the Cause Notice.
(c) By the Executive for Good Reason upon thirty (30) days
prior written notice to the Board. The Executive may not
terminate his employment for Good Reason by reason of any
event or action unless such written notice is delivered within
thirty (30) days of the Executive becoming aware of such event
or action. "Good Reason" shall mean the following, unless
specifically approved by the Executive in writing prior to the
event or action (i) a materially adverse change in the
Executive's title, position, duties, responsibilities or
reporting relationships, (ii) a reduction in the Salary or
failure to pay compensation or benefits, (iii) a change in
location of the Company's executive offices which is more than
fifty (50) miles away from both the location of the Company's
current executive offices and the Executive's Connecticut
residence, (iv) the assignment to the Executive of duties
materially inconsistent with the Executive's status as Chief
Executive Officer of the Company, (v) if the Company
terminates the Executive under Section 6(b) hereof, the
Company's failure to (A) provide thirty (30) days prior
written notice to the Executive of its intention to terminate
his employment for Cause in accordance with Section 6(b)
hereof, or (B) provide the Executive the opportunity to appear
before the Board in accordance with Section 6(b) hereof, (vi)
the Company notifies the Executive prior to September 30, 2000
of its intention not to extend the Employment Term pursuant to
Section 1 hereof, (vii) the Company does not nominate the
Executive for election to the Board or fails to use its
reasonable best efforts to cause the Executive to be elected
to the Board, in either case, in accordance with Section 2
hereof, and/or (viii) a material breach of this Agreement by
the Company. The Company shall be afforded twenty (20) days
following receipt of written notice from the Executive of his
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intention to terminate his employment for Good Reason in which
to cure any of the foregoing actions or events.
(d) By reason of the Disability of the Executive. The
Executive shall be considered to be disabled after he has been
unable fully to perform his duties hereunder, with reasonable
accommodation as required by law, by reason of physical or
mental illness for 180 days during any 360 day period as
determined in a written medical opinion by a medical doctor
mutually acceptable to the Executive and the Company. In the
event that the Executive and the Company cannot agree upon
such medical doctor, they shall each appoint a medical doctor
of their choice and those two medical doctors shall then
appoint a third medical doctor to make the determination (a
"Disability").
(e) By reason of the death of the Executive ("Death").
In the event of termination of the Employment Term, for whatever reason, (i) the
Executive shall cooperate with the Company and be reasonably available to the
Company with respect to continuing and/or future matters arising out of the
Executive's employment or any other relationship with the Company, whether such
matters are business-related, legal or otherwise and (ii) the Executive shall
resign immediately from his membership on the Board and each Subsidiary Board.
7. Termination Payments. The following termination payments and
benefits shall be provided to the Executive in lieu of any benefits provided in
the Company's Executive Separation Pay Plan and such payments and benefits shall
be paid or provided in accordance with the terms of the applicable Company plan,
program or policy. Subject to Sections 10 and 14 hereof, the following payments
upon termination shall constitute the exclusive payments and benefits due the
Executive upon termination of Executive's employment, but shall have no effect
on (i) any benefits which may be due the Executive under any plan, program or
policy of the Company which provides benefits after termination of employment,
other than any severance pay or salary continuation plan, which shall be
inapplicable, and/or (ii) the Executive's entitlement to reimbursements under
Sections 4.3 and 4.4 hereof.
7.1 Termination for Cause or other than Good Reason. Upon
termination of the Executive's employment and the Employment Term by the Company
for Cause or by
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the Executive other than for Good Reason, the Company shall pay the Executive
the Salary and other benefits accrued hereunder and unpaid as of the date of
termination.
7.2 Termination without Cause or for Good Reason. If the
Executive's employment and the Employment Term is terminated by the Company
without Cause (except by reason of the Executive's Death or Disability) or by
the Executive for Good Reason, the Company shall (i) pay the Executive the
Salary and other benefits accrued hereunder and unpaid as of the date of
termination, (ii) pay the Executive for the Severance Period (as hereinafter
defined) an amount equal to the Salary, (iii) continue to provide the Executive
for the Severance Period coverage under those Company-sponsored welfare benefit
plans (other than severance plans) in which he participated immediately prior to
such termination, (iv) pay the Executive an amount equal to the product of his
target bonus under the MICP for the year of termination and a fraction, the
numerator of which is the number of days in the Severance Period and the
denominator of which is 365, assuming for this purpose that the performance
target level for the year of termination has been achieved, (v) provide that any
outstanding option to purchase Company Stock held by the Executive as of the
date of termination shall continue to vest in accordance with its regular
vesting schedule through the expiration of the Severance Period and shall remain
exercisable in accordance with Section 4.7 hereof for one year (three (3) years
for the Commencement Option) following the expiration of the Severance Period,
after which any such outstanding option shall expire, (vi) provide that both
Performance Vested ISUs and Service Vested ISUs shall continue to vest in
accordance with their regular vesting schedule through the expiration of the
Severance Period, and, in the case of the Performance Vested ISUs, assuming that
the applicable target performance goal has been achieved, (vii) pay the
Executive when due the full amount owing pursuant to each of the Executive's
LTIP awards, assuming, for each award, that the applicable target performance
goal has been achieved, and (viii) provide the Executive service credit under
the Company's non-qualified retirement plans in which the Executive then
participates through the expiration of the Severance Period.
For purposes of this Section 7.2, the "Severance Period" shall mean the period
commencing on the date of termination and ending on the last day of the
Employment Term (as determined as of the day immediately preceding the date of
termination), provided, however, that the Severance Period shall be no shorter
than two years. All payments shall be made, and other benefits provided, when
such payments or other benefits would have been made or provided if the
Executive's employment had not terminated.
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7.3 Termination upon Death or Disability. If the Executive's
employment and the Employment Term are terminated by reason of the Executive's
Death or Disability, the Company shall (i) pay the Executive the Salary and
other benefits accrued hereunder and unpaid as of the date of termination, (ii)
pay the Executive or his beneficiary, when ordinarily payable under the MICP, a
pro-rated portion of his annual bonus under the MICP for the calendar year of
termination, subject to the achievement of the applicable performance targets
for such year, (iii) provide that any outstanding options to purchase Company
Stock held by the Executive as of date of termination shall become immediately
vested and fully exercisable as of the date of such termination and remain
exercisable for the one (1) year period (three (3) years for the Commencement
Option) following such termination, (iv) provide that both Performance Vested
ISUs and Service Vested ISUs will continue to vest in accordance with their
regular vesting schedule for the remainder of the calendar year in which such
termination occurs, it being understood that vesting of the Performance Vested
ISUs shall remain subject to the achievement of the applicable performance
targets for such year, and (v) pay the Executive or his beneficiary, at the time
or times amounts are paid under the LTIP generally, a pro-rated portion of each
of the Executive's LTIP awards based on the number of days elapsed prior to such
termination during each relevant LTIP cycle, subject to the achievement of the
applicable performance goals.
7.4 Termination by the Executive. If on or prior to December
8, 2001, the Executive terminates his employment without Good Reason and during
the Employment Term (determined as of the day immediately preceding the date of
termination) he accepts employment as CEO or a comparable position with a
company of equal or larger size than the Company measured by gross revenues for
the most recently completed fiscal year, the Executive shall within twenty (20)
days of such acceptance pay the Company $500,000 in cash.
7.5 No Mitigation or Offset. Upon termination of the
Executive's employment hereunder, he shall have no mitigation obligation
hereunder; it being expressly agreed that if the Executive receives any income,
payment or other benefit from a third party after any such termination, such
income payment or benefit shall not be set off against any payments or benefits
to be made or provided to the Executive by the Company pursuant to this Section
7.
8. Excise Tax Limitation. (a) Notwithstanding anything contained in
this Agreement to the contrary, to the extent that any payment or distribution
of any type to or for
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the benefit of the Executive by the Company, any affiliate of the Company, any
person who acquires ownership or effective control of the Company or ownership
of a substantial portion of the Company's assets (within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder), or any affiliate of such person, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (the "Total Payments") is or will be subject to the excise tax
imposed under Section 4999 of the Code (the "Excise Tax"), then the Total
Payments shall be reduced (but not below zero) if and to the extent that a
reduction in the Total Payments would result in the Executive retaining a larger
amount, on an after-tax basis (taking into account federal, state and local
income taxes and the Excise Tax), than if the Executive received the entire
amount of such Total Payments. Unless the Executive shall have given prior
written notice specifying a different order to the Company to effectuate the
foregoing, the Company shall reduce or eliminate the Total Payments by first
reducing or eliminating the portion of the Total Payments which are not payable
in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as hereinafter defined). Any notice
given by the Executive pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Executive's rights and entitlements to any benefits or compensation.
(b) The determination of whether the Total Payments shall be reduced as
provided in Section 8(a) and the amount of such reduction shall be made at the
Company's expense by an accounting firm selected by the Company from among the
five (5) largest accounting firms in the United States (the "Accounting Firm").
The Accounting Firm shall provide its determination (the "Determination"),
together with detailed supporting calculations and documentation to the Company
and the Executive within ten (10) days of the Termination Date. Absent manifest
error, such Determination shall be binding, final and conclusive upon the
Company and the Executive. If the Accounting Firm determines that an Excise Tax
would be payable, the Executive shall have the right to accept the Determination
of the Accounting Firm as to the extent of the reduction, if any, pursuant to
Section 8(a), or to have such Determination reviewed by an accounting firm
selected by the Executive, at the expense of the Company, in which case a mutual
determination by such second accounting firm and the Accounting Firm shall be
binding, final and conclusive upon the Company and Executive.
9. Executive Covenants.
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(a) Unauthorized Disclosure. The Executive agrees and understands that
in the Executive's position with the Company, the Executive has been and will be
exposed to and receive information relating to the business affairs of the
Company, including but not limited to technical information, business and
marketing plans, strategies, customer information, other information concerning
the Company's products, promotions, development, financing, expansion plans,
business policies and practices, and other forms of information considered by
the Company to be confidential and in the nature of trade secrets. The Executive
agrees that during the Employment Term and thereafter, the Executive will keep
such information confidential and not disclose such information, either directly
or indirectly, to any third person or entity without the prior written consent
of the Company (unless such information is otherwise in the public domain
through no fault of the Executive); provided, however, that nothing in this
Section 9(a) shall prevent the Executive with or without the Company's consent,
from disclosing documents or information in connection with any judicial or
administrative investigation, inquiry or proceeding, provided the Executive is
compelled to do so by court order or subpoena and notifies the Company as soon
as practicable after the receipt of such court order or subpoena. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Employment Term, the Executive will
promptly supply to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards,
surveys, maps, logs, machines, technical data or any other tangible product or
document in the actual or constructive possession of the Executive at the end of
the Employment Term.
(b) Non-competition. By and in consideration of the Company's entering
into this Agreement and the Salary and benefits to be provided by the Company
hereunder, and further in consideration of the Executive's exposure to the
proprietary information of the Company, the Executive agrees that the Executive
will not, during the Employment Term and for a period of two (2) years
thereafter (the "Restriction Period"), directly or indirectly, own, manage,
operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner, including
but not limited to, holding the position of shareholder, director, officer,
consultant, independent contractor, employee, partner, or investor, with any
Competing Enterprise. For purposes of this paragraph, the term "Competing
Enterprise" shall mean any person, corporation, partnership or other entity
engaged in a business which is in competition, directly or indirectly, with any
material or significant business of the Company or any of its affiliates at the
date of termination of employment. Following termination of the Employment Term,
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upon request, the Executive shall notify the Company of the Executive's then
current employment status.
(c) Non-solicitation and Non-disparagement. The Executive agrees that
during the Restriction Period, he will not intentionally or knowingly, directly
or indirectly, (i) interfere with the Company's or any of its affiliates'
relationship with, or endeavor to entice away from the Company or any of its
affiliates, any individual, person, firm, corporation or other business entity
who at any time during the Employment Term was an employee or customer of the
Company or any of its affiliates or otherwise had a material business
relationship with the Company or any of its affiliates, or (ii) discourage, or
attempt to discourage, any individual, person, firm, corporation or business
entity from doing business with the Company or any of its affiliates. The
Executive agrees that during the Employment Term and thereafter, he will not
intentionally or knowingly, directly or indirectly, make or publish any negative
or disparaging statements, comments or remarks regarding the Company or its
subsidiaries, affiliated entities, directors, or senior officers. The Company
agrees that during the Employment Term and thereafter neither it nor its
subsidiaries or affiliated entities will, on behalf of the Company, such
subsidiary or affiliated entity, intentionally or knowingly, directly or
indirectly, make or publish any negative or disparaging statements, comments or
remarks about the Executive and that it will inform its directors and senior
officers of this requirement and use its best efforts to ensure that its
directors and senior officers comply with this requirement.
(d) Remedies. The Executive agrees that any breach of the terms of this
Section 9 would result in irreparable injury and damage to the Company for which
the Company would have no adequate remedy at law; the Executive therefore also
agrees that in the event of said breach or any threat of breach, the Company
shall be entitled to an immediate injunction and restraining order to prevent
such breach and/or threatened breach and/or continued breach by the Executive
and/or any and all persons and/or entities acting for and/or with the Executive,
without having to prove damages, and to all costs and expenses, including
reasonable attorneys' fees and costs, in addition to any other remedies to which
the Company may be entitled at law or in equity. The terms of this paragraph
shall not prevent the Company from pursuing any other available remedies for any
breach or threatened breach hereof, including but not limited to the recovery of
damages from the Executive. The Executive and the Company further agree that the
provisions of this Section 9 are reasonable and the Company would not have
entered into this Agreement but for their inclusion herein. Should a court or
arbitrator determine that any provision of the covenant not to compete is
unreasonable, either in period of time, geographical area, or
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15
otherwise, the parties hereto agree that the covenant should be interpreted and
enforced to the maximum extent which such court or arbitrator deems reasonable.
The provisions of this Section 9 shall survive any termination of the
Employment Term, and the existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 9.
10. Indemnification and Insurance. During the Employment Term and at
all times thereafter, the Company shall cause the Executive to be covered and
named as an insured under any policy or contract of insurance obtained by it to
insure its officers and directors against personal liability for acts or
omissions in connection with service as an officer or director of the Company or
service in other capacities at the request of the Company. The coverage provided
to the Executive pursuant to this Section 10 shall be of the same scope and on
the same terms and conditions as the coverage provided to other officers or
directors of the Company. The Executive shall be entitled to indemnification for
liabilities and expenses to the fullest extent permitted under Delaware law to
the extent consistent with the Company's Articles of Incorporation and By-Laws.
11. Non-Waiver of Rights. The failure to enforce at any time the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part hereof, or the right of either party to enforce each and every
provision in accordance with its terms.
12. Notices. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown below, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 12.
If to the Company:
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16
Xxxxxx Group, Inc.
0 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx
ATTN: Xxxxxxx X. Xxxxxxx
If to the Employee:
Xx. Xxxxxx X. Xxxxxxxxx
13. Binding Effect/Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estates, successors (including, without
limitation, by way of merger) and permitted assigns. Notwithstanding the
provisions of the immediately preceding sentence, the Executive shall not assign
all or any portion of this Agreement without the prior written consent of the
Company.
14. Interaction with Change in Control Severance Agreement. On the
Commencement Date or as soon as practicable thereafter, the Executive will enter
into a Change in Control Severance Agreement with the Company in the form
previously approved by the Board and attached hereto as Schedule B. In the event
the Executive becomes entitled to a substantially similar payment or benefit
under both this Agreement and such Change in Control Severance Agreement, each
as in effect from time to time, he will be entitled to receive (a) the payment
or benefit to which he is entitled under this Agreement, or (b) the payment or
benefit to which he is entitled under his Change in Control Severance Agreement,
whichever is greater, but not both, it being expressly understood that the
purpose of this provision is to provide the Executive with the highest
applicable payment or benefit and to prevent the duplication of any amount or
benefit payable to the Executive.
15. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and plans, written or oral between them as
to such subject matter, including, but not limited to, the Company's Executive
Severance Pay Plan. However, except as provided in Section 14 hereof, this
Agreement shall not affect or reduce the rights and benefits of the Executive
under his Change in Control Severance Agreement.
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17
16. Severability. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Connecticut, without reference
to the principles of conflict of laws.
18. Modifications and Waivers. No provision of this Agreement may be
modified, altered or amended except by an instrument in writing executed by the
parties hereto. No waiver by either party hereto of any breach by the other
party hereto of any provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions at the time
or at any prior or subsequent time.
19. Headings. The headings contained herein are solely for the purposes
of reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
21. Executive Representation. The Executive represents and warrants to
the Company that he is not subject to any agreement, written or oral, any law,
regulation or similar enactment, or any decree, order or similar action by any
tribunal or government authority, which could, in any way, restrict his ability
to negotiate, enter into or fully perform his obligations hereunder.
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18
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by authority of its Board of Directors, and the Executive has hereunto
set his hand, the day and year first above written.
XXXXXX GROUP INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman, Board of Directors
By: /s/ XXXXXX X. XXXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxxx
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19
Schedule A
to Xxxxxx X. Xxxxxxxxx
Employment Agreement,
dated as of December 8, 1998
----------------------------------------
- Texaco Inc.
- Xxxx Corporation
- Xxxxxxxx Soup
20
Schedule B
to Xxxxxx X. Xxxxxxxxx
Employment Agreement,
dated as of December 8, 1998
----------------------------------------
The Company's Executive Officer Change-In-Control Severance Agreement is
incorporated by reference to Exhibit 10.14 to the Company's report on Form 10-K
for the year ended December 31, 1997.
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